• Mr. Lim Wa - 63% interest

Company Subsidiaries:

• China Force Oils & Grains Industrial Limited (100%): Investment holding
• China Force Oils & Grains Industrial (Hong Kong) Co Ltd (100%): Trading of edible oils
• China Force Oils & Grains Industrial (Tianjin) Co Ltd (100%): Production and sale of edible oils and related services
• China Force Oils & Grains Industrial (Zhenjiang) Co Ltd (100%): Production and sale of edible oils and related services
• China Force High-Tech Chemical Industrial (Zhenjiang) Co Ltd (100%): Production and sale of oil and fatty acids and related services
• China Force Oils & Grains Industrial (Dongguan) Co Ltd (100%): Production and sale of edible oils and related services
• China Force Oils & Grains Industrial (Xiamen) Co Ltd (100%): Production and sale of edible oils and related products
• Able Rich Investment Holdings Limited (100%)¡GInvestment holding
• Super Unit Investment Holdings Limited (100%)¡GInvestment holding
• China Force Protein Biotechnology (Zhenjiang) Co., Ltd. (100%): Production and sale of protein related products
• China Force Modern Storage & Transportation (Zhenjiang) Co., Ltd (100%): Logistics Service
• Beijing China Force Huarui Management Consultant Co., Ltd. (100%): management and consultation services

The Group is engaged principally in fractionation, refining, sale and trading of edible oil products in the PRC. The Group is one of the leading suppliers of edible soyabean oil and palm oil in the PRC market. The custoemrs include food producers and edible oil distributors in the PRC.

The Group also refines and processes other types of edible oil, such as rapeseed oil and sunflowerseed oil to satisfy the custoemrs'; demand. As part of the business activities, the Group provides the customer in the PRC with a wide range of logistics services in respect of edible oil products, ranging from import custom clearance, storage to transportation services. As at the Latest Practicable date, the Group operates two production plants in Tianjin and Zhenjiang, the PRC with a total annual production capacity of approximately 1.0 million tonnes of edible oil. The newly constructed production plant in Dongguan, the PRC is expected to commence commercial operation in October 2004. Accordingly, the total annual production capacity will increase to approximately 1.4 million tonnes of edible oil by the end of 2004.

According to the U.S department of Agriculture, the global consumption of eight major types of edible oil has reported a steady growth. Soyabean oil and palm oil are two most popular edible oil products in the world, contributing approximately 33% and 29%, respectively, of the global consumption of these eight major edible oil products in 2003.

The rise in personal income levels has also changes the consumption pattern of edible oil as people become more health conscious. Accordingly, there has been a shift from consumption of low quality edible oil to refined vegetable oil for nutrition reason.

• The Directors believe that the Group has the following competitive advantages:
• Each of the production plants is strategically located in coastal areas adjacent to port facilities and is equipped with fractional and refinery facilities, storage tanks, transmissions pipes, as well as loading and unloading facilities.
• The existing production facilities enable the Group to achieve economies of scale and maximize the production efficiency.
• The Group has established a logistics network comprising the production plants and distribution centers. The distribution centers support the production plants and expand the geographical coverage to provide the customers with timely and cost-effective delivery services of edible oil products in PRC.
• The Group adopts an efficient supply chain management system. These integrated functions enhance the competitiveness and increase the value of the services.
• The Group has established customer base, comprising edible oil distributors and food producers. The Directors believe that the Group can leverage these established business relationships to develop new markets and new products.
• The Group has implemented a comprehensive risk management system to monitor and manage the exposure to price fluctuation in oil commodity.
• The management team is experience in edible oil industry in the PRC. Most of the executive Directors and the senior management members have over 10 years of experience in the edible oil and related industries in the PRC.

• The gross profits per tonne and the results are acted by fluctuations in the prices of raw materials and end products
• The Group has been affected by the recent exceptional market circumstances in respect of the PRC edible oil sector
• The Group relies on imported raw materials
• The business is seasonal
• The Group depends on certain major suppliers
• The Group depends on certain major customers
• The Group only sells products in the PRC market
• The Group may face potential product liability claims
• The Group are required to comply with increasingly stringent environmental protection regulations
• The Group depends on certain key executives in the conduct of the business
• The Group may be unable to effectively manage the growth
• The Group may be unable to implement the development plan
• The Group has high gearing ratio
• The Group had net current liabilities and cash outflows from operating activities during the Track Record Periods
• Past dividend should not be used as a reference for the Company';s future dividend policy
• The tax benefits granted by tax authorities in the PRC may not be continue in the future

To capture the continuing growth in the edible oil markets in the PRC, the group will implement business strategies to (i) increase the market share in the edible oil industry in the PRC;(ii) increase the cost efficiency in the production process ; and (iii) vertically integrate the production activities.

In order to increase the market share in the edible oil industry in the PRC, the Group plans to:

Established new edible oil production facilities to capture additional demands in the PRC.

Penetrates into retail and household markets by selling the edible oil products in the branded small packs

In order to increase the cost efficiency and vertically integrated the production activities, the Group plans to

Build a private berth with storage and ancillary facilities for the Zhenjiang production plan to reduce the port handling charges; and

Develop new production facilities for downstream fatty-acids products and upstream soy protein products, expand the products mix as well as enhance the value of the products.

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The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$263 million based on the offer price HK$1.19 per share (being the mid-point of indicative Offer Price range). The Group at present intends to apply the net proceeds as follows:

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