DEVELOP A STORE CHAIN NETWORK SPANNING NATIONWIDE WITH A STRONG FOOTHOLD IN YANGTZE RIVER DELTA AS WELL AS EXPANSION INTO CENTRAL AND WESTERN REGIONS OF CHINA
Since the opening of Nanjing Xinjiekou Store, our first department store, the Group has, with its devoted efforts in the past sensitive successfully opened 20 self-owned stores and 1 management store as at the date of this report. These stores span across four provinces, namely Jiangsu Province, Anhui Province, Shaanxi Province and Yunnan Province, and covering 14 cities, including Shanghai, Nanjing, Nantong, Yangzhou, Changzhou, Suzhou, Xuzhou, Taizhou, Huai’an, Yancheng, Hefei, Huaibei, Xi’an and Kunming, with a total gross floor area of approximately 775,000 square meters and a total operating area of approximately 533,000 square meters.

The Group has successfully established a leading position in Jiangsu Province, the market in which the Group enjoys competitive advantages. Anhui Province is an emerging strategic focus of the Group. We will expand gradually our market share in Anhui Province so as to achieve a leading position in the industry there. The Group strategically positions Xi’an in Shaanxi Province and Kunming in Yunnan Province as its bases in the western region of China. The Group will devote more efforts to solidify and expand its market share in Xi’an and Kunming and expand further into adjacent cities with these two cities as foothold. At the same time, the Group will actively explore opportunities in the first and second-tier cities as well as third-tier cities with immense development potential so as to allow us to gradually achieve the target of developing a nationwide store network.

INSIST ON THE STRATEGY OF DEVELOPING AT SELF-OWNED PROPERTIES WITH ESTABLISHMENT OF LONG TERM LEASES AS ALTERNATIVE
The Group’s department stores are situated at prime shopping districts in their respective cities. As at 30 June 2011, the proportion of self-owned properties is approximately 61.8%. In order to capture development opportunities, the Group also occupies high quality properties by entering into long-term leases, which can minimize the impact of rental increase on the operations of department stores. The target term of those leases is a term of ten years or more.

AFFIRM THE DIRECTION OF STORE DEVELOPMENT TOWARDS MEGA STORE CONCEPT AND PROMOTES “ONE-STOP SOPHISTICATED SHOPPING SPREE”
In order to remain competitive and innovative in this fast changing retail industry with different business models, the Group has, in addition to the traditional department store elements, introduced more varieties of value added services, such as food & beverages, entertainment, beauty care, hair styling, cinema and kindergarten education, in our retail floor space so as to enrich the categories of services offer, to enhance the attactiveness of our department stores to target customers and to promote our service mission of “One-Stop Sophisticated Shopping Spree”.

DEVELOP PROPRIETARY BRANDS BY LEVERAGING ON THE ADVANTAGES IN BRAND MIX SO AS TO ENHANCE THE BRAND VALUE OF “GOLDEN EAGLE”
The Group has set-up a professional team to develop proprietary brands. By leveraging on a rich brand mix with differentiation, the Group will further enhance the competitiveness of its brands so as to gear target customers’ consumption demand and enhance the brand value of “Golden Eagle”.

IDENTIFY TARGET CUSTOMERS’ CONSUMPTION PATTERN AND CHANGES IN TRENDS OF DEMAND WHILST PROACTIVELY EXPLORING E-COMMERCE
The department store and retail industry has been exploring new sales channels proactively. E-commerce is a new trend of development. The Group has set up a professional team to study the feasibility of tapping into e-commence as one of the sales channels, and to identify a profitable business model in channeling sales through e-commerce by its department store operations. It is expected that e-commence will become a new profit centre for our department store operation. Moreover, through the introduction of e-commence, the Group can break the geographical boundaries and deliver quality products and services of Golden Eagle to more customers.

FOCUS ON VIP CUSTOMER EXPANSION PLAN TO ATTRACT LOYAL VIP CUSTOMERS
Through the provision of value-added services exclusively for VIPs and continuous improvement in the quantity and quality of our services, the Group has successfully secured over 842,000 loyal VIP customers as at 30 June 2011 , which has further strengthened the Group’s foundation for long-term development and expansion. VIP customers’ spending accounted for approximately 61.8% of the gross sales proceeds of the Group.

STANDARDIZED MANAGEMENT SYSTEM AND LEADING ERP MANAGEMENT SYSTEM IN THE INDUSTRY
The Group has obtained the ISO9001 quality management award and manages every department store with a standardized management system. In order to centralize the management of all chain stores, the Group has successfully developed an ERP management system, which efficiently and timely provides operational, financial and human resources data to the headquarter and the management. The ERP system enables the Group to monitor the operational status of the Group’s chain stores effectively and formulate its development strategy in response to the ever-changing market conditions.

INSIGHT FOR INTERNATIONALIZED MANAGEMENT AND LOCALIZED OPERATING STRATEGIES
The Group highly respects the efforts and contributions of its employees. The Group organizes regular professional training sessions and overseas study trips for the management and employees, so as to enhance their sustainable development capabilities and their insights for internationalized management. The Group also implements a localized management system which is suitable for the relevant local markets. The Group recruits local talents who are familiar with the local market to form its own management team for the relevant department stores. As at 30 June 2011, the Group had approximately 4,900 employees.