Global Testing Corporation Limited

PROSPECTUS DATED 15 AUGUST 2005 (registered with the Monetary Authority of Singapore on 15 August 2005)

This document is important. If you are in any doubt as to the action you should take, you should consult your stockbroker, bank manager, “Specialising in Mixed Signal and Logic IC Testing” solicitor, accountant, or other professional adviser. We have made an application to the Singapore Exchange Securities Trading Limited (“SGX-ST”) for permission to deal in, and for quotation of, all the ordinary · Established in 1998 shares of S$0.10 each (the “Shares”) in the capital of Global Testing Corporation Limited (the “Company”) already issued (including the Vendor Shares, as defined herein), the new Shares which are the subject of the Invitation (the “New Shares”) and the Shares which may be issued upon the exercise · Operates two facilities housed in Hsin-Chu, Taiwan and the US with approximately of the options to be granted under the Global Testing Employee Share Option Scheme (the “Option Shares”). Such permission will be granted 100 testers in Taiwan when we have been admitted to the Official List of the SGX-ST. The dealing in and quotation of the Shares will be in Singapore dollars.

Acceptance of applications will be conditional upon permission being granted by the SGX-ST to deal in, and for quotation of, all of the existing issued Shares (including the Vendor Shares), the New Shares and the Option Shares. If the completion of the Invitation does not occur because the SGX-ST’s permission OUR is not granted or for any other reasons, monies paid in respect of any application accepted will be returned to you at your own risk, without interest or any share of revenue or other benefit arising therefrom and you will not have any claims whatsoever against us, the Vendors, the Manager, the Underwriter or BUSINESS the Placement Agent. Global Testing Corporation Limited The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in this Prospectus. • Provides testing services such as wafer sorting and final testing services to the semi-conductor industry, focusing Global Testing Corporation Limited Admission to the Official List of the SGX-ST is not to be taken as an indication of the merits of the Invitation, our Company, our subsidiaries, our Shares, on logic and mixed signal semi-conductors used in consumer electronics and communication devices the New Shares, the Vendor Shares or the Option Shares. • Commenced provision of wafer sorting services in respect of 12 inch (300mm) wafers for Marvell Technology Group No. 75 Guangfu Road, Hu-Kou Limited (“Marvell”) Hsin-Chu Industrial Park A copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the “Authority”). The Authority assumes no Hsin-Chu County 303 • Other services: Provide test program development as well as conversion and optimisation services, load board and Taiwan responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act (Chapter probe card design, and leasing of testers to customers for trial and pilot testing purposes 289) of Singapore, or any other legal or regulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of • Customers are mainly independent foundries and fabless companies located in Taiwan and the US including Taiwan our Shares, the New Shares, the Vendor Shares or the Option Shares, as the case may be, being offered or in respect of which an invitation is made, for Tel: (886) 3-598-7168 Semiconductor Manufacturing Company Limited (“TSMC”), United Microelectronic Corporation (“UMC”), Marvell, ESS Fax: (886) 3-598-7166 investment. Technology Inc., Cypress Semiconductor Corporation, PMC-Sierra Inc., and Sunplus Technology Co. Ltd. Our Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), and www.gttw.com.tw may not be offered or sold in the United States (“U.S.”) or to, or for the account or benefit of, U.S. persons except to certain persons in offshore transactions in reliance on Regulation S under the Securities Act. Revenue and Profit attributable to the Group Investing in our Shares involves risks which are described in the section entitled “Risk Factors” of this Prospectus. No Shares will be allocated or allotted on the basis of this Prospectus later than 6 months after the date of registration of this Prospectus. FINANCIAL HIGHLIGHTS Revenue Profit attributable 50 45.2 to the Group

(US$’million) 40

30 25.6 25.2

20 11.5 10 Global Testing Corporation Limited 4.2 Company Registration Number: 200409582R (Incorporated in the Republic of Singapore on 30 July 2004) 0

-5.0 Invitation in respect of 211,885,000 Invitation Shares of S$0.10 each -10 comprising 175,500,000 New Shares and 36,385,000 Vendor Shares FY2002 FY2003 FY2004 as follows: (i) 5,000,000 Offer Shares at S$0.30 for each Offer Share by way of public Revenue by Business Activity (%) Revenue by Geographical Region (%) offer; and FY2004 FY2004 (ii)206,885,000 Placement Shares at S$0.30 for each Placement Share by US Provision of Testing 22.0% way of placement, Services Singapore Taiwan 65.8% Leasing of Testers 57.7% payable in full on application. 13.5% 20.3%

Provision of Test Program Others Development Services 10.1% 10.6% Manager

FY = Financial year ended 31 December

As at 31 December 2004, Underwriter and Placement Agent • We operated 89 testers • Our utilisation rate was at 82.6% Order book as at 11 July 2005 was approximately US$9.0 million PROSPECTUS DATED 15 AUGUST 2005 (registered with the Monetary Authority of Singapore on 15 August 2005)

(US$’million) 40

30 25.6 25.2

20 11.5 10 Global Testing Corporation Limited 4.2 Company Registration Number: 200409582R (Incorporated in the Republic of Singapore on 30 July 2004) 0

Provision of Test Program Others Development Services 10.1% 10.6% Manager

FY = Financial year ended 31 December

As at 31 December 2004, Underwriter and Placement Agent • We operated 89 testers • Our utilisation rate was at 82.6% Order book as at 11 July 2005 was approximately US$9.0 million COMPETITIVE Company Specialising in Mixed Signal and Logic IC Testing STRENGTHS

• Highly qualified and experienced management and • Established working relationships with customers engineering team - Strong emphasis on building close working relationships with customers, - Key management team comprises individuals with experience in the in particular, customers’ technical teams semi-conductor industry - Pre-qualified supplier of testing services to TSMC and UMC due to close - Engineering team comprises more than 35 engineers and is led by a working relationships core group of experienced test development engineers who collectively - Obtained award from Pixelworks Inc. for outstanding performance in July possesses more than 50 years of experience in the semi-conductor 2004, the “Best Sort Partnership” award for Year 2003 and Year 2004 industry in both mixed signal and logic semi-conductors using a variety from Marvell, and a vendor appreciation award from UMC in December of test platforms including those from Teradyne Inc. and Agilent 2004 in recognition of our outstanding engineering support and consistent Technologies, Inc. service quality STRATEGIES AND - Engineering team responsible for test program development, conversion - Have also received “Best Long Term Supplier – 5 Years of Service FUTURE PLANS and optimisation services as well as load board and probe card design Excellence” award from Oasis Semiconductor, Inc., and an “Outstanding Contribution” award from ALi Corporation • Strong engineering capabilities to provide wafer sorting • An even more focused sales strategy and wafer testing services with more stable and higher - To focus sales efforts on providing wafer sorting of mixed signal yield results semi-conductors to fabless companies and IDMs to enjoy better margins - Believed to be one of the largest independent testing services company in Asia-Pacific providing wafer sorting services for mixed signal and logic - Utilise approximately S$13 million of proceeds to expand existing semi-conductors factory premises and purchase additional testers, and also embark on a retooling program to selectively replace test handlers used in - Ability to handle more than 32,000 pieces of wafers each month and final testing with test probers used in wafer sorting the experience gathered in providing wafer sorting services allows us to provide customers with effective solutions to deal with a wide range - To also focus sales efforts on providing testing services on semi- of potential wafer sorting issues conductor devices whose functionalities we believe tend to be less sensitive to market obsolescence compared to other types of semi- - In-depth knowledge of testing platforms and good understanding of conductors technologies used in providing testing services enable us to maintain high and more stable yields - an indicator of the effectiveness of testing services • To extend capability to meet demands for testing of INDUSTRY larger wafers PROSPECTS - Provide testing services for 12 inch (300 mm) wafers • Quick turnaround time - Utilise approximately S$13 million of proceeds to purchase new - Close integration of customer support functions has shortened decision- factory premises, plant and equipment and construct ancillary making process and facilitates efficient and effective communication • Global economic recovery to result in continual increase facilities in Taiwan to handle this demand with customers in demand for consumer electronics and communication - Ability to meet quick turnaround time required by customers as mixed devices • To expand or set up separate facilities in Taiwan or signal and logic semi-conductors are used in consumer electronics and - Increased capital expenditures in information technology devices by overseas where commercially or legally feasible communication devices which typically have short product life cycles companies and increased spending on fast moving consumer electronics expected to generate demand for testing of semi-conductors used in - Utilise approximately S$21 million of proceeds for the expansion - Enables customers, in turn, to respond quickly to their own market and setting up of separate facilities in Taiwan or overseas demands consumer electronics and communication devices • Continued outsourcing of testing services - This may include the setting up of additional separate facilities to provide testing services in respect of more specialised semi-conductors - Growth in outsourcing trend will be a significant driver for our business as seen in the following : • Integrated Device Manufacturers (“IDMs”), or semi-conductor manufacturers that design, manufacture and market their proprietary brands of semi-conductors, have started to outsource testing requirements as a cost effective means to reduce need for high capital investment, access specialised engineering expertise and lower their unit manufacturing costs • Growth in fabless companies that concentrate on the design, marketing and sale of semi-conductors and outsource almost all of the semi-conductor manufacturing process • Increased complexity of semi-conductors - Increasing functional density and integration of semi-conductors in consumer electronics and communication devices resulting in opportunities to provide our testing services - Semi-conductor manufacturers integrate more digital and analog functions into mixed signal semi-conductors and migrate to 12-inch (300mm) wafer manufacturing from the current 8-inch (200 mm) wafers - Increase in future demand for testing of 12-inch wafers COMPETITIVE Company Specialising in Mixed Signal and Logic IC Testing STRENGTHS

• Highly qualified and experienced management and • Established working relationships with customers engineering team - Strong emphasis on building close working relationships with customers, - Key management team comprises individuals with experience in the in particular, customers’ technical teams semi-conductor industry - Pre-qualified supplier of testing services to TSMC and UMC due to close - Engineering team comprises more than 35 engineers and is led by a working relationships core group of experienced test development engineers who collectively - Obtained award from Pixelworks Inc. for outstanding performance in July possesses more than 50 years of experience in the semi-conductor 2004, the “Best Sort Partnership” award for Year 2003 and Year 2004 industry in both mixed signal and logic semi-conductors using a variety from Marvell, and a vendor appreciation award from UMC in December of test platforms including those from Teradyne Inc. and Agilent 2004 in recognition of our outstanding engineering support and consistent Technologies, Inc. service quality STRATEGIES AND - Engineering team responsible for test program development, conversion - Have also received “Best Long Term Supplier – 5 Years of Service FUTURE PLANS and optimisation services as well as load board and probe card design Excellence” award from Oasis Semiconductor, Inc., and an “Outstanding Contribution” award from ALi Corporation • Strong engineering capabilities to provide wafer sorting • An even more focused sales strategy and wafer testing services with more stable and higher - To focus sales efforts on providing wafer sorting of mixed signal yield results semi-conductors to fabless companies and IDMs to enjoy better margins - Believed to be one of the largest independent testing services company in Asia-Pacific providing wafer sorting services for mixed signal and logic - Utilise approximately S$13 million of proceeds to expand existing semi-conductors factory premises and purchase additional testers, and also embark on a retooling program to selectively replace test handlers used in - Ability to handle more than 32,000 pieces of wafers each month and final testing with test probers used in wafer sorting the experience gathered in providing wafer sorting services allows us to provide customers with effective solutions to deal with a wide range - To also focus sales efforts on providing testing services on semi- of potential wafer sorting issues conductor devices whose functionalities we believe tend to be less sensitive to market obsolescence compared to other types of semi- - In-depth knowledge of testing platforms and good understanding of conductors technologies used in providing testing services enable us to maintain high and more stable yields - an indicator of the effectiveness of testing services • To extend capability to meet demands for testing of INDUSTRY larger wafers PROSPECTS - Provide testing services for 12 inch (300 mm) wafers • Quick turnaround time - Utilise approximately S$13 million of proceeds to purchase new - Close integration of customer support functions has shortened decision- factory premises, plant and equipment and construct ancillary making process and facilitates efficient and effective communication • Global economic recovery to result in continual increase facilities in Taiwan to handle this demand with customers in demand for consumer electronics and communication - Ability to meet quick turnaround time required by customers as mixed devices • To expand or set up separate facilities in Taiwan or signal and logic semi-conductors are used in consumer electronics and - Increased capital expenditures in information technology devices by overseas where commercially or legally feasible communication devices which typically have short product life cycles companies and increased spending on fast moving consumer electronics expected to generate demand for testing of semi-conductors used in - Utilise approximately S$21 million of proceeds for the expansion - Enables customers, in turn, to respond quickly to their own market and setting up of separate facilities in Taiwan or overseas demands consumer electronics and communication devices • Continued outsourcing of testing services - This may include the setting up of additional separate facilities to provide testing services in respect of more specialised semi-conductors - Growth in outsourcing trend will be a significant driver for our business as seen in the following : • Integrated Device Manufacturers (“IDMs”), or semi-conductor manufacturers that design, manufacture and market their proprietary brands of semi-conductors, have started to outsource testing requirements as a cost effective means to reduce need for high capital investment, access specialised engineering expertise and lower their unit manufacturing costs • Growth in fabless companies that concentrate on the design, marketing and sale of semi-conductors and outsource almost all of the semi-conductor manufacturing process • Increased complexity of semi-conductors - Increasing functional density and integration of semi-conductors in consumer electronics and communication devices resulting in opportunities to provide our testing services - Semi-conductor manufacturers integrate more digital and analog functions into mixed signal semi-conductors and migrate to 12-inch (300mm) wafer manufacturing from the current 8-inch (200 mm) wafers - Increase in future demand for testing of 12-inch wafers PROSPECTUS DATED 15 AUGUST 2005 (registered with the Monetary Authority of Singapore on 15 August 2005)

(US$’million) 40

30 25.6 25.2

20 11.5 10 Global Testing Corporation Limited 4.2 Company Registration Number: 200409582R (Incorporated in the Republic of Singapore on 30 July 2004) 0

Provision of Test Program Others Development Services 10.1% 10.6% Manager

FY = Financial year ended 31 December

As at 31 December 2004, Underwriter and Placement Agent • We operated 89 testers • Our utilisation rate was at 82.6% Order book as at 11 July 2005 was approximately US$9.0 million TABLE OF CONTENTS

Page

CORPORATE INFORMATION ...... 1

DEFINITIONS...... 3

GLOSSARY OF TECHNICAL TERMS...... 9

SELLING RESTRICTIONS ...... 12

DETAILS OF THE INVITATION ...... 13 LISTING ON THE SGX-ST ...... 13 INDICATIVE TIMETABLE FOR LISTING ...... 15

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS ...... 17

EXCHANGE RATES ...... 18

PROSPECTUS SUMMARY ...... 19

THE INVITATION ...... 23

PLAN OF DISTRIBUTION ...... 25

CLEARANCE AND SETTLEMENT ...... 26

RISK FACTORS ...... 27

INVITATION STATISTICS ...... 33

SELECTED PROFORMA GROUP FINANCIAL INFORMATION ...... 35

REVIEW OF PAST OPERATING PERFORMANCE AND FINANCIAL POSITION ...... 39 OVERVIEW ...... 39 SEGMENTAL OPERATING RESULTS ...... 42 REVIEW OF PAST OPERATING PERFORMANCE...... 43 REVIEW OF FINANCIAL POSITION ...... 46 LIQUIDITY AND CAPITAL RESOURCES...... 47 CAPITAL EXPENDITURE AND COMMITMENTS ...... 49 FOREIGN EXCHANGE MANAGEMENT ...... 49

DIVIDEND POLICY ...... 51

EXCHANGE CONTROL ...... 52

CAPITALISATION AND INDEBTEDNESS ...... 53

DILUTION...... 57

SHARE CAPITAL...... 58

i Page

SHAREHOLDERS ...... 60 SELLING SHAREHOLDERS ...... 62 MORATORIUM ...... 64

RESTRUCTURING EXERCISE ...... 65

GROUP STRUCTURE ...... 66

GENERAL INFORMATION ON OUR GROUP ...... 67 HISTORY...... 67 BUSINESS ...... 68 TEST FACILITIES AND UTILISATION ...... 69 QUALITY CONTROL...... 70 TECHNOLOGY DEVELOPMENT ...... 71 SALES AND MARKETING ...... 71 INTELLECTUAL PROPERTY ...... 72 TRAINING ...... 72 MAJOR SUPPLIERS...... 72 MAJOR CUSTOMERS ...... 73 COMPETITION ...... 74 COMPETITIVE STRENGTHS...... 74 PROPERTIES AND FIXED ASSETS ...... 76 GOVERNMENT REGULATIONS ...... 77 INSURANCE ...... 78 PROSPECTS ...... 79 STRATEGIES AND FUTURE PLANS...... 80

DIRECTORS, MANAGEMENT AND STAFF ...... 81 MANAGEMENT REPORTING STRUCTURE ...... 81 DIRECTORS ...... 82 EXECUTIVE OFFICERS...... 87 REMUNERATION ...... 89 EMPLOYEES...... 89 SERVICE AGREEMENTS...... 90

GLOBAL TESTING EMPLOYEE SHARE OPTION SCHEME ...... 92

INTERESTED PERSON TRANSACTIONS ...... 98 PAST INTERESTED PERSON TRANSACTIONS ...... 98 PRESENT ON-GOING INTERESTED PERSON TRANSACTIONS...... 99 POTENTIAL CONFLICTS OF INTEREST ...... 99 REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS ...... 100

ii Page

CORPORATE GOVERNANCE ...... 101

GENERAL AND STATUTORY INFORMATION...... 103

APPENDIX A COMPILATION REPORT OF THE JOINT REPORTING ACCOUNTANTS ON THE PROFROMA CONSOLIDATED FINANCIAL STATEMENTS ...... A-1

APPENDIX B AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF GLOBAL TESTING CORPORATION AND ITS SUBSIDIARIES ...... B-1

APPENDIX C SUMMARY OF THE CONSTITUTION OF OUR COMPANY ...... C-1

APPENDIX D DESCRIPTION OF OUR SHARES...... D-1

APPENDIX E TAXATION ...... E-1

APPENDIX F SUMMARY OF THE RELEVANT LAWS AND REGULATIONS IN TAIWAN...... F-1

APPENDIX G TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION ...... G-1

APPENDIX H RULES OF THE GLOBAL TESTING EMPLOYEE SHARE OPTION SCHEME...... H-1

iii CORPORATE INFORMATION

BOARD OF DIRECTORS : Pierre Tie-Min Chen (Executive Chairman) Paul Yao-Chou Yang (President and Chief Executive Officer) Jon-Fwu Hwu (Executive Director) Vincent Chi-Sheng Weng (Executive Director) Kenneth Chung-Hou Tai (Non-Executive Director) Wheng-Jing Kuan (Independent Director) Chan Wai Meng (Independent Director) Chia Soon Loi (Independent Director) Sunny Wong Fook Choy (Independent Director)

COMPANY SECRETARY : Abdul Jabbar Bin Karam Din, LLB (Hons)

REGISTERED OFFICE : 4 Battery Road #15-01 Bank of China Building Singapore 049908

HEAD OFFICE AND PRINCIPAL : No. 75 Guangfu Road, Hu-Kou PLACE OF BUSINESS Hsin-Chu Industrial Park Hsin-Chu County 303 Taiwan

SHARE REGISTRAR AND SHARE : Lim Associates (Pte) Ltd TRANSFER OFFICE 10 Collyer Quay #19-08 Ocean Building Singapore 049315

MANAGER : Stirling Coleman Capital Limited 4 Shenton Way #07-03 SGX Centre 2 Singapore 068807

UNDERWRITER AND : UOB Kay Hian Private Limited PLACEMENT AGENT 80 Raffles Place #30-01 UOB Plaza 1 Singapore 048624

SOLICITORS TO THE INVITATION : Rajah & Tann 4 Battery Road #26-01 Bank of China Building Singapore 049908

LEGAL ADVISERS TO THE : YangMing Partners COMPANY ON TAIWANESE Exchange Square 1 LAW 10F No. 89 Sung Jen Road Taipei 110 Taiwan

LEGAL ADVISERS TO THE : Hoge, Fenton, Jones & Appel, Inc. COMPANY ON US LAW 60 South Market Street Suite 1400 San Jose, CA United States of America

1 AUDITORS : Deloitte & Touche (Singapore) 6 Shenton Way #32-00 DBS Building Tower Two Singapore 068809

JOINT REPORTING : Deloitte & Touche (Singapore) ACCOUNTANTS 6 Shenton Way #32-00 DBS Building Tower Two Singapore 068809

Deloitte & Touche (Taiwan) 12th Floor Hung-Tai Plaza 156 Min Sheng East Road Sec 3 Taipei 105 Taiwan

RECEIVING BANK : The Bank of East Asia, Limited 137 Market Street Bank of East Asia Building Singapore 048943

PRINCIPAL BANKERS : Ta Chong Bank Ltd Taipei Branch No 112 Kung-Fu North Road Taipei Taiwan

Chiao Tung Bank Silicon Valley Branch 333 W. San Carlos Street Suite 100 San Jose, CA 95110 United States of America

VENDORS : Please see section entitled “Selling Shareholders” on pages 62 and 63 of this Prospectus.

2 DEFINITIONS

In this Prospectus and the accompanying Application Forms and, in relation to Electronic Applications, the instructions appearing on the screens of ATMs or IB websites of the relevant Participating Banks, the following definitions apply where the context so admits:

Our Group Companies “Company” or “GTC” : Global Testing Corporation Limited, a company incorporated in Singapore

“Global Investment” : Global Investment Company , a company incorporated in Taiwan

“Group” or “Proforma Group” : Our Company and its subsidiaries following the completion of the Restructuring Exercise, treated for the purposes of this Prospectus, as if these entities had been in existence since 1 January 2002 on the basis described in the Compilation Report of the Joint Reporting Accountants on the Proforma Consolidated Financial Statements

“GTC Taiwan” : Global Testing Corporation , a company incorporated in Taiwan

“GTC US” : Global Testing Corporation, a company incorporated in the US

Other Corporations and Agencies “Agilent” : Agilent Technologies, Inc. and/or its subsidiaries, as the case may be

“Authority” : The Monetary Authority of Singapore

“CDP” : The Central Depository (Pte) Limited

“Forefront Venture” : (Forefront Venture Partners L.P.)

“Hsu Tai” : (Hsu Tai Investment Limited)

“Investar Burgeon” : (Investar Burgeon Venture Capital, Inc.)

“Investar Dayspring” : (Investar Dayspring Venture Capital, Inc.)

“Investar Excelsus” : (Investar Excelsus Venture Capital (Int’l) Inc., LDC.)

“Investar Semiconductor” : (Investar Semiconductor Development Fund, Inc.)

“Manager” : Stirling Coleman Capital Limited

3 “Marvell” : Marvell Technology Group Limited and/or its subsidiaries, as the case may be

“SCCS” : Securities Clearing & Computer Services (Pte) Ltd of Singapore

“SGX-ST” or “Singapore Exchange” : Singapore Exchange Securities Trading Limited

“Teradyne” : Teradyne Inc.

“TSMC” : Taiwan Semiconductor Manufacturing Company Limited

“UMC” : United Microelectronics Corporation

“Underwriter”, “Placement Agent” : UOB Kay Hian Private Limited or “UOB Kay Hian”

General “Application Forms” : The official printed application forms to be used for the purpose of the Invitation and which form part of this Prospectus

“Application List” : The list of applications for subscription for and/or purchase of the Invitation Shares

“Articles” : Articles of Association of our Company

“associates” : (a) in relation to a corporation, means:

(i) a director or controlling shareholder; (ii) a subsidiary or associated company; or (iii) a subsidiary or associated company of the controlling shareholder, of the corporation;

(b) in relation to any director, chief executive officer, substantial shareholder or controlling shareholder of a corporation who is an individual, means:

(i) his immediate family; (ii) a trustee, acting in his capacity as such trustees, of any trust of which the individual or his immediate family is a beneficiary or, in the case of a discretionary trust, is a discretionary object; and (iii) any corporation in which he and his immediate family together (directly or indirectly) have an interest of not less than 30% of the aggregate of the nominal amount of all the voting shares; and

(c) in relation to a substantial shareholder, or controlling shareholder, which is a corporation, means, notwithstanding paragraph (a), any corporation which is its related corporation or associated company

4 “associated company” : In relation to a corporation, means:

(a) any corporation in which the corporation or its subsidiary has, or the corporation and its subsidiary together have, a direct interest of not less than 20% but not more than 50% of the aggregate of the nominal amount of all the voting shares; or

(b) any corporation, other than a subsidiary of the corporation or a corporation which is an associated company by virtue of paragraph (a), the policies of which the corporation or its subsidiary, or the corporation together with its subsidiary, is able to control or influence materially

“ATM” : Automated teller machines of a Participating Bank

“Audit Committee” : The audit committee of our Company

“Board” : Board of Directors of our Company

“Companies Act” : The Companies Act, Chapter 50 of Singapore

“controlling shareholder” : In relation to a corporation, means:

(a) a person who has an interest in the voting shares of a corporation and who exercises control over the corporation; or

(b) a person who has an interest of 15% or more of the aggregate of the nominal amount of all the voting shares in a corporation, unless he does not exercise control over the corporation

“CPF” : The Central Provident Fund

“Directors” : The directors of our Company as at the date of this Prospectus

“Electronic Applications” : Applications for the Offer Shares made through an ATM of one of the Participating Banks or the IB website of one of the relevant Participating Banks in accordance with the terms and conditions of this Prospectus

“EPS” : Earnings per Share

“ESOS” : Global Testing Employee Share Option Scheme

“Executive Directors” : The executive Directors of our Company as at the date of this Prospectus

“Executive Officers” : The executive officers of our Company as at the date of this Prospectus

“Founders” : Mr Pierre Tie-Min Chen, Mr Jon-Fwu Hwu, Mr Wei Ming, Mr Raymond Hong-Wah Lai, Yageo Corporation and Investar Semiconductor

5 “FY” : Financial year ended 31 December

“IB” : Internet Banking

“Independent Directors” : The independent Directors of our Company as at the date of this Prospectus

“Invitation” : The invitation by our Company and the Vendors to the public to subscribe for and/or purchase the Invitation Shares, subject to and on the terms and conditions of this Prospectus

“Invitation Shares” : The 211,885,000 Shares which are subject of the Invitation, comprising the New Shares and the Vendor Shares

“Issue Price” : S$0.30 for each Invitation Share

“Latest Practicable Date” : 11 July 2005, being the latest practicable date prior to the lodgment of this Prospectus

“Listing Manual” : Listing Manual of the SGX-ST

“Market Day” : A day on which the SGX-ST is open for trading in securities

“New Shares” : The 175,500,000 new Shares for which our Company invites applications to subscribe for pursuant to the Invitation, subject to and on the terms and conditions of this Prospectus

“Nominating Committee” : The nominating committee of our Company

“Non-executive Directors” : Non-executive Directors of our Company (including Independent Directors) as at the date of this Prospectus

“NTA” : Net tangible assets

“Offer” : The offer by our Company and the Vendors of the Offer Shares to the public in Singapore for subscription and/or purchase at the Issue Price, subject to and on the terms and conditions of this Prospectus

“Offer Shares” : 5,000,000 of the Invitation Shares which are the subject of the Offer

“Option Shares” : The new Shares which may be allotted and issued upon the exercise of the Options

“Options” : The options which may be granted pursuant to the ESOS

“Participating Banks” : United Overseas Bank Limited and its subsidiary, Far Eastern Bank Limited (the “UOB Group”), DBS Bank Ltd (including POSB) (“DBS”) and Oversea-Chinese Banking Corporation Limited (“OCBC”)

“PER” : Price earnings ratio

“Placement” : The placement by the Placement Agent on behalf of our Company and the Vendors of the Placement Shares at the Issue Price, subject to and on the terms and conditions of this Prospectus

6 “Placement Shares” : 206,885,000 of the Invitation Shares which are the subject of the Placement

“PRC” : The People’s Republic of China

“Restructuring Exercise” : The corporate restructuring exercise undertaken in connection with the Invitation, as described on page 65 of this Prospectus

“Securities Account” : The securities account maintained by a Depositor with CDP but does not include a securities sub-account

“Securities and Futures Act” : The Securities and Futures Act, Chapter 289 of Singapore

“Shareholders” : Registered holders of Shares, except where the registered holder is CDP, the term “Shareholders” shall, in relation to such Shares, mean the Depositors whose Securities Accounts are credited with Shares

“Shares” : Ordinary shares of S$0.10 each in the capital of our Company

“Taiwan” : Taiwan, Republic of China

“US”, “U.S.” or “United States” : United States of America

“Vendor Shares” : The 36,385,000 issued and fully paid-up Shares for which the Vendors invite applications to purchase pursuant to the Invitation, subject to and on the terms and conditions of this Prospectus

“Vendors” : Refers to the Shareholders listed in the section entitled “Selling Shareholders” on pages 62 and 63 of this Prospectus

Currencies, Units and Others “mm” : millimetres

“NT$” : New Taiwan dollars

“$” or “S$” and “cents” : Singapore dollars and cents respectively

“US$” and “US cents” : United States dollars and cents respectively

“%” or “per cent.” : Per centum

Any reference in this Prospectus and the Application Forms to any statute or enactment is a reference to that statute or enactment for the time being amended or re-enacted. Any word defined under the Companies Act and the Securities and Futures Act or any statutory modification thereof and used in this Prospectus and the Application Forms shall have the meaning assigned to it under the Companies Act and the Securities and Futures Act or such statutory modification, as the case may be.

Any reference in this Prospectus and the Application Forms to Shares being allotted and/or allocated to an applicant includes allotment and/or allocation to CDP for the account of that applicant.

Any reference to a time of day in this Prospectus is a reference to Singapore time unless otherwise stated.

7 The expressions “we”, “us”, “our”, “ourselves”, or other grammatical variations thereof shall, unless otherwise stated, mean our Company and our subsidiaries.

The terms “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings ascribed to them respectively in Section 130A of the Companies Act.

Words importing the singular shall, where applicable, include the plural and vice versa and words importing the masculine gender shall, where applicable, include the feminine and neuter genders. References to persons shall include corporations.

Certain names with Chinese characters have been translated into English names. Such translations are provided solely for the convenience of investors. The English names may not have been registered with the relevant Taiwanese authorities and should not be construed as representations that the English names actually represent the Chinese characters.

8 GLOSSARY OF TECHNICAL TERMS

The glossary contains an explanation of certain terms used in this Prospectus in connection with our Group. The terms and their assigned meanings may not correspond to standard industry or common meanings, as the case may be, or usage of these terms.

“bonded warehouse” : A secure storage area in which imported goods, on which the excise taxes or custom duties are unpaid, are stored. These goods are subject to excise taxes and customs duties if they are transported out of the bonded warehouse and sold in Taiwan. If the goods are re-exported, no such taxes and duties will be payable

“Class 100” : The measure of the air quality of a clean room. A Class 100 clean room is one where there exists no more than 100 0.5 micron sized particles in a cubic foot of air

“Class 1000” : The measure of the air quality of a clean room. A Class 1000 clean room is one where there exists no more than 1,000 0.5 micron sized particles in a cubic foot of air

“clean room” : A work area in which the air quality, temperature and humidity are highly regulated in order to protect sensitive equipment from contamination

“CMOS” : Complementary Metal Oxide Semi-conductor. CMOS is a widely used type of semi-conductor that uses two types of transistors and requires less power than chips using just one type of transistor. This makes them attractive for use in battery powered devices such as portable computers

“CMOS image sensor” : A semi-conductor used for processing images used in electronic devices such as digital cameras

“controller” : A device that controls the transfer of data from a computer to a peripheral device and vice versa

“CPU” : Central Processing Unit. A chip that functions as the brain of a computer, interpreting and executing instructions

“design houses” : Semi-conductor companies that focus on the design of ICs without providing wafer fabrication, assembly or testing services

“die” or “dice” : A square of silicon that contains an integrated circuit. “Dice” is the plural of die

“DVD” : Digital Video Disk

“fabless companies” : Semi-conductor companies that design and market their proprietary brands of semi-conductors without owning any manufacturing facilities

“foundry” or “foundries” : Semi-conductor wafer fabrication companies that provide independent wafer processing services for IDMs and fabless companies

“IC” : Integrated circuit. A semi-conductor device fabricated on a wafer, which is a large and thin circular base material usually made of silicon. An IC consists of thousands or millions of tiny resistors, capacitors, and transistors that are combined as a system to function as an amplifier, ocillilator, timer or various other functions. Also known as a chip or die

9 “IDMs” : Integrated Device Manufacturers. IDMs are semi-conductor manufacturers that design, manufacture and market their proprietary brands of semi-conductors

“ISO” : International Organization for Standardization, a worldwide federation of national standards bodies

“ISO 9001:2000” : The ISO 9000 family is one of the management standards and guidelines of ISO. The three standards, namely ISO 9001, ISO 9002 and ISO 9003 have been integrated into the new ISO 9001:2000. ISO 9001:2000 specifies the requirements for the management system of any organization that needs to demonstrate the ability to consistently provide products that meet customer and applicable regulatory requirements and aims to enhance customer satisfaction

“ISO 14001:1996” : The ISO 14000 family is a group of voluntary international standards of ISO addressing environmental management systems, environmental auditing, environmental labeling, environmental performance evaluation and life cycle assessment

“load board” : Printed circuit board that is used as an interface between our tester and the packaged IC, used in the provision of our final testing services

“logic semi-conductors” : A type of semi-conductor that is designed to process data by executing instructions in accordance to its design specifications

“memory chips” : A type of semi-conductor that stores data, which is an important component in every computing or electronic system

“microprocessor” : A computer whose entire CPU is contained on one (or a small number of) semi-conductors

“mixed signal semi-conductors” : A type of semi-conductor that is able to process both digital data as well as analog signals by converting them into digital data and vice versa

“non-memory chips” : Integrated circuits that have no capability of storing information

“optical disk drive” : A machine that reads data from and writes data onto a disk storage medium through the use of lasers

“packaged IC” : A chip or discrete device with its housing attached, which electrically interconnects the chip with outside circuitry

“probe card” : An electrical connector linking a tester with the bonding pads of each die formed on a wafer

“QS9000:1998” : A quality management system developed for suppliers of production parts, material and services to the automotive industry. QS9000 is based on the 1994 edition of ISO 9001, but contains additional requirements that are particular to the automotive industry

10 “semi-conductor” : The basic building block of an electronic device. A semi- conductor is made from material that is neither conductive nor insulative, such as silicon, gallium arsenide and germanium. Such materials possess selective conductivity characteristics which makes them useful as electronics material

“test handler” : Equipment used to transfer the packaged IC to the load board, used in the provision of final testing services

“test prober” : Equipment used to transfer the wafer to the probe card, used in the provision of final testing services

“wafer” : A thin, circular slice of single-crystal semi-conductor material used in manufacturing of semi-conductor devices and integrated circuits

“wafer fabrication” : Semi-conductor wafer manufacturing

11 SELLING RESTRICTIONS

This Prospectus does not constitute an offer, solicitation or invitation to subscribe for and/or purchase our Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or to any person to whom it is unlawful to make such offer, solicitation or invitation. No action has been or will be taken under the requirements of the legislation or regulations of, or of the legal or regulatory authorities of, any jurisdiction, except for the filing and/or registration of this Prospectus in Singapore in order to permit a public offering of our Shares and the public distribution of this Prospectus in Singapore. The distribution of this Prospectus and the offering of our Shares in certain jurisdictions may be restricted by the relevant laws in such jurisdictions. Persons who may come into possession of this Prospectus are required by us, the Vendors, the Manager, the Underwriter and the Placement Agent to inform themselves about, and to observe and comply with, any such restrictions.

In Taiwan Our Company has not applied and will not apply for an approval from the Securities and Futures Bureau, part of the Financial Supervisory Commission in Taiwan, in respect of an offering of our Shares to the public in Taiwan within the meaning of the Securities Exchange Law and relevant regulations promulgated thereunder. Therefore, our Shares may not be offered or sold in a manner which constitutes a public offering in Taiwan.

In the US Our Shares have not been and will not be registered under the United States Securities Act of 1933 (the “Securities Act”), and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S under the Securities Act) except in certain transactions exempt from the registration requirements of the Securities Act.

Transfer restrictions If you purchase our Shares under Regulation S under the Securities Act you will, by purchasing our Shares offered in the Placement, be considered to have represented and agreed with us as follows:

(a) you acknowledge (or if you are a broker-dealer, your customer has confirmed to you that such person acknowledges) that our Shares have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as defined in Regulation S) except under an exemption from or in a transaction not subject to the registration requirements of the Securities Act; and

(b) you certify that (i) upon delivery of our Shares, you will be the beneficial owner of our Shares and (A) you are not a U.S. person (as defined in Regulation S), are located outside the United States (within the meaning of Regulation S) and have acquired, or will have acquired, our Shares outside the United States (within the meaning of Regulation S), (B) you are not an affiliate of us or a person acting on behalf of such an affiliate, and (C) you are not in the business of buying and selling securities; or (ii) if you are a broker-dealer acting on behalf of your customer, your customer must have confirmed that, (A) upon delivery of our Shares, such customer will be the beneficial owner of such Shares, (B) such customer is not a U.S. person (as defined in Regulation S) and is located outside the United States (within the meaning of Regulation S), (C) such customer is not an affiliate of us or a person acting on behalf of one of our affiliates, and (D) such customer is not in the business of buying and selling securities.

12 DETAILS OF THE INVITATION

LISTING ON THE SGX-ST We have applied to the SGX-ST for permission to deal in, and for quotation of, all our Shares already issued (including the Vendor Shares), the New Shares as well as the Option Shares on the Official List of the SGX-ST. Such permission will be granted when our Company has been admitted to the Official List of the SGX-ST. Acceptance of applications for the Invitation Shares will be conditional upon, inter alia, permission being granted by the SGX-ST to deal in and for the quotation of all of our existing issued Shares (including the Vendor Shares), the New Shares and the Option Shares. If the said permission is not granted, monies paid in respect of any application accepted will be returned to you at your own risk, without interest or any share of revenue or other benefit arising therefrom, and you will not have any claim against us, the Vendors, the Manager, the Underwriter or the Placement Agent.

The SGX-ST assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Prospectus. Admission to the Official List of the SGX-ST is not to be taken as an indication of the merits of the Invitation, our Company, our subsidiaries, our Shares, the New Shares, the Vendor Shares or the Option Shares.

No Shares shall be allotted or allocated on the basis of this Prospectus later than six months after the date of registration of this Prospectus.

A copy of this Prospectus has been lodged with and registered by the Authority. The Authority assumes no responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does not imply that the Securities and Futures Act, or any other legal or regulatory requirements, have been complied with. The Authority has not, in any way, considered the merits of our Shares, the New Shares, the Vendor Shares or the Option Shares, as the case may be, being offered or in respect of which an invitation is made, for investment.

We are subject to the provisions of the Securities and Futures Act and the Listing Manual regarding corporate disclosure. In particular, if after this Prospectus is registered but before the close of the Invitation, we become aware of:

(a) a false or misleading statement or matter in this Prospectus;

(b) an omission from this Prospectus of any information that should have been included in it under Section 243 of the Securities and Futures Act; or

(c) a new circumstance that has arisen since this Prospectus was lodged with the Authority which would have been required by Section 243 of the Securities and Futures Act to be included in this Prospectus, if it had arisen before this Prospectus was lodged, that is materially adverse from the point of view of an investor, we may lodge a supplementary or replacement prospectus with the Authority pursuant to Section 241 of the Securities and Futures Act.

Where the Authority issues a stop order pursuant to Section 242 of the Securities and Futures Act, it is provided in the Securities and Futures Act that:

(a) in the case where the Invitation Shares have not been issued to applicants, the applications shall be deemed to have been withdrawn and cancelled and our Company (as well as on behalf of the Vendors) shall, within 14 days from the date of issue of the stop order, pay to the applicants all monies the applicants have paid in respect of applications for the Invitation Shares;

(b) in the case where the Invitation Shares have been issued to applicants, the issuance of the Invitation Shares shall be deemed to be void and we (as well as on behalf of the Vendors) shall, within 14 days from the date of issue of the stop order, pay to the applicants all monies the applicants have paid for the Invitation Shares; and

13 (c) where the Invitation Shares have been sold to applicants, the sale of the Invitation Shares shall be deemed to be void and if documents purporting to evidence title have been issued to the applicants, we shall on behalf of the Vendors inform the applicants to return such documents to us within 14 days from that date and within 7 days from the date of receipt of such documents (if applicable) or the date of the stop order, whichever is later, pay to the applicants all monies the applicants have paid for the Invitation Shares.

This Prospectus has been reviewed and approved by our Directors and the Vendors, and they individually and collectively accept full responsibility for the accuracy of the information given in this Prospectus and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and the opinions expressed in this Prospectus are fair and accurate in all material respects as at the date of this Prospectus and that there are no material facts the omission of which would make any statements in this Prospectus misleading.

The Invitation Shares are offered for subscription or sale solely on the basis of the information contained and the representations made in this Prospectus.

Neither our Company, the Manager, the Underwriter or the Placement Agent nor any other parties involved in the Invitation is making any representation to any person regarding the legality of an investment in our Shares by such person under any investment or other laws or regulations. No information in this Prospectus should be considered as being business, legal or tax advice. Each prospective investor should consult his own professional or other advisers for business, legal or tax advice regarding his investment in our Shares.

No person has been or is authorised to give any information or to make any representation not contained in this Prospectus in connection with the Invitation and, if given or made, such information or representation must not be relied upon as having been authorised by us, the Vendors, the Manager, the Underwriter or the Placement Agent. Neither the delivery of this Prospectus and the Application Forms nor the Invitation shall, under any circumstances, constitute a continuing representation or create any suggestion or implication that there has been no change in our affairs or in the statements of fact or information contained in this Prospectus since the Latest Practicable Date. Where such changes occur, we may make an announcement of the same to the SGX-ST and will comply with the requirements of the Securities and Futures Act. All applicants should take note of any such announcement and, upon release of such an announcement, shall be deemed to have notice of such changes. Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as, a promise or representation as to our future performance or policies.

This Prospectus has been prepared solely for the purpose of the Invitation and may not be relied upon by any persons other than the applicants in connection with their application for the Invitation Shares for any other purpose. This Prospectus does not constitute an offer, solicitation or invitation to subscribe for and/or purchase the Invitation Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or to any person to whom it is unlawful to make such offer, solicitation or invitation.

Copies of this Prospectus and the Application Forms may be obtained on request, subject to availability during office hours from:

Stirling Coleman Capital Limited UOB Kay Hian Private Limited 4 Shenton Way #07-03 80 Raffles Place #30-01 SGX Centre 2 UOB Plaza 1 Singapore 068807 Singapore 048624 and from members of the Association of Banks in Singapore, members of the SGX-ST and merchant banks in Singapore. A copy of this Prospectus is also available on the SGX-ST website http://www.sgx.com.

The Application List will open at 10.00 a.m. on 22 August 2005 and will remain open until noon on the same day or for such further period or periods as our Directors and the Vendors may, in consultation with the Manager, in their absolute discretion decide, subject to any limitation under all applicable laws. In the event a supplementary prospectus or replacement prospectus is lodged, the Application List will remain open for at least 14 days after the lodgment of the supplementary or replacement prospectus.

14 Where applications have been made for the Invitation Shares prior to the lodgment of the supplementary or replacement prospectus, we (as well as on behalf of the Vendors) shall within 7 days from the date of lodgment of the supplementary or replacement prospectus, either:

(a) provide the applicants with a copy of the supplementary or replacement prospectus and provide the applicants with an option to withdraw their applications; or

(b) treat the applications as withdrawn and cancelled and return all monies paid, without interest or any share of revenue or other benefit arising therefrom, in respect of any application accepted within 7 days from the date of lodgment of the supplementary or replacement prospectus.

Any applicant who wishes to exercise his option to withdraw his application shall, within 14 days from the date of lodgment of the supplementary or replacement prospectus, notify us whereupon we shall, within 7 days from the receipt of such notification, return the application monies without interest or any share of revenue or other benefit arising therefrom and at the applicant’s risk.

Details for the procedure for application for the Invitation Shares are set out in Appendix G of this Prospectus.

INDICATIVE TIMETABLE FOR LISTING In accordance with the SGX-ST News Release of 28 May 1993 on the trading of initial public offering shares on a “when issued” basis, an indicative timetable is set out below for your reference:

Indicative date/time Event

12.00 noon on 22 August 2005 Close of Application List

23 August 2005 Balloting of applications, if necessary (in the event of over- subscription for the Offer Shares)

9.00 a.m. on 24 August 2005 Commence trading on a “when issued” basis

31 August 2005 Last day of trading on a “when issued” basis

9.00 a.m. on 1 September 2005 Commence trading on a “ready” basis

5 September 2005 Settlement date for all trades done on a “when issued” basis and for trades done on a “ready” basis on 1 September 2005

The above timetable is only indicative as it assumes that the date of closing of the Application List is 22 August 2005, the date of admission of our Company to the Official List of the SGX-ST is 24 August 2005, the SGX-ST’s shareholding spread requirement will be complied with and the Invitation Shares will be issued and fully paid-up prior to 24 August 2005. The actual date on which our Shares will commence trading on a “when issued” basis will be announced when it is confirmed by the SGX-ST.

The above timetable and procedure may be subject to such modifications as the SGX-ST may in its discretion decide, including the decision to permit trading on a “when issued” basis and the commencement date of such trading. All persons trading in the Shares on a “when issued” basis do so at their own risk. In particular, persons trading in the Shares before their Securities Accounts with CDP are credited with the relevant number of Shares do so at the risk of selling Shares which neither they nor their nominees, as the case may be, have been allotted or allocated or are otherwise beneficially entitled to. Such persons are also exposed to the risk of having to cover their net sell positions earlier if “when issued” trading ends sooner than the indicative date mentioned above. Persons who have a net sell position traded on a “when issued” basis should close their position on or before the first day of “ready” basis trading.

The Invitation will be open from 16 August 2005 to 22 August 2005.

15 In the event of any changes in the closure of the Application List or the time period during which the Invitation is open, we will publicly announce the same:

(i) through a SGXNET announcement to be posted on the Internet at the SGX-ST website http://www.sgx.com; and

(ii) in a local English newspaper.

Investors should consult the SGX-ST announcement of the “ready” listing date on the Internet (at the SGX-ST website http://www.sgx.com), INTV or newspapers, or check with their brokers on the date on which trading on a “ready” basis will commence.

We will provide details of the results of the Invitation through the channels in paragraphs (i) and (ii) above.

16 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

All statements contained in this Prospectus, statements made in press releases and oral statements that may be made by the Vendors, us or our officers, Directors or employees acting on our behalf, that are not statements of historical fact, constitute ‘forward-looking statements’. You can identify some of these statements by forward-looking terms such as ‘expect’, ‘believe’, ‘plan’, ‘intend’, ‘estimate’, ‘anticipate’, ‘may’, ‘will’, ‘would’, and ‘could’ or similar words. However, you should note that these words are not the exclusive means of identifying forward-looking statements. All statements regarding our expected financial position, business strategy, plans and prospects are forward-looking statements. These forward- looking statements, including statements as to our revenue and profitability, cost measures, planned strategy and any other matters discussed in this Prospectus regarding matters that are not historical facts are only predictions. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Given the risks and uncertainties that may cause our actual future results, performance or achievements to be materially different from that expected, expressed or implied by the forward-looking statements in this Prospectus, undue reliance must not be placed on these statements. Neither our Company, the Vendors, the Manager, the Underwriter and the Placement Agent nor any other person represents or warrants that our Group’s actual future results, performance or achievements will be as discussed in those statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of the risks faced by us.

Further, our Company, the Vendors, the Manager, the Underwriter and the Placement Agent disclaim any responsibility to update any of those forward-looking statements or publicly announce any revisions to those forward-looking statements to reflect future developments, events or circumstances for any reason, even if new information becomes available or other events occur in the future. Where such changes occur and if they are material, we will make an announcement of the same to the SGX-ST and the public and, if required, lodge a supplementary or replacement document or prospectus with the Authority pursuant to Section 241 of the Securities and Futures Act and will take steps to comply with the requirements of the Securities and Futures Act and the regulations issued thereunder. We are also subject to the provisions of the Listing Manual regarding corporate disclosure upon our admission to the Official List of the SGX-ST.

17 EXCHANGE RATES

As at the Latest Practicable Date, the exchange rate between the S$ and the US$ was S$1.6939 to US$1.00. The table below sets out the high and low exchange rates for S$/US$ for each month for the 6 months prior to the Latest Practicable Date. The table below indicates how many S$ can be bought with US$1.00.

S$/US$ High Low

January 2005 1.6506 1.6306 February 2005 1.6523 1.6219 March 2005 1.6525 1.6191 April 2005 1.6654 1.6375 May 2005 1.6665 1.6346 June 2005 1.6859 1.6604

The following table sets out, for each of the financial periods indicated, the average and closing exchange rates between S$ and US$. The average exchange rate between S$ and US$ is calculated using the average of the exchange rates on the last day of each month during each financial year. Where applicable, the exchange rates in this table are used for the translation of our Company’s financial statements disclosed elsewhere in this Prospectus.

S$/US$ Average Closing

FY2002 1.7853 1.7362 FY2003 1.7418 1.6989 FY2004 1.6903 1.6326

The exchange rates between S$ and US$ as outlined in the table above have been presented solely for information. The exchange rates should not be construed as a representation that these US$ amounts could have been, or could be converted into S$ at any particular rates, the rates stated above, or at all.

18 PROSPECTUS SUMMARY

This summary highlights certain information found in greater detail elsewhere in this Prospectus. In addition to this summary, we urge you to read the entire Prospectus carefully, especially the discussion of risks relating to investment in our Shares set out in the section entitled “Risk Factors”, beginning on page 27 of this Prospectus, before deciding to buy our Shares.

BUSINESS We are engaged primarily in the business of providing testing services such as wafer sorting and final testing services to the semi-conductor industry, and are focused on the provision of these services in respect of logic and mixed signal semi-conductors. We have operations in Taiwan and the US.

As part of our testing services, we also provide test program development, conversion and optimisation services, and load board and probe card design, and lease our testers to our customers for trial and pilot testing purposes on an ad hoc basis when we have excess capacity or upon request by our customers.

We were given an award from Pixelworks Inc. (“Pixelworks”) in July 2004 for our outstanding performance and in September 2004, we received Marvell’s “Best Sort Partnership” award for Year 2003. In December 2004, we received a vendor appreciation award from UMC in recognition of our outstanding engineering support and consistent service quality, and the “Best Long Term Supplier – 5 Years of Service Excellence” award from Oasis Semiconductor, Inc. (“Oasis”).

In January 2005, we received Marvell’s “Best Sort Partnership” award for the second consecutive year as well as an “Outstanding Contribution” award from ALi Corporation (“ALi”). In March 2005, we began to provide wafer sorting services in respect of 12 inch (300 mm) wafers for Marvell.

Further details are set out in the section entitled “Business” beginning on page 68 of this Prospectus.

COMPETITIVE STRENGTHS We have identified the following as our key competitive strengths:

We have a highly qualified and experienced management and engineering team to provide quality test program development, conversion and optimisation services We have an experienced management team that comprises individuals who have worked in the semi- conductor industry in areas such as administration, operations, technology development, marketing and financial management. For more information on our senior management team, please refer to the section entitled “Directors, Management and Staff” beginning on page 81 of this Prospectus.

Our engineering team comprises more than 35 engineers and is led by a core group of experienced test development engineers who collectively possess more than 50 years of experience in the semi-conductor industry working on both mixed signal and logic semi-conductors using a variety of test platforms including those from Teradyne and Agilent.

Our engineering team is responsible for test program development, conversion and optimisation as well as load board and probe card design which are essential to enable us to understand our customers’ technical requirements.

19 We have strong engineering capabilities to provide wafer sorting and wafer testing services with more stable and higher yield results We believe that we are one of the largest independent testing services company in Asia-Pacific to provide wafer sorting services for mixed signal and logic semi-conductors. We are able to handle more than 32,000 pieces of wafers each month and the experience gathered from providing wafer sorting services in such volumes has provided us with the ability to anticipate and deal with a wide range of potential wafer sorting issues. This allows us to provide our customers with effective solutions when faced with such issues.

We believe that our strong engineering capability and our operators’ and maintenance staff’s in-depth knowledge of our testing platforms allow us to have a good understanding of the technologies that are used in providing testing services. This in turn has enabled us to maintain high and more stable yields as evidenced by feedback from our customers.

Yields are an important indicator of the functionality of a semi-conductor’s design and the performance of its manufacturing process, both of which our testing services serve to validate. The proportion of die or packaged IC that pass the wafer sort or final testing criteria (known as the “test yield”) is one indicator of the effectiveness of our testing services.

We are able to provide our customers with quick turnaround time We focus on providing testing services for mixed signal and logic semi-conductors used in consumer electronics and communications devices, which typically have short product life cycles. As such, our customers require quick turnaround time in respect of the testing services we provide so that they are able to respond to their own market demands quickly.

We have been able to meet our customers’ turnaround requirements by closely integrating our customer support functions such as technology development and production control, together with our sales and marketing function. This allows us to facilitate effective and efficient communication with our customers and shorten the decision making process in respect of any issues that may arise.

We have established working relationships with our customers Since our establishment in 1998, we have placed strong emphasis on building close working relationships with our customers, in particular, our customers’ technical teams, to ensure that our services meet their requirements. We have successfully established close working relationships with customers such as TSMC and UMC, two of the world’s leading foundries, such that we are pre-qualified suppliers of testing services to them. In addition, we also have established relationships with customers such as Analog Devices Inc, a company specialising in high-performance analog, mixed-signal and digital signal processing integrated circuits, and Marvell, a fabless company involved in the design of semi-conductors for the communication industry.

PROSPECTS Our Directors believe that we will continue to enjoy growth in the foreseeable future because of the following reasons:

Expected continual increase in demand for consumer electronics and communication devices as a result of global economic recovery We expect the global Gross Domestic Product to increase steadily over the next few years and believe this will result in, amongst others, increased capital expenditures in information technology devices by companies, as well as increased spending on fast moving consumer electronics. As we are focused on the testing of semi-conductors used in consumer electronics and communication devices, we believe that we are well-positioned to take advantage of this trend.

20 Continued outsourcing of testing services With the increased importance and complexity of the testing function, the need for higher capital requirements and specialised engineering expertise is becoming more pronounced.

IDMs thus started to outsource their testing requirements to foundries and specialised testing services companies as a cost effective means to reduce the need for high capital investment, access specialised engineering expertise and to lower their unit manufacturing costs.

Additionally, there has been a growth in the number of companies that concentrate on design, marketing and sale of semi-conductors. These companies do not have any commercial scale manufacturing or testing capabilities and outsource almost all of the semi-conductor manufacture process.

We believe that the growth in the outsourcing trend will be a significant driver for our business.

Increased complexity of semi-conductors We believe that the increasing functional density and integration of semi-conductors in consumer electronics and communication devices will create opportunities for us to provide our testing services. This will be driven by the trend for increased mobility and functionalities of such devices.

Coupled with increasing pressures to reduce cost, size constraints and the demand to integrate more functions, this has prompted semi-conductor manufacturers to, amongst others, integrate more digital and analog functions into mixed signal semi-conductors and migrate to 12 inch (300 mm) wafer manufacturing from the current 8 inch (200 mm) wafers.

STRATEGIES AND FUTURE PLANS We intend to adopt an even more focused sales strategy We intend to focus our sales efforts towards the provision of wafer sorting of mixed signal semi- conductors to fabless companies and IDMs as we typically enjoy better margins in respect of these testing services that we provide. We will therefore be promoting our capabilities in providing wafer sorting services for mixed signal semi-conductors on test platforms that we are familiar and have technical expertise in.

To support the expected increase in demand for such services, we intend to expand our existing factory premises and purchase additional testers and also embark on a retooling program to selectively replace the test handlers used in final testing with test probers used in wafer sorting.

We also intend to focus our sales efforts on providing testing services on semi-conductor devices whose functionalities we believe tend to be less sensitive to market obsolescence compared to other types of semi-conductors. Such semi-conductors include power management chips and controller chips. Through this strategy, we will be able to prolong the usefulness of our current testers.

We intend to extend our capability to meet demands for testing of larger wafers We note that the semi-conductor industry is migrating towards the manufacturing of 12 inch (300 mm) wafers. This trend to move towards production of larger wafers is driven in part by demands for more functionality to be integrated, and lower cost semi-conductors. A larger wafer will contain more dice, which we believe would also produce higher yields.

To cater to the demands from our existing and potential new customers for the testing of 12 inch (300 mm) wafers, we intend to purchase new factory premises, plant and equipment and construct ancillary facilities so as to handle this demand in Taiwan.

21 We intend to expand and set up separate facilities We intend to expand and set up separate facilities in Taiwan or overseas when it is commercially or legally feasible for us to do so. These may include the setting up of additional separate facilities to provide testing sevices in respect of more specialised semi-conductors.

For more details, please refer to section entitled “Strategies and Future Plans” beginning on page 80 of this Prospectus.

OUR FINANCIAL PERFORMANCE The following table represents summary proforma financial and operating data for our Proforma Group. The data presented in this table are derived from the section entitled “Selected Proforma Group Financial Information” and the Compilation Report of the Joint Reporting Accountants on the Proforma Consolidated Financial Statements in Appendix A in this Prospectus. You should read those sections and the section entitled “Review of Past Operating Performance and Financial Position” for a further explanation of the financial data summarised here.

Selected Profit and Loss Data of our Proforma Group

US$’000 FY2002 FY2003 FY2004

Revenue 25,609 25,199 45,180

Gross profit 9,498 4,822 20,549

Profit / (Loss) before income tax 4,787 (1,692) 10,010

Profit / (Loss) after income tax 4,222 (5,006) 11,516

Selected Balance Sheet Data of our Proforma Group

US$’000 As at 31 December 2004

Non-current assets 110,482

Net current liabilities 11,241

Non-current liabilities 22,247

Capital and reserves 76,994

WHERE YOU CAN FIND US Our registered office is at 4 Battery Road #15-01, Bank of China Building, Singapore 049908 and our business address is at No. 75 Guangfu Road, Hu-Kou, Hsin-Chu Industrial Park, Hsin-Chu County 303, Taiwan. Our telephone number is (886) 3-598-7168 and our facsimile number is (886) 3-598-7166. Our Internet address is www.gttw.com.tw. Information contained on our website does not constitute part of this Prospectus.

22 THE INVITATION

Issue Size : The 211,885,000 Invitation Shares comprising 175,500,000 New Shares and 36,385,000 Vendor Shares by way of public offer and placement. The New Shares will, upon issue and allotment, rank pari passu in all respects with the existing issued Shares.

Issue Price : S$0.30 for each Invitation Share.

The Offer : The Offer comprises an invitation by our Company and the Vendors to the public in Singapore to subscribe for and/or purchase the 5,000,000 Offer Shares at the Issue Price, subject to and on the terms and conditions of this Prospectus.

The Placement : The Placement comprises a placement of 206,885,000 Placement Shares at the Issue Price, subject to and on the terms and conditions of this Prospectus.

Purpose of the Invitation : Our Directors believe that the listing of our Company and the quotation of our Shares on the SGX-ST will enhance the public image of our Group and enable us to tap the capital markets for the expansion of our operations.

The Invitation will also provide members of the public and business associates with an opportunity to participate in the equity of our Company.

Use of Proceeds : The net proceeds from the issue of the New Shares (after deducting estimated issue expenses to be borne by our Company) is approximately S$49.4 million, which we intend to use in the following manner:

(a) S$13.0 million to expand our existing factory premises and purchase additional plant and equipment for the provision of testing services in respect of 8 inch (200 mm) wafers;

(b) S$13.0 million for the purchase of factory premises, plant and equipment and construction of ancillary facilities to expand our range of testing services in Taiwan to provide testing services in respect of 12 inch (300 mm) wafers;

(c) S$21.0 million for the expansion and setting up of separate facilities in Taiwan or overseas in addition to those referred to in (a) and (b) if and when it is commercially or legally feasible to do so. These may include the setting up of additional separate facilities to provide testing services in respect of more specialised semi-conductors; and

(d) the balance of approximately S$2.4 million for working capital.

Pending the deployment of the net proceeds from the issue of the New Shares as aforesaid, the funds may be used as working capital for our Group or be placed in short-term deposits or money markets or debt instruments as our Directors may deem fit.

Please refer to the section entitled “Strategies and Future Plans” of this Prospectus for further information.

23 In the opinion of our Directors, no minimum amount must be raised by the Invitation. Although no minimum amount must be raised by our Company for the Invitation in order to provide for the items above, such amount is proposed to be provided out of the Invitation or in the event the Invitation is cancelled, out of our existing bank facilities and/or funds generated from our operations.

Listing Status : Our Shares will be quoted on the Official List of the SGX-ST in Singapore dollars, subject to admission of our Company to the Official List of the SGX-ST and permission for dealing in and for quotation of our Shares being granted by the SGX-ST.

Risk Factors : Investing in our Shares involves risks which are described under the section entitled “Risk Factors” beginning on page 27 of this Prospectus.

24 PLAN OF DISTRIBUTION

The Issue Price is determined by us and the Vendors, in consultation with the Manager and the Underwriter and Placement Agent, based on market conditions and estimated market demand for our Shares determined through a book-building process. The Issue Price is the same for all the Invitation Shares and is payable in full on application.

Offer Shares The Offer Shares are made available to the members of the public in Singapore for subscription and/or purchase at the Issue Price. The terms and conditions and procedures for application are described in Appendix G of this Prospectus.

In the event of an under-subscription for the Offer Shares as at the close of the Application List, that number of Offer Shares not subscribed for and/or purchased shall be made available to satisfy excess applications for the Placement Shares to the extent there is an over-subscription for the Placement Shares as at the close of the Application List.

In the event of an over-subscription for the Offer Shares as at the close of the Application List and/or the Placement Shares are fully subscribed for and/or purchased or over-subscribed as at the close of the Application List, the successful applications for the Offer Shares will be determined by ballot or otherwise as determined by our Directors and approved by the SGX-ST.

Pursuant to the terms and conditions contained in the Management and Underwriting Agreement signed between our Company, the Vendors, the Manager and the Underwriter dated 15 August 2005, the Underwriter has agreed to underwrite our Offer Shares.

Placement Shares Application for the Placement Shares may only be made by way of Application Form. The terms and conditions and procedures for application are described in Appendix G of this Prospectus.

Pursuant to the terms and conditions in the Placement Agreement signed between our Company, the Vendors and the Placement Agent dated 15 August 2005, the Placement Agent has agreed to subscribe for and/or purchase and/or procure subscribers for the Placement Shares at the Issue Price.

Subscribers of the Placement Shares may be required to pay a commission of up to 1.0% of the Issue Price to the Placement Agent (subject to Singapore Goods and Services Tax of 5.0%, if applicable).

In the event of an under-subscription for the Placement Shares as at the close of the Application List, that number of Placement Shares not subscribed for and/or purchased shall be made available to satisfy excess applications for the Offer Shares to the extent that there is an over-subscription for the Offer Shares as at the close of the Application List.

None of the members of our Company’s management or employees intend to subscribe for and/or purchase the Invitation Shares in the Invitation amounting to more than 5% of the Invitation Shares.

As at the date of this Prospectus, we are not aware of any person who intends to subscribe for and/or purchase more than 5% of the Invitation Shares in the Invitation. However, through a book-building process to assess market demand for our Shares, there may be person(s) who may indicate his interest to subscribe for more than 5% of the Invitation Shares. If such person(s) were to make an application for more than 5% of the Invitation Shares pursuant to the Invitation and subsequently allocated or allotted such number of Shares, we will make the necessary announcements at an appropriate time.

Further, no Shares shall be allocated or allotted on the basis of this Prospectus later than 6 months after the date of registration of this Prospectus.

25 CLEARANCE AND SETTLEMENT

In-principle approval has been obtained from the SGX-ST for the listing and quotation of our Shares. For the purpose of trading, a board lot for our Shares will comprise 1,000 Shares. Upon listing and quotation on the SGX-ST, our Shares will be traded under the book-entry settlement system of CDP, and all dealings in and transactions of our Shares through the SGX-ST will be effected in accordance with the terms and conditions for the operation of securities accounts with CDP, as amended from time to time.

Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf of persons who maintain, either directly or through depository agents, securities accounts with CDP. Persons named as direct securities account holders and depository agents in the depository register maintained by CDP, rather than CDP itself, will be treated under our Articles and the Companies Act as members of our Company in respect of the number of Shares credited to their respective Securities Accounts.

Persons holding our Shares in Securities Accounts with CDP may withdraw the number of Shares they own from the book-entry settlement system in the form of physical share certificates. Such share certificates will, however, not be valid for delivery pursuant to trades transacted on the SGX-ST, although they will be prima facie evidence of title and may be transferred in accordance with our Articles. A fee of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for each withdrawal of more than 1,000 Shares is payable upon withdrawing our Shares from the book-entry settlement system and obtaining physical share certificates. In addition, a fee of S$2.00 or such other amount as our Directors may decide, is payable to the share registrar for each share certificate issued and a stamp duty of S$10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing our Shares or S$0.20 per S$100.00 or part thereof of the last-transacted price where it is withdrawn in the name of a third party. Persons holding physical share certificates who wish to trade on the SGX-ST must deposit with CDP their share certificates together with the duly executed and stamped instruments of transfer in favour of CDP, and have their respective Securities Accounts credited with the number of Shares deposited before they can effect the desired trades. A fee of S$10.00 is payable upon the deposit of each instrument of transfer with CDP. A fee of S$10.00 is also chargeable as stamp duty on such instrument of transfer.

Transactions in our Shares under the book-entry settlement system will be reflected by the seller’s Securities Account being debited with the number of Shares sold and the buyer’s Securities Account being credited with the number of Shares acquired. No transfer stamp duty is currently payable for our Shares that are settled on a book-entry basis.

A Singapore clearing fee for trades in our Shares on the SGX-ST is payable at the rate of 0.05 per cent. of the transaction value subject to a maximum of S$200.00 per transaction. The clearing fee, instrument of transfer deposit fee and share withdrawal fee may be subject to Singapore Goods and Services Tax of 5.0%.

Dealings of our Shares will be carried out in Singapore dollars and will be effected for settlement on CDP on a scripless basis. Settlement of trades on a normal “ready” basis on the SGX-ST generally takes place on the third Market Day following the transaction date, and payment for the securities is generally settled on the following business day. CDP holds securities on behalf of investors in securities accounts. An investor may open a direct account with CDP or a sub-account with a CDP agent. The CDP agent may be a member company of the SGX-ST, bank, merchant bank or trust company.

26 RISK FACTORS

Prospective investors should carefully consider and evaluate the following considerations and all the other information contained in this Prospectus before deciding to invest in our Shares. Some of the following risk factors relate principally to the industry in which our Group operates and the business of our Group in general. Other considerations relate principally to general economic and political conditions and the securities market and ownership of the Shares, including possible future sales of our Shares.

If any of the following considerations and uncertainties develop into actual events, our business, results of operations and financial condition could be materially and adversely affected. In such circumstances, the trading price of our Shares could decline due to any of these considerations and uncertainties, and you may lose all or part of your investment in our Shares.

To the best of our Directors’ and the Vendors’ knowledge and belief, all risk factors which are material to investors in making an informed judgment in our Group have been set out below.

RISKS RELATING TO OUR BUSINESS The semi-conductor industry is highly cyclical and any downturn will materially and adversely affect our operating results Our profits are sensitive to and may be significantly affected by, amongst others, the cyclical conditions of the semi-conductor industry. The semi-conductor industry is highly cyclical and, at various times, has experienced significant downturns because of over supply of semi-conductors as well as decreases in demand for end-products that the semi-conductors are manufactured for, for example, consumer electronics and telecommunication devices. These factors may cause rapid erosion of semi-conductors’ average selling prices and lower production output by semi-conductor manufacturers. If any of such events occur, we may experience a decline in the demand for our services and our business and results will be adversely affected.

We are dependent on our major customers whom we do not have any long-term contracts with We are dependent on our major customers for a significant portion of our revenue. For FY2004, our major customers in aggregate accounted for approximately 88.7% of our revenue (please refer to the section entitled “Major Customers” in this Prospectus for details of our major customers). In particular, our ability to retain our existing major customers and attract new customers is essential for our continual growth. In the absence of long-term sales contracts, there is no assurance that our major customers will continue to place their purchase orders with us in the future or that demand from our major customers will be sustained at current levels.

If any of our major customers ceases to place orders with us, our business and profitability will be adversely affected.

We may not be able to compete successfully with our competitors

The semi-conductor test service industry is very competitive and diverse and requires us to be capable of testing increasingly complex semi-conductors as quickly as our competitors. The industry consists of both large multi-national companies and small niche market participants whom we face substantial competition from. A number of these competitors have facilities primarily located in Asia. These multi- national companies generally have significant financial resources, research and development operations, marketing and other capabilities and have been in operation for some time. Some of them have also established relationships with many of our current or potential customers.

We also face competition from the internal testing resources of our current and potential customers. Many of these companies may rely on their internal resources for test services due to any or all of the following reasons: z their desire to realise higher utilisation of their existing test capacity; z their unwillingness to disclose proprietary technology; and

27 z they may have better control over the allocation of their internal testing capacity.

We cannot assure you that we will be able to compete successfully in the future against our existing or potential competitors or that our customers will not rely on their internal resources for the provision of test services, or that our business, financial condition, results of operations and/or prospects will not be materially and adversely affected by such increased competition.

Our profitability is affected by our capacity utilisation rates Our operations are characterised by high fixed costs arising from the heavy investment in plant and equipment which results in depreciation charges forming a significant component of our cost of sales. Consequently, insufficient utilisation of installed capacity can have a material adverse effect on our profitability. Therefore, our ability to maintain or increase our profitability will continue to be dependent, in large part, upon our ability to maintain high capacity utilisation rates. Capacity utilisation rates may be affected by a number of factors and circumstances, including: z general economic conditions; z the cyclical nature of the semi-conductor industry; z installation of new equipment in anticipation of future business; z the level of customers’ orders; z operating efficiencies; z mechanical failures; z disruption due to expansion of operations or relocation of equipment; or z disruptions in power supply.

Any inability on our part to maintain or increase capacity utilisation rates in tandem with existing or future demand will have a material effect on our business, financial condition and results of operations.

We are dependent on the demand for consumer electronics and communication devices The semi-conductors for which we provide testing services are found in consumer electronics and communication devices such as mobile phones, digital television, DVDs, photocopiers and printers. Any significant decline in the demand for such devices may lead to a decline in the demand for the services and/or products of our customers. This will in turn lead to a decrease in the demand for our services.

In addition, a decline in demand for consumer electronics and communication devices may also lead to a lowering of prices of such devices. This may result in significant pressure being put on the prices for our services, which may lead to lower revenues for us.

Should there be a significant decline in the demand for consumer electronics and communication devices, our business and profitability will be adversely affected.

Our operating results have fluctuated and are expected to continue to fluctuate from quarter to quarter which may make it difficult to predict our future performance The semi-conductor industry is cyclical in nature and has experienced significant demand fluctuations, driven by fluctuations in demand for the end-products the semi-conductors are manufactured for. Such demand fluctuations affect the demand for semi-conductors, which in turn may affect our ability to accurately predict and react to changes in the demand for our testing services. Factors that contribute to such uncertainties in the demand for our services include: z decision by IDMs to shift between their internal testing resources and outsourcing of testing services;

28 z changes in the anticipated timing and volume of demand relative to our capacity; z short term nature of our customers’ commitments; and z the potential cancellation, deferral and rescheduling of orders.

Any inability on our part to accurately predict the future demand for our testing services will lead to uncertainty in predicting our future performance. As a result, we believe that period to period comparisons of our past operating results may not be a meaningful indication of our future performance. Unfavourable changes in any of the above factors may adversely affect our business, results of operations and financial condition.

In addition, these factors may also affect our ability to plan for capacity changes accurately and may lead us to suffer a divergence between the time that we incur additional capital expenditure for testing equipment and ancillary facilities, and the anticipated demand for testing services. In the event that such capital expenditure is not matched by a corresponding increase in the demand for our testing services, our financial position will be materially and adversely affected.

We may not be able to obtain testers in a timely manner The semi-conductor testing service business is capital intensive and requires investment in expensive equipment manufactured by a limited number of suppliers, who are located primarily in the US, Germany, Korea and Japan. The demand for our services is in accordance with market demand which is seasonal. The market for equipment used in semi-conductor testing is therefore characterised by intense demand in certain periods, limited supply and long delivery cycles. We have two suppliers for our testers, namely Agilent and Teradyne. Agilent and Teradyne are leading suppliers of testers for logic and mixed signal semi-conductors, and whose test platforms are most compatible with our customers’ devices.

If we experience an increase in orders from our customers and we are unable to obtain adequate equipment from our suppliers in a timely manner due to shortage of inventories or manufacturing capacity, we may be unable to fulfil our customers’ orders.

Further, we lease our equipment for short periods to our customers from time to time at a negotiated price. If we experience an increase in orders from our customers and we are unable to obtain the return of such testers on lease, we may not be able to fulfil our customers’ orders. All of the above may result in the loss of customers which will have a material adverse effect on our business, results of operations and financial condition.

We expect to incur significant capital expenditure in the future in connection with our growth plans and therefore may require additional financing To grow and expand our business, we intend to use the net proceeds from the issue of the New Shares to finance our capital expenditures required for our continued growth and development as set out in the section entitled “The Invitation - Use of Proceeds” on page 23 of this Prospectus. Such capital expenditure is likely to be incurred in advance of any increased sales. We cannot assure you that our revenue will increase after such expenditure is incurred. Our failure to increase our revenue after such capital expenditure has been incurred could reduce our profitability.

In addition, we may need to obtain additional debt or equity financing to fund our capital expenditure. Additional equity financing may result in dilution to our Shareholders. Additional debt financing may be required which, if obtained, may: z limit our ability to pay dividends or require us to seek consents for the payment of dividends; z increase our vulnerability to general economic and industry conditions; z require us to dedicate a substantial portion of our cash flow from operations to payments for our debt, thereby reducing the availability of our cash flow to fund capital expenditures, working capital and other general corporate purposes; and/or z limit our flexibility in planning for, or reacting to, changes in our business and our industry.

29 We cannot assure you that we will be able to obtain such required additional financing on terms that are acceptable to us, and in such circumstances, we may not be able to fully implement our future plans.

The semi-conductor testing process is complex and therefore more prone to software programming and operator errors Semi-conductor testing is a complex process involving sophisticated testers and computer software. We develop computer software which is used to test our customers’ semi-conductors. We also develop conversion software programs which enable us to test semi-conductors on different test platforms. As with most software programs, these software programs are complex and are prone to programming errors. In addition, the testing process is subject to operator errors by our employees who operate our testers and related software. Any significant defect in our testing or conversion software, or any malfunction of our testers or significant errors caused by our operators could reduce our production yields, damage our customer relationships and materially harm our business.

Our know-how is important to our ability to succeed in our business Our ability to compete successfully will depend, in part, on our ability to protect our know-how and the proprietary know-how of our customers entrusted to us. We seek to protect proprietary information and know-how through the use of confidentiality and non-disclosure agreements and by limiting access to such proprietary know-how.

The departure of any of our senior management or technical personnel and the breach of their confidentiality and non-disclosure obligations could adversely affect our business.

In the event that we are unable to protect our know-how and those of our customers, our operations and our profitability will be adversely affected.

We may not be able to access leading technology which may affect our ability to compete effectively The semi-conductor industry is characterised by rapid technology changes that are driven, in part, by the changes in demand for consumer electronic and communication devices. These technology changes could cause our testing capabilities to be less competitive or obsolete.

If we fail to access advanced leading testing technologies in a timely manner, we could lose existing or potential customers or miss the opportunity to benefit from higher selling prices for such advanced leading testing technologies. Should any of these events arise, our business and profitability will be adversely affected.

We are dependent on our key employees Our success has been, to a significant extent, due to the collective efforts of our Executive Directors and Executive Officers. Our Executive Directors, namely Mr Pierre Tie-Min Chen, Mr Paul Yao-Chou Yang, Mr Jon-Fwu Hwu and Mr Vincent Chi-Sheng Weng, have been instrumental in the development of our corporate strategy and the establishment of business relationships with our Group’s customers.

Our continued success and growth are therefore dependent on our ability to retain their services and attract key operations and sales and marketing personnel. In particular, we consider our senior management and our technology development team to be important to our success. Consequently, the loss of the services of any of our key personnel without timely replacement, or the inability to attract and retain such qualified personnel, will have a material and adverse effect on us.

We may be subject to higher tax charges owing to the expiry of tax incentives enjoyed by our Taiwan subsidiary Our subsidiary, GTC Taiwan, qualifies under Article 9 of the Statue for Upgrading Industries in Taiwan for tax incentives which are available to companies that are deemed “important and strategic”. GTC Taiwan has been granted a 5-year exemption starting from FY2004 from business income tax on qualifying income. The income which is exempted from tax is determined by Taiwan’s Ministry of Finance based on the proportion of revenue from in-house testing services provided from Taiwan, excluding any income unrelated to such services.

30 In the event that our tax incentives expire, we will be subject to higher business income taxes, which will reduce our profitability.

The amount of dividends that we can declare is subject to withholding taxes We are a capital intensive business and we have undertaken not to declare and pay any dividends out of our retained earnings of any period prior to FY2004 so as to be able to fund our expansion plans which are expected to involve significant capital expenditure.

If we are to declare any dividends out of the profits of our subsidiaries in any period subsequent to FY2004, we may be subject to withholding taxes up to the applicable amount as prescribed by the authorities in the jurisdictions in which our subsidiaries operate. This will reduce the amount of dividend that we can receive from our subsidiaries.

Fire, earthquakes or other natural calamities at our facilities in Taiwan and the US may affect our operations Our operations in Taiwan and the US may be adversely affected by fire, earthquakes and other natural calamities. Fire, earthquakes and other natural calamities can result in significant damage and interruption to our operations. There can be no assurance that we may not be affected by natural calamities in the future or that our current insurance coverage for our plant and machinery, in particular our testers and our customers’ products will continue to be sufficient in the future as we expand our scale of operations. In the event that our insurance policies cannot sufficiently cover our losses due to fire, earthquakes and other natural calamities, our operations will be adversely affected.

We are susceptible to foreign exchange fluctuations Our functional currency is in US$. Our revenue and trade receivables are denominated mainly in US$ and to a certain extent in NT$, while we have substantial borrowings denominated in NT$. Currently, we do not have a formal foreign currency hedging policy to manage our foreign exchange risks. We may therefore be exposed to foreign exchange risks when there is significant depreciation in the exchange rate of the US$ against the NT$.

In addition, our sales and purchases are mainly denominated in US$ and to a certain extent in NT$. To the extent that our sales, purchases and operating costs are not matched in the same currency and that there are timing differences between collections and payments, we will be exposed to any adverse fluctuations of the various currencies against the US$. This may have an adverse impact on our financial performance.

For further information, please refer to the section entitled “Foreign Exchange Management” in this Prospectus.

RISKS RELATING TO THE COUNTRIES IN WHICH WE OPERATE There are risks associated with doing business in Taiwan Our principal subsidiary and a significant portion of all our assets and employees are located in Taiwan. Accordingly substantially all of our revenue are derived from our operations in Taiwan and our business and results of operations may be affected by changes in Taiwan’s governmental policies, taxation, inflation or interest rates and by social instability as well as diplomatic and social developments in or affecting Taiwan which are outside our control. Although significant economic and cultural relations have been established during recent years between Taiwan and the PRC, the PRC government has indicated that it may use military force to gain control over Taiwan if Taiwan declares independence or indefinitely delays progress toward unification or if any foreign power interferes in Taiwan’s affairs. The PRC has also threatened to take hostile action towards Taiwan if Taiwan does not officially endorse the PRC’s “one China” policy.

In the event that Taiwan’s political, economic or social policies result in domestic instability or threatened hostile action from the PRC, our business and operations will be adversely affected.

31 Further, our business operations in Taiwan are governed by the Taiwan legal system. The Taiwan legal system is a codified system comprising written laws, regulations, circulars, administrative directives and internal guidelines. Administration of these laws and regulations is subject to a certain degree of discretion on the part of government officials. In the judicial system, the Supreme Court in Taiwan may adopt certain judgments as precedents, which are then binding on all other courts. Other precedents on the interpretation, implementation and enforcement of Taiwan laws and regulations and the decisions of the Taiwan courts, although persuasive, are not binding on subsequent cases. If an administrator’s or judge’s decision in relation to our business does not follow relevant precedents and are decided to our detriment, our business and results will be adversely affected.

Our US subsidiary may be subject to stricter regulatory requirements The operations of GTC US are subject to a wide variety of regulatory requirements and potential liabilities arising under US federal and California state laws and regulations. These laws and regulations are likely to be substantially more stringent and compliance with them is likely to be substantially more expensive than compliance with similar laws which may affect our operations in other countries.

These include laws and regulations governing public health and safety including laws and regulations affecting air, water, pollution, pesticides, wastes and the storage, use and disposal of hazardous materials and substances, inter alia, the Comprehensive Environmental Response Compensation and Liability Act, the Clean Air Act, the Federal Water Pollution Control Act, the Solid Waste Disposal Act, the Federal Insecticide, Fungicide and Rodenticide Act and the California Safe Drinking Water and Toxic Enforcement Act, which are generally administered by the California Environmental Protection Agency and the U.S. Environmental Protection Agency; laws and regulations governing workplace health and safety, which are generally administered by the California Division of Occupational Safety and Health and the U.S. Department of Labor Occupational Safety & Health Administration; and laws and regulations governing exports of technology, goods and services, which may be administered by one or more U.S. federal agencies, depending on the classification of such items, including the U.S. Department of Commerce, Bureau of Industry and Security, and the U.S. Department of State, Directorate of Defense Trade Controls.

RISKS RELATING TO INVESTMENT IN OUR SHARES Future sale of our Shares could adversely affect our Share price Any future sale or availability of our Shares can exert a downward pressure on our Share price. The sale of a significant amount of our Shares in the market after the Invitation, or the perception that such sales may occur, could materially affect the market price of our Shares. These factors also affect our ability to sell additional equity securities. Except as otherwise described in the section entitled “Moratorium” in this Prospectus, there will be no restrictions on the ability of our substantial Shareholders to sell their Shares either on the SGX-ST or otherwise.

Our Share price may fluctuate following the Invitation The market price of our Shares may fluctuate significantly and rapidly as a result of, among others, the following factors, some of which are beyond our control: z variations in our operating results; z changes in securities analysts’ estimates of our financial performance; z announcements by us of significant acquisitions, strategic alliances or joint ventures; z additions or departures of key personnel; z fluctuations in stock market prices and volume; z involvement in litigation; and z general economic and stock market conditions.

32 INVITATION STATISTICS

Issue Price S$0.30

NTA Our NTA per Share based on the proforma consolidated balance sheet of our Group as at 31 December 2004 and including the effects of the Restructuring Exercise referred to on page 65 of this Prospectus (the “Adjusted NTA”) is as follows:

(a) before adjusting for the estimated net proceeds from issue of the New 17.19 cents Shares and based on our pre-Invitation share capital of 699,500,001 Shares

(b) after adjusting for the estimated net proceeds from issue of the New Shares 19.39 cents and based on our post-Invitation share capital of 875,000,001 Shares

Premium of Issue Price over the Adjusted NTA per Share:

(a) before adjusting for the estimated net proceeds from issue of the New 74.52% Shares and based on our pre-Invitation share capital of 699,500,001 Shares

(b) after adjusting for the estimated net proceeds from issue of the New Shares 54.72% and based on our post-Invitation share capital of 875,000,001 Shares

Earnings per Share Historical net earnings per Share of our Group for FY2004 based on our pre- 2.78 cents Invitation share capital of 699,500,001 Shares

Historical net earnings per Share of our Group for FY2004 based on our pre- 2.80 cents Invitation share capital of 699,500,001 Shares, assuming that the Service Agreements (as set out on pages 90 and 91 of this Prospectus) had been in place since the beginning of FY2004

PER Historical net PER based on the historical net earnings per Share of our Group for 10.79 times FY2004

Historical net PER based on the historical net earnings per Share of our Group for 10.71 times FY2004 assuming that the Service Agreements (as set out on pages 90 and 91 of this Prospectus) had been in place since the beginning of FY2004

Net Operating Cash Flow(2) Historical net operating cash flow per Share of our Group for FY2004 based on our 6.19 cents pre-Invitation share capital of 699,500,001 Shares

Price to Cash Flow Ratio Price to net operating cash flow per Share based on the historical net operating 4.85 times cash flow per Share of our Group for FY2004

Market Capitalisation Market capitalisation based on the Issue Price and our post-Invitation share capital S$262.5 million of 875,000,001 Shares

33 Notes: (1) Earnings and net operating cash flow are converted based on the exchange rate of US$1:S$1.6903, which was the average exchange rate for FY2004.

(2) Net operating cash flow is defined as net profit before taxation with depreciation on property, plant and equipment added back and write-back of allowance for doubtful debts deducted.

34 SELECTED PROFORMA GROUP FINANCIAL INFORMATION

The following selected financial information should be read in conjunction with the full text of this Prospectus, including the section entitled “Review of Past Operating Performance and Financial Position” and the Compilation Report of the Joint Reporting Accountants on the Proforma Consolidated Financial Statements set out in Appendix A of this Prospectus.

OPERATING RESULTS OF OUR PROFORMA GROUP(1)

US$’000 FY2002 FY2003 FY2004

Revenue 25,609 25,199 45,180

Cost of sales (16,111) (20,377) (24,631)

Gross profit 9,498 4,822 20,549

Other operating income 353 202 106

Distribution costs (318) (336) (654)

Administrative expenses (3,053) (3,716) (5,331)

Other operating expenses (983) (2,032) (3,806)

Profit / (Loss) from operations 5,497 (1,060) 10,864

Finance costs (710) (632) (854)

Profit / (Loss) before income tax 4,787 (1,692) 10,010(2)

Income tax (565) (3,314) 1,506

Profit / (Loss) attributable to 4,222 (5,006) 11,516(2) the Group

EPS / (Loss per Share) (US cents)(3) 0.60 (0.72) 1.65

Notes: (1) The operating results of our Proforma Group for FY2002 to FY2004 have been prepared on a proforma basis assuming that our Proforma Group has been in existence throughout the periods under review.

(2) Had the Service Agreements (as set out on pages 90 and 91 of this Prospectus) been in place since the beginning of FY2004, the profit before tax and profit attributable to the Group for FY2004 would have been approximately US$10.1 million and US$11.6 million respectively.

(3) EPS / (Loss per Share) is calculated based on the pre-Invitation share capital of 699,500,001 Shares.

35 FINANCIAL POSITION OF OUR PROFORMA GROUP

US$’000 As at 31 December 2004 Current assets Cash 6,072 Trade receivables 9,125 Other investments 5,282 Other receivables and prepayments 1,912

Total current assets 22,391

Non-current assets Property, plant and equipment 106,971 Deferred tax assets 3,327 Other receivables and prepayments 184

Total non-current assets 110,482

Total assets 132,873

Current liabilities Bank loans and overdrafts 29,371 Trade payables 2,025 Other payables 2,236

Total current liabilities 33,632

Non-current liabilities Long-term loans 22,089 Retirement benefit obligations 158

Total non-current liabilities 22,247

Proforma shareholders’ equity 76,994

Total liabilities and shareholders’ equity 132,873

NTA per Share (US cents) (1) 10.53

Note: (1) For comparative purposes, NTA per Share is calculated based on net asset value less deferred tax assets and the pre- Invitation share capital of 699,500,001 Shares.

36 The following selected financial information presented in S$ set out on pages 37 and 38 of this Prospectus has been translated from US$ to S$ solely for the convenience of investors and using the Proforma Consolidated Financial Statements for the financial years ended 31 December 2002, 2003 and 2004, and has not been audited. These translations are made with reference to the exchange rates set out in the section entitled “Exchange Rates” in this Prospectus. They should not be construed as representations that the US$ amounts actually represent such S$ amounts or could be converted into S$ at the rate indicated or any other rate.

OPERATING RESULTS OF OUR PROFORMA GROUP(1) (translated to Singapore dollars)

S$’000 FY2002 FY2003 FY2004

Revenue 45,720 43,892 76,368

Cost of sales (28,763) (35,493) (41,634)

Gross profit 16,957 8,399 34,734

Other operating income 630 352 179

Distribution costs (568) (585) (1,105)

Administrative expenses (5,451) (6,473) (9,011)

Other operating expenses (1,755) (3,539) (6,434)

Profit / (Loss) from operations 9,813 (1,846) 18,363

Finance costs (1,268) (1,101) (1,443)

Profit / (Loss) before income tax 8,545 (2,947) 16,920(2)

Income tax (1,009) (5,772) 2,545

Profit / (Loss) attributable to 7,536 (8,719) 19,465(2) the Group

EPS / (Loss per Share) (cents) 1.08 (1.25) 2.78

(3) EPS / (Loss per Share) is calculated based on the pre-Invitation share capital of 699,500,001 Shares.

37 FINANCIAL POSITION OF OUR PROFORMA GROUP (translated to Singapore dollars)

S$’000 As at 31 December 2004 Current assets Cash 9,913 Trade receivables 14,897 Other investments 8,623 Other receivables and prepayments 3,122

Total current assets 36,555

Non-current assets Property, plant and equipment 174,641 Deferred tax assets 5,432 Other receivables and prepayments 300

Total non-current assets 180,373

Total assets 216,928

Current liabilities Bank loans and overdrafts 47,951 Trade payables 3,306 Other payables 3,651

Total current liabilities 54,908

Non-current liabilities Long-term loans 36,063 Retirement benefit obligations 257

Total non-current liabilities 36,320

Proforma shareholders’ equity 125,700

Total liabilities and shareholders’ equity 216,928

NTA per Share (cents)(1) 17.19

Note: (1) For comparative purposes, NTA per Share is calculated based on net asset value less deferred tax assets and the pre- Invitation share capital of 699,500,001 Shares.

38 REVIEW OF PAST OPERATING PERFORMANCE AND FINANCIAL POSITION

The following discussion and analysis of our financial position and results of operations should be read in conjunction with the section entitled “Selected Proforma Group Financial Information” and the Compilation Report of the Joint Reporting Accountants on the Proforma Consolidated Financial Statements and the related notes thereto included elsewhere in this Prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from those projected in the forward-looking statements. Factors that might cause future results to differ significantly from those projected in the forward-looking statements include, but are not limited to, those discussed below and contained elsewhere in this Prospectus, particularly in the section entitled “Risk Factors”.

OVERVIEW We are engaged primarily in the business of providing testing services such as wafer sorting and final testing services to the semi-conductor industry, and are focused on the provision of these services in respect of logic and mixed signal semi-conductors. We have operations in Taiwan and the US.

Our customers are mainly companies which do not have their own manufacturing facilities as well as IDMs and foundries.

Revenue We derive our revenue primarily from the provision of testing services. Revenue represents the invoiced value of services rendered, and is recognised upon completion of testing services. In connection with our provision of testing services, we provide test program development services to our customers and as part of our sales strategy to secure future orders from our existing and potential customers, we also lease our testers to our customers on an ad hoc basis when we have excess capacity or upon requests by our customers for them to conduct pilot testing on their semi-conductors. Revenue from the leasing of testers is recognised on an accrual basis over the period of the lease while revenue from the provision of test program development services is recognised upon completion of such services. For FY2004, provision of testing services, leasing of testers and provision of test program development services accounted for approximately 65.8%, 13.5% and 10.6% of our revenue respectively. The remaining 10.1% of our revenue was mainly made up of subcontracting revenue and revenue from tester modification. Subcontracting revenue relates to revenue earned from customers for the outsourcing of semi-conductor packaging and assembly services. GTC Taiwan does not provide such services but would tie up with suppliers to provide such services if requested by their customers. GTC Taiwan would charge its customers based on a mark-up of the prices charged by the suppliers. Our customers are mainly located in Taiwan and the US. For FY2002, FY2003 and FY2004, our sales are denominated mainly in US$ and to a certain extent in NT$.

We consider the following factors to be key drivers of our revenue:

Ability to continue to meet our customers’ requirements As the semi-conductor industry is competitive and diverse, our ability to continuously introduce and provide high quality testing services to meet the requirements of the customers is important in helping us to secure new customers, as well as to maintain close working relationships with our existing customers.

Ability to keep abreast with technological advances The semi-conductor industry is characterised by rapid technological advancements, hence our ability to effectively adapt to technological changes would affect our revenue.

Global demand for consumer electronics and communication devices As we are focused on the testing of semi-conductors used in consumer electronics and communication devices, global demand for these devices would affect the demand for our testing services.

39 Cyclical nature of the semi-conductor industry The semi-conductor industry is highly cyclical and has experienced significant downturns due to over supply of semi-conductors and decreases in global demand for end products that the semi-conductors are manufactured for. If demand does not keep pace with the growth in supply, our revenue derived from testing services will be affected by the downward pricing pressure and capacity under-utilisation.

Seasonality factor The level of our business activities is generally higher in the second half as compared to the first half of the year as our customers, in particular those from the US, tend to place larger orders in the third and fourth quarters, in line with the generally higher demand for consumer electronics and communication devices during the festive seasons.

Order book As at the Latest Practicable Date, our non-binding order book based on forecast orders from certain of our major customers, stood at approximately US$9.0 million. The majority of our customers would place orders with us approximately 2 to 3 months in advance. However, these purchase orders are subject to cancellation, deferral or rescheduling by our customers and as such, our order book at any particular date may not be indicative of our revenues for the succeeding period.

Revenue trend Our selling prices are determined and negotiated on a case-by-case basis and may vary according to the type of device to be tested, types of tester to be used, volume of order and location of our customers. As at the Latest Practicable Date, our Directors are not aware of any significant trends or factors that may materially adversely affect the prices of our services in the current financial year. Our Directors expect the provision of testing services to continue to be the main revenue contributor of our Group in the current financial year.

Cost of Sales Our cost of sales comprises mainly depreciation, direct labour, indirect labour, subcontracting and other manufacturing overheads.

Depreciation charges constituted approximately 52.9%, 59.6% and 58.5% of our cost of sales in FY2002, FY2003 and FY2004. Depreciation charges relate mainly to testers used for testing purposes.

Direct labour expense constituted approximately 7.1%, 7.4% and 8.3% of our cost of sales in FY2002, FY2003 and FY2004 respectively. Direct labour expense comprises mainly salaries and wages of our operators.

Indirect labour expense constituted approximately 6.9%, 8.1% and 7.9% of our cost of sales in FY2002, FY2003 and FY2004 respectively. Indirect labour expense comprises mainly salaries and wages of our production support engineers.

Subcontracting cost constituted approximately 10.1%, 2.8% and 5.5% of our cost of sales in FY2002, FY2003 and FY2004 respectively. Subcontracting cost relates mainly to costs of outsourcing semi- conductor packaging and assembly services, which we do not provide and are requested for by our customers.

Other manufacturing overheads constituted approximately 23.0%, 22.1% and 19.8% of our cost of sales in FY2002, FY2003 and FY2004 respectively. Other manufacturing overheads comprise mainly maintenance charges and consumables.

As at the Latest Practicable Date, and saved as disclosed under the section entitled “Prospects” beginning on page 79 of this Prospectus, our Directors are not aware of any significant trends in production and trends or factors that will materially affect our cost of sales in the current financial year.

40 Gross Profit Margin Our gross profit margins for FY2002, FY2003 and FY2004 were approximately 37.1%, 19.1% and 45.5% respectively. Our business is capital-intensive in nature; hence our financial results are directly dependent on the capacity utilisation of our testers. Further, there is often a time lapse between the point at which our equipment is placed into service and the point which they achieve high level of utilisation. Increases or decreases in our capacity utilisation rates can have a significant effect on our gross profit margins since the unit cost of testing services generally decreases as fixed charges, such as depreciation expense for the equipment, are allocated over a larger number of units. Please refer to the section entitled “Risk Factors - Our profitability is affected by our capacity utilisation rates” of this Prospectus for further details.

Other Operating Income Our other operating income comprises mainly interest income, profits from the purchase and sale of investments undertaken by our Taiwan subsidiary, Global Investment, as well as write-back of allowance for doubtful debt.

Distribution Costs Our distribution costs comprise mainly payroll-related expenses for our sales personnel, depreciation charges, insurance and utilities.

For FY2002, FY2003 and FY2004, distribution costs accounted for approximately 1.2%, 1.3% and 1.4% of our revenue respectively. Generally, our distribution costs fluctuate according to the level of our business activities.

Administrative Expenses Our administrative expenses comprise mainly staff costs of employees, including those of management personnel, finance personnel and management information systems personnel as well as directors’ fees, staff welfare and insurance, employees’ pension fund, office utilities, property insurance and depreciation charges.

Administrative expenses accounted for approximately 11.9%, 14.7% and 11.8% of our revenue for FY2002, FY2003 and FY2004 respectively.

Other Operating Expenses Our other operating expenses comprise mainly technology development expenses, including payroll- related expenses of technology development staff.

Other operating expenses accounted for approximately 3.8%, 8.1% and 8.4% of our revenue for FY2002, FY2003 and FY2004 respectively.

Finance Costs Our finance costs comprise mainly interest on bank overdrafts and bank loans.

Income Tax Our subsidiaries in Taiwan and the US are taxed in accordance with the tax laws under the taxation administrations of Taiwan and the US respectively. Under current Taiwan Income Tax Law, one of the Taiwan subsidiaries, GTC Taiwan, recognises future tax benefits arising from tax losses incurred during the past 5 years which are eligible to be carried forward for use to offset against future taxable income. The Taiwan subsidiary also recognises investment tax credit under the Statute for Upgrading Industries. These tax credits are valid for 1 to 5 years. In addition, GTC Taiwan is currently exempted from business income tax for a period of 5 years starting from FY2004 in respect of qualifying income. Please refer to the section entitled “Profit / (Loss) attributable to the Group” on page 46 of this Prospectus for further details on the tax exemptions. Besides, GTC Taiwan has received approvals in respect of a planned purchase of equipment which when completed will entitle qualifying income from the use of the equipment to be exempted from business income tax for a period of 5 years starting, at GTC Taiwan’s election, from any of the first 4 years following the financial year in which all the equipment under the approval is put into use.

41 Please refer to pages A-25 and A-26 of the Compilation Report of the Joint Reporting Accountants on the Proforma Consolidated Financial Statements for further details.

As at 31 December 2004, the amount of deferred tax benefits on the unutilised tax losses and investment credits available to GTC Taiwan were approximately US$0.3 million and US$3.6 million respectively. As at the Latest Practicable Date, approximately US$0.3 million and US$0.1 million of deferred tax benefits on the unutilised tax losses and investment credits had been utilised respectively.

Our other subsidiaries in Taiwan and the US currently do not enjoy any tax concessions.

SEGMENTAL OPERATING RESULTS The following tables set out the distribution of our revenue by various segments for each of the periods under review.

Revenue by Business Activity

FY2002 FY2003 FY2004 US$’000 % US$’000 % US$’000 %

Provision of testing 22,213 86.7 18,625 73.9 29,712 65.8 services Leasing of testers 964 3.8 3,926 15.6 6,108 13.5 Provision of test program development 1,917 7.5 1,860 7.4 4,785 10.6 services Others 515 2.0 788 3.1 4,575 10.1

Total 25,609 100.0 25,199 100.0 45,180 100.0

Revenue by Geographical Region (1)

FY2002 FY2003 FY2004 US$’000 % US$’000 % US$’000 %

Taiwan 14,807 57.8 13,139 52.1 26,077 57.7 US 8,576 33.5 6,317 25.1 9,944 22.0 Singapore 2,226 8.7 5,743 22.8 9,159 20.3

Total 25,609 100.0 25,199 100.0 45,180 100.0

Note: (1) Based on the billing address of our customers.

42 REVIEW OF PAST OPERATING PERFORMANCE FY2003 vs FY2002 Revenue Our revenue decreased by approximately US$0.4 million or 1.6% from US$25.6 million in FY2002 to US$25.2 million in FY2003. The decrease was due mainly to lower revenue generated from provision of testing services and provision of test program development services in FY2002, partially offset by increase in revenue from the leasing of testers. Revenue from provision of testing services decreased by approximately US$3.6 million or 16.2% from US$22.2 million in FY2002 to US$18.6 million in FY2003.

In particular, revenue from provision of testing services to 3 of our existing major customers of which 2 are located in Taiwan, specialising mainly in the consumer electronics and communication device sectors respectively; and the third customer is located in the US, specialising mainly in the consumer electronics sector, decreased by approximately US$10.4 million. The decrease was partially offset by an increase in sales to another 3 of our existing major customers of approximately US$6.2 million, of which 2 are located in Taiwan, specialising mainly in the consumer electronics and communication device sectors respectively; and the third customer is located in Singapore, specialising mainly in the consumer electronics sector.

Revenue from leasing of testers increased by approximately US$2.9 million or 307% from US$1.0 million in FY2002 to US$3.9 million in FY2003.

Revenue from provision of test program development services remained fairly constant at US$1.9 million.

Cost of Sales and Gross Profit Our cost of sales increased by approximately US$4.3 million or 26.5% from US$16.1 million in FY2002 to US$20.4 million in FY2003. The increase was attributable mainly to higher depreciation charges as we continued to invest in fixed assets to expand our business operations. Our capital expenditure in FY2003 totalled approximately US$14.5 million, due mainly to an increase in the number of testers from 63 as at 31 December 2002 to 84 as at 31 December 2003. Consequently, depreciation charges increased by approximately US$3.6 million from US$8.5 million in FY2002 to US$12.1 million in FY2003. Direct labour expense increased by approximately US$0.4 million from US$1.1 million in FY2002 to US$1.5 million in FY2003 while indirect labour expense increased by approximately US$0.4 million from US$1.2 million in FY2002 to US$1.6 million in FY2003. In addition, other manufacturing overheads increased by approximately US$0.8 million from US$3.7 million in FY2002 to US$4.5 million in FY2003, of which consumables increased by approximately US$0.2 million and rental expenses increased by approximately US$0.3 million. The increase in our cost of sales was partially offset by a decrease in subcontracting cost of approximately US$1.0 million from US$1.6 million in FY2002 to US$0.6 million in FY2003, which was in line with the decrease in testing services revenue earned in FY2003.

Our gross profit decreased by approximately US$4.7 million or 49.2% from US$9.5 million in FY2002 to US$4.8 million in FY2003 due mainly to the increase in cost of sales and decrease in revenue. Consequently, our gross profit margin decreased from approximately 37.1% in FY2002 to 19.1% in FY2003 following lower utilisation of tester capacity in FY2003 at 49.4% which increased our fixed cost per unit of semi-conductor tested.

Other Operating Income Our other operating income decreased by approximately US$0.2 million or 42.8% from US$0.4 million in FY2002 to US$0.2 million in FY2003. In FY2002, we made insurance claims of US$0.2 million relating to power interruption that occurred at the US plant. There was no occurrence of such incident in FY2003.

Distribution Costs Our distribution costs increased by approximately US$18,000 or 5.7% from US$318,000 in FY2002 to US$336,000 in FY2003 due mainly to an increase in payroll-related expenses for sales personnel by approximately US$92,000, partially offset by decrease in doubtful debt expense. We continued to build on our sales and marketing efforts by employing more sales personnel and customer support staff.

43 Administrative Expenses Our administrative expenses increased by approximately US$0.6 million or 21.7% from US$3.1 million in FY2002 to US$3.7 million in FY2003. The increase was due mainly to an increase in payroll from an increase in the number of administrative staff. The increase was also due to an increase in depreciation and utilities expenses and professional fees for advice on our production processes in FY2003. There were no directors’ fees and employee bonus share expenses incurred in FY2003.

Other Operating Expenses Other operating expenses increased by approximately US$1.0 million or 106.7% from US$1.0 million in FY2002 to US$2.0 million in FY2003 due mainly to foreign exchange translation loss of US$0.7 million in FY2003. This exchange loss was due mainly to the depreciation of the US$ against the NT$ in FY2003. As most of our loans are denominated in NT$, we suffered a translation loss upon translating these loans to US$. The increase in other operating expenses was also due to US$0.2 million of guarantee expenses incurred to secure the banks’ guarantee for our commercial papers.

Finance Costs Our finance costs decreased by approximately US$0.1 million or 11.0% from US$0.7 million in FY2002 to US$0.6 million in FY2003 due mainly to a decrease in interest rates, partially offset by an increase in loans taken up mainly for the acquisition of property, plant and equipment.

Profit / (Loss) attributable to the Group As a result of the above, we recorded a loss attributable to the Group of approximately US$5.0 million in FY2003, representing a decrease of approximately US$9.2 million from profit attributable to the Group in FY2002 of approximately US$4.2 million, due mainly to a lower capacity utilisation rates in FY2003 and tax expense.

In FY2003, we recorded an income tax expense of approximately US$3.3 million due mainly to the write- off of deferred tax assets previously recognised. The write-off pertains to the portion of investment allowances which is expected to lapse in FY2004.

FY2004 vs FY2003 Revenue Our revenue increased significantly by approximately US$20.0 million or 79.3% from US$25.2 million in FY2003 to US$45.2 million in FY2004. The increase was due to higher revenue achieved for all of our business activities. Revenue from the provision of testing services increased by approximately US$11.1 million or 59.5% from US$18.6 million in FY2003 to US$29.7 million in FY2004 due to increase in sales to both existing and new customers.

Revenue from provision of testing services to 5 existing major customers of which 3 are companies located in Taiwan, 1 in US and 1 in Singapore, increased by approximately US$12.8 million or 97.7% from US$13.1 million in FY2003 to US$25.9 million in FY2004. These 5 existing major customers comprised 3 companies specialising mainly in communication devices and 2 in consumer electronics. In addition, sales to 4 new customers contributed approximately US$0.3 million to the increase in testing service revenue. The increase was partially offset by the decrease in sales of approximately US$2.3 million to 2 of our existing major customers specialising in consumer electronics and both located in Taiwan.

Revenue from leasing of testers increased by approximately US$2.2 million or 55.6% from US$3.9 million in FY2003 to US$6.1 million in FY2004 due mainly to an increase in demand for leasing services from our customers.

Revenue from provision of test program development services increased by approximately US$2.9 million or 157.3% from US$1.9 million in FY2003 to US$4.8 million in FY2004 due mainly to an increase in the volume of test program development services provided to our customers in view that these customers would likely engage our Group to provide testing services in the future.

44 Other revenue increased by approximately US$3.8 million or 480.6% from US$0.8 million in FY2003 to US$4.6 million in FY2004. The increase relates mainly to program testing services and tester software and hardware modification services provided to a new customer, Jetek Technology Corp..

Cost of Sales and Gross Profit Our cost of sales increased by approximately US$4.2 million or 20.9% from US$20.4 million in FY2003 to US$24.6 million in FY2004. The increase was mainly attributable to higher depreciation charges as we continued to invest in property, plant and equipment to expand our business operations. Our capital expenditure in FY2004 increased by approximately US$18.0 million from US$14.5 million in FY2003 to US$32.5 million in FY2004, due mainly to a net increase in our number of testers from 84 as at 31 December 2003 to 89 as at 31 December 2004. Consequently, depreciation charges accounted for in cost of sales increased by approximately US$2.3 million from US$12.1 million in FY2003 to US$14.4 million in FY2004.

Direct labour expense increased by approximately US$0.5 million from US$1.5 million in FY2003 to US$2.0 million in FY2004 while indirect labour charges increased by approximately US$0.3 million from US$1.6 million in FY2003 to US$1.9 million in FY2004. In addition, our subcontracting cost increased by approximately US$0.8 million from US$0.6 million in FY2003 to US$1.4 million in FY2004 and other manufacturing overheads increased by approximately US$0.4 million from US$4.5 million in FY2003 to US$4.9 million in FY2004.

Our gross profit increased by approximately US$15.7 million or 326.2% from US$4.8 million in FY2003 to US$20.5 million in FY2004, due mainly to the increase in revenue and improvement in gross profit margin. Our gross profit margin increased from approximately 19.1% in FY2003 to 45.5% in FY2004. The increase was due mainly to the improved capacity utilisation rate of our testers in FY2004 at 82.6% from 49.4% in FY2003, which resulted in a lower fixed cost per unit of semi-conductor tested.

Other Operating Income Our other operating income decreased by approximately US$0.1 million or 47.5% from US$0.2 million in FY2003 to US$0.1 million in FY2004.

Distribution Costs Our distribution costs increased by approximately US$318,000 or 94.6% from approximately US$336,000 in FY2003 to approximately US$654,000 in FY2004 due mainly to an increase in salary and payroll- related expenses and utilities expenses in line with the increase in sales for FY2004.

Administrative Expenses Our administrative expenses increased by approximately US$1.6 million or 43.5% from US$3.7 million in FY2003 to US$5.3 million in FY2004. The increase was due mainly to an increase in depreciation charges by approximately US$0.6 million and salary and payroll-related expenses by approximately US$0.5 million from US$1.6 million in FY2003 to US$2.1 million in FY2004.

Other Operating Expenses Other operating expenses increased by approximately US$1.8 million or 87.3% from US$2.0 million in FY2003 to US$3.8 million in FY2004, due mainly to an increase in foreign exchange translation losses by approximately US$1.3 million from US$0.7 million in FY2003 to US$2.0 million in FY2004. The increase in foreign exchange translation losses was due mainly to translation losses that arose when we translated our loans which are mainly denominated in NT$ to US$ as the US$ depreciated against NT$ from FY2003 to FY2004.

Finance Costs Our finance costs increased by approximately US$0.3 million or 35.1% from US$0.6 million in FY2003 to US$0.9 million in FY2004 due mainly to an increase in loans obtained mainly for the acquisition of property, plant and equipment.

45 Profit / (Loss) attributable to the Group As a result of the above, we recorded a profit attributable to the Group of approximately US$11.5 million, representing an increase of approximately US$16.5 million from loss attributable to the Group of approximately US$5.0 million recorded in FY2003. The increase in profit attributable to the Group was due mainly to the increase in revenues and improved utilisation of our tester capacity.

With effect from 1 January 2004 for a period of five years, qualified revenue generated from in-house testing services provided to customers by GTC Taiwan would be exempted from taxation. Despite the profit attributable to the Group generated for FY2004 of approximately US$11.5 million as compared to the loss attributable to the Group generated for FY2003 of approximately US$5.0 million, in FY2004, we did not have any tax expense. On the other hand, we had a tax credit of approximately US$1.5 million. This was due to the recognition of the deferred tax asset on unutilised investment allowances projected to be utilised in the next few years.

REVIEW OF FINANCIAL POSITION Non-current Assets Non-current assets comprise property, plant and equipment, deferred tax assets and other receivables and prepayments.

Property, plant and equipment comprise mainly plant and machinery such as testers, freehold land, building on leasehold land, leasehold improvements, furniture and fittings, computer software and testers under assembly. When testers are purchased, they are subjected to acceptance by our Group’s engineers before they can be deployed for production use. During this acceptance period, which normally takes approximately 7 months, these assets will be recorded as testers under assembly. Upon acceptance by our Group’s engineers, these assets will be reclassified as plant and machinery and subject to depreciation charges.

As at 31 December 2004, the net book value of our property, plant and equipment amounted to approximately US$107.0 million, of which approximately US$97.1 million relates to plant and equipment and plant and equipment under assembly, US$1.9 million to freehold land, US$0.8 million to leasehold improvements, US$0.7 million to buildings and the balance of US$6.5 million to furniture and fittings, motor vehicles and computer software.

Net book value of our property, plant and equipment increased by approximately US$13.4 million or 14.3% from US$93.6 million as at 31 December 2003 to US$107.0 million as at 31 December 2004. The increase was due mainly to new additions in FY2004 amounting to approximately US$32.5 million, of which US$30.8 million relates to the purchase of testers; partially offset by total depreciation charges of approximately US$15.6 million for FY2004 and disposals, mainly testers, of approximately net book value US$3.5 million.

As at 31 December 2004, our deferred tax assets and other receivables and prepayments amounted to approximately US$3.3 million and US$0.2 million respectively.

Current Assets Current assets comprise trade receivables, other receivables and prepayments, other investments and cash balances.

As at 31 December 2004, our current assets amounted to approximately US$22.4 million, comprising approximately US$9.1 million of trade receivables, US$1.9 million of other receivables and prepayments, US$5.3 million quoted unit trust fund investments and US$6.1 million of cash.

Our current assets increased by approximately US$8.4 million or 59.8% from US$14.0 million as at 31 December 2003 to US$22.4 million as at 31 December 2004 due mainly to higher cash balances and trade receivables.

Our cash balances increased by approximately US$4.4 million or 256.8% from US$1.7 million as at 31 December 2003 to US$6.1 million as at 31 December 2004, in line with the increase in sales.

46 Our trade receivables increased by approximately US$2.4 million or 36.6% from US$6.7 million as at 31 December 2003 to US$9.1 million as at 31 December 2004. The increase was due mainly to the increase in revenue achieved during FY2004, despite an improvement in collectibility of our trade receivables. As at 31 December 2004, our trade receivable collection period was approximately 74 days as compared to approximately 97 days as at 31 December 2003. Credit terms granted to our customers typically range from 60 to 90 days.

Current Liabilities Our current liabilities comprise trade payables, other payables and bank loans and overdrafts.

As at 31 December 2004, our current liabilities amounted to approximately US$33.6 million, comprising approximately US$2.0 million of trade payables, US$2.2 million of other payables and US$29.4 million of bank loans and overdrafts.

Our current liabilities increased by approximately US$18.0 million or 115.8% from US$15.6 million as at 31 December 2003 to US$33.6 million as at 31 December 2004 due mainly to the net increase in our short-term bank loans by approximately US$11.9 million from US$7.4 million as at 31 December 2003 to US$19.3 million as at 31 December 2004 and a net increase in the current portion of long-term bank loans by approximately US$4.6 million from US$5.5 million as at 31 December 2003 to US$10.1 million as at 31 December 2004, drawn down partially to finance the purchases of property, plant and equipment, mainly testers.

Our trade payables increased by approximately US$0.8 million or 70.9% from US$1.2 million as at 31 December 2003 to US$2.0 million as at 31 December 2004, which was in line with the increase in sales.

Non-Current Liabilities Our non-current liabilities comprise long-term loans and retirement benefit obligations.

As at 31 December 2004, our non-current liabilities amounted to approximately US$22.2 million, comprising US$22.1 million of long-term loans and US$0.1 million of retirement benefit obligations.

Our non-current liabilities decreased by approximately US$6.1 million or 21.5% from US$28.3 million as at 31 December 2003 to US$22.2 million at 31 December 2004, due mainly to a decrease in the non- current portion of long-term loans from approximately US$28.2 million as at 31 December 2003 to US$22.1 million as at 31 December 2004 with more long-term loans becoming current by 31 December 2004.

Proforma Shareholders' Equity As at 31 December 2004, our proforma shareholders' equity stood at approximately US$77.0 million.

LIQUIDITY AND CAPITAL RESOURCES Our operations are funded through a combination of shareholders’ equity, external borrowings and internally generated funds. In particular, we finance our capital expenditure requirements mainly through bank borrowings.

As at 31 December 2004, we had total bank borrowings amounting to approximately US$51.5 million, comprising short-term and long-term borrowings of approximately US$29.4 million and US$22.1 million respectively. Our gearing ratio (computed based on our total indebtedness and our shareholders’ equity) and interest-servicing ratio (calculated based on our interest expense and earnings before interest, taxation, depreciation and amortisation or “EBITDA”) were approximately 0.7 times and 31.0 times respectively. To date, we have been able to service our loan repayment commitments on schedule.

As at 31 December 2004, our negative working capital of approximately US$11.2 million was due mainly to the current portion of our long-term borrowings taken up to fund capital expenditure as we expand our business operations.

47 As at the Latest Practicable Date, our principal sources of liquidity included cash and bank balances of approximately US$1.4 million and unutilised credit facilities of approximately US$42.1 million. Our credit facilities comprised mainly letters of credit and trade receivables factoring facilities which are secured either by way of personal guarantees by our Executive Chairman and/or charges over certain of our property, plant and equipment.

As at the Latest Practicable Date, we have outstanding short-term and long-term bank borrowings of approximately US$12.9 million and US$44.6 million respectively. Please refer to the section entitled “Capitalisation and Indebtedness” beginning on page 53 of this Prospectus for further details.

As at the Latest Practicable Date, taking into account cash generated from operations, our present cash position and banking facilities, our Directors are of the opinion that our Group will have sufficient working capital to meet our present requirements.

The following table set forth a summary of the proforma statement of cash flow for FY2004.

US$’000 FY2004

Net cash from operating activities 23,186

Net cash used in investing activities (29,133)

Net cash from financing activities 10,205

Net effect of exchange rate changes in consolidating subsidiaries 108

Net increase in cash 4,366

Cash at beginning of the year 1,687

Cash at end of the year 6,053

Net cash from operating activities Our net cash flow from operating activities for FY2004 amounted to approximately US$23.2 million. Net cash generated from operating activities before working capital changes amounted to approximately US$26.8 million, comprising mainly profit before taxation of approximately US$10.0 million adjusted for non-cash items comprising mainly depreciation charges of approximately US$15.6 million and loss on disposal of property, plant and equipment of approximately US$0.3 million. Net cash utilised for working capital amounted to approximately US$2.6 million, due mainly to an increase in trade receivables of approximately US$2.4 million as a result of the significant increase in sales in FY2004 and increase in other receivables and prepayments of approximately US$1.6 million due mainly to prepaid listing expenses of approximately US$0.6 million and other receivables from the sale of testers of approximately US$0.9 million; offset by increase in trade payables and other payables of approximately US$0.8 million and US$0.7 million respectively, in line with the increase in sales in FY2004. In addition, we paid interest on our borrowings of approximately US$0.9 million.

Net cash used in investing activities Net cash used in our investing activities for FY2004 amounted to approximately US$29.1 million, due mainly to property, plant and equipment additions totalling approximately US$32.4 million, partially offset by a decrease in investments in unit trust funds and proceeds from the disposal of property, plant and equipment totalling approximately US$3.3 million. During FY2004, our capital expenditure on testers, including the cost of acquiring 7 testers and the cost of tester upgrading, amounted to approximately US$30.8 million.

Net cash from financing activities Our cash flow generated from financing activities for FY2004 amounted to approximately US$10.2 million due primarily to the net proceeds from bank borrowings of approximately US$10.3 million.

48 CAPITAL EXPENDITURE AND COMMITMENTS Our capital expenditure and divestments were as follows:

1 January 2005 to the Latest US$’000 FY2002 FY2003 FY2004 Practicable Date

Freehold land – – – – Building – 272 – – Leasehold improvements 170 261 91 12 Testers 31,457 12,783 30,848 14,341 Motor vehicles 18 – 25 – Furniture and fittings 132 675 268 1,156 Computer software 117 555 1,219 290

Total 31,894 14,546 32,451 15,799

1 January 2005 to the Latest FY2002 FY2003 FY2004 Practicable Date

Number of testers purchased during the year/period 19 21 7 19

The semi-conductor industry is generally characterised by rapid technological changes. Hence, we need to continuously invest in more sophisticated testing technologies in order to respond to the competitive market conditions and constantly evolving customer requirements. Testers typically cost between US$0.3 million and US$4.1 million each, depending on their respective functions and operating speed. As such, investment on testers constituted the bulk of our capital expenditure for each of FY2002, FY2003 and FY2004 and the period from 1 January 2005 to the Latest Practicable Date.

We had not made any material divestment in FY2002 and FY2003. In FY2004, we disposed of 2 testers, including handlers, amounting to net book value of approximately US$3.5 million. For the period from 1 January 2005 to the Latest Practicable Date, no material divestment was made.

As at the Latest Practicable Date, we had capital commitments of approximately US$8.1 million in respect of the purchase of additional testers and related equipment in FY2005. Subsequent to the Latest Practicable Date, none of our capital commitments has been paid. These capital commitments are expected to be funded using cash generated from our operations, credit facilities or proceeds from the issue of the New Shares.

FOREIGN EXCHANGE MANAGEMENT Our functional currency is US$. Income and expenses in other currencies are converted into the functional currency at the exchange rates prevailing on the transaction dates. Monetary assets and liabilities denominated in other currencies are converted into the functional currency on the rates prevailing as at the balance sheet date. Exchange gains or losses are accounted for in the income statement accordingly.

Our revenue and cost of sales are denominated mainly in US$ and to a certain extent in NT$. To the extent that our sales, purchases and operating costs are not matched in the same currency and that there are timing differences between collections and payments, we will be exposed to any adverse fluctuations of the various currencies against US$.

Our revenue for FY2002, FY2003 and FY2004 in US$ and NT$ as a percentage of our total revenue are set out below:

FY2002 FY2003 FY2004

US$ 69% 64% 70% NT$ 31% 36% 30%

49 Our cost of sales for FY2002, FY2003 and FY2004 in US$, Japanese Yen and NT$ as a percentage of our total cost of sales are set out below:

FY2002 FY2003 FY2004

US$ 76% 73% 65% Japanese Yen – n.m. n.m. NT$ 24% 27% 35% n.m. : Not meaningful

Our net foreign exchange losses are as follows:

FY2002 FY2003 FY2004

Foreign exchange loss (US$’000) 12 702 2,002 As % of revenue 0.05 2.79 4.43

Currently we do not have a formal foreign currency hedging policy as our Directors are of the opinion that our foreign currency exposure is manageable. We will continue to monitor our foreign currency policy exposure closely and will consider hedging any material foreign exchange exposure should the need arise in the future. However, as a portion of our loans are denominated in NT$, we may enter into derivative foreign exchange contracts from time to time to hedge against our exposure to NT$ borrowings.

As at 31 December 2004 and the Latest Practicable Date, our Group did not have any outstanding financial derivative contract.

50 DIVIDEND POLICY

Our Company has not distributed any dividends since incorporation.

In FY2003, GTC Taiwan declared and paid a final cash dividend of approximately US$0.023 per share (net of tax).

We currently do not have a formal dividend policy. The form, frequency and amount of future dividends on our Shares will depend on our earnings and financial position, our results of operations, our capital needs, our plans for expansion and other factors as our Directors may deem appropriate. In view of our expansion plans which we expect would require significant capital expenditures, we have undertaken not to declare and distribute any dividends out of the retained earnings of GTC Taiwan as at 31 December 2004 as the resources will be ploughed back to fund our operations.

We may declare dividends by ordinary resolution of our Shareholders at a general meeting, but may not pay dividends in excess of the amount recommended by our Directors. We must pay all dividends out of our distributable profits.

Information relating to taxes payable on dividends is set out in Appendix E of this Prospectus entitled “Taxation”.

51 EXCHANGE CONTROL

Foreign Exchange Control in Taiwan Even though foreign exchange restrictions have been relaxed significantly since 1990, Taiwan still has a foreign exchange control system under its Foreign Exchange Control Statute. The Central Bank is the competent authority, namely as the regulator, of the foreign exchange market in Taiwan. Foreign exchange rates change based on the supply and demand of the market, including the role Central Bank plays as a buyer or a seller of a particular currency when it steps into the market.

The Foreign Exchange Control Statute and regulations require that a foreign exchange transaction must be executed by banks designated by the Ministry of Finance and the Central Bank to handle foreign exchange transactions. Along with the Central Bank’s policy to relax the foreign control system, foreign exchange currency earned from exports of merchandise and services may now be retained and used by exporters in Taiwan, without being required to sell to the designated foreign exchange bank. All foreign currency needed for the importation of merchandise and services may be purchased from the foreign exchange market through the designated foreign exchange banks.

On the capital account side, Taiwan citizens and certified alien residents may remit, to and from Taiwan, foreign currencies up to a total upper limit of US$5 million per year for their inward and outward remittance respectively. Taiwan companies may exchange a total upper limit of US$50 million per year for their inward and outward remittance respectively. These limits also apply to remittances involving a conversion between NT$ and US$ or other foreign currencies. Remittance of foreign currencies beyond these limits is still allowed if an advance approval is obtained. The conversion of NT$ into RMB and vice versa is restricted. In addition, all private enterprises are required to register all medium and long-term foreign debt with the Central Bank.

Any foreign investor possessing a foreign investment approval obtained in advance from Taiwan’s Investment Commission of the Ministry of Economic Affairs may repatriate annual net profits, interests and cash dividends attributable to the approved investment. Stock dividends, investment capital and capital gains attributable to the approved investment may be repatriated with approval of the Investment Commission or other governmental authority.

Our subsidiaries in Taiwan, GTC Taiwan and Global Investment, are subject to the Foreign Exchange Control Statute and its regulations, which require them to (1) process any foreign exchange transaction with banks designated by the Central Bank, and (2) declare such transaction with the Central Bank. When making a declaration, GTC Taiwan or Global Investment, as the case may be, may need to provide contracts or documents evidencing the reason for the foreign exchange transaction if the remittance in question exceeds US$1 million or if certain circumstances identified by the Central Bank are present. Such certain circumstances include (i) a remittance for a direct investment or portfolio investment approved by the Taiwan government; (ii) outward remittance to the PRC except for remittances that do not require evidencing documents pursuant to other regulations of the Central Bank; (iii) remittance for transactions conducted within the territory of Taiwan involving goods or services located outside the territory of Taiwan; and (iv) other remittance that require evidencing documents for verification by banks pursuant to other regulations of the Central Bank.

Foreign Exchange Control in the US Our subsidiary, GTC US, is subject to the Currency and Foreign Transactions Reporting Act, which requires GTC US to (1) file reports with the Secretary of the Treasury of exports and imports of monetary instruments, and (2) maintain records and reports of any transactions with a foreign financial agency on its own behalf or that of GTC Taiwan or any other foreign shareholder. These requirements apply to any distribution or dividend payment by GTC US to GTC Taiwan in excess of US$5,000.

In the event that any financial transaction of GTC US becomes subject to either US or foreign imposed restrictions on the export or import of monetary instruments (also referred to as “blocked income”), and payment or reimbursement for goods, services, interest or the use of property is prevented because of such restrictions, US income tax deductions relating to the blocked income generally must be deferred until the blocked income is no longer subject to restrictions.

52 CAPITALISATION AND INDEBTEDNESS

The following table shows our cash and cash equivalents, capitalisation and indebtedness as at 31 December 2004:

(i) based on our proforma consolidated balance sheet as at 31 December 2004; and

(ii) as adjusted to give effect to the issue of the New Shares pursuant to the Invitation and the application of net proceeds.

You should read this in conjunction with the Compilation Report of the Joint Reporting Accountants on the Proforma Consolidated Financial Statements in Appendix A of this Prospectus.

As at 31 December 2004 As Adjusted for the Proforma Invitation (US$’000) (US$’000)

Cash and cash equivalents 6,072 35,244

Short-term debt - Secured current portion of long-term loans 9,288 9,288 - Secured short-term loans 5,594 5,594 - Unsecured short-term loans 13,701 13,701 - Unsecured current portion of long-term loans 788 788

29,371 29,371

Long-term debt - Secured term loans 21,695 21,695 - Unsecured term loans 394 394

22,089 22,089

Total indebtedness 51,460 51,460

Proforma shareholders’ equity 76,994 106,166

Total capitalisation and indebtedness 128,454 157,626

As at 31 December 2004, our Group has total bank borrowings amounting to approximately US$51.5 million. Of the secured short-term debt of US$5.6 million, approximately US$0.6 million is guaranteed by our Executive Chairman with the balance of US$5.0 million being secured by a guarantee from GTC Taiwan.

The long-term debt of approximately US$32.2 million of which US$10.1 million is due within one year, comprises a secured portion of US$31.0 million. Out of the US$31.0 million, approximately US$29.0 million is secured by certain property, plant and equipment of our Group and guarantee of our Executive Chairman. The remaining US$2.0 million, which relates to GTC US, is secured by certain property, plant and equipment of our Group and a guarantee from GTC Taiwan.

Included in the US$31.0 million are term loans of US$11.4 million and commercial papers totalling US$17.6 million issued in October 2002 by a consortium of 9 banks led by Hua Nan Commercial Bank under a revolving credit arrangement which provides for the re-issuance of all commercial papers up to October 2007.

53 On 9 May 2005, GTC Taiwan obtained a syndicated credit facility ("Syndicated Facility") from Ta Chong Bank Ltd together with 10 other banks, with Ta Chong Bank Ltd and Taishin International Bank as co-lead banks, for an amount of NT$2.15 billion, comprising a NT$1.4 billion term loan facility and a NT$750 million promissory note facility. Repayments are on 7 half-yearly instalments, with the first payment due in May 2007. The term loan bears interest at a rate based on the New Taiwan Dollar commercial paper rate in the secondary money market plus 1.45% per annum while the promissory note bears interest determined by the bid of purchasers of the promissory note, plus 1% service charge per annum payable to the bank providing the guarantee on the promissory note. For the first interest payment, the term loan carries an interest rate of 2.891% per annum while the promissory note carries an interest rate of 2.23% per annum. The loan is secured on certain property, plant and equipment of our Group. As at the Latest Practicable Date, we have drawn down NT$1.15 billion, to use for:-

(i) repayment of our existing short-term borrowings amounting to approximately NT$149.9 million which carried interest rates of between 1.588% and 3.95% per annum;

(ii) repayment of the outstanding balance of our Group's existing syndicated credit facility of approximately NT$790 million with Hua Nan Commercial Bank as lead bank, comprising a NT$300 million term loan facility which carries an interest rate at 3.69% per annum and a NT$490 million promissory note which carries an interest rate of 2.047% per annum. This existing syndicated credit facility comprised current portion of NT$150 million and non-current portion of NT$640 million; and

(iii) payment for the purchase of testers of approximately NT$210.1 million.

Our Group intends to continue to draw down on the Syndicated Facility to repay our existing short-term bank borrowings as and when they are due if it is commercially beneficial to our Group, taking into account interest rates and terms of the bank borrowings.

Our Directors are of the view that the Syndicated Facility is beneficial to our Group for the following reasons:-

(a) the Syndicated Facility replaces existing short-term borrowings and existing syndicated credit facility which generally bore relatively higher interest rates thereby enabling our Group to enjoy net interest savings; and

(b) the Syndicated Facility, which is repayable over 3.5 years and has its first instalment due in May 2007, replaces a portion of the existing short-term loans as well as the current portion of the existing syndicated credit facility of our Group. Hence, the replacement is expected to improve the working capital position of our Group.

On 19 May 2005, GTC Taiwan obtained a long-term loan facility with a Taiwan financial institution, Far Glory Life Insurance, for a credit line of NT$300 million carrying an interest rate of approximately 3.96% per annum. Repayments are over 18 monthly instalments, with the first payment due in June 2005. The loan is secured on certain property, plant and equipment of our Group. In accordance with the terms of the loan facility, any amount of credit not drawn down by 12 June 2005 would be cancelled. As at 12 June 2005, we had drawn down NT$88 million to repay some of our existing loans and for working capital purposes. As at the Latest Practicable Date, we had repaid approximately NT$4.9 million of this long-term loan facility.

On 23 June 2005, GTC Taiwan obtained a long-term credit facility from Ta Chong Bank Ltd amounting to NT$650 million, comprising a general revolving credit line of NT$250 million and letter of credit facility of NT$400 million.

The general revolving credit line of NT$250 million is subject to the following sub-limits:- (i) NT$250 million in letters of credit; (ii) US$3 million in stand-by letters of credit; (iii) NT$50 million in term loan facility; and (iv) US$2 million in term loan facility.

54 Foreign currency denominated letters of credit and the US$ loan facilities bear interest at a rate based on the relevant Singapore Interbank Offered Rate ("SIBOR") plus 0.75% per annum, divided by 0.945. NT$ denominated letters of credit and loan facilities bear interest at a rate based on the bank's prevailing interest rate (currently 2.47% per annum). Under the terms of this facility, GTC Taiwan had undertaken that any payment of trade receivables from TSMC and Marvell to be made into GTC Taiwan's account with Ta Chong Bank Ltd.

This facility replaces the existing short-term credit facility of NT$250 million GTC Taiwan had with Ta Chong Bank Ltd. As at the Latest Practicable Date, GTC Taiwan had drawn down approximately US$4.3 million in term loans under this credit facility.

As at the Latest Practicable Date, after taking into consideration the foregoing, our total borrowings amounted to approximately US$57.5 million and unutilised banking facilities and loans amounted to approximately US$42.1 million.

After adjusting for the amount of Syndicated Facility and new and existing loan facilities drawn down as at the Latest Practicable Date and the repayment of bank borrowings from internal resources and using funds from the Syndicated Facility by the Latest Practicable Date, our Group's gearing ratio as at 31 December 2004 would have been 0.7 times before the Invitation, and 0.5 times after the Invitation. We have been able to service our loan repayment commitments on a timely basis. Barring unforeseen circumstances, our Directors have confirmed that our Group would be able to continue servicing our indebtedness in accordance with the loan repayment schedules.

As at the Latest Practicable Date, based on the management accounts of our Group, there are no material changes in our cash and cash equivalents, capitalisation and indebtedness as disclosed above save for:

(a) a decrease in cash and cash equivalents of approximately US$4.7 million from US$6.1 million as at 31 December 2004 to US$1.4 million as at the Latest Practicable Date;

(b) a net decrease in short term loans of approximately US$6.4 million from US$19.3 million as at 31 December 2004 to US$12.9 million as at the Latest Practicable Date;

(c) a net increase in long term loans of approximately US$12.4 million from US$32.2 million as at 31 December 2004 to US$44.6 million as at the Latest Practicable Date; and

(d) changes in our reserves arising from the day-to-day operations in the ordinary course of business.

As at 31 December 2004, our Group had the following commitments, which are not provided for in the financial statements:

Operating Lease Commitments As at 31 December 2004, our Group had operating lease commitments in respect of our office facilities and staff quarters amounting to approximately US$1.5 million payable as follows:

US$’000

Within one year 409 In the second to fifth year inclusive 857 After five years 271

Total 1,537

As at the Latest Practicable Date, our Group had operating lease commitments in respect of our office facilities and staff quarters amounting to approximately US$1.3 million.

55 Capital Expenditure Commitments As at 31 December 2004, our Group had capital commitments for capital expenditure of approximately US$0.4 million. As at the Latest Practicable Date, our Group had capital commitments of approximately US$8.1 million in respect of the purchase of additional testers and related equipment in FY2005. We will fund these commitments using cash generated from our operations, credit facilities or the proceeds from the issue of the New Shares.

Save for the foregoing, as at the Latest Practicable Date, our Group has no other borrowings or indebtedness and liabilities under acceptances (other than normal trading bills) or acceptance credits, mortgages, charges, obligations under finance leases, guarantees or other material contingent liabilities.

56 DILUTION

Dilution is the amount by which the Issue Price paid by subscribers and/or purchasers of the Invitation Shares exceeds our NTA per Share immediately after the Invitation. The NTA of our Group as at 31 December 2004 was approximately 17.19 cents per Share based on our pre-Invitation share capital of 699,500,001 Shares.

Based on the issue of 175,500,000 New Shares at an Issue Price of S$0.30 per Share pursuant to the Invitation and after deducting estimated issue expenses to be borne by our Company, the NTA of our Group as at 31 December 2004 would have been approximately 19.39 cents per Share based on our post-Invitation share capital of 875,000,001 Shares. This represents an immediate increase in NTA of approximately 2.20 cents per Share to our existing Shareholders and an immediate dilution in NTA of approximately 10.61 cents per Share to our new investors. The following table illustrates this per Share dilution:

Issue Price per Share S$0.30

NTA per Share as at 31 December 2004 before adjusting for the Invitation 17.19 cents

Increase in NTA per Share attributable to our existing Shareholders 2.20 cents

NTA per Share after the Invitation 19.39 cents

Dilution in NTA per Share to our new investors 10.61 cents

The following table summarises the total number of Shares held by our existing Shareholders prior to the sale of the Vendor Shares and the total number of Shares issued by us and the average price paid per Share by our new investors pursuant to the Invitation.

Average price per Number of Shares Amount Share S$ cents

Existing Shareholders(1) 699,500,001 69,950,000 10.00

New investors pursuant to the Invitation 211,885,000 63,565,500 30.00

Note: (1) 699,500,000 Shares were issued to the existing Shareholders pursuant to the Restructuring Exercise, details of which are set out on page 65 of this Prospectus. 1 Share was issued to Mr Paul Yao-Chou Yang as he was the initial Shareholder of our Company.

57 SHARE CAPITAL

Our Company (Registration No.: 200409582R) was incorporated in Singapore on 30 July 2004 under the Companies Act as a private limited company, under the name of “Global Testing Corporation Private Limited”. Our Company was converted into a public limited company on 28 March 2005 and our name was changed to “Global Testing Corporation Limited”. As at the date of incorporation, our Company had an authorised share capital of S$1,000,000 comprising 10,000,000 Shares and an issued and paid-up share capital of one Share.

Pursuant to written resolutions dated 22 March 2005, the sole Shareholder of our Company approved, inter alia, the following:

(a) the increase in the authorised share capital of our Company from S$1,000,000 divided into 10,000,000 Shares to S$300,000,000 divided into 3,000,000,000 Shares;

(b) the conversion of our Company into a public limited company and the change of name to “Global Testing Corporation Limited”;

(d) the allotment and issue of an aggregate 699,500,000 Shares to the shareholders of GTC Taiwan in connection with the Restructuring Exercise, details of which are set out on page 65 of this Prospectus;

(e) the allotment and issue of the New Shares which are the subject of the Invitation. The New Shares, when issued and paid-up, will rank pari passu in all respects with our existing issued and paid-up Shares;

(f) the adoption of the ESOS (“ESOS Mandate”); and

(g) that authority be given pursuant to section 161 of the Companies Act to our Directors to allot and issue Shares (other than the New Shares) or convertible securities at any time (whether by way of rights, bonus or otherwise) and upon such terms and conditions whether for cash or otherwise and for such purposes and to such persons as our Directors may in their absolute discretion deem fit, provided that the aggregate number of Shares and convertible securities to be issued pursuant to such authority shall not exceed 50% of our post-Invitation share capital of our Company and that the aggregate number of such Shares and convertible securities to be issued other than on a pro- rata basis to our existing shareholders does not exceed 20% of our post-Invitation share capital of our Company (taking into account the conversion or exercise of any convertible securities and employee share options, if any, on issue as at the date of passing of this resolution), and unless revoked or varied by us in general meeting, such authority shall continue in full force until the conclusion of our next annual general meeting or the date by which our next annual general meeting is required by law or by our Articles to be held, whichever is earlier (“Share Issue Mandate”).

For the purposes of this resolution and pursuant to Rules 806(3) and 806(4) of the Listing Manual, the “post-Invitation share capital” shall mean the enlarged issued and paid-up share capital of our Company after the Invitation, after adjusting for any subsequent consolidation or sub-division of our Shares.

At the first Annual General Meeting of our Company held on 12 August 2005, and pursuant to written resolutions dated 12 August 2005, the Shareholders of our Company approved, inter alia, the renewal of the ESOS Mandate and the Share Issue Mandate.

58 As at the Latest Practicable Date, our Company has only one class of shares, being ordinary shares of S$0.10 each. The rights and privileges of our Shares are as stated in our Articles. Save for the Option Shares, there are no founder, management, deferred or unissued shares reserved for issue for any purpose. Save for the ESOS, no person has been, or is entitled to be, given an option to subscribe for or purchase any securities of our Company or any of its subsidiaries.

The present issued and paid-up capital of our Company is S$69,950,000.10 comprising 699,500,001 Shares. Upon the allotment of the New Shares, the resultant issued and paid-up share capital of our Company will be increased to S$87,500,000.10 comprising 875,000,001 Shares.

Details of the changes in the issued and paid-up share capital of our Company since incorporation and the resultant issued and paid-up share capital immediately after the Invitation are as follows:

Number Resultant issued Par Value of Shares share capital Purpose (S$) (S$)

Issued and paid-up capital as at date of incorporation 0.10 1 0.10

Issued and paid-up Shares pursuant to the 0.10 699,500,000 69,950,000.10 Restructuring Exercise

New Shares to be issued pursuant to the Invitation 0.10 175,500,000 87,500,000.10

Post-Invitation share capital 0.10 875,000,001 87,500,000.10

The authorised share capital and the shareholders’ equity of our Company as at the date of incorporation, after adjustments to reflect, inter alia, the increase in the authorised share capital of our Company, the Restructuring Exercise and the issue of the New Shares pursuant to the Invitation are set forth below:

After the increase in authorised share As As at the capital and the adjusted date of Restructuring for the incorporation Exercise Invitation (S$) (S$’000) (S$’000)

AUTHORISED SHARE CAPITAL Ordinary shares of S$0.10 each 1,000,000 300,000 300,000

SHAREHOLDERS’ EQUITY Issued and paid-up share capital 0.10 69,950 87,500

Share premium – – 31,864

Total shareholders’ equity 0.10 69,950 119,364

59 SHAREHOLDERS

The Shareholders of our Company and their respective shareholdings immediately before the Invitation (as at the date of this Prospectus) and immediately after the Invitation are set out as follows: Before the Invitation After the Invitation Direct Interest Deemed Interest Direct Interest Deemed Interest Number Number Number Number of Shares % of Shares % of Shares % of Shares %

Directors Pierre Tie-Min Chen (1) 43,324,665 6.19 92,234,470 13.19 29,897,000 3.42 75,074,845 8.58 Paul Yao-Chou Yang (2) 1 n.m. – – 1 n.m. – – Jon-Fwu Hwu (3) 16,154,945 2.31 5,000,000 0.71 14,404,000 1.65 4,125,000 0.47 Vincent Chi-Sheng Weng (4) 272,500 0.04 50,000 0.01 272,500 0.03 50,000 0.01 Kenneth Chung-Hou Tai (5) 250,000 0.04 – – 250,000 0.03 – – Wheng-Jing Kuan – – – – – – – – Chan Wai Meng – – – – – – – – Chia Soon Loi – – – – – – – – Sunny Wong Fook Choy – – – – – – – –

Executive Officers Ching-Chiang Chang 325,000 0.05 – – 325,000 0.04 – –

Controlling / Substantial Shareholders Yageo Corporation (6) 187,652,730 26.83 50,744,810 7.25 187,652,730 21.45 50,744,810 5.80 Investar Semiconductor (5) 66,339,300 9.48 – – 58,044,000 6.63 – – (Lee Hwei-Jan) (1) 7,139,780 1.02 71,667,025 10.26 3,407,820 0.39 71,667,025 8.19 TSMC (5) – – 66,339,300 9.48 – – 58,044,000 6.63

Other Shareholders of less than 5% who are related to our Directors or Substantial Shareholders Hsu Tai (7) 40,003,245 5.72 31,663,780 4.52 40,003,245 4.57 31,663,780 3.62 (“Kuo Shin Investment”) (6) 28,063,345 4.01 – – 28,063,345 3.21 – – Investar Dayspring (5) 20,256,690 2.90 – – 17,719,000 2.02 – – Investar Excelsus (5) 20,256,690 2.90 – – 17,719,000 2.02 – – (“Hsu Chang Investment”) (1) 20,042,300 2.87 – – 20,042,300 2.29 – –

(“Kuo Ding Venture Capital”) (6) 17,431,465 2.49 – – 17,431,465 1.99 – – Forefront Venture (5) 15,467,770 2.21 – – 13,534,020 1.55 – – (“San Tai Investment”) (1) 11,621,480 1.66 – – 11,621,480 1.33 – – Investar Burgeon (5) 10,358,130 1.48 – – 9,063,130 1.04 – – (“Kuo Chung Development”) (6) 5,250,000 0.75 – – 5,250,000 0.60 – – (Sui-Ching Ko Hwu) (3) 5,000,000 0.71 – – 4,125,000 0.47 – – (Chen Mu-Yuan) (9) 774,765 0.11 – – 774,765 0.09 – – Wei-Hsiang Ke (10) 385,000 0.06 – – 385,000 0.04 – – (Liu Wanru) (4) 50,000 0.01 – – 50,000 0.01 – – Shao-Chiao Chen (1) – – 4,471,575 0.64 – – – – Shao-Wei Chen (1) – – 4,474,515 0.64 – – – – Shao-Man Chen (1) – – 4,481,575 0.64 – – – – Others (8) 183,080,200 26.16 – – 183,080,200 20.92 – – Public – – – – 211,885,000 24.21 – –

TOTAL 699,500,001 100.00 875,000,001 100.00

60 Notes: (1) Mr Pierre Tie-Min Chen and Ms Lee Hwei-Jan are husband and wife. Ms Shao-Chiao Chen and Ms Shao-Man Chen are their daughters and Mr Shao-Wei Chen is their son. Of the 43,324,665 Shares, Mr Pierre Tie-Min Chen holds 4,471,575, 4,474,515 and 4,481,575 Shares on trust for Ms Shao-Chiao Chen, Mr Shao-Wei Chen and Ms Shao-Man Chen respectively. Ms Lee Hwei-Jan is the owner of a 99.87% interest in the issued share capital of Hsu Tai while Ms Shao-Chiao Chen, Ms Shao-Man Chen and Mr Shao-Wei Chen own the remaining 0.12% in equal proportions. Hsu Tai and Ms Lee Hwei-Jan are the owners of 99.82% and 0.17% of the issued share capital of Hsu Chang Investment while Ms Shao-Chiao Chen and Ms Shao-Man Chen own the remaining 0.01% in equal proportion. Hsu Tai owns 99.99% of the issued share capital of San Tai Investment. Mr Pierre Tie-Min Chen is deemed interested in all the Shares held by Ms Lee Hwei-Jan, Hsu Tai, Hsu Chang Investment and San Tai Investment. Ms Lee Hwei-Jan is deemed interested in all the Shares held by Hsu Tai, Hsu Chang Investment and San Tai Investment. Mr Pierre Tie-Min Chen is Chairman of Yageo Corporation, our controlling shareholder, and the owner of approximately 2.3% of the issued share capital of Yageo Corporation.

(2) Mr Paul Yao-Chou Yang holds 1 Share as he was the initial Shareholder of our Company.

(3) Mr Jon-Fwu Hwu and Ms Sui-Ching Ko Hwu are husband and wife. Mr Jon-Fwu Hwu is deemed interested in all the Shares held by Ms Sui-Ching Ko Hwu.

(4) Mr Vincent Chi-Sheng Weng and Ms Liu Wanru are husband and wife. Mr Vincent Chi-Sheng Weng is deemed interested in all the Shares held by Ms Liu Wanru.

(5) Mr Kenneth Chung-Hou Tai is Chairman of InveStar Capital, Inc., a fund management company which manages three funds, namely; Investar Semiconductor, Investar Excelsus, and Investar Burgeon on a discretionary basis and which respectively hold 9.48%, 2.90% and 1.48% of our pre-Invitation share capital. Mr Tai is also shareholder and managing member of Forefront Associates, LLC. a fund management company which manages Forefront Venture, a venture capital fund, on a discretionary basis and which holds a 2.21% interest of our pre-Invitation share capital. Furthermore, Mr Tai is Chairman of (“InveStar Capital (Taiwan), Inc.”) which manages Investar Dayspring, a venture capital fund, on a discretionary basis and which holds a 2.90% interest of our pre-Invitation share capital. TSMC is a company incorporated in Taiwan and listed on the Taiwan Stock Exchange. TSMC holds a 97.09% interest in the issued capital of Investar Semi- conductor through its wholly-owned subsidiary, TSMC International Investment Ltd. TSMC is deemed interested in all the Shares held by Investar Semiconductor.

(6) Yageo Corporation is a company incorporated in Taiwan and listed on the Taiwan Stock Exchange. Yageo Corporation is the owner of the entire issued share capital of Kuo Ding Venture Capital, Kuo Shin Investment and Kuo Chung Development. Yageo Corporation is deemed interested in all the Shares held by Kuo Ding Venture Capital, Kuo Shin Investment and Kuo Chung Development.

(7) Hsu Tai is a company incorporated in Taiwan. Hsu Tai is the owner of 99.82% of the issued share capital of Hsu Chang Investment and 99.99% of the issued share capital of San Tai Investment respectively. Hsu Tai is deemed interested in all the Shares held by Hsu Chang Investment and San Tai Investment.

(8) This category comprises more than 400 minority shareholders who were shareholders of GTC Taiwan who were issued Shares pursuant to the Restructuring Exercise, details of which are found on page 65 of this Prospectus.

(9) (Chen Mu-Yuan) is the brother of Mr Pierre Tie-Min Chen. (Chen Mu-Yuan) is a director of Yageo Corporation, our controlling shareholder, and the owner of approximately 0.01% of the issued share capital of Yageo Corporation.

(10) Mr Wei-Hsiang Ke is an ex-employee of our Group. n.m. Not meaningful

The Shares held by our Directors and substantial Shareholders do not carry different voting rights from the New Shares which are the subject of the Invitation.

Save as disclosed above, our Company is not directly or indirectly owned or controlled by another corporation, any government or other natural or legal person whether severally or jointly.

To the best of their knowledge, our Directors are not aware of any arrangements, the operation of which may at a subsequent date result in a change in control of our Company.

61 SELLING SHAREHOLDERS The names of the Vendors and the number of Shares which they will offer (in proportion to their respective shareholding before the Invitation) pursuant to the Invitation are set out below:

No. of Vendor Shares as a % of No. of No. of our pre-Shares Name of Vendors/ Shares held No. of Invitation held Relationship with before the Vendor share after the our Group Address Invitation(1) Shares capital Invitation(1)

Pierre Tie-Min Chen 8th Floor 43,324,665 13,427,665(2) 1.92 29,897,000 Executive Chairman No. 116 Songqin Road Xinyi District Taipei City 110 Taiwan

Investar Semiconductor Leeward One Building 66,339,300 8,295,300 1.19 58,044,000 Substantial shareholder Safe Haven Corporate Centre West Bay Road P.O. Box 31106 Seven Mile Beach Grand Cayman Cayman Islands British West Indies

Lee Hwei-Jan No. 36, Renmin Road 7,139,780 3,731,960 0.53 3,407,820 Wife of Executive Chairman Shihlin District Taipei City 111 Taiwan

Investar Dayspring Room 1201, 12th Floor 20,256,690 2,537,690 0.36 17,719,000 Shareholder No. 333, Section 1 Gilong Road Xinyi District Taipei City 110 Taiwan

Investar Excelsus Leeward One Building, 20,256,690 2,537,690 0.36 17,719,000 Shareholder Safe Haven Corporate Centre West Bay Road PO Box 31106 Seven Mile Beach Grand Cayman Cayman Islands British West Indies

Forefront Venture 1209 Orange Street 15,467,770 1,933,750 0.28 13,534,020 Shareholder Wilmington Delaware 19801 US

Jon-Fwu Hwu No. 2 Lane 15 16,154,945 1,750,945 0.25 14,404,000 Executive Director Dafu Street West Central District Tainan City 700 Taiwan

62 No. of Vendor Shares as a % of No. of No. of our pre-Shares Name of Vendors/ Shares held No. of Invitation held Relationship with before this Vendor share after this our Group Address Invitation(1) Shares capital Invitation(1)

Investar Burgeon Leeward One Building, 10,358,130 1,295,000 0.19 9,063,130 Shareholder Safe Haven Corporate Centre West Bay Road PO Box 31106 Seven Mile Beach Grand Cayman Cayman Islands British West Indies

Sui-Ching Ko Hwu No. 2 Lane 15 5,000,000 875,000 0.13 4,125,000 Wife of Executive Director Dafu Street West Central District Tainan City 700 Taiwan

Notes: (1) Please refer to the footnotes to the table on page 61 for details on the respective Vendors’ direct and deemed interests.

(2) 4,471,575, 4,474,515 and 4,481,575 Shares are sold by Mr Pierre Tie-Min Chen as trustee for Ms Shao-Chiao Chen, Mr Shao-Wei Chen and Ms Shao-Man Chen respectively.

63 MORATORIUM To demonstrate their commitment to our Group, each of Yageo Corporation, Investar Semiconductor, Investar Dayspring, Investar Excelsus, Forefront Venture, Investar Burgeon, Hsu Tai, Hsu Chang Investment, San Tai Investment, Kuo Ding Venture Capital, Kuo Shin Investment, Pierre Tie-Min Chen, Lee Hwei-Jan and Kuo Chung Development have undertaken, save as provided below, not to dispose of, transfer or realise any part of their respective shareholdings in our Company for a period of 6 months commencing from the date of admission of our Company to the Official List of the SGX-ST and in the 6 months thereafter not to dispose of, transfer or realise more than 50 per cent. of their respective interests in our Company immediately after the Invitation.

Lee Hwei-Jan who owns a controlling interest in Hsu Tai and Hsu Chang Investment has given an undertaking that, save as provided below, she will not dispose of, transfer or realise any part of her interest in each of Hsu Tai and Hsu Chang Investment for a period of 12 months commencing from the date of admission of our Company to the Official List of the SGX-ST.

Hsu Tai which owns a controlling interest in each of Hsu Chang Investment and San Tai Investment has given an undertaking that, save as provided below, it will not dispose of, transfer or realise any part of its interest in each of Hsu Chang Investment and San Tai Investment for a period of 12 months commencing from the date of admission of our Company to the Official List of the SGX-ST.

Yageo Corporation which owns the entire issued share capital of each of Kuo Ding Venture Capital, Kuo Shin Investment and Kuo Chung Development has given an undertaking that it will not dispose of, transfer or realise any part of its interest in Kuo Ding Venture Capital, Kuo Shin Investment and Kuo Chung Development for a period of 12 months commencing from the date of admission of our Company to the Official List of the SGX-ST.

Our Executive Directors, Jon-Fwu Hwu and Vincent Chi-Sheng Weng, our Non-Executive Director, Kenneth Chung-Hou Tai, our Executive Officer, Ching-Chiang Chang and an ex-employee, Wei-Hsiang Ke, have each given an undertaking not to dispose of, transfer or realise any part of their respective shareholdings in our Company for a period of 6 months commencing from the date of admission of our Company to the Official List of the SGX-ST.

Liu Wanru, Sui-Ching Ko Hwu and Chen Mu-Yuan have each given an undertaking not to dispose of, transfer or realise any part of their respective shareholdings in our Company for a period of 6 months commencing from the date of admission of our Company to the Official List of the SGX-ST.

During the respective periods stated above, Pierre Tie-Min Chen may transfer his Shares to Lee Hwei- Jan or to any corporation wholly-owned by her and Lee Hwei-Jan may transfer her Shares or interests in Hsu Tai, San Tai Investment and Hsu Chang Investment to Pierre Tie-Min Chen or any corporation wholly-owned by him and Hsu Tai, San Tai Investment and Hsu Chang Investment may transfer their Shares to Pierre Tie-Min Chen or Lee Hwei-Jan or any corporation wholly-owned by them jointly or singly. Any Shares so transferred will be subject to the similar moratorium undertakings stated above.

64 RESTRUCTURING EXERCISE

Our subsidiary, GTC Taiwan, was registered as a public company on 21 March 2000 and its shares were quoted and traded on the Emerging Market of the GreTai Securities Market on 12 December 2002.

The Emerging Market of the GreTai Securities Market was established on 1 January 2002 to facilitate the trading of securities of companies which are public companies but do not qualify for listing on the Taiwan Stock Exchange or the GreTai Securities Market. The Emerging Market was designed as a second board of the GreTai Securities Market, and also as the pre-market for the GreTai Securities Market and the Taiwan Stock Exchange.

The Emerging Market is relatively illiquid. The volume of specific stocks traded over the Emerging Market is generally very limited. Entities that hold shares in companies that are traded on the Emerging Market of the GreTai Securities Market are not allowed under Taiwan Generally Accepted Accounting Principles to record them as short-term investments in their financial statements to reflect their illiquid nature. Our Directors are of the view that the valuation of GTC Taiwan as reflected by the prices of its shares traded on the Emerging Market of the GreTai Securities Market does not represent the fair value of GTC Taiwan. This is one of the reasons why our Company is applying for a listing on the SGX-ST.

On 3 August 2004, our Company entered into a share swap agreement with GTC Taiwan to acquire all the issued and outstanding common shares of GTC Taiwan comprising 139,900,000 shares of NT$10.00 each at a consideration based on the consolidated net tangible assets of GTC Taiwan as at 30 June 2004 (the “Purchase Consideration”). The Purchase Consideration was satisfied by the allotment and issue of an aggregate of 699,500,000 Shares, credited as paid to all the shareholders of GTC Taiwan on 8 April 2005 at an exchange ratio of 5 Shares for every 1 GTC Taiwan share with a par value of NT$10.00 per share. Our Group has obtained all necessary consents and approvals for the completion of the share swap from the relevant Taiwanese governmental or regulatory authorities. The shares of GTC Taiwan ceased to be quoted and traded on the GreTai Securities Market on 24 March 2005 and completion of the share swap took place on 8 April 2005.

Pursuant to the Restructuring Exercise, our Company became the holding company of our Group.

65 GROUP STRUCTURE

Our Group structure following the Restructuring Exercise and the Invitation is shown as follows:

Global Testing Corporation Limited (incorporated in Singapore) 100%

Global Testing Corporation (incorporated in Taiwan)

100% 100% Global Testing Corporation Global Investment Company (incorporated in US) (incorporated in Taiwan)

We do not have any associated companies and the following companies are subsidiaries of our Group:

Paid-in capital / Held Date and Principal Registered beneficially Name of place of place of Principal capital / Issued by our company incorporation business activities share capital Company

Global Testing 24 April 1998 Taiwan Provision of NT$1,399,000,000 100% Corporation Taiwan testing services

Global Investment 14 November Taiwan Investment holding NT$50,000,000 100% Company 2001 Taiwan

Global Testing 16 April 1998 US Provision of US$1,750,000 100% Corporation US marketing and test program development services

66 GENERAL INFORMATION ON OUR GROUP

HISTORY Our Company was incorporated in Singapore on 30 July 2004 as a private company limited by shares under the Companies Act under the name “Global Testing Corporation Private Limited”. On 28 March 2005, our Company was converted to a public company and changed its name to “Global Testing Corporation Limited”.

We can trace our history back to 1997 when our Founders noted that there was a trend for companies to outsource their semi-conductor manufacturing to foundries located in Taiwan. They also noted that the semi-conductor testing capabilities in Taiwan were confined mainly to testing of memory chips. As such, they decided that there were opportunities to provide testing services for non-memory chips.

In April 1998, our Founders incorporated GTC Taiwan to provide testing services in Taiwan. At its establishment, Yageo Corporation, Investar Semiconductor, Chen Mu-Yuan, Kuo Ding Venture Capital, and Jon-Fwu Hwu took a 44.7%, 12.5%, 10.0%, 5.0% and 4.8% interest respectively, while each of Hsu Tai and Hsu Chang Investment took a 4.5% interest, and each of Investar Dayspring, Investar Excelsus and Forefront Venture took a 4.2% interest, in the capital of GTC Taiwan with the remaining 1.4% interest held by 2 individual shareholders. In the same month, we also incorporated GTC US which became a wholly-owned subsidiary of GTC Taiwan to provide marketing and test program development services in the US. This was to ensure that our marketing and test program development activities were located close to our US customers whom we expected to be mainly fabless companies. GTC Taiwan started offering our testing services in October 1998 with 2 testers and approximately 7 employees at our current premises.

On 2 March 1999, we were awarded the ISO 9002:1998 certification for our inspection services for final testing and wafer sorting services.

In August 1999, we were recognised as an approved semi-conductor testing sub-contractor of TSMC, one of the world’s largest independent foundries. At that time, we realised that IDMs and fabless companies were increasingly moving their operations to Taiwan. To increase the investment in our testing services capacity, we converted GTC Taiwan to a public company and increased GTC Taiwan’s paid-in capital from NT$600 million to NT$800 million by issuing 20,000,000 additional new shares of par value NT$10.00 at NT$18.00 per share to the then shareholders of GTC Taiwan, our employees and certain other specific persons in April 2000. In July 2000, we issued 30,000,000 additional new shares of par value NT$10.00 at NT$30.00 per share to our employees and certain other specific persons to further fund our capital expenditures.

In February 2000, we were qualified as a testing sub-contractor of Marvell, a fabless company.

On 14 November 2001, we incorporated Global Investment with a paid-up capital of NT$50 million, to invest in financial instruments with our excess cash.

In April 2002, we qualified as one of UMC's approved testing subcontractor after a trial testing services program that commenced in February 1999. UMC is a leading foundry headquartered in Taiwan.

On 12 December 2002, GTC Taiwan’s shares were quoted and traded on the Emerging Market of the GreTai Securities Market.

In January 2004, Deloitte Touche Tohmatsu, a global professional services organisation named us as one of Asia Pacific’s leading technology companies in the 2003 Deloitte Touche Tohmatsu Asia Pacific Technology Fast 500.

67 On 20 July 2004, we passed the ISO 14001:1996 certification in respect of our environmental management practices and systems for wafer sorting, laser repair, IC test, test program development and burn-in activities. In the same month, we were given an award from Pixelworks, a fabless semi-conductor company that designs, develop and markets System-On-a-Chip semi-conductors, for our outstanding performance.

On 3 August 2004, we entered into a share swap agreement pursuant to which we acquired from the shareholders of GTC Taiwan, the entire issued and outstanding common shares of GTC Taiwan.

In September 2004, we received Marvell’s “Best Sort Partnership” award for Year 2003. In December 2004, we received a vendor appreciation award from UMC in recognition of our outstanding engineering support and consistent service quality, and the “Best Long Term Supplier – 5 Year of Service Excellence” award from Oasis.

In January 2005, we received Marvell’s “Best Sort Partnership” award for the second consecutive year, and an “Outstanding Contribution” award from ALi. In March 2005, we began to provide wafer sorting services in respect of 12 inch (300 mm) wafers for Marvell.

The shares of GTC Taiwan ceased to be quoted and traded on the GreTai Securities Market on 24 March 2005. Upon completion of the share swap agreement on 8 April 2005 as described in the section entitled “Restructuring Exercise” in this Prospectus, our Company became the holding company of our Group.

As part of our testing services, we also provide test program development, conversion and optimisation services, and load board and probe card design and lease our testers to our customers for trial and pilot testing purposes on an ad hoc basis when we have excess capacity or upon request by our customers. For more information regarding our test program development services, please refer to the section entitled “Technology Development” in this Prospectus.

All our testing services are provided in respect of semi-conductors used in consumer electronics and communication devices. Our customers are mainly independent foundries and fabless companies located in Taiwan and the US. In cases where our customers own their wafer fabrication facilities, they will send the wafers and/or packaged semi-conductors to us for testing. Where our customers are fabless companies that do not own wafer fabrication facilities, they will instruct their foundries to deliver the processed wafers and/or packaged ICs to us for testing. Our customers include foundries like TSMC and UMC, and fabless companies like Marvell, ESS Technology Inc. (“ESS”), Cypress Semiconductor Corporation (“Cypress”), PMC-Sierra Inc. (“PMC”) and Sunplus Technology Co. Ltd. (“Sunplus”).

Wafer Sorting Wafer sorting is the testing process that a piece of processed wafer undergoes after it is produced and before it is cut into individual dice to ensure that any defective dice are identified and eliminated. The tests are designed to ensure that the circuitry on the dice are correctly etched, verify that the dice function effectively and provide yield information as a feedback mechanism to assess and improve the wafer fabrication process.

When our customers deliver the processed wafers to our testing facilities, the processed wafers first undergo an initial visual inspection by our quality control section to ensure that they are free of physical defects like scratches and probe marks. Processed wafers that pass the initial visual inspection are then subject to a wafer sort test program that is pre-agreed between our customers and us.

68 Final Testing Final testing is the testing conducted at the final stage of the semi-conductor manufacturing process after the individual die is sawed from the wafer and packaged into a packaged semi-conductor or chip. Final testing encompasses a wide variety of procedures including, amongst others, lead scans to ensure that the chips are free of physical defects, functional tests to ensure that the chips perform to their designed specifications and stress tests to ensure that the chips can withstand the rigorous strains of daily use.

The final testing services that we provide are conducted based on test programs that are agreed to between our customers and us.

The price that we charge our customers for the provision of our wafer sorting and final testing services are based on a pre-agreed time-based charge for the testing of each die or packaged IC. This time- based charge is usually negotiated with our customers in advance and is normally based on the complexity of the test program required. Due to differences in the operational complexity of providing final testing services compared to wafer sorting services, we normally obtain relatively higher revenues from the provision of wafer sorting services than final testing services for each hour that our testers are in operation.

Our Business Focus As our technology development team has extensive experience in this area, the wafer sorting and final testing that we are able to perform are all for logic and mixed signal semi-conductors used in consumer electronics and communication devices.

Mixed signal semi-conductors We provide testing services for mixed signal semi-conductors used in mobile phones, digital television, DVDs, digital cameras, and networking products such as routers and switches.

Mixed signal semi-conductors are semi-conductors that are able to process both digital data as well as analog signals by converting them into digital data and vice versa. Mixed signal semi-conductors are therefore complex and require a combination of good technical expertise and sophisticated test programs in order for us to be able to carry out testing. Customers that we provide mixed signal semi-conductor testing services to include Marvell, ESS, ALi, TSMC and UMC.

Logic semi-conductors We provide testing services for logic semi-conductors used for data processing and office automation products such as photocopiers and printers.

Logic semi-conductors are semi-conductors that are designed to process data by executing instructions in accordance to its design specifications. Customers that we provide logic semi-conductor testing services to include Oasis, PMC, Transmeta Corporation, TSMC and UMC.

TEST FACILITIES AND UTILISATION Our main testing facilities are located in Hsin-Chu, Taiwan, where most of our testers are installed. We currently have approximately 100 testers in Taiwan. All of our equipment are housed in a clean room environment which has been designed to Class 1000 standards and whose temperature and relative humidity is maintained at constant levels. We also have a smaller clean room which is designed to Class 100 standards for customers that require higher standards of contamination control. Our clean rooms are tested fortnightly by our quality assurance department to ensure that they meet the required standards.

GTC US has a smaller testing facility in Sunnyvale, California, where 5 testers are installed that is used primarily for selective test program development and prototype verification with small volume testing.

69 Our utilisation rates for FY2002, FY2003 and FY2004 are as follows:

FY2002 FY2003 FY2004

Utilisation rate 76.7% 49.4% 82.6% Number of testers owned 63 84 89

Note: (1) Utilisation rates are calculated based on the actual number of hours that our testers were in operation in a year divided by the theoretical number of hours that our testers were in operation in the year. The theoretical number of hours is arrived at based on the summation for the four quarters of each year of the number of testers in operation at the end of every quarter multiplied by 720 hours (being the number of hours in each month) multiplied by 3 months.

Our testers are an important element of our business and we work closely with 2 leading vendors, namely Teradyne and Agilent, to supply us with testers.

As at 31 December 2004, we operated 89 testers which included test platforms that provide a fully integrated mixed signal test environment such as semi-conductors used in optical disk drive controllers, CMOS image sensor semi-conductors for applications like digital cameras, and network controller semi- conductors for networking devices like routers and switches. These testers are also capable of testing power management semi-conductors and microprocessor semi-conductors.

In certain cases where a customer has specified a tester that is not widely applicable to the other products that we provide testing services on, or that we do not possess, we require the customer to provide the tester on a consignment basis. As at 31 December 2004, we had a total of 7 testers on consignment from our customers.

QUALITY CONTROL As a testament to our quality commitment, we were awarded the following certifications:

Type of certification Year of award Purpose Expiration date

1 ISO 9002:1994 1999 Inspection services for final March 2002(1) testing and wafer sorting

2 QS9000:1998(1) 1999 Inspection services for final December 2006 testing and wafer sorting

3 ISO 9001:2000 2004 Testing services for March 2008 semi-conductors and related devices

4 ISO 14001:1996 2004 Inspection services for final July 2007 testing and wafer sorting

Note: (1) QS9000:1998 certification is based on, and includes, the ISO 9002:1994 standards. Accordingly, no renewal of the ISO 9002:1994 certification was sought.

Our quality control (“QC”) function is integrated with our testing services operations and consists of 16 employees (“QC employees”) as at the Latest Practicable Date. The QC employees are responsible for ensuring that our testing services meet our internal quality control standards and customer defined test sampling program. The QC employees’ main roles are to, amongst others, perform product incoming, product in-process and final quality control sample testing. All our QC employees have to undergo internal training and certification before commencement of duties.

We have not encountered any significant defects in our testing or conversion software or any malfunction of testers or significant errors which has had a material adverse effect on the business and financial results of our Group in the last 3 financial years.

70 For wafers or packaged ICs received from our customers, our QC section will perform visual inspection on samples of the wafer and packaged ICs and ensure that all accompanying documentation are in order. During the testing process, we will randomly subject the wafers or packaged ICs to separate tests to ensure that they conform to the results of the test programs.

We also have a quality assurance department divided into 2 sections, namely the quality assurance (“QA”) section and the quality system (“QS”) section.

As at the Latest Practicable Date, our QA section comprised 6 employees who are responsible for co- ordinating problems encountered with the test program by our customers.

As at the Latest Practicable Date, our QS section comprised 1 employee who is responsible for managing our quality system. His role includes the control of quality system documentation, and scheduling and conducting internal quality audits to ensure our compliance with our quality standards such as the ISO 9002:1994 and QS9000:1998.

TECHNOLOGY DEVELOPMENT The responsibility for developing test programs lies with our technology development division which is headed by our Director – Technology Development, Mr Bosen Wen-Ching Hsu. Mr Hsu is assisted by a team of approximately 39 employees.

As a testing services company, we provide test program development services for our customers as a service to assist them in reducing the time taken to commercialise their products (commonly known as “time to market”). We are able to achieve this through our knowledge of and experience with different test platforms gained from testing a variety of semi-conductors. We have a library of test programs that we have developed in the past which we are able to leverage on when assisting our customers with their test program development.

We also provide test program conversion services where we assist customers to convert test programs applicable for one test platform to other test platforms. We also provide test program optimisation services where we will work closely with our customers to provide them with solutions to reduce the time taken as well as cost of completing their testing requirements.

We also assist our customers with test result analysis to enable them to isolate and identify issues with semi-conductor design, manufacturing or testing processes so that they can improve on the quality of the semi-conductors produced.

Our research and development costs for FY2002, FY2003 and FY2004 amounted to approximately US$907,000, US$1,067,000 and US$1,319,000 respectively.

SALES AND MARKETING Our sales and marketing team is headed by our President and Chief Executive Officer, Mr Paul Yao-Chou Yang, who is assisted by a sales manager and approximately 10 sales and marketing employees. Each of our sales and marketing employees are assigned specific customer accounts which they are fully responsible for. This method of organising our sales function facilitates the management and control of our customers’ orders from receipt to delivery of services. All of our sales and marketing employees are allocated annual sales quotas and their performance are evaluated on a monthly basis to ensure that they are performing to targets.

To obtain a better understanding of our customers’ requirements, our sales team also solicits feedback from our customers on the latest market developments.

We have also entered into a sales representative agreement with Thousand Oaks Micro Systems, Inc. (“TOMSI”) pursuant to which TOMSI will be our exclusive sales agent for ESS, one of our customers, and use its best efforts to solicit and promote our services to ESS. In return, we will pay TOMSI a commission based on our sales to ESS. The agreement is for a period of 3 years and will terminate on 11 January 2007.

71 INTELLECTUAL PROPERTY Apart from the patents registered in respect of our device for combining supporting boards and spear plates, details of which are set out below, we do not own and have not applied for any patents or trademarks.

Place of issue Date of grant Patent number Expiry date

Taiwan 11 March 2002 188136 11 January 2013

PRC 7 May 2003 ZL 02 2 31071.1 23 April 2012

As at the Latest Practicable Date, our business or profitability is not dependent on any registered trademark, patent or licence or any other intellectual property rights.

TRAINING We believe that our employees are a key component to the success of our business. The training we provide to our employees consist of both in-house training conducted by our own managers and professional trainers, as well as external training where we send our employees to be trained by external organisations.

New employees who join us typically undergo a comprehensive orientation program that, amongst others, introduces our Company, as well as teach specific topics like clean room regulations and labour safety.

From time to time, we provide specific skills enhancement training to our employees to ensure that they are equipped with the necessary skills to perform their job functions effectively. In addition, we provide our employees with professional development training to equip them with skills such as communication skills.

Our managers also undergo a management training program that include topics such as project management, presentation skills and leadership.

MAJOR SUPPLIERS As a semi-conductor testing services company, the largest portion of our purchases in FY2002, FY2003 and FY2004 relates to plant and equipment. Our major suppliers that account for more than 5% of our total plant and equipment expenditure for FY2002, FY2003 and FY2004 are set out below:

Percentage of total plant and equipment purchases (%)

FY2002 FY2003 FY2004

Teradyne 69.6 61.9 40.1 Aegis Semiconductor, Inc. – – 7.1 Spirox Corporation 0.1 7.7 0.1 Megalith Technology, Inc. – 6.3 0.3 GE Global Electronics Solutions Limited – 5.1 – Agilent 13.3 5.1 32.7 Kanematsu Corporation 8.4 – 2.0 Hauman Technology Corp. – 1.3 8.9

Agilent and Teradyne supply us with testers. Agilent and Teradyne are companies listed on the New York Stock Exchange, and are leading suppliers of testers for logic and mixed signal semi-conductors.

None of our Directors, Executive Officers, controlling shareholder or substantial shareholders has an interest (direct or indirect) of 5% or more of any of the above-mentioned major suppliers.

72 MAJOR CUSTOMERS The following are our customers who accounted for 5% or more of our revenue in FY2002, FY2003 and FY2004:

Percentage of total sales (%)

FY2002 FY2003 FY2004

ALi 0.1 2.5 8.4 Jetek Technology Corp. (“Jetek”) – – 6.6 Marvell 8.7 22.8 20.3 MediaTek Inc. (“MediaTek”) 17.1 8.1 0.6 Oasis 11.0 3.9 5.5 PMC 12.8 14.3 11.1 TSMC 27.2 16.2 21.6 UMC 9.6 18.8 14.6

For FY2004, the above major customers in aggregate accounted for approximately 88.7% of our revenue.

ALi and MediaTek are Taiwan-based fabless companies while Marvell and Oasis are US-based fabless companies specialising mainly in analog, mixed-signal and digital signal processing integrated circuits, and office automation semi-conductors, respectively. Jetek is a Taiwan-based company specialising mainly in program development, tester modification and sale of modified testers.

TSMC and UMC are foundries based in Taiwan. PMC is a fabless company based in the US.

TSMC holds 97.09% interest in the issued capital of Investar Semiconductor, our substantial Shareholder, through its wholly-owned subsidiary, TSMC International Investment Ltd.

None of our Directors, Executive Officers, controlling shareholder or substantial shareholders has an interest (direct or indirect) of 5% or more in any of the above-mentioned major customers.

As at the Latest Practicable Date, our business or profitability is not materially dependent on any industrial, commercial or financial contract (including a contract with a customer or supplier) or any new manufacturing process.

Credit Policy To Our Customer All of our sales are made on credit terms. We usually grant our customers credit term ranging from 30 to 90 days, depending on the type and size of the customers’ orders and the credit standing of the customers. We review our debtors’ collectibility regularly and in accordance to our credit management policy, make provisions for doubtful debts based on debtors’ aging and specific provision for certain doubtful debts when we are of the view that collectibility of the outstanding debts are doubtful.

Our provision for doubtful debts and average debtors turnover days for FY2002, FY2003 and FY2004 are as follows:

FY2002 FY2003 FY2004

Provision for doubtful debts (US$’000) 73 45 42 Debtors turnover (days) 87 97 74

73 The ageing schedules for our trade receivables as at 31 December 2004 of approximately US$9.17 million are as follows:

As at (US$’000) 31 December 2004

Less than 60 days : 5,670 Between 61 and 90 days : 2,716 Between 91 and 120 days : 418 Over 120 days : 363

From FY2002 to FY2004, our trade debtors’ turnover remained fairly consistent and ranged from 74 to 97 days.

As at the Latest Practicable Date, approximately 97.3% of our trade receivables as at 31 December 2004 was collected.

COMPETITION We believe that the semi-conductor testing services industry is specialised. Companies in this industry will be required to possess specialised knowledge of test platforms and test programs, offer fast turnaround time, and have established relationships with customers to be successful. In addition, many of our competitors also engage in the provision of assembly services as a natural extension of the testing services they are already providing.

As a company engaged only in the provision of testing services for mixed signal and logic semi- conductors, we consider King Yuan Electronic Corporation, Ardentec Corporation and Winstek Semiconductor Corporation to be our closest competitors in Taiwan.

While we are not aware of any companies engaged solely in the provision of testing services in Singapore, we consider United Test and Assembly Center Ltd and STATS ChipPAC Ltd to be our competitors.

In addition, we may face competition from the internal testing resources of our foundry customers if these customers choose to reduce the amount of testing outsourced to us.

Even though we operate in a highly competitive environment, we believe that our competitive strengths will distinguish us from our competition.

COMPETITIVE STRENGTHS We have identified the following as our key competitive strengths:

We have a highly qualified and experienced management and engineering team to provide quality test program development, conversion and optimisation services We have an experienced management team that comprise individuals who have worked in the semi- conductor industry in areas such as administration, operations, technology development, marketing and financial management. For more information on our senior management team, please refer to the section entitled “Directors, Management and Staff” beginning on page 81 of this Prospectus.

74 We have strong engineering capabilities to provide wafer sorting and wafer testing services with more stable and higher yield results We believe that we are one of the largest independent testing services company in Asia-Pacific to provide wafer sorting services for mixed signal and logic semi-conductors. We are able to handle more than 32,000 pieces of wafers each month and the experience gathered from providing wafer sorting services in such volumes has provided us with the ability to anticipate and deal with a wide range of potential wafer sorting issues. This allows us to provide our customers with effective solutions when faced with such issues.

We believe that our strong engineering capability and our operators’ and maintenance staff’s in-depth knowledge of our testing platforms allows us to have a good understanding of the technologies that are used in providing testing services. This in turn has enabled us to maintain high and more stable yields as evidenced by feedback from our customers.

In July 2004, we were given an award from Pixelworks for our outstanding performance and in September 2004, we received the Marvell’s “Best Sort Partnership” award for Year 2003. In December 2004, we received a vendor appreciation award from UMC in recognition of our outstanding engineering support and consistent service quality, and the “Best Long Term Supplier – 5 Years of Service Excellence” from Oasis.

In January 2005, we received Marvell’s “Best Sort Partnership” award for the second consecutive year as well as an “Outstanding Contribution” award from ALi.

75 PROPERTIES AND FIXED ASSETS We own the following properties which we use for our operations:

Gross Built-up Net Book Value as Location / Description Area Tenure at 31 December 2004 Use of Property

2nd and 3rd Floor, and the 8,137.3 sq m Freehold US$7.8 million(2) House our testing related common areas facilities, storage, No. 75 Guangfu Road ancillary office and other Hsin-Chu Industrial Park ancillary use Hu-Kou Hsin-Chu County 303 Taiwan (1)

Notes: (1) We have mortgaged the property to Ta Chong Bank Ltd to secure loans of up to NT$164,140,000 for a term from 9 May 2005 to 8 May 2055.

(2) Comprises freehold land of US$1,853,000 and building amounting to US$682,000 and furniture and fittings of US$5,305,000 including equipment fittings.

We also lease the following properties which we use for our operations:

Gross Lease Location / Description Area Period / Rent Lessor Use of Property

Basement and 1st floor 525 sq m 1 April 2004 – Mechanical equipment No. 75 Guangfu Road 31 March 2007 / room, staff canteen and Hsin-Chu Industrial Park NT$72,200 per month (“Lam Soon bonded warehouse Hu-Kou Industries Inc.”) Hsin-Chu County 303 Taiwan

1st floor 192 sq m 1 February 2005 – Lam Soon Mechanical equipment No. 75 Guangfu Road 1 February 2007 / Industries Inc. room Hsin-Chu Industrial Park NT$29,000 per month Hu-Kou Hsin-Chu County 303 Taiwan

3rd floor 565 sq m 1 June 2004 – Lam Soon Offices No. 77 Guangfu Road 31 May 2007 / Industries Inc. Hsin-Chu Industrial Park NT$73,530 per month Hu-Kou Hsin-Chu County 303 Taiwan

4th floor 364 sq m 1 August 2005 – Lam Soon Offices No. 77 Guangfu Road 31 July 2007 / Industries Inc. Hsin-Chu Industrial Park NT$47,300 per month Hu-Kou Hsin-Chu County 303 Taiwan

1st, 2nd and 3rd floors 231.4 sq m 1 June 2004 – Staff quarters No. 19 Jui An Street 31 May 2006 / (Lin Mei Zhen) Hsin-Feng NT$15,000 per month Hsin-Chu County 303 Taiwan

1st, 2nd and 3rd floors 214.8 sq m 1 June 2004 – Staff quarters No. 3, 29 Lane 31 May 2006 / (Lin Mei Zhen) Jui An Street NT$18,000 per month Hsin-Feng Hsin-Chu County 303 Taiwan 76 Gross Lease Location / Description Area Period/Rent Lessor Use of Property

Basement and space in 137.2 sq m 8 April 2005 – Panther Electrical power front of the door on 7 April 2013 / Technology room 1st floor NT$14,525 per month(1) Co. Ltd. No. 32-1 Guangfu Road Hsin-Chu Industrial Park Hu-Kou Hsin-Chu County 303 Taiwan

4th floor 2,215 sq m 8 April 2005 – Panther Office and factory No. 32-1 Guangfu Road 7 April 2013 / Technology Hsin-Chu Industrial Park NT$268,000 per month(2) Co. Ltd. Hu-Kou Hsin-Chu County 303 Taiwan

1st floor One unit 1 October 2004 – Yageo Office No. 100 Section 5 31 December 2005 / Corporation(3) Hsin Yi Road NT$8,000 per month Taipei City Taiwan

1360 Bordeaux Drive 12,000 sq ft 28 January 2002 – AMB Office and testing facility Sunnyvale, California 31 May 2007 / Property, CA94089, US US$9,600 per month L.P.

Notes: (1) No rental charges are payable for the first 18 months in lieu of dismantling expenses.

(2) No rental charges were paid for the first 3 months due to the renovation of the premise.

(3) The rental rate was arrived at based on the market price for comparable units.

GOVERNMENT REGULATIONS We have obtained the necessary business licences for our day-to-day operations. Save as disclosed in this section below, we are not subject to any government regulations in the countries in which we operate, other than those generally applicable to companies and businesses in such countries, which will have a material effect on our business operations.

In Taiwan There is no special permit or governmental approval required for entry into the wafer sorting and testing services or for operating a wafer sorting and testing company in Taiwan, except that the business must comply with relevant corporate and/or factory laws and regulations. However, under the current out- bound investment restrictions in Taiwan, investment in wafer sorting and testing in the PRC is prohibited. Therefore, Taiwanese companies, including GTC Taiwan and Global Investment, and individuals are prohibited from investing, directly or indirectly, in wafer sorting and testing in the PRC.

As wafer sorting and testing is deemed a high-technology industry targeted for development by the Taiwan government, such businesses are qualified for certain tax incentives. Tax credit and/or five-year tax free benefits are available if an investment in the company can qualify as an investment in a “new and important strategic industry” under the Statute for Upgrading Industries. An investment in a company need not satisfy the requirements for new and important strategic industry under the Statute for Upgrading Industries unless it wishes to obtain such tax benefits. If an investment in GTC Taiwan or Global Investment qualifies as an investment in a “new and important strategic industry” under the Statute for Upgrading Industries, GTC Taiwan or Global Investment, as the case may be, may obtain a five-year tax holiday for their respective qualified income. To this extent, GTC Taiwan has been granted a 5-year exemption from business income tax on qualifying income starting from FY2004. For more information, please refer to the risk factor entitled “We may be subject to higher tax charges owing to the expiry of tax incentives enjoyed by our Taiwan subsidiary” on page 30 of this Prospectus.

77 In the US Our US subsidiary is subject to a wide variety of federal and state laws which are generally applicable to companies and businesses operating in the US and in the State of California. These include laws and regulations governing public health and safety, workplace health and safety, and exports of technology, goods and services.

Laws and regulations governing public health and safety include laws and regulations affecting air, water, pollution, pesticides, wastes and the storage, use and disposal of hazardous materials and substances, inter alia, the Comprehensive Environmental Response Compensation and Liability Act, the Clean Air Act, the Federal Water Pollution Control Act, the Solid Waste Disposal Act, the Federal Insecticide, Fungicide and Rodenticide Act and the California Safe Drinking Water and Toxic Enforcement Act, which are generally administered by the California Environmental Protection Agency and the U.S. Environmental Protection Agency. In general, such public health and safety laws and regulations are intended to prevent the discharge or release of hazardous substances into the soil, groundwater, and/or air; to regulate the use, storage, management, transport, and disposal of hazardous substances and waste; and to provide for regulatory oversight of environmental management and cleanup activities. Therefore, in relation to the facilities in the US, GTC US would be required to avoid accidental discharges or releases of hazardous materials or wastes; conduct any activities relating to hazardous materials in compliance with current standards or practice; obtain permits for certain activities relating to such materials; keep and maintain comprehensive records and documentation of the use, storage, and transport of hazardous materials and waste; post warnings regarding the risk of exposure to certain chemicals and materials; report all spills or releases of hazardous materials to local, state, and/or federal agencies or authorities; and to investigate and remediate any contamination resulting from the activities conducted on or by that facility or site.

Laws and regulations governing workplace health and safety are generally administered by the California Division of Occupational Safety and Health and the U.S. Department of Labor Occupational Safety & Health Administration. In general, such workplace health and safety laws and regulations require GTC US to post notices to employees; avoid discrimination in hiring, evaluating, and terminating employees; confirm employees’ eligibility to work in the US; create and maintain personnel records and employment- related documents, and retain those documents for varying durations of time during and following an individual’s employment; comply with wage and hour laws, including paying minimum wage, paying overtime compensation to eligible employees, and maintaining records of hours worked; comply with employee leave laws for such things as work related injuries, pregnancy, and other legally-mandated reasons to provide time off from work or accommodate employees regarding their work schedules or duties; maintain a safe workplace; and, prevent and remedy harassment and discrimination based on race, sex, national origin, age, disability, and other protected classifications.

Laws and regulations governing exports of technology, goods and services may be administered by one or more U.S. federal agencies, depending on the classification of such items, including the U.S. Department of Commerce’s Bureau of Industry and Security (“US BIS”) and the U.S. Department of State’s Directorate of Defense Trade Controls. In general, such export laws and regulations regulate the export and re-export of commercial items including "dual-use" items which have both commercial and military or proliferation applications, and defense articles and services. Regulated items include commodities, software or technology, such as circuit boards, blueprints, design plans, and technical information. In the event that GTC US intends to export semi-conductors that are regulated by the US BIS due to the semi-conductors' technical characteristics, the destination of such exports and the end- user and/or the end use, GTC US would have to apply to the US BIS for an export licence unless an exception is available.

INSURANCE We maintain insurance against fire, earthquake, typhoon and flood covering losses of certain fixed assets and our customers’ wafers and ICs and public liability with policy specifications and insured limits in line with normal commercial practice in Taiwan. In addition, we maintain marine, air and inland cargo transportation insurance against damage in respect of the customers’ products that we handle. GTC US also maintains insurance covering property, general liability, automobile and terrorism in the US.

78 We believe we maintain adequate insurance coverage for our business and industry. All insurance coverage is obtained at market rates from independent insurance companies.

PROSPECTS Our Directors believe that we will continue to enjoy growth in the foreseeable future because of the following reasons:

Continued outsourcing of testing services In the past, semi-conductor testing service was deemed as a relatively unimportant part of the overall semi-conductor manufacturing process and was mostly provided in-house by IDMs. However, as the designs of semi-conductors became more complex with more functionality and features, the testing function became increasingly important as a means to ensure that the semi-conductors worked properly. As a result of the increased importance and complexity of the testing function, the higher capital requirements and specialised engineering expertise needed to provide testing services became more pronounced.

We believe that the growth in the outsourcing trend will be a significant driver for our business.

Increased complexity of semi-conductors We believe that the increasing functional density and integration of semi-conductors in consumer electronics and communication devices like mobile phones, digital television, DVD machines, digital cameras and networking products, and therefore semi-conductors that are found in these devices like the System-on-a-Chip will create opportunities for us to provide our testing services. This will be driven by the trend for increased mobility and functionalities of such devices.

Due to generally unfavourable and difficult market conditions in the semi-conductor industry, we expect our Group’s net profit to be significantly lower year-on-year for the first half of FY2005 as compared with that of the previous corresponding half-year. Assuming that there is no significant decrease in global demand for communications and consumer electronic devices from current level, our Directors remain confident of the prospects of our Group for FY2005.

79 STRATEGIES AND FUTURE PLANS It is our corporate philosophy to provide testing services with particular emphasis on speed, reliability and with accountability to our customers and to capitalise on our competitive strengths.

The salient points of our business strategy are as follows:

We intend to adopt an even more focused sales strategy We intend to focus our sales efforts towards the provision of wafer sorting of mixed signal semi- conductors to fabless companies and IDMs as we typically enjoy better margins in respect of these testing services that we provide. We will therefore be promoting our capabilities in providing wafer sorting services for mixed signal semi-conductors on test platforms (like Teradyne’s Catalyst and J750, and Agilent’s 93000) that we are familiar and have technical expertise in.

To support the expected increase in demand for such services, we intend to utilise approximately S$13 million of our proceeds from the issue of the New Shares to expand our existing factory premises and purchase additional testers and also embark on a retooling program to selectively replace the test handlers used in final testing with test probers used in wafer sorting.

To cater to the demands from our existing and potential new customers for the testing of 12 inch (300 mm) wafers, we intend to utilise approximately S$13 million of our proceeds from the issue of the New Shares to purchase new factory premises, plant and equipment such as wafer sorters, test handlers and test probers, and construct ancillary facilities so as to handle this demand in Taiwan.

We intend to expand or set up separate facilities We intend to expand and set up separate facilities in Taiwan or overseas when it is commercially or legally feasible for us to do so. These may include the setting up of additional separate facilities to provide testing services in respect of more specialised semi-conductors. We intend to utilise approximately S$21 million of our proceeds from the issue of the New Shares for this purpose.

80 DIRECTORS, MANAGEMENT AND STAFF

MANAGEMENT REPORTING STRUCTURE

Board of Directors

Executive Chairman Pierre Tie-Min Chen

President and Chief Executive Officer Paul Yao-Chou Yang

Chairman, GTC US Jon-Fwu Hwu

Director – Technology Director – Administration Director – Operations Chief Financial Officer Development Vincent Chi-Sheng Ching-Chiang Chang Yao-Tsu Wang Bosen Wen-Ching Hsu Weng

81 DIRECTORS Our Board of Directors is entrusted with the responsibility for the overall management of our Group. Our Directors’ particulars are listed below:

Name Age Address Occupation

Pierre Tie-Min Chen 48 8th Floor Executive Chairman No. 116 Songqin Street Xinyi District Taipei City 110 Taiwan

Paul Yao-Chou Yang 36 10th Floor-2 President and Chief Executive No. 279 Liufu Road Officer Luzhu Shiang Taoyuan County 338 Taiwan

Jon-Fwu Hwu 54 No. 2 Lane 15 Executive Director / Chairman, Dafu Street GTC US West Central District Tainan City 700 Taiwan

Vincent Chi-Sheng Weng 34 9th Floor Director - Administration No. 7-1 Shih-Shang Rd Shilin District Taipei City 111 Taiwan

Kenneth Chung-Hou Tai 55 No. 92 Jingshan Road Chairman, InveStar Capital, Inc. Shilin District Taipei City 111 Taiwan

Wheng-Jing Kuan 43 8th Floor Executive Chairman, No. 288 Section 1 SmartASIC Technology, Dunhua South Road Inc. Da-an District Taipei City 106 Taiwan

Chan Wai Meng 52 159 Thomson Ridge Company director Singapore 574735

Chia Soon Loi 49 11 Nathan Road Company director Regency Park #11-01 Singapore 248732

Sunny Wong Fook Choy 49 70 Jalan Simpang Bedok Advocate and Solicitor Singapore 488205

82 Information on the business and working experience of our Directors is set out below:

Mr Pierre Tie-Min Chen was appointed our Executive Chairman on 30 August 2004. Mr Chen is responsible for overseeing the overall strategic direction of our Group. Mr Chen is also chairman of Yageo Corporation where he has worked since 1983 rising from the position of president responsible for Yageo Corporation’s business operations to chief executive officer responsible for the corporate strategy of Yageo Corporation to his current designation of chairman. Mr Chen holds a Bachelor of Engineering degree from the National Cheng Kung University .

Mr Paul Yao-Chou Yang was appointed our President and Chief Executive Officer on 30 July 2004. Mr Yang is responsible for the overall operations and execution of our Group’s business strategies. In addition, Mr Yang also oversees our sales functions. Prior to joining our Group in March 2004, Mr Yang was the general manager for the Automatic Test Group in Agilent where he was responsible for its sales and marketing and its business operations for the PRC and South Korea market from September 1999 to February 2004. From July 1993 to September 1999, Mr Yang was a manager at Hewlett Packard in Taiwan where he was responsible for the sales and marketing operations of its Test and Measurement Organisation. Mr Yang holds a Bachelor degree and Masters degree in Engineering from National Cheng Kung University .

Mr Jon-Fwu Hwu was appointed our Executive Director on 27 August 2004. Mr Hwu is also Chairman of GTC US where he is responsible for the strategic development of GTC US. Mr Hwu has served in various capacities in our Group including Vice Chairman, Chief Executive Officer and Executive Vice President of GTC Taiwan and Chairman of GTC US. Prior to founding our business in 1998, he worked for several companies in the semi-conductor industry including KLA-Tencor Corporation from October 1989 to April 1998 as manager responsible for design work on inspection equipment, and National Semiconductor Corporation from October 1984 to October 1989 as a Technical Specialist responsible for the design and testing of semi-conductors. Mr Hwu holds a Masters of Science degree in Electrical Engineering from Santa Clara University, and a Masters of Engineering degree from Utah State University.

Mr Vincent Chi-Sheng Weng was appointed our Executive Director on 22 November 2004. Mr Weng heads the Administration division and is responsible for, among others, our administration, corporate development and management information technology functions. Prior to joining our Group in June 2003, Mr Weng was a manager at Yageo Corporation from March 2000 to May 2003. From May 1999 to February 2000, he was a senior specialist at the Investment Department of Taiwan Life Insurance Co. Ltd., part of the team responsible for investments. From August 1997 to April 1999, he worked at the Investment Department at Wan Sheng Securities Limited involved in the trading of securities. Mr Weng holds a Bachelor degree in Public Administration from the National Chengchi University .

Mr Kenneth Chung-Hou Tai was appointed our Non-Executive Director on 30 August 2004. Mr Tai is currently chairman of InveStar Capital, Inc., DigiTimes Publications Inc. and Chief Telecom, Inc. In addition, Mr Tai sits on the board of directors of various public listed companies in Taiwan. Between 1975 and 1998, Mr Tai has held senior positions in technology companies like UMAX Technologies, Inc., InterNex Information Services, Inc. and the Acer Group where he was responsible for, inter alia, the sales and marketing strategy for the US market. Mr Tai holds a Masters in Business Administration from TamKang University and a Bachelor of Science degree in Electrical Engineering from National Chiao Tung University .

Mr Wheng-Jing Kuan was appointed our Independent Director on 5 January 2005. Mr Kuan is the founder and executive chairman of SmartASIC Technology, Inc. (“SmartASIC”), a fabless semi-conductor company whose shares are quoted on the Emerging Market of the GreTai Securities Market. Prior to founding SmartASIC, Mr Kuan was also the co-founder and vice-president of Worldwide Sales and Marketing at NeoParadigm Labs, Inc. from 1996 to 1997. From 1990 to 1996, Mr Kuan held various positions at WYSE Technology, Inc., starting out as a market planning manager at their San Jose office and rising to vice president and general manager of Worldwide Monitor Business at their Taiwan office.

83 Mr Kuan holds a Doctor of Philosophy and a Masters of Science degree in Chemical Engineering from the Leland Stanford Junior University, as well as a Bachelor of Science degree in Chemical Engineering from the National Cheng Kung University .

We have, in the past, provided testing services to SmartASIC amounting to approximately US$21,000, the value of which were determined on an arms length basis. In addition to being chairman and chief executive officer, Mr Kuan is also a shareholder with an approximately 3.86% interest in SmartASIC. Our Directors are of the view that the value and nature of the past transactions between our Group and SmartASIC are not significant and will not affect the independence of Mr Kuan.

Mr Chan Wai Meng was appointed as an Independent Director by our Board on 19 January 2005. He has over 25 years of working experience in finance, corporate planning and sales and marketing. Mr Chan has worked in various financial positions in a public accounting firm, a financial institution and an electronic manufacturing company. He has also been involved in the start-up of the business of a local software company in the capacity of a financial officer. From 1985 to 2003, he served in various management positions in Singapore Pools (Private) Limited, and was their chief operating officer from 1998 to 2003. He is currently the executive director of the Singapore Cancer Society, a voluntary welfare organisation. Mr Chan holds a Bachelor degree in Accountancy from the University of Singapore, and has been a member of the Institute of Certified Public Accountants of Singapore for over 20 years.

Mr Chia Soon Loi was appointed as an Independent Director by our Board on 17 November 2004. Mr Chia is the non-executive chairman of ASJ Holdings Limited, a company listed on the SGX-ST. He has more than 25 years experience in the electronics industry as the founder and director of Cony Electronics (S) Pte Ltd since 1977, as well as extensive experience in the food and beverage industry.

Mr Chia also serves on the board of several other companies in Singapore and overseas both in the electronics and non-electronics industries.

Mr Sunny Wong Fook Choy was appointed as an Independent Director by our Board on 22 March 2005. He is a practicing advocate and solicitor of the Supreme Court of Singapore. He started his legal career in 1982. He is currently the Managing Director of Wong Tan & Molly LLC. He holds a Bachelor of Laws (Honours) degree from the National University of Singapore.

The list of present and past directorships of each Director over the last 5 years, excluding those held in our Company, is set out below:

Name Present Directorships Past Directorships

Pierre Tie-Min Chen Group Companies Group Companies Global Investment GTC US GTC Taiwan

Other Companies Other Companies (Kuo Chung (Chilisin Electronics Development) Corporation) (Kuo Ding (Far Eastern Air Transport Venture Capital) Corporation) (Kuo Shin Investment) (Tait Marketing & (Li Tai Investment Ltd) Distribution Corporation) (Taiwan Cellular (Teapo Electronics Corporation) Corporation) ASJ Holdings Limited (Yi Tai Investment Ltd) ASJ Pte Ltd Scan Technology (S) Pte Ltd Yageo Corporation Yageo Holding (Singapore) Pte Ltd

84 Name Present Directorships Past Directorships

Luminary International Ltd Rancher International Ltd Steller Inc. Vitrohm Holdings GmbH Yageo Holding International Ltd Yageo Holdings (Bermuda) Limited

Paul Yao-Chou Yang Group Companies Group Companies GTC Taiwan Nil GTC US

Other Companies Other Companies Nil Nil

Jon-Fwu Hwu Group Companies Group Companies GTC Taiwan Nil GTC US

Other Companies Other Companies Nil Nil

Vincent Chi-Sheng Group Companies Group Companies Weng GTC US Nil

Other Companies Other Companies Nil Nil

Kenneth Chung-Hou Group Companies Group Companies Tai GTC Taiwan Nil

Other Companies Other Companies

Sage, Inc. World Peace Industrial Co., Ltd.

(InveStar Capital (Taiwan), Inc.)

85 Name Present Directorships Past Directorships

Allied Material Technology Corporation AltiGen Communications, Inc. Chief Telecom, Inc. D-Link Corporation Investar Burgeon InveStar Capital, Inc. Investar Excelsus Chiao-Tung University Alumni Association in America

Wheng-Jing Kuan Group Companies Group Companies GTC Taiwan Nil

Other Companies Other Companies Helix Technology Inc. Premier Micorelectronics Sales Inc. Hitron Technology Inc. UltraChip, Inc. SmartASIC Technology, Inc.

Chan Wai Meng Group Companies Group Companies Nil Nil

Other Companies Other Companies CG Technologies Holdings Limited Paradiz Investments Ltd China Paper Holdings Limited Pine Agritech Limited Scottish & Oriental Estates Ltd

Chia Soon Loi Group Companies Group Companies Nil Nil

Other Companies Other Companies ASJ Components Inc. The Oaks Cigars Pte Ltd ASJ Components (M) Sdn Bhd Zanstad Pte Ltd ASJ Holdings Limited ASJ (Hong Kong) Limited ASJ Pte Ltd ASJ (Shenzhen) Pte Ltd Cony Electronics (S) Pte Ltd Kingsward Investment Limited Led Electronics (S) Pte. Ltd. Popular Way Sdn Bhd Scan Components (M) Sdn Bhd Scan Electronics (S’pore) Pte. Ltd. Scan Technology (S) Pte Ltd The Oaks Grill & Bar Pte Ltd The Oaks Cellars Pte Ltd

Sunny Wong Fook Group Companies Group Companies Choy(1) Nil Nil

Other Companies Other Companies Advanced Integrated Manufacturing Nil Corp. Ltd. Excelpoint Technology Ltd. Wong Tan & Molly Lim LLC WTML Management Services Pte Ltd

Note: (1) Companies in which Mr Sunny Wong Fook Choy was appointed as director for the purpose of incorporation as nominee director only and in the course of his professional practice have not been included.

86 EXECUTIVE OFFICERS The particulars of our Executive Officers are set out below:

Name Age Address Position

Ching-Chiang Chang 45 No. 60, Lane 486 Director - Operations Ming Hu Road Hsin Chu City 300 Taiwan

Bosen Wen-Ching Hsu 37 5F-2, No. 12, Lane 55 Director – Technology Development ChaoJhon St. Da-An District Taipei, 106 Taiwan

Yao-Tsu Wang 39 6F, No. 10 Alley 482 Chief Financial Officer Sung-Shan Road Taipei, 110 Taiwan

Information on the business and working experience of our Executive Officers is set out below:

Mr Ching-Chiang Chang is our Director – Operations and is responsible for all of our operations including manufacture, engineering and quality control. Prior to joining our Group in April 2003, he held various positions from February 2001 to April 2003 at Toppoly Optoelectronics Corp., a company that manufactures low temperature poly silicon displays, rising from a manager in charge of the module operation division to the director of the Operation Center in Taiwan and the PRC. From July 1992 to February 2001, Mr Chang worked at TSMC rising to manager responsible for outsourced production.

Mr Chang holds a Bachelor of Industrial Engineering degree from Chung Yuan Christian University .

Mr Bosen Wen-Ching Hsu is our Director – Technology Development and is responsible for our technology development. Prior to joining our Group in March 2004, he was senior manager at DEK Printing Machines Limited, a semi-conductor packaging system company, responsible for business development and project coordination from March 2003 to March 2004. From November 1999 to March 2003, Mr Hsu worked for Agilent Technologies, Inc. as director of the Greater China region responsible for the Application Engineering Team, and from November 1997 to October 1999 for Hewlett Packard’s semi-conductor testing unit in Taiwan as district manager also responsible for the Application Engineering Team. From August 1994 to November 1997, Mr Hsu was a senior engineer at Macronix International Co., Ltd., a semi-conductor manufacturing company.

Mr Hsu holds a Masters of Science degree in Electrical Engineering from Northeastern University, and an Associate Bachelor degree from the National Taipei University of Technology .

Mr Yao-Tsu Wang is our Chief Financial Officer and is responsible for our financial and accounting functions. Prior to joining our Group in March 2005, he was the department director and head of billing at Taiwan Fixed Network Co., Ltd., a telecommunications service provider, responsible for billing of and collections from customers, settlements with foreign telecommunication service providers, credit control and risk management from February 2001 to February 2005. From November 1999 to January 2001, Mr Wang worked for Ecorpserv Co., Ltd. as Chief Financial Officer responsible for among others, fund raising and budgeting. From January 1999 to November 1999, he was financial manager at Yageo Electronic (China) Co., Ltd.. From April 1997 to December 1998, Mr Wang was assistant accounting manager at Lite-On Electronics Co., Ltd.. Prior to that, Mr Wang worked at TECO ( ) from September 1996 to February 1997, TN Soong & Co. from July 1994 to August 1996, and was an accountant at Bleema Manufacturing Co., Ltd. from September 1992 to June 1994.

87 Mr Wang holds a Masters in Business Administration Degree in Accounting from the City University of New York’s Bernard M. Baruch College, a Bachelor of Economics Degree from Soochow University , and is a member of the American Institute of Certified Public Accountants.

None of our Executive Officers has any present and past directorships over the past 5 years.

To support the management in the discharging of their financial reporting responsibilities and obligations, our Company has undertaken to engage an independent external auditor to:

(i) conduct a full review on the internal controls of our Group each year for three financial years from the date of listing and to report its findings to the SGX-ST; and

(ii) provide advice to our Group in respect of our financial reporting in accordance with the Singapore Financial Reporting Standards for at least one financial year from the date of listing. Should the appointment of such independent external auditor be subsequently terminated within a year of the date of listing, our Company would appoint a replacement of a similar standing. Should the appointment of the independent external auditor be terminated after a year from the date of listing, our Audit Committee will provide a confirmation to the SGX-ST that our Group’s accounting function has sufficient experience and expertise to satisfy our financial reporting obligations.

Our Independent Director, Mr Chia Soon Loi has been a director of Scan Technology (S) Pte Ltd ("Scan Technology") since 1988. From the date of incorporation of Scan Technology until 1996, Mr Chia Soon Loi was also a substantial shareholder of Scan Technology. From 1988 to around 2002, Scan Technology had been distributing resistors for Yageo Corporation (“Yageo”), our controlling shareholder. Scan Technology is no longer a distributor of Yageo's products but continues to transact with Yageo in respect of the purchase of Yageo's products for its own consumption or for re-packaging to be sold under its own brand. However the quantum of such transactions is insignificant.

Our Executive Chairman, Mr Pierre Tie-Min Chen is also executive chairman and a shareholder of Yageo, a company engaged in the manufacture and distribution of passive components based in Taiwan and listed on the Taiwan Stock Exchange.

In 1994, Scan Technology and Yageo decided to jointly acquire ASJ Pte Ltd, a resistor manufacturer in Singapore. Pursuant to a restructuring exercise which was carried out for the purposes of its listing, ASJ Holdings Limited (“ASJ Holdings”) was set up in March 1996 to acquire, inter alia, ASJ Pte Ltd and Scan Technology. ASJ Pte Ltd and Scan Technology are wholly-owned subsidiaries of ASJ Holdings.

Both Mr Chia and Mr Pierre Tie-Min Chen serve on the board of ASJ Holdings as non-executive chairman and non-executive director respectively, and are also substantial shareholders of ASJ Holdings. Mr Chia and Mr Chen have been directors of ASJ Holdings since 1996 and 1997 respectively.

Save for the aforesaid, there is no other business relationship between Mr Chia and Mr Chen as made known to the Audit Committee. Our Directors and our Audit Committee (other than Mr Chia), having considered:

(i) that Mr Chen has executed a statutory declaration confirming, inter alia, that apart from being co- investors in ASJ Holdings and co-directors of ASJ Holdings and the Company, he and Mr Chia do not have any other business relationship;

(ii) that Mr Chia has executed a statutory declaration confirming, inter alia, that he is not aware of any arrangement or relationship that will compromise his independence as a director of the Company; and

(iii) the information available to the Audit Committee, are of the view that the nature of the past and current relationship between Mr Chia and Mr Chen does not affect Mr Chia's independence.

88 Save as disclosed in the section entitled “Shareholders” of this Prospectus, none of our Directors and Executive Officers are related by blood or marriage to one another nor are they so related to any substantial shareholder of our Company. To the best of our knowledge and belief, there are no arrangements or undertakings with any substantial Shareholders, customers, suppliers or others, pursuant to which any of our Directors and Executive Officers was appointed.

REMUNERATION The compensation paid to our Directors and our Executive Officers for services rendered to us and our subsidiaries on an individual basis and in remuneration bands during FY2003, FY2004 and expected to be paid for the current financial year is as follows:

Names FY2003(1) FY2004(1) Estimated amount for current FY2005

Directors Pierre Tie-Min Chen Band A Band A Band A Paul Yao-Chou Yang N.A. Band A Band A Jon-Fwu Hwu Band A Band A Band A Vincent Chi-Sheng Weng Band A Band A Band A Kenneth Chung-Hou Tai Band A Band A Band A Wheng-Jing Kuan Band A Band A Band A Chan Wai Meng N.A. N.A. Band A Chia Soon Loi N.A. Band A Band A Sunny Wong Fook Choy N.A. N.A. Band A

Executive Officers Ching-Chiang Chang Band A Band A Band A Bosen Wen-Ching Hsu N.A. Band A Band A Yao-Tsu Wang N.A. N.A. Band A

Band A means between S$0 and S$249,999. N.A. means not applicable.

Note: (1) Based on an average exchange rate of NT$19.747:S$1 and NT$19.772:S$1 for FY2003 and FY2004, respectively.

Our Company has not set aside or accrued any amounts for our employees to provide for pension, retirement or similar benefits.

Our subsidiary, GTC Taiwan, participates in a pension scheme in accordance with applicable regulations in Taiwan. Under the scheme, GTC Taiwan is required to contribute a fixed percentage of its payroll incurred to the pension fund and to pay a certain amount out of this pension fund to its employees when they attain the age of retirement.

EMPLOYEES As at the Latest Practicable Date, we have a workforce of approximately 412 full-time employees. All of our employees are not unionised. The relationship and cooperation between the management and staff have been good and are expected to continue to be so in the foreseeable future. There has not been any incidence of work stoppages or labour disputes which affected our operations for the last 3 financial years. We are not aware of any breach of their confidentiality and non-disclosure obligations by any senior management or technical personnel who left our Group in the last 3 financial years.

89 The functional distribution of our full-time employees as at 31 December 2002, 31 December 2003, 31 December 2004 and the Latest Practicable Date were as follows:

As at As at As at As at the 31 December 31 December 31 December Latest 2002 2003 2004 Practicable Date

Function Management 34 47 30 30

Sales, Marketing and Customer Support Centre 55 48 45 54

Operation Centre 198 238 270 291

Administration and Finance Centre 17 30 36 37

Total 304 363 381 412

We expanded our business in FY2002 and purchased new machinery during that period. To support such expansion, we hired 106 new employees in FY2002 to operate the testers. In addition, our sales grew and we employed sales and marketing staff and customer support centre staff to cope with the increased sales.

The geographical breakdown of our full-time employees as at 31 December 2002, 31 December 2003, 31 December 2004 and the Latest Practicable Date were as follows:

As at As at As at As at the 31 December 31 December 31 December Latest 2002 2003 2004 Practicable Date

Taiwan 285 345 365 398

US 19 18 16 14

Total 304 363 381 412

SERVICE AGREEMENTS Our Company has entered into separate service agreements (the “Service Agreements”) with our Executive Directors, namely, Mr Pierre Tie-Min Chen, Mr Paul Yao-Chou Yang, Mr Jon-Fwu Hwu and Mr Vincent Chi-Sheng Weng, for a period of two years with effect from 1 April 2005 (unless otherwise terminated by either party giving not less than three months’ notice to the other). We may also terminate the Service Agreements of our Executive Directors if he, amongst other things, commits any serious and persistent breach of the provisions of their respective Service Agreement, become of unsound mind, become bankrupt or otherwise act to the prejudice of our Company. None of these Executive Directors will be entitled to any benefits upon termination of their respective Service Agreements. The Service Agreements cover the terms of employment, specifically salaries and bonuses.

Pursuant to the terms of their respective Service Agreements, each of Mr Pierre Tie-Min Chen, Mr Paul Yao-Chou Yang, Mr Jon-Fwu Hwu and Mr Vincent Chi-Sheng Weng is entitled to a monthly salary NT$206,360, NT$250,000, US$10,000 and NT$150,000 respectively. In addition, each of Mr Pierre Tie- Min Chen, Mr Paul Yao-Chou Yang and Mr Vincent Chi-Sheng Weng are entitled to a bonus equivalent to two months’ salary at the end of each completed year of service.

Directors’ fees do not form part of the terms of the Service Agreements as these require the approval of Shareholders in our Company’s annual general meeting.

90 All travelling and travel-related expenses, entertainment expenses and other out-of-pocket expenses reasonably incurred by our Executive Directors in the process of discharging their duties on behalf of our Group will be borne by our Company. In addition, they will be entitled to health, labour and group insurance.

Had the Service Agreements been in existence for FY2004, the aggregate remuneration paid to our Executive Directors would have been approximately US$0.37 million instead of US$0.46 million and our profit before income tax for our Group and the profit after income tax would have been US$10.10 million (instead of US$10.01 million) and US$11.61 million (instead of US$11.52 million) respectively.

Save as disclosed above, there are no existing or proposed service agreements between our Company, our subsidiaries and any of our Directors. There are no existing or proposed service agreements entered or to be entered into by our Directors with our Company or any of its subsidiaries which provide for benefits upon termination of employment.

91 GLOBAL TESTING EMPLOYEE SHARE OPTION SCHEME

On 22 March 2005, our sole Shareholder approved an employee share option scheme known as the Global Testing Employee Share Option Scheme (the “ESOS”), the rules of which are set out in Appendix H of this Prospectus. The ESOS complies with the relevant rules of the SGX-ST as set out in Chapter 8 of the Listing Manual. The ESOS will provide eligible participants with an opportunity to participate in the equity of our Company and to motivate them towards better performance through increased dedication and loyalty. The ESOS, which forms an integral and important component of our employee compensation plan, is designed to primarily reward and retain executive directors, non-executive directors and employees of our Group whose services are vital to our well-being and success.

As at the Latest Practicable Date, no Options have been granted under the ESOS.

Objectives of the ESOS The objectives of the ESOS are as follows:

(a) to motivate participants to optimise their performance standards and efficiency and to maintain a high level of contribution to our Group;

(b) to retain key employees and directors whose contributions are essential to the long-term growth and profitability of our Group;

(d) to attract potential employees with the relevant skill sets to contribute to our Group and to create value for our Shareholders; and

(e) to align the interest of participants with the interests of our Shareholders.

Summary of ESOS A summary of the rules of the ESOS is set out as follows:

(1) Participants Under the rules of the ESOS, executive and non-executive directors (including our Independent Directors) and employees of our Group, who are not controlling shareholders or their associates, are eligible to participate in the ESOS.

(2) Administration The ESOS shall be administered by the Remuneration Committee with powers to determine, inter alia, the following:

(a) persons to be granted Options;

(b) number of Options to be granted; and

As at the date of this Prospectus, our Remuneration Committee comprises Mr Chia Soon Loi, Mr Wheng-Jing Kuan and Mr Pierre Tie-Min Chen. The Remuneration Committee will consist of Directors (including Directors who may be participants of the ESOS). A member of the Remuneration Committee who is also a participant of the ESOS must not be involved in its deliberation in respect of Options granted or to be granted to him.

92 (3) Size of the ESOS The aggregate number of Shares over which the Remuneration Committee may grant Options on any date, when added to the nominal amount of Shares issued and issuable in respect of all Options granted under the ESOS shall not exceed 15 per cent. of the issued share capital of our Company on the day immediately preceding the date of the relevant grant.

We believe that this 15 per cent. limit set by the SGX-ST gives our Company sufficient flexibility to decide the number of Option Shares to offer to our existing and new employees. 15 per cent. of the post-Invitation share capital of our Company constitutes approximately 131,250,000 Shares. As it is intended that the ESOS shall last for 10 years, assuming that there is no change in the total issued share capital of our Company, the number of Options that may be granted in a year will average approximately 13 million Shares. The number of eligible participants is expected to grow over the years. Our Company, in line with its goal of ensuring sustainable growth, is constantly reviewing its position and considering the expansion of its talent pool which may involve employing new employees. The employee base, and thus the number of eligible participants will increase as a result. If the number of Options available under the ESOS is limited, our Company may only be able to grant a small number of Options to each eligible participant which may not be a sufficiently attractive incentive. Our Company is of the opinion that it should have sufficient number of Options to offer to new employees as well as to existing ones. The number of Options offered must also be significant to serve as a meaningful reward for contributions to our Group. However, it does not necessarily mean that the Remuneration Committee will definitely issue Option Shares up to the prescribed limit. The Remuneration Committee shall exercise its discretion in deciding the number of Option Shares to be granted to each employee which will depend on the performance and value of the employee to our Group.

(4) Maximum entitlements The aggregate number of Shares comprised in any Option to be offered to a participant under the ESOS shall be determined at the absolute discretion of the Remuneration Committee, which shall take into account (where applicable) criteria such as rank, past performance, years of service and potential for future development of that participant.

(5) Options, exercise period and exercise price The Options that are granted under the ESOS may have exercise prices that are, at the Remuneration Committee's discretion, set at a price (the “Market Price”) equal to the average of the last dealt prices for the Shares on the Official List of the SGX-ST for the 5 consecutive Market Days immediately preceding the relevant date of grant of the relevant Option; or at a discount to the Market Price (subject to a maximum discount of 20 per cent.). Options which are fixed at the Market Price (“Market Price Options”) may be exercised after the first anniversary of the date of grant of that Option while Options exercisable at a discount to the Market Price (“Discounted Options”) may only be exercised after the second anniversary from the date of grant of the Option. Options granted under the ESOS will have a life span of 10 years. Under no circumstances shall the exercise price be less than the nominal value of a Share.

(6) Grant of options Under the rules of the ESOS, there are no fixed periods for the grant of Options. As such, offers for the grant of Options may be made at any time from time to time at the discretion of the Remuneration Committee. However, no Option shall be granted during the period of 30 days immediately preceding the date of announcement of our Company's interim or final results (as the case may be).

In addition, in the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is imminent, offers may only be made after the second Market Day from the date on which the aforesaid announcement is made.

93 (7) Termination of Options Special provisions in the rules of the ESOS deal with the lapse or earlier exercise of Options in circumstances which include the termination of the participant's employment in our Group, the bankruptcy of the participant, the death of the participant, a take-over of our Company and the winding-up of our Company.

(8) Acceptance of Options The grant of Options shall be accepted within 30 days from the date of offer. Offers of Options made to grantees, if not accepted before the closing date, will lapse. Upon acceptance of the offer, the grantee must pay our Company a consideration of S$1.00.

(9) Rights of Shares arising Shares arising from the exercise of Options are subject to the provisions of the Memorandum and Articles of Association of our Company. The Shares so allotted will upon issue rank pari passu in all respects with the then existing issued Shares, save for any dividend, rights, allotments or distributions, the record date (“Record Date”) for which is prior to the relevant exercise date of the Option. “Record Date” means the date as at the close of business on which Shareholders must be registered in order to participate in any dividends, rights, allotments or other distributions (as the case may be).

(10) Duration of the ESOS The ESOS shall continue in operation for a maximum duration of 10 years and may be continued for any further period thereafter with the approval of our Shareholders by ordinary resolution in general meeting and of any relevant authorities which may then be required.

(11) Abstention from voting Shareholders who are eligible to participate in the ESOS are to abstain from voting on any resolution of Shareholders relating to the ESOS.

Grant of Discounted Options The ability to offer Options to participants of the ESOS with exercise prices set at a discount to the prevailing market prices of the Shares will operate as a means to recognise the performance of participants as well as to motivate them to continue to excel while encouraging them to focus more on improving the profitability and return of our Group above a certain level which will benefit our Shareholders when these are eventually reflected through share price appreciation. The ESOS will also serve to recruit new employees whose contributions are important to the long-term growth and profitability of our Group. Discounted Options would be perceived in a more positive light by the participants, inspiring them to work hard and produce results in order to be offered Discounted Options as only employees who have made significant contributions to the success and development of our Group would be granted Discounted Options.

The flexibility to grant Discounted Options is also intended to cater to situations where the stock market performance has overrun the general market conditions. In such events, the Remuneration Committee will have absolute discretion to:

(a) grant Options set at a discount to the Market Price of a Share (subject to a maximum limit of 20 per cent.); and

(b) determine the participants to whom, and the Options to which, such reduction in exercise prices will apply.

In determining whether to give a discount and the quantum of the discount, the Remuneration Committee shall be at liberty to take into consideration factors including the performance of our Company, our Group, the performance of the participant concerned, the contribution of the participant to the success and development of our Group and the prevailing market conditions.

94 At present, our Company foresees that Discounted Options may be granted principally in the following circumstances:

(a) Firstly, where it is considered more effective to reward and retain talented employees by way of a Discounted Option rather than a Market Price Option. This is to reward the outstanding performers who have contributed significantly to our Group’s performance and the Discounted Option serves as additional incentives to such Group employees. Options granted by our Company on the basis of market price may not be attractive and realistic in the event of an overly buoyant market and inflated share prices. Hence during such period the ability to offer Discounted Options would allow our Company to grant Options on a more realistic and economically feasible basis. Furthermore, Discounted Options will give an opportunity to our Group employees to realise some tangible benefits even if external events cause the Share price to remain largely static.

(b) Secondly, where it is more meaningful and attractive to acknowledge a participant's achievements through a Discounted Option rather than paying him a cash bonus. For example, Discounted Options may be used to compensate employees and to motivate them during economic downturns when wages (including cash bonuses and annual wage supplements) are frozen or cut, or they could be used to supplement cash rewards in lieu of larger cash bonuses or annual wage supplements. Accordingly, it is possible that merit-based cash bonuses or rewards may be combined with grants of Market Price Options or Discounted Options, as part of eligible employees’ compensation packages. The ESOS will provide our Group employees with an incentive to focus more on improving the profitability of our Group thereby enhancing shareholder value when these are eventually reflected through the price appreciation of our Shares after the vesting period.

(c) Thirdly, where due to speculative forces and having regard to the historical performance of the Share price, the Market Price of the Shares at the time of the grant of the Options may not be reflective of financial performance indicators such as return on equity and/or earnings growth.

The Remuneration Committee will have the absolute discretion to grant Discounted Options, to determine the level of discount (subject to a maximum discount of 20 per cent. of the Market Price) and the grantees to whom, and the Options to which, such discount in the exercise price will apply provided that our Shareholders in general meeting shall have authorised, in a separate resolution, the making of offers and grants of Options under the ESOS at a discount not exceeding the maximum discount as aforesaid.

Our Company may also grant Options without any discount to the Market Price. Additionally, our Company may, if it deems fit, impose conditions on the exercise of the Options (whether such Options are granted at the market price or at a discount to the Market Price), such as restricting the number of Shares for which the Option may be exercised during the initial years following its vesting.

Rationale for participation of directors (including our Independent Directors) and employees of our Group The extension of the ESOS to the executive and non-executive directors (including our Independent Directors but excluding controlling shareholders or their associates) and employees of our Group allows our Group to have a fair and equitable system to reward directors and employees who have made and who continue to make significant contributions to the long-term growth of our Group.

Non-executive directors bring to our Group their wealth of knowledge, business expertise and contacts in the business community. It is desirable that non-executive directors of our Group be allowed to participate in the ESOS to incentivise and retain them and to further align their interests with that of our Group.

Granting eligibility to the non-executive directors of our Group gives us the ability to supplement the current cash-based remuneration by way of director's fees to the non-executive directors of our Group for their services and will help us remain competitive in the remuneration of the non-executive directors of our Group when other listed companies offer share options to their non-executive directors.

95 We are of the view that including the non-executive directors of our Group in the ESOS will show our appreciation for, and further motivate them in their contribution towards our success. However, as we recognise that the services and contributions of the non-executive directors of our Group cannot be measured in the same way as those of our full time employees, we envisage that the bulk of the Options will be given to our employees. The non-executive directors of our Group will be granted Options at the discretion of our Remuneration Committee.

Our Remuneration Committee, when deciding on the selection of the non-executive directors of our Group to participate in the ESOS and the number of Options to be offered, will take into consideration the nature and extent of their input, the assistance and expertise rendered by them to the Board and the impact thereof on the growth, success and development of our Group, as well as their involvement and commitment to the boards of directors on which they sit. Our Remuneration Committee may, where it considers relevant, take into account other factors such as the economic conditions and our Company's performance.

Although the non-executive directors of our Group may be appointed as members of our Remuneration Committee, the rules of the ESOS provide that a member is not to be involved in its deliberations in respect of the grant of Options to him. We will ensure that the number of Options granted to the non- executive directors of our Group will be such that any conflict of interests that may potentially arise is kept minimal and that the independence of the non-executive directors of our Group are not compromised.

It is our intention that all our employees whether key employees or not should be treated equally for the purposes of the ESOS. The main purpose of the ESOS is to align the interests of our Group’s directors and all employees who are involved in our business and prosperity with those of our own. The extension of the ESOS to all employees of our Group allows us a fair and equitable system to reward employees who have made and will continue to make important contributions to our long-term growth, be they key employees or otherwise.

We believe that the ESOS will be an essential part of our strategy for recruiting and retaining capable employees. The ESOS will provide an incentive to our employees to achieve and maintain a high level of performance as well as to encourage greater dedication and loyalty by enabling our Group to give recognition to past contributions and services as well as to further encourage participants generally to contribute towards our long term prosperity. To this end, we will determine the number of Options to be granted to an employee by taking into account the appointment, responsibilities, length of service, potential and performance. The level of performance of each employee will be assessed on the basis of an annual appraisal process for all employees.

Cost of Options granted under the ESOS to our Company The grant of Options under the ESOS will result in an increase in our Company’s issued share capital to the extent that Options are exercised and new Shares are issued. This will in turn depend on, inter alia, the number of Shares comprised in the Options granted, the vesting schedules and the prevailing Market Price of the Shares on the SGX-ST.

The issue of new Shares upon the exercise of Options granted under the ESOS will have the effect of increasing our Company’s consolidated NTA by the aggregate exercise price of the new Shares issued. On a per Share basis, the effect would be accretive if the exercise price is above the NTA per Share but dilutive otherwise.

Based on the current Singapore Financial Reporting Standards, no cash outlays would be expended by our Company at the time Options are granted by it (as compared with cash bonuses). Accordingly, our profitability will not be affected at such point in time. However, with effect from 1 January 2005 with the adoption of FRS 102 on Share-based payments, whenever the Options are granted by our Company to subscribe for new Shares, such Options which have a fair value attached to them at the time of grant will need to be expensed off over the grant period. This fair value is the estimated value of the Option on its date of grant and may be derived by applying a variety of valuation techniques or pricing models developed for valuing traded options.

96 Under the ESOS, each participant to whom an Option is offered pays a nominal consideration of S$1.00 to our Company on his acceptance of the offer of the Option. Insofar as such Options are granted at a consideration that is less than their fair value at the time of grant, there will be a cost to our Company (in that we will receive from the participant upon the grant of the Option to him, a consideration that is less than the fair value of the Option).

The cost to our Company in granting an Option would vary depending on the number of Options granted pursuant to the ESOS, whether these Options are granted at Market Price or at a discount and the validity period of the Options. Generally a greater discount and a longer validity period for an Option will result in a higher potential cost to our Company. If such costs were to be recognised in accordance with FRS 102, it would have to be charged to our Company's profit and loss account over the grant period.

The issuance of new Shares under the ESOS will have a dilutive impact on our consolidated EPS. However, the impact is not expected to be material in any given financial year as the Options are likely to be exercised over several years in accordance with the predetermined vesting schedules.

97 INTERESTED PERSON TRANSACTIONS

In general, transactions between our Group and any of its interested persons (namely, the Directors, Chief Executive Officer or controlling shareholders of our Company or the associates of such Directors, Chief Executive Officer or controlling shareholders) are known as interested person transactions. The following discussion sets out the material interested person transactions for our Group for the last 3 financial years and from 1 January 2005 up to the Latest Practicable Date.

PAST INTERESTED PERSON TRANSACTIONS Guarantees provided by our Executive Chairman Our Executive Chairman, Mr Pierre Tie-Min Chen, provided guarantees to secure the following financing facilities for our Group: Largest amount outstanding up to expiry of the facilities Expiry/Termination or the Latest Practicable Bank / Financier Facilities granted date of facilities Date, as the case may be

NT$100,000,000 short 16 March 2004 NT$40,000,000 (Hua Nan Commercial term loan facility Bank) NT$350,000,000 trade 16 March 2004 NT$33,153,643 financing facility

NT$102,750,000 short 2 September 2003 NT$44,000,000 term loan facility

NT$340,000,000 trade 31 January 2004 NT$30,000,000 financing facility

NT$30,000,000 3 February 2006 NT$30,000,000 (E. Sun Bills Finance promissory note Corporation) guarantee facility

NT$920,000,000 16 May 2005 (Hua Nan Commercial syndicated credit Bank)(1) facility comprising:

(1) NT$360,000,000 (1) NT$420,000,000 term loan facility; and drawn on the term loan facility; and

(2) NT$560,000,000 (2) NT$700,000,000 promissory note drawn on the promissory guarantee facility note facility

Note: (1) Hua Nan Commercial Bank is the lead bank for a syndicated credit facility together with 8 other banks. The other banks participating in the syndicated loan were: , and . The aggregate amount of credit originally granted for the syndicated credit facility was NT$2.1 billion comprising a NT$1.4 billion term loan facility and a NT$700 million promissory note guarantee facility. In accordance with the terms of the term loan facility, any credit not drawndown within a specified drawdown period will be cancelled. In accordance with the terms of the promissory note guarantee facility, the amount of credit available will be reduced by NT$100 million every 6 months, starting 24 months after the first drawdown which was on 22 October 2002. On 16 May 2005, the outstanding balance of this syndicated credit facility drawn down of approximately NT$790 million was repaid, using proceeds from the new Syndicated Facility (for details, please refer to section entitled “Capitalisation and Indebtedness” in this Prospectus), therefore accordingly, as at the Latest Practicable Date, the facility with Hua Nan Commercial Bank is not an interested person transaction.

98 Save for the facility with E. Sun Bills Finance Corporation, the above financing facilities have expired or have been terminated and we have repaid all outstanding amounts owed. With regard to the promissory note guarantee facility with E. Sun Bills Finance Corporation, Mr Pierre Tie-Min Chen is no longer a guarantor to such facility and accordingly, as at the Latest Practicable Date, the facility is not an interested person transaction.

PRESENT ON-GOING INTERESTED PERSON TRANSACTIONS Guarantees provided by our Executive Chairman Our Executive Chairman, Mr Pierre Tie-Min Chen, has provided guarantees to secure the following financing facilities for our Group:

Facilities granted Amount outstanding Largest amount outstanding as at the Latest as at the Latest from 1 January 2002 up to Bank / Financier Practicable Date Practicable Date the Latest Practicable Date

NT$100,000,000 trade and short term financing facility (the “Facility”) comprising the following sub-limits:

(1) NT$100,000,000 (i) NT$9,067,092 (i) NT$55,963,320 letter of credit and short letter of credit; and letter of term trade financing (ii) NT$63,532,468 credit; and (ii) NT$63,532,468 facility; of short term trade of short term trade financing financing facilities facilities

(2) NT$80,000,000 Nil NT$8,600,000 accounts receivable factoring facility;

(3) NT$30,000,000 US$350,000 US$850,000 stand-by letter of credit facility;

(4) NT$20,000,000 NT$7,000,000 NT$20,000,000 customs guarantee facility; and

(5) NT$30,000,000 Nil Nil short term loan facility,

subject to the aggregate outstanding on the Facility not exceeding NT$100,000,000

Subsequent to the Invitation, Mr Pierre Tie-Min Chen has agreed to continue providing the above personal guarantees until such time as the respective banks may agree to the release of such guarantees on satisfactory terms to our Group, or the termination of the facilities.

POTENTIAL CONFLICTS OF INTEREST Save as disclosed in the section entitled “Interested Person Transactions” of this Prospectus, none of our Directors, controlling shareholders and Chief Executive Officer or their associates has any material interest, direct or indirect, in:

(i) any company carrying out the same business or deals in similar products as our Company or any of our subsidiaries;

(ii) any enterprise or company that is our Group’s customer or supplier of goods or services; and

(iii) any transaction to which we are a party.

99 REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS Review by Audit Committee We anticipate that we would, in the ordinary course of business, enter into certain transactions with our interested persons. It is likely that such transactions will occur with some degree of frequency and could arise at any time and from time to time. Chapter 9 of the Listing Manual allows a listed company to obtain a general mandate from its shareholders (“Shareholders’ Mandate”) for recurrent interested person transactions which are of a revenue or trading nature or for those necessary for its day-to-day operations. However, as our Company’s transactions with our interested persons are not expected to be more than 5% of our Group’s NTA in aggregate for FY2005, a Shareholders’ Mandate would not be required.

Our Audit Committee will review all other existing and future interested person transactions, if any, on at least a quarterly basis to ensure that they are carried out on normal commercial terms and are not prejudicial to the interests of our shareholders.

Our Audit Committee will also review all interested person transactions to ensure that the then prevailing rules and regulations of the SGX-ST (in particular Chapter 9 of the Listing Manual) are complied with. We will also endeavour to comply with the principles of and best practices set out in the Listing Manual.

100 CORPORATE GOVERNANCE

Our Articles provide that our board of Directors will consist of not less than 2 Directors. None of our Directors are appointed for any fixed terms, but one-third of our Directors are required to retire at every annual general meeting of our Company. Hence, the maximum term for each Director is 3 years. Directors who retire are eligible to stand for re-election.

Our Directors recognise the importance of corporate governance and the offering of high standards of accountability to the shareholders of our Company.

Nominating Committee Our Nominating Committee comprises Mr Wheng-Jing Kuan, Mr Pierre Tie-Min Chen, Mr Chia Soon Loi, and Mr Sunny Wong Fook Choy. The Chairman of the Nominating Committee is Mr Wheng-Jing Kuan. Our Nominating Committee will be responsible for (i) re-nomination of our Directors having regard to the Director’s contribution and performance, (ii) determining annually whether or not a Director is independent and (iii) deciding whether or not a Director is able to and has been adequately carrying out his duties as a director. The Nominating Committee will decide how the Board’s performance is to be evaluated and propose objective performance criteria, subject to the approval of the Board, which address how the Board has enhanced long-term shareholders’ value. The performance evaluation will also include consideration of our Company’s share price performance over a 5-year period vis-à-vis the Singapore Straits Times Index and a benchmark index of its industry peers. The Board will also implement a process to be carried out by the Nominating Committee for assessing the effectiveness of the Board as a whole and for assessing the contribution by each individual Director to the effectiveness of the Board. Each member of the Nominating Committee shall abstain from voting on any resolutions in respect of the assessment of his performance or re-nomination as director.

Remuneration Committee Our Remuneration Committee comprises Mr Chia Soon Loi, Mr Chan Wai Meng, Mr Wheng-Jing Kuan and Mr Pierre Tie-Min Chen. The Chairman of the Remuneration Committee is Mr Chia Soon Loi. Our Remuneration Committee will recommend to our Board a framework of remuneration for the Directors and key executives, and determine specific remuneration packages for each Executive Director. The recommendations of our Remuneration Committee should be submitted for endorsement by the entire Board. All aspects of remuneration, including but not limited to directors’ fees, salaries, allowances, bonuses, Options issued under our ESOS and benefits in kind shall be covered by our Remuneration Committee. Each member of the Remuneration Committee shall abstain from voting any resolutions in respect of his remuneration package.

Audit Committee Our Audit Committee comprises Mr Chan Wai Meng, Mr Chia Soon Loi and Mr Sunny Wong Fook Choy. The Chairman of the Audit Committee is Mr Chan Wai Meng. Our Directors recognise the importance of corporate governance and the offering of high standards of accountability to the shareholders of our Company. Our Audit Committee shall meet periodically to perform the following functions:

(a) review the audit plans of our Company’s external auditors;

(b) review the external auditors’ reports;

(d) review the financial statements of our Company and our Group before their submission to the Board;

(e) nominate external auditors for re-appointment; and

(f) review interested person transactions, if any.

101 Apart from the duties listed above, the Audit Committee shall commission and review the findings of internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation which has or is likely to have a material impact on our Group’s operating results and/or financial position. Each member of the Audit Committee shall abstain from voting on any resolutions in respect of matters in which he is interested.

102 GENERAL AND STATUTORY INFORMATION

INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS 1. Save as disclosed below, none of our Directors or Executive Officers is or was involved in any of the following events:

(i) during the last 10 years, a petition under any bankruptcy laws of any jurisdiction filed against him or against a partnership of which he was a partner;

(ii) during the last 10 years, a petition under any law of any jurisdiction filed against a corporation of which he was a director or key executive for the winding-up of that corporation on the ground of insolvency;

(iii) any unsatisfied judgments against him;

(iv) a conviction of any offence, in Singapore or elsewhere, involving fraud or dishonesty which is punishable with imprisonment for 3 months or more, or any criminal proceedings (including any pending criminal proceedings which he is aware of) for such purpose;

(v) a conviction of any offence, in Singapore or elsewhere, involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or any criminal proceedings (including pending criminal proceedings which he is aware of) for such breach;

(vi) during the last ten years, judgment entered against him in any civil proceeding in Singapore or elsewhere involving a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere, or a finding of fraud, misrepresentation or dishonesty on his part, or any civil proceedings (including any pending civil proceedings which he is aware of) involving an allegation of fraud, misrepresentation or dishonesty on his part;

(vii) a conviction in Singapore or elsewhere of any offence in connection with the formation or management of any corporation;

(viii) disqualification from acting as a director of any corporation, or from taking part directly or indirectly in the management of any corporation;

(ix) the subject of any order, judgement or ruling of any court, tribunal or governmental body permanently or temporarily enjoining him from engaging in any type of business practice or activity; and

(x) to his knowledge, been concerned with the management or conduct, in Singapore or elsewhere, of affairs of:

(a) any corporation which has been investigated for a breach of any law or regulatory requirement governing corporations in Singapore or elsewhere; or

(b) any corporation or partnership which has been investigated for a breach of any law or regulatory requirement that relates to the securities or futures industry in Singapore or elsewhere,

in connection with any matter occurring or arising during the period when he was so concerned with the corporation or partnership.

103 Pierre Tie-Min Chen In 2002, various plaintiffs brought actions against Rextron International Limited (“Rextron”) as well as, amongst others, Yageo Holdings (Bermuda) Limited (“Yageo Bermuda”), Yageo Corporation and 6 individuals who were either directors of Rextron, Yageo Bermuda and/or Yageo Corporation. The defendants of the lawsuits were accused of ordering Long Life Noodle Company, Inc (“Long Life”), a California restaurant chain, into bankruptcy for “improper reasons”. The “improper reasons” cited were the defendants’ intention to utilise the United States Bankruptcy Court as a forum in which to eliminate minority shareholder interests in Long Life without paying any consideration therefore.

At the time, Long Life was a subsidiary of Rextron, Rextron was a subsidiary of Yageo Bermuda and Yageo Bermuda was a subsidiary of Yageo Corporation. Mr Pierre Tie-Min Chen was a director of Yageo Corporation.

In 2004, one plaintiff, Geordy Murphy, received US$369,231 from Rextron pursuant to a settlement agreement in full settlement of his claims against the defendants.

In 2004, the other 2 plaintiffs, Dux Capital Management Corporation and Jerry Davis received a judgment against, amongst others, Yageo Corporation and Yageo Bermuda for approximately US$1.3 million. In addition, Mr Pierre Tie-Min Chen was exonerated by the jury of any wrongdoing whatsoever in connection with the bankruptcy of Long Life, and judgment to that effect was entered in his favour. Both judgments are currently being cross appealed.

Sunny Wong Fook Choy In April 2003, Mr Sunny Wong Fook Choy, who was a director of Space & Telecommunications Systems Pte Ltd (“Space & Telecommunications”), along with the board of directors of Space & Telecommunications passed resolutions to convene an extraordinary general meeting and a meeting of creditors to wind up Space & Telecommunications by way of creditors’ voluntary winding-up. Space & Telecommunications was wound up in November 2003.

2. No option to subscribe for shares in, or debentures of, our Company has been granted to, or was exercised by, any Director or Executive Officer within the last financial year.

3. Save for the Options that may be granted under the ESOS, no person has been, or is entitled to be given, an option to subscribe for any shares in or debentures of our Company.

4. Save as disclosed in the sections entitled “Properties and Fixed Assets” and “Interested Person Transactions” of this Prospectus, no Director or expert is (i) interested, directly or indirectly, in the promotion of, or in any assets acquired or disposed of by, or leased to, our Company within 2 years preceding the Latest Practicable Date, or in any proposal for such acquisition or disposal or leased as aforesaid, or (ii) interested where the interest consists in being a partner in a firm or a holder of shares in or debentures of a corporation interested in the same.

5. Save as disclosed in the section entitled “Interested Person Transactions’’ of this Prospectus, no Director has any interest in any existing contract or arrangement which is significant in relation to our business taken as a whole.

6. There is no shareholding qualification for Directors in the Articles of our Company.

7. No sum or benefit has been paid or has been agreed to be paid to any Director or expert who is a partner of any firm in which a Director or expert or any corporation in which such Director or expert holds shares or debentures, in cash or shares or otherwise by any person (i) (in the case of a Director) to induce him to become, or to qualify him as our Director or otherwise for the services rendered by him or such firm or corporation in connection with the promotion or formation of our Company or (ii) (in the case of an expert) for services rendered by him or such firm or corporation in connection with the promotion or formation of our Company.

104 SHARE CAPITAL 8. Save as disclosed below and in the section entitled “Share Capital” of this Prospectus, there were no changes in the issued and paid-up capital of our Company and our subsidiaries within the 3 years preceding the date of lodgment of this Prospectus.

GTC Taiwan Issue price Resultant Purpose of per share / Number of paid-in issue Par value Consideration shares capital (NT$) (NT$) (NT$)

24 April 1998 Incorporation 10.00 10.00 60,000,000 600,000,000

18 April 2000 Purchase of 10.00 18.00 20,000,000 800,000,000 equipment

28 July 2000 Purchase of 10.00 30.00 30,000,000 1,100,000,000 equipment

19 December 2001 Stock dividend 10.00 10.00 27,619,565 1,376,195,650 and bonus issue

20 October 2003 Bonus issue 10.00 10.00 2,280,435 1,399,000,000

Global Investment Resultant Purpose of Number of registered issue Par value Consideration shares capital (NT$) (NT$) (NT$)

14 November 2001 Incorporation Not applicable 50,000,000 N.A. 50,000,000

GTC US

Issue price Resultant Purpose of per share / Number of issued share issue Par value Consideration shares capital (US$) (US$) (US$)

1 October 1998 Working capital Not applicable 1.00 400,000 400,000

31 December 2000 Loan repayment Not applicable 1.00 1,350,000 1,750,000

9. Save as disclosed above and in the section entitled “Restructuring Exercise” in this Prospectus, no shares or debentures were issued or were agreed to be issued by our Company for cash or for a consideration other than cash during the last 2 years.

10. There has been no previous issue of Shares by us or offer for sale of our Shares to the public within the 2 years preceding the Latest Practicable Date.

LITIGATION 11. Our Company and our subsidiaries were not engaged in any legal or arbitration proceedings in the last 12 months before the date of the lodgment of this Prospectus, as plaintiff or defendant in respect of any claims or amounts which are material in the context of the Invitation and our Directors have no knowledge of any proceedings pending or threatened against our Company or our subsidiaries or any facts likely to give rise to any litigation, claims or proceedings which might materially affect the financial position or the profitability of our Group.

105 MATERIAL CONTRACTS 12. The following contracts not being contracts entered into in the ordinary course of business have been entered into by our Company and our subsidiaries within the 2 years preceding the date of registration of this Prospectus and are or may be material:

(a) the share swap agreement dated 3 August 2004 between our Company and GTC Taiwan pursuant to which our Company acquire all the issued and outstanding common shares of GTC Taiwan comprising 139,900,000 shares of NT$10.00 each at a consideration based on the net tangible assets of GTC Taiwan as at 30 June 2004. For further details, please refer to the section entitled “Restructuring Exercise” of this Prospectus;

(b) the management and underwriting agreement dated 15 August 2005 between our Company, the Vendors, the Manager and the Underwriter for the management of the Invitation and the underwriting of the Offer Shares (the “Management and Underwriting Agreement”);

(c) the placement agreement dated 15 August 2005 between our Company, the Vendors and the Placement Agent for the placement of the Placement Shares (the “Placement Agreement”); and

(d) the depository agreement dated 15 August 2005 made between our Company and CDP pursuant to which CDP agreed to act as central depository for our Shares.

MANAGEMENT AND UNDERWRITING AND PLACEMENT ARRANGEMENTS 13. (a) Pursuant to the Management and Underwriting Agreement dated 15 August 2005, our Company and the Vendors appointed the Manager to manage the Invitation, and the Underwriter to underwrite the Offer Shares. The Manager will receive a management fee from our Company and the Vendors for its services rendered in connection with the Invitation.

(b) Pursuant to the Management and Underwriting Agreement, the Underwriter agreed to underwrite the Offer Shares for a commission of 2.75% of the Issue Price for each Offer Share, payable by our Company and the Vendors, in the proportion in which the number of Invitation Shares offered by each pursuant to the Invitation bears to the total number of Invitation Shares, for subscribing or for procuring subscribers for any Offer Shares not subscribed for pursuant to the Invitation and will pay or procure payment to our Company and the Vendors for such Shares.

(c) Pursuant to the Placement Agreement dated 15 August 2005, the Placement Agent agreed to subscribe or procure subscriptions for the Placement Shares for a placement commission of 3.00% of the Issue Price for each Placement Share, payable by our Company and the Vendors, in the proportion in which the number of Invitation Shares offered by each pursuant to the Invitation bears to the total number of Invitation Shares.

(d) Subscribers of Placement Shares may be required to pay a brokerage of 1.0% of the Issue Price to the Placement Agent (subject to Singapore Goods and Services Tax of 5.0%, if applicable)

(e) Brokerage will be paid by our Company to members of the Singapore Exchange, merchant banks and members of the Association of Banks in Singapore in respect of accepted applications made on Application Forms bearing their respective stamps, or to Participating Banks in respect of successful applications made through Electronic Applications at the rate of 0.25% of the Issue Price for each Offer Share.

(f) Save as aforesaid, no commission, discount or brokerage, has been paid or other special terms granted within the 2 years preceding the Latest Practicable Date or is payable to any Director, promoter, expert, proposed Director or any other person for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions for any shares or debentures in our Company.

106 (g) The Management and Underwriting Agreement may be terminated by the Manager and/or the Underwriter at any time before the close of the Application List on the occurrence of certain events including, inter alia, any change, or any development involving a prospective change, in local, national, or international, financial (including stock market, foreign exchange market, international bank or interest rates or money market), political, industrial, economic, legal or monetary conditions, taxation or exchange controls, which event or events shall, in the opinion of the Manager and the Underwriter (exercised in good faith):

(i) result or be likely to result in a material adverse fluctuation or adverse conditions in the stock market in Singapore or overseas; or

(ii) be likely to prejudice the success of the subscription or offer of the Invitation Shares (whether in the primary market or in respect of dealings in the secondary market); or

(iii) make it impracticable, inadvisable, inexpedient or uncommercial to proceed with any of the transactions contemplated in the Management and Underwriting Agreement; or

(iv) be likely to have an adverse effect on the business, trading position, operations or prospects of our Company or of our Group as a whole; or

(v) be such that no reasonable underwriter would have entered into the Management and Underwriting Agreement; or

(vi) result or be likely to result in the issue of a stop order by the Authority pursuant to the Securities and Futures Act; or

(vii) makes it uncommercial or otherwise contrary to or outside the usual commercial practices of underwriters in Singapore for the Underwriter to observe or perform or be obliged to observe or perform the terms of the Management and Underwriting Agreement.

(h) The Placement Agreement is conditional upon the Management and Underwriting Agreement not having been terminated or rescinded pursuant to the provisions of the Management and Underwriting Agreement and may be terminated on the occurrence of certain events, including those specified in paragraph (g) above.

14. Save as disclosed above, we do not have any material relationship with any of the Manager, Underwriter or Placement Agent.

EXPENSES OF THE INVITATION 15. The estimated amount of expenses of the Invitation and of the application for listing, including underwriting and placement commission, brokerage, management fee, professional fees to reporting accountants and solicitors to the Invitation and all other incidental expenses in relation to the Invitation is approximately S$3.9 million, which will be borne by us and the Vendors. A breakdown of these estimated expenses is as follows:

S$’000

Listing fees 40

Professional fees 1,500

Underwriting commission, placement commission and brokerage 1,907

Miscellaneous expenses 460

Total estimated expenses of the Invitation 3,907

107 The Vendors will bear their portion of the total issue expenses in proportion to the number of Invitation Shares offered by the Vendors pursuant to the Invitation to the total number of Invitation Shares.

MISCELLANEOUS 16. There has been not been any public takeover offer by a third party in respect of our Shares, or by our Company in respect of shares of another corporation, which has occurred during the last and current financial year.

17. No amount of cash or securities or benefit has been paid or given to any promoter within the 2 years preceding the Latest Practicable Date or is proposed or intended to be paid or given to any promoter at any time.

18. No expert is employed on a contingent basis by our Company or any of our subsidiaries, has a material interest, whether direct or indirect, in the shares of our Company or our subsidiaries, or has a material economic interest, whether direct or indirect, in our Company, including an interest in the success of this Invitation.

19. Save as disclosed in the sections entitled “Risk Factors”, “Review of Past Operating Performance and Financial Position” and “Prospects” in this Prospectus, the financial condition and operations of our Group are not likely to be affected by any of the following:

(a) known trends or known demands, commitments, events or uncertainties that will result in or are reasonably likely to result in our Group’s liquidity increasing or decreasing in any material way;

(b) material commitments for capital expenditure;

(c) unusual or infrequent events or transactions or any significant economic changes that will materially affect the amount of reported income from operations; and

(d) known trends or uncertainties that have had or that we reasonably expect to have a material favourable or unfavourable impact on revenues or operating income.

20. Save as disclosed set out in the sections entitled “Risk Factors” and “Review of Past Operating Performance and Financial Position”, respectively, in this Prospectus, our Directors are not aware of any event which has occurred since 31 December 2004, which may have a material effect on the financial information provided in the Compilation Report of the Joint Reporting Accountants on the Proforma Consolidated Financial Statements.

21. We currently have no intention of changing the auditors of our Company after the listing of our Company on the SGX-ST.

Details including the names, addresses and professional qualifications (including membership in a professional body) of the auditors of our Group for the last three financial years from FY2002 to FY2004 and up to the date of this Prospectus are as follows:

Partner-in-charge/ Professional Membership and Period Name and Address Qualification Professional Body

The Company From date of Deloitte & Touche Cheng Ai Phing / Institute of Certified incorporation 6 Shenton Way #32-00 Certified Public Public Accountants DBS Building Tower Two Accountant of Singapore Singapore 068809

108 Partner-in-charge/ Professional Membership and Period Name and Address Qualification Professional Body

GTC Taiwan and its subsidiaries FY2002 to FY2004 Deloitte & Touche (Taiwan) Wu En Ming / CPA Association, 12th Floor Hung-Tai Plaza Certified Public Republic of China 156 Min Sheng East Road Sec 3 Accountant Taipei 105 Taiwan

CONSENTS 22. The Auditors and Joint Reporting Accountants have given and have not withdrawn their respective written consents to the issue of this Prospectus with the inclusion herein of their Compilation Report of the Joint Reporting Accountants on the Proforma Consolidated Financial Statements, the Auditors’ Report and the Audited Consolidated Financial Statements of Global Testing Corporation and its subsidiaries for FY2002, FY2003 and FY2004 in the form and context in which they are included and references to their name in the form and context in which they appears in this Prospectus and to act in such capacity in relation to this Prospectus.

23. Each of the Underwriter, the Placement Agent, the Solicitors to the Invitation, the Legal Advisers to the Company on Taiwanese Law, the Legal Advisers to the Company on US Law, the Share Registrar and Share Transfer Office, the Receiving Bank and the Principal Bankers do not make, or purport to make, any statement in this Prospectus or any statement upon which a statement in this Prospectus is based and, to the maximum extent permitted by law, expressly disclaim and take no responsibility for any liability to any person which is based on, or arises out of, the statements, information or opinions in this Prospectus.

DOCUMENTS AVAILABLE FOR INSPECTION 24. Copies of the following documents may be inspected at our registered office at 4 Battery Road #15-01, Bank of China Building, Singapore 049908, during normal business hours for a period of 6 months from the date of registration of this Prospectus:

(a) the Memorandum and Articles of Association of our Company;

(b) the Compilation Report of the Joint Reporting Accountants on the Proforma Consolidated Financial Statements as set out in Appendix A of this Prospectus;

(c) the Audited Consolidated Financial Statements of Global Testing Corporation and its subsidiaries, and the Auditors’ Reports for FY2002, FY2003 and FY2004 as set out in Appendix B of this Prospectus;

(d) the Audited Financial Statements of Global Testing Corporation Limited for the financial period from the date of incorporation on 30 July 2004 to 31 December 2004;

(e) the Audited Financial Statements of Global Testing Corporation (US) and the Auditors’ Reports for FY2002, FY2003 and FY2004;

(f) the material contracts referred to on page 106 of this Prospectus;

(g) the letters of consent referred to on page 109 of this Prospectus; and

(h) the Service Agreements referred to on pages 90 and 91 of this Prospectus.

109 STATEMENT BY DIRECTORS AND THE VENDORS 25. This Prospectus has been seen and approved by our Directors and the Vendors and they collectively and individually accept the full responsibility for the accuracy of the information given in this Prospectus and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, that the facts stated and the opinions expressed herein are fair and accurate in all material respects as of the date hereof and there are no other facts the omission of which would make any statements herein misleading, and that this Prospectus constitutes full and true disclosure of all material facts about this Invitation and our Group.

STATEMENT BY THE MANAGER 26. The Manager acknowledges that, having made due and careful enquiry and to the best of its knowledge and belief, based on information furnished to it by our Group and the Vendors, this Prospectus constitutes a full and true disclosure of all the material facts about this Invitation and our Group, and it is not aware of any other facts, the omission of which would make any statements herein misleading.

110 APPENDIX A

COMPILATION REPORT OF THE JOINT REPORTING ACCOUNTANTS ON THE PROFORMA CONSOLIDATED FINANCIAL STATEMENTS

15 August 2005

The Board of Directors Global Testing Corporation Limited 4 Battery Road #15-01 Bank of China Building Singapore 049908

Dear Sirs

COMPILATION REPORT OF THE JOINT REPORTING ACCOUNTANTS ON THE PROFORMA CONSOLIDATED FINANCIAL STATEMENTS

This compilation report has been prepared for inclusion in the Prospectus dated 15 August 2005 (the “Prospectus”) in connection with the Invitation in respect of 211,885,000 ordinary shares of S$0.10 each in the capital of Global Testing Corporation Limited (“the Company”) comprising 175,500,000 New Shares and 36,385,000 Vendor Shares, payable in full on application, as follows: a) 5,000,000 Offer Shares at S$0.30 for each Offer Share by way of public offer; and b) 206,885,000 Placement Shares at S$0.30 for each Placement Share by way of placement.

We report on the proforma financial statements of the Company and its subsidiaries (the “Proforma Group”) for the financial years ended 31 December 2002, 2003 and 2004 set out on pages A-3 to A-29 of the Prospectus which have been prepared for illustrative purposes only and based on certain assumptions after making certain adjustments to show what: a) the financial results of the Proforma Group for the financial years ended 31 December 2002, 2003 and 2004 would have been if the group structure as of the date of registration of the Prospectus had been in place since the beginning of the periods being reported on; and b) the financial position of the Proforma Group as at 31 December 2004, changes in equity and cash flows for the financial year ended on 31 December 2004 would have been if the group structure as of the date of registration of the Prospectus had been in place on those dates.

The proforma financial statements, because of their nature, may not give a true picture of the Proforma Group’s actual financial position or results.

The proforma financial statements are the responsibility of the directors of the Company. Our responsibility is to express an opinion on the proforma financial statements based on our work.

We carried out our procedures in accordance with Singapore Statements of Auditing Practice: SAP 24 – “Auditors and Public Offering Documents”. Our work, which involved no independent examination of the underlying financial statements, consisted primarily of comparing the

A-1 proforma financial statements of the Proforma Group to the audited consolidated financial statements of Global Testing Corporation and its subsidiaries, considering the evidence supporting the adjustments and discussing the proforma financial statements with the directors of the Company.

In our opinion:

(a) the proforma financial statements have been properly prepared in a manner consistent with both the format of the financial statements and the accounting policies of the Proforma Group;

(b) the proforma financial statements have been properly prepared on the basis stated in Note 2 of Section E to the proforma financial statements and from the audited consolidated financial statements of Global Testing Corporation and its subsidiaries for the financial years ended 31 December 2002, 2003 and 2004, which were prepared in accordance with Singapore Statements of Accounting Standard for the financial year ended 31 December 2002 and in accordance with Singapore Financial Reporting Standards for the financial years ended 31 December 2003 and 2004; and

(c) each material adjustment made to the information used in the preparation of the proforma financial statements is appropriate for the purpose of preparing such financial statements.

Yours faithfully

DELOITTE & TOUCHE DELOITTE & TOUCHE Certified Public Accountants Certified Public Accountants Singapore Taipei, Taiwan

Cheng Ai Phing E.M. Wu Partner Partner

A-2 A. PROFORMA CONSOLIDATED GROUP BALANCE SHEET AS AT 31 DECEMBER 2004 As at 31 December Note 2004 US$’000

ASSETS

Current assets: Cash 6,072 Trade receivables 6 9,125 Other investments 7 5,282 Other receivables and prepayments 8 1,912

Total current assets 22,391

Non-current assets: Investment in subsidiaries 9 – Property, plant and equipment 10 106,971 Deferred tax assets 11 3,327 Other receivables and prepayments 8 184

Total non-current assets 110,482

Total assets 132,873

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities: Bank loans and overdrafts 12 29,371 Trade payables 2,025 Other payables 13 2,236

Total current liabilities 33,632

Non-current liabilities: Long-term loans 14 22,089 Retirement benefit obligations 15 158

Total non-current liabilities 22,247

Shareholders’ equity: Issued capital 16 41,123 Merger reserve 23,908 Accumulated profits 11,832 Currency translation reserve 131

Net shareholders’ equity 76,994

Total liabilities and shareholders’ equity 132,873

A-3 B. PROFORMA GROUP CONSOLIDATED PROFIT AND LOSS STATEMENTS FOR THE FINANCIAL YEARS ENDED 31 DECEMBER 2002, 2003 AND 2004

Year ended 31 December Notes 2002 2003 2004 US$’000 US$’000 US$’000

Revenue 19 25,609 25,199 45,180

Cost of sales (16,111) (20,377) (24,631)

Gross profit 9,498 4,822 20,549

Other operating income 20 353 202 106

Distribution costs (318) (336) (654)

Administrative expenses (3,053) (3,716) (5,331)

Other operating expenses (983) (2,032) (3,806)

Profit/(Loss) from operations 21 5,497 (1,060) 10,864

Finance costs 22 (710) (632) (854)

Profit/(Loss) before income tax 4,787 (1,692) 10,010

Income tax 23 (565) (3,314) 1,506

Profit/(Loss) attributable to the Group 4,222 (5,006) 11,516

Earning/(Loss) per share (US cents)* 24 0.60 (0.72) 1.65

* Earning/(Loss) per share for the periods under review has been computed based on pre-Invitation share capital of 699,500,001 ordinary shares of S$0.10 each.

A-4 C. PROFORMA GROUP CONSOLIDATED MOVEMENTS IN SHAREHOLDERS’ EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2004

Accumulated Currency Issued Treasury Share Legal Merger (losses)/ translation Note capital shares premium reserve reserve profits reserve Total US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Balance at 1 January 2004 as per consolidated balance sheet of Global Testing Corporation and its subsidiaries F1(a) 43,248 – 24,570 1,420 – (3,806) 23 65,455

Proforma adjustment for Group restructuring: F2 – Transfer (43,248) – (24,570) – 67,818 – – – – Issue of shares to acquire Proforma Group 41,123 – – – (41,123) – – –

Proforma balance as at 1 January 2004 41,123 – – 1,420 26,695 (3,806) 23 65,455

Transfer – – (2,702) (1,420) – 4,122 – –

Net profit for the year – – – – – 11,516 – 11,516

Purchase of treasury shares – (85) – – – – – (85)

Currency translation reserve – – – – – – 108 108 A-5

Proforma adjustment for Group restructuring: – Transfer 43,248 – 24,570 – (67,818) – – – – Issue of shares to acquire Proforma Group (41,123) – – – 41,123 – – –

Balance at 31 December 2004 as per consolidated balance sheet of Global Testing Corporation and its subsidiaries F1(b) 43,248 (85) 21,868 – – 11,832 131 76,994

Proforma adjustment for Group restructuring: F2 – Transfer (43,248) 85 (21,868) – 65,031 – – – – Issue of shares to acquire Proforma Group 41,123 – – – (41,123) – – –

Proforma balance at 31 December 2004 41,123 – – – 23,908 11,832 131 76,994

For details of the Proforma adjustments, see Section F of the Compilation Report. D. PROFORMA GROUP CONSOLIDATED STATEMENTS OF CASH FLOW FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2004 As at 31 December Note 2004 US$’000

Cash flows from operating activities:

Profit before income tax 10,010 Adjustments for: Depreciation expense 15,615 Write-back of allowance for doubtful debts (3) Interest income (6) Interest expense 854 Loss on disposal of property, plant and equipment 300

Operating profit before working capital changes 26,770

Trade receivables (2,443) Other receivables and prepayments (1,645) Trade payables 840 Other payables 748 Retirement benefit obligations 58

Cash generated from operations 24,328

Income tax paid (261) Interest paid (887) Interest received 6

Net cash from operating activities 23,186

Cash flows from investing activities: Decrease in other investments 107 Purchase of property, plant and equipment A (32,418) Proceeds from disposal of property, plant and equipment 3,178

Net cash used in investing activities (29,133)

Cash flows from financing activities: Proceeds from borrowings 10,290 Purchase of treasury shares (85)

Net cash from financing activities 10,205

Net effect of exchange rate changes in consolidating subsidiaries 108

Net increase in cash 4,366 Cash at beginning of year 1,687

Cash at end of year 25 6,053

Note A. Property, plant and equipment During the financial year ended 31 December 2004, the Group acquired property, plant and equipment with an aggregate cost of US$32,451,000 of which US$33,000 related to capitalisation of borrowing costs during the financial year. Cash payment of US$32,418,000 was made to acquire property, plant and equipment.

A-6 E. NOTES TO PROFORMA GROUP FINANCIAL STATEMENTS 1. General The Company was incorporated in the Republic of Singapore on 30 July 2004 as a private limited company under the name of Global Testing Corporation Private Limited. It has its registered office at 4 Battery Road #15-01 Bank of China Building, Singapore 049908 and principal place of business at No. 75 Guangfu Rd., Hu-Kou, Hsin-Chu Industrial Park Hsin-Chu County, 303 Taiwan, Republic of China.

The financial statements are expressed in United States dollars, which is the measurement currency of the Group as the majority of the transactions are transacted in that currency.

The Company is an investment holding company.

The principal activities of the subsidiaries are described in Note 9.

2. Basis of Preparation of Proforma Financial Information The Proforma Group financial information for the financial years ended 31 December 2002, 2003 and 2004 have been prepared for inclusion in the Prospectus in connection with the Invitation as described in the Compilation Report.

I. Restructuring Exercise On 30 July 2004, the Company, Global Testing Corporation Limited was incorporated as Global Testing Corporation Private Limited in Singapore under the Singapore Companies Act as a private company with limited liability with an authorised share capital of S$1,000,000 and initial paid up capital of 1 ordinary share of S$0.10 each at par. The principal activity of the Company is that of investment holding. On 28 March 2005, the Company changed its name to Global Testing Corporation Limited.

On 22 March 2005, the Company increased its authorised share capital from S$1,000,000 to S$300,000,000 by the creation of another 2,990,000,000 ordinary shares of S$0.10 each.

For the purpose of listing the Company’s shares on the Singapore Exchange Securities Trading Limited (“SGX-ST”), Global Testing Corporation Limited and its subsidiaries (the “Group” or “Proforma Group”) undertook a Restructuring Exercise, wherein the Company acquired the entire issued and paid-up capital of Global Testing Corporation from the existing shareholders then for a consideration which is based on the book values of the underlying consolidated net assets of Global Testing Corporation and its subsidiaries as at 30 June 2004. The purchase consideration is satisfied by the issuance and allotment of 699,500,000 shares of S$0.10 each.

As the Restructuring Exercise qualified for merger relief under the Singapore Companies Act, the excess of the fair value of the Company’s shares over their par value is not required to be set aside as share premium and is recorded as Merger Reserve.

Pursuant to written resolutions dated 22 March 2005, the sole Shareholder of the Company approved, inter alia, the following:

a) the increase in the authorised share capital of the Company from S$1,000,000 divided into 10,000,000 ordinary shares to S$300,000,000 divided into 3,000,000,000 ordinary shares;

b) the conversion of the Company into a public limited company and the change of the name to “Global Testing Corporation Limited”;

c) the adoption of a new set of Articles;

A-7 d) the allotment and issue of an aggregate 699,500,000 ordinary shares to the shareholders of Global Testing Corporation in connection with the Restructuring Exercise;

e) the allotment and issue of an aggregate 175,500,000 new ordinary shares of S$0.10 each which are the subject of the Invitation. The new ordinary shares when issued and paid up, will rank pari passu in all respects with the existing issued and paid-up shares;

f) the adoption of the Employee Share Option Scheme; and

g) that authority be given pursuant to section 161 of the Companies Act to the directors of the Company to allot and issue new shares or convertible securities at any time (whether by way of rights, bonus or otherwise) and upon such terms and conditions whether for cash or otherwise and for such purposes and to such persons as the directors may in their absolute discretion deem fit, provided that the aggregate number of shares and convertible securities to be issued pursuant to such authority shall not exceed 50 per cent of the post-invitation share capital of the Company and that the aggregate number of such shares and convertible securities to be issued, other than on a pro-rata basis to the existing shareholders does not exceed 20% of the post-invitation share capital of the Company (taking into account the conversion or exercise of any convertible securities and employee share options, if any, on issue at the date of the passing of the resolution), and unless revoked or varied by the Company in the general meeting, such authority shall continue in full force until the conclusion of the Company’s next annual general meeting or the date which the next annual general meeting is required by law or by the Articles to be held, whichever is earlier.

II. Basis of Preparation a) The proforma financial statements of the Group for the three financial years ended 31 December 2002, 2003 and 2004 are prepared for illustrative purposes only. They are prepared in accordance with the accounting policies of the Proforma Group set out in Note 3 to the Proforma Group financial statements. They are prepared based on certain assumptions after making certain adjustments to show what the effect on:

i) the financial results of the Proforma Group for the financial years ended 31 December 2002, 2003 and 2004 would have been if the above Proforma Group structure as of the date of registration of the Prospectus had been in place since the beginning of the periods reported on; and

ii) the financial position of the Proforma Group as at 31 December 2004, changes in equity and cash flow for the financial year ended 31 December 2004 would have been if the above Proforma Group structure as of the date of registration of the Prospectus had been in place on those dates.

The objective of the proforma financial statements of the Group is to show what the historical information might have been had the Group existed throughout the periods under review. However, the proforma financial statements of the Group is not necessarily indicative of the results of the operations or the related effects on the financial position that would have been attained had the Proforma Group actually existed earlier.

A-8 b) The Proforma Group financial statements for the financial years ended 31 December 2002, 2003 and 2004 are compiled based on the audited consolidated financial statements of Global Testing Corporation and its subsidiaries for the financial years ended 31 December 2002, 2003 and 2004 which were prepared in accordance with Singapore Statements of Accounting Standard for the financial year ended 31 December 2002 and in accordance with Singapore Financial Reporting Standards for the financial year ended 31 December 2003 and 2004. c) The auditors of the Proforma Group are described below:

i) Deloitte & Touche Singapore was appointed auditors of the Company on 12 October 2004 and audited the financial statements of the Company for the financial period from the date of incorporation on 30 July 2004 to 31 December 2004 which were prepared in accordance with Singapore Financial Reporting Standards.

ii) Deloitte & Touche Taiwan acted as auditors of Global Testing Corporation and audited the consolidated financial statements of Global Testing Corporation and its subsidiaries for the financial years ended 31 December 2002, 2003 and 2004, which were prepared in accordance with Singapore Statements of Accounting Standard for the financial year ended 31 December 2002 and in accordance with Singapore Financial Reporting Standards for the financial years ended 31 December 2003 and 2004.

iii) The auditors for the companies within the Proforma Group are as follows:

1) Deloitte & Touche Taiwan, a member firm of Deloitte Touche Tohmatsu which audited the financial statements of Global Testing Corporation and Global Investment Corporation (both incorporated in Taiwan, Republic of China) for the financial years ended 31 December 2002, 2003 and 2004.

2) Frank S.K. Cheung, U.S.A. which audited the financial statements of Global Testing Corporation, incorporated in the United States of America for the financial years ended 31 December 2002, 2003 and 2004.

We have performed a review as we considered necessary on these financial statements and are satisfied that the financial statements are appropriate and proper for inclusion in the Proforma Group Consolidated Profit and Loss Statements, Proforma Group Consolidated Balance Sheet, Proforma Group Consolidated Movements in Shareholders’ Equity and Proforma Group Consolidated Statements of Cash Flow. d) The auditors’ reports on the audited financial statements of the companies within the Proforma Group described in paragraph (c) above for the financial periods covered in these proforma financial statements were not subject to any qualification.

A-9 III. Details of Proforma Group Upon completion of the Restructuring Exercise referred to above, the Company will have the following subsidiaries:

Effective equity interest Place of Cost of held by incorporation/ Subsidiary investment the Group operation Principal activities US$’000 %

(a) Held by the Company

Global Testing 41,123 100 Taiwan, Republic Provision of testing Corporation of China services

(b) Held by Global Testing Corporation

(i) Global 1,448 100 Taiwan, Republic Investment holding Investment of China Corporation

(ii) Global Testing 1,750 100 United States Provision of Corporation USA of America marketing and test program development services

3. Summary of Significant Accounting Policies Basis of Accounting The financial statements are prepared in accordance with the historical cost convention modified by the valuation of short-term investments in unit trust funds which are carried at their net asset values. The financial statements are drawn up in accordance with the Singapore Statements of Accounting Standard for the financial year ended 31 December 2002 and the Singapore Financial Reporting Standards for the financial years ended 31 December 2003 and 2004.

The Group’s principal operations are conducted in Taiwan, Republic of China. The financial statements are expressed in the United States dollars, which is the measurement currency of the Group as the majority of the Group’s transactions are denominated in that currency.

Basis of Proforma Consolidation The proforma financial statements for the financial years ended 31 December 2002, 2003 and 2004 are prepared for illustration purposes only. They are prepared on the basis detailed in Note 2 above.

The consolidated proforma financial statements incorporate the financial statements of the Company and enterprises controlled by the Company made up to 31 December each year. Control is achieved when the Company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities.

The subsidiaries included in the Proforma Group pursuant to the Restructuring Exercise are accounted for using the pooling-of-interest method.

To the extent that the fair value of the Company’s shares is in excess over their par value, the difference is recognised as Merger Reserve in the Group’s financial statements.

Except for those subsidiaries which have been consolidated using the pooling-of-interest method, interests in subsidiaries acquired from third parties have been accounted for in accordance with the purchase method.

A-10 On acquisition, the assets and liabilities of the relevant subsidiaries acquired from third parties are measured at their fair values at the date of acquisition.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated profit and loss statement from the effective date of acquisition or to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group.

All significant inter-company transactions and balances between Group enterprises are eliminated on consolidation.

Financial Assets The Group’s principal financial assets are cash, trade and other receivables and other investments. Trade and other receivables are stated at their nominal values as reduced by appropriate allowances for estimated irrecoverable amounts. The accounting policy adopted for other investments is outlined below.

Financial Liabilities and Equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. Significant financial liabilities include trade and other payables and bank loans and overdrafts. Trade and other payables are stated at their nominal values.

Interest-bearing bank loans and overdrafts are recorded at the proceeds received, net of direct costs. Finance charges are accounted for on an accrual basis and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.

Equity instruments are recorded at the fair value of the consideration received, net of direct issue costs.

Treasury Shares Treasury shares are shown as a deduction from equity. Any gain or loss from the disposal of treasury shares is taken to share premium and accumulated profits respectively.

Merger Reserve Merger reserve represents the difference between the nominal amount of the share capital and share premium of the subsidiary, Global Testing Corporation, incorporated in Taiwan, Republic of China at the date on which it was acquired by the Proforma Group and the nominal amount of the share capital of the Company issued as consideration for the acquisition.

Minority Interest Minority interest is stated at the appropriate proportion of the post acquisition fair values of the net identifiable assets of the subsidiary.

Other Investments Other investments comprising investments in unit trust funds on a short-term basis are carried at the net asset value of the unit trust funds provided by the unit trust funds managers. Increases or decreases in the carrying amount of the unit trust funds are recognised as income or expense of the period.

Investments in unit trust funds are recorded in the books on trade date.

A-11 Property, Plant and Equipment Property, plant and equipment are carried at cost less accumulated depreciation and any impairment loss where the recoverable amount of the asset is estimated to be lower than its carrying amount.

Depreciation is charged on a straight line basis so as to write-off the cost of assets, other than freehold land, over their estimated useful lives as follows:

Building – 40 years Leasehold improvements – 5 years Plant and equipment – 3 to 8 years Motor vehicles – 5 years Furniture and fittings – 5 to 10 years Computer software – 5 years

Depreciation is not provided on freehold land and plant and equipment under assembly.

Fully depreciated assets still in use are retained in the financial statements.

Impairment of Assets At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment losses are recognised as an expense immediately.

When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

Provisions Provisions are recognised when the Group has a present obligation as a result of a past event where it is probable that such obligation will result in an outflow of economic benefits that can be reasonably estimated.

Revenue Recognition Revenue represents the invoiced value of services rendered, net of trade discounts and allowances and Value Added Tax. Revenue is recognised when testing services or test program development services have been completed.

Revenue from the leasing of test equipment is recognised on an accrual basis over the period of the operating lease.

Interest income is accrued on a time proportionate basis.

Dividend income is recognised when the shareholders’ rights to receive payment are established.

Borrowing Costs Borrowing costs directly attributable to the acquisition and construction of qualifying assets, which take a substantial period of time to be assembled are added to the cost of those assets, until such time the assets are substantially ready for their intended use.

A-12 All other borrowing costs are recognised in the profit and loss statement in the period in which they are incurred.

The interest capitalised is based on the cost of borrowing to finance the acquisition of the assets and the time taken to assemble the assets and get them ready for their intended use.

Employee Benefits (a) Employee leave entitlement Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.

(b) Equity compensation benefits Employees are entitled to receive shares in a subsidiary, Global Testing Corporation, incorporated in Taiwan, Republic of China when the subsidiary makes a profit, without any payment. The number of shares to be issued to the employees is determined by the management of the subsidiary and is subject to the approval of the shareholders at the annual general meeting. The subsidiary accrues for such shares entitlement based on the par value of the shares on the date of entitlement.

A new accounting standard recently introduced will require the recognition of the expense in respect of such shares entitlement based on the fair value of the shares at the date of entitlement. The requirement to recognise an expense in respect of the shares entitlement based on the fair value of the shares at the date of entitlement is set out in FRS 102, Share- based Payments, issued by the Council on Corporate Disclosure and Governance in July 2004 and is effective for annual financial periods beginning on or after 1 January 2005 for companies listed in Singapore.

(c) Share option Share options were previously granted by a subsidiary, Global Testing Corporation, incorporated in Taiwan, Republic of China, to its directors and employees. No compensation cost was recognised at the date the share options were granted. When the options were exercised, the proceeds received net of any transaction costs were credited to the subsidiary’s share capital account for the par value and the balance to the share premium account.

A new accounting standard recently introduced will require the share option expense, if any, to be recognised over the vesting period based on the fair value of the share options on grant date. The requirement to recognise an expense over the vesting period is set out in FRS 102, Share-based Payments, issued by the Council on Corporate Disclosure and Governance in July 2004 and is effective for annual financial periods beginning on or after 1 January 2005 for companies listed in Singapore.

(d) Retirement benefit A subsidiary, Global Testing Corporation, incorporated in Taiwan, Republic of China, operates a defined benefit retirement plan for its employees in Taiwan whereby eligible employees are entitled to receive benefits from the plan in one lump sum on the date of their retirement.

The cost of providing the retirement benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognised over the expected average remaining working lives of the participating employees. Where there are changes to the defined benefit retirement plan, any associated past service cost is recognised as an expense on a straight-line basis over the average period until the benefits become vested.

A-13 The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service cost and as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to unrecognised actuarial losses and past service cost, plus the present value of available refunds and reductions in future contributions to the plan.

Research and Development Costs Research and development costs are expensed when incurred.

Income Tax Tax expense is determined on the basis of tax effect accounting, using the liability method, and it is applied to all significant temporary differences arising between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, except that a debit to the deferred tax balance is not carried forward unless there is a reasonable expectation of realisation in the foreseeable future.

Deferred tax is charged or credited to the profit and loss statement. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same tax authority.

Conversely, if it is probable that there are sufficient taxable profits in the future to allow all or part of an unrecognised deferred tax asset to be recovered, the deferred tax asset would be recognised to the extent recoverable.

Financial Derivatives Financial derivative transactions entered into by the Group to hedge its financial risks are dealt with in the same manner as the underlying hedged items.

Foreign Currency Transactions and Translation Transactions in foreign currencies are recorded using the rates ruling on the dates of the transactions. At each balance sheet date, recorded monetary balances and balances carried at fair value that are denominated in foreign currencies are reported at the rates ruling at the balance sheet date. All realised and unrealised exchange differences are dealt with in the profit and loss statement.

For inclusion in the consolidated financial statements, the assets and liabilities of the subsidiaries are translated at the rates of exchange approximating those ruling at the balance sheet date. The profit and loss statements are translated at the average rates of exchange for the year and the opening net investment in the foreign entities are translated at the historical rates. The resulting currency translation differences are taken to the currency translation reserve. On disposal of the subsidiary, the accumulated currency translation difference is recognised in the profit and loss statement as part of the profit or loss on disposal.

Cash Cash in the cash flow statement includes cash and cash equivalents, less bank overdrafts.

4. Financial Risks and Management The Group has informal risk management policies. These policies cover the Group’s overall business strategies and its risk management philosophy. The Group’s overall risk management programme seeks to minimise potential adverse effects on the financial performance of the Group.

A-14 Foreign Exchange Risk The Group conducts its business predominantly in the United States dollars and to a certain extent in New Taiwan dollars. The Group currently does not have any formal policy with respect to the management of its foreign exchange risk. It enters into foreign exchange derivatives to hedge the foreign exchange risk when the need arises.

Interest Rate Risk The primary source of the interest rate risk of the Group relates to its bank overdrafts and loans. The Group borrows at variable rates and any fluctuations in interest rate movements would have an impact on the Group’s net income. The interest rates on bank overdrafts and loans are disclosed in Notes 12 and 14 to the financial statements.

The Group currently does not have any formal policy with respect to the management of its interest rate exposure.

Credit Risk The Group has a number of major customers in Asia and the United States of America. During the financial year ended 31 December 2004, the Group’s largest customer accounted for 21.6% of revenues. The Group’s five largest customers collectively accounted for approximately 76.0% of revenues for the financial year ended 31 December 2004. The Group is working on diversifying its customer base and anticipates that its customers concentration will reduce in the foreseeable future. The Group believes that the concentration of its credit risk in trade receivables is mitigated substantially by its credit evaluation process, credit policies, credit control and collection procedures.

The Group’s cash is placed with creditworthy financial institutions.

Liquidity Risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities. Due to the high capital intensive nature of the semiconductor industry, the Group seeks to achieve flexibility in funding by maintaining a combination of committed and uncommitted credit lines with banks.

Fair Values of Financial Assets and Financial Liabilities The carrying amounts of financial assets and financial liabilities reported in the balance sheet approximate their fair values.

5. Related Company Transactions

Some of the transactions and arrangements are between members of the Group. Significant intercompany transactions are as follows:

Year ended 31 December 2002 2003 2004 US$’000 US$’000 US$’000

Testing service charged by a subsidiary 2,821 3,542 5,491

The effects of the above transactions on the bases determined between the parties have been eliminated on consolidation.

A-15 6. Trade Receivables

As at 31 December 2004 US$’000

Outside parties 9,167 Allowance for doubtful debts (42)

Net 9,125

7. Other Investments As at 31 December 2004 US$’000

Unit trust funds: At net asset values 5,282

8. Other Receivables and Prepayments

As at 31 December 2004 US$’000 (a) Current Security deposits 22 Prepayments 872 Other receivables 1,018

Total 1,912

(b) Non-current Deposits 14 Prepayments 117 Other receivables 53

Total 184

The security deposits pertain to deposits placed by the Group as security in accordance with the requirements of the Foreign Labour Law in Taiwan, Republic of China.

A-16 9. Investment in Subsidiaries

Company As at 31 December 2004 US$’000

(a) Equity shares, at cost 41,123

(b) The subsidiaries of the Group are as follows: Effective Country of incorporation/ equity interest Subsidiary Principal activities held by Group Cost 31 December 31 December 2004 2004 % US$’000

(i) Held by the Company

Global Testing Taiwan, Republic of China/ 100 41,123 Corporation (1) (2) Provision of testing services

(ii) Held by Global Testing Corporation

Global Investment Taiwan, Republic of China/ 100 1,448 Company (2) Investment holding

Global Testing United States of America/ 100 1,750 Corporation USA (3) Provision of marketing and test program development services

(1) Shares of this subsidiary are traded on the Emerging Market of the GreTai Securities Market in Taiwan, Republic of China. The shares ceased to be quoted and traded on the GreTai Securities Market on 24 March 2005.

(2) Audited by Deloitte & Touche, Taiwan, Republic of China.

(3) Audited by Frank S.K. Cheung, U.S.A. As at 31 December 2004 US$’000

A-17 10. Property, Plant and Equipment Plant and Leasehold Furniture equipment Freehold improve- Plant andMotor and Computerunder Group land Building ments equipment vehicles fittings software assembly Total US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Cost: At 1 January 2004 1,853 732 608 110,715 104 6,898 872 3,151 124,933

Additions – – 91 6,086 25 268 1,219 24,762 32,451 Disposal – – – (5,263) (42) (1) – – (5,306) Reclassification – – 372 13,378 – 170 – (13,920) –

At 31 December 2004 1,853 732 1,071 124,916 87 7,335 2,091 13,993 152,078

Accumulated depreciation: At 1 January 2004 – 32 156 29,366 63 1,334 369 – 31,320 Depreciation for the year – 18 132 14,241 15 697 512 – 15,615 Disposal – – – (1,794) (33) (1) – – (1,828)

A-18 At 31 December 2004 – 50 288 41,813 45 2,030 881 – 45,107

Depreciation for last year – 14 76 11,858 14 397 170 – 12,529

Carrying amount: At 31 December 2004 1,853 682 783 83,103 42 5,305 1,210 13,993 106,971

As at 31 December 2004, the Group’s freehold land, building and certain of its plant and equipment with a total net book value of US$65,990,000 have been pledged as securities in respect of bank loans granted to the Group (Note 14).

During the financial year ended 31 December 2004, interest expense on bank loans obtained specifically to finance the purchase of plant and equipment under assembly amounting to US$33,000 had been capitalised in the cost of plant and equipment under assembly. The average interest rate applicable to interest expense capitalised for the financial year ended 31 December 2004 ranges from 1.00% to 3.56% per annum. The accumulated interest capitalised amounted to US$729,000 as at 31 December 2004. 11. Deferred Tax Assets As at 31 December 2004 US$’000

Deferred tax assets 4,909 Deferred tax liabilities (1,582)

Net 3,327

The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon during the financial year ended 31 December 2004:

Investment allowance Others Total US$’000 US$’000 US$’000

At 1 January 2004 1,353 207 1,560 Credit (Charge) to profit and loss statement for the year (Note 23) 2,208 (441) 1,767

At 31 December 2004 3,561 (234) 3,327

The balance in others comprises mainly the deferred tax effect on employee benefits and retirement benefit obligations.

12. Bank Loans and Overdrafts As at 31 December 2004 US$’000

Bank overdrafts (unsecured) 19 Short-term bank loans 19,276 Current portion of long-term loans (Note 14) 10,076

Total 29,371

As at 31 December 2004, included in short-term bank loans are amounts of US$594,000 and US$5,000,000 which are secured by a guarantee issued by the Chairman of the Group and by a subsidiary, Global Testing Corporation, respectively. The remaining balance of the short-term bank loans is unsecured.

As at 31 December 2004, the short-term bank loans bear interests at rates ranging from 1.56% to 4.75% per annum and are repayable in full on final maturity on 21 August 2005.

A-19 13. Other Payables As at 31 December 2004 US$’000

Accrued operating expenses 1,794 Payables for plant and equipment purchased 17 Others 425

Total 2,236

14. Long-term Loans As at 31 December 2004 US$’000

Bank loans Current portion (Note 12) 10,076 Non-current portion 22,089

Total 32,165

Long-term loans comprise the following:

(a) A loan of US$11,353,000 which is secured on certain property, plant and equipment of the Group (Note 10) and a guarantee issued by the Chairman of the Group. The loan was obtained on 22 October 2002 with repayment commencing on 22 October 2004. Repayments are on 7 half-yearly instalments with final payment due on 22 October 2007. The loan bears interest at a rate of 2.1% plus one-year term deposit rate which amounts to an average rate of 3.625% per annum.

(b) A loan of US$2,000,000 which is secured on certain property, plant and equipment of the Group (Note 10). The loan bears interest at prime minus 0.25% which amounts to an average rate of 5.0% per annum. The loan was obtained on 3 September 2002 and repayments are on monthly instalments with final payment due on 1 December 2007.

(c) Commercial papers amounting to US$17,630,000 which are secured on certain property, plant and equipment of the Group (Note 10) and a guarantee issued by the Chairman of the Group. The commercial papers were issued on 22 October 2002 and have a maturity date of one year, which can be extended up to 22 October 2007 as a consortium of banks has given a guarantee to the Group under a revolving credit arrangement which provides for the re-issuance of all commercial papers up to 22 October 2007. The commercial papers bear interest at rates ranging from 2.006% to 2.188% per annum.

(d) A loan of US$1,182,000 which is unsecured. The loan was obtained on 30 March 2004 with repayment commencing on 30 September 2004. Repayments are on 4 half-yearly instalments basis with final payment due on 30 March 2006. The loan bears interest at a rate of 2.0% plus prime which amounts to an average rate of 3.59% per annum.

A-20 15. Retirement Benefit Obligations The pension obligations represent the net liability of a subsidiary, Global Testing Corporation, incorporated in Taiwan, Republic of China, under a defined benefit plan in Taiwan. The subsidiary in Taiwan participates in a pension scheme in accordance with the Taiwanese regulations. Under the scheme, the subsidiary is required to contribute a fixed percentage of its payroll incurred to the pension fund and to pay a certain amount out of this pension fund to its employees when they attain the age of retirement.

Actuarial valuation has been performed on the pension liability as at 31 December 2004 by Eureka Consulting Co., Ltd., Taiwan, Republic of China and the shortfall between the pension asset and present value of the obligation as of 31 December 2004 is recognised in the profit and loss statements for the financial year ended 31 December 2004.

Amounts recognised in the profit and loss statements in respect of the defined benefit plan are as follows:

Year ended 31 December 2002 2003 2004 US$’000 US$’000 US$’000

Current service cost 79 83 129 Interest costs 3 6 8 Expected return on plan assets (2) (2) (7) Actuarial gain recognised (1) (2) (2)

Net 79 85 128

The charges have been included in staff costs.

During 2004, the actual return on plan assets was US$2,679.

The following amounts were included in the Group’s balance sheet:

As at 31 December 2004 US$’000

Present valuation of funded obligations 295 Unrecognised actuarial losses 145 Fair value of plan assets (282)

Net 158

The principal actuarial assumptions used were as follows:

As at 31 December 2004 % Discount rate 3.00 Expected return on plan assets 3.00 Expected rate of salary increase 3.25

A-21 16. Issued Capital Number of shares of S$0.10 each As at As at 31 December 31 December 2004 2004 US$’000

Authorised: At beginning and end of year 3,000,000,000 176,367

Issued and paid up: At beginning and end of year 699,500,001 41,123

On 30 July 2004, the Company was incorporated as Global Testing Corporation Private Limited in Singapore under the Singapore Companies Act as a private company with limited liability with an authorised share capital of S$1,000,000 comprising 10,000,000 ordinary shares of S$0.10 each and an initial paid up capital of 1 ordinary share of S$0.10 each at par.

On 22 March 2005, the Company increased its authorised share capital from S$1,000,000 to S$300,000,000 by the creation of another 2,990,000,000 ordinary shares of S$0.10 each. It issued 699,500,000 ordinary shares of S$0.10 pursuant to the Restructuring Exercise.

17. Legal Reserve The Corporation Law in Taiwan, Republic of China requires each company to set aside a legal reserve amounting to 10% of the net profit after tax each year until the company’s accumulated legal reserve is equivalent to the aggregate par value of its issued capital. The company is allowed to capitalise its legal reserve. However, the amount which can be capitalised is limited to 50% of its total accumulated legal reserve and the capitalisation can only be effected when the accumulated legal reserve exceeds 50% of the aggregate par value of the company’s issued capital. The legal reserve can also be used to offset against accumulated losses, if any.

During the financial year ended 31 December 2004, the subsidiary, Global Testing Corporation utilised its legal reserve and share premium amounting to US$1,420,000 and US$2,702,000 respectively, to offset against its accumulated losses of US$4,122,000 as of 31 December 2003.

18. Share Option Scheme (i) A subsidiary, Global Testing Corporation, incorporated in Taiwan, Republic of China, implemented an Employees’ Share Option Scheme (“Share Option Scheme”) for its employees. The Share Option Scheme was approved by its Board of Directors at their meeting held on 27 April and 29 June 2004 and is administered by a committee appointed by the Board of Directors.

(ii) Under the Share Option Scheme, an option entitled the option holder to subscribe for 1,000 new ordinary shares of NT$10 each in the subsidiary at a subscription price of NT$14.9 per share. There is no consideration for the grant of an option. Options granted shall only be exercised after the second anniversary but before the sixth anniversary of the date of grant of that option. The percentage of shares under option which may be exercised on the payment of the relevant subscription price after the second, third and fourth anniversary is 50%, 75% and 100% respectively. Options granted will lapse when the option holder ceases to be a full-time employee of the subsidiary or any company of the Group subject to certain exceptions at the discretion of the subsidiary.

A-22 (iii) The subsidiary issued 5,000 stock options to its employees during April and June 2004 pursuant to the Share Option Scheme. The 5,000 stock options were convertible into 5,000,000 common shares in the subsidiary. To facilitate the listing of the Company’s shares on SGX-ST, all the employees who received such options gave up their rights under the options without any condition or recourse before 23 November 2004. Accordingly, there were no valid options outstanding as of 23 November 2004.

(iv) As at 31 December 2004, the movement of options granted pursuant to the Share Option Scheme are as follows:

Balance Balance as at as at 1 January 31 December Subscription Date of grant 2004 Issued Cancelled 2004 price (US$) Expiry date

27 April 2004 – 2,000 (2,000) – 0.44 26 April 2010 29 June 2004 – 3,000 (3,000) – 0.44 28 June 2010

19. Revenue Revenue comprises fees from the rendering of services.

20. Other Operating Income Year ended 31 December 2002 2003 2004 US$’000 US$’000 US$’000

Interest income 16 6 6 Gain on disposal of other investments 90 72 41 Others 247 124 59

Total 353 202 106

21. Profit/(Loss) from Operations Year ended 31 December 2002 2003 2004

Number of employees at end of year 304 363 381

Year ended 31 December 2002 2003 2004 US$’000 US$’000 US$’000

Directors’ remuneration 263 383 421 Staff costs (including directors’ remuneration) 4,934 5,997 7,576 Costs of defined benefit plans included in staff costs 79 85 128 Allowance/(Write-back of allowance) for doubtful debts 73 (28) (3) Research and development cost 907 1,067 1,319 Rental expense – operating lease 252 283 577 Loss on disposal of property, plant and equipment 1 – 300 Foreign currency exchange adjustment loss 12 702 2,002

Staff costs for the financial year ended 31 December 2002 included accruals of US$660,000 for 2,280,435 shares issued by a subsidiary, Global Testing Corporation, incorporated in Taiwan, Republic of China, to its staff in the financial year ended 31 December 2003 pursuant to the staff benefit plan. The accruals were based on the par value of the subsidiary’s ordinary shares.

A-23 22. Finance Costs Finance costs comprise interest expense on bank overdrafts and loans.

23. Income Tax (a) Year ended 31 December 2002 2003 2004 US$’000 US$’000 US$’000

Current – Taiwan, Republic of China 534 – 258 – Foreign 1 1 3 Overprovision in prior years – (55) – Deferred (Note 11) 30 3,368 (1,767)

Net/Total 565 3,314 (1,506)

(b) The income tax amount varied from the amount of income tax expense (benefit) determined by applying the Singapore income tax rate applicable to each financial year to profit (loss) before income tax as a result of the following differences:

Year ended 31 December 2002 2003 2004 US$’000 US$’000 US$’000

Profit/(Loss) for the year 4,787 (1,692) 10,010

Income tax rate 22.0% 22.0% 20.0%

Income tax expense/(benefit) at statutory rate 1,053 (372) 2,002 Non-allowable/(taxable) items 158 (80) (921) (Utilisation of)/ deferred tax benefits on tax loss carryforwards not recorded (46) 345 161 Investment allowance utilised (677) – (1,675) Deferred tax benefits on investment allowance written off/(recognised) 18 2,980 (1,767) Income tax on undistributed earnings – – 757 Effect of change in tax rate and different tax rates of overseas operations 50 512 (182) Overprovision of current tax in prior years – (55) – Others 9 (16) 119

Net 565 3,314 (1,506)

A-24 (c) Subject to the agreement with the Comptroller of Income Tax and the tax authority in the relevant foreign tax jurisdictions in which the Group operates and conditions imposed by law in those jurisdictions, the Group has tax loss carryforwards and investment allowances available for offsetting against future taxable income as detailed below.

(i) Tax loss carryforwards As at 31 December 2004 US$’000

Taiwan, Republic of China: Amount at beginning and end of year 1,015

Deferred tax benefit on above not recorded 253

United States of America: Amount at beginning of year 3,392 Amount in current year 1,826 Amount utilised in current year (1,020)

Amount at end of year 4,198

Deferred tax benefit on above not recorded –

Deferred tax benefit on above recorded 1,248

Tax losses available for carry forward for offset against future profit in Taiwan, Republic of China are available for five years while those in the United States of America are valid for six to ten years after which any unutilised amount will lapse.

(ii) Investment allowances – deferred tax benefit As at 31 December 2004 US$’000 Taiwan, Republic of China: Amount at beginning of year 7,820 Amount in current year 4,302 Reversal of amount not recorded in prior year (6,467) Amount utilised in current year (2,094)

Amount at end of year 3,561 Amount recorded (Note 11) (3,561)

Amount not recorded –

A-25 (iii) Tax exemption On 20 March 2001, a subsidiary, Global Testing Corporation, incorporated in Taiwan, Republic of China, was granted tax exemption status in respect of any income generated from its in-house testing activities after 1 January 2004 for a period of five years.

(d) Based on current regulations in Taiwan, Republic of China, any dividends paid by a company in Taiwan to a shareholder outside of Taiwan is subject to withholding tax.

Withholding tax on the profits of the profitable subsidiary in Taiwan, Global Testing Corporation, has not been provided for in the Group’s proforma financial statements as the Company does not intend to distribute any dividends out of the subsidiary’s profits generated from the date of incorporation of the subsidiary to 31 December 2004 as they will be ploughed back to fund the subsidiary’s operations. Should the Company desire to distribute the dividends out of the subsidiary’s profits, withholding tax of approximately US$2,575,000 at 31 December 2004 would need to be accrued in the accounts.

To restrict the distribution of the dividends, the subsidiary will transfer the accumulated profits as at 31 December 2004 to a non-distributable general reserve account.

24. Earning/(Loss) Per Share Year ended 31 December 2002 2003 2004

(i) Profit/(Loss) after tax attributable to shareholders (US$’000) 4,222 (5,006) 11,516

(ii) Weighted average number of ordinary shares in issue during the year (‘000) 699,500 699,500 699,500

(iii) Basic earning/(loss) per share (US cents) 0.60 (0.72) 1.65

Basic earning/(loss) per share is calculated by dividing the profit/(loss) after tax attributable to shareholders by the weighted average number of ordinary shares in issue during the financial year.

25. Cash Cash in the consolidated cash flow statements consists of the following:

As at 31 December 2004

US$’000 Cash 6,072 Bank overdrafts (Note 12) (19)

Net 6,053

26. Segment Information (i) Primary reporting format – business segment

The Group’s principal business segment is the provision of testing services to customers in the semi-conductor industry. As there is only one principal business segment, the information regarding its financial position and results is represented by the financial statements as a whole.

A-26 (ii) Secondary reporting format – geographical segment

The Group’s operations and its assets are located mainly in Taiwan, Republic of China. Its customers are located mainly in Taiwan, Republic of China, the United States of America and Singapore. The Group’s geographical segmentation of revenue is based on the billing address of the customers.

The following table shows the revenue by geographical area:

Year ended 31 December 2002 2003 2004 US$’000 US$’000 US$’000

Taiwan, Republic of China 14,807 13,139 26,077 United States of America 8,576 6,317 9,944 Singapore 2,226 5,743 9,159

Total 25,609 25,199 45,180

The following table shows the assets by geographical area as at 31 December 2004 and additions to property, plant and equipment by geographical area during the financial years ended 31 December 2004: As at 31 December 2004 US$’000

Total assets: Taiwan, Republic of China 123,771 United States of America 9,102

Total 132,873

Capital additions: Taiwan, Republic of China 26,659 United States of America 5,792

Total 32,451

27. Capital Expenditure Commitments As at 31 December 2004 US$’000

Estimated amounts committed for future capital expenditure, but not provided for in the financial statements 386

A-27 28. Operating Lease Commitments At the balance sheet date, commitment in respect of operating leases for rental of office facilities and staff quarters with a term of more than one year were as follows: As at 31 December 2004 US$’000

Future minimum lease payments payable: Within one year 409 In the second to fifth year inclusive 857 After five years 271

Total 1,537

29. Subsequent Events Except for the subsequent events disclosed in Note 2I to the proforma financial statements and the event disclosed below, no item, transaction or event of a material and unusual nature has arisen in the interval between 31 December 2004 and the date of this report.

Subsequent to the financial year end, a subsidiary, Global Testing Corporation:

(a) accepted a syndicated credit facility amounting to NT$2.15 billion (US$68,504,000) on 9 May 2005 from a group of financial institutions. The credit facility comprises a NT$1.4 billion (US$44,607,000) term loan and a NT$750 million (US$23,897,000) promissory note. The term loan bears interest at the rate on New Taiwan Dollar commercial paper in the secondary money market plus 1.45% per annum while the promissory note bears interest determined by the bid of the purchasers of the promissory note plus 1% service charge payable to the bank providing the guarantee of the promissory note. As at 11 July 2005, the subsidiary has drawn down NT$1.150 billion (US$35,960,000) for the repayment of its existing short-term loans, the outstanding balance of its existing syndicated credit facility and the purchase of testers. Repayments are on 7 half-year instalments, with the first payment due in May 2007. The term loan is secured on the property, plant and equipment of this subsidiary; and

(b) entered into a long-term loan facility with a financial institution on 19 May 2005 for a credit line of NT$300 million (US$9,559,000). In accordance with the terms of the loan facility, any amount of the loan facility not drawn down by 12 June 2005 would be cancelled. The facility bears interest of approximately 3.96% per annum with repayments in the form of 18 monthly instalments, with the first payment due in June 2005. The loan facility is secured on certain property, plant and equipment of this subsidiary. As at 1 June 2005, the subsidiary has drawn down NT$88 million (US$2,804,000) for the partial repayment of its existing loans and to provide for working capital purposes.

30. Audited Financial Statements No audited financial statements of the Company and its subsidiaries have been prepared for any financial period subsequent to 31 December 2004.

31. Authorisation of Proforma Financial Statements The Proforma financial statements of the Proforma Group for the financial years ended 31 December 2002, 2003 and 2004 were authorised for issue by the Board of Directors on 15 August 2005.

A-28 F. STATEMENT OF ADJUSTMENTS 1. Balance Sheet of Global Testing Corporation and its subsidiaries (a) This represents the audited consolidated balance sheet of Global Testing Corporation and its subsidiaries as at 31 December 2003.

(b) This represents the audited consolidated balance sheet of Global Testing Corporation and its subsidiaries as at 31 December 2004.

2. Pooling-of-interest The subsidiaries included in the Proforma Group pursuant to the Restructuring Exercise are accounted for using the pooling-of-interest method.

To the extent that the fair value of the Company’s shares is in excess over the par value, the difference is recognised as Merger Reserve in the Group’s financial statements.

A-29 APPENDIX B

AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF GLOBAL TESTING CORPORATION AND ITS SUBSIDIARIES

Global Testing Corporation and its Subsidiaries

Consolidated Financial Statements Years Ended December 31, 2004 and 2003

B-1 STATEMENT BY DIRECTORS

In the opinion of the directors, the consolidated financial statements set out on pages B-4 to B-23 are drawn up so as to give a true and fair view of the state of affairs of the Group as at December 31, 2004 and 2003 and of the results, changes in equity and cash flows of the Group for the financial years then ended.

On behalf of the Board of Directors

(June 1, 2005)

B-2 AUDITORS’ REPORT TO THE MEMBERS OF GLOBAL TESTING CORPORATION AND ITS SUBSIDIARIES

We have audited the accompanying consolidated financial statements of Global Testing Corporation and its subsidiaries for the financial years ended December 31, 2004 and 2003 set out on pages B-4 to B-23. These consolidated financial statements are the responsibility of the directors of Global Testing Corporation. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with Singapore Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated 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 the directors, as well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements of the Group for the financial years ended December 31, 2004 and 2003 are properly drawn up in accordance with the Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group as at December 31, 2004 and 2003 and of the results, changes in equity and cash flows of the Group for the financial years ended on those dates.

June 1, 2005

B-3 CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2004 AND 2003

Group Note 2004 2003 US$’000 US$’000

ASSETS CURRENT ASSETS Cash 6,072 1,702 Trade receivables 5 9,125 6,679 Other investments 6 5,282 5,389 Other receivables and prepayments 7 1,912 242

Total current assets 22,391 14,012

NON-CURRENT ASSETS Investment in subsidiaries 8 – – Property, plant and equipment 9 106,971 93,613 Deferred tax assets 10 3,327 1,560 Other receivables and prepayments 7 184 209

Total non-current assets 110,482 95,382

TOTAL ASSETS 132,873 109,394

LIABILITIES AND EQUITY

CURRENT LIABILITIES Bank loans and overdrafts 11 29,371 12,909 Trade payables 2,025 1,185 Other payables 12 2,236 1,488

Total current liabilities 33,632 15,582

NON-CURRENT LIABILITIES Long-term bank loans 13 22,089 28,257 Retirement benefit obligations 14 158 100

Total non-current liabilities 22,247 28,357

Total liabilities 55,879 43,939

CAPITAL AND RESERVES Issued capital 15 43,248 43,248 Treasury shares 15 (85) – Share premium 21,868 24,570 Legal Reserve 16 – 1,420 Accumulated profits (losses) 11,832 (3,806) Currency translation reserve 131 23

Net equity 76,994 65,455

TOTAL LIABILITIES AND EQUITY 132,873 109,394

See accompanying notes to the consolidated financial statements.

B-4 CONSOLIDATED PROFIT AND LOSS STATEMENTS YEARS ENDED DECEMBER 31, 2004 AND 2003

Group Note 2004 2003 US$’000 US$’000

REVENUE 17 45,180 25,199

COST OF SALES (24,631) (20,377)

GROSS PROFIT 20,549 4,822

OTHER OPERATING INCOME 18 106 202

DISTRIBUTION COSTS (654) (336)

ADMINISTRATIVE EXPENSES (5,331) (3,716)

OTHER OPERATING EXPENSES (3,806) (2,032)

PROFIT (LOSS) FROM OPERATIONS 19 10,864 (1,060)

FINANCE COSTS 20 (854) (632)

PROFIT (LOSS) BEFORE INCOME TAX 10,010 (1,692)

INCOME TAX BENEFIT (EXPENSE) 21 1,506 (3,314)

NET PROFIT (LOSS) FOR THE YEAR 11,516 (5,006)

See accompanying notes to the consolidated financial statements.

B-5 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2004 AND 2003

Accumulated Currency Issued Treasury Share Legal (Losses) Translation Group Note Capital Shares Premium Reserve Profits Reserve Total US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

BALANCE AT JANUARY 1, 2003 42,588 – 24,570 938 4,876 (10) 72,962

Legal reserve – – – 482 (482) – –

Issue of share capital 15 660 – – – – – 660

Dividends paid 22 – – – – (3,194) – (3,194)

Net loss for the year – – – – (5,006) – (5,006)

Currency translation reserve – – – – – 33 33 BALANCE AT DECEMBER 31, 2003 43,248 – 24,570 1,420 (3,806) 23 65,455

Transfer – – (2,702) (1,420) 4,122 – –

Net profit for the year – – – – 11,516 – 11,516

Purchase of treasury shares – (85) – – – – (85)

Currency translation reserve – – – – – 108 108 BALANCE AT DECEMBER 31, 2004 43,248 (85) 21,868 – 11,832 131 76,994

See accompanying notes to the consolidated financial statements.

B-6 CONSOLIDATED CASH FLOW STATEMENTS YEARS ENDED DECEMBER 31, 2004 AND 2003

Group Note 2004 2003 US$’000 US$’000

CASH FLOWS FROM OPERATING ACTIVITIES Profit (Loss) before income tax 10,010 (1,692) Adjustments for: Depreciation expense 15,615 12,529 Write–back of allowance for doubtful debts (3) (28) Interest income (6) (6) Interest expense 854 632 Loss on disposal of property, plant and equipment 300 –

Operating profit before working capital changes 26,770 11,435 Trade receivables (2,443) (532) Other receivables and prepayments (1,645) 440 Trade payables 840 175 Other payables 748 (1,269) Retirement benefit obligations 58 15

Cash generated from operations 24,328 10,264 Income tax refund (paid) (261) 54 Interest paid (887) (706) Interest received 66

Net cash from operating activities 23,186 9,618

CASH FLOWS FROM INVESTING ACTIVITIES Decrease (increase) in other investments 107 (3,079) Purchase of property, plant and equipment A (32,418) (14,472) Proceeds from disposal of property, plant and equipment 3,178 –

Net cash used in investing activities (29,133) (17,551)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 10,290 9,997 Issue of share capital – 660 Payment to minority interest – (1) Dividends paid – (3,194) Purchase of treasury shares (85) –

Net cash from financing activities 10,205 7,462

NET EFFECT OF EXCHANGE RATE CHANGES IN CONSOLIDATING SUBSIDIARIES 108 33

NET INCREASE (DECREASE) IN CASH 4,366 (438)

CASH AT BEGINNING OF YEAR 1,687 2,125

CASH AT END OF YEAR 23 6,053 1,687

Note A. Property, plant and equipment During the financial year ended December 31, 2004, the Group acquired property, plant and equipment with an aggregate cost of US$32,451,000 (2003: US$14,546,000) of which US$33,000 (2003: US$74,000) relates to capitalisation of borrowing costs. Cash payments of US$32,418,000 (2003: US$14,472,000) were made to acquire property, plant and equipment.

See accompanying notes to the consolidated financial statements.

B-7 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2004 AND 2003

1. GENERAL The Company is incorporated in the Republic of China with its principal place of business and registered office at No. 75 Guangfu Rd., Hu-Kou, Hsin-Chu Industrial Park Hsin-Chu County, 303 Taiwan, Republic of China.

The financial statements are expressed in the United States dollar which is the measurement currency of the Company and the Group as the majority of the Group’s transactions are denominated in United States dollar.

The principal activities of the Company and the Group are the provisions of testing services to the semiconductor industry. The Group also provides test program development services to customers as well as leasing testing equipments to customers.

During the financial year, the Group undertook a Restructuring Exercise with the objective of having the shares listed on the Singapore Exchange Securities Trading Limited (”SGX-ST”). Under the Restructuring Exercise, the Group incorporated a company, Global Testing Corporation Private Limited (“GTCPL”) in the Republic of Singapore on July 30, 2004. GTCPL’s shares will be listed on SGX-ST. Under the Restructuring Exercise, GTCPL will acquire the entire issued and paid-up capital of the Company from the existing shareholders for a consideration which is based on the book values of the underlying consolidated net assts of the Group as at June 30, 2004. The purchase consideration will be satisfied by the issuance and allotment of 699,500,000 shares of S$0.10 each.

The consolidated financial statements of the Group for the financial years ended December 31, 2004 and 2003 were authorised for issue by the Directors of the Company on June 1, 2005.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements are prepared in accordance with the historical cost convention modified by the valuation of short-term investments in unit trust funds which are carried at their net asset values. The financial statements are drawn up in accordance with the Singapore Financial Reporting Standards and Interpretations of Financial Reporting Standards.

Basis of Consolidation The consolidated financial statements incorporate the financial statements of the Company and enterprises controlled by the Company made up to December 31 each year. Control is achieved when the Company has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefits from its activities. On acquisition, the assets and liabilities of the relevant subsidiaries acquired from third parties are measured at their fair values at the date of acquisition.

All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation.

B-8 Financial Assets The Group’s principal financial assets are cash, trade and other receivables and other investments. Trade and other receivables are stated at their nominal values as reduced by appropriate allowances for estimated irrecoverable amounts. The accounting policy adopted for other investments is outlined below.

Equity instruments are recorded at the fair value of the consideration received, net of direct issue costs.

Other Investments Other investments comprising investments in unit trust funds on a short-term basis are carried at the net asset value of the unit trust funds provided by the unit trust fund managers. Increases or decreases in the carrying amount of the unit trust funds are recognised as income or expense of the period.

Investments in unit trust funds are recorded in the books on trade date.

Property, Plant and Equipment Property, plant and equipment are carried at cost less accumulated depreciation and any impairment loss where the recoverable amount of the asset is estimated to be lower than its carrying amount.

Depreciation is charged on a straight line basis so as to write-off the cost of assets, other than freehold land, over their estimated useful lives as follows:

Building 40 years Leasehold improvements 5 years Plant and equipment 3 to 8 years Motor vehicles 5 years Furniture and fittings 5 to 10 years Computer software 5 years

Depreciation is not provided on freehold land and plant and equipment under assembly.

Fully depreciated assets still in use are retained in the financial statements.

B-9 When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

Treasury Shares Treasury shares are shown as a deduction from equity. Any gain or loss from the disposal of treasury shares is taken to share premium and accumulated profits respectively.

Revenue from the leasing of test equipment is recognised on an accrual basis over the period of the operating lease.

Interest income is accrued on a time proportionate basis.

Dividend income is recognised when the shareholders’ rights to receive payment are established.

All other borrowing costs are recognised in the profit and loss statement in the period in which they are incurred. The interest capitalised is based on the cost of borrowing to finance the acquisition of the assets and the time taken to assemble the assets and get them ready for their intended use.

(b) Equity compensation benefits Employees are entitled to receive shares in the Company when the Company makes a profit, without any payment. The number of shares to be issued to the employees is determined by the management and is subject to the approval of the shareholders at the annual general meeting. The Company accrues for such shares entitlement based on the par value of the shares on the date of entitlement.

(c) Retirement benefit The Company operates a defined benefit retirement plan for its employees in Taiwan, Republic of China whereby eligible employees are entitled to receive benefits from the plan in one lump sum on the date of their retirement.

B-10 The cost of providing the retirement benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognised over the expected average remaining working lives of the participating employees. Where there are changes to the defined benefit retirement plan, any associated past service cost is recognised as an expense on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service cost and as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to unrecognised actuarial losses and past service cost, plus the present value of available refunds and reductions in future contributions to the plan.

Research and Development Costs Research and development costs are expensed as incurred.

Deferred tax is charged or credited to the profit and loss statement. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same tax authority.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Conversely, if it is probable that there are sufficient taxable profits in the future to allow all or part of an unrecognised deferred tax asset to be recovered, the deferred tax assets would be recognised to the extent recoverable.

Cash Cash in the cash flow statement includes cash and cash equivalents, less bank overdrafts.

3. FINANCIAL RISKS AND MANAGEMENT The Group has informal risk management policies. These policies cover the Group’s overall business strategies and its risk management philosophy. The Group’s overall risk management programme seeks to minimise potential adverse effects on the financial performance of the Group.

B-11 Foreign Exchange Risk The Group conducts its business predominantly in United States dollar and to a certain extent in New Taiwan dollar. The Group currently does not have any formal policy with respect to the management of its foreign exchange risk. It enters into foreign exchange derivatives to hedge the foreign exchange risk when the need arises.

The Group currently does not have any formal policy with respect to the management of its interest rate exposure.

Credit Risk The Group has a number of major customers in Asia and in the United States of America. During the financial years ended December 31, 2004 and 2003, the Group’s largest customer accounted for 21.6% and 22.8% of revenues, respectively. The Group’s five largest customers collectively accounted for approximately 76.0% and 80.2% of revenues, respectively, for the financial years ended December 31, 2004 and 2003. The Group is working on diversifying its customer base and anticipates that its customers concentration will reduce in the foreseeable future. The Group believes that the concentration of its credit risk in trade receivables is mitigated substantially by its credit evaluation process, credit policies, credit control and collection procedures.

The Group’s cash is placed with creditworthy financial instruments.

Fair Value of Financial Assets and Financial Liabilities The carrying amounts of financial assets and financial liabilities reported in the balance sheet approximate their fair values.

4. RELATED COMPANY TRANSACTIONS Some of the transactions and arrangements are between members of the Group. Significant intercompany transactions are as follows:

Company 2004 2003 US$’000 US$’000

Testing service charged by a subsidiary 5,491 3,542

The effects of the above transactions on the bases determined between the parties have been eliminated on consolidation.

B-12 5. TRADE RECEIVABLES Group 2004 2003 US$’000 US$’000

Outside parties 9,167 6,724 Allowance for doubtful debts (42) (45)

Net 9,125 6,679

6. OTHER INVESTMENTS Group 2004 2003 US$’000 US$’000

Unit trust funds: At net asset value 5,282 5,389

7. OTHER RECEIVABLES AND PREPAYMENTS Group 2004 2003 US$’000 US$’000

a. Current Security deposits 22 30 Prepayments 872 210 Other receivables 1,018 2

Total 1,912 242

b. Non-current Deposits 14 – Prepayments 117 156 Other receivables 53 53

Total 184 209

The security deposits pertain to deposits placed by the Group as a security in accordance with the requirements of the Foreign Labour Law in Taiwan, Republic of China. In 2004, the Group prepaid the related expenditures for the listing of GTCPL in Singapore in 2004. As of December 31, 2004, the amount prepaid was US$633,000 and this is included in other receivables - current.

B-13 8. INVESTMENT IN SUBSIDIARIES Company 2004 2003 US$’000 US$’000

Equity shares, at cost 3,198 3,198

The subsidiaries of the Group are as follows:

Effective Equity Interest Held by Principal Activities/ Group Cost Name of Company Country of Incorporation 2004 2003 2004 2003 % % US$’000 US$’000

Global Investments Taiwan, Republic of China/ 100.00 100.00 1,448 1,448 Company (1) investment holding

Global Testing United States of America/ 100.00 100.00 1,750 1,750 Corporation—USA (2) provision of marketing and test program development services

Total 3,198 3,198

(1) Audited by Deloitte & Touche, Taiwan, Republic of China.

(2) Audited by Frank S.K. Cheung, U.S.A.

B-14 9. PROPERTY, PLANT AND EQUIPMENT

Plant and Furnitures Equipment Freehold Leasehold Plant and Motor and Computer under Group Land Building Improvements Equipment Vehicles Fittings Software Assembly Total US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Cost: At beginning of year 1,853 732 608 110,715 104 6,898 872 3,151 124,933 Additions – – 91 6,086 25 268 1,219 24,762 32,451 Disposal – – – (5,263) (42) (1) – – (5,306) Reclassification – – 372 13,378 – 170 – (13,920) –

At end of year 1,853 732 1,071 124,916 87 7,335 2,091 13,993 152,078

Accumulated depreciation: At beginning of year – 32 156 29,366 63 1,334 369 – 31,320 Depreciation for the year – 18 132 14,241 15 697 512 – 15,615 Disposal – – – (1,794) (33) (1) – – (1,828) B-15 At end of year – 50 288 41,813 45 2,030 881 – 45,107

Depreciation for last year – 14 76 11,858 14 397 170 – 12,529

Carrying amount: At end of year 1,853 682 783 83,103 42 5,305 1,210 13,993 106,971

At beginning of year 1,853 700 452 81,349 41 5,564 503 3,151 93,613

The Group’s freehold land, building and certain of its plant and equipment with a total net book value of US$65,990,000 (2003: US$72,555,000) have been pledged as securities in respect of bank loans granted to the Group (Note 13).

During the financial year, interest expense on bank loans obtained specifically to finance the purchase of plant and equipment under assembly amounting to US$33,000 (2003: US$74,000) had been capitalised in the cost of plant and equipment under assembly. The average interest rate applicable to interest expenses capitalised ranges from 1.00% to 3.56% (2003: 0.14% to 2.15%) per annum. The accumulated interest capitalised amounted to US$729,000 (2003: US$696,000). 10. DEFERRED TAX ASSETS Group 2004 2003 US$’000 US$’000

Deferred tax assets 4,909 1,566 Deferred tax liabilities (1,582) (6)

Net 3,327 1,560

The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon during the financial years ended December 31, 2004 and 2003:

Investment Allowance Others Total US$’000 US$’000 US$’000

At January 1, 2003 4,739 189 4,928

(Charge) credit to profit and loss statement for the year (Note 21) (3,386) 18 (3,368)

At December 31, 2003 1,353 207 1,560

Credit (charge) to profit and loss statement for the year (Note 21) 2,208 (441) 1,767

At December 31, 2004 3,561 (234) 3,327

The balance in others comprise mainly the deferred tax effect on employee benefits and retirement benefit obligations.

11. BANK LOANS AND OVERDRAFTS Group 2004 2003 US$’000 US$’000

Bank overdrafts (unsecured) 19 15 Short-term bank loans 19,276 7,417 Current portion of long-term loans (Note 13) 10,076 5,477

Total 29,371 12,909

Included in short-term bank loans are amounts of US$594,000 (2003: US$883,000) and US$5,000,000 (2003: US$Nil) which are secured by a guarantee issued by the Chairman of the Group and by a subsidiary, Global Testing Corporation, respectively. The remaining balance of the short-term loan is unsecured.

The short-term bank loans bear interests at rates ranging from 1.56% to 4.75% (2003: 1.80% to 3.50%) per annum and are repayable in full on final maturity on August 21, 2005 (2003: August 21, 2004).

B-16 12. OTHER PAYABLES Group 2004 2003 US$’000 US$’000

Accrued operating expenses 1,794 1,289 Payables for plant and equipment purchased 17 129 Others 425 70

Total 2,236 1,488

13. LONG-TERM BANK LOANS Group 2004 2003 US$’000 US$’000 Bank loans Current portion (Note 11) 10,076 5,477 Non-current portion 22,089 28,257

Total 32,165 33,734

Long-term loans comprise the following:

a. A loan of US$11,353,000 (2003: US$12,364,000) which is secured on certain property, plant and equipment of the Group (Note 9) and a guarantee issued by the Chairman of the Group. The loan was obtained on October 22, 2002 with repayment commencing on October 22, 2004. Repayments are on 7 half-yearly instalments with final payment due on October 22, 2007. The loan bears interest at a rate of 2.1% plus one year term deposit rate which amounts to an average rate of 3.625% (2003: 3.5%) per annum.

b. A loan of US$2,000,000 (2003: US$767,000) which is secured on certain property, plant and equipment of the Group (Note 9). The loan bears interest at prime minus 0.25% which amounts to an average rate of 5.0% (2003: 3.75%) per annum. The loan was obtained on September 3, 2002 and repayments are on monthly instalments with final payment due on December 1, 2007.

c. Commercial papers amounting to US$17,630,000 (2003: US$20,603,000) which are secured on certain property, plant and equipment of the Group (Note 9) and a guarantee issued by the Chairman of the Group. The commercial papers were issued on October 22, 2002 and have a maturity date of one year, which can be extended up to October 22, 2007 as a consortium of banks has given a guarantee to the Group under a revolving credit arrangement which provides for the re-issuance of all commercial papers up to October 22, 2007. The commercial papers bear interest at rates ranging from 2.006% to 2.188% (2003: 1.7470% to 1.7640%) per annum.

d. A loan of US$1,182,000 (2003: US$Nil) which is unsecured. The loan was obtained on March 30, 2004 with repayment commencing on September 30, 2004. Repayments are 4 half-yearly instalments basis with final payment due on March 30, 2006. The loan bears interest at a rate of 2.0% plus prime which amounts to an average rate of 3.59% per annum.

B-17 14. RETIREMENT BENEFIT OBLIGATIONS The pension obligations represent the net liability of the Company under a defined benefit plan in Taiwan, Republic of China. The Company in Taiwan, Republic of China participates in a pension scheme in accordance with the Taiwan, Republic of China regulations. Under the scheme, the Company is required to contribute a fixed percentage of its payroll incurred to the pension fund and to pay a certain amount out of this pension fund to its employees when they attain the age of retirement.

Actuarial valuation has been performed on the pension liability as at December 31, 2004 and December 31, 2003 by Eureka Consulting Co., Ltd., Taiwan, Republic of China and the shortfall between the pension asset and present value of the obligation as of December 31, 2004 and 2003 are recognised in the profit and loss statements of 2004 and 2003, respectively.

Amounts recognised in the profit and loss statements in respect of the defined benefit plan are as follows:

Group 2004 2003 US$’000 US$’000

Current service cost 129 83 Interest costs 86 Expected return on plan assets (7) (2) Actuarial gain recognised (2) (2)

Net 128 85

The charges have been included in staff costs.

During 2004, the actual return on plan assets was US$2,679 (2003: US$2,016).

The following amounts were included in the Group’s balance sheet: Group 2004 2003 US$’000 US$’000

Present valuation of funded obligations 295 260 Unrecognised actuarial losses 145 21 Fair value of plan assets (282) (181)

Net 158 100

The principal actuarial assumptions used were as follows:

2004 2003

Discount rate 3.00% 3.00% Expected return on plan assets 3.00% 3.00% Expected rate of salary increase 3.25% 3.25%

B-18 15. ISSUED CAPITAL Company 2004 2003 Number of Ordinary Shares of NT$10 Each 2004 2003 US$’000 US$’000

Authorised: At beginning of year 230,000,000 200,000,000 58,416 57,554 Issued during the year – 30,000,000 – 862

At end of year 230,000,000 230,000,000 58,416 58,416

Issued and paid up: At beginning of year 139,900,000 137,619,565 43,248 42,588 Issued during the year – 2,280,435 – 660

At end of year 139,900,000 139,900,000 43,248 43,248

During the financial year ended December 31, 2003, the Company increased its authorised share capital from 200,000,000 ordinary share of NT$10 each to 230,000,000 ordinary shares of NT$10 each by the creation of an additional 30,000,000 ordinary shares of NT$10 each. The Company subsequently issued 2,280,435 ordinary shares with a par value of NT$10 each totalling US$660,000 by capitalising the amount owing to employees.

During the financial year ended December 31, 2004, the Company purchased treasury shares amounting to US$85,000.

16. LEGAL RESERVE The Corporation Law in Taiwan, Republic of China requires each company to set aside a legal reserve amounting to 10% of the net profit after tax each year until the company’s accumulated legal reserve is equivalent to the aggregate par value of its issued capital. The company is allowed to capitalise its legal reserve. However, the amount which can be capitalised is limited to 50% of its total accumulated legal reserve and the capitalisation can only be effected when the accumulated legal reserve exceeds 50% of the aggregate par value of the company’s issued capital. The legal reserve can also be used to offset against accumulated losses, if any.

During the financial year ended December 31, 2004, the Company transferred out of its legal reserve and share premium amounting to US$1,420,000 and US$2,702,000 respectively, to offset against its accumulated losses as of December 31, 2003.

17. REVENUE Revenue comprises fees from rendering of services.

18. OTHER OPERATING INCOME Group 2004 2003 US$’000 US$’000

Interest income 6 6 Gain on disposal of other investments 41 72 Other income 59 124

Total 106 202

B-19 19. PROFIT (LOSS) FROM OPERATIONS Group 2004 2003 US$’000 US$’000

Number of employees at end of year 381 363

Group 2004 2003 US$’000 US$’000

Directors’ remuneration 421 383 Staff costs (including directors’ remuneration) 7,576 5,997 Costs of defined benefit plans included in staff costs 128 85 Write-back of allowance for doubtful debts (3) (28) Research and development costs 1,319 1,067 Rental expense – operating lease 577 283 Loss on disposal of property, plant and equipment 300 – Foreign currency exchange adjustment loss 2,002 702

20. FINANCE COSTS Finance costs comprise interest expense on bank overdrafts and loans.

21. INCOME TAX BENEFIT (EXPENSE) Group 2004 2003 US$’000 US$’000

Current – Taiwan, Republic of China (258) – – Foreign (3) (1) Over provision in prior years – 55 Deferred (Note 10) 1,767 (3,368)

Net 1,506 (3,314)

The income tax amount varied from the amount of income (benefit) tax expense determined by applying the Taiwan, Republic of China income tax rate of 25% to profit (loss) before income tax as a result of the following differences:

Group 2004 2003 US$’000 US$’000

Income tax expense (benefit) at statutory rate 2,503 (423) Non-(taxable) allowable items (1,151) (91) Deferred tax benefits on tax loss carryforwards (utilised) 201 392 Investment allowance utilised (2,094) – Deferred tax benefits on investment allowance written off (2,208) 3,386 Income tax on undistributed earnings 947 – Effect of different tax rates of overseas operations 147 123 Overprovision of current tax in prior years – (55) Others 149 (18)

Net (1,506) 3,314

B-20 Subject to the agreement with the Comptroller of Income Tax and the tax authority in the relevant foreign tax jurisdiction in which the Group operates and conditions imposed by law, the Group has tax loss carryforwards and investment allowances available for offsetting against future taxable income as detailed below. a) Tax loss carryforwards 2004 2003 US$’000 US$’000

Taiwan, Republic of China: Amount at beginning of year 1,015 – Amount in current year – 1,015

Amount at end of year 1,015 1,015

Deferred tax benefit on above not recorded 253 253

United States of America: Amount at beginning of year 3,392 2,839 Amount in current year 1,826 553 Amount utilised in the current year (1,020) –

Amount at end of year 4,198 3,392

Deferred tax benefit on above not recorded – 790

Deferred tax benefit on above recorded 1,248 –

Taiwan, Republic of China: Amount at beginning of year 7,820 6,486 Amount in current year 4,302 1,334 Reversal of amount not recorded in prior year (6,467) – Amount utilised in current year (2,094) –

Amount at end of year 3,561 7,820 Amount recorded (Note 10) (3,561) (1,353)

Amount not recorded – 6,467

Unutilised investment allowances in Taiwan, Republic of China can be used to offset against future profits so long as they are used within five years after which any unutilised amount will lapse. The amount of deferred tax benefits recognised on the unutilised investment allowances is based on management’s estimation of future utilisation of such investment allowances. c) Tax exemption On March 20, 2001, the Company was granted tax exemption status in respect of any income generated from its in-house testing activities after January 1, 2004 for a period of five years.

B-21 22. DIVIDENDS During the financial year ended December 31, 2003 the Company declared and paid a final dividend of US$0.023 (NT$0.80) per ordinary share less tax on the ordinary shares of the company totalling US$3,194,000 (NT$110,096,000) in respect of the financial year ended December 31, 2002.

23. CASH Cash in the consolidated cash flow statements consists of the following:

2004 2003 US$’000 US$’000

Cash flows from operating activities: Cash 6,072 1,702 Bank overdrafts (Note 11) (19) (15)

Net 6,053 1,687

24. CAPITAL EXPENDITURE COMMITMENTS Group 2004 2003 US$’000 US$’000

Estimated amounts committed for future capital expenditure, but not provided for in the financial statement 386 1,898

25. OPERATING LEASE COMMITMENTS At the balance sheet date, commitments in respect of operating leases for the rental of office facilities and staff quarters with a term of more than one year were as follows: Group 2004 2003 US$’000 US$’000

Future minimum lease payments payable:

Within one year 409 234 In the second to fifth year inclusive 857 566 After five years 271 –

Total 1,537 800

B-22 26. SUBSEQUENT EVENTS Subsequent to the financial year end, the Company:

a. accepted a syndicated credit facility amounting to NT$2.15 billion (US$68,504,000) on May 9, 2005 from a group of financial institutions. This credit facility comprises a NT$ 1.4 billion (US$44,607,000) term loan and a NT$750 million (US$23,897,000) promissory note. The term loan bears interest at the rate on New Taiwan Dollar commercial paper in the secondary money market plus 1.45% per annum, while the promissory note bears interest determined by the bid of the purchasers of the promissory note plus 1% service charge payable to the bank providing the guarantee of the promissory note. As at June 1 2005, the Company has drawn down NT$975 million (US$31,066,000) for the repayment of the Company’s existing short-term loans, the outstanding balance of the Company’s existing syndicated credit facility and the purchase of testers. Repayments are on 7 half-year installments, with the first payment due in May 2007. The loans are secured on property, plant and equipment of the Company.

b. entered into a long-term loan facility with a financial institution on May 19, 2005 for a credit line of NT$300 million (US$9,559,000). The facility bears interest rate of approximately 3.96% per annum with repayments in the form of 18 monthly instalments, with the first payment due in June 2005. The facility is secured on certain property, plant and equipment of the Company. As at June 1, 2005, the Company has drawn down NT$88 million (US$2,804,000) for the partial repayment of the Company’s existing loans and for working capital purposes.

B-23 Global Testing Corporation and its Subsidiaries

Consolidated Financial Statements Years Ended December 31, 2003 and 2002

B-24 STATEMENT BY DIRECTORS

In the opinion of the directors, the consolidated financial statements set out on pages B-27 to B-45 are drawn up so as to give a true and fair view of the state of affairs of the Group as at December 31, 2002 and 2003 and of the results, changes in equity and cash flows of the Group for the financial years then ended.

On behalf of the Board of Directors

July 26, 2004

B-25 AUDITORS’ REPORT TO THE MEMBERS OF GLOBAL TESTING CORPORATION AND ITS SUBSIDIARIES

We have audited the consolidated financial statements of Global Testing Corporation and its subsidiaries for the financial years ended December 31, 2003 and 2002 set out on pages B-27 to B-45. These consolidated financial statements are the responsibility of the directors of Global Testing Corporation. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the consolidated financial statements of the Group are properly drawn up in accordance with Singapore Financial Reporting Standards and Singapore Statements of Accounting Standards so as to give a true and fair view of the state of affairs of the Group as at December 31, 2003 and 2002, respectively and of the results, changes in equity and cash flows of the Group for the financial years ended on those dates.

Deloitte & Touche (T N Soong & Co and Deloitte & Touche (Taiwan) Established Deloitte & Touche Effective June 1, 2003) Taipei, Taiwan Republic of China

July 26, 2004

B-26 CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2003 AND 2002

Group Note 2003 2002 US$’000 US$’000

ASSETS CURRENT ASSETS Cash 1,702 2,152 Trade receivables 5 6,679 6,119 Other investments 6 5,389 2,310 Other receivables and prepayments 7 242 655

Total current assets 14,012 11,236

NON-CURRENT ASSETS Investment in subsidiaries 8 – – Property, plant and equipment 9 93,613 91,596 Deferred tax assets 10 1,560 4,928 Other receivables and prepayments 7 209 236

Total non-current assets 95,382 96,760

TOTAL ASSETS 109,394 107,996

LIABILITIES AND EQUITY CURRENT LIABILITIES Bank loans and overdrafts 11 12,909 4,522 Trade payables 1,185 1,010 Other payables 12 1,488 2,757

Total current liabilities 15,582 8,289

NON-CURRENT LIABILITIES Long-term bank loans 13 28,257 26,659 Retirement benefit obligations 14 100 85

Total non-current liabilities 28,357 26,744

Total liabilities 43,939 35,033

MINORITY INTEREST –1

CAPITAL AND RESERVES Issued capital 15 43,248 42,588 Share premium 24,570 24,570 Legal Reserve 16 1,420 938 Accumulated (losses) profits (3,806) 4,876 Currency translation reserve 23 (10)

Total equity 65,455 72,962

TOTAL LIABILITIES AND EQUITY 109,394 107,996

See accompanying notes to the consolidated financial statements.

B-27 CONSOLIDATED PROFIT AND LOSS STATEMENTS YEARS ENDED DECEMBER 31, 2003 AND 2002

Group Note 2003 2002 US$’000 US$’000

REVENUE 17 25,199 25,609

COST OF SALES (20,377) (16,111)

GROSS PROFIT 4,822 9,498

OTHER OPERATING INCOME 18 202 353

DISTRIBUTION COSTS (336) (318)

ADMINISTRATIVE EXPENSES (3,716) (3,053)

OTHER OPERATING EXPENSES (2,032) (983)

(LOSS) PROFIT FROM OPERATIONS 19 (1,060) 5,497

FINANCE COSTS 20 (632) (710)

(LOSS) PROFIT BEFORE INCOME TAX (1,692) 4,787

INCOME TAX 21 (3,314) (565)

(LOSS) PROFIT AFTER INCOME TAX (5,006) 4,222

MINORITY INTERESTS – –

(LOSS) NET PROFIT FOR THE YEAR (5,006) 4,222

See accompanying notes to the consolidated financial statements.

B-28 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2003 AND 2002

Accumulated Currency Issued Share Legal Profits Translation Capital Premium Reserve (Losses) Reserve Total Note US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

BALANCE AT JANUARY 1, 2002 42,588 24,570 937 655 (18) 68,732

Legal reserve – – 1 (1) – –

Net profit for the year – – – 4,222 – 4,222

Currency translation reserve – – – – 8 8

BALANCE AT DECEMBER 31, 2002 42,588 24,570 938 4,876 (10) 72,962

Legal reserve – – 482 (482) – –

Issue of share capital 15 660 – – – – 660

Dividends paid 22 – – – (3,194) – (3,194)

Net loss for the year – – – (5,006) – (5,006)

Currency translation reserve – – – – 33 33

BALANCE AT DECEMBER 31, 2003 43,248 24,570 1,420 (3,806) 23 65,455

See accompanying notes to the consolidated financial statements.

B-29 CONSOLIDATED CASH FLOW STATEMENTS YEARS ENDED DECEMBER 31, 2003 AND 2002

Group Note 2003 2002 US$’000 US$’000

CASH FLOWS FROM OPERATING ACTIVITIES (Loss) profit before income tax (1,692) 4,787 Adjustments for: Depreciation expense 12,529 8,690 (Write-back of) allowance for doubtful debts (28) 73 Interest income (6) (16) Interest expense 632 710 Loss on disposal of property, plant and equipment – 1

Operating profit before working capital changes 11,435 14,245 Trade receivables (532) (4,529) Other receivables and prepayments 440 107 Trade payables 175 593 Other payables (1,269) 1,548 Retirement benefit obligations 15 35

Cash generated from operations 10,264 11,999 Income tax refund (paid) 54 (535) Interest paid (706) (797) Interest received 616

Net cash from operating activities 9,618 10,683

CASH FLOWS FROM INVESTING ACTIVITIES (Increase) decrease in other investments (3,079) 2,727 Purchase of property, plant and equipment A (14,472) (31,807)

Net cash used in investing activities (17,551) (29,080)

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 9,997 19,010 Issue of share capital 660 – Payment to minority interest (1) – Dividends paid (3,194) –

Net cash from financing activities 7,462 19,010

NET EFFECT OF EXCHANGE RATE CHANGES IN CONSOLIDATING SUBSIDIARIES 33 8

NET (DECREASE) INCREASE IN CASH (438) 621

CASH AT BEGINNING OF YEAR 2,125 1,504

CASH AT END OF YEAR 23 1,687 2,125

Note A. Property, plant and equipment During the financial year ended December 31, 2003, the Group acquired property, plant and equipment with an aggregate cost of US$14,546,000 (2002: US$31,894,000) of which US$74,000 (2002: US$87,000) relates to capitalisation of borrowing costs. Cash payments of US$14,472,000 (2002: US$31,807,000) were made to acquire property, plant and equipment.

See accompanying notes to the consolidated financial statements.

B-30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2003 AND 2002

1. GENERAL The Company was incorporated in the Republic of China with its principal of business and registered office at No. 75 Guangfu Rd., Hu-Kou, Hsin-Chu Industrial Park Hsin-Chu County, 303 Taiwan, Republic of China.

The financial statements are expressed in the United States dollar which is the measurement currency of the Group as the majority of the Group’s transactions are denominated in United States dollar.

The consolidated financial statements of the Group for the financial years ended December 31, 2003 and 2002 were authorised for issue by the Directors of the Company on July 26, 2004.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements are prepared in accordance with the historical cost convention modified by the valuation of short-term investments in unit trust funds which are carried at their net asset values. The financial statements are drawn up in accordance with Singapore Financial Reporting Standards (“FRS”) and Interpretations of Financial Reporting Standards.

Previously, the Group prepared its financial statements in accordance with Singapore Statements of Accounting Standard. The adoption of FRS does not have any material impact on the accounting policies and figures presented in the financial statements for the financial year ended December 31, 2002.

The results of the subsidiaries acquired or disposed of during the year are included in the consolidated profit and loss statement from the effective date of acquisition or to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by other members of the Group.

All significant intercompany transactions and balances between Group enterprises are eliminated on consolidation.

B-31 Financial Liabilities and Equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. Significant financial liabilities include trade and other payables and bank loans and overdrafts. Trade and other payables are stated at their nominal values.

Equity instruments are recorded at the fair value of the consideration received, net of direct issue costs.

Minority Interest Minority interest is stated at the appropriate proportion of the post acquisition fair values of the net identifiable assets of the subsidiary.

Other Investments Other investments comprising investments in unit trust funds on a short-term basis are carried at the net asset value of the unit trust funds provided by the unit trust fund managers. Increases or decreases in the carrying amount of the unit trust funds are recognised as income or expense of the period.

Investments in unit trust funds are recorded in the books on trade date.

Depreciation is charged on a straight line basis so as to write-off the cost of assets, other than freehold land, over their estimated useful lives as follows:

Building 40 years Leasehold improvements 5 years Plant and equipments 3 to 8 years Motor vehicles 5 years Furniture and fittings 5 to 10 years Computer software 5 years

Depreciation is not provided on freehold land and plant and equipment under assembly.

Fully depreciated assets still in use are retained in the financial statements.

Impairment of Assets At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment losses are recognised as an expense immediately.

B-32 When an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income immediately.

Provisions Provisions are recognised when the Group has a present obligation as a result of a past event where it is probable that the such obligation will result in an outflow of economic benefits that can be reasonably estimated.

Treasury Shares Treasury shares are deducted shown as a deduction from equity. Any gain or loss from the disposal of treasury shares is taken to share premium and accumulated profits respectively.

Revenue from the leasing of test equipment is recognised on an accrual basis over the period of the lease.

Interest income is accrued on a time proportionate basis.

Dividend income is recognised when the shareholders’ rights to receive payment are established.

Borrowing Costs Borrowing costs directly attributable to the acquisition and construction of qualifying assets, which take a substantial period of time to be assembled, are added to the cost of those assets, until such time the assets are substantially ready for their intended use.

All other borrowing costs are recognised in the profit and loss statement in the period in which they are incurred.

The interest capitalised is based on the cost of borrowing to finance the acquisition of the assets and the time taken to assemble the assets and get them ready for their intended use.

(b) Equity compensation benefits Employees are entitled to receive shares in the Company when the Company makes a profit without any payment. The number of shares to be issued to the employees is determined by the management and is subject to the approval of the shareholders at the annual general meeting. The Company accrues for such shares entitlement based on the par value of the shares on the date of entitlement.

B-33 (c) Retirement Benefit The Company operates a defined benefit retirement plan for its employees in Taiwan, Republic of China whereby eligible employees are entitled to receive benefits from the plan in one lump sum on the date of their retirement.

Research and Development Costs Research and development costs are expensed when incurred.

Deferred tax is charged or credited to the profit and loss statement. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same tax authority.

Cash Cash in the cash flow statement includes cash and cash equivalents, less bank overdrafts.

B-34 3. FINANCIAL RISKS AND MANAGEMENT The Group has informal risk management policies. These policies cover the Group’s overall business strategies and its risk management philosophy. The Group’s overall risk management programme seeks to minimise potential adverse effects on the financial performance of the Group.

Foreign Exchange Risk The Group conducts its business predominantly in United States dollar and to a certain extent in New Taiwan dollar. The Group currently does not have any formal policy with respect to the management of its foreign exchange risk. It enters into foreign exchange derivatives to hedge the foreign exchange risk when the need arises.

The Group currently does not have any formal policy with respect to the management of its interest rate exposure.

Credit Risk The Group has a number of major customers in Asia and in the United States of America. During the financial years ended December 31, 2003 and 2002, the Group’s largest customer accounted for 22.8% and 27.2% of revenues, respectively. The Group’s five (2002: four) largest customers collectively accounted for approximately 80.2% and 68.1% of revenues, respectively, for the financial years ended December 31, 2003 and 2002. The Group is working on diversifying its customer base and anticipates that its customers concentration will reduce in the foreseeable future. The Group believes that the concentration of its credit risk in trade receivables is mitigated substantially by its credit evaluation process, credit policies, credit control and collection procedures.

The Group’s cash is placed with creditworthy financial instruments.

Fair Value of Financial Assets and Financial Liabilities The carrying amounts of financial assets and financial liabilities reported in the balance sheet approximate their fair values.

4. RELATED COMPANY TRANSACTIONS Some of the transactions and arrangements are between members of the Group. Significant intercompany transactions are as follows:

Company 2003 2002 US$’000 US$’000

Testing service charged by a subsidiary 3,542 2,821

The effects of the above transactions on the bases determined between the parties have been eliminated on consolidation.

B-35 5. TRADE RECEIVABLES Group 2003 2002 US$’000 US$’000

Outside parties 6,724 6,192 Allowance for doubtful debts (45) (73)

Net 6,679 6,119

6. OTHER INVESTMENTS Group 2003 2002 US$’000 US$’000

Unit trust funds: At net asset value 5,389 2,310

7. OTHER RECEIVABLES AND PREPAYMENTS Group 2003 2002 US$’000 US$’000

a. Current Security deposits 30 29 Prepayments 210 331 Other receivables 2 295

Total 242 655

b. Non-current Security deposits – 1 Prepayments 156 178 Other receivables 53 57

Total 209 236

The security deposits pertain to deposits placed by the Group as security in accordance with the requirements of the Foreign Labour Law in Taiwan, Republic of China.

B-36 8. INVESTMENT IN SUBSIDIARIES Group 2003 2002 US$’000 US$’000

Equity shares, at cost 3,198 3,197

The subsidiaries of the Group are as follows:

Effective Equity Interest Held by Group Cost Principal Activities/ Name of Company Country of Incorporation 2003 2002 2003 2002 % % US$’000 US$’000

Global Investments Taiwan, Republic of China/ 100.00 99.92 1,448 1,447 Company (1) Investment holding

Global Testing United States of America/ 100.00 100.00 1,750 1,750 Corporation – USA (2) Provision of marketing and test program development services

Total 3,198 3,197

(1) Audited by Deloitte & Touche, Taiwan, Republic of China.

(2) Audited by Frank S.K. Cheung, U.S.A.

B-37 9. PROPERTY, PLANT AND EQUIPMENT

Cost: At beginning of year 1,853 460 334 92,362 104 2,726 317 12,231 110,387 Additions – 272 261 297 – 675 555 12,486 14,546 Reclassification – – 13 18,056 – 3,497 – (21,566) –

At end of year 1,853 732 608 110,715 104 6,898 872 3,151 124,933

Accumulated depreciation: At beginning of year – 18 80 17,508 49 937 199 – 18,791 Depreciation for the year – 14 76 11,858 14 397 170 – 12,529

At end of year – 32 156 29,366 63 1,334 369 – 31,320 B-38

Depreciation for last year – 11 40 8,345 15 227 52 – 8,690

Carrying amount: At end of year 1,853 700 452 81,349 41 5,564 503 3,151 93,613

At beginning of year 1,853 442 254 74,854 55 1,789 118 12,231 91,596

The Group’s building, freehold land, building and certain of its plant and equipment with a net book value of US$72,555,000 (2002: US$65,821,000) have been pledged as securities in respect of bank loans granted to the Group (Note 13).

During the financial year, interest expense on bank loans obtained specifically to finance the purchase of plant and equipment under assembly amounting to US$74,000 (2002: US$87,000) had been capitalised in the cost of plant and equipments under assembly. Average interest rate applicable to interest expenses capitalised ranges from 0.14% to 2.15% (2002: 1.58% to 5.76%) per annum. The accumulated interest capitalised amounted to US$696,000 (2002: US$622,000). 10. DEFERRED TAX ASSETS Group 2003 2002 US$’000 US$’000

Deferred tax assets 1,566 4,943 Deferred tax liabilities (6) (15)

Net 1,560 4,928

The following are the major deferred tax assets and liabilities recognised by the Group and movements thereon during the financial years ended December 31, 2003 and 2002:

Investment Allowance Others Total US$’000 US$’000 US$’000

At January 1, 2002 4,759 199 4,958 Charge to profit and loss statement for the year (Note 21) (20) (10) (30)

At December 31, 2002 4,739 189 4,928 (Charge) credit to profit and loss statement for the year (Note 21) (3,386) 18 (3,368)

At December 31, 2003 1,353 207 1,560

The balance in others comprises mainly the deferred tax effect on employee benefits and retirement benefit obligations.

11. BANK LOANS AND OVERDRAFTS Group 2003 2002 US$’000 US$’000

Bank overdrafts (unsecured) 15 27 Short-term bank loans 7,417 3,500 Current portion of long-term loans (Note 13) 5,477 995

Total 12,909 4,522

Included in short-term bank loans is an amount of US$883,000 (2002: US$Nil) which is secured by a guarantee issued by the Chairman of the Group. The balance of the short-term loan are unsecured.

The short-term bank loans bear interests at rates ranging from 1.80% to 3.50% (2002: 3.30% to 3.75%) per annum and are repayable in full on final maturity on August 21, 2004 (2002: July 19, 2003).

B-39 12. OTHER PAYABLES Group 2003 2002 US$’000 US$’000

Accrued operating expenses 1,289 1,582 Payables for plant and equipment purchased 129 644 Others 70 531

Total 1,488 2,757

13. LONG-TERM BANK LOANS Group 2003 2002 US$’000 US$’000

Bank loans Current portion (Note 11) 5,477 995 Non-current portion 28,257 26,659

Total 33,734 27,654

Long-term loans comprise the following:

a. A loan of US$12,364,000 (2002: US$8,633,000) which is secured on certain property, plant and equipment of the Group (Note 9) and a guarantee issued by the Chairman of the Group. The loan was obtained on October 22, 2002 with repayment commencing on October 22, 2004. Repayments are on 7 half-yearly instalments basis with final payment due on October 22, 2007. The loan bears interest at a rate of 2.1% plus six months deposit rate of one year which amounts to an average rate of 3.5% (2002: 3.95%) per annum.

b. A loan of US$767,000 (2002: US$1,763,000) which is secured on certain property, plant and equipment of the Group (Note 9). The loan bears interest at prime minus 0.25% which amounts to an average rate of 3.75% (2002: 4.0%) per annum. The loan was obtained on September 3, 2002 and repayments are on monthly instalments with final payment due on September 18, 2004.

c. Commercial papers amounting to US$20,603,000 (2002: US$17,258,000) which are secured on certain property, plant and equipment of the Group (Note 9) and a guarantee issued by the Chairman of the Group. The commercial papers were issued on October 22, 2002 and have a maturity date of one year, which can be extended up to October 22, 2007 as a consortium of banks has given a guarantee to the Group under a revolving credit arrangement which provides for the re-issuance of all commercial papers up to October 22, 2007. The commercial papers bear interest at rates ranging from 1.7470% to 1.7640% (2002: 2.4300% to 2.7745%) per annum.

14. RETIREMENT BENEFIT OBLIGATIONS The pension obligations represent the net liability of the Company under a defined benefit plan in Taiwan, Republic of China. The Company in Taiwan, Republic of China participates in a pension scheme in accordance with the Taiwan, Republic of China regulations. Under the scheme, the Company is required to contribute a fixed percentage of its payroll incurred to the pension fund and to pay a certain amount out of this pension fund to its employees when they attain the age of retirement.

B-40 Actuarial valuation has been performed on the pension liability as at December 31, 2003 and December 31, 2002 by Eureka Consulting Co., Ltd., Taiwan, Republic of China and the shortfall between the pension asset and present value of the obligation as of December 31, 2003 and 2002 are recognised in the profit and loss statements of 2003 and 2002, respectively.

Amounts recognised in the profit and loss statements in respect of the defined benefit plan are as follows:

Group 2003 2002 US$’000 US$’000

Current service cost 83 79 Interest costs 63 Expected return on plan assets (2) (2) Actuarial gain recognised (2) (1)

Net 85 79

The charges have been included in staff costs.

During 2003, the actual return on plan assets was US$2,016 (2002: US$1,799).

The following amounts were included in the Group’s balance sheet:

Group 2003 2002 US$’000 US$’000

Present valuation of funded obligations 260 187 Unrecognised actuarial losses 21 2 Fair value of plan assets (181) (104)

Net 100 85

The principal actuarial assumptions used were as follows:

2003 2002

Discount rate 3.00% 3.00% Expected return on plan assets 3.00% 3.00% Expected rate of salary increase 3.25% 3.25%

B-41 15. ISSUED CAPITAL Company 2003 2002 2003 2002 Number of Ordinary US$’000 US$’000 Shares of NT$10 Each

Authorised: At beginning of year 200,000,000 200,000,000 57,554 57,554 Issued during the year 30,000,000 – 862 –

At end of year 230,000,000 200,000,000 58,416 57,554

Issued and paid up: At beginning of year 137,619,565 137,619,565 42,588 42,588 Issued during the year 2,280,435 – 660 –

At beginning of year 139,900,000 137,619,565 43,248 42,588

During the financial year ended December 31, 2002, the Company purchased treasury shares amounting to US$378,000. The treasury shares were subsequently issued to the employees at the acquisition price.

17. REVENUE Revenue comprises fees from rendering of services.

18. OTHER OPERATING INCOME Group 2003 2002 US$’000 US$’000

Interest income 6 16 Gain on disposal of other investments 72 90 Other income 124 247

Total 202 353

B-42 19. (LOSS) PROFIT FROM OPERATIONS Group 2003 2002

Number of employees at end of year 363 304

Group 2003 2002 US$’000 US$’000

Directors’ remuneration 383 263 Staff costs (including directors’ remuneration) 5,997 4,934 Costs of defined benefit plans included in staff costs 85 79 (Write-back of) allowance for doubtful debts (28) 73 Research and development costs 1,067 907 Rental expense – operating lease 283 252 Foreign currency exchange adjustment loss 702 12

Staff costs for the financial year ended December 31, 2002 (2003: Nil) included accruals of US$660,000 for 2,280,435 shares issued to staff pursuant to the staff benefit plan. The accruals were based on the par value of the Company’s ordinary shares.

20. FINANCE COSTS Finance costs comprise interest expense on bank overdrafts and loans.

21. INCOME TAX Group 2003 2002 US$’000 US$’000

Current – Taiwan, Republic of China – 534 – Foreign 1 1 Over provision in prior years (55) – Deferred (Note 10) 3,368 30

Net/total 3,314 565

The income tax expense varied from the amount of income tax (benefit) expense determined by applying the Taiwan, Republic of China income tax rate of 25% to (loss) profit before income tax as a result of the following differences:

Group 2003 2002 US$’000 US$’000

Income tax (benefit) expense at statutory rate (423) 1,197 Non-(taxable) allowable items (91) 179 Deferred tax benefits on tax loss carryforwards (utilised) 392 (52) Investment allowance utilised – (769) Deferred tax benefits on investment allowance written off 3,386 20 Effect of different tax rates of overseas operations 123 (20) Overprovision of current tax in prior years (55) – Others (18) 10

Net 3,314 565

B-43 Subject to the agreement with the Comptroller of Income Tax and the tax authority in the relevant foreign tax jurisdictions in which the Group operates and conditions imposed by law in those jurisdictions, the Group has tax loss carryforwards and investment allowances available for offsetting against future taxable income as detailed below.

(a) Tax loss carryforwards 2003 2002 US$’000 US$’000

Taiwan, Republic of China: Amount at beginning of year – 737 Amount in current year 1,015 – Amount utilised in current year – (737)

Amount at end of year 1,015 –

Deferred tax benefit on above not recorded 253 –

United States of America: Amount at beginning of year 2,839 2,309 Amount in current year 553 530

Amount at end of year 3,392 2,839

Deferred tax benefit on above not recorded 790 644

(b) Investment allowances – deferred tax benefit 2003 2002 US$’000 US$’000

Taiwan, Republic of China: Amount at beginning of year 6,486 5,262 Amount in current year 1,334 1,993 Amount utilised in current year – (769)

Amount at end of year 7,820 6,486 Amount recorded (Note 10) (1,353) (4,739)

Amount not recorded 6,467 1,747

(c) Tax exemption On March 20, 2001, a subsidiary, Global Testing Corporation, incorporated in Taiwan, Republic of China, was granted tax exemption status in respect of any income generated from its in-house testing activities after January 1, 2004 for a period of five years.

B-44 22. DIVIDENDS During the financial year ended December 31, 2003, the Company declared and paid a final dividend of US$0.023 (NT$0.80) per ordinary share less tax on the ordinary shares totalling US$3,194,000 (NT$110,096,000) in respect of the financial year ended December 31, 2002.

23. CASH Cash in the consolidated cash flow statements consists of the following:

2003 2002 US$’000 US$’000

Cash flows from operating activities: Cash 1,702 2,152 Bank overdrafts (Note 11) (15) (27)

Net 1,687 2,125

24. CAPITAL EXPENDITURE COMMITMENTS Group 2003 2002 US$’000 US$’000

Estimated amounts committed for future capital expenditure, but not provided for in the financial statements 1,898 3,729

Group 2003 2002 US$’000 US$’000

Future minimum lease payments payable: Within one year 234 234 In the second to fifth year inclusive 566 798 After five years – –

Total 800 1,032

B-45 APPENDIX C

SUMMARY OF THE CONSTITUTION OF OUR COMPANY

The discussion below provides information about certain provisions of our Memorandum and Articles of Association and the laws of Singapore. This description is only a summary and is qualified by reference to Singapore law and our Articles. Where portions of our Articles are reproduced below, defined terms bear the meanings ascribed to them in our Articles.

The instruments that constitute and define our Company are the Memorandum and Articles of Association of our Company.

1. Memorandum of Association and Registration Number The registration number with which our Company was incorporated is 200409582R. Pursuant to our Memorandum of Association and the law, the liability of Shareholders is limited to the amount, if any, for the time being unpaid on the shares respectively held by them. Our Memorandum of Association also sets out the objects for which our Company was formed and the powers of our Company, including the powers set out in the Third Schedule to the Companies Act.

2. Directors (a) Power of Directors to hold office of profit and to contract with our Company

Power of Directors 110) a) Other than the office of auditor, a Director may hold to hold office of any other office or place of profit in the Company and he or any firm profit and to of which he is a member or any company of which he is a director contract with or shareholder may act in a professional capacity for the Company Company in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine. Subject to the Act, no Director or intending Director shall be disqualified by his office from contracting or entering into any arrangement with the Company whether as Vendors, purchaser, lessor, lessee, mortgagor, mortgagee, manager, agent, broker or otherwise howsoever nor shall such contract or arrangement or any contract or arrangement entered into by or on behalf of the Company in which any Director shall be in any way interested whether directly or indirectly be avoided nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason only of such Director holding that office or of the fiduciary relation thereby established. Provided Always That he has complied with the requirements of Section 156 of the Act as to disclosure.

Directors to 110) b) Every Director shall observe the provisions of Section observe Section 156 of the Act relating to the disclosure of the interests of the 156 of the Act Directors in contracts or proposed contracts with the Company or of any office or property held by a Director which might create duties or interests in conflict with his duties or interests as a Director. Notwithstanding such disclosure, a Director shall not vote in regard to any contract or proposed contract or arrangement in which he has directly or indirectly a personal material interest although he shall be taken into account in ascertaining whether a quorum is present.

C-1 110 c) The provisions of Article 110 b) may at any time be suspended or relaxed to any extent and either generally or in respect of any particular contract, arrangement or transaction by the Company in general meeting, and any particular contract, arrangement or transaction carried out in contravention of this Article may be ratified by ordinary resolution of the Company, or as otherwise provided in these Articles.

Directors may 111) b) Subject always to Article 110 b), the Directors may exercise voting exercise the voting power conferred by the shares in any company power conferred held or owned by the Company in such manner and in all respects by Company’s as the Directors think fit in the interests of the Company (including shares in another the exercise thereof in favour of any resolution appointing the company Directors or any of them to be Directors of such company or voting or providing for the payment of remuneration to the Directors of such company).

(b) Remuneration

Fees for Directors 112) (1) The fees of the Directors shall be determined from time to time by the Company in general meetings and such fees shall not be increased except pursuant to an ordinary resolution passed at a general meeting where notice of the proposed increase shall have been given in the notice convening the meeting. Such fees shall be divided among the Directors in such proportions and manner as they may agree and in default of agreement equally, except that in the latter event any Director who shall hold office for part only of the period in respect of which such fee is payable shall be entitled only to rank in such division for the proportion of fee related to the period during which he has held office.

Extra (2) Any Director who is appointed to any executive office remuneration or serves on any committee or who otherwise performs or renders services, which in the opinion of the Directors are outside his ordinary duties as a Director, may, subject to Section 169 of the Act, be paid such extra remuneration as the Directors may determine.

Remuneration (3) Notwithstanding any other Article herein, the by fixed sum remuneration in the case of a Director other than an Executive Director shall be payable by a fixed sum and shall not at any time be by commission on or percentage of the profits or turnover, and no Director whether an Executive Director or otherwise shall be remunerated by a commission on or percentage of turnover.

Reimbursement of 113) The Directors shall be entitled to be repaid all travelling or Expenses such reasonable expenses as may be incurred in attending and returning from meetings of the Directors or of any committee of the Directors or general meetings or otherwise howsoever in or about the business of the Company in the course of the performance of their duties as Directors.

Benefits for 109) The Directors may procure the establishment and employees maintenance of or participate in or contribute to any non- contributory or contributory pension or superannuation fund or life assurance scheme or any other scheme whatsoever for the benefit of and pay, provide for or procure the grant of donations, gratuities, pensions, allowances, benefits or emoluments to any persons (including Directors and other officers) who are or shall have been

C-2 at any time in the employment or service of the Company or of the predecessors in business of the Company or of any subsidiary company, and the wives, widows, families or dependants of any such persons. The Directors may also procure the establishment and subsidy of or subscription and support to any institutions, associations, clubs, funds or trusts calculated to be for the benefit of any such persons as aforesaid or otherwise to advance the interests and well-being of the Company or of any such other company as aforesaid or of its Members and payment for or towards the insurance of any such persons as aforesaid, and subscriptions or guarantees of money for charitable or benevolent objects or for any exhibition or for any public, general or useful object.

Power to borrow 126) The Directors may at their discretion exercise every borrowing power vested in the Company by its Memorandum of Association or permitted by law and may borrow or raise money from time to time for the purpose of the Company and secure the payment of such sums by mortgage, charge or hypothecation of or upon all or any of the property or assets of the Company including any uncalled or called but unpaid capital or by the issue of debentures (whether at par or at discount or premium) or otherwise as they may think fit.

(d) Retirement Age Limit and Shareholding Qualification

Qualifications 107) A Director need not be a Member and shall not be required to hold any share, but subject to the provisions of the Act he shall not be of or over the age of 70 years at the date of his appointment.

3. Share rights and restrictions Our Company currently has one class of shares, namely, ordinary shares.

(a) Dividends and distribution

Declaration and 163) The Directors may, with the sanction of a general meeting, payment of from time to time declare dividends, but no such dividend shall dividends (except as by the Statutes expressly authorised) be payable otherwise than out of the profits of the Company. No higher dividend shall be paid than is recommended by the Directors and a declaration by the Directors as to the amount of the profits at any time available for dividends shall be conclusive. The Directors may, if they think fit, and if in their opinion the position of the Company Interim dividends justifies such payment, without any such sanction as aforesaid, from time to time declare and pay an interim dividend, or pay any preferential dividend on shares issued upon the terms that the preferential dividends thereon shall be payable on fixed dates.

Apportionment of 161) Subject to any right or privileges for the time being attached dividends to any shares having preferential, deferred or other special rights in regard to dividends, the profits of the Company which it shall from time to time be determined to distribute by way of dividend shall be applied in payment of dividends upon the shares in proportion to the amounts paid-up thereon respectively otherwise than in advance of calls.

C-3 Payment of 164) With the sanction of a general meeting, dividends may be dividends in paid wholly or in part in specie, and may be satisfied in whole or in specie part by the distribution amongst the Members in accordance with their rights of fully paid shares, stock or debentures of any other company, or of any other property suitable for distribution as aforesaid. The Directors shall have full liberty to make all such valuations, adjustments and arrangements, and to issue all such certificates or documents of title as in their opinion may be necessary or expedient with a view to facilitating the equitable distribution amongst the Members of the dividends or portions of dividends to be satisfied or to give them the benefit of their proper shares and interests in the property, and no valuation, adjustment or arrangement so made shall be questioned by any Member.

Distribution of 197) If the Company shall be wound up, the liquidator may, with assets in specie the sanction of a special resolution, divide among the Members in specie or kind the whole or any part of the assets of the Company and whether or not the assets shall consist of property of one kind or shall consist of properties of different kinds and may for such purpose set such value as he deems fair upon any one or more class or classes of property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members, but so that if any division is resolved on otherwise than in accordance with such rights, the Members shall have the same right of dissent and consequential rights as if such resolution were a special resolution passed pursuant to Section 306 of the Act. A special resolution sanctioning a transfer or sale to another company duly passed pursuant to the said Section may in like manner authorise the distribution of any shares or other consideration receivable by the liquidators amongst the Members otherwise than in accordance with their existing rights; and any such determination shall be binding upon all the Members subject to the right of dissent and consequential rights conferred by the said Section.

(b) Rights, Preferences and Restrictions

Rights attached to 8) (1) Preference shareholders shall have the same rights preference shares as ordinary shareholders as regards receiving of notices, reports and balance sheets and attending general meetings of the Company. Preference shareholders shall also have the right to vote at any meeting convened for the purpose of reducing the capital or winding up or sanctioning a sale of the undertaking of the Company or where the proposal to be submitted to the meeting directly affects their rights and privileges or when the dividend on the preference shares is more than 6 months in arrears.

Variation of rights 9) If at any time the share capital is divided into different of shares classes, the rights attached to any class (unless otherwise provided by the terms of issue of the shares of that class) may, subject to the provisions of the Act, whether or not the Company is being wound up, be varied or abrogated with the sanction of a special resolution passed at a separate general meeting of the holders of shares of the class and to every such special resolution the provisions of Section 184 of the Act shall with such adaptations as are necessary apply. To every such separate general meeting, the provisions of these Articles relating to general meetings shall mutatis mutandis apply.

C-4 Provided Always That:

a) the necessary quorum shall be two persons at least holding or representing by proxy or by attorney one-third of the issued shares of the class and that any holder of shares of the class present in person or by proxy or by attorney may demand a poll, but where the necessary majority for such a special resolution is not obtained at the meeting, consent in writing if obtained from the holders of three-fourths of the issued shares of the class concerned within two months of the meeting shall be as valid and effectual as a special resolution carried at the meeting; and

b) where all the issued shares of the class are held by one person, the necessary quorum shall be one person and such holder of shares of the class present in person or by proxy or by attorney may demand a poll.

Variation of rights 10) The repayment of preference capital other than redeemable of preference preference capital or any other alteration of preference shareholders shareholders’ rights, may only be made pursuant to a special resolution of the preference shareholders concerned. Provided Always That where the necessary majority for such a special resolution is not obtained at a meeting, consent in writing if obtained from the holders of three-fourths of the preference shares concerned within two months of the meeting, shall be as valid and effectual as a special resolution carried at the meeting.

Form of transfer 22) Subject to the restrictions of these Articles any Member may transfer all or any of his shares, but every transfer must be in writing and in the usual common form, or in any other form which the Directors and the Exchange may approve, and must be left at the Office for registration, accompanied by the certificate of the shares to be transferred, and such other evidence (if any) as the Directors may require to prove the title of the intending transferor, or his right to transfer the shares.

Transferor and 24) The instrument of transfer of a share shall be signed both transferee to by the transferor and by the transferee, provided that an instrument execute transfer of transfer in respect of which the transferee is the Depository shall not be ineffective. The transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the Register of Members in respect thereof; Provided Always That the Directors may dispense with the execution of the instrument of transfer by the transferee in any case in which they think fit in their discretion so to do.

Person under 26) No share shall in any circumstances be transferred to any disability infant, bankrupt or person of unsound mind.

Directors’ power to 28) (1) Subject to these Articles, the Act or as required by decline to register the Exchange, there shall be no restriction on the transfer of fully paid-up shares (except where required by law or the rules, bye-laws or listing rules of the Exchange) but the Directors may in their discretion decline to register any transfer of shares upon which the Company has a lien and in the case of shares not fully paid-up may refuse to register a transfer to a transferee of whom they do not approve.

C-5 Directors’ power to 28) (2) The Directors may decline to recognise any decline to register instrument of transfer unless:

a) a fee not exceeding S$2/- (or such other fee as the Directors may determine having regard to any limitation thereof as may be prescribed by any stock exchange upon which the shares may be listed) as the Director may from time to time require, is paid to the Company in respect thereof;

b) the instrument of transfer is deposited at the Office or such other place as the Directors may appoint and is accompanied by the certificate of the shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer, and where the instrument is executed by some other person on his behalf, the authority of the person so to do; and

c) the instrument of transfer is in respect of only one class of shares.

Closure of 30) The Register of Members and the Depository Register shall Register of be closed during the fourteen (14) days immediately preceding Members every annual general meeting of the Company and at such other times (if any) and for such period as the Directors may from time to time determine; Provided Always That it shall not be closed for more than thirty (30) days in any year (in aggregate) and during such periods the Directors may suspend the registration of transfers. Further Provided Always That the Company shall give prior notice of such closure as may be recognised to the Exchange stating the period and purpose or purposes for which the closure was made.

Renunciation of 31) Nothing in these Articles shall preclude the Directors from allotment recognising a renunciation of the allotment of any share by the allottee in favour of some other person.

Indemnity against 32) Neither the Company nor its Directors nor any of its officers wrongful transfer shall incur any liability for registering or acting upon a transfer of shares apparently made by relevant parties, although the same may, by reason of any fraud or other cause not known to the Company or its Directors or other officers, be legally inoperative or insufficient to pass the property in the shares proposed or professed to be transferred, and although the transfer may, as between the transferor and transferee, be liable to be set aside, and notwithstanding that the Company may have notice that such instrument of transfer was signed or executed and delivered by the transferor in blank as to the name of the transferee or the particulars of the shares transferred, or otherwise in defective manner. In every such case, the person registered as transferee, his executors, administrators and assigns, alone shall be entitled to be recognised as the holder of such shares and the previous holder shall, so far as the Company is concerned, be deemed to have transferred his whole title thereto.

Directors may 38) The Directors may from time to time, as they think fit, make make calls on calls upon the Members in respect of any moneys unpaid on their shares shares or on any class of their shares (whether on account of the nominal value of the shares or by way of premium) and not by the conditions of the issue and allotment thereof made payable at fixed times; and each Member shall (subject to his having been given at

C-6 least fourteen (14) days’ notice specifying the time or times and place of payment) pay to the Company at the time or times and place so specified the amount called on his shares. A call may be made payable by instalments. A call may be revoked or postponed as the Directors may determine.

Time when new 39) A call shall be deemed to have been made at the time call made when the resolution of the Directors authorising the call was passed.

Interest and other 40) If before or on the day appointed for payment thereof, a call late payment payable in respect of a share is not paid, the person from whom the costs amount of the call is due shall pay interest on such amount at the rate of ten per cent (10%) per annum from the day appointed for payment thereof to the time of actual payment, and shall also pay all costs, charges and expenses which the Company may have incurred or become liable for in order to procure payment of or in consequence of the non-payment of such call or instalment, but the Directors shall be at liberty to waive payment of such interest, costs, charges and expenses wholly or in part.

Sum due on 41) Any sum which by the terms of issue of a share is made allotment or other payable upon allotment or at any fixed date, whether on account of fixed date the nominal value of the share or by way of premium, and any instalment of a call shall for all purposes of these Articles be deemed to be a call duly made and payable on the date fixed for payment and, in the case of non-payment, the provisions of these Articles as to payment of interest and expenses, forfeiture and the like and all other relevant provisions of the Statutes or of these Articles shall apply as if such sum were a call duly made and notified as hereby provided.

Power of directors 42) The Directors may from time to time make arrangements on to differentiate the issue of shares for a difference between the holders of such shares in the amount of calls to be paid and in the time of payment of such calls.

Annual general 70) The Company shall in each calendar year hold a general meetings meeting as its annual general meeting in addition to any other meetings in that year and shall specify the meeting as such in the notices calling it. Not more than fifteen (15) months shall elapse between the date of one annual general meeting and that of the next; Provided Always That so long as the Company holds its first annual general meeting within eighteen (18) months of its incorporation, it need not hold it in the year of its incorporation or in the following year. The annual general meeting shall be held at such time and place as the Directors shall appoint.

Extraordinary 71) All general meetings other than annual general meetings general meetings shall be called extraordinary general meetings.

Calling for 72) The Directors may whenever they think fit convene an extraordinary extraordinary general meeting and an extraordinary general meeting general meetings shall also be convened on such requisition or in default may be convened by such requisitionist as provided for by Section 176 of the Act. If at any time there are not within Singapore sufficient

C-7 Directors capable of action to form a quorum at a meeting of Directors, any Director or any two (2) Members may convene an extraordinary general meeting in the same manner as nearly as possible as that in which such a meeting may be convened by the Directors.

Length of notice 74) Any general meeting at which it is proposed to pass special resolutions or (save as provided by the Statutes) a resolution of which special notice has been given to the Company, shall be called by at least twenty-one (21) days’ notice in writing and an annual general meeting or any other general meeting by at least fourteen (14) days’ notice in writing. The notice must specify the place, the day and the hour of meeting, and in the case of special business Contents of notice the general nature of such business, shall be given in the manner hereinafter mentioned to such persons as are under the provisions of these Articles entitled to receive notices of general meetings from the Company, but with the consent of all persons for the time being entitled as aforesaid, a meeting may be convened in such manner as such persons may approve.

Shorter notice Provided that a general meeting notwithstanding that it has been called by a shorter notice than that specified above shall be deemed to have been duly called if it is so agreed:

a) in the case of an annual general meeting by all the Members entitled to attend and vote thereat; and

b) in the case of an extraordinary general meeting by that number or majority in number of the Members having a right to attend and vote thereat as is required by the Act.

Accidental Provided also that the accidental omission to give notice of a omission meeting to or the non-receipt of notice of a meeting by any person entitled to receive notice shall not invalidate the proceedings at the meeting.

The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given.

At least fourteen (14) days’ notice of every general meeting shall be given by advertisement in the daily press and in writing to the Exchange and to each stock exchange upon which the Company is listed.

All business 77) All business shall be deemed special that is transacted at deemed special an extraordinary general meeting and also all that is transacted at business an annual general meeting with the exception of the consideration of the accounts, balance sheets and reports (if any) of the Directors and the auditor of the Company, the election of Directors in place of those retiring by rotation or otherwise, the fixing of the remuneration of Directors, the declaration of dividends, and the appointment of and the fixing of the remuneration of the auditor of the Company, which shall be deemed routine business. Any notice of a meeting called to consider special business shall be accompanied by a statement regarding the effect of any proposed resolution in respect of such special business.

C-8 Notice to specify 78) In the case of any general meeting if any resolution is to be nature of special proposed as a special resolution or as requiring special notice, the business notice shall contain a statement to that effect.

Quorum 79) No business shall be transacted at any general meeting unless a quorum of Members is present at the time when the meeting proceeds to business. Except as herein otherwise provided, two (2) Members present in person shall form a quorum. For the purposes of this article ‘Member’ includes a person attending as a proxy and a corporation being a Member shall be deemed to be personally present if represented in accordance with the provisions of Section 179(3) of the Act. Provided that (i) a proxy representing more than one Member shall only count as one Member for the purpose of determining the quorum; and (ii) where a Member is represented by more than one proxy such proxies shall count as only one Member for the purpose of determining the quorum.

Adjournment if 80) If within half an hour from the time appointed for the holding quorum not of a general meeting a quorum is not present, the meeting if present convened on the requisition of Members shall be dissolved. In any other case, it shall stand adjourned to the same day in the next week at the same time and place or to such other day and at such other time and place as the Directors may determine, and if at such adjourned meeting a quorum is not present within half an hour from the time appointed for holding the meeting, the meeting shall be dissolved.

Chairman 81) The Chairman (if any) of the Board shall preside as Chairman at every general meeting, but if there be no such Chairman, or if at any meeting he shall not be present within fifteen (15) minutes after the time appointed for holding the same, or shall be unwilling to act as Chairman, the Members present shall choose some Director, or if no Director be present, or if all the Directors present decline to take the chair, one of themselves to be Chairman of the meeting.

Adjournment by 82) The Chairman of the meeting may, with the consent of any chairman meeting at which a quorum is present, and shall, if so directed by the meeting, adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for thirty (30) days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give notice of an adjournment or of the business to be transacted at an adjourned meeting.

Method of voting 83) At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands unless, subject to Article 88, a poll is (before or on the declaration of the result of the show of hands) demanded:

(a) by the Chairman of the meeting; or

(b) by at least two Members present in person or by proxy (where a Member has appointed more than one proxy, any one of such proxies may represent that Member) or attorney or in the case of a corporation by a representative and entitled to vote thereat; or

C-9 (c) by any Member or Members present in person or by proxy (where a Member has appointed more than one proxy, any one of such proxies may represent that Member) or attorney or in the case of a corporation by a representative or any number or combination of such Members, holding or representing not less than one-tenth of the total voting rights of all the Members having the right to vote at the meeting; or

(d) by any Member or Members present in person or by proxy (where a Member has appointed more than one proxy, any one of such proxies may represent that Member) or attorney or in the case of a corporation by a representative or any number or combination of such Members, holding or representing shares conferring a right to vote at the meeting being shares on which an aggregate sum has been paid-up equal to not less than one-tenth of the total sum paid-up on all the shares conferring that right.

Equality of votes 84) In the case of an equality of votes whether on a show of hands or on a poll as aforesaid, the Chairman shall be entitled to a second or casting vote in addition to the vote or votes to which he may be entitled as a Member.

Time for taking a 85) If a poll is demanded as aforesaid, it shall be taken in such poll manner and at such time and place as the Chairman of the meeting directs and either at once or after an interval or adjournment or otherwise and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. No notice need be given of a poll not taken at once. In case of any dispute as to the admission or rejection of a vote the Chairman shall determine the same and such determination made in good faith shall be final and conclusive.

Continuance 87) The demand of a poll shall not prevent the continuance of a of business meeting for the transaction of any business other than the question on which a poll has been demanded

Resolutions in 89) Subject to the provisions of the Act, a resolution in writing writing signed by every Member entitled to vote or being a corporation by its duly authorised representative shall have the same effect and validity as an ordinary resolution of the Company passed at a general meeting duly convened, held and constituted, and may consist of several documents in the like form, each signed by one or more of such Members. The expressions ‘in writing’ and ‘signed’ include approval by telefax, telex, cable or telegram by any such Member.

Error in counting 90) If at any general meeting any votes shall be counted which votes ought not to have been counted or might have been rejected, the error shall not vitiate the result of the vote unless it be pointed out at the same meeting, and be in the opinion of the Chairman of sufficient magnitude to vitiate the result of the voting.

C-10 4. Change in capital

Power to 64) The Company may from time to time by ordinary resolution, increase capital whether all the shares for the time being authorised shall have been issued or all the shares for the time being issued shall have been fully called up or not increase its capital by the creation and issue of new shares, such aggregate increase to be of such amount and to be divided into shares of such respective amounts as the Company by the resolution authorising such increase directs.

Rights of new 65) The new shares shall be issued upon such terms and shares conditions and with such rights and privileges annexed thereto as the general meeting resolving upon the creation thereof shall direct, and if no direction be given as the Directors shall determine, and in particular, such new shares may be issued with a preferential or qualified right to dividends and in the distribution of the assets of the Company and with a special or restricted right of voting.

Issue of new 66) (1) Subject to any direction to the contrary that may be shares given by the Company in general meeting or except as permitted under the listing rules of the Exchange, all new shares shall before issue be offered to the Members in proportion, as nearly as the circumstances admit, to the amount of the existing shares to which they are entitled or hold. The offer shall be made by notice specifying the number of shares offered, and limiting a time within which the offer, if not accepted, will be deemed to be declined, and, after the expiration of that time, or on the receipt of an intimation from the person to whom the offer is made that he declines to accept the shares offered, the Directors may dispose of those shares in such manner as they think most beneficial to the Company. The Directors may likewise so dispose of any new shares which (by reason of the ratio which the new shares bear to shares held by persons entitled to an offer of new shares) cannot, in the opinion of the Directors, be conveniently offered under this Article.

(2) Notwithstanding Article 66 (1) above but subject to the Act, the Directors shall not be required to offer any new shares to Members to whom by reason of foreign securities laws such offers may not be made without registration of the shares or a prospectus or other document, but to sell the entitlements to the new shares on behalf of such Members in such manner as they think most beneficial to the Company.

Capital raised 67) Subject to any directions that may be given in accordance deemed original with the powers contained in the Memorandum of Association of the capital Company or these Articles, any capital raised by the creation of new shares shall be considered as part of the original capital and as consisting of ordinary shares and shall be subject to the same provisions with reference to the payment of calls, transfer, transmission, forfeiture, lien and otherwise as if it had been part of the original capital.

Power to 68) (1) The Company may by ordinary resolution: consolidate, cancel and (a) consolidate and divide all or any of its share capital subdivide into shares of larger amount than its existing shares; or shares

C-11 (b) cancel any shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person or which have been forfeited and diminish the amount of its share capital by the amount of the shares so cancelled; or

(c) subdivide its shares or any of them into shares of a smaller amount than is fixed by the Memorandum of Association of the Company (subject nevertheless to the provisions of the Act) provided always that in such subdivision the proportion between the amount paid and the amount (if any) unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; or

(d) subject to the provisions of these Articles and the Act, convert any class of shares into any other class of shares.

Power to (2) Subject to and in accordance with the provisions of purchase or the Act, the listing rules of the Exchange and any applicable acquire shares legislation or regulation, the Company may authorise the Directors in general meeting to purchase or otherwise acquire any of its issued shares on such terms as the Company may think fit and in the manner prescribed by the Act. All shares repurchased or otherwise reacquired by the Company shall be cancelled in accordance with the provisions of the Act. On cancellation of any share as aforesaid, the rights and privileges attached to that share shall expire. In any other instance, the Company may deal with any such share which is so purchased or acquired by it in such manner as may be permitted by the Act.

Reduction of 69) The Company may by special resolution reduce its share share capital capital, any capital redemption reserve fund or any share premium account in any manner, subject to any requirements and consents required by law.

5. Limitations on shareholders regarded as non-residents of Singapore Except as described in the sub-sections entitled “Voting Rights” and “Takeovers” in Appendix D on pages D-2 and D-3 of this Prospectus, there are no limitations imposed by Singapore law or by our Articles on the rights of non-resident Shareholders to hold our Shares or to vote.

C-12 APPENDIX D

DESCRIPTION OF OUR SHARES

The discussion below provides information about our share capital, the main provisions of our Articles and the laws of Singapore relating to our shares. This description is only a summary and is qualified by reference to Singapore law and our Articles.

Ordinary Shares Our authorised capital is S$300,000,000 consisting of 3,000,000,000 ordinary shares of par value S$0.10 each. We have only one class of shares, namely, our ordinary shares, which have identical rights in all respects and rank equally with one another. Our Articles provide that we may issue shares of a different class with preferential, qualified or deferred right to dividends and in the distribution of assets of our Company and with special or restricted right of voting, privileges or conditions as our Board may determine and may issue preference shares which are, or at our option are, liable to be redeemed, subject to certain limitations. Our Directors may issue shares at a premium. If shares are issued at a premium, a sum equal to the aggregate amount or value of the premium will be transferred to a share premium account.

As of the date of this Prospectus, 699,500,001 ordinary shares of par value S$0.10 each are issued and paid-up. All of our Shares are in registered form. We may, subject to the provisions of the Companies Act and the rules of the SGX-ST, purchase our own Shares. However, we may not, except in circumstances permitted by the Act, grant any financial assistance for the acquisition or proposed acquisition of our own Shares.

New Shares New Shares may only be issued with the prior approval of our Shareholders in a general meeting. The approval, if granted, will lapse at the conclusion of the annual general meeting (“AGM”) following the date on which the approval was granted. Our Shareholders have given us general authority to issue any remaining approved but unissued Shares prior to our next AGM. Subject to the foregoing, the provisions of the Companies Act and any special rights attached to any class of shares currently issued, all new Shares are under the control of our Board who may allot and issue the same with such rights and restrictions as it may think fit. Our Shareholders are not entitled to pre-emptive rights under our Articles or Singapore law.

Shareholders Only persons who are registered in our register of shareholders and, in cases in which the person so registered is the CDP, the persons named as the depositors in the depository register maintained by the CDP for our Shares, are recognised as our Shareholders.

We will not, except as required by law, recognise any equitable, contingent, future or partial interest in any Share or other rights for any Share other than the absolute right thereto of the registered holder of the Share or of the person whose name is entered in the depository register for that Share. We may close the Register of Shareholders from time to time if we provide the Accounting & Corporate Regulatory Authority of Singapore with at least 14 days notice and the SGX-ST at least 10 clear Market Days notice. However, the Register may not be closed for more than 30 days in aggregate in any calendar year.

Transfer of Shares Save as disclosed in this Prospectus, there is no restriction on the transfer of our fully paid Shares except where required by law or the rules, articles of association or existing rules of the SGX-ST. Our Board may only decline to register any transfer of Shares which are not fully paid Shares or Shares on which we have a lien. Our Shares may be transferred by a duly signed instrument of transfer in any form acceptable to our Board and SGX-ST. Our Board may also decline to register any instrument of transfer

D-1 unless, among other things, it has been duly stamped and is presented for registration together with the share certificate and such other evidence of title as they may require. We will replace lost or destroyed certificates for our Shares if we are properly notified and if the applicant pays a fee which will not exceed S$2.00 and furnishes any evidence and indemnity that our Board may require.

General Meetings of Shareholders We are required to hold an AGM every year. Our Board may convene an extraordinary general meeting whenever it thinks fit and must do so if Shareholders representing not less than 10% of the total voting rights of all Shareholders request in writing that such a meeting be held. In addition, two or more Shareholders holding not less than 10% of our issued share capital may call a meeting. Unless otherwise required by Singapore law or by our Articles, voting at general meetings is by ordinary resolution, requiring an affirmative vote of a simple majority of the votes cast at that meeting. An ordinary resolution suffices, for example, for the appointment of Directors. A special resolution, requiring the affirmative vote of at least 75% of the votes cast at the meeting, is necessary for certain matters under Singapore law, including the voluntary winding up of our Company, amendments to our Memorandum and Articles of Association, a change of our corporate name and a reduction in our share capital, share premium account or capital redemption reserve fund. We must give at least 21-days’ notice in writing for every general meeting convened for the purpose of passing a special resolution. Ordinary resolutions generally require at least 14-days’ notice in writing. The notice must be given to every Shareholder who at all times of the convening of the meeting shall have paid all calls or other sums presenting payable by him in respect of our Shares and must set forth the place, the day and the hour of the meeting and, in the case of special business, the general nature of that business.

Voting Rights A Shareholder is entitled to attend, speak and vote at any general meeting, in person or by proxy. A proxy need not be a Shareholder. A person who holds Shares through the CDP book-entry clearance system will only be entitled to vote at a general meeting as a Shareholder if his name appears on the depository register maintained by CDP 48 hours before the general meeting.

Except as otherwise provided in our Articles, two or more Shareholders must be present in person or by proxy to constitute a quorum at any general meeting. Under our Articles, on a show of hands, every Shareholder present in person shall have one vote and, on a poll, every Shareholder present in person or by proxy shall have one vote for each Share held. A poll may be demanded in certain circumstances, including but not limited to the chairman of the meeting, by any Shareholder present in person or by proxy and representing not less than 10% of the total voting rights of all Shareholders having the right to attend and vote at the meeting, by any two Shareholders present in person or by proxy and being entitled to vote.

Dividends Our Directors may, with the sanction of the Shareholders by ordinary resolution, declare dividends, but we may not pay dividends in excess of the amount recommended by our Board. Any dividend we pay must be paid out of our profits or pursuant to Section 69 of the Companies Act. Our Directors may also declare an interim dividend. All dividends are paid pro rata among our Shareholders in proportion to the amount paid-upon each Shareholder’s Shares, unless the rights attaching to an issue of any Share provides otherwise. Unless otherwise directed, dividends are paid by cheque or warrant sent through the post to each Shareholder at his last registered address.

Bonus and Rights Issue Our Shareholders at a general meeting may, upon the recommendation of our Director, capitalise any reserves or profits (including profit or monies carried and standing to any reserve or to the share premium account) and distribute the same as bonus shares credited as paid-up to our Shareholders in proportion to their shareholdings. Our Directors may also issue rights to take up additional Shares to Shareholders in proportion to their shareholdings. Such rights are subject to any conditions attached to such issue.

D-2 Takeovers The Securities and Futures Act and the Singapore Code on Takeovers and Mergers regulate the acquisition of ordinary shares of public companies and contain certain provisions that may delay, deter or prevent a future takeover or change in control of our Company. Any person acquiring an interest, either acting singly or together with other parties acting in concert with him, in 30% or more of our voting shares must extend a takeover offer for the remaining voting shares in accordance with the provisions of the Singapore Code on Takeovers and Mergers. A mandatory takeover offer is also required to be made if a person holding, either on his own or together with parties acting in concert with him, between 30% and 50% of our voting shares acquires additional voting shares representing more than 1% of our voting shares in any six-month period.

“Parties acting in concert” include, unless the contrary is established, a company and its related and associated companies, a company and its directors (including their close relatives and related trusts), a company and any of its pension funds, a person and any investment company, unit trust or other fund whose investment such person manages on a discretionary basis, and a financial adviser and its client in respect of shares held by the financial adviser, including a stockbroker and shares held by all the funds which the financial adviser managers on a discretionary basis, where the shareholdings of the financial adviser and any of those funds in the client total 10% or more of the client’s equity share capital, a director of a company (together with their close relatives, related trusts and companies controlled by any such directors, their close relatives and related trust) which is subject to an offer or where the directors have reason to believe a bona fide offer for their company may be imminent, partners and an individual, his close relatives, his related trust, any person who is accustomed to act in accordance with his instruction and companies controlled by him (or his close relatives, his related trust or any person who is accustomed to act in accordance with his instruction).

Liquidation or Other Return of Capital If our Company is liquidated or in the event of any other return of capital, holders of our Shares will be entitled to participate in any surplus assets in proportion to their shareholdings, subject to any special rights attaching to any other class of shares then existing.

Indemnity Our Articles provide that, subject to the Companies Act, we will indemnify our Directors and officers against any costs, charges, losses, expenses and liabilities incurred in the execution and discharge of their duties or in relation thereto. We may not indemnify Directors and officers against any liability which by law would otherwise attach to them in respect of any negligence, wilful default, breach of duty or breach of trust of which they may be guilty in relation to our Company.

Minority Rights As we are a Singapore-incorporated company, the rights of our minority Shareholders are protected under Section 216 of the Companies Act, which gives the Singapore courts a general power to make any order, upon application by any of our Shareholders, as they think fit to remedy any of the following situations: z if our affairs are being conducted or the powers of our Board are being exercised in a manner oppressive to, or in disregard of the interests of, one or more of our Shareholders; or z if we take an action, or threaten to take an action, or our Shareholders pass a resolution, or propose to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to, one or more of our Shareholders, including the applicant.

Singapore courts have wide discretion as to the relief they may grant and that relief is in no way limited to those listed in the Companies Act itself.

Without prejudice to the foregoing, Singapore courts may: z direct or prohibit any act or cancel or vary any transaction or resolution;

D-3 z regulate our affairs in the future; z authorise civil proceedings to be brought in the name of, or on behalf of, our Company by a person or persons and on such terms as the court may direct; z provide for the purchase of a minority shareholder’s shares by our other Shareholders or by our Company and, in the case of a purchase of shares by us, a corresponding reduction of our share capital; or z provide that our Company be wound up.

D-4 APPENDIX E

TAXATION

SINGAPORE TAXATION The following is a discussion of certain tax matters arising under the current tax laws in Singapore and is not intended to be and does not constitute legal or tax advice. The discussion is based on laws, regulations and interpretations now in effect and available as of the date of this Prospectus. These laws and regulations are subject to changes, which may be retrospective to the date of issuance of our Shares. These laws and regulations are also subject to various interpretations and the relevant tax authorities or the courts of Singapore could later disagree with the explanations or conclusions set out below.

The discussion is limited to a general description of certain tax consequences in Singapore with respect to purchase, ownership and disposal of our Shares, and does not purport to be a comprehensive nor exhaustive description of all tax considerations that may be relevant to a decision to purchase, hold or dispose of our Shares. Prospective investors should consult their own tax advisors concerning the tax consequences of owning and disposing our Shares. Neither our Company, Directors, the Vendors nor any other persons involved in the Invitation accepts responsibility for any tax effects or liabilities resulting from the subscription for, purchase, holding or disposal of our Shares.

INCOME TAX General Singapore resident taxpayers are subject to Singapore income tax on:

(i) income accruing in or derived from Singapore; and

(ii) foreign income received or deemed received in Singapore.

However, foreign income in the form of branch profits, dividends and service income received or deemed received in Singapore on or after 1 June 2003 by a resident taxpayer shall be tax exempt provided the following conditions are met:

(i) such income is subject to tax of a similar character to income tax under the law of the jurisdiction from which such income is received;

(ii) at the time the income is received in Singapore, the highest rate of tax of a similar character to income tax in the jurisdiction from which the income is received is at least 15%; and

(iii) the Comptroller of Income Tax is satisfied that the tax exemption would be beneficial to the recipient of the foreign income.

In addition, all foreign-sourced personal income received or deemed received in Singapore by a Singapore tax resident individual (except where such income is received through a partnership) on or after 1 January 2004 will be exempt from tax in Singapore. Certain investment income derived from Singapore sources by individuals on or after 1 January 2004 will also be exempt from tax.

Non-Singapore resident corporate taxpayers, subject to certain exceptions, are subject to Singapore income tax on:

(i) income that is accrued in or derived from Singapore; and

(ii) foreign income received or deemed received in Singapore.

E-1 Non-Singapore resident individuals, subject to certain exceptions, are subject to Singapore income tax only on income accruing in or derived from Singapore.

A company is regarded as a tax resident in Singapore if the control and management of its business is exercised in Singapore. An individual is a tax resident in Singapore if, in the calendar year preceding the year of assessment, he was physically present in Singapore or exercised employment in Singapore (other than as a director of a company) for 183 days or more, or if he ordinarily resides in Singapore.

The corporate tax rate in Singapore is 20% from the Year of Assessment 2005 (22% for the Year of Assessment 2004). In addition, three-quarters of up to the first $10,000 of a company’s normal chargeable income, and one-half of up to the next $90,000 of the company’s normal chargeable income are exempt from tax. The remaining chargeable income (after the partial tax exemption) will be taxed at the applicable corporate tax rate. The partial tax exemption does not apply to Singapore dividends received by companies.

In addition, a tax exemption scheme for qualifying newly incorporated Singapore companies will be effective from Year of Assessment 2005. Under this scheme, the first $100,000 of their normal chargeable income (excluding Singapore dividends) for each of their first three consecutive years of assessment that falls within Years of Assessment 2005 to 2009 would be exempt from tax.

Singapore tax resident individuals are subject to tax based on a progressive scale. The top marginal rate is 22% for the Year of Assessment 2005 (i.e. calendar year 2004). The top marginal tax rate will be reduced to 21% and 20% for Years of Assessment 2006 and 2007 respectively.

Non-Singapore resident individuals are generally subject to tax at a rate equivalent to the prevailing corporate tax rate.

Dividend Distributions Dividend Distributions – Imputation System Prior to 1 January 2003, Singapore operated an imputation system to all dividends (other than normal exempt dividends) paid by companies which are resident in Singapore. Under this system, the tax paid by a company at the prevailing corporate tax rate is imputed to the shareholders upon the payment of a dividend to its shareholders. Effectively, the tax paid by the company is deemed to be paid by the shareholders. The shareholders, therefore, receive the dividend net of such tax and they are taxed on the gross amount of the dividend (i.e. the cash amount plus a tax credit which represents corporate tax paid by the company). The tax paid by the company is available to its shareholders as a tax credit to offset their overall Singapore income tax liability. If the overall Singapore tax payable by the shareholder is less than the tax credit, the shareholder is entitled to a refund on the difference from the Inland Revenue Authority of Singapore (“IRAS”).

Singapore franked dividend received by a non-resident shareholder is taxable at the prevailing corporate tax rate. As the tax paid by the company at the prevailing corporate tax rate is deemed to be paid by its shareholders, there would be no further Singapore tax payable by the non-resident shareholder in respect of the dividend received. Correspondingly, if the non-resident shareholder does not incur any expenses which are deductible against the dividend received, there would generally be no refund due to the non-resident shareholder from the IRAS.

Dividend Distributions – One Tier Corporate Taxation System (“One-Tier System”) The Imputation System was replaced by a One-Tier Corporate Taxation System (“One-Tier System”) on 1 January 2003. Under the One-Tier System, the tax paid by a company is a final tax and the after-tax profits of the company can be distributed to shareholders as Tax Exempt (One-Tier) dividends.

As our Company is currently under the One-Tier System, any dividend paid by our Company would be a Tax-Exempt (One-Tier) dividend. The dividend would be exempt from tax in the hands of our Shareholders (individual or corporate) regardless of whether the shareholders are Singapore tax resident.

E-2 Gains on disposal of the Shares Singapore does not impose tax on capital gains. However, gains arising from the disposal of our Shares may be construed to be of an income nature and subject to tax if they arise from activities which the IRAS regards as the carrying on of a trade or business in Singapore.

Any profits from the disposal of our Shares are not taxable in Singapore unless the seller is regarded as carrying on a trade or business of dealing in shares in Singapore. In which case, such gains would be taxable as trading profits.

STAMP DUTY No stamp duty is payable on the allotment or holding of our Shares.

Stamp duty is payable on an instrument of transfer of our Shares at the rate of $0.20 for every $100 or any part thereof of the consideration for our Shares. The purchaser is liable for stamp duty, unless otherwise agreed. However, no stamp duty is payable if no instrument of transfer is executed (such as in the case of scripless shares, the transfer of which does not require instruments of transfer to be executed) or if the instrument of transfer is executed outside Singapore. However, stamp duty may be payable if the instrument of transfer which is executed outside Singapore is subsequently received in Singapore.

ESTATE DUTY Singapore estate duty is imposed on the value of immovable property situated in Singapore and on movable property, wherever it may be, owned by individuals who are domiciled in Singapore, subject to specific exemption limits.

Singapore estate duty is imposed on the value of immovable property situated in Singapore and owned by individuals who are not domiciled in Singapore, subject to specific exemption limits.

Our Shares are considered movable property situated in Singapore as our Company is incorporated in Singapore and the register of the shares is kept in Singapore. Accordingly, our Shares held by an individual are subject to Singapore estate duty upon the individual’s death, if the individual is domiciled in Singapore. Singapore estate duty is payable to the extent that the value of the shares aggregated with any other assets subject to Singapore estate duty exceeds $600,000. Any excess beyond $600,000 will be taxed at 5% on the first $12,000,000 of the individual’s Singapore dutiable assets and any excess over $12,000,000 will be taxed at 10%. It should be noted that certain assets, although dutiable, are not included in this aggregation. For example, dwelling houses are assessed separately and subject to a different exemption limit.

Individuals, whether or not domicile in Singapore, should consult their own tax advisors regarding the Singapore estate duty consequences of their ownership of our Shares.

GOODS AND SERVICES TAX (“GST”) The sale of the Shares by an investor belonging in Singapore through a SGX-ST member or to another person belonging in Singapore is an exempt supply not subject to GST. Where the Shares are sold by the investor to a person belonging outside Singapore, the sale is generally a taxable supply subject to GST at zero-rate. Any GST incurred by a GST-registered investor in the making of this supply in the course of furtherance of a business may be recovered from the Comptroller of GST. Services such as brokerage, handling and clearing services rendered by a GST-registered person to an investor belonging in Singapore in connection with the investor’s purchase, sale or holding of the Shares will be subject to GST at the current rate of five percent. Similar services rendered to an investor belonging outside Singapore would generally be zero-rated i.e. subject to GST at zero per cent..

E-3 TAIWAN TAXATION TAXATION LAW Taiwan’s taxation administration is under the ultimate jurisdiction of the Ministry of Finance that administers taxation at all levels and has power to formulate, enact and construct tax law, its enforcement on an administrative level, set forth taxation policy as well as its implementation in levying and collecting taxes. In Taiwan, taxes are divided into approximately 17 categories at the national, metropolitan, county and city taxes.

The tax year for profit-seeking enterprises is the fiscal accounting year, while the tax year of individuals shall be on the basis of a calendar year. In principle, Taiwan imposes taxation on the global income of profit-seeking enterprises having headquarters in Taiwan, subject to investment incentive measures, i.e., tax breaks or other tax exemption, etc. Despite whether the income is remitted into Taiwan, branches of foreign companies are liable for their profit-seeking enterprise income taxation if such income is generated from the sources within Taiwan.

Taiwan’s taxation law provides various tax designations to accommodate the rapid changing development of industry and commerce; and there are specific regulations governing income taxes, business taxes, customs tariffs and so forth. As for corporate income taxation is concerned:

1. For any profit-seeking enterprise having its head office within the territory of Taiwan, a profit- seeking-enterprise income tax shall be levied on its total profit-seeking-enterprise income derived within and without the territory of Taiwan; provided that in case income tax has been paid on the income derived outside of the territory of Taiwan in accordance with the tax law of the source country of that income, such tax paid may be deducted from amount of tax payable at the time of filing annual returns on the total profit-seeking-enterprise income, to the extent that such deduction shall not exceed the amount of tax which, computed at the applicable domestic tax rate, is increased in consequence of inclusion of its income derived from abroad.

2. For any profit-seeking enterprise having its head office outside the territory of Taiwan, the profit- seeking-enterprise income tax shall be levied only on income derived within the territory of Taiwan. For any foreign profit-seeking enterprise having a fixed place of business or a business agent within the territory of Taiwan, such a fixed place of business or business agent shall keep separate accounts in order to compute the profit-seeking-enterprise income tax and file the annual profit- seeking-enterprise income tax return for such foreign profit-seeking enterprise. For any profit- seeking enterprise having no fixed place of business or business agent within the territory of Taiwan but having income from sources in Taiwan, the profit-seeking-enterprise income tax levied on various income shall be withheld.

3. Sales by the foreign head offices of foreign companies directly to clients within the territory of Taiwan are recognised as international transactions and income derived from such sales is not taxable. However, for income derived from services provided within the territory of Taiwan by foreign head offices of foreign companies directly to clients in the territory of Taiwan, the branches of such foreign companies in Taiwan shall pay the profit-seeking-enterprise income tax on such income.

4. Any profit-seeking enterprise having its head office outside the territory of Taiwan but is engaged in international transportation, construction-contracting, provision of technical services, or leasing of machinery and equipment in the territory of Taiwan, for which the calculation of the division of cost and expenses is problematic, may apply to the Ministry of Finance for approval to adopt a fixed profit rate.

5. All capital gains derived from qualified securities or futures transactions is not taxable regardless of whether a profit-seeking enterprise has a fixed place of business or business agent in Taiwan, or whether an individual is residing in Taiwan.

E-4 6. Dividends are distributed from the after-tax surplus profits. If dividends are distributed by a profit- seeking enterprise in Taiwan, shareholders who are individuals residing in Taiwan receiving such dividends shall declare such dividends as part of their income in their consolidated income tax returns. The amount of deductible tax contained in the aggregate of dividends so distributed may be subtracted from the total tax payable. Dividends received by a profit-seeking enterprise are not included as taxable income. The amount of deductible tax contained in the aggregate of dividends so distributed shall be included in the balance of such profit-seeking enterprise’s shareholder imputation credit account.

7. In principle, various income received by the same taxable entity shall be combined for filing a tax return; and capital gains are included in the aggregate income for filing a tax return, and not reported separately.

There is a value-added business taxation system in Taiwan since 1986 to levy Value-Added and Non- Value-Added Tax, which system is generally similar to the system adopted by many European countries. Except for those specially exempted according to the law, a business tax is levied at each stage of the sale of goods or services. The business tax on imported goods shall be calculated at the prescribed tax rate based on the total amount of duty-paying value plus customs duty, commodity tax, or tobacco and alcohol tax, if applicable. Also, there are other related tax laws and regulations as applicable to different designations, for examples:-

1. The stamp tax is levied on receipts of monetary payments, deeds for sale of movable property, contractual agreements, and deeds for real estate transactions.

2. The commodity tax is levied on all taxable goods whether manufactured domestically or imported from abroad.

3. Trading of securities, with the exceptions of government-issued bonds, shall be subject to Taiwan securities transaction tax. Sellers of securities shall pay transaction tax for each transaction at the following rates based on the transaction amount:

a. 0.3% of the transaction price for shares or share certificates embodying the right to shares issued by companies.

b. 0.1% of the transaction price for corporate bonds and other securities approved by the government.

4. Land taxes include the Land Value Tax, Agricultural Land Tax, and Land Increment Tax.

5. In order to avoid double taxation, to promote international investment and trade development, and to strengthen coordination among the tax authorities of different countries and prevent tax evasion, Taiwan has concluded agreements for the avoidance of double taxation with Singapore, South Africa, U.K., Senegal, Indonesia, Malaysia, Vietnam, Gambia, Swaziland, Australia, New Zealand, Macedonia, Netherlands and Sweden.

6. Tobacco and alcohol products, whether manufactured domestically or imported from abroad, shall be subject to the tobacco and alcohol tax to be levied upon the removal of the tobacco or alcohol products from the factory or upon importation.

7. For imported tobacco and alcohol, the tobacco and alcohol tax as well as the health levy for tobacco products shall be collected by Customs on behalf of the tax authority.

E-5 APPENDIX F

SUMMARY OF THE RELEVANT LAWS AND REGULATIONS IN TAIWAN

1 . TAIWAN LEGAL SYSTEM The legal system of the Republic of China in Taiwan (Taiwan) is a civil law one, which basically follows that of the Roman law in continental European systems. As a code-pleading state, the codified laws of Taiwan are drawn from similar German and Japanese laws as well as of those of traditional Chinese. On the basis of Taiwan Constitution – the supreme law thereof, the legal system is made up of written laws, regulations as well as other administrative directives. According to the Organic Law of the Courts, there are highly selected precedents from the decided court cases by the Supreme Court of Taiwan, which have de facto binding effect towards the lower court level.

The legislative power of the state is vested upon the Legislative Yuan (Branch) pursuant to the Constitution, while the highest administrative organ is the Executive Branch to enforce law. The Legislative Branch is Taiwan’s highest legislative organ, which is constituted of legislators elected by the people, to exercise legislative power on behalf of the people, and shall have the power to decide by resolution upon statutory or budgetary bills or bills concerning martial law, amnesty, declaration of war, conclusion of peace or treaties, and other important affairs of the state. The Judicial Branch is the highest judiciary of Taiwan, which is in charge of the trial of civil, criminal, and administrative cases, as well as the imposition of disciplinary measures against public functionaries, i.e., by Commission on the Disciplinary Sanctions of Public Functionaries.

Taiwan’s primary statutory laws are civil and criminal codes and civil, criminal and administrative procedure laws. Commercial matters are governed by various separate statutes that deal individually with different business matters, for example the Company Law, Security Exchange Law, Insurance Law, Merger and Acquisition Law, Banking Law, Trust Law, and Civil Aviation Law. There is no jury trial system; all cases are adjudicated by judges.

Special law shall prevail over the general law. In the event that the special law is silent in respect of certain civil matter, the Civil Code will come into play as supplement. The autonomy of the parties is respected, but may be nullified should there be conflicts with an imperative or prohibitive provision of law, public order, or good morals. The Civil Code, together with the commercial laws, has priority in the application of law to commercial disputes. In the event the law is not specified, the business custom will prevail over mere civil custom. The custom applicable nevertheless may not contradict public order or good morals. If there is no such custom, civil matters then must be determined pursuant to general principles of law.

Taiwan law recognises and authorises the enforcement of foreign judgments, including default judgments, so long as the foreign judgment is in compliance with Article 402 of the Code of Civil Procedure as amended. There is a conflict of laws rule named the Law Governing the Application of Laws to Civil Matters Involving Foreign Elements in Taiwan, which will govern those civil matters involving foreign elements and application of law. As with continental European legal systems, the stipulated provisions of law will have a greater weight than that of court decisions. Although precedents in Taiwan were not considered as a major source of law, the lower level of the court, i.e., District Court, will follow the decisions or judgments rendered by the higher court, i.e., Supreme Court or High Court.

F-1 2. JUDICIAL SYSTEM The utmost power to interpret laws is vested upon the Judiciary that shall have the authority to unify the interpretation of laws and ordinances. The Council of Grand Justices is the main body of the Judiciary that shall have 15 grand justices, inclusive of one Chief Justice (president) and one Deputy-Chief Justice (vice president). The grand justices are nominated and appointed by the President of the state, with the consent of the Legislative Branch.

The court system has three levels; namely, the Supreme Court, High Court and District Court. Except for cases subject to simplified court procedures, the District Courts and their branches will hear civil and criminal cases in the first instance; the High Courts and their branches are at the intermediate level to hear appeals against judgments of District Courts or their branches; and the Supreme Court is at the highest appellate level, which reviews judgments by lower courts for compliance with pertinent laws or regulations. The Supreme Court is the court of final appeal under Taiwan judicial system.

Courts in the first and second levels are facts-finders, while the Supreme Court only considers issues of law. Since the Supreme Court does not decide upon questions of fact, documentary proceedings are generally the rule, while oral arguments are the exception. Moreover, there are exceptions to this system: Criminal cases relating to rebellion, treason, and offences against friendly relations with foreign states are handled by the High Courts, as the court of first instance; and appeals may be filed with the Supreme Court. Specialised divisions may also be set up by District Courts to deal with juvenile, family, traffic, financial, and labor cases, as well as motions to set aside rulings on the violations of the Statute of the Maintenance of Social Order.

Cases to be tried by a District Court are heard before a single judge, although three-judge panel may hear more important cases. The High Court is also divided into civil and criminal, as well as specialised divisions dealing with juvenile, traffic, and labor cases. Each division has a presiding judge and associates. Cases to be tried by the High Court are heard before a three-judge panel. However, one of the judges may conduct the preliminary proceedings alone. The Supreme Court has a president, who is responsible for the administrative work of the said court and is concurrently a judge. An appeal may be made to the Supreme Court only on the grounds that the lower court’s decision violates a law or ordinance. Cases presented before the Supreme Court are tried by five-judge panel.

As for appeal of administrative decisions or rulings, there is a separate administrative court system, i.e., High Administrative Court for trier of fact and law, while Supreme Administrative Court for trier of law. Any person who claims that his rights or legal interests are violated by an unlawful administrative action rendered by a government agency may institute administrative proceedings before the High Administrative Court. This right is available on objection to the decision on an administrative appeal submitted in accordance with the Law of Administrative Appeal, or if no decision is rendered over three months after the submission of an administrative appeal, or over two months of extension after the prescribed period for decision has expired. An administrative action, which exceeds the legal authority of the government agency or which results from an abuse of power, is unlawful. Cases presented before High Administrative Court are tried by three- judge panel. Appeals may be filed with the Supreme Administrative Court for review by a five-judge panel. The administrative supervision of Taiwan court system is exercised by the Judicial Branch, while its implementation of due compliance by judicial personnel with judicial independence as constitutionally mandated.

There is a Constitutional Court established by the Judiciary in 1993, as stipulated in the Amendment to the Constitution and the revised Organic Law of the Judicial Branch, to adjudicate cases concerning the dissolution of political parties that have violated the Constitution. The Constitutional Court is composed of grand justices and presided over by its most senior member. In addition, the Ministry of the Interior may, as the agency overseeing political parties, petition to the Constitutional Court for the dissolution of a political party whose objectives and activities are found to endanger Taiwan’s existence or its free democratic constitutional order.

F-2 3. ARBITRATION AND ENFORCEMENT OF ARBITRAL AWARD As an alternative dispute resolution to litigation and with respect to such disputes, present or future, contracting parties may sign an arbitration agreement and submit the disputes, if any, to the designated arbitrator(s) to form an arbitration tribunal in accordance with the Arbitration Law of Taiwan.

Article 37 of the Arbitration Law provides that an arbitral award, as between the parties to the arbitration, has the same legally binding effect as a final court judgment and can be enforced by a court of law. The arbitration procedure is relatively speedy, economical, confidential, and can draw on expert opinion. Under the Arbitration Law, arbitrable disputes are limited to those that can be settled by the parties pursuant to law.

Two other special categories of disputes will be solved by resolution of two special arbitration tribunals. According to Article 166 of the Securities and Exchange Act, disputes between securities firm and the securities exchange or between two or more securities firms must be submit to arbitration. Under Article 6 of the Settlement of Labour Disputes Law, adjustment disputes between an employer and certain amount of employees calculated in accordance with the law shall be settled by conciliation or arbitration procedures as provided thereof.

Since Taiwan is not a member to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, Taiwan may not enjoy the employ of said ICSID to resolve investment disputes thereof. Neither is Taiwan a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Award (New York Convention) that provides a basis for recognising and enforcing foreign awards, so as unable to receive such recognition and enforcement of Taiwan arbitral award in foreign countries.

According to Section 2, Article 49 of Arbitration Law, the definition of foreign arbitral award includes such arbitration award rendered outside Taiwan or the award granted according to the applicable law other than that of Taiwan. Foreign awards are required to be recognised by courts before they can be enforced in Taiwan. On the principle of reciprocity, a court has discretion to refuse to recognise or enforce a foreign arbitral award if the courts in the country where the award was made or whose arbitration was the basis for the award would not recognise and enforce an arbitral award made in Taiwan.

4. INVESTMENT LAWS There are laws and regulations governing foreign and overseas Chinese investment, as amended, making efforts to remove investment obstacles and improve investment conditions. Two major investment laws are Statute for Investment by Foreign Nationals and Statute for Investment by Overseas Chinese. Taiwan also provides other assistance to foreign nationals and overseas Chinese making investment in Taiwan, as well as the provision of certain investment protections. The content of the Statute for Investment by Overseas Chinese is similar to that of the Statute for Investment by Foreign Nationals. The only difference is that overseas Chinese may invest in some of the categories prohibited to overseas investors of non-Chinese origin.

Unless otherwise fallen under the prohibited or restricted investment areas that requires approval or consent from the competent authority, investments as referred to in the Statute for Investment by Foreign Nationals are as follows: (1) holding shares issued by a Taiwan company, or contributing to the capital of a Taiwan company; (2) establishing a proprietary business or a partnership in the Taiwan’s territory; and (3) providing loans to invested businesses referred to in the above two categories for a period exceeding one year. Foreign-invested enterprises enjoy the same rights and obligations to which enterprises operated by local Chinese nationals are subject, except as otherwise provided for in other laws.

F-3 In accordance with Article 12 of the Statute For Investment By Foreign Nationals, as amended, investors may apply for exchange settlement for their interest earnings or on profit distributed to them from their investment. When the investor is approved to transfer his/her shares, to withdraw or decrease his/her investment, he/she may apply for exchange settlement, in a lump sum, against the total amount of his/her investment as approved. This is also applicable to the capital gains realised from the investment. Further, the investor’s application for exchange settlement against the payment of the principal and interest of his/her loan investment is governed by the agreed terms and conditions approved by the competent authority.

5. ENVIRONMENTAL PROTECTION REGULATIONS In response to the ever-increasing environmental challenges in recent years, the Environmental Protection Administration, Executive Yuan (“EPA”) was established in 1987 to conduct environmental monitoring so that the general public can know the condition of their ambient environmental quality. The EPA’s primary task is to set forth the environmental policy, formulate pertinent regulations to effectuate environmental legislations and delegate enforcement of environmental laws and regulations to local environmental authorities such as the Environmental Protection Bureaus with municipal or county government.

The environmental regulations in Taiwan are relatively comprehensive and encompasses a wide range of pollution control. The major laws include Environmental Impact Assessment Act, Water Pollution Control Act, Air Pollution Control Act, Noise Pollution Control Act, Waste Disposal Act, and Toxic Chemical Substance Control Act. In general, Taiwan’s environmental laws and regulations have geared toward a more stringent trend, and violations will lead to disciplinary action, civil and criminal, as well as the suspension or production or discontinuance of business.

In terms of industrial investment plans, if a project is not in an industry under the jurisdiction of the environmental protection regulations, investors may apply to the local bureau of construction for factory-building permit. Otherwise, the project must be evaluated and approved by the environmental protection authorities. Only after obtaining the necessary approval from environmental protection agency can an application for factory construction be filed.

Taiwan also provides assistance to factories to control pollution and encourages businesses to take the initiative in environmental protection as well. As an incentive, all imported equipment for the control of air, water and noise pollution, and for the treatment of solid waste are exempt from import duties. Taiwan has explicit standards for the control of air, water, and noise pollution, and for the treatment of solid wastes. As Taiwan is getting more and more conscientious about environmental protection, the government is making efforts to provide assistance and incentives to encourage pollution control.

6. FAIR TRADE REGULATIONS The Fair Trade Law (“FTL”) and the Enforcement Rules promulgated under the FTL are the principal legislation and regulation concerning merger and acquisition, unfair competition and monopoly in Taiwan.

At the national level, the Fair Trade Commission (“FTC”) is the competent government authority responsible for policing all types of violations under the FTL. The FTC is empowered to examine and investigate possible violations of the FTL and to take actions against violators by imposing fines and other penalties. The FTC is also empowered to order the dissolution of any combinations that violate the provisions of the FTL. The FTC will investigate complaints initiated by private parties, in most cases, their competitors, against combinations effected without consent of the FTC, but may also investigate matters on its own initiative.

The FTC defines a monopoly as any enterprise that faces no competition or has a dominant position to enable it to prevent competition in a relevant market. Two or more enterprises shall be deemed monopolistic enterprises if they do not in fact engage in price competition with each other and they, as a whole, can effectively prevent competition in the market.

F-4 The FTL places mergers and acquisitions in the broader category of “combination of enterprises”. The review of combination is under a notification system rather than an approval system. Transactions which fall under the broad category of “enterprise combinations” under the FTL and meet one of the jurisdictional thresholds must be reported to the FTC in advance. The establishment of a joint venture company by two or more enterprises is also considered to be an “enterprise combination” subject to the FTL.

The FTL also prohibits enterprises from engaging in unfair competition by forbidding enterprises from engaging in abuse of dominance, practices of price fixing, predatory pricing, tying or bundling as well as unfair discrimination.

F-5 APPENDIX G

TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION

You are invited to apply and subscribe for and/or purchase the 211,885,000 Invitation Shares at the Issue Price for each Invitation Share subject to the following terms and conditions:-

1. YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 INVITATION SHARES AND HIGHER INTEGRAL MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF INVITATION SHARES WILL BE REJECTED.

2. Your application for Offer Shares may be made by way of printed Offer Shares Application Forms or by way of Electronic Applications through ATMs of the Participating Banks (“ATM Electronic Applications”) or through the Internet Banking (“IB”) websites of the relevant Participating Banks (“Internet Electronic Applications” which, together with ATM Electronic Applications, shall be referred as “Electronic Applications”).

Your application for the Placement Shares may only be made by way of Placement Shares Application Forms.

YOU MAY NOT USE CPF FUNDS TO APPLY FOR THE INVITATION SHARES.

3. You (being other than an approved nominee company) are allowed to submit ONLY one application in your own name for:-

(a) the Offer Shares by any one of the following:-

(i) Offer Shares Application Form;

(ii) ATM Electronic Application;

(iii) Internet Electronic Application,

(b) the Placement Shares by Placement Shares Application Form.

If more than one application is submitted for either the Offer Shares or the Placement Shares, such separate applications shall be deemed to be multiple applications and shall be rejected.

If you have made an application for Placement Shares, you should not make any application for Offer Shares and vice versa. Such separate applications shall be deemed to be multiple applications and shall be rejected.

Joint or multiple applications shall be rejected. If you submit or procure submissions of multiple share applications for Offer Shares, Placement Shares or both Offer Shares and Placement Shares, you may be deemed to have committed an offence under the Penal Code, Chapter 224 of Singapore and the Securities and Futures Act, Chapter 289 of Singapore, and your applications may be referred to the relevant authorities for investigation. Multiple applications or those appearing to be or suspected of being multiple applications will be liable to be rejected at the discretion of our Company and the Vendors.

4. We will not accept applications from any person under the age of 21 years, undischarged bankrupts, sole-proprietorships, partnerships, chops or non-corporate bodies, joint Securities Account holders of CDP and from applicants whose addresses (furnished in their Application Forms or, in the case of Electronic Applications, contained in the records of the relevant Participating Banks, as the case may be) bear post office box numbers.

G-1 5. We will not recognise the existence of a trust. Any application by a trustee or trustees must be made in his/their own name(s) and without qualification or, where the application is made by way of an Application Form, in the name(s) of an approved nominee company or approved nominee companies after complying with paragraph 6 below.

6. WE WILL ONLY ACCEPT APPLICATIONS FROM APPROVED NOMINEE COMPANIES. Approved nominee companies are defined as banks, merchant banks, finance companies, insurance companies, licensed securities dealers in Singapore and nominee companies controlled by them. Applications made by persons acting as nominees other than approved nominee companies shall be rejected.

7. IF YOU ARE NOT AN APPROVED NOMINEE COMPANY,YOU MUST MAINTAIN A SECURITIES ACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you do not have an existing Securities Account with CDP in your own name at the time of your application, your application will be rejected (if you apply by way of an Application form), or you will not be able to complete your Electronic Application (if you apply by way of an Electronic Application). If you have an existing Securities Account but fail to provide your Securities Account number or provide an incorrect Securities Account number in Section B of the Application Form or in your Electronic Application, as the case may be, your application is liable to be rejected. Subject to paragraph 8 below, your application shall be rejected if your particulars, such as name, NRIC/passport number, nationality and permanent residence status provided in your Application Form or in the records of the relevant Participating Bank at the time of your Electronic Application, as the case may be, differ from those particulars in your Securities Account as maintained with CDP. If you possess more than one individual direct Securities Account with CDP, your application shall be rejected.

8. If your address as stated in the Application Form or, in the case of an Electronic Application, contained in the records of the relevant Participating Bank, as the case may be, is different from the address registered with CDP, you must inform CDP of your updated address promptly, failing which the notification letter on successful allotment will be sent to your address last registered with CDP.

9. Our Company and the Vendors reserve the right to reject any application which does not conform strictly to the instructions set out in the Application Form or the instruction for Electronic Applications and in this Prospectus or with the terms and conditions of this Prospectus, which is illegible, incomplete, incorrectly completed or which is accompanied by an improperly drawn up or improper form of remittance. Our Company and the Vendors further reserve the right to treat as valid any applications not completed or submitted or effected in all respects in accordance with the instructions set out in the Application Forms or the instructions for Electronic Applications or the terms and conditions of this Prospectus, and also to present for payment or other processes all remittances at any time after receipt and to have full access to all information relating to, or deriving from, such remittances or the processing thereof.

10. Our Company and the Vendors reserve the right to reject or to accept, in whole or in part, or to scale down or to ballot any application, without assigning any reason therefor, and our Company and the Vendors will not entertain any enquiry and/or correspondence on our decision. This right applies to applications made by way of Application Forms and by way of Electronic Applications. In deciding the basis of allotment, our Company and the Vendors will give due consideration to the desirability of allotting the Invitation Shares to a reasonable number of applicants with a view to establishing an adequate market for the Shares.

11. Share certificates will be registered in the name of CDP and will be forwarded only to CDP. It is expected that CDP will send to you, at your own risk, within 15 Market Days after the close of the Application List, a statement of account stating that your Securities Account has been credited with the number of Invitation Shares allotted and/or allocated to you. This will be the only acknowledgement of application moneys received and is not an acknowledgement by our

G-2 Company and the Vendors. You irrevocably authorise CDP to complete and sign on your behalf as transferee or renouncee any instrument of transfer and/or other documents required for the issue or transfer of the Invitation Shares allotted and/or allocated to you. This authorisation applies to applications made by way of Application Forms and by way of Electronic Applications.

12. In the event of an under-subscription for the Offer Shares as at the close of the Application List, we will make available that number of Offer Shares under-subscribed to satisfy applications for Placement Shares to the extent that there is an over-subscription for Placement Shares as at the close of the Application List.

In the event of an under-subscription for the Placement Shares as at the close of the Application List, we will make available that number of Placement Shares under-subscribed to satisfy applications for Offer Shares to the extent that there is an over-subscription for Offer Shares as at the close of the Application List.

In the event of an over-subscription for Offer Shares as at the close of the Application List and the Placement Shares are fully subscribed or over-subscribed as at the close of the Application List, the successful applications for Offer Shares will be determined by ballot or otherwise as determined by our Directors and the Vendors and approved by the SGX-ST.

13. You irrevocably authorise CDP to disclose the outcome of your application, including the number of Invitation Shares allotted and/or allocated to you pursuant to your application, to our Company, the Manager, the Underwriter, Placement Agent and any other parties so authorised by CDP, our Company, the Vendors, the Manager, the Underwriter and/or the Placement Agent.

14. Any reference to the “you” in this section shall include an individual, a corporation, an approved nominee and trustee applying for the Offer Shares by way of an Application Form or by way of an Electronic Application and a person applying for the Placement Shares through the Placement Agent by way of a Placement Shares Application Form.

15. By completing and delivering an Application Form or by making and completing an Electronic Application by (in the case of an ATM Electronic Application) pressing the “Enter” or “OK” or “Confirm” or “Yes” key on the ATM (as the case may be) or by (in the case of an Internet Electronic Application) clicking “Submit” or “Continue” or “Yes” or “Confirm” on the IB website screen (as the case may be) in accordance with the provisions of this Prospectus, you:-

(a) irrevocably offer to subscribe for and/or purchase the number of Invitation Shares specified in your application (or such smaller number for which the application is accepted) at the Issue Price and agree that you will accept such Invitation Shares as may be allotted and/or allocated to you, in each case on the terms of this Prospectus and on the terms of, and subject to the conditions set out in, this Prospectus and the Memorandum and Articles of Association of our Company;

(b) agree that in the event of any inconsistency between the terms and conditions for application set out in this Prospectus and those set out in the IB websites or ATMs of the relevant Participating Banks, the terms and conditions set out in this Prospectus shall prevail;

(c) agree that the aggregate Issue Price for the Invitation Shares applied for is due and payable to our Company and the Vendors upon application;

(d) warrant the truth and accuracy of the information contained, and representations and declarations made, in your application, and acknowledge and agree that such information, representations and declarations will be relied on by our Company and the Vendors in determining whether to accept your application and/or whether to allot and/or allocate any Invitation Shares to you; and

G-3 (e) agree and warrant that if the laws of any jurisdictions outside Singapore are applicable to your application, you have complied with all such laws and none of our Company, the Vendors, the Manager, the Underwriter and/or the Placement Agent will infringe any such laws as a result of the acceptance of your application.

16. Our acceptance of applications will be conditional upon, inter alia, our Company and the Vendors being satisfied that:-

(a) permission has been granted by the SGX-ST to deal in, and for quotation of, all our existing Shares (including the Vendor Shares) and the New Shares, on the Official List of the SGX- ST;

(b) the Management and Underwriting Agreement and the Placement Agreement referred to on pages 106 and 107 of this Prospectus have become unconditional and have not been terminated or cancelled prior to such date as our Company and the Vendors may determine; and

(c) the Authority has not served a stop order which directs that no further shares to which this Prospectus relates be allotted and/or allocated.

17. Our Company will not hold any applications in reserve.

18. Our Company will not allot or allocate Shares on the basis of this Prospectus later than six months after the date of registration of this Prospectus.

19. Additional terms and conditions for applications using printed Application Forms are set out on pages G-4 to G-7 of Appendix G of this Prospectus.

20. Additional terms and conditions for Electronic Applications are set out on pages G-7 to G-14 of Appendix G of this Prospectus.

ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATION FORMS You shall make an application by way of Application Forms made on and subject to the terms and conditions of this Prospectus including but not limited to the terms and conditions appearing below as well as those set out under the section on “TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION” on pages G-1 to G-14 of Appendix G of this Prospectus, as well as the Memorandum and Articles of Association of our Company.

1. Your application for the Offer Shares must be made using the WHITE Offer Shares Application Forms and WHITE official envelopes “A” and “B” accompanying and forming part of this Prospectus.

Your application for the Placement Shares must be made using the BLUE Placement Shares Application Forms accompanying and forming part of this Prospectus.

We draw your attention to the detailed instructions contained in the respective Application Forms and this Prospectus for the completion of the Application Forms which must be carefully followed. Our Company and the Vendors reserve the right to reject applications which do not conform strictly to the instructions set out in the Application Forms and this Prospectus or to the terms and conditions of this Prospectus or which are illegible, incomplete, incorrectly completed or which are accompanied by improperly drawn remittances or improper form of remittances.

2. Your Application Forms must be completed in English. Please type or write clearly in ink using BLOCK LETTERS.

G-4 3. All spaces in the Application Forms except those under the heading “FOR OFFICIAL USE ONLY” must be completed and the words “NOT APPLICABLE”or “N.A.” should be written in any space that is not applicable.

4. Individuals, corporations, approved nominee companies and trustees must give their names in full. You must make your application, in the case of individuals, in your full names appearing in your identity cards (if applicants have such identification documents) or in your passports and, in the case of corporations, in your full names as registered with a competent authority. If you are a non- individual completing the Application Form under the hand of an official, you must state the name and capacity in which that official signs. If you are a corporation completing the Application Form, you are required to affix your Common Seal (if any) in accordance with your Memorandum and Articles of Association or equivalent constitutive documents. If you are a corporate applicant and your application is successful, a copy of your Memorandum and Articles of Association or equivalent constitutive documents must be lodged with our Company’s Share Registrar and Share Transfer office. Our Company and the Vendors reserve the right to require you to produce documentary proof of identification for verification purposes.

5. (a) You must complete Sections A and B and sign page 1 of the Application Form.

(b) You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form. Where paragraph 7(a) is deleted, you must also complete Section C of the Application Form with particulars of the beneficial owner(s).

(c) If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be, on page 1 of the Application Form, your application is liable to be rejected.

6. You (whether you are an individual and corporate applicant, whether incorporated or unincorporated and wherever incorporated or constituted), will be required to declare whether you are a citizen or permanent resident of Singapore or a corporation in which citizens or permanent residents of Singapore or any body corporate constituted under any statute of Singapore have an interest in the aggregate of more than 50 per cent. of the issued share capital of or interests in such corporations. If you are an approved nominee company, you are required to declare whether the beneficial owner of the Invitation Shares is a citizen or permanent resident of Singapore or a corporation, whether incorporated or unincorporated and wherever incorporated or constituted, in which citizens or permanent residents of Singapore or any body corporate whether incorporated or unincorporated and wherever incorporated or constituted under any statute of Singapore have an interest in the aggregate of more than 50 per cent. of the issued share capital of or interests in such corporation.

7. Your application must be accompanied by a cash remittance in Singapore currency for the full amount payable, in respect of the number of Invitation Shares applied for, in the form of a BANKER’S DRAFT or CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of “GTC Share Issue Account” crossed “A/C PAYEE ONLY’”, with your name and address written clearly on the reverse side.

We will not accept applications accompanied by ANY OTHER FORM OF PAYMENT. We will reject remittances bearing “NOT TRANSFERABLE” or “NON TRANSFERABLE” crossings. No acknowledgement or receipt will be issued by our Company, the Vendors or the Manager for applications and application moneys received.

8. Unsuccessful applications are expected to be returned (without interest or any share of revenue or other benefit arising therefrom) to you by ordinary post within 24 hours of the balloting at your own risk. Where your application is rejected or accepted in part only, the full amount or the balance of the application moneys, as the case may be, will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by ordinary post at your own risk within 14 Market Days after the close of the Application List.

G-5 9. Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the meanings assigned to them in this Prospectus.

10. By completing and delivering the Application Form in accordance with the provisions of this Prospectus, you agree that:-

(a) in consideration of our Company having distributed the Application Form to you and agreeing to close the Application List at 12.00 noon on 22 August 2005 or such other time or date as our Company and the Vendors may, in consultation with the Manager, decide and by completing and delivering the Application Form, you agree that:-

(i) your application is irrevocable; and

(ii) your remittance will be honoured on first presentation and that any moneys returnable may be held pending clearance of your payment without interest or any share of revenue or other benefit arising therefrom;

(b) all applications, acceptances and contracts resulting therefrom under the Invitation shall be governed by and construed in accordance with the laws of Singapore and that you irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;

(c) in respect of the Invitation Shares for which your application has been received and not rejected, acceptance of your application shall be constituted by written notification and not otherwise, notwithstanding any remittance being presented for payment by or on behalf of our Company and the Vendors;

(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at any time after acceptance of your application; and

(e) in making your application, reliance is placed solely on the information contained in this Prospectus and none of our Company, the Vendors, the Manager, the Underwriter, the Placement Agent or any other person involved in the Invitation shall have any liability for any information not so contained.

Applications for Offer Shares 1. Your applications for Offer Shares MUST be made using the WHITE Offer Shares Application Forms and WHITE official envelopes “A” and “B”. ONLY ONE APPLICATION should be enclosed in each envelope.

2. You must:-

(a) enclose the WHITE Offer Shares Application Form, duly completed and signed, together with your remittance in the WHITE envelope “A” provided;

(b) in the appropriate spaces on WHITE envelope “A”:-

(i) write your name and address;

(ii) state the number of Offer Shares applied for;

(iii) tick the relevant box to indicate the form of payment; and

(iv) affix adequate Singapore postage;

G-6 (d) write, in the appropriate box provided on the larger WHITE official envelope “B” addressed to LIM ASSOCIATES (PTE) LTD, 10 COLLYER QUAY, #19-08, OCEAN BUILDING, SINGAPORE 049315, the number of Offer Shares you have applied for; and

(e) insert WHITE official envelope “A” into WHITE official envelope “B”, seal WHITE envelope “B”, affix adequate Singapore postage on WHITE official envelope “B” (if despatching by ordinary post) and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY HAND the documents at your own risk to LIM ASSOCIATES (PTE) LTD, 10 COLLYER QUAY, #19-08 OCEAN BUILDING, SINGAPORE 049315, so as to arrive by 12.00 noon on 22 August 2005 or such other time or date as our Company and the Vendors may, in consultation with the Manager, decide. Local Urgent Mail or Registered Post must NOT be used. No acknowledgement of receipt will be issued for any application or remittance received.

3. Applications that are illegible, incomplete or incorrectly completed or accompanied by improperly drawn remittances or which are not honoured upon their first presentation are liable to be rejected.

Applications for Placement Shares 1. Your application for Placement Shares MUST be made using the BLUE Placement Shares Application Forms. ONLY ONE APPLICATION should be enclosed in each envelope.

2. The completed and signed BLUE Placement Shares Application Form and your remittance, in accordance with the terms and conditions of this Prospectus, for the full amount payable in respect of the number of Placement Shares applied for, with your name and address written clearly on the reverse side, must be enclosed and sealed in an envelope to be provided by you. You must affix adequate Singapore postage on the envelope (if despatching by ordinary post) and thereafter the sealed envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND the documents at your own risk to UOB KAY HIAN PRIVATE LIMITED, 80 RAFFLES PLACE, #30-01 UOB PLAZA 1, SINGAPORE 048624, to arrive by 12.00 noon on 22 August 2005 or such other time or date as our Company and the Vendors may, in consultation with the Manager, decide. Local Urgent Mail or Registered Post must NOT be used. No acknowledgement of receipt will be issued for any application or remittance received.

3. Applications which are illegible, incomplete or incorrectly completed or accompanied by improperly drawn remittances or which are not honoured upon their first presentation are liable to be rejected.

ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS The procedures for Electronic Applications at ATMs are set out on the ATM screens (in the case of ATM Applications) and the IB website screens (in the case of Internet Electronic Applications) of the relevant Participating Banks.

Currently, DBS and UOB are the only Participating Banks through which an Internet Electronic Application can be made on the respective IB websites of DBS and UOB.

For illustration purposes, the procedures for Electronic Applications through ATMs and the IB website of DBS are set out respectively in the “Steps for Electronic Applications for Offer Shares through ATMs of DBS” and “Steps for Internet Electronic Applications through the IB website of DBS Bank” appearing on pages G-12 to G-14 of this Prospectus.

The Steps set out the actions that you must take at an ATM or the IB website of DBS to complete an Electronic Application. Please read carefully the terms of this Prospectus, the Steps and the terms and conditions for Electronic Applications set out below before making an Electronic Application.

Any reference to “you” in the additional terms and conditions for Electronic Applications and the Steps shall refer to you making an application for Offer Shares through an ATM or the IB website of a relevant Participating Bank.

G-7 To make an ATM Application:-

(a) You must have an existing bank account with and be an ATM cardholder of one of the Participating Banks before you can make an Electronic Application at the ATMs. An ATM card issued by one Participating Bank cannot be used to apply for Offer Shares at an ATM belonging to other Participating Banks. Upon the completion of your ATM Electronic Application transaction, you will receive an ATM transaction slip (“Transaction Record”), confirming the details of your ATM Electronic Application. The Transaction Record is for your retention and should not be submitted with any Application Form.

(b) You must ensure that you enter your own Securities Account number when using the ATM card issued to you in your own name. If you operate a joint bank account with any of the Participating Banks, you must ensure that you enter your own Securities Account number when using the ATM card issued to you in your own name. Using your own Securities Account number with an ATM card which is not issued to you in your own name will render your Electronic Application liable to be rejected.

To make an Internet Electronic Application, you must have an existing bank account with and an IB User Identification (“User ID”) and a Personal Identification Number/Password given by the relevant Participating Bank. Upon completion of your Internet Electronic Application, there will be an on-screen confirmation (“Confirmation Screen”) of the application which you can print out for your record. This printed record of the Confirmation Screen is for your retention and should not be submitted with any Application Form.

Further, you must ensure, when making an Internet Electronic Application that:

(a) you are currently in Singapore at the time of making of such application;

(b) your mailing address for IB with the relevant Participating Bank is in Singapore; and

(c) you are not a US person(1) (as such term is defined in Regulation S under the United States Securities Act of 1933, as amended from time to time), and you will be asked to declare the above accordingly. Otherwise, your application is liable to be rejected.

Note:- (1) For details, please refer to definition of “US person” on the IB websites.

Your Electronic Application shall be made on the terms and subject to the conditions of this Prospectus including but not limited to the terms and conditions appearing below and those set out under the section on “TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION” on pages G-1 to G-14 of this Prospectus as well as the Memorandum and Articles of Association of our Company.

1. In connection with your Electronic Application for Invitation Shares, you are required to confirm statements to the following effect in the course of activating the Electronic Application:-

(a) that you have received a copy of this Prospectus and has read, understood and agreed to all the terms and conditions of application for Invitation Shares and this Prospectus prior to effecting the Electronic Application and agrees to be bound by the same;

(b) that you consent to the disclosure of your name, NRIC/passport number, address, nationality, permanent resident status, CDP Securities Account number, and share application amount (the “Relevant Particulars”) from your account with that Participating Bank to the Share Registrar, SGX-ST, CDP, SCCS, our Company and the Manager (the “Relevant Parties”); and

G-8 (c) that this is your only application and it is made in your own name and at your own risk.

Your application will not be successfully completed and cannot be recorded as a completed transaction in the ATM unless you press the “Enter” or “OK” or “Confirm” or “Yes” key. By doing so, you shall be treated as signifying your confirmation of each of the above three statements. In respect of statement 1(b) above, your confirmation, by pressing the “Enter” or “OK” or “Confirm” or “Yes” key, shall signify and shall be treated as your written permission, given in accordance with the relevant laws of Singapore including Section 47(2) of the Banking Act (Chapter 19) of Singapore to the disclosure by that Participating Bank of your Relevant Particulars to the Relevant Parties.

2. BY MAKING AN ELECTRONIC APPLICATION, YOU CONFIRM THAT YOU ARE NOT APPLYING FOR INVITATION SHARES AS NOMINEE OF ANY OTHER PERSON AND THAT ANY ELECTRONIC APPLICATION THAT YOU MAKE IS THE ONLY APPLICATION MADE BY YOU AS BENEFICIAL OWNER.

3. For an ATM Application or Internet Electronic Application, you must have sufficient funds in your bank account with your Participating Bank at the time you make your ATM Application or Internet Electronic Application, failing which your ATM Application or Internet Electronic Application will not be completed. Any ATM Application or Internet Electronic Application which does not conform strictly to the instructions set out on the screens of the ATM or IB website through which your ATM Application or Internet Electronic Application is being made shall be rejected.

4. You irrevocably agree and undertake to subscribe for and/or purchase and to accept the number of Invitation Shares applied for as stated on the Transaction Record or Confirmation Screen. You also irrevocably agree and undertake to subscribe for and/or purchase and to accept any lesser number of Invitation Shares that may be allotted and/or allocated to you in respect of your Electronic Application. In the event that our Company and the Vendors decide to allot and/or allocate any lesser number of such Invitation Shares or not to allot and/or allocate any Invitation Shares to you, you agree to accept such decision as final.

If your Electronic Application is successful, your confirmation (by your action of pressing the “Enter” or “OK” or “Confirm” or “Yes” key on the ATM, clicking “Confirm” or “OK” on the IB website screen) of the number of Invitation Shares applied for shall signify and shall be treated as your acceptance of the number of Invitation Shares that may be allotted and/or allocated to you and your agreement to be bound by the Memorandum and Articles of Association of our Company.

5. Our Company will not keep any applications in reserve. Where your Electronic Application is unsuccessful, the full amount of the application moneys will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by being automatically credited to your account with your Participating Bank within 24 hours after the close of the Application List. Trading on a “WHEN ISSUED” basis, if applicable, is expected to commence after such refund has been made.

Where your Electronic Application is rejected or accepted in part only, the full amount or the balance of the application moneys, as the case may be, will be refunded (without interest or any share of revenue or other benefit arising therefrom) to you by being automatically credited to your account with your Participating Bank, at your own risk, within 14 Market Days after the close of the Application List provided that the remittance in respect of such application which has been presented for payment or other processes has been honoured and the application moneys received in the designated share issue account.

G-9 Responsibility for timely refund of application moneys arising from unsuccessful or partially successful Electronic Applications lies solely with the respective Participating Banks. Therefore, you are strongly advised to consult your Participating Bank as to the status of your Electronic Application and/or the refund of any moneys to you from unsuccessful or partially successful Electronic Application, to determine the exact number of Invitation Shares allotted and/or allocated to you before trading the Invitation Shares on the SGX-ST. Neither the SGX-ST, the CDP, the SCCS, the Participating Banks, our Company, the Vendors, the Manager, the Underwriter and the Placement Agent assume any responsibility for any loss that may be incurred as a result of you having to cover any net sell positions or from buy-in procedures activated by the SGX-ST.

6. If your Electronic Application is made through the ATMs of one of the Participating Banks and is unsuccessful, no notification will be sent by the relevant Participating Bank.

If your Internet Electronic Application made through the IB website of DBS or UOB is unsuccessful, no notification will be sent by such Participating Bank.

If you make ATM Electronic Applications through the ATMs of the following banks, you may check the results of your ATM Electronic Applications as follows:-

Bank Telephone Available at Operating Hours Service expected from

DBS 1800 339 6666 Internet Banking 24 hours a day Evening of the balloting (for POSB account http://www.dbs.com(1) day holders)

1800 111 1111 (for DBS account holders)

OCBC 1800 363 3333 ATM ATM / Phone Banking Evening of the balloting 24 hours a day day

UOB 1800 222 2121 ATM (Other ATM/ Phone Banking Evening of the balloting Group Transactions – “IPO 24 hours a day day Enquiry”)(2) Internet Banking http://www.uobgroup. 24 hours a day com(1)(2)

Notes: (1) If you have made your Internet Electronic Applications through the IB website of DBS or UOB, you may check the result of your application through the same channels listed in the table above in relation to ATM Electronic Applications made at ATMs of DBS or UOB Group.

(2) If you have made your Electronic Application through the ATMs or IB website of the UOB Group, you may check the results of your application through UOB Personal Internet Banking, UOB Group ATMs or UOB PhoneBanking Services.

7. Electronic Applications shall close at 12.00 noon on 22 August 2005 or such other time or date as our Company and the Vendors may, in consultation with the Manager, decide. Subject to paragraph 9 below, your Internet Electronic Application is deemed to be received when it enters the designated information system of the relevant Participating Bank.

8. You are deemed to have irrevocably requested and authorised us to:-

(a) register the Offer Shares or Placement Shares, as the case may be, allotted and/or allocated to you in the name of CDP for deposit into your Securities Account;

(b) send the relevant Share certificate(s) to CDP;

G-10 (c) return or refund (without interest or any share of revenue earned or other benefit arising therefrom) the application moneys, should your ATM Electronic Applications or Internet Electronic Applications be unsuccessful, by automatically crediting your bank account with your Participating Bank with the relevant amount within 24 hours of the balloting; and

(d) return or refund (without interest or any share of revenue or other benefit arising therefrom) the balance of the application moneys, should your ATM Electronic Applications or Internet Electronic Applications be accepted in part only, by automatically crediting your bank account with your Participating Bank with the relevant amount within 14 Market Days after the close of the Application List.

9. You irrevocably agree and acknowledge that your Electronic Application is subject to risks of electrical, electronic, technical and computer-related faults and breakdowns, fires, acts of God and other events beyond the control of the Participating Banks and if, in any such event, our Company, the Vendors, the Manager and/or the relevant Participating Bank do not receive your Electronic Application, or data relating to your Electronic Application is lost, corrupted or not otherwise accessible, whether wholly or partially for whatever reason, you shall be deemed not to have made an Electronic Application and you shall have no claim whatsoever against our Company, and the Vendors, the Manager and/or the relevant Participating Bank for Invitation Shares applied for or for any compensation, loss or damage.

10. Our Company does not recognise the existence of a trust. Any Electronic Application by a trustee must be made in your own name and without qualification. Our Company and the Vendors will reject any application by any person acting as nominee.

11. All your particulars in the records of your Participating Bank at the time you make your Electronic Application shall be deemed to be true and correct and your Participating Bank and the Relevant Parties shall be entitled to rely on the accuracy thereof. If there has been any change in your particulars after making your Electronic Application, you shall promptly notify your Participating Bank.

12. You should ensure that your personal particulars as recorded by both CDP, the relevant Participating Bank are correct and identical, otherwise, your Electronic Application is liable to be rejected. You should promptly inform CDP of any change in address, failing which the notification letter on successful allotment will be sent to your address last registered with CDP.

13. By making and completing an Electronic Application, you are deemed to have agreed that:-

(a) in consideration of our Company and the Vendors making available the Electronic Application facility, through the Participating Banks acting as agents of our Company and the Vendors, at the ATMs and the IB websites:-

(i) your Electronic Application is irrevocable; and

(ii) your Electronic Application, the acceptance of our Company, the Vendors and the contract resulting therefrom under the Invitation shall be governed by and construed in accordance with the laws of Singapore and you irrevocably submit to the non- exclusive jurisdiction of the Singapore courts;

(b) none of our Company, the Vendors, the Manager or the Participating Banks shall be liable for any delays, failures or inaccuracies in the recording, storage or in the transmission or delivery of data relating to your Electronic Application to us or CDP due to breakdowns or failure of transmission, delivery or communication facilities or any risks referred to in paragraph 9 above or to any cause beyond their respective controls;

G-11 (c) in respect of Offer Shares for which your Electronic Application has been successfully completed and not rejected, acceptance of your Electronic Application shall be constituted by written notification by or on behalf of our Company and the Vendors and not otherwise, notwithstanding any payment received by or on behalf of our Company and the Vendors;

(d) you will not be entitled to exercise any remedy of rescission for misrepresentation at any time after acceptance of your application; and

(e) reliance is placed solely on information contained in this Prospectus and that none of our Company, the Vendors, the Manager, the Placement Agent and Underwriter nor any other person involved in the Invitation shall have any liability for any information not so contained.

STEPS FOR ATM ELECTRONIC APPLICATIONS FOR OFFER SHARES THROUGH ATMS OF DBS Instructions for ATM Electronic Applications will appear on the ATM screens of the Participating Bank. For illustration purposes, the steps for making an ATM Electronic Application through a DBS ATM are shown below. Certain words appearing on the screen are in abbreviated form (“A/c”, “amt”, “appln”, “&”, “I/C”, “SGX”, “No.” and “Max” refer to “Account”, “amount”, “application”, “and”, “NRIC”, “SGX-ST”, “Number” and “Maximum”, respectively). Instructions for ATM Electronic Applications on the ATM screens of Participating Banks (other than DBS) may differ slightly from those represented below.

Step 1 : Insert your personal DBS Bank or POSB ATM Card.

2 : Enter your Personal Identification Number.

3 : Select “CASHCARD & MORE SERVICES”.

4 : Select “ESA-IPO SHARE/INVESTMENTS”.

5 : Select “ELECTRONIC SECURITY APPLN (IPOS/BONDS/ST-NOTES)” to “GTC”.

6 : Read and understand the following statements which will appear on the screen:

z THE OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE IN, OR ACCOMPANIED BY, A COPY OF THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AND IF APPLICABLE, A COPY OF THE REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE STATEMENT) WHICH CAN BE OBTAINED FROM ANY DBS/POSB BRANCH IN SINGAPORE AND, WHERE APPLICABLE, THE VARIOUS PARTICIPATING BANKS DURING BANKING HOURS, SUBJECT TO AVAILABILITY.

z ANYONE WISHING TO ACQUIRE THESE SECURITIES (OR UNITS OF SECURITIES) SHOULD READ THE PROSPECTUS/ DOCUMENT OR PROFILE STATEMENT (AS SUPPLEMENTED OR REPLACED, IF APPLICABLE) BEFORE SUBMITTING HIS APPLICATION WHICH WILL NEED TO BE MADE IN THE MANNER SET OUT IN THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT (AS SUPPLEMENTED OR REPLACED, IF APPLICABLE). A COPY OF THE PROSPECTUS/ DOCUMENT OR PROFILE STATEMENT, AND IF APPLICABLE. A COPY OF THE REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE STATEMENT HAS BEEN LODGED WITH AND REGISTERED BY THE MONETARY AUTHORITY OF SINGAPORE WHO ASSUMES NO RESPONSIBILITY FOR ITS OR THEIR CONTENTS.

z Press the “Enter” key to confirm that you have read and understood.

G-12 7 : Press the “ENTER” key to acknowledge:-

z YOU HAVE READ, UNDERSTOOD AND AGREED TO ALL TERMS OF THE APPLICATION AND PROSPECTUS/ DOCUMENT OR PROFILE STATEMENT, AND IF APPLICABLE, THE REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/ DOCUMENT OR PROFILE STATEMENT.

z YOU CONSENT TO DISCLOSE YOUR NAME, NRIC/ PASSPORT NO., ADDRESS, NATIONALITY, CDP SECURITIES A/C NO., CPF INVESTMENT A/C NO. AND SECURITIES APPLICATION AMOUNT FROM YOUR BANK ACCOUNT(S) TO SHARE REGISTRARS, SGX, SCCS, CDP, CPF AND THE ISSUER(S).

z FOR FIXED AND MAX PRICE SECURITY APPLICATION, THIS IS YOUR ONLY APPLICATION AND IT IS MADE IN YOUR OWN NAME AND AT YOUR OWN RISK.

z THE MAXIMUM PRICE FOR EACH SHARE IS PAYABLE IN FULL ON APPLICATION AND SUBJECT TO REFUND IF THE FINAL PRICE IS LOWER.

z FOR TENDER SECURITIES APPLICATIONS, THIS IS YOUR ONLY APPLICATION AT THE SELECTED TENDER PRICE AND IT IS MADE IN YOUR OWN NAME AND AT YOUR OWN RISK.

z YOU ARE NOT A US PERSON AS REFERRED TO IN THE PROSPECTUS/DOCUMENT OR PROFILE STATEMENT AND IF APPLICABLE, THE REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE STATEMENT.

8 : Select your nationality.

9 : Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSB account (current/savings) from which to debit your application moneys.

10 : Enter the number of securities you wish to apply for using cash.

11 : Enter your own 12-digit CDP Securities Account number. (Note: This step will be omitted automatically if your CDP Securities Account number has already been stored in the Bank’s records).

12 : Check the details of your securities application, your I/C/Passport number and CDP Securities Account number and number of securities on the screen and press the “ENTER” key to confirm your application.

13 : Remove the Transaction Record for your reference and retention only.

STEPS FOR AN INTERNET ELECTRONIC APPLICATION THROUGH THE IB WEBSITE OF DBS For illustrative purposes, the steps for making an Internet Electronic Application through the DBS IB website are shown below. Certain words appearing on the screen are in abbreviated form (“A/C”, “amt”, “&”, “I/C”, “SGX” and “No.” refer to “Account”, “Amount”, “and”, “NRIC”, “SGX-ST”, and “Number” respectively).

Step 1 : Click on to DBS Bank website (www.dbs.com).

2 : Login to Internet Banking.

3 : Enter your User ID and PIN.

4 : Select “Electronic Security Application”.

G-13 5 : Click “Yes” to proceed and to warrant that you have observed and complied with all applicable laws and regulations.

6 : Select your country of residence.

7 Click on “GTC” and click the “Submit” button.

8 : Click “Confirm” to confirm:-

(a) You have read, understood and agreed to all terms of this application and the Prospectus/Document or Profile Statement and if applicable, the Supplementary or Replacement Prospectus/Document or Profile Statement.

(b) You consent to disclose your name, I/C or Passport number, address, nationality, CDP Securities Account number, CPF Investment Account number (if applicable) and securities application amount from your DBS/POSBank Account(s) to registrars of securities, SGX, SCCS, CDP, CPF Board and issuer/vendor(s).

(c) You are not a US Person (as such term is defined in Regulation S under the United States Securities Act of 1993, as amended).

(d) This application is made in your name and at your own risk.

(e) For FIXED/MAX price securities application, this is your only application. For TENDER price securities application, this is your only application at the selected tender price.

9 : Fill in details for share application and click “Submit”.

10 : Check the details of your share application, your NRIC or passport number and click “OK” to confirm your application.

11 : Print Confirmation Screen (optional) for your reference & retention only.

G-14 APPENDIX H

RULES OF THE GLOBAL TESTING EMPLOYEE SHARE OPTION SCHEME

1. NAME OF THE ESOS The ESOS shall be called the “Global Testing Employee Share Option Scheme’’.

2. DEFINITIONS 2.1 In the ESOS, unless the context otherwise requires, the following words and expressions shall have the following meanings:

“Act” The Companies Act, Chapter 50 of Singapore as amended, modified or supplemented from time to time;

“Auditors” The auditors of the Company for the time being;

“Board” The board of directors of the Company;

“CDP” The Central Depository (Pte) Limited;

“CPF” Central Provident Fund;

“Committee” The remuneration committee of the Company, or such other committee comprising directors of the Company duly authorised and appointed by the Board to administer this ESOS;

“Company” Global Testing Corporation Limited;

“Control” The capacity to dominate decision making, directly or indirectly, in relation to the financial and operating policies of the Company;

“Controlling Shareholder” A shareholder exercising control over the Company and unless rebutted, a person who controls directly or indirectly fifteen (15) per cent. or more of the Company’s issued share capital shall be presumed to be a Controlling Shareholder of the Company;

“Date of Grant” In relation to an Option, the date on which the Option is granted to a Participant pursuant to Rule 7;

“Director” A person holding office as a director for the time being of the Company and/or its Subsidiaries, as the case may be;

“ESOS” The Global Testing Employee Share Option Scheme, as the same may be modified or altered from time to time;

“Executive Director” A director of the Company and/or its Subsidiaries, as the case may be, who performs an executive function within the Company or the relevant Subsidiary, as the case may be;

“Exercise Price” The price at which a Participant shall subscribe for each Share upon the exercise of an Option which shall be the price as determined in accordance with Rule 9, as adjusted in accordance with Rule 10;

“Grantee” A person to whom an offer of an Option is made;

H-1 “Group” The Company and its Subsidiaries;

“Group Employee” Any confirmed employee of the Group (including any Executive Director) selected by the Committee to participate in the ESOS in accordance with Rule 4;

“Market Day” A day on which the SGX-ST is open for trading in securities;

“Market Price” A price equal to the average of the last dealt prices for the Shares on the SGX-ST over the five consecutive Trading Days immediately preceding the Date of Grant of that Option, as determined by the Committee by reference to the daily official list or any other publication published by the SGX-ST, rounded to the nearest whole cent in the event of fractional prices;

“Non-Executive Director” A director of the Company and/or its Subsidiaries, as the case may be, other than an Executive Director but including the independent Directors of the Company;

“Offer Date” The date on which an offer to grant an Option is made pursuant to the ESOS;

“Offeree” The person to whom an offer of an Option is made;

“Option” The right to subscribe for Shares granted or to be granted to a Group Employee pursuant to the ESOS and for the time being subsisting;

“Participant” The holder of an Option;

“Record Date” The date as at the close of business on which the Shareholders must be registered in order to participate in any dividends, rights, allotments or other distributions;

“Rules” Rules of the Global Testing Employee Share Option Scheme;

“S$” Singapore Dollars;

“Securities Account” The securities account maintained by a Depositor with CDP;

“Shareholders” Registered holders of Shares, except where the registered holder is CDP, the term “Shareholders” shall, in relation to such Shares, mean the Depositors whose Securities Accounts are credited with Shares;

“Shares” Ordinary shares of par value S$0.10 each in the capital of the Company;

“Subsidiaries” Companies which are for the time being subsidiaries of the Company as defined by Section 5 of the Act; and “Subsidiary” means each of them;

“SGX-ST” Singapore Exchange Securities Trading Limited; and

“Trading Day” A day on which the Shares are traded on the SGX-ST.

H-2 2.2 The term “Depositor”, “Depository Register” and “Depository Agent” shall have the meanings ascribed to it by Section 130A of the Act and the term “associate” shall have the meaning ascribed to it by the Listing Manual or any other publication prescribing rules or regulations for corporations admitted to the Official List of the SGX-ST (as modified, supplemented or amended from time to time).

2.3 Words importing the singular number shall, where applicable, include the plural number and vice versa. Words importing the masculine gender shall, where applicable, include the feminine and neuter gender.

2.4 Any reference to a time of a day in the ESOS is a reference to Singapore time.

2.5 Any reference in the ESOS to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Act or any statutory modification thereof and used in the ESOS shall have the meaning assigned to it under the Act.

3. OBJECTIVES OF THE ESOS The ESOS will provide an opportunity for Group Employees who have contributed significantly to the growth and performance of the Group (including Executive and Non-Executive Directors) and who satisfy the eligibility criteria as set out in Rule 4 of the ESOS, to participate in the equity of the Company.

The ESOS is primarily a share incentive scheme. It recognises the fact that the services of such Group Employees are important to the success and continued well-being of the Group. Implementation of the ESOS will enable the Company to give recognition to the contributions made by such Group Employees. At the same time, it will give such Group Employees an opportunity to have a direct interest in the Company at no direct cost to its profitability and will also help to achieve the following positive objectives:

(a) the motivation of each Participant to optimise his performance standards and efficiency and to maintain a high level of contribution to the Group;

(b) the retention of key employees and Executive Directors of the Group whose contributions are essential to the long-term growth and profitability of the Group;

(c) to instil loyalty to, and a stronger identification by the Participants with the long-term prosperity of, the Company;

(d) to attract potential employees with relevant skills to contribute to the Group and to create value for the Shareholders; and

(e) to align the interests of the Participants with the interests of the Shareholders.

4. ELIGIBILITY 4.1 Confirmed Group Employees (including Executive and Non-Executive Directors) who have attained the age of twenty-one (21) years on or prior to the relevant Offer Date and are not undischarged bankrupts and have not entered into a composition with their respective creditors, shall be eligible to participate in the ESOS at the absolute discretion of the Committee.

4.2 Controlling Shareholders and their associates shall not be eligible to participate in the ESOS.

4.3 There will be no restriction on the eligibility of any Participant to participate in any other share option or share incentive schemes implemented by any other companies within the Group.

4.4 Subject to the Act and any requirement of the SGX-ST, the terms of eligibility for participation in the ESOS may be amended from time to time at the absolute discretion of the Committee, which would be exercised judiciously.

H-3 5. MAXIMUM ENTITLEMENT Subject to RuIe 4 and Rule 10, the aggregate number of Shares in respect of which Options may be offered to a Grantee for subscription in accordance with the ESOS shall be determined at the discretion of the Committee who shall take into account criteria such as rank, past performance, years of service and potential development of the Participant.

6. LIMITATION ON SIZE OF THE ESOS The aggregate nominal amount of Shares over which the Committee may grant Options on any date, when added to the nominal amount of Shares issued and issuable in respect of all Options granted under the ESOS shall not exceed fifteen (15) per cent of the issued share capital of the Company on the day immediately preceding the Offer Date of the Option.

7. OFFER DATE 7.1 The Committee may, save as provided in Rule 4, Rule 5 and Rule 6, offer to grant Options to such Grantees as it may select in its absolute discretion at any time during the period when the ESOS is in force, except that no Option shall be granted during the period of thirty (30) days immediately preceding the date of announcement of the Company’s quarterly, interim and/or final results (whichever the case may be). In addition, in the event that an announcement on any matter of an exceptional nature involving unpublished price sensitive information is made, offers to grant Options may only be made on or after the second Market Day on which such announcement is released.

7.2 An offer to grant the Option to a Grantee shall be made by way of a letter (the “Letter of Offer’’) in the form or substantially in the form set out in Schedule A, subject to such amendments as the Committee may determine from time to time.

8. ACCEPTANCE OF OFFER 8.1 An Option offered to a Grantee pursuant to Rule 7 may only be accepted by the Grantee within thirty (30) days after the relevant Offer Date and not later than 5.00 p.m. on the thirtieth (30th) day from such Offer Date (a) by completing, signing and returning to the Company the Acceptance Form in or substantially in the form set out in Schedule B, subject to such modification as the Committee may from time to time determine, accompanied by payment of S$1.00 as consideration and (b) if, at the date on which the Company receives from the Grantee the Acceptance Form in respect of the Option as aforesaid, he remains eligible to participate in the ESOS in accordance with these Rules.

8.2 If a grant of an Option is not accepted strictly in the manner as provided in this Rule 8, such offer shall, upon the expiry of the thirty (30) day period, automatically lapse and shall forthwith be deemed to be null and void and be of no effect.

8.3 The Company shall be entitled to reject any purported acceptance of a grant of an Option made pursuant to this Rule 8 or Exercise Notice given pursuant to Rule 12 which does not strictly comply with the terms of the ESOS.

8.4 Options are personal to the Grantees to whom they are granted and shall not be sold, mortgaged, transferred, charged, assigned, pledged or otherwise disposed of or encumbered in whole or in part or in any way whatsoever without the Committee’s prior written approval, but may be exercised by the Grantee’s duly appointed personal representative as provided in Rule 11.6 in the event of the death of such Grantee.

8.5 The Grantee may accept or refuse the whole or part of the offer. If only part of the offer is accepted, the Grantee shall accept the offer in multiples of 1,000 Shares.

8.6 In the event that a grant of an Option results in a contravention of any applicable law or regulation, such grant shall be null and void and be of no effect and the relevant Participant shall have no claim whatsoever against the Company.

H-4 8.7 Unless the Committee determines otherwise, an Option shall automatically lapse and become null, void and of no effect and shall not be capable of acceptance if:

(a) it is not accepted in the manner as provided in Rule 8.1 within the thirty (30) day period; or

(b) the Grantee dies prior to his acceptance of the Option; or

(c) the Grantee is adjudicated a bankrupt or enters into composition with his creditors prior to his acceptance of the Option; or

(d) the Grantee being a Group Employee ceases to be in the employment of the Group or (being a Director) ceases to be a Director of the Company, in each case, for any reason whatsoever prior to his acceptance of the Option; or

(e) the Company is liquidated or wound-up prior to the Grantee’s acceptance of the Option.

9. EXERCISE PRICE 9.1 Subject to any adjustment pursuant to Rule 10, the Exercise Price for each Share in respect of which an Option is exercisable shall be determined by the Committee, in its absolute discretion, on the Date of Grant, at:

(a) a price equal to the Market Price; or

(b) a price which is set at a discount to the Market Price, provided that:

(i) the maximum discount shall not exceed twenty (20) per cent. of the Market Price; and

(ii) the Shareholders in general meeting shall have authorised, in a separate resolution, the making of offers and grants of Options under the ESOS at a discount not exceeding the maximum discount as aforesaid.

9.2 In making any determination under Rule 9.1(b) on whether to give a discount and the quantum of such discount, the Committee shall be at liberty to take into consideration such criteria as the Committee may, at its absolute discretion, deem appropriate, including but not limited to:

(a) the performance of the Company and/or its Subsidiaries, as the case may be;

(b) the years of service and individual performance of the eligible Group Employee or Director;

(c) the contribution of the eligible Group Employee or Director to the success and development of the Company and/or the Group; and

(d) the prevailing market conditions.

9.3 The Exercise Price shall in no event be less than the nominal value of a Share. Where the Exercise Price as determined above is less than the nominal value of the Share, the Exercise Price shall be the nominal value.

10. ALTERATION OF CAPITAL 10.1 If a variation in the issued share capital of the Company (whether by way of a capitalisation of profits or reserves or rights issue or reduction (including any reduction arising by reason of the Company purchasing or acquiring its issued Shares), subdivision, consolidation or distribution, or otherwise howsoever) should take place, then:

(a) the Exercise Price in respect of the Shares and nominal value, class and/or number of Shares comprised in the Options to the extent unexercised and the rights attached thereto; and/or

H-5 (b) the nominal value, class and/or number of Shares in respect of which additional Options may be granted to Participants, may, be adjusted in such manner as the Committee may determine to be appropriate including retrospective adjustments where such variation occurs after the date of exercise of an Option but the Record Date relating to such variation precedes such date of exercise and, except in relation to a capitalisation issue, upon the written confirmation of the Auditors (acting only as experts and not as arbitrators), that in their opinion, such adjustment is fair and reasonable.

10.2 Notwithstanding the provisions of Rule 10.1 above, no such adjustment shall be made (a) which would result in the Shares to be issued upon the exercise of an Option being issued at a discount to the nominal value and if such an adjustment would but for this sub-Clause have so resulted, the Exercise Price payable shall be the nominal value of a Share; (b) if as a result, the Participant receives a benefit that a Shareholder does not receive; and (c) unless the Committee after considering all relevant circumstances considers it equitable to do so.

10.3 The issue of securities as consideration for an acquisition of any assets by the Company will not be regarded as a circumstance requiring adjustment under the provisions of this Rule 10.

10.4 The restriction on the number of Shares to be offered to any Grantee under Rule 5 above, shall not apply to the number of additional Shares or Options over additional Shares issued by virtue of any adjustment to the number of Shares and/or Options pursuant to this Rule 10.

10.5 Upon any adjustment required to be made, the Company shall notify each Participant (or his duly appointed personal representative(s)) in writing and deliver to him (or, where applicable, his duly appointed personal representative(s)) a statement setting forth the new Exercise Price thereafter in effect and the nominal value, class and/or number of Shares thereafter comprised in the Option so far as unexercised. Any adjustment shall take effect upon such written notification being given.

11. OPTION PERIOD 11.1 Options granted with the Exercise Price set at Market Price shall only be exercisable, in whole or in part (provided that an Option may be exercised in part only in respect of 1,000 Shares or any multiple thereof), at any time, by a Participant after the first anniversary of the Offer Date of that Option, Provided Always that the Options shall be exercised before the tenth anniversary of the relevant Offer Date, or such earlier date as may be determined by the Committee, failing which all unexercised Options shall immediately lapse and become null and void and a Participant shall have no claim against the Company.

11.2 Options granted with the Exercise Price set at a discount to Market Price shall only be exercisable, in whole or in part (provided that an Option may be exercised in part only in respect of 1,000 Shares or any multiple thereof), at any time, by a Participant after the second anniversary from the Offer Date of that Option, Provided always that the Options shall be exercised before the tenth anniversary of the relevant Offer Date, or such earlier date as may be determined by the Committee, failing which all unexercised Options shall immediately lapse and become null and void and a Participant shall have no claim against the Company.

11.3 An Option shall, to the extent unexercised, immediately lapse and become null and void and a Participant shall have no claim against the Company:

(a) subject to Rules 11.4, 11.5 and 11.6, upon the Participant ceasing to be in the employment of the Company or any of the companies within the Group for any reason whatsoever; or

(b) upon the bankruptcy of the Participant or the happening of any other event which result in his being deprived of the legal or beneficial ownership of such Option; or

(c) in the event of misconduct on the part of the Participant, as determined by the Committee in its absolute discretion.

H-6 For the purpose of Rule 11.4(a), a Participant shall be deemed to have ceased to be so employed as of the date the notice of termination of employment is tendered by or is given to him, unless such notice shall be withdrawn prior to its effective date.

11.4 If a Participant ceases to be employed by the Group by reason of his:

(a) ill health, injury or disability, in each case, as certified by a medical practitioner approved by the Committee;

(b) redundancy;

(d) retirement before that age with the consent of the Committee,

or for any other reason approved in writing by the Committee, he may, at the absolute discretion of the Committee exercise any unexercised Option within the relevant Option Period and upon the expiry of such period, the Option shall immediately lapse and become null and void.

11.5 If a Participant ceases to be employed by a Subsidiary:

(a) by reason of the Subsidiary, by which he is principally employed ceasing to be a company within the Group or the undertaking or part of the undertaking of such Subsidiary, being transferred otherwise than to another company within the Group; or

(b) for any other reason, provided the Committee gives its consent in writing, he may, at the absolute discretion of the Committee, exercise any unexercised Options within the relevant Option Period and upon the expiry of such period, the Option shall immediately lapse and become null and void.

11.6 If a Participant dies and at the date of his death holds any unexercised Option, such Option may, at the absolute discretion of the Committee, be exercised by the duly appointed legal personal representatives of the Participant within the relevant Option Period and upon the expiry of such period, the Option shall immediately lapse and become null and void.

11.7 If a Participant, who is also an Executive Director, ceases to be a Director for any reason whatsoever, he may, at the absolute discretion of the Committee, exercise any unexercised Option within the relevant Option Period and upon the expiry of such period, the Option shall immediately lapse and become null and void.

12. EXERCISE OF OPTIONS, ALLOTMENT AND LISTING OF SHARES 12.1 An Option may be exercised, in whole or in part (provided that an Option may be exercised in part only in respect of 1,000 Shares or any multiple thereof), by a Participant giving notice in writing to the Company in or substantially in the form set out in Schedule C (the “Exercise Notice”), subject to such amendments as the Committee may from time to time determine. Every Exercise Notice must be accompanied by a remittance for the full amount of the aggregate Exercise Price in respect of the Shares which have been exercised under the Option, the relevant CDP charges (if any) and any other documentation the Committee may require. All payments shall be made by cheque, cashier’s order, bank draft or postal order made out in favour of the Company. An Option shall be deemed to be exercised upon the receipt by the Company of the abovementioned Notice duly completed and the receipt by the Company of the full amount of the aggregate Exercise Price in respect of the Shares which have been exercised under the Option.

12.2 Subject to:

(a) such consents or other actions required by any competent authority under any regulations or enactments for the time being in force as may be necessary (including any approvals required from the SGX-ST); and

H-7 (b) compliance with the Rules, the Memorandum and Articles of Association of the Company, the Company shall, as soon as practicable after the exercise of an Option by a Participant but in any event within ten (10) Market Days after the date of the exercise of the Option in accordance with Rule 12.1, allot the Shares in respect of which such Option has been exercised by the Participant and within five (5) Market Days from the date of such allotment, despatch the relevant share certificates to CDP for the credit of the securities account of that Participant by ordinary post or such other mode of delivery as the Committee may deem fit.

12.3 The Company shall, if necessary, as soon as practicable after the exercise of an Option, apply to the SGX-ST or any other stock exchange on which the Shares are quoted or listed for permission to deal in and for quotation of the Shares which may be issued upon exercise of the Option and the Shares (if any) which may be issued to the Participant pursuant to any adjustments made in accordance with Rule 10.

12.4 Shares which are all allotted on the exercise of an Option by a Participant shall be issued, as the Participant may elect, in the name of CDP to the credit of the securities account of the Participant maintained with CDP or the Participant’s securities sub-account with a CDP Depository Agent.

12.5 Shares allotted and issued upon the exercise of an Option shall be subject to all provisions of the Memorandum and Articles of Association of the Company and shall rank pari passu in all respects with the then existing issued Shares in the capital of the Company except for any dividends, rights, allotments or other distributions, the Record Date for which is prior to the date such Option is exercised.

12.6 The Company shall keep available sufficient unissued Shares to satisfy the full exercise of all Options for the time being remaining capable of being exercised.

13. MODIFICATIONS TO THE ESOS 13.1 Any or all the provisions of the ESOS may be modified and/or altered at any time and from time to time by resolution of the Committee, except that:

(a) any modification or alteration which shall alter adversely the rights attaching to any Option granted prior to such modification or alteration and which in the opinion of the Committee, materially alters the rights attaching to any Option granted prior to such modification or alteration may only be made with the consent in writing of such number of Participants who, if they exercised their Options in full, would thereby become entitled to not less than three- quarters (3/4) in nominal amount of all the Shares which would fall to be allotted upon exercise in full of all outstanding Options;

(b) any modification or alteration which would be to the advantage of Participants under the ESOS shall be subject to the prior approval of the Shareholders in general meeting; and

(c) no modification or alteration shall be made without the prior approval of the SGX-ST or (if required) any other stock exchange on which the Shares are quoted and listed, and such other regulatory authorities as may be necessary.

For the purposes of Rule 13.1(a), the opinion of the Committee as to whether any modification or alteration would alter adversely the rights attaching to any Option shall be final and conclusive.

13.2 Notwithstanding anything to the contrary contained in Rule 13.1, the Committee may at any time by resolution (and without other formality, save for the prior approval of the SGX-ST) amend or alter the ESOS in any way to the extent necessary to cause the ESOS to comply with any statutory provision or the provision or the regulations of any regulatory or other relevant authority or body (including the SGX-ST).

13.3 Written notice of any modification or alteration made in accordance with this Rule 13 shall be given to all Participants.

H-8 14. DURATION OF THE ESOS 14.1 The ESOS shall continue to be in force at the discretion of the Committee, subject to a maximum period of ten (10) years, commencing on the date on which the ESOS is adopted by Shareholders. Subject to compliance with any applicable laws and regulations in Singapore, the ESOS may be continued beyond the above stipulated period with the approval of the Shareholders by ordinary resolution at a general meeting and of any relevant authorities which may then be required.

14.2 The ESOS may be terminated at any time by the Committee or by resolution of the Shareholders at a general meeting subject to all other relevant approvals which may be required and if the ESOS is so terminated, no further Options shall be offered by the Company hereunder.

14.3 The termination, discontinuance or expiry of the ESOS shall be without prejudice to the rights accrued to Options which have been granted and accepted as provided in Rule 8, whether such Options have been exercised (whether fully or partially) or not.

15. TAKE-OVER AND WINDING UP OF THE COMPANY 15.1 In the event of a take-over offer being made for the Company, Participants (including Participants holding Options which are then not exercisable pursuant to the provisions of Rules 11.1 and 11.2) holding Options as yet unexercised shall, notwithstanding Rules 11 and 12 but subject to Rule 15.5, be entitled to exercise such Options in full or in part in the period commencing on the date on which such offer is made or, if such offer is conditional, the date on which the offer becomes or is declared unconditional, as the case may be, and ending on the earlier of:

(a) the expiry of six (6) months thereafter, unless prior to the expiry of such six (6) month period, at the recommendation of the offeror and with the approvals of the Committee and the SGX-ST, such expiry date is extended to a later date (being a date falling not later than the date of expiry of the Option Period relating thereto); or

(b) the date of the expiry of the Option Period relating thereto,

whereupon any Option then remaining unexercised shall immediately lapse and become null and void.

Provided Always that if during such period the offeror becomes entitled or bound to exercise the rights of compulsory acquisition of the Shares under the provisions of the Act and, being entitled to do so, gives notice to the Participants that it intends to exercise such rights on a specified date, the Option shall remain exercisable by the Participants until such specified date or the expiry of the Option Period relating thereto, whichever is earlier. Any Option not so exercised by the said specified date shall lapse and become null and void.

Provided that the rights of acquisition or obligation to acquire stated in the notice shall have been exercised or performed, as the case may be. If such rights of acquisition or obligations have not been exercised or performed, all Options shall, subject to Rule 11.3, remain exercisable until the expiry of the Option Period.

15.2 If, under any applicable laws, the court sanctions a compromise or arrangement proposed for the purposes of, or in connection with, a scheme for the reconstruction of the Company or its amalgamation with another company or companies, Participants (including Participants holding Options which are then not exercisable pursuant to the provisions of Rules 11.1 and 11.2) shall notwithstanding Rules 11 and 12 but subject to Rule 15.5, be entitled to exercise any Option then held by them during the period commencing on the date upon which the compromise or arrangement is sanctioned by the court and ending either on the expiry of sixty (60) days thereafter or the date upon which the compromise or arrangement becomes effective, whichever is later (but not after the expiry of the Option Period relating thereto), whereupon any unexercised Option shall lapse and become null and void, Provided always that the date of exercise of any Option shall be before the tenth anniversary of the Offer Date.

H-9 15.3 If an order or an effective resolution is passed for the winding up of the Company on the basis of its insolvency, all Options, to the extent unexercised, shall lapse and become null and void.

15.4 In the event a notice is given by the Company to its members to convene a general meeting for the purposes of considering and, if thought fit, approving a resolution to voluntarily wind-up the Company, the Company shall on the same date as or soon after it dispatches such notice to each member of the Company give notice thereof to all Grantees (together with a notice of the existence of the provision of this Rule 15.4) and thereupon, each Grantee (or his personal representative) shall be entitled to exercise all or any of his Options at any time not later than two business days prior to the proposed general meeting of the Company by giving notice in writing to the Company, accompanied by a remittance for the aggregate Exercise Price whereupon the Company shall as soon as possible and in any event, no later than the business day immediately prior to the date of the proposed general meeting referred to above, allot the relevant Shares to the Grantee cr0edited as fully paid.

15.5 If in connection with the making of a general offer referred to in Rule 15.1 above or the scheme referred to in Rule 15.2 above or the winding up referred to in Rule 15.4 above, arrangements are made (which are confirmed in writing by the Auditors, acting only as experts and not as arbitrators, to be fair and reasonable) for the compensation of Participants, whether by the continuation of their Options or the payment of cash or the grant of other options or otherwise, a Participant holding an Option, which is not then exercisable, may not, at the discretion of the Committee, be permitted to exercise that Option as provided for in this Rule 15.

15.6 To the extent that an Option is not exercised within the periods referred to in this Rule 15, it shall lapse and become null and void.

16. ADMINISTRATION OF THE ESOS 16.1 The ESOS shall be administered by the Committee in its absolute discretion with such powers and duties as are conferred on it by the Board.

16.2 The Committee shall have the power, from time to time, to make or vary such regulations (not being inconsistent with the ESOS) for the implementation and administration of the ESOS as it thinks fit.

16.3 Any decision of the Committee, made pursuant to any provision of the ESOS (other than a matter to be certified by the Auditors), shall be final and binding (including any decisions pertaining to disputes as to the interpretation of the ESOS or any rule, regulation, or procedure thereunder or as to any rights under the ESOS).

16.4 A Director who is a member of the Committee shall not be involved in its deliberation in respect of Options to be granted to him.

17. NOTICES 17.1 Any notice given by a Participant to the Company shall be sent by post or delivered to the registered office of the Company or such other address as may be notified by the Company to the Participant in writing.

17.2 Any notice or documents given by the Company to a Participant shall be sent to the Participant by hand or sent to him at his home address stated in the records of the Company or the last known address of the Participant, and if sent by post shall be deemed to have been given on the day immediately following the date of posting.

H-10 18. TERMS OF EMPLOYMENT UNAFFECTED 18.1 The ESOS or any Option shall not form part of any contract of employment between the Company or any Subsidiary (as the case may be) and any Participant and the rights and obligations of any individual under the terms of the office or employment with such company within the Group shall not be affected by his participation in the ESOS or any right which he may have to participate in it or any Option which he may hold and the ESOS or any Option shall afford such an individual no additional rights to compensation or damages in consequence of the termination of such office or employment for any reason whatsoever.

18.2 The ESOS shall not confer on any person any legal or equitable rights (other than those constituting the Options themselves) against the Company and/or any Subsidiary directly or indirectly or give rise to any cause of action at law or in equity against the Company or any Subsidiary.

19. TAXES All taxes (including income tax) arising from the exercise of any Option granted to any Participant under the ESOS shall be borne by that Participant.

20. COSTS AND EXPENSES OF THE ESOS 20.1 Each Participant shall be responsible for all fees of CDP relating to or in connection with the issue and allotment of any Shares pursuant to the exercise of any Option in CDP’s name, the deposit of share certificate(s) with CDP, the Participant’s securities account with CDP, or the Participant’s securities sub-account with a Depository Agent or CPF investment account with a CPF agent bank and all taxes referred to in Rule 19 which shall be payable by the relevant Participant.

20.2 Save for such costs and expenses expressly provided in the ESOS to be payable by the Participants, all fees, costs and expenses incurred by the Company in relation to the ESOS including but not limited to the fees, costs and expenses relating to the allotment and issue of Shares pursuant to the exercise of any Option shall be borne by the Company.

21. CONDITION OF OPTION Every Option shall be subject to the condition that no Shares shall be issued pursuant to the exercise of an Option if such issue would be contrary to any law or enactment, or any rules or regulations of any legislative or non-legislative governing body for the time being in force in Singapore or any other relevant country.

22. DISCLAIMER OF LIABILITY Notwithstanding any provisions herein contained and subject to the Act, the Board, the Committee and the Company shall not under any circumstances be held liable for any costs, losses, expenses and damages whatsoever and howsoever arising in respect of any matter under or in connection with the ESOS, including but not limited to the Company’s delay in allotting and issuing the Shares or in applying for or procuring the listing of the Shares on the SGX-ST.

23. DISCLOSURE IN ANNUAL REPORT The Company shall make the following disclosure in its annual report:

(a) The names of the members of the Committee;

(b) The information required in the table below for the following Participants (which for the avoidance of doubt, shall include Participants who have exercised all their Options in any particular financial year):

(i) participants who are Directors of the Company; and

H-11 (ii) participants, other than those in (i) who receive five (5) per cent. or more of the total number of Options available under the ESOS.

Name of Options granted Aggregate Options Aggregate Options Aggregate Options Participant during financial granted since exercised since outstanding as at year under review commencement commencement end of financial (including terms) of the ESOS to of the ESOS to year under review end of financial end of financial year under review year under review

(c) The number and proportion of Options granted at the following discounts to average market value of the Shares in the financial year under review:

(i) Options granted at up to 10 per cent. discount; and

(ii) Options granted at between 10 per cent. but not more than 20 per cent. discount.

24. ABSTENTION FROM VOTING Grantees who are Shareholders are to abstain from voting on any Shareholders’ resolution relating to the ESOS.

25. DISPUTES Any disputes or differences of any nature arising hereunder shall be referred to the Committee and its decision shall be final and binding in all respects.

26. GOVERNING LAW The ESOS shall be governed by, and construed in accordance with, the laws of the Republic of Singapore. The Participants, by accepting Options in accordance with the ESOS, and the Company submit to the exclusive jurisdiction of the courts of the Republic of Singapore.

H-12 Schedule A

GLOBAL TESTING EMPLOYEE SHARE OPTION SCHEME

LETTER OF OFFER

Serial No:

Date:

To:

Private and Confidential

Dear Sir/Madam,

1. We have the pleasure of informing you that, pursuant to the Global Testing Employee Share Option Scheme (“ESOS”), you have been nominated to participate in the ESOS by the Committee (the “Committee”) appointed by the Board of Directors of Global Testing Corporation Limited (the “Company”) to administer the ESOS. Terms as defined in the ESOS shall have the same meaning when used in this letter.

2. Accordingly, in consideration of the payment of a sum of S$1.00, an offer is hereby made to grant you an option (the “Option”), to subscribe for and be allotted Shares at the price of S$ for each Share.

3. The Option is personal, to you and shall not be transferred, charged, pledged, assigned or otherwise disposed of by you, in whole or in part, except with the prior approval of the Committee.

4. The Option shall be subject to the terms of the ESOS, a copy of which is available for inspection at the business address of the Company.

5. If you wish to accept the offer of the Option on the terms of this letter, please sign and return the enclosed Acceptance Form with a sum of S$1.00 not later than 5.00 p.m. on failing which this offer will lapse.

Yours faithfully, For and on behalf of Global Testing Corporation Limited

Name:

H-13 Schedule B

GLOBAL TESTING EMPLOYEE SHARE OPTION SCHEME

ACCEPTANCE FORM

Serial No:

Date:

To: The Committee, Global Testing Employee Share Option Scheme 4 Battery Road #15-01 Bank of China Building Singapore 049908

Closing Date for Acceptance of Offer :

Number of Shares Offered :

Exercise Price for each Share : S$

Total Amount Payable : S$

I have read your Letter of Offer dated and agree to be bound by the terms of the Letter of Offer and ESOS referred to therein. Terms defined in your Letter of Offer shall have the same meanings when used in this Acceptance Form.

I hereby accept the Option to subscribe for Shares at S$ for each Share. I enclose cash for S$1.00 in payment for the purchase of the Option/I authorise my employer to deduct the sum of S$1.00 from my salary in payment for the purchase of the Option.

I understand that I am not obliged to exercise the Option.

I confirm that my acceptance of the Option will not result in the contravention of any applicable law or regulation in relation to the ownership of shares in the Company or options to subscribe for such shares.

I agree to keep all information pertaining to the grant of the Option to me confidential.

I further acknowledge that you have not made any representation to induce me to accept the offer and that the terms of the Letter of Offer and this Acceptance Form constitute the entire agreement between us relating to the offer.

H-14 Please print in block letters

Name in full :

Designation :

Address :

Nationality :

*NRIC/Passport No. :

Signature :

Date :

Notes: * Delete accordingly

H-15 Schedule C

GLOBAL TESTING EMPLOYEE SHARE OPTION SCHEME

FORM OF EXERCISE OF OPTION

Total number of ordinary shares of S$0.10 each (the “Shares”) offered at S$ for each Share (the “Exercise Price”) under the ESOS on (Date of Grant) :

Number of Shares previously allotted thereunder :

Outstanding balance of Shares to be allotted thereunder :

Number of Shares now to be subscribed :

To: The Committee, Global Testing Employee Share Option Scheme 4 Battery Road #15-01 Bank of China Building Singapore 049908

1. Pursuant to your Letter of Offer dated and my acceptance thereof, I hereby exercise the Option to subscribe for Shares in Global Testing Corporation Limited (the “Company”) at S$ for each Share.

2. I enclose a *cheque/cashiers order/banker’s draft/postal order no. for S$ by way of subscription for the total number of the said Shares.

3. I agree to subscribe for the said Shares subject to the terms of the Letter of Offer, the Global Testing Employee Share Option Scheme and the Memorandum and Articles of Association of the Company.

4. I declare that I am subscribing for the said Shares for myself and not as a nominee for any other person.

5. I request the Company to allot and issue the Shares in the name of The Central Depository (Pte) Limited (“CDP”) for credit of my *Securities Account with CDP/Sub-Account with the Depository Agent/CPF investment account with my Agent Bank specified below and I hereby agree to bear such fees or other charges as may be imposed by CDP in respect thereof.

H-16 Please print in block letters

Name in full :

Designation :

Address :

Nationality :

*NRIC/Passport No :

*Direct Securities Account No. :

*Sub Account No. :

Name of Depository Agent :

*CPF Investment Account No. :

Name of Agent Bank :

Signature :

Date :

Notes: * Delete accordingly

H-17