of our products belong to our Group. We are entitled to terminate our agreement as well as damages for delay in any phases of the design process. Mr. Luigi Fabio Piras does not work exclusively for us in the PRC and to the best knowledge of our Directors, he does not do work for other companies in the same industry in the PRC. Our agreement with Mr. Luigi Fabio Piras will expire in October 2014. While there is no renewal term in the existing agreement, we intend to negotiate a new agreement with Mr. Luigi Fabio Piras upon expiration of the existing one.

# Ms. Fang Ying

Ms. Fang Ying graduated from Central Academy of Art and Design\* (中央工藝美術學院) which is currently, Academy of Fine Arts of Tsinghua University (清華大學美術學院) and has further her studies in Ecole Superieure De La Chambre Syndicale De La Couture Parisienne (法國巴黎高級時裝公會學校).She acted as designers and creative directors for various companies since 1998 and has been thej udges for various national apparel design competitions in the PRC. She is the design director (設計總監) of the 5th Fashion and Arts Committee of China Fashion Association\* (中國服裝設計師協會第五屆時裝藝術委員會) and the vice chairman of Guangdong Province Fashion Association\* (廣東省服裝設計師協會). She is also the council member of the China Fashion Association\* (中國服裝設計師協會). During her over 15 years of experience in fashion design, she won a number of awards including 7th China Fashion Design — Golden Award (第7屆中國時裝設計 — 「金頂獎」, Chinese Top 10 Fashion Designers\* (中國十佳時裝設計師), Chinese Excellent Fashion Designers\* (中國優秀服裝設計師),China Best Fashion Designer 2002 (2002年中國最佳時裝設計師) and China Best Womenswear Fashion Designer 2003 (2003年中國最佳女裝設計師). Pursuant to our agreement with Ms. Fang Ying, our Group engaged Ms. Fang Ying over a term of two years and obtained guidance on themes, main colours and materials to be used for each upcoming collection. Consultancy fees are payable at the beginning of each collection during the term of the agreement. The pre-agreed consultancy fees are determined based on the experience, professional capability and quality of services of design consultants in the same industry. Pursuant to our arrangement, Ms. Fang Ying does work exclusively for our Group in the PRC and all the intellectual property rights of our products belong to our Group. Our agreement with Ms. Fang Ying will expire in December 2014. The existing agreement is renewable, subject to terms being agreed between Ms. Fang Ying and us. We intend to negotiate a new agreement with Ms. Fang Ying upon expiration of the existing one.

# I.S. Planning

During the process of the establishment of our Koradior elsewhere brand, I.S. Planning helped us analyse the latest fashion trends, conduct domestic and overseas market researches, plan production as well as other processes such as designing, sampling and fabric and colour planning. I.S. Planning, a Korean company established in 2006, operated by a team with extensive experience in brand building and brand promotion. Their core professional team has over 10 years of experience in the industry. I.S. Planning has helped the establishment of various ladies-wear brands in Korea. I.S. Planning has started its business in the PRC market since its establishment and has provided brand building and brand promotion services to various domestic and international brands in the PRC. Pursuant to our agreement, our Group engaged I.S. Planning for a term of one year. I.S. Planning shall cooperate with us to design and develop the products for the upcoming fall/winter collection and spring/summer collection of our upcoming brand, Koradior elsewhere. We were required to pay around 30% of the total pre-agreed fees at the entry of our agreement, with the balance of remaining fees payable in three phases in each collection, namely, completion of production planning, completion of sample creation and completion of

product mix for the upcoming sales fairs. The pre-agreed fees are determined based on the experience, professional capability and quality of services of similar service providers in the same industry. All the intellectual property rights of our products belong to our Group. I.S. Planning does not work exclusively for us in the PRC and to the best knowledge of our Directors, it does work for other companies in the same industry in the PRC. However, it is prohibited from disclosing our confidential information to any other third party without our prior consent. Our agreement with I.S. Planning will expire in October 2014. While there is no renewal term in the existing agreement, we intend to negotiate a new agreement with I.S. Planning upon expiration of the existing one.

# Design

Our design team is also responsible for conceptualising, designing and developing apparel products. Our technical team is primarily responsible for production of samples.

We typically start our design process for our upcoming spring/summer collection and fall/winter collection a year before the relevant collection is released. Once the seasonal themes, main colours and materials to be used are determined by our research team alongside with our design consultants, our design team commences design of the collections. Our design team prepares drawings and sketches of our products and develops the specifications for the materials and accessories to match the design of the collections. We conduct several internal style evaluation meetings before making the final decision as to which styles or products are to be launched in the market for each collection. To encourage the creativeness of our designers, we have established a promotion and demotion system for them pursuant to which they are free to compete constructively. We have also established an incentive plan for our design team such that they are awarded based on various criteria such as design/sales ratio; design innovativeness, mix and match variety and team work. We have also signed confidentiality agreements with some members of the design and product development team to keep our information including but not limited to our product design drawings, paper patterns and processes confidential.

Our design team will communicate with our retail store supervisors on a selected basis through on-site meeting or telephone calls every week to discuss the sales task, feedback on best-selling products and review sales data, in order to understand the sales performance of particular products of our brands and competing brands and identify any design themes with high customer recognition. The store managers report on sales data on a daily basis and prepare sales reports on a weekly basis. Such reports will be analysed and used in our half-yearly product planning and design conference. After that, our designers develop ideas that form the basis of the creation of upcoming collections after consultations with our design consultants. Our sales and marketing team is involved in the design process to ensure that the new collection will better cater to the needs and preferences of our targeted customers.

We have cooperated with I.S. Planning to design and develop the products of our upcoming brand, Koradior elsewhere which is expected to be launched in the second half of 2014. As at the Latest Practicable Date, our design team is working closely with I.S. Planning on 2014 autumn/winter collection and we expect the new collection of Koradior elsewhere could be ready for sale in our first Koradior elsewhere retail stores in the second half of 2014.