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OVERVIEW
During the reporting year, the Group was principally engaged in two major business segments, which were
information technology and property development and investment respectively.
Information Technology
The Group’s Information Technology segment is devided into four operating devisions, including (i) provision
of system integration services; (ii) research and development of customized software products; (iii) sale of
software and hardware products; and (iv) provision of maintenance and other services. During the reporting
year, the main customers of the Group are Rural Credit Co-operatives (“RCCs”) in the PRC.

The provision of electronic network services for RCCs was still the major source of income of the Group,
representing approximately 81.4% of the Group’s total turnover in 2007. Most of the RCCs electronic
network construction projects have been upgraded from a municipal or local level to a provincial level and
the projects which are in local level have been under a process of revision currently. At the beginning of
the year, RCCs adhered to the adjustments of the provincial policies and therefore newly or already signed
software projects have been suspended or shelved and pending further instructions. As a result, the
Group has responded to the requests from RCCs and shelved the operation of software projects such as
system integration. Most of the projects under the new software contracts entered into by the RCCs and
the Group have delayed. Such adjustments of the policies have directly led to a massive impact on the
Group’s operating income in the reporting year.
Property Development and Investment
Facing the difficult business environment and challenges under segment of Information Technology, the
Group realised the risks of relying on a single market and has been proactively exploring to develop a new
business to mitigate this risk. During the year, the Group had invested considerable resources in developing
a piece of commercial land in Laoshan District, Qingdao City which was obtained through the acquisition
of 100% interest in 青島中天軟件園有限公司 (Qingdao Zhongtian Software Park Company Limited)
(“Zhongtian Software”) at the end of 2006. The Group intended to utilize part of the land for the development
of its R&D centre and the remaining for long term property investment or for sale. Through the development
of the abovementioned land, the Group aims to start a new line of business to reduce the risks derived
from its heavy reliance on a single market and diversify its business. During the reporting year, there was
still no contribution to the Group’s turnover and result from this project as it was still at the construction
stage.