Major Shareholder:

• Mr. So Chi Hiu ¡V 75.0% interest

Company Subsidiaries:

• Top Million International Limited (100%): Provision of administrative services
• Sincere Jade Limited (100%): Provision of quality control and design services
• LeRoi Trading International Limited (10%): Trading of fashion apparel

The group is principally engaged in the design, distribution, and sales of women's apparel to the PRC market. All of the Group's products, including blazers, coats, dresses, skirts, pants, vest, shirts, blouses, T-shirts, sweaters, and cardigans are distributed mainly in the PRC under the Group's brandname LeRoi. LeRoi products primarily target middle to upper class trendy women customers aged between 20 and 40.

As at the Latest Practicable Date, the Group had 66 franchisees and two authorised distributors in the PRC, covering 33 cities in 15 provinces. The Group's products are either sold directly to the Group's franchisees in the PRC or sold to authorised distributors in the PRC, who in turn distribute such products to other sales outlets (including franchises shops and sales counters in department stores) in the PRC.

Franchisees of the Group are required to sell the Group's products at the designated shops and are not allowed to otherwise carry out any other direct or indirect sales of he Group's products in the PRC. The franchisees and the authorized distributors take the legal title of the goods sold to the by the Group. Accordingly, the goods in the possession of the franchisees and the authorized distributors do not belong to the Group and are not accounted as assets of the Group.

Since May 1999 and September 1999, respectively, the Group has been working with two independent sub-contractors, namely Dongguan Li Lei Fashion Factory and Dongguan Chi Fu Garment Factory, in Dongguan, Guangdong Province, each on a 20-year subcontracting agreement commencing on May 5, 1999 and September 6, 1999, respectively. Under the subcontracting arrangements, the Group is responsible for product design, quality control, and marketing while the Subcontractors are responsible for the manufacturing of the products.

The Directors believe that the Group has the following competitive advantages:

• The increasing recognition of the brandname established by the Group, LeRoi;
• The extensive experience and expertise of the Group's management team in distribution of fashion products;
• The ability of the Group's design team to design innovative and marketable fashion products;
• The ability of the Group to offer a comprehensive range of quality products to its customers; and
• The ability of the Group's marketing team to promote the brand image by conducting various marketing activities including advertisements and promotions, customer loyalty programmes, and fashion shows.

• Reliance on key management;
• Reliance on the PRC retail market;
• Sustainability of growth in turnover and net profit;
• Sustainability of high profit margin;
• Reliance on independent subcontractors;
• Possible termination of the trademark licensing agreements;

The Directors believe that the PRC market for women's apparel is large as long as the Group can provide good quality and well designed merchandises. It is the Group's intention to become one of the top-tier women's apparel suppliers in the PRC. The Group will continue to focus its efforts on product design, quality control, and marketing by employing the following strategies:

The Group intends to increase the number of franchisees in the PRC to about 150 franchisees by the end of 2004. The Group plans to allocate more resources to the further development of the PRC sales network, such as to purchase sales monitoring computer systems and to enhance advertisements and customer relations.

More resources will be spent on the design and development of LeRoi products so as to enhance the quality of LeRoi productsby purchasing more advanced design machines and employing more high quality design staff. Resources will also be spent on promoting the Group's brandname by purchasing more advanced equipment in design, attending more fashion shows, employing more image-building advertisements, and quality control staff of a high calibre.

The Group is planning to develop a new line of products under a separate brandname for younger women, aged between 16 and 25, by conducting market research, employing image-building consultants, and setting up a new design team.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$28.4 million (based on the offer price HK$0.25 per share). The Group at present intends to apply the net proceeds as follows: