UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 20-F

[ ]    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES
       EXCHANGE ACT OF 1934
                                       OR
[X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       For the fiscal year ended March 31, 2005
                                       OR
[ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       For the transition period from _____________ to _____________
                                       OR
[ ]    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934
       Date of event requiring this shell company report

                        Commission file number 000-21919

                       CHINA TECHNOLOGY GLOBAL CORPORATION
             (Exact name of Registrant as specified in its charter)

                     TERRITORY OF THE BRITISH VIRGIN ISLANDS
                 (Jurisdiction of incorporation or organization)

                  UNIT 3611, 36/F, WEST TOWER, SHUN TAK CENTRE,
                    168-200 CONNAUGHT ROAD CENTRAL, HONG KONG
                    (Address of principal executive offices)

              Securities registered or to be registered pursuant to
                         Section 12(b) of the Act. NONE

               Securities registered or to be registered pursuant
                          to Section 12(g) of the Act.
                           COMMON STOCK, NO PAR VALUE
                                (Title of Class)

              Securities for which there is a reporting obligation
                     pursuant to Section 15(d) of the Act.
                                 NOT APPLICABLE
                                (Title of Class)

        Indicate the number of outstanding shares of each of the issuer's
        classes of capital or common stock as of the close of the period
                          covered by the annual report.
             263,948,336 SHARES OF COMMON STOCK AS OF MARCH 31, 2005

         Indicate by check mark whether the registrant (1) has filed all
           reports required to be filed by Section 13 or 15(d) of the
         Securities Exchange Act of 1934 during the preceding 12 months
         (or for such shorter period that the registrant was required to
    file such reports), and (2) has been subject to such filing requirements
                              for the past 90 days.
                                 [X] Yes [ ] No

      Indicate by check mark which financial statement item the registrant
                 has elected to follow. [ ] Item 17 [X] Item 18

If this is an annual report, indicate by check mark whether the registrant is a
  shell company (as defined in Rule 12b-2 of the Exchange Act). [ ]Yes [X] No


<PAGE>

GENERAL INFORMATION:

UNLESS OTHERWISE INDICATED, ALL REFERENCES HEREIN ARE TO US DOLLARS.

FORWARD LOOKING STATEMENTS

The Company cautions readers regarding  forward looking  statements found in the
following  discussion  and  elsewhere  in this  annual  report  and in any other
statement  made by, or on the  behalf of the  Company,  whether or not in future
filings  with  the  Securities  Exchange  Commission  ("SEC").   Forward-looking
statements are statements not based on historical  information  and which relate
to future  operations,  strategies,  financial  results  or other  developments.
Forward looking  statements are necessarily based upon estimates and assumptions
that are inherently  subject to significant  business,  economic and competitive
uncertainties and contingencies,  many of which are beyond the Company's control
and many of which,  with respect to future  business  decisions,  are subject to
change.  See "Item 3. Key Information - Risk Factors." These  uncertainties  and
contingencies can affect actual results and could cause actual results to differ
materially from those expressed in any forward looking  statements made by or on
behalf  of  the  Company.   The  Company  disclaims  any  obligation  to  update
forward-looking statements.


                                     PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS.
================================================================================

Not applicable.


ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.
================================================================================

Not applicable.


ITEM 3.  KEY INFORMATION.
================================================================================

SELECTED FINANCIAL DATA

The selected  financial  data of the Company for the years ended March 31, 2005,
2004 and 2003,  was derived from the  consolidated  financial  statements of the
Company  which have been  audited by Jimmy C.H.  Cheung & Co., as  indicated  in
their report which is included  elsewhere in this report. The selected financial
data for the years ended  March 31,  2002 and 2001  cannot be  provided  without
reasonable effort or expense.

The  information  in the following  table was  extracted  from the more detailed
consolidated  financial  statements and related notes included herein and should
be read in conjunction  with such financial  statements and with the information
appearing  under  the  heading  "Item 5.  Operating  and  Financial  Review  and
Prospects."

<TABLE>
<CAPTION>
                                                                    YEARS ENDED MARCH 31,
                                         -----------------------------------------------------------------------------
                                                2003               2004                2005               2005
INCOME STATEMENT DATA:                        HK$'000             HK$'000            HK$'000           US$'000 (1)<F1>
                                              -------             -------            -------           ---------------
<S>                                           <C>                  <C>                 <C>                  <C>
Net sales..............................              -                   -             17,573               2,253
(Loss) income from continuing
operations before taxes................              -              (4,731)               766                  98
(Loss) income from discontinued
operations.............................       (101,674)            (30,116)               921                 118
Net (loss) income......................       (101,674)            (34,847)             1,157                 148
(Loss) income per common share from
continuing operations..................              -             HK$(0.1784)          HK$0.0011           US$0.0001
(Loss) income per common share from
discontinued operations................        HK$(5.1053)         HK$(1.1355)          HK$0.0042           US$0.0005


                                       2
<PAGE>


<CAPTION>
                                                                    YEARS ENDED MARCH 31,
                                         -----------------------------------------------------------------------------
                                                2003               2004                2005               2005
INCOME STATEMENT DATA:                        HK$'000             HK$'000            HK$'000           US$'000 (1)<F1>
                                              -------             -------            -------           ---------------
<S>                                           <C>                  <C>                 <C>                  <C>
Net (loss) income per common stock
- basic and diluted....................        HK$(5.1053)         HK$(1.3139)          HK$0.0052           US$0.0007

                                                                         AS OF MARCH 31,
                                                2003               2004                2005               2005
BALANCE SHEET DATA:                           HK$'000             HK$'000            HK$'000           US$'000 (1)<F1>
                                              -------             -------            -------           -----------
Fixed assets...........................         33,747                  15              1,622                 208
Total assets...........................         34,893              36,776            872,032             111,799
Long-term liabilities..................              -                   -             45,283               5,804
Stockholders' equity...................         19,868              29,849            673,881              86,395
------------------
<FN>
(1)<F1>  The translation from Hong Kong dollars  into U.S. dollars  for the 2005
         data  is  at US$1.00  equals HK$7.8,  the conversion rate prevailing on
         March 31, 2005.
</FN>
</TABLE>

RISK FACTORS

The following  matters,  among others, may have a material adverse effect on our
business,  financial condition,  liquidity,  results of operations or prospects,
financial or otherwise. Reference to this cautionary statement in the context of
a forward-looking statement or statements shall be deemed to be a statement that
any one or more of the  following  factors  may cause  actual  results to differ
materially from those in such forward-looking statement or statements.

RISKS RELATED TO OUR BUSINESS

WE HAVE A LIMITED OPERATING HISTORY.

All of our  revenues  come  from our  subsidiary,  DICHAIN  Software,  which was
founded  and  commenced  operations  in  December  3, 2001.  DICHAIN  Software's
operating  history may be  insufficient  for you to evaluate  our  business  and
future prospects.

KEY  EMPLOYEES  ARE  ESSENTIAL TO BUILDING OUR  CUSTOMER  RELATIONSHIPS  AND OUR
BUSINESS.

We are highly  dependent  on key  employees.  Dr. FAN Di, our Chairman and Chief
Executive Officer,  ZHOU Li Yang, our Director and Chief Financial Officer,  TAI
Ching Nam, our Strategic  Controller,  WANG Wei, our Director and Deputy General
Manager   (responsible   for  software   development,   e-commerce   and  office
administration), WANG Zhenhua, our Vice President and Sales Director, XI Xiuwen,
our Finance Manager and Investment Director,  QI Ming Yau, our Director and Vice
President (responsible for GPS/GIS business development), WANG Zhiquan, our Vice
President  (responsible  for cell phone software  application),  YU Wai Kit, our
Company Secretary and FU Li, our Investors Relation Manager are essential to our
ability to establish and maintain relationships with our customers.  Competition
in our  industry  for  executive-level  personnel  is strong  and we can make no
assurance  that we will be able to hire,  motivate and retain  highly  effective
executive employees.

OUR OPERATIONS COULD BE CURTAILED IF WE ARE UNABLE TO OBTAIN REQUIRED ADDITIONAL
FINANCING.

As of March 31, 2005, we had  approximately  HK$101,962,000  (US$13,072,000)  in
cash and cash equivalents.  In the future, we may need to raise additional funds
through  public  or  private  financing,  which may  include  the sale of equity
securities.  The issuance of these equity securities could result in dilution to
our  shareholders.  If we are unable to raise capital when needed,  our business
growth  strategy may slow,  which could  severely  limit our ability to generate
revenue.


                                       3
<PAGE>

THE ESTABLISHMENT AND EXPANSION OF INTERNATIONAL OPERATIONS REQUIRES SIGNIFICANT
MANAGEMENT ATTENTION.

All of our current,  as well as most of our anticipated future revenues,  are or
are  expected  to be derived  from Asia.  Our  operations  are subject to risks,
including  the  following,  which,  if not planned and managed  properly,  could
materially  adversely  affect our  business,  financial  condition and operating
results:

     o    Legal  uncertainties or  unanticipated  changes  regarding  regulatory
          requirements,  liability, export and import restrictions,  tariffs and
          other trade barriers;
     o    Longer customer payment cycles and greater  difficulties in collecting
          accounts receivable;
     o    Uncertainties  of laws and  enforcement  relating to the protection of
          intellectual property;
     o    Seasonal  reductions in business  activity for our  technology-related
          products; and
     o    Potentially uncertain or adverse tax consequences.

WE MAY NOT BE COMPETITIVE  AND INCREASED  COMPETITION  COULD  SERIOUSLY HARM OUR
BUSINESS.

Many of our competitors have one or more of the following advantages over us:

     o    Longer operating history;
     o    Greater financial, technical, marketing, sales and other resources;
     o    Greater profitability in their operations;
     o    Superior product functionality in certain areas;
     o    Greater name recognition;
     o    A broader range of products to offer;
     o    Better software performance; or
     o    A larger installed base of customers.

Current  and  potential   competitors  have   established,   or  may  establish,
cooperative  relationships  among  themselves  or with third  parties to enhance
their products, which may result in increased competition.  As a result of these
and other factors, we may be unable to compete successfully with our existing or
new competitors.

OUR INABILITY TO LIST OUR COMMON STOCK ON THE NASDAQ CAPITAL MARKET MAY MAKE OUR
COMMON STOCK MORE DIFFICULT TO TRADE, HARM OUR BUSINESS REPUTATION AND ADVERSELY
AFFECT OUR ABILITY TO RAISE FUNDS IN THE CAPITAL MARKETS.

The de-listing of our common stock from the NASDAQ SmallCap Market (now known as
the NASDAQ  Capital  Market) may have made our common  stock more  difficult  to
trade, may have harmed our general business reputation and may have impaired our
ability  to raise  funds in the  capital  markets,  which  could have a material
adverse effect on our business,  results of operations and financial  condition.
We may  not be able to  satisfy  NASDAQ's  initial  listing  requirements  to be
eligible to re-apply for listing on the NASDAQ Capital Market.

OUR MAJOR SHAREHOLDERS HAVE SIGNIFICANT INFLUENCE OVER SHAREHOLDER VOTES.

As of  November  8,  2005,  five of our major  shareholders  beneficially  owned
approximately 76% of the total voting power of our company, approximately 45% of
which is beneficially  owned by DiChain Systems  Limited,  approximately  11% of
which is beneficially  owned by Farsight Holdings  Limited,  approximately 9% of
which is beneficially  owned by Squadram  Limited,  approximately 6% of which is
beneficially owned by Earnest Investments Services Limited, and approximately 5%
of which is beneficially  owned by China Merchants DiChain (Asia).  Accordingly,
these  major   shareholders  have  significant   influence  in  determining  the
composition of our Board of Directors and other  significant  matters  requiring
shareholder  approval,  including  amendments  to our  memorandum or articles of
association,  a  substantial  sale of  assets,  a merger  or  similar  corporate
transaction  or  a  non-negotiated   takeover  attempt.  Such  concentration  of
ownership  may  discourage a potential  acquirer  from making an offer to buy us
that other  shareholders  might find  favorable,  which in turn could  adversely
affect the market price of our common stock.


                                       4
<PAGE>

RISKS ASSOCIATED WITH DOING BUSINESS IN GREATER CHINA

THERE ARE SUBSTANTIAL  RISKS ASSOCIATED WITH DOING BUSINESS IN GREATER CHINA, AS
SET FORTH IN THE FOLLOWING RISK FACTORS.

Our operations and assets in greater China are subject to significant  political
and  economic  uncertainties.   Changes  in  laws  and  regulations,   or  their
interpretation,  or the imposition of  confiscatory  taxation,  restrictions  on
currency conversion,  imports and sources of supply, devaluations of currency or
the  nationalization or other  expropriation of private enterprises 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 that encourage  private economic activity and
greater  economic  decentralization.  There is no assurance,  however,  that the
Chinese  government will continue to pursue these policies,  or that it will not
significantly alter these policies from time to time without notice.

WE MAY HAVE LIMITED LEGAL RECOURSE UNDER CHINESE LAW IF DISPUTES ARISE UNDER OUR
CONTRACTS WITH THIRD PARTIES.

The  Chinese  government  has enacted  some laws and  regulations  dealing  with
matters such as  corporate  organization  and  governance,  foreign  investment,
commerce,  taxation  and  trade.  However,  their  experience  in  implementing,
interpreting  and  enforcing  these laws and  regulations  is  limited,  and our
ability  to  enforce  commercial  claims or to resolve  commercial  disputes  is
unpredictable.  Due to our current business operations, we may be subject to the
implementations,  interpretations  and enforcement of China's laws by its courts
or  governmental  agencies in connection  with our contracts with third parties.
The  resolution  of  any  such  matters  may  be  subject  to  the  exercise  of
considerable  discretion  by  agencies  of the  Chinese  government,  and forces
unrelated to the legal merits of a  particular  matter or dispute may  influence
their determination.  Any rights we may have to specific performance, or to seek
an injunction under Chinese law, in either of these cases, are severely limited,
and without a means of recourse by virtue of the Chinese legal system, we may be
unable to prevent these  situations from  occurring.  The occurrence of any such
events could have a material adverse effect on our business, financial condition
and results of operations.

RISKS RELATED TO OUR TECHNOLOGY AND EQUIPMENT

WE MUST RESPOND QUICKLY AND EFFECTIVELY TO NEW TECHNOLOGICAL DEVELOPMENTS.

Our business is highly  dependent on our  computer  and  software  systems.  Our
failure to maintain the  superiority  of our  technological  capabilities  or to
respond  effectively  to  technological   changes  could  adversely  affect  our
business,  results of operations or financial condition. Our future success also
depends on our ability to enhance  existing  services and introduce new services
or products to respond to changing technological developments.  If we are unable
to successfully develop and bring to market new services or products in a timely
manner,  our  competitors'  technologies  or services may render our products or
services noncompetitive or obsolete.

IF WE ARE UNABLE TO DEVELOP  ACCEPTABLE  PRODUCTS AND  GENERATE  DEMAND FOR SUCH
PRODUCTS, ADDITIONAL SERIOUS HARM COULD RESULT TO OUR BUSINESS.

We have invested significant  resources in developing and marketing our products
and  services.  The demand  for,  and market  acceptance  of, our  products  and
services are subject to a high level of  uncertainty.  Our products and services
are often  considered  complex and may involve a new  approach to the conduct of
business by our customers.  As a result,  intensive  marketing and sales efforts
may be  necessary  to  educate  prospective  customers  regarding  the  uses and
benefits of these products and services in order to generate demand.  The market
for our products and services may never  develop as we intend,  competitors  may
develop  superior  products  and  services or we may fail to develop  acceptable
solutions to address new market conditions. Any one of these events could have a
material  adverse  effect on our business,  results of operations  and financial
condition.



                                       5
<PAGE>

OUR SOFTWARE PRODUCTS ARE INTENDED TO WORK WITHIN COMPLEX BUSINESS PROCESSES. AS
SUCH,   IMPLEMENTATION   OR  UPGRADES  OF  OUR   PRODUCTS   CAN  BE   DIFFICULT,
TIME-CONSUMING  AND  EXPENSIVE,  AND  CUSTOMERS  MAY BE UNABLE TO  IMPLEMENT  OR
UPGRADE OUR PRODUCTS SUCCESSFULLY OR OTHERWISE ACHIEVE THE BENEFITS ATTRIBUTABLE
TO OUR  PRODUCTS.  THIS MAY  RESULT  IN  CUSTOMER  DISSATISFACTION,  HARM TO OUR
REPUTATION AND CAUSE NON-PAYMENT ISSUES.

Our products  typically must integrate with the many existing  computer  systems
and software programs of our customers. This can be complex,  time-consuming and
expensive,  and may cause delays in the deployment of our products. As a result,
some  customers  may have  difficulty  or be unable to  implement  our  products
successfully  or otherwise  achieve the benefits  attributable  to our products.
Delayed or ineffective  implementation  or upgrades of our software and services
may limit our sales opportunities,  result in customer  dissatisfaction and harm
to our reputation, or cause non-payment issues.

OUR SOFTWARE MAY CONTAIN ERRORS, WHICH COULD RESULT IN THE LOSS OF CUSTOMERS AND
REPUTATION,  ADVERSE PUBLICITY,  LOSS OF REVENUES,  DELAYS IN MARKET ACCEPTANCE,
DIVERSION OF DEVELOPMENT RESOURCES AND CLAIMS AGAINST US BY CUSTOMERS.

Our software  programs may contain errors or "bugs." Although we conduct testing
and quality assurance through a release management  process, we may not discover
bugs until our customers  install and use a given product or until the volume of
services that a product  provides  increases.  On occasion,  we have experienced
delays in the scheduled  introduction  of new and enhanced  products  because of
bugs.  Errors  could  result  in  loss  of  customers  and  reputation,  adverse
publicity,  loss  of  revenues,  delays  in  market  acceptance,   diversion  of
development resources and claims against us by customers.

BECAUSE OUR PRODUCTS COLLECT AND ANALYZE STORED CUSTOMER  INFORMATION,  CONCERNS
THAT OUR  PRODUCTS DO NOT  ADEQUATELY  PROTECT THE  PRIVACY OF  CONSUMERS  COULD
INHIBIT SALES OF OUR PRODUCTS.

One of the features of our supply chain management software  applications is the
ability to develop and  maintain  profiles of consumers  for use by  businesses.
Typically,  these products capture profile information when consumers,  business
customers and employees visit an Internet web-site and volunteer  information in
response  to  survey  questions  concerning  their  backgrounds,  interests  and
preferences.  Our products  augment these profiles over time by collecting usage
data. Although our supply chain management products are designed to operate with
applications that protect user privacy,  privacy concerns nevertheless may cause
visitors  to resist  providing  the  personal  data  necessary  to support  this
profiling  capability.  Any inability to adequately  address  consumers' privacy
concerns  could  have a  material  adverse  affect on our  business,  results of
operation and financial condition.

IF WE FAIL TO  ADEQUATELY  PROTECT OUR  INTELLECTUAL  PROPERTY  RIGHTS OR FACE A
CLAIM OF INTELLECTUAL  PROPERTY INFRINGEMENT BY A THIRD PARTY, WE COULD LOSE OUR
INTELLECTUAL PROPERTY RIGHTS OR BE LIABLE FOR SIGNIFICANT DAMAGES.

We rely  primarily on a  combination  of  copyright,  trademark and trade secret
laws,  confidentiality  procedures  and  contractual  provisions  to protect our
proprietary rights. However, unauthorized parties may attempt to copy aspects of
our  products or to obtain and use  information  that we regard as  proprietary.
Policing unauthorized use of our products is difficult, and we cannot be certain
that the steps we have taken will prevent  misappropriation  of our intellectual
property.  This is  particularly  true in China  where  the laws do not  protect
proprietary  rights to the same extent as the laws of the United  States and may
not provide us with an effective remedy against piracy. The  misappropriation or
duplication of our  intellectual  property  could disrupt our ongoing  business,
distract  our  management  and  employees,  reduce our revenues and increase our
expenses.  Any litigation to defend our  intellectual  property  rights could be
time-consuming and costly.

There has been a  substantial  amount of  litigation  in the  software  industry
regarding intellectual property rights. As a result, we may be subject to claims
of intellectual property infringement. Although we are not aware that any of our
products  infringe upon the proprietary  rights of third parties,  third parties
may claim  infringement  by us with respect to current or future  products.  Any
infringement  claims, with or without merit, could be time-consuming,  result in
costly  litigation  or damages,  cause  product  shipment  delays or the loss or
deferral of sales, or require us to enter into royalty or licensing  agreements.
If we enter into royalty or licensing agreements in settlement of any litigation
or claims,  these agreements may not be on terms  acceptable to us.  Unfavorable
royalty and licensing  agreements  could have a material  adverse  effect on our
business, results of operations and financial condition.


                                       6
<PAGE>

WE ARE DEPENDENT ON THIRD-PARTY  SOFTWARE THAT WE  INCORPORATE  INTO AND INCLUDE
WITH OUR PRODUCTS AND  SOLUTIONS.  IMPAIRED  RELATIONS WITH THESE THIRD PARTIES,
DEFECTS IN THIRD-PARTY  SOFTWARE OR THE INABILITY TO ENHANCE THEIR SOFTWARE OVER
TIME COULD HARM OUR business.

We incorporate and include  third-party  software into and with our products and
solutions.  Additionally,  we may incorporate and include additional third-party
software into and with our products and solutions in future  product  offerings.
The  operation  of our  products  could  be  impaired  if  errors  occur  in the
third-party software that we utilize. It may be more difficult for us to correct
any defects in third-party  software  because the development and maintenance of
the  software is not within our  control.  Accordingly,  our  business  could be
adversely affected in the event of any errors in this software.  There can be no
assurance  that  these  third  parties  will  continue  to make  their  software
available  to us on  acceptable  terms,  to  invest  the  appropriate  levels of
resources  in their  products  and services to maintain and enhance the software
capabilities, or to remain in business.

Further,  it may be difficult  for us to replace any  third-party  software if a
vendor seeks to terminate  our license to the software or our ability to license
the software to customers.  Any impairment in our relationship  with these third
parties  could  have a  material  adverse  effect on our  business,  results  of
operations and financial condition.

WE MAY BECOME SUBJECT TO PRODUCT  LIABILITY CLAIMS THAT COULD SERIOUSLY HARM OUR
BUSINESS.

Our software  products  generally are used by our customers in mission  critical
applications  where  component  failures  could cause  significant  damages.  To
mitigate  this  exposure,  our license  agreements  typically  seek to limit our
exposure to product liability claims from our customers. However, these contract
provisions may not preclude all potential  claims.  Additionally,  our insurance
policies may be inadequate  to protect us from all  liability  that we may face.
Product liability claims could require us to spend significant time and money in
litigation or to pay significant damages. As a result, any claim, whether or not
successful,  could harm our reputation and have a material adverse effect on our
business, results of operations and financial condition.


ITEM 4.  INFORMATION ON THE COMPANY.
================================================================================

HISTORY AND DEVELOPMENT OF THE COMPANY

Our legal and commercial name is China Technology  Global  Corporation.  We were
incorporated on June 24, 1996 as an  International  Business Company pursuant to
the International  Business Companies Act of the British Virgin Islands. We were
originally  named  Dransfield  China Paper  Corporation.  On March 28, 2000,  we
changed  our name to DF China  Technology,  Inc.,  and on January 12,  2005,  we
changed our name to China Technology Global Corporation. Our registered agent in
the British  Virgin  Islands is HWR Services  Limited,  P.O.  Box 71,  Craigmuir
Chambers, Road Town, Tortola, British Virgin Islands.

Our  principal  place of business is 3611,  36/F,  West Tower,  Shun Tak Centre,
168-200  Connaught Road Central,  Hong Kong,  where our telephone  number is 852
2255 0688.  Our agent in the United States is Fay M.  Matsukage,  Dill Dill Carr
Stonbraker & Hutchings,  P.C., 455 Sherman Street,  Suite 300, Denver,  Colorado
80203.

We are listed on the  Over-The-Counter  Bulletin  Board  ("OTCBB") in the United
States  under the  trading  symbol  "CTGLF".  After our  acquisition  of DICHAIN
Software,  we became a leading  supply chain  management  software and solutions
provider in China. Our businesses are not materially  dependent on any licenses,
patents or other contracts with any third parties.

BUSINESS OPERATION AND REVIEW

On April 30, 2003, certain of our major shareholders  removed Mr. Horace Yao Yee
Cheong as our director and chairman, Ms. Cheung Kam Wa as our director and chief
executive officer and Mr. Kenneth Mak Kar Shun as our director.  In their place,
Dr. Fan Di, Mr. Aaron Zhu Xiaojun, Mr. Kwok Yam Sheung, Dr. Robert Fung Hing Piu
and Dr. Godwin Wong were elected as our directors. Dr. Fan Di was also appointed
our chairman and chief executive  officer and Mr. Zhu was appointed as our chief
financial officer.


                                       7
<PAGE>

Since inception and subsequent entry as a public company in 1997 and up to March
2004,  our main  business  focus had been in the paper  manufacturing  market in
China and Hong Kong.  However,  due to changes in the industry and the inability
of our previous  management,  this business never became profitable and resulted
in losses for us and a significant depletion of shareholders' equity.

In May 2004, we merged with DiChain Software. DiChain Software is engaged in the
business of designing,  manufacturing and selling computer software and hardware
products and systems  solutions  for the supply chain  management  and logistics
industry in China and the  business of DiChain  Software has now become our core
business.

SALE OF NON-CORE ASSETS

Our board of directors  devoted its time and efforts to appraising  the value of
our assets and the merits of the business  plan under which we have operated for
the past  several  years.  After their  review,  we  determined  that it was not
feasible to continue to pursue the earlier  objective of building an  integrated
paper manufacturer with four principal paper plants.

On January  26,  2004,  we entered  into an  agreement  (the  "Agreement")  with
Gumption Trading Ltd. ("Gumption  Trading"),  a company  incorporated in the BVI
and  Guangzhou  Dransfield  Paper  Limited,  a wholly owned  subsidiary of ours.
Pursuant to the Agreement,  we sold to Gumption Trading (i) all of the shares of
our wholly owned  subsidiaries  DF Paper Guangdong  Ltd.,  Guangdong  Dransfield
Paper Ltd., DF Paper Jiangsu Limited and Jiangsu  Dransfield Paper Co. Ltd., and
(ii) all fixed assets of our subsidiary in Conghua,  Guangzhou  Dransfield Paper
Limited. Guangzhou Dransfield Paper agreed to lease back these fixed assets from
Gumption Trading for its paper manufacturing operations at a rent of HK$1.00 per
annum for a term of one year, renewable yearly thereafter upon mutual agreement.
For such purchase,  Gumption  Trading paid to us a nominal  aggregate  amount of
HK$5 and assumed all of our liabilities,  including  liabilities related to such
subsidiaries and assets described above,  which we incurred prior to January 28,
2004. We entered into the Agreement  primarily to streamline our operations.  In
connection  with this  transaction,  we also  received a guarantee  from a third
party,  which  guaranteed  to us and  Guangzhou  Dransfield  Paper Ltd.  the due
payment by Gumption  Trading of all sums and charges under the Agreement and due
performance and observance by Gumption Trading of the Agreement. We also entered
into a deed of  confirmation  with  Guangzhou  Dransfield  Paper Ltd. and Qindao
Haotian  Investment  Limited to clarify and define the  liabilities  of Gumption
Trading under the Agreement. This transaction closed on January 28, 2004.

After  consultation  with our legal counsel in the BVI, we were informed that we
should  have sought and  received  shareholder  approval  under BVI law prior to
entering into the Agreement due to the fact that the combined  assets being sold
by us at such time exceeded  fifty  percent  (50%) of our total assets.  We have
engaged BVI counsel and U.S. counsel to prepare the documents required to obtain
the approval of our  shareholders at a special meeting to ratify the transaction
into which we entered with  Gumption  Trading.  Pursuant to the laws of the BVI,
upon our receiving approval from a majority of our shareholders, the transaction
with  Gumption  Trading  will be ratified  and  approved as if such  shareholder
approval had been received prior to the execution of the  Agreement.  Section 83
of the  International  Business  Companies  Act (Cap.  291) of the BVI  provides
dissenters  rights for those of our  shareholders  who held their  shares at the
time  of  this  transaction  and  exercise  their  right  to  dissent  from  the
transaction  entitling them to receive fair value for their shares.  On November
8,  2004,  we filed a report  on Form  6-K with the SEC in  connection  with the
Agreement and the required shareholder approval.

We continued the  manufacturing  and selling of the  consumer-grade  jumbo paper
roll products until March 2005. On 30 March 2005, our directors decided to cease
the paper operation, the leased back assets were then returned to the owner.

PRIVATE PLACEMENTS

In February 2004, we completed a private placement with seven investors for 21.5
million  shares of our stock at  US$0.20  per  share or an  aggregate  amount of
US$4.3 million.

On October 28,  2004,  we received  letters  from three of the  investors in our
February 2004 private  placement  stating their desire to rescind their purchase
of an aggregate of  11,200,000  shares in light of our  subsequent  receipt of a
delisting  notice  from  NASDAQ in March  2004.  These  letters  confirmed  oral
requests made by these investors  earlier


                                       8
<PAGE>

in 2004. In March 2004, we established a fund of RMB20 million (HK$18,843,000 or
US$2,417,000)  for  investment   purposes  with  Shenzhen   International  Trust
Investment  Company, a nationally owned investment  company.  As a result of the
requests from investors,  and for the purpose of repaying these investors in the
event that our board of directors decided to take such action, the fund of RMB20
million (HK$18,843,000 or US$2,417,000) was set aside into escrow (the "Escrow")
pursuant to the terms of a loan agreement dated March 26, 2004 between  Shenzhen
International  Trust  Investment  Company and a related  company of ours,  China
Merchants  DiChain  Investment  Holdings  Ltd.  ("China  Investment  Holdings").
Pursuant to the terms of the loan  agreement,  the initial  duration of the loan
was for one (1) year bearing  interest of 4.8% per year. All interest  earned on
the Escrow remains with China  Investment  Holdings.  DiChain Holdings Ltd., the
parent  and  owner of all of the  capital  stock of China  Investment  Holdings,
agreed to guarantee payment of the Escrow to us should China Investment Holdings
fail to repay the Escrow. Based on the advice of counsel, our board of directors
believes that it does not have a legal obligation under the placement  documents
to refund the investors' purchase and at a meeting of the Board held on November
5,  2004,  the  Board  decided  to  demand  repayment  of the  Escrow as soon as
possible. In March 2005, the Escrow was returned to the Company.

On April 5, 2004, the Company  raised US$2.1  million in a private  placement to
one investor, Squadram Limited. We believe we are well positioned to execute our
new business strategy.

THE ACQUISITION OF DICHAIN SOFTWARE

In February 2004, DICHAIN Software Systems (Shenzhen) Ltd. ("DICHAIN  Software")
and our  board of  directors  entered  into  discussions  in  connection  with a
possible acquisition. After reviewing the proposal, our board concluded that the
addition of DICHAIN  Software's  business would add  significant  value to us in
terms of overall revenue, net profit, and net assets. Consequently, a meeting of
our  shareholders  took place on March 25, 2004 and the acquisition was voted on
and passed. The acquisition was completed in May 2004.

Prior to the  acquisition,  DICHAIN  Software was affiliated with us (i) through
two directors,  Dr. Fan Di, our Chairman and Chief Executive Officer,  and Aaron
Zhu Xiaojun,  our then Chief Financial Officer and an Executive  Director,  that
were common to both  entities and (ii) through the direct or indirect  ownership
of shares of capital stock of both entities by DiChain Holdings Limited. DiChain
Holdings  Limited,  which is  affiliated  with China  Merchants  Group,  a large
business  conglomerate  in China,  held  approximately  2% of our  common  stock
through its subsidiary  DiChain Systems Ltd. and approximately 68% of the common
stock of DICHAIN Software prior to the acquisition.

On May 25, 2004, we acquired DICHAIN Software.  DICHAIN Software is now a wholly
owned  subsidiary  of ours.  The  information  technology  business  of  DICHAIN
Software has now become our primary business.

Prior to the issuance of 197,799,000 shares of our stock to the six shareholders
of DICHAIN  Software in connection  with our  acquisition  of DICHAIN  Software,
there were 52,820,712 shares of our stock  outstanding.  The 197,799,000  shares
issued   represented   approximately   78.9%  of  the  250,619,712  shares  then
outstanding after the acquisition.

This  78.9%  allocation  of our  common  stock to the  shareholders  of  DICHAIN
Software is  consistent  with the  unaudited  current  net asset  values in U.S.
dollars of the  Company and  DICHAIN  Software  at the time of the  acquisition,
which were as follows:

     Company                         $     3,970,000        19.28%
     DICHAIN Software                     16,619,000        80.72%
                                     ---------------       -------
                                     $    20,589,000       100.00%
                                     ===============       =======



                                       9

<PAGE>


BUSINESS OVERVIEW

SUMMARY

DICHAIN  Software is engaged in the  business of  designing,  manufacturing  and
selling computer  software and hardware  products and systems  solutions for the
supply chain  management and logistics  industry in China. It has  approximately
110  employees  with  headquarters  in Shenzhen and branch  offices in Shanghai,
Beijing,  Dalian,  Wuhan,  Chengdu and  Chongqing.  It has 320 customers and was
rated by the  International  Data Corporation  ("IDC"),  a leading U.S. based IT
consulting  firm,  as one of the leading IT solution  providers  in supply chain
management  and logistics in China in 2002 and 2003.  DICHAIN  Software has more
than 30 intellectual property patents pending.

We believe  DICHAIN  Software  is the first  company in China to  integrate  GIS
(Geographic  Information System), GPS (Global Positioning System),  wireless and
web technologies to provide complete IT and consultancy solutions for the supply
chain management and logistics operations industry.  DICHAIN Software's products
and  solutions  have been  deployed by more than 320 customers in China and Hong
Kong, including some of the largest logistics,  manufacturing,  and distribution
companies.  After  our  acquisition  of  DICHAIN  Software,  we  believe  we are
positioned  to continue to be a major IT solution  provider in China in the next
three to five years.

DICHAIN  Software  has  strategic  alliances  with some of the  world's  largest
companies, including IBM, GE, Oracle, Hewlett Packard, ILOG, DELL, Motorola, and
China Mobile. We believe that these strategic partnerships enhance our marketing
ability. DICHAIN Software is a strategic partner with IBM in China in the supply
chain  management  and logistics  operations  industry and was awarded by IBM as
"the Best Value Added  Reseller" in 2003. The areas of DICHAIN  Software and the
IBM China strategic  partnership  range from technology  exchange to co-branding
and co-marketing.

DICHAIN  Software is  headquartered in Shenzhen with branch offices in Shanghai,
Beijing,  Dalian, Wuhan, Chengdu and Chongqing.  DICHAIN Software's main product
line is its DAP(R) ("DICHAIN  application  platform")  series.  DAP is the first
domestic   IT   platform   in   China   designed   by   applying   international
state-of-the-art   technologies   and  modern   management   concepts  into  the
standardization of logistics and supply chain management in China.

DICHAIN Software's revenue is derived from the procurement of hardware on behalf
of its  customers,  professional  services  for  system  development,  including
designing,  planning,  consulting  and system  integration,  system  consultancy
services and monthly subscription fees for system services.

LOGISTICS OPERATIONS AND SUPPLY CHAIN MANAGEMENT

With China's  accession to the WTO, it is expected  that more foreign  companies
will invest and conduct business in China. This will further boost international
trade,  which  demands a high level of  coordination  and  control  for  optimal
efficiency.   Faced  with  increasing  foreign  competition,   domestic  Chinese
companies  realize that they have to improve their  efficiency,  flexibility and
responsiveness  to market  changes in order to maintain  their market share.  An
efficient dynamic supply chain is regarded as one of the most crucial factors to
maintain or improve competitiveness.

Companies  compete  on the  basis of  their  service,  which  is  often  largely
determined by a company's  ability to deliver  product on time.  Shortened  time
throughout  the supply chain  process may give a company an  advantage  over its
competitors.  Currently,  logistics  costs range on average  between  30%-40% of
total operating costs. As provided by the Ministry of  Communications  of China,
in developed countries with an advanced logistics infrastructure, this logistics
cost is approximately 10% of total costs. By employing integrated solutions that
combine e-logistics technologies and MIS software, Chinese companies can achieve
significant  operational  efficiencies  and cost  savings.  As a result,  a huge
demand for modern  logistics has emerged in China.  According to the World Bank,
the Chinese  logistics  market is expected to grow at 20%-30% per annum over the
next five to ten years  versus a global  average  growth of 10%-15%.  The entire
Asia Pacific logistics software market is expected to grow even faster.

Despite the  growing  demand of  logistics  software  applications,  China lacks
sophisticated infrastructure and advanced technology in the logistics and supply
chain management  sector.  There is no standardized  logistics software platform
available  to create a common  interface  linking  logistics  systems with other
operational and planning systems.



                                       10

<PAGE>

A rapid expansion in China's road or land transportation  sector demands a focus
on routing  efficiencies.  It is estimated by the Ministry of  Communications of
China that 60% of the  freight  capacity  in China lies idle,  while its storage
capacity is five times that of the U.S. By applying  information  technology  in
managing  logistics  resources,  including trucks,  ships and warehouses,  it is
believed by the Ministry of  Communications  of China that the freight  delivery
time between  Northern  and Southern  China can be reduced by seven to ten days.
Consequently,   the  levels  of  inventory  will  decrease,   resulting  in  the
acceleration of capital flow.

An IDC survey report indicated that the market scale of IT products  consumption
in China's  logistic  industry had already  reached  RMB1.63 billion in 2003, an
increase  of 18.1%  from  2002.  Software  related  products  sales were RMB 320
million, 19.6% of the total market, an increase of 51% from 2002.

The IDC survey also indicates that many small and mid-sized logistic enterprises
will accelerate their information  technology purchases and installations during
the remainder of 2004 through 2008.  Most of these  purchases are or will be the
first information  technology purchases for these companies.  Although, the size
of each  installation is or may be relatively  small,  the Company believes that
the total number of enterprise installations will raise overall market demand.

The IDC survey predicts that during 2004 through 2008, the IT application market
for China's logistic  industry will also continue to develop.  This total market
will  increase  from  approximately  RMB 700  million to  approximately  RMB 1.5
billion.

DICHAIN SOFTWARE'S SOLUTION

DICHAIN  Software  provides an  integrated,  end-to-end  logistics  solution for
enterprises,  transportation  companies  and logistics  centers,  such as ports,
airports and rail centers.  DICHAIN  Software can help manage  inventory,  track
goods and transport  assets as they move to and from the warehouse,  capture the
data associated with logistics operations and have the information  available to
management for further analysis.  DICHAIN  Software's  solutions are designed to
identify  bottlenecks in the supply chain and to improve  efficiency in managing
the  flow of raw  materials  and  goods  between  warehouses,  distribution  and
logistics centers.  We believe DICHAIN Software's  solutions will help customers
reengineer their logistics processes by shortening  lead-time,  quoting reliable
delivery dates,  and decreasing idle freight  capacity.  As a result,  logistics
costs can be lowered significantly.

In addition, DICHAIN Software can help companies link up with their customers in
order to provide better information exchange. We believe that DICHAIN Software's
knowledge  of the  Chinese  market,  including a clear  understanding  of market
trends, the regulatory environment, and customer and pricing requirements,  is a
competitive  advantage.  With this knowledge,  DICHAIN Software is able to offer
clients  differentiated  products and services  that are suitable for use in the
Chinese market and which are competitively priced.

We will continue to develop and extend  DICHAIN  Software's  product and service
offerings to provide  customers  with  comprehensive,  advanced  and  integrated
logistics  and supply chain  management  IT  solutions.  DICHAIN  Software's  IT
logistics   solutions   represent  a  revolutionary   platform  for  integrating
operational  and  business  planning  systems  and  provide  customers  with the
following benefits:

    >    One scalable and adaptable integrated platform

              DICHAIN   Software  has  designed  its  platform  to  provide  the
              scalability  necessary to support volume growth in the movement of
              goods and people in the shortest  period of time.  Its software is
              also  adaptable to many  computer  systems.  In addition,  DICHAIN
              Software can integrate  its logistics and supply chain  management
              platform  with  its  customers'  other  operational  and  business
              planning systems,  as well as their end customers'  systems.  This
              will help reduce data entry  redundancy in other  applications and
              improve  accuracy.  As  a  result,  customers  can  have  a  fully
              integrated,  automated and  functional IT platform to manage their
              businesses.


                                       11
<PAGE>

    >    Convenient real-time information accessibility

              DICHAIN  Software has successfully  applied GPS/GIS  technology to
              its  logistics  solutions.  Through  GIS  (Geographic  Information
              Systems) technology,  its customers can track their transportation
              fleets (e.g. buses, vans, taxis)  instantaneously,  either through
              its web-based or wireless application  systems.  This GIS solution
              also offers auto  navigation  and visual  solutions  in  warehouse
              management  and  logistics  optimization.  Our  customers can then
              analyze and respond quickly to market changes.  DICHAIN Software's
              GPS (Global  Positioning  System)  solution helps the customers to
              improve  communications  and efficiency by enabling them to better
              manage their transportation and shipping fleets and employees.

    >    Immediate and cost-effective development of solutions

              Based on its proprietary  solutions,  DICHAIN Software can quickly
              customize its logistics  solutions to fit its customers'  specific
              needs.   Since  DICHAIN  Software  can  spread  its  research  and
              development costs over a large installed base, DICHAIN Software is
              able to offer its solutions at an attractive  price.  This enables
              customers to deploy IT logistics  solutions more  cost-effectively
              than developing these capabilities in-house.

OUR TECHNOLOGY PLATFORM

The core of DICHAIN Software's  applications is its DAP(R) (DICHAIN  application
platform)  technology.  This is the first domestic IT platform in China designed
by applying global, state-of-the-art technologies and modern management concepts
into standardized logistics and supply chain management.  DAP adopts world-class
information  technologies  such as J2EE (Java 2 Platform,  Enterprise  Edition),
XML/EDI  (extensible  markup  language),  .NET and Internet service and combines
with Internet,  wireless, GPS (Global Positioning System), and GIS (Geographical
Information  Systems)  to  cover  the  supply  chain  management  and  logistics
industries.

OUR TECHNOLOGY-RELATED PRODUCTS

DAP-based software products and solutions are deployed in industries  including,
among others, the automobile,  tobacco,  food and beverage,  electric appliance,
garment,  chain  business,  port and  pharmacy  industries.  DAP  platform  also
integrates with the information systems at customs, banks, and tax authorities.

Through  our  DAP(R)  technology,  we  have  products  to  serve  a  variety  of
applications and industries. Our products are:

     o    DAP(R) Container Ports Operation System;
     o    DAP(R) Logistics Network Operation System;
     o    DAP(R) Logistic Plan System;
     o    DAP(R) Warehouse Management System;
     o    DAP(R) Transportation Management System;
     o    DAP(R) Distribution Resource Planning System; and
     o    DAP(R) Office Automation System.

DAP(R) CONTAINER PORTS OPERATION  SYSTEM ("DAP CTOS").  Based on modern shipping
industry  standards  and  requirements,  DAP CTOS is designed  and  developed to
ensure that the operation of a port can meet the ever-changing  challenges ports
face,  both now and in the  future.  DAP CTOS  covers all  aspects  of  control,
operations,  planning and management of container  terminals.  From trucking and
rail operations,  berthing,  loading, and discharging to management and control,
DAP CTOS is the all-in-one solution for terminal  operators.  Various interfaces
provide seamless, integrated access to information from clients and suppliers.

DAP CTOS has the  following  functions  and  features  that we believe give it a
competitive advantage over other technologies:

     o    Modularized design, flexible interface and scalable;
     o    Graphic interfaces, intuitive and simple to use;


                                       12
<PAGE>

     o    Standardized operational procedures and real-time data sharing;
     o    Powerful graphical planning function;
     o    Extensive inquiring and analysis; and
     o    Unified security system.

DAP(R) LOGISTICS NETWORK OPERATION SYSTEM ("DAP LNOS"). DAP LNOS mainly consists
of the DAP Logistics  Plan System,  DAP  Warehouse  Management  System,  and DAP
Transportation Management System, all of which are described below.

DAP(R)  LOGISTIC  PLAN  SYSTEM  ("DAP  LPS").  DAP LPS is  designed  for complex
logistics  operations  with  multi-level  distribution  centers to maximize  all
resources of a logistics  network.  DAP LPS seamlessly  integrates GPS, Barcode,
radio frequency and other modern logistics technologies.

DAP LPS's main functions and features are:

     o    Seamless  connectivity with ERP (enterprise  resource  planning),  DRP
          (distribution  resource  planning)  and  SCM  (supply  chain  manager)
          supporting online order entry and order tracking; and
     o    Automatic order division function where users can freely set different
          logistics solutions and order division  parameters  according to their
          specific requirements.

DAP(R)  WAREHOUSE  MANAGEMENT  SYSTEM  ("DAP  WMS").  DAP  WMS  offers  complete
warehouse management  solutions.  It is designed for managing multiple warehouse
locations.  DAP WMS maximizes  warehouse space  utilization as well as warehouse
equipment  efficiency.  It enables users to optimally allocate space for various
products on its graphic warehouse rack space. The system's paperless  operations
process greatly reduces the margin of error and increases operation performance.

DAP WMS:

     o    Supports VIM (vendor inventory  manager),  and QR (quick response) and
          ECR (effective customer response);
     o    Enables planned cycle counting and random counting;
     o    Has  user-defined  functions  for  stocking a  warehouse,  for setting
          maximum and minimum  inventory  levels,  for order  placements and for
          tracking back-ordered goods; and
     o    Supports radio frequency and Barcode technologies.

DAP(R) TRANSPORTATION MANAGEMENT SYSTEM ("DAP TMS"). DAP TMS integrates GPS, GIS
and  wireless  communication  technology.  DAP TMS is  capable of  managing  and
tracking  truck  fleets  in  real-time.  DAP TMS  utilizes  ILOG's  optimization
components,  offering  routing  optimization  planning  solutions  resulting  in
maximized fleet utilization and reduced capital assets expenditure.

DAP TMS's main functions and features:

     o    Enables route optimization and fleet utilization maximization;
     o    Supports multiple transport dispatch modes;
     o    Integrates  seamlessly  with  GIS/GPS  systems,  to  enable  real-time
          vehicle tracking;
     o    Supports TL (Truck Load),  LTL  (Less-Than-Truck  Load), and Container
          Tray transportation types; and
     o    Assists in managing vehicles in a fleet to optimize efficiencies.

DAP(R) DISTRIBUTION  RESOURCE PLANNING SYSTEM ("DAP DRP"). DAP DRP collects data
from entire supply chain and sales channels to assist in  information  flow. The
system can manage various parties throughout a distribution channel according to
each party's individual  profile.  DAP DRP can collect real-time  information on
inventory,  orders,  and sales of products  from  various  distribution  channel
points.  This greatly  enhances a business'  ability to manage its inventory and
respond quickly to market needs.



                                       13
<PAGE>

DAP DRP's functions and features offer:

     o    Complete pricing system and pricing policy administration;
     o    Flexible operation flow control;
     o    Timely query of stock, marketing and financial information; and
     o    Management of sales promotion.

DAP(R) OFFICE AUTOMATION SYSTEM ("DAP OAS"). DAP OAS manages email,  examination
and approval flow and documents.  It offers security and a user-friendly desktop
interface.  By deploying  DAP OAS,  the client can optimize its back-end  office
support and decision making processes.

DAP OAS's main functions and features enable:

     o    Voice mail messaging management and records management;
     o    Security;
     o    Telephone recording, data management and vehicle management;
     o    Business-to-business   service   arrangements,   activity  guides  and
          telephone directories; and
     o    Human resource management, recruitment and personal profiles.

COMPETITION

Software  implementation  in China has been cumbersome and many projects require
extensive customization and integration. Even though software licenses are sold,
supply-chain  planning software companies have acted more as service consultants
and have yet to realize their target level of return from their investments.

Our competition in China can be divided into two groups: domestic  companies and
international companies.

In China,  our domestic  competition can be sub-divided  into two groups:  large
domestic companies such as Topsoft,  Dongda,  Founders,  UFSoft, and Kingdee and
small- to medium-sized companies such as eGistics, Yuanwang Software,  PanChina,
and  AsiaBridge.  We seek to compete  with the large  domestic  companies in our
industry by focusing on our  strength  as a  project-oriented  company  that can
provide  services  tailored to meet a customer's  needs. We seek to compete with
small- to  medium-sized  companies in our industry by levering our  economies of
scale.  Our  GIS/GPS/Wireless  and  Web  integrated  platforms  enable  seamless
integration across different systems of our customers, which we believe provides
us with a competitive advantage.

We also complete with international companies in the supply chain management and
logistics software industry in China.  International  companies,  including SAP,
Oracle,  Manhattan  Associates,  have already  established  their  operations in
China.  Most of the  international  companies  in our  industry in China  target
primarily  subsidiaries of foreign-owned  corporation  operating in China, which
differs from our target  market.  Although our  international  competitors  have
advanced  technologies,  we  believe  that their  products  are  generally  more
expensive  than ours. We also believe that we have a competitive  advantage over
these international companies because of our localized technical support.

The  manufacturing  and selling of computer  software and hardware  products and
systems  solutions for the supply chain  management  and  logistics  industry in
China is characterized by rapidly evolving  technology and intense  competition.
Many companies of all sizes,  including  large companies  located in China,  are
engaged in this industry.  Many of our competitors  have  substantially  greater
financial and other resources,  larger research and development  staffs and more
experience  in  servicing  this  industry  than  we  do.   Moreover,   potential
competitors  have or may have  patents or other  rights  that we may  require in
order to remain competitive in the future.

STRATEGIES

Our  objective  is to become one of the  largest  supply  chain  management  and
logistics solution providers in China by providing state-of-the art technologies
and complete  application  solutions and services.  The strategy to achieve this
objective includes the following key elements:


                                       14
<PAGE>


    >   Continue  to  develop  technology, standardize  its products and protect
        intellectual property

              We  intend  to   continue   developing   advanced   products   and
              technologies to provide clients with total solutions.  In order to
              achieve this, we plan to establish an open architecture  platform,
              expand GIS/GPS  wireless  applications,  improve  integration  and
              continue to build technology on both J2EE and .NET dual platforms.
              By creating standardized modular applications,  we will be able to
              reduce development costs, as well as offer rapid system deployment
              and  implementation  to  clients.   We  also  intend  to  continue
              developing our hardware  technology and to develop and standardize
              platform and modular products so as to set industry  standards and
              secure a leading position in the market.

    >   Increase  business  capacity  through  addition  and  retention  of high
        quality workforce

              We  have   assembled   an   outstanding   group  of  domestic  and
              international  professionals  with  experience  in the  logistics,
              supply chain management,  and IT industries.  To grow our software
              development and consulting  capabilities,  we intend to retain and
              recruit more local and foreign IT  professionals  and  experienced
              logistics  and  supply  chain  management  experts.  To retain and
              motivate  our  staff we  intend to offer  advanced  training,  and
              monetary  performance and other incentives.  By expanding our team
              of  experts,  we  believe we can  provide  our  clients  with more
              advanced end-to-end solutions.

    >   Establish  and  reinforce  strategic  relationships  in  technology  and
        marketing

              We have collaborated with other information  technology companies.
              We believe we have  received  favorable  terms for  licensing  key
              technologies  from  our  strategic  partners  and  leveraging  our
              existing network and service capabilities to offer a wide range of
              logistics system  solutions.  We plan to work with other companies
              for  certain  projects  to boost  marketing  efforts and reach new
              clients. Additionally,  through our sales channel partners such as
              local  distributors,  we intend to establish a presence throughout
              China  and  leverage  our  local  market  knowledge.  We intend to
              continue to enhance our  technology  and products,  and to promote
              our solutions by partnering with other technology,  software,  and
              third party logistics companies.

    >   Continue  to  enhance  our expertise in the logistics domain and Chinese
        market

              We have acquired in-depth  knowledge of the logistics industry and
              local market through our team of experienced logistics experts and
              local  professionals.  In order to further understand our clients'
              needs and foresee emerging market trends, we intend to continue to
              improve  our   logistics   domain   expertise   and  local  market
              intelligence.  We plan to leverage our  knowledge in logistics and
              the PRC  market  to  develop  better  products  that will meet the
              precise requirements and usage standards of our clients.

SALES AND MARKETING

We sell our products and services through our own branch offices across China as
well as through  partner  channels.  Currently,  we have  branch  offices in the
largest cities in China. We conduct product promotion road shows and participate
in industry  trade  shows.  We also  advertise  in  industry  media and over the
Internet, and use direct mailings and electronic mailings.

Currently,  our sales and  marketing  teams  operate  from  offices in  Beijing,
Shanghai and Shenzhen. The teams' responsibilities  include brand establishment,
preparation and distribution of marketing materials, organization of promotional
events,  advertising,  media  and  public  relations  and  market  research  and
analysis.

Our sales and  marketing  teams first conduct a thorough  industry  analysis and
carefully identify the target customers in specific market segments.  Each sales
representative is responsible for a list of target  customers,  and they analyze
the customer profile and identify potential issues in their logistics functions.
The sales and  marketing  teams also  share  customer  intelligence  used in the
marketing  process with the research and  development  team in order to forecast
technology trends and to generate new system solutions for our clients.


                                       15
<PAGE>


In addition to our  marketing  efforts,  our sales staff works  closely with our
product  requirement  and  technical   development  team  as  well  as  industry
consultants.   The  sales  staff's   responsibilities  include  preparation  and
submission of technical and solution  proposals to prospective  customers.  They
pay  regular  visits to  customers'  sites,  gather  information  on  customers'
requirements, business and operational flow, and then work with the research and
development team to generate system solutions and proposals accordingly.

We use both  traditional and Internet media in our sales and marketing  efforts,
as well as client referrals.  We market ourselves using  promotional  activities
such as telephone calls to prospective and existing  customers,  direct customer
visits  and  contract  negotiations.  We also  engage  systems  distributors  to
represent us in  solutions  sales.  Furthermore,  we have  established  Internet
portal links and information and promotional relationships with key industry web
portals.

NASDAQ DELISTING

In March  2004,  we  received a letter  from the NASDAQ  Listing  Qualifications
Department  indicating  that we were subject to being  delisted  from the NASDAQ
SmallCap Market because of our failure to comply with NASDAQ  Marketplace  Rules
4320(e)(2)(B) and  4350(i)(1)(D)(ii).  Rule 4320(e)(2)(B)  requires a company to
have a minimum of $2,500,000 of  shareholders'  equity.  Rule  4350(i)(1)(D)(ii)
requires  shareholder approval when a company issues more than 20% of its shares
at a discounted price.

We requested an oral hearing before the NASDAQ Listing Qualifications Panel (the
"Panel")   to  review  the   determination   reached   by  the  NASDAQ   Listing
Qualifications  Department.  Under applicable  rules, the hearing request stayed
the  delisting of our common stock from The NASDAQ  SmallCap  Market,  pending a
decision by the Panel.  Prior to the  hearing,  we presented a plan to the Panel
for achieving and sustaining  compliance with Marketplace Rule 4320(e)(2)(B) and
we sought to comply with Marketplace Rule 4350(i)(1)(D)(ii).

The hearing was held on April 22, 2004 in Washington,  D.C. On May 21, 2004, the
Company  received a  notification  letter from  counsel  for the NASDAQ  Listing
Qualifications  Department  stating that our common stock would be delisted from
The NASDAQ SmallCap Market effective as of the open of business on Tuesday,  May
25,  2004.  On such  date,  our common  stock was listed on the OTCBB  under the
symbol "DFCT".

In May 2004,  our board  sought to comply  with  newly  adopted  SEC and  NASDAQ
requirements  regarding  independent  directors  and  corporate  governance.  We
increased the size of our board of directors to nine,  including  four executive
directors and five  independent  directors.  We also created an audit  committee
consisting of three  independent  directors with accounting,  business and legal
backgrounds.  We also adopted several corporate  governance policies in order to
have greater  transparency in our corporate practices and to increase management
accountability,  including adopting corporate  governance  guidelines,  an Audit
Committee  Charter,  a Code of Ethics for our Chief  Executive  Officer  and our
Senior Financial  Officers,  employee  compliance  procedures for accounting and
auditing matters,  a Compensation  Committee Charter and a Nominating  Committee
Charter.

On June 7, 2004, after our acquisition of DICHAIN Software,  we filed an initial
listing  application to list our common stock on The NASDAQ SmallCap Market.  On
August  17,  2004,  we  received a letter  from  NASDAQ  Listing  Qualifications
Department denying our application for listing.  On August 23, 2004, we filed an
application  for another  hearing in front of the Panel. We engaged the law firm
of Loeb & Loeb LLP in New York to be our new corporate counsel.  The hearing was
held on September 30, 2004 in  Washington,  DC. On December 30, 2004,  the Panel
responded  to the  hearing and denied the  Company's  request for listing on the
NASQAD  SmallCap  Market.  We received a letter dated  November 4, 2004 from the
NASDAQ  Listing  Qualifications  Department  regarding  our late  filing of this
Annual  Report on Form 20-F.  We  responded  to this  letter and have filed this
Annual Report accordingly.

ORGANIZATIONAL STRUCTURE

We are  part of a group  of  companies.  At the top of  this  group  is  DiChain
Holdings Ltd.  DiChain  Holdings Ltd. has a 51.17%  interest in China  Merchants
DiChain  (Asia) Ltd.,  which  currently has a 5.05% interest in us. Prior to our
acquisition of DICHAIN  Software,  DICHAIN  Holdings'  wholly-owned  subsidiary,
DICHAIN  Systems Ltd.,  held a 68% interest in DICHAIN  Software.  Following the
acquisition,  DICHAIN Software,  incorporated in the People's Republic of China,
became our wholly owned  subsidiary and DICHAIN  Systems Ltd.  became a majority
holder of our shares.


                                       16
<PAGE>


Since  the  sale  of our  subsidiaries  and  assets  we had  been  using  leased
facilities  and  equipment  for  our  paper  manufacturing   operations.   These
facilities   and  equipment  were  used  to  convert  jumbo  tissue  rolls  into
consumer-grade   hygienic  tissue  products.   We  believe  that  there  are  no
environmental issues related to our paper manufacturing business or our software
business.  Due to the  continuous  unsatisfied  performance,  we cease our paper
business operating in March 2005.


ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS.
================================================================================

The following  discussion and analysis  should be read in  conjunction  with the
financial  statements  and  the  accompanying  notes  thereto  and is  qualified
entirely  by the  foregoing  and by other more  detailed  financial  information
appearing elsewhere in "Item 18.
Financial Statements."

OVERVIEW

Until May 2004, we were  principally  engaged in the industry  segments of paper
merchanting  and paper  manufacturing.  We acquired all of the capital  stock of
DiChain Software in May 2004 by issuing  197,799,000 shares of our common stock.
DiChain  Software is engaged in the business of  designing,  manufacturing,  and
selling computer  software and hardware  products and systems  solutions for the
supply chain management and logistics industry in China. The business of DiChain
Software became our core business.

We ceased  operations  in the paper  industry  in March 2005.  Accordingly,  the
financial   statements  for  the  operations  of  paper  merchanting  and  paper
manufacturing segments have been classified as discontinued  operations in 2003,
2004 and 2005.

RESULTS OF OPERATIONS

FISCAL YEAR ENDED MARCH 31, 2005 COMPARED WITH FISCAL YEAR ENDED MARCH 31, 2004

SALES AND GROSS PROFIT.  Sales are derived from the  procurement  of hardware on
behalf of customers and professional services for system development,  including
design,  planning,  consulting,  and system integration,  the system consultancy
services,  and  the  monthly  subscription  fees  for  system  services.  System
development  service income is recognized  based on the percentage of completion
method.  Revenues  from customer  contracts  requiring  significant  production,
modifications,  or  customization  of  the  software  are  recognized  over  the
installation and customization  period.  Labor hours and direct project expenses
are used to determine the stage of  completion,  except for revenues  associated
with the procurement of hardware. Revenues from sales of hardware are recognized
upon delivery.  System  consultancy  services are  recognized  when services are
rendered and  obligations  under related  contracts are fulfilled.  Subscription
fees for system services are recognized ratably over the contract period.

Our sales in fiscal 2005 were HK$17,573,000  (US$2,253,000) with gross profit of
HK$12,129,000 (US$1,555,000), approximately 69%.

OPERATING EXPENSES. Selling, general and administrative expenses for fiscal 2005
were HK$12,222,000 (US$1,567,000),  as compared to HK$4,731,000 (US$606,500) for
fiscal  2004.   The  increase  in  expenses  in  fiscal  2005  was  due  to  the
consolidation  of the company's  corporate and other  expenses  incurred  during
fiscal 2005.

OTHER INCOME AND EXPENSES. We had net other income of HK$859,000 (US$110,000) in
fiscal 2005,  which consisted  primarily of interest income,  interest  expense,
provision of doubtful debts, and provision for obsolescence inventories.

NET INCOME FROM CONTINUING OPERATIONS BEFORE TAXES. After deducting other income
and expenses, net income from continuing operations before taxes for fiscal 2005
was HK$766,000 (US$98,000), compared to a loss of HK$4,731,000 for fiscal 2004.

DISCONTINUED  OPERATIONS.  We generated a net income of HK$921,000  (US$118,000)
from  discontinued  operations  in  fiscal  2005,  as  compared  to  a  loss  of
HK$30,116,000 (US$3,861,000) in fiscal 2004.


                                       17
<PAGE>

We do not believe that inflation has had any  significant  impact on our results
of operations.  Also, we do not believe that foreign currency  fluctuations have
been material.  Foreign  currency  transactions  are  translated  into Hong Kong
dollars at the applicable  rates of exchange  ruling at the  transaction  dates.
Monetary assets and liabilities denominated in foreign currencies at the balance
sheet date are  translated  into Hong Kong  dollars at the  applicable  rates of
exchange  ruling at that  date.  Capital  accounts  in  foreign  currencies  are
translated  into Hong Kong dollars at their  historical  exchange rates when the
capital  transaction  occurred.  Net gains and  losses  resulting  from  foreign
exchange   translation   are  included  in  the  statements  of  operations  and
stockholders'  equity  as other  comprehensive  income  (loss).  No  translation
differences were recorded for the three years ended March 31, 2005.

Some of our business is transacted in the Chinese Renminbi ("RMB"), which is not
freely convertible into foreign currencies.  While the PRC government introduced
a single rate of exchange as quoted  daily by the People's  Bank of China,  this
does not imply convertibility of RMB into United States dollars or other foreign
currencies.  All foreign  exchange  transactions  continue to take place  either
through  the Bank of China or other  banks  authorized  to buy and sell  foreign
currencies  at the  exchange  rates  quoted  by the Bank of China.  Approval  of
foreign  currency  payments by the Bank of China or other  institutions  require
submitting  a  payment  application  form  together  with  suppliers'  invoices,
shipping documents and signed contracts.

FISCAL YEAR ENDED MARCH 31, 2004  COMPARED  WITH THE FISCAL YEAR ENDED MARCH 31,
2003.

For the 2003 fiscal year we  incurred a loss of  HK$101,674,000,  as compared to
HK$30,116,000  for fiscal 2004.  While our  operations  improved in 2004, we had
determined to change our business focus.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2005,  we had working  capital of  approximately  HK$229,738,000
(US$29,452,000),  as compared to HK$28,507,000 (US$3,655,000) at March 31, 2004.
Cash and cash equivalents at March 31, 2005 were HK$101,962,000 (US$13,072,000),
as compared to HK$16,059,000  (US$2,059,000)  at March 31, 2004. The increase in
working  capital and cash was due  primarily  to the  profitable  operations  of
DiChain  Software.  We believe that our working  capital is  sufficient  for our
present  requirements  for the next 12 months.  After this time,  we may need to
raise  additional funds through public or private  financing,  which may include
the sale of equity securities.

Despite   our   profitable   operations,   we  used   cash   of   HK$261,175,000
(US$33,484,000)  in fiscal 2005, as compared to HK$22,976,000  (US$2,946,000) in
fiscal 2004, for our operating activities.  In fiscal 2005, we also used cash of
HK$489,669,000  (US$62,778,000)  for our  investing  activities  in fiscal 2005,
primarily for the acquisition of a subsidiary (HK$487,508,000).

In  fiscal   2005,   cash  was  provided  by  the  new  issue  of  common  stock
(HK$642,875,000) and bank borrowings (HK$193,635,000).  In fiscal 2004, cash was
primarily provided by the issue of common stock (HK$39,084,000).

Our bank  borrowings  bear  interest at rates  ranging  from 4.779% per annum to
6.138% per  annum,  are  secured by bank  deposits  and/or  guarantees,  and are
repayable within one year.

On March 31, 2005, the Company issued 13,328,624 shares of common stock to China
Merchants  DiChain (Asia) Limited ("CMDA") to pay indebtedness  owned to CMDA in
the amount of HK$9,357,000 (US$1,200,000).

RESEARCH AND DEVELOPMENT

Research and development  expenses include payroll,  employee benefits and other
employee-related  costs  associated  with  product  development.   Technological
feasibility for our software products is reached shortly before the products are
released to  manufacturing.  Costs incurred after  technological  feasibility is
established  are not  material,  and  accordingly,  we expense all  research and
development costs when incurred.  We have not incurred any significant  research
and development expenses during the past three years.



                                       18
<PAGE>

EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In November 2004, the Financial  Accounting  Standards  Board (FASB) issued SFAS
151,  Inventory  Costs-- an amendment of ARB No. 43,  Chapter 4. This  Statement
amends the guidance in ARB No. 43,  Chapter 4,  "Inventory  Pricing," to clarify
the accounting for abnormal amounts of idle facility expense,  freight, handling
costs,  and  wasted  material  (spoilage).  Paragraph  5 of ARB 43,  Chapter  4,
previously  stated  that ". . . under  some  circumstances,  items  such as idle
facility expense excessive spoilage, double freight, and rehandling costs may be
so abnormal  as to require  treatment  as current  period  charges.  . . ." This
Statement  requires  that those items be recognized  as  current-period  charges
regardless  of whether they meet the  criterion of "so  abnormal."  In addition,
this Statement  requires that  allocation of fixed  production  overheads to the
costs  of  conversion  be  based  on  the  normal  capacity  of  the  production
facilities.  This  Statement is effective for inventory  costs  incurred  during
fiscal  years  beginning  after June 15, 2005.  Management  does not believe the
adoption  of this  Statement  will  have any  immediate  material  impact on the
company.

In December  2004,  the FASB issued  SFAS No. 152,  "Accounting  for Real Estate
Time-Sharing Transactions--an amendment of FASB Statements No. 66 and 67" ("SFAS
152) The amendments made by Statement 152. This Statement  amends FASB Statement
No.  66,  Accounting  for  Sales of Real  Estate,  to  reference  the  financial
accounting and reporting guidance for real estate time-sharing transactions that
is  provided in AICPA  Statement  of Position  (SOP) 04-2,  Accounting  for Real
Estate Time-Sharing Transactions.  This Statement also amends FASB Statement No.
67,  Accounting for Costs and Initial Rental Operations of Real Estate Projects,
to state that the guidance for (a) incidental  operations and (b) costs incurred
to sell  real  estate  projects  does  not  apply  to real  estate  time-sharing
transactions.  The accounting  for those  operations and costs is subject to the
guidance in SOP 04-2.  This Statement is effective for financial  statements for
fiscal years beginning after June 15, 2005, with earlier application encouraged.
We do not  anticipate  that the  implementation  of this  standard  will  have a
material impact on our financial position, results of operations or cash flows.

On  December  16,  2004,  the  FASB  published  SFAS  No.  123  (Revised  2004),
Share-Based  Payment ("SFAS 123R").  SFAS 123R requires that  compensation  cost
related to  share-based  payment  transactions  be  recognized  in the financial
statements.  Share-based  payment  transactions  within  the  scope of SFAS 123R
include stock options,  restricted stock plans,  performance-based awards, stock
appreciation  rights,  and employee share purchase plans. The provisions of SFAS
123R are  effective  as of the first  interim  period that begins after June 15,
2005.  Accordingly,  we will implement the revised standard in the first quarter
of  fiscal  year  2006.  Currently,  we  account  for  our  share-based  payment
transactions under the provisions of APB 25, which does not necessarily  require
the recognition of  compensation  cost in the financial  statements.  Management
does not believe the adoption of this revised  standard  will have any immediate
materially  impact on our  financial  position and results of operations or cash
flows.

On December 16,  2004,  the FASB issued SFAS No. 153,  Exchanges of  Nonmonetary
Assets,  an  amendment  of  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions  (" SFAS 153").  This statement  amends APB Opinion 29 to eliminate
the  exception  for  nonmonetary  exchanges  of  similar  productive  assets and
replaces it with a general exception for exchanges of nonmonetary assets that do
not have  commercial  substance.  Under SFAS 153, if a  nonmonetary  exchange of
similar productive assets meets a commercial-substance  criterion and fair value
is  determinable,  the transaction must be accounted for at fair value resulting
in  recognition  of any gain or  loss.  SFAS 153 is  effective  for  nonmonetary
transactions  in fiscal  periods  that  begin  after  June 15,  2005.  We do not
anticipate that the  implementation of this standard will have a material impact
on our financial position, results of operations or cash flows.

In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, "Accounting for
Conditional  Asset Retirement  Obligations,  an interpretation of FASB Statement
No. 143," which  requires an entity to recognize a liability  for the fair value
of a conditional  asset  retirement  obligation when incurred if the liability's
fair value can be reasonably estimated.  We are required to adopt the provisions
of FIN 47 no later than the second  quarter of its fiscal 2006. We do not expect
the  adoption  of  this   Interpretation  to  have  a  material  impact  on  our
consolidated financial position, results of operations or cash flows.

In May  2005  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and  Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3." SFAS
154 requires  retrospective  application to prior periods' financial  statements
for changes in accounting  principle,  unless it is  impracticable  to determine
either the period-specific  effects


                                       19
<PAGE>

or  the  cumulative   effect  of  the  change.   SFAS  154  also  requires  that
retrospective  application of a change in accounting principle be limited to the
direct  effects  of the  change.  Indirect  effects  of a change  in  accounting
principle,  such  as  a  change  in  non-discretionary  profit-sharing  payments
resulting from an accounting  change,  should be recognized in the period of the
accounting  change.  SFAS  154 also  requires  that a  change  in  depreciation,
amortization,  or  depletion  method  for  long-lived,  non-financial  assets be
accounted  for as a change  in  accounting  estimate  effected  by a  change  in
accounting  principle.   SFAS  154  is  effective  for  accounting  changes  and
corrections  of errors made in fiscal years  beginning  after December 15, 2005.
Early  adoption is permitted for  accounting  changes and  corrections of errors
made in fiscal years  beginning  after the date this Statement is issued.  We do
not  expect  the  adoption  of  this  SFAS  to  have a  material  impact  on our
consolidated financial position, results of operations or cash flows.

TREND INFORMATION

The  supply  chain  management  and  logistics  software  business  in  China is
generally seasonal in nature.  Revenues in the first six months of each calendar
year are flat. Typically,  the revenue of the last quarter of each calendar year
accounts for over 40% of the revenue for the entire year.

The  supply  chain  management  and  logistics  software  business  in  China is
experiencing  a  period  of  rapid  growth  due to an  increase  in  demand  for
information  management systems by manufacturing and distribution  businesses to
improve such businesses operating efficiency and productivity.  According to the
Industry  Report of 2004 of the Ministry of  Information  and  Technology of the
People's  Republic  of China,  demand  for  information  management  systems  by
small-to medium-sized companies has grown even faster than the industry average.
We believe this trend will  positively  influence our  operating  results in the
future.

CONTRACTUAL OBLIGATIONS AND COMMITMENTS

As of March 31, 2005, we had the following contractual obligations:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
                                                                    Payments due by period (HK$'000)
----------------------------------------------------------------------------------------------------------------------
Contractual Obligations                                             Less than                              More than 5
                                                         Total        1 year     1 - 3 years   3 - 5 years     years
----------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>          <C>                 <C>          <C>           <C>
Long-term debt obligations                               45,283            -        45,283            -             -
----------------------------------------------------------------------------------------------------------------------
Short-term debt obligations                             148,352      148,352             -            -             -
----------------------------------------------------------------------------------------------------------------------
Operating lease obligations                               1,044        1,044             -            -             -
----------------------------------------------------------------------------------------------------------------------
Purchase obligations                                          -            -             -            -             -
----------------------------------------------------------------------------------------------------------------------
Other long-term liabilities                                   -            -             -            -             -
----------------------------------------------------------------------------------------------------------------------
Total                                                   194,679      149,396        45,283            -             -
----------------------------------------------------------------------------------------------------------------------
</TABLE>

OFF-BALANCE SHEET ARRANGEMENTS

We do currently do not have any off-balance sheet arrangements.


ITEM 6.  DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES.
================================================================================

DIRECTORS AND SENIOR MANAGEMENT

Set  forth  below  are the  names,  ages  and  terms  of  office  of each of the
directors,  executive  officers and  significant  employees of the Company and a
description of the business experience of each.

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
PERSON                            AGE    OFFICE                                        OFFICE HELD          TERM OF
                                                                                       SINCE              OFFICE (1)<F1>
------------------------------------------------------------------------------------------------------------------------
<S>                               <C>    <C>                                           <C>                     <C>
Dr. FAN Di                        49     Chairman, Chief Executive Officer and         April 2003              *
                                         Executive Director
------------------------------------------------------------------------------------------------------------------------
ZHOU Li Yang                      46     Chief Financial Officer and Executive         February 2004           *
                                         Director
------------------------------------------------------------------------------------------------------------------------


                                       20
<PAGE>
<CAPTION>
<S>                               <C>    <C>                                           <C>                     <C>
------------------------------------------------------------------------------------------------------------------------
WANG Wei                          39     Executive Director                            August 2004             *
------------------------------------------------------------------------------------------------------------------------
Dr. QI Mingyau                    31     Executive Director                            March 2005              *
------------------------------------------------------------------------------------------------------------------------
YU Wai Kit                        39     Corporate Secretary                           November 2004
------------------------------------------------------------------------------------------------------------------------
Dr. Robert FUNG Hing Piu          69     Independent Director                          April 2003              *
------------------------------------------------------------------------------------------------------------------------
Dr. Godwin WONG                   55     Independent Director                          April 2003              *
------------------------------------------------------------------------------------------------------------------------
Iain F.                           64     Independent Director                          February 2004           *
BRUCE
------------------------------------------------------------------------------------------------------------------------
Barry J.                          60     Independent Director                          June 2004               *
BUTTIFANT
------------------------------------------------------------------------------------------------------------------------
Professor CHI Tianhe              44     Independent Director                          March 2005              *
------------------------------------------------------------------------------------------------------------------------
------------------
* Until the next annual general meeting
<FN>
(1)<F1>  A director is subject to earlier  removal,  with or without  cause,  by
         the  shareholders  and  with cause by the other directors. Officers are
         subject to earlier removal, with or without cause, by the directors.
</FN>
</TABLE>

There  are no family  relationships  among any of our  Executive  Directors  and
Independent Directors.

EXECUTIVE DIRECTORS

DR.  FAN DI.  Since  April  2003,  Dr.  Fan has  served as our  Chairman,  Chief
Executive  Officer  and  an  Executive  Director.  Dr.  Fan is  responsible  for
overseeing  our strategic  development.  Since April 2002, Dr. Fan has served as
the Chairman  and Chief  Executive  Officer of China  Merchants  DiChain  (Asia)
Limited,  a company  listed on the Stock  Exchange  of Hong Kong  Limited.  From
December  1999 to April  2002,  he served  as an  Executive  Director  and Chief
Financial  Officer of China  Merchants  Group.  Dr.  Fan is a director  of China
Merchants  DiChain  (Asia)  Limited  and  China  Pharmaceuticals   International
Corporation.  Dr. Fan has  substantial  experience in financial  management  and
business  management.  He  holds a Ph.D.  in  Business  Administration  from the
Southern University of California.

MR. ZHOU LI YANG.  Since February 2004, Mr. Zhou has served one of our Executive
Directors  of the Company  and Mr. Zhou was  appointed  as the  Company's  Chief
Financial Officer in December 2004. Since February 2002, Mr. Zhou has worked for
China Merchants DiChain group, which is the ultimate controlling  shareholder of
the Company.  Since September 2004, Mr. Zhou has served as the Managing Director
of China  Merchants  DiChain  (Asia)  Limited,  a  company  listed  on the Stock
Exchange of Hong Kong,  engaging in the  business  of  logistics.  He has been a
director,  since October 2004,  and the Chief  Financial  Officer,  since August
2005,  of China  Pharmaceuticals  International  Corporation,  a  majority-owned
subsidiary of China Merchants DiChain Investment  Holdings Limited,  whose stock
trades on the OTC Bulletin Board.  From May 2000 to August 2001, Mr. Zhou served
as the Investment Manager of Tianjin Development Holdings Ltd., a window company
of Tianjin  government  in Hong Kong  listed on the Stock  Exchange of Hong Kong
with businesses in  manufacturing  and selling winery and beverage  products and
elevator and  investment  and operation of container  terminal,  highway and gas
supply in China.  From  February  1995 to October  1999,  Mr.  Zhou served as an
Assistant  Manager to Ka Wah Capital Ltd.,  an  investment  banking arm of CITIC
Kawah Bank,  which is a bank listed on the Stock Exchange of Hong Kong. Mr. Zhou
has  substantial  experience  in  management  of listed  companies,  mergers and
acquisitions,  direct investment and corporate  finance.  He obtained a Bachelor
degree in Physics from Central-South  University,  China and a Master of Science
degree in  Business/Finance  from the  University  of  Baltimore  in the  United
States.

MR. WANG WEI. Dr. Wang has served as one of our Executive Directors since August
2004 and joined DiChain  Software  Systems in October 2000. Since November 2001,
Dr. Wang has served as a General Manager of DiChain  Software.  From August 1999
to October  2000,  Dr.  Wang served as the Senior  Manager and Chief  Technology
Officer of Yin Pai Technology  (SZ) Co., Ltd. and Zhu Yang  Technology (SZ) Co.,
Ltd., each of which is focused on developing information technologies.  Dr. Wang
received his Ph.D.  degrees in Industrial  Engineering  and Management from Hong
Kong Technology University and Central China University.

DR. QI MINGYAU.  Dr. Qi was appointed  one of our  Executive  Directors in March
2005 and is currently the General Manager of DiChain Intelligent  Transportation
System Co.,  Ltd, a subsidiary  of DiChain  Group.  Dr. Qi holds a Ph.D.  in GIS
Studies,  Institute of Geographic Science and Nature Resources Research, Chinese
Academy of Science and has over ten years'  experience in GIS, GPS, LBS wireless
application and logistics in China.


                                       21
<PAGE>

NON-EXECUTIVE DIRECTORS

DR.  GODWIN WONG.  Professor  Wong has been on the faculty of the Haas School of
Business at the University of California, Berkeley for the past seventeen years.
He performs research and teaches doctoral,  master's and baccalaureate  programs
and executive  training  courses in the areas of  Entrepreneurship,  Information
Technology  Management  (IT/MIS),  Strategic  Planning,  International  Business
Negotiation,  and Multicultural  Management. He has been a management consultant
and    specialist/strategist   to   various   organizations   including   banks,
corporations,  government agencies,  other consulting firms and private business
enterprises.  He  has  assisted  multinational  companies  in  the  conduct  and
negotiation  of  businesses  with  China and Asia,  especially  in  mergers  and
acquisitions.  He has been involved in the  turnaround and the purchase and sale
of  troubled  financial  institutions.  He has  also  served  on the  boards  of
directors of several  California banks and several high tech ventures in Silicon
Valley. He has headed his own management  companies in real estate,  consulting,
trading, and investment management. Dr. Wong obtained his Bachelor's degree from
the University of Wisconsin, his Master's degree from U.C.L.A., and Master's and
Doctorate degrees from Harvard University.

DR.  ROBERT  FUNG  HING  PIU.  Dr.  Fung is a  non-executive  director  of China
Merchants DiChain (Asia) Limited, a company listed on the Stock Exchange of Hong
Kong  Limited.  Dr. Fung holds  degrees  from Harvard  University  in the United
States and McGill  University in Canada. He is the founding chairman of the Hong
Kong Committee of UNICEF and a member of the Rotary Club of Hong Kong.

MR. IAIN F. BRUCE. Mr. Bruce has more than 40 years of international  experience
in  accounting  and  consulting.  He  joined  KPMG Hong Kong in 1964 and was its
senior  partner from 1991 to 1996.  He is a member of the Institute of Chartered
Accountants  of  Scotland  and the  Hong  Kong  Institute  of  Certified  Public
Accountants and  serves on the boards of several  publicly  listed  companies in
Hong Kong and overseas.

MR.  BARRY J.  BUTTIFANT.  Mr.  Buttifant  has been  appointed  as the  Managing
Director of Hsin Chong  International  Holdings Limited ("Hsin Chong"),  and the
Alternate  Director of Hsin Chong Construction Group Limited since December 2004
and became the Alternate  Director of Synergis Holdings Limited in January 2005.
Before  joining Hsin Chong,  Mr.  Buttifant was an Operating  Partner of Barings
Private Equity  Partners Asia Limited.  He was also the Managing  Director of Wo
Kee Hong  (Holdings)  Limited  ("Wo  Kee  Hong")  from  2001 to 2002 and was the
Adviser to the board of directors  of Wo Kee Hong from 2002 to 2004.  He was the
Managing Director of IDT  International  Limited for over 8 years and had worked
for Sime Darby Hong Kong  Limited and Polly Peck Group for more than 11 years in
the capacity of Finance Director and Managing  Director during the period. He is
also an  independent  non-executive  director  of Hong  Kong  public  companies:
Giordano International  Limited,  Daiwa Associate Holdings Limited,  MediaNation
Inc, and Alltronics Holdings Limited, one NASDAQ listed company China Technology
Global  Corporation  and a  director  of one  NYSE  public  company  Global-Tech
Appliances Inc. Mr. Buttifant is a fellow member of the Association of Chartered
Certified Accountants,  the Hong Kong Institute of Certified Public Accountants,
the Chartered Management Institute, the Hong Kong Management Association and the
Hong Kong Institute of Directors.

PROFESSOR  CHI TIANHE.  Professor  Chi is the director and professor of National
Engineering  Research  Centre for  Geoinformatics,  Institute of Remote  Sensing
Applications  and Chinese  Academy of Sciences Leader of the Research for Remote
Sensing Application on Digital City. He is also the Co-Chair of the Committee of
Urban  Information  System,  GIS  Association  of  China  and the  Committee  of
Categraphy and Geographic Information System, Geography Union of China.

EXECUTIVE OFFICER

MR. YU WAI KIT. Since November 2004, Mr. Yu has served as the Secretary.  Mr. Yu
has  also  served  as  the  secretary  of  China  Pharmaceuticals  International
Corporation since November 2004. Mr. Yu is currently the Secretary and Financial
Controller of China Merchants  DiChain (Asia) Limited,  a holding company listed
on the Stock  Exchange of Hong Kong Limited.  From July 2002 to August 2004, Mr.
Yu served as the  Financial  Controller  and  Company  Secretary  of  Matsunichi
Communication  Holdings  Limited,  an investment  holding  company listed on the
Stock  Exchange  of Hong Kong,  Limited.  From  April 1997 to June 2002,  Mr. Yu
served as the Group Chief  Accountant of Continental  Jewelry (MFG.) Limited,  a
company listed on the Stock Exchange of Hong Kong, Limited.  Mr. Yu is


                                       22

<PAGE>

currently a member of Australian Society of Certified Practising Accountants and
a member of Hong Kong Institute of Certified Public Accountants.

COMPENSATION

During fiscal year 2005,  except for the monthly fee of  HK$200,000  (US$25,600)
payable to a related company as sharing of management fees on a cost basis, none
of our  other  directors  or  officers  received  any  bonus  and  none of their
compensation  was paid  pursuant to a bonus or  profit-sharing  plan.  In fiscal
2004,  each of Robert Fung Hing Piu,  Godwin Wong,  Michael J.  Reiser,  Iain F.
Bruce and Barry J. Buttifant received 150,000 options, with an exercise price of
US$0.20 per share,  under our 2002 Stock Option Plan.  These  options  expire in
July  2013.  There  are  no  present  plans,  arrangements,   or  understandings
concerning  any change in  compensation  for our  directors  and  officers.  The
Company  has no  pension,  retirement  or similar  benefits  for  directors  and
officers pursuant to a plan contributed to by the Company.

BOARD PRACTICES

SERVICE CONTRACTS

Neither  the  Company  nor  its  subsidiaries  have  entered  into  any  service
agreements with any of its executive directors or senior management.

COMMITTEES OF THE BOARD

We have an Executive  Committee,  an Audit  Committee,  a Human  Resources  (HR)
Committee and a Nominating Committee. The members of each are set forth below:

Executive Committee:  Messrs. Fan Di (Chairman), Zhou Li Yang and Wang Wei, each
of whom is an executive board member.

Audit  Committee:  Messrs.  Iain F. Bruce  (Chairman),  Godwin Wong and Barry J.
Buttifant, each of whom is an independent board member.

HR Committee (formerly called the Compensation  Committee):  Messrs. Godwin Wong
(Chairman),  Iain  F.  Bruce  and  Robert  Fung  Hing  Piu,  each  of whom is an
independent board member.

Nominating  Committee:  Messrs.  Robert  Fung Hing Piu  (Chairman)  and Barry J.
Buttifant, each of whom is an independent board member.

The  Executive  Committee  meets  as and  when  necessary  and the  other  three
committees each meet once annually.

The Executive Committee is authorized during any interim period between meetings
of the full  Board  of  Directors,  to act for and in lieu of the full  Board of
Directors and to approve of any transaction requiring Board approval.

The Audit Committee selects and engages,  on our behalf,  the independent public
accountants  to audit our  annual  financial  statements,  and will  review  and
approve the planned scope of our annual audit. In addition,  the Audit Committee
will have to review the terms of proposed  transactions  with related parties in
accordance  with the terms of our Articles of  Association.  The Audit Committee
operates compliant with applicable rules and regulations of the SEC.

The HR Committee establishes remuneration levels for our officers, performs such
functions as provided under employee  benefit  programs and administers the 2002
Stock Option Plan.

The  Nominating  Committee  identifies  individuals  qualified  to become  Board
members,  recommends  to the  Board  candidates  to  fill  Board  vacancies  and
newly-created director positions,  recommends whether incumbent directors should
be nominated for  re-election  to the Board upon the  expiration of their terms,
and oversees the evaluation of the Board's performance. EMPLOYEES


                                       23
<PAGE>

We had 80 full-time  employees on March 31, 2005. Of those 80 employees,  2 were
in  accounting  and  finance,  41 were in  production,  22  were  in  sales  and
marketing, 2 were in administration and 13 were in product development.  We have
no relationships with labor unions. We employ no significant number of temporary
employees.

SHARE OWNERSHIP

The following table sets forth certain  information  regarding  ownership of the
Company's  common shares by the Company's  officers and directors as of November
8, 2005.

<TABLE>
<CAPTION>

                                                             SHARES AND RIGHTS BENEFICIALLY
TITLE OF CLASS        NAME AND ADDRESS OF OWNER                  OWNED OR CONTROLLED (1)<F1>     PERCENT OF CLASS (1)<F1>
<S>                   <C>                                              <C>                              <C>
Common Stock          FAN Di (2)<F2>                                   161,793,674                       61.3%
Common Stock          ZHOU Li Yang                                          0                             0%
Common Stock          WANG Wei                                              0                             0%
Common Stock          QI Mingyau                                            0                             0%
Common Stock          YU Wai Kit                                            0                             0%
Common Stock          Dr. Robert FUNG Hing Piu (3)<F3>                   150,000                        0.057%
Common Stock          Dr. Godwin WONG (3)<F3>                            150,000                        0.057%
Common Stock          Iain F. BRUCE (3)<F3>                              150,000                        0.057%
Common Stock          Barry J. BUTTIFANT (3)<F3>                         150,000                        0.057%
Common Stock          Professor CHI Tianhe                                  0                             0%
------------------
<FN>
(1)<F1> Where persons listed on this  table have the right to obtain  additional
        shares of common stock  through the exercise of  outstanding  options or
        warrants within 60 days from November 8, 2005, these  additional  shares
        are deemed to be outstanding for the purpose of computing the percentage
        of  common  stock  owned  by such  persons,  but are  not  deemed  to be
        outstanding  for the purpose of computing  the  percentage  owned by any
        other person. Based on 263,948,336 shares of common stock outstanding as
        of November 8, 2005.

(2)<F2>  Includes shares are held of record by DiChain Systems Limited and China
        Merchants  DiChain (Asia)  Limited,  both of which are  subsidiaries  of
        DiChain Holdings  Limited.  Dr. Fan is deemed to be the beneficial owner
        of these shares since he is a director of DiChain Holdings Limited.

(3)<F3> Includes shares issuable upon exercise of stock options.
</FN>
</TABLE>

At the  Company's  annual  meeting of  shareholders  held on July 18, 2003,  our
shareholders  approved and adopted our 2002 Stock Option Plan, which will expire
in July 2013.  Options to purchase  shares of common  stock  granted and held by
directors and senior management are as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
                                               NO. OF
NAME                                        OPTIONS HELD           EXERCISE PRICE              EXPIRATION DATE
-------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                     <C>                       <C>
Dr. FAN Di                                        0                      --                           --
-------------------------------------------------------------------------------------------------------------------
ZHOU Li Yang                                      0                      --                           --
-------------------------------------------------------------------------------------------------------------------
WANG Wei                                          0                      --                           --
-------------------------------------------------------------------------------------------------------------------
QI Mingyau                                        0                      --                           --
-------------------------------------------------------------------------------------------------------------------
YU Wai Kit                                        0                      --                           --
-------------------------------------------------------------------------------------------------------------------
Dr. Robert FUNG Hing Piu                       150,000                 $ 0.20                    July 17, 2013
-------------------------------------------------------------------------------------------------------------------
Dr. Godwin WONG                                150,000                 $ 0.20                    July 17, 2013
-------------------------------------------------------------------------------------------------------------------
Iain F. BRUCE                                  150,000                 $ 0.20                    July 17, 2013
-------------------------------------------------------------------------------------------------------------------
Barry J. BUTTIFANT                             150,000                 $ 0.20                    July 17, 2013
-------------------------------------------------------------------------------------------------------------------
Professor CHI Tianhe
-------------------------------------------------------------------------------------------------------------------
</TABLE>

On August 13, 2004, the Board granted options  pursuant to the 2002 Stock Option
Plan,  amounting  to  750,000  shares  at US$0.2  per  share to the  independent
directors.


                                       24
<PAGE>


ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
================================================================================

MAJOR SHAREHOLDERS

To the extent that the following  information  is known to the Company or can be
ascertained  from public  filings,  the following  sets forth  information as of
November  8,  2005  with  regard  to the  Company's  shareholders  that  are the
beneficial owners of five percent or more of our common stock:

<TABLE>
<CAPTION>
                                                             SHARES AND RIGHTS BENEFICIALLY
    TITLE OF CLASS       NAME AND ADDRESS OF OWNER               OWNED OR CONTROLLED (1)<F1>   PERCENT OF CLASS (1)<F1>
<S>                   <C>                                              <C>                              <C>
Common Stock          Dr. Fan Di(2)<F2>                                161,793,674                      61.3%
                      Unit 3611, 36/F, West Tower, Shun Tak
                      Centre, 168-200 Connaught Road
                      Central, Hong Kong

Common Stock          DiChain Systems Limited                          118,679,400                      45.0%
                      Unit 3611, 36/F, West Tower, Shun Tak
                      Centre, 168-200 Connaught Road
                      Central, Hong Kong

Common Stock          Farsight Holdings Limited
                      Units 3611, 36/F, West Tower                      29,669,850                      11.2%
                      Shun Tak Centre
                      168-200 Connaught Road
                      Central, Hong Kong

Common Stock          Squadram Limited                                  23,001,910                       8.7%
                      The Chinese Bank Building
                      61 Des Voeux Road, 16/F
                      Central, Hong Kong

Common Stock          Earnest Investments Services Limited              15,823,920                       6.0%
                      The Chinese Bank Building
                      61 Des Voeux Road, 16/F
                      Central, Hong Kong

Common Stock          China Merchants DiChain (Asia) Limited            13,328,624                       5.0%
                      Unit 3611, 36/F, West Tower, Shun Tak
                      Centre, 168-200 Connaught Road
                      Central, Hong Kong
------------------
<FN>
(1)<F1>  Where persons listed on this table have the right to obtain  additional
         shares of common stock through the exercise of  outstanding  options or
         warrants within 60 days from November 8, 2005, these additional  shares
         are  deemed  to  be  outstanding  for  the  purpose  of  computing  the
         percentage of common stock owned by such persons, but are not deemed to
         be outstanding for the purpose of computing the percentage owned by any
         other person.  Based on 263,948,336  shares of common stock outstanding
         as of November 8, 2005.

(2)<F2>  Includes shares are held of record by DiChain Systems Limited and China
         Merchants  DiChain (Asia)  Limited,  both of which are  subsidiaries of
         DiChain Holdings Limited.  Dr. Fan is deemed to be the beneficial owner
         of these shares since he is a director of DiChain Holdings Limited.
</FN>
</TABLE>

During the last three years,  the following  significant  percentage  changes in
shares held by major shareholders occurred:


                                       25
<PAGE>


On April 16, 2004,  pursuant to the subscription  agreement entered into between
Squadram Limited and the Company, Squadram paid the subscription money of US$2.1
million.  The Company  completed  the  transaction  on April 20, 2004 and issued
5,200,000 shares of its common stock to Squadram.

On May 25, 2004, the Company has completed the  acquisition of DICHAIN  Software
by the  acquiring  the entire  issued  share  capital of DICHAIN  Software.  The
acquisition was approved by shareholders  at the  shareholders'  meeting held on
March 25, 2004. Prior to the  acquisition,  DiChain Software was affiliated with
the Company (i) through two  directors,  Dr. Fan Di, the Company's  Chairman and
Chief  Executive  Officer  and Aaron  Zhu  Xiaojun,  the  Company's  then  Chief
Financial Officer and an Executive  Director,  that were common to both entities
and (ii) through the direct or indirect  ownership of shares of capital stock of
both entities by DiChain Holdings Limited.  DiChain Holdings  Limited,  which is
affiliated with China Merchants  Group, a large business  conglomerate in China,
held approximately 2% of our common stock through its subsidiary DiChain Systems
Limited and  approximately  68% of the common stock of DiChain Software prior to
the  acquisition.  After the  acquisition,  DiChain  Systems  Limited,  Farsight
Holdings Limited, Squadram Limited and Earnest Investments Services Limited held
approximately  56.1%,  14.0%,  10.9% and 7.5%,  respectively,  of the issued and
outstanding shares of the Company's common stock.

On March 31, 2005, the Company issued 13,328,624 shares of common stock to China
Merchants DiChain (Asia) Limited to pay indebtedness owed to that company in the
amount of HK$9,357,000 (US$1,200,000).

The major shareholders have no different voting rights than other shareholders.

Of the 263,948,336  outstanding shares of the Company's common stock at November
8, 2005,  46,842,380 shares are held in the United States by approximately 1,027
record  holders,  and  209,947,551  shares  are held in Hong  Kong and  China by
approximately 409  shareholders,  one of whom,  DiChain Systems Limited,  a Hong
Kong corporation, is a subsidiary of DiChain Holdings Limited.

The  Company is not  directly or  indirectly  owned or  controlled  by any other
corporation,  by any foreign government or by any other natural or legal person,
other  than as set  forth  above  with  regard  to the  shareholdings  of  major
shareholders.  The  Company  knows  of no  arrangements  that  may  now  or at a
subsequent date result in a change of control of the Company.

RELATED PARTY TRANSACTIONS

On May 1, 2003,  Victorison  Logistics Limited ("VLL"), a related company of the
Company,  entered  into an  agreement  with the  Company  whereby  VLL agreed to
provide  management  services  to the  Group  at a  monthly  fee  of  HK$200,000
(US$25,641). According to the management, these transactions were carried out at
the terms  determined  and agreed by the relevant  parties.  For the fiscal year
ended March 31, 2005, US$308,000 was paid to VLL for management services.

On March 30, 2005, the Company  authorized the issuance of 13,328,624  shares of
its common stock in payment of debt in the amount of HK$9,357,000 (US$1,200,000)
owed to China  Merchants  DiChain  (Asia)  Limited.  Dr. Fan is the Chairman and
Chief Executive Officer of China Merchants DiChain (Asia) Limited.  Both DiChain
Systems Limited, the principal  shareholders of the Company, and China Merchants
DiChain (Asia) Limited are subsidiaries of DiChain Holdings Limited.

During  the  years  presented,  the  Group  obtained  bank  loans  and made fund
transfers  to its  related  companies.  The Group also  obtained  funds from its
related  companies.  Details are set out in the consolidated  statements of cash
flows.

The Group received  interest income from related  companies for advances to them
amounting to approximately  HK$0, HK$0 and HK$12,090,000  (US$1,550,000)  during
the years ended March 31, 2003, 2004 and 2005, respectively.

INTERESTS OF EXPERTS AND COUNSEL

Not applicable.





                                       26

<PAGE>


ITEM 8.  FINANCIAL INFORMATION
================================================================================

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

The  information  required by this  section is  included in "Item 18.  Financial
Statements" in this annual report.

LEGAL PROCEEDINGS

We are involved in certain litigation and are exposed to some unasserted claims.
For a discussion of these matters, see "Item 18. Financial Statements - Notes to
Financial Statements - Note 15 - Commitments and Contingencies."

In May 2004,  Mr.  Horace Yao Yee  Cheong,  the former  chairman  and  executive
director of the Company, sued the Company,  seeking,  among other things, unpaid
remuneration  of  HK$480,000  and a short  term  advance of  HK$1,162,222,  plus
interest and costs, and specific  performance by the Company to allot to Mr. Yao
1,153,846 fully paid shares of common stock and 62,500 shares of common stock at
US$0.001 par value. Since Mr. Yao's claim falls within the agreement of Gumption
Trading to assume all the  liabilities  of the  company,  including  contingency
liabilities,  incurred prior to January 28, 2004, we have not made any provision
for the claimed amount in our financial statements.


ITEM 9.  THE OFFER AND LISTING.
================================================================================

PRICE HISTORY

The  common  stock  has been  trading  on the  Over-The-Counter  Bulletin  Board
("OTCBB") since May 25, 2004 under the following symbols:

     o    DFCT - May 25, 2004 to December 31, 2004;
     o    DFCTF - December 31, 2004 to February 7, 2005; and
     o    CTGLF - since February 7, 2005.

There  have  been no  trading  suspensions  imposed  by the  OTCBB or any  other
regulatory authorities in the past three years.

The following table sets forth the market price ranges and the aggregate  volume
of trading of the common  shares of the  Company on the OTCBB,  and  predecessor
exchanges, for the periods indicated:

                             STOCK TRADING ACTIVITY

                                                        SALES PRICE

YEAR ENDED                                         HIGH                 LOW

March 31, 2005                                   $ 1.180              $ 0.0785
March 31, 2004                                   $ 2.290              $ 0.130
March 31, 2003                                   $ 0.400              $ 0.080
March 31, 2002                                   $ 0.625              $ 0.140
March 31, 2001                                   $ 4.375              $ 0.340

                                                          SALES PRICE

QUARTER ENDED                                      HIGH                 LOW

September 30, 2005                               $ 0.130              $ 0.075
June 30, 2005                                    $ 0.280              $ 0.090
March 31, 2005                                   $ 0.350              $ 0.0785
December 31, 2004                                $ 0.350              $ 0.120
September 30, 2004                               $ 0.570              $ 0.190



                                       27
<PAGE>

                                                          SALES PRICE

QUARTER ENDED                                      HIGH                 LOW

June 30, 2004                                    $ 1.180              $ 0.340
March 31, 2004                                   $ 1.850              $ 0.370
December 31, 2003                                $ 1.050              $ 0.260
September 30, 2003                               $ 2.290              $ 0.600
June 30, 2003                                    $ 2.040              $ 0.130

                                                        SALES PRICE

MONTH ENDED                                        HIGH                 LOW

October 31, 2005                                 $ 0.100              $ 0.055
September 30, 2005                               $ 0.108              $ 0.075
August 31, 2005                                  $ 0.120              $ 0.090
July 31, 2005                                    $ 0.130              $ 0.092
June 30, 2005                                    $ 0.135              $ 0.090
May 31, 2005                                     $ 0.280              $ 0.115
April 30, 2005                                   $ 0.190              $ 0.125
March 31, 2005                                   $ 0.230              $ 0.0785
February 28, 2005                                $ 0.330              $ 0.200
January 31, 2005                                 $ 0.350              $ 0.160
December 31, 2004                                $ 0.330              $ 0.160
November 30, 2004                                $ 0.350              $ 0.120
October 31, 2004                                 $ 0.280              $ 0.160

These above  quotations  reflect  inter-dealer  prices without  retail  mark-up,
markdown, or commissions and may not necessarily represent actual transactions.

MARKETS

All of the above  market price  information  is given with respect to the market
price in the United  States.  The stock does not trade in Hong Kong or elsewhere
on any organized market. Our common stock is currently listed on the OTCBB.


ITEM 10.  ADDITIONAL INFORMATION.
================================================================================

MEMORANDUM AND ARTICLES OF ASSOCIATION

The Company was  incorporated  in the  Territory of the British  Virgin  Islands
under the International  Business  Companies Act, Cap. 291, IBC No. 189457.  The
Company's  objects  and  purposes,  found in  paragraph 4 of the  Memorandum  of
Association,  are  general in nature  and  permit  the  Company to engage in any
business,  acts, or activities  which are not  prohibited  under any law for the
time being in force in the British Virgin Islands.

There are no provisions in the Company's  Articles of  Association  that limit a
director's  power to vote on a matter in which he is materially  interested,  to
vote  compensation  to  himself  or any  other  director  in the  absence  of an
independent  quorum, or to vote on matters regarding  borrowings by the Company.
There  are no  retirement  age  requirements,  and  there  are  no  shareholding
requirements to qualify as a director.

The  Company  has only one class of stock:  ordinary  (or  common)  shares.  The
holders of ordinary shares do not have dividend rights, are entitled to one vote
for each share held of record on all matters submitted to the  stockholders,  do
not have rights to share in the Company's  profits,  have rights to share in any
surplus in the event of  liquidation,  do not have  redemption  or sinking  fund
provisions,  are not liable to further capital calls by the Company, and are not
subject to any  provisions  discriminating  against any existing or  prospective
holder of such securities as a result of such  shareholder  owning a substantial
number of shares.


                                       28
<PAGE>


In order to change the rights of  holders of any class of the  Company's  stock,
the  Memorandum  of  Association  must  be  amended  by a  majority  vote of the
Company's shareholders and of the holders of any class of stock whose rights are
changed.

Annual or  special  meetings  of the  Company's  shareholders  are called by the
directors  at any time or place of their  choosing  and must be called  upon the
written  request  of  shareholders  holding  ten  percent  (10%)  or more of the
outstanding  shares of the Company's common stock. At least seven days notice of
a  shareholders'  meeting must be given.  A shareholder  may be represented at a
meeting by a proxy who may speak and vote on behalf of the shareholder.

There are no  limitations  on the rights to own the Company's  securities or the
rights of  non-residents  or foreign  shareholders  to hold or  exercise  voting
rights on the  securities  imposed by foreign law or the  Company's  constituent
documents.

There are no provisions in the Company's  Memorandum or Articles of  Association
that would  have an effect on  delaying,  deferring  or  preventing  a change in
control of the Company  and that would  operate  only with  respect to a merger,
acquisition  or  corporate  restructuring  involving  the  Company or any of its
subsidiaries.

There are no provisions in the Company's  Articles of  Association  governing an
ownership threshold above which shareholder ownership must be disclosed.

With regard to the foregoing matters, the laws in the British Virgin Islands are
not significantly different than those in the United States.

There are no conditions in the Memorandum and Articles of Association  governing
changes  in the  Company's  capital  or  changes in the rights of holders of any
class of its stock that are more stringent than is required by law.

MATERIAL CONTRACTS

The following are material  contracts entered into by the Company during the two
years preceding the date of this annual report:

1.       On January  26,  2004,  we entered  into the  Agreement  with  Gumption
         Trading  and  Guangzhou  Dransfield  Paper  Limited.  Pursuant  to  the
         Agreement,  we sold to  Gumption  Trading  (i) all of the shares of our
         wholly  owned  subsidiaries  DF  Paper  Guangdong  Limited,   Guangdong
         Dransfield  Paper  Limited,   DF  Paper  Jiangsu  Limited  and  Jiangsu
         Dransfield  Paper  Co.  Limited,  and  (ii)  all  fixed  assets  of our
         subsidiary in Conghua,  Guangzhou  Dransfield Paper Limited.  Guangzhou
         Dransfield  Paper  Limited  agreed  to lease  back  these  assets  from
         Gumption  Trading for its paper  manufacturing  operations at a rent of
         HK$1.00 per year for a term of one year,  renewable  yearly  thereafter
         upon mutual agreement. For such purchase, Gumption Trading paid to us a
         nominal  aggregate  amount of HK$5 and assumed all of our  liabilities,
         including  liabilities related to such subsidiaries and assets, that we
         incurred  prior to January 28, 2004.  We entered into this  transaction
         primarily to streamline our operations.  This transaction was closed on
         January 28, 2004.  The  Agreement has been filed as Exhibit 4.3 to this
         Annual Report.

2.       A Deed of Guarantee and Deed of Confirmation  were also entered into in
         connection  with  the  transactions   contemplated  by  the  Agreement.
         Pursuant  to the Deed of  Guarantee,  dated  January 28,  2004,  Qindao
         Haotian Investment  Limited  guaranteed to us and Guangzhou  Dransfield
         Paper Ltd. the obligations of Gumption Trading under the Agreement. The
         Deed of Guarantee has been filed as Exhibit 4.4 to this Annual Report.

3.       The Deed of  Confirmation,  dated  September 20, 2004, was entered into
         among us, Guangzhou Dransfield Paper Ltd. and Qindao Haotian Investment
         Limited to clarify and define the liabilities of Gumption Trading under
         the  Agreement.  Pursuant  to the  terms of the  Deed of  Confirmation,
         Qindao Haotian Investment Limited confirmed the validity of the Deed of
         Guarantee.  The Deed of  Confirmation  has been filed as Exhibit 4.5 to
         this Annual Report.


                                       29
<PAGE>



4.       On February 13, 2004,  we entered into an Agreement for the Exchange of
         Common  Stock  with  DiChain   Systems   Limited,   a  limited  company
         incorporated in Hong Kong, Farsight Holdings Limited, a limited company
         incorporated in the British Virgin Islands, Squadram Limited, a limited
         company  incorporated  in  the  British  Virgin  Islands,  and  Earnest
         Investments  Services  Limited,  a limited company  incorporated in the
         British Virgin Islands,  pursuant to which DICHAIN  Software became our
         wholly owned subsidiary. The information technology business of DICHAIN
         Software has now become our primary  business.  In connection with this
         acquisition,  we issued to DiChain  Systems  197,799,000  shares of our
         common  stock.  This  transaction  was  closed  on May 25,  2004.  This
         Agreement has been filed as Exhibit 4.6 to this Annual Report.

5.       In February  2004,  we  completed a private  placement  of 21.5 million
         shares of our stock at  US$0.20  per  share or an  aggregate  amount of
         US$4.3 million.  In connection with this private placement,  we entered
         into a letter  agreement  dated  February 4, 2004 with Quam  Securities
         Company Limited ("Quam"), in which Quam agreed to be the placing agent.
         On February  13,  2004,  Quam and the  investors  entered  into placing
         letters  and  confirmations  thereto  in  connection  with the  private
         placement.  The letter agreement is filed as Exhibit 4.7 to this Annual
         Report on Form 20-F and the placing  letters and related  confirmations
         are filed as Exhibits 4.8 through  4.14,  respectively,  to this Annual
         Report on Form 20-F.

6.       On April 5, 2004,  we  completed  a private  placement  of 5.2  million
         shares of our stock at US$0.4038  per share or an  aggregate  amount of
         approximately   US$2.1   million.   In  connection  with  this  private
         placement,  we entered into a placing  letter and related  confirmation
         with  Squadram  Limited.  The  subscription  offer  letter and  related
         confirmation  is filed as Exhibit  4.15 to this  Annual  Report on Form
         20-F.

7.       On March 31, 2005, the Company issued 13,328,624 shares of common stock
         to China Merchants  DiChain (Asia) Limited ("CMDA") to pay indebtedness
         owned to CMDA in the amount of HK$9,357,000 (US$1,200,000).

EXCHANGE CONTROLS

The  Company's  business  is  conducted  in and from Hong  Kong and the  People'
Republic  of China  (the  "PRC")  in Hong  Kong  dollars  and the PRC  Renminbi.
Periodic  reports made to U.S.  shareholders are expressed in U.S. dollars using
the then-current exchange rates.

The PRC  Government  imposes  foreign  currency  control in part through  direct
regulation  of the  conversion  of Renminbi  into  foreign  exchange and through
foreign trade  restrictions.  The  conversion of the Renminbi into U.S.  dollars
must be based on the People's Bank of China  ("PBOC") Rate. The PBOC Rate is set
based on the previous day's PRC interbank  foreign exchange market rate and with
reference to current exchange rates on the world financial markets. In line with
the  unification  of the two  exchange  rates,  the  Renminbi  was  revalued  at
HK$1.00=RMB1.12 and  US$1.00=RMB8.70 on January 3, 1994. Since revaluation,  the
exchange rate has fluctuated  between a range of US$1.00 = RMB8.30 and US$1.00 =
RMB8.70.

The Hong Kong dollar is freely  convertible into the U.S. dollar.  Since October
17, 1983, the Hong Kong dollar has been pegged to the U.S.  dollar at HK$7.80 to
US$1.00.  The central  element in the  arrangements  for the peg is an agreement
between the Hong Kong government and the three Hong Kong banknote issuing banks,
HSBC,  Standard  Chartered  Bank and the Bank of  China.  Under  the  agreement,
certificates  of  indebtedness,  which are  issued  by the Hong Kong  Government
Exchange  Fund to the  banknote  issuing  bank to be held  as  cover  for  their
banknote issues,  are issued and redeemed only against payment in U.S.  dollars,
at the  fixed  exchange  rate of  US$1.00  =  HK$7.80.  When the bank  notes are
withdrawn  from   circulation,   the  banknote   issuing  banks   surrender  the
certificates of  indebtedness to the Hong Kong Government  Exchange Fund and are
paid the  equivalent of U.S.  dollars at the fixed rate.  Exchange rates between
the Hong Kong  dollar and other  currencies  are  influenced  by the linked rate
between the U.S. dollar and the Hong Kong dollar.

The  market  exchange  rate of the Hong  Kong  dollar  against  the U.S.  dollar
continues  to be  determined  by the forces of supply and demand in the  foreign
exchange market. However,  against the background of the fixed rate system which
applies  to the  issue  of Hong  Kong  currency  in the form of bank  notes,  as
described  above, the market exchange rate has not deviated  significantly  from
HK$7.80 to  US$1.00.  See  "Selected  Financial  Data" in Item 3 of this  annual
report.  The Hong Kong  government has stated its intention to maintain the link
at that rate.  The Hong Kong


                                       30
<PAGE>

government has stated that is has no intention of imposing  exchange controls in
Hong Kong and that the Hong Kong  dollar  will remain  freely  convertible  into
other  currencies  (including the U.S.  dollar).  The PRC and the United Kingdom
agreed in 1984 pursuant to the Joint Declaration of the Government of the United
Kingdom of Great Britain and Northern Ireland and the Government of the People's
Republic of China on the Question of Hong Kong ("the Joint  Declaration")  that,
after Hong Kong became a special administrative region of the PRC (the "SAR") on
July 1, 1997,  the Hong Kong dollar will continue to circulate and remain freely
convertible.  However,  no assurance can be given that the SAR  government  will
maintain the peg at HK$7.80 to US$1.00, if at all.

TAXATION

There are no  British  Virgin  Islands  ("BVI")  governmental  laws,  decrees or
regulations   affecting  the  remittance  of  dividends  or  other  payments  to
nonresident holders of the Company's  securities.  U.S. holders of the Company's
securities are subject to no taxes or withholding  provisions under existing BVI
laws and  regulations.  By  reason  of the fact  that the  Company  conducts  no
business within the BVI, there are no applicable reciprocal tax treaties between
the BVI and the U.S. that would affect the preceding statement that there are no
BVI taxes, including withholding provisions,  to which U.S. security holders are
subject under existing laws and regulations of the BVI.

DOCUMENTS ON DISPLAY

The constituent documents concerning the Company may be inspected at the offices
of its U.S.  counsel,  Dill Dill Carr Stonbraker & Hutchings,  P.C., 455 Sherman
Street, Suite 300, Denver, Colorado 80203, Attn.: Fay M. Matsukage, Esq.

The  Company's  documents  publicly  filed  with  the  Securities  and  Exchange
Commission  may also be viewed and inspected at the SEC's Public  Reference Room
located at 100 F Street, N.E., Room 1580, Washington,  DC 20549. Copies may also
be obtained from the SEC at prescribed rates.


ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
================================================================================

We do not deal in market risk sensitive instruments such as derivative financial
instruments  such as futures,  forwards,  swaps,  and  options,  and  derivative
commodity instruments. We have no market risks.


ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.
================================================================================

Not applicable.


                                     PART II

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES.
================================================================================

There has been no material payment default of principal,  interest, a sinking or
purchase fund  installment,  or any other  material  default not cured within 30
days, with respect to any  indebtedness of the company or any of its significant
subsidiaries  exceeding  five percent of the total assets of the company and its
consolidated subsidiaries.


ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
          PROCEEDS.
================================================================================

Not applicable.




                                       31

<PAGE>


ITEM 15.  CONTROLS AND PROCEDURES
================================================================================

We maintain  "disclosure controls and procedures," as such term is defined under
Securities  Exchange  Act Rule  13a-15(e),  that are  designed  to  ensure  that
information  required to be disclosed in our Securities  Exchange Act reports is
recorded, processed,  summarized, and reported within the time periods specified
in the SEC's  rules and forms,  and that such  information  is  accumulated  and
communicated to our management,  including our Chief Executive Officer and Chief
Financial Officer, as appropriate,  to allow timely decisions regarding required
disclosures. In designing and evaluating the disclosure controls and procedures,
our management  recognized that any controls and procedures,  no matter how well
designed and operated,  can provide only  reasonable  assurance of achieving the
desired control  objectives and in reaching a reasonable  level of assurance our
management  necessarily  was  required to apply its judgment in  evaluating  the
cost-benefit  relationship of possible controls and procedures.  We have carried
out an  evaluation  under  the  supervision  and with the  participation  of our
management,  including our Chief Executive Officer and Chief Financial  Officer,
of the effectiveness of the design and operation of our disclosure  controls and
procedures as of March 31, 2005.  Based upon their evaluation and subject to the
foregoing,  the Chief Executive  Officer and Chief Financial  Officer  concluded
that as of March 31, 2005 our disclosure  controls and procedures were effective
at the reasonable assurance level in ensuring that material information relating
to us, is made known to the Chief Executive  Officer and Chief Financial Officer
by others  within our  company  during the period in which this report was being
prepared.

There were no changes in our internal  controls or in other  factors  during the
most recent quarter that has  materially  affected,  or is reasonably  likely to
materially affect, our internal controls over financial reporting.

We  believe  that the delay in  filing  this  report  was due  primarily  to our
engaging a new auditing firm this year.


ITEM 16.  [RESERVED]
================================================================================

Not applicable.


ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT
================================================================================

Our Audit Committee consists of three directors:  Iain F. Bruce (Chairman),  Dr.
Godwin  Wong  and  Barry  J.  Buttifant,  each of whom  meets  the  independence
requirements and standards  currently  established by the SEC. In addition,  the
Board of Directors has  determined  that Messrs.  Bruce and Buttifant are "audit
committee financial experts" defined under the relevant rules of the SEC.


ITEM 16B.  CODE OF ETHICS
================================================================================

We adopted a code of ethics  that  applies to our Chief  Executive  Officer  and
Chief Financial Officer, and other persons who perform similar functions. A copy
of our Code of Ethics is filed as an exhibit to this Annual Report on Form 20-F.
We also  adopted a Code of Business  Conduct  and  Ethics,  which is filed as an
exhibit to this Annual Report on Form 20-F.  Our Codes of Ethics are intended to
be a codification of the business and ethical  principles which guide us, and to
deter wrongdoing,  to promote honest and ethical conduct,  to avoid conflicts of
interest,  and  to  foster  full,  fair,  accurate,  timely  and  understandable
disclosures,   compliance  with   applicable   governmental   laws,   rules  and
regulations,  the prompt internal reporting of violations and accountability for
adherence to this Code.


ITEM 16C.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.
================================================================================

During the fiscal year ended March 31, 2005, our principal  independent  auditor
was Jimmy C.H. Cheung & Co. ("Cheung").  During fiscal year ended March 31, 2003
and 2004, our principal independent auditor was BDO McCabe Lo & Company ("BDO").
The following are the services provided and the amount billed.



                                       32

<PAGE>

AUDIT FEES

The aggregate fees billed by Cheung and BDO for professional  services  rendered
for the audit of the  Company's  annual  financial  statements  were  HK$507,000
(US$65,000) and HK$268,000 (US$34,359) for the fiscal years ended March 31, 2005
and 2004, respectively.

AUDIT RELATED FEES

 Other than the fees described under the caption "Audit Fees" above,  Cheung and
BDO did not bill any fees for services  rendered to us during  fiscal years 2005
and 2004 for  assurance  and related  services in  connection  with the audit or
review of our consolidated financial statements.

TAX FEES

The aggregate fees billed by Cheung and BDO tax services during the fiscal years
ended March 31, 2005 and 2004 were Nil and HK$7,000, respectively.

ALL OTHER FEES

There  were no fees  billed by Cheung  or BDO for  other  professional  services
rendered during the fiscal years ended March 31, 2005 and 2004.

PRE-APPROVAL OF SERVICES

The  Audit  Committee  pre-approves  all  services,  including  both  audit  and
non-audit services, provided by our independent accountants. For audit services,
each  year  the  independent  auditor  provides  the  Audit  Committee  with  an
engagement  letter  outlining  the scope of the audit  services  proposed  to be
performed  during the year,  which must be formally  accepted  by the  Committee
before  the audit  commences.  The  independent  auditor  also  submits an audit
services fee proposal,  which also must be approved by the Committee  before the
audit commences.


ITEM 16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.
================================================================================

Not applicable.


ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PERSONS.
================================================================================

Not applicable.


                                    PART III

ITEM 17.  FINANCIAL STATEMENTS.
================================================================================

Not applicable.


ITEM 18.  FINANCIAL STATEMENTS.
================================================================================

See pages beginning with page F-1.




                                       33

<PAGE>


ITEM 19.  EXHIBITS
================================================================================

The following exhibits are filed as a part of this annual report:

EXHIBIT NUMBER                            DOCUMENT

     1.1          Certificate of Merger issued on February 26, 1997, by the
                  Registrar of Companies of the British Virgin Islands,
                  evidencing the merger between Dransfield China Paper
                  Corporation, as the surviving company, and Dransfield Paper
                  Holdings Limited, as the discontinuing company (1)

     1.2          Memorandum of Association of Dransfield China Paper
                  Corporation (2)

     1.3          Restated and Amended Articles of Association of Dransfield
                  China Paper Corporation (3)

     1.4          Certificate of Incorporation, dated as of March 28, 2000,
                  changing the name of the corporation from Dransfield China
                  Paper Corporation to DF China Technology, Inc. (4)

     4.1          1996 Share Option Scheme, as amended, adopted by Dransfield
                  China Paper Corporation (now known as DF China Technology,
                  Inc.) (5)

     4.2          2002 Stock Option Plan (6)

     4.3          Form of Agreement for the Sale and Purchase of Shares (the
                  "Share Purchase Agreement") in certain subsidiaries of DF
                  China Technology Inc. and Certain Assets in the PRC, dated as
                  of January 26, 2004 among DF China Technology Inc., Gumption
                  Trading Limited, a company incorporated in the British Virgin
                  Islands, and Guangzhou Dransfield Paper Ltd, a company
                  incorporated in the PRC (7)

     4.4          Form of Deed of Guarantee, dated as of January 26, 2004, of
                  Qingdao Haotian Investment Limited, as Guarantor, in
                  connection with the Share Purchase Agreement (7)

     4.5          Form of Deed of Confirmation, dated as of September 20, 2004,
                  among DF China Technology Inc., Gumption Trading Limited, a
                  company incorporated in the British Virgin Islands, and
                  Guangzhou Dransfield Paper Ltd, a company incorporated in the
                  PRC (7)

     4.6          Agreement for the Exchange of Common Stock,  dated as of
                  February 13, 2004, by and among DF China Technology Inc. and
                  DiChain Systems Limited, a limited company incorporated in
                  Hong Kong, Farsight Holdings Limited, a limited company
                  incorporated in the British Virgin Islands, Squadram Limited,
                  a limited company incorporated in the British Virgin Islands,
                  and Earnest Investments Services Limited, a limited company
                  incorporated in the British Virgin Islands (7)

     4.7          Form of Letter Agreement, dated February 4, 2004, between DF
                  China Technology, Inc. and Quam Securities Company Limited, as
                  Placement Agent (7)

     4.8          Form of Placing Letter of Quam Securities Company Limited, as
                  Placement Agent, to Asia Century Development Limited, as
                  Purchaser, dated February 13, 2004, and the related placing
                  confirmation, in connection with the purchase of 3,900,000
                  shares of DF China Technology Inc. (7)

     4.9          Form of Placing Letter of Quam Securities Company Limited, as
                  Placement Agent, to Global China Enterprises Limited, as
                  Purchaser, dated February 13, 2004, and the related placing
                  confirmation, in connection with the purchase of 3,100,000
                  shares of DF China Technology Inc. (7)


                                       34
<PAGE>

EXHIBIT NUMBER                            DOCUMENT

     4.10         Form of Placing Letter of Quam Securities Company Limited, as
                  Placement Agent, to Poly Crown Limited, as Purchaser, dated
                  February 13, 2004, and the related placing confirmation, in
                  connection with the purchase of 3,200,000 shares of DF China
                  Technology Inc. (7)

     4.11         Form of Placing Letter of Quam Securities Company Limited, as
                  Placement Agent, to Kinetic Point Limited, as Purchaser, dated
                  February 13, 2004, and the related placing confirmation, in
                  connection with the purchase of 3,500,000 shares of DF China
                  Technology Inc. (7)

     4.12         Form of Placing Letter of Quam Securities Company Limited, as
                  Placement Agent, to Host Glory Limited, as Purchaser, dated
                  February 13, 2004, and the related placing confirmation, in
                  connection with the purchase of 3,000,000 shares of DF China
                  Technology Inc. (7)

     4.13         Form of Placing Letter of Quam Securities Company Limited, as
                  Placement Agent, to Sino Castle Holdings Limited, as
                  Purchaser, dated February 13, 2004, and the related placing
                  confirmation, in connection with the purchase of 1,000,000
                  shares of DF China Technology Inc. (7)

     4.14         Form of Placing Letter of Quam Securities Company Limited, as
                  Placement Agent, to Gush Intelligence Limited, as Purchaser,
                  dated February 13, 2004, and the related placing confirmation,
                  in connection with the purchase of 3,800,000 shares of DF
                  China Technology Inc. (7)

     4.15         Form of Subscription Offer Letter of DF China Technology, Inc.
                  to Squadram Limited and the related subscription confirmation,
                  each dated April 5, 2004, in connection with the purchase by
                  Squadram Limited of 5,200,000 shares of DF China Technology
                  Inc. (7)

     8.1          List of all subsidiaries of DF China Technology, Inc.

    11.1          Code of Ethics for CEO and Senior Financial Officers (7)

    11.2          Code of Business Conduct and Ethics (7)

    12.1          Section 302 Certification of Chief Executive Officer

    12.2          Section 302 Certification of Chief Financial Officer *

    13.1          Section 906 Certification of the Chief Executive Officer

    13.2          Section 906 Certification of the Chief Financial Officer *

------------------

*    Filed herewith.

(1)  Incorporated by reference herein from DF China Technology,  Inc.'s Form S-1
     (SEC File No. 333-11637) filed with the SEC on September 9, 1996.

(2)  Incorporated by reference herein from DF China Technology, Inc.'s Amendment
     No. 1 to Form S-1 (SEC File No.  333-11637)  filed with the SEC on December
     30, 1996.

(3)  Incorporated by reference herein from DF China Technology,  Inc.'s Form 6-K
     filed with the SEC on March 7, 1997; incorporated herein.

(4)  Incorporated by reference herein from DF China Technology, Inc.'s Amendment
     No. 2 on Form F-1 filed with the SEC on June 25, 1997.

(5)  Incorporated by reference  herein from DF China  Technology,  Inc.'s Annual
     Report on Form 20-F for the fiscal  year ended March 31,  2002,  filed with
     the SEC on October 15, 2002.



                                       35
<PAGE>


(6)  Incorporated by reference herein from DF China Technology,  Inc.'s Form 6-K
     filed with the SEC on July 22, 2003.

(7)  Incorporated  by reference  herein from the  registrant's  Annual Report on
     Form 20-F for the fiscal year ended March 31,  2004,  filed with the SEC on
     November 18, 2004.
































                                       36

<PAGE>


                                   SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and that it has duly caused and authorized the  undersigned to sign
this annual report on its behalf.


                                   CHINA TECHNOLOGY GLOBAL CORPORATION





Dated:  November 16, 2005          /s/ FAN DI
                                   ---------------------------------------------
                                   FAN Di, Chief Executive Officer
























                                       37

<PAGE>


JIMMY C.H. CHEUNG & CO                      Registered with the Public Company
CERTIFIED PUBLIC ACCOUNTANTS                    Accounting Oversight Board
(A MEMBER OF KRESTON INTERNATIONAL)





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of:
China Technology Global Corporation (Previously DF Technology Inc.)
(Incorporated in the British Virgin Islands with limited liability)

We have audited the accompanying consolidated balance sheets of China Technology
Global  Corporation  (previously  DF China  Technology  Inc.)  and  subsidiaries
(hereinafter  referred to as the  "Group") as of March 31, 2004 and 2005 and the
related  consolidated  statements of  operations,  cash flows and  stockholders'
equity  for each of the three  years  ended  March  31,  2005.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial statement presentation. We believe that our audit provide a reasonable
basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial  position of the
Group as of March  31,  2004  and  2005,  and the  consolidated  results  of its
operations  and cash flows for each of the three years ended March 31, 2005,  in
conformity with accounting principles generally accepted in the United States of
America.



/s/ JIMMY C.H. CHEUNG & CO.

JIMMY C.H. CHEUNG & CO
Certified Public Accountants


Hong Kong

Date: November 16, 2005











      Suite 1607 Dominion Centre, 43 Queen's Road East, Wanchai, Hong Kong
Tel: (852) 25295500 Fax: (852) 28651067 Email: jchc@krestoninternational.com.hk
                      Website: http://www.jimmycheungco.com

                                                                             F-1
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                          AS OF MARCH 31, 2004 AND 2005

<TABLE>
<CAPTION>
                                                                                       MARCH 31,
                                                                        2004                  2005                  2005
                                                                     HK$'000               HK$'000               US$'000
<S>                                                           <C>                   <C>                    <C>
CURRENT ASSETS
   Cash and cash equivalents                                          16,059               101,962                13,072
   Accounts receivable, net of allowances                                -                   1,459                   187
   Inventories                                                           -                     281                    36
   Other receivables                                                     532                14,336                 1,838
   Due from related companies                                         18,843               246,495                31,602
   Due from a stockholder                                                -                  18,073                 2,317
                                                              ---------------       ---------------        --------------
       Total Current Assets                                           35,434               382,606                49,052

PROPERTY AND EQUIPMENT, NET                                               15                 1,622                   208
INTEREST IN AFFILIATE                                                      1                   -                     -
GOODWILL                                                                 -                 487,508                62,501
DISCONTINUED OPERATIONS                                                1,326                   296                    38
                                                              ---------------       ---------------        --------------
TOTAL ASSETS                                                          36,776               872,032               111,799
                                                              ===============       ===============        ==============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Notes payable - due within one year                                   -                 148,352                19,021
   Accounts payable                                                       81                    31                     4
   Other payables and accrued liabilities                                260                 2,684                   344
   Due to a related company                                            2,356                   608                    78
   Liabilities of discontinued operations                              4,230                 1,193                   153
                                                              ---------------       ---------------        --------------
       Total Current Liabilities                                       6,927               152,868                19,600
                                                              ---------------       ---------------        --------------

LONG-TERM LIABILITIES
   Notes payable - due over one year                                     -                  45,283                 5,804
                                                              ---------------       ---------------        --------------
       Total Long-Term Liabilities                                       -                  45,283                 5,804
                                                              ---------------       ---------------        --------------

COMMITMENTS AND CONTINGENCIES                                            -                     -                     -

STOCKHOLDERS' EQUITY
   Common stock, no par value, 300,000,000 and
       400,000,000 shares authorized; 47,620,712
       and 263,948,336 shares issued and outstanding
       at March 31, 2004 and 2005 respectively                       286,748               929,623               119,182
   Preferred stock, no par value, nil and
       100,000,000 shares authorized at March 31, 2004
       and 2005 respectively, nil shares issued
       and outstanding                                                   -                     -                     -
   Contributed surplus                                                 4,677                 4,677                   600
   Accumulated deficit                                              (261,576)             (260,419)              (33,387)
                                                              ---------------       ---------------        --------------
       Total Stockholders' Equity                                     29,849               673,881                86,395
                                                              ---------------       ---------------        --------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                            36,776               872,032               111,799
                                                              ===============       ===============        ==============

</TABLE>


    The accompanying notes are an integral part of these financial statements

                                                                             F-2
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                             AND COMPREHENSIVE LOSS
                FOR THE YEARS ENDED MARCH 31, 2003, 2004 AND 2005


<TABLE>
<CAPTION>
                                                                                        YEAR ENDED MARCH 31,
                                                                       2003             2004               2005               2005
                                                                    HK$'000          HK$'000            HK$'000            US$'000
                                                                    -------          -------            -------            -------
<S>                                                           <C>              <C>              <C>                <C>
NET SALES                                                              -                -               17,573              2,253

COST OF SALES                                                          -                -               (5,444)              (698)
                                                              -------------    -------------    ---------------    ---------------

GROSS PROFIT                                                           -                -               12,129              1,555
                                                              -------------    -------------    ---------------    ---------------

OPERATING EXPENSES
   Selling, general and distribution expenses
      - third parties                                                  -             (2,531)            (9,266)            (1,188)
      - related parties                                                -             (2,200)            (2,402)              (308)
   Depreciation                                                        -                -                 (554)               (71)
                                                              -------------    -------------    ---------------    ---------------
          Total Operating Expenses                                     -             (4,731)           (12,222)            (1,567)
                                                              -------------    -------------    ---------------    ---------------

LOSS FROM OPERATIONS                                                   -             (4,731)               (93)               (12)

OTHER INCOME (EXPENSES)
   Interest expense                                                    -                -              (11,730)            (1,504)
   Interest income                                                     -                -               14,516              1,861
   Other income, net                                                   -                -                  226                 29
   Provision of doubtful debts                                         -                -                 (920)              (118)
   Provision for inventories obsolescence                              -                -               (1,232)              (158)
   Impairment loss on investment in affiliate                          -                -                   (1)               -
                                                              -------------    -------------    ---------------    ---------------
          Total Other Income                                           -                -                  859                110
                                                              -------------    -------------    ---------------    ---------------
(LOSS) INCOME FROM CONTINUING OPERATIONS
  BEFORE TAXES                                                         -             (4,731)               766                 98

INCOME TAX EXPENSE                                                     -                -                 (530)               (68)
                                                              -------------    -------------    ---------------    ---------------

NET (LOSS) INCOME FROM CONTINUING OPERATIONS                           -             (4,731)               236                 30

DISCONTINUED OPERATIONS
   (Loss) income from discontinued operations                     (101,674)         (30,116)               921                118
                                                              -------------    -------------    ---------------    ---------------

NET (LOSS) INCOME                                                 (101,674)         (34,847)             1,157                148
                                                              =============    =============    ===============    ===============

NET (LOSS) INCOME PER SHARE - BASIC AND DILUTED                      HK$              HK$                HK$                 US$%
   (Loss) income per common stock from
     continuing operations                                             -            (0.1784)            0.0011             0.0001
   (Loss) income per common stock from
     discontinued operations                                       (5.1053)         (1.1355)            0.0042             0.0005
                                                              -------------    -------------    ---------------    ---------------
   Net (loss) income per common stock
     - basic and diluted                                           (5.1053)         (1.3139)            0.0052             0.0007
                                                              -------------    -------------    ---------------    ---------------

Weighted average number of shares outstanding during the year
   -basic and diluted                                           19,915,292       26,522,467        221,158,647        221,158,647
                                                              -------------    -------------    ---------------    ---------------

</TABLE>

    The accompanying notes are an Integral part of these financial statements

                                                                             F-3
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
             (PREVIOUSLY DF CHINA TECHNOLOGY INC.) AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                FOR THE YEARS ENDED MARCH 31, 2003, 2004 AND 2005


<TABLE>
<CAPTION>
                                                                 Common stock           Contributed      Accumulated
                                                              Shares         Amount         surplus          deficit         Total
                                                                            HK$'000         HK$'000          HK$'000       HK$'000
<S>                                                    <C>              <C>             <C>             <C>             <C>
Balance at March 31, 2002                                 19,915,292        241,920           4,677        (125,055)       121,542
Net loss for the year                                            -              -               -          (101,674)      (101,674)
                                                       --------------   ------------    ------------    ------------    -----------
Balance at March 31, 2003                                 19,915,292        241,920           4,677        (226,729)        19,868
New issue of 3,201,513 shares on conversion
   of debts on June 11, 2003                               3,201,513          5,744             -               -            5,744

New issue of 1,680,000 shares for the exercise
   of options on August 1, 2003                            1,680,000          3,014             -               -            3,014

New issue of 100,310 shares for the exercise
   of options on August 25, 2003                             100,310            224             -               -              224

New issue of 48,909 shares for settlement
   of an employee's debt on September 30, 2003                48,909            401             -               -              401

New issue of 30,000 shares for the exercise
   of options on October 10, 2003                             30,000             54             -               -               54

New issue of 1,144,688 shares for private
   placement on November 18, 2003                          1,144,688          2,000             -               -            2,000

New issue of 21,500,000 shares for
   private placement on February 20, 2004                 21,500,000         33,391             -               -           33,391

Net loss for the year                                            -              -               -               -          (34,847)
                                                       --------------   ------------    ------------    ------------    -----------
Balance at March 31, 2004                                 47,620,712        286,748           4,677        (261,576)        29,849

New issue of 5,200,000 shares for
   private placement on April 20, 2004                     5,200,000         16,386             -               -           16,385

New issue of 197,799,000 shares for
   the acquisition of a subsidiary on May 25, 2004       197,799,000        617,132             -               -          617,132

New issue of 13,328,624 shares for
   settlement of debts on March 30, 2005                  13,328,624          9,357             -               -            9,357

Net profit for the year                                          -              -               -             1,157          1,157
                                                       --------------   ------------    ------------    ------------    -----------
Balance at March 31, 2005                                263,948,336        929,623           4,677        (260,419)       673,881
                                                       ==============   ============    ============    ============    ===========

</TABLE>

    The accompanying notes are an integral part of these financial statements


                                                                             F-4
<PAGE>

                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE YEARS ENDED MARCH 31, 2003, 2004 AND 2005


<TABLE>
<CAPTION>
                                                                                       YEAR ENDED MARCH, 31
                                                                          2003          2004            2005           2005
                                                                       HK$'000       HK$'000         HK$'000        US$'000
                                                                       -------       -------         -------        -------
<S>                                                              <C>             <C>           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES
   Net (loss) income from continuing operations                           -          (4,731)            236             30
   Net loss from discontinued operations                             (101,674)      (30,116)            921            118
                                                                 -------------   -----------   -------------   ------------
      Total net (loss) income                                        (101,674)      (34,847)          1,157            148
   Adjusted to reconcile net loss to net cash
      used in operating activities:
      Depreciation                                                        -             -               554             71
      Provision for doubtful debts                                        -             -               920            118
      Provision for inventories obsolescence                              -             -             1,232            158
      Impairment loss on investment in affiliate                          -             -                 1            -
      Discontinued operations, net                                     99,853        28,976            (718)           (92)
   Changes in operating assets and liabilities
      (Increase) in:
      Accounts receivable, net                                            -             -            (1,459)          (187)
      Inventories, net                                                                               (281)           (36)
      Other receivables                                                   -            (530)        (13,804)        (1,770)
      Due from related companies                                          -         (18,843)       (227,652)       (29,186)
      Due from a stockholder                                              -             -           (18,073)        (2,317)
      Increase (decrease) in:
      Accounts payable                                                    -              (9)            (50)            (6)
      Other payables and accrued liabilities                              -             260           2,426            311
      Due to a related company                                            -           2,356          (1,748)          (224)
      Discontinued operations, net                                      1,034          (339)         (3,680)          (472)
                                                                 -------------   -----------   -------------   ------------
      Net cash used in operating activities                              (787)      (22,976)       (261,175)       (33,484)
                                                                 -------------   -----------   -------------   ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Acquisition of property and equipment                                  -             (15)         (2,161)          (277)
   Acquisition of a subsidiary                                            -             -          (487,508)       (62,501)
   Discontinued operations, net                                            (3)          (23)            -              -
                                                                 -------------   -----------   -------------   ------------
      Net cash used in investing activities                                (3)          (38)       (489,669)       (62,778)
                                                                 -------------   -----------   -------------   ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   New issue of common stock                                              -          39,084         642,875         82,420
   Bank loans borrowed                                                    -             -           193,635         24,825
   Discontinued operations, net                                           730           217             -              -
                                                                 -------------   -----------   -------------   ------------
      Net cash provided by financing activities                           730        39,301         836,510        107,245
                                                                 -------------   -----------   -------------   ------------

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS                      (60)       16,287          85,666         10,983

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                            116            56          16,343          2,095
                                                                 -------------   -----------   -------------   ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                   56        16,343         102,009         13,078
                                                                 -------------   -----------   -------------   ------------
Continuing operations                                                      14        16,059         101,962         13,072

Discontinued operations                                                    42           284              47              6
                                                                 -------------   -----------   -------------   ------------

</TABLE>

    The accompanying notes are an integral part of these financial statements

                                                                             F-5
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION

China  Technology  Global  Corporation  (formerly DF China Technology Inc.) (the
"Company")  was  incorporated  in the British Virgin Islands (the "BVI") on June
24, 1996. Prior to June 30, 2000, Dransfield Holdings Limited ("DHL"), a company
incorporated  in the  Cayman  Islands  and the  shares of which are  listed  for
trading on the main board of The Stock  Exchange of Hong Kong  Limited,  was the
holding company of the Group. On June 30, 2000,  8,325,700 shares of the Company
were distributed in specie by DHL to its stockholders.  During fiscal year 2002,
DHL sold 1,973,600 shares, which reduced its equity interest in the Company from
29.67% to 19.76%.  On June 11, 2003, DHL increased its equity interest to 30.87%
by  converting  the debts owed to them into 3,201,513  shares.  During the year,
DHL reduced its equity interest to 0.45%.

During the fiscal year 2002,  DHL became the  wholly-owned  subsidiary  of China
Merchants  DiChain  (Asia) Limited  ("CMDA"),  which replaced DHL to list on the
main board of The Stock Exchange of Hong Kong Limited.

The Company and its subsidiaries  (hereinafter  referred to as the ("Group") are
principally  engaged  in two  industry  segments  of  paper  trading  and  paper
manufacturing  before  acquiring  DiChain Software  Systems  (Shenzhen)  Company
Limited  ("DiChain  Software") in May 2004.  Paper trading is being  operated in
Hong Kong, Macau and other parts of the People's  Republic of China (the "PRC").
The  manufacturing  of  hygienic  paper is  being  operated  in the  PRC.  After
acquiring  DiChain  Software,  the Group is  principally  engaged in the design,
manufacture  and sale of computer  software  and  hardware  products and systems
solutions for the supply chain  management  and  logistics  industry in the PRC.
Intercompany balances and transactions have been eliminated on consolidation.

On January 26, 2004,  the Company  entered into an agreement  (the  "Agreement")
with Gumption Trading Limited ("Gumption  Trading"),  a company  incorporated in
the BVI, and Guangzhou  Dransfield  Paper Limited,  a wholly owned subsidiary of
the Company. Pursuant to the Agreement, the Company sold to Gumption Trading (i)
all of the shares of its wholly owned  subsidiaries DF Paper Guangdong  Limited,
Guangdong  Dransfield  Paper  Limited,  DF Paper  Jiangsu  Limited  and  Jiangsu
Dransfield Paper Company Limited, and (ii) all fixed assets of its subsidiary in
Conghua,  Guangzhou Dransfield Paper Limited. Guangzhou Dransfield Paper Limited
agreed to lease back assets from  Gumption  Trading for its paper  manufacturing
operations at a rent of HK$1 per annum for a term of one year,  renewable yearly
thereafter upon mutual  agreement.  For such purchase,  Gumption Trading paid to
the Company a nominal


                                                                             F-6
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


aggregate amount of HK$5 and assumed all of the Company's liabilities, including
liabilities  related to such  subsidiaries  and assets,  incurred by the Company
prior to January 28, 2004. The Company entered into this  transaction  primarily
to streamline its operations. This transaction closed on January 28, 2004.

The  leased  back  assets  are the basis for the  operating  revenue  from paper
manufacturing   business,   which  provides  a  solid  platform  for  the  paper
manufacturing   business.  On  March  30,  2005,  the  Group  ceased  the  paper
manufacturing operation and the leased assets were returned to the owner.

On May 25, 2004, the Company  completed its acquisition of all the capital stock
of DiChain Software.  The Company issued  197,799,000 shares of its common stock
to the six  shareholders  of DiChain  Software in  exchange  for all the capital
stock  of  DiChain  Software.   DiChain  Software  is  engaged  in  the  design,
manufacture  and sale of computer  software  and  hardware  products and systems
solutions for the supply chain management and logistics industry in the PRC. The
Group  intends to expand the  information  technology  business in the future by
increasing  the sales network and enhancing  the marketing  team.  Following the
acquisition  of DiChain  Software,  the name of the Company was changed  from DF
China Technology Inc. to China Technology Global Corporation on January 12, 2005
to reflect the new line of business and the new management team.

On May 24,  2004,  the  Company  increased  its  authorized  common  stock  from
300,000,000  shares to  400,000,000  shares and preferred  stock from 0 share to
100,000,000 shares.

On May 25,  2004 the common  stock of the  Company  was  delisted  by The Nasdaq
SmallCap  Stock  Market.  One of the  reasons  for the  delisting  was  that the
Company's  shareholders'  equity had fallen below Nasdaq's  required  minimum of
US$2,500,000. The application for the re-listing at Nasdaq SmallCap Stock Market
was dismissed after two hearings.

Effective from February 7, 2005, the common stock of the Company is traded under
the symbol "CTGLF" on the Over-The-Counter Bulletin Board ("OTCBB").

BASIS OF PRESENTATION

The  consolidated   financial   statements  were  prepared  in  accordance  with
accounting  principles generally accepted in the United States of America ("U.S.
GAAP").

The functional currency of the Group is Hong Kong Dollars except that of DiChain
Software,  which is the Chinese  Renminbi  ("RMB").  However,  the  consolidated
financial  statements  have been  prepared  in Hong Kong  dollars  ("HK$").  For
presentation and convenience of the reader,  the financial  statements have been


                                                                             F-7
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


translated  into United States  dollars  ("US$") using the  approximate  rate of
exchange prevailing on March 31, 2005 which was US$1 = HK$7.8. No representation
is made that Hong Kong dollars  amounts could have been, or could be,  converted
into US$ at that rate or any other certain rate on March 31, 2005.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements include the financial  statements of the
Company and its greater-than-50%-owned  subsidiaries.  Investments in affiliates
in which the Company  owns 20% to 50% and does not have a  controlling  interest
are accounted for using the equity method.  Investments in companies  owned less
than  20% are  carried  at  cost.  All  significant  intercompany  accounts  and
transactions have been eliminated on consolidation.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the reported amounts of revenue and expenses during the reporting period.  These
estimates  include,   among  others,   allowances  for  doubtful  accounts,  net
realizable values on long-lived assets and deferred tax assets,  certain accrued
expense accounts and revenue recognition. Actual results could differ from those
estimates.

CASH AND CASH EQUIVALENTS

The Group  considers  all highly  liquid  investments  with a maturity  of three
months or less when purchased to be cash equivalents.

ALLOWANCE FOR DOUBTFUL ACCOUNTS.

The Group  records an allowance  for  doubtful  accounts  based on  specifically
identified  amounts that are  considered  to be  uncollectible.  The Group has a
limited  number of customers  with  individually  large amounts due at any given
balance sheet date. Any  unanticipated  change in one of those customers' credit
worthiness or other matters  affecting  the  collectibility  of amounts due from
such customers, could have a material affect on the results of operations of the
Group in the period in which such changes or events occur. After all attempts to
collect a receivable  have  failed,  the  receivable  is written off against the
allowance.


                                                                             F-8
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


PROPERTY AND EQUIPMENT

Property  and  equipment  are  stated  at cost  less  accumulated  depreciation.
Depreciation  is  computed  using  the  straight-line  method  over the  assets'
estimated economic useful lives. The principal annual rates used are as follows:

Machinery and equipments                             5%

Computer equipments                                 18%

Motor vehicles                                      18%

Furniture, fixtures and office equipments           18%

GOODWILL

In accordance with Statement of Financial  Accounting Standards ("SFAS") No. 141
"Business  Combinations",  the  Group  allocates  the  purchase  prices  of  its
acquisitions  to the tangible  assets  acquired  based on their  estimated  fair
values.  The excess  purchase  prices  over those fair  values are  recorded  as
goodwill.  The fair values  assigned to intangible  assets acquired are based on
valuations  negotiated at arms-length  between the Company and the seller of the
acquired assets.  In accordance with SFAS No. 142 "Goodwill and Other Intangible
Assets"  and 144  "Accounting  for the  Impairment  or  Disposal  of  Long-Lived
Assets".  Goodwill  arising  on  consolidation  is not  amortized,  but  will be
reviewed at least once a year at the third  quarter of each  financial  year for
impairment  or whenever  events or changes in  circumstances  indicate  that the
carrying  amount  may  not  be  recoverable.  For  purposes  of  evaluating  the
recoverability of the carrying amount of goodwill, when undiscounted future cash
flows will not be sufficient to recover the asset's carrying  amount,  the asset
is written down to its fair value.  The Group  believes  that no  impairment  of
goodwill exists at March 31, 2005.

IMPAIRMENT OF LONG-LIVED ASSETS

The Group  periodically  evaluates the carrying value of long-lived assets to be
held and used when events and circumstances  warrant such a review. The carrying
value  of a  long-lived  asset  is  considered  impaired  when  the  anticipated
undiscounted  cash flow from such asset is separately  identifiable  and is less
than its carrying value. In that event, a loss is recognized based on the amount
by which the  carrying  value  exceeds the fair market  value of the  long-lived
asset.  Fair market value is determined  primarily  using the  anticipated  cash
flows  discounted  at a rate  commensurate  with the risk  involved.  Losses  on
long-lived  assets to be disposed of are determined in a similar manner,  except
that fair market values are reduced for the cost to dispose.  The Group believes
that no impairment of property and equipment existed at March 31, 2005.


                                                                             F-9

<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


INVENTORIES

Inventories  comprising goods held for resale, are stated at lower of cost, on a
first-in, first-out basis, or market value.

INCOME TAXES

Income taxes,  if any, are accounted for under SFAS,  No. 109,  "Accounting  for
income taxes",  which requires the use of the liability method of accounting for
income taxes.  The liability  method measures  deferred income taxes by applying
enacted  statutory  rates in effect at the balance sheet date to the differences
between the tax bases of assets and  liabilities  and their reported  amounts in
the financial statements.

FOREIGN CURRENCY TRANSLATION

Foreign  currency  transactions  are  translated  into Hong Kong  dollars at the
applicable  rates of exchange ruling at the transaction  dates.  Monetary assets
and liabilities  denominated in foreign currencies at the balance sheet date are
translated into Hong Kong dollars at the applicable  rates of exchange ruling at
that date.  Capital accounts in foreign currencies are translated into Hong Kong
dollars  at  their  historical  exchange  rates  when  the  capital  transaction
occurred.  Net gains and losses resulting from foreign exchange  translation are
included in the  statements  of  operations  and  stockholders'  equity as other
comprehensive  income  (loss).  No  translation  difference was recorded for the
three years ended March 31, 2005.

COMPREHENSIVE INCOME (LOSS)

The foreign currency  translation gain or loss resulting from translation of the
financial  statements expressed in RMB to HK$ is reported as other comprehensive
income (loss) in the  statements  of operations  and  stockholders'  equity.  No
translation difference was recorded for the three years ended March 31, 2005.


                                                                            F-10
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


OPERATING LEASES

Leases  where  substantially  all the rewards and risks of  ownership  of assets
remain with the leasing company are accounted for as operating  leases.  Rentals
applicable to such operating  leases are charged to income on the  straight-line
basis over the term of the leases.

REVENUE RECOGNITION

The Group generates two revenue streams during the year: paper manufacturing and
information technology development.

Paper manufacturing

Revenue from sales of goods is recognized on delivery to and upon  acceptance by
customers, when collectibility of the sales price is reasonably assured.

Information technology development

The Group's  revenue is also derived from the  procurement of hardware on behalf
of  customers,  and  professional  services  for system  development,  including
design,  planning,  consulting,  and system integration,  the system consultancy
services,  and  the  monthly  subscription  fees  for  system  services.  System
development  service income is recognized  based on the percentage of completion
method.  Revenues  from customer  contracts  requiring  significant  production,
modifications,  or  customization  of  the  software  are  recognized  over  the
installation and customization  period.  Labor hours and direct project expenses
are used to determine the stage of  completion,  except for revenues  associated
with the procurement of hardware. Revenues from sales of hardware are recognized
upon delivery. Costs related to insignificant  obligations for a period of up to
one year, which include telephone  support,  are accrued at the time the revenue
is recorded.  System  consultancy  services  are  recognized  when  services are
rendered and  obligations  under related  contracts are fulfilled.  Subscription
fees for system services are recognized over the contract period.

Revisions  in  estimated  contract  profits  are made in the period in which the
circumstances requiring the revision become known. Provisions,  if any, are made
currently for anticipated losses on uncompleted contracts. Billings in excess of
revenues  recognized  are  recorded as deferred  revenue.  Billings are rendered
based on agreed milestones included in the contracts with customers.



                                                                            F-11
<PAGE>

                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


ADVERTISING EXPENSES

Advertising expenses are charged to the statements of operations when incurred.

RESEARCH AND DEVELOPMENT EXPENSES

Research and development  expenses include payroll,  employee benefits and other
employee-related  costs  associated  with  product  development.   Technological
feasibility  for the Group's  software  products is reached  shortly  before the
products are  released to  manufacturing.  Costs  incurred  after  technological
feasibility is established are not material, and accordingly, the Group expenses
all research and development costs when incurred.

EMPLOYEE STOCK PLANS

The Group has  elected to follow  Accounting  Principles  Board  Opinion  No. 25
"Accounting   for  Stock   Issued  to   Employees"   ("APB   25")  and   related
interpretations in accounting for its employee stock options.  Under APB 25, the
excess of fair market  value of the  underlying  stock on the date of grant over
the  exercise  price of employee  stock  options is expensed  and is credited to
contributed  surplus.  For  disclosure   purposes,   pro-forma   information  in
accordance with Statement of Financial  Accounting Standards No. 123 "Accounting
for Stock-Based Compensation" has been included.

Pro-forma information regarding net income and earnings per share is required by
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123") and has been determined as if the Group had accounted
for its stock options under the fair value method of that statement.  No options
were granted in 2002. During 2005, a total of 750,000 stock options were granted
to certain  members of the Company's  management at an exercise  price of US$0.2
per share. The weighted-average  fair value of options granted in 2003, 2004 and
2005 estimated on the date of grant using a  Black-Scholes  option pricing model
was US$0.24, US$0.24 and US$0.33 respectively.  The fair value for these options
was   estimated  at  the   respective   dates  of  grant  using  the   following
weighted-average assumptions for the respective dates of grant:

<TABLE>
<CAPTION>
                                                                             Options granted in
                                                                     2003           2004            2005
<S>                                                           <C>            <C>              <C>
Risk-free interest rate                                              2.5%          2.13%           3.42%
Dividend yield                                                        Nil            Nil             Nil
Volatility factor of the expected market price
  of the common stock                                                100%           100%            100%
Weighted average expect life                                  9.125 years    9.292 years      8.93 years
</TABLE>


                                                                            F-12
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


COMMON STOCK OPTIONS

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options,  which have no vesting  restrictions and are fully
transferable.  In addition,  option valuation models require the input of highly
subjective  assumptions  including the expected stock price volatility.  Because
the  Company's  employee  stock  options  have   characteristics   significantly
different from those of trade options,  and because changes in these  subjective
input assumptions can materially  affect the affect the fair value estimate,  in
management's  opinion,  the  existing  models do not  provide a reliable  single
measure of the fair value of its employee stock options.

At March 31, 2005, the Company has one stock-based  employee  compensation plan,
which is  described  more fully in Note 23. The Company  accounts  for this plan
under  the  recognition  and  measurement  principles  of APB  Opinion  No.  25,
Accounting  for Stock  Issued to  Employees,  and  related  Interpretations.  No
stock-based  employee  compensation  cost is  reflected  in net  income,  as all
options  granted under this plan had an exercise price equal to the market value
of the  underlying  common  stock  on the date of  grant.  The  following  table
illustrates  the effect on net income and  earnings per share if the company had
applied  the fair  value  recognition  provisions  of FASB  Statement  No.  123,
Accounting for Stock-Based Compensation, to stock-based employee compensation.

<TABLE>
<CAPTION>
                                                                   2003           2004         2005        2005
                                                                HK$'000        HK$'000      HK$'000     US$'000

<S>                                                           <C>             <C>            <C>         <C>
Net (loss) income, as reported                                (101,674)       (34,847)        1,157         148
Deduct: total stock-based employee
  compensation expenses determined under the
  fair value based method for all awards,
  net of related tax effects                                      (251)           -             -           -
Proforma net (loss) income                                    (101,925)       (34,847)        1,157         148
                                                            ---------------------------------------------------

Basic and diluted net (loss) income per share
  - As reported                                                (5.1053)       (1.3139)       0.0052      0.0007
  - Proforma                                                   (5.1199)       (1.3139)       0.0052      0.0007
                                                            ===================================================
</TABLE>



                                                                            F-13
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS

In November 2004, the Financial  Accounting  Standards  Board (FASB) issued SFAS
151,  Inventory  Costs-- an amendment of ARB No. 43,  Chapter 4. This  Statement
amends the guidance in ARB No. 43, Chapter 4,  "Inventory  Pricing",  to clarify
the accounting for abnormal amounts of idle facility expense,  freight, handling
costs,  and  wasted  material  (spoilage).  Paragraph  5 of ARB 43,  Chapter  4,
previously  stated  that ". . . under  some  circumstances,  items  such as idle
facility expense excessive spoilage, double freight, and rehandling costs may be
so abnormal  as to require  treatment  as current  period  charges.  . . ." This
Statement  requires  that those items be recognized  as  current-period  charges
regardless  of whether they meet the  criterion of "so  abnormal".  In addition,
this Statement  requires that  allocation of fixed  production  overheads to the
costs  of  conversion  be  based  on  the  normal  capacity  of  the  production
facilities.  This  Statement is effective for inventory  costs  incurred  during
fiscal  years  beginning  after June 15, 2005.  Management  does not believe the
adoption of this Statement will have any immediate material impact on the Group.

In December  2004,  the FASB issued  SFAS No. 152,  "Accounting  for Real Estate
Time-Sharing Transactions--an amendment of FASB Statements No. 66 and 67" ("SFAS
152) The amendments  made by Statement 152 This Statement  amends FASB Statement
No.  66,  Accounting  for  Sales of Real  Estate,  to  reference  the  financial
accounting and reporting guidance for real estate time-sharing transactions that
is  provided in AICPA  Statement  of Position  (SOP) 04-2,  Accounting  for Real
Estate Time-Sharing Transactions.  This Statement also amends FASB Statement No.
67,  Accounting for Costs and Initial Rental Operations of Real Estate Projects,
to state that the guidance for (a) incidental  operations and (b) costs incurred
to sell  real  estate  projects  does  not  apply  to real  estate  time-sharing
transactions.  The accounting  for those  operations and costs is subject to the
guidance in SOP 04-2.  This Statement is effective for financial  statements for
fiscal years beginning after June 15, 2005, with earlier application encouraged.
The Group does not anticipate that the implementation of this standard will have
a material  impact on its  financial  position,  results of  operations  or cash
flows.

On  December  16,  2004,  the  FASB  published  SFAS  No.  123  (Revised  2004),
Share-Based  Payment ("SFAS 123R").  SFAS 123R requires that  compensation  cost
related to  share-based  payment  transactions  be  recognized  in the financial
statements.  Share-based  payment  transactions  within  the  scope of SFAS 123R
include stock options,  restricted stock plans,  performance-based awards, stock
appreciation  rights,  and employee share purchase plans. The provisions of SFAS
123R are  effective  as of the first  interim  period that begins after June 15,
2005.  Accordingly,  the Group will implement the revised  standard in the first
quarter of fiscal year 2006.  Currently,  the Group accounts for its share-based





                                                                            F-14
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



payment  transactions under the provisions of APB 25, which does not necessarily
require  the  recognition  of  compensation  cost in the  financial  statements.
Management does not believe the adoption of this revised  standard will have any
immediate  materially  impact on the Group's  financial  position and results of
operations or cash flows.

On December 16,  2004,  the FASB issued SFAS No. 153,  Exchanges of  Nonmonetary
Assets,  an  amendment  of  APB  Opinion  No.  29,  Accounting  for  Nonmonetary
Transactions ("SFAS 153"). This statement amends APB Opinion 29 to eliminate the
exception for nonmonetary exchanges of similar productive assets and replaces it
with a general  exception for exchanges of  nonmonetary  assets that do not have
commercial  substance.  Under SFAS 153,  if a  nonmonetary  exchange  of similar
productive  assets  meets a  commercial-substance  criterion  and fair  value is
determinable,  the transaction  must be accounted for at fair value resulting in
recognition  of any  gain  or  loss.  SFAS  153  is  effective  for  nonmonetary
transactions  in fiscal  periods that begin after June 15, 2005.  The Group does
not  anticipate  that the  implementation  of this standard will have a material
impact on its financial position, results of operations or cash flows.

In March 2005, the FASB issued FASB Interpretation (FIN) No. 47, "Accounting for
Conditional  Asset Retirement  Obligations,  an interpretation of FASB Statement
No. 143," which  requires an entity to recognize a liability  for the fair value
of a conditional  asset  retirement  obligation when incurred if the liability's
fair value can be  reasonably  estimated.  The  Company is required to adopt the
provisions  of FIN 47 no later than the second  quarter of its fiscal 2006.  The
Group does not expect the  adoption  of this  Interpretation  to have a material
impact on its  consolidated  financial  position,  results of operations or cash
flows.

In May  2005  the FASB  issued  SFAS No.  154,  "Accounting  Changes  and  Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3." SFAS
154 requires  retrospective  application to prior periods' financial  statements
for changes in accounting  principle,  unless it is  impracticable  to determine
either the period-specific  effects or the cumulative effect of the change. SFAS
154 also  requires  that  retrospective  application  of a change in  accounting
principle be limited to the direct effects of the change.  Indirect effects of a
change  in  accounting   principle,   such  as  a  change  in  non-discretionary
profit-sharing   payments  resulting  from  an  accounting  change,   should  be
recognized in the period of the accounting change. SFAS 154 also requires that a
change in  depreciation,  amortization,  or  depletion  method  for  long-lived,
non-financial  assets  be  accounted  for as a  change  in  accounting  estimate
effected  by a  change  in  accounting  principle.  SFAS  154 is  effective  for
accounting  changes and  corrections  of errors made in fiscal  years  beginning
after December 15, 2005. Early adoption is permitted for accounting  changes



                                                                            F-15
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


and  corrections  of errors made in fiscal years  beginning  after the date this
Statement is issued. The Group does not expect the adoption of this SFAS to have
a material impact on its consolidated financial position,  results of operations
or cash flows.

BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

Basic net income (loss) per share is computed using the weighted  average number
of common shares outstanding  during the periods.  Diluted net income (loss) per
share is computed using the weighted  average  number of common and  potentially
dilutive common shares during the periods, except those that are anti-dilutive.

The basic net income  (loss) per share for the years ended March 31, 2003,  2004
and 2005 were computed by dividing net income (loss)  applicable to common stock
by the weighted average number of 19,915,292,  26,522,467 and 221,158,647 shares
of common stock, respectively.

The amount of diluted  net income  (loss) per share for each of the years  ended
March 31, 2003,  2004 and 2005 are the same as those of basic net income  (loss)
per share, as the Company's stock options outstanding during each of these years
had  anti-dilutive  effect  on the  basic  net  income  (loss)  per  share.  The
outstanding stock options which had anti-dilutive effect on the basic net income
(loss) per share are  1,147,000,  nil and  750,000  for each of the years  ended
March 31, 2003, 2004 and 2005, respectively.

<TABLE>
<CAPTION>
                                                                     Year ended March 31,
                                                       2003            2004             2005            2005
                                                    HK$'000         HK$'000          HK$'000         US$'000
<S>                                             <C>             <C>              <C>             <C>
Numerator for basic and diluted
  (loss) income per share:
    Net (loss) income                             (101,674)        (34,847)            1,157             148
                                               ==============================================================

Denominator for basic and diluted
  (loss) income per share:
    Weighted average number of shares           19,915,292      26,522,467       221,158,647     221,158,647
                                               ==============================================================

Basic and diluted (loss) income per share          (5.1053)        (1.3139)           0.0052          0.0007
                                               ==============================================================
</TABLE>


                                                                            F-16

<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


SEGMENTS

The  Group  operates  in  two  reportable  segments;  paper  trading  and  paper
manufacturing  (both discontinued) and the information  technology  development.
The paper trading and paper  manufacturing  segments  were held as  discontinued
operations in 2003,  2004 and 2005.  All  information  for this segment has been
omitted  from segment  presentation  and  therefore  segment  disclosure  is not
presented.

RECLASSIFICATIONS

Where applicable,  reclassifications  have been adjusted to disclose them on the
same basis as current year figures.

ROUNDING UP OF AMOUNTS

Amounts  in  the  consolidated   financial  statements  have,  unless  otherwise
indicated, been rounded to the nearest thousand HK$ or US$.

NOTE 3 - BUSINESS COMBINATION

On May 25, 2004,  pursuant to a Sale and Purchase  Agreement ("the  Agreement"),
the  Company  completed  its  acquisition  of all the  capital  stock of DiChain
Software.  The Company issued  197,799,000 shares of its common stock to the six
shareholders  of DiChain  Software  in  exchange  for all the  capital  stock of
DiChain Software. The acquisition has been accounted for by the purchase method.
The purchase price was determined by the fair value of the  consideration  given
up, being  US$79,120,000,  was allocated to the assets  acquired and liabilities
assumed  based on the fair values on the date of  acquisition  in the  following
table.

                                                    HK$'000             US$'000

Cash and cash equivalents                           174,151              22,327
Accounts receivable                                   3,065                 393
Inventories                                             577                  74
Other current assets                                185,749              23,814
Property and equipment                                1,747                 224
Goodwill                                            487,508              62,501
Accounts payable                                      (156)                (20)
Other payables and accrued liabilities              (5,374)               (689)
Notes payable                                     (230,131)            (29,504)
                                              ---------------------------------
Total                                               617,136              79,120
                                              =================================



                                                                            F-17
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The  operating  results of DiChain  Software from May 27, 2004 to March 31, 2005
are  included  in the  consolidated  statements  of  operations.  The  following
proforma  financial  information is presented as if the DiChain  acquisition had
been made on April 1, 2002,  at the  beginning  of fiscal  2003.  The  unaudited
proforma  information  was  derived  from  DiChain  Software  and  they  are not
necessarily  indicative of the results that may be expected for future years, in
which the Group might realize revenue enhancements and/or costs savings.

<TABLE>
<CAPTION>
                                                                      Year ended March 31,
                                                         2003           2004            2005          2005
                                                      HK$'000        HK$'000         HK$'000       US$'000
<S>                                                  <C>            <C>               <C>            <C>
Net sales                                              27,684         29,429          20,576         2,638
Net (loss) income                                    (91,026)       (25,935)           1,989           255
                                                          HK$            HK$             HK$           US$
Net (loss) income per share                           (4.571)        (0.978)           0.009         0.001
</TABLE>

NOTE 4 - DISCONTINUED OPERATIONS

On March 30, 2005,  the Group  discontinued  the operations of paper trading and
paper  manufacturing.  The  financial  statements  for the  operations  of paper
trading and paper manufacturing have been classified as discontinued  operations
at March 31, 2004 and 2005.  The amounts  reported as assets and  liabilities of
net assets held from  discontinued  operations at March 31, 2004 and 2005 are as
follows:

<TABLE>
<CAPTION>
                                                                            2004             2005              2005
                                                                         HK$'000          HK$'000           US$'000
                                                                    ------------------------------------------------
<S>                                                                        <C>              <C>                 <C>
Current assets                                                             1,326              296                38

Property and equipment                                                         -                -                 -
                                                                    ------------------------------------------------
   Assets of discontinued operations                                       1,326              296                38
                                                                    ================================================

Current portion of liabilities of discontinued operations                  4,230            1,193               153
                                                                    ================================================
</TABLE>




                                                                            F-18

<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The operations of paper trading and paper  manufacturing  have been reclassified
as discontinued operations in the accompanying consolidated financial statements
of  operations  for the  years  ended  March  31,  2003,  2004  and 2005 and are
summarized as follows:

<TABLE>
<CAPTION>
                                                                        Year ended March 31,

                                                               2003         2004         2005         2005

                                                            HK$'000      HK$'000      HK$'000      US$'000
<S>                                                       <C>           <C>           <C>            <C>

Net sales                                                    5,488        4,131        2,707          347

Cost of sales                                               (4,139)      (3,619)      (1,801)        (231)

Gross profit                                                 1,349          512          906          116

Operating expenses                                          (5,257)      (3,270)      (1,053)        (135)

Other operating income                                          26          124        1,068          137

Net (loss) income from operation                            (3,882)      (2,634)         921          118

Other losses

  Loss on disposal of subsidiary                                 -       (7,979)           -            -

  Loss on disposal of property and equipment                     -      (19,500)           -            -

  Impairment loss on property and equipment                (97,792)           -            -            -

  Bank interest expenses                                         -           (3)           -            -

Net (loss) income                                         (101,674)      (3,116)         921          118

</TABLE>

                                                                            F-19

<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 5 - SUPPLEMENTARY INCOME STATEMENT INFORMATION

                                           Year ended March, 31
                                  2003         2004         2005         2005
                               HK$'000      HK$'000      HK$'000      US$'000
Administrative expenses
  Depreciation                   1,848        1,279          554           71
  Advertising expenses             -            -            148           19
  Operating lease rentals          -            -          1,053          135
  Research expenses                -            -            -            -
                             ================================================



NOTE 6 - SUPPLEMENTAL CASH FLOW INFORMATION

CASH PAID FOR INTEREST AND INCOME TAXES

                                           Year ended March, 31
                                  2003         2004         2005         2005
                               HK$'000      HK$'000      HK$'000      US$'000
Cash paid during the year
  Interest                         -            -            796          102
  Income taxes                     -            -         10,288        1,319
                              ===============================================


NON-CASH FINANCING ACTIVITIES

On June 11, 2003, the Company  issued a total of 3,201,513  shares of its common
stock at a market value of US$0.23 each to DHL to settle  partially debts due to
DHL up to a total of HK$5,744,000 (US$736,000).

On May 25, 2004, the Company issued a total of 197,799,000  shares of its common
stock at US$0.4 each to the six  shareholders of DiChain Software to acquire the
entire interests of DiChain Software of HK$617,133,000 (US$79,120,000).

On March 30, 2005, the Company issued a total of 13,328,624 shares of its common
stock at a market value of US$0.09 each to CMDA to settle partially debts due to
Victorison  Logistics Limited ("VLL"), a wholly owned subsidiary of CMDA up to a
total of HK$9,357,000 (US$1,200,000).



                                                                            F-20
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 7 - INCOME TAXES

The Company was  incorporated  in the British  Virgin Islands and, under current
law of the British Virgin Islands, is not subject to tax on income or on capital
gains.

Grandom Dransfield (International) and Company Limited and Dransfield Paper (HK)
Trading Limited,  wholly-owned  subsidiaries of the Group,  were incorporated in
Hong Kong and under the  current  Hong Kong tax law,  any income  arising in and
deriving from  business  carried on in Hong Kong is subject to Hong Kong tax. No
tax is charged on dividends received and capital gains earned.

Guangzhou  Dransfield Paper Limited ("GDP"), a co-operative joint venture formed
in the PRC and DiChain Software, a wholly foreign owned enterprise formed in the
PRC, in which the Group has 100% interest (2004: GDP - 100%;  DiChain Software -
0%) are  subject  to PRC  income  taxes  at the  applicable  tax rate of 33% for
Sino-foreign  joint  venture   enterprises  and  15%  for  software   technology
enterprises respectively. The companies are eligible for full exemption from PRC
income tax for the first two years  starting from its first  profitable  year of
operations  followed by a 50% deduction from the third to fifth year.  Under the
Income Tax Law applicable to Sino-foreign joint ventures,  no PRC income tax was
levied on GDP as it did not  generate  profits for each of the three years ended
March 31, 2005.

Total income tax expense  differs from the amount  computed by applying the Hong
Kong applicable  statutory income tax rate of 2005: 17.5%, 2004: 17.5% and 2003:
16% to income before taxes as follows:












                                                                            F-21
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>
                                                                        Year ended March 31,
                                                               2003          2004         2005          2005
                                                            HK$'000       HK$'000      HK$'000       US$'000
<S>                                                      <C>              <C>           <C>             <C>
Computed expected income taxes                             (16,268)       (6,450)          296            38
Non-deductible losses of the Company
  and subsidiaries                                          16,103         6,682         1,076           138
Non-taxable income                                             -            (232)          -             -
Tax losses utilized                                            -             -            (133)          (17)
Difference in tax rate                                         -             -            (179)          (23)
Exemption granted                                              -             -            (530)          (68)
Change of tax rates                                            -            (221)          -             -
Valuation allowance                                            165           221           -             -
                                                         ----------------------------------------------------
Tax charge for the year                                        -             -             530            68
                                                         ====================================================

Deferred tax asset is comprised
  the following:
Tax losses carried forwad                                    2,360         2,581         2,200           282
Valuation allowance                                         (2,360)       (2,581)       (2,200)         (282)
                                                         ----------------------------------------------------
                                                               -             -             -             -
                                                         ====================================================
</TABLE>

Due to its history of losses for the companies subject to Hong Kong Profits Tax,
the  Group  does  not  believe  that  sufficient  objective,  positive  evidence
currently exists to conclude that  recoverability of its net deferred tax assets
is more  likely  than not.  Consequently,  the Group has  provided  a  valuation
allowance covering 100% of its net deferred tax assets.

As at March  31,  2005,  the Group has Hong Kong tax  losses  carry  forward  of
approximately   HK$12,588,000   (US$1,614,000)  (2004  and  2003:  HK$14,747,000
(US$1,890,000)   2002:   HK$13,718,000    (US$1,758,000)   2001:   HK$12,379,000
(US$1,587,000)),  which  has not yet  been  confirmed  by the Hong  Kong  Inland
Revenue  Department ("IRD") as the IRD implemented an assessing program known as
"Assess  First  Audit  Later".  Currently,  the Hong  Kong tax  losses as can be
carried forward indefinitely.



                                                                            F-22
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 8 - ACCOUNTS RECEIVABLE, NET

                                                   Year ended March 31,
                                               2004         2005         2005
                                            HK$'000      HK$'000      US$'000

Accounts receivable - trade                     -          1,459          187
Less: Allowance for doubtful debts              -            -            -
                                          ------------------------------------
                                                -          1,459          187
Discontinued operations                         549           55            7
                                          ------------------------------------
                                                549        1,514          194
                                          ====================================
Movement of allowance for doubtful debts
  Balance as at April 1                         -            -            -
  Provided during the year                      -            -            -
                                          ------------------------------------
                                                -            -            -
  Discontinued operations                       472          -            -
                                          ------------------------------------
  Balance as at March 31                        472          -            -
                                          ====================================










                                                                            F-23

<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 9 - INVENTORIES, NET

                                            Year ended March 31,
                                            2004          2005           2005
                                         HK$'000       HK$'000        US$'000

Inventories                                  -          1,513            194
Less: Allowance for obsolescence
           and net realizable value          -         (1,232)          (158)
                                        -------------------------------------
                                             -            281             36
Discontinued operations                      273          -              -
                                        -------------------------------------
Inventories, net                             273          281             36
                                        =====================================

Movement of allowance for obsolescence
  and net realizable value
    Balance as at April 1                    -            -              -
    Provided during the year                 -          1,232            158
                                        -------------------------------------
                                             -          1,232            158
    Discontinued operations                1,211          -              -
                                        -------------------------------------
    Balance as at March 31                 1,211        1,232            158
                                        =====================================



NOTE 10 - PROPERTY AND EQUIPMENT

                                             Year ended March 31,
                                               2004          2005         2005
                                            HK$'000       HK$'000      US$'000

Machinery and equipment                          15          -            -
Computer equipment                              -          2,005          257
Motor vehicles                                  -            889          114
Furniture, fixtures and office equipment        -             78           10
                                            ----------------------------------
                                                 15        2,972          381
Less: Accumulated depreciation                  -         (1,350)        (173)
                                            ----------------------------------
                                                 15        1,622          208
                                            ==================================




                                                                            F-24

<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


On January 26,  2004,  the Company  entered  into the  Agreement  with  Gumption
Trading, a company  incorporated in the BVI, and GDP. Pursuant to the Agreement,
the Company  sold to Gumption  Trading (i) all of the shares of its wholly owned
subsidiaries DF Paper Guangdong Ltd.,  Guangdong Dransfield Paper Ltd., DF Paper
Jiangsu Limited and Jiangsu Dransfield Paper Co. Ltd., and (ii) all fixed assets
of its  subsidiary  in Conghua,  GDP. GDP agreed to lease back these assets from
Gumption  Trading for its paper  manufacturing  operations at a rent of HK$1 per
annum for a term of one year, renewable yearly thereafter upon mutual agreement.
For such  purchase,  Gumption  Trading  paid to the Company a nominal  aggregate
amount  of  HK$5  and  assumed  all  of  the  Company's   liabilities  including
liabilities  related to such  subsidiaries  and assets,  incurred by the Company
prior  to  January  28,  2004.  The  Group  recorded  a  loss  of  HK$19,500,000
(US$2,500,000)  in last year  resulting  from the  disposal of the fixed  assets
described above.

On March 30, 2005, the management  discontinued the paper manufacturing business
and terminated the lease back agreement.

NOTE 11 - INTEREST IN AN AFFILIATE

On August 8,  2000,  the Group  entered  into an  agreement  with a third  party
whereby  the Group  agreed to acquire  26% equity  interest  in Tianjin 3D Image
Technique  Company Limited  ("TJ3D") for a consideration  of 1,560,000 shares of
the Company's common stock valued at HK$12,936,000 (US$1,658,000) based upon the
closing price of the Company's common stock on August 8, 2000.

TJ3D is engaged in  production  and  distribution  of  three-dimensional  visual
products,  which were developed by Professor Li, an ex-executive director of the
Company and his team. Professor Li was appointed as a director of DFCT on August
16, 2000 subsequent to the acquisition of TJ3D.

The  investment  is  accounted  for  using  the  equity   method.   The  Group's
proportionate share of the affiliate's net loss in 2002 amounted to HK$1,332,000
(US$171,000). The affiliate did not achieve the profitability target established
prior  to  acquisition  by a  significant  margin.  Due  to  changes  in  market
conditions,  the former management believed that the investment's  impairment is
other than temporary based on an analysis of discounted cash flows. Accordingly,
impairment losses of HK$3,262,000  (US$418,000) and HK$1 (US$1) were recorded in
2002 and 2005 respectively. The impairment losses and the amortization of excess
of carrying  value over equity in net assets are  recorded in the  statement  of
operations in equity in loss of affiliate.



                                                                            F-25
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 12 - DUE FROM RELATED COMPANIES

On October 28, 2004, the Group  received  letters from three of the investors in
its  February  2004 private  placement  stating  their  desire to rescind  their
purchase of an aggregate of 11,200,000 shares in light of the Group's subsequent
receipt of a delisting notice from Nasdaq in March 2004. These letters confirmed
oral requests made by these investors  earlier in 2004. In March 2004, the Group
established a fund of RMB20 million  (US$2,417,000) for investment purposes with
Shenzhen  International  Trust Investment Company, a nationally owned investment
company.  As a result of the  requests  from  investors,  and for the purpose of
repaying  these  investors  in the event that the  Company's  board of directors
decided to take such action,  the fund of RMB20 million  (US$2,417,000)  was set
aside into escrow (the "Escrow") pursuant to the terms of a loan agreement dated
March 26, 2004 between Shenzhen  International  Trust  Investment  Company and a
related  company of the  Group,  China  Merchants  DiChain  Investment  Holdings
Limited  ("China  Investment  Holdings").  Pursuant  to the  terms  of the  loan
agreement, the initial duration of the loan was for one year bearing interest of
4.8% per year. The Escrow was held by China Investment Holdings and is available
to the Group on demand.  All  interest  earned on the Escrow  remains with China
Investment  Holdings.  DiChain Holdings Ltd., the parent and owner of all of the
capital stock of China Investment  Holdings,  agreed to guarantee payment of the
Escrow to the Group should China  Investment  Holdings fail to repay the Escrow.
Based on the advice of counsel,  the Group  demanded  repayment of the Escrow in
November  2004 and as at March 31,  2005,  the Escrow was fully  received by the
Group.

The amounts due from related  companies as at March 31, 2005 represent  expenses
paid by the Group on behalf of its  related  companies  and the  advances to the
related  companies.  The funds were obtained from bank loans borrowed by DiChain
Software  before its  acquisition by the Group and the loans were  guaranteed by
certain  directors  of the  Group and  companies  within  the same  group of the
related companies to the extent of HK$264,151,000 (US$33,858,000).  The balances
of HK$186,942,000 (US$23,967,000) are unsecured, interest free and have no fixed
terms of repayments.  The remaining balances are unsecured,  bearing interest at
6.8% per annum and have no fixed terms of repayments.

NOTE 13 - DUE FROM A STOCKHOLDER

The balance due from a stockholder  was deposit  placed with the  stockholder to
guarantee  the  specific  performance  by the  Company to remain  listing on any
United States exchange board.  The deposit bore no interest and was fully repaid
in June 2005.



                                                                            F-26
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 14 - DUE TO A RELATED COMPANY

The balance due to a related  company  represents  expenses  paid by the related
company on behalf of the Group. The balance is unsecured,  interest-free and has
no fixed terms of repayment.

On March 30, 2005,  the Company  issued a total of  13,328,624  shares of common
stock at a market value of US$0.09 per share to CMDA, the holding company of the
related company to partially settle the debts due to the related company up to a
total of HK$9,357,000 (US$1,200,000.)

On June 11, 2003, the Company issued a total of 3,201,513 shares of common stock
at a market value of US$0.23 per share to DHL to partially  settle the debts due
to DHL up to a total of HK$5,744,000 (US$736,410).






















                                                                            F-27


<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 15 - NOTES PAYABLE

<TABLE>
<CAPTION>
                                                                                 Year ended March 31,
                                                                              2004          2005        2005
                                                                           HK$'000       HK$'000     US$'000
<S>                                                                    <C>           <C>           <C>
Note payable to a bank, interest rate at 6.138% per annum,
US$5,000,000 secured by bank deposits and remaining
balance secured by guarantees from its affiliates at no cost
to the Group, due on November 18, 2005                                         -          75,465       9,675

Note payable to a bank, interest rate at 4.779% per annum,
US$6,000,000 secured by bank deposits, due on
June 23, 2005.                                                                 -          45,283       5,804

Note payable to a bank, interest rate at 5.841% per annum,
secured by guarantees from its affiliates at no cost to the
Group, due on June 30, 2005.                                                   -          23,575       3,024

Note payable to a bank, interest rate at 5.76% per annum,
secured by guarantees from its affiliates at no cost to the
Group, due on June 16, 2005.                                                   -           5,660         726

Note payable to a bank, interest rate at 5.76% per annum,
secured by guarantees from its affiliates at no cost to the
Group, due on June 10, 2005                                                    -          13,200       1,692

Note payable to a bank, interest rate at 5.31% per annum,
secured by guarantees from its affiliates at no cost to the
Group, due on May 27, 2005.                                                    -          28,291       3,627

Note payable to a bank, interest rate at 5.31% per annum,
secured by guarantee from a third party at no cost to the
Group, due on April 12, 2005.                                                  -           2,161         277
                                                                       -----------   -----------   ---------
                                                                               -         193,635      24,825
Less current maturities                                                        -         148,352      19,021
                                                                       -----------   -----------   ---------
                                                                               -          45,283       5,804
                                                                       ===========   ===========   =========
</TABLE>

The  maturities  of notes payable for the year ended March 31, 2006 and 2007 are
HK$148,352,000 and HK$45,283,000 respectively.

Interest paid for the years ended March 31, 2003,  2004 and 2005 was HK$0,  HK$0
and HK$11,730,000 (US$1,504,000) respectively.



                                                                            F-28
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 16 - COMMITMENTS AND CONTINGENCIES

OPERATING LEASE COMMITMENTS

As of March 31, 2005, the Group had operating lease  agreements  principally for
its office premises in the PRC. Such leases have remaining terms of 9 months and
are renewable  subject to  negotiation.  Rental expense for the year ended March
31,  2003,  2004  and  2005  was  HK$0,  HK$0  and   HK$1,049,000   (US$135,000)
respectively.

Future minimum lease payments under the above  non-cancellable  operating  lease
agreements as at March 31, 2005 are HK$1,044,000 (US$134,000),  which are due in
the fiscal year 2006.

CONTINGENCIES

(a)   On  January  26,  2004,  the  Company,   Gumption   Trading  Limited  (the
      "Purchaser") and Guangzhou  Dransfield Paper Ltd. ("GDP") entered into the
      Agreement  wherein  the  Company  disposed  of a  majority  of its  assets
      primarily to streamline its paper  operations.  The Purchaser  assumed all
      the liabilities including  contingency  liabilities of the Company and its
      subsidiaries  incurred by the  Company  prior to January  28,  2004.  By a
      guarantee  dated  January  28,  2004 and by a deed of  confirmation  dated
      September 20, 2004, the guarantor,  an independent third party, guaranteed
      to the Company and GDP the due  payment by the  Purchaser  of all sums and
      charges  under the  Agreement and due  performance  and  observance by the
      Purchaser of the terms and conditions of the Agreement.

      As a result of the disposal of the subsidiaries and the guarantee provided
      by the guarantor, the liabilities, including contingent liabilities of the
      Company and its subsidiaries incurred prior to January 28, 2004, have been
      fully assumed by the Purchaser.

      Accordingly,  as the  liabilities of the Company and its  subsidiaries  in
      relation to the pending litigations as mentioned in the last annual report
      were incurred prior to the completion of the Agreement,  the Purchaser has
      assumed all the liabilities resulting from the said pending litigations.

(b)   In May 2004, Mr. Horace Yao Yee Cheong ("Mr.  Yao"),  the former  chairman
      and executive director of the Company,  sued the Company,  seeking,  inter
      alia,  the unpaid  remuneration  of HK$480,000 and a short term advance of
      HK$1,162,222,  plus interest and costs,  and specific  performance  by the
      Company to allot to Mr. Yao  1,153,846  fully paid shares of common  stock
      and 62,500  shares of common stock at US$0.001 par value.  Mr. Yao's claim
      falls within the ambit of the Agreement as


                                                                            F-29
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      supplemented  by the  Guarantee  and thus no  provision in relation to the
      claimed amount has been made in the financial statements.

(c)   In connection  with the preparation of this Annual Report on Form 20-F and
      after  consultation  with its  legal  counsel  in the BVI,  the  Group was
      informed  that it should have  sought and  received  shareholder  approval
      under BVI law prior to entering  into the  Agreement  due to the fact that
      the combined  assets being sold by the Group at such time  exceeded  fifty
      percent (50%) of its total  assets.  The Group has engaged BVI counsel and
      U.S.  counsel to prepare the documents  required to obtain the approval of
      its shareholders at a special meeting to ratify the transaction into which
      we entered with  Gumption  Trading.  Pursuant to the laws of the BVI, upon
      the Group  receiving  approval  from a majority of its  shareholders,  the
      transaction with Gumption Trading will be ratified and approved as if such
      shareholder  approval  had been  received  prior to the  execution  of the
      Agreement.  Section 83 of the International  Business  Companies Act (Cap.
      291) of the BVI  provides  dissenters  rights  for  those  of the  Group's
      shareholders  who held their  shares at the time of this  transaction  and
      exercise  their right to dissent from the  transaction  entitling  them to
      receive  fair value for their  shares.  On  November  8, 2004,  we filed a
      report on Form 6-K with the SEC in  connection  with the Agreement and the
      required shareholder  approval.  In connection with the dissenters rights,
      the Group is unable to  quantify  at this time the number of  shareholders
      who held their shares at the time of this transaction and who may exercise
      their right to dissent from the transaction.

NOTE 17 - STOCKHOLDERS' EQUITY

STOCK ISSUANCES

(a)   On June 11, 2003, the Company issued  3,201,513 shares of its common stock
      at a market  value  of  US$0.23  per  share to a  related  company  to pay
      indebtedness  owed to the  related  company in the amount of  HK$5,744,000
      (US$736,000).

(b)   On August 1, 2003, the Company issued 1,680,000 shares of its common stock
      at a fair value of US$0.23  per share for the  exercise  of options in the
      amount of HK$3,014,000 (US$386,000).

(c)   On August 25, 2003,  the Company issued 100,310 shares of its common stock
      at a fair value of US$0.29  per share for the  exercise  of options in the
      amount of HK$224,000 (US$29,000).

(d)   On September  30, 2003,  the Company  issued  48,909  shares of its common
      stock at a fair value of US$1.05 per share for settlement of an employee's
      debt in the amount of HK$401,000 (US$51,000).



                                                                            F-30
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(e)   On October 10, 2003,  the Company issued 30,000 shares of its common stock
      at a fair value of US$0.23  per share for the  exercise  of options in the
      amount of HK$54,000 (US$7,000).

(f)   On November 18, 2003,  the Company issued  1,144,688  shares of its common
      stock at a fair value of US$0.224  per share for private  placement  to an
      investor in the amount of HK$2,000,000 (US$256,000).

(g)   On February 20, 2004, the Company issued  21,500,000  shares of its common
      stock at a fair value of US$0.2 per share for private  placement  to seven
      investors in the amount of HK$33,391,000 (US$4,281,000).

(h)   On April 20, 2005, the Company issued 5,200,000 shares of its common stock
      at a fair value of US$0.404 per share for private placement to an investor
      in the amount of HK$16,386,000 (US$2,101,000).

(i)   On May 25, 2005, the Company issued 197,799,000 shares of its common stock
      at a market  value of US$0.4  per  share to the  shareholders  of  DiChain
      Software  to  acquire  the  entire   interests  of  DiChain   Software  of
      HK$617,132,000 (US$79,120,000).

(j)   On March 30,  2005,  the Company  issued  13,328,624  shares of its common
      stock at a market  value of US$0.09 per share to a related  company to pay
      indebtedness   to  a  related   company  in  the  amount  of  HK$9,357,000
      (US$1,200,000).

NOTE 18 - RELATED PARTY TRANSACTIONS AND ARRANGEMENTS

The major related  party  transactions  are  described in further  detail below.
Management believes that the methods used in allocating costs are reasonable.

Storage and delivery charges

Storage and delivery  services are provided to the Group by Dransfield  Services
Limited  which  is a  subsidiary  of DHL.  According  to the  management,  these
transactions were carried out at the terms determined and agreed by the relevant
parties.

Storage and delivery charges paid to the related party for the years ended March
31, 2003, 2004 and 2005 was HK$725,000, HK$0 and HK$0 (US$0) respectively.




                                                                            F-31

<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Management fee

On May 1, 2003,  VLL, a related party of the Company,  entered into an agreement
with the Company whereby VLL agreed to provide management  services to the Group
at the monthly fee of HK$200,000 (US$26,000). According to the management, these
transactions were carried out at the terms determined and agreed by the relevant
parties.

Management  fee paid to the related  party for the years  ended March 31,  2003,
2004 and 2005 was HK$0, HK$2,200,000 and HK$2,400,000 (US$308,000) respectively.

Fund Transfers

During  the  years  presented,  the  Group  obtained  bank  loans  and made fund
transfers  to its  related  companies.  The Group also  obtained  funds from its
related  companies.  Details are set out in the consolidated  statements of cash
flows.

Interest Income

The Group received  interest income from related  companies for advances to them
amounting to approximately  HK$0, HK$0 and HK$12,090,000  (US$1,550,000)  during
the years ended March 31 2003, 2004 and 2005 respectively.

Guarantees

The  following  related  parties  have given  guarantees  to banks in respect of
general banking facilities granted to the Group.


                                    RMB'000                 US$'000

Director                                65,000                  7,860

Related companies                      215,000                 25,998
                                      --------               --------

                                       280,000                 33,858
                                      ========               ========



                                                                            F-32

<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Settlement of Debts

On June 11, 2003, the Company issued  3,201,513  shares of its common stock at a
market value of US$0.23 per share to a related  company to pay  indebtedness  to
the related company in the amount of HK$5,744,000 (US$736,000).

On March 31, 2005, the Company issued 13,328,624 shares of its common stock at a
market value of US$0.09 per share to a related company to pay indebtedness owned
to the related company in the amount of HK$9,357,000 (US$1,200,000).

The issue prices were  determined  after arm's length  negotiations  between the
Company and the related companies.


NOTE 19 - LOSS ON DISPOSAL OF SUBSIDIARIES

                                                2004         2005          2005
                                             HK$'000      HK$'000       US$'000

Net assets disposed of:
Property, plant and equipment                12,835            -             -

Cash at bank                                     16            -             -

Prepayments and other receivables               179            -             -

Accrued liabilities and other payables       (1,860)           -             -

Construction payable                         (2,826)           -             -

Accrued rental payable                         (199)           -             -

Due to related companies                        (72)           -             -
                                          --------------------------------------
                                              8,073            -             -
Satisfied by cash of HK$5                         -            -             -
                                          --------------------------------------
Loss on disposal of subsidiaries              8,073            -             -
                                          --------------------------------------
Cash at bank disposal of                         16            -             -
                                          ======================================

The subsidiaries disposed of in last year did not have any significant impact on
the Group's operating results and cash flows.


                                                                            F-33
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


During the year ended March 31, 2005, CS Paper Holdings (International) Limited,
a dormant  subsidiary  incorporated in the BVI, was struck off from the Register
of Companies of the BVI.  The striking off of this  subsidiary  has no effect on
the Group's operating results and cash flows for 2005.

NOTE 20 - FINANCIAL INSTRUMENTS

The carrying amount of the Group's cash and cash equivalents  approximate  their
fair value  because of the short  maturity of those  instruments.  The  carrying
amounts of the  Group's  borrowing  approximate  their  fair value  based on the
borrowing  rates  currently  available  for  borrowings  with similar  terms and
average  maturities,  except for the loans from related  parties,  which, due to
their nature, the fair value was not determinable.

On January 26, 2004 pursuant to the Agreement with Gumption Trading, the Company
sold four subsidiaries namely DF Paper Guangdong Limited,  Guangdong  Dransfield
Paper Limited,  DF Paper Jiangsu  Limited and Jiangsu  Dransfield  Paper Company
Limited, and certain paper manufacturing assets at a total nominal consideration
of HK$5 to Gumption Trading.  The Agreement  required Gumption Trading to assume
all the liabilities related to such subsidiaries and assets prior to January 28,
2004.  Under the Agreement,  Gumption  Trading also agreed to lease back part of
the paper  manufacturing  assets  to the  Group at a nominal  rental of HK$1 per
annum.

NOTE 21 - PENSION PLAN

Prior to  December  1,  2000,  the Group was a member of a defined  contribution
pension  plan of DHL (the  "Plan").  All the full time  permanent  staff in Hong
Kong,  after the  completion  of one year's  service,  were eligible to join the
Plan. The  participants  contributed  5% of their basic monthly  salaries to the
Plan while the Group contributed 5% to 6.5% of the basic monthly salaries of the
participants  depending  on the  number  of years of  employment  of  individual
participants and such  contributions were charged to the statement of operations
as they  became  payable  in  accordance  with the  rules of the  Plan.  When an
employee  left  the  Plan  prior  to  his/her  interest  in the  Group  employer
contributions vested fully, the ongoing contributions payable by the Group could
be reduced by the relevant amount of forfeited contributions.


On December 1, 2000, all of the members of the existing Plan were transferred to
a Mandatory Provident Fund (the "MPF Plan"). All of the underlying assets of the
existing Plan have been  transferred to the MPF Plan.  Contributions  to the MPF
are made based on rates applicable to the respective employees' monthly salaries
and are  charged  to the  profit  and loss  account  as they  become  payable in
accordance  with  government  regulations.  The  assets of the MPF Plan are held
separately



                                                                            F-34
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


from  those of the Group in an  independently  administered  fund.  The  Group's
employer  contributions  to the MPF Plan  vest  fully  with the  employees  when
contributed into the MPF Plan.

Employees in Mainland China are members of the Central  Pension Plan operated by
the PRC  government.  These  subsidiaries  are required to  contribute a certain
percentage  of their  covered  payroll to the Central  Pension  Plan to fund the
benefits.  The only obligation for the Group with respect to the Central Pension
Plan is the associated  required  contributions  under the Central Pension Plan,
which are  charged  to the  profit  and loss  account  in the year to which they
related.

Pension plan expenses,  net of forfeited  contributions,  were insignificant for
the three years ended March 31, 2005.

NOTE 22 - CONCENTRATIONS AND RISKS

MAJOR CUSTOMERS

During the fiscal years ended March 31, 2003, 2004 and 2005, 100% of the Group's
assets  were  located  in  the  PRC  (including  Hong  Kong  and  Macau  Special
Administrative  Regions)  and 100% of the Group's  revenues  were  derived  from
customers in the PRC.

For the fiscal year ended March 31, 2003,  three  customers  accounted  for more
than  10%  of  the  total  net  sales.  Sales  to  these  three  customers  were
HK$1,499,000  (US$192,000 or 27%), HK$948,000 (US$122,000 or 17%) and HK$553,000
(US$71,000  or 10.1%)  respectively.  For the fiscal year ended March 31,  2004,
five  customers  accounted  for more than 10% of the total net  sales.  Sales to
these  five  customers  were  HK$1,306,000  (US$167,000  or  31.6%),  HK$563,000
(US$72,000 or 13.6%),  HK$529,000 (US$68,000 or 12.8%), HK$524,000 (US$67,000 or
12.7%) and  HK$444,000  (US$57,000 or 10.7%)  respectively.  For the fiscal year
ended March 31, 2005,  three customers  accounted for more than 10% of the total
net sales.  Sales to these three  customers  were  HK$4,719,000  (US$605,000  or
26.8%),  HK$4,415,000  (US$566,000  or 25.1%) and  HK$3,853,000  (US$494,000  or
22.0%) respectively.

CONCENTRATION OF CREDIT RISK

The  Group's  principal  activities  are  designing,  manufacturing  and selling
computer  software and hardware  products and systems  solutions  for the supply
chain management and logistics  industry and  manufacturing and the distribution
of paper products.  The Group has long standing  relationships  with most of its
customers.  The Group  performs  ongoing  credit  evaluation  of its  customers'
financial conditions and, generally does not require collateral.



                                                                            F-35
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


The allowance for doubtful  accounts that the Group  maintains is based upon the
expected collectibility of all accounts receivable.

CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS

Some  of the  Group's  business  is  transacted  in  RMB,  which  is not  freely
convertible to other foreign currencies.  On January 1, 1994, the PRC government
abolished  the dual rate  system and  introduced  a single  rate of  exchange as
quoted daily by the People's  Bank of China.  However,  the  unification  of the
exchange rates does not imply  convertibility  of RMB into United States dollars
or other foreign currencies.  All foreign exchange transactions continue to take
place either through the Bank of China or other banks authorized to buy and sell
foreign  currencies at the exchange rates quoted by the Bank of China.  Approval
of foreign currency payments by the Bank of China or other institutions  require
submitting  a  payment  application  form  together  with  suppliers'  invoices,
shipping documents and signed contracts.

NOTE 23 - COMMON STOCK OPTIONS

On November  20,  1996,  the then sole  director of the Company  adopted a stock
option plan (the "Plan 1") whereby  nontransferable  options could be granted by
the directors to employees and  executive  officers of the Company.  The options
must be 4-year  terms but are  subject  to earlier  expiration  on April 2, 2003
which is the last validity  date of the Plan 1. All the options  granted may not
be exercised  during the first year of the grant.  The  exercise  price for each
option shall be set by the directors but may not be less than 80% of the average
of closing  prices of the  Company's  common  stock during the five trading days
prior to the grant of the  option.  The total  number of shares of common  stock
which  can be  subject  to the  options  at any  time,  both  under the Plan and
otherwise,  shall not exceed  10% of the  number of shares of common  stock than
outstanding.  No person can be granted options which, if fully exercised,  would
result in that person owning more than 25% of the  outstanding  shares of common
stock after such exercise.

On May 15, 2002, the then board of directors of the Company  adopted a new stock
option plan (the "Plan 2") whereby  nontransferable  options could be granted by
the  directors  to employees  and  executive  officers of the  Company.  Options
granted  under  the Plan 2 will be  exercisable  for a period  of up to 10 years
commencing on the date of the grant.

The per share exercise price for the Shares to be issued pursuant to exercise of
an  Option  shall  be such  price  as is  determined  by the  Option  Committee;
provided, however, that as to an Incentive Option:

(a)   granted to an  Employee  who,  at the time of the grant of such  Incentive
      Stock Option is subject to the United  States'  Internal  Revenue Code and
      also owns  stock  representing  more than 10% of the



                                                                            F-36
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      voting  power of all  classes  of stock of the  Company  or any  Parent or
      Subsidiary, the per Share exercise price shall be no less than 110% of the
      Fair Market Value per Share on the date of grant.


(b)   granted to any other  Employee,  the per Share  exercise price shall be no
      less than 100% of the Fair Market Value per Share on the date of grant.


The status of the Company's stock options as of March 31 is summarized below:

                                          Number of     Weighted average
                                            options       exercise price
                                                                     US$

Outstanding at March 31, 2003               875,000                 0.65
Granted                                   1,710,000                 0.37
Exercised                                (1,755,000)                0.37
Cancelled                                  (830,000)                0.37
                                     ------------------------------------
Outstanding at March 31, 2004                     -
Granted                                     750,000                 0.20
                                     ------------------------------------
Outstanding at March 31, 2005               750,000
                                     ====================================

Options exercisable at:
March 31, 2003                                    -                    -
March 31, 2004                                    -                    -
March 31, 2005                                    -                    -
                                     ====================================

Weighted average fair value of options granted during the year
    ended
    March 31, 2003                                                  0.19
    March 31, 2004                                                  0.24
    March 31, 2005                                                  0.15
                                                            =============

On June 20, 2000,  the board of directors  invited the grantees of share options
issued between January through May 2000 to surrender their share options by June
30, 2000 in exchange for the same number of stock  options at an exercise  price
of US$1.75 per share,  being the market closing price of the Company's  share on
June 19, 2000.  All stock options were  surrendered  and exchanged for new stock
options on June 30, 2000.

On March 1, 2001, the board of directors invited the grantees of all outstanding
share  options in exchange  for the same number of share  options at an exercise
price of US$0.82 per share.


                                                                            F-37
<PAGE>
                       CHINA TECHNOLOGY GLOBAL CORPORATION
                      (PREVIOUSLY DF CHINA TECHNOLOGY INC.)
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


On May 17,  2002,  the  board of  directors  resolved  to grant a total of stock
options  pursuant to Plan 2 amounting to 542,000  shares at an exercise price of
US$0.286 per share,  being the average  market  closing  price of the  Company's
share in the last five trading days of the grant, to management and staff.

On April 2, 2003,  all the stock  option  under Plan 2 as of March 31,  2003 had
lapsed.

On June 11,  2003,  the board of  directors  granted to  certain  members of the
Company's  management a total of 1,710,000  stock  options  pursuant to the 2002
Stock Option Plan, at an exercise  price of US$ 0.23 per share,  which  exercise
price was the closing price of the Company's  common stock on June 10, 2003. The
Group applies  Accounting  Principle Board Opinion No. 25, "Accounting for Stock
Issued to  Employees"  in  accounting  for the Plan.  The  compensation  expense
represents the difference  between the option exercise price and the fair market
value of the  Company's  common  stock at the  respective  dates of grant and is
recognized over the vesting period.  No compensation  expense was recognized for
the years  ended March 31,  2002,  2003 and 2004 as the  exercise  prices of the
outstanding options exceeded the fair market value of the Company's shares as of
March 31, 2002, 2003 and 2004.

NOTE 24- CONTRIBUTED SURPLUS

The amount  represents a net  compensation of HK$1,530,000  (US$196,000)  from a
minority shareholder,  which was accounted for as a capital transaction in 1998,
and accumulated  stock  compensation  expense of HK$3,147,000  (US$403,000).  No
stock  compensation  expense was  recognized for the three years ended March 31,
2005.















                                                                            F-38