Future Plans / Business Strategies

To enhance our future growth, we intend to embark on the following business strategies and future plans:

(i) Expand into new geographical markets
We intend to expand into new geographical markets in the Asia Pacific region through our direct selling channel. We are optimistic about the outlook for our direct selling market as public perception in the Asia Pacific region improves through increased regulation and governance of direct selling practices. Our initiatives include ISS which we adopted for our expansion into Thailand in April 2004. Through the ISS, we are able to leverage on our distributors' network in our targeted geographical markets to establish our direct selling network in those markets.

Our distributors in these targeted markets may also participate in the training programmes we currently offer to our distributors in Singapore. We also intend to develop training programmes for our management staff to equip them with knowledge of the corporate practices and latest information on business trends in our target markets. We intend to utilise approximately $2.0 million of our proceeds from the issue of New Shares for expansion into new geographical markets.

(ii) Develop our retail and export channels
We derived approximately 72.3%, 83.6% and 90.6% of our revenue from sales of our products through our direct selling channel for the last 3 financial years from FY2001 to FY2003 respectively. The balance was contributed by our retail and export channels. We plan to further develop our retail and export channels to increase our revenue generated from sales of our products through these channels so as to complement our direct selling channel. For our retail channel, we intend to further promote our retail brand, "Avance'', in Singapore through increased advertising and promotional campaigns, as well as appoint retail distributors in Hong Kong. We intend to utilise approximately $1.5 million of our proceeds from the issue of New Shares for advertising and promotional campaigns.

We are in the proccess of acquiring the Vigor Brand of Nutritional Supplement that have been sold and marketed in the PRC for the last five years, including the rights to 20 product licences, inventories and trademarks. In future, we intend to introduce our other brands of cosmetics, skin care, nutritional supplements, personal care and healthcare equipment to the PRC market. To develop our export channel, we intend to continue participating in international trade fairs, for example, international exhibitions such as "Cosmoprof Asia'' which was held in Hong Kong in 2002.

(iii) Increase brand management efforts
We believe that strong branding is essential to effective marketing. In line with our marketing philosophy, we constantly manage our existing brands and develop new contemporary brands in order to stay competitive and relevant. We intend to continue to build on the goodwill of our brands through increased advertising and promotional activities. This is to raise general public awareness of our brands and to counter increased market competition.

(iv) Expand our range of products
We intend to expand our range of products across all our 5 product categories, namely, cosmetics, skin care, nutritional supplements, personal care products and healthcare equipment, to meet specific market needs as well as to capitalise on the current trend towards preventive health practices. For example, in February 2004, in conjunction with one of our principals, Hyflux Ltd, we launched the new healthcare equipment product, PUREfLO, an ultrafiltration sink-fitted health filter which uses ultra-filtration technology developed by Hyflux Ltd to filter water up to 0.015 micrometre thereby removing bacteria and viruses. We also intend to collaborate with our contract manufacturers to leverage on their expertise to expand our range of products.

(v) Invest in information technology
We intend to invest in information technology systems such as CRM software. Through CRM software, we aim to increase customer retention by tracking the usage patterns of our customers, customising our marketing efforts and developing focused marketing initiatives to target specific market segments. We also intend to customise our existing software which supports our ENP and ISS and if necessary, develop new modules to meet the operational requirements of our new geographical markets. We intend to use approximately $0.2 million of the proceeds from the issue of New Shares to invest in information technology systems.

(vi) Develop our labelling and packaging capabilities
We currently have a packaging facility to package bulk nutritional supplements for sale under our own brands and third party private labels. We have obtained a Manufacturer's Licence for CPM issued by HSA (a GMP equivalent certification) for our packaging facility. We intend to further develop our labelling and packaging capabilities to meet changing consumer preferences. From time to time, we will introduce new presentation and packaging ideas for our products. For example, in 2003, we introduced an innovative form of packaging and presentation by utilising a customised packing machine to pack different types of nutritional supplements in a sachet for a single dose of consumption.

(vii) Develop our training arm
We intend to develop the training arm of our Group and to conduct beauty, health and lifestyle enhancement courses. Our Company has been granted Approved Training Centre ("ATC'') status by the Singapore Workforce Development Agency. As an ATC, we are certified as having the qualified facilities and assessors to conduct training courses. In order to be eligible for grants by the Singapore Workforce Development Agency, the course must be an approved training course endorsed by SPRING Singapore. We intend to obtain such endorsement for our courses and to offer courses through IBWL to our distributors and the general public.