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					Barrow Street Advisors of New York

 The Key to Accessing Investor Capital:

        An Organized Approach

                         Michael J. Nocera

                         Harbin, China
                         November 1, 2004

         Barrow Street Advisors of New York
                           Michael J. Nocera

   A.    Securities Regulator at the U.S. Securities & Exchange
          Commission: 1973 to 1982.

   B.    Investment Banker at E.F. Hutton & Company and Paine
          Webber: 1982 to 1990.

   C.    VP/Dept. Head-Structured Finance at New York Life Insurance
          Company: 1990 to 1996.

   D.    President of New York Life International 1996 to 2000.

   E.    Independent Consultant: 2000 to Present.
Barrow Street Advisors of New York
   Representative Clients
      Dagong Global Credit Rating Company, Beijing

       Inter-Asia Venture Management, Hong Kong

       China Shanghai Seeinglong Bio-Pharmaceutical Corporation,

       The Hong Kong Association of New York, Executive Director

       Standard & Poors Corporation, New York

    Barrow Street Advisors of New York

   Notwithstanding the Growing Interest in China post
    WTO entry, substantially all the annual foreign direct
    investment (“FDI”) of US$53+ billion is targeted for
    medium to long term strategic expenditures.

   Multi-national corporations as well as smaller SMEs
    invest for the medium to long-term for infrastructure,
    plant and equipment intended to generate products for
    export and/or Chinese domestic consumption.

Barrow Street Advisors of New York

   Only a small percentage of such FDI is financial investment
    made solely for the purpose of providing the equity or debt
    financing requirements of domestic Chinese Businesses.

   2003: Approximately US$1.0 billion in “financial investment” vs.
    US$52 billion in longer term “strategic investment.”

Barrow Street Advisors of New York
                      China Statistics
        Annual Accumulative Investments
                   (US $ MM)

                                      418        418
                       518            518        518

        2318           2318       2318           2318

   Before 2001      2001        2002           2003
                 Before 2001   2001     2002    2003
        Barrow Street Advisors of New York

                    Number of firms        Capital Under Management
US ($MM)             2002           2003                   2002 2003
Dosmetic VCs          269            273                     417    487
Foreign VC             38             41                  10,179 10,273
Joint-Venture VCs      18             18                      54     63
Total                 325            332                  10,651 10,824

Barrow Street Advisors of New York
   Getting Ready to Approach Western Investors
       Understand Which Investor is Approaching You

       Organize for Success

       Understand Your Goals

       Be Ready with Answers to Many Questions

       Have the Data Available

       Understand Investors Needs and Objectives

   Barrow Street Advisors of New York

Strategic Investors: Typically, corporations with a long term strategic
   plan to locate and sell its products in a country. Characterized by
   building manufacturing plants, corporate infrastructure, distribution
   systems and other support systems necessary to build a profitable
   self-sustaining operation.

Financial Investors: Typically, pension funds which avoid risks and
   which invest via private equity or venture funds which control
   large amounts of money which are required to be invested for the
   benefit of retired persons. These investors expect to receive 100%
   of their investment plus a risk-adjusted return on their investment
   within 3 to 5 years from investment. They do not want to
   participate in management unless necessary to preserve their

Barrow Street Advisors of New York
   Strategic Investors:
      Maybe Want to Become a Joint Venture/Control Partner

       Possibly Want to Buy 100% of Your Company

       Probably Do Not Care About Your Financial Situation

       Will Want to Understand Your Business But They Have a
        Plan for Conducting Their Business

       Look at the Quality of Your Assets and Other Resources

       Understand Your Expertise (if JV)

Barrow Street Advisors of New York
   Financial Investors:
       Require Specific Information About All Aspects of the Business
       Most Will Require Audited Financial Statements: IAS or GAAP
       Accounting Firm Must be Internationally Recognized
       Will Conduct In-Depth Due Diligence
       Conduct Background Checks on Management
       Require Contractual Provisions to Preserve Rights Including:
            Corporate Governance and Independent Directors on Board
            Transparent Decision Making
            Protections Against Misuse of Company Money and Assets
            Dispute Resolution in a Neutral Venue
            Other provisions
       Most Will Want Control or Easy Exit if Company Underperforms

Barrow Street Advisors of New York
   It is Important to Understand that these Requirements are the
    Same in the U.S. and Europe

   The Financial Investors Have, Over Time, Created a Process
    that Works. This Process is called “Due Diligence”

   Understanding the Process Saves You Time and Money

   If You are Well Organized, You Can Make the Process Work for

Barrow Street Advisors of New York
   Due Diligence: The Due Diligence process is an Inquiry
    into Each Important Aspect of the Company’s Operations

       It Has Evolved from the U.S. Legal System and Smart
        Business Practice

       Once a Financial Investor Buys an Interest in a Company , It
        is Impossible to Return to the Seller and Get a refund; So, It
        is Important to Check Carefully in Order to gain a Complete
        Understanding of the Company’s Affairs

       If You Organize in Advance and Understand Why It is a
        Requirement, then You Can Save Time and Money and
        Attract Good Investors

    Barrow Street Advisors of New York
   Due Diligence Inquiries Include Reviews and Analysis
       A Clear Business Plan and Vision of the Company’s Future
       Complete Biographical History of Management
       Organization Charts
       Capital Structure
       Financing Plans and Review process
       Financial Statements. There may be Exceptions, but Most
        Investors will Expect Audited Financial Statements. At a
        Minimum, Immediately after Investment is made
       Balance Sheets and Income Statements Comparing One
        Year to the Next

    Barrow Street Advisors of New York
   Due Diligence Inquiries (Cont.)
       Shareholder Agreements
       A listing of All Obligations to Employees, Creditors, and Others
       All Contracts and Other Business Between the Company and its
        Management, Directors and Shareholders
       Detailed Financial Projections for Next Five Years
       Description and Location of All Assets
       List of Major Customers
       List of Major Suppliers and Vendors
       All Permits and Licenses Permitting the Company to Conduct
       A Listing and Documentation for All Intellectual Property

    Barrow Street Advisors of New York

   Navigating the Process
       Recognize that this Process Can Work for You
       Get Organized
       Think Through What You Want and What You Need
       Be Forthright: Investors Understand that This process may be
        Unfamiliar to You But Will Expect Honesty
       Avoid Surprises: You can Negotiate Deal Terms But Not
        Information Requirements of the Investor Due Diligence
       Consider Engaging a Consultant to Assist in Preparation for the
        Process and negotiations

Barrow Street Advisors of New York

   Pursue Search for Capital in an Orderly Way
       Gather All Important Company Information

       Write a Business Plan that Explains the Company’s Business

       Organize Company’s Financial Information
            Prepare Reliable Financial Statements
            Goal should be to prepare Financials under IAS or GAAP
            Create a Dynamic Financial Model to Test Variable Assumptions
            Supporting Documents should be Easily Available for Review by

Barrow Street Advisors of New York
     Add Independent Members to Board of Directors
     Review Corporate Governance
     Create a Summary Marketing Presentation
     Prepare a “Term Sheet” which Explains Your Ideas on
      Financial Participation by Investors
          Equity or Debt
          Percent Equity Participation or Debt Structure
          Amount of Investment Desired
          Investor Rights and Safe-Guards
          Length of Time for Investment
          Exit Strategy for Investors

Barrow Street Advisors of New York

   Introduce Your Company to Investors BEFORE Your
    Company Needs Capital
   Recognize that Each Party will Have Differing Views
    of “Enterprise Value”
   U.S. Investors will Expect a Return on Their
    Investment which is Higher than U.S. and European
    Benchmarks (typically IRR of 15% to 20% or higher
    depending on perception of risk)
   Be Prepared to Negotiate

Barrow Street Advisors of New York
   How Consultants Can Improve Your Efforts
       Consultants Are Like Professors

       Consultants Provide the Benefits of Their Experience

       Consultants Offer You the Power of Their Knowledge

       Applying Their Knowledge and Experience to Your Efforts
        Enhances the Opportunity for Success

       Expenses Related to Consultants’ Fees Go Away after The
        Engagement is Completed

Barrow Street Advisors of New York
     Consultants are not Free

     Each Company CEO Must Answer the Question: What is the
      Lost Opportunity in Time and the Potential for Funding by
      NOT Working With a Consultant?

     Only You Can Decide if the Cost of the Consultant is
      Valuable to Your Efforts

Barrow Street Advisors of New York

Barrow Street Advisors Wishes You a
            Bright Future


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