Major Shareholder:

• Mr. Wang Ya Qun ¡V 25.9% interest
• China Ruilian ¡V 25.9% interest
• Mr. Chen Zheng Tu ¡V 18.5% interest

Company Subsidiary:

• Yitian Technology(51%): R&D of controller systems for telecommunication devices
• Yitai Electronic (51%): R&D of controller systems for display devices

The Group is principally engaged in the design, manufacture and sale of intelligent controller systems, which can be used for various consumer electrical and electronic appliances, such as air-conditioners, refrigerators, smoke extractors, mobile phones and televisions. The Group offers its services mainly to suppliers and manufacturers of consumer electrical and electronic appliances with brand names such as Electrolux and Aucma.

All of the Group's products were manufactured at the Group's production plant at No. 65 Siming Road East in Yuyao City, Zhejiang Province, the PRC. This production plant and the Group's headquarters and staff quarters occupy a total site are of about 48,000 sq.m. and were built on a piece of land owned by the Group. The Directors believe that the use of advanced machinery and equipment contributes to the efficiency of the Group's business. The Group had 4 production facilities include 3 auto insertion machines, 4 SMT machines, 4 automatic solder machines, and 3 in-circuit tester test function equipment.

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

• An experienced and committed management team capable of attracting talented employees;
• A specific niche in the design and manufacture of controller devices for various consumer electrical and electronic appliances;
• A well- established customer base;
• The ability to maintain high operational efficiency and consistent product quality and offer outstanding engineering support services;
• The capability to produce customized complex products;
• Manufacturing facilities located in a country with abundant supply of labour, low production costs and a large potential market; and
• Strategically located in Ningbo City, Zhejiang Province, situated at the junction of national highway networks and railway networks linking with major cities in the PRC such as Beijing, Shanghai and Fuzhou, and with close proximity to Taiwan, which enables the Group to make timely deliveries to its customers, recruit highly qualified professionals, and develop more business opportunities.

• Reliance on major customers, key management , major suppliers, one principal product and bank borrowings from principal banker;
• The Group has not applied for patent registration in respect of certain technological know-how in relation to certain major products ;
• Credit risk on customers.

The Group plans to increase its production capability and volume by acquiring additional equipment and machineries. The Group also plans to further invest in its R&D in order to maintain the advanced position of the technology used in the Group's products. In addition to further recruitment of technicians locally and from Taiwan, and purchase of new equipment, the Group will continue to undertake technology research in collaboration with various universities and institutes, and pursue strategic alliances with other hi-tech enterprises. The Group plans to expand its business to the R&D of other IT products such as controller systems for TFT-LCD devices and controller systems for telecommunication devices.

The Group plans to set up additional sales points, representative offices or branch offices in the PRC and overseas so as to expand the market coverage of the Group's products. The Group will also continue to participate in exhibitions and trade shows in the PRC, and plans to conduct seminars with a view to further strengthening its reputation in the industry and enhancing sales performance.

The Group plans to improve on its management IT system and internal control system by adopting advanced system software and IT solutions. The Group also plans to provide more trainings to employees. The Directors believe that trainings would improve the standards and performance of its employees and, in turn, the Group's management, R&D capability, production efficiency and product quality.

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$47million (based on the offer price HK$0.45- HK$0.60 per share). The Group at present intends to apply the net proceeds as follows: