Major Shareholder:

• Mr. Guo Xia, Williams ¡V 41.128% interest
• C Tech Fund ¡V 22.427% interest

Company Subsidiaries:

• Dezhong VP (100%): R& D and Technology Transfer
• V Biopharm (97.5%): Pharmaceutical Development Services and clinical Research Services Marketing & Sales Promotion Services
• VP Life Sciences Capital (100%): Future investment complementary to the core business of the Group
• P.K. Pharmatech (50.0%): Future technical marketing of the Group's products

The Group is engaged principally in the research, development and commercialization of drug products. As at the Latest Practicable Date, the Group had in R&D team comprising 100 staff members and was engaged in the R&D of 248 drug projects. In January 2002, the Group was named as ¡§Forerunner in New Drug Development¡¨ by (China Medpharm News), a publication of SFDA.

The Group is based in Beijing and principally serves pharmaceutical manufactures in the PRC, including some of the top 20 pharmaceutical manufacturers in the PRC (in terms of revenue) and certain international pharmaceutical companies. It contracted with more than 35 customers (including both Independent Third Parties and a related party) in respect of an aggregate of 106 drug projects as at the Latest Practicable Date. The revenue of the Group is principally derived from (1) Technology Transfer, and (2) the provision of Pharmaceutical Development Services and Clinical Research Services.

Leveraging on its track record in research and development of new drugs and its established customer base in the PRc, the Group position itself as a dominant R&D specialist in the substantial and growing pharmaceutical market in the PRC. The Group plans to launch drug products under the its own brand name by the PRC with enhanced capability also in sales and marketing and manufacturing.

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

• R&D capabilities in new drug formulation development and capability to commercialize R&D results;
• Portfolio of proprietary intellectual property rights
• Demonstrated track record in the PRC pharmaceutical market;
• Diversified sources of revenues;
• Relationship with pharmaceutical manufacturers;
• Professional management team supported by scientific and corporate advisory board

• Research institution registration
• Delayed payment of registered capital of Dezhong VP
• Possible infringement of intellectual property rights of third parties
• Protection of an possible infringement of the Group's intellectual property rights
• Limited operating history
• Reliance on key employees

The Group intends to apply its R&D capability to a broad range of drug products. By utilizing its technology platform in drug delivery system and drug entity development, the Group will continue to grow its new drug pipeline. The Group's R&D program focuses on therapeutic segments with high market potential. Based on it drug entity development platform, the Group identifies and improves drug entities with an aim to improve efficiency and cost effectiveness while reducing side effects of existing drug products

It is the long-term objective of the Group to become an integrated pharmaceutical company with its own manufacturing and marketing capabilities. Currently, the Group has entered into cooperation agreements with two pharmaceutical manufacturers such that the manufacturers are responsible for manufacturing. Whilst the Group is responsible for other areas such as R&D, regulatory approval, promotion and marketing. With these arrangements, the Group will not need to make extensive investments in manufacturing facilities at this stage of development, but can commence to share directly the results of the sales of drug products to be developed by the Group.

The Group is on the lookout for potential targets for strategic acquisition of interest in pharmaceutical manufacturers, research institutions and marketing services companies in the PRC. The Group will utilize the experience and expertise of its management staff in overseas pharmaceutical markets to identify acquisition opportunities. It is planned that approximately HK$1.55 million of the net proceed from the Placing will be used by investing in business in North America and/or South East Asia, including new drug development and/or provision of services complementary to that of the Group it is also intended that the Group could use its proprietary new drug formulations as consideration to acquire interest in identified targets.

It is the mission of the Group to establish itself as a global player in the pharmaceutical industry Certain members of the seniors management of the Group possess working experience in international pharmaceutical companies. In addition, the Group's management is well supported by its Scientific Advisory Board and Corporate Advisory Board comprising industry experts and practitioners with years of experience in the industry. The Directors expect that India will likely be the first overseas market for the Group's products.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$28.0 million (based on the offer price HK$0.41 per share). The Group at present intends to apply the net proceeds as follows: