Item 3. Key Information.

The selected consolidated income statement data for the fiscal years ended March 31, 2002, 2003 and 2004 and the selected consolidated balance sheet data as of March 31, 2003 and March 31, 2004 set forth below have been prepared in accordance with U.S. GAAP and are derived from our consolidated financial statements and notes thereto included elsewhere in this annual report. The selected consolidated income statement data for the fiscal years ended March 31, 2000 and 2001 and the selected consolidated balance sheet data as of March 31, 2000, March 31, 2001 and March 31, 2002 set forth below have been prepared in accordance with U.S. GAAP and are derived from our consolidated financial statements and notes thereto not included elsewhere in this annual report. The selected consolidated financial data set forth below should be read in conjunction with “Item 5—Operating and Financial Review and Prospects,” the consolidated financial statements and the notes thereto and other financial information which appear elsewhere in this annual report.

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The Company revised its interpretation of EITF 96-9 with respect to the amounts of $4,991,407, write-off of inventory and tooling, and $2,523,292, loss on cessation of a production line. Originally, our accounting classification of these costs was to treat them as an exit of business. Consequently, we revised the fiscal 2001 financial data and included $6,205,706 of inventory write-off and dedicated tooling write-off in the cost of goods sold. The revised selling, general and administrative expenses in fiscal 2001 included $1,308,994 attributable to the write-off of inventory and tooling. This amount included bad debts of $325,570, a provision for loss on a promissory note of $224,357 and legal fees of $759,067. The revision had no impact on the Company’s net income for fiscal 2001

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The summarized results of discontinued operations are as follows:

The aggregate assets and liabilities of the discontinued TFEL business on the date of disposal were $480,407 and $3,145,432, respectively.

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Not applicable.

Not applicable.

Foreign sales, operations and assets. Substantially all of our products are currently manufactured in China and approximately 90% of the net book value of our total fixed assets is located there. We sell products to companies based principally in North America, Europe and Australia. Consequently, our international operations and sales may be subject to the following risks, among others:

In particular, changes in tariff structures or other trade policies could adversely affect our customers or suppliers or decrease our competitors’ costs of production.

Renminbi revaluation . As the U.S. trade deficit with China has increased in recent years, calls are being made in the United States for the Chinese government to revalue its currency, the Renminbi. If the Renminbi (which has thus far been pegged to the dollar at the approximate rate of $8.3 Renminbi to US $1.0) was allowed to increase in value relative to U.S. dollar, then Chinese goods would become more expensive in the U.S. market in relation to comparable U.S. goods. Under our current mode of operations, we primarily purchase our raw materials, in particular plastic resin and display panels from countries in Asia and sell our goods to US markets through our subsidiaries in Hong Kong and overseas. Consequently, the unlinking of the Renminbi from the U.S. dollar should

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not have a significant impact on our financial condition and results of operation. However, the Company can give no assurance that it may not be required in the future to modify its mode of operations and cause our Chinese subsidiaries to buy materials and major components directly from U.S. suppliers and then sell goods to U.S. customers directly from these Chinese subsidiaries. Consequently, we would be subject to foreign exchange risk with respect to the Renminbi, which could negatively impact our financial position and results of operations.

Government regulation. Our operations and assets in China are subject to significant political, economic, legal and other uncertainties. Any of the following could result from policy changes by the Chinese government and could have a material adverse effect on our business, results of operations and financial condition:

Under its current leadership, the Chinese government has been pursuing economic reform policies, including the encouragement of private economic activity and greater economic decentralization. In 2001, China was admitted to the World Trade Organization, or WTO, ending 15 years of negotiations and entitling China to the full trading rights of a WTO member country. There can be no assurance, however, that the Chinese government will continue to pursue economic reform policies, that such policies will be successful if pursued or that such policies will not be significantly altered from time to time without notice.

The municipal authorities in each township in China have discretion to impose or waive a large number of fees and taxes including value-added tax, stamp duty, licenses and permits. In the Company’s manufacturing location, it is subject to the laws and regulations of the township of Dongguan, the Province of Guangdong and the Peoples Republic of China (“PRC”). In the early years of our operation in Dongguan, the majority of the local fees and taxes were waived or abated as a result of negotiation with local authorities. In recent years, however, we have received less favorable consideration of our requests for waivers and abatements and believe that we may incur a significant increase in fees and taxes over the coming years.

Outbreak of epidemic diseases. Any re-occurrence of Severe Acute Respiratory Syndrome (“SARS”) and Avian Influenza in China could also significantly impact our manufacturing plant located in Dongguan, China. Inability to travel by our Hong Kong based supervisory staff and other labor problems could seriously disrupt our manufacturing operation and cause significant delays in production.

Cost and availability of labor. The work permits issued to Chinese workers are limited by each province. In Guangdong Province, the supply of labor is currently inadequate to meet demand and we expect both a potential shortage of labor and increasing labor costs to impact our manufacturing operations over time.

Increase in effective tax rates. The location of our business operations results in an overall effective tax rate that may be less than that of U.S. corporations. We are incorporated in the British Virgin Islands and have subsidiaries incorporated in the British Virgin Islands, Hong Kong, Macau, China and the United States. Our executive and administrative offices are located in Hong Kong and Macau and our manufacturing facilities are located in China. We sell our products to customers located primarily in the United States and Europe. Changes in tax laws could have a material adverse effect on our results of operations. In addition, one of our subsidiaries in China, Dongguan Wing Shing Electrical Products Factory Company Limited, was exempted from income tax for

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two years (1999 and 2000) followed by a 50% exemption for the next three years (2001 to 2003). Commencing January 1, 2004, this Chinese subsidiary is subject to the full tax rate of 27%. This subsidiary houses our manufacturing facilities that incur a significant portion of manufacturing overhead. The finished products it produces are then sold to our other subsidiaries. We do not believe the full tax rate will have significant impact on our financial condition and results of operations. In fiscal 2004, we established a new subsidiary, Dongguan Lite Array Company Limited, which is also exempt from income tax for the two year period commencing with its first profitable year and followed by a 50% exemption for the next three years. We also do not believe that our current method of operation subjects us to material U.S. taxes. There can be no assurance, however, that U.S. taxes will not be imposed on an additional portion of our income. The imposition of material U.S. income taxes could have a material adverse effect on our results of operations. Our subsidiary in Macau is not subject to taxation in Macau in accordance with Macau tax regulation, but there is no assurance that the Hong Kong Inland Revenue Department will not seek to impose taxation on income generated in Macau.

Dependence on major customers. Sales to five major customers accounted for 73.5%, 76.6% and 79.9% of our net sales during fiscal 2002, 2003 and 2004, respectively (See Note 26(d) of Notes to Consolidated Financial Statements). The significant increase in the percentage of net sales to our major customers in fiscal 2004 was due to increased sales of floor care products to The Eureka Company (“Eureka”). Sales to Eureka accounted for approximately 26.1% of our net sales in fiscal 2004, as compared to 5.7% in fiscal 2003. Royal Appliance Manufacturing Company (“Royal”) continued to be a major customer in fiscal 2004. Sales to Royal accounted for 48.4% of our net sales in fiscal 2004, as compared to 44.3% in fiscal 2003. Although sales to Royal decreased by 3.2% in dollars in fiscal 2004, as compared to fiscal 2003, the decrease was primarily attributable to the decreased sales of an older model, which was partially offset by the introduction of a newer one. Neither Royal, nor Eureka is contractually obligated to purchase floor care products from us, as we only sell to them on the basis of purchase orders. On December 17, 2002, Techtronic Industries Limited (“TTI”) and Royal jointly announced that they had entered into a definitive agreement for TTI to acquire Royal. Effective April 23, 2003, TTI announced a merger with Royal. Following the completion of the merger, Royal is operating as a wholly-owned subsidiary of TTI. TTI, like the Company, is a full-line electrical products manufacturer based in Hong Kong and China and eventually is likely to produce all of Royal’s products. We have continued offering Royal favorable pricing and payment terms in an attempt to maintain business with them. We cannot predict when TTI will begin producing all of Royal’s products and cease buying from us, and we have received no formal or informal notice to that effect. We believe such a result is inevitable and likely to occur in the reasonably near future. There will be a significant adverse impact on our financial position when we lose this customer unless we are able to replace it with another major floor care company. Although the relative percentage of net sales to each of our major customers changes each year, we expect that, in the foreseeable future, we will be dependent on between four and seven major customers during each fiscal year. While we may enter into contracts with general terms for the purchase of products with certain of our major customers, sales are generally made pursuant to purchase orders received by us from time to time. Therefore, there can be no assurance of the level of sales to any of these major customers in the future. The loss of any one of these major customers, particularly Royal or Eureka, could have a material adverse effect on our business, results of operations and financial condition. See “Item 4.B—Business Overview—Major Customers” for information related to Moulinex S.A., a former major customer of ours.

Increases in cost of raw materials. We are dependent upon outside suppliers for all of our raw material needs, including plastic resins, and we are subject to price increases in these raw materials. The plastic resins used by us are derived from natural gas liquids. Plastic resin prices may fluctuate as a result of the fluctuation in natural gas and crude oil prices, and the relative capacity and supply and demand for the resin and petrochemical intermediates from which plastic resins are produced. We have no long-term supply contracts for the purchase of plastic resin, although we generally maintain a 90-day supply. In the past, we have had limited ability to increase product prices in response to plastic resin cost increases. We closely monitor the fluctuation of crude oil prices that normally affects the price of plastic resin and our inventory level to ensure we can meet the production necessary to meet our orders on hand. If our reserves are not sufficient for our production requirements, we have to buy plastic resin at potentially higher prices in order to deliver to our customers in accordance with agreed upon schedules. There can be no assurance that we will be able to purchase the necessary quantities of plastic resin and other raw materials at reasonable prices. Any future increase in the cost of plastic resins or other raw materials or our inability to pass the increased cost of these or other raw materials onto our customers or to purchase sufficient quantities of plastic resins could have a material adverse effect on our business, results of operations and financial condition.

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New product category. We announced recently a significant strategic initiative to enter the consumer electronic products business concentrating on display-oriented products. While we expect to invest in marketing and product development over the next few years, there can be no assurance that our initiative will be successful, particularly since we will be relying on our own designs and original design manufacturing (“ODM”) capability to attract new customers. Our subsidiary, Global Display Limited, is currently developing a wide range of consumer products incorporating high-definition flat panel displays (FPDs) that utilize liquid crystal displays (LCDs), plasma display panels (PDPs), liquid crystal on silicon (LCOS), optical, and digital display technologies. Lite Array, Inc., another subsidiary of ours, is developing a range of display modules utilizing proprietary small molecule organic light emitting diode (OLED) technology. These modules are expected to be initially marketed to consumer electronics companies for use in cellular phones and MP3 players. There can be no assurance that these new product categories can be successfully launched commercially.

Limited source of supply. In our newly established flat panel display business, (currently plasma and liquid crystal display (“LCD”) televisions), we are dependent upon outside suppliers for all of our raw materials and components including display panels, printed circuited board assemblies, electronic parts, integrated circuits and some critical software. We entered into a strategic partnership agreement with Samsung Electronic H.K. Co. Ltd. (“Samsung”) to provide Global Display Limited (“Global Display”) with a reliable supply of flat panel display panels at competitive prices. In addition, we selected Oplus Technologies Ltd. (“Oplus”) to be our major supplier of video and display processors for our larger sized high-definition (HD) flat panel televisions (FDP TVs). Since there are only limited suppliers of display panels for plasma and LCD modules, we are subject to both availability and price fluctuation. Additionally, our order quantities in the early stages of production will not be significant as compared to other established plasma and LCD users and therefore our bargaining power with our suppliers is expected to be limited. Moreover, many other electronic parts for display-oriented products are also subject to frequent market price fluctuation, and there can be no assurance that we will be able to purchase materials in the necessary quantities and at reasonable prices.

New products and rapid technological change. The technology incorporated in many of our products, particularly consumer electronics is characterized by rapid change. In addition, the emergence of new technologies can quickly render existing products obsolete or unmarketable. See “Item 4.B—Business Overview” for information related to our thin film electroluminescent, or TFEL, flat-panel display business. Our ability to anticipate changes in technology and industry standards and successfully develop and introduce new and enhanced products that gain market acceptance will be a critical factor in our ability to grow and remain competitive. There can be no assurance that we will timely or successfully complete the development of new or enhanced products or successfully manage the transitions from one product release to the next, or that our future products will achieve market acceptance. The failure to realize such goals could have a material adverse effect on our business, results of operations and financial condition. We are also the licensee of proprietary small molecule, passive matrix, organic light emitting diode, or OLED, display technology and we reflect the value of this license as an intangible asset. Should our plans to develop and produce OLED displays not come to fruition, this asset would become impaired.

Strategic acquisitions. Historically, our core business has been designing, manufacturing and selling small electrical household appliances to brand marketers in developed countries. More recently, however, we have sought to diversify and transform a portion of our business to higher-value, technology-oriented products by pursuing selected acquisitions that fit this long-term business strategy. Our ability to conduct such acquisitions is limited by our ability to identify potential acquisition candidates. In the event we are unable to identify and take advantage of these opportunities, we may experience difficulties in growing our business, given the fact that we made the strategic business decision to de-emphasize our small household appliance business. If we make strategic acquisitions, we could have difficulty assimilating or retaining the acquired companies’ personnel or integrating their operations, equipment or services into our organization. In addition, we may be unable to recruit qualified staff who have the necessary experience to manage the acquired business since our existing staff primarily has only had experience in small household appliances. These difficulties could disrupt our ongoing business, distract our management and employees and increase our expenses. Moreover, our profitability may suffer because of acquisition-related costs or amortization of acquired goodwill and other intangible assets. See “Item 4.B—Business Overview” for information related to the write-off of assets associated with our TFEL flat-panel display business.

Proprietary technology; patent protection. We hold a number of patents registered in various jurisdictions, including the United States, the United Kingdom, Germany and France, and hold the exclusive rights

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with respect to certain technology included in our products. We rely primarily upon a combination of trademark, copyright, know-how, trade secrets and contractual restrictions to protect our intellectual property rights. We believe that such measures afford only limited protection and, accordingly, there can be no assurance that the steps taken by us to protect these proprietary rights will be adequate to prevent misappropriation of the technology or the independent development of similar technology by others. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy aspects of our products or obtain and use information that we regard as proprietary.

Indemnification liability for patent infringement. In contracts relating to ODM products, we typically agree to indemnify customers for all liabilities, costs, expenses or damages payable by our customers based upon a claim of patent infringement by an ODM product manufactured by us, whether such amount is awarded by a court or agreed to in settlement negotiations. On behalf of a former customer, we are currently defending a patent infringement claim relating to a deep fryer model. See “Item 8.A—Financial Information—Legal Proceedings.” No assurance can be given that this current infringement claim will be resolved in our favor or that other parties will not assert infringement claims against us in the future with respect to that, or other products. An adverse decision in any such legal proceeding could have a material adverse effect on our business, results of operations and financial condition. After considering all facts known to us and based on the advice of legal counsel, however, we do not believe that any currently pending actions will have such a material adverse effect and the likelihood of a negative effect on our operating results is remote. Still, the cost of any such indemnity or of responding to any such assertion could be significant, regardless of whether the assertion is valid.

Product liability. We may be subject to substantial product liability costs if claims arise out of problems associated with our products. We provide a warranty for limited manufacturing defects to certain of our customers. We do not provide warranties, however, that extend to the ultimate consumers of the product. Nevertheless, there can be no assurance that we will not be subject to a suit by a consumer who uses one of our products should the product cause injury to any person or not perform properly. We maintain product liability insurance in an amount that we believe is sufficient. There can be no assurance, however, that the coverage limits of our insurance will be adequate or that all such claims will be covered by insurance. In addition, these policies must be renewed annually. To date, we have not been subject to any material product liability claim. While we have been able to obtain liability insurance in the past, such insurance continues to increase in cost and may not be available in the future on terms acceptable to us, if at all. The failure to maintain insurance coverage, or a successful claim against us not covered by or in excess of the insurance coverage, could have a material adverse effect on our business, results of operations and financial condition. In addition, product liability claims, regardless of their merit or eventual outcome, may have a material adverse effect on our business reputation.

Product safety; delays in regulatory approval. Our products include several electric components, which may cause fires if not properly installed. Although our products have experienced no significant safety problems in the past and we believe that our products do not present safety risks, there can be no assurance that safety problems will not occur in the future. Prior to the commercial introduction of our products into the market, we generally obtain approval of our products by one or more of the organizations engaged in testing product safety. Such approvals require significant time and resources of our technical staff and could delay the introduction of our products. Our inability to obtain regulatory approval within the projected timeframe for commercial introduction of our products or other product introduction delays could have a material adverse effect on our business, results of operations and financial condition.

Risks of manufacturing in China; property damage. All of our products are manufactured at our factory complex located in the Guangdong Province of China in the County of Dongguan. In addition to the political and economic risks of operations in China, firefighting and disaster relief assistance in China is not as sophisticated as in Western countries. We currently maintain property damage insurance aggregating approximately $56.7 million covering our inventory, furniture, equipment, machinery and buildings and business interruption insurance in the aggregate of approximately $27.9 million for losses relating to our factory. Material damage to, or the loss of, our facilities due to fire, severe weather, flood or other act of God or cause, even if insured against, would have a material adverse effect on our business, results of operations and financial condition.

Impact of environmental regulations. We are subject to Chinese laws that regulate environmental quality, the utilization of natural resources and the reduction of pollution. Environmental regulation in China is currently

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evolving and could become more stringent or more stringently enforced in the future, which could require us to make substantial additional capital expenditures in the future to maintain compliance. As a manufacturer, we are subject to annual inspections by the local branch of the State Environment Protection Administration (SEPA). Although compliance with environmental regulations has not had a material adverse effect on us in the past, the failure in the future to comply with these laws or to pass such an inspection could have a material adverse effect on our business, results of operations and financial condition.

Dependence on distributions from operating subsidiaries and currency fluctuation. We have no direct business operations, other than our ownership of our subsidiaries. Should we decide to pay dividends, as a holding company, our ability to pay dividends and meet other obligations would depend upon the receipt of dividends or other payments from our operating subsidiaries and our other holdings and investments. In addition, our operating subsidiaries from time to time may be subject to restrictions on their ability to make distributions to us, such as restrictive covenants in loan agreements, restrictions on the conversion of local currency into U.S. dollars or other hard currency and other regulatory restrictions. As we do not engage in hedging or other similar transactions, extraordinary currency fluctuations could have a material adverse effect on our business, results of operations and financial condition.

Dependence on key personnel. We depend to a significant extent on the abilities and continued participation of our management personnel, and principally on John C.K. Sham, our President and Chief Executive Officer, who directs our day-to-day manufacturing and marketing operations from our executive offices in Hong Kong. We have an employment agreement with John Sham and maintain a key man life insurance policy of $1 million on him. There can be no assurance that proceeds of such insurance would be sufficient to compensate us for his loss. The loss of John Sham or others among our key personnel would have a material adverse effect on our business, results of operations and financial condition if a suitable replacement or replacements could not be promptly found.

Concentration of ownership. Wing Shing Holdings Company Limited, a British Virgin Islands company, beneficially owns approximately 62.0% of our outstanding common shares. The share ownership of Wing Shing Holdings is held 50% by Kwong Ho Sham, 40% by John Sham and 10% by Wai Chun Hui, each of whom except Wai Chun Hui are directors. Voting control of Wing Shing Holdings is held approximately 36% by Kwong Ho Sham, approximately 57% by John Sham, and approximately 7% by Wai Chun Hui. As a result, Wing Shing Holdings and its shareholders are in a position to control our activities and policies, including possessing the voting power to elect our board of directors and approve all matters requiring shareholder approval and the ability to generally direct our affairs.

Service and enforcement of legal process. We are organized under the laws of the British Virgin Islands. All but one of our directors and executive officers reside outside the United States, and most of our assets are located outside the United States. As a result, it may be difficult or impossible for investors to effect service of process on these persons within the United States or to enforce against these persons judgments obtained in U.S. courts, including judgments predicated on the civil liability provisions of the federal securities laws of the United States. In particular, judgments of U.S. courts predicated upon the civil liability provisions of the federal securities laws of the United States may be difficult to enforce in British Virgin Islands courts and there is doubt as to whether British Virgin Islands courts will enter judgments in original actions brought in British Virgin Islands courts predicated solely upon the civil liability provisions of the federal securities laws of the United States.

British Virgin Islands company. Our corporate affairs are governed by our memorandum and articles of association and by the International Business Companies Act of the British Virgin Islands. Principles of law relating to such matters as the validity of corporate procedures, the fiduciary duties of management and the rights of our shareholders may differ from those that would apply if we were incorporated in the United States or another jurisdiction. The rights of shareholders under British Virgin Islands law are not as clearly established as are the rights of shareholders in many other jurisdictions. Thus, our shareholders may have more difficulty protecting their interests in the face of actions by our board of directors or our principal shareholders than shareholders would have as shareholders of a corporation incorporated in another jurisdiction. Please see details under Item 10 – Additional Information.

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Maca u s ubsidiary o perations. We established a subsidiary in Macau for the purpose of buying and selling products to our customers. No treaty exists between Macau and the United States providing for reciprocal enforcement of foreign judgments. However, the courts of Macau are generally prepared to accept a debt due and actions may then be commenced in Macau for recovery subject to specific preconditions being satisfied regarding the authenticity of the judgment.

Enforcement of a foreign judgment in Macau may also be limited or affected by applicable bankruptcy, insolvency, liquidation, arrangement, and moratorium or similar laws relating to or affecting creditors’ rights generally, but will be subject to statutory time limitation within which proceedings may be brought.

Director actions without shareholder approval. Under our memorandum and articles of association and the laws of the British Virgin Islands, our memorandum and articles of association may be amended by our board of directors without shareholder approval. This includes:

Our ability to amend our memorandum and articles of association by a resolution of directors or a resolution of members could have the effect of delaying, deterring or preventing a change in control of the Company without any further action by the shareholders including, but not limited to, a tender offer to purchase our common shares at a premium over then current market prices.

Our status as a foreign private issuer . We are a foreign private issuer within the meaning of rules promulgated under the Securities Exchange Act of 1934. As such, we are exempt from certain of the reporting requirements under the Securities Exchange Act of 1934 and corporate governance standards of the New York Stock Exchange (or NYSE). Because of these exemptions, investors are not afforded the same protection or information generally available to investors holding shares in public companies organized in the United States or traded on the NYSE. However, the NYSE does not exempt foreign private issuers from independent audit committee requirements and we are required to disclose any significant ways our home country corporate governance practices differ from those followed by domestic companies under the NYSE listing standards. Please see Item 10 of this Form 20-F.

Reciprocal enforcement of foreign judgments. No treaty exists between Hong Kong and the United States providing for the reciprocal enforcement of foreign judgments. Accordingly, Hong Kong courts might not enforce judgments predicated on the federal securities laws of the United States, whether arising from actions brought in the United States or, if permitted, in Hong Kong.