Prospectus Dated 20 May 2000

PROSPECTUS DATED 20 MAY 2000

Application has been made to the Singapore Exchange Securities OUR STRENGTHS Trading Limited (“SGX-ST”) for permission to deal in, and for quotation of, all the ordinary shares of $0.05 each (“Shares”) in the capital of • Secured distributorship and sales representative Achieva Limited (the ”Company”) already issued as well as the new agreements and arrangements relating to well- Shares (the “New Shares”) which are the subject of this Invitation (as BUSINESS PROFILE established brand names. defined herein) and the Shares which may be issued pursuant to the • Principal activity is the distribution of electronic and options granted to employees referred to on pages 76 and 77 of this IT-related products in the Asia-Pacific region including Prospectus. Such permission will be granted when the Company has WELL-ESTABLISHED BRAND NAMES been admitted to the Official List of the SGX-ST. Acceptance of Singapore, Malaysia, Thailand, the Philippines, applications will be conditional upon, inter alia, permission being Indonesia, Australia, Vietnam and the People’s Republic of China (including Hong Kong) (“PRC”). granted to deal in, and for quotation of, all of the issued Shares as well PC peripherals, parts and software as the New Shares. Moneys paid in respect of any application accepted will, subject to applicable laws, be returned, without interest • Distributes electronic and IT-related products which American Power Conversion, ASUSTeK, Aztech, Gigabyte, Intel, Kodak, LG, Microsoft, Mitsubishi, or any share of revenue earned or other benefit arising therefrom and may be broadly classified into: Motorola, PC Partner and Seagate at the applicant’s own risk, if the said permission is not granted. – PC peripherals, parts and software; – Electronic components; and The SGX-ST assumes no responsibility for the correctness of any of Electronic components the statements made, reports contained or opinions expressed in this – Data network products and services. Prospectus. Admission to the Official List of the SGX-ST is not to be Allayer, Altera, Ecliptek, Falco Electronics, Level One, taken as an indication of the merits of the Invitation, the Company, its • Appointed as distributor and sales representative for Semtech, Synplicity, Texas Instruments, Thomas & subsidiaries, the issued Shares or the New Shares. several well-known brands including Altera, Intel, Betts, ZiLOG Microsoft, Motorola, Seagate, Texas Instruments and A copy of this Prospectus, together with copies of the Application 3Com. Data network products and services Forms, has been lodged with and registered by the Registrar of 3Com Companies and Businesses in Singapore who takes no responsibility • Diverse clientele of approximately 3,500 customers for its contents. spread across the Asia-Pacific region including Singapore, Malaysia, Thailand, the Philippines, Indonesia, Australia, Vietnam and the PRC. • Extensive customer base in the Group's current ACHIEVA territories.

ACHIEVA LIMITED EXTENSIVE CUSTOMER BASE (Incorporated in the Republic of Singapore on 3 November 1993)

Invitation in respect of 103,540,000 New Shares of $0.05 each comprising: – PC peripherals, • Dealers parts and software • Retailers (1) 21,000,000 Offer Shares at $0.22 for each Offer Share by way of • Value-added Resellers public offer; and • System Integrators (2) 82,540,000 Placement Shares by way of placement comprising: – (a) 74,286,000 Placement Shares at $0.22 for each Electronic Placement Share; and Mainly multinational components manufacturers of multimedia (b) 8,254,000 Reserved Shares at $0.20 for each Reserved products, data networking and Share for subscription by the employees, management and telecommunications equipment directors of the Group, for major PC OEM and major network equipment suppliers payable in full on application.

Data network In Malaysia: Manager Lead Underwriter and Lead Placement Agent products and • Commercial firms Agent services • Government-related organisations • Educational institutions PROSPECTUS DATED 20 MAY 2000

ACHIEVA LIMITED EXTENSIVE CUSTOMER BASE (Incorporated in the Republic of Singapore on 3 November 1993)

The Group’s business development plans for 2000 and 2001 :

Diversification

• To secure additional product lines of electronic components and Internet telephony products.

• To set up a design centre with third parties to provide design and consultancy services relating to the electronics industry.

• To explore other investment opportunities in businesses related to the Group’s core businesses or the electronics industry. • Ability to carry and hold sufficient stocks to satisfy customers’ orders. Ancillary services

• To provide advanced training in digital design and applications to • Good relationships with suppliers and customers. design engineers.

• Provision of ancillary services including servicing of equipment Geographical expansion under suppliers’ warranties and contract maintenance for PC systems. • To further expand market share in existing markets.

• Ability to provide technical support for customers at the product • To seek fresh opportunities in new emerging markets. design stage including programming and training services.

FINANCIAL OVERVIEW PROSPECTS TURNOVER (S$ m) IT market outlook for Asia-Pacific region (excluding Japan)

250

• Market studies reveal renewed growth in the region:- 229.2 200 – Total PC shipments in 1999 surpassed 14.1 million units for an 190.5 increase of 35.1% over 1998. The PC shipments in 1999 was the 150 highest annual figure ever recorded.1 135.4 100

– Shipment value of semiconductor components grew by 21.4% in 50 1999 driven by demand for Internet applications, computing and 43.5 0 2 communications equipment. FY96 FY97 FY98 FY99

• Sales of IT products forecast to grow at a CAGR of 15% between 1 1998 to 2003 to reach US$84.8 billion by 2003. PROFIT BEFORE TAX (S$ m)

• Shipment value of semiconductor components between 1999 to 8 3 7 2002 is forecast to grow at a CAGR of 20% from US$35.0 billion 7.2 to US$60.5 billion. 2 6 5 5.5

1 IDC Asia Pacific and Computerworld 3 2 Semiconductor Industry Association 2 2.6 3 CAGR refers to compound annual growth rate 1 1.3 0 FY96 FY97 FY98 FY99 GROWTH STRATEGIES AND FUTURE PLANS

The Group’s business development plans for 2000 and 2001 :

Diversification

• To secure additional product lines of electronic components and Internet telephony products.

• To set up a design centre with third parties to provide design and consultancy services relating to the electronics industry.

• To provide advanced training in digital design and applications to • Good relationships with suppliers and customers. design engineers.

• Ability to provide technical support for customers at the product • To seek fresh opportunities in new emerging markets. design stage including programming and training services.

FINANCIAL OVERVIEW PROSPECTS TURNOVER (S$ m) IT market outlook for Asia-Pacific region (excluding Japan)

250

– Shipment value of semiconductor components grew by 21.4% in 50 1999 driven by demand for Internet applications, computing and 43.5 0 2 communications equipment. FY96 FY97 FY98 FY99

• Sales of IT products forecast to grow at a CAGR of 15% between 1 1998 to 2003 to reach US$84.8 billion by 2003. PROFIT BEFORE TAX (S$ m)

• Shipment value of semiconductor components between 1999 to 8 3 7 2002 is forecast to grow at a CAGR of 20% from US$35.0 billion 7.2 to US$60.5 billion. 2 6 5 5.5

1 IDC Asia Pacific and Computerworld 3 2 Semiconductor Industry Association 2 2.6 3 CAGR refers to compound annual growth rate 1 1.3 0 FY96 FY97 FY98 FY99 CONTENTS

Page

CORPORATE INFORMATION ...... 3

DEFINITIONS ...... 5

ABBREVIATIONS OF TECHNICAL TERMS ...... 9

DETAILS OF THE INVITATION — Listing on the SGX-ST ...... 10 — Indicative Timetable for Listing ...... 11

PROSPECTUS SUMMARY ...... 12 — The Invitation ...... 15

RISK FACTORS ...... 16

ISSUE STATISTICS ...... 20

SUMMARY OF GROUP FINANCIAL INFORMATION...... 22

GENERAL INFORMATION ON THE GROUP — Share Capital ...... 23 — Shareholders ...... 25 — Moratorium ...... 26 — Restructuring Exercise ...... 26 — Group Structure ...... 28 — History ...... 30 — Business ...... 34 — Marketing and Distribution ...... 43 — Foreign Exchange Risk Management ...... 45 — Credit Terms ...... 46 — Research and Development Policy ...... 47 — Staff Training Policy ...... 47 — Year 2000 Compliance ...... 47 — Review of Past Performance ...... 48 — Finance...... 54 — Prospects and Future Plans ...... 56 — Major Customers ...... 59 — Major Suppliers ...... 60 — Competition ...... 61 — Interested Party Transactions ...... 65 — Directors, Management and Staff ...... 72 — Corporate Governance and Audit Committee ...... 74 — Service Agreements and Profit Sharing Arrangements ...... 75

1 Page

— Grant of Share Options to Employees ...... 76 — Properties and Fixed Assets ...... 78 — Subsidiary Companies...... 78

DIRECTORS’ REPORT ...... 81

ACCOUNTANTS’ REPORT ...... 82

GENERAL AND STATUTORY INFORMATION ...... 101

APPENDIX — Terms and Conditions and Procedures for Applications ...... 120 — Additional Terms and Conditions for Applications using Printed Application Forms ...... 123 — Additional Terms and Conditions for Electronic Applications ...... 126 — Instructions for Electronic Applications through ATMs of the UOB Group and IB Web-site of UOB ...... 131

2 CORPORATE INFORMATION

Board of Directors : Lim Yong Choon (Executive Chairman) Pok Tam Soon Ng Chee Seng Soh Eng Kuang Cheong Wai Chew Chia Chong Leong Lew Syn Pau (Independent Director) Goh Kian Hwee (Independent Director)

Company Secretaries : Adrian Chan Pengee, LLB (Hons) Leong Shiao Yee, LLB (Hons)

Registered Office : 35 Kallang Pudding Road Tong Lee Building A #09-05 Singapore 349314

Registrar and Share Transfer Office : Lim Associates (Pte) Ltd 10 Collyer Quay #19-08 Ocean Building Singapore 049315

Auditors and Reporting Accountants : Ernst & Young Certified Public Accountants 10 Collyer Quay #21-01 Ocean Building Singapore 049315

Solicitors to the Invitation : Lee & Lee 5 Shenton Way, Level 19 UIC Building Singapore 068808

Manager : UOB Asia Limited 80 Raffles Place, #12-00 UOB Plaza 1 Singapore 048624

Lead Underwriter and Lead : United Overseas Bank Limited Placement Agent 80 Raffles Place UOB Plaza 1 Singapore 048624

Co-Underwriters and Co-Placement : ABN AMRO Asia Merchant Bank (Singapore) Limited Agents 63 Chulia Street, #11-01 Singapore 049514

NM Rothschild & Sons (Singapore) Limited 20 Cecil Street The Exchange #09-00 Singapore 049705

3 Ong & Company Private Limited 24 Raffles Place #12-01/06 Clifford Centre Singapore 048621

Co-Underwriters : Industrial & Commercial Bank Limited 80 Robinson Road #08-00 Singapore 068898

Citicorp Investment Bank (Singapore) Limited 3 Temasek Avenue #17-00 Centennial Tower Singapore 039190

Principal Bankers : Industrial & Commercial Bank Limited 80 Robinson Road #08-00 Singapore 068898

Citibank, N.A. (Singapore Branch) 23 Church Street #01-01 Singapore 049481

ABN AMRO Bank N.V. (Singapore Branch) 63 Chulia Street Singapore 049514

K.B.C. Bank N.V. 30 Cecil Street #12-01 Prudential Tower Singapore 649712

ABSA Bank Limited 7 Temasek Boulevard #16-01 Suntec City Tower 1 Singapore 038987

4 DEFINITIONS

For the purpose of this Prospectus, the accompanying Application Forms and in relation to Electronic Applications, the instructions appearing on the screens of the ATMs of the Participating Banks or the Internet banking web-sites of the relevant Participating Banks, the following definitions have, where appropriate, been used:-

Companies within the Group “Achieva” or “Company” : Achieva Limited

“ACL” : Achieva China Limited

“ACPL” : Achieva Components Pte Ltd

“ACSB” : Achieva Components Sdn. Bhd.

“AEPL” : Achieva Electronics Pte Ltd

“AESB” : Achieva Electronics Sdn. Bhd.

“ASCSB” : Achieva Service Centre Sdn. Bhd.

“ATAPL” : Achieva Technology Australia Pte Ltd

“ATAPL(Aust)” : Achieva Technology Australia Pty. Ltd.

“ATEAPL” : Achieva Technology East Asia Pte Ltd

“ATPL” : Achieva Technology Pte Ltd

“ATPPL” : Achieva Technology Philippines Pte Ltd

“ATSB” : Achieva Technology Sdn. Bhd.

“ATSCPL” : Achieva Technology Service Centre Pte Ltd

“MNSB” : Mangrove Networks Sdn. Bhd.

“SHSB” : Stacks Holdings Sdn. Bhd.

“SSSB” : Stacks Systems Sdn. Bhd.

“STSB” : Stacks Technology Sdn. Bhd.

“AC sub-group” : ACPL and its subsidiary, ACSB

“AE sub-group” : AEPL and its subsidiaries, AESB and ACL

“AT sub-group” : ATPL and its subsidiaries, ATSB, ASCSB, ATEAPL, ATAPL, ATAPL(Aust), ATSCPL and ATPPL

“Stacks sub-group” : SHSB and its subsidiaries, STSB, SSSB and MNSB

Other Organisations or Companies “ABN AMRO Rothschild” : ABN AMRO Asia Merchant Bank (Singapore) Limited and NM Rothschild & Sons (Singapore) Limited

“Allayer” : Allayer Communications

“Altera” : Altera International Limited

“Apple Computer” : Apple Computer Limited

5 “ASUSTeK” : ASUSTeK Computer Inc.

“Aztech” : Aztech Systems Ltd

“CDP” : The Central Depository (Pte) Limited

“Cisco” : Cisco Systems, Inc.

“CPF” : Central Provident Fund

“Ecliptek” : Ecliptek Corporation

“Gigabyte” : Giga-Byte Technology Co., Ltd

“Intel” : Intel Semiconductor Ltd.

“Iomega” : Iomega International S.A.

“Kodak” : Kodak (Australasia) Pty Ltd

“Level One” : Level One Communications, Incorporated

“LG” : LG International Corp.

“Microsoft” : Microsoft Licensing, Inc.

“Mitsubishi” : Mitsubishi Electric Asia Pte Ltd

“Motorola” : Motorola Inc.

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

“Seagate” : Seagate Technology International and Seagate Singapore Distribution Pte Ltd

“Semtech” : Semtech Corporation

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

“T&B” : Thomas & Betts (S.E. Asia) Pte Ltd

“Texas Instruments” : Texas Instruments Singapore (Pte) Limited

“UOB” : United Overseas Bank Limited

“UOBA” : UOB Asia Limited

“3Com” : 3 Com Asia Pacific Rim Pte. Ltd.

General “Act” : The Companies Act (Chapter 50) of Singapore

“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 of the New Shares

“ATM” : Automated teller machine of a Participating Bank

6 “Directors” : The directors of the Company as at the date of this Prospectus, unless the context otherwise requires

“Electronic Applications” : Applications for the Offer Shares made through an ATM of one of the Participating Banks or through an Internet banking web-site of one of the relevant Participating Banks in accordance with the terms and conditions of this Prospectus

“FY” : Financial year ended or ending 31 December

“Group” or “Proforma Group” : The Company and its subsidiaries treated for the purposes of this Prospectus as if the current corporate structure had been in existence since 1 January 1995

“Invitation” : The invitation by the Company to the public to subscribe for the New Shares, subject to and on the terms and conditions of this Prospectus

“Latest Practicable Date” : 17 May 2000

“Manager” : UOB Asia Limited

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

“New Shares” : The 103,540,000 New Shares for which the Company invites applications to subscribe, comprising the Offer Shares and the Placement Shares, subject to and on the terms and conditions of this Prospectus

“NTA” : Net tangible assets

“Offer” : The invitation by the Company to the public for subscription of the Offer Shares at the Offer Price, subject to and on the terms and conditions of this Prospectus

“Offer Price” : $0.22 for each Offer Share

“Offer Shares” : The 21,000,000 New Shares which are the subject of the Offer

“P/E Ratio” : The price to earnings ratio

“Participating Banks” : The Development Bank of Singapore Ltd (including its POSBank Services division) (“DBS”); Keppel TatLee Bank Limited (“KTB”); Oversea-Chinese Banking Corporation Limited and its subsidiary, Bank of Singapore Limited (“OCBC Group”); Overseas Union Bank Limited (“OUB”); and United Overseas Bank Limited and its subsidiaries, Far Eastern Bank Limited and Industrial & Commercial Bank Limited (“UOB Group”)

“Placement” : The placement of the Placement Shares by the Placement Agents at the Placement Price, subject to and on the terms and conditions of this Prospectus

“Placement Agents” : UOB as lead placement agent and ABN AMRO Asia Merchant Bank (Singapore) Limited, NM Rothschild & Sons (Singapore) Limited and Ong & Company Private Limited as co-placement agents

“Placement Price” : $0.22 for each Placement Share (other than the Reserved Shares) and $0.20 for each Reserved Share

7 “Placement Shares” : The 82,540,000 New Shares which are the subject of the Placement, including the Reserved Shares

“PRC” : The People’s Republic of China

“Prospectus” : This prospectus published in respect of the Invitation and the Application Forms

“Reserved Shares” : Up to 8,254,000 Placement Shares reserved for the employees, management and directors of the Group

“Restructuring Exercise” : The restructuring exercise undertaken by the Group in connection with the Invitation, described on pages 26 and 27 of this Prospectus

“Securities Account” : A securities account maintained by a depositor with CDP

“Shares” : Ordinary shares of $0.05 each in the capital of the Company

“Underwriters” : UOB as lead underwriter and Industrial & Commercial Bank Limited, ABN AMRO Asia Merchant Bank (Singapore) Limited, NM Rothschild & Sons (Singapore) Limited, Citicorp Investment Bank (Singapore) Limited and Ong & Company Private Limited as co-underwriters

“USA” or “US” : United States of America

“%” or “per cent.” : percentage

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

“RM” : Malaysian Ringgit

“US$” : US Dollars

The terms “depositor”, “depository agent” and “depository register” shall have the meanings ascribed to them respectively in Section 130A of the 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 and vice versa. References to persons shall include corporations.

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

Any reference in this Prospectus or the Application Forms to shares being allotted to an applicant includes allotment to CDP for the account of that applicant.

Any reference to a time of day in this Prospectus and the Application Forms shall be a reference to Singapore time, unless otherwise stated.

Any discrepancies in tables included herein between the amounts listed and the totals thereof are due to rounding; accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede therein.

Unless the context otherwise requires, all financial information contained in this Prospectus is based on the consolidated financial statements contained in the “Accountants’ Report”.

8 ABBREVIATIONS OF TECHNICAL TERMS

For the purpose of this Prospectus, the following abbreviations have, where appropriate, been used:-

“ASIC” Application specific integrated circuit(s)

“CDR” Compact disk reader

“CD-Rom” Compact disk read only memory

“DRAM” Dynamic random access memory

“IC” Integrated circuit

“IT” Information technology

“LAN” Local area network(s)

“LCD” Liquid crystal display

“Mb” Megabyte

“Mbs” Megabit per second

“OEM” Original equipment manufacturer(s)

“PC” Personal computer(s)

9 DETAILS OF THE INVITATION

LISTING ON THE SGX-ST Application has been made to the SGX-ST for permission to deal in, and for quotation of, all the Shares already issued as well as the New Shares and the Shares which may be issued pursuant to the options granted to employees referred to on pages 76 and 77 of this Prospectus. Such permission will be granted when the Company has been admitted to the Official List of the SGX-ST. Acceptance of applications will be conditional upon, inter alia, permission being granted to deal in, and for quotation of, all of the issued Shares as well as the New Shares. Moneys paid in respect of any application accepted will, subject to applicable laws, be returned, without interest or any share of revenue earned or other benefit arising therefrom and at the applicant’s own risk, if the said permission is not granted.

The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained 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, the Company, its subsidiaries, the issued Shares or the New Shares.

A copy of this Prospectus, together with copies of the Application Forms, has been lodged with and registered by the Registrar of Companies and Businesses in Singapore who takes no responsibility for its contents. The Directors collectively and individually 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, there are no other facts, the omission of which would make any statement in this Prospectus misleading and this Prospectus constitutes full and true disclosure of all material facts about the Invitation and the Company and its subsidiaries.

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 the Company or the Manager. 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 the affairs of the Company or the Group or in any statement of fact or information contained in this Prospectus since the date of this Prospectus. Where such changes occur, the Company may make an announcement of the same to the SGX-ST. All applicants should take note of any such announcement and, upon the 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 the future performance or policies of the Company or its subsidiaries or the Group.

Neither the Company nor the Manager is making any representation to any person regarding the legality of an investment in the 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 an investment in the Shares.

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 New Shares or for any other purpose. This Prospectus does not constitute an offer of, or invitation or solicitation to subscribe for, the New Shares in any jurisdiction in which such offer or invitation or solicitation is unauthorised or unlawful nor does it constitute an offer or invitation or solicitation to any person to whom it is unlawful to make such offer or invitation or solicitation.

Copies of this Prospectus and the Application Forms and envelopes may be obtained on request, subject to availability, from:- UOB ASIA LIMITED 80 Raffles Place UOB Plaza 1 Singapore 048624

10 and from branches of the UOB Group, members of the Association of Banks in Singapore, members of the SGX-ST and merchant banks in Singapore.

The Application List will open at 10.00 a.m. on 30 May 2000 and will remain open until 12.00 noon on the same day or for such further period or periods as the Directors may, in their absolute discretion, decide, subject to any limitations under all applicable laws.

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, the indicative timetable for trading in the Shares is set out below for the reference of applicants:-

Indicative date/time Event

30 May 2000, 12.00 noon Close of Application List

31 May 2000 Balloting of applications, if necessary

1 June 2000, 9.00 a.m. Commence trading on a “when issued” basis

9 June 2000 Last day of trading on a “when issued” basis

12 June 2000, 9.00 a.m. Commence trading on a “ready” basis

15 June 2000 Settlement date for all trades done on a “when issued” basis and for trades done on a “ready” basis on 12 June 2000

The above timetable is only indicative as it assumes that the closing date of the Application List is 30 May 2000, the date of admission of the Company to the Official List of the SGX-ST is 1 June 2000, the SGX-ST shareholding spread requirement will be complied with and the New Shares will be issued and fully paid-up prior to 1 June 2000. The actual date on which the Shares will commence trading on a “when issued” basis will be announced if and 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. The commencement of trading on a “when issued” basis will be entirely at the discretion of the SGX-ST. All persons trading in the Shares on a “when issued” basis, if implemented, 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 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 net sell positions traded on a “when issued” basis should close their positions on or before the first day of “ready” basis trading.

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

11 PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and is subject to, the more detailed information and financial statements (including the notes thereto) appearing elsewhere in this Prospectus. Prospective investors should carefully consider the information presented in this Prospectus, particularly the matters set out under the section “Risk Factors” before making an investment decision. This Prospectus contains forward-looking statements which involve risks and uncertainties. The results of the Group could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section “Risk Factors”.

The Company The Company was incorporated on 3 November 1993 under the Act as a private limited company under the name of “Achieva Pte Ltd”. On 11 April 2000, the Company was converted into a public limited company and changed its name to “Achieva Limited”. The Company is an investment holding company.

The Company holds directly the following wholly-owned subsidiaries, namely: 1. Achieva Components Pte Ltd (ACPL) 2. Achieva Electronics Pte Ltd (AEPL) 3. Achieva Technology Pte Ltd (ATPL) 4. Stacks Holdings Sdn. Bhd. (SHSB)

Each of the above direct subsidiaries also has its own subsidiaries.

Business The Group is principally engaged in the distribution of electronic and IT-related products under distributorship and sales representative agreements or arrangements with its principals.

The various product lines carried by the Group and the product-markets which they serve may be classified into the following three categories:

1. PC peripherals, parts and software These products are sold to dealers, retailers and computer system value-added resellers. They are also sold to smaller local assemblers of PC and PC systems. The specific products include data storage equipment like hard disk drives and removable disk drives, PC microprocessors, PC motherboards and add-on functional cards for sound and multimedia. The Group also distributes digital cameras as well as cellular telephone sets and accessories.

2. Electronic components These are sold principally to OEM (original equipment manufacturers) of electronic and IT equipment. The Group distributes two broad categories of electronic components, namely semiconductor components and electromechanical devices. The semiconductor components carried by the Group are principally application specific integrated circuits (“ASIC”) for data compression, data networking and communications. They also include commodity items like linear and logic devices as well as power regulators. The electromechanical devices sold by the Group are principally electronic connectors and other interconnect devices, switches, flex cables and connector systems. The Group also sells structured cabling products, which are inter connections products for use with networking equipment.

12 3. Data network products and services The Group distributes data network products on a piecemeal as well as system basis. These products include network interface cards, network hubs, routers, data switches, remote access equipment and network administration software. In addition to the distribution of products and the associated network planning services, the Group also offers contract maintenance services for corporate data networks. Most of the above data network products and services are offered to corporate customers which include commercial firms, Malaysian government-related organisations and Malaysian educational institutions.

Regionalisation The Group competes not only in its home base in Singapore but also in other Asia-Pacific countries such as Australia, Indonesia, Malaysia, the PRC (including Hong Kong), Thailand, the Philippines and Vietnam. Territorial expansion is pursued partly because the Group aims to sustain longer-term sales growth without being limited by the size of any single Asian geographical market. In FY 1999, the turnover attributable to markets outside Singapore accounted for approximately 65% of the total turnover of the Group.

Competitive Strengths As the Group competes in different markets, each with different competitive environments, the Group does not employ a single across-the-board competitive strategy. The Group’s management believes that the Group’s competitive strengths in each of the different markets lie in the following:

Dealers’ market for PC–related products The dealers’ market for PC-related products is one which tends to be consumer-oriented, volume- driven, fast changing, price-sensitive and highly competitive. The Group’s strategies in this market include the following:

1. Well-established brand names Customers of PC-related products are as brand-conscious as they are price-conscious. The Group has distribution agreements or arrangements with established companies including Seagate, Intel, ASUSTeK and Microsoft.

2. Extensive distribution channels The Group has expanded its dealership network in various countries. In FY 1999, the Group distributed PC-related products to a network of approximately 3,000 dealers in the region, including Australia, Malaysia, Singapore, the Philippines and Vietnam.

3. Inventory holding power The Group has generally been able to carry stocks of PC-related products distributed by the Group sufficient to meet the demands of the market. This has enabled the Group to satisfy dealers’ orders consistently and secure their loyalty. The Group has also been able to meet suppliers’ requests to offtake goods at the end of each quarter to meet their performance targets.

13 5. Ancillary services Over the last few years, competitive pricing has become prevalent in the distribution business. There is less scope in competing solely on price and/or on product features. The Group competes by providing ancillary services to customers, some of which are services provided on behalf of certain suppliers. These services include servicing of equipment under suppliers’ warranties, assembly and upgrading for PC servers and fee-based contract maintenance of PC systems.

OEM market for electronic components 1. Semiconductor components The Group distributes semiconductor components with particular focus on ASIC. ASIC tend to be sold in low to medium volume and are subject to rapid technological changes. However, because they are specific in application or are proprietary products, price competition is less intense. The barriers of entry for the distribution of ASIC also tend to be higher than for the distribution of PC-related products. To be able to secure distributorships for these products and to sell successfully, in-house electronic application skills and the ability to provide electronic design support and application support to customers are required. The Group, with its team of field application engineers, is able to provide such support.

2. Interconnect devices The Group’s sales representative agreements with T&B1 allows the Group to sell, on behalf of T&B, electronic connectors and other interconnect devices to OEMs in certain Asian countries, including the PRC (including Hong Kong), Malaysia, Thailand and Singapore. The Group’s major customers for interconnect devices include leading multinational manufacturers of computer peripherals and telecommunications products. In selling T&B interconnect devices, the Group competes against world leading brands in interconnect devices, such as “AMP”, “Molex” and “Berg”. To gain a competitive advantage over these major brand names, the Group relies on quality of service, design capability and the provision of value-engineering services for customers.

Corporate market for data networking The Group focuses on being a contractor and supplier of data networking equipment and related networking services to the larger IT-system integrators in Malaysia. The Group’s competitive strengths lie in its technical capability and in building a network of relationships with, inter alia, commercial IT-system integrators and IT personnel of Malaysian government-related organisations. It also emphasizes strong and close relationships with its principals.

Dealers’ market for data network products MNSB, a subsidiary of the Company, is presently one of two Malaysia-based Advanced Distribution Partner (“ADP”) for 3Com. As an ADP, the principal role of MNSB is to support selected business partners (i.e. entities with whom 3Com has business relations, excluding joint ventures or partnerships in the legal sense) that are referred by 3Com’s Malaysian office and MNSB, as a matter of policy, refrains from competing against them. In addition, 3Com also directs selected business partners to MNSB for technical assistance in planning, configuring and installing data network systems and for the supply of products. In its role as an ADP, MNSB maintains its competitive advantage by building and maintaining strong relationships with 3Com. It also builds strong and continuing relationships with 3Com’s business partners to encourage repeat purchases. To maintain its status as an ADP, MNSB is obliged to achieve and maintain high standards of technical capabilities by continuously training, updating and upgrading its technical staff.

Note: 1 Thomas & Betts Corporation has recently announced an agreement to sell its global electronic OEM business to a third party. The agreement is subject to, inter alia, regulatory approval. The Group does not know whether the proposed sale, if completed, would affect the continuation of the sales representative agreements between the Group and T&B.

14 THE INVITATION Issue Size : 103,540,000 New Shares, comprising 21,000,000 Offer Shares and 82,540,000 Placement Shares. The New Shares will, when issued and fully paid, rank pari passu in all respects with the then existing issued Shares.

Price : $0.22 for each Offer Share and each Placement Share (other than the Reserved Shares); $0.20 for each Reserved Share

Par Value of Share : $0.05 each

Purpose of Invitation : The Directors consider that the listing of the Company and the quotation of the Shares on the SGX-ST will enhance the public image of the Group and enable it to tap the capital markets to fund the expansion of its operations. It will also provide the members of the public, the management, staff and directors of the Group with an opportunity to participate in the equity of the Company. The proceeds of the issue of the New Shares will also provide the Group with additional working capital to finance its business expansion.

Use of Proceeds : The net proceeds to be received by the Company from the issue of the New Shares (after deducting the estimated expenses in relation to the Invitation) will be approximately $21.2 million.

The estimated net proceeds will be used as follows:-

(i) $2.0 million will be used to develop and install a Group-wide Internet- based IT infrastructure and system; and

(ii) the remaining $19.2 million will be used to improve working capital capacity of the Group. Upon receipt of such proceeds, the Group will apply them to reduce its short term bank borrowings including the following approximate amounts to be paid to some of the Underwriters or their affiliates, namely the UOB Group $5.5 million, Citibank, N.A. (Singapore branch) $3.6 million and ABN AMRO Bank N.V. (Singapore branch) $4.8 million by way of reduction of the outstanding balances. Notwithstanding such reductions, the Group will continue to use the facilities and to seek more facilities so as to finance the expansion of the Group’s business.

Pending the deployment of the net proceeds from the Invitation as aforesaid, the net proceeds may be placed in fixed deposits, used to invest in short term money market instruments or to reduce bank borrowings and/or for any purpose on a short term basis as the Directors may deem fit.

Reserved Shares : Up to 8,254,000 New Shares will be reserved for the employees, management and directors of the Group. In the event that any of the Reserved Shares are not taken up, they will be made available to satisfy applications for the Placement Shares, or in the event of an under- subscription of the Placement Shares, to satisfy applications from the members of the public for the Offer Shares.

Listing Status : The Shares will, on admission of the Company to the Official List of the SGX-ST, be quoted on the Main Board of the SGX-ST.

15 RISK FACTORS

The Group is exposed to a number of possible risks which may arise from economic, business, market and financial factors and developments which may have adverse impacts on the Group’s future performance. If any of the following risk factors and uncertainties develop into actual events, the business, financial condition or results of operations of the Group could be materially adversely affected. These are not the only risks the Group faces. Some risks are not yet known to the Group and there are others the Group does not currently believe are material but could adversely affect the business of the Group. In such an event, the trading price of the Shares could decline due to any of these risks, and investors may lose all or part of their investment.

These risks include the following:

Product Concentration and Reliance on Specific Markets The distribution of PC-related products accounted for approximately 85% of the Group’s turnover and for approximately 25% of the Group’s profit before tax in FY 1999, respectively. It is expected that, in terms of turnover, this line of business is likely to remain the Group’s dominant business in the near future.

The recent foreign exchange turmoil and economic downturn in Asia showed that the PC-related markets are vulnerable to wider economic conditions. Any disruptions or turmoil in the PC-related markets will have a significant negative impact on the Group’s business and overall financial performance, given the dominance of this sector in the Group’s business.

The distribution of electronic components accounted for 74% of the Group’s profit before tax for FY 1999. This segment of the business is significantly dependent on the telecommunications (including data communications) market. Any downturn in this market would have a significant negative impact on the Group’s performance.

Market Price Erosion Although the unit sales of PC-related products in the Asia-Pacific region have been generally enjoying growth, most of the growth has been generated by the sales of lower-priced PCs. This development puts significant downward pressure on the prices of PC-related products. A characteristic of most PC-related products is that once their prices had fallen, they tend to remain at the low level. One major concern is that this trend of price erosion may turn out to be a factor that will drive further consolidations among suppliers and resellers alike, and may cause business failure among smaller local assemblers of PC systems who are existing or prospective customers of the Group.

Even with an increase in unit sales of PC-related products, it may not translate into higher sales revenue if prices of PC-related products continue their downward trend. It may even have a negative impact on the Group’s earnings despite the suppliers’ price protection programmes (please see the section “Inventory holding power” on pages 62 and 63 for further details). Accordingly, should prices continue their downward trend, leading to the Group’s major suppliers reducing their sales incentives, the Group’s financial performance will be materially and adversely affected.

Country Risks As the Group has operations in countries including Australia, Malaysia, Singapore, Vietnam, Thailand, the Philippines, and the PRC (including Hong Kong), it is extremely dependent on the economic growth and political stability in these countries. Any adverse change in the economic, political, legal or regulatory environments in these countries may have an adverse effect on the Group’s performance, financial conditions and results of operations. In countries such as the PRC and Vietnam, various institutions, laws, policies and regulations pertaining to a market economy continue to evolve. The Group may therefore be affected, positively or negatively, by such changes. As the legal systems of the PRC and Vietnam develop further, the promulgation of new laws and changes could have additional effects on the business and prospects of entities investing and operating in these countries.

16 Suppliers’ Dominance In terms of purchases, Seagate accounted for approximately 41% of the Group’s total purchases for FY 1998, decreasing to approximately 37% for FY 1999. Intel accounted for approximately 29% of total purchases in FY 1998, increasing to approximately 32% in FY 1999. Altera accounted for approximately 11% and 5% of the Group’s purchases in FY 1998 and FY 1999, respectively. Based on the Group’s FY 1999 results, it is estimated that profit before tax will decrease by at least 10% should any one of the above-mentioned major suppliers terminate its distributorship agreement with the Group.

The Group’s management recognises that the Group is vulnerable to the risk of heavy reliance on a small number of suppliers. The Group faces the risk of termination of the Group’s distributorship or sales representative agreements or arrangements by any one or more of the major suppliers (please refer to the details on the Group’s distributorships and sales representative agreements or arrangements on pages 38 to 42 of this Prospectus). There is also the risk of business failure of any of the Group’s suppliers. The Group will also face the same risk if any one of them is merged with or acquired by one of its competitors which already has its own distribution or sales representative network in the Group’s regional market. If any of these events occurs, the Group’s distributorship or sales representative agreements or arrangements with the supplier in question may be jeopardised, as the Group may be considered redundant and its distributorship or sales representative agreements or arrangements consequently terminated. This would adversely affect the Group’s business and result in a decrease in the Group’s turnover and profits.

Supply and Demand Imbalances Occasionally, the volatility of the PC-related markets causes serious imbalances in supply and demand. Predicted demand may not materialise, leading to excess stocks for a particular supplier or worse, industry-wide oversupply. Conversely, unanticipated surges in market demand may create shortages and/or rising prices of parts. One significant and unexpected event that had an impact on the Group’s performance was the earthquakes in Taiwan in September 1999. For a few months, the earthquakes disrupted the production and logistics of many Taiwanese electronics and IT parts and equipment suppliers. The earthquakes reduced the Group’s supply of certain products, especially PC peripherals. On the supply side, there were stock shortages for some parts. On the demand side, the earthquakes in Taiwan affected some of the Group’s customers who cut back on their production as they were experiencing shortages in parts (that were not distributed by the Group). Consequently, these customers demanded less of the Group’s products. There is no guarantee that such calamities which may adversely affect the Group’s performance will not recur.

Supply shortages result in opportunity losses for the Group. This is because suppliers resort to allocation when there are supply shortages. Usually the allocated quantity of goods tends to be insufficient to meet the distributor’s demand. In addition, during periods of supply shortages, suppliers may reduce sales incentives.

Fluctuations and imbalances in supply and demand in the market are beyond the control of the Group. Such events, especially supply shortages, would have a negative impact on the Group’s turnover and profits.

Foreign Exchange Exposures The Group transacts in multiple currencies. While a significant portion of trade purchases are in US Dollars, the Group’s sales are invoiced in a number of currencies including Australian Dollar, Malaysian Ringgit, Singapore Dollar and US Dollar. Operating expenses and general local purchases are in local currencies that include Australian Dollar, Chinese Renminbi, Hong Kong Dollar, Malaysian Ringgit, Singapore Dollar and Thai Baht. This situation leads to a significant amount of foreign exchange exposure as any depreciation, for example, in the Australian Dollar, Singapore Dollar and Malaysian Ringgit (in the event that the peg against the US Dollar is removed) against the US Dollar would have a negative impact on the Group’s earnings.

17 The Group’s Foreign Exchange Differences, FY 1996 to FY 1999

Audited (S$) FY 1996 FY 1997 FY 1998 FY 1999 Unrealised Foreign Exchange Gains/(Losses) (24,531) (2,440,844) 161,886 (479,329) Realised Foreign Exchange Gains/ (Losses) (42,638) 425,456 493,526 649,002

Please refer to the section “Foreign Exchange Risk Management” on pages 45 and 46 of this Prospectus for further details.

Credit Risk Historically, the Group has had relatively minor problems with the collections of trade debts from its customers. As at 31 December 1999, the Group’s doubtful debts constituted approximately 0.7% of the Group’s total trade debts.

However, there is no assurance that this situation will continue in the future. It should be noted that about 85% of the Group’s turnover for FY 1999 is derived from the distribution of PC-related and data network products to dealers and other resellers. Many of these customers are relatively small and are not financially strong. As profit margins for the sales of IT products at retail level are thin, many of these resellers are prone to experience tight cash flow and often do not have adequate bank credit facilities to support their purchases. Some of the Group’s customers are located in countries where the collection or recovery of debts may be inefficient. In view of this, there will be continuing uncertainties over the timeliness of their payments and whether they will be able to fulfil their payment obligations. In particular, the possibility of payment delays and defaults by a large number of customers in the event of an economic downturn and the consequent negative impact on the Group’s profitability and cash flow cannot be ruled out.

Changing Business Paradigm Price erosion at the end-user level is prevalent in the PC industry. The low price levels of PCs since 1997 provided the impetus for the growth in worldwide shipments of PCs in 1998 and 1999.

This price-driven sales growth, however, is putting PC manufacturers as well as suppliers of peripheral equipment and components under increasing pressure to keep unit cost down. PC manufacturers will also have to reduce overhead costs through more efficient logistics while maintaining their capability for technological innovations.

In dealing with this challenge, one response that is increasingly gaining acceptance by major IT suppliers is to adopt e-business transactions (which, generally speaking, refers to commercial transactions carried out through the electronic transmission of data). This calls for the development and deployment of computerised supply chain management as well as Internet-based data links and transaction processing with suppliers and distributors. E-business is leading to a paradigm change in the way goods and services are transacted, supplied and distributed in the IT industry. However, while there is increasing adoption of e-business by IT manufacturers, there are still concerns about the reliability of the Internet, privacy and security of transactions and human reactions to transactions in which the human interface is minimised or non-existent. Nevertheless, the reported cost savings and logistics efficiencies achieved by multinational companies are encouraging more IT manufacturers to venture into e-business.

IT distributors are therefore required to invest in the requisite IT infrastructure and information systems so as to participate in their principals’ Internet-based communications systems (Extranet) and e-business programmes. They will also have to support their dealers’ networks in such programmes.

18 If the Group is unable to adapt quickly to the evolving e-business models being adopted by its IT suppliers, the Group’s role and corresponding business will be reduced and/or its distributorship and sales representative agreements or arrangements may be terminated.

Dependence on Short-term Debt Financing Other than cash from operations, the Group is heavily dependent on short-term bank facilities to finance its operations. As of 31 December 1999, the Group had trade-finance related facilities (principally trust receipts and letters of credit) totalling approximately $32.7 million from seven banks. Of this amount, $16.7 million was outstanding as at 31 December 1999.

For FY 1998, the average age of the Group’s trade accounts receivable and inventory turnover was approximately 59 days and this has improved to an average of approximately 39 days in FY 1999 due to a lower inventory balance as at 31 December 1999. The credit terms of the Group’s trade payables averaged approximately 30 days for FY 1998 and FY 1999. Therefore, generally speaking, the collections from trade debtors lag behind the payments to trade creditors. The Group therefore needs to raise short-term borrowings to finance purchases. With increasing sales growth, the need for short-term external financing grows correspondingly.

As it is dependent on increasing amounts of short-term external financing, largely in the form of trade financing, the Group’s potential liquidity risk rises correspondingly. If a significant amount of these trade finance-related facilities is withdrawn, the Group’s turnover and profitability will be adversely affected as its ability to purchase goods for sale will be curtailed. Another cause for concern is the increasing cost arising from the growing use of trade financing and other facilities from banks. Interests and bank charges arising from the use of trade finance and bank overdraft facilities increased more than eleven-fold from $0.14 million in FY 1996 to $1.79 million in FY 1999.

Dependence on Key Personnel The Group’s success has been largely due to the contributions from Messrs Lim Yong Choon, Pok Tam Soon, Ng Chee Seng, Soh Eng Kuang and Chia Chong Leong. These persons are expected to continue to play an important role in the continuing development and growth of the Group. The loss of their services may cause some disruptions to the Group’s operations and affect adversely the Group’s profitability as they are instrumental in securing new and maintaining existing distributorship and sales representative agreements or arrangements.

It should be pointed out that Mr Lim Yong Choon concurrently oversees the business and management of Hexon Technology Pte Ltd (“Hexon”) and its subsidiaries, a company in which he, together with his wife, holds the entire stake. This is an addition to Mr Lim’s duties as the Group’s Chief Executive Officer and President of the Company. In the event that Mr Lim decides to focus on Hexon’s business, he may neglect his duties as the Group’s Chief Executive Officer and President of the Company. This may cause some disruptions to the Group’s operations and adversely affect the Group’s profitability.

The Group is also dependent on its technical and marketing staff. The loss of their services could adversely affect the Group’s business. In addition, the Group believes that its future success will depend upon its ability to continue to attract, retain and motivate such highly skilled and technical employees. If the Group is unable to recruit and train adequate numbers of qualified personnel on a timely basis would adversely affect the Group’s ability to market and support its products.

19 ISSUE STATISTICS

Offer Price for the Offer Shares and Placement Price for the Placement Shares (other than the Reserved Shares) : $0.22

Placement Price for the Reserved Shares : $0.20

NET TANGIBLE ASSETS (“NTA”) NTA per Share, based on the audited consolidated balance sheet of the Group as at 31 December 1999, adjusted for the Restructuring Exercise referred to on pages 26 and 27 of this Prospectus:- — Before adjusting for the estimated net proceeds from the Invitation and based on the pre-Invitation issued share capital of 310,607,740 Shares : 6.01 cents — After adjusting for the estimated net proceeds from the Invitation and based on the post-Invitation issued share capital of 414,147,740 Shares : 9.64 cents

Premium of the Offer Price and the Placement Price (other than for the Reserved Shares) over NTA per Share as at 31 December 1999 — Before adjusting for the estimated net proceeds from the Invitation and based on the pre-Invitation issued share capital of 310,607,740 Shares : 266.06% — After adjusting for the estimated net proceeds from the Invitation and based on the post-Invitation issued share capital of 414,147,740 Shares : 128.22%

Premium of the Placement Price for Reserved Shares over NTA per Share as at 31 December 1999 — Before adjusting for the estimated net proceeds from the Invitation and based on the pre-Invitation issued share capital of 310,607,740 Shares : 232.78% — After adjusting for the estimated net proceeds from the Invitation and based on the post-Invitation issued share capital of 414,147,740 Shares : 107.47%

EARNINGS Historical net earnings per Share for FY 1999 based on the pre-Invitation issued share capital of 310,607,740 Shares : 1.59 cents

NET OPERATING CASH FLOW(1) Historical net operating cash flow per Share for FY 1999 based on the pre-Invitation issued share capital of 310,607,740 Shares : 1.81 cents

Note:- (1) Net operating cash flow is defined as profit after taxation and minority interest, adding back provision for depreciation.

20 PRICE EARNINGS RATIO Price earnings ratio based on the Offer Price and the Placement Price (other than for the Reserved Shares) and the historical net earnings per Share for FY 1999 : 13.84 times

Price earnings ratio based on the Placement Price of Reserved Shares and the historical net earnings per Share for FY 1999 : 12.58 times

PRICE TO NET OPERATING CASH FLOW RATIO Offer Price and Placement Price (other than for the Reserved Shares) to net operating cash flow based on the historical net operating cash flow per Share for FY 1999 : 12.15 times

Placement Price for Reserved Shares to net operating cash flow based on the historical net operating cash flow per Share for FY 1999 : 11.05 times

DIVIDENDS The Directors did not recommend any dividend by the Company for FY 1999. The Group does not currently have a dividend policy. However, the Directors intend to pursue a dividend policy that will commensurate with the Group’s earnings, financial position and future plans.

21 SUMMARY OF GROUP FINANCIAL INFORMATION

The following selected financial information should be read in conjunction with the full text of this Prospectus, including the Accountants’ Report set out on pages 82 to 100 of this Prospectus.

STATEMENT OF GROUP RESULTS(1)

($’000) < Audited > FY 1996 FY 1997 FY 1998 FY 1999

Turnover 43,508 135,380 190,470 229,216

Interest income 52 188 362 418 Other income 17 9 29 5 Profit before interest, exchange difference, depreciation and tax 1,674 5,418 6,500 9,506 Interest paid (144) (467) (1,191) (1,790) Depreciation (171) (370) (501) (671) Net foreign exchange (loss)/gain (67) (2,015) 655 170 Profit before taxation 1,292 2,566 5,463 7,215 Taxation (389) (1,199) (1,116) (1,871) Profit after taxation 903 1,367 4,347 5,344 Minority interests — — (256) (406) Profit after taxation and minority interests 903 1,367 4,091 4,938 Extraordinary item — — — (388) Profit attributable to shareholders 903 1,367 4,091 4,550

Earnings per Share(2) (cents) 0.29 0.44 1.32 1.59

SUMMARISED BALANCE SHEETS OF THE GROUP(1)

($’000) < Audited as at > 31 Dec 31 Dec 31 Dec 31 Dec 1996 1997 1998 1999

Shareholders’ equity 4,651 9,068 14,123 18,660 Represented by:- Fixed assets 3,648 3,761 3,939 2,661 Other investments 26 26 26 26 Current assets 14,525 44,400 61,031 61,954 Current liabilities (11,729) (37,360) (48,782) (44,115) Net current assets 2,796 7,040 12,249 17,839 Non-current liabilities (1,819) (1,759) (1,499) (859) Minority interests — — (592) (1,007) 4,651 9,068 14,123 18,660

NTA per Share(3) (cents) 1.50 2.92 4.55 6.01

Notes:- (1) The financial position of the Group as at the end of the three financial years from FY 1996 to FY 1998 have been prepared on a proforma basis, as if the Group had been in existence throughout the periods under review. (2) For comparison purposes, the earnings per Share is calculated based on the profit after depreciation, interest, tax and minority interest but before extraordinary items and on the pre-Invitation share capital of 310,607,740 Shares. (3) For comparative purposes, the NTA per Share is calculated based on the pre-Invitation share capital of 310,607,740 Shares.

22 GENERAL INFORMATION ON THE GROUP

SHARE CAPITAL The Company was incorporated in Singapore under the Act as a private limited company on 3 November 1993 under the name of Achieva Pte Ltd.

As at 31 December 1999, the authorised share capital of the Company was $30,000,000 divided into 30,000,000 ordinary shares of $1.00 each, and the issued and paid-up share capital of the Company was $10,178,077 divided into 10,178,077 ordinary shares of $1.00 each.

At an extraordinary general meeting held on 7 April 2000, the Shareholders of the Company approved, inter alia, the following: (a) the capitalisation of $4,425,801 and $926,509 from the Company’s revenue reserve and share premium account respectively by way of a bonus issue of 5,352,310 ordinary shares of $1.00 each credited as fully paid to the shareholders;

(b) the sub-division of each ordinary share of $1.00 in the authorised and issued and paid-up share capital of the Company into 20 ordinary shares of $0.05 each (the “Sub-division of Shares”);

(d) the adoption of a new set of Articles of Association of the Company.

At an annual general meeting held on 19 May 2000, the Shareholders of the Company approved, inter alia, the following: (a) the issue of 103,540,000 New Shares pursuant to the Invitation which when fully paid, allotted and issued, will rank pari passu in all respects with the existing issued Shares of the Company (the “Issue of New Shares”);

(b) that the Directors be authorised, pursuant to Section 161 of the Act, to issue shares in the Company at any time, provided that the aggregate number of shares issued pursuant to such authority shall not exceed 50% of the issued share capital of the Company for the time being, and provided further that where shareholders of the Company are not given an opportunity to participate in the same, then the shares to be issued under such circumstances shall not exceed 20% of the issued share capital of the Company for the time being. Unless revoked or varied by the Company in general meeting, such authority shall continue in full force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is earlier; and

(c) the approval of the Achieva Share Option Agreement referred to on pages 76 and 77 of this Prospectus and the authorisation to the Directors to grant options in accordance with the Achieva Share Option Agreement and to issue and allot Shares upon the exercise of any such options (notwithstanding that the exercise thereof or such issue and allotment may occur after the conclusion of the next or any ensuing annual general meeting of the Company) and to do all acts and things which they may consider necessary or expedient to carry the same into effect.

23 Details of the changes in the issued share capital of the Company since 31 December 1999, being the date of the last audited accounts of the Company, are set out below:

No. of shares $

Issued and paid-up ordinary shares of $1.00 each as at 31 December 1999 10,178,077 10,178,077 Bonus issue out of share premium and revenue reserve accounts 5,352,310 5,352,310 Issued and paid-up ordinary shares of $1.00 each 15,530,387 15,530,387 Pre-Invitation issued and paid-up ordinary shares of $0.05 each 310,607,740¢ 15,530,387 New Shares issued pursuant to the Invitation 103,540,000 5,177,000 Post-Invitation issued and paid-up share capital 414,147,740 20,707,387

The authorised share capital and the shareholders’ funds of the Company as at 31 December 1999, before and after the bonus issue out of the share premium account and revenue reserve accounts, the Sub-division of Shares and the Issue of New Shares are set out below. These statements should be read in conjunction with the Accountants’ Report set out on pages 82 to 100 of this Prospectus.

As at Prior to Immediately 31 December the After the 1999 Invitation Invitation Authorised Share Capital Ordinary shares of $1.00 each 30,000,000 — — Ordinary shares of $0.05 each — 600,000,000 600,000,000

Shareholders’ Funds(1) Share Capital $10,178,077 $15,530,387 $20,707,387 Share Premium $926,509 — $16,071,377(1) Revenue Reserve $161,861 $161,861 $161,861 $11,266,447 $15,692,248 $36,940,625

Note: (1) Net issue proceeds of approximately $21.2 million less par value of the New Shares calculated on the basis of an issue of 95,286,000 Shares at $0.22 each and 8,254,000 Shares at $0.20 each

The Company has only one class of shares. There are no founder, management, deferred or unissued shares reserved for issue for any purpose. The rights and privileges of these shares are stated in the Company’s Articles of Association.

24 SHAREHOLDERS The shareholders of the Company and their respective shareholdings, adjusted for the bonus issue out of the share premium and revenue reserve accounts and the Sub-Division of Shares, before and immediately after the Invitation are set out below:-

Before the Invitation After the Invitation No. of Shares % No. of Shares % Directors Lim Yong Choon 106,412,009 34.26 106,412,009 25.69 Pok Tam Soon 36,305,064 11.69 36,305,064 8.77 Ng Chee Seng 30,232,116 9.73 30,232,116 7.30 Chia Chong Leong 28,968,851 9.33 28,968,851 6.99 Soh Eng Kuang 22,746,825 7.32 22,746,825 5.49 Cheong Wai Chew(1) 5,714,034 1.84 5,714,034 1.38 Lew Syn Pau(2) —— — — Goh Kian Hwee — — — —

Holders of 5% or more (other than Directors) Huang Ting-chu@Tim Huang 22,237,826 7.16 22,237,826 5.37

Holders of less than 5% who are related to Directors or substantial shareholders None — — — —

Holders of less than 5% who are not related to Directors or substantial shareholders Cheng Chee Khon 14,242,438 4.59 14,242,438 3.44 Gui Yock Meng 13,432,752 4.32 13,432,752 3.24 Lo Ju Jie 13,005,815 4.19 13,005,815 3.14 Tan Phuan Lam(3) 6,692,756 2.15 6,692,756 1.62 Oh Chon Seng(3) 5,200,489 1.67 5,200,489 1.26 Lwee Nai Hock(3) 4,565,057 1.47 4,565,057 1.10 Ong Chong Peng 851,708 0.28 851,708 0.21 Public — — 103,540,000 25.0 TOTAL 310,607,740 100.0 414,147,740 100.0

None of the Directors or substantial shareholders of the Company are related to one another. Notes: (1) Mr Cheong Wai Chew, who is an Executive Director, will be allocated 275,000 Reserved Shares. He intends to subscribe for the Reserved Shares and may dispose of or transfer all of part of his shareholding in the Company after the admission of the Company to the Official List of the SGX-ST. (2) Mr Lew Syn Pau, who is an Independent Director, will be allocated 300,000 Reserved Shares. He intends to subscribe for the Reserved Shares and may dispose of or transfer all or part of his shareholding in the Company after the admission of the Company to the Official List of the SGX-ST. (3) Messrs Tan Phuan Lam, Oh Chon Seng and Lwee Nai Hock, who are Executive Officers of the Group, will be allocated 390,000, 385,000 and 230,000 Reserved Shares, respectively. They intend to subscribe for the Reserved Shares and may dispose of or transfer all or part of their shareholding in the Company after the admission of the Company to the Official List of the SGX-ST.

25 MORATORIUM To demonstrate their commitment to the Group, Messrs Lim Yong Choon, Pok Tam Soon, Ng Chee Seng, Soh Eng Kuang, Huang Ting-chu@Tim Huang and Chia Chong Leong who in aggregate hold 246,902,691 Shares, representing 59.62% of the Company’s issued and paid-up share capital immediately after the Invitation, have each undertaken: (a) not to sell, transfer or otherwise dispose of any part of their respective interests held in the Company immediately after the Invitation for a period of 6 months commencing on the date of the Company’s admission to the Official List of the SGX-ST (the “Initial Period”), and

(b) for a period of six months after the Initial Period, not to sell, transfer or otherwise dispose of more than 50% of their respective interests held in the Company immediately after the Invitation.

RESTRUCTURING EXERCISE To streamline the structure of the Group, certain companies in the Group were restructured in August 1999 in preparation for the listing of the Company on the Exchange.

The Restructuring Exercise involved the following steps:- 1. An amount of $2,447,500 standing to the credit of the Company’s share premium account was capitalised into 2,447,500 shares of $1.00 each in the capital of the Company at par, such shares being allotted and distributed credited as fully paid to the shareholders of the Company (or their renouncees) in proportion to their existing shareholding.

2. Each of ACPL, AEPL and ATPL capitalised the amounts standing to the credit of their respective share premium or revenue reserve accounts (as the case may be) and applied the same for the issue of bonus shares to the existing shareholders of the respective companies in proportion to their existing shareholding.

3. The Company issued new shares to the shareholders of ACPL, AEPL and ATPL (or their renouncees) in exchange for their shares in the respective companies (the “Share Swap”).

4. The Share Swap was carried out based on the audited consolidated NTA of each of ACPL, AEPL and ATPL as at 31 December 1998.

The particular details of the Restructuring Exercise in relation to each of ACPL, AEPL and ATPL are set out below: (a) ACPL An amount of $166,667 standing to the credit of ACPL’s share premium account was capitalised into 166,667 ordinary shares of $1.00 each in the capital of ACPL at par, such shares being allotted and distributed credited as fully paid to the shareholders of ACPL or as they may direct.

Prior to the Restructuring Exercise, the Company held 70% of the shares in ACPL. Pursuant to the Restructuring Exercise, the Company acquired the remaining 30% of the issued and paid- up share capital of ACPL from Gui Yock Meng, Oh Chon Seng and Tan Phuan Lam at an aggregate purchase consideration of $764,766 based on the audited consolidated NTA of ACPL of $2,549,222 as at 31 December 1998.

The said acquisition was satisfied by the allotment and issue of 551,160 ordinary shares of $1.00 each in the capital of the Company at an issue price based on the NTA per share as at 31 December 1998 (of approximately $1.3876) to the following persons:

Issued to Number of shares of $1.00 each Gui Yock Meng 292,111 Oh Chon Seng 110,237 Tan Phuan Lam 148,812

26 (b) AEPL An amount of $400,000 standing to the credit of AEPL’s revenue reserve account was capitalised into 400,000 ordinary shares of $1.00 each in the capital of AEPL at par, such shares being allotted and distributed credited as fully paid to the shareholders of AEPL or as they may direct.

Prior to the Restructuring Exercise, the Company held 87.5% of the shares in AEPL. Pursuant to the Restructuring Exercise, the Company acquired the remaining 12.5% of the issued and paid-up share capital of AEPL from Lwee Nai Hock and Ong Chong Peng at an aggregate purchase consideration of $190,872 based on the audited consolidated NTA of AEPL of $1,526,971 as at 31 December 1998.

The said acquisition was satisfied by the allotment and issue of 137,558 ordinary shares of $1.00 each in the capital of the Company at an issue price based on the NTA per share as at 31 December 1998 (of approximately $1.3876) to the following persons:

Issued to Number of shares of $1.00 each

Lwee Nai Hock 110,047 Ong Chong Peng 27,511

(c) ATPL An amount of $102,041 standing to the credit of ATPL’s revenue reserve account was capitalised into 102,041 ordinary shares of $1.00 each in the capital of ATPL at par, such shares being allotted and distributed and credited as fully paid to the shareholders of ATPL or as they may direct.

Prior to the Restructuring Exercise, the Company held 51% of the shares in ATPL. Pursuant to the Restructuring Exercise, the Company acquired the remaining 49% of the issued and paid- up share capital of ATPL from Chia Chong Leong and Lim Yong Choon at an aggregate purchase consideration of $2,361,447 based on the audited consolidated NTA of ATPL of $4,819,278 as at 31 December 1998.

The said acquisition was satisfied by the allotment and issue of 1,701,859 ordinary shares of $1.00 in the capital of the Company at an issue price based on the NTA per share as at 31 December 1998 (of approximately $1.3876) to the following persons (or their renouncees):

Issued to Number of shares of $1.00 each

Chia Chong Leong 1,215,613 Lim Yong Choon 486,246

Chia Chong Leong directed the Company to allot an aggregate of 266,354 of the shares due to him to Ng Chee Seng, Soh Eng Kuang, Gui Yock Meng and Oh Chon Seng in the following manner:

Renounced to Number of shares of $1.00 each

Ng Chee Seng 62,978 Soh Eng Kuang 14,049 Gui Yock Meng 148,057 Oh Chon Seng 41,270

27 GROUP STRUCTURE The structure of the Group prior to the Restructuring Exercise is as follows:-

Achieva Pte Ltd (Singapore)

Achieva Electronics Stacks Holdings Achieva Technology Achieva Components Pte Ltd Sdn. Bhd.(2) Pte Ltd Pte Ltd(1) (Singapore) (Malaysia) (Singapore) (Singapore) 87.5% shares 100% shares 51% shares 70% shares

Achieva Electronics Stacks Technolgy Achieva Technology Achieva Components Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. Sdn. Bhd. (Malaysia) (Malaysia) (Malaysia) (Malaysia) 100% shares 100% shares 100% shares 100% shares

Achieva China Stacks Systems Achieva Service Limited(3) Sdn. Bhd. Centre Sdn. Bhd. (Hong Kong) (Malaysia) (Malaysia) 60% shares 100% shares 80% shares

Mangrove Networks Achieva Technology Sdn. Bhd. East Asia Pte Ltd (Malaysia) (Singapore) 100% shares 51% shares

Achieva Technology Australia Pte Ltd (Singapore) 51% shares

Achieva Technology Australia Pty. Ltd. (Australia) 100% shares

Achieva Technology Notes: Service Centre Pte Ltd (1) Achieva Components Pte Ltd has established (Singapore) representative offices in Bangkok, Thailand and Manila, the Philippines. 100% shares (2) The Company is currently the registered holder of 47.36% of the shares in Stacks Holdings Sdn. Bhd. Deeds of transfers have been entered into between the Achieva Technology Company and the registered holders of the remaining Philippines Pte Ltd shares in Stacks Holdings Sdn. Bhd., Messrs Pok Tam (Singapore) Soon and Nah Soo Hoe, to transfer the remaining 100% shares 52.64% shares in Stacks Holdings Sdn. Bhd. to the Company for a nominal consideration of S$2. The transfers of shares are pending registration. (3) Achieva China Limited has established a representative office in Beijing, PRC. (4) Words in brackets denote country of incorporation.

28 The Group structure after the Restructuring Exercise is as follows:-

Achieva Limited (Singapore)

Achieva Electronics Stacks Holdings Achieva Technology Achieva Components Pte Ltd Sdn. Bhd.(2) Pte Ltd Pte Ltd(1) (Singapore) (Malaysia) (Singapore) (Singapore) 100% shares 100% shares 100% shares 100% shares

Achieva China Stacks Systems Achieva Service Limited(3) Sdn. Bhd. Centre Sdn. Bhd. (Hong Kong) (Malaysia) (Malaysia) 60% shares 100% shares 80% shares

Mangrove Networks Achieva Technology Sdn. Bhd. East Asia Pte Ltd (Malaysia) (Singapore) 100% shares 51% shares

Achieva Technology Australia Pte Ltd (Singapore) 51% shares

Achieva Technology Australia Pty. Ltd. (Australia) 100% shares

Achieva Technology Service Centre Pte Ltd (Singapore) 100% shares

Achieva Technology Philippines Pte Ltd (Singapore) 100% shares Notes: (1) Achieva Components Pte Ltd has established representative offices in Bangkok, Thailand and Manila, the Philippines. (2) The Company is currently the registered holder of 47.36% of the shares in Stacks Holdings Sdn. Bhd. Deeds of transfers have been entered into between the Company and the registered holders of the remaining shares in Stacks Holdings Sdn. Bhd., Messrs Pok Tam Soon and Nah Soo Hoe, to transfer the remaining 52.64% shares in Stacks Holdings Sdn. Bhd. to the Company for a nominal consideration of S$2. The transfers of shares are pending registration. (3) Achieva China Limited has established a representative office in Beijing, PRC. (4) Words in brackets denote country of incorporation.

29 HISTORY The Company was incorporated on 3 November 1993 in the Republic of Singapore under the Act as a private limited company to engage in business venture development and investment holding activities. It was founded by Mr Lim Yong Choon and several other individuals in the electronics and IT industry.

The Proforma Group was engaged in setting up business ventures and operations in various countries, including the following:

Achieva Business Development, Inc. In September 1993, Achieva Business Development, Inc. (“ABDI”) was incorporated in the State of California, USA. The Company held approximately 94% of the shares of ABDI. ABDI was established to engage in sourcing and purchasing in Asia, parts and components for electronic product manufacturers in the USA.

Owing to the time needed to work out design and engineering changes and the process of quotes and re-quotes, the development period for sourcing projects tended to be long. Consequently, ABDI sustained losses during its start-up period. Unfortunately, at the point when development efforts were starting to bear fruit, its two major start-up customers in the USA cancelled their orders. These two customers were contract assemblers for Apple Computer in the USA and, because of Apple Computer’s major cut-backs at that time, ABDI’s two customers lost their orders from Apple Computer.

In the aftermath of the above development, the Group’s management decided to wind up ABDI in December 1995 for the following reasons: 1. market feedback at that time suggested that the price differential between Asian-made parts and those made by US manufacturers was narrowing and thus the sourcing of parts in Asia was losing its appeal, and

2. increasingly, US-based electronics manufacturers were liasing directly with manufacturing operations in South-east Asia and in the PRC or they were starting their own sourcing operations in Asia. This reduced the demand for independent procurement services like those offered by ABDI.

Stacks Holdings Sdn. Bhd. (“SHSB”) and its subsidiaries In January 1994, SHSB was incorporated as the investment holding arm of the group in Malaysia. At the same time, Stacks Technology Sdn. Bhd. (“STSB”) was incorporated in Malaysia to carry out the business of planning, configuring and installing data networks and providing other network-related services to business firms and Malaysian government-related organisations.

In order to provide a broader range of data networking and IT-related services in Malaysia, SHSB recruited a group of industry executives and systems engineers to launch a new IT-related services business. The new business was to provide data network security services, network maintenance and web-related services as well as to distribute data security software. In April 1997, it activated Stacks Systems Sdn. Bhd. (“SSSB”), a dormant company which was acquired in Malaysia by SHSB previously, to undertake this new business. Despite some initial success in its marketing and sales efforts, SSSB was hard hit by the business slowdown in Malaysia towards the latter part of 1997, resulting in a loss for its first year of operations. After reviewing the market conditions and outlook, the management of SHSB decided to wind down the operations of SSSB.

In October 1996, SHSB incorporated Mangrove Networks Sdn. Bhd. (“MNSB”) in Malaysia to assume the distribution business of STSB. This exercise was necessary to maintain the Group’s distribution rights in Malaysia granted by 3Com, a large supplier of network products. With these rights, MNSB became an advanced distribution partner in Malaysia authorised by 3Com to sell its network products to IT-system integrators and existing authorised 3Com distributors (which includes STSB). Although MNSB was hit by the economic recession in Malaysia in its first year of operations, by mid-1998, MNSB was on its way to recovery and was profitable for FY 1998 and FY 1999.

30 The Group had also, in the past, shareholding interests in two Malaysian companies, namely, LaserNet Technology Sdn. Bhd. (“LTSB”) and Stacks Integrator Sdn. Bhd. (“SISB”). In April 1997, after transferring LTSB’s operations to STSB, the Group sold LTSB to an individual for a nominal consideration. The Group sold SISB to its Malaysian joint venture partner in June 1997 for strategic reasons.

Achieva Electronics Pte Ltd (“AEPL”) and its subsidiaries In September 1994, AEPL was incorporated in Singapore to act as a distributor and commission agent for interconnect devices as well as other electromechanical devices and related products. In January 1996, AEPL was appointed as the sales representative for T&B electronic interconnect devices in Singapore, Malaysia, Indonesia and Thailand. AEPL’s representation rights were subsequently extended to cover additional product lines which include structured cabling products for data networking applications. In February 1998, T&B further extended AEPL’s territorial coverage to include the PRC (including Hong Kong) and Taiwan on a non-exclusive basis.

Achieva China Limited (“ACL”) was incorporated in Hong Kong in December 1997. The plan was for ACL to serve as a base for the operations of the various subsidiaries in the Group in their efforts to establish marketing presence in the PRC (including Hong Kong) and Taiwan. ACL started business by acting as a sales representative for T&B electronic interconnect devices, structured cabling and industrial electrical products. Its role is to develop the market in the PRC (including Hong Kong) and Taiwan for T&B’s products. In developing the market in the PRC, ACL makes sales calls from Hong Kong and appoints agents in the PRC. AEPL holds 60% of the shares of ACL with the balance being held by Mr Yang Chee Seng (30%) and Mr Liang Fang (10%).

In August 1998, AEPL incorporated Achieva Electronics Sdn. Bhd. (“AESB”) in Malaysia as a wholly- owned subsidiary with a view to expanding into Malaysia. AESB’s principal business is to provide logistics and after-sales support to the Malaysian manufacturing subsidiaries of AEPL’s interconnect customers in Singapore and to promote new business in Malaysia for T&B’s interconnect devices. In addition, it also undertakes the task of market development and product promotion for T&B’s structured cabling products in Malaysia.

Achieva Components Pte Ltd (“ACPL”) and its subsidiaries In August 1995, ACPL was incorporated in Singapore to engage in the distribution of electronic, electromechanical and electrical components. ACPL focuses principally on the distribution of selected application specific semiconductor components, for example, devices used in data networking, telecommunications and multi-media applications. Since its establishment, ACPL’s sales have been increasing, boosted by its increasing ability to provide ancillary services to its customers. These services include assisting customers in programming special logic devices, assisting customers in the use of the application specific chips sold by ACPL and providing technical training to customers.

Achieva Components Sdn. Bhd. (“ACSB”) was incorporated in September 1995 as a wholly-owned subsidiary of ACPL in Malaysia. ACSB distributes similar products to ACPL and also provides after- sales services. Currently, ACSB confines its territorial coverage to Malaysia whereas ACPL’s territorial reach includes Singapore and other countries in the Southeast Asian region.

To support its gradually growing customer base in Thailand and the Philippines, representative offices were established by ACPL in Bangkok and Manila in May 1999 and September 1999, respectively. The role of the representative offices is to source for new customers in Thailand and the Philippines and to provide continuing after-sales services to customers in Thailand and the Philippines on behalf of ACPL.

The AC sub-group’s major distributorships include those involving the products of Texas Instruments, Altera and Level One.

31 Achieva Technology Pte Ltd (“ATPL”) and its subsidiaries In June 1996, ATPL was incorporated in Singapore to engage in the distribution of PC peripherals, parts and software. Its major distributorships include those to distribute computer microprocessors for Intel, computer data storage devices like hard-disk drives for Seagate as well as PC motherboards for ASUSTeK and for Gigabyte.

ATPL expanded its operations to Malaysia in August 1996 when Achieva Technology Sdn. Bhd. (“ATSB”) was acquired to carry on its activities in Malaysia. ATSB started with the distribution of a single product line, namely microprocessors from Intel. ATSB has arrangements with ASUSTeK of Taiwan to distribute its PC motherboards, notebooks and CD-Roms. ATSB has also secured distribution rights for hard disk drives from Seagate. In April 1997, ATSB added another major supplier to its list of principals, namely Mitsubishi, for monitors, floppy disk drives, and a removable storage device known as the LS120 drive. As part of its efforts to build a dealers’ network in Malaysia, ATSB opened sales and customer service centres in Penang, Johor Bahru, Kuching, Kota Kinabalu, Ipoh and Kuala Lumpur in 1997 and 1998.

ATSB’s management also felt a growing need to expand ATSB’s repair and product exchange services in Malaysia to support the product warranties offered by Seagate and other principals. It was therefore decided that a separate and independent service centre be set up by ATSB to undertake these exchange and repair services as well as to offer contract PC maintenance services to businesses. In October 1998, ATSB incorporated Achieva Service Centre Sdn. Bhd. (“ASCSB”) to carry out these service centre activities. ATSB holds 80% of the issued shares in ASCSB whereas Mr Lee Choong Thye holds the balance 20%.

In 1998, the AT sub-group expanded to Australia and to Vietnam. In June 1998, as part of its plan to invest in the PC-related distribution businesses in Australia and New Zealand, ATPL formed a joint venture with Grand Folk Limited, a Hong Kong-based investment company, as a result of which Achieva Technology Australia Pte Ltd (“ATAPL”) was incorporated in Singapore. ATPL holds 51% of the issued share capital of ATAPL whereas Grand Folk Limited holds the balance 49%. Grand Folk Limited is an investment holding company owned by Mr Lee Kam Tong, who is the brother of Mr Stephen Lee Kam Chi, and Ms Liang Li Qin, who is the mother of Mr John Lu Hai Hao. Both Mr John Lu and Mr Stephen Lee are the directors of Achieva Technology Australia Pty. Ltd. (“ATAPL(Aust)”) and are responsible for the management of ATAPL(Aust). The initial charter of ATAPL was to act as an investment holding and management company, which will invest in PC-related businesses in Australia and New Zealand and to provide financial management and logistic support to its Australian subsidiaries and affiliates. In June 1998, ATAPL incorporated ATAPL(Aust) in Australia as a wholly-owned subsidiary of ATAPL to engage in the distribution of the PC product lines carried by ATAPL. ATAPL(Aust) has to date established distribution operations in Sydney, Melbourne, Brisbane and Perth.

For its entry into the Vietnam market, Achieva Technology East Asia Pte Ltd (“ATEAPL”), a previously dormant company, was activated in April 1998. ATPL holds 51% of the shares in ATEAPL. Mr Paul Nguyen, a US citizen of Vietnamese origin who owns a PC peripherals, parts and software distribution business in Vietnam, holds 39% shareholding of ATEAPL and the balance 10% is held by Mr Tong Yau Lor, Steven.

In 1999, Mr Nguyen established a joint stock company known as Thanh Dat Trading Shareholding Company (“TDTSC”) in Vietnam, which took over the PC-related distribution operations from CTY Tnhh Thuong Mai Phuong Lan (“Phuong Lan”) (certain family members of Mr Paul Nguyen hold the entire registered capital of Phuong Lan). Mr Nguyen and his family members currently hold the entire registered capital of TDTSC. TDTSC has operations in Ho Chi Minh City, Hanoi, Da Nang, Can Tho and Nha Trang.

Mr Nguyen has entered into a call option deed with ATEAPL pursuant to which Mr Nguyen has agreed to grant to ATEAPL a call option at a nominal consideration of $1.00 to require Mr Nguyen, from time to time, to transfer and to procure that his family will transfer all or part of the entire registered capital of TDTSC to ATEAPL. The option can only be exercised if permitted by and subject to Vietnamese law. The exercise price payable by ATEAPL is $1.00 in respect of each exercise of the option. The exercise price was set at a nominal amount of $1.00 because ATEAPL provides all financing required for the distribution business of TDTSC. The above arrangements were entered into as there are restrictions relating to the foreign ownership of companies carrying out certain types of business activities in Vietnam.

32 Awards and Rankings The following is a list of awards and rankings accredited to the Group from 1994 to 1999:-

1995 • Award from 3Com Asia Pacific for network system integrator 100% year-to-year growth

1996

• Award from Intel for being Top Achiever in Overall Q4 Sales Performance for Box Pentium Processors (Malaysia) • Award from 3Com Asia Pacific for Excellence in Marketing • Award from 3Com Asia Pacific for Excellence in Internetworking

1997 • Award from Thomas & Betts (SE Asia) for Excellent Contribution to their sales growth • Award from Seagate Asia Pacific for marketing excellence • Award from Texas Instruments for achieving the highest digital signal processor revenue in Malaysia

1998 • Ranked 7th in the Enterprise 50 Award (from Business Times and Arthur Andersen) • Star Award in conjunction with Enterprise 50 Award for being the new entrant that achieved the highest position • Award from Seagate Asia Pacific for Marketing Excellence

1999 • Ranked 5th in the Enterprise 50 Award (from Business Times and Arthur Andersen) • Award from Intel for establishing leadership in Intel’s Asia-Pacific channels • Award from Seagate for being the top regional distributor in Association of South-east Asian Nations (ASEAN); and Australia and New Zealand • Award from Seagate for being the best distributor for personal storage products and for marketing excellence in Australia • Award from ASUSteK in appreciation of Excellent Business Support in Australia

33 BUSINESS PRINCIPAL ACTIVITIES The Group is principally engaged in the distribution of electronic and IT-related products under distributorship and sales representative agreements or arrangements with its principals. The Group may be described as a multi-product line and multi-product market business enterprise.

The various product lines carried by the Group are classified into the following three categories: 1. PC peripherals, parts and software; 2. Electronic components; and 3. Data network products and services.

The various market segments and customers that the Group serves may be classified into the following three categories: 1. Dealers’ market, which includes retailers, computer and data network system integrators and smaller local assemblers of PC; 2. Original equipment manufacturer (“OEM”) market; and 3. Corporate market, which includes commercial firms, government-related organisations in Malaysia and educational institutions in Malaysia.

The product-markets matrix presented below shows the category of products and principal markets of the Group’s various sub-groups.

Matrix of the Group’s Product-Markets

ProductsProducts

PC-related AT sub-groupsub-group Products

Electronic AEAE sub-group sub-group Components ACAC sub-group sub-group

Network Products & StacksStacks sub-group sub-group StacksStacks sub-group sub-group Services 1

2 3 4 Markets Dealer OEM Corporate

Notes 1. Includes network planning and installation services, network maintenances, and application software development. 2. Includes systems integrators, smaller assemblers of PC system and other distributors and retailers of PC equipment. 3. OEM stands for original equipment manufacturers. 4. Includes commerical firms, goverment-related organisations in Malaysia and educational institutions in Malaysia.

34 Products Distributed

Some of the products currently distributed by the Group are as follows:-

Subsidiary Products Principal

AT sub-group PC peripherals, parts and software • Hard disk and tape drives Seagate • Removable opto-magnetic drives (Zip drive), lomega removable tape drives (Jaz drive), mobile click drive • Removable opto-magnetic 120-Mb drives Mitsubishi (LS-120), floppy drives • Microprocessors and networking products Intel ASUSTek, • PC motherboards PC Partner, Gigabyte, Intel • Computer monitors and large LCD displays Mitsubishi, LG • Multi-media cards, sound cards; data modems Aztech • Digital cameras, CDR media, CDR writer Kodak • Software Microsoft • Uninterruptable power supply (UPS) American Power Conversion • Mobile phones and accessories Motorola • Notebook and CD-Rom ASUSTeK

AC sub-group Electronic components: (a) Semiconductor components • Ethernet switch applications, twisted pair to Allayer fibre convertors • Programmable logic devices, associated Altera development software and programming hardware • Complete line of microprocessor crystals, Ecliptek watch crystals and clock oscillators • PCB-mount transformers and inductors Falco Electronics • Short-haul and long-haul transceiver Level One applications, repeaters and clock adapters, digital subscriber line devices, Fast Ethernet and Gigabit applications, multiplexer/demultiplexer devices • Low dropout regulators, switching Semtech regulators, voltage regulators for microprocessors, transient voltage suppressors and battery management IC • Linear IC, logic IC, optoelectronic devices, Texas Instruments microcontrollers, digital signal processors, IC for telecommunication, data communication and industrial applications • Microcontrollers, embedded microprocessors, ZiLOG controllers for digital signal, voice and wireless applications

Others • Software tools for electronic circuit design Synplicity Altera

35 Subsidiary Products Principal

AE sub-group (b) Interconnect devices • Data storage interconnect devices T&B • Structured cabling systems for data networks, T&B fibre optic connectors • Flat cable and connector systems, flexstrips, T&B IDC systems, PC-board connectors • Metallised particle interconnect T&B

Others • Battery packs T&B

Stacks sub-group Data network products Network interface cards, network hubs, routers, 3Com data switches, ATM switches, remote access equipment, network administration systems

1. PC peripherals, parts and software The distribution of PC hardware and software is carried out by the AT sub-group. The Group sells PC peripherals and parts to a network of PC dealers, smaller local PC-system integrators and assemblers as well as value-added resellers in, inter alia, Singapore (through ATPL), Malaysia (through ATSB), Australia (through ATAPL) and Vietnam (through ATEAPL). The specific products include data storage equipment like hard disk drives and removable disk drives, PC microprocessors, PC motherboards and add-on functional cards for sound and multimedia. The Group also distributes digital cameras as well as cellular telephone sets and accessories.

As part of the Group’s business strategy to add value to the products it distributes and to diversify its business, the Group also provides the following services:

(a) Warranty services for PC peripherals The Group acts as the warranty agent for a majority of its suppliers. End customers who have purchased PC peripherals with problems will send the PC peripherals to the nearest AT sub-group office instead of sending them to the relevant dealer or supplier. The AT sub- group will either replace or repair the faulty PC peripheral depending on the nature of the problem and the condition of the PC peripheral. Tests will be conducted on the PC peripheral to determine the defective part before sending it to the supplier for replacement. The Group does not bear any replacement cost but bears the testing costs, which are insignificant.

(b) Assembly of servers (Channel Assembly Service) This service involves the assembly of servers according to specifications provided by the dealers and IT-system integrators. The channel assembly service is currently offered by the Group in Malaysia and Australia.

(c) Contract maintenance for PC systems This service is offered through ASCSB to corporate customers directly or on behalf of IT- system integrators who are customers. ASCSB maintains and repairs PC systems and servers for its corporate clients on a contractual fee-paying basis.

36 2. Electronic components The distribution of electronic components is undertaken by ACPL and its subsidiaries (the “AC sub-group”) and AEPL and its subsidiaries (the “AE sub-group”). The Group sells electronic components directly to OEMs in Singapore, Malaysia, Indonesia, Thailand, the PRC (including Hong Kong) and the Philippines through ACPL, ACSB, AEPL, AESB and ACL.

The Group distributes two broad categories of electronic components, namely semiconductor components and electromechanical devices.

The semiconductor components carried by the Group are principally application specific integrated circuits (“ASIC”) for data compression, data networking and communications. They also include commodity items like linear and logic devices as well as power regulators. ASIC devices generally require programming to enable them to perform functions specific to the products in which they are used. In selling these ASIC devices, the Group generally has to assist its customers in designing the devices into the customers’ products. The Group also assists customers in programming these ASIC devices as well as in training customers’ engineers in the applications of ASIC and in the programming of these devices.

The electromechanical devices sold by the Group are principally electronic connectors and other interconnect devices, switches, flex cables and connector systems. The Group also sells structured cabling products.

The Group has distribution agreements or arrangements with established companies such as Texas Instruments, Level One and Altera as well as sales representative agreements or arrangements with T&B, Level One and Semtech, the details of which are set out on pages 38 to 42 of this Prospectus.

In addition, the Group also offers the following technical support services to OEM customers of electronic components: (a) Digital circuit design-related service The following technical and support services are offered by the AC sub-group: (i) assisting customers in the programming of programmable logic devices; and (ii) assisting and training customers in the application of programmable logic devices and in resolving design and engineering issues involving these components.

Although these services are not revenue generating, they are an integral part of the sales of the special application semiconductor components supplied by the AC sub-group.

(b) Design and value-engineering for electronic interconnect devices The following technical services are offered by the AE sub-group: (i) value-engineering and re-design of interconnect devices; and (ii) design of new interconnect devices.

The technical services provided by the AE sub-group, while generally not considered as essential to selling interconnect products, nevertheless contribute significantly to the competitive standing of the AE sub-group.

3. Data network products and services The Group distributes data network products on a piecemeal as well as system basis. These products include network interface cards, network hubs, routers, data switches, remote access equipment and network administration software. In addition to the distribution of products and the associated network planning services, the Group also offers contract maintenance services for corporate data networks. Most of the above data network products and services are offered to corporate customers which include commercial firms, government-related organisations in Malaysia and educational institutions in Malaysia.

37 STSB is engaged in providing data network services together with the selling of data network products directly to the corporate market in Malaysia. It bids against other IT-system integrators for network projects from commercial companies, government organisations and educational institutions to supply its network services and products directly to the end customers.

MNSB is the only subsidiary in the Group that is engaged in selling data network products directly to the dealers’ market. It has been designated by 3Com, its principal, as an Advanced Distribution Partner (“ADP”) in Malaysia and accordingly, obtains referrals for projects undertaken by 3Com from time to time. This designation permits MNSB to sell only to distributors and network system integrators and not to end-users. As an ADP, MNSB is also obliged to support system integrators as well as other distributors before and after sales by providing network services and other product-specific technical services at end-user sites upon the request of the IT-system integrators or distributors.

The Group’s Distributorships and Sales Representative Agreements or Arrangements The Group’s roles under the distributorships and sales representative agreements or arrangements are described below: • as a distributor - the Group purchases the goods to be sold, takes possession of them and records them as stocks in its accounts. • as a sales representative - the Group markets and sells goods on behalf of a principal but does not purchase or own the goods sold. For successful sales, the Group would earn a sales commission from the relevant principal. • as a Product Reseller - as designated by Texas Instruments, a Product Reseller is a selected distributor which is designated to distribute and provide technical support for special application semiconductor products. The relationship is that of a buyer and seller. • as an Advanced Distribution Partner (“ADP”) - as designated by 3Com, the principal role of the Group as an ADP is to support selected business partners (i.e. entities with whom 3Com has business relations, excluding joint ventures or partnerships in the legal sense) that are referred by 3Com’s Malaysian office. As an ADP, the Group is also obliged to support 3Com’s business partners by providing before and after sales network services and other product specific technical services at end-user sites, if and when so requested. The Group derives revenues from selling goods and providing services to 3Com’s business partners.

The Group’s distributorship and sales representative agreements or arrangements as at the Latest Practicable Date include the following:

Principal Nature of Territories Duration of Current Products & appointment Appointment/ Services Renewal and termination terms

AC sub-group Allayer Distributor Malaysia, 12 months Application specific Communications and sales Indonesia and Automatic renewal integrated circuits (formerly known representative Singapore for subsequent for data network as Allayer (Non-exclusive) periods of one applications Technologies Since 1998 year unless either Corporation) party gives 30 days written notice to terminate Altera Distributor Malaysia, 12 months Programmable International (Non-exclusive) Indonesia and Automatic renewal logic integrated Limited Since 1997 Singapore for subsequent circuits, periods of one year. programming Termination by hardware, software 90 days prior written and related notice materials

38 Principal Nature of Territories Duration of Current Products & appointment Appointment/ Services Renewal and termination terms

AC sub-group Ecliptek Distributor Singapore, 12 months Complete line of Corporation (Non-exclusive) Malaysia, Automatic renewal microprocessor Since 1999 Thailand, for subsequent crystals, watch Indonesia and periods of one crystals and clock the Philippines year unless either oscillators party gives the other party 60 days written notice Falco Electronics Sales Malaysia, 12 months PC board mount Mexico S.A. de Representative Indonesia, Automatic renewal transformers and C.V. (Exclusive) Thailand, after one year inductors Since 1999 Singapore, unless either party Philippines and gives at least Taiwan 30 days prior written notice to terminate Level One Distributor Indonesia, 12 months Application Communica- (Non-exclusive) Malaysia, May be extended specific integrated tions, Since 1997 Singapore by agreement circuits for data Incorporated and Thailand in writing. communications Termination by and mutual consent or telecommunication either party giving applications 60 days prior written notice Level One Sales Indonesia, 12 months Application specific Communica- Representative Malaysia, May be extended integrated circuits tions, (Non-exclusive) Singapore and by agreement in for data Incorporated Since 1999 Thailand writing. Termination by communications mutual agreement of and the parties or upon telecommunication 30 days written notice applications by either party Methode Sales Singapore and 12 months Optoelectronic Electronics, Inc. Representative Malaysia Automatic renewal for products and (Non-exclusive) subsequent periods of communication Since 2000 one year unless either modules party gives the other party 60 days written notice Sager Sales Malaysia, 12 months Sager Electronics Electronics Representative Singapore, Either party may line-card products Incorporated (Exclusive) Indonesia, terminate at any time Since 1998 Philippines and Thailand Semtech Distributor and Indonesia, Term unspecified. Semiconductor Corporation Sales Malaysia, Termination by either products for power Representative Singapore and party giving the other management and (Non-exclusive) Thailand party 30 days prior over-voltage Since 1996 written notice protection for PC and electronic products

39 Principal Nature of Territories Duration of Current Products & appointment Appointment/ Services Renewal and termination terms

AC sub-group Synplicity, Inc Distributor Malaysia, 6 months Software tools for (Non-exclusive) Singapore, Renewable by electronic circuit Since 2000 Indonesia, notification of intent design with Philippines and to renew by Synplicity. programmable Thailand Termination by written logic devices notice by Synplicity (notice period not stated) or by not less than 90 days’ written notice by ACPL Texas Distributor Malaysia and 12 months Semiconductor IC Instruments (Non-exclusive) Indonesia Renewable by mutual products including Singapore (Pte) Since 1996 consent, in writing, logic chips, opto- Limited at least 30 days prior electronic devices, to the date of microprocessors expiration. and digital signal Either party may processors terminate with 90 days notice Product Reseller South-east Asia 12 months Data conversion Since 1999 Renewable for 1-year semiconductor periods by mutual components and consent, in writing, at digital signal least 30 days prior to processors the date of expiration. Either party may terminate with 3 months notice ZiLOG, INC. Distributor Malaysia Term unspecified. Microcontrollers, (Non-exclusive) Either party may embedded Since 2000 terminate with microprocessors, 30 days notice controllers for digital signal, voice and wireless applications AE sub-group Thomas & Betts Sales Indonesia, Termination by either Electronic (S.E. Asia) Representative Malaysia, party giving 12 months interconnect Pte. Ltd.1 (Exclusive for Singapore and prior written notice to products made and Malaysia & Thailand the other party sold under T&B Singapore, name Non-exclusive for Indonesia & Thailand) Since 1995 Sales PRC (including Termination by either All products Representative Hong Kong) and party giving 6 months manufactured by with the Company Taiwan prior written notice to Thomas & Betts (Non-exclusive) the other party Since 1998 Nitek Electronic Distributor Southeast Asia Termination by either Magnesium alloy Co., Ltd (Non-exclusive) party giving 6 months Since March prior written notice to 2000 the other party

AT sub-group American Power Distributor Ho Chi Minh City 12 months Power protection Conversion (Non-exclusive) and surrounding Automatic renewal at products used in Corporation Since 1999 provinces in the end of each computing and Vietnam year unless expressly communications terminated by either equipment party. Termination by either party by giving 90 days notice ASUSTeK Distributor Australia and No formal written PC motherboards, Computer Inc. (Non-exclusive) Malaysia agreement notebooks and Since 1997 CD-ROM (for Malaysia) Since 1998 (for Australia) Aztech Systems Distributor Singapore, No formal written Multi-media cards, Ltd (Non-exclusive) Malaysia, agreement sound cards and Since 1998 Australia and data modems for Vietnam PC Giga-Byte Distributor Philippines and No formal written PC motherboards Technology (Non-exclusive) Singapore agreement and notebooks Co., Ltd Since 1998 (for Singapore) Since 1999 (for Philippines) Intel Distributor Malaysia Automatic renewal for Microprocessors Semiconductor (Non-exclusive) one-year periods Ltd. Since 1996 unless either party (for Malaysia) notifies the other of its intention to terminate by giving 30 days prior written notice. Termination by either party without cause by giving 90 days written notice Iomega Distributor Vietnam No formal written Removable storage International (Non-exclusive) agreement drives and media S.A. SInce 1999 Kodak Distributor Singapore, No formal written Digital camera, (Australasia) (Non-exclusive) Malaysia, agreement CDR media, CDR Pty Ltd Since 1999 Philippines and writer Vietnam LG International Distributor Singapore No formal written Computer monitors Corp. (Non-exclusive) agreement and large LCD Since 1999 displays Microsoft Distributor Vietnam and 12 months Computer software Licensing, Inc. (Non-exclusive) Malaysia Either party may Since 1999 terminate agreement by giving to the other party, 30 days prior notice

41 Principal Nature of Territories Duration of Current Products & appointment Appointment/ Services Renewal and termination terms

AT sub-group Mitsubishi Distributor Singapore and No formal written Computer monitors Electric Asia (Non-exclusive) Malaysia agreement and flat LCD Pte Ltd Since 1998 displays Motorola Inc. Distributor Vietnam 3 years Cellular telephones (Non-exclusive) Automatic renewal for Since 1998 one-year periods. Termination by either party giving 30-day prior written notice to the other party PC Partner Distributor Australia, No formal written PC motherboards Limited (Non-exclusive) Malaysia and agreement Since 1998 Vietnam Seagate Distributor Malaysia Term unspecified. Hard disk drives Technology (Non-exclusive) Termination by for computers International Since 1997 30 days prior written notice by either party to the other party Seagate Distributor Singapore Term unspecified. Hard disk drives Singapore (Non-exclusive) Termination by for computers Distribution Since 1998 30 days prior written Pte Ltd notice by either party to the other party Distributor Australia Term unspecified. Hard disk drives (Non-exclusive) Termination by for computers Since 1998 30 days prior written notice by either party to the other party Distributor Vietnam Term unspecified. Hard disk drives (Non-exclusive) Termination by for computers Since 1998 30 days prior written notice by either party to the other party Distributor Philippines Term unspecified. Hard disk drives (Non-exclusive) Termination by for computers Since 1999 30 days prior written notice by either party to the other party Stacks sub-group 3Com Asia Advanced Malaysia 15 months Data network Pacific Rim Distribution Renewal subject to products made and Pte. Ltd. Partner renegotiations sold by 3Com (Non-exclusive) Since 1997

42 MARKETING AND DISTRIBUTION

Each of the product-markets in which the Group competes has a different competitive environment. Therefore, to compete successfully in each of its product-markets, the Group employs different sales, marketing and distribution approaches and methods. The table below summarises the different sales approaches and methods that the Group employs in each of the different principal product-markets.

Marketing and Distribution in the Different Principal Product-Markets

Product-markets Sales & Customer Purchases from Stocking of (Subsidiary-group) Promotion Orders Principals Goods Dealers’ market for Sales Usually Based on forecasts Yes PC peripherals, promotion, phone-in/faxed of orders from parts and software telemarketing orders for dealers or quotas (AT sub-group) and visits to one-time set by principals dealers delivery or multiple deliveries OEM market for Sales executives Orders tend to Generally back-to- Yes electronic promote and cover a period back orders matching components offer technical of months with customer’s orders (AC and AE advice to multiple sub-groups) executives and scheduled research and deliveries development personnel Corporate market for Generally, May be one-off Generally back-to- Minimal data network direct executive order or orders back orders products & services selling. with multiple matching customer’s For projects, scheduled orders bidding and deliveries strategic selling Dealers’ market for Undertaken at Project or Orders only to fill Minimal data network the direction of contract basis specific requirements products & services 3Com, its of a project principal

(Stacks sub-group)

PC peripherals, parts and software In selling PC peripherals and other related products in the dealers’ market, the Group’s field sales personnel are deployed to develop and expand the dealer networks in their respective countries, which currently include Australia, Malaysia, Singapore, the Philippines and Vietnam. These field sales personnel are supported by teams of tele-sales and marketing personnel whose principal roles include following up with dealers to whom the field sales personnel have been promoting the products. There is no formal arrangement relating to the appointment of these dealers by the Group. They are regarded as dealers by the Group principally on account of repeated purchases by them.

The AT sub-group’s marketing personnel provides ancillary services by assisting the principals in promotional activities for their products, including product awareness road shows and advertisements.

As of 31 December 1999, the AT sub-group’s sales and marketing personnel support a network of approximately 3,000 dealers in the 5 countries mentioned above.

43 Electronic components The AC and AE sub-groups designate teams of field sales and field application engineers to provide services to the OEMs to whom the Group markets its products. The Group’s engineers generally have to work closely with the customers’ product development and manufacturing personnel to design and incorporate application specific integrated circuits and interconnect devices distributed by the Group into the customers’ products. Even after the components sold by the AC sub-group and the AE sub-group have been incorporated in the customers’ products, the AC sub-group’s and the AE sub-group’s field application engineers need to provide continuing technical support and training.

Advertising is undertaken by the principals, who regularly advertise in technical and trade publications. The AC sub-group’s field application engineers will identify selected customers followed by direct sales calls to their product research and engineering personnel.

Data network products and services For selling data network products on a discrete basis to IT-system integrators and dealers, the approaches employed are similar to those employed in the distribution of PC peripherals, namely, by employing direct sales personnel who are supported by a small team of sales support personnel. In selling entire systems or selling on a project basis, STSB and MNSB employ small teams of technical persons. These teams also work in collaboration with a local IT-system integrator, to plan and configure the required network, perform site studies and to install and test run the entire network. Such projects are usually won through tenders for projects outsourced by Malaysian government-related organisations or they are undertaken at the direction of 3Com, the Group’s principal for data network products.

STSB and MNSB only employ a relatively small staff of technical sales and support persons as there is marketing and technical support provided by 3Com and any joint bidding partners.

Regionalisation The Group competes in the above product-markets, not only in its home base in Singapore but also in other Asia-Pacific countries such as Australia, the PRC (including Hong Kong), Indonesia, Malaysia, Thailand, the Philippines and Vietnam. Territorial expansion is pursued partly because the Group aims to sustain longer-term sales growth without being limited by the size of any single Asian country- market. Prior to the Asian economic crisis, the Group was conservative in its geographical expansion. However, with the onset of the economic and business downturn in Southeast Asia, the Group’s management had to review and re-think its growth plans. Based on its review of the longer term economic and business outlook as well as market conditions, it decided against putting the Group’s growth plans on hold. Instead, it re-directed the Group’s business development efforts to countries that were less affected by the Asian recession. As a result, the Group accelerated its geographical expansion programme but targeted it at Australia, the PRC and Vietnam.

The Group’s Sales Offices and Representative Offices

Sub-group Sales Offices Representative Offices Country Location Country Location AC sub-group Singapore Singapore Thailand Bangkok Malaysia Kuala Lumpur, The Philippines Manila Penang AE sub-group Singapore Singapore PRC Beijing Malaysia Kuala Lumpur, Penang PRC Hong Kong

44 Sub-group Sales Offices Representative Offices Country Location Country Location AT sub-group Singapore Singapore — — Malaysia Johor Bahru, Ipoh, Kota Kinabalu, Kuching, Kuala Lumpur, Penang, Petaling Jaya Australia Brisbane, Melbourne, Sydney, Perth Vietnam Can Tho, Da Nang, Hanoi, Ho Chi Minh City, Nha Trang The Philippines Manila Stacks Malaysia Kuala Lumpur, — — sub-group Penang

FOREIGN EXCHANGE RISK MANAGEMENT The Group’s foreign exchange risk includes both transaction and translation exposures.

Transaction Exposure Transaction exposure arises when a foreign currency transaction is entered into from the perspective of the reporting entity. As the Group’s purchases are mainly billed in US$, transaction exposure therefore arises for the subsidiaries whose sales are denominated in non-US$ which includes Australian Dollar, Malaysian Ringgit and Singapore Dollar.

This situation leads to a significant amount of foreign exchange exposure as a depreciation in the Australian Dollar, Singapore Dollar and Malaysian Ringgit (in the event that the peg against the US$ is removed) against the US$ would have a negative impact on the Group’s earnings.

The Group recognises its foreign exchange risk and the Group’s finance department has, since mid- 1997, been engaged in weekly foreign exchange hedging as part of its risk management (hedging was done, to the extent practicable, on a daily basis during the 1997 Asian economic crisis). Hedging of foreign exchange risk was not done prior to mid-1997. The hedging is done on a regular basis with pre-approved foreign exchange lines from the banks in respect of currencies other than the Vietnamese Dong. For Vietnamese Dong-denominated sales, the Group seeks to conduct sales on a cash basis and converts the same, to the extent practicable, to US$ on a daily basis.

The Group’s finance department periodically collects sales as well as local purchases and expenses figures from all of the relevant subsidiaries of the Group to determine the extent of exchange exposure arising from these sales. It then hedges the net amount of foreign exchange exposure, which is the difference between the sales and any local expenses incurred. For instance, if the Group made a sale today in Australian Dollar and was due to receive the revenue in a month’s time, it would enter into a contract to sell the net Australian Dollar sale proceeds (which will be based on the Australian Dollar sale proceeds less any Australian Dollar general purchase and expenses) and buy US$ to be delivered in a month’s time.

The management of exchange exposure helped to shield, to some extent, the Group’s finances from the profit eroding effects of the recent currency market turmoil.

45 The Group is not able to recognise the foreign exchange hedge contract until the contract matures in accordance with Singapore Statements of Accounting Standard. Accordingly, upon maturity, the Group recognises the realised exchange differences from its foreign exchange hedges contracted.

Please refer to the table at the end of this section which sets out the Group’s foreign exchange differences for FY 1996 to FY 1999. Most of the realised exchange gains for FY 1997 to FY 1999 were the result of the differences in exchange rates prevailing at the date of transaction and the hedged rates.

Translation Exposure The Singapore Statements of Accounting Standard require that all foreign currency monetary assets and liabilities be translated at the exchange rates ruling at the balance sheet date.

As a result of the depreciation of the Malaysian Ringgit and Singapore Dollar against the US$ during the second half of FY 1997, the Group incurred an unrealised exchange loss of $2.5 million in FY 1997 arising from the translation of the foreign currency monetary assets and liabilities (mainly trade balances) at the rates ruling at the balance sheet date.

Unrealised exchange losses were much higher in FY 1997 compared to FY 1996 due to the significant depreciation of the Asian currencies against the US$ in the second half of FY 1997.

Although the fluctuations in exchange rates were less volatile in FY 1998 and FY 1999 as compared to FY 1997, unrealised exchange losses arising from the translation of foreign currency assets and liabilities amounted to $2.3 million and $2.8 million in FY 1998 and FY 1999, respectively. This was due to the increase in business volume in FY 1998 and FY 1999, and correspondingly, the trade balances outstanding as at the end of the financial year were larger. Further, the Group was exposed to greater foreign exchange risk commencing from FY 1998 due to its expansion into Australia and was affected by the depreciation of the Australian Dollar against the US$.

The Group’s Foreign Exchange Differences, FY 1996 to FY 1999 (In Singapore Dollar)

< Audited > S$ FY 1996 FY 1997 FY 1998 FY 1999 Exchange losses incurred for the translation of foreign currency assets and liabilities for the year (28,221) (2,469,065) (2,307,179) (2,786,508) Reversal of prior year unrealised exchange differences 3,690 28,221 2,469,065 2,307,179 Unrealised Exchange Gains/ (Losses) (24,531) (2,440,844) 161,886 (479,329) Realised Exchange Gains/(Losses) (42,638) 425,456 493,526 649,002

CREDIT TERMS The Group generally extends a 30-day credit term to repeat customers with whom it has favourable and long-standing credit experience. For new customers, sales are on a cash basis. For the past three financial years, the amount of bad and doubtful debts has been insignificant. The credit terms granted by the Group’s suppliers average about 30 days.

46 RESEARCH AND DEVELOPMENT POLICY The Group does not have any formalised research and development policies or any organised research and development efforts. However, as part of the services they offer to their customers, the technical personnel of the AC and the AE sub-groups do assist their customers in developing solutions to technical problems. They may even assist their customers in the development of new products. In the course of this work, these technical personnel, largely through their own initiative, have even developed improved or new products that were subsequently commercialised by their customers or patented by their customers. The significant products that the Group’s technical personnel had a major role in developing together with customers or developed on behalf of customers include the following:

• A mechanical part for use in smart card readers was developed by the Group’s technical personnel together with its customers. This part was originally developed to help a customer in Malaysia solve a functional problem it had with its smart card readers. Because of its success in solving the Malaysian customer’s problems, it subsequently become an integral part of a new smart card holder that the AE sub-group helped its principal, T&B, to develop.

• In the course of its work with customers, two new connectors were jointly developed by the Group together with T&B. These are designed for mounting on printed circuit boards and supplied to manufacturers of data storage devices. Owing to certain unique features owing to one of the connectors has been granted a patent by the US Patent Office while the other is still pending approval. The relevant details are as follows:

— Single-sided straddle mount printed circuit board connector US Patent No: 5,823,799 Date of Patent: 20 October 1998

— Cover for an edge mounted printed circuit board connector US Patent Application No: 08/741,011 Date of Application: 31 October 1996

In accordance with the terms of the sales representative agreements signed by the Company and AEPL with T&B, all patents developed by, applied by and paid for by either T&B or the Company and AEPL shall remain as property of T&B. However, the terms of the sales representative agreements grant the Group the right to 30% of any royalties earned by T&B from patents in which an employee of the Company or AEPL is named as inventor. To date, no fees or royalties have been collected by the Group from T&B.

STAFF TRAINING POLICY The Group recognises the invaluable contribution of its staff to the success of its business. Therefore, it considers product-related technical training as essential to the build-up of in-house skill sets needed for competitive success. Such training is generally provided by the principals and it is mandatory for technical and sales personnel to attend such training. Generally, technical knowledge is imparted through on-the-job training where guidance and supervision is provided by the more experienced staff.

The Group also encourages relevant employees to undergo training leading to professional certifications such as Certified Network Engineers, Microsoft Certified Systems Engineer, Association of Chartered Certified Accountants and other professional programmes of study. The Group sponsors its employees when they attend some of the above courses. For FY 1999, the Group incurred about $12,000 in respect of the above.

YEAR 2000 COMPLIANCE The Group had in FY 1999 incurred approximately $230,000 to address the Year 2000 (“Y2K”) compliance issue. This included costs for upgrading and replacing software and hardware due to technological changes and/or operational requirements. As at the Latest Practicable Date, the Group has not experienced any problems relating to the Y2K issue and the Y2K did not have any financial impact on the business of the Group.

47 REVIEW OF PAST PERFORMANCE Review of Past Performance By Activity A breakdown of the Group’s audited turnover and profit before tax (in dollar terms and percentage terms) by activities for the last four financial years ended 31 December 1996 to 31 December 1999 are as follows:- Turnover

< Audited > $’000 FY 1996 % FY 1997 % FY 1998 % FY 1999 %

PC peripherals, parts and software 22,820 52.5 105,464 77.9 154,164 80.9 195,233 85.1 Electronic components 14,991 34.4 23,017 17.0 30,309 15.9 29,719 13.0 Data network products and services 5,697 13.1 6,898 5.1 5,996 3.2 4,263 1.9 Others — 0.0 1 0.0 1 0.0 1 0.0 Total 43,508 100 135,380 100 190,470 100 229,216 100

Profit before tax

< Audited > $’000 FY 1996 % FY 1997 % FY 1998 % FY 1999 %

PC peripherals, parts and software 292 22.6 2,520 98.2 3,566 65.3 1,803 25.0 Electronic components 976 75.5 786 30.6 1,874 34.3 5,327 73.8 Data network products and services 20 1.6 (708) (27.6) (397) (7.3) (197) (2.7) Others 4 0.3 (32) (1.2) 420 7.7 282 3.9 Total 1,292 100 2,566 100 5,463 100 7,215 100

Review of Past Performance by Geographical Markets Classification by Geographical Markets Each company in the Group is classified by the key market(s) that each was set up to serve irrespective of its country of incorporation or operations. Whilst the country of incorporation of a company in the Group generally coincides with the specific geographical market that it serves, such as Achieva Technology Sdn. Bhd. which distributes PC peripherals, parts and software only in Malaysia or Achieva China Limited, incorporated in Hong Kong, which is focused on serving the PRC (including Hong Kong) markets, there are companies in the Group, such as Achieva Technology Australia Pte Ltd and Achieva Technology East Asia Pte Ltd, which although incorporated in Singapore were set up principally to serve markets outside of Singapore. The markets are defined by reference to the billing address rather than the shipping destination of goods.

48 Classification of companies in the Group by Geographical Markets

Geographical Market Relevant companies in the Group Singapore Achieva Limited Achieva Components Pte Ltd Achieva Electronics Pte Ltd Achieva Technology Pte Ltd

Malaysia Achieva Components Sdn. Bhd. Achieva Electronics Sdn. Bhd. Achieva Technology Sdn. Bhd. Achieva Service Centre Sdn. Bhd. Stacks Holdings Sdn. Bhd. and its subsidiaries, Stacks Technology Sdn. Bhd., Stacks Systems Sdn. Bhd. and Mangrove Networks Sdn. Bhd.

Australia Achieva Technology Australia Pte Ltd and its Australia- domiciled subsidiary, Achieva Technology Australia Pty. Ltd.

Vietnam Achieva Technology East Asia Pte Ltd

PRC (including Hong Kong) Achieva China Limited

A breakdown of the Group’s audited turnover and profit before tax (in dollar terms and percentage terms) by geographical markets for the last four financial years ended 31 December 1996 to 31 December 1999 are as follows:- Turnover

< Audited > $’000 FY 1996 % FY 1997 % FY 1998 % FY 1999 %

Singapore 26,344 60.5 94,852 70.1 113,955 59.8 80,268 35.0 Malaysia 17,164 39.5 40,528 29.9 39,798 20.9 68,972 30.1 Australia — — — — 28,292 14.9 60,381 26.3 Vietnam — — — — 7,207 3.8 19,029 8.3 PRC (including Hong Kong) — — — — 1,218 0.6 566 0.3 Total 43,508 100 135,380 100 190,470 100 229,216 100

Profit before tax

< Audited > $’000 FY 1996 % FY 1997 % FY 1998 % FY 1999 %

Singapore 1,018 78.8 5,092 198.4 4,267 78.1 5,314 73.7 Malaysia 274 21.2 (2,526) (98.4) 537 9.8 1,048 14.5 Australia — — — — (271) (4.9) 898 12.4 Vietnam — — — — 821 15.0 515 7.1 PRC (including Hong Kong) — — — — 109 2.0 (560) (7.7) Total 1,292 100 2,566 100 5,463 100 7,215 100

49 Review of Earnings The Group’s earnings is analysed by reference to the performance of the four sub-groups namely, the AT sub-group, the AC sub-group, the AE sub-group and the Stacks sub-group. The AT sub-group distributes PC peripheral, parts and software and is responsible for the PC products business. The electronic components business is handled by both the AC and the AE sub-groups. The AC sub- group distributes semiconductor components including ASIC whilst the AE sub-group distributes electromechanical devices including electronic connect devices, connector systems as well as structured cabling products. The Stacks sub-group is responsible for distributing data network products on a piecemeal basis as well as on a system basis.

FY 1996 Turnover and profit before tax of the Group for FY 1996 were $43.5 million and $1.3 million, respectively.

An analysis of the performance of the sub-groups for FY 1996 is set out below:

PC Peripheral, Parts and Software 1. Although the AT sub-group operated for only 6 months in FY 1996, it contributed $21.7 million or 49.9% to the Group’s turnover in FY 1996, and its contribution to the Group’s profit before tax amounted to $261,000 or 20.2%. The encouraging performance was due to the strong market demand for PC products in Singapore and Malaysia and the experienced executives in the IT industry that the Group brought in to develop this line of business. Prior to the commencement of the AT sub-group’s operations, the PC peripheral, parts and software business (which commenced in FY 1996) was carried on by the Company. The Company contributed $1.1 million or 2.6% to the Group’s turnover and $31,000 or 2.4% to the Group’s profit before tax in FY 1996 for this line of business.

Electronic Components 2. The AC sub-group contributed $13.0 million or 29.9% to the Group’s FY 1996 turnover and $384,000 or 29.7% to the Group’s profit before tax.

3. The AE sub-group recorded a turnover of $2.0 million and profit before tax of $592,000 in FY 1996. Although turnover of the AE sub-group accounted for only 4.5% of the Group’s total turnover, the AE sub-group accounted for 45.8% of the Group’s profit before tax as a result of the commission income pursuant to its sales arrangements with T&B for interconnect devices and the distribution by the AE sub-group of such devices. All the commission income was derived from sales in the Singapore market. As commission sales were made on behalf of T&B, the cost of goods was not recognised in the books of accounts of the Group, and hence generally speaking, the profit margins were high.

Data Network Products and Services 4. The turnover of the Stacks sub-group amounted to $5.7 million in FY 1996 and it turned in a profit before tax of $20,000 for FY 1996. This was mainly due to the increase in operating expenses arising from the start-up and business development costs associated with the Group’s efforts to expand into the distribution of data security software and related products and the promotion of web-related services.

The turnover attributable to the Group’s Singapore operations was $26.3 million representing 60.5% of total Group’s turnover. However, the profit before tax of the Group’s Singapore operations of $1.0 million accounted for 78.8% of the Group’s total profit before tax. This was mainly due to the commission income derived from the AE sub-group’s operations in Singapore as explained above.

50 FY 1996 to FY 1997 Turnover of the Group increased by $91.9 million (211.2%) from $43.5 million in FY 1996 to $135.4 million in FY 1997. Profit before tax increased by $1.3 million (98.6%) from $1.3 million in FY 1996 to $2.6 million in FY 1997.

An analysis of the performance of the sub-groups for FY 1997 is set out below:

PC Peripheral, Parts and Software 1. The AT sub-group achieved $105.5 million in turnover in FY 1997, an increase of $83.8 million (386.2%). This was due to:

• the full year of operations as against only six months of operations in FY 1996; and

• the securing of distribution rights for hard disk drives in Malaysia from Seagate Technology International and PC motherboards from ASUSTeK in FY 1997.

Profit before tax increased by $2.3 million (865.5%) from $261,000 in FY 1996 to $2.5 million in FY 1997 which in percentage terms was more than the increase in the turnover. This was due to the new distributorships secured by the Group in FY 1997 which commanded a higher margin. The profitability of the AT sub-group would have been higher but for the unrealised exchange losses of $1.5 million due to the depreciation of the Malaysian Ringgit against the US Dollar in the later part of FY 1997. For the sub-group’s Malaysian operations, purchases were made in US Dollars whilst sales were in Malaysian Ringgit. The Group was able to stave off realised exchange losses in the subsequent year due to the implementation of the Group’s risk management programme. Please refer to the section “Foreign Exchange Risk Management” on pages 45 and 46 for further details.

Electronic Components 2. Turnover of the AC sub-group increased by $7.8 million (60.0%) from $13.0 million in FY 1996 to $20.8 million in FY 1997 as the Group started to distribute more specialised semiconductor components in early 1997.

Profit before tax increased by $21,000 (5.4%) from $384,000 in FY 1996 to $405,000 in FY 1997 but grew at a slower rate than the increase in turnover due to the manpower build-up associated with a new distributorship secured in end FY 1997, which contributed to the $396,000 increase in personnel expenses without the corresponding increase in profits.

3. Turnover of the AE sub-group increased by $222,000 (11.2%) from $2.0 million in FY 1996 to $2.2 million in FY 1997. Growth was muted as there was a reduction in orders for the interconnect devices from disk drives manufacturers (being the AE sub-group’s major customers for these components). The reduction in orders was due to a slowdown in the demand for hard disk drives.

Profit before tax decreased by $211,000 (35.6%) from $592,000 in FY 1996 to $381,000 in FY 1997. This was due to a significant rise in operating expenses, brought about by an increase in selling expenses arising from stepped-up efforts in the areas of business development and product diversification in Malaysia.

51 Data Network Products and Services 4. Turnover of the Stacks sub-group increased by $1.2 million (21.1%) from $5.7 million in FY 1996 to $6.9 million in FY 1997 despite the decrease in demand for data networking products and services in Malaysia which occurred in the second half of the year.

Despite the increase in turnover, profit before tax decreased by $728,000 from a profit of $20,000 in FY 1996 to a loss of $708,000 in FY 1997. This was mainly due to the unrealised exchange loss of $839,000 arising from the depreciation of the Malaysian Ringgit against the US Dollar as payments to suppliers were in US Dollar whilst sales were denominated in Malaysian Ringgit.

The Group incurred operating losses of $2.5 million in FY 1997 for the Malaysian operations due mainly to unrealised exchange losses arising from the depreciation of the Malaysian Ringgit against the US Dollar. This was despite the fact that turnover of the Malaysian operations had increased by $23.3 million (136.1%) from $17.2 million in FY 1996 to $40.5 million in FY 1997.

FY 1997 to FY 1998 Turnover of the Group increased by $55.1 million (40.7%) from $135.4 million in FY 1997 to $190.5 million in FY 1998. Profit before tax of the Group increased by $2.9 million (112.9%) from $2.6 million in FY 1997 to $5.5 million in FY 1998.

The economic and business slowdown in the region continued to have an adverse impact on the Group’s turnover and earnings throughout FY 1998 until the last quarter of that year. In an attempt to diversify business risk, the AT sub-group expanded into Australia and Vietnam whilst the AE sub- group expanded into the PRC (including Hong Kong) by mid-1998. As a result of the geographical diversification, the Group’s operations outside Singapore and Malaysia contributed an aggregate of 19.3% of the Group’s turnover and 12.1% of the Group’s profit before tax.

The Group recorded a net exchange gain of $655,000 for FY 1998 as compared to a net exchange loss of $2.0 million for FY 1997. Please refer to the section “Foreign Exchange Risk Management” on pages 45 and 46 for further details.

An analysis of the performance of the sub-groups for FY 1998 is set out below:

PC Peripheral, Parts and Software 1. Turnover of the AT sub-group increased by $48.7 million (46.2%) from $105.5 million in FY 1997 to $154.2 million in FY 1998 principally as a result of the AT sub-group’s expansion into Australia and Vietnam. Although both operations started only in the second half of FY 1998, they contributed $35.5 million or 23.0% to the AT sub-group’s turnover in FY 1998. This more than offset the decline in the AT sub-group’s sales revenue for PC-related products in Malaysia.

In line with the increase in turnover, profit before tax increased by $1.1 million (41.5%) from $2.5 million in FY 1997 to $3.6 million in FY 1998.

Electronic Components 2. Turnover of the AC sub-group increased by $6.5 million (31.1%) from $20.8 million in FY 1997 to $27.3 million in FY 1998. The increase arose largely from the revenue arising from the distribution of ASIC under the brand name “Altera”, the distributorship of which was secured at the end of FY 1997.

Profit before tax increased by $1.2 million (284.0%) from $405,000 in FY 1997 to $1.6 million in FY 1998. This was higher than the increase in turnover due to higher margins resulting from ancillary services provided in connection with ASIC sales. This was so notwithstanding that there was a $396,000 increase in personnel expenses incurred in FY 1997.

52 3. The AE sub-group’s turnover increased by $815,000 (37.1%) from $2.2 million in FY 1997 to $3.0 million in FY 1998. No immediate results from its geographical expansion into the PRC in mid-1998 was evident because it generally takes more than six months to conclude a sale of structured cabling products in the PRC.

Despite the increase in turnover, profit before tax decreased by $62,000 (16.4%) from $381,000 in FY 1997 to $319,000 in FY 1998 due mainly to the price pressure and lower margins on interconnect devices.

Data Network Products and Services 4. Turnover of the Stacks sub-group decreased by $902,000 (13.1%) from $6.9 million in FY 1997 to $6.0 million in FY 1998 due to the decline in demand in the Malaysian IT market, wide- spread cut-backs in IT expenditure and increased market competition which adversely affected the Malaysian-based data networking business.

Profit before tax was reduced by $311,000 (43.9%) from a loss of $708,000 in FY 1997 to a loss of $397,000 in FY 1998 due to cost-cutting measures. As part of these measures, the Stacks sub-group closed two Kuala Lumpur-based operations, retrenched their staff and froze the salaries of the personnel in the remaining operations.

FY 1998 to FY 1999 Turnover of the Group increased by $38.7 million (20.3%) from $190.5 million in FY 1998 to $229.2 million in FY 1999. Profit before tax increased by $1.7 million (30.9%) from $5.5 million in FY 1998 to $7.2 million in FY 1999. The Group’s operations in Singapore and Malaysia contributed an aggregate of 65.1% of the Group’s turnover and 88.2% of the Group’s profit before tax in FY 1999.

An analysis of the performance of the sub-groups for FY 1999 is set out below:

PC Peripheral, Parts and Software 1. The AT sub-group’s turnover increased by $41.0 million (26.6%) from $154.2 million in FY 1998 to $195.2 million in FY 1999. This was due mainly to the full year of operations in Australia and Vietnam as compared to only half a year in FY 1998. Although the AT sub-group’s turnover accounted for 85.1% of the Group’s total turnover, its profit contribution was only 25.0% of the Group’s profit before tax. This was due mainly to the recruitment of additional staff and increase in marketing expenses in the first half of FY 1999 in expectation of renewed growth of the PC- related markets. In addition, start-up expenses were incurred for the Philippines and Indonesian operations. The growth in turnover and profit in FY 1999 would have been higher but for the parts shortages in the industry caused by the series of earthquakes in Taiwan in September 1999.

Electronic Components 2. Turnover of the AC sub-group decreased by $1.7 million (6.2%) from $27.3 million in FY 1998 to $25.6 million in FY 1999. The decline in turnover for the AC sub-group was because certain customers who were affected by the supply shortages of parts (that were not distributed by the Group) arising from the earthquakes in Taiwan had cutback their production. Despite the decrease in turnover, the AC sub-group’s profit before tax increased by $3.7 million (239.8%) from $1.6 million in FY 1998 to $5.3 million in FY 1999 mainly due to two high margin one-off projects that were completed in the first 6 months of FY 1999 and the increase in gross margins of certain semiconductor components used in telecommunications equipment.

53 3. Turnover of the AE sub-group increased by $1.1 million (36.6%) from $3.0 million in FY 1998 to $4.1 million in FY 1999. The slight growth in turnover was due mainly to the increased demand for structured cabling in Malaysia. The AE sub-group’s profit before tax decreased by $276,000 (86.5%) from $319,000 in FY 1998 to $43,000 in FY 1999. This was because expenses were incurred to penetrate the structured cabling markets in the PRC (including Hong Kong) which did not contribute significantly to either the AE sub-group’s sales or profits in FY 1999. Further, the AE sub-group failed to secure certain projects in FY 1999 for which it incurred marketing expenses.

Data Network Products and Services 4. Turnover of the Stacks sub-group decreased by $1.7 million (28.3%) from $6.0 million in FY 1998 to $4.3 million in FY 1999. Although the Malaysian economy showed signs of recovery, capital expenditure in general remained weak, and this adversely affected the business of the Stacks sub-group. Net losses reduced by $200,000 (50.4%) from a loss of $397,000 in FY 1998 to a loss of $197,000 in FY 1999 due to the control of overheads and expenses. The Stacks sub-group also incurred a one-time extraordinary loss of $388,000 in relation to the sale 1 of the 3 ⁄2-storey semi-detached factory in Cheras, Kuala Lumpur for RM2.2 million (approximately $908,000). The net book value of the factory disposed of was $1.3 million.

FINANCE The following is based on the audited results of the Group as at 31 December 1996, 31 December 1997, 31 December 1998 and 31 December 1999:

Shareholders’ equity The Group’s shareholders’ equity comprised paid-up capital, revenue reserve and capital reserve. The shareholders’ equity grew from approximately $4.7 million in FY 1996 to $18.7 million in FY 1999.

Owing to business expansion, additional working capital was required to fund the Group’s operations. The Group issued additional ordinary shares resulting in an increase in paid-up capital from $3.3 million in FY 1996 to $5.3 million in FY 1998. The Group undertook a restructuring exercise in FY 1999, the details of which are set out on pages 26 and 27 of this Prospectus. Following the restructuring exercise, the Group’s share capital increased to $10.2 million as at 31 December 1999.

Capital reserve consisted of share premium which increased from $447,000 in FY 1996 to $2.4 million in FY 1998. In FY 1999, as part of the restructuring exercise, $2.4 million of the accumulated share premium was distributed to the then existing shareholders of the Company as fully-paid bonus shares and share premium amounting to $927,000 was created when the Company issued shares in consideration of the acquisition of in certain subsidiaries from their respective minority shareholders. The balance in the capital reserve following the distribution stood at $927,000 as at 31 December 1999.

Revenue reserve increased by $7.2 million from $529,000 in FY 1996 to $7.8 million in FY 1999 mainly due to the Group’s profits over the same period.

Fixed Assets The Group’s fixed assets comprised mainly freehold and leasehold properties, shoplot, office equipment and fixture and fittings. Leasehold and freehold properties amounting to $3.0 million was purchased in FY 1996. In FY 1999, the Group sold off an industrial property (with a net book value of approximately $1.3 million) which it owned in Malaysia. Consequently, fixed assets was reduced from $3.9 million as at 31 December 1998 to $2.7 million as at 31 December 1999.

54 Current Assets Current assets of the Group consisted mainly of stocks, trade debtors, other debtors, deposits and prepayments, fixed deposits and cash and bank balances. The increase in current assets by $47.5 million from $14.5 million in FY 1996 to $62.0 million in FY 1999 was in line with the increase in business volume.

Stocks which constituted approximately 48.1% of total current assets in FY 1998 have increased at a compound annual rate of 236.8% between FY 1996 and FY 1998 which was faster than the increase in turnover. Stocks attributable to the AT sub-group form the bulk of the total stock balance of the Group between FY 1996 and FY 1998. For FY 1998, such stocks constituted approximately 88.6% of the Group’s total stock balance in that year. This increase in stocks was in line with the rapid growth of the AT sub-group as the trading and distribution of PC-related products is a high volume business and require large holdings of stocks at any point in time to meet customers’ demand.

Further, the Group decided in FY 1997 to centralise inventory management for PC-related products and required that all the non-Singapore-based operations of the AT sub-group hold all their stocks of PC-related products in Singapore and ship out stocks from Singapore to fill their customers’ orders. As such, these stocks in transit boosted the stock balances. In addition, several new offices and warehouses in Johor Bahru, Kuala Lumpur and Kuching in Malaysia were opened as part of the AT sub-group’s inventory management programme to enlarge its dealers’ network in Malaysia. The setting up of these offices close to dealers within larger population centres in Malaysia also resulted in increased stock holdings.

The Group would often off-take goods around the quarter-end or year-end when suppliers, in an attempt to reduce the stock balances in their books, encourage their distributors to off-take more goods with added sales incentives.

As at 31 December 1999, the Group’s stock balance decreased by 31.4% to $20.1 million. This was due to the shortage of supplies in the third and fourth quarters of FY 1999 arising from a series of earthquakes in Taiwan.

In line with the increase in turnover, trade debtors have increased at a compound annual rate of 53.6% between FY 1996 to FY 1999.

Other debtors, accruals and prepayments (“other debtors”) related primarily to the accruals of price rebates and sales discounts payable by suppliers of the Group. In FY 1997, there was a sharp increase of $4.2 million in sundry debtors. This was due to a one-time significant price reduction announced by a major supplier in December 1997 which was covered by the supplier’s price protection programme. Under this programme, the supplier would credit the Group with an amount equal to the difference between the higher pre-announcement price and the lower post-announcement price for each unit of the affected goods on hand.

Since the later part of FY 1998, prices of PC-related products were generally more stable than those as at the end of FY 1997. As there were no major price adjustments, the other debtors’ balance fell back to levels that were more in line with the level of the Group’s normal purchases. This accounted for the $3.1 million or 55.4% drop in sundry debtors’ balance from $5.6 million as at the end of FY 1997 to $2.5 million as at the end of FY 1998. Other debtors balance amounted to $2.7 million as at the end of FY 1999.

Current Liabilities The Group’s current liabilities comprised mainly trade creditors, bills payable, other creditors and accruals, amounts owing to directors and provision for taxation. Current liabilities increased by approximately $32.4 million (276.9%) from $11.7 million in FY 1996 to $44.1 million in FY 1999, in line with the increase in business volume.

55 Trade creditors increased by $25.1 million (407.6%) from $6.2 million in FY 1996 to $31.3 million in FY 1998 as a result of the Group’s rapid business growth and the extension of larger credit lines by major suppliers. There were two other factors that were responsible for the significant increases in the trade creditors’ accounts in FY 1997 and FY 1998. First, the Group had to off-take additional stock from the major suppliers to help reduce their quarter-end or year-end inventory balances. Secondly, the Group’s establishment of new distribution operations in Australia and Vietnam led to increased purchases. In FY 1999, the Group reduced its trade creditors’ balance to $17.1 million by paying off purchases with trust receipts, which increased the bills payable balance.

Bills payables represented the amounts of trust receipts facilities extended by banks that were utilised and outstanding at year-end which formed part of the Group’s working capital. Bills payable increased from $2.9 million in FY 1996 to $16.7 million in FY 1999, in line with the increase in business volume.

Certain Directors have provided personal guarantees for certain of the Group’s bank facilities. The Directors intend to withdraw the guarantees after the Invitation provided it does not affect the Group’s bank facilities.

Amount due to related parties increased from $7,000 in FY 1996 to $1.7 million in FY 1999. This arose from a US$ loan to the Company by Hexon Technology Pte Ltd, a company which Mr Lim Yong Choon, the Group’s Chief Executive Officer and President of the Company, together with his wife, holds the entire stake. Please refer to pages 69 and 70 of this Prospectus for more details of this loan.

Working Capital The Group’s working capital steadily increased over the period under review as the Group was profitable and there was proper working capital management.

Long-Term Liabilities The Group’s long-term liabilities reduced by $0.3 million (16.7%) from $1.8 million in FY 1996 to $1.5 million in FY 1998. The long-term bank loans reduced from $1.7 million in FY 1996 to $1.3 million in FY 1998 due mainly to gradual repayment. The decline in long-term liabilities in FY 1997 was due to the repayment of loans as well as the depreciation of the Malaysian Ringgit against the Singapore Dollar as a portion of the Group’s long-term liabilities were denominated in Malaysian Ringgit.

Long-term liabilities decreased to $0.9 million in FY 1999 due to the repayment of a term loan using proceeds received from the sale of the Group’s industrial property in Malaysia.

PROSPECTS AND FUTURE PLANS The prospects of the Group’s business are heavily influenced by developments and trends in the end-user markets and in the underlying industries. The existing products distributed by the Group are supplied to dealers and manufacturers in what may be broadly classified as the IT market.

IT Market Outlook By the first quarter of 2000, it was evident that the Asia-Pacific IT markets, especially the PC segment, were on the way to renewed growth following the market slowdown that started in 1997.

The data on PC shipments in the Asia-Pacific region publicly released on 15 February 2000 by IDC Asia Pacific (IDC), an IT market research firm, and reported in Computerworld, showed that the Asia-Pacific (excluding Japan) PC market surpassed 14.1 million units in 1999 representing an increase of 35.1% over 1998. The figure for 1999 was the highest annual figure ever recorded and a complete rebound from the previous two years when the economic crisis held back, to some extent, expansion of the PC market.

56 IDC forecast that sales of IT products in Asia-Pacific (excluding Japan) will grow at a compound annual growth rate (“CAGR”) of 15% for the period 1998 to 2003, reaching US$84.8 billion by the year 2003. According to IDC, the growth in IT sales will not be evenly spread out among all the Asia-Pacific countries and sub-regions. For instance, the ASEAN region is forecast to show a CAGR of 11.5% in IT spending growth while the IT spending growth in the PRC (including Hong Kong) and Taiwan and in Australia/New Zealand will grow at a CAGR of 21.3% and 9.4%, respectively.

According to the Semiconductor Industry Association (“SIA”), worldwide shipment value of semiconductor components grew by 14.7% in 1999 while the Asia-Pacific (excluding Japan) shipments grew by 21.4%, driven by the demand for Internet applications, computing equipment and communications equipment. For the period 1999 to 2002, the SIA forecast that the value of shipments of semiconductor components will grow from US$35.0 billion to US$60.5 billion in Asia-Pacific (excluding Japan), at a CAGR of 20% while worldwide semiconductor shipments will grow at a CAGR of 17.5% reaching US$233.7 billion in 2002, up from US$144.1 billion in 1999.

Industry Developments & Trends More manufacturers of PC-related equipment are deploying the direct sales model in distribution and increasingly, customers are encouraged to do their ordering over the Internet.

Suppliers and distributors are developing and deploying computerised and Internet-based supply chain management as well as Internet-based data links and transaction processing. These business process innovations are changing the way in which goods are supplied, sold and distributed in the IT industry. E-business is compelling distributors to look at their current model and assess where they can reduce costs, add value, and become more efficient. If they are not to be left behind, IT distributors are required to invest in the requisite IT infrastructure and information systems so as to participate in their principals’ Internet-based communications systems (Extranet) and e-business programmes. They will also have to support their dealers’ networks in such programmes.

To prepare for any eventual shifts from the traditional business models to the e-business model in the IT distribution business, the Group recently conducted an in-house study to determine the feasibility and options for developing a Group-wide Internet-based IT infrastructure. It is also in the process of evaluating various Enterprise Resource Planning (ERP) software for Group-wide deployment. The Group’s management is targeting to have in place the necessary IT infrastructure and software that will be capable of supporting e-business by the end of FY 2000. The Group’s management will use part of the proceeds from this Invitation to fund the development and installation of the Group-wide Internet IT infrastructure and system.

Business Development Plans The Group’s management has formulated the following business development plans for the 2000- 2001 period:

1. Diversify into product lines and services that are less dependent on the volatile PC-related markets.

2. Add more value to the products that the Group distributes by offering services that are related to these products.

3. Enlarge the Group’s market share in the various geographical-markets which it has recently entered as well as expand into new territories.

57 1. Diversification Every sub-group has been directed to expand its product line and, where possible, add new product lines that are less dependent on its traditional markets but yet allow the sub-group to capitalise on its current sales channels and its distinctive strengths and skills.

The Group is in the process of seeking and attempting to secure additional lines of electronic components and Internet telephony products. The Group has started discussions with a few principals and suppliers of electronic components not currently carried by the Group in Southeast Asia.

The Group intends to set up a design centre with third parties to provide design and other consultancy services relating to the electronics industry and to develop it into a distinct business.

The Group also intends to explore investment opportunities in businesses, which are related to the core businesses of the Group or the electronics industry.

2. Ancillary Services The Group is implementing its strategy of adding more value to the products. In addition to its current offering of ancillary services which include servicing of PC peripherals, assembly of servers (channel assembly service) and contract maintenance for PC systems and data networking equipment, the Group has started to provide advanced training in digital design and applications on a fee basis to design engineers.

3. Geographical Expansion The results of the Group’s regional expansion programme have been encouraging. In view of this, the Group’s management has decided to increase the scope of its regional expansion programme. The geographical markets that the Group has targeted for entry or further expansion include the following: a) Philippines A Singapore-based entity known as Achieva Technology Philippines Pte Ltd (“ATPPL”) was incorporated in April 1999. ATPPL is chartered to develop and grow the Group’s PC-related business in the Philippines. ATPPL is in the process of registering a representative office in the Philippines to undertake sales promotion and to provide country-wide logistics support for dealers in the Philippines.

In September 1999, ACPL established a representative office in the Philippines to market electronic components.

b) Australia For its business development in Australia, the AT sub-group had previously focused its efforts mainly in the eastern part of Australia. The AT sub-group has expanded its operations to the western part of Australia. The Group has established an office in Perth, Western Australia.

c) Indonesia The Group is planning to set up a representative office in Indonesia to market the PC- related products of the AT sub-group. The proposed office in Indonesia is expected to be operational in FY 2000.

58 Group’s Prospects The Group is confident that it will be able to continue to grow through the development of its competitive strengths and future business development plans as set out above. The Group expects that the various structural and financial reforms instituted by the various Asian governments since the onset of the Asian economic downturn may lead to a business environment that is even more conducive to renewed growth in Asia.

Although the Asia-Pacific economy, and correspondingly the IT markets in the Asia-Pacific region, improved in 1999, uncertainties still remain. Continued growth and profitability of the Group are not assured for the foreseeable future as unanticipated and adverse economic and business developments may still derail the Group’s growth.

MAJOR CUSTOMERS Customers accounting for 5% or more of the Group’s turnover based on the audited results of the last four financial years ended 31 December 1999 are listed below:

< Audited > FY 1996 FY 1997 FY 1998 FY 1999 Name of customer (%) (%) (%) (%)

Ablewell Australia Pty. Ltd. — 6.4 7.9 — Beam Technology Pte Ltd 2.5 12.8 14.7 1.6 Corex Technology (S) Pte Ltd 4.7 5.8 0.1 — CTY Thnh Thuong Mai Phuong Lan — — 5.5 1.0 IPC Corporation Ltd 0.1 5.4 0.4 — Hexon Technology Pte Ltd 5.2 1.3 0.2 0.04 LSC Systems & Peripherals 6.5 8.0 — — Thanh Dat Trading Shareholding Company — — — 7.2 Third Century International, Inc. 6.2 1.0 0.4 —

The Group’s customer base is diverse and grew from about 600 in FY 1996 to approximately 3,500 by the end of FY 1999. These customers are spread over several Asia-Pacific countries including Australia, the PRC (including Hong Kong), Indonesia, Malaysia, Singapore, Thailand, the Philippines and Vietnam.

The rapid increase of the Group’s customer base dilutes any given customer’s share of the Group’s sales. The Group’s management is of the opinion that there is no heavy reliance on any individual customer.

Ablewell Australia Pty. Ltd. The AT sub-group had been selling PC products to Ablewell Australia Pty. Ltd. since FY 1997. Since the end of FY 1998, the Company has ceased all sales to Ablewell Australia as the latter has ceased operations.

Beam Technology Pte Ltd (“Beam Technology”) The AT sub-group sells PC products to Beam Technology in Malaysia. Such sales have increased from 2.5% in FY 1996 to 14.7% in FY 1998 due to the increase in the product range offered by the AT sub-group. Beam Technology has substantially reduced its purchases from the Group since late FY 1998.

59 Corex Technology (S) Pte Ltd and IPC Corporation Ltd The AT sub-group had tradings with IPC Corporation Ltd and Corex Technology (S) Pte Ltd, a subsidiary of IPC Corporation. Such sales have ceased since FY 1998.

CTY Thnh Thuong Mai Phuong Lan (“Phuong Lan”) Phuong Lan is in the business of distributing of PC peripheral in Vietnam. The Group previously had an arrangement whereby ATEAPL sold PC peripherals to Phuong Lan. Paul Nguyen, a director of a subsidiary of the Group, has management control over Phuong Lan.

Hexon Technology Pte Ltd (“Hexon”) The Group sells dynamic random access memory (“DRAM”) devices to Hexon when requested by its existing network of suppliers to off-take the suppliers’ over-supply of DRAM devices. Such sales have decreased from 5.2% of the Group’s turnover in FY 1996 to 0.04% in FY 1999 as Texas Instruments divested its DRAM business in FY 1998. Lim Yong Choon is a Director and substantial shareholder of the Company and is a director and, together with his wife, holds the entire stake in Hexon.

LSC Systems & Peripherals The Group sold PC products to LSC Systems & Peripherals. Such sales have since ceased.

Thanh Dat Trading Shareholding Company (“TDTSC”) TDTSC was incorporated in April 1999 and is in the business of distributing PC peripherals in Vietnam. The company was formed by Paul Nguyen, a director of a subsidiary of the Group. Mr Nguyen has management control of TDTSC. Following TDTSC’s incorporation, ATEAPL sold PC peripherals to TDTSC instead of Phuong Lan.

Third Century International, Inc. (“Third Century”) The Group sold PC-related products to Third Century. Such sales have decreased from 6.2% of the Group’s turnover in FY 1996 to 0.4% in FY 1998 and has ceased in FY 1999. Huang Ting-chu@Tim Huang is a substantial shareholder of the Company and is the largest shareholder and a director of Third Century.

Please see the section “Interested Party Transactions” on pages 65 to 72 of this Prospectus for further details.

Save as disclosed above, none of the Company’s Directors or substantial shareholders has any interest (direct or indirect) in any of the above customers.

MAJOR SUPPLIERS Suppliers accounting for 5% or more of the Group’s turnover based on the audited results of the last four financial years ended 31 December 1999 are listed below:

< Audited > FY 1996 FY 1997 FY 1998 FY 1999 Name of supplier (%) (%) (%) (%)

Seagate — 24.7 40.7 37.3 Intel 35.9 43.7 29.1 31.9 Altera — — 10.8 5.1 Texas Instruments 9.9 10.4 4.0 0.6 Hexon 8.7 0.2 0.4 0.6

60 The Group has made efforts to secure a growing number of distribution and representation rights for brand name products. The Group enjoys good working relationships with its suppliers and has over the years established a strong rapport with them. These suppliers have contributed significantly to the Group’s rate of growth and success and they continue to be invaluable to the Group’s success.

Seagate Since the securing of a distribution agreement in FY 1997, the Group’s purchases from Seagate have increased from 24.7% in FY 1997 to 40.7% and 37.3% in FY 1998 and FY 1999, respectively. This is in line with the increase in contribution to the Group’s turnover by the PC products business.

Altera The Altera distributorship was secured in late FY 1997 and the Group only started distributing its products in FY 1998. Purchases have decreased to 5.1% in FY 1999 because of the decrease in demand during the last two quarters of FY 1999. The earthquakes in Taiwan had caused supply shortages in electronic components that were not distributed by the Group, leading to the cutting back of production by some of the Group’s customers.

Texas Instruments The Group purchased DRAM from Texas Instruments when it was asked to off-take over-supply of DRAM devices. Such purchases declined from 9.9% in FY 1996 to 4.0% in FY 1998 as Texas Instruments has divested its DRAM business. As a result of the divestment, the Group’s purchases of DRAM devices from Texas Instruments have since ceased. However, the Group continues to distribute Texas Instruments’ products such as digital signal processors which accounted for the 0.6% of the Group’s purchases in FY 1999.

Hexon The Group purchases PC memory modules from Hexon for resale to the Group’s customers as and when these customers require such products. One reason the Group engages in the sale of memory modules is that it helps the Group to gain a foothold in new markets in which the Group ventures into. Such purchases have decreased from 8.7% in FY 1996 (when it was establishing itself in the Malaysian market) to 0.4% in FY 1998 but increased slightly to 0.6% in FY 1999. Lim Yong Choon is a Director and substantial shareholder of the Company and is a director and, together with his wife, holds the entire stake in Hexon.

Save as disclosed above, none of the Company’s Directors or substantial shareholders has any interest (direct or indirect) in any of the above suppliers.

COMPETITION The Group competes in different product-markets, each of which has different competitive environments. The Group competes with a number of established companies in the Asia-Pacific region across most of its product-markets. The Group’s management regards the following as major competitors for each of its sub-groups:

Sub-group Competitors

AC sub-group Memec (Asia Pacific) Ltd Serial Systems Ltd World Peace (S) Pte Ltd

AE sub-group AMP Singapore Pte Ltd FCI Singapore Pte Ltd (formerly known as Berg Electronics) Molex Singapore Pte Ltd

61 Sub-group Competitors

AT sub-group Ingram-Micro Singapore Inc (formerly known as Electronic Resources Ltd) Tech Pacific (S) Pte Ltd Synnex Australia Pty. Ltd. SIS Technologies Pte Ltd

Stacks sub-group Mesiniaga Bhd. CSA Distribution Sdn. Bhd. Accurate System Sdn. Bhd. MCSB System Bhd. Note: (1) The Group may also compete with other companies which are related to those companies set out above.

Given the size and diversity of the electronics industry, it is not possible to obtain independent statistics regarding the market share captured by individual companies especially for those in the distribution business as such companies serve different sectors of the electronics industry.

Competitive Strengths As the Group competes in different product-markets, each with different competitive environments, the Group does not employ a single across-the-board competitive strategy. The Group’s management believes that the Group’s competitive strengths in each of the different markets lie in the following:

Dealers’ market for PC peripherals, parts and software The dealers’ market for PC peripherals, parts and software products is a consumer-oriented, volume- driven, fast-changing, price-sensitive and highly competitive market. The Group’s success in this market is attributable to the following:

1. Well-established brand names Customers of PC peripherals, parts and software are as brand-conscious as they are price- conscious. The distribution rights to well-established brands have contributed to the Group’s competitive success.

Since it first commenced its PC peripherals, parts and software distribution business, the Group has secured the distribution rights (on a non-exclusive basis) for several well-known suppliers, which are also noted for their mass marketing and mass distribution prowess. Currently the Group has distribution agreements or arrangements with established companies including Seagate, Intel, ASUSTeK and Microsoft. An added advantage of carrying products from these companies is that they are generally able to provide direct promotional support and financial support for promotional activities.

2. Extensive distribution channels The Group has expanded its dealership network in various countries. In FY 1999, the Group distributed PC peripherals, parts and software to a network of approximately 3,000 dealers in the region, including Australia, Malaysia, Singapore, the Philippines and Vietnam. Going forward, the Group is continuously expanding its dealership network in each of the countries it already sells in as well as expanding into Asian countries where it does not yet have any presence.

3. Inventory holding power The ability to hold an increasing amount of stock as its customer base grows is a critical factor to the success of a distributor of high turnover products such as PC-related products. Unless it is able to satisfy customers’ orders readily and consistently, a distributor of PC-related products runs the risk of losing customers.

62 The Group has generally been able to carry stocks of PC-related products distributed by the Group sufficient to meet the demand of the market. This ability is the main factor for the Group’s success in building up a relatively extensive dealership network rapidly. Further, due to the Group’s relatively good payment record, suppliers have generally been willing to extend credit readily. The Group has also been able to secure extensive credit lines from banks. Because of its ability to secure credit lines from both suppliers and banks, the Group is able to continue to enlarge its stocking of goods. As the Group has sufficient stock to satisfy dealers’ orders consistently and secure their loyalty, the Group is able to continuously and rapidly enlarge its dealership network.

In addition, the Group has also been able to meet suppliers’ requests to off-take goods at the end of each quarter to meet their performance targets. Due to its relatively extensive dealership network, the Group is generally able to sell off any off-take of goods within a relatively short time.

Holding inventory that tends to experience periodic price reductions and obsolescence seem fraught with financial risks. These risks are mitigated, to a certain extent, by the price protection and stock rotation programmes currently provided by the major suppliers. Under the price protection programme, if any price reductions are announced after the distributor has ordered and taken delivery of the goods affected, the supplier charges the distributor only the reduced price and not the higher price at which the order was placed. Under the stock rotation programme, suppliers allow distributors to return a certain portion of unsold goods within a specified time period in exchange for new goods or for credit to offset against new orders. The Group thus tends to be less adversely affected by an over-supply situation than by supply shortages.

4. Good relationships with suppliers and dealers The ability to provide good after-sales service and to deliver consistent results for suppliers are critical factors in winning and maintaining key distributorships. The Group’s management has a policy of continuously cultivating and maintaining strong relationships with both dealers and suppliers, at both the operating and senior management levels. The Group’s good relationship with suppliers and dealers is a key factor to the long-term success of its distributorships. As part of its dealer relationship building programme, the Group also undertakes promotional programmes that assist dealers in penetrating markets and marketing their products.

5. Ancillary services Over the last few years, competitive pricing has been prevalent in the IT distribution business. There is now less scope in competing solely on price and/or on product features. The Group competes by providing ancillary services to customers, some of which are services provided on behalf of certain suppliers. These services include servicing of equipment under suppliers’ warranties, assembly and upgrading for PC servers and fee-based contract maintenance of PC systems.

OEM market for electronic components Semiconductor components The Group distributes semiconductor components with particular focus on ASIC. ASIC tends to be sold in low to medium volume and are subject to rapid technological changes. However, because they are specific in application or are proprietary products, price competition is less intense. The barriers of entry are also higher than for the distribution of PC-related products. To be able to secure distributorships for these products and sell successfully, in-house electronic application skills and the ability to provide electronic design and application support to customers are required. The Group, with its team of field application engineers, is able to provide such support.

The Group has secured several multinational customers, including manufacturers of multimedia products, data networking and telecommunications equipment such as Venture Manufacturing (Singapore) Ltd, Natsteel Electronics Ltd and Solectron Technology Sdn. Bhd. (which makes products for, inter alia, major PC OEMs and network equipment suppliers).

63 The Group has been successful in receiving the endorsements of its principals because of its competitive strategies, including the following:-

1. Winning the confidence of, and continuing support from, existing and prospective customers, which involves:-

(i) close application support for customers at the product design stage, which may lead to the Group being appointed the sole supplier if and when the customers’ new products are launched and begin volume production; and

(ii) providing after-sales technical support, e.g. programming Programmable Logic Devices (PLD) for customers as well as supplying them the software development tools and necessary training for them to undertake such programming for themselves.

2. Longer-term market development, which involves:-

(i) proposing to customers new product ideas that may use the ASIC distributed by the Group;

(ii) working with the relevant engineering departments of local universities of countries in which the AC sub-group has operations to develop courses in digital electronic design and donating, on behalf of the principals, sample products, development tools and evaluation kits for use in these courses. The aim is to familiarise budding electronic engineers with the technology and products supplied by the Group; and

(iii) organising and presenting periodic seminars on the applications and benefits of the ASIC to design and development engineers from electronic firms.

Interconnect devices The Group’s sales representative agreement with T&B allows the Group to sell, on behalf of T&B, electronic connectors and interconnect devices to OEMs in certain Asian countries, including the PRC (including Hong Kong), Malaysia, Thailand and Singapore. The major customers of the Group for interconnect devices include leading multinational manufacturers of computer peripherals and telecommunications products like Seagate, Samsung (Asia) Pte Ltd, Matsushita Kotobuki Electronics Industries (S) Pte Ltd, Western Digital (M) Sdn. Bhd. and Motorola. The AE sub-group is focused on selling to the large multinational electronic manufacturers. In selling T&B interconnect devices, the Group competes against world leading brands in interconnect devices like “AMP”, “Molex” and “Berg”. To gain a competitive advantage over these major brand names, the Group relies on quality of service and design capability as well as the provision of value-engineering support services for customers.

Corporate market for data networking In offering data network products and services in Malaysia, the Group operates in a highly competitive environment. Recognising that it does not have the financial and human resources of its larger competitors in Malaysia, the Group focuses on being a contractor and supplier of data networking equipment and related networking services to the larger IT-system integrators. To compete successfully in this environment, the Group relies on its technical capability. It also focuses on building a network of relationships with, inter alia, commercial IT-system integrators and IT personnel of Malaysian government-related organisations. It also emphasizes strong and close relationships with its principals.

64 Dealers’ market for data network products MNSB, a subsidiary of the Company, is presently one of two Malaysian-based Advanced Distribution Partner (“ADP”) for 3Com. As an ADP, the principal role of MNSB is to support selected business partners (i.e. entities with whom 3Com has business relations, excluding joint ventures or partnerships in the legal sense) that are referred to MNSB by 3Com’s Malaysian office. MNSB, as a matter of policy, refrains from competing against the business partners of 3Com. In addition, 3Com also directs selected business partners to MNSB for technical assistance in planning, configuring and installing complete data network systems and for the supply of products. With this arrangement, the ADPs relieve 3Com of the need to maintain its own logistics and technical staff in-house while being able to provide nation-wide support for the 3Com distribution network.

In its role as an ADP, MNSB maintains its competitive advantage by building and maintaining strong relationships with 3Com. It also builds strong and continuing relationships with 3Com’s business partners to encourage repeat purchases. To maintain its status as an ADP, it is obliged to achieve and maintain high standards of technical capabilities by continuously training, updating and upgrading its technical staff.

INTERESTED PARTY TRANSACTIONS The material transactions undertaken from FY 1996 to FY 1999 in which the Directors and substantial shareholders of the Company or Executive Officers of the Group have had an interest are as follows:-

Sales The value of sales from the Group to related parties and their respective percentages of the Proforma Group’s total sales based on the audited results for the last four financial years ended 31 December 1999 are set out below:-

< Audited > FY 1996 FY 1997 FY 1998 FY 1999 $%$%$%$%

Celebit Circuit Technology (S) Pte Ltd 590 — — — 395 * — — C.V. Sentosa Electric 11,134 0.03 32,778 0.02 — — — — CTY Tnhh Thuong Mai Phuong Lan — — — — 10,412,075 5.46 2,329,112 1.02 Thanh Dat Trading Shareholding Company — — — — — — 16,471,175 7.19 Hexon Technology Pte Ltd 2,246,891 5.16 1,711,433 1.26 471,010 0.25 — * Hong Hsiang Technology Corp — — 384,591 0.28 — — — — Intergroup Investment Holdings Pte Ltd — — — — 301 * — — Newtech Electronics Pte Ltd 301,582 0.69 — — — — — — Richcom Technology (S) Pte Ltd 1,038,201 2.39 1,067,694 0.79 4,393,489 2.31 773,409 0.03 Third Century International, Inc 2,709,234 6.23 1,338,333 0.99 735,325 0.39 — — Vanni Ltd 504,857 1.16 439,884 0.32 501,700 0.26 277,539 0.01 YIC Singapore Pte Ltd 65,843 0.15 — — — — — —

Notes:- * percentage of sales less than 0.01%

65 Purchases The value of purchases made by the Group from related parties and their respective percentages of the Proforma Group’s total purchases based on the audited results for the last four financial years ended 31 December 1999 are set out below:-

< Audited > 1996 1997 1998 1999 $%$%$%$%

Avnet Electronics Pte Ltd 202,207 0.49 62,454 0.05 — — — — Hexon Technology Pte Ltd 3,537,646 8.72 207,251 0.15 719,417 0.38 1,397,270 0.60 Hong Hsiang Technology Corp — — 35,721 0.03 — — — — Newtech Electronics Pte Ltd 80,484 0.20 — — — — — — Richcom Technology (S) Pte Ltd 552,964 1.36 764,373 0.56 323,201 0.17 416,023 0.20 Third Century International, Inc. 94,259 0.23 — — — — — — YIC Singapore Pte Ltd 526,590 1.30 135,152 0.10 — — — — Yosure Singapore Pte Ltd 885,103 2.18 13,686 0.01 79,700 0.04 97,659 0.04

Avnet Electronics Pte Ltd (“Avnet”) Mr Pok Tam Soon, an executive Director and substantial shareholder of the Company, holds a 50% equity stake in Avnet and is its director. Avnet is a trader of electronic components to three customers in the PRC (including Hong Kong) and Taiwan. Although the Group has a presence in Hong Kong and Taiwan through the distribution of interconnect devices and structured cabling, its business differs from Avnet’s business of trading semiconductor parts.

When the Group’s customers required certain semiconductor parts which the Group did not carry, the Group sourced for such parts in Taiwan through Avnet. Since FY 1998, the Group has ceased such purchases from Avnet. All purchases were at the prevailing market rates and conducted on arm’s length basis.

Celebit Circuit Technology (S) Pte Ltd (“Celebit Circuit”) Messrs Lim Yong Choon, Lo Ju Jie and Cheng Chee Khon, who are shareholders of the Company, together hold more than 95% of the shares in Celebit Circuit, a manufacturer of printed circuit boards in Indonesia, a business in which the Group does not engage. The Group sold PC peripherals to Celebit Circuit for its internal use. All sales were at the prevailing market rates and conducted on arm’s length basis.

C.V. Sentosa Electric (“C.V. Sentosa”) Mr Lo Ju Jie, a shareholder of Company, together with his family, owns C.V. Sentosa. The Group sold electronic components to C.V. Sentosa. Since FY 1998, the Group has ceased such sales to C.V. Sentosa. All sales were at the prevailing market rates and conducted on arm’s length basis.

CTY Tnhh Thuong Mai Phuong Lan (“Phuong Lan”) Mr Paul Nguyen is a director and shareholder as to 39% of ATEAPL, a subsidiary of the Company. Certain family members of Mr Paul Nguyen hold the entire registered capital of Phuong Lan. Phuong Lan is in the business of PC peripheral distribution in Vietnam. The Group regards Mr Paul Nguyen as a strategic local business associate in Vietnam. The Group had an arrangement whereby ATEAPL sold PC peripherals to Phuong Lan at a price close to the prevailing market price in Vietnam. Since March 1999, the Group has ceased such arrangements with Phuong Lan.

In 1999, Mr Nguyen established a joint stock company known as Thanh Dat Trading Shareholding Company (“TDTSC”), which took over the PC-related distribution operations from Phuong Lan. Mr Nguyen and his family members currently hold the entire registered capital of TDTSC. Please refer to the section “Companies with Similar Business” on pages 70 and 71 for further details.

66 Thanh Dat Trading Shareholding Company (“TDTSC”) TDTSC was incorporated in April 1999 and is in the business of distributing PC peripherals in Vietnam. The company was formed by Mr Paul Nguyen, a director and shareholder of ATEAPL, a subsidiary of the Company. Mr Nguyen has management control of TDTSC. Following TDTSC’s incorporation, ATEAPL started selling PC peripherals in Vietnam to TDTSC instead of Phuong Lan.

Hexon Technology Pte Ltd (“Hexon”) Mr Lim Yong Choon, a Director and substantial shareholder of the Company, together with his wife, holds the entire stake in Hexon, which is also in the electronic component distribution business focusing on the assembly and trading of PC memory modules.

The Group sells dynamic random access memory (“DRAM”) devices to Hexon as and when such opportunities arise. The DRAM devices business is highly volatile with its attendant risk of price erosion without price protection programmes. Before Texas Instruments divested its DRAM business, the Group was occasionally asked by Texas Instruments to off-take over-supply of DRAM devices. The Group does not focus on this business and therefore faced difficulties in disposing of such products readily. When such situations arose, the Group would approach Hexon (this being Hexon’s main business) with such business opportunities and sell the products to Hexon at a profit. Such sales have decreased from $2.25 million (representing 5.16% of the Group’s turnover) in FY 1996 to $88,801 (representing 0.04% of the Group’s turnover) in FY 1999. Sales of memory devices decreased in FY 1999 as Texas Instruments divested its DRAM business in FY 1998 although there continued to be small amounts transacted in early FY 1999.

The Group purchases PC memory modules from Hexon for resale to the Group’s customers as and when the Group’s customers require such products. In addition, to gain a foothold in new markets in which the Group ventures into, the Group would usually start off with selling, amongst others, memory products as they are standard products used in PCs. In FY 1996, the Group’s purchases from Hexon amounted to approximately $3.54 million (representing 8.72% of the Group’s purchases for that year) as it was establishing itself in the Malaysian market, whilst in FY 1998, as the Group was venturing into Vietnam and Australia, the Group’s purchases from Hexon amounted to approximately $719,000 (representing 0.38% of the Group’s purchases for that year). In FY 1999, purchases of memory modules from Hexon increased to $1,397,270 (representing 0.6% of the Group’s total purchases for FY 1999) due to demand from the Group’s customers in Australia.

All transactions were at the prevailing market rates and conducted on arm’s length basis.

Please refer to the section “Companies with Similar Business” on pages 70 and 71 for further details.

Hong Hsiang Technology Corp (“Hong Hsiang”) Mr Huang Ting-chu@Tim Huang, a substantial shareholder of the Company, held shares in Hong Hsiang which has since been liquidated. Hong Hsiang was in the business of assembling and distributing PC memory modules. The Group sold Texas Instruments DRAM devices to Hong Hsiang in FY 1997 when the Group was asked to off-take these products due to Texas Instruments’ over- supply of DRAM devices. The Group also bought memory modules from Hong Hsiang (assembled from DRAM devices). All transactions were at the prevailing market rates and conducted on arm’s length basis.

Intergroup Investment Holdings Pte Ltd (“Intergroup”) Mr Lim Yong Choon, a Director and substantial shareholder of the Company, has a 50% equity stake in Intergroup and is one of its directors. Intergroup is a supplier of security equipment to Indonesia. The Group sold PC peripherals to Intergroup for its internal use. All sales were at the prevailing market rates and conducted on arm’s length basis.

67 Newtech Electronics Pte Ltd (“Newtech”) Messrs Pok Tam Soon and Ng Chee Seng, Directors and substantial shareholders of the Company, are also directors and shareholders of Newtech, which exports sound-cards. The Group sold sound cards to Newtech. Newtech ceased operations in 1997 and is currently a dormant company. All sales were at the prevailing market rates and conducted on arm’s length basis.

Richcom Technology (S) Pte Ltd (”Richcom”) Mr Tong Yau Lor, Steven, a director and shareholder as to 10% of ATEAPL, a subsidiary of the Company, together with his family members, holds a 100% equity stake in Richcom, a distributor of PC peripherals. The Group sold PC peripherals to Richcom. In return, the Group purchased PC monitors from Richcom for PC assembly. Such purchases from Richcom amounted to $416,023 (representing 0.2% of the Group’s purchases) in FY 1999. All sales and purchases were at the prevailing market rates and conducted on arm’s length basis.

Third Century International, Inc (“Third Century”) Huang Ting-chu@Tim Huang is a substantial shareholder of the Company and is the largest shareholder and a director of Third Century. Third Century is mainly in the business of general trading. The Group sold and purchased PC-related products from Third Century. The sales relate to PC-related products for Third Century’s customers and there was a total of three transactions from FY 1996 to FY 1998. The purchases relate to sourcing for certain semiconductor parts in Taiwan through Third Century, the brand of which the Group did not carry, as and when the Group’s customers required these products. All transactions were at the prevailing market rates and conducted on arm’s length basis.

Vanni Ltd (“Vanni”) Mr Lim Yong Choon, a Director and substantial shareholder of the Company, holds a 30% equity stake in Vanni and is its director. However, Mr Lim is not involved in the management of Vanni. Vanni is a Hong Kong company in the business of general electronic trading. It does not have distribution lines and hence undertakes various transactions as and when opportunities arise. In FY 1996, the Group sold Vanni DRAM devices that it was asked to off-take from Texas Instruments. From FY 1997 to FY 1999, Vanni purchased structured cabling products from the Group. This was because the Group, being a foreign-owned company in the PRC, was restricted by PRC law from selling directly in the PRC. The Group sold structured cabling products to Vanni for resale in the PRC. All transactions were at the prevailing market rates and conducted on arm’s length basis.

YIC Singapore Pte Ltd (“YIC”) Mr Pok Tam Soon, an executive Director and substantial shareholder of the Company, was a shareholder as to 4.67% of Aimtop Holdings Pte Ltd, the holding company of YIC. YIC is an electronic components distributor. The Group sold a small quantity of electronic components to YIC in FY 1996. The Group in FY 1996 and FY 1997 purchased “Samsung” electronic components from YIC when its customers required these products. Since FY 1998, the Group has ceased all such transactions with YIC. All transactions were at the prevailing market rates and conducted on arm’s length basis.

Yosure Singapore Pte Ltd (“Yosure”) Mr Pok Tam Soon, an executive Director and substantial shareholder of the Company, was a shareholder as to 4.67% of Aimtop Holdings Pte Ltd, the holding company of Yosure. Yosure is an electronic components distributor. The Group purchased SGS Thomson (now known as STMicroelectronics) electronic components from Yosure when its customers required those products. All transactions were at the prevailing market rates and conducted on arm’s length basis.

68 Other Transactions The value of other transactions between the Group and its related parties from FY 1996 to FY 1999 are set out below:-

< Audited > 1996 1997 1998 1999 Acquisition/(disposal) of fixed assets by the Group Hexon Technology Pte Ltd 2,335 (721) — — Intergroup Investment Pte Ltd 1,250 — — —

Rental paid to related parties Hexon Technology Pte Ltd 30,850 158,307 157,154 128,046

Administrative fee paid to related parties P.T. Hestrindo — 7,750 6,000 4,200

Acquisition/disposal of fixed assets The Group acquired fixed assets from Hexon in FY 1996 upon shifting into premises owned by Hexon. The Group also acquired fixed assets from the previous tenant Intergroup Investment Pte Ltd.

In FY 1997, the Group disposed of fixed assets to Hexon when it moved into new premises.

All transactions were at their respective net book values.

Rental The Group currently rents from Hexon three units, namely #09-02/05/06, Block A, Tong Lee Building, 35 Kallang Pudding Road. The lease, which was effective from 1 September 1999, is for a term of one year with an option to extend for a further period of one year. The rental charge is based on market rentals as assessed by an independent valuer.

Management fee paid to related parties P.T. Hestrindo is a subsidiary of Celebit Circuit, a company in which Messrs Lim Yong Choon, Lo Ju Jie and Cheng Chee Khon, who are shareholders of the Company, together have a 95% interest. From FY 1997 to FY 1999, P.T. Hestrindo provided technical services to the customers of the AC sub-group which the Group subsequently reimbursed for costs incurred.

Advances to/from Directors and Related Parties The Group had in the past received advances from Messrs Lim Yong Choon and Cheng Chee Khon. The advances were on an unsecured basis, interest-free and had no fixed terms of repayment. The balances have been fully repaid.

In 1998, the Group received a US$ loan of approximately US$2.5 million from Hexon which was on an unsecured basis, had no fixed terms of repayment and bore interest at 10% per annum (being the prevailing market rate). This loan was made to enable the Group to make an early payment for hard disk drives delivered to the Group so as to enjoy a cash discount from the supplier. Mr Lim Yong Choon, a Director and substantial shareholder of the Company, together with his wife holds all the shares in Hexon. As at 31 December 1999, US$1.6 million of the principal was repaid. The amount outstanding has been fully repaid in February 2000.

69 As at 31 December 1999, $67,000 owing from related party relates to trade debts outstanding from Vanni. As at 31 December 1999, the outstanding balances were as follows:

As at ($’000) 31 December 1999

Amount owing to Directors — Amount owing to Related Party (1,666) Amount owing from Related Party 67

Companies with Similar Business TDTSC Mr Paul Nguyen, a director and substantial shareholder of ATEAPL, together with his family members currently hold the entire registered capital of TDTSC and is one of its directors. TDTSC was established in 1999 and took over the PC-related distribution operations from Phuong Lan (certain family members of Paul Nguyen hold the entire registered capital of Phuong Lan).

Hexon Mr Lim Yong Choon, a Director and substantial shareholder of the Company, together with his wife, holds the entire stake in Hexon, which is currently in the business of selling, distributing and manufacturing memory modules for the computer industry. Hexon purchases semiconductor components from semiconductor device manufacturers in the form of unfinished packages (“memory dies or wafers”) or finished semiconductor packages (“memory chips”). The memory dies or wafers (which can be packaged into the form of memory chips) and the memory chips are assembled into different configurations of memory modules. These memory modules are then sold to retailers, distributors and manufacturers in the computer industry to be used in computer products such as workstations, desktops, notebooks and other electronic devices (“Hexon’s existing business”). However, any conflict of interests is mitigated as the Group does not focus on the DRAM devices business, it being a highly volatile business. Prior to FY 1998, as part of the requirement of Texas Instruments, the Group distributed Texas Instruments’ DRAM devices but this has since been discontinued following the divestment of this product line by Texas Instruments. At that time, Hexon also dealt with DRAM devices of other brands.

Mr Lim Yong Choon is the Managing Director of Hexon. Mr Lim’s performance as the Group’s Chief Executive Officer since 1994 has not given the Board of Directors of the Company any grounds for dissatisfaction or concern. It is estimated that Mr Lim spends at least 80% of his time overseeing the business of the Achieva Group. Hexon focuses solely in the PC memory module business and has built up a dedicated team of professional managers since its incorporation in 1989.

To resolve the potential conflict of interests, Mr Lim Yong Choon has given the following undertakings to the SGX-ST and the Company:

(a) Mr Lim shall not, directly or indirectly, in any capacity be engaged or concerned in any business which is in any respect in competition with any business for the time being or from time to time carried on by the Group Provided That the foregoing shall not (i) apply to Hexon’s existing business, (ii) prohibit the holding of investments listed on any stock exchange as long as not more than five (5) per cent. of the issued shares or stock of any class of any one company shall be so held, or (iii) prohibit the holding of shares in any private company in which he does not have a controlling interest.

70 (b) Mr Lim shall promptly refer to the Company all enquiries relating to any business similar to that carried out by the Group for the time being (other than Hexon’s existing business) made to him directly or indirectly. The Company shall have the right of first refusal for all enquiries or proposals relating to any business similar to that carried out by the Group for the time being (other than Hexon’s existing business) which he may directly or indirectly receive.

In respect of any right of first refusal granted to the Group, if the Group shall decline or not revert later than seven (7) days after notification in writing by Mr Lim to the Group of the same, Mr Lim may proceed to conduct the business specified in its notification.

The undertakings will cease to apply if:-

(a) Mr Lim and/or his associates cease to own or have an interest of not less than ten (10) per cent. of the issued share capital of the Company; or

(b) Mr Lim and/or his associates cease to be the largest shareholder in the Company.

Avnet, YIC and Yosure Mr Pok Tam Soon is an executive Director and substantial shareholder of the Company. Mr Pok previously owned 500,000 shares (4.67%) of Aimtop Holdings Pte Ltd, which in turn owns 100% of YIC and Yosure. Mr Pok, upon joining the Group as its Chief Operating Officer in January 2000, had divested his shares in Aimtop.

YIC and Yosure distribute electronic components mainly from Samsung and SGS Thomson (now known as STMicroelectronics). The electronic components distributed by YIC and Yosure are mainly classified as “commodity” components, i.e. the same components are also manufactured by other companies, while ACPL’s principals mainly manufacture “application-specific” components. Commodity components are targeted at the mass market with price and availability as being key to winning business. On the other hand, application-specific components are targeted at a niche market and customers with a longer selling process through value-added engineering and technical support. The selling process of the two electronic components are different.

Mr Pok is also currently holding 50% of the shareholding of Avnet. Avnet supplies electronic components mainly to three selected customers in Hong Kong and Taiwan. There is currently no territorial or customer conflict as the Group does not distribute such electronic components in Hong Kong and Taiwan. Furthermore, Mr Pok is in the process of disposing his shares in Avnet.

Future Interested Person Transactions Upon the listing of the Company on the SGX-ST, the Audit Committee of the Company will periodically review all interested person transactions (within the meaning of Chapter 9A of the SGX-ST Listing Manual) to ensure that they are conducted on commercial terms comparable to those extended to uninterested parties. The Group will comply with Chapter 9A of the SGX-ST Listing Manual in respect of all future interested person transactions. The Directors will ensure that all future interested person transactions will be on an arm’s length basis by undertaking, inter alia, the following procedures:-

(i) when purchasing from an interested person, to take into account the prices and terms of at least two other comparative offers from third parties. The purchase price shall not be higher than the most competitive price of the two other comparative offers from third parties;

(ii) when selling to an interested person, to take into account the prices and terms of at least two other successful sales to third parties. The sale price shall not be lower than the lowest sale price of the other two successful sales to third parties;

(iii) in determining the most competitive purchase price, the nature of the project, the cost and the experience and expertise of the supplier will be taken into consideration; and

(iv) should any future interested person transactions be on less preferential terms than as determined in steps (i) to (iii), the prior approval of the Board of Directors must be obtained.

71 The considerations in paragraphs (i) and (ii) above will allow for variation from the prices and terms of the comparative offers or, as the case may be, sales to the extent that the volume of trade, creditworthiness of the buyer, differences in service reliability or other relevant factors render justifiable and whether or not a comparative offer or, as the case may be, a sale shall be judged with reference to the volatility of the market for the goods and services in question.

In order to ensure that all future material interested person transactions (other than transactions in which Messrs Lim Yong Choon or Pok Tam Soon has an interest which are provided for in the next paragraph) in excess of $100,000 per transaction or in aggregate for a financial year are carried out on arm’s length basis and on commercial terms comparable to those extended to uninterested parties, prior approval from the Interested Person Transactions Monitoring Committee (“IPTMC”) currently comprising Messrs Ng Chee Seng, Soh Eng Kuang, Chia Chong Leong, Cheong Wai Chew and Angela Lim Ai Ping must first be sought before the transaction is conducted. In the event that a member of the IPTMC is interested in any such interested person transaction, he will abstain from reviewing that particular transaction. Further, all such transactions will be summarised and submitted to the Audit Committee to monitor compliance of the above procedures.

In respect of future material interested person transactions in excess of $100,000 per transaction or in aggregate for a financial year in which either Messrs Lim Yong Choon or Pok Tam Soon is interested, such transactions will be submitted to the Audit Committee for approval. In such instances, the Company will submit the relevant information as may be necessary to assist the Audit Committee in considering the same. In the event that a member of the Audit Committee is interested in any interested person transaction, he will abstain from reviewing that particular transaction.

The Board of Directors will also ensure that all disclosure requirements on interested person transactions, including those required by prevailing legislation, the Listing Manual of the SGX-ST and accounting standards, are complied with. In addition, such transactions will also be subject to shareholders’ approval if deemed necessary by the Listing Manual of the SGX-ST.

Save as disclosed above and in this Prospectus:-

(i) no Director or substantial shareholder of the Company or Executive Officer of the Group has had any interest, direct or indirect, in any material transaction to which the Company or its subsidiaries has undertaken;

(ii) no Director or substantial shareholder of the Company or Executive Officer of the Group has any interest, direct or indirect, in any company carrying on the same business or carrying on a similar trade as the Group; and

(iii) no Director or substantial shareholder of the Company or Executive Officer of the Group has any interest, direct or indirect, in any enterprise or company that is the Group’s customer or supplier of goods and services.

DIRECTORS, MANAGEMENT AND STAFF Directors The Board of Directors is entrusted with the responsibility for the overall management of the Company. The particulars of the Directors are listed below: Country of Principal Name Age Address Residence Current Occupation

Lim Yong Choon 44 24A Coldstream Avenue Singapore Executive Chairman, Singapore 459617 Group Chief Executive Officer & President, Achieva

Pok Tam Soon 48 5 Jalan Kemaman #11-04 Singapore Chief Operating Kemaman Point Officer, Achieva Singapore 329325

72 Country of Principal Name Age Address Residence Current Occupation

Ng Chee Seng 36 491C Tampines Street 45, Singapore Vice President, ACPL #11-212 Singapore 522491

Soh Eng Kuang 43 151H Kings Road #07-34 Singapore Vice President, AEPL Singapore 268165

Cheong Wai Chew 55 42 Everton Road, #09-03 Singapore Vice President, Asia Gardens Achieva Singapore 089394

Chia Chong Leong 34 12 Tanah Merah Kechil Ridge Singapore Vice President, ATPL Singapore 465597

Lew Syn Pau 46 20 Leonie Hill Singapore Managing Director, #02-26 Tower Block B Stanbridge Singapore 239222 International Pte Ltd

Goh Kian Hwee 45 5 Tanjong Rhu Road Singapore Partner, Lee & Lee #21-03 Singapore 436882

None of the Directors are related to one another.

Messrs Lew Syn Pau and Goh Kian Hwee are independent Directors. Mr Goh Kian Hwee is a partner of Lee & Lee who will be receiving a fee from the Company for legal services rendered in connection with the Invitation. The secretaries of the Company, Mr Adrian Chan Pengee and Ms Leong Shiao Yee, are from Lee & Lee. It is envisaged that the Group may continue to engage the services of Lee & Lee as and when the need arises. The Directors are of the view that the provision by Lee & Lee of such services will not interfere with Mr Goh Kian Hwee’s exercise of independent judgement in his role as a member of the Audit Committee.

Management The day-to-day operations of the Group are entrusted to the Executive Directors of the Company who are assisted by a management team of key executive officers (“Executive Officers”). The particulars of the Executive Officers are set out below:-

Country of Principal Name Age Address Residence Current Occupation

Lim Ai Ping, Angela 31 431 Jurong West Ave 1, Singapore Group Financial #08-294 Controller Singapore 640431

Lwee Nai Hock 44 56 West Coast Crescent, Singapore Technical Director, #03-12 AEPL Singapore 128038

Lam Yen Ling 31 150-5-2 Villa Flora Malaysia Country Manager, Taman Tun Dr Ismail, 6000 ATSB Kuala Lumpur Malaysia

73 Country of Principal Name Age Address Residence Current Occupation

Gui Yock Meng 32 160 Killiney Road #09-02 Singapore Sales Director, ACPL Singapore 239568

Oh Chon Seng 36 Blk 821, Woodlands St 82, Singapore Senior Technical #07-373 Application Manager, Singapore 730821 ACPL

Tan Phuan Lam 40 65 Jalan Ibukota Kiri, Malaysia General Manager, Taman Ibukota ACSB 53100 Kuala Lumpur Malaysia

None of the Executive Officers are related to any other Executive Officer, Director or substantial shareholder of the Company.

Further information on the Directors and Executive Officers are contained in the section “Information on Directors and Executive Officers” on pages 102 to 108 of this Prospectus.

CORPORATE GOVERNANCE AND AUDIT COMMITTEE Presently, the business and operations of the Group are under the management and supervision of the President and Vice Presidents of the Company, namely Messrs Lim Yong Choon, Pok Tam Soon, Ng Chee Seng, Soh Eng Kuang and Chia Chong Leong. Generally, management of the day-to-day operations of the Group is overseen by Mr Lim Yong Choon, while Messrs Pok Tam Soon, Ng Chee Seng, Soh Eng Kuang and Chia Chong Leong manage the respective operating subsidiary groups and the marketing aspects.

The Audit Committee comprises the two independent Directors and Mr Pok Tam Soon. Mr Lew Syn Pau is the Chairman of the Audit Committee.

Recognising the importance of corporate governance and the need to offer the highest standards of accountability to the shareholders of the Company, the Audit Committee intends to meet periodically to perform the following functions:-

(i) review the audit plans of the Company’s external auditors;

(ii) review the external auditors’ evaluation of the system of internal controls;

(iii) review the external auditors’ reports;

(iv) review the co-operation given by the Company’s officers to the external auditors;

(v) review the financial statements of the Company and the Group before their submission to the Board of Directors;

(vi) nominate external auditors for re-appointment; and

(vii) review interested person transactions.

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 the Group’s operating results and/or financial position.

74 Staff As at 31 December 1999, the Group had a total of 195 full-time employees. They comprised 13 directors, 38 managers, 60 technical non-managers and 84 administrative staff. The relationship between the management and staff has been good. There has not been any industrial dispute in the Group in the past three years.

SERVICE AGREEMENTS AND PROFIT SHARING ARRANGEMENTS Currently, the Executive Directors of the Company, namely Messrs Lim Yong Choon, Pok Tam Soon, Ng Chee Seng, Soh Eng Kuang, Cheong Wai Chew and Chia Chong Leong have signed letters of appointment with the Group. Their services may be terminated by either party giving no less than three months’ notice.

Directors’ Remuneration The remuneration of the Directors on an aggregate basis and in remuneration bands for FY 1998 and FY 1999 are as follows:-

(a) Aggregate Directors’ remuneration by category

< FY 1998 >< FY 1999 > Non- Non- Executive Executive Executive Executive Directors Directors Total Directors Directors Total $$$$ 633,852 0 633,852 1,139,998 0 1,139,998

(b) Number of Directors in remuneration bands < FY 1998 >< FY 1999 > Non- Non- Executive Executive Executive Executive Directors Directors Total Directors Directors Total

$500,000 and above — — — — — — $250,000 to $499,999 — — — 2 — 2 below $250,000 5 — 5 4 — 4 5—56—6

Profit sharing arrangements The Group has implemented a profit sharing scheme pursuant to which the directors and/or senior management members of each direct subsidiary who have contributed significantly to the relevant subsidiary (“Participants”) may participate. Currently, the Company has four direct subsidiaries which participate in this scheme, namely, ACPL, AEPL, ATPL and SHSB. Participants are entitled, in each financial year, to an aggregate of ten (10) per cent. of the profit before tax (after minority interests, exceptional and extraordinary items but before provision for directors’ fees) of the particular direct subsidiary. On consolidation, the payments arising from the profit sharing scheme may, in aggregate, be more than ten (10) per cent. of the profit before tax (after minority interests, exceptional and extraordinary items but before provision for directors’ fees) on a consolidated Group basis.

75 The proportion in which the profit available for distribution for each direct subsidiary will be allocated to each Participant as determined by an ad-hoc committee comprising the executive directors of that direct subsidiary together with the Chief Executive Officer and Chief Operating Officer of the Group. The criteria used in determining such allocation include, inter alia, the extent to which the duties assigned to the relevant Participant have been satisfactorily performed, his ability to suggest new business ideas which are viable, his ability to execute ideas and business plans as well as the extent to which performance targets set for him have been achieved. Each Participant will however not be involved in the deliberations in respect of the proportion of profits to be allocated to himself. Any disputes arising from or in connection with the profit sharing scheme will be referred to the Audit Committee whose decision shall be final and binding.

In addition, each Participant is also entitled to an annual wage supplement of one month’s pay.

GRANT OF SHARE OPTIONS TO EMPLOYEES On 19 May 2000, the Company entered into an agreement with 10 selected employees of the Group, namely the Achieva Share Option Agreement (the “SOA”), pursuant to which options to subscribe for an aggregate of 2,100,000 Shares were granted to 10 selected employees of the Group on a one-off basis at a consideration of $1.00 for each employee.

The options were granted with an exercise price of $0.10 per Share (subject to such adjustments as provided in the SOA). Such exercise price is approximately equal to the post-Invitation NTA per Share as at 31 December 1999. The employees may exercise the options to subscribe for not more than 40% of the Shares under such options on or after the date falling 2 years from the date of admission of the New Shares to the Official List of SGX-ST (the “Listing Date”) and may exercise the options to subscribe for the remaining Shares on or after the date falling 3 years from the Listing Date, provided that (i) no options shall be exercisable on or after the fourth anniversary of the Listing Date and (ii) the exercising employee remains an employee on the date of the exercise. These options, if fully exercised, amount to approximately 0.5 per cent. of the post-Invitation issued share capital of the Company.

Owing to the nature of the Group’s business, its human resources are a valuable asset and the retention of highly trained and qualified employees and the motivation of such employees are of importance to the Group’s business. As such employees are in high demand in the IT industry, the Group believes that the grant of share options should be an effective tool in retaining and motivating them. Such options will provide the employees with an opportunity to participate in the equity of the Company and will act as an incentive for them to continue to contribute to the long-term growth of the Group.

In-principle approval has been received from SGX-ST for the listing and quotation for the new Shares to be issued pursuant to the SOA.

Details on the number of options granted, the number of options exercised and the exercise price (as well as the discount involved) will be disclosed in the annual report of the Company. The Directors who have been appointed to administer the SOA are Mr Lim Yong Choon and Mr Pok Tam Soon who are not participants of the SOA.

The details of the options granted to each employee under the SOA are as follows:-

Name Address Designation No. of Shares under options granted

Tang Joo Cheng Blk 236 Hougang Senior Field 300,000 Avenue 1 #13-278 Application Engineer Singapore 530236

Soh Beng Chye Blk 505 Woodlands Field Application 300,000 Drive 14 #04-68 Manager Singapore 730505

76 Name Address Designation No. of Shares under options granted

Lim Ai Ping, Angela 431 Jurong West Group Financial 300,000 Avenue 1, #08-294 Controller Singapore 640431

Thum Kent Fong No 63 Cangkat Minden, Customer Service 250,000 Jalan 2, Glugor 11700 Manager Pulau Pinang

Liew Thian Hock Blk 895B Woodlands Product Marketing 200,000 Drive 50 #03-20 Manager Singapore 731895

Lee Chee Khiang Blk 654 Woodlands Sales Manager 200,000 Ring Road #04-370 Singapore 730654

Ee Yuen Ping Blk 14 Toa Payoh Sales Operation 200,000 Lorong 7 #24-219 Manager Singapore 310014

Lee Kwee Ling 46 Jalan Bukit Candan, Internal Audit 150,000 Batu 4.1/2, Jalan Ipoh, Manager 51200 Kuala Lumpur

Wayne Kusuma Blk 211 Serangoon Sales Manager 100,000 Avenue 4 #08-36 Singapore 550211

Lam Yen Ling 150-5-2 Villa Flora Country Manager – 100,000 Taman Tun Dr Ismail, Malaysia 6000 Kuala Lumpur

Total 2,100,000

Save as disclosed above, no person has been, or is entitled to be, granted an option to subscribe for shares in the Company or any of its subsidiaries.

77 PROPERTIES AND FIXED ASSETS As at 31 December 1999, the Group had interests in the following properties:-

Cost/Valuation Accumulated Net book value as at depreciation as at Description 31 December 31 December 31 December 1999 1999 1999 ($’000) ($’000) ($’000)

1 3 ⁄2-storey office-shop lot located at 281 9 272 No. 9 Jalan Kenari 2, Bandar Puchong Jaya, 47100 Puchong Jaya, Malaysia Land area: 1,800 sq ft Built-in area: 6,125 sq ft Tenure: Freehold Flatted factory unit located at 1,228 49 1,179 37 Kallang Pudding Road #09-03 Tong Lee Building Blk B, Singapore 349314 Built-in area: 2,820 sq ft Tenure: Freehold

All the properties described above are not intended for redevelopment.

The Group has the intention to acquire office-cum-warehouse premises for the purposes of housing the Group’s operations in Singapore. The Group expects to incur a capital commitment of approximately $5 million in the acquisition, renovation and furnishing of the premises. The Group intends to fund this investment by bank borrowings and internal resources.

The fixed assets of the Group, comprising of properties, equipment and motor vehicles had a net book value of approximately $2.7 million as at 31 December 1999.

SUBSIDIARY COMPANIES The details of the Company’s subsidiaries as at the date of this Prospectus are as follows:-

Date and Issued and Name of place of paid-up % subsidiary incorporation Principal business capital owned

Held by APL AEPL 14/09/94 Distributor and commission agent S$900,000 100 Singapore of electronic inter-connectivity devices and structured cabling and premise wiring

ACPL 04/08/95 Distributor and manufacturers’ S$716,667 100 Singapore representative of electronic components and related products

78 Date and Issued and Name of place of paid-up % subsidiary incorporation Principal business capital owned

ATPL 15/06/96 Distributor of information technology S$602,041 100 Singapore computer peripherals, components and software

SHSB 10/01/94 Investment holding, rental of RM749,553 1001 Malaysia properties and general trading

Held by AEPL AESB 04/08/98 Distributor and commission agent of RM2 100 Malaysia inter-connectivity devices and structured cabling products

ACL 19/12/97 Distributor and commission agent of HKD10,000 60 Hong Kong inter-connectivity products, structured USD100,000 cabling and cable TV products

Held through ACPL ACSB 27/09/95 Distributor and manufacturers’ RM300,000 100 Malaysia representative of electronic components

Held by ATPL ATSB 08/06/96 Distribution of information technology RM200,000 100 Malaysia computer peripherals, parts, software and related products

ATAPL 05/06/98 Distribution of information technology S$200,000 51 Singapore computer peripherals, parts, software and related products

ATEAPL 09/10/96 Distribution of information technology S$350,000 51 Singapore computer peripherals, parts, software and related products

ATPPL 17/04/99 Distribution of information technology S$2 100 Singapore computer peripherals, parts, software and related products

ATSCPL 17/04/99 Provide contract repairs and S$2 100 Singapore maintenance services of information technology systems and personal computers

1 The Company is currently the registered holder of 47.36% of the shares in Stacks Holdings Sdn. Bhd. Deeds of transfers have been entered into between the Company and the registered holders of the remaining shares in Stacks Holdings Sdn. Bhd., Messrs Pok Tam Soon and Nah Soo Hoe, to transfer the remaining 52.64% shares in Stacks Holdings Sdn. Bhd. to the Company for a nominal consideration of S$2. The transfers of shares are pending registration.

79 Date and Issued and Name of place of paid-up % subsidiary incorporation Principal business capital owned

Held by ATSB ASCSB 15/10/98 Provide contract repairs and RM100,000 80 Malaysia maintenance services of information technology systems and personal computers

Held by ATAPL ATAPL 03/06/98 Distribution of information technology A$2 51 (Aust) Australia computer peripherals, parts, software and related products

Held by SHSB2 MNSB 29/10/96 Distributor of networking computer RM250,002 100 Malaysia products and providing contract maintenance and services for data networking systems

STSB 10/01/94 Distribution of data networking RM1,350,002 100 Malaysia products and planning, configuration and installation of data networking systems

SSSB 10/01/94 Trading in computer hardware and RM2 100 Malaysia software and all its related products and services

None of the Company’s subsidiaries is listed on any stock exchange.

2 The Company is currently the registered holder of 47.36% of the shares in Stacks Holdings Sdn. Bhd. Deeds of transfers have been entered into between the Company and the registered holders of the remaining shares in Stacks Holdings Sdn. Bhd., Messrs Pok Tam Soon and Nah Soo Hoe, to transfer the remaining 52.64% shares in Stacks Holdings Sdn. Bhd. to the Company for a nominal consideration of S$2. The transfers of shares are pending registration.

80 DIRECTORS’ REPORT

20 May 2000

The Shareholders Achieva Limited 35 Kallang Pudding Road Tong Lee Building A #09-05 Singapore 349314

Dear Sirs

This report has been prepared for inclusion in the prospectus (the “Prospectus”) by Achieva Limited (the “Company”) dated 20 May 2000 in connection with the Invitation in respect of 103,540,000 new ordinary shares of $0.05 each in the capital of the Company.

On behalf of the Directors of the Company, I report that, having made due inquiry in relation to the period between 31 December 1999, the date to which the last audited consolidated accounts of the Company and its subsidiaries were made up, and 20 May 2000, being a date not earlier than 14 days before the issue of this Prospectus:-

(a) the business of the Company and its subsidiaries has, in the opinion of the Directors, been satisfactorily maintained;

(b) save as disclosed in the section “Review of Past Performance” on pages 48 to 54 and the section “Finance” on pages 54 to 56 of this Prospectus, in the opinion of the Directors, no circumstances have arisen since the last Annual General Meeting of the Company which would adversely affect the trading or the value of the assets of the Company or any of its subsidiaries;

(c) the current assets of the Company and of its subsidiaries appear in the books at values which are believed to be realisable in the ordinary course of business;

(d) no contingent liabilities have arisen by reason of any guarantees given by the Company or any of its subsidiaries; and

(e) save for the Restructuring Exercise disclosed on pages 26 and 27 of this Prospectus and the bonus issues referred to on pages 23 and 24 and save as disclosed in the section “Review of Past Performance” on pages 48 to 54 and the section “Finance” on page 54 to 56, there have been no changes in the published reserves or any unusual factors affecting the profits of the Company and its subsidiaries since the last annual report.

Yours faithfully for and on behalf of the Board of Directors

Lim Yong Choon Group Chief Executive Officer and President Achieva Limited

81 ACCOUNTANTS’ REPORT

20 May 2000

The Board of Directors Achieva Limited 35 Kallang Pudding Road Tong Lee Building A #09-05 Singapore 349314

Dear Sirs,

This report has been prepared for inclusion in the Prospectus of Achieva Limited (the “Company”) dated 20 May 2000 in connection with the Invitation by the Company in respect of 103,540,000 ordinary shares of S$0.05 each in the capital of the Company comprising 21,000,000 ordinary shares at S$0.22 per share by way of public offer and 82,540,000 ordinary shares by way of placement (the “Placement Shares”) payable in full on application. The Placement Shares comprise 74,286,000 ordinary shares at S$0.22 per share and 8,254,000 reserved shares at S$0.20 per share for subscription by the employees, management and directors of the Group.

A. The Company The Company was incorporated in Singapore on 3 November 1993 as a private exempt limited company under the name of Achieva Pte Ltd. It was converted into a public limited company on 11 April 2000 and changed its name to Achieva Limited.

The principal activities of the Company are those of investment holding and provision of management services. The principal activities of the subsidiary companies are disclosed in Section B.

The authorised, issued and paid-up share capital of the Company at 31 December 1999 was S$30,000,000 and S$10,178,077 respectively comprising 30,000,000 and 10,178,077 ordinary shares of S$1.00 each respectively.

The changes in the authorised and issued share capital of the Company since the date of its incorporation to 31 December 1999 are as follows:-

(a) during the financial year ended 31 December 1994, the Company issued two subscriber shares of S$1.00 each and 979,998 fully paid ordinary shares of S$1.00 each for cash to its shareholders;

(b) during the financial year ended 31 December 1995, the Company increased its authorised share capital from S$2,000,000 to S$3,000,000 by the creation of 1,000,000 ordinary shares of S$1.00 each. The Company further issued 410,000 ordinary shares of S$1.00 each at par and 950,000 ordinary shares of S$1.00 each at a premium of S$0.05 per share for cash;

(c) during the financial year ended 31 December 1996, the Company increased its authorised share capital from S$3,000,000 to S$6,000,000 by the creation of 3,000,000 ordinary shares of S$1.00 each. In addition, the Company issued 1,000,000 ordinary shares of S$1.00 each at a premium of S$0.40 per share for cash;

(d) during the financial year ended 31 December 1997, the Company issued 1,500,000 ordinary shares of S$1.00 each at a premium of S$1.00 per share for cash;

82 A. The Company (Cont’d) (e) during the financial year ended 31 December 1998, the Company issued 500,000 ordinary shares of S$1.00 each at a premium of S$1.00 per share for cash; and

(f) during the financial year ended 31 December 1999, the Company increased its authorised share capital from S$6,000,000 to S$30,000,000 by the creation of 24,000,000 ordinary shares of S$1.00 each. In addition, the Company issued 2,447,500 ordinary shares of S$1.00 each at par, by way of a bonus issue from the Company’s share premium account and acquired the remaining equity interests in the following subsidiary companies from the minority shareholders for consideration based on the audited net tangible assets of the respective subsidiary companies as at 31 December 1998. The total consideration was satisfied by the issue of 2,390,577 new ordinary shares of S$1.00 each in the capital of the Company at S$1.3876 per share credited as fully paid upon issue as follows:

Equity Number of interest new ordinary Name of company acquired Consideration shares issued %S$

Achieva Electronics Pte Ltd 12.5 190,872 137,559 Achieva Components Pte Ltd 30.0 764,766 551,160 Achieva Technology Pte Ltd 49.0 2,361,447 1,701,858 3,317,085 2,390,577

At a subsequent extraordinary general meeting held on 7 April 2000, the shareholders of the Company, approved, inter alia, the following:

(a) the capitalisation of S$4,425,801 and S$926,509 from the Company’s revenue reserve and share premium account respectively by way of a bonus issue of 5,352,310 ordinary shares of S$1.00 each credited as fully paid to the shareholders;

(b) the sub-division of each ordinary share of S$1.00 in the authorised and issued and paid- up share capital of the Company into 20 ordinary shares of S$0.05 each (the “Sub-division of Shares”);

(d) the adoption of a new set of Articles of Association of the Company.

At an annual general meeting held on 19 May 2000, the Shareholders of the Company approved, inter alia, the following:

(a) the issue of 103,540,000 New Shares pursuant to the Invitation which when fully paid, allotted and issued, will rank pari passu in all respects with the existing issued Shares of the Company (the “Issue of New Shares”);

(b) that the Directors be authorised, pursuant to Section 161 of the Act, to issue shares in the Company at any time, provided that the aggregate number of shares issued pursuant to such authority shall not exceed 50% of the issued share capital of the Company for the time being, and provided further that where shareholders of the Company are not given an opportunity to participate in the same, then the shares to be issued under such circumstances shall not exceed 20% of the issued share capital of the Company for the time being and, unless revoked or varied by the Company in general meeting, such authority shall continue in full force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is earlier; and

83 (c) the approval of the Achieva Share Option Agreement and the authorisation to the Directors to grant options in accordance with the Achieva Share Option Agreement and to issue and allot Shares upon the exercise of any such options and to do all acts and things which they may consider necessary or expedient to carry the same into effect.

B. The Group At the date of this report, the Company has the following interests in the subsidiary companies (referred to collectively with the Company as “the Group”):-

Date and Issued and Percentage country of fully paid-up of equity held Principal activities Name of company incorporation share capital by the Group (Place of business) % Held by the Company Achieva Electronics 14 September 1994 S$900,000 100.00 Distributor and commission Pte Ltd (Singapore) agent of electronic inter- connectivity devices and structured cabling and premise wiring (Singapore)

Achieva Components 4 August 1995 S$716,667 100.00 Distributor and Pte Ltd (Singapore) manufacturers’ representative of electronic components and related products (Singapore)

Achieva Technology 15 June 1996 S$602,041 100.00 Distributor of information Pte Ltd (Singapore) technology computer peripherals, components and software (Singapore)

Stacks Holdings 10 January 1994 RM749,553 100.00# Investment holding, rental Sdn. Bhd. (Malaysia) of properties and general trading (Malaysia)

Held through Achieva Electronics Pte Ltd Achieva Electronics 4 August 1998 RM2 100.00 Distributor and commission Sdn. Bhd. (Malaysia) agent of inter-connectivity devices and structured cabling products (Malaysia)

Achieva China Ltd 19 December 1997 HKD10,000 60.00 Distributor and commission (Hong Kong) USD100,000 agent of inter-connectivity products, structured cabling and cable TV products (Hong Kong) Held through Achieva Components Pte Ltd Achieva Components 27 September 1995 RM300,000 100.00 Distributor and Sdn. Bhd. (Malaysia) manufacturers’ representative of electronic components (Malaysia)

84 B. The Group (Cont’d)

Date and Issued and Percentage country of fully paid-up of equity held Principal activities Name of company incorporation share capital by the Group (Place of business) %

Held through Achieva Technology Pte Ltd Achieva Technology 8 June 1996 RM200,000 100.00 Distribution of information Sdn. Bhd. (Malaysia) technology computer peripherals, parts, software and related products (Malaysia)

Achieva Technology 9 October 1996 S$350,000 51.00 Distribution of information East Asia Pte Ltd (Singapore) technology computer peripherals, parts, software and related products (Singapore)

Achieva Technology 5 June 1998 S$200,000 51.00 Distribution of information Australia Pte Ltd (Singapore) technology computer peripherals, parts, software and related products (Singapore)

Achieva Technology 17 April 1999 S$2 100.00 Provide contract repairs Service Centre (Singapore) and maintenance services Pte Ltd of information technology systems and personal computers (Singapore)

Achieva Technology 17 April 1999 S$2 100.00 Distribution of information Philippines Pte Ltd (Singapore) technology computer peripherals, parts, software and related products (Philippines)

Held through Achieva Technology Sdn. Bhd. Achieva Service 15 October 1998 RM100,000 80.00 Provide contract repairs Centre Sdn. Bhd. (Malaysia) and maintenance services of information technology systems and personal computers (Malaysia)

Held through Achieva Technology Australia Pte Ltd Achieva Technology 3 June 1998 A$2 51.00 Distributor of information Australia Pty Ltd (Australia) technology computer peripherals, parts, software and related products (Australia)

Held through Stacks Holdings Sdn. Bhd. Stacks Technology 10 January 1994 RM1,350,002 100.00# Distribution of data Sdn. Bhd. (Malaysia) networking products and planning, configuration and installation of data networking systems (Malaysia)

85 B. The Group (Cont’d)

Date and Issued and Percentage country of fully paid-up of equity held Principal activities Name of company incorporation share capital by the Group (Place of business) %

Mangrove Networks 29 October 1996 RM250,002 100.00# Distributor of networking Sdn. Bhd. (Malaysia) computer products and providing contract maintenance and services for data networking systems (Malaysia)

Stacks Systems 10 January 1994 RM2 100.00# Trading in computer Sdn. Bhd. (Malaysia) hardware and software, and all its related products and services (Malaysia)

# The Company is currently the registered holder of 47.36% of the shares in Stacks Holdings Sdn. Bhd.. Deeds of transfers have been entered into between the Company and the registered holders of the remaining shares in Stacks Holdings Sdn. Bhd., Messrs Pok Tam Soon and Nah Soo Hoe, to transfer the remaining 52.64% shares in Stacks Holdings Sdn. Bhd. to the Company for a nominal consideration of S$2. The transfers of shares are pending registration.

C. Financial Information The financial information set out in this report is expressed in Singapore dollars and shows the Proforma Statement of Group Results for each of the four financial years ended 31 December 1995 to 31 December 1998 and the Statement of Group results for the financial year ended 31 December 1999, the Summarised Proforma Balance Sheets of the Group as at the end of each of the four financial years ended 31 December 1995 to 31 December 1998 and the Summarised Balance Sheet of the Group as at the end of the financial year ended 31 December 1999, and the Statement of Net Assets of the Group and of the Company as at 31 December 1999.

The Proforma Statement of Group Results and the Summarised Proforma Balance Sheets have been prepared on the basis that the Group Structure as outlined above has been in existence throughout the period under review, or since the respective dates of incorporation of the companies in the Group, if later. The financial information is based on the audited financial statements and management accounts for companies where the financial year end were not co-terminous with the Group, after making such adjustments as we considered appropriate. Such financial information has been prepared in accordance with the accounting policies set out in Section H.

The objective of the proforma financial information of the Group is to show what the historical information might have been had the Group listed above existed at an earlier date. However, the proforma financial information 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 above mentioned Group actually existed earlier.

We have been the auditors of the Company since the financial year ended 31 December 1997. Prior to the financial year ended 31 December 1997, the financial statements were audited by S.S. Lim & Co. for financial year ended 31 December 1995, and by Chio Lim & Associates for financial year ended 31 December 1996.

86 C. Financial Information (Cont’d)

The financial statements of the subsidiary companies were audited by the following firms:

Name of company Auditors Financial year/period

Held by the Company Achieva Electronics S.S. Lim & Co. For financial period from 14 September Pte Ltd 1994 (date of incorporation) to 31 December 1995

Chio Lim & Associates For financial year ended 31 December 1996

Ernst & Young, Singapore For financial years ended 31 December 1997 to 31 December 1999

Achieva Components Chio Lim & Associates For financial period from 4 August 1995 Pte Ltd (date of incorporation) to 31 December 1996

Ernst & Young, Singapore For financial years ended 31 December 1997 to 31 December 1999

Achieva Technology Ernst & Young, Singapore For financial period from 15 June 1996 Pte Ltd (date of incorporation) to 31 December 1997 and financial years ended 31 December 1998 to 31 December 1999

Stacks Holdings GEP Associates For financial periods from 10 January Sdn. Bhd. 1994 (date of incorporation) to 28 February 1995 and 1 March 1995 to 31 December 1995 and financial years ended 31 December 1996 to 31 December 1999

Held through Achieva Electronics Pte Ltd Achieva Electronics Horwath Teoh Yap For financial period from 4 August 1998 Sdn. Bhd. (date of incorporation) to 31 December 1998

Ernst & Young, Malaysia For financial year ended 31 December 1999

Achieva China Ltd Horwath Hong Kong For financial period from 19 December CPA Limited 1997 (date of incorporation) to 31 December 1998

Ernst & Young, For financial year ended 31 December Hong Kong 1999

Held through Achieva Components Pte Ltd Achieva Components Horwath Mok & Poon For financial period from 27 September Sdn. Bhd. 1995 (date of incorporation) to 31 December 1996 and financial years ended 31 December 1997 to 31 December 1999

87 C. Financial Information (Cont’d)

Name of company Auditors Financial year/period

Held through Achieva Technology Pte Ltd Achieva Technology Ernst & Young, Malaysia For financial period from 8 June 1996 Sdn. Bhd. (date of incorporation) to 31 December 1997 and financial years ended 31 December 1998 to 31 December 1999

Achieva Technology Chio Lim & Associates For financial period from 9 October East Asia Pte Ltd 1996 (date of incorporation) to 31 December 1997 and financial year ended 31 December 1998

Ernst & Young, Singapore For financial year ended 31 December 1999

Achieva Technology Ernst & Young, Singapore For financial period from 5 June 1998 Australia Pte Ltd (date of incorporation) to 31 December 1998 and financial year ended 31 December 1999

Achieva Technology Ernst & Young, Singapore For financial period from 17 April 1999 Service Centre (date of incorporation) to 31 December Pte Ltd 1999

Achieva Technology Ernst & Young, Singapore For financial period from 17 April 1999 Philippines Pte Ltd (date of incorporation) to 31 December 1999 Held through Achieva Technology Sdn. Bhd. Achieva Service Centre Ernst & Young, Malaysia For financial period from 15 October Sdn. Bhd. 1998 (date of incorporation) to 31 December 1999

Held through Achieva Technology Australia Pte Ltd Achieva Technology Anderson’s Chartered For financial period from 3 June 1998 Australia Pty Ltd Accountants (formerly (date of incorporation) to 31 December known as J. Lee & Co 1998 and financial year ended 31 Pty Ltd) December 1999

Held through Stacks Holdings Sdn. Bhd. Stacks Technology GEP Associates For financial periods from 10 January Sdn. Bhd. 1994 (date of incorporation) to 28 February 1995, 1 March 1995 to 31 December 1995 and financial years ended 31 December 1996 to 31 December 1999

Mangrove Networks GEP Associates For financial period from 29 October Sdn. Bhd. 1996 (date of incorporation) to 31 December 1997 and financial years ended 31 December 1998 to 31 December 1999

88 C. Financial Information (Cont’d)

Name of company Auditors Financial year/period

Stacks Systems GEP Associates For financial periods from 10 January Sdn. Bhd. 1994 (date of incorporation) to 28 February 1995, 1 March 1995 to 31 December 1995 and financial years ended 31 December 1996 to 31 December 1999

The auditors’ report on the financial statements of the Company and its subsidiary companies for the year ended 31 December 1995 was qualified on the basis that the financial statements of Achieva Business Development, Inc. (“ABDI”) and Achieva Components Pte Ltd (“ACPL”) were not consolidated as the financial statements of these two subsidiary companies were not available for the year ended 31 December 1995.

As the first set of financial statements of ACPL was included in the consolidated financial statements of the Company for the year ended 31 December 1996 and ABDI was disposed in 1997, this audit qualification has no impact on the proforma financial information presented as retrospective adjustments have been made.

Other than the above, the auditors’ reports on the financial statements of the Company and its subsidiary companies for the period under review were not subject to any qualification.

D. Statement of Group Results The Proforma Statement of Group Results for each of the four financial years ended 31 December 1995 to 31 December 1998 and the Statement of Group results for the financial year ended 31 December 1999, prepared on the basis set out in Section C above, after making such adjustments as we considered appropriate, are as follows:

Note 1995 1996 1997 1998 1999 S$’000 S$’000 S$’000 S$’000 S$’000

Turnover E1 6,645 43,508 135,380 190,470 229,216

Operating profit before taxation E2 316 1,292 2,566 5,463 7,215 Taxation E3 (84) (389) (1,199) (1,116) (1,871) Profit after taxation 232 903 1,367 4,347 5,344 Minority interests — — — (256) (406) Profit after taxation and minority interests 232 903 1,367 4,091 4,938 Extraordinary item E4 — — — — (388) Profit attributable to shareholders 232 903 1,367 4,091 4,550

89 E. Notes to Statement of Group Results 1. Turnover Turnover represents the invoiced value of goods supplied and services rendered to customers less returns and discounts, sales commission income and rental income.

Transactions within the Group have been excluded in the Group turnover.

2. Operating profit before taxation 1995 1996 1997 1998 1999 S$’000 S$’000 S$’000 S$’000 S$’000

Operating profit before taxation is stated after charging/(crediting): Depreciation 76 171 370 501 671 Directors’ emoluments — Company 78 363 61 145 140 — others — — 275 489 1,000 Interest expense: — others 17 144 458 979 1,460 — directors — — 9 6 5 — related parties — — — 206 325 Preliminary expenses written off 8 2 1 3 — Doubtful debts — — 73 160 174 Fixed assets written off — 6 1 23 56 (Gain)/loss on disposal of fixed assets — (17) — 4 (2) Interest income: — bank (15) (52) (169) (362) (418) — others — — (5) — — Net exchange (gain)/loss (11) 67 2,015 (655) (170)

3. Taxation 1995 1996 1997 1998 1999 S$’000 S$’000 S$’000 S$’000 S$’000

The taxation charge comprises: Current taxation 77 383 960 1,333 1,911 Deferred taxation 7 6 226 (218) (40) Underprovision in prior years — — 13 1 — 84 389 1,199 1,116 1,871

The taxation charge for the years ended 31 December 1996 and 1997 were higher than the amount determined by applying the applicable income tax rates to the pre-tax profits of the Group because of certain non-deductible expenses and losses incurred by certain subsidiary companies which cannot be offset against profits by other subsidiary companies.

The taxation charge for the year ended 31 December 1998 was lower than the amount determined by applying the applicable income tax rates to the pre-tax profits of the Group because of the utilisation of unutilised tax losses in the Company and certain subsidiary companies.

90 E. Notes to Statement of Group Results (Cont’d)

4. Extraordinary item The extraordinary item in 1999 represents the loss on disposal of a leasehold property.

5. Significant related party transactions Significant transactions between the Group and companies which one or more of the directors of the Company were also directors and/or substantial shareholders, were as follows:

1995 1996 1997 1998 1999 S$’000 S$’000 S$’000 S$’000 S$’000

Sale to related parties (207) (3,119) (2,151) (973) (278) Purchases from related parties 15 5,232 419 799 1,495 Rental paid to a related party — 31 158 157 128 Management fee paid to a related party — 12 — — — Administrative fee paid to a related party — — 8 6 4 Interest paid to a related party — — — 206 325

6. Statement of adjustments The Proforma Statement of Group Results have been arrived at after taking into account the following adjustments:

(a) allocation of prior period adjustments to the appropriate years;

(b) allocation of results of subsidiary companies to the appropriate years;

(d) inclusion of rental income and sales commission as turnover; and

(e) adjustment for minority interests based on the current group structure.

6.1 Turnover 1995 1996 1997 1998 1999 S$’000 S$’000 S$’000 S$’000 S$’000

Per audited financial statements 925 49,961 134,880 190,470 229,216 Adjustments: See (a) above 3,615 — — — — See (b) above 3,436 (2,756) — — — See (c) above (1,331) (3,726) — — — See (d) above — 29 500 — — As stated in this report 6,645 43,508 135,380 190,470 229,216

91 E. Notes to Statement of Group Results (Cont’d) 6.2 Operating profit before taxation 1995 1996 1997 1998 1999 S$’000 S$’000 S$’000 S$’000 S$’000

Per audited financial statements 114 1,494 2,566 5,463 7,215 Adjustments: See (a) above (15) — — — — See (b) above 160 (53) — — — See (c) above 57 (149) — — — As stated in this report 316 1,292 2,566 5,463 7,215

6.3 Share of profit of associated companies

Per audited financial statements 4 — — — — Adjustment: See (a) above (4) — — — — As stated in this report — — — — —

6.4 Taxation Per audited financial statements (63) (389) (1,199) (1,116) (1,871) Adjustments: See (a) above 3 — — — — See (b) above (21) — — — — See (c) above (3) — — — — As stated in this report (84) (389) (1,199) (1,116) (1,871)

6.5 Minority interests Per audited financial statements (11) (211) (879) (1,937) (406) Adjustments: See (a) above (3) — — — — See (b) above (21) 16 — — — See (c) above 3 6 — — — See (e) above 32 189 879 1,681 — As stated this report — — — (256) (406)

6.6 Extraordinary items Per audited financial statements — — (64) — (388) Adjustment: See (c) above — — 64 — — As stated in this report — — — — (388)

92 F. Summarised Balance Sheets of the Group The Summarised Proforma Balance Sheets of the Group as at the end of each of the four financial years ended 31 December 1995 to 31 December 1998 and the Summarised Balance Sheet of the Group as at the end of the financial year ended 31 December 1999, prepared on the basis set out in Section C above, after making adjustments as we considered appropriate, are as follows:

1995 1996 1997 1998 1999 S$’000 S$’000 S$’000 S$’000 S$’000

Shareholders’ equity 2,087 4,651 9,068 14,123 18,660

Represented by: Fixed assets 436 3,648 3,761 3,939 2,661 Other investments 26 26 26 26 26 Current assets 3,432 14,525 44,400 61,031 61,954 Less: Current liabilities (1,576) (11,729) (37,360) (48,782) (44,115) Net current assets 1,856 2,796 7,040 12,249 17,839

Non-current liabilities (231) (1,819) (1,759) (1,499) (859) Minority interests — — — (592) (1,007) 2,087 4,651 9,068 14,123 18,660

The movements in the shareholders’ equity of the Group for each of the five financial years ended 31 December 1995 to 31 December 1999 are as follows:

Balance brought forward 374 2,087 4,651 9,068 14,123 Issue of new shares 1,360 1,000 1,500 500 — Premium on issue of new shares 48 400 1,500 500 — Profit attributable to shareholders 232 903 1,367 4,091 4,550 Currency realignment (12) 16 (167) (36) (13) Acquisition of the remaining equity interests in subsidiary companies from the minority shareholders 85 245 217 — — Balance carried forward 2,087 4,651 9,068 14,123 18,660

93 G. Statement of Net Assets

The Statement of Net Assets of the Group and of the Company as at 31 December 1999, prepared on the basis set out in Section C above, are as follows:

Note Group Company S$’000 S$’000

Shareholders’ equity 18,660 11,266

Fixed assets I1 2,661 1,286 Investment in subsidiary companies I2 — 5,003 Other investment I3 26 26 Current assets Stocks I4 20,135 — Trade debtors I5 24,720 1,357 Other debtors I6 2,746 331 Amount due from subsidiary companies — 479 Amount due from related party I7 67 — Fixed deposits 6,368 3,651 Cash and bank balances 7,918 188 61,954 6,006 Deduct: Current liabilities Amounts due to bankers I8 16,696 — Trade creditors 17,134 — Other creditors and other accruals 5,715 274 Amount due to related party I7 1,666 — Term loans I9 110 90 Obligations under finance lease contracts I10 55 — Provision for taxation 2,739 85 44,115 449

Net current assets 17,839 5,557 Non-current liabilities Term loans I9 753 606 Obligations under finance lease contracts I10 101 — Deferred taxation 5 —

(859) (606) Minority interests (1,007) — 18,660 11,266

94 H. Significant Accounting Policies The significant accounting policies of the Group, which have been consistently applied in the preparation of the financial information set out in this report, are described in the following paragraphs:

(a) Basis of accounting The financial statements of the Group and of the Company, which are expressed in Singapore dollars, are prepared under the historical cost convention and in accordance with applicable accounting standards.

(b) Basis of consolidation The financial statements of the Group incorporate the audited financial statements of the Company and all its subsidiary companies made up to the end of each financial year.

Subsidiary companies comprise those companies in which the Group holds more than one half of the voting power and/or controls the majority composition of the Board of Directors and/or is in a position to exercise controlling influence on their financial and operating activities.

The excess of the cost of acquisition of a subsidiary company over the fair value of the net underlying assets acquired is dealt with as goodwill on consolidation. Such goodwill is amortised over its estimated useful life. Where the cost of acquisition of a subsidiary company is less than the fair value of the net assets acquired, the discount on acquisition is included in the capital reserve.

(c) Revenue recognition Revenues from sale of goods are recognised upon passage of title to the customer which generally coincides with their delivery and acceptance.

(d) Fixed assets Fixed assets are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged to the profit and loss account. When assets are sold or retired, their cost and accumulated depreciation are removed from the financial statements and any gain or loss resulting from their disposal is included in the profit and loss account.

(e) Depreciation Depreciation is calculated on the straight line method to write off the cost of fixed assets over their estimated useful lives. The estimated useful lives of fixed assets are as follows: Office equipment, furniture and fittings — 2 – 5 years Motor vehicles — 5 years Renovation — 3 – 5 years Freehold property — 100 years Shoplot — 50 years

Fully depreciated assets are retained in the financial statements until they are no longer in use and no further charge for depreciation is made in respect of these assets.

95 H. Significant Accounting Policies (Cont’d) (f) Leased assets Where assets are financed by lease agreements that give rights approximating to ownership (finance leases), the assets are capitalised under fixed assets as if they had been purchased outright at the values equivalent to the present values of total rental payable during the periods of the leases and the corresponding lease commitments are included under liabilities. Lease payments are treated as consisting of capital and interest elements and the interest is charged to profit and loss account. Depreciation on the relevant assets is charged to profit and loss account on the basis outlined in paragraph (e).

Annual rental on operating leases is charged to profit and loss account.

(g) Subsidiary companies Investment in subsidiary companies is stated at cost unless, in the opinion of the Directors, there has been permanent diminution in value, in which event they would be written down to a valuation fixed by the Directors.

(h) Investments Quoted and unquoted investments held on a long-term basis are stated at cost. Provision is made where there is a permanent impairment in value.

Dividend income is recorded gross on the date it is declared payable by the investee company.

(i) Stocks Stocks held for resale are stated at the lower of cost (on a first-in, first-out basis) and net realisable value. Net realisable value represents the estimated selling price less anticipated cost of disposal and after making allowance for damaged, obsolete and slow-moving items.

(j) Deferred taxation Deferred taxation is accounted for under the liability method whereby the tax charge for the year is based on the disclosed book profit after adjusting for all permanent differences. The amount of taxation deferred on account of all timing differences is reflected in the deferred taxation account. Deferred tax benefits are not recognised unless there is reasonable expectation of their realisation.

(k) Foreign currencies Transactions arising in foreign currencies during the year are converted at rates closely approximating those ruling on the transaction dates. Foreign currency monetary assets and liabilities are translated into local currency at exchange rates ruling at the balance sheet date. All exchange differences arising from conversion are included in the profit and loss account.

For inclusion in the consolidated financial statements, all assets and liabilities of foreign subsidiaries are translated into Singapore dollars at the exchange rates ruling at the balance sheet date and the results of foreign subsidiaries are translated into Singapore dollars at rates of exchange closely approximating those ruling at the balance sheet date. Exchange differences due to such currency translations are dealt with through the Group’s foreign currency translation reserve.

96 I. Notes to the Statement of Net Assets 1. Fixed assets

Accumulated Net book At cost depreciation value S$’000 S$’000 S$’000 Group Office equipment, furniture and fittings 1,989 1,119 870 Motor vehicles 351 133 218 Renovation 222 100 122 Freehold property 1,228 49 1,179 Shoplot 281 9 272 4,071 1,410 2,661 Company

Office equipment, furniture and fittings 281 192 89 Renovation 61 43 18 Freehold property 1,228 49 1,179 1,570 284 1,286

The Group’s net book value of motor vehicles and office equipment includes assets under finance leases amounting to S$178,000.

Freehold property and the shoplot have been pledged to secure term loans (note I9) and banker’s credit facilities (note I8).

2. Investment in subsidiary companies Company $’000

Unquoted shares, at cost 5,003

The subsidiary companies are disclosed in Section B.

3. Other investment This refers to funds placed with an overseas company for the development of a new product. No fixed rate of return is expected.

4. Stocks Group Company $’000 $’000

Stocks are stated after deducting provision for obsolete stock of 108 —

97 I. Notes to the Statement of Net Assets (Cont’d) 5. Trade debtors Group Company $’000 $’000

Trade debtors are stated after deducting provision for doubtful debts of 384 —

6. Other debtors Other debtors 2,430 141 Deposits 83 18 Prepayments 233 172 2,746 331

7. Amounts due from/(to) related party The amount due from related party is trade related, unsecured, interest-free and is repayable on demand.

The amount due to related party is unsecured, has no fixed terms of repayment and bears interest at 10% per annum.

The related parties refer to companies in which a Director of the Company is a common director and a substantial shareholder.

8. Amounts due to bankers Trust receipts - secured 16,696 —

The trust receipts are secured against:

(i) Pledge of fixed deposits of the Group and of the Company amounting to S$5,826,000 and S$3,651,000 respectively;

(ii) Legal mortgage of the Group’s and Company’s freehold property at 37 Kallang Pudding Road #09-03 Tong Lee Building, Block B, Singapore 349315; and

(iii) Joint and several personal guarantees signed by certain Directors of the Company.

98 I. Notes to the Statement of Net Assets (Cont’d) 9. Term loans Group Company $’000 $’000

Due within 12 months 110 90 Due after 12 months 753 606 863 696

The term loan of the Company is secured by a legal mortgage of the Company’s freehold property (note I1) and the joint and several guarantees of certain Directors of the Company. The loan is repayable over 10 years, and bears interest at 0.25% per annum above prime rate.

A subsidiary’s term loan is secured on the subsidiary’s shoplot and the joint and several guarantees of the subsidiary’s directors of which certain Directors are also Directors of the Company. The loan is repayable over 10 years and bears interest at between 1% to 1.7% per annum above the bank’s base lending rate.

10. Obligation under finance lease contracts Repayable within one year 55 — Repayable after one year 101 — 156 —

11. Commitments Commitments in respect of forward contracts placed 832 –

J. Net tangible asset backing The net tangible asset backing of the Group for each of the ordinary shares of S$0.05 each, based on the Statement of Net Assets of the Group as at 31 December 1999, after taking into account the effects of the proceeds and estimated expenses from the issue of New Shares, is set out below:

Group S$’000

Net tangible assets as at 31 December 1999 18,660 Add: Estimated proceeds from the issue of 103,540,000 New Shares 22,614 Less: Estimated issue expenses (1,365) Net tangible assets after issue of New Shares 39,909

99 J. Net tangible asset backing (Cont’d) Number of shares Issued share capital Issued and fully paid-up ordinary shares of S$1.00 each as at 31 December 1999 10,178,077 Bonus issue out of revenue reserve and share premium accounts (approved at EGM on 7 April 2000 as described in Section A) 5,352,310 15,530,387

Sub-division of 15,530,387 ordinary shares of S$1.00 each into 310,607,740 ordinary shares of S$0.05 each 310,607,740 Pre-invitation issued and fully-paid up share capital 310,607,740 Issue of 103,540,000 New Shares of S$0.05 each which form part of this Invitation 103,540,000 414,147,740

Net tangible asset backing for each ordinary share of S$0.05

Cents

— before issue of New Shares 6.01

— after issue of New Shares 9.64

K. Dividends The Company has not declared any dividends since the date of its incorporation.

L. General No audited financial statements of the Group and the Company have been prepared for any period subsequent to 31 December 1999.

Yours faithfully,

ERNST & YOUNG Certified Public Accountants Singapore

100 GENERAL AND STATUTORY INFORMATION

1. SHARE CAPITAL (a) As at the date of this Prospectus, there is only one class of shares in the capital of the Company. There are no founder, management or deferred shares. The rights of and privileges attached to the Shares are stated in the Articles of Association of the Company.

(b) The Company was incorporated on 3 November 1993. It presently has an authorised share capital of $30,000,000 divided into 600,000,000 Shares.

(c) Upon completion of the Invitation, the issued and paid-up share capital of the Company will be increased to $20,707,387 divided into 414,147,740 Shares.

(d) Save as disclosed below, there were no changes in the issued and paid-up share capital of the Company or its subsidiaries within the two years preceding the date of this Prospectus:- No. of shares offered for subscription, issued and Resultant Purpose of Company Date allotted capital Consideration Issue

Achieva 31/12/98 500,000 S$5,340,000 Cash Working capital 21/09/99 2,447,500 S$7,787,500 Capitalisation of share Bonus issue premium account 21/09/99 2,390,577 S$10,178,077 Shares in ACPL, Restructuring exercise AEPL and ATPL 7/04/00 5,352,310 S$15,530,387 Capitalisation of share Bonus issue premium and revenue reserve accounts

ACL 30/12/98 100,000 US$100,000 Cash Working capital HK$10,000

ACPL 21/09/99 166,667 S$716,667 Capitalisation of share Bonus issue premium account

AEPL 21/09/99 400,000 S$900,000 Capitalisation of Bonus issue revenue reserve account

AESB 04/08/98 2 RM2 Cash Subscriber shares

ASCSB 15/10/98 10 RM10 Cash Working capital 27/09/99 99,990 RM100,000 Cash Working capital

ATAPL 05/06/98 2 S$2 Cash Subscriber shares 26/12/98 199,998 S$200,000 Cash Working capital

ATAPL(Aust) 03/06/98 2 A$2 Cash Subscriber shares

ATEAPL 11/06/98 34,998 S$35,000 Cash Working capital 28/12/98 315,000 S$350,000 Cash Working capital

ATPL 21/09/99 102,041 S$602,041 Capitalisation of Bonus issue revenue reserve account

ATPPL 17/04/99 2 S$2 Cash Subscriber shares

ATSCPL 17/04/99 2 S$2 Cash Subscriber shares

STSB 01/07/99 1,000,000 RM1,350,002 Cash Working capital

101 (e) Save as disclosed above, no shares in or debentures of the Company or any of its subsidiaries have been issued, or is proposed to be issued, as fully or partly paid-up for cash, or for a consideration other than cash, within the two years preceding the date of this Prospectus.

(f) Save as disclosed on pages 76 and 77 of this Prospectus, no person has been granted or is entitled to be granted an option to subscribe for shares in, or debentures of, the Company or any of its subsidiaries.

2. INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS (a) The names, addresses, ages and principal occupations of all the Directors of the Company and Executive Officers of the Group are set out on pages 72 to 74 of this Prospectus.

(b) The business and working experience of the Directors of the Company are set out below:-

Mr Lim Yong Choon is a co-founder of the Company and is currently the President as well as the Group Chief Executive Officer and has been with the Group since 1993. In addition to co-founding the Group, Mr Lim has founded several other companies including Hexon Technology Pte Ltd, a company engaged in the assembly and distribution of computer memory modules and in which he is concurrently the Managing Director. He has also been the Deputy Managing Director of Eagle Aero Pte. Ltd. and a Staff Officer with the Republic of Singapore Navy. Mr Lim graduated from the then Nanyang University in Singapore with a Bachelor of Science degree.

Mr Pok Tam Soon is a co-founder of the Company and has been the Chief Operating Officer of the Group since January 2000. Mr Pok was previously employed as the Managing Director of Yosure Singapore Pte Ltd (“Yosure”), a distributor of electronic components. Before joining Yosure, Mr Pok was the Managing Director of Hamilton Electronics Pte. Ltd., an electronic components distributor and a company he co-founded. Prior to this, Mr Pok held various management positions at SGS-Thomson Microelectronics, including General Manager of its Taiwan branch. Mr Pok holds a Bachelor of Science and a Masters degree in Electrical Engineering from the United Kingdom as well as a Graduate Diploma in Marketing Management.

Mr Ng Chee Seng is a co-founder of ACPL and joined the Group in 1995. He is the Chairman of the Group’s Executive Committee and the Vice President of ACPL. Mr Ng has previously being employed as the Marketing Director of Hamilton Electronics Pte. Ltd., a distributor of electronic components and sub-systems and as the Product Marketing Manager of SGS-Thomson Microelectronics, a multinational manufacturer of semiconductor components. Mr Ng holds a Diploma in Electrical Engineering and a Graduate Diploma in Business Administration.

Mr Soh Eng Kuang is a co-founder of the Company and the Vice President of AEPL. Before joining the Company in 1994, Mr Soh worked as the Sales Manager at Dupont Singapore Pte Ltd Electronics Division (now known as FCI Pte Ltd), a leading manufacturer and marketer of electronic interconnect devices. He had also worked with Behn Meyer Pte. Ltd. as a Marketing Executive. Mr Soh holds a Bachelor of Science degree and a Master of Business Administration degree.

Mr Cheong Wai Chew is a co-founder and a Vice President of the Company and has been with the Group since 1993. Before joining the Company, he had co-founded several other companies including Eltech Electronics Ltd., a Singapore-based electronics manufacturing services company. Mr Cheong had also held various senior officer positions at the Economic Development Board in its Singapore and its New York offices. He had also worked as a banking officer in J.P. Morgan and the then Private Investment Corporation of Asia. Mr Cheong holds Bachelor of Arts (Honours), Master of Arts and Master of Business Administration degrees.

102 Mr Chia Chong Leong is a co-founder and joined the Group in 1996. He is also the Vice President of ATPL and has overall day-to-day management responsibility for the AT sub- group operations and business development in the Asia Pacific region. Mr Chia has previously worked as the Regional Sales Manager in Electronic Resources Ltd., a Singapore- based distributor of electronic components and products. He had also worked in various sales engineering positions with Astina Electronics Pte. Ltd. and Digital Appliance Control Pte. Ltd., a manufacturer of electronic controls. Mr Chia holds an Industrial Technician Certificate.

Mr Lew Syn Pau is the Managing Director of Stanbridge International Pte Ltd and was appointed as an Independent Director of the Company in April 2000. He started his career with the Singapore Civil Service where he was seconded to the National Trade Union Congress (“NTUC”). He was the Executive Secretary of the Metal Industries Workers’ Union from 1981 to 1982 and 1984 to 1989. From 1987 to 1993, he was the General Manager and subsequently Managing Director of NTUC Comfort Holdings Ltd, the largest transport co-operative in Singapore. During this period, he was concurrently the General Manager (1989-1991) of NTUC Pasir Ris Resort, Managing Director (1990-1993) of General Automotive Services Pte Ltd, and Executive Director (1993-1994) of NTUC Fairprice Co- operative Ltd. In addition, he was also the Assistant Secretary-General of the NTUC from 1990 to 1994. Mr Lew left the NTUC Group in 1994 to join Banque Indosuez (subsequently renamed Credit Agricole Indosuez) as General Manager and Senior Country Officer from 1994 to 1997. As a director of Suez Asia Holdings Pte Ltd, an associate company, he was also involved in the sourcing and approval of direct investments in many small and medium- sized companies in the Asia Pacific region. He was also a director of Indosuez Asset Management (S) Ltd and Carr Indosuez Asia (S) Limited, its merchant banking subsidiary.

Mr Lew has been a director of many statutory boards and companies in Singapore, including Singapore Telecommunications Ltd for 11 years. He was a director of Jurong Town Corporation and Chairman of its Finance and Investment Committee from 1996 to 1999. He is also the Executive Director of Corporate Brokers International Pte Ltd, a company dedicated to identifying and bringing together businesses from all over the world by way of mergers, acquisitions or joint ventures. He was appointed a Vice-President of the Singapore Confederation of Industries in 1998. Mr Lew was a Singapore Government scholar with a Masters of Engineering Degree from Cambridge University, United Kingdom and a Masters in Business Administration degree from Stanford University, United States of America.

He has been a Member of Parliament since 1988 and is currently the Chairman of the Government Parliamentary Committee for National Development. He has previously chaired the Government Parliamentary Committees for Education, Finance and Trade & Industry.

Mr Goh Kian Hwee is an independent non-executive Director of the Company and was appointed as an Independent Director of the Company in April 2000. He is a partner of the law firm, Lee & Lee and a non-executive director of several public listed companies in Singapore. Mr Goh holds a LLB (Honours) degree from the University of Singapore and has been a practising lawyer since 1980.

(c) The list of present directorships and past directorships, other than those held in the Company, of each Director as at the date of this Prospectus and over the five years preceding the date of this Prospectus is set out as follows:-

Director Present Directorships Past Directorships

Lim Yong Choon Group Companies Other Companies Achieva Components Pte Ltd Avnet Electronics Pte Ltd Achieva Components Sdn. Bhd. Stacks Integrator Sdn. Bhd. Achieva Electronics Pte Ltd Achieva Electronics Sdn. Bhd. Achieva Technology Pte Ltd Achieva Technology Sdn. Bhd.

103 Director Present Directorships Past Directorships

Mangrove Networks Sdn. Bhd. Stacks Holdings Sdn. Bhd. Stacks Systems Sdn. Bhd. Stacks Technology Sdn. Bhd.

Other Companies Celebit Circuit Technology (S) Pte Ltd Hexon Technology Pte Ltd Intergroup Investment Holdings Pte Ltd NCP International Pte. Ltd. Ultimate Properties Sdn. Bhd. Vanni Pte. Ltd.

Pok Tam Soon Group Companies Group Companies Achieva Electronics Pte Ltd Achieva Components Pte. Ltd Stacks Holdings Sdn. Bhd. Achieva Components Sdn. Bhd. Stacks Technology Sdn. Bhd. Stacks Systems Sdn. Bhd.

Other companies Other Companies Avnet Electronics Pte Ltd. Aimtop Holdings Pte Ltd Hamilton Electronics Sdn. Bhd. Hamilton Electronics Pte. Ltd. Newtech Electronics Pte. Ltd Interproc Pte. Ltd. Yosure Singapore Pte. Ltd

Ng Chee Seng Group Companies Group Companies Achieva Components Pte Ltd Achieva Technology Pte Ltd Achieva Components Sdn. Bhd. Achieva China Limited

Other companies Other Companies Newtech Electronics Pte Ltd. Chromatech Electronics Pte. Ltd.

Soh Eng Kuang Group Companies Other Companies Achieva China Limited Macron Design Pte Ltd Achieva Components Pte Ltd Macron Enterprise Pte Ltd Achieva Electronics Pte Ltd Achieva Electronics Sdn. Bhd. Achieva Technology Pte Ltd Achieva Technology Australia Pte Ltd Achieva Technology East Asia Pte Ltd

Cheong Wai Chew Group Companies Other Companies Stacks Holdings Sdn. Bhd. Achieva Business Development, Stacks Technology Sdn. Bhd. Inc.

104 Director Present Directorships Past Directorships

Chia Chong Leong Group Companies Other Companies Achieva China Limited — Achieva Service Centre Sdn. Bhd. Achieva Technology Pte Ltd Achieva Technology East Asia Pte Ltd Achieva Technology Australia Pte Ltd Achieva Technology Australia Pty. Ltd. Achieva Technology Service Centre Pte Ltd Achieva Technology Sdn. Bhd.

Lew Syn Pau Other Companies Other Companies Asia Food and Properties Ltd Asia Nominees Pte Ltd CalendarOne.com Pte Ltd Carr Indosuez Asia (S) Limited Corporate Brokers International Credit Agricole Indosuez Pte Ltd Indosuez Asset Management Cosmic Insurance Corporation (S) Ltd Limited Indosuez Singapore Nominees Food Empire Holdings Limited Pte Ltd Golden Agri-Resources Ltd Integrated Information Pte Ltd Lafe Technology Ltd Jurong Town Corporation Poh Tiong Choon Logistics Ltd Singapore Telecommunications Stanbridge International Pte Ltd Limited Strike Engineering Limited Singapore Post Pte Limited Uraco Holdings Ltd SLF Leisure Enterprises (Pte) Ltd Suez Asia Holdings Pte Ltd UAH Investments Pte Ltd

Goh Kian Hwee Other Companies Other Companies Hartford Insurance Company China Development Corporation (Singapore) Ltd Ltd Hotel Negara Limited Delifrance Asia Ltd Hwa Hong Corporation Limited Note: the list of TLB Land Limited directorships Transmarco Limited excludes directorships held by him in the course of his professional duties

(d) Information on the working experience and areas of responsibility of the Executive Officers of the Group is set out below:- Achieva Limited Ms Lim Ai Ping, Angela is the Group Financial Controller. Prior to joining the Group in 1997 as the Group Financial Controller, Ms Lim held the position of Assistant Manager with Ernst & Young, an international accounting firm. Ms Lim manages the Group’s accounting function. She is also responsible for formulating and implementing Group-wide accounting policies and practices, liaison with external auditors and tax agents on behalf of the Group, planning and managing the Group’s cash flow and corporate finances, funding the Group’s capital expenditure and new business ventures. Ms Lim graduated from the Nanyang Technological Institute with a Bachelor of Accountancy (Hons) degree.

105 Achieva Components Pte Ltd (ACPL) Mr Gui Yock Meng is a co-founder and director of ACPL and currently holds the position of Sales Director and has been with the Group since 1995. Mr Gui is responsible for the management of ACPL’s sales in Singapore and Thailand. He had previously held various sales positions in AMD Far East Ltd, Creative Technology Ltd and Elcoma Electronics Pte Ltd. Mr Gui holds a Bachelor of Engineering (Hons) degree.

Mr Oh Chon Seng is a co-founder and director of ACPL and currently holds the position of Senior Technical Application Manager and has been with the Group since 1995. Mr Oh is responsible for technical sales and support and in technical liaison with the principals. He had worked previously as the Sales and Applications Manager at Hamilton Electronics Pte. Ltd. and as a R&D engineer in Thomson Consumer Electronics. Mr Oh holds a Bachelor of Science (Hons) degree.

Mr Tan Phuan Lam is a director of ACPL and is currently the General Manager of Achieva Components Sdn. Bhd., ACPL’s Malaysian subsidiary and has been with the Group since 1996. He is responsible for managing all of ACPL’s Malaysia-based offices and sales operations including business development and budgeting. Mr Tan was previously the Sales Manager in Malaysia for Hamilton Electronics Sdn. Bhd. He had also worked as a Senior Sales Engineer in Uraco Impex and as a Product Engineer in Texas Instruments (S) Pte. Ltd. Mr Tan has a Diploma in Electronics Engineering and a Master of Science (Electronics) degree.

Achieva Electronics Pte Ltd (AEPL) Mr Lwee Nai Hock is a director of AEPL and is the Technical Director of AEPL and has been with the Group since 1994 and has been in the Group since 1995. He is responsible for technical support for the regional field sales team, product design and engineering, as well as providing value-engineering services to customers. Mr Lwee had previously held various technical positions at Berg Electronics Pte. Ltd., a subsidiary of Berg Electronics, Inc (now known as FCI Pte. Ltd.), a US manufacturer of electronic connectors. Prior to that, Mr Lwee founded and managed his own product design services company.

Achieva Technology Pte Ltd (ATPL) Ms Lam Yen Ling is a director of Achieva Technology Sdn. Bhd., ATPL’s Malaysian subsidiary and heads the unit as its Country Manager. She has been with the Group since 1996. She is responsible for the general management of all Malaysia-based offices and operations and for the development of dealers’ network, business planning and budgeting. She had previously worked in Electronic Resources Ltd in Singapore where she held various sales positions, the last being Assistant Sales Manager. Ms Lam holds a Diploma in Electronic Engineering.

(e) Save as disclosed below, none of the Executive Officers holds directorships in companies, other than those held in the Company, as at the date of this Prospectus, or over the five years preceding the date of this Prospectus:-

Director Present Directorships Past Directorships

Gui Yock Meng Achieva Components Pte Ltd Other Companies Elcoma Electronics Pte. Ltd.

Tan Phuan Lam Achieva Components Pte Ltd Other Companies Achieva Components Sdn. Bhd. Perusahaan Ice Cream Pelangi E-Elegance Trading Sdn. Bhd. Sdn. Bhd. Hamilton Electronics Sdn. Bhd.

Oh Chon Seng Achieva Components Pte Ltd — Achieva Components Sdn. Bhd.

Lwee Nai Hock Achieva Electronics Pte Ltd —

106 Director Present Directorships Past Directorships

Lam Yen Ling Achieva Technology Sdn. Bhd. — Achieva Service Centre Sdn. Bhd.

(f) None of the Directors and Executive Officers is related to one another or to any substantial shareholder of the Company.

(g) The interests of the Directors and substantial shareholders of the Company in the Shares as at the date of this Prospectus are as follows:- Shares in which the Shares registered in the Directors and substantial names of Directors and shareholders are deemed substantial shareholders to have an interest

No. of Shares % No. of Shares %

Directors Lim Yong Choon 106,412,009 34.26 — — Pok Tam Soon 36,305,064 11.69 — — Ng Chee Seng 30,232,116 9.73 — — Soh Eng Kuang 22,746,825 7.32 — — Cheong Wai Chew 5,714,034 1.84 — — Chia Chong Leong 28,968,851 9.33 — — Lew Syn Pau — — — — Goh Kian Hwee — — — —

Substantial shareholders Lim Yong Choon 106,412,009 34.26 — — Pok Tam Soon 36,305,064 11.69 — — Ng Chee Seng 30,232,116 9.73 — — Soh Eng Kuang 22,746,825 7.32 — — Chia Chong Leong 28,968,851 9.33 — — Huang Ting-chu@Tim Huang 22,237,826 7.16 — —

(h) There is no shareholding qualification for Directors in the Articles of Association of the Company.

(i) None of the Directors or Executive Officers is or was involved in any of the following events:-

(i) a petition under any bankruptcy laws filed in any jurisdiction against him or any partnership in which he was a partner or any corporation of which he was a director or an executive officer; or

(ii) a conviction of any offence, other than a traffic offence, or any judgement, including findings in relation to fraud, misrepresentation or dishonesty, given against him in any civil proceedings in Singapore or elsewhere, or any proceedings now pending which may lead to such conviction or judgement, or any criminal investigation pending against him; or

(iii) the subject of any order, judgement or ruling of a court of competent jurisdiction, tribunal or government body, permanently or temporarily enjoining him from acting as an investment adviser, dealer in securities, director or employee of a financial institution and engaging in any type of business practice or activity.

(j) Save as disclosed in this Prospectus, there are no existing or proposed service contracts between the Directors and the Company or any of its subsidiaries.

107 (k) The aggregate fees and remuneration (including CPF thereon) paid or distributed by the Group to the Directors for services rendered in all capacities to the Company and its subsidiaries for FY 1998 amounted to $633,852. For FY 1999, the aggregate fees and remuneration payable to the Directors under the arrangements with the Group in force as at the date of this Prospectus amounted to $1,139,998 (including profit sharing and CPF thereon).

(l) Save as disclosed on pages 76 and 77 of this Prospectus, no option to subscribe for securities of the Company or any of its subsidiaries has been granted to, or was exercised by, any Director or Executive Officer within the two years preceding the date of this Prospectus.

(m) Save as disclosed in this Prospectus, none of the Directors or substantial shareholders of the Company is interested, directly or indirectly, in the promotion of, or in any assets acquired or disposed of by, or leased to, the Company or any of its subsidiaries within the two years preceding the date of this Prospectus, or in any proposal for such acquisition or disposal or lease as aforesaid.

(n) Save as disclosed in this Prospectus, none of the Directors, Executive Officers or substantial shareholders of the Company has any interest, direct or indirect, in any company carrying on the same trade as the Company or any of its subsidiaries.

(o) None of the Directors is materially interested in any existing contract or arrangement subsisting at the date of this Prospectus which is significant in relation to the business of the Company and its subsidiaries.

(p) No sum or benefit has been paid or has been agreed to be paid to any Director or to any firm in which a Director is a partner or corporation in which such Director holds shares or debentures in cash or in shares or otherwise by any person to induce him to become, or to qualify him as, a Director or otherwise for services rendered by him or such firm or corporation in connection with the promotion or formation of the Company.

3. ARTICLES OF ASSOCIATION The following provisions in the Articles of Association of the Company relate to the Directors’ borrowing powers and remuneration, restrictions on voting powers of Directors in interested transactions, shareholders’ voting rights, consents for variation of class rights and the voting rights of shareholders and restrictions on the transferability of shareholdings:-

(a) Directors’ Borrowing Powers Article 65 The Directors may, at their discretion and from time to time, raise or borrow or secure the payment of any sum or sums of moneys for the purposes of the Company or of any third party.

Article 66 The Directors may raise or secure the repayment of such sum or sums in such manner and upon such terms and conditions in all respects as they think fit, and, in particular, by the issue of debentures or debenture stock of the Company, perpetual or otherwise, charged upon or by mortgage charge or lien of and on the undertaking of the whole or any part of the property of the Company (both present and future), including its uncalled capital for the time being, or by making, accepting, endorsing or executing any promissory notes or bills of exchange.

108 (b) Directors’ Remuneration Article 104(6) Any fee paid by the Company to an alternate Director shall be deducted from the fees of the Director appointing the alternate. Save as aforesaid an alternate Director shall not (in respect of such appointment) be entitled to receive any remuneration from the Company.

Article 105 (i) The Directors shall be entitled to receive by way of fees for their services as Directors in each year such sum as shall from time to time be determined by the Company by resolution passed at a General Meeting, the notice of which shall specify the proposals concerning the same. Such fee shall be divided amongst the Directors as they shall determine or failing agreement equally.

(ii) The fees payable to the Directors as Directors shall not be increased except pursuant to a resolution passed at a General Meeting, where notice of the proposed increase has been given in the notice convening the meeting.

(iii) The fees of a non-executive Director shall be by a fixed sum and not by a commission on or percentage of profits or turnover.

(iv) The provisions of this Article are without prejudice to the power of the Directors to appoint any of their number to be an employee or agent of the Company at such remuneration and upon such terms as they think fit without the approval of the Members in General Meeting Provided That such remuneration may include a commission on or percentage of profits but not a commission on or percentage of turnover.

Article 106 If any Director, being willing and having been called upon to do so, shall render or perform extra or special services of any kind, including services on any Committee established by the Directors, or shall travel or reside abroad for any business or purposes of the Company, he shall be entitled to receive such sum as the Board may think fit for expenses, and also such remuneration as the Board may think fit, either as a fixed sum or as provided in Article 105(4) (in the case of Directors who are employees of the Company, such remuneration shall not be by way of commission on or percentage of turnover and in the case of Directors who are not employees of the Company, such remuneration shall not be by way of commission on or percentage of profits or turnover ) without the approval of the Members in General Meeting and such remuneration may, as the Directors shall determine, be either in addition to or in substitution for any other remuneration he may be entitled to receive, and the same shall be charged as part of the ordinary working expenses of the Company.

Article 108(3) A Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine. No Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit or as a vendor, purchaser or otherwise. No such contract and no contract or arrangement entered into by or on behalf of the Company in which any Director is in any way interested shall be liable to 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 of such Director holding that office or of the fiduciary relationship thereby established provided the nature of the interest of such Director in such contract or arrangement be declared to the Board in accordance with the provisions of the Act.

109 Article 117 The Directors shall (subject to the provisions of any contract between the Managing Director and the Company) from time to time fix the remuneration of the Managing Director which may be by way of fixed salary, commission or participation in profits (but not turnover) of the Company or by any or all of these modes.

(c) Restriction on Voting Powers of Directors in Interested Transactions Article 108 (i) A Director who is in any way whether directly or indirectly interested in a contract or proposed contract with the Company shall declare the nature of his interest at a meeting of the Directors in accordance with the provisions of the Act.

(ii) A Director shall not vote in respect of any contract or proposed contract or arrangement with the Company in which he has directly or indirectly a personal material interest and if he shall do so his vote shall not be counted nor save as provided by Article 109 shall he be counted in the quorum present at the meeting, but neither of these prohibitions shall apply to:-

(a) any arrangement for giving any Director any security or indemnity in respect of money lent by him to or obligations undertaken by him for the benefit of the Company; or

(b) any arrangement for the giving by the Company of any security to a third party in respect of a debt or obligation of the Company for which the Director himself has assumed responsibility in whole or in part under a guarantee or indemnity or by the deposit of security; or

Provided that these prohibitions may at any time be suspended or relaxed to any extent and either generally or in respect of any particular contract arrangement or transaction or any particular proposed contract arrangement or transaction by the Company by Ordinary Resolution.

Article 109 Subject to applicable law, a general notice that a Director is an officer or member of any specified firm or corporation and is to be regarded as interested in all transactions with that firm or company shall be deemed to be a sufficient disclosure under Article 108 as regards such Director and the said transactions if it specifies the nature and extent of his interest in the specified firm or corporation and his interest is not different in nature or greater in extent than the nature and extent so specified in the general notice at the time any transaction is so made, but no such notice shall be of effect unless either it is given at a meeting of the Directors or the Director takes reasonable steps to ensure that it is brought up and read at the next meeting of the Directors after it is given.

110 (d) Shareholders’ Voting Rights Article 7 Any share in the Company may be issued with such preferred, deferred or other special rights, or such restrictions, whether in regard to dividend, return of capital, voting or otherwise, either at a premium or otherwise, as the Company may from time to time by Ordinary Resolution determine, and subject to the provisions of the Act (and these Articles) the Company may issue preference shares which are, or at the option of the Company are, liable to be redeemed on such terms and in such manner as the Company before the issue thereof may by Ordinary Resolution determine. The total nominal value of issued preference shares shall not at any time exceed the total nominal value of the issued ordinary shares for the time being.

Article 10 Preference shareholders shall have the same rights as ordinary shareholders as regards the receiving of notices, reports and balance sheets and the attending of 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 of the Company 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 where the dividend on the preference shares is more than six months in arrears.

Article 89 Subject to any rights or restrictions for the time being attached to any class or classes of shares, at a meeting of Members or classes of Members, each Member entitled to be present and to vote may vote in person or by proxy. On a show of hands every Member present in person and each proxy shall have one vote and on a poll, every Member present in person or by proxy shall have one vote for each share in respect of which he is a Member or represents and upon which all calls or other sums due thereon to the Company have been paid Provided Always That:-

(i) where a Member is represented by one or more proxies, only the first named proxy specified in the relevant instrument of proxy shall be deemed to be authorised to vote on a show of hands and the second named proxy shall not be so entitled to vote unless the first named proxy is not present or fails to cast a vote;

(ii) if the Member is a Depositor the Company shall be entitled on a poll to accept as validly cast by a Depositor votes in respect of such number of shares as is equal to the number of shares appearing against his name in the Depository Register 48 hours prior to the commencement of the relevant general meeting as certified by CDP to the Company.

Article 90 In the case of joint Members the vote of the senior who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint Members; and for this purpose seniority shall be determined by the order in which the names stand in the Register or the Depository Register, as the case may be.

Article 91 Save as herein expressly provided, no person other than a Member who is duly registered or who is certified by CDP as named in the Depository Register forty-eight hours before the General Meeting and who shall have paid everything for the time being due from him and payable to the Company in respect of his shares, shall be entitled to be present or to vote on any question either personally or by proxy at any General Meeting.

111 Article 92 A Member of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll by the committee, curator bonis, or other person in the nature of committee or curator bonis appointed by that court, and any such committee, curator bonis, or other person may, on a show of hands or on a poll, vote by proxy.

Article 93 Votes whether by a show of hands or on a poll may be given either personally or by proxy, attorney or representative. A proxy need not be a Member of the Company.

Article 94 Any corporation which is a Member may, by resolution of its directors, authorise any person to act as its representative at any meetings of the Company; and such representative shall be entitled to exercise the same powers on behalf of the corporation which he represents as if he had been an individual shareholder.

Article 95 The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or if the appointor is a corporation, either under seal, or under the hand of an official or attorney duly authorised. An instrument of proxy shall not, unless the Directors in their absolute discretion determine otherwise, be required to be witnessed.

Article 96 The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of the power or authority shall, if required by law, be duly stamped and deposited at the Office, not less than forty-eight hours before the time for holding the meeting, or adjourned meeting, at which the person named in the instrument proposes to vote, and in default the instrument of proxy or attorney shall not be treated as valid.

Article 97 A Member may appoint not more than two proxies to attend and vote at the same General Meeting. A Member appointing more than one proxy shall specify the percentage of shares to be represented by each proxy and if no percentage is specified, the first named proxy shall be deemed to represent 100 per cent of the shareholding and the second named proxy shall be deemed to be an alternate to the first named. An instrument appointing a proxy shall be in such form as the Directors may from time to time approve. The Company shall be entitled (i) to reject any instrument of proxy executed by a Depositor if the Depositor’s name does not appear in the Depository Register forty-eight hours prior to the commencement of the relevant General Meeting as certified by CDP to the Company, and (ii) for the purpose of a poll, to treat an instrument of proxy executed by a Depositor as representing the number of shares equal to the number of shares appearing against his name in the Depository Register referred to in (i) above, notwithstanding the number of shares actually specified in the relevant instrument of proxy.

Article 98 A vote given in accordance with the terms of an instrument of proxy or attorney shall be valid notwithstanding the previous death of the principal or revocation of the proxy or transfer of the share in respect of which the vote is given Provided That no notice in writing of the death or revocation or transfer shall have been received at the Office at least forty-eight hours before the time fixed for holding the meeting.

112 Article 99 The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll.

Article 100 Where the capital of the Company consists of shares of different monetary denominations, voting rights may, at the discretion of the Board, be prescribed in such manner that a unit of capital in each class, when reduced to a common denominator, shall carry the same voting power when such right is exercisable.

(e) Consent for Variation of Class Rights Article 9 Subject to the provisions of the Act all or any of the special rights or privileges for the time being attached to any preference shares for the time being issued may from time to time (whether or not the Company is being wound up) be modified, affected, altered or abrogated and preference capital other than redeemable preference shares may be repaid if authorised by Special Resolution passed by Members in respect of such preference shares at a special meeting called for the purpose. To any such special meeting all the provisions of these Articles as to General Meetings of the Company shall mutatis mutandis apply but so that the necessary quorum shall be two persons at least being or representing by proxy Members in respect of not less than one-third of the preference shares issued and that every such Member shall be entitled on a poll to one vote for every preference share held by him, and that any such Member present either in person or by proxy may demand a poll.

Provided that where the necessary majority for such a Special Resolution is not obtained at the meeting, consent in writing if obtained from the Members in respect 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.

Article 64 Subject to the provisions of the Act, all or any of the special rights or privileges attached to any class of shares in the capital of the Company for the time being may, at any time, as well before as during liquidation, be modified, affected, altered or abrogated, either with the consent in writing of the Members in respect of not less than three-fourths of the issued shares of the class, or with the sanction of a Special Resolution passed at a separate General Meeting of the Members in respect of shares of the class, and all the provisions contained in these Articles relating to General Meeting shall mutatis mutandis apply to every such meeting, but so that the quorum thereof shall be not less than two persons personally present and being or representing by proxy of one-third of the issued shares of the class, and that any Member in respect of shares of the class, present in person or by proxy, shall on a poll be entitled to one vote for each share of the class in respect of which he is a Member, and if at any adjourned meeting of such Members such quorum as aforesaid is not present, any two Members in respect of shares of the class who are personally present shall be a quorum. The Directors shall comply with the provisions of Section 186 of the Act as to forwarding a copy of any such consent or resolution to the Registrar of Companies.

113 (f) Restrictions on Share Transfers Article 41 Subject to the restrictions of these Articles and any restrictions imposed by law or the Exchange or the CDP, any Member may transfer all or any of his shares, but every transfer by any Member must either be by means of:-

(i) an instrument in the form approved by the Exchange, which must be left at the Office or such other place or places as the Directors may appoint from time to time for registration, duly stamped and accompanied by the certificates 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 (“a registered transfer”); or

(ii) book-entry in the Depository Register in accordance with the Act.

Article 42 The instrument of transfer of a share which is the subject of a registered transfer shall be signed by or on behalf of both the transferor and the transferee and be witnessed and the transferor shall be deemed to remain the holder of the share concerned until the name of the transferee is entered in the Register in respect thereof. CDP may transfer any share in respect of which its name is entered in the Register by means of a registered transfer. CDP shall not be required as transferee to sign any form of transfer for the transfer of shares to it. The Directors may dispense with the execution of the instrument of transfer by the transferee and the requirement that the instrument of transfer be witnessed in any case in which they think fit in their discretion so to do. Shares of different classes shall not be comprised in the same instrument of transfer. This Article 42 shall not apply to any transfer of shares by way of book-entry in compliance with the Act.

Article 43 No share shall in any circumstances be transferred to any infant, bankrupt or person of unsound mind but nothing herein contained shall be construed as imposing on the Company any liability in respect of the registration of such transfer if the Company has no actual knowledge of the same.

Nothing in this Article shall preclude the Directors from recognising a renunciation of the allotment of any share by the allottee in favour of some other person.

Article 44 In the case of registered transfers, all instruments of transfers submitted which shall be registered shall be retained by the Company, but any instrument of transfer which the Directors may refuse to register shall (except in any case of fraud) be returned to the party presenting the same.

Article 45 In the case of a registered transfer, a fee not exceeding two dollars for each transfer as the Directors may from time to time determine shall be charged for the registration of a transfer except that CDP shall not be liable to pay any fee in respect of the registration of a transfer.

Article 46 In the case of a registered transfer, the Directors may decline to register any transfer of shares on which the Company has a lien.

114 Article 49 The Register of Transfers may be closed at such times 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 days in any calendar year, and during such periods the Directors may suspend the registration of transfers. Ten Market Days’ notice (or such shorter notice as the Exchange may agree) of such closure shall be advised to any stock exchange upon which the Company is listed, stating the period and purpose or purposes for which the closure is being made.

4. MATERIAL CONTRACTS The dates of, parties to, and general nature of all material contracts, not being contracts entered into in the ordinary course of business of the Company and its subsidiaries, within the two years preceding the date of issue of this Prospectus are as follows:-

(a) a deed of shareholders’ agreement dated 27 December 1998 between ATPL and Grand Folk Limited to govern their relationship as shareholders of ATAPL(Aust);

(b) a deed of shareholders’ agreement dated 28 December 1998 between ATPL, Paul Nguyen and Tong Yau Lok, Steven to govern their relationship as shareholders of ATEAPL;

(c) a deed of shareholders’ agreement dated 1 July 1999 between ATSB and Lee Chong Thye to govern their relationship as shareholders of ASCSB;

(d) a sale and purchase agreement dated 6 August 1999 between SHSB and Kit-Card Corporation Sdn. Bhd. (“Kit Card”) pursuant to which SHSB agreed to sell, and Kit-Card agreed to purchase and accept assignment of, all of SHSB’s rights, title, interest and benefits under the principal sale and purchase agreement dated 23 June 1994 between Shamelin Holdings Sdn. Bhd. and SHSB to the three and a half storey semi-detached factory known as Lot No. C7, Type C (Terra), Gateway 2020 Industrial Park, Phase 5, Tama Shamelin Perkasa, Cheras, Kuala Lumpur, at a price of RM2,200,000;

(e) a reconstruction agreement dated 27 August 1999 between (i) Gui Yock Meng, Oh Chon Seng, Tan Phuan Lam, Lwee Nai Hock, Ong Chong Peng, Chia Chong Leong and Lim Yong Choon (collectively, the “Transferors”), (ii) Lim Yong Choon, Ng Chee Seng, Soh Eng Kuang, Gui Yock Meng and Oh Chon Seng (collectively, the “Renouncees”), (iii) ACPL, AEPL and ATPL (collectively, the “Subsidiaries”) and the Company pursuant to which the Transferors agreed to sell to the Company their respective shareholdings in the Subsidiaries in consideration of the allotment and issue of shares in the Company to the Transferors or the Renouncees;

(f) a depository agreement dated 19 May 2000 entered into between the Company and CDP pursuant to which CDP agreed to act as share depository for the Company’s securities traded on the SGX-ST;

(g) a management and underwriting agreement dated 19 May 2000 entered between the Company, UOB Asia and the Underwriters for the management and underwriting of the Invitation;

(h) a placement agreement dated 19 May 2000 entered into between the Company and the Placement Agents for the placement of the Placement Shares; and

(i) a receiving bank agreement dated 19 May 2000 entered between the Company and UOB pursuant to which UOB agreed to act as the receiving bank in relation to the Invitation.

115 5. WORKING CAPITAL The Directors are of the opinion that, after taking into account the present banking facilities, the Group will have adequate working capital for its present operating requirements.

In the opinion of the Directors, there are no minimum amounts which must be raised by the issue of the New Shares in order to provide for the following:-

(a) the purchase price or any property purchased or to be purchased;

(b) estimated preliminary expenses (including underwriting and placement commission) for the Invitation payable by the Company;

(d) working capital.

No amount in respect of the foregoing matters is to be provided otherwise than out of the proceeds from the issue of the New Shares.

6. LOAN CAPITAL AND OTHER BORROWINGS Save as disclosed on pages 55 and 56 of this Prospectus and in the Accountants’ Report as at 31 December 1999, the Group had no other borrowings or indebtedness in the nature of borrowings including bank overdrafts and liabilities under acceptances (other than normal trading bills) or acceptance credits, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities.

7. FINANCIAL CONDITION AND OPERATIONS OF THE GROUP Save as disclosed in this Prospectus, the Directors are not aware of any material information including trading factors or risks which are unlikely to be known or anticipated by the general public and which could materially affect the profits of the Company and its subsidiaries.

Save as disclosed in this Prospectus, the financial condition and operations of the 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 the 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 materially affected the amount of reported income from operations; and

(d) known trends or uncertainties that have had or that the Group expects to have a material favourable or unfavourable impact on revenues or operating income.

8. LITIGATION In the conduct of its business, the Group from time to time takes legal action against its customers to recover receivables and to enforce its other rights, including the following:-

(a) claim against Mextel Electronics for a sum of approximately US$60,000;

(b) claim against SWD Technology Sdn. Bhd. for a sum of approximately US$25,000;

116 (c) claim against Sepadu Komputer Sdn. Bhd. (“Sepadu”) for approximately RM105,000;

(d) claim against Quantumnet for approximately RM140,000.

The Group has also obtained judgment in the Malaysian courts against Sivanendra A/L Ratnasingam for the sum of approximately RM85,000 together with interest thereon at the rate of eight (8) per cent. per annum and costs of approximately RM1,500.

The Group has obtained judgement in the Malaysian courts against Komputer Sistan (M) Sdn. Bhd. (“Komputer Sistan”) for the sum of approximately RM90,000 together with interests thereon at the rate of eight (8) per cent. per annum and costs of approximately RM1,500.

Neither the Company nor its subsidiaries are engaged in any litigation either as plaintiff or defendant, in respect of any claims or amounts which are material in the context of the Invitation, and the Directors have no knowledge of any proceedings pending or threatened against the Group or any facts likely to give rise to any litigation, claims or proceedings which might have a material adverse effect on the financial position of the Group.

9. GENERAL (a) The nature of the business of the Company has been stated earlier in this Prospectus. The corporations which, by virtue of Section 6 of the Act, are deemed to be related to the Company are set out under “Subsidiary Companies” on pages 78 to 80 of this Prospectus.

(b) No Shares will be allotted or issued on the basis of this Prospectus later than six months after the date of the issue of this Prospectus.

(d) The amount payable on application and allotment is $0.22 for each New Share (other than the Reserved Shares) and $0.20 for each Reserved Share.

(e) Save as disclosed on pages 23, 26, 27, 76 and 77 of this Prospectus, there has been no previous offer for subscription by the Company of its Shares within the two years preceding the date of this Prospectus.

(f) No property has been purchased or acquired or proposed to be purchased or acquired by the Company or its subsidiaries which is to be paid for wholly or partly out of the proceeds of the issue of New Shares or the purchase or acquisition of which has not been completed at the date of this Prospectus other than property the contract for the purchase or acquisition whereof was entered into in the ordinary course of business of the Company or its subsidiaries, the contract not being made in contemplation of the Invitation nor the Invitation in consequence of the contract.

(g) The expenses payable by the Company in connection with the Invitation, including underwriting commission, brokerage, management fee and all other incidental expenses in relation to this Invitation, are estimated to amount to approximately $1.4 million which will be borne by the Company.

(h) No amount, cash, securities or benefit has been or is intended to be paid or given to any promoter within the two years preceding the date of this Prospectus or is proposed or intended to be paid or given to any promoter at any time in respect of this Invitation.

117 (i) Application monies received by the Company in respect of successful applications (including successfully ballotted applications which are subsequently rejected) will be placed in a separate non-interest bearing account with UOB (the “Receiving Bank”). In the ordinary course of its business, the Receiving Bank will deploy these monies in the interbank money market. Pursuant to an agreement entered into between the Company and the Receiving Bank contained in a letter dated 19 May 2000 and accepted by the Company on 19 May 2000, the Company and the Receiving Bank have agreed that the Company will receive 50% of any net revenue earned by the Receiving Bank from the deployment of such monies in the interbank money market. Any refund of all or part of the application monies to unsuccessful or partially successful applicants will be made without any interest or any share of such net revenue.

10. MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS AND BROKERAGE (a) Pursuant to the Management and Underwriting Agreement dated 19 May 2000, the Company appointed UOBA to manage the Invitation. UOBA will receive a management fee from the Company for its services rendered in connection with the Invitation.

(b) Pursuant to the Management and Underwriting Agreement, the Underwriters have agreed to underwrite the Offer Shares for a commission of 1.5% of the Offer Price for each Offer Share.

(c) Pursuant to the Placement Agreement dated 19 May 2000, the Placement Agents have agreed to subscribe or procure subscriptions for the Placement Shares for a placement commission of 1.5% of the Placement Price for each Placement Share, to be paid by the Company.

(d) Brokerage will be paid by the Company on the Invitation Shares at the rate of 1.0% of the Offer Price for each Offer Share and 1.0% of the Placement Price for each Placement Share. For the Offer Shares, the brokerage will be paid to members of the Association of Banks in Singapore, members of the SGX-ST and merchant banks in respect of successful applications made on Application Forms bearing their respective stamps, or to the Participating Banks in respect of successful applications made through Electronic Applications. For the Placement Shares, the brokerage will be paid to the Placement Agents in accordance with the Placement Agreement.

(e) Save as aforesaid, no commission, discount or brokerage has been paid or other special terms granted within the two years preceding the date of this Prospectus or is payable to any Directors, promoter, expert, proposed Director or any other person for subscribing or agreeing to subscribe, or procuring or agreeing to procure subscription for any shares in, or debentures of, the Company.

(f) The Management and Underwriting Agreement may be terminated by UOB on behalf of UOBA and the Underwriters at any time on or before the close of the Application List on the occurrence of certain events. These events include any change in national or international political, financial, monetary or economic conditions which is likely to result in, inter alia, the conditions in the stock market in Singapore being materially and adversely affected or the success of the Invitation being materially prejudiced.

(g) In the event the Management and Underwriting Agreement is terminated, the Company reserves the right, at the absolute discretion of the Directors, to cancel the Invitation.

(h) The Placement Agreement is conditional upon the Management and Underwriting Agreement not being terminated or rescinded pursuant to the provisions of the Management and Underwriting Agreement.

118 11. CONSENTS (a) The Auditors and Reporting Accountants have given and have not withdrawn their written consent to the issue of this Prospectus with the inclusion herein of their Accountants’ Report and references to their name in the form and context in which they appear in this Prospectus and to act in such capacity in relation to this Prospectus.

(b) The Manager, Underwriters and Placement Agents, the Share Registrar, the Principal Bankers and the Solicitors to the Invitation have each given and have not withdrawn their respective written consents to the issue of this Prospectus with the inclusion herein of their respective names and references to their respective names in the forms and context in which they respectively appear in this Prospectus and to act in such respective capacities in relation to this Prospectus.

12. STATEMENT BY THE MANAGER UOBA acknowledges that, to the best of its knowledge and belief based on the information made available to it by the Company, there are no material facts about the Invitation and the Company and its subsidiaries the omission of which would make any statement in this Prospectus misleading and this Prospectus constitutes full and true disclosure of all material facts about the Invitation and the Company and its subsidiaries.

13. STATEMENT BY THE DIRECTORS OF THE COMPANY The Prospectus has been seen and approved by the Directors of the Company and they collectively and individually accept full responsibility for the accuracy of the information given herein and confirm, having made all reasonable enquiries that, to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading and this Prospectus constitutes full and true disclosure of all material facts about the Invitation and the Company and its subsidiaries.

14. DOCUMENTS FOR INSPECTION Copies of the following documents may be inspected at the registered office of the Company during normal business hours for a period of 6 months from the date of this Prospectus:-

(a) the Memorandum and Articles of Association of the Company;

(b) the Directors’ Report referred to on page 81 of this Prospectus;

(d) the audited accounts of the Company and of its subsidiaries for FY1997, FY1998 and FY 1999;

(e) the material contracts referred to in paragraph 4 on page 115 of this Prospectus; and

(f) the letters of consent referred to in paragraph 11 on page 119 of this Prospectus.

119 APPENDIX

TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION

Applications are invited for the subscription of the New Shares at the Offer Price for each Offer Share and the relevant Placement Price for each Placement Share, subject to the following terms and conditions:-

1. Applications must be made in lots of 1,000 New Shares and integral multiples thereof. Applications for any other number of Shares will be rejected.

2. Applications for Offer Shares may be made by way of Offer Shares Application Forms or by way of electronic applications through ATMs of the Participating Banks (“ATM Electronic Applications”) or through Internet Banking (“IB”) web-sites of the relevant Participating Banks (“Internet Electronic Applications”, which together with ATM Electronic Applications, shall be referred to as “Electronic Applications”). Applications for Placement Shares (other than for Reserved Shares) may only be made by way of Placement Shares Application Forms. Applications for Reserved Shares may only be made by way of Reserved Shares Application Forms. APPLICANTS MAY NOT USE CPF FUNDS TO APPLY FOR THE NEW SHARES.

3. Only one application may be made for the benefit of one person in his own name for either the Offer Shares or the Placement Shares (other than Reserved Shares). A person submitting an application for Offer Shares by way of a printed Application Form MAY NOT submit another application for Offer Shares by way of an Electronic Application and vice versa. A person submitting an application for Offer Shares by way of an ATM Electronic Application MAY NOT submit another application for Offer Shares by way of an Internet Electronic Application and vice versa. Such separate applications shall be deemed to be multiple applications and shall be rejected.

A person, other than an approved nominee company, who is submitting an application in his own name should not submit any other applications, whether on a printed Application Form or through an Electronic Application, for any other person. Such separate applications will be deemed to be multiple applications and shall be rejected.

An applicant who has been procured by the Placement Agent to subscribe for Placement Shares (other than Reserved Shares) or who otherwise subscribes for Placement Shares shall not make any application for Offer Shares either through an Electronic Application or by way of a printed Application Form. Such separate applications shall be deemed to be multiple applications and shall be rejected.

Conversely, an applicant who has made an application for Offer Shares either through an Electronic Application or by way of a printed Application Form shall not make or procure to be made another separate application for Placement Shares (other than Reserved Shares). Such separate applications shall be deemed to be multiple applications and shall be rejected.

Joint or multiple applications will be rejected. Persons submitting or procuring submission of multiple share applications (whether for Offer Shares, Placement Shares or both Offer Shares and Placement Shares) may be deemed to have committed an offence under the Penal Code (Chapter 224) of Singapore and the Securities Industry Act (Chapter 289) of Singapore, and such applications may be referred to the relevant authorities for investigations. Applications appearing to be or suspected of being multiple applications are liable to be rejected at the discretion of the Company.

An applicant for Reserved Shares using the Reserved Shares Application Form may submit ONE separate application for Offer Shares in his own name by way of a printed Application Form or by way of an Electronic Application or submit one separate application for Placement Shares (other than Reserved Shares) by way of a printed Application Form, provided he adheres to the terms and conditions of this Prospectus. SUCH SEPARATE APPLICATIONS SHALL NOT BE TREATED AS MULTIPLE APPLICATIONS.

120 4. Applications will not be accepted from any person under the age of 21, undischarged bankrupts, sole-proprietorships, partnerships, chops or non-corporate bodies, joint Securities Account holders of CDP or applicants whose addresses (furnished in their printed 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.

5. The existence of a trust will not be recognised. An application by any person must therefore be made in his/her/their own name(s) and without qualification or, where the application is made by way of a printed Application Form by a nominee, in the name(s) of an approved nominee company or companies after complying with paragraph 6 below of this Prospectus.

6. NOMINEE APPLICATIONS MAY BE MADE BY APPROVED NOMINEE COMPANIES ONLY. 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 any persons acting as nominees other than approved nominee companies shall be rejected.

7. FOR NON-NOMINEE APPLICATIONS, EACH APPLICANT MUST MAINTAIN A SECURITIES ACCOUNT WITH CDP IN HIS OWN NAME AT THE TIME OF APPLICATION. An applicant without an existing Securities Account with CDP in his own name at the time of application will have his application rejected in the case of an application by way of a printed Application Form, or will not be able to complete his Electronic Application in the case of an Electronic Application. An applicant with an existing Securities Account who fails to provide his Securities Account number or who provides an incorrect Securities Account number in Section B of the Application Form or in his Electronic Application, as the case may be, is liable to have his application rejected. Subject to paragraph 8 below, an application may be rejected if the applicant’s particulars such as name, NRIC/passport number, nationality and permanent residence status provided in his Application Form or, in the case of an Electronic Application contained in the records of the relevant Participating Bank at the time of his Electronic Application, as the case may be, differ from those particulars in his Securities Account as maintained with CDP. If an applicant possesses more than one individual direct Securities Account with CDP, his application will be rejected.

8. IF THE ADDRESS OF AN APPLICANT STATED ON 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, THE APPLICANT MUST INFORM CDP OF HIS UPDATED ADDRESS PROMPTLY, FAILING WHICH THE NOTIFICATION LETTER ON SUCCESSFUL ALLOTMENT AND OTHER CORRESPONDENCE FROM CDP WILL BE SENT TO HIS ADDRESS LAST REGISTERED WITH CDP.

9. The Company reserves the right to reject or accept, in whole or in part, or to scale down or ballot, any application without assigning any reason therefor, and no enquiry and/or correspondence on the decision of the Company will be entertained. This right applies to applications made by way of printed Application Forms and by way of Electronic Applications. In deciding the basis of allotment which shall be at the discretion of the Company, due consideration will be given to the desirability of allotting the New Shares to a reasonable number of applicants with a view to establishing an adequate market for the Shares.

10. The Company reserves the right to reject any application which does not conform strictly to the instructions set out in the Application Forms and this Prospectus or which does not comply with the instructions for Electronic Applications or with the terms and conditions of this Prospectus or, in the case of an application by way of a printed Application Form, which is illegible, incomplete, incorrectly completed or which is accompanied by improperly drawn up or improper form of remittance. The Company further reserves the right to treat as valid any applications not completed or submitted or effected in all respects in accordance with the terms and conditions of this Prospectus, the instructions set out in the printed Application Forms or the instructions for Electronic Applications 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.

121 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 each successful applicant at his own risk, within 15 Market Days after the close of the Application List, a statement showing that his Securities Account has been credited with the number of New Shares allotted to him. This will be the only acknowledgement of application moneys received and is not an acknowledgement by the Company.

12. Each applicant irrevocably authorises CDP to complete and sign on his behalf as transferee or renouncee any instrument of transfer and/or other documents required for the issue or transfer of New Shares allotted to the applicant. This authorisation applies to applications made both by way of printed Application Forms and by way of Electronic Applications.

13. If there is an over-subscription for the Offer Shares as at the close of the Application List and the number of Placement Shares are fully subscribed or over subscribed as at the close of the application list, the applications for the Offer Shares will be determined by ballot or otherwise determined by the Directors and approved by the SGX-ST. In the event of an under-subscription for the Offer Shares as at the close of the Application List, that number of Offer Shares under- subscribed shall be made available to satisfy applications for the Placement Shares to the extent there is an over-subscription for the Placement Shares as at the close of Application List. Any of the Reserved Shares not taken up will be made available to satisfy applications for the Placement Shares to the extent that there is an over-subscription for the Placement Shares.

In the event of an under-subscription for the Placement Shares as at the close of the Application List, that number of Placement Shares under-subscribed shall be made available to satisfy applications for the Offer Shares to the extent there is an over-subscription for the Offer Shares as at the close of the Application List.

14. By completing and delivering an Application Form and, in the case of an Electronic Application, by (in the case of an ATM Electronic Application) pressing the “Enter” or “OK” or “Confirm” or “Yes” or any other relevant 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” or any other relevant button on the IB web-site screen (as the case may be) in accordance with the provisions herein, each applicant:-

(a) irrevocably offers to subscribe for the number of New Shares specified in his application (or such smaller number for which the application is accepted) at the Offer Price and agrees that he will accept such Shares as may be allotted to him, in each case in accordance with, and subject to, the terms and conditions set out in the Prospectus and the Memorandum and Articles of Association of the Company; and

(b) warrants the truth and accuracy of the information in his application.

15. No Shares will be allotted on the basis of this Prospectus later than six months after the date of issue of this Prospectus.

16. Acceptance of applications will be conditional upon the Company being satisfied that:-

(a) permission has been granted by the SGX-ST to deal in and for quotation for all the existing Shares and the New Shares on a “when issued” basis on the SGX-ST; and

(b) the Management and Underwriting Agreement and Placement Agreement referred to on page 118 of this Prospectus have become unconditional and have not been terminated.

17. Each applicant irrevocably authorises CDP to disclose the outcome of his application, including the number of New Shares allotted to the applicant pursuant to his application, to authorised operators.

122 18. Any reference to the “Applicant” in this section shall include a person applying for the Offer Shares by way of Electronic Application or by way of printed Application Forms and a person applying for the Placement Shares through the Placement Agent and a person applying for the Reserved Shares by way of printed application forms.

19. Further terms and conditions for applications by way of printed Application Forms are set out on pages 123 to 126 of this Prospectus.

20. Further terms and conditions for applications by way of Electronic Applications are set out on pages 126 to 133 of this Prospectus.

21. No application will be held in reserve.

ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATION FORMS Applications by way of printed Application Forms shall be made on, and subject to, the terms and conditions of this Prospectus including but not limited to the terms and conditions appearing below and including those set out under “TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION” found on pages 120 to 123 of this Prospectus as well as the Memorandum and Articles of Association of the Company.

1. Applications must be made using the WHITE Application Forms and official envelopes “A” and “B” for Offer Shares, the BLUE Application Forms for Placement Shares (other than Reserved Shares) or the PINK Application Forms for Reserved Shares accompanying and forming part of this Prospectus. Care must be taken to follow the detailed instructions set out in the respective Application Forms and this Prospectus for the completion of the respective Application Forms. The Company reserves 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 or incorrectly completed or which are accompanied by improperly drawn up or improper form of remittances may be rejected.

2. The Application Forms must be completed in English. Please type or write clearly in ink using BLOCK LETTERS. 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.

3. Individuals, corporations and approved nominee companies must give their names in full. Applications must be made, in the case of individuals, in their full names as appearing in their identity cards (if the applicants have such identification documents) or in their passports and, in the case of corporations, in their full names as registered with a competent authority. Applicants, other than individuals, completing the Application Form under the hand of an officer, must state the name and capacity in which that officer signs. A corporation completing the Application Form is required to affix its Common Seal (if any) in accordance with the Memorandum and Articles of Association or the equivalent constitutive document(s) of the corporation. If an application by a corporate applicant is successful, a copy of its Memorandum and Articles of Association or the equivalent constitutive document(s) of the corporation must be lodged with the Company’s Share Registrar. The Company reserves the right to require any applicant to produce documentary proof of identification for verification purposes.

4. (a) All applicants must complete Sections A and B and sign page 1 of the Application Form.

(b) All applicants are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form. Where paragraph 7(a) is deleted, the applicant must also complete Section C of the Application Form with particulars of the beneficial owner(s).

(c) Applicants who fail to make the required declaration in paragraph 7(a) or 7(b) (as the case may be) on page 1 of the Application Forms are liable to have their applications rejected.

123 5. Applications for New Shares must be accompanied by payment in cash in the form set out below only. Each application must be accompanied by a cash remittance in Singapore currency for the full amount payable, in respect of the number of New 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 “ACHIEVA SHARE ISSUE ACCOUNT” and crossed “A/C PAYEE ONLY”, or in the form of a UOB GROUP ATM CASHIER’S ORDER EQUIVALENT, and with the name and address of the applicant written clearly on the reverse side. Applications not accompanied by any payment or accompanied by ANY OTHER FORM OF PAYMENT WILL NOT BE ACCEPTED. Remittances bearing “Not Transferable” or “Non Transferable” crossings will be rejected. No acknowledgement of receipt will be issued by the Company or the Manager for applications and application moneys received.

6. Individual applicants will be required to declare whether they are citizens or permanent residents of Singapore. Corporate applicants, whether incorporated or unincorporated and wherever incorporated or constituted, will be required to declare whether they are corporations 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. Approved nominee companies are required to declare whether the beneficial owner of the New 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. It is expected that unsuccessful applications and those not successfully ballotted or accepted will be returned to the applicants by ordinary post at the risk of the applicants within three Market Days after the close of the Application List (without interest or any share of revenue or other benefit arising therefrom). Where an 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 to the applicant by ordinary post at his own risk (without interest or any share of revenue or other benefit arising therefrom), within 14 days after the close of the Application List provided that the remittance accompanying 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. Unsuccessful applicants using UOB Group ATM Cashier’s Order Equivalent will have the full amount of their application moneys (without interest or any share of revenue or other benefit arising therefrom) automatically credited to their accounts maintained with the relevant bank within the UOB Group.

8. Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the meanings assigned to them in this Prospectus.

9. In consideration of the Company having distributed the Application Form to the applicant and agreeing to close the Application List at 12.00 noon on 30 May 2000 or such later time or date as the Directors may in their absolute discretion decide and by completing and delivering the Application Form, each applicant agrees that:-

(a) his application is irrevocable;

(b) his remittance will be honoured on first presentation and that any moneys returnable may be held pending clearance of his payment and he will not be entitled to any interest or any share of revenue or other benefit arising therefrom;

(c) in respect of New Shares for which his application has been received and not rejected, acceptance of his application shall be constituted by written notification by or on behalf of the Company and not otherwise, notwithstanding any remittance being presented for payment by or on behalf of the Company;

(d) he will not be entitled to exercise any remedy of rescission for misrepresentation at any time after acceptance of his application;

124 (e) all applications, acceptances and contracts resulting therefrom pursuant to the Invitation shall be governed by and construed in accordance with the laws of Singapore and that he irrevocably submits to the non-exclusive jurisdiction of the Singapore courts; and

(f) in making his application, reliance is placed solely on the information contained in the Prospectus and that none of the Company, the Manager, the Underwriters, the Placement Agents nor any other involved in the Invitation shall have any liability for any information not so contained.

10. Application for Offer Shares (a) Applications for Offer Shares MUST be made using the WHITE Offer Shares Application Forms and the WHITE official envelopes “A” and “B”. ONLY ONE APPLICATION should be enclosed in each envelope.

(b) The applicant must:-

(i) enclose the WHITE Offer Shares Application Form, duly completed and executed, together with the correct remittance in accordance with the terms and conditions of this Prospectus in the WHITE official envelope “A” which is provided;

(ii) in the appropriate spaces on the WHITE official envelope “A”:-

(aa) write his name and address;

(bb) state the number of Offer Shares applied for;

(cc) tick the box if cash payment is by UOB Group ATM Cashier’s Order Equivalent; and

(dd) affix adequate Singapore postage.

(d) write, in the appropriate box provided on the larger official WHITE envelope “B” addressed to UOB ASIA LIMITED, 80 RAFFLES PLACE, UOB PLAZA 1, SINGAPORE 048624, the number of Offer Shares for which the application is made; and

(e) insert WHITE official envelope “A” into WHITE official envelope “B”. The applicant must seal the WHITE official envelope “B”, affix adequate Singapore postage on envelope “B” (if despatching by ordinary post) and thereafter DELIVER BY HAND OR DESPATCH BY ORDINARY POST at his own risk to UOB ASIA LIMITED, 80 RAFFLES PLACE, UOB PLAZA 1, SINGAPORE 048624 so as to arrive by 12.00 NOON ON 30 MAY 2000 or such later date and time as the Company may, in its absolute discretion, decide. Local Urgent Mail or Registered Post must NOT be used. No receipt or acknowledgement will be issued for any application or remittance received.

125 11. Application for Placement Shares (other than Reserved Shares) Applications for Placement Shares (other than Reserved Shares) MUST be made using the BLUE Placement Shares Application Forms. The completed BLUE Placement Shares Application Form and the applicant’s remittance in accordance with the terms and conditions of this Prospectus must be enclosed and sealed in any envelope to be provided by the applicant. The applicant must affix adequate postage (if despatching by ordinary post) and thereafter the sealed envelope must be DELIVERED BY HAND OR DESPATCHED BY ORDINARY POST at the applicant’s own risk to UOB ASIA LIMITED, 80 RAFFLES PLACE, UOB PLAZA 1, SINGAPORE 048624 so as to arrive by 12.00 NOON ON 30 MAY 2000 or such later date and time as the Company may, in its absolute discretion, decide. Local Urgent Mail or Registered Post MUST NOT be used. ONLY ONE APPLICATION should be enclosed in each envelope. No receipt or acknowledgement will be issued for any application or remittances received.

12. Application for Reserved Shares Application for Reserved Shares MUST be made using the PINK Reserved Shares Application Forms. ONLY ONE APPLICATION should be enclosed in each envelope. The completed PINK Reserved Shares Application Form and the applicant’s remittance in accordance with the terms and conditions of this Prospectus must be enclosed and sealed in any envelope to be provided by the applicant. The sealed envelope must be DELIVERED BY HAND OR DESPATCHED BY ORDINARY POST at the applicant’s own risk to the Company’s registered office so as to arrive by 12.00 NOON ON 30 MAY 2000 or such later date and time as the Company may, in its absolute discretion, decide. Local Urgent Mail or Registered Post must NOT be used. No receipt or acknowledgement will be issued for any application or remittance received.

ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS The procedures for Electronic Applications are set out on the ATM screens (in the case of ATM Electronic Applications) and the IB web-site screens (in the case of Internet Electronic Applications) of the relevant Participating Banks (the “Steps”). Currently, UOB, DBS Bank and OUB are the only Participating Banks through which Internet Electronic Applications may be made. For illustration purposes, the procedure for Electronic Applications through ATMs of the UOB Group and the IB web-site of UOB are set out in the “Steps for an ATM Electronic Application through the ATMs of UOB Group” and the “Steps for an Internet Electronic Application through the IB web-site of UOB” (the “UOB Steps”) on pages 132 and 133 of this Prospectus, respectively. 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 an “Applicant” in these additional terms and conditions for Electronic Applications and the Steps shall mean the applicant who applies for Offer Shares through an ATM or the IB web- site of the relevant Participating Banks. For an ATM Electronic Application, the Applicant must have an existing bank account with, and be an ATM cardholder of, one of the Participating Banks before he can make an ATM Electronic Application at an ATM of that Participating Bank. An ATM card issued by one Participating Bank cannot be used to apply for Offer Shares at an ATM belonging to another Participating Bank. For an Internet Electronic Application, the Applicant 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. The UOB Steps set out the actions that the Applicant must take at ATMs of the UOB Group or the IB web-site of UOB to complete an Electronic Application. The actions that the Applicant must take at ATMs or the IB web-sites of other Participating Banks are set out on the ATM screens or the IB web-site screens of the relevant Participating Banks. Upon the completion of his ATM Electronic Application transaction, the Applicant will receive an ATM transaction slip (“Transaction Record”) confirming the details of his ATM Electronic Application. Upon completion of his Internet Electronic Application through the IB web-site of UOB, there will be an on-screen confirmation (“Confirmation Screen”) of the application which the Applicant can print for his record. The Transaction Record or printed record of the Confirmation Screen is for retention by the Applicant and should not be submitted with any printed Application Form.

126 An Applicant must ensure that he enters his own Securities Account number when using the ATM card issued to him in his own name. Using his own Securities Account number with an ATM card which is not issued to him in his own name will render his Electronic Application liable to be rejected. An Applicant operating a joint bank account with any of the Participating Banks must ensure that he enters his own Securities Account number when using an ATM card issued to him in his own name. An Applicant who fails to use his own ATM card or who does not key in his own Securities Account number will have his application rejected.

An Applicant must ensure, when making an Internet Electronic Application, that the mailing address of his account selected for the application is in Singapore and the application is being made in Singapore. Otherwise his application is liable to be rejected. In this connection, the Applicant will be asked to declare that he is in Singapore at the time when he makes his application.

Electronic Applications shall be made in accordance with, and subject to, the terms and conditions of this Prospectus including but not limited to those appearing below and those set out under the section on “TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION” found on pages 120 to 123 of this Prospectus as well as the Memorandum and Articles of Association of the Company.

1. In connection with his Electronic Application for Offer Shares, the Applicant is required to confirm statements to the following effect in the course of activating his Electronic Application, i.e. that:

(a) he has received a copy of the Prospectus and has read, understood and agreed to all the terms and conditions of application for Offer Shares in this Prospectus prior to effecting the Electronic Application and agrees to be bound by the same;

(b) he consents to the disclosure of his name, NRIC/passport number, nationality and permanent residence status, address, share application amount, CPF Investment Account number (if applicable), CDP Securities Account number and share application amount (the “Relevant Particulars”) from his account with that Participating Bank to the CDP, CPF, SCCS, the Share Registrar, the Company and the Manager (the “Relevant Parties”); and

His application will not be successfully completed and cannot be recorded as a completed transaction in the ATM or on the IB web-site unless he presses the “Enter” or “Confirm” or “Yes” or “OK” or any other relevant key in the ATM or clicks “Confirm” or “OK” or “Submit” or “Continue” or “Yes” or any other relevant button on the IB web-site screen. By doing so, the Applicant shall be treated as signifying his confirmation of each of the above statements. In respect of statement 1(b) above, such confirmation shall signify, and shall be treated as, his written permission given in accordance with the relevant laws of Singapore including Section 47(4) of the Banking Act (Chapter 19) of Singapore to the disclosure by the relevant Participating Bank of the Relevant Particulars of his account(s) with the Participating Bank to the Relevant Parties.

2. An applicant may make an ATM Electronic Application at the ATM of any Participating Bank or an Internet Electronic Application at the IB web-site of any relevant Participating Bank for the Offer Shares in the form of cash only by authorising such Participating Bank to deduct the full amount payable from his account with such Participating Bank.

127 3. The Applicant irrevocably agrees and undertakes to subscribe for and to accept the number of Offer Shares applied for as stated on the Transaction Record or on the Confirmation Screen or any lesser number of Offer Shares that may be allotted to him in respect of his Electronic Application. In the event that the Company decides to allot any lesser number of such Offer Shares or not to allot any Offer Shares to the Applicant, the Applicant agrees to accept such decision as final. If the Applicant’s Electronic Application is successful, his confirmation (by his action of pressing the “Enter” or “Confirm” or “Yes” or “OK” or any other relevant key on the ATM or clicking “Confirm” or “OK” or “Submit” or “Continue” or “Yes” or any other relevant button on the IB web-site screen) of the number of Offer Shares applied for shall signify, and shall be treated as, his acceptance of the number of Offer Shares that may be allotted to him and his agreement to be bound by the Memorandum and Articles of Association of the Company.

4. The Applicant irrevocably requests and authorises the Company to:

(a) register the Offer Shares allotted to the Applicant in the name of CDP for deposit into his Securities Account;

(b) send the relevant Share certificate(s) to CDP;

(c) return or refund (without interest or any share of revenue or other benefit arising therefrom) the application moneys in Singapore currency should his Electronic Application be rejected, by automatically crediting the Applicant’s bank account with the relevant Participating Bank with the relevant amount within three Market Days after the close of the Application List; and

(d) return or refund (without interest or any share of revenue or other benefit arising therefrom) the balance of the application moneys in Singapore currency should his Electronic Application be accepted in part only, by automatically crediting the Applicant’s bank account with the relevant Participating Bank with the relevant amount within 14 days after the close of the Application List.

5. BY MAKING AN ELECTRONIC APPLICATION, THE APPLICANT CONFIRMS THAT HE IS NOT APPLYING FOR OFFER SHARES AS NOMINEE OF ANY OTHER PERSON AND THAT ANY ELECTRONIC APPLICATION THAT HE MAKES IS THE ONLY APPLICATION MADE BY HIM AS BENEFICIAL OWNER.

WHERE AN APPLICANT HAS MADE AN ELECTRONIC APPLICATION FOR THE OFFER SHARES, HE SHALL NOT MAKE ANY OTHER APPLICATION FOR THE NEW SHARES (OTHER THAN RESERVED SHARES), WHETHER AT THE ATMS OR THE IB WEB-SITES (IF ANY) OF ANY PARTICIPATING BANK OR ON THE PRESCRIBED PRINTED APPLICATION FORMS. WHERE A PERSON HAS MADE AN APPLICATION FOR NEW SHARES (OTHER THAN RESERVED SHARES) ON AN APPLICATION FORM, HE SHALL NOT MAKE AN ELECTRONIC APPLICATION FOR OFFER SHARES AND VICE VERSA.

6. The Applicant irrevocably agrees and acknowledges that his 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, the Company and the Manager and if, in any such event, the Participating Banks and/or the Company and/or the Manager do not record or receive the Applicant’s Electronic Application, or data relating to the Applicant’s Electronic Application or the tape or any other devices containing such data is lost, corrupted, destroyed or not otherwise accessible, whether wholly or partially for whatever reason, the Applicant shall be deemed not to have made an Electronic Application and the Applicant shall have no claim whatsoever against the Manager, the Participating Banks, or the Company for Offer Shares applied for or for any compensation, loss or damage.

7. Electronic Applications shall close at 12 noon on 30 May 2000 or such other time as the Directors may, in their absolute discretion, decide. Subject to the paragraph above, an Internet Electronic Application is deemed to be received only upon its completion, that is, when there is an on-screen confirmation of the application.

128 8. All particulars of the Applicant in the records of the relevant Participating Banks at the time he makes his Electronic Application shall be deemed to be true and correct and the relevant Participating Bank and the Relevant Parties shall be entitled to rely on the accuracy thereof. If there has been any change in the particulars of the Applicant after the time of the making of his Electronic Application, the Applicant shall promptly notify the relevant Participating Bank.

9. The Applicant must have sufficient funds in his bank account(s) with the relevant Participating Bank at the time he makes his Electronic Application, failing which his Electronic Application will not be completed or accepted. Any Electronic Application which does not strictly conform to the instructions set out in this Prospectus or on the screens of the ATM or IB web-site through which that Electronic Application is being made will be rejected.

10. No applications will be kept in reserve. Where an Electronic Application is rejected, it is expected that the full amount of the application moneys will be refunded in Singapore currency (without interest or any share of revenue or other benefit arising therefrom) to the Applicant by being automatically credited to the Applicant’s bank account(s) with the relevant Participating Bank within three Market Days 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 an Electronic Application is rejected or accepted in part only, the full amount or the balance of the application moneys will be refunded in Singapore currency (without interest or any share of revenue or other benefit arising therefrom) to the Applicant by being automatically credited to the Applicant’s bank account(s) with the relevant Participating Bank within 14 days after the close of the Application List.

The responsibility for timely refund of application moneys arising from unsuccessful or partially successful Electronic Application lies solely with the respective Participating Banks. Therefore, Applicants are strongly advised to consult their respective Participating Banks regarding the status of their Electronic Applications and/or refund of application moneys to them arising from their unsuccessful or partially successful Electronic Applications, to determine the exact number of Shares, if any, which have been allotted to them. Neither the SGX-ST, CDP, SCCS, the Participating Banks, the Company nor the Manager assumes any responsibility for any loss which may be incurred as a result of Applicants having to cover any net sell positions or from buy-in procedures activated by the SGX-ST.

If the Applicant’s ATM Electronic Application is made through the ATMs of KTB or UOB Group and is unsuccessful, it is expected that a computer-generated notice will be sent to the Applicant by the relevant Participating Bank (at the address of the Applicant stated in the records of the relevant Participating Bank as at the date of his ATM Electronic Application) by ordinary post at the Applicant’s own risk within three Market Days after the close of the Application List. If the Applicant’s ATM Electronic Application is made through the ATMs of OCBC Group, OUB or DBS Bank (including those of its POSBank Services division) and is unsuccessful, no notification will be sent by the relevant Participating Bank.

If the Applicant’s Internet Electronic Application made through the IB web-site of UOB, OUB or DBS Bank is unsuccessful, no notification will be sent by such Participating Bank.

129 Applicants who make Electronic Applications through the ATMs of the following banks may check the provisional results of their Electronic Applications as follows:

Bank Telephone Other Channels Operating Hours Service expected from DBS 1800-222 2222 Internet Banking or 24 hours a day Evening of the Bank 327 4767 Internet Kiosk balloting day www.dbs.com.sg* KTB 222 8228 ATM ATM – 24 hours a day ATM – Evening of the Phone Banking – balloting day Mon – Fri 0800-2200 Phone Banking – Sat 0800-1500 8.00 am on the day after the balloting day OCBC 1800-363 3333 ATM ATM – 24 hours a day Evening of the balloting day Phone Banking – 24 hours a day OUB 1800-224 2000 OUB Personal Internet Phone Banking/ Evening of the balloting day Banking Internet Banking – 24 hours a day www.oub2000.com.sg*

OUB Mobile Buzz OUB Mobile Buzz** – 24 hours a day UOB 1800-5335533 ATM (Other Transactions – Phone Banking/ATM*** – 6.00 p.m. on the balloting 1800-2222121 “IPO Enquiry”) 24 hours a day day www.uobcyberbank.com.sg***

* Applicants who make Internet Electronic Applications through the IB web-site of OUB or DBS Bank may also check the results of their application through the same channels listed in the table above in relation to ATM Electronic Applications made at ATMs of OUB or DBS Bank. ** Applicants who make Electronic Applications through the ATMs or IB web-site of OUB and who have activated their OUB Mobile Buzz service will be notified of the results of their Electronic Application via their mobile phones. *** Applicants who make Electronic Applications through the ATMs or IB web-site of UOB may check the results of their application through UOB CyberBank, UOB Group ATMs or UOB PhoneBanking Services.

11. In consideration of the Company making available the Electronic Application facility through the ATMs and the IB web-sites (if any) of the Participating Banks and agreeing to close the Application List at 12.00 noon on 30 May 2000 or such later time or date as the Directors may in their absolute discretion decide, and by making and completing an Electronic Application, the Applicant agrees that:

(a) his Electronic Application is irrevocable;

(b) his Electronic Application, the acceptance by the Company and the contract resulting therefrom under the Invitation shall be governed by and construed in accordance with the laws of Singapore and he irrevocably submits to the non-exclusive jurisdiction of the Singapore courts;

(c) he will not be entitled to exercise any remedy of rescission for misrepresentation at any time after acceptance of his application;

(d) neither the Company, the Manager nor 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 his Electronic Application to the Company or CDP due to a breakdown or failure of transmission, delivery or communication facilities or any risks referred to in paragraph 6 on page 128 of this Prospectus or to any cause beyond their respective controls;

(e) in respect of Offer Shares for which the Applicant’s Electronic Application has been successfully completed and not rejected, acceptance of the Applicant’s Electronic Application shall be constituted by written notification by or on behalf of the Company and not otherwise, notwithstanding receipt of any payment by or on behalf of the Company; and

130 (f) in making his application, reliance is placed solely on the information contained in the Prospectus and that none of the Company, the Manager, the Underwriters, the Placement Agents nor any other involved in the Invitation shall have any liability for any information not so contained.

12. The existence of a trust will not be recognised. Any Electronic Application by a person must be made in his/their own name(s) and without qualification. The Company will reject any application by any person acting as nominee.

13. The Applicant should ensure that his personal particulars as recorded by both CDP and the relevant Participating Bank are correct and identical, otherwise, his Electronic Application is liable to be rejected. The Applicant should promptly inform CDP of any change in address, failing which the notification letter on successful allotment will be sent to his address last registered with CDP.

INSTRUCTIONS FOR ELECTRONIC APPLICATIONS THROUGH ATMS OF THE UOB GROUP AND IB WEB-SITE OF UOB The instructions for an Applicant using Electronic Application will appear on the ATM screens and the IB web-site screens of the respective Participating Banks. For illustrative purposes, the steps for making an Electronic Application through UOB Group’s ATMs or through the IB web-site of UOB are shown below. Instructions for Electronic Applications appearing on the ATM screens and the IB web- site screens (if any) of the relevant Participating Banks (other than UOB Group) may differ from that represented below.

Owing to space constraints on UOB Group’s ATM screen, the following terms will appear in abbreviated form:-

“&” : AND

“A/C” and “A/CS” : ACCOUNT and ACCOUNTS, respectively

“ADDR” : ADDRESS

“AMT” : AMOUNT

“APPLN” : APPLICATION

“CDP” : THE CENTRAL DEPOSITORY (PTE) LIMITED

“CPF” : CENTRAL PROVIDENT FUND

“CPFINVT A/C” : CPF INVESTMENT ACCOUNT

“ESA” : ELECTRONIC SHARE APPLICATION

“IC/PSSPT” : NRIC or PASSPORT NUMBER

“NO” or “NO.” : NUMBER

“PERSONAL NO” : PERSONAL IDENTIFICATION NUMBER

“REGISTRARS” : SHARE REGISTRARS

“SCCS” : SECURITIES CLEARING & COMPUTER SERVICES (PTE) LTD

“UOB/ICB CPFIS” : UOB or ICB CPF INVESTMENT SCHEME

“YR” : YOUR

131 Steps for an ATM Electronic Application through the ATMs of UOB Group Step 1 : Insert your personal Unicard, Uniplus card or UOB VISA/MASTER card and key in your personal identification number. 2 : Select “OTHER TRANSACTIONS”. 3 : Select “SHARE APPLN”. 4 : Select “ESA - FIXED”. 5 : Select the share counter you wish to apply for. 6 : Read and understand the following statements which will appear on the screen:- — THE PROSPECTUS IS AVAILABLE AT VARIOUS PARTICIPATING BANKS — A COPY OF THE PROSPECTUS HAS BEEN LODGED WITH AND REGISTERED BY THE REGISTRAR OF COMPANIES AND BUSINESSES WHO TAKES NO RESPONSIBILITY FOR ITS CONTENTS Press the “ENTER” key to confirm that you have read and understood the above statements. 7 : Read and understand the following terms which will appear on the screen:- — YOU HAVE READ UNDERSTOOD & AGREED TO ALL TERMS OF THE PROSPECTUS & THIS ELECTRONIC APPLICATION — YOU CONSENT TO DISCLOSE YR NAME IC/PSSPT NATIONALITY ADDR APPLN AMT CPFINVT A/C NO & CDP A/C NO FROM YR A/CS TO CDP CPF SCCS REGISTRARS & ISSUER/VENDOR(S) — THIS IS YR ONLY FIXED PRICE APPLN & IS IN YR NAME AND AT YR RISK Confirm your consent to above terms by pressing the “ENTER” key. 8 : Key in your NRIC or passport number (the numerical portion only) and press the “ENTER” key. 9 : Select mode of payment i.e. “CASH ONLY”. 10 : After you have selected “CASH ONLY”:- (a) key in your CDP Securities Account number (12 digits) and press the “ENTER” key; (b) select your nationality status; and (c) key in the number of Shares you wish to apply for and press the “ENTER” key. 11 : Check the details of your Electronic Application on the screen and press “ENTER” key to confirm your Electronic Application. 12 : Select “NO” if you do not wish to make any further transactions and remove the Transaction Record. You should keep the Transaction Record for your own reference only.

Owing to space constraints on UOB’s IB web-site screen, the following terms will appear in abbreviated form:- “CDP” : The Central Depository (Pte) Limited “CPF” : The Central Provident Fund “NRIC” or “I/C” : National Registration Identity Card “PR” : Permanent Resident “SGD” : Singapore dollars “SCCS” : Singapore Clearing & Computer Services (Pte) Ltd “SGX-ST” : Singapore Exchange Securities Trading Limited

132 Steps for an Internet Electronic Application through the IB web-site of UOB For illustrative purposes, the steps for making an Internet Electronic Application through the CyberBank website of UOB is shown below.

Step 1 : Click on to UOB Cyberbank website at http://www.uobcyberbank.com.sg

2 : Enter your Access Code/CIN and Password

3 : Select “Applications and Purchases”

4 : Select “Initial Public Offerings (IPOs)”

5 : Click “Yes” to declare that you are in Singapore and have a mailing address in Singapore

6 : Select Share Counter “Achieva”, mode of payment and your account to debit

7 : Click on “I confirm” to confirm

— YOU HAVE READ, UNDERSTOOD & AGREED TO ALL THE TERMS OF THIS APPLICATION AND THE PROSPECTUS

— YOU CONSENT TO DISCLOSE YOUR NAME, I/C OR PASSPORT NUMBER, ADDRESS, NATIONALITY, CDP SECURITIES ACCOUNT NUMBER, CPF INVESTMENT ACCOUNT NUMBER (IF APPLICABLE) AND APPLICATION DETAILS TO THE SHARE REGISTRARS, SCCS, CDP, SGX-ST, CPF BOARD, ISSUER/VENDOR(S) AND LEAD ISSUE MANAGER

— THIS APPLICATION IS MADE IN YOUR OWN NAME AND AT YOUR OWN RISK

— FOR FIXED PRICE SHARES APPLICATION, THIS IS YOUR ONLY APPLICATION. FOR TENDER PRICE SHARES APPLICATIONS, THIS IS YOUR ONLY APPLICATION AT THE SELECTED TENDER PRICE

8 : Check the share counter, the payment mode and the account to debit are correct and click “submit”

9 : Fill in details for the IPO application

— Select your Nationality, enter CDP Securities A/c No., and the number of shares applied for

— Check your NRIC/Passport No.

— Click “submit”

10 : Check details of your application and click “Confirm” to confirm your application

11 : Print Confirmation Screen (optional) for your reference and retention only

133 PLEASE PIN REMITTANCE HERE THE NOTES AND INSTRUCTIONS ON PAGES 120 TO 133 OF THE PROSPECTUS DATED 20 MAY 2000 (THE “PROSPECTUS”) SHOULD BE READ CAREFULLY BEFORE COMPLETING THIS APPLICATION FORM. THIS APPLICATION FORM CONSTITUTES AN INTEGRAL PART OF THE PROSPECTUS. THE APPLICATION LIST WILL OPEN AT 10.00 A.M. ON 30 MAY 2000 AND WILL REMAIN OPEN UNTIL 12 NOON ON THE SAME DAY OR FOR SUCH FURTHER PERIOD OR PERIODS AS THE DIRECTORS OF THE COMPANY MAY, IN THEIR ABSOLUTE DISCRETION, DECIDE.

ACHIEVA LIMITED (Incorporated in the Republic of Singapore on 3 November 1993)

TO: ACHIEVA LIMITED (THE “COMPANY”) c/o UOB ASIA LIMITED (“UOB ASIA”) 80 RAFFLES PLACE UOB PLAZA 1 SINGAPORE 048624 Gentlemen, 1. *I/We hereby declare that *I/we have read, understood and agree to the terms and conditions set out in the Prospectus including the notes and instructions for the completion and return of this Application Form set out on pages 120 to 133 of the Prospectus and that this application has been made in accordance with the Prospectus and such notes and instructions. Capitalised terms used in this Application Form shall bear the meanings assigned to them in the Prospectus. 2. In accordance with and subject to the terms and conditions of the Prospectus, this Application Form and the Memorandum and Articles of Association of the Company, *I/we hereby irrevocably apply for the number of Offer Shares at $0.22 for each Offer Share as set out on page 2 of this Application Form. *I/We enclose a Banker’s Draft or Cashier’s Order drawn in Singapore currency on a bank in Singapore and made out in favour of “ACHIEVA SHARE ISSUE ACCOUNT” crossed “A/C PAYEE ONLY” or a UOB Group ATM Cashier’s Order Equivalent, with *my/our name and address written clearly on the reverse side for the amount as set out on page 2 of this Application Form being payment in full for the number of Offer Shares applied for. 3. *I/We hereby irrevocably undertake and agree to subscribe for and to accept the number of Offer Shares applied for or any lesser number of Offer Shares that may be allotted to *me/us in respect of this application. In the event that you decide to allot a lesser number of Offer Shares or not to allot any Offer Shares to *me/us, *I/we agree to accept that decision as final. If *my/our application is successful, *my/our signature(s) hereto (or, if the applicant is a corporation, the affixation of its common seal hereto) shall signify *my/our acceptance(s) of the number of Offer Shares that may be allotted to *me/us and *my/our agreement to be bound by the Memorandum and Articles of Association of the Company. 4. *I/We hereby request and authorise you (a) to register the Offer Shares allotted to *me/us in the name of The Central Depository (Pte) Limited (“CDP”) for deposit in *my/our Securities Account; (b) to send the relevant share certificate(s) by ordinary post at *my/our own risk to CDP; and (c) to return or refund (without interest or any share of revenue earned or other benefit arising therefrom) the application moneys or the balance thereof should this application be unsuccessful or accepted in part only, by ordinary post at *my/our own risk, to *my/our address which appears in Section B of this Application Form or as registered with CDP or as indicated on the self-addressed envelope marked “A”. *I/We hereby agree and acknowledge that *I/we shall not be entitled to any interest or share of revenue earned or other benefit arising therefrom in connection with or by reason of the application moneys being deposited with United Overseas Bank Limited. 5. I declare that I am not under 21 years of age or an undischarged bankrupt (for individuals only). 6. *I/We hereby acknowledge that (a) *my/our receipt of this Application Form was accompanied by the Prospectus; and (b) the Prospectus and this Application Form were not furnished to *me/us outside Singapore by the Company or UOB Asia. 7. (a) *For Non-nominee Applicants:– (i) *I/We declare that *I am/we are not applying for the Offer Shares as nominee(s) for any other person and that this is the only application for Offer Shares in the Company made by *me/us as beneficial owner(s). (ii) *I/We declare that, save for this application, *I/we have not made any other application for Offer Shares and/or Placement Shares (other than for Reserved Shares) except as permitted by the Prospectus. (b) *For Approved Nominee Applicants:– (i) We declare that we are an approved nominee company as defined on page 121 of the Prospectus and are applying for the Offer Shares as a nominee for the beneficial owner(s) whose particulars are set out in Section C of this Application Form and, save for this application, the beneficial owner(s) *has/have not made any other applications for Offer Shares and/or Placement Shares (other than for Reserved Shares) as beneficial owner(s) except as permitted by the Prospectus. (ii) Following the allotment to us of any Offer Shares applied for in this Application Form, we undertake to immediately transfer or allocate the Offer Shares allotted to us to the Securities Account(s) of the beneficial owner(s). 8. *I/We hereby irrevocably authorise CDP to complete and sign on *my/our behalf as transferee or renouncee any instrument of transfer and/or other documents required for the issue or transfer of the Offer Shares allotted to *me/us. 9. *I/We hereby irrevocably authorise CDP to disclose the outcome of this application, including the number of Offer Shares allotted to *me/us pursuant to this application, to the authorised operators. 10. *I/We understand that if the address stated on this Application Form is different from *my/our address registered with CDP, *I/we must inform CDP of the updated address promptly, failing which the notification letter on successful allotment will be sent to *my/our address last registered with CDP. 11. *I/We declare that *I/we do not possess more than one individual direct Securities Account with CDP.

Date Signature of Individual Applicant

Common Seal Name(s) and Capacity of Officer(s) signing Signature(s) of Authorised Officer(s) (if applicant is a corporation) (if applicant is a corporation) (if applicant is a corporation)

*Delete accordingly. 1 ACHIEVA LIMITED (Incorporated in the Republic of Singapore on 3 November 1993) TO BE COMPLETED BY ALL APPLICANTS THE NOTES AND INSTRUCTIONS ON PAGES 120 TO 133 OF THE PROSPECTUS SHOULD BE READ CAREFULLY BEFORE COMPLETING THIS APPLICATION FORM.

SECTION A: ALL APPLICANTS EACH APPLICATION MUST BE ACCOMPANIED BY A REMITTANCE FOR THE FULL AMOUNT PAYABLE IN RESPECT OF THE NUMBER OF OFFER SHARES APPLIED FOR IN THE FORM OF A BANKER’S DRAFT OR CASHIER’S ORDER DRAWN IN SINGAPORE CURRENCY ON A BANK IN SINGAPORE AND MADE OUT IN FAVOUR OF “ACHIEVA SHARE ISSUE ACCOUNT” CROSSED “A/C PAYEE ONLY” OR A UOB GROUP ATM CASHIER’S ORDER EQUIVALENT, WITH THE NAME AND ADDRESS OF THE APPLICANT WRITTEN CLEARLY ON THE REVERSE SIDE.

Number of Offer Shares Amount of Remittance Name of Bank and *Banker’s Draft/Cashier’s Order No. or applied for UOB Group ATM Cashier’s Order Equivalent Reference No.

PLEASE PRINT IN BLOCK LETTERS, EACH BOX TO CONTAIN ONE LETTER ONLY. LEAVE ONE BOX BETWEEN WORDS. DO NOT BREAK UP WORDS.

SECTION B: ALL APPLICANTS FULL NAME OF *INDIVIDUAL/CORPORATE APPLICANT (In the case of an individual applicant, please print surname first — e.g. TAN GEOK ENG, MARY) *MR/MRS/MISS/MADAM/MESSRS 1 2

ADDRESS OF *INDIVIDUAL/CORPORATE APPLICANT 3

5 POSTAL CODE

6 **NATIONALITY OF *INDIVIDUAL/CORPORATE APPLICANT

I Singaporean

II Malaysian For II & III only: Yes No

III Others (Please specify) ______Permanent Resident of Singapore

†NRIC/PASSPORT NO.

TOTAL NO. OF OFFER SHARES APPLIED FOR SECURITIES ACCOUNT NO. 7 00 0 1681 –– #DEPOSITORY AGENT CODE OR 8 @ 3331 ––

SECTION C: APPROVED NOMINEE APPLICANTS FULL NAME OF PARTY ON WHOSE BEHALF APPLICATION IS MADE (In the case of an individual applicant, please print surname first — e.g. TAN GEOK ENG, MARY) *MR/MRS/MISS/MADAM/MESSRS 1 2

ADDRESS OF PARTY ON WHOSE BEHALF APPLICATION IS MADE 3

5 POSTAL CODE

6 **NATIONALITY OF PARTY ON WHOSE BEHALF APPLICATION IS MADE

I Singaporean

II Malaysian For II & III only: Yes No

III Others (Please specify) ______Permanent Resident of Singapore

†NRIC/PASSPORT NO.

BANK/BROKER FOR OFFICIAL USE ONLY

* Delete accordingly. ** To be completed by individuals/corporations. For corporations, a foreign corporation shall mean a corporation, whether incorporated or unincorporated and wherever incorporated or constituted, in respect of which citizens or permanent residents of Singapore or any body corporate constituted under any statute of Singapore do not have an interest in the aggregate of more than 50 per cent. of the issued share capital of or interests in such corporation. Please indicate the nationality of your corporation accordingly. † Singapore and Malaysian citizens and permanent residents of Singapore must provide their NRIC numbers. For others, please provide your Passport numbers. Please indicate your NRIC/Passport numbers as maintained with CDP. Applications with different NRIC/Passport numbers are liable to be rejected. # For approved nominee companies, please indicate your Depository Agent code only.

Printed by SNP Security Printing Pte Ltd

2 PLEASE PIN REMITTANCE HERE THE NOTES AND INSTRUCTIONS ON PAGES 120 TO 133 OF THE PROSPECTUS DATED 20 MAY 2000 (THE “PROSPECTUS”) SHOULD BE READ CAREFULLY BEFORE COMPLETING THIS APPLICATION FORM. THIS APPLICATION FORM CONSTITUTES AN INTEGRAL PART OF THE PROSPECTUS. THE APPLICATION LIST WILL OPEN AT 10.00 A.M. ON 30 MAY 2000 AND WILL REMAIN OPEN UNTIL 12 NOON ON THE SAME DAY OR FOR SUCH FURTHER PERIOD OR PERIODS AS THE DIRECTORS OF THE COMPANY MAY, IN THEIR ABSOLUTE DISCRETION, DECIDE.

ACHIEVA LIMITED (Incorporated in the Republic of Singapore on 3 November 1993)

INVITATION IN RESPECT OF 103,540,000 NEW ORDINARY SHARES OF $0.05 EACH COMPRISING:– (A) 21,000,000 OFFER SHARES AT $0.22 FOR EACH OFFER SHARE BY WAY OF PUBLIC OFFER; AND (B) 82,540,000 PLACEMENT SHARES BY WAY OF PLACEMENT COMPRISING:– (I) 74,286,000 PLACEMENT SHARES AT $0.22 FOR EACH PLACEMENT SHARE; AND (II) 8,254,000 RESERVED SHARES AT $0.20 FOR EACH RESERVED SHARE FOR SUBSCRIPTION BY THE EMPLOYEES, MANAGEMENT AND DIRECTORS OF THE GROUP, PAYABLE IN FULL ON APPLICATION. PLACEMENT SHARES APPLICATION FORM Bank’s/ TO: ACHIEVA LIMITED (THE “COMPANY”) c/o UOB ASIA LIMITED (“UOB ASIA”) Broker’s 80 RAFFLES PLACE Stamp UOB PLAZA 1 SINGAPORE 048624 Gentlemen, 1. *I/We hereby declare that *I/we have read, understood and agree to the terms and conditions set out in the Prospectus including the notes and instructions for the completion and return of this Application Form set out on pages 120 to 133 of the Prospectus and that this application has been made in accordance with the Prospectus and such notes and instructions. Capitalised terms used in this Application Form shall bear the meanings assigned to them in the Prospectus. 2. In accordance with and subject to the terms and conditions of the Prospectus, this Application Form and the Memorandum and Articles of Association of the Company, *I/we hereby irrevocably apply for the number of Placement Shares at $0.22 for each Placement Share as set out on page 2 of this Application Form. *I/We enclose a Banker’s Draft or Cashier’s Order drawn in Singapore currency on a bank in Singapore and made out in favour of “ACHIEVA SHARE ISSUE ACCOUNT” crossed “A/C PAYEE ONLY” or a UOB Group ATM Cashier’s Order Equivalent, with *my/our name and address written clearly on the reverse side for the amount as set out on page 2 of this Application Form being payment in full for the number of Placement Shares applied for. 3. *I/We hereby irrevocably undertake and agree to subscribe for and to accept the number of Placement Shares applied for or any lesser number of Placement Shares that may be allotted to *me/us in respect of this application. In the event that you decide to allot a lesser number of Placement Shares or not to allot any Placement Shares to *me/us, *I/we agree to accept that decision as final. If *my/our application is successful, *my/our signature(s) hereto (or, if the applicant is a corporation, the affixation of its common seal hereto) shall signify *my/our acceptance(s) of the number of Placement Shares that may be allotted to *me/us and *my/our agreement to be bound by the Memorandum and Articles of Association of the Company. 4. *I/We hereby request and authorise you (a) to register the Placement Shares allotted to *me/us in the name of The Central Depository (Pte) Limited (“CDP”) for deposit in *my/our Securities Account; (b) to send the relevant share certificate(s) by ordinary post at *my/our own risk to CDP; and (c) to return or refund (without interest or any share of revenue earned or other benefit arising therefrom) the application moneys or the balance thereof should this application be unsuccessful or accepted in part only, by ordinary post at *my/our own risk to *my/our address which appears in Section B of this Application Form or as registered with CDP. *I/We hereby agree and acknowledge that *I/we shall not be entitled to any interest or share of revenue earned or other benefit arising therefrom in connection with or by reason of the application moneys being deposited with United Overseas Bank Limited. 5. I declare that I am not under 21 years of age or an undischarged bankrupt (for individuals only). 6. *I/We hereby acknowledge that (a) *my/our receipt of this Application Form was accompanied by the Prospectus; and (b) the Prospectus and this Application Form were not furnished to *me/us outside Singapore by the Company or UOB Asia. 7. (a) *For Non-nominee Applicants:– (i) *I/We declare that *I am/we are not applying for the Placement Shares as nominee(s) for any other person and that this is the only application for Placement Shares (other than for Reserved Shares) in the Company made by *me/us as beneficial owner(s). (ii) *I/We declare that, save for this application, *I/we have not made any other application for Offer Shares or Placement Shares (other than for Reserved Shares) except as permitted by the Prospectus. (b) *For Approved Nominee Applicants:– (i) We declare that we are an approved nominee company as defined on page 121 of the Prospectus and are applying for the Placement Shares as a nominee for the beneficial owner(s) whose particulars are set out in Section C of this Application Form and, save for this application, the beneficial owner(s) *has/have not made any other applications for Offer Shares and/or Placement Shares (other than for Reserved Shares) as beneficial owner(s) except as permitted by the Prospectus. (ii) Following the allotment to us of any Placement Shares applied for in this Application Form, we undertake to immediately transfer or allocate the Placement Shares allotted to us to the Securities Account(s) of the beneficial owner(s). 8. *I/We hereby irrevocably authorise CDP to complete and sign on *my/our behalf as transferee or renouncee any instrument of transfer and/or other documents required for the issue or transfer of the Placement Shares allotted to *me/us. 9. *I/We hereby irrevocably authorise CDP to disclose the outcome of this application, including the number of Placement Shares allotted to *me/us pursuant to this application, to the authorised operators. 10. *I/We understand that if the address stated on this Application Form is different from *my/our address registered with CDP, *I/we must inform CDP of the updated address promptly, failing which the notification letter on successful allotment will be sent to *my/our address last registered with CDP. 11. *I/We declare that *I/we do not possess more than one individual direct Securities Account with CDP.

Date Signature of Individual Applicant

Common Seal Name(s) and Capacity of Officer(s) signing Signature(s) of Authorised Officer(s) (if applicant is a corporation) (if applicant is a corporation) (if applicant is a corporation)

SECTION A: ALL APPLICANTS EACH APPLICATION MUST BE ACCOMPANIED BY A REMITTANCE FOR THE FULL AMOUNT PAYABLE IN RESPECT OF THE NUMBER OF PLACEMENT SHARES APPLIED FOR IN THE FORM OF A BANKER’S DRAFT OR CASHIER’S ORDER DRAWN IN SINGAPORE CURRENCY ON A BANK IN SINGAPORE AND MADE OUT IN FAVOUR OF “ACHIEVA SHARE ISSUE ACCOUNT” CROSSED “A/C PAYEE ONLY” OR A UOB GROUP ATM CASHIER’S ORDER EQUIVALENT, WITH THE NAME AND ADDRESS OF THE APPLICANT WRITTEN CLEARLY ON THE REVERSE SIDE.

Number of Placement Shares Amount of Remittance Name of Bank and *Banker’s Draft/Cashier’s Order No. or applied for UOB Group ATM Cashier’s Order Equivalent Reference No.

PLEASE PRINT IN BLOCK LETTERS, EACH BOX TO CONTAIN ONE LETTER ONLY. LEAVE ONE BOX BETWEEN WORDS. DO NOT BREAK UP WORDS.

SECTION B: ALL APPLICANTS FULL NAME OF *INDIVIDUAL/CORPORATE APPLICANT (In the case of an individual applicant, please print surname first — e.g. TAN GEOK ENG, MARY) *MR/MRS/MISS/MADAM/MESSRS 1 2

ADDRESS OF *INDIVIDUAL/CORPORATE APPLICANT 3

5 POSTAL CODE

6 **NATIONALITY OF *INDIVIDUAL/CORPORATE APPLICANT

I Singaporean

II Malaysian For II & III only: Yes No

III Others (Please specify) ______Permanent Resident of Singapore

†NRIC/PASSPORT NO.

TOTAL NO. OF PLACEMENT SHARES APPLIED FOR SECURITIES ACCOUNT NO. 7 00 0 1681 –– #DEPOSITORY AGENT CODE OR 8 @ 3331 ––

ADDRESS OF PARTY ON WHOSE BEHALF APPLICATION IS MADE 3

5 POSTAL CODE

6 **NATIONALITY OF PARTY ON WHOSE BEHALF APPLICATION IS MADE

I Singaporean

II Malaysian For II & III only: Yes No

III Others (Please specify) ______Permanent Resident of Singapore

†NRIC/PASSPORT NO.

BANK/BROKER FOR OFFICIAL USE ONLY

Printed by SNP Security Printing Pte Ltd

ACHIEVA LIMITED (Incorporated in the Republic of Singapore on 3 November 1993)

TO: ACHIEVA LIMITED (THE “COMPANY”) c/o UOB ASIA LIMITED (“UOB ASIA”) 80 RAFFLES PLACE UOB PLAZA 1 SINGAPORE 048624 Gentlemen, 1. *I/We hereby declare that *I/we have read, understood and agree to the terms and conditions set out in the Prospectus including the notes and instructions for the completion and return of this Application Form set out on pages 120 to 133 of the Prospectus and that this application has been made in accordance with the Prospectus and such notes and instructions. Capitalised terms used in this Application Form shall bear the meanings assigned to them in the Prospectus. 2. In accordance with and subject to the terms and conditions of the Prospectus, this Application Form and the Memorandum and Articles of Association of the Company, *I/we hereby irrevocably apply for the number of Reserved Shares at $0.20 for each Reserved Share as set out on page 2 of this Application Form. *I/We enclose a Banker’s Draft or Cashier’s Order drawn in Singapore currency on a bank in Singapore and made out in favour of “ACHIEVA SHARE ISSUE ACCOUNT” crossed “A/C PAYEE ONLY” or a UOB Group ATM Cashier’s Order Equivalent, with *my/our name and address written clearly on the reverse side for the amount as set out on page 2 of this Application Form being payment in full for the number of Reserved Shares applied for. 3. *I/We hereby irrevocably undertake and agree to subscribe for and to accept the number of Reserved Shares applied for or any lesser number of Reserved Shares that may be allotted to *me/us in respect of this application. In the event that you decide to allot a lesser number of Reserved Shares or not to allot any Reserved Shares to *me/us, *I/we agree to accept that decision as final. If *my/our application is successful, *my/our signature(s) hereto (or, if the applicant is a corporation, the affixation of its common seal hereto) shall signify *my/our acceptance(s) of the number of Reserved Shares that may be allotted to *me/us and *my/our agreement to be bound by the Memorandum and Articles of Association of the Company. 4. *I/We hereby request and authorise you (a) to register the Reserved Shares allotted to *me/us in the name of The Central Depository (Pte) Limited (“CDP”) for deposit in *my/our Securities Account; (b) to send the relevant share certificate(s) by ordinary post at *my/our own risk to CDP; and (c) to return or refund (without interest or any share of revenue earned or other benefit arising therefrom) the application moneys or the balance thereof should this application be unsuccessful or accepted in part only, by ordinary post at *my/our own risk, to *my/our address which appears in Section B of this Application Form or as registered with CDP. *I/We hereby agree and acknowledge that *I/we shall not be entitled to any interest or share of revenue earned or other benefit arising therefrom in connection with or by reason of the application moneys being deposited with United Overseas Bank Limited. 5. I declare that I am not under 21 years of age or an undischarged bankrupt (for individuals only). 6. *I/We hereby acknowledge that (a) *my/our receipt of this Application Form was accompanied by the Prospectus; and (b) the Prospectus and this Application Form were not furnished to *me/us outside Singapore by the Company or UOB Asia. 7. (a) *For Non-nominee Applicants:– (i) *I/We declare that *I am/we are not applying for the Reserved Shares as nominee(s) for any other person and that this is the only application for Reserved Shares in the Company made by *me/us as beneficial owner(s). (ii) *I/We declare that, save for this application, *I/we have not made any other application for Offer Shares and/or Placement Shares except as permitted by the Prospectus. (b) *For Approved Nominee Applicants:– (i) We declare that we are an approved nominee company as defined on page 121 of the Prospectus and are applying for the Reserved Shares as a nominee for the beneficial owner(s) whose particulars are set out in Section C of this Application Form and, save for this application, the beneficial owner(s) *has/have not made any other applications for Reserved Shares as beneficial owner(s) except as permitted by the Prospectus. (ii) Following the allotment to us of any Reserved Shares applied for in this Application Form, we undertake to immediately transfer or allocate the Reserved Shares allotted to us to the Securities Account(s) of the beneficial owner(s). 8. *I/We hereby irrevocably authorise CDP to complete and sign on *my/our behalf as transferee or renouncee any instrument of transfer and/or other documents required for the issue or transfer of the Reserved Shares allotted to *me/us. 9. *I/We hereby irrevocably authorise CDP to disclose the outcome of this application, including the number of Reserved Shares allotted to *me/us pursuant to this application, to the authorised operators. 10. *I/We understand that if the address stated on this Application Form is different from *my/our address registered with CDP, *I/we must inform CDP of the updated address promptly, failing which the notification letter on successful allotment will be sent to *my/our address last registered with CDP. 11. *I/We declare that *I/we do not possess more than one individual direct Securities Account with CDP.

Date Signature of Individual Applicant

Common Seal Name(s) and Capacity of Officer(s) signing Signature(s) of Authorised Officer(s) (if applicant is a corporation) (if applicant is a corporation) (if applicant is a corporation)

SECTION A: ALL APPLICANTS EACH APPLICATION MUST BE ACCOMPANIED BY A REMITTANCE FOR THE FULL AMOUNT PAYABLE IN RESPECT OF THE NUMBER OF RESERVED SHARES APPLIED FOR IN THE FORM OF A BANKER’S DRAFT OR CASHIER’S ORDER DRAWN IN SINGAPORE CURRENCY ON A BANK IN SINGAPORE AND MADE OUT IN FAVOUR OF “ACHIEVA SHARE ISSUE ACCOUNT” CROSSED “A/C PAYEE ONLY” OR A UOB GROUP ATM CASHIER’S ORDER EQUIVALENT, WITH THE NAME AND ADDRESS OF THE APPLICANT WRITTEN CLEARLY ON THE REVERSE SIDE.

Number of Reserved Shares Amount of Remittance Name of Bank and *Banker’s Draft/Cashier’s Order No. or applied for UOB Group ATM Cashier’s Order Equivalent Reference No.

PLEASE PRINT IN BLOCK LETTERS, EACH BOX TO CONTAIN ONE LETTER ONLY. LEAVE ONE BOX BETWEEN WORDS. DO NOT BREAK UP WORDS.

SECTION B: ALL APPLICANTS FULL NAME OF *INDIVIDUAL/CORPORATE APPLICANT (In the case of an individual applicant, please print surname first — e.g. TAN GEOK ENG, MARY) *MR/MRS/MISS/MADAM/MESSRS 1 2

ADDRESS OF *INDIVIDUAL/CORPORATE APPLICANT 3

5 POSTAL CODE

6 **NATIONALITY OF *INDIVIDUAL/CORPORATE APPLICANT

I Singaporean

II Malaysian For II & III only: Yes No

III Others (Please specify) ______Permanent Resident of Singapore

†NRIC/PASSPORT NO.

TOTAL NO. OF RESERVED SHARES APPLIED FOR SECURITIES ACCOUNT NO. 7 00 0 1681 –– #DEPOSITORY AGENT CODE OR 8 @ 3331 ––

ADDRESS OF PARTY ON WHOSE BEHALF APPLICATION IS MADE 3

5 POSTAL CODE

6 **NATIONALITY OF PARTY ON WHOSE BEHALF APPLICATION IS MADE

I Singaporean

II Malaysian For II & III only: Yes No

III Others (Please specify) ______Permanent Resident of Singapore

†NRIC/PASSPORT NO.

BANK/BROKER FOR OFFICIAL USE ONLY

Printed by SNP Security Printing Pte Ltd