Major Shareholder:

• HCHK Holdings ¡V 68.89% interest

Company Subsidiaries:

• Optimum(100%): Provision of repair and maintenance services in HK
• Hsin Sheng Security Services Ltd (100%): Provision of security services in HK
• Master Clean Services Ltd (100%): Provision of cleaning services in HK
• Landrimate Services (100%): Provision of laundry services in HK
• Services Pro Ltd (100%): Provision of copying services, sale of garbage bags and wheel accessories for litter bins and property holdings in HK
• Synergoes Facility Management Ltd (100%): Provision of facility management in HK

The Group is principally engaged in the provision of property and facility management services in Hong Kong and the PRC. With regard to property management, SMS provides a wide range of professional services to property owners tailored to meet the needs of each particular property. In terms of facility management, SFM provides customised services to corporate clients seeking to maximise their operational efficiency and cost effectiveness by outsourcing non-core and non revenue-generating workplace functions. Essentially, the Group's businesses capitalise on ongoing corporate and governmental outsourcing trends in the context of record regional FDI inflows and the development of the property markets in Hong Kong and the PRC.

As at 30th June, 2003, the Group managed 185 properties and facilities, comprising more than 150,000 residential units and approximately 1.33 million sq.m. in gross floor area of office, commercial, industrial and facility space in Hong Kong.

The total number of properties and facilities, the total number of residential units and the total gross floor area of non-residential properties and facilities managed by the Group grew at compound annual growth rates of approximately 27%, 25% and 75%, respectively over the three years ended 31st March, 2003. The Group also achieved a high level of contract renewal rates in property management of 100%, 100% and approximately 97% and 97% for the calendar years 2000, 2001 and 2002 and for the six months up to 30th June, 2003, respectively.

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

• Market leader in high quality services and good reputation
• Established business process and management model
• Well rounded professional team with recognized qualifications and experience
• Strong financial background
• Public sector track record
• Response to market changes

• Reliance on key customers
• Reliance on key management personnel
• Responsibility for sub-contracting arrangements
• Change in revenue model
• Lack of proven record in the PRC
• Reliance on public sector policies

The Group plans to establish a call centre equipped with advanced technological infrastructure and staffed by trained professional personnel to further strengthen its services to clients in Hong Kong and the PRC. The call centre will be integrated with CMMS, which will enable the Group to keep track of and respond to customers' requests promptly, thereby enhancing customer satisfaction. The Directors believe that the call centre supported by CMMS will be an effective tool for the Group to expand not just its property management business but also its facility management business in particular given the growing demand for comprehensive analysis of service and facility operations as a result of the outsourcing strategy of corporations across different sectors.

The Group is implementing ERP systems through a comprehensive development program of information technology infrastructure and process re-engineering. The information technology project of the Group will include the development of portal application for providing a common platform to internal users and external customers. Internally, the web-based network will enable all local and district offices of the Group in Hong Kong and the PRC to retrieve business process and project information online. Externally, the web-based network will enable clients to access the latest news about the Group's services and development. It will also serve as an additional channel for customers to highlight their needs and express their opinions. The Directors believe that this comprehensive web-based solution will enhance the competitiveness and operational efficiency of the Group.

The Directors believe that the demand for quality and professional property and facility management services in the PRC will continue to grow. The recent signing of Closer Economic Partnership Arrangement (¡§CEPA¡¨) between the PRC and Hong Kong would provide great flexibility for the Group in structuring its investments in the PRC. China's entry into the WTO is also expected to enhance the economic growth and further attract FDIs in the PRC, which will, in turn, help stimulate demand for quality property and facility management services. The Directors believe that the Group will be able to leverage its expertise and experience to substantially benefit from such market opportunities. Having established footholds in both northern and southern China, the Group intends to expand its PRC network through the establishment of additional offices in eastern China.

With a focused business strategy to become a total property and facility management solution provider in Asia, the Group plans to launch a comprehensive brand-building program to develop a distinct corporate identity and aims to establish its new brand as the ¡§trademark¡¨ of quality and professional property and facility management services. This program is expected to generate higher public awareness of the Group, which the Directors believe will create further business opportunities for the Group.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$49 million (based on the offer price HK$0.75 per share). The Group at present intends to apply the net proceeds as follows: