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					                                                Prospectus Dated 24 July 2000
Application has been made to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) for permission to deal in, and for
quotation of, all the ordinary shares of par value $0.05 each (“Shares”) in the capital of Stratech Systems Limited (the “Com-
pany”) already issued (including the Vendor Shares) as well as those new Shares (the “New Shares”) which are the subject of this
Invitation (as defined below). 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 permission being granted to deal in, and for quotation of, all of the
issued Shares (including the Vendor Shares) as well as the New Shares. Moneys paid in respect of any application accepted will
be returned, without interest or any share of revenue 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 SGX-ST is not to be taken as an indication of the merits of the Invitation, the
Company, its subsidiaries, the 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.




                                           stratech systems limited




 C O M P E T I T I V E A DVA N TAG E T H R O U G H T E C H N O L O G Y

Invitation in respect of 66,770,000 Ordinary Shares of $0.05 each comprising 53,417,000 New Shares and 13,353,000 Vendor
Shares as follows:
(1)   15,600,000 Offer Shares at $1.10 for each Offer Share by way of public offer; and
(2)   51,170,000 Placement Shares by way of placement, comprising:
      (i)    3,100,000 Reserved Shares at $1.10 for each Share reserved for the Independent Directors, employees,
             business associates and those who have contributed to the success of our Group; and
      (ii)   48,070,000 Placement Shares at $1.10 for each Placement Share,
             payable in full on application.


                                            Manager, Lead Underwriter and Lead Placement Agent




                                          THE DEVELOPMENT BANK OF SINGAPORE LTD
                                                  Co-underwriter and Co-Placement Agent
                     Stratech is an IT systems and
                technology developer, evolving into
                  a leading, world-class e-business
                 infrastructure and internet enabler
                   capable of providing innovative
                  technology-intensive solutions for
                   the knowledge based economy
                                                                                     TECHNOLOGY-INTENSIVE IT DIVISION
ESTABLISHED IN 1989, STRATECH IS                                                     - 3-D Computer Vision
                                                                                     - Intelligent Transport Systems (ITS)
TODAY A FOCUSED TECHNO-CENTRIC
                                                                                     E-BUSINESS ENABLER
PLAYER WITH TWO BUSINESS DIVISIONS:                                                  - Application Service Provider (ASP)
                                                                                     - Infrastructure (Developer/ Provider)


Our diversified portfolio of in-house developed technologies and products include:
Computer Vision (3-Dimensional image processing technology)
                                                   C O M P U T E R        V I S I O N
 Name of Product               Application

 Super BullsEyeTM              Utilises 3-D image processing technology to automate the scoring process, record firings and
                               manage results in military “live” firing training

 ARTSTM                        Automatic Archery Target Scoring System

 Shipmast Height               Regulation and monitoring of height of naval vessels entering waterways
 Detection System

 Vessel Image                  Automatic tracking and capture of vital information of vessels such as name, position, speed,
 Processing System *           size and heading

 Ship Hull Image               Performs optical image measurements of ship hull surfaces to reconstruct 3-D models of hulls
 Processing System *

 Medical Robotics/
 Computer-Aided                Minimally invasive surgery and tele-surgery
 Surgery *

Intelligent Transport Systems (technologies that enhance driver and road user productivity and safety, and improve the efficiency of the
transport and road infrastructure)
                                    I N T E L L I G E N T     T R A N S P O R T        S Y S T E M S
  Name of Product              Application

  SmartParkTM                  An intelligent transport management system that controls, monitors, manages vehicle
                               entry/exit of carparks, and collects payment electronically

 Vehicle Entry Permit/         Monitoring, issuance and payment of vehicle entry permits and toll charges
 Toll System

 Public Transport              Provides wireless communications infrastructure for bus-operator system communications.
 Traveller Information         Uses Global Positioning System (GPS) to provide real time & accurate prediction of vehicle
 System                        travel data

  Autonomous Driving *         Enhances driving safety with lane keeping features. Ultimate aim is to create an intelligent
                               driverless system which integrates with cruise control, steering, braking and radar

  Next Generation              Electronic road pricing, in-vehicle information system, e-Logistics management system and
  intelligent transport        automatic vehicle/fleet management system
  systems *
                                                                                                            * currently under development
                      E - B U S I N E S S
 Name of Product      Application

 SuperAucTM           Online dynamic pricing engines
                      1st application :Online COE Open Bidding System

 Safe-EX.comTM *      Online secure exchange and payment service
                 TM
 SmarTown.com         e-Learning Portal
 Medical Claims       Online system for Prime Minister’s Office (PMO)
 Proration System     covering all civil servants and their dependants
 (MCPS)
 SmartCareTM *        Web-based medical benefits and claims
                      information system
 Super-eHubTM         Internet Data Centre infrastructure services
 AMANDATM             Enables central monitoring and administration of
                      remote and networked desktop PCs
 Passenger            Networked multimedia system that provides real
 Information          time information on travel flights, airport facilities
 Kiosk System         & services

                                               * currently under development




                B U S I N E S S                                     S T R A T E G Y
Become a Global Market Leader by:
   - Expanding overseas aggressively with international strategic
     partners
   - Enhancing our existing technologies, products and services
   - Developing new complementary technologies, products
     and services
   - Developing innovative new industry uses for our e-business,
     computer vision and intelligent transport systems
     technologies

Enhance our internal strengths by:
   - Hiring more talent and strengthening manpower resources
     to reach global markets
   - Expanding our range of e-business competencies,
     applications and services
   - Leveraging on our unique range of and synergistic IT
     expertise to provide quality, complete end-to-end customer
     systems and solutions
Increase our revenue by:
   - Investing in internet-enabling brick-and-mortar businesses
   - Strengthening our marketing resources and presence, especially
     outside Singapore
   - Pursuing large-scale IT contracts and projects in the public and
     private sectors

Grow our external links by:
   - Entering into strategic alliances with leading industry players
   - Expanding our product range and capabilities by acquisition
     and joint ventures
   - Developing strategic R&D relationships with leading industry
     players and research institutes




 S T R AT E C H I S U N I Q U E LY
                   POSITIONED TO CAPTURE
             HIGH GROWTH MARKETS


     SYNERGISTIC DIVERSITY IN TECHNOLOGY
                                          1997-1999
         FINANCIAL TRACK RECORD FR OM e-Business
                                                                              TM
                 (Year Ended December 31)
                           • SmarTown.com

                                                  • SuperAucTM            • SmartCareTM
                                                                   TM
                                                  • Safe-EX.com           • AMANDA

                                                  • Super-eHubTM          • MCPS
                                                11.44m




                                                         • COE Open Bidding System
                                                                                                                             SEGMENTAL BREAKDOWN BY ACTIVITY
                                     • PTTIS
                                                                                                               5.91m




                                 • PIKS • Smartcards
                                                                                   • Networked
                                                                                      vision
                                                                                                                                    FOR FY 1999 ($’000)
                                      • Traffic Prediction
                                                                                • Remote visual
                                       • Logistics & Fleet                   information & control
                                          Management
                                                            • Payment • Tele-surgery
            • AVMS                                                                                                                             TURNOVER
                                               • Wireless    systems
                                                                                                                                               Technology-intensive IT
                             6.04m




                                                 Internet • Large scale
                                                             systems                                    • Super BullsEyeTM                     Division (7,548)
            • Route Planning/
                                                                                                2.35m




            Vehicle Navigation                            • SmartParkTM
                                                                                             • Archery Scoring System                          E-business
                                                                 • Traffic
                                                                                                                                               Division (3,895)
                3.02m




                                                                Violation
              • Identification/Tracking/Location               Enforcement
                                                                                   1.06m




                                                                 System                    • SHIPS
                                                                                                                                               PBT
                                                                  • ADS                                                                        E-business
                            • Wireless
                          Communications                                                                                                       Division (2,509)
                                                                                    • Medical Robotics

                                                                                                                                               Technology-intensive
                                                                                                                                               IT Division (3,398)
                97           98                99                                  97          98             99
                           Intelligent
                        S$ TURNOVER                                                  Computer
                                                                             S$ PROFIT BEFORE TAX                                              Others (6)
                           Transport                                                             Vision
                           Systems
                 stratech systems limited
1 International Business Park #05-13/14 The Synergy Singapore 609917
                Tel: (65) 323 2188 Fax: (65) 323 2177
                    www.StratechSystems.com
SNP Security Printing Pte Ltd 602372
                                                       TABLE OF CONTENTS

                                                                                                                                                   Page

CORPORATE INFORMATION ....................................................................................................                           3

DEFINITIONS ..............................................................................................................................           4

GLOSSARY OF TECHNICAL TERMS .......................................................................................                                  8

DETAILS OF THE INVITATION
—     Listing on SGX-ST ...............................................................................................................             15
—     Structure of Our Invitation ....................................................................................................              16
—     Result of Application and Distribution ..................................................................................                     18
—     Indicative Time-table for Listing ...........................................................................................                 19

PROSPECTUS SUMMARY ........................................................................................................                         20

RISK FACTORS ..........................................................................................................................             24

ISSUE STATISTICS ....................................................................................................................               30

SELECTED FINANCIAL INFORMATION ...................................................................................                                  31

RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS
—     Revenue ...............................................................................................................................       33
—     Expenses .............................................................................................................................        34
—     Profitability ............................................................................................................................    36
—     Results of Operation ............................................................................................................             37
—     Review of Financial Position ................................................................................................                 41
—     Capitalisation and Indebtedness ..........................................................................................                    43
—     Dividends .............................................................................................................................       44
—     Dilution .................................................................................................................................    44
—     Credit Policy .........................................................................................................................       45
—     Foreign Exchange Exposure ...............................................................................................                     45

HISTORY & BUSINESS
—     History ..................................................................................................................................    46
—     Business Activities ...............................................................................................................           49
—     Competition ..........................................................................................................................        59
—     Major Suppliers ....................................................................................................................          60
—     Major Customers ..................................................................................................................            60
—     Research and Development ................................................................................................                     61
—     Licences, Patents and Trademarks .....................................................................................                        64
—     Insurance .............................................................................................................................       65
—     Government Regulations .....................................................................................................                  66




                                                                            1
                                                                                                                                                  Page

—     Prospects — Industry Overview ..........................................................................................                     67
—     Future Plans .........................................................................................................................       69

DIRECTORS, MANAGEMENT AND STAFF
—     Directors ...............................................................................................................................    73
—     Management Team ..............................................................................................................               77
—     Committees of the Board of Directors .................................................................................                       81
—     Service Agreement ...............................................................................................................            81
—     Stratech ESOS 2000 ...........................................................................................................               83
—     Interested Person Transactions ...........................................................................................                   87
—     Shareholders’ Mandate for Future Interested Person Transactions ....................................                                         88
—     Potential Conflicts of Interest ...............................................................................................              90
—     Properties & Fixed Assets ...................................................................................................                91

GENERAL INFORMATION ON THE GROUP
—     Share Capital .......................................................................................................................        93
—     Description of Our Ordinary Shares ....................................................................................                      95
—     Restructuring Exercise .........................................................................................................             98
—     Group Structure ...................................................................................................................          99
—     Shareholders ........................................................................................................................        99
—     Moratorium ...........................................................................................................................      101

DIRECTORS’ REPORT ..............................................................................................................                  102

LETTER FROM THE AUDITORS AND REPORTING ACCOUNTANTS
  IN RELATION TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
  FOR THE FOUR MONTHS ENDED 30 APRIL 2000 .............................................................                                           103

ACCOUNTANTS’ REPORT ........................................................................................................                      105

GENERAL AND STATUTORY INFORMATION ..........................................................................                                      124

APPENDIX A — RULES OF THE STRATECH SYSTEMS LIMITED ESOS .............................                                                             139

APPENDIX B — TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION .......                                                                          153




                                                                            2
                         CORPORATE INFORMATION


BOARD OF DIRECTORS             :   Dr David Chew Khien Meow (Chairman)
                                   Dr Kennedy Chew Khien Mien (Executive Director)
                                   Leong Sook Ching (Executive Director)
                                   Lucy Ng @ Hwang Fei Fung (Non-Executive Director)
                                   Liow Voon Kheong (Non-Executive Director)
                                   Tjio Kay Loen (Independent Director)
                                   Professor Hang Chang Chieh (Independent Director)
                                   Seah Chin Yew (Independent Director)

COMPANY SECRETARY              :   Leong Sook Ching, LL.B. (Hons)

REGISTERED OFFICE              :   1 International Business Park
                                   #05-14 The Synergy
                                   Singapore 609917

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

MANAGER, LEAD UNDERWRITER      :   The Development Bank of Singapore Ltd
 AND LEAD PLACEMENT AGENT          6 Shenton Way
                                   DBS Building Tower One
                                   Singapore 068809

CO-UNDERWRITER AND             :   Citicorp Investment Bank (Singapore) Limited
 CO-PLACEMENT AGENT                3 Temasek Avenue #17-00
                                   Centennial Tower
                                   Singapore 039190

AUDITORS AND REPORTING         :   Ernst & Young
 ACCOUNTANTS                       10 Collyer Quay #21-01
                                   Ocean Building
                                   Singapore 049315

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

PRINCIPAL BANKERS              :   Citibank N.A.
                                   3 Temasek Avenue #17-00
                                   Centennial Tower
                                   Singapore 039190
                                   The Development Bank of Singapore Ltd
                                   6 Shenton Way
                                   DBS Building Tower One
                                   Singapore 068809




                                      3
                                          DEFINITIONS


In 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
websites of the relevant Participating Banks, unless the context otherwise requires, the following
definitions apply throughout where the context so admits:−

Companies
‘‘Stratech’’ or ‘‘Company’’       :    Stratech Systems Limited

‘‘Stratech Group’’ or ‘‘Group’’   :    Stratech and its subsidiaries

‘‘SAPL’’                          :    Stratech Australia Pty Ltd (formerly known as Starstyle
                                       Enterprises Pty Ltd)

‘‘SLSPL’’                         :    Stratech Life Sciences Pte Ltd

‘‘SSPL’’                          :    Stratech Systems Pte Ltd

‘‘STPL’’                          :    Strategic Technologies Pte Ltd

‘‘SVPL’’                          :    Stratech Vision Pte Ltd

General
‘‘Act’’ or ‘‘Companies 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’’              :    List of applications for subscription of the New Shares

‘‘ASME’’                          :    Association of Small and Medium Enterprises

‘‘ATM’’                           :    Automated teller machine

‘‘Audit Committee’’               :    The audit committee of the Company

‘‘Bond Conversion’’               :    The conversion of redeemable convertible bonds of principal
                                       amount of $3,990,000 by PLEi and Infocomm Investment into
                                       ordinary shares of par value $1.00 each in the capital of the
                                       Company

‘‘CDP’’ or ‘‘Depository’’         :    The Central Depository (Pte) Limited

‘‘Citibank’’                      :    Citibank N.A.

‘‘Co-Underwriter’’,               :    Citicorp Investment Bank (Singapore) Limited
   ‘‘Co-Placement Agent’’ or
   ‘‘Citicorp’’

‘‘CPF’’                           :    The Central Provident Fund of Singapore

’’DBS Bank’’, ‘‘Manager’’,        :    The Development Bank of Singapore Ltd
   ‘‘Lead Underwriter’’ or
   ‘‘Lead Placement Agent’’

‘‘Directors’’                     :    The directors of the Company as at the date of this Prospectus,
                                       unless otherwise stated



                                                  4
‘‘EDB’’                           :   Economic Development Board of Singapore

‘‘Electronic Applications’’       :   Applications for the Offer Shares made through an ATM of one of
                                      the Participating Banks or the Internet Banking website of one of
                                      the relevant Participating Banks in accordance with the terms
                                      and conditions of this Prospectus

‘‘Executive Officers’’            :   The executive officers of the Group, whose names and details
                                      are set out in the section entitled ‘‘Directors, Management and
                                      Staff’’ on page 77 of this Prospectus

‘‘FY’’                            :   Financial year ended or ending 31 December

‘‘IDA’’                           :   Infocomm Development Authority of Singapore

‘‘Infocomm Investment’’           :   Infocomm Investments Pte Ltd (previously known as NCB
                                      Holdings Pte Ltd)

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

‘‘Invitation Shares’’             :   66,770,000 Shares which are the subject of the Invitation,
                                      comprising 53,417,000 New Shares and 13,353,000 Vendor
                                      Shares

‘‘Issue Price’’                   :   $1.10 for each Invitation Share

‘‘LTA’’                           :   Land Transport Authority of Singapore

‘‘mm’’                            :   Millimetres

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

‘‘New Shares’’                    :   The 53,417,000 new Shares for which the Company invites
                                      applications to subscribe, subject to and on the terms of this
                                      Prospectus

‘‘NCB’’                           :   National Computer Board

‘‘NTA’’                           :   Net tangible assets

‘‘Offer’’, ‘‘Public Offer’’, or   :   The Invitation by the Company and the Vendors of the Offer
   ‘‘Public Offer Tranche’’           Shares to the public in Singapore for subscription at the Issue
                                      Price

‘‘Offer Shares’’                  :   The 15,600,000 Invitation Shares which are the subject of the
                                      Offer

‘‘Participating Banks’’           :   Citibank; DBS Bank (including its POSBank Services division);
                                      Keppel TatLee Bank Limited (‘‘KTB’’); Oversea-Chinese Banking
                                      Corporation Limited (‘‘OCBC’’) group (comprising OCBC and
                                      Bank of Singapore Limited); Overseas Union Bank Limited
                                      (‘‘OUB’’); and United Overseas Bank Limited (‘‘UOB’’) group
                                      (comprising UOB, Far Eastern Bank Limited and Industrial &
                                      Commercial Bank Limited)

‘‘Placement’’ or ‘‘Placement      :   The placement of the Placement Shares by the Placement
   Tranche’’                          Agents on behalf of the Company and the Vendors for
                                      subscription at the Issue Price




                                                    5
‘‘Placement Shares’’            :   The 51,170,000 Invitation Shares which are the subject of the
                                    Placement (including the Reserved Shares)

‘‘PLEi’’                        :   PLE Investments Pte Ltd

‘‘%’’                           :   Percentage or per centum

‘‘Receiving Bank’’              :   DBS Bank

‘‘Reserved Shares’’             :   3,100,000 Invitation Shares reserved for Independent Directors,
                                    employees, business associates and those who have
                                    contributed to the success of our Group

‘‘Restructuring’’               :   The restructuring exercise undertaking by the Group and as
                                    described on page 98 of this Prospectus

‘‘SCCS’’                        :   Securities Clearing & Computer Services (Pte) Ltd

‘‘SGX-ST’’                      :   Singapore Exchange Securities Trading Limited

‘‘Securities Account’’          :   Securities account maintained by a depositor with CDP

‘‘Share(s)’’                    :   Ordinary share(s) of par value $0.05 each in the capital of the
                                    Company

‘‘Share Registrar’’             :   Lim Associates (Pte) Ltd

‘‘sq m’’                        :   square metre

‘‘UK’’                          :   United Kingdom

‘‘US’’ or ‘‘ USA’’              :   United States of America

‘‘Vendors’’                     :   Leong Sook Ching and Lucy Ng @ Hwang Fei Fung

‘‘Vendor Shares’’               :   The aggregate 13,353,000 existing Shares held by the Vendors
                                    and for which the Vendors invite applications to purchase,
                                    subject to and on the terms and conditions of this Prospectus

Currencies
‘‘A$’’                          :   Australian Dollars

‘‘S$’’ or ‘‘$’’ and ‘‘cents’’   :   Singapore dollars and cents respectively, unless otherwise
                                    stated

‘‘¥’’                           :   Japanese Yen

‘‘HK$’’                         :   Hong Kong Dollars

‘‘RM’’                          :   Malaysian Ringgit

‘‘US$’’                         :   US Dollars

‘‘£’’                           :   British Pounds




                                                 6
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 which precede them.

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.

Unless otherwise indicated, 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 word
defined under the Companies Act or any statutory modification thereof and used in this Prospectus and
the Application Forms shall have the meaning assigned to it under the Companies Act or statutory
modification, as the case may be.

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




                                                   7
                                   GLOSSARY OF TECHNICAL TERMS


To facilitate a better understanding of the business of our Group, the following glossary provides an
explanation on some of the technical terms and abbreviations used in this Prospectus relating to our
Group’s industry sectors.

‘‘Artificial Intelligence’’ or ‘‘AI’’   :   Artificial Intelligence refers to software or technology
                                            applications that exhibit human intelligence and reasoning
                                            behaviour, including expert/knowledge-based systems, neural
                                            networks, fuzzy logic and genetic algorithm technologies. The
                                            applications include vehicle/crew scheduling and dispatch,
                                            traffic flow management, bus arrival time prediction, supply
                                            chain process optimisation, voice recognition, natural and
                                            foreign language processing and multi-sensor data fusion. AI
                                            also implies the ability to learn or adapt through experience.

‘‘ASP’’                                 :   An Application Service Provider or ‘‘commercial service
                                            provider’’ is an organisation that hosts software applications on
                                            its own servers within its own facilities. Customers access the
                                            applications via private lines or the Internet.

‘‘ASP Industry Consortium’’             :   The Application Service Provider Industry Consortium is a
                                            trade organisation founded in 1999, dedicated to research and
                                            standards pertaining to the ASP industry.

‘‘B2B’’                                 :   Business to business transactions focus on those transactions
                                            between businesses and differ from B2C models in terms of
                                            business models, strategy, execution, and fulfilment. Examples
                                            of websites focusing on B2B solutions include those that cater
                                            to vertical markets such as the automotive industry. Only other
                                            businesses, not individuals, can access or buy/sell products
                                            and services on a B2B site.

‘‘B2C’’                                 :   Business to consumer businesses and transactions target
                                            consumers, typically taking place without going through
                                            a middleman. An example of a B2C website is
                                            www.amazon.com.

‘‘Ballistics instrumentation’’          :   Ballistics is the science dealing with the motion and impact of
                                            projectiles such as bullets, rockets and bombs. Ballistics
                                            instrumentation refers to specific instruments or equipment
                                            used to measure the motion and impact of projectiles.

‘‘Bidding transactions’’                :   Transactions that involve some form of bidding, as in auctions,
                                            where there is a declaration of the price buyers are willing to
                                            pay.

‘‘Broadband’’                           :   A high-speed, high-capacity transmission channel. Broadband
                                            channels are typically carried on coaxial or fibre-optic cables
                                            that have a wider bandwidth, giving them the ability to carry
                                            video, voice, and data simultaneously.

‘‘Click-and-mortar businesses’’         :   Many traditional ‘‘brick-and-mortar businesses’’ are trying to
                                            establish an online or Internet presence but often have a
                                            difficult time doing so for various reasons. ‘‘Click-and-mortar
                                            businesses’’ refer to those businesses that have successfully
                                            added a significant online or Internet dimension to their
                                            traditional, real world business operations.




                                                      8
‘‘Computer vision’’                  :   Computer vision refers to the use of computer programming/
                                         techniques and video capturing devices such as video
                                         cameras, to provide computers with the ability to see,
                                         recognise and understand what they see.

‘‘Computer-aided surgery’’           :   Computer-aided surgery refers to the use of computers and
                                         robots in performing surgical operations.

‘‘Database’’                         :   A database is a set of related files that is created and managed
                                         by a database management system which can manage any
                                         form of data including text, images, sound and video.

‘‘Data centre’’ or ‘‘Internet data   :   A facility or site that houses computer systems serving many
   centre’’                              different organisations, providing a reliable physical and
                                         technical environment for hosting mission-critical systems. The
                                         data centre must keep its servers running 24 hours a day, 7
                                         days a week. This form of outsourcing requires special climate
                                         controls, security and monitoring systems and built-in
                                         redundancy, for example, in the form of powerful back-up
                                         power supplies and reliable (typically broadband) Internet
                                         connectivity.

‘‘Distributed systems’’              :   These are systems with separate interacting applications
                                         residing at different hardware servers connected by LAN and/or
                                         WAN.

‘‘Domain expertise’’                 :   Knowledge or experience in a particular industry or field.

‘‘e-business’’                       :   Electronic business refers to an actual business that derives
                                         revenue, at least in part, from some sort of transaction on the
                                         Internet. Speed to market, open competition, easy access to
                                         global markets, and innovative, dynamic business models are
                                         some of the perceived benefits of e-business. e-business
                                         differs from e-commerce in the extent and depth to which the
                                         culture of doing business online permeates an organisation. An
                                         electronic business is an enterprise in which all the value
                                         chains are electronically intermediated — a business that is
                                         built upon and operated through its IT systems.

‘‘e-commerce’’                       :   Electronic commerce means conducting business online, using
                                         software programs that run the main functions of the
                                         e-commerce website, such as product display, online ordering,
                                         and inventory management. The software typically includes
                                         working in conjunction with online payment systems to process
                                         payments.

‘‘Emerging technology’’              :   Any technology that is perceived as new or innovative is known
                                         as an emerging technology.

‘‘Endoscopy’’ or ‘‘endoscopic        :   The visual inspection of any cavity of the body by means of an
   systems’’                             endoscope, a camera attached to a robotic arm

‘‘Enterprise Resource Planning’’     :   Software applications that attempt to achieve company-wide
   or ‘‘ERP’’                            integration of business and technical information are known as
                                         Enterprise Resource Planning (‘‘ERP’’) products and
                                         applications.




                                                   9
‘‘Extranet’’                        :   A website for existing customers rather than the general public.
                                        It can provide access to paid research, current inventories and
                                        internal databases, virtually any information that is private and
                                        not published for everyone. An extranet uses the public Internet
                                        as its transmission system, but requires passwords to gain
                                        access.

‘‘Fleet management’’                :   Application of computer software, hardware and mobile
                                        telecommunications to automate the strategic and tactical
                                        management of vehicle fleet operation including vehicle/driver
                                        scheduling, dispatch and route planning with the goal of
                                        maximising productivity, minimising cost and ensuring good
                                        customer service levels.

‘‘Geographic Information            :   GIS in the context of the intelligent transport systems, are
   Systems’’ or ‘‘GIS’’                 information systems that collate application-specific attributes
                                        such as dynamic traffic conditions, vehicle travel speed, spatial
                                        entities such as road network and service area geography to
                                        automate analysis and planning. GIS is an indispensable
                                        component for both strategic and operational management of
                                        vehicle fleet dispatch and transportation management in
                                        general. GIS is used in route planning, traffic flow analysis,
                                        congestion prediction, diversion route planning, etc.

‘‘Global positioning system’’ or    :   This system provides accurate geographical positioning or
   ‘‘GPS’’                              location information using satellite signal readings and such
                                        information is used in navigation.

‘‘Incubation fund’’                 :   A venture capital fund that focuses on nurturing start-ups or
                                        new companies by providing them with the necessary
                                        resources in terms of financial and other support. The aim is to
                                        grow the start-ups into viable business enterprises.

‘‘Intelligent Transport Systems’’   :   Intelligent Transport Systems refer to a wide range of
    or ‘‘ITS’’                          technologies and applications that aim to maximise the
                                        efficiency and throughput of the road network infrastructure,
                                        improve productivity and safety of drivers and passengers of
                                        private and public transport. Traffic flow management,
                                        congestion prevention, passenger information system, car
                                        navigation, multi-modal travel planning, real-time traffic
                                        information broadcast, fleet management for public transport,
                                        logistics and delivery vehicles, electronic toll collection, and
                                        carpark management are all examples of ITS applications.

‘‘Interface’’                       :   The connection and interaction between hardware and/or
                                        software components and systems, as well as users. Hardware
                                        interfaces are the plugs, sockets, wires and the electrical
                                        pulses travelling through them in a particular pattern. Software
                                        or programming interfaces are the languages, codes and
                                        messages that programs use to communicate with each other
                                        and to the hardware. Users ‘‘talk to’’ the software. The software
                                        ‘‘talks to’’ the hardware and other software. Hardware ‘‘talks to’’
                                        other hardware. All this is interfacing. Interfaces refer to a
                                        format and language that defines the services one system is
                                        capable of delivering to another.




                                                  10
‘‘Internet’’                        :   A global computer network of interconnected commercial,
                                        educational and governmental networks that utilise a common
                                        communications protocol. Originally designed by the US
                                        Department of Defense so that a communication network could
                                        withstand a nuclear war and serve military institutions
                                        worldwide, the Internet was first known as the ARPANet. A
                                        system of linked computer networks, international in scope,
                                        that facilitates data communication services such as remote
                                        login, web surfing, file transfer, electronic mail, and
                                        newsgroups.

‘‘Internet economy’’                :   An economy that uses the Internet or World Wide Web as a
                                        platform for communication, collaboration and community
                                        building, as well as transactions in business.

‘‘Internet Service Provider’’ or    :   An Internet Service Provider is a company that provides
    ‘‘ISP’’                             businesses and individuals with access to the Internet.

‘‘Intranet’’                        :   An in-house website or Internet-based system or network that
                                        serves the employees or members of the enterprise or
                                        organisation. Although intranet pages may link to the Internet,
                                        an intranet is not a site accessed by the general public.
                                        Intranets use the same communications protocols and
                                        hypertext links as the Web and thus provide a standard way of
                                        disseminating information internally and extending the
                                        applications worldwide at the same time.

‘‘Information Technology’’ or       :   Refers to the broad range of technologies and applications that
    ‘‘IT’’                              support the creation, processing, transmission, storage and
                                        management of digital information. IT includes hardware
                                        systems such as computers and network equipment, as well as
                                        software applications that run on computers.

‘‘IT infrastructure’’               :   Refers to the enterprise-wide foundation or backbone of an
                                        organization’s IT systems, including networking, computer and
                                        application systems and management. It is a vital and
                                        necessary component of any organisation that uses some form
                                        of computing or IT.

‘‘Laparoscopic surgery’’            :   Surgery performed using a laparoscope, a thin fibre-optic
                                        scope introduced into a body cavity for diagnostic and surgical
                                        purposes.

‘‘Large-scale distributed           :   These usually refer to systems consisting of a large number of
   systems’’                            computer systems distributed over a wide area network
                                        (‘‘WAN’’).

‘‘Local Area Network’’ or ‘‘LAN’’   :   A Local Area Network is a communications network that serves
                                        users within a confined geographical area, usually contained
                                        within one or more floors of an entire building/ building
                                        complex.

‘‘Local Industry Upgrading          :   Under Singapore’s LIUP scheme, IT multi-national corporation
   Programme’’ or ‘‘LIUP’’              (‘‘MNC’’) leaders such as Sun Microsystems, Microsoft and
                                        Oracle help nurture their respective groups of local IT firms in a
                                        variety of ways. These include local product development by
                                        providing access to the MNCs’ latest technologies and
                                        reaching out to global markets through their worldwide
                                        marketing and distribution channels. IDA is also involved in
                                        providing guidance and funding for some LIUP initiatives where
                                        needed.


                                                  11
‘‘Logistics management’’            :   The management of delivery, transportation and other aspects
                                        of the supply chain. Logistics management involves software
                                        and hardware for managing various processes including
                                        inventory and warehouse management, delivery vehicle
                                        scheduling, routing and dispatch, and multi-modal delivery
                                        necessary to complete the fulfilment cycle for customers.

‘‘Medical robotics’’                :   Medical robotics refers to the use of robots that are specially
                                        designed to facilitate medical procedures as in surgery.

‘‘Micro and nano-machines’’         :   A nanometer is one billionth of a meter (3-4 atoms wide). A
                                        micrometer is one millionth of a meter. Extremely small devices
                                        and machines that have dimensions that are less than a
                                        millimeter and measured in terms of nanometers and
                                        micrometers are referred to as ‘‘micro- and nano-machines’’.

‘‘Minimally Invasive Surgery’’ or   :   MIS refers to surgical procedures that require only very minute
   ‘‘MIS’’                              incisions into the human body. The benefits of using MIS
                                        include less patient trauma and a shorter recovery period.

‘‘Mission-critical systems’’        :   Mission-critical systems are systems with applications where
                                        failures would result in substantial loss of revenue and/or have
                                        a severe impact on business operations or safety.

‘‘Online auctions’’                 :   Auctions that take place on the Internet are known as online
                                        auctions. They require reliable transaction capability,
                                        verification of client identity, and protection of confidential data.

‘‘Online dynamic pricing engine’’   :   Dynamic pricing refers to the changing of prices of goods and
                                        services depending on factors such as demand, supply,
                                        quantity and quality of the goods and services. An example is
                                        the change of prices due to bids in an auction situation. Online
                                        dynamic pricing refers to the use of online interactive and/or
                                        real-time methods and systems to achieve dynamic pricing. A
                                        software or technology platform that is designed to facilitate
                                        online dynamic pricing in a dynamic, changing environment is
                                        known as an online dynamic pricing engine.

‘‘Online payment system’’           :   Payment for goods and services through the Internet requires
                                        online payment systems that are fast, reliable, secure and
                                        scalable. Such systems require direct links with financial
                                        institutions and their payment gateways.

‘‘Optical image measurement’’       :   The measurement of specific items or spaces using computer
                                        vision.

‘‘Order fulfilment’’                :   Ordering goods online requires the delivery of these same
                                        goods in the physical environment. Order fulfilment refers to the
                                        post-order scenario where companies have to deliver their
                                        goods on time, and fulfill customer expectations.

‘‘Portal’’                          :   A principal entry point and gateway for surfing the Internet that
                                        provides useful Web-related services information and links.

‘‘Promising Local Enterprise’’ or   :   Promising Local Enterprises is a term given to Singapore
   ‘‘PLE’’                              companies that show promise of success. Singapore’s
                                        Economic Development Board (‘‘EDB’’) and IDA spearhead the
                                        PLE initiative.

‘‘Protocol’’                        :   The rules, formats and functions governing communications
                                        and interfaces between components in a communications or
                                        computer system or network.


                                                  12
‘‘Prototype’’                 :   A customised design and implementation or production of a
                                  piece of equipment (hardware) or application (software) or a
                                  combination of both, that incorporates real inputs from its real
                                  world operating environment to deliver expected outcomes. A
                                  prototype is usually built to assess, verify, validate and test the
                                  performance of these applications in real world conditions
                                  before launching the applications as products.

‘‘Real-time’’                 :   Such systems are able to provide appropriate feedback in
                                  response to inputs and real world sensor data extremely
                                  quickly, fast enough to meet the systems’ stringent operational
                                  requirements.

‘‘Smart cars’’                :   Cars that have in-built computers, intelligent software, voice/
                                  data mobile communications and other technologies that work
                                  together to improve driver and passenger productivity and
                                  safety and respond intelligently to driver command. Smart car
                                  applications could include pre-trip route planning, dynamic
                                  navigation, voice recognition, automatic cruise control, wireless
                                  Internet, and multimedia information access.

‘‘Smart Card’’                :   A card with a built-in microprocessor and memory used for
                                  identification or financial transactions. When inserted into a
                                  reader, it transfers data to and from a (central) computer. It is
                                  more secure than a magnetic stripe card. As a financial
                                  transaction card or electronic purse, it can be loaded with digital
                                  money and used like a traveler’s cheque, except that variable
                                  amounts of money can be spent until the balance is zero.

‘‘Start-ups’’                 :   Emerging or new companies that aspire to be viable
                                  businesses. Start-ups can be self-financing (with money
                                  coming from its founders and/or its operations) or funded by
                                  corporate and other investors.

‘‘Supply chain management’’   :   The supply chain usually refers to the back-end operations that
                                  concern the supply of materials or components or products in
                                  support of business operations, e.g. shopfront sales and
                                  manufacturing.

‘‘Systems development’’       :   Systems development refers to the activity after the design
                                  stage where technology applications are developed.

‘‘Systems integrator’’ or     :   The systems integrator is a company that specialises in putting
   ‘‘systems integration’’        different components or systems together to build ‘‘new’’,
                                  customised products, applications or systems. Systems
                                  integrators mostly purchase or license third party or off-the-
                                  shelf technologies and components to re-package and
                                  integrate. Sometimes they build their own in-house developed
                                  technologies — this is not usually the case for most systems
                                  integrators because it involves investment in R&D and some
                                  degree of innovation.

‘‘Tele-surgery’’              :   Tele-surgery refers to the use and control of medical robots
                                  by surgeons to perform surgical procedures on remotely
                                  located patients over a geographical distance. Suitable
                                  telecommunications links and devices are required to connect
                                  the surgeon and his equipment with the remotely located
                                  patient and the equipment located with him.




                                            13
‘‘User interface’’                 :   The design of the interaction between the user and the
                                       computer. User interfaces include keyboards, mice, commands
                                       and menus as well as graphical user interfaces used for
                                       communications between the user and the computer.

‘‘Virtual Private Network’’ or     :   Refers to a network which uses special network equipment
   ‘‘VPN’’                             (e.g., router) configurations so that users in a designated group
                                       see only their own messages, though the network carries
                                       messages and traffic meant for other user groups as well.

‘‘Weapons scoring system’’         :   Refers to a system used to ascertain or score the accuracy of
                                       weapon deliveries by determining the location of weapon
                                       impacts with respect to pre-determined targets.

‘‘Web-based system’’               :   Refers to a system which supports user access to applications
                                       and information using web browsers — these are software
                                       programs that serve as the front end to the World Wide Web.
                                       Two major web browsers today are Netscape Navigator® and
                                       Microsoft® Internet Explorer. This also refers to systems that
                                       incorporate the technologies as well as the hardware or
                                       software building blocks that make up the World Wide Web.

‘‘Wide Area Network’’ or ‘‘WAN’’   :   A Wide Area Network is a communications network that covers
                                       a wide geographic area, such as a city, state or country.
                                       Connectivity is over greater distances (compared to a LAN) and
                                       involves the support infrastructure of telecommunication
                                       providers or companies.

‘‘Wired and wireless               :   Wired tele-surgery refers to the use of wired telecommunication
   tele-surgery’’                      networks to perform tele-surgery operations. Wireless tele-
                                       surgery refers to the use of wireless telecommunication
                                       networks for tele-surgery.




                                                14
                                  DETAILS OF THE INVITATION


LISTING ON SGX-ST
Application has been made to the SGX-ST for permission to deal in, and for quotation for all the Shares
already issued (including the Vendor Shares) as well as the New Shares on SGX-ST. Such permission
will be granted when the Company has been admitted to the Official List of SGX-ST. Acceptance of
applications will be conditional upon permission being granted to deal in, and for quotation for all the
issued Shares (including the Vendor Shares) as well as the New Shares. Moneys paid in respect of any
application accepted will be returned, without interest or any share of revenue 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 SGX-ST is not to be
taken as an indication of the merits of the Invitation, the Company, its subsidiaries, the Shares or the New
Shares.

The Directors and the Vendors individually and collectively accept full responsibility for the accuracy of
the information given in this Prospectus and confirm, having made all reasonable enquiries, that to the
best of their knowledge and belief, there are no other material facts the omission of which would make
any statement in this Prospectus misleading.

No person 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, the Vendors 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 of its subsidiaries or in any statements 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 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.

This Prospectus has been prepared solely for the purpose of the Invitation and may not be relied upon
by any persons other than the applicants in connection with their application for the Invitation Shares or
for any other purpose. This Prospectus does not constitute an offer of, or invitation to subscribe for, the
Invitation Shares in any jurisdiction in which such offer or invitation is unauthorised or unlawful, nor does
it constitute an offer or invitation to any person to whom it is unlawful to make such offer or invitation.

Copies of this Prospectus and the Application Forms and envelopes may be obtained on request, subject
to availability, from:−
                                The Development Bank of Singapore Ltd
                                           6 Shenton Way
                                       DBS Building Tower One
                                          Singapore 068809

and from DBS Bank branches (including its POSBank Services division), members of the Association of
Banks in Singapore, members of the Singapore Exchange Securities Trading Ltd and merchant banks
in Singapore.

The Application List will open at 10.00 a.m. on 31 July 2000 and will remain open until 12.00 noon
on the same day or for such further period or periods as the Directors and the Vendors may, in
their absolute discretion, decide, subject to any limitation under all applicable laws.




                                                     15
STRUCTURE OF OUR INVITATION
Issue Price
The Issue Price, determined by us, the Vendors and DBS Bank based on the estimated market valuation
of our Company and the market demand for our Shares, is $1.10 for each Invitation Share offered in our
Invitation. The Issue Price is the same for all Invitation Shares offered in the various tranches of our
Invitation and is payable in full on application.


Our Invitation
The Invitation comprises the following tranches:−


                                            PUBLIC OFFER
                                    v         TRANCHE
                                        15,600,000 Offer Shares
       INVITATION
                                                                                     3,100,000




                                                                          v
        66,770,000                                                                Reserved Shares
      Ordinary Shares
                                        PLACEMENT TRANCHE
                                    v




                                         51,170,000 Placement
                                                Shares
                                                                                     48,070,000




                                                                          v
                                                                                  Placement Shares


Investors may subscribe for any number of Invitation Shares in integral multiples of 1,000 Invitation
Shares.

(i) Public Offer Tranche
    The Public Offer is open to members of the public in Singapore as well as to institutional and
    professional investors. Investors may apply for Invitation Shares under the Public Offer Tranche by
    way of printed Offer Shares Application Forms or by way of electronic applications through the ATMs
    belonging to 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’’).

    The terms and conditions and the procedures for application of Invitation Shares under the Public
    Offer Tranche are set out on pages 158 and 159 in Appendix B of this Prospectus.

    Only one application may be made for the benefit of a person for Invitation Shares under the
    Public Offer Tranche. A person submitting an application for Invitation Shares in the Public
    Offer Tranche by way of a printed Offer Shares Application Form may not submit another
    application by way of Electronic Application and vice versa. A person submitting an
    application for the Invitation Shares in the Public Offer Tranche by way of ATM may not
    submit another application of Invitation Shares by way of an Internet Electronic Applications
    and vice versa. Such separate applications shall be deemed to be multiple applications and
    shall be rejected.

    The Public Offer Tranche of initially 15,600,000 Invitation Shares at the Issue Price represents
    23.36% of the total number of Invitation Shares available under the Invitation and 5.84% of our
    post-IPO issued and paid-up share capital.

    Allocation of Invitation Shares under the Public Offer Tranche will be based on the level of valid
    applications received. In the event that the Public Offer Tranche and the Invitation on the whole are
    substantially over-subscribed, there will be balloting and applicants who are not successful in the
    ballot will not receive any Invitation Shares under the Public Offer Tranche while successful
    applicants in the ballot may receive less than the number of Invitation Shares they applied for under
    the Public Offer Tranche.




                                                    16
The Placement Tranche comprises Reserved Shares and Placement Shares.

(i) Reserved Shares
       3,100,000 of Invitation Shares are subject to priority allocation to persons in the following categories
       who have contributed to our success: (a) the Independent Directors, and employees of our Group,
       and (b) our business associates and those who have contributed to our success.

       Application for the Reserved Shares may only be made by way of printed Reserved Shares
       Application Forms. The terms and conditions and the procedures for application of Reserved
       Shares are set out on page 159 in Appendix B of this Prospectus.

       An applicant making an application for the Reserved Shares using the Reserved Shares Application
       Form may submit one separate application for Offer in his own name either by way of an Offer
       Shares Application Form or through an Electronic Application or submit one separate application for
       the Placement Shares (other than for the Reserved Shares) by way of a Placement Shares
       Application Form, provided he adheres to the terms and conditions of this Prospectus. Such
       separate applications will not be treated as multiple applications.

       The Reserved Shares of 3,100,000 Invitation Shares at the Issue Price represents 4.64% of the total
       number of Invitation Shares available under the Invitation and 1.16% of our post-IPO issued and
       paid-up capital.

(ii)   Placement Shares
       The Placement will involve selective marketing of Invitation Shares to institutional and professional
       investors and other investors expected to have a sizeable demand for the Invitation Shares.
       Professional investors generally include brokers, dealers, companies (including fund managers)
       whose ordinary business involves dealing in shares and other securities and corporate entities
       which regularly invest in shares and other securities. Application for the Placement Shares may only
       be made by way of printed Placement Share Application Forms. The terms and conditions and the
       procedures for application of Placement Shares are set out on page 159 in Appendix B of this
       Prospectus.

       An applicant who has agreed to subscribe for Placement Shares (other than the Reserved Shares)
       or who otherwise subscribes for Placement Shares shall not make or procure any separate
       application for Offer Shares, either by way of the Offer Shares Application Form or through an
       Electronic Application. Such separate application will be deemed to be multiple applications and
       shall be rejected.

       The Placement Shares of 48,070,000 Invitation Shares at the Issue Price represents 71.99% of the
       total number of Invitation Shares available under the Invitation and 18% of our post-IPO issued and
       paid-up share capital.




                                                       17
RESULTS OF APPLICATION AND DISTRIBUTION
We will publicly announce the level of subscription for Invitation Shares and the basis of allocation of the
Invitation Shares, as soon as it is practicable after the closing date for applications:−
(i)     through a MASNET announcement to be posted on the Internet at the SGX-ST website
        http://www.singaporeexchange.com;

(ii)    in any of the local English and Chinese newspapers.

Applicants who make ATM Electronic Applications through the ATMs of the following banks may check
the provisional results of their ATM Electronic Applications as follows:−

  Bank         Telephone/website           Available at ATM             Operating Hours          Service Expected From

  DBS Bank     1800-222 2222               Internet Banking or          24 hours a day           7.00 p.m. on the balloting day
               327 4767                    Internet Kiosk
               www.dbs.com.sg*

  KTB          222 8228                    ATM                          ATM — 24 hours a day     ATM — Evening of the balloting day
                                                                        Phone Banking:           Phone Banking:
                                                                        Mon − Fri: 0800-2200     8.00 a.m. on the day after the
                                                                        Sat:       0800-1500     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:
               www.oub2000.com.sg*
                                                                        24 hours a day

                                           OUB Mobile Buzz              OUB Mobile Buzz†
                                                                        24 hours a day

  UOB‡         1800-533-5533               ATM (Other Transactions —    Phone Banking/ATM:       6.00 p.m. on the balloting day
               1800-222-2121               ‘‘IPO Enquiry’’)             24 hours a day
               www.uobcyberbank.com.sg

*Applicants who have made Internet Electronic Applications through the Internet Banking website of DBS Bank or OUB may also
 check the result of their applications through the same channels listed in the table above in relation to ATM Electronic Applications
 made at the ATMs of DBS Bank or OUB.
†Applicants who have made Electronic Applications through the ATMs or the Internet Banking website of OUB and who have
 activated their OUB Mobile Buzz services will be notified of the results of their Electronic Applications, via their mobile phones.
‡Applicants who have made Electronic Applications through the ATMs or the Internet Banking website of UOB, may check the
 results of their applications through UOB CyberBank, UOB Group’s ATMs or UOB Phone Banking services.


If the Applicant’s Electronic Application is made through the ATMs of KTB or the 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 as stated in the records of the relevant Participating
Bank 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 the OCBC Group, OUB or DBS Bank (including its POSBank Services
division) and is unsuccessful, no notification will be sent by the relevant Participating Bank.

If the Applicants’ Internet Electronic Applications made through the IB web-sites of UOB, OUB or DBS
Bank is unsuccessful, no notification will be sent by such Participating Banks.




                                                                   18
INDICATIVE TIMETABLE FOR LISTING
In accordance with the SGX-ST’s News Release of 28 May 1993 on the trading of initial public offering
shares on a ‘‘when issued’’ basis, an indicative timetable is set out below for the reference of applicants:−

Indicative date/time                    Event
31 July 2000, 12 noon                   Close of Application List

1 August 2000                           Balloting of applications, if necessary

2 August 2000, 9.00 a.m.                Commence trading on a ‘‘when issued’’ basis

10 August 2000                          Last day of trading on a ‘‘when issued’’ basis

11 August 2000, 9.00 a.m.               Commence trading on a ‘‘ready’’ basis

16 August 2000                          Settlement date for all trades done on a ‘‘when issued’’ basis and
                                        for all trades done on a ‘‘ready’’ basis on 11 August 2000


The above timetable is only indicative as it assumes that the closing of the Application List is 31 July
2000, the date of admission of the Company to the Official List of the SGX-ST will be 1 August 2000, the
SGX-ST’s shareholding spread requirement will be complied with and the New Shares will be issued and
fully paid up prior to 1 August 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.

All persons trading in the Shares on a ‘‘when issued’’ basis do so at their own risk. In particular,
persons trading in the Shares before their Securities Accounts with CDP are credited with the
relevant number of Shares do so at the risk of selling Shares which neither they nor their
nominees, if applicable, have been allotted and/or allocated or are otherwise beneficially entitled
to. Such persons are also exposed to the risk of having to cover their net sell positions earlier if
‘‘when issued’’ trading ends sooner than the indicative date mentioned above. Persons who have
a net sell position traded on a ‘‘when issued’’ basis should close their position on or before the
first day of ‘‘ready’’ basis trading.

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




                                                     19
                                     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. Terms defined
elsewhere in this Prospectus have the same meanings when used therein. Prospective investors should
carefully consider all the information presented in this Prospectus, particularly the matters set out under
‘‘Risk Factors’’ before making an investment decision.

OVERVIEW OF OUR GROUP
We are an information technology group. Our principal activities are Technology-intensive IT services
and products and e-business applications and services. These two competencies are distinct yet
complement and reinforce each other.

We started in 1989 as a manufacturers’ representative for US and European high technology suppliers
to industries in the Asia Pacific region. Being a manufacturers’ representative, we served as the
marketing and sales arm of the manufacturers as well as being responsible for managing all aspects of
customer orders, including delivery to customers, payments and, in some cases, implementation. In the
early 1990s, we became a systems integrator and developer, mainly making use of third party
technologies and products, which enabled us to undertake large-scale IT projects. Later, we developed
our own technologies and ventured into computer vision and intelligent transport systems where we
developed, installed and operated IT and computer systems for customers who are public sector bodies
or government agencies as well as the private sector.

In computer vision, our expertise is in 3-D computer image processing. Our developed systems include
(i) a computer vision-based weapons scoring system, (ii) a system that recognises, measures, and tracks
ships in ports or waterways, and (iii) a system which monitors the height of ships. In intelligent transport
systems, our expertise in research and development culminated in (i) an intelligent computer vision-
based car park system, (ii) a vehicle entry permit and road toll system, and (iii) a public transport traveler
information system. Our expertise in computer vision and intelligent transport systems embodies our
ability to design and develop computer systems that can detect, identify and monitor real world events,
and to interact with and manage them accordingly.

Since 1996, we have evolved into a systems and technology developer for e-business IT projects. Some
of these projects were a passenger information kiosk system for the Hong Kong airport and a
government medical claims proration system. We are currently developing an online Certificate of
Entitlement (‘‘COE’’) open bidding system for the Land Transport Authority of Singapore. In performing
these projects, we moved from our earlier skill bases as a contractor and systems integrator to become
a systems and technology developer. In conjunction, we develop and continue to refine our e-business
applications, services and tools such as our data centres, our online dynamic pricing engines and our
secure payment systems. We intend to offer our e-business applications, services and tools to various
sectors and to incorporate them into our present range of activities.

We are now in a position to combine our various areas of expertise to meet the needs of our customers
for new integrated systems and solutions in a knowledge-based economy which we believe, will
increasingly incorporate Internet technology and services. Our objective is to be a leading e-business
and Internet enabler capable of providing innovative technology-intensive system solutions for the
knowledge-based economy.

In the past three years, our group’s consolidated turnover was $3.02 million, $6.04 million and $11.44
million respectively. Our corresponding profits after tax was $1.04 million, $1.86 million and $4.31 million
respectively.




                                                     20
BUSINESS STRATEGY
Our objective is to be a leading, world-class e-business, infrastructure and Internet enabler capable of
providing innovative technology-intensive system solutions for the knowledge-based economy.

Our strategy to achieve this objective includes the following:−

(a)   Strengthen and capitalise on our existing capabilities and market presence by:−
      ‰   Enhancing our existing technologies, products and services
      ‰   Developing new complementary technologies, products and services
      ‰   Developing innovative new industry uses for our e-business, computer vision and intelligent
          transport systems capabilities, products, technologies and services

(b)   Enhance our internal strengths by:−
      ‰   Hiring more talent and strengthening manpower resources to reach global markets
      ‰   Expanding our range of e-business competencies, applications and services
      ‰   Leveraging on our unique range of and synergistic IT expertise to provide quality, complete
          end-to-end customer systems and solutions

(c)   Increase our revenue by:−
      ‰   Investing in the internet-enabling of brick-and-mortar businesses
      ‰ Strengthening our marketing resources and presence, especially outside Singapore
      ‰ Pursuing large-scale IT contracts and projects in the public and private sectors

(d)   Grow our external links by:−
      ‰ Entering into strategic alliances with leading industry players
      ‰ Expanding our product range and capabilities by acquisitions and joint ventures
      ‰ Developing strategic R&D relationships with leading industry players and research institutes




                                                   21
COMPETITIVE STRENGTHS
We have a diversified portfolio of products and services with a strong technology focus, ranging from
computer vision, intelligent transport systems to e-business. We believe the following competitive factors
distinguish us from our competitors:−

(a) Innovation
     Our efforts in R&D form a crucial component of our competitive strength and have enabled us to
     differentiate ourselves from some of our existing competitors. Our strategy of in-house technology
     development is beneficial in the following ways.
     ‰   The markets we are in require critical mass and sufficient R&D capability. We have developed,
         and will continue to develop, our in-house technology products, systems and services. With the
         financial proceeds from the Invitation, we will be able to continue our investment in R&D through
         more aggressive recruitment, acquisition, joint ventures and other strategies that will ensure we
         have a sustainable lead in core R&D capability in the markets we compete in.
     ‰   As most of the technologies we utilise in our products are developed in-house, we are in a better
         position to offer our clients customized solutions to meet their unique needs. Our technical
         expertise and knowledge may give us a degree of competitive advantage. In addition, our
         ownership of intellectual property rights gives us a degree of flexibility which may add to our
         competitive strength.

(b) Quality
     We are committed to delivering quality products and services to our customers. Our commitment to
     quality is apparent through our efforts to attain and maintain the ISO9001 certification we received
     in May 1996. Specifically, we are ISO9001 certified for the design, development, integration,
     implementation, maintenance and project management of electronic and electrical systems.

     As a significant proportion of our products and services are rolled out in large-scale complex
     projects, there is significant emphasis on quality assurance. This importance of quality control is
     also apparent in markets for certain products and services as in medical robotics where regulations
     mandate the appropriate quality certification and assurance before allowing product sale,
     distribution or use.

(c) Customer Focus
     Driven by the diversity of our customers and their different needs, we seek to address the
     requirements of our customers whilst developing appropriate technology solutions to help them
     remain competitive in their respective businesses. Our R&D teams work closely with our business
     development team to draw on their industry knowledge and understanding of customers’
     requirements from the conceptualisation stage of the product or service to the final product or
     service roll-out. Consequently, we have been able to deliver customised solutions to fulfill our
     customers’ specialised needs.

(d) Business-oriented Philosophy
     We believe in sustaining growth and ensuring a healthy cash flow in our Company. We have been
     able to generate income and profit in recent years and we intend to continue operating with an eye
     on the bottom line. Our philosophy and approach to projects and markets are governed by our
     awareness of the importance of competitive pricing, speed of delivery, and quality of service.




                                                   22
THE INVITATION
Size                        :   66,770,000 Invitation Shares, comprising 15,600,000 Offer
                                Shares and 51,170,000 Placement Shares. The New Shares will,
                                upon registration in the name of CDP or its nominee, rank pari
                                passu in all respects with the then existing issued Shares.

Issue Price                 :   $1.10 for each Offer Share, Placement Share and Reserved
                                Share.

Purpose of the Invitation   :   The Directors consider that the listing of our Company and the
                                quotation of the Shares on SGX-ST will enhance our Company’s
                                public image and provide an alternative source of capital. It will
                                also provide members of the public, the management, staff and
                                business associates of our Group an opportunity to participate in
                                the equity of our Company.

Use of Proceeds             :   The net proceeds of approximately $55 million from the issue of
                                the New Shares (after deducting estimated expenses in relation to
                                the Invitation) will be utilised as follows:−
                                (a)   approximately $8.5 million for the proposed incubation fund
                                      with NIF Management Singapore Pte Ltd (a member of the
                                      Daiwa Securities group). For more details of this fund, to be
                                      named the NIF Stratech Technology Fund, please refer to
                                      page 59;
                                (b)   approximately $14 million for future business expansion
                                      (local or overseas) which may include acquisition of related
                                      technologies and/or companies (details of which are on
                                      page 71);
                                (c)   approximately $3.5 million for investment in Mobiwave Pte
                                      Ltd, details of which are on page 71;
                                (d)   approximately $10 million for e-business ventures (details of
                                      which are on page 70); and
                                (e)   approximately $19 million to finance research and
                                      development of new products and/or working capital
                                      purposes.

                                Pending the deployment of net proceeds as aforesaid, the net
                                proceeds may be added to the Group’s working capital or used for
                                investment in short-term money market instruments, as the
                                Directors may deem fit.

Reserved Shares             :   3,100,000 of the 66,770,000 Invitation Shares will be reserved
                                for the Group’s Independent Directors, employees, business
                                associates and those who have contributed to the success of our
                                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 for the
                                Placement Shares, to satisfy applications made by members of
                                the public for the Offer Shares.

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




                                             23
                                           RISK FACTORS


Prospective investors should carefully consider the following risk factors and all other information
contained in this Prospectus before making a decision to subscribe for/or purchase the Invitation Shares.

If any of the following risk factors and uncertainties develop into actual events, our business, financial
conditions or results may be adversely affected in a material way. In such cases, the trading price of the
Shares could decline due to any of these considerations, and the investor may lose all or part of their
investment.

RISKS RELATING TO OUR COMPANY OR THE INDUSTRY
Rapid technological change may lead to the obsolescence of our engineered solutions
A key competitive edge of our products, systems and services are our in-house developed technologies
and systems, and our technical capabilities. Hence, patents (details of which are on page 64) to protect
our developed systems and technologies, and our ability to re-use these capabilities, technologies and
systems are very important. However, modern technology is changing rapidly due to increasing
computer processing power and new discoveries. As a result, new technologies and applications are
continually being introduced in the markets which we compete in. This may negate the competitive
advantages of our patents, technologies, products and systems, and render them obsolete. Also, such
rapid technological changes often result in substantial improvements in cost savings which will reduce
the prices we can charge for our products, systems and services.

Our competitors may have larger R&D teams, more experience and capabilities in conducting R&D and
testing activities, obtaining regulatory approvals, manufacturing, marketing and selling products and
systems. We cannot be certain that we will be able to develop new products and systems that are more
effective and/or cost-effective than established or new products and systems developed by our current
or potential competitors. We cannot guarantee that we will be able to achieve adequate sales of our
products and systems if our products and systems are unable to demonstrate efficacy and cost
advantages over other products or services of our competitors. Even if our initial products and systems
gain market acceptance and generate revenue, our ability to achieve or sustain profitability will be
adversely affected if we fail to develop new technologies, products and systems before our competitors
on a continual basis. Keen competition in the IT industry may result in the obsolescence of our
engineered solutions.

Non-market acceptance of our engineered solutions will have negative effects on our profitability
Successful commercialisation of our engineered solutions will depend on achieving user acceptance of
our products, systems and services. There can be no assurance that our products, systems and services
will gain any significant degree of market acceptance by users.

‰   For example, in the field of medical robotics, surgeons may be reluctant to abandon time-proven
    conventional techniques. We expect that there will be a significant learning process involved for users
    to become proficient in the use of the new medical robotic systems and products developed by us in
    performing surgical procedures, such as heart (or cardiac) surgery, which to date have been mostly
    performed with surgical techniques that require making large openings or cuts. Broad use of these
    systems will require training of surgical teams in performing minimally invasive procedures, and
    market acceptance could be delayed by the time required to complete this training.

‰   For example, in the development of industry-specific portals such as SmarTown.comTM, which
    focuses on the education industry (details of which are on page 58), market acceptance and the
    ability to generate interest in the portal is necessary to gain the critical mass for the concept to be
    commercially successful.

If our products and services fail to achieve sufficient market acceptance, we may not be able to achieve
revenue from product sales to support our operations.




                                                    24
The fluctuations and seasonality of our revenue stream and lengthy sales cycle may have an
adverse effect on our profitability
Our financial results depend upon numerous factors, including obtaining regulatory approval and market
acceptance, public sector IT budget allocation, the timing and ability to develop our development, sales
and marketing capabilities, our ability to develop, introduce and market new or enhanced versions of
existing products or systems on a timely basis, rectification of any quality problems and changes in
third-party pay or reimbursement policies. Historically, our revenue in the first half of the year was much
lower than the second half and this seasonal fluctuation is due to some of the Singapore public sector
agencies which are our major customers, having financial years ending on 31 March of each year. The
public sector agencies typically then award new tenders in the middle or second half of the year. In
addition, our operations experience lengthy product and systems sales cycles because our products and
systems are relatively high-value and thus require multiple levels of purchase authorisation by
customers. As a result, our quarterly or yearly results of operations may fluctuate substantially and our
operating results in any particular period should not be relied upon as an indication of future
performance. Please refer to page 34 for further details.

Any infringement of patents and intellectual property rights may affect our operations and
profitability
Our success will depend in part on the ability to obtain patent and copyright protection for our products,
systems and processes, to operate without infringing or violating the proprietary rights of third parties,
and to prevent others from infringing on our proprietary rights.

We recognise that as new patents are issued or are brought to our attention by the holders of such
patents, it may be necessary for us to withdraw products and systems from the market, obtain licenses
from such patent holders, or redesign our products and systems. To date, we are not aware that any of
our products infringe patents or other proprietary rights of third parties. However, we cannot be totally
certain about this issue. In addition, the legal costs and engineering time required to safeguard
intellectual property or to defend against litigation could become a significant expense of our operations
and solutions and may have a material adverse effect on our revenue and profitability. Please refer to
page 64 for more detailed information.


Dependence on contract manufacturers to scale up production of our products may affect our
growth potential
Our systems and solutions may include products or items, which are required to be produced in large
quantities. An example of this is an in-vehicle unit or a public display board that may be part of a large
intelligent transport system solution. To increase profits and retain ownership over such technologies,
such units will likely be designed and prototyped by our in-house technical resources. However for
full-scale system implementation, large numbers of these products may be needed. To date, we have no
experience in the mass production of our products in volumes, as in the past, there was no necessity for
us to do so. However, going forward, we may be required to engage contract manufacturers for certain
products designed by us which will be necessary for us to achieve significant commercial sales. We may
outsource any mass production requirements of our products to contract manufacturers. There can be
no assurance that a reliable, high-volume production facility can be established by contract
manufacturers for our products. Manufacturers may encounter difficulties in scaling up production of new
products, including problems involving production yields, quality control and assurance, component
supply shortages, shortages of qualified personnel and compliance with regulations. In the event that the
contract manufacturers we engage are unable to meet the production requirements in terms of both
quality and quantity, the growth in sales of our products will be substantially diminished. This will have
a material adverse effect on our business, financial condition and results of operations.




                                                    25
Failure to estimate correctly the time required to complete our projects will result in losing money
on fixed-price contracts
A significant portion of our contracts are fixed-priced contracts, rather than contracts in which the
customer pays us on a time and materials basis. We must estimate the number of hours and the
materials required before entering into a fixed-price contract. Our future success will depend on our
ability to continue to set rates and fees accurately and to maintain targeted rates of employee utilisation
and project quality. If we fail to accurately estimate the time and the resources required for a project, any
required increase in the time and resources to complete the project could cause our profits to decline.

Dependence on key management personnel and R&D engineers may have material adverse
effect on our business prospects and financial position
Our future performance depends substantially on the continued services and performance of our senior
management and key R&D engineers. Our performance is also dependent on our continued ability to
retain and motivate our employees. The loss of the services of any of our key executive officers or other
R&D engineers could have a material adverse effect on our businesses, prospects, financial conditions
and results of operations. Our future success also depends on our ability to attract, hire, retain and
motivate other highly skilled engineers, managerial and marketing personnel. As competition for such
personnel is intense, we cannot be certain that we will succeed in attracting and retaining such
personnel. Our failure to attract and retain these personnel will have a material adverse effect on our
business, prospects, financial condition and result of operations.


Inability to maintain timely compliance with regulations may have a material adverse effect on
our financial performance
The use, testing, manufacture and sale of some of our products such as medical and surgical products,
are subject to government and other regulations. In order for us to market such products, we must obtain
the relevant regulatory approvals and clearances, and comply with extensive regulations regarding
product safety, manufacturing processes and product quality. These regulations, including the
requirements for approvals or clearance to market and the time required for regulatory review, vary from
country to country.

Non-compliance with regulations or the lack of necessary approvals will prevent or delay our ability to put
affected products on the market. This will have a direct negative impact on the revenue streams expected
from the sale, support or use of these products and related services.

Our business may be adversely affected if legally-binding agreements are not executed
We have entered into several memorandums of understanding with third parties, namely NIF (refer to
page 59), Citibank N.A. (refer to page 58), PREMAS International Limited (refer to page 54) and 3M
Singapore Pte Ltd (refer to page 64), to form joint ventures or to utilise technologies, products and
services that form an integral part of our systems and services. Whether written or oral, these
memorandums of understanding do not legally bind the parties, have indefinite terms and may be ended
at the will of either party. If the parties are unable to agree on the relevant terms and no definitive
legally-binding agreements are entered into, our business may be adversely affected.

Our products and systems development may depend on regulations and approvals
In the course of our technology development, system prototyping, piloting, implementation and operating
activities, certain regulatory approvals may be needed. For example, wireless application solutions or
technology may require the use of certain wireless communication frequency bands. Local government
or regulator approval may need to be obtained before they can be used. In Singapore, the approval of
IDA will be required. Another example is the approval of the use of new surgical techniques in animal or
human trials in the area of medical robotics which will require the approval of Ministry of Health in the
case of Singapore. There can be no assurance that we will obtain regulatory approvals or that we will not
incur significant costs in obtaining or maintaining regulatory approvals. Delays in receipt of approvals to
market, develop and implement our products and systems, or failure to receive these approvals, or
revocation or cancellation of prior approvals will have an adverse effect on our financial performance.
Please refer to ‘‘Government Regulation’’ on page 66 for more detailed information.


                                                     26
Our business may be subject to product, public or other liability claims
Product, public or other liability claims may have an adverse effect on our business and financial
performance.

The development, manufacture and sale of our products and systems, especially in the areas of
intelligent transport systems and medical robotics, entail significant risk of liability claims. We face an
inherent business risk of financial exposure to liability claims in the event that the use of our products or
systems results in personal injury, death or property damages. We also face the possibility that defects
in the design or manufacture of our products might necessitate a product recall.

There can be no assurance that we will not experience losses due to product, public or other liability
claims or recalls. Any claims, regardless of their merit or eventual outcome, may have an adverse effect
on our business and financial performance. Please refer to ‘‘Insurance’’ on page 65 for more details.

Our business may be subject to security breaches
To conduct e-business applications, services and solutions over public networks such as the Internet, it
is fundamental that the storage and transmission of confidential information is secured. Failure to prevent
security breaches of our systems that are accessible to the public via the Internet or well publicised
security breaches affecting the Internet web in general could significantly harm our business and
financial conditions. We cannot be certain that advances in computer capabilities or other developments
will not result in a compromise or breach of the systems and methods we use to protect the content of
the transactions conducted over our Internet-based systems or proprietary information in our databases.
Anyone who is able to circumvent our security measures could misappropriate proprietary, confidential
customer information or cause interruptions in our operations. We may be required to incur significant
costs to protect against or to alleviate problems caused by security breaches. In addition, a highly-
publicised compromise of security could discourage people from using the Internet to conduct
transactions which involve confidential or sensitive information.

We are dependent on key customers
A significant portion of our sales is, and may continue to be, concentrated among a limited number of
customers. For example, a significant portion of sales is currently attributable to public sector agencies,
detailed as follows:−

Financial Year                                                       1997             1998             1999
Public Sector Sales ($’000)                                          881              1,630            7,956
% of total sales                                                    29.2%            27.0%            69.5%

As a result, our performance depends significantly on relatively large orders from a limited number of
customers. In the event of the loss of any existing customers coupled with the failure to expand our client
base, our financial performance will be adversely affected.

Furthermore, in an event of dispute, we may for goodwill and commercial reasons, choose not to exhaust
fully its legal rights against public sector agencies.


Possible write-off of development expenditure may have a negative impact on future profits
Certain costs comprising engineers’ salaries and related expenses (including relevant directors’
remuneration) incurred in the design and development of information technology and advanced
technology systems have been capitalised as development expenditure and are written off to the profit
and loss account on a straight line basis over 5 years commencing from the date of billings to the
customers. We have two types of development expenditure. The first is development expenditure for
reusable component of products or systems where contracts from customers have already been secured
such as our Super BullsEyeTM system. The second type of development expenditure is the in-house
development of products or systems which we have identified as having good market potential such as
our medical robotics system. In compliance with Singapore Accounting Standards, when the projects are
unable to generate future revenue, the unamortised balance of the development expenditure is written
off to the profit and loss account.

                                                     27
As at 30 April 2000, the development expenditure amounted to $10.0 million and the breakdown of this
cost relative to our core business activities is as follows:−
‰   development expenditure of $4.2 million in the e-Business division; and
‰   development expenditure of $5.8 million in the Technology-intensive IT division

Some of the development expenditure stated above may need to be written off because the developed
products and systems may not gain market acceptance or in the case of development expenditure where
contracts have already been secured, continue to generate future revenue. In such event, the write-off
of the development expenditure would have an adverse impact on the Group’s future profits.

Please refer to page 35 for more details.


Possible future capital requirements may have a negative impact on shareholders
Based on our current anticipated business plan, we believe that the present cash revenue and the net
proceeds from the Invitation will be sufficient to meet our capital requirements. We expect to expend
substantial additional funds in the foreseeable future as we continue to fund trials in support of business
development and regulatory approvals, expand R&D activities and expand sales and marketing
activities. However due to the nature of our operations, our capital requirements can be affected by
factors such as the level of R&D needed to keep abreast of the competition. Accordingly, the timing and
amount of such capital requirements cannot be accurately predicted. Please refer to ‘‘Research and
Development’’ on page 61 for more details.

Any additional equity financing, depending on the issue price, may dilute the shareholding of our
shareholders and any debt financing may contain restrictive covenants with respect to dividends, future
capital raising and other financial and operational matters. In the event that we are unable to obtain
additional financing when such financing is required, our business, operational results and financial
performance may be adversely affected.

We are exposed to foreign exchange risks
A proportion of our revenue, and purchases and expenses are in foreign currencies, namely US$ and
HK$, while the balance is denominated in S$. In FY1999, the proportion of revenue in US$, HK$ and S$
was 18.7%, 1.9% and 79.4% respectively while the proportion of purchases and expenses in US$ and
S$ was 0.6% and 99.4% respectively.

Moving forward, we expect to secure contracts from foreign jurisdictions as we expand our client base
to include overseas companies. Accordingly, our exposure to foreign exchange fluctuations is likely to
increase as more of our revenue is expected to be denominated in foreign currencies. The impact on our
financial statements depends on the movement of such foreign currencies against S$ and the amount
of revenue or expenses denominated in such currencies. For example, profits derived from our projects
denominated in US$, would be lower in S$ should there be any depreciation in the exchange rate of US$
against S$. Currently, we do not adopt any hedging policy. Hence, in future, any drastic movements in
the foreign exchange markets may have an adverse impact on our financial performance. Please refer
to ‘‘Foreign Exchange Exposure’’ on page 45 for more details.

Slowdown in economic growth may have an adverse effect on our financial performance
The Asian economic and financial crisis during the late nineties affected the economies in the region,
including Singapore. However, during this period, our turnover continued to increase with the delivery of
existing contracts as well as contracts secured during the crisis due to our success in addressing niche
and selective market needs and in developing cost-effective and suitable technology solutions for those
needs. There is no assurance that in the event of a similar crisis in the future, our financial performance
will not be adversely affected.




                                                    28
RISKS RELATING TO OWNERSHIP OF OUR SHARES
Investors in our Shares may face dilution in the value of their Invitation
We intend to implement an employees’ share option scheme. The exercise price of any option to acquire
new Shares under the scheme may be below the then prevailing market price of the Shares at the time
of exercise as no discount is given under the ESOS. In such a case, existing shareholders will suffer
dilution in the value of their investments.

Our Directors own a large percentage of our Company and could significantly influence the
outcome of actions
Upon completion of this Invitation, our Directors and their associates will collectively own approximately
60.84% of our issued share capital. These shareholders, if acting together, would be able to significantly
influence many matters requiring shareholders’ approval, including the election of directors and the
approval of transactions such as capital restructuring and business ventures. This concentration of
ownership could also have the effect of delaying or preventing a change in control of the Company or
otherwise discouraging a potential acquirer from attempting to obtain control of us.

There has been no prior market for our Shares and this offering may not result in an active or
liquid market for these Shares
There has not been a public market for our Shares prior to this Invitation. Therefore, we cannot assure
investors that an active public market will develop or be sustained after the Invitation. The Issue Price
was determined by negotiations between us, the Vendors, and the representatives of the Manager and
may not be indicative of prices that will prevail in the trading market. Investors may not be able to resell
their Shares at or above the Issue Price. Volatility in the trading price of our Shares may be caused by
factors outside our control and may be unrelated or disproportionate to our operating results.

Our Share price may be volatile, which could result in substantial losses for investors purchasing
Shares in this Invitation
The market price of our Shares may fluctuate significantly and rapidly as a result of, inter alia, the factors
mentioned below:−
‰ Announcements by us or our competitors of significant contracts, acquisitions, strategic alliances or
  capital commitments;
‰ Announcements of technological developments;
‰ Fluctuations of share price and volume, which are particularly common among highly volatile
  securities of IT-based companies in Singapore and the region;
‰   Changes in our operating results;
‰   Changes in securities analysts’ estimates of our financial performance;
‰   Changes in market valuation of similar companies; and
‰   Involvement in litigation.

In addition, due to the technology-intensive and emerging nature of our business, the market price of our
Shares may also rise and fall in response to factors beyond our control. These fluctuations may be
exaggerated if the trading volume of our Shares is low.




                                                     29
                                                  ISSUE STATISTICS


Issue Price                                                                                                    $1.10

NET TANGIBLE ASSETS
NTA per Share based on the Group’s audited consolidated NTA as at 31 December
1999, after taking into account the Bond Conversion:−
(a)    before adjusting for the estimated net proceeds from the issue of the New                               3.22 cents
       Shares (based on the pre-Invitation share capital of 213,634,580 Shares)
(b)    after adjusting for the estimated net proceeds from the issue of the New                                23.08 cents
       Shares (based on the post-Invitation share capital of 267,051,580 Shares)

Premium of Issue Price of $1.10 per Share over the Group’s audited consolidated
NTA per Share as at 31 December 1999, after taking into account the Bond
Conversion:−
(a)    before adjusting for the estimated net proceeds from the issue of the New                               3,316%
       Shares (based on the pre-Invitation share capital of 213,634,580 Shares)
(b)    after adjusting for the estimated net proceeds from the issue of the New                                377%
       Shares (based on the post-Invitation share capital of 267,051,580 Shares)

EARNINGS
Historical net earnings per Share of the Group for the financial year ended                                    2.02 cents
31 December 1999 based on the pre-Invitation share capital of 213,634,580
Shares

NET OPERATING CASH FLOW(1)
Historical net operating cash flow per Share for the financial year ended                                      2.67 cents
31 December 1999 based on the pre-Invitation share capital of 213,634,580
Shares

BASED ON THE ISSUE PRICE OF $1.10 PER SHARE
Historical price earnings ratio based on the historical net earnings per Share of the                          54.5 times
Group for the financial year ended 31 December 1999

Historical price to net operating cash flow based on the historical net operating                              41.2 times
cash flow per Share for the financial year ended 31 December 1999

Market Capitalisation
Based on 267,051,580 Shares at the Issue Price of $1.10 each                                                   $293.7 million

Note:−
(1)   Net operating cash flow is defined as net profit after tax with provision for depreciation and amortisation added back.




                                                                30
                                   SELECTED FINANCIAL INFORMATION


The following selected financial information should be read in conjunction with the Letter from the
Auditors and Reporting Accountants in Relation to the Unaudited Consolidated Financial Statements on
pages 103 and 104 and the Accountants’ Report on pages 105 to 123 of this Prospectus.


Results of Operations of the Proforma Group(1)


                                                     Financial Year ended 31 December                                    Unaudited
                                                                                                        4 months         4 months
                                                                                                          ended            ended
                                                     —————— Audited ——————                               30 April         30 April
($’000)                                                1997             1998             1999             1999(2)            2000

Turnover                                              3,016            6,040           11,443             1,341                852

Earnings before depreciation,
  amortisation, interest expense and
  tax                                                 1,416            3,247             7,355              679               (859)
Depreciation and amortisation expense                   (358)           (892)           (1,399)            (428)              (685)
Interest expense                                           (1)             (5)             (43)               (8)              (68)

Profit/(Loss) before tax                              1,057            2,350             5,913              243             (1,612)
Taxation                                                 (14)           (490)           (1,603)            (142)               362

Profit/(Loss) after tax                               1,043            1,860             4,310              101             (1,250)

Earnings per Share (cents)(3)                           0.49            0.87             2.02              0.05             (0.59)


Notes:−
(1)   The financial results of the Proforma Group for the period under review have been prepared on the basis that the Proforma
      Group had been in existence throughout the period under review.
(2)   The results for four months ended 30 April 1999 were extracted from the management accounts.
(3)   For comparative purposes, the Earnings per Share for FY1997 to FY1999 and the four months ended 30 April 2000 is
      calculated using profit after taxation and minority interest but before extraordinary item and divided by the pre-flotation share
      capital of 213,634,580 Shares.
(4)   In FY1999, the remuneration paid to Dr David Chew, Dr Kennedy Chew and Mdm Leong Sook Ching totalled $920,011. Had
      the service agreements been in place in FY1999, the estimated total remuneration paid to the three said directors would have
      been $1,070,349 instead of $920,011, i.e. an increase of $150,338. Of the increase in remuneration of $150,338, $127,028
      would have been capitalised to development expenditure, as part of the three said directors’ effort are spent on product
      development activities. As such, the Group consolidated profit before tax for FY1999 would have been approximately
      $5,889,690 instead of $5,913,000, had the service agreement been in place in FY1999.




                                                                  31
Financial Position of the Proforma Group(1)

                                                                                                                  Unaudited
                                                                As at Financial Year ended 31 December            4 months
                                                                                                                    ended
                                                                   —————— Audited ——————                           30 April
($’000)                                                             1997             1998             1999            2000
Fixed assets                                                         322              324            2,860           3,405
Development Expenditure                                            1,489            3,034            7,951           9,981
Deferred Expenditure                                                 215              152              136             108
Patents and trademarks                                               —                 14                33              35
Current assets                                                     2,415            5,454           12,293           7,271
Current liabilities                                                (1,078)         (1,765)          (9,500)         (8,817)
Net current assets/(liabilities)                                   1,337            3,689            2,793          (1,546)
Non-current liabilities:−
  Hire Purchase Creditors                                            —                —             (1,406)         (1,404)
  Deferred taxation                                                   (14)           (504)          (1,348)           (810)

                                                                   3,349            6,709           11,019           9,769

Represented by:−
Shareholders’ equity                                               3,349            6,709           11,019           9,769

NAV per Share (cents)(2)                                            1.57             3.14            5.16             4.57

NTA per Share (cents)(3)                                            0.77             1.64            1.36            (0.17)


Notes:−
(1)   The financial results of the Proforma Group for the period under review have been prepared on the basis that the Proforma
      Group had been in existence throughout the period under review.
(2)   For comparative purposes, the Net Assets Value (NAV) per Share for FY1997 to FY1999 and the four months ended 30 April
      2000 is calculated using shareholders’ equity divided by the pre-flotation share capital of 213,634,580 Shares.
(3)   For comparative purposes, the NTA per Share for FY1997 to FY1999 and the four months ended 30 April 2000 is calculated
      using shareholders’ equity minus the development and deferred expenditure and patents and trademarks; and divided by the
      pre-flotation share capital of 213,634,580 Shares.




                                                              32
              RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS


This discussion and analysis should be read in conjunction with our consolidated financial statements
and the related notes, which are included elsewhere in this Prospectus.

REVENUE
Our main sources of revenue are as follows:−
‰   design, development, delivery, installation, and implementation of information technology systems in
    Technology-intensive IT and e-Business core activities. For more information on the core activities,
    please refer to pages 49 to 59;
‰   maintenance and operation of the developed systems mentioned above; and
‰   variation orders for work not covered in the contracts awarded.

Design, development, delivery, installation and implementation of information technology
systems in Technology-intensive IT and e-Business core activities
Contracts secured, either through tenders or in-house marketing cover the entire process from design to
implementation of the information technology system. We usually purchase any third-party hardware
required by the system developed and this is covered in the contract price. The application software is
developed in-house. The contract price is arrived at taking into account the manpower costs to develop
the system, complexity of the system and the costs of third party hardware and software.

In the recent past, most of our revenue has come from contracts that involve in-house developed IT and
technology-based turnkey systems, products and related services. Many of these contracts were won
through tenders. Other sources of past and potential contracts include customers approaching us
directly, referrals from customers and business partners, and also customers whom we approach directly
on our own. By re-using the systems, technologies and know-how gained from past projects and
contracts and exploiting them in future contracts, and in some cases transforming them into new
products, we are able to create new sources of revenue with lower associated development and other
related costs. Besides projects and products, we expect to derive new revenue from service usage,
business and e-commerce transactions in the future.

A large part of our revenue is project-based and is derived from the award of contracts for the
development and installation of such systems and the progress of completion of such projects. Such
revenue is recognised in the accounts using the percentage-of-completion method by reference to
physical progress or agreed milestone on each contract. We closely monitor the progress of our projects
to estimate the percentage of completion and the costs incurred. Where it is probable that a loss will arise
from a contract, the excess of total estimated costs over expected revenue is recognised as an expense
immediately.

Maintenance and operation of information technology systems
Our customers usually sign a three to five years maintenance contract with us for systems that we have
developed and implemented for them. In some cases, we also operate these systems for our customers
as well. Revenue from such rendering of services is recognised in the accounts upon completion of
services. For the past three financial years from FY1997 to FY1999, revenue generated from
maintenance and operation constituted 1.8%, 9.0%, 10.4% of total revenue for FY1997, FY1998 and
FY1999 respectively.


Variation orders for work not covered in the contract awarded
Where customers require new features or enhancements in the system, which are not covered in the
contract previously awarded, such work is considered as variation orders. Separate billings will be made
for such variation orders and recognition of revenue is on the same basis as system development work.




                                                    33
Historical Trend and Seasonality of Our Revenue Stream
Historically, revenue in the first half of the year was much lower than the second half. Revenue for the
first half accounted for 27.2%, 57.5% and 20.5% of the total revenue for FY1997, FY1998 and FY1999
respectively. The seasonal fluctuation is because the Singapore public sector agencies, which are our
major customers, have financial years ending on 31 March of each year. The public sector agencies
typically then award new tenders in the middle or second half of the year. The exceptionally high
proportion of the revenue recognised in the first half of FY1998 was due to delivery of the RSAF/MINDEF
Super BullsEyeTM contract and the passenger information kiosk system for the Airport Authority of Hong
Kong in the first half of the year.

Revenue generated from the Singapore market constituted 48.7%, 75.8%, and 79.8% of the total
revenue in FY1997, FY1998 and FY1999 respectively. Overseas revenue was mainly from Hong Kong,
which was derived from the passenger information kiosk system project for the Airport Authority of Hong
Kong. The rest of the overseas revenue was generated from the United Kingdom, Indonesia and Taiwan.

Factors affecting our revenue include the following:−
‰   Competition affects our chances of securing contracts and the prices that we can charge. For
    example, in a tender which attracts widespread interest from our competitors, keen competition faced
    may lead to our rivals lowering their prices, which may thus affect our chances of securing the
    contracts.
‰   Our research and development ability to innovate and develop new products or systems readily
    accepted by the market will affect our revenue because any successful launch of such new
    innovations will increase our revenue. However, some of our research and development expenditure
    may not generate future revenue and would thus need to be written off in accordance with our
    accounting policy for development expenditure. In such event, the write-off of development
    expenditure may have material impact on our Group’s future profits. For details on our research and
    development efforts, please refer to page 61.
‰   Our ability to complete and deliver a project to our customers as scheduled. This will allow our
    professional team to commence on another project quickly. Hence, our ability to turnaround and
    complete a project as scheduled can affect our revenue. Inability to complete a project on time may
    also result in damages charged to us.
‰   Our ability to expand our operations in Singapore and overseas. Any contracts secured in new
    overseas markets will increase the growth of our revenue.
‰   Our ability to meet customers’ technical project specifications and expectations will affect our revenue
    as failure to do so can result in delayed revenue. This in turn depends on our ability to hire, train and
    retain qualified professionals to provide appropriate IT solutions to our customers.
‰   Public sector IT budget allocation will affect the number and size of tenders for public sectors’ IT
    projects which in turn will affect our revenue because we participate in some of these tenders. Our
    sales to public sector agencies from FY1997 to FY1999 formed 29.2%, 27.0% and 69.5% of total
    revenue in FY1997, FY1998 and FY1999 respectively.
‰   General economic conditions will affect the companies’ corporate earnings and thus the total
    spending on IT services. As our projects tend to be of high value, both in the private and public sector,
    in the event of economic downturn, the target markets of our products and services may scale back
    their spending or budgets, which will result in cancellation or postponement of requirements or
    projects planned. This in turn will affect our revenue, as fewer projects will be available.


EXPENSES
For the last three financial years, our operating expenses were as follows:−

S$’000                                                                    FY1997        FY1998       FY1999
Annual operating expenses                                                  1,610         2,539        2,991
Total annual operating expenses inclusive of amount capitalised to
  development expenditure                                                  3,087         4,828        8,373



                                                      34
Our annual operating expenses comprise mainly the following:−
‰   salaries, bonuses and staff-related costs
‰   amortisation of development expenditure
‰   depreciation of fixed assets
‰   other operating expenses such as office rental, rental of equipment, legal and professional fees and
    travelling expenses

Salaries, Bonuses and Staff-related costs
Being a knowledge intensive information technology group, our manpower and staff-related costs form
a major part of our annual operating expenses. Our manpower and staff-related costs for the last three
financial years were as follows:−

S$’000                                                                   FY1997        FY1998       FY1999
Salaries, bonuses and staff related costs                                   900         1,039          981
Total salaries, bonuses and staff related costs inclusive of amount
  capitalised to development expenditure                                   1,969        2,800        5,139


Factors affecting salaries, bonuses and staff-related costs include the following:−
‰   The mix of employees holding diplomas, degrees, Masters or PhDs;
‰   The decision by the government to reinstate the employer’s CPF contribution rate to 20% over time;
‰   The mix of the local and foreign employees as the CPF contribution rates for Singapore citizens and
    those holding employment passes may differ;
‰   Labour market conditions for IT personnel. For example, if there is a shortage in trained IT personnel
    in the market, these personnel would be able to command higher salaries, which would cause an
    increase in our salaries, bonuses and staff-related costs; and

The decrease in salaries, bonuses and related costs in FY1999 compared to FY1998 was mainly due to
the decrease in employer’s CPF rate from 20% to 10% in FY1999.

Amortisation of Development Expenditure
Our development expenditure comprising mainly engineers’ salaries and related expenses (including
relevant directors’ remuneration) incurred for the design and development of information technology
systems are recognised as assets to the extent that such costs are probably recoverable from related
future economic benefits. The portion of engineers’ salaries capitalised is based on the proportion of their
time spent on carrying out the development work. We have two types of development expenditure. The
first is development expenditure for products or systems where contracts from customers have already
been secured while the second type is in-house development of products or systems which we have
identified as having good market potential. An example of the first type is our Super BullsEyeTM weapons
scoring system and an example of the second type is our medical robotics. We amortise development
expenditure on a product-by-product or system-by-system basis over five years commencing from the
date of billings to the customers. The balance of the development expenditure which has not been
amortised is written off to the profit and loss account when the amount in the opinion of our Directors, is
unable to generate future revenue. The amount of our development expenditure that was amortised in
each of the last three financial years are as follows:−

S$’000                                                                   FY1997        FY1998       FY1999
Amortisation of development expenditure                                    220           743         1,036




                                                        35
As at 30 April 2000, our development expenditure amounted to $10.0 million. Some of the development
expenditure may face the risk of being written off in the event that these products or systems do not gain
market acceptance or are unable to continue to generate revenue. For example, if we are unable to
secure contracts for the developed products that we launch, the development expenditure pertaining to
the developed product would have to be written off to profit and loss account. For the last three financial
years from FY1997 to FY1999, there is no write-off of development expenditure to profit and loss
account.

Depreciation of fixed assets
Our fixed assets comprised mainly computer hardware and software, office furniture and fittings and
office equipment. The amount of depreciation of our fixed assets in each of the last three years were as
follows:−

S$’000                                                                    FY1997       FY1998       FY1999
Depreciation of fixed assets                                                66           75           283


Other Operating Expenses
Our other operating expenses relate mainly to office rental, rental of equipment, legal and professional
fees and travelling expenses.


PROFITABILITY
Our profit before tax and profit before tax margin for the past three financial years were as follows:−
                                                                          FY1997       FY1998       FY1999
Profit before tax (S$’000)                                                 1,057        2,350        5,913
Profit before tax margin (%)                                               35.0         38.9          51.7

Our profitability is affected by the following:−

‰ Revenue
    The amount of revenue booked will affect our absolute gross profit figure, which in turn will affect our
    net profit. Please refer to page 34 for factors affecting our revenue.

‰   Gross Profit Margin
    The gross profit margin varies from project to project and this is the same for both Technology-
    intensive IT and e-Business core activities. The proportion of software development and hardware
    content will affect the gross profit margin. Projects with higher software development content will
    carry a higher profit margin because the bulk of the software is usually developed in-house while the
    hardware is purchased from third parties. In certain projects, higher margins can be obtained
    because of variation orders as the additional work involved are usually software development work.

‰   Operating expenses
    Lower operating expenses will result in higher net profit and vice versa. Please refer to pages 34 to
    36 for more details on our operating expenses.

Inflation has no adverse impact on our financial performance.

We are in the process of applying to the EDB for pioneer status. If pioneer status is granted, we would
be able to enjoy certain exemption from income tax for those core activities granted for a stipulated
period of time. This will result in a higher net profit after tax.




                                                    36
RESULTS OF OPERATIONS
For purpose of discussion, we have segmented our turnover, profit before taxation and profit before
taxation margin by sources of revenue derived from our two core business activities namely the
Technology-intensive IT division and the e-Business division; and by geographical regions. Our
segmental turnover by geographical regions is based on the operational localities of our customers, of
which we have grouped the geographical regions into 5 countries namely Singapore, Hong Kong, United
Kingdom, Indonesia and Taiwan.

Review of Past Performance by Activity
Turnover
$’000                                                           1997          1998           1999
Technology-intensive IT division                                2,339        4,209           7,548
e-Business division                                               677        1,831           3,895

Total                                                           3,016        6,040          11,443


Profit before taxation (‘‘PBT’’)
$’000                                                           1997          1998           1999
Technology-intensive IT division                                  838        1,236          3,398
e-Business division                                               199          686          2,509
Other Income                                                       20          428                6

Total                                                           1,057        2,350          5,913


PBT margin
%                                                               1997          1998           1999
Technology-intensive IT division                                 35.8         29.4           45.0
e-Business division                                              29.4         37.5           64.4



Review of Past Performance by Geographical Regions
Turnover
$’000                                                           1997          1998           1999
Singapore                                                       1,468        4,580           9,126
Hong Kong                                                         677        1,379           2,306
United Kingdom                                                    —             51            —
Indonesia                                                          41           30              11
Taiwan                                                            830          —              —

                                                                3,016        6,040          11,443




                                                 37
Profit before taxation (‘‘PBT’’)
$’000                                                                 1997          1998            1999
Singapore                                                              506          1,571           4,350
Hong Kong                                                              202           741            1,556
United Kingdom                                                         —               24            —
Indonesia                                                               20             14                7
Taiwan                                                                 329           —               —

                                                                     1,057          2,350           5,913


PBT margin
%                                                                     1997          1998            1999
Singapore                                                             34.5          34.3            47.7
Hong Kong                                                             29.8          53.7            67.5
United Kingdom                                                         —            47.1             —
Indonesia                                                             48.8          46.7            63.6
Taiwan                                                                39.6           —               —


FY1998 vs FY1997
In FY1998, our turnover increased by 100.3% due to the following contracts:−
‰   the design, development, implementation and maintenance of the medical claims proration system
    for a total contract value amounting to $7.8 million for the Prime Minister’s Office. Out of this, revenue
    of $0.5 million was recognised in FY1998;
‰   the design and development of the credit information bureau system of $1.5 million contractual
    billings for Indopura Technologies Pte Ltd; and
‰   the implementation of the computer server management system for a total contract value of $1 million
    for Standard Chartered Bank.

The Technology-intensive IT Division’s turnover increased by 79.9% from $2.3 million to $4.2 million
mainly due to the credit information bureau system and computer server management system contracts
that were secured by the Group in FY1998. The e-Business division’s turnover increased by 170.5%
from $677,000 to $1.83 million due to the revenue derived from medical claims proration system for the
Prime Minister’s Office and the passenger information kiosk system project for the Airport Authority of
Hong Kong. The passenger information kiosk system contract was secured by the Group in FY1996 and
approximately $1.3 million of revenue was recognised in FY1998.

Our operating expenses increased by 57.8% to $2.54 million in FY1998 due primarily to the following
factors:−
‰   increase in salary and staff related expenses by $0.3 million which resulted from an increase in
    headcount. New staff were engaged mainly for the new contracts as mentioned above; and
‰   increase in amortisation of development expenditure by $0.52 million..

Our group profit before tax increased by 122.3% to $2.35 million and profit before tax margin improved
by an additional 3.9% to 38.9% in FY1998. Profit before tax margin for the Technology-intensive IT
division decreased from 35.8% in FY1997 to 29.4% in FY1998 mainly because of lower margin derived
from the system contract from Standard Chartered Bank as we incurred higher costs by using third party
software. The increase of 8.1% in profit before tax for the e-Business Division was explained by the high
profit margin generated from the medical claims proration system contract where work performed
pertained to software development work which carried a higher profit margin.



                                                     38
Other income in FY1998 was mainly derived from management fees charged to Stratech (Hong Kong)
Ltd for the rendering of administrative, accounting, management, business development and technical
services.


FY1999 vs FY1998
Turnover increased by 89.5% from $6.0 million to $11.4 million in FY1999 compared to FY1998 primarily
due to the following contracts:−
‰   the design, development, implementation and maintenance of the vehicle entry permit system for a
    contract value of $7.9 million in partnership with Guthrie Engineering (S) Pte Ltd for Land Transport
    Authority. Out of this, revenue of $5.7 million was recognised in FY1999 together with additional
    variation orders of $0.3 million;
‰   the design, development and implementation of SmartParkTM system of total contract value of
    $98,000 for Jurong Point Realty Pte Ltd;
‰ the design, development and implementation of shipmast height detection system of $327,000
  contractual billings for Maritime and Port Authority of Singapore;
‰ the software development pertaining to medical robotics amounting to $507,000 for National
  University of Singapore and National University Hospital; and
‰ the design, development, implementation and maintenance of COE open bidding contract for a total
  contract value of $5.2 million for Land Transport Authority. Out of this, revenue of $264,000 was
  recognised in FY1999.

In FY1999, we continued to derive revenue from the medical claims proration system of $1.3 million and
a variation order of $2.3 million for the passenger information kiosk system project developed for the new
Hong Kong International Airport. In addition, approximately $0.4 million of turnover was also derived from
the delivery, installation and maintenance of burglar alarm system for schools.

Under the Technology-intensive IT division, turnover increased by 79.3% in FY1999 as compared to
FY1998 mainly due to revenue derived from design, development and implementation of the vehicle
entry permit system, SmartParkTM system, shipmast height detection system, burglar alarm system and
medical robotics as mentioned above. Under the e-Business division, turnover increased by 112.7% in
FY1999 due to revenue derived from medical claims proration system, COE open bidding system and
passenger information kiosk system as mentioned above.

Our operating expenses increased by 17.8% to $2.99 million in FY1999 due primarily to higher
depreciation and amortisation expenses, which resulted from an increase in fixed assets of $2.8 million
and development expenditure of $6.0 million. In 1999, we purchased new computer hardware and
software to support the system development of the projects mentioned above. We had also bought a
medical surgical robot for $1.04 million for the collaboration in the field of medical robotics with National
University of Singapore and National University Hospital.

Our profit before taxation increased by 151.6% to $5.91 million and profit before tax margin improved by
an additional 12.8% to 51.7% in FY1999. For the Technology-intensive IT Division, there was an increase
in net profit margin of 15.6% in FY1999 mainly due to the higher gross profit margin derived from vehicle
entry permit system as it carried greater element of software development work which generally fetched
higher profit margin. The increase in net profit margin of 26.9% in FY1999 for the e-Business Division
was due to the high gross profit margin fetched from the variation orders of the passenger information
kiosk system project. The variation order was for extension of time due to the delay in the opening of the
new Hong Kong International Airport. As the non-recurring costs had already been covered in the main
contract, the variation order carried a higher profit margin.




                                                     39
Unaudited four months ended 30 April 2000 vs four months ended 30 April 1999
Historically, most of our turnover was recognised in the second half of the year, as explained on page 34.
Our turnover decreased by 36.5% from $1.34 million in the four months ended 30 April 1999 to $0.85
million in the four months ended 30 April 2000. For the first four months of FY1999, we rendered
progressive billings of approximately $0.78 million upon achieving certain agreed stage of progressive
billings as specified in the contract for the medical claims proration system (‘‘MCPS’’) and vehicle entry
permit system (‘‘VEPS’’) contracts. For the first four months of FY2000, we rendered substantially lower
progressive billings as the agreed stage of progress billings for on-going contracts such as the COE open
bidding contract and VEPS fall outside the four months ended 30 April 2000.

Our operating expenses increased by 141.1% from $0.90 million in the four months ended 30 April 1999
to $2.17 million in the four months ended 30 April 2000. This was primarily due to the following:−
‰      increase in salary and staff related expenses by $0.60 million which resulted from an increase in
       headcount and salary increment in FY2000. Additional staff employed was in line with the increase
       in research and development activities that the group is engaged in and also in anticipation of the
       various new contracts expected to be secured in the second half of the year.
‰      increase in amortisation expenses by $0.22 million which resulted from the amortisation of medical
       claims proration system and vehicle entry permit system.
‰      increase in other expenses such as office rental, telephone and utilities, professional fees in respect
       of sourcing of software development costs, professional fees in respect of a study on corporate
       strategy and legal fees in respect of patents. Additional office space of 526 square metres was taken
       up in the second half of 1999 to cater to the increase in headcount and higher level of research and
       development activities undertaken in FY2000. We also incurred higher entertainment expenses to
       secure contracts.

We recorded an unaudited loss before tax of $1.61 million for the four months ended 30 April 2000
compared to a profit before tax of $0.24 million for the four months ended 30 April 1999. This was mainly
due to the following:−
‰      lower turnover achieved in the four months ended 30 April 2000.
‰      lower gross profit margin achieved in the four months ended 30 April 2000 because contract billing
       for software development work in the four months ended 30 April 1999 carried a higher margin than
       the maintenance income recorded in the four months ended 30 April 2000.
‰      higher operating expenses incurred in the four months ended 30 April 2000.


Future Contracts
Currently, we have contracts previously secured amounting to $26 million for which we are still in the
process of implementing or maintaining. Of these, about $2.12 million had been recognised and the
balance will be recognised as and when the contracts are implemented in the next few years.

For the ensuing months of FY2000, we have tendered and/or are in the process of negotiation for several
projects with potential contract values amounting to $83.8 million. While some of these projects are
expected to be completed in FY2000, the balance would take more than a year to complete. The
breakdown of tenders for each business activities is as follows:−

Technology-intensive IT Division
(i)     Computer Vision Systems            :    $4.9 million
(ii)    Intelligent Transport Systems      :    $68.0 million

E-business Division                        :    $10.9 million




                                                       40
REVIEW OF FINANCIAL POSITION
Fixed Assets
Our fixed assets consist of office equipment, renovations, furniture and fittings, computer,
telecommunication and robotic equipment, and motor vehicles.

Fixed assets remained unchanged in FY1998 as compared to FY1997. This was because purchases of
computers and office equipment in FY1998 amounting to $85,000 was offset by the depreciation of fixed
assets.

In FY1999, there was an increase in net book value of fixed assets of 783% to $2.9 million compared to
FY1998 mainly due to the purchases of computer hardware and software which are necessary for the
system development of the projects that we have undertaken. We have also bought a medical surgical
robot for a consideration of $1.04 million. Renovation cost and purchases of new office equipment,
furniture and fittings amounting to $208,000 was also incurred for office expansion. In addition, a motor
vehicle costing $325,000 was purchased under hire purchase terms for a director.


Development Expenditure
Development expenditure in FY1998 increased by 104% to $3 million. This was due to the system
development for products and systems which included the healthcare medical benefits system, Super
BullsEyeTM weapons scoring system, ship hull image processing system, public transport traveler
information system, SmartParkTM system, shipmast height detection system, vehicle entry permit
system, AMANDA, medical robotics and vessel image processing system.

In FY1999, development expenditure increased significantly by 162% to $8.0 million due to expenditure
incurred for system development for the vehicle entry permit system, healthcare medical benefits
system, shipmast height detection system, SmartParkTM, the dynamic pricing engines, the public
transport traveler information system, SmarTown.comTM and medical robotics/computer-aided surgery.


Deferred Expenditure
Deferred expenditure relates to the amounts paid in consideration for the release of Dr Kennedy Chew
from his previous employment, club membership entrance fees and incorporation expenses. Deferred
expenditure was amortised each year and this explained the decrease in deferred expenditure from
FY1997 to FY1999.

Current Assets
Current assets comprise contract work-in-progress, stocks, trade debtors, other debtors, amount due
from related parties, fixed deposits and cash and bank balances.

Our current assets increased by 126% to $5.5 million in FY1998 as compared to FY1997 mainly due to
the increase in amounts due from directors and increase in amounts due from related parties. The
increase in amounts due from related parties was mainly attributable to the rendering of the software
developmental work of $1.5 million for Indopura Technologies Pte Ltd for the credit information bureau
system. (Please refer to ‘‘Interested Person Transactions’’ on page 87 for more details).

In FY1999, the Group’s current assets increased by 125% to $12.3 million as compared to FY1998
mainly due to increase in cash and bank balances of $4.9 million, increase in trade debtors of $4.6 million
and partially set-off by the repayment from directors of $3.2 million. The cash and bank balances
increased following the increase in sales and proceeds from issuance of convertible bonds of $3 million
to PLEi and $0.99 million to Infocomm Investment. The increase in trade debtors arose as a result of the
billing on variation orders for passenger information kiosk system in FY1999, progress billing for the
vehicle entry permit system and the billing to National University Hospital and National University of
Singapore for software development in the field of medical robotics.




                                                    41
Included in our total debtors of S$6.3 million are balances from 2 major customers amounting to S$3.1
million. The debts of $3.1 million are in respect of the following claims:−

1. Procurement Bureau of the Republic of China, Ministry of Taiwan National Defence (MOND)
    Our Company had an agreement for a job with MOND in 1998. MOND breached the contract and
    in the resulting litigation, our Company obtained judgement in late 1999. Currently damages are
    being assessed by proceedings in the courts. We have conservatively recognised approximately
    $993,000 in damages on this matter. We will proceed to enforce the judgement once the damages
    have been quantified by the courts.

2. EDS Electronic Data Systems (HK) Ltd — Hong Kong Airport Project
    Our Company was awarded a sub-contract by EDS to develop the passenger information kiosk
    system in the Chek Lap Kok Airport. The sub-contract has been performed and paid. There was a
    variation order which was necessary because of changes in specifications and inadvertent delays in
    the Hong Kong project by other parties. A sum of S$2.1 million has been billed (substantially made
    in the third quarter of 1999) by the Company on EDS for this variation order based on time, material
    and costs incurred by the Company in connection with the variation order and delays. EDS in turn
    would be claiming against the Hong Kong Airport Authority. EDS, in consultation with us, is in
    negotiation with the Hong Kong Airport Authority to quantify our respective claims.

These debts have the benefit of Dr David Chew’s personal guarantee for a period of 24 months from
14 March 2000. We are confident of recovery from both customers but in the interest of longer term
commercial relationships especially since these 2 customers and their contracts are government-linked,
we may decide not to pursue recovering against these 2 customers aggressively. In any event, we will
not suffer any loss resulting from the latter action, if taken, as we will call on Dr David Chew’s personal
guarantee if payment is not recovered from the above claims before the expiry of the personal guarantee.

The Company is of the view that David Chew has sufficient unencumbered financial resources to cover
the above-mentioned personal guarantee amounting to $3.1 million.


Current Liabilities
Components of current liabilities include trade creditors and accruals, hire purchase creditors,
convertible bonds and provision for taxation.

In FY1998, current liabilities increased by 64% as compared to FY1997 primarily due to the increase in
trade creditors amounting to $795,000 as a result of the increase in purchases for the development of
projects we had undertaken.

In FY1999, current liabilities further increased by 438% to $9.5 million due to the increase in convertible
bond of $3.99 million, trade creditors of $2.7 million and provision for income tax of $0.76 million. The
increase in trade creditors was mainly due to increased purchases for the many new contracts secured
in FY1999 whereas the increase in income tax provision was because of increased profitability in
FY1999.


Non-Current Liabilities
Non-current liabilities comprise hire purchase creditors and deferred taxation. Increase in non-current
liabilities in FY1998 was related to an increase in deferred taxation as a result of the timing differences
created by increase in development expenditure.

As for FY1999, non-current liabilities further increased by 446% to $2.8 million primarily due to increase
in deferred taxation of $0.8 million which was caused by timing differences created in development
expenditure, and hire purchase creditors of $1.4 million. Hire purchase creditors increased due to the
various hire purchase agreements that the Group has entered into for the purchase of the development
software for projects, medical surgical robot of $1.04 million, motor vehicle and renovation cost for the
expanded office.


                                                    42
Shareholders’ Equity
Shareholders’ equity increased from approximately $3.3 million in FY1997 to $11 million in FY1999,
representing an increase of 3.3 times. The growth was mainly due to the issue of new shares for $1.5
million in FY1998 and the improved net profit after tax, which grew from approximately $1.0 million in
FY1997 to $4.3 million in FY1999.

Liquidity and Capital Resources
Our cash generated from operations are mainly from progress billings of contracts secured with
government bodies and other multi-national corporations. Our principal uses of cash have been for
meeting operating expenses and research and development expenses, principally purchases of
computer hardware and software, staff related expenses and selling and administrative costs. Cash
generated from operations, borrowings from financial institutions and proceeds from the issue of
convertible bonds currently finances our capital expenditure and working capital requirements. Our
consolidated cash and cash equivalents at 31 December 1999 stood at $5.0 million. Taking into account
our existing banking facilities, we are of the opinion that, we have sufficient working capital for our
present requirements.

Our growth has been financed through a combination of shareholders’ equity and other credit facilities.
We have secured adequate facilities to finance our operations. Based on our audited financial
statements for financial year ended 31 December 1999, we had total borrowings of $5.79 million,
comprising hire purchase liabilities of $1.8 million and convertible bonds of $3.99 million. Out of this,
$4.38 million was categorised as current liabilities while the balance of $1.41 million was long term
liabilities. The convertible bonds held by PLEi and Infocomm Investment were unsecured and were
converted into ordinary shares on 14 July 2000. After taking into consideration the conversion of the
convertible bonds into equity, our bank gearing stood at 0.12 times.

As at financial year 1999, we have tender bonds, rental bonds and performance bonds amounting to
about $1.31 million and we also have short term credit facilities with Citibank of US$1.45 million which
was unutilised as at the reporting date of FY1999. All borrowings are secured against joint and several
personal guarantees of directors namely Dr David Chew, Mdm Leong Sook Ching, Dr Kennedy Chew
and Mdm Lucy Ng.

Save as disclosed above, our Group had no 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 commitment, guarantees or other material
contingent liabilities.

Subsequent to the Invitation, our Directors intend to request for a release of the guarantees made by
them to secure the Group’s banking facilities. Our Directors are confident that with our Company’s listing
status and its strengthened financial position from the expected net proceeds from the issue of the New
Shares, our credit rating should improve and we should be able to secure further or alternative sources
of credit facilities at the then prevailing interest rates should abovementioned facilities be terminated.


CAPITALISATION AND INDEBTEDNESS
The following table shows our cash and cash equivalents and capitalisation as at 31 December 1999:−
‰   on an actual basis; and
‰   as adjusted to give effect to the allotment and issue of Shares pursuant to the conversion of the
    convertible bonds, the issue of Shares from the Invitation, and the net proceeds, based on an Issue
    Price of $1.10 per Share, after deducting estimated expenses.




                                                   43
You should read this table in conjunction with our financial statements and the related notes included in
this Prospectus.
                                                                               As at 31 December 1999
                                                                                Actual        As Adjusted
                                                                                 $’000            $’000
Cash at bank                                                                     4,890           59,649
Short-term debt and current instalments of long-term debt
  Short-term hire purchase creditors                                               396              396
  Convertible bonds                                                              3,990             —
  Long-term hire purchase creditors                                              1,406            1,406
Shareholders’ equity:
  Authorised capital                                                            20,000           40,000
  Issued and paid-up capital                                                     6,700           13,353
  Share premium                                                                   —              52,096

                                                                                 6,700           65,449
Reserves                                                                         4,319            4,319
  Total shareholders’ equity                                                    11,019           69,768

  Total capitalisation                                                          11,019           69,768



DIVIDENDS
The declaration and payment of dividends will be determined at the sole discretion of the Board of
Directors subject to shareholders’ approval, and will depend upon the Group’s operating results, financial
conditions, other cash requirements including capital expenditures, the terms of its borrowing
arrangements (if any), and other factors deemed relevant by the Directors. We currently do not have any
dividend policy. Therefore, there can be no assurance that dividends will be paid in the future or as to the
amount or timing of any dividends that are to be paid in the future. For the financial year ended
31 December 1999, no dividends were declared.


DILUTION
Dilution is the amount by which the Issue Price paid by the purchasers of our Shares in this Invitation
exceeds our NTA per Share after the Invitation. The audited NTA per Share of our Group as at
31 December 1999 before adjusting for the net proceeds from the Invitation and based on pre-Invitation
issued and paid up share capital of 213,634,580 Shares was 3 cents.

Pursuant to the Invitation in respect of 53,417,000 News Shares at the Issue Price of $1.10 per Share,
our Group’s NTA per Share after adjusting for the estimated net proceeds from the Invitation and based
on the post-Invitation issued and paid-up share capital of 267,051,580 Shares would have been
23 cents. This represents an immediate increase in NTA per Share of 20 cents per Share or
approximately 666.7% to our existing shareholders and an immediate dilution in NTA per Share of 87
cents per Share or 79.1% to our new investors.




                                                      44
CREDIT POLICY
For large turnkey projects, depending on the contractual terms, there could be an initial downpayment
of 5% to 10% and the rest of the billing will be progressive, depending on stage of completion of the
project or agreed milestone. In the past, due to the nature of our customers base, which were primarily
government bodies and/or reputable multi-national corporations, our Group has minimal collection
and/or bad debt problems with credit term granted of 30 days.

We have typically 30 days payment terms from our suppliers.


FOREIGN EXCHANGE EXPOSURE
For FY1999, about 79% of our revenue and about 99.4% of our purchases were denominated in S$. The
percentage of our total sales, and total purchases and expenses denominated in the major foreign
currencies for the years from FY1997 to FY1999 are as follows:−

Sales

  %                                                    FY1997             FY1998            FY1999

  US Dollar                                             43.4%             44.7%              18.7%

  Hong Kong Dollar                                      22.4%             20.4%              1.9%

  Singapore Dollar                                      34.2%             34.9%              79.4%
  Total                                                 100%              100%               100%


Purchases and expenses

  %                                                    FY1997             FY1998            FY1999

  US Dollar                                             9.9%              17.9%              0.6%
  Hong Kong Dollar                                      1.0%               3.6%                —

  Singapore Dollar                                      89.1%             78.5%              99.4%
  Total                                                 100%              100%               100%

The impact on our financial statements depends on the movement of such foreign currencies against S$
and the amount of revenue or expenses denominated in such currencies. For example, profits derived
from our projects denominated in US$, would be lower in S$ should there be any depreciation in the
exchange rate of US$ against S$. We are therefore exposed to fluctuations in foreign currencies, but not
to a material extent as shown below:−

  S$’000                                                1997               1998              1999

  Foreign Exchange Gains/(Losses)                        213                50                (4)
  % of Profit before tax                                20.2%              2.1%              0.1%

Although we do not have any formal hedging policy with respect to our foreign exchange transactions,
we will monitor our foreign currency exposure position closely and may consider taking positions in
forward contracts to hedge against such exposure.




                                                  45
                                     HISTORY AND BUSINESS


HISTORY
Our Group started off with its first member Strategic Technologies Pte Ltd (‘‘STPL’’) which was founded
by Dr David K M Chew in 1989 in Singapore. Our other Singapore members, Stratech Systems Pte Ltd
(‘‘SSPL’’), Stratech Vision Pte Ltd (‘‘SVPL’’) and Stratech Life Sciences Pte Ltd (‘‘SLSPL’’) were formed
in 1996, 1998 and 1998 respectively. As part of the Restructuring, SSPL acquired STPL, SVPL and
SLSPL. Stratech Australia Pty Ltd (‘‘SAPL’’), our Australian subsidiary, was also acquired by SSPL as
part of the Restructuring in 2000.

We started as a manufacturers’ representative in 1989
From 1989 to 1993, STPL operated as a manufacturers’ representative for US and European high
technology suppliers and contractors to the aerospace, defense and security industries in the Asia
Pacific region. As a manufacturers’ representative, we served as the marketing and sales arm of the
manufacturers, as well as being responsible for managing all aspects of customer orders, including
delivery to customers, payments and, in some cases, implementation. Among the systems and products
that STPL procured were systems for ballistics instrumentation and for scoring the performance and
accuracy of air, land and sea weaponry. STPL also provided technical services and input towards the
design and customisation of such weapons scoring systems. In the early 1990s, STPL made initial steps
towards developing its own in-house development and systems integration resources. The strategy was
to eventually have its own strong technology capabilities and products and to focus on higher
value-added activities to achieve greater profit margins, flexibility in its marketing and sales activities, as
well as reduce its reliance on its suppliers and contractors.


We became a systems integrator and developer in the early 1990s
During the period 1993 to the mid-1990s, STPL began moving into systems development, taking on
projects that increasingly involved system requirements analysis, design, development, testing and
implementation skills. We built up our in-house project management team, our systems integration and
systems development expertise as we took on and completed turnkey projects, with contract values of
one to three million dollars, in the aerospace, transportation, defense and security industry sectors we
were serving.

One of our first major contracts worth S$2.8 million awarded in 1995 was from Singapore’s PWD
Corporation (formerly known as the Public Works Department) (‘‘PWD’’) for the design, development,
installation and maintenance of burglar alarm systems for the Ministry of Education in 108 schools.

In 1994, we ventured into computer vision
In 1994, STPL started our involvement with computer vision technology which uses computer
programming or techniques and video capturing devices such as video cameras, to provide computers
with the ability to see, recognise and understand what they see. In early 1996, STPL completed
development of a computer vision-based weapons scoring system. In January 1999, we were awarded
a contract by the Maritime Port Authority of Singapore (‘‘MPA’’) to develop a computer vision-based
system that uses laser technology to monitor in real-time the height of naval vessels passing through a
particular waterway. We have also developed an optical imaging prototype that performs optical image
measurements of ship hulls. In February 1998, SLSPL was incorporated to pursue opportunities in 3-D
computer vision for computer-aided surgery and medical robotics.




                                                      46
In 1998 we moved into intelligent transport systems (‘‘ITS’’)
In end-1998, we recruited a core team of R&D engineers and moved into intelligent transport systems.
These R&D engineers were experienced in designing and developing systems for fleet management and
vehicle tracking, incorporating elements of artificial intelligence. SSPL made headway in several projects
in intelligent transport systems. ITS refer to a wide range of technologies and applications that aim to
maximise the efficiency and throughput of the road network infrastructure, improve productivity and
safety of drivers and passengers of private and public transport. Traffic flow management, congestion
prevention, passenger information system, car navigation, multi-modal travel planning, real-time traffic
information broadcast, fleet management for public transport, logistics and delivery vehicles, electronic
toll collection, and carpark management are all examples of ITS applications.

Our first ITS was SSPL’s intelligent car park management system. The car park management system,
which is patent-pending, uses intelligent computer vision recognition technology to visually capture,
recognise and distinguish vehicles as they enter and leave car parks. No parking tickets, coupons or
tokens need to be collected and presented by the driver on entry and exit respectively. Neither are
in-vehicle units, access cards and devices required. Proper access control and collection of correct
payment for use of the car park can still be achieved. This system is currently in use in Singapore at
Jurong Point shopping centre and is being implemented at 19 carparks on the National University of
Singapore campus.

Our second ITS was a vehicle entry and toll collection system, which was developed and installed
pursuant to a contract from LTA. The system commenced operation in April 2000. Our third ITS was a
public transport traveler information system, which provides accurate predictions of travel and arrival
times for public buses. We have in April 2000 submitted a tender for the bus traveler information system
contract from LTA.


Through 1996 to the present, we became a systems and technology developer
In April 1996, STPL was awarded a contract to develop a passenger information kiosk system for Hong
Kong’s new international airport. The system was a networked multimedia information kiosk system to
provide information on travel, flights, airport facilities and services, and weather updates.

In November 1996, SSPL was formed to take on large-scale public sector IT system contracts. One of
the public sector contracts was a medical claims proration system which is a web-based online intranet
system managing the healthcare benefits and medical claims of Singapore’s civil servants and their
dependants. This system was put into use in April 1999. Another public sector contract is the
development of a system for the Singapore public to bid for Certificates of Entitlement (‘‘COE’’) for motor
vehicles through the Internet and other electronic banking channels. The online COE open bidding
system, expected to be completed later this year, requires our online dynamic pricing engine and a
secure and integrated online payment system linked to multiple banks.

To tender for large-scale public sector projects in Singapore, a company would have to be registered with
the applicable Government authority. Since 1997, SSPL has been registered as a government supplier
with the Expenditure and Procurement Policies Unit (‘‘EPPU’’) of the Singapore Ministry of Finance. In
June 1998, SSPL qualified for the S9 classification, being the highest classification of the EPPU, which
allows SSPL to tender for projects which are in excess of S$10 million for computer hardware and
software, software development, communication and navigation systems and service (maintenance of
equipment and computers).

In April 2000, SSPL acquired Starstyle Enterprises Pty Ltd, a then dormant company from Koh Boon
Check and Redcliffe Pty Ltd. The name was subsequently changed to SAPL primarily to facilitate the
submission of a tender in Australia, to bid for the supply of a real-time passenger information system for
the Rockingham-Fremantle System 21 Bus Service.

With each large-scale IT project, we gained experience and standing as a contractor, systems and
technology developer. Our expertise in multimedia design and development, database design and
management, web interfaces and large-scale distributed systems also grew correspondingly and rapidly.




                                                    47
Since 1999 we have been developing e-business applications, services and tools
In 2000, we are leveraging on our experience in hosting, operating and maintaining high performance,
secure and mission critical systems (such as the medical claims proration system, and the vehicle entry
and toll collection system) to become an Internet data centre and network service provider, hosting
services for the servers and related hardware, software applications and content of third parties. We
have ongoing developments to build various online dynamic pricing engines. To complement these, we
are developing secure payment systems suitable for online transactions that are high performance and
robust. One of our real-time dynamic pricing engines with a secure payment system is an integral part
of the online COE open bidding system. Our pricing engines and payment systems are aimed at B2C and
B2B auctions and bidding transactions over the Internet. We will continue to develop our e-business
services, solutions and tools to be one of our key business activities.

We have started to combine our various areas of expertise for the integrated systems and
solutions of the Internet age
In chronological order, our first area of expertise is our computer vision technology. Our second area of
expertise came with our various intelligent transport systems development. These two areas represent
our expertise to design and develop computer systems that can detect, identify and monitor real-world
inputs and events, and to interact and manage them efficiently. Our third area of expertise is our systems
and technology development and implementation expertise with which we undertake large-scale IT
projects. We have moved from our skills base as a systems integrator where we have benefited from
government contracts, and by demonstrating the feasibility and achieving acceptance of our in-house
developed technology and product/ system architectures, to become a systems and technology
developer and implementer.

We have begun to combine our various distinct but complementary areas of expertise to meet the needs
of our customers for integrated systems and end-to-end solutions in the new Internet economy which will
increasingly incorporate Internet connectivity and technology.

As at 30 April 2000, our engineering manpower base has grown to more than 90 out of a total staff
strength of 110. We became ISO9001 certified in 1996 for the design, development, integration,
implementation, maintenance and project management of electronic systems.


We have gained acceptance and recognition
We came under the government’s Promising Local Enterprise (‘‘PLE’’) Programme and the Local
Industry Upgrading Programme (‘‘LIUP’’) in 1998. These programs are organised by the government
agencies to help upgrade local enterprises, such as by teaming them with multinational corporations to
develop technologies. In October 1999, we became a member of the Application Service Provider
(‘‘ASP’’) Industry consortium which is an international advocacy group of companies formed to promote
the ASP industry.

We were ranked 37th in the 1999 Enterprise 50 list of privately-held Singapore corporations, and Dr
David Chew was named 1999 ASME-Rotary Entrepreneur of the Year.

Institutional shareholders such as Citicorp Investment Bank (Singapore) Limited, PLEi, Infocomm
Investment and NIF Asian Pre-IPO Limited from Japan invested in our Company in 1999 and 2000. PLEi
is a subsidiary of EDB Investments Pte Ltd, the equity investment arm of the Singapore Economic
Development Board (‘‘EDB’’). Infocomm Investment and NIF Asian Pre-IPO Limited are the respective
investment arms for the IDA and Nippon Investment and Finance (‘‘NIF’’), which is part of the Daiwa
Securities group.

In February 2000, we entered into a memorandum of cooperation with NIF Management Singapore Pte
Ltd to jointly establish and manage an incubation fund with Stratech playing the role of technology
manager. The incubation fund is to be known as the NIF Stratech Technology Fund and has a target fund
size of about US$50 million. This incubation fund will invest in and incubate start-ups in the emerging
technology areas of IT and life sciences. In 2000, we have allocated, under a memorandum of
cooperation, at least US$5 million of our Invitation proceeds to this fund. (Please refer to page 59 for
more details.)


                                                   48
BUSINESS ACTIVITIES
Overview
We believe that we provide value for money in the systems, products, and services that we deliver to our
customers. We aim to compete in the market space where customers are willing to pay a premium for
better innovative solutions and technologies. We believe that our pricing model and structures are
competitive and whenever required, we are prepared to price very aggressively or even invest to secure
projects and contracts or customers of significant long term and strategic value.

A key business strategy is the use of our own in-house developed software and technologies, services,
resources and systems, especially if the resultant products and services are highly commercialisable and
can contribute to talent and capability building. We typically only sub-contract out those parts of projects
and products that we do not yet have the core competence and which are not strategic to our business
and doing so will not result in strong dependence on third parties.

Because of our focus on developing new and innovative, highly customer-centric, large-scale systems
and technologies, product and systems sales and purchase order cycles are relatively lengthy, ranging
from several weeks to months. This is because they typically involve high contract values and it takes
time and effort to win over customers to new ideas and solutions. Tender evaluations can also be lengthy.
The tendering process from the point when tender documents are released to the point when a tender
is awarded takes about 4 to 6 months. Furthermore, given our in-house technology development
philosophy, our system development and implementation cycles also tend to be lengthy, at least from 6
to 9 months in duration. In areas such as medical robotics and tele-surgery, technology development can
take even longer.

Competitive Advantage through Technology
Our goal is to provide competitive advantage to our customers through the innovative use of technology
to empower business. Hence, we are constantly developing solutions, systems and technologies that are
new and at the forefront. The technology solutions and systems developed are mostly based on in-house
developed technology and expertise. In fact, to increase profits and retain ownership over such
technologies, we make a deliberate effort to develop these in-house as much as possible. Outsourcing
is considered as a last resort or if it makes business sense, for example if time-to-market is critical to the
customer. This business strategy also enables us to be more accountable to our customers and be in a
better position to customise our solutions to their unique requirements. Internally, such an approach
enables us to build up technologies, expertise, a stronger track record and core competencies that are
valuable in the long term and which can be re-applied or productised. Our Directors believe that this is
one of our key business differentiators, especially in relation to our Asian competitors.

Apart from readily available, commercial off-the-shelf products like computer hardware, network
equipment, and system software like operating systems and database management software, our
business does not depend significantly on third party technologies and systems. Key components of our
systems are mostly developed in-house. If they are purchased from third parties, we typically ensure that
alternatives are obtainable from other suppliers.

Nonetheless, as we move forward to achieve greater business growth and international market
penetration, we are open to and seek to establish strategic alliances with other technology, service and
solution providers to complement and further enhance our business activities.




                                                     49
Technology Development
In order to stay ahead of our competition and provide innovative solutions and technologies to our
customers, and due to the large-scale nature of the projects we usually target, some of our technology
and systems development activities will commence before any contract is awarded. We initiate many of
our projects on our own or with partners, typically using internal funds, with some or no external funding
support, and selectively prototype deserving business and technology ideas and projects as they are
brought to our attention and after they have been evaluated and reviewed. We can commence
development activities in anticipation of a strong market potential or customer need. Examples of such
activities include those that resulted in Super BullsEyeTM, SmartParkTM, PTTIS and our award of the
COE open bidding contract. As such, we have and will continue to invest significantly in capability and
technology development, knowledge capital and applied R&D. This will enable us to continue to bid for
and secure business when the contracts become available and the market is ready.

Our Key Business Activities and Expertise
We classify our key business activities and expertise in two divisions.

The first is our Technology-intensive IT division comprising:−
(i)    expertise and activities in computer vision systems; and
(ii)   expertise and activities in intelligent transport systems.

The second is our e-business projects and services division comprising:−
(i)    expertise and activities as a systems and technology developer in developing, hosting and
       operating IT e-business projects; and
(ii)   expertise and activities in developing and providing e-business applications, services and
       infrastructure.

Each division has its own core competence and engineering resources with which it conducts its
business operations and achieves its targets and business goals. In all divisions, we focus on and have
developed expertise on high-end, large-scale solutions and systems with high reliability, availability,
integrity and performance requirements, or those that have the potential to be so.




                                                      50
Able to provide complete, end-to-end systems and solutions through synergistic diversity
Even though the various divisions are distinct, they are also complementary to each other. Shown below
in the overlapping regions of the circles are actually products that have been or are being developed
using the synergistic combination of the Group’s knowledge and capabilities in two or more areas.


                                                                                             e-Business

                                                   SmarTown.com™
                                   SuperAuc™                              SmartCare™


                                                               AMANDA

                       Safe-EX.com™                               MCPS            COE Open
                                                                                  Bidding System
                                                   Super-eHub™




                     PTTIS            Traffic                                     Networked vision
                                      Prediction
                     PIKS
                                                                              Remote visual
                     Smartcards                       Payment                 information & control
                                                      Systems
                              Logistics &
                              Fleet Management        Large scale
                                                      systems                                      Super BullsEye™
     AVMS                     Wireless Internet                            Tele-surgery


                                                      SmartPark™                          Archery Scoring System
              Route Planning/
              Vehicle Navigation

                                                      Traffic Violation
                                                      Enforcement                                           SHIPS
                                                      System
         Identification/Tracking/Location
                                                                                               SHDS
                                                         ADS

                              Wireless                                       Medical
                              Communications                                 Robotics
Intelligent                                                                                               Computer
Transport                                                                                                 Vision
Systems




There are many areas of synergy between the Technology-intensive IT area and the e-Business division.
The Technology-intensive IT areas of computer vision and ITS incorporate knowledge of hard sciences,
mathematical models of the real, physical world, as well as technical know-how including artificial
intelligence and image processing. They provide the e-business division with the capability to effectively
sense, detect, track, record, digitally process and computerise events and objects in the real world. This
capability enables our e-business solutions and systems to be complete and able to provide end-to-end
customer service. These e-business solutions are not constrained to operate entirely in the virtual world
of the Internet but instead are built on strong technology fundamentals. For example, in an integrated
e-logistics or e-transport portal or application, the actual physical location of goods or trucks may need
to be monitored continuously, and real-time demand and traffic prediction can also be very important.
Another example is the ability to identify vehicles entering car parks and buildings uniquely enables new
Internet-based payment and royalty schemes, as well as, building automation possibilities.




                                                         51
Similarly, we exploit the new technologies, standards and products of the Internet to more cost-effectively
design, implement, deploy and operate our networked computer vision and ITS systems and solutions,
as well as to enhance their features and enable them to be highly scalable. For example, a large scale
public intelligent transport infrastructure can be built on internet technologies and standards to enable
information exchange between many system components, external systems and to facilitate the
dissemination of transport information to the public (for example, multimedia kiosks and mobile Internet
access technologies). A networked, WAN version of our intelligent car park management system with
remote management capabilities leverages on Internet technologies.

Hence, a unique characteristic of our business is our wide range of IT and technology expertise and the
dynamic interaction between and potential to leverage on these different competencies within one single
organisation.

Technology-intensive IT Division
(i) Computer Vision Systems
    Computer vision refers to the use of computer programming or techniques and video capturing
    devices such as video cameras, to provide computers with the ability to see, recognise and
    understand what they see.

    Our computer vision activities are carried out by a core team of 15 engineers. We have developed
    a weapons scoring system and completed several other computer vision systems.

    Activities
    Details of our various current computer vision-based systems and contracts are set out below:−

    Computer vision-based weapons scoring system known as Super BullsEyeTM
    In 1996, we completed our computer vision-based weapons scoring system known as Super
    BullsEyeTM. Our first systems were sold in 1997. Super BullsEyeTM supports realistic weapons
    training required by modern military forces. Our system utilises 3-D image processing technology to
    automate the scoring process, record firings and manage results. It replaces current practices which
    rely on human spotters to estimate where the rounds of ammunition have landed. Super BullsEyeTM
    is capable of scoring weapons and ammunition over land and on water during the day and night. The
    system is currently undergoing evaluation with a view to purchase by several military forces.

    A leading defence contractor has included our Super BullsEyeTM as part of their service offering to
    potential military buyers. Our enhanced version, Super BullsEyeTM II with better detection
    capabilities, was officially launched at the Asian Aerospace 2000 show in February 2000.

    We have developed for commercial sale a computer vision-based archery scoring system that
    automatically detects, scores and records archery scores under both indoor and outdoor conditions.
    The archery system is capable of scoring targets of different shapes and forms in addition to
    standard concentric-circle archery targets.

    Shipmast Height Detection System
    In January 1999, SSPL was awarded a contract by the Maritime Port Authority of Singapore to
    develop a laser-based system that monitors the height of naval vessels passing through a stretch
    of waterway in real-time. This system which we named our Shipmast Height Detection System
    (‘‘SHDS’’) allows early warning when a ship’s mast is in danger of collision with overhanging
    structures. The Maritime Port Authority of Singapore started using our system in the last quarter of
    1999 in the waterway between Singapore and Sentosa Island to ensure that no ship would collide
    with the cable car system that spans the waterway.




                                                    52
Vessel Image Processing System
In 1999, SSPL began developing a computer vision-based system that recognises naval vessels,
their names and sizes, and can automatically detect and track their speeds, positions and directions
in real-time. This system, known as our Vessel Image Processing System (‘‘VIPS’’), can be installed
in ports to enhance radar-based vessel traffic management systems. Currently, ships entering
crowded ports and waterways report their identities and other required data, and are identified and
tracked visually by radar and/or human operators or waterway controllers until they depart. We
foresee a need for VIPS in Singapore and other international ports. We have completed the
prototype and are currently in the development stage. VIPS is expected to complete within the next
12 months.

Ship Hull Image Processing System
In 1998, in response to a local industry upgrading program sponsored by Singapore Economic
Development Board and a group of shipyards, we began developing an optical digital imaging
system that uses computer vision to perform optical image measurements of ship hull surfaces.
When ship hulls are damaged, the extent and location of damage is conventionally determined
manually. Our system, known as Ship Hull Image Processing Systems (‘‘SHIPS’’), uses lasers and
cameras, 3-D image processing technology with our software algorithms to perform such
measurements automatically. SHIPS is being designed to reduce costs and time for shipyards in
measuring damage to ships and it is expected to complete within the next 12 months.

With the financial resources from the Invitation, we intend to market internationally our various
computer vision systems to military forces, government agencies, port authorities and operators,
and shipyards. We are currently in discussions with local and overseas representatives and
distributors.

Our new and intended projects for computer vision include the following:−

3-D Computer Vision for Computer-Aided Surgery
Since 1999, we have been collaborating with the National University of Singapore (‘‘NUS’’) and the
National University Hospital (‘‘NUH’’) on a 3-year program in developing a 3-D image processing
technology for computer-aided surgery and medical robotics. As part of this collaboration, surgeons
at NUH are using our medical surgery robot which we had acquired from Computer Motion Inc
to perform surgical procedures that require very precise and minute incision into the human body.
We are applying our 3-D computer vision experience with the clinical trial outcomes to refine the
3-D imaging and computer vision technology involved. Our plan is also to develop wired and
wireless tele-surgery and this research and development will be fully funded by our internal funds.
Tele-surgery refers to the use and control of medical robots by surgeons to perform surgical
procedures on remotely located patients over a geographical distance. Suitable telecom-
munications links and devices are required to connect the surgeon and his equipment with the
remotely located patient and the equipment located with him. Wireless tele-surgery utilises wireless
communications, for example satellite or microwave communications, to link the doctor and his
control console with his remote robot and patient. Wired tele-surgery uses traditional
communication networks like leased lines, cables, telephone lines or even the Internet. Tele-surgery
could enable expert surgeons to operate on many patients all over the world without having to travel
to each of the countries where the patients are located. Patients can seek treatment more quickly
and avoid the additional stress of travel. Such surgeons can operate on more patients and avoid the
overheads and fatigue of long distance travel and jet lag.

Combining ITS for Autonomous Driving System
The Autonomous Driving System (‘‘ADS’’) is a form of automated driving with 3-D image processing
technology and artificial intelligence. We intend to combine our computer vision technology with our
ITS technology to pursue development in this area. The system is currently at the prototype stage
and is targeted to complete within 1 to 2 years period. Please refer to ‘‘Autonomous Driving System’’
on page 56 for more details.




                                              53
(ii) Intelligent Transport Systems
    In end-1998, we started our intelligent transport systems development activities with a core group
    of 4 highly experienced R&D engineers. Intelligent transport systems (‘‘ITS’’) generally refer to
    technologies that can enhance driver productivity and safety, and improve the efficiency of the
    transport and road infrastructure system. Traffic flow management, congestion prevention, car park
    management, automatic toll collection, real-time traffic information broadcast, driver and passenger
    safety enhancement, dynamic route guidance, and public transport traveler information systems are
    all ITS applications that can increase the productivity and safety of road users and travelers, and
    facilitate travel and route planning.

    Our ITS activities are carried out by SSPL, supported by a team of 27 engineers. We have
    developed an intelligent computer vision-based car park system, completed a major public sector
    ITS contract and developed a public transport traveler information system.

    Activities
    Details of our various ITS contracts are set out below:−

    SmartParkTM
    Our first ITS is our patent-pending computer vision-based intelligent car park system known as
    SmartParkTM. Our system automatically detects, recognises, controls, monitors and manages motor
    vehicles’ entry into, and exit from, a car park. The system relies on computer vision technology and
    artificial intelligence.

    SmartParkTM facilitates remote car park management and reduces manpower needed to operate
    each car park and can be customized to provide parking availability information and parking
    guidance. SmartParkTM has been installed at the Jurong Point Shopping Centre car park in 1999.
    By the fourth quarter of 2000, NUS will commence operations of SmartParkTM in all its 19 campus
    car parks. This contract was awarded by NUS to us in February 2000 on a build-operate transfer
    basis for nine years. Using ordinary cameras, SmartPark TM registers the licence plates of cars
    entering a car park and automatically bills the driver when the same car exits. Payment is by
    cashcard, eliminating the need for coupons, auto-pay machines, in-vehicle units, gantries and
    manpower.

    We have a distribution contract with a Korean party to market and implement SmartParkTM in South
    Korea. In Singapore, we entered into a Memorandum of Understanding with PREMAS International
    Limited in July 2000 to form a joint venture for car park management systems. We are also in the
    process of negotiating with parties in Hong Kong and Taiwan who are interested in marketing and
    implementing our system.

    Vehicle Entry Permit (Toll) System
    The Vehicle Entry Permit (Toll) System (‘‘VEPS’’) is a management platform for transportation hubs,
    capable of handling all activities related to the monitoring, issuance and payment of vehicle entry
    permits and toll.

    In March 1999, we were awarded a contract for the development and installation of VEPS for LTA.
    This is a smart card-based entry permit system for foreign vehicles entering Singapore. The system
    allows LTA to determine the visitors’ length of stay, and levy an appropriate road toll charge. Our
    contract was to design, supply, install, commission and maintain the system. The system was
    launched in April 2000.




                                                  54
Public Transport Traveler Information System
We have completed a pilot Public Transport Traveler Information System (‘‘PTTIS’’) project in 1999.
PTTIS uses Global Positioning System (‘‘GPS’’) and artificial intelligence to process real-time bus
travel data and make accurate predictions of bus travel speed and arrival timing at bus stops and
interchanges.

We believe, for example, that a commercial-scale PTTIS used in bus fleet operations would facilitate
accurate bus arrival predictions under all conditions including abnormal traffic flow, assist in bus
dispatching and monitoring, and manage driver behaviour. A commercial-scale PTTIS is expected
to be capable of providing:−
‰   bus commuters with accurate predictions of bus arrival times at bus stops and other service
    status information so that commuters can make better travel decisions;
‰   public bus transport regulators or transport authorities with real-time traffic data using buses as
    traffic probes and the means to monitor and collect information on the quality of service of bus
    operations;
‰   bus operators with real-time traffic and service data for them to implement automatic fleet
    management systems to control and track, in real-time, the location and status of their bus fleets
    to improve management and optimise operation efficiency.

We are currently marketing this system and with the financial resources from the Invitation and our
growing investment in our R&D efforts, we intend to pursue large-scale local as well as international
ITS contracts and projects.

Our new and intended projects in ITS are as follows:−

Automatic Vehicle (Fleet) Management System
Fleet operators of freight forwarding and delivery trucks, buses, taxis and field maintenance vehicles
can better track, manage and control their fleets more efficiently using a Web-based Automatic
Vehicle (Fleet) Management System (‘‘AVMS’’).

We intend to develop automated, flexible and generic software and hardware modules that can be
readily integrated and configured to provide a solution that meets the needs of fleet operators with
fleet sizes ranging from a dozen to a few thousand vehicles. We will incorporate GPS, advanced
error correction techniques for accurate vehicle locating, wireless mobile data messaging, in-vehicle
driver display and geographic information system.

Logistics and Transportation Management System
We intend to develop an artificial intelligence-based management system that optimizes logistics,
warehousing and transportation operations. It will provide fleet and crew scheduling and dispatch,
freight management and real-time fleet or order tracking for delivery, courier, utility and haulage
companies, distributors and e-retailers.

An Internet-enabled order processing and demand planning module will complement an integrated
inventory and logistics management system to help companies move into e-commerce rapidly and
efficiently. This logistics and transportation management system (‘‘LTMS’’) can help address the
specific order fulfilment requirements of both B2B and B2C e-commerce markets.

In-Vehicle Information System
We plan to develop an in-vehicle information system (‘‘IVIS’’) to connect drivers over the Internet to
real-time telematics services including dynamic travel and traffic information, weather, stock quotes,
and news updates. An advanced version would integrate GPS, real-time traffic data, mobile
communications, multimedia and wireless Internet to provide dynamic route guidance and voice
navigation instructions.

The abovementioned three ITS namely AVMS, LTMS and IVIS share a common prototype platform.
We have completed the prototype and are currently seeking approval from EDB for R&D funding
and to roll out these systems in phases in the above order. These projects are targeted to complete
within the next 12 to 36 months.

                                               55
    Autonomous Driving System
    An autonomous driving system (‘‘ADS’’) is generally seen as a safety enhancement system with the
    eventual aim of creating a totally driver-less system. We anticipate that with our in-house developed
    3-D image processing technology and artificial intelligence, we can develop an ADS which is
    integrated with cruise control, steering, braking systems and radar to provide an intelligent cruise
    control and lane keeping system (‘‘LKS’’). LKS could provide vehicles with virtual eyes’ that can
    facilitate travel by minimizing human error in driving the vehicle.

    An initial application of LKS will be the automatic steering of a car so that it stays within its lane on
    a highway, moderate its speed, watch out for other vehicles and obstacles ahead and warn the
    driver if the car is steering excessively sideways. Using live video images captured by one or more
    cameras mounted in front of a car, the system ‘looks’ ahead and interprets what it sees in real time
    and reacts accordingly by communicating with the driver or directly providing control signals to other
    internal car systems. We believe that such computer vision-based systems can enhance the
    existing radar-based adaptive cruise control systems by providing an additional sensor input.

    We demonstrated LKS prototype at the 5thWorld Congress of intelligent transport systems in Seoul,
    South Korea in October 1998. Potential applications for ADS include integration with automatic
    guided vehicles (self-driving vehicles) for autonomous ports, logistics depots and driver-less trains
    for use in mass rapid transit systems.

E-Business Projects and Services Division
(i) Systems and technology developer for e-business IT projects
    Our experience and expertise in Internet-related systems and technologies started with the Hong
    Kong Airport passenger information kiosk system as we became involved with multimedia and Web
    technologies, large distributed systems, and network management. The applications in such
    systems are online manifestations of businesses and we regard our expertise in developing, hosting
    and operating them as our Internet-related or e-business expertise.

    Activities
    Details of our public sector contracts are as follows:−

    Hong Kong Airport passenger information kiosk system
    We commenced work in 1996 and installed and commissioned the passenger information kiosk
    system in 1998. The networked multimedia system provided information on travel, flights, airport
    facilities and services, and weather updates.

    Medical claims proration system contract
    SSPL delivered on a contract from the Prime Minister’s Office of Singapore in April 1999 to develop
    a medical claims proration system (‘‘MCPS’’). MCPS is a Web-based secure intranet healthcare
    medical benefits system which enables the government to manage the healthcare benefits and
    medical claims of civil servants and their dependants in Singapore. Since its completion, we have
    started to host, operate and maintain the system, for a duration of 5 years.

    Certificate of Entitlement open bidding system contract
    In October 1999, SSPL won a contract from LTA to develop an online system for the public to bid
    for Certificates of Entitlement (‘‘COEs’’) for motor vehicles through the Internet and other electronic
    banking channels. The system will operate dynamically in real-time to handle and process incoming
    bids. Our dynamic pricing engines built for high performance, robust, secure and dynamic real-time
    transactions will be incorporated into the system. The bidding system will handle and process
    payments with several banks. We expect the online COE open bidding system to be completed in
    the third quarter of 2000. Thereafter, we will host, operate and maintain the system for an agreed
    duration.




                                                    56
    We benefited from IT projects awarded to us by the government and public sector in Singapore as
    a contractor, systems integrator and technology developer. In earlier years, these projects involved
    elements of computer vision and intelligent transport systems technology, and were undertaken by
    our Technology-intensive IT division. In recent years, the projects awarded were larger and required
    a substantial e-business component. The medical claims proration system and the online COE open
    bidding system also require our group to host, operate and maintain them, a development which is
    in line with our plans to become an application service provider.

    We believe IT projects for the public sector in Singapore will increasingly incorporate Internet
    technology and services. With the financial resources from the Invitation and our increasing R&D
    efforts, we intend to pursue large-scale Internet or e-business contracts and projects in Singapore
    and other countries.


(ii) Developing and providing e-business applications, services, solutions
    Details of our e-business applications, services and solutions are as follows:−

    Online dynamic pricing engines — ‘‘SuperAucTM’’
    Online auctions are already a feature of B2B, B2C and even C2C e-commerce. Auctions are just a
    small part of the greater online dynamic pricing potential. Online dynamic pricing is an evolving
    business model that will change the way people and businesses buy and sell products and services
    online. Online dynamic pricing technology allows dynamic factors such as time, quantity, quality,
    demand and supply to determine the prices of goods and services in an open and transparent
    fashion.

    Recognising the increasing importance of online dynamic pricing engines in auctions, and other
    pricing transactions in the Internet economy, we are continually investing in R&D to improve and
    develop new, innovative online dynamic pricing-driven business models and technology. Similarly,
    we are doing the same for variations of our pricing engines to power these business models. LTA
    will be using one of our engines for the online COE open bidding system in Singapore starting in
    2000.

    SuperAucTM is a suite of technology and services related to online dynamic pricing. Our dynamic
    pricing engines can be licensed to third parties, be incorporated in customized e-business solutions,
    be offered as part of e-commerce platforms, or be provided by us as an ASP. Our pricing engines
    are designed for high-value, high-volume, high-performance, secure payment and trusted auctions.
    They are secured at several levels, incorporating regular external audits, audit trails, and computer
    security measures. We plan to combine SuperAucTM with Safe-EX.comTM, a platform that ensures
    safe and trusted business transactions.

    Online secure payment system — ‘‘Safe-EX.comTM’’
    In conjunction with SuperAucTM, we are improving the real-time, secure payment mechanisms
    associated with online auctions and related business transactions, their security features and ability
    to handle high value and volume transactions, which are important aspects of e-commerce. We plan
    to implement Safe-EX.comTM, a trusted and secure Internet escrow service, by working with global
    financial institutions and other highly respected logistics services companies. Safe-EX.comTM will
    promote the safe exchange of goods, services and payment between buyers and sellers in an open
    marketplace on the Internet. For example, consider the case of a buyer (or bidder) and seller (or
    auctioneer) who do not previously know or sufficiently trust each other but wish to transact a high
    value exchange or sale, or complete a bid, over the Internet. The buyer will be wise not to send
    payment until he has ascertained that the goods to be purchased are as expected. The seller will
    be reluctant to ship the goods before full payment is received. Hence, both parties will be
    deadlocked and unable to proceed with the desired transaction. Safe-EX.comTM plans to provide a
    service to facilitate such transactions. It will accept payment from the buyer and hold the amount in
    escrow and notify the seller, who then can ship the goods to the prospective buyer. After the buyer
    accepts the delivered goods, the Safe-EX.comTM service makes the payment available to the seller.
    Funds are returned to the buyer should the goods be rejected and returned to the seller, less
    applicable costs. The system is targeted to roll out to market around end of this year.




                                                   57
    In July 2000, we entered into a Memorandum of Understanding with Citibank, N.A. Singapore
    Branch to form a joint venture to strategically position Safe.EX.comTM to provide an innovative
    Internet-based escrow service in the Asia Pacific region.

    Internet data centre services — ‘‘Super-eHubTM’’
    We are leveraging on our experience from hosting, operating and maintaining high performance,
    secure and mission critical systems such as MCPS and VEPS to develop a network of Internet data
    centres which will host the hardware, software and content of third parties. We have already
    established our first data centre and have made commitments for an additional premise.

    Web-Based Medical Benefits and Claims Information System — ‘‘SmartCareTM’’
    We plan to develop a web-based medical benefits and claims information system (to be known as
    SmartCareTM) to serve as a secure intranet or Internet application to centrally manage information
    on an organisation’s healthcare benefits and medical claims. The system can be expected to
    achieve significant cost and efficiencies in terms of processing and settlement of payments. This
    system is targeted to roll out to market within the next 12 months.

    Education portal — ‘‘SmarTown.comTM’’
    We launched SmarTown.comTM (www.SmarTown.com) in April 1999 as an online community for
    education and learning. SmarTown.comTM is an e-learning portal that currently combines the
    functionalities of an online community and aggregator of educational resources. SmarTown.comTM
    is also co-operating with the Hong Kong Education Department’s IT Education Resource Centre to
    develop and promote an online community in Hong Kong for education and learning.

    SmarTown.comTM targets international users such as teachers, students, parents and adult learners
    through aggregating, organising and contextualising educational resources, applications and
    content, making them easily accessible through the Internet. We expect to facilitate e-commerce in
    education products within the next 6 to 12 months. This could take the form of B2C transactions,
    with students and parents buying education services, or B2B transactions, as in schools or
    corporate institutions buying education services and technology.

    Agent for Monitoring and Administration — ‘‘AMANDA’’
    AMANDA is designed for distributed management of desktop PCs. It enables central monitoring and
    administration of desktop PCs, as well as configuration recovery and management, through the
    network. AMANDA is targeted at PC manufacturers and companies with distributed systems,
    providing them with a cost-effective management solution.

    This project has been completed and we are currently negotiating and marketing this system to
    several potential alliance partners. We intend to expand our e-business services and solutions, and
    will continue our R&D in these areas.

    Other e-Business Investment
    In 1998, STPL became a Council Member of the Online Technologies Consortium (OTC), a division
    within the then NCB. OTC was spun off as an industry-driven entity called Coolconnect Pte Ltd
    (‘‘Coolconnect’’) which carries on the business of providing infrastructure and services for building
    online communities. STPL’s membership was converted into shares in Coolconnect amounting to
    approximately 2.1% of its issued capital in early 2000.

Even though the various divisions are distinct, they are also complementary to each other. The
Technology-intensive IT areas of computer vision and ITS provide the e-business division with the
capability of effectively sensing, detecting, tracking, recording, digitally processing and computerising
events and objects in the real world. This enables our e-business solutions and systems to be complete
and able to provide end-to-end customer service. These e-business solutions are not constrained to
operate entirely in the virtual world of the Internet. Similarly, we exploit the new technologies, standards
and products of the Internet to more cost-effectively design, implement, deploy and operate our
networked computer vision and ITS systems and solutions, as well as to enhance their features.



                                                    58
Our incubation services
Our future growth is based on continuous engagement and participation in emerging markets. We want
to extend our access to new and existing synergistic technologies and potential partners with increased
efficiency and at reduced costs. Our proposed incubation fund with NIF Management Singapore Pte Ltd
is one means of targeting regional prospects we identify as potential market leaders or complementary
business partners. We will focus on incubating and maturing new companies and ventures in the
emerging technology areas of IT and life sciences.

The incubation fund is to be jointly established and managed by NIF Management Singapore Pte Ltd and
us, with Stratech playing the role of technology manager and incubator. As technology manager, we will
be responsible for assessing the technical merits of proposals and candidate incubatees. As technology
incubator, we will nurture and work very closely with the incubatee companies, especially in the areas of
business plans and execution, and technology development activities. The incubation fund is to be
known as the NIF Stratech Technology Fund and has a target fund size of about US$50 million. Besides
capital appreciation, we plan to exploit our planned active participation as incubator and investment in
this fund to gain early access to emerging and relevant technologies being developed by the investee
companies and to their local markets. These investment and incubation activities will also present
opportunities for our teams to work and collaborate closely with the many talented technical and
business founders of these new companies and startups. Synergistic relationships can potentially be
established, and the creation of new technology ideas and solutions accelerated and enhanced. In
February 2000, we have allocated, under a memorandum of cooperation, at least US$5 million of our
Invitation proceeds to this fund.


COMPETITION
We compete in markets where our competitors are segmented by technology focus. We believe no one
company in the Asia region has a similar set of combined technology capabilities in Technology-intensive
IT (computer vision and intelligent transport systems) and e-business, as we do. Our competitors in the
following market segments include:−

Computer vision —
Rahmonic Resources Pte Ltd and Vision Systems Ltd

Medical robotics/computer-aided surgery —
Intuitive Surgical Inc.

Intelligent transport systems —
CET Technologies Pte Ltd, Singapore Technologies Electronics Limited, Singtel Aeradio Pte Ltd, Sanyo
Trading Co, Ltd, Orbital Sciences Corporation and Siemens Advanced Engineering Pte Ltd.

e-Business —
National Computer Systems Pte Ltd, Singapore Computer Systems Ltd, IBM Singapore Pte Ltd,
Singapore Network Services Pte Ltd, Andersen Consulting, NIIT Ltd, Ariba Inc, and Commerce One, Inc.




                                                   59
MAJOR SUPPLIERS
The suppliers accounting for 5% or more of our total purchases during each of the past three financial
years are as follows:−
                                                                   — Percentage of Total Purchases —
Supplier                                                            FY1997        FY1998       FY1999
Apple Computer                                                      13.2%          0.3%           —
C.I. Systems (Israel) Ltd                                           23.4%          0.5%          0.3%
BMC Software Incorporated                                             —           29.0%           —
Oracle Systems (S.E.A.) Pte Ltd                                       —            9.8%         11.8%
Computer Associates Pte Ltd                                           —             —           13.2%
Hewlett Packard Singapore (Sales) Pte Ltd                             —           17.0%         10.9%
Sun Microsystems Pte Ltd                                              —             —           16.1%

Total                                                               36.6%         56.6%         52.3%


We purchase hardware and software from different suppliers, depending on the technical specification
of the projects secured. In FY1997, we purchased electro-optics equipment from C.I Systems (Israel) Ltd
for resale to Chartered Electro-Optics Pte Ltd. The other major supplier in FY1997 was Apple Computer
which we used for the passenger information kiosk system project for the Airport Authority of Hong Kong.

In FY1998, most of the hardware and software purchases for the medical claims proration system project
for the Prime Minister’s Office were made with BMC Software Inc, Oracle Systems (S.E.A.) Pte Ltd and
Hewlett Packard Singapore (Sales) Pte Ltd.

In FY1999, we continued to buy from Hewlett Packard Singapore (Sales) Pte Ltd for the medical claims
proration system project. The other major suppliers whom we purchased from were for the vehicle entry
permit system contract secured in FY1999.

None of the our directors or substantial shareholders has any interest, direct or indirect, in any of the
above suppliers.


MAJOR CUSTOMERS
The customers accounting for 5% or more of our total turnover during each of the past three financial
years are listed below:−
                                                                    — Percentage of Total Turnover —
Customer                                                            FY1997        FY1998       FY1999
EDS Electronic Data Systems (HK) Ltd
  (Airport Authority Of Hong Kong)                                  22.4%         21.4%         20.1%
Standard Chartered Bank                                               —           15.5%           —
Procurement Bureau M.N.D, Republic of China, Taiwan                 27.5%           —             —
Chartered Electro-Optics Pte Ltd                                      5.1%         0.2%           —
Ministry of Defence                                                 29.2%         19.1%          0.5%
Prime Minister’s Office                                               —            8.3%         11.6%
Public Works Department (Ministry of Education)                       9.2%         3.9%          1.9%
Indopura Technologies Pte Ltd                                         —           24.3%           —
Guthrie Engineering Pte Ltd/Land Transport Authority                  —             —           52.5%

Total                                                               93.4%         92.7%         86.6%




                                                       60
In FY1997, our major customers were the Procurement Bureau M.N.D, Republic of China, Taiwan, the
Ministry of Defence of Singapore (‘‘MINDEF’’), EDS Electronic Data Systems (HK) Ltd (‘‘EDS’’) and
Chartered Electro-Optics Pte Ltd. The contract with the Procurement Bureau M.N.D, Republic of China,
Taiwan was for the delivery of the Underground Test Range Measuring system. There were two MINDEF
contracts for the procurement of two Super BullsEyeTM systems. EDS was the main contractor for a
systems integration project for the Airport Authority of Hong Kong. As part of the systems integration
project, EDS contracted us in FY1996 to develop the passenger information kiosk system at Hong
Kong’s International Airport at Chek Lap Kok and this project continued to generate revenue in FY1997.
In FY1995, we were awarded a contract for the design, installation and maintenance of burglar alarm
systems in the schools designated by the Ministry of Education and we continued to have revenue in
FY1997. As for Chartered Electro-Optics Pte Ltd, the revenue related to the trading of electro-optics
equipment.

In FY1998, we secured two major new contracts. The first was the medical claims proration system from
the Prime Minister’s Office and the second was a computer server management system from the
Standard Chartered Bank. Turnover was also generated from the credit information bureau system
developed for Indopura Technologies Pte Ltd. We continued to generate revenue from EDS, PWD,
MINDEF and Chartered Electro-Optics Pte Ltd for the projects described above.

In FY1999, a major contract known as vehicle entry permit system was secured from Land Transport
Authority with Guthrie Engineering Pte Ltd as the main contractor. Revenue was also generated from
EDS for a variation order relating to the passenger information kiosk system and we continued to have
maintenance income from the Prime Minister’s Office for the medical claims proration system.

Save as disclosed in page 87 of this Prospectus, none of the Group’s directors or substantial
shareholders has any interest, direct or indirect, in any of the above customers.


RESEARCH AND DEVELOPMENT
We are committed to investment in R&D to maintain our leadership in and competitive edge through
technology, both in terms of manpower and funds.


Investment in R&D
Our commitment to R&D is reflected in the increase in investments over the past 4 years.

In FY 1999, our total R&D expenditure was approximately $8.78 million. In FY 1998, our total R&D
expenditure amounted to approximately 38% of our annual turnover, an increase of 55% over 1997
figures. Our total R&D expenditure over the years 1997 to 1999 is shown in the following table:−

                                                                                 ———— R&D Expenditure ————
(S$’000)                                                                         FY1997          FY1998          FY1999
Human Capital Cost/Salaries                                                       1,069           1,761          4,158
Equipment (Hardware & Software)                                                     —               —            3,398
Overheads                                                                           408              528         1,224
Total R & D Expenditure                                                           1,477           2,289          8,780


Note:−
Total R&D expenditure includes development expenditure and acquisition of fixed assets used in R&D activities.




                                                             61
Of the R&D expenditure incurred as above, the following amounts were spent on in-house development
for projects which have yet to generate revenue:−

(S$’000)                                                                  FY1997      FY1998        FY1999
In-house development                                                         —          511             3,594


Focus of R&D
In recent years, our R&D in computer vision focused on 3-D image processing, electro-optics and
multi-sensor integration. In ITS, we focused on real-time location tracking, map-matching and dead-
reckoning technology, wireless and radio frequency identification technology. In large-scale IT projects,
our R&D focused on large-scale system architecture, object-oriented system design, performance and
scalability, and data management system. In e-business our R&D is on our online dynamic pricing
engines and payment systems where we focused on pricing systems, security, encryption, database
management and network architecture. We will continue our R&D in these areas.

We collaborate with leading institutions and corporations to collaborate on R&D. These include National
University of Singapore, Nanyang Technological University, National University Hospital, Sun
Microsystems Pte Ltd and BMC Software Inc. In addition to our in-house R&D efforts, we also work
closely with leading institutions and corporations to tap on an external pool of R&D resources and to
develop technological solutions.

We will also develop incubator services for Internet and Technology-intensive IT startups in order to have
early access to technology. To do all these things, we need to recruit and retain talent.

Key elements of our R&D strategy and direction are as follows:−
‰   Increasing our R&D manpower and resources;
‰   Collaborating in joint R&D with industry partners, corporations and institutions;
‰   Investing in or acquiring businesses with technologies or R&D which can support our business; and
‰   Developing and investing in new Internet-based IT services, infrastructure and solutions.


External R&D Funding
Since the beginning of our in-house R&D initiatives in 1994, R&D investment and staff strength have
grown substantially. In the past, our R&D was conducted with internal funds. In recent years we have
been able to receive R&D funding in the form of government grants, particularly in 1999, detailed as
follows:−

R&D Funding in 1999
Specific R&D Project                Scheme Covered                            Partnering Government Agency

Ship Hull Image Processing          Innovation Development Scheme             Economic Development Board
  System (‘‘SHIPS’’)                (‘‘IDS’’)/ Local Industry Upgrading
                                    Programme (‘‘LIUP’’)

Public Transport Traveler           Innovation Development Scheme             Economic Development Board
  Information System (‘‘PTTIS’)     (‘‘IDS’’)/ Local Industry Upgrading
                                    Programme (‘‘LIUP’’)

Agent for Monitoring and            Innovation Development Scheme             National Computer Board
  Administration (‘‘AMANDA’’)       (‘‘IDS’’)/ Local Industry Upgrading
                                    Programme (‘‘LIUP’’)
SmarTown.comTM                      Local Enterprise Electronic               National Computer Board
                                    Commerce Programme




                                                     62
Of the above R&D funding applications approved in FY1999, we have received a grant of $128,392 for
the development of AMANDA. We have also entered into financing arrangements with local companies
to purchase computer hardware, software and the medical robot amounting to $1,093,095 for R&D
purposes. The rest of the R&D were conducted with internal funds of $7.56 million.


R&D Manpower
As of 30 April 2000, 82% of our manpower strength consists of engineers and IT specialists. 5% of these
engineers and IT specialists hold PhD degrees and 24% hold Masters degrees in their areas of
specialisation. Several were awarded scholarships for their undergraduate or postgraduate studies.

The number of engineers involved in R&D have increased significantly from 1997 to 1999 as shown in
the table below:−
                                                                   FY 1997       FY 1998       FY 1999
Number of R&D Staff                                                   25            40            71

Of our 90 engineers, 71 engineers are involved in R&D, pooling their expertise in the following teams:−

Computer Vision R&D
Fifteen engineers form the core group of the computer vision R&D team. Their expertise in 3-D image
processing, electro-optics (laser/ thermal) and multi-sensor integration (which enables sight, weight and
motion detection, real-time image processing, recognition and understanding) has enabled systems
such as Super BullsEyeTM, VIPS, and SHDS to be developed.

Intelligent Transport Systems R&D
Twenty-seven engineers form the core group of the ITS R&D team. Their expertise includes contact and
contact-less Smartcard technology, real-time location tracking (‘‘GPS’’) and other related sensor
technologies. This knowledge is enhanced by wireless communication, map-matching and dead
reckoning technology, multi-sensor data fusion and radio frequency identification technology.

Together with computer vision and artificial intelligence, the ITS team developed systems such as
SmartParkTM, PTTIS and VEPS.

Artificial Intelligence R&D
The computer vision and ITS R&D teams also contribute significantly to the development of artificial
intelligence software to monitor, manage and produce intelligent automatic responses in reaction to
real-time data input in real-life situations.

e-Business R&D
Twenty-nine engineers form the core group of the e-business team. They form our R&D expertise in
large-scale IT systems including large system architecture skills, database design and management,
strong object-oriented system design capabilities, network security, high performance and scalable
design and implementation capabilities. This team is currently developing online dynamic pricing
systems, large distributed systems, secure payment systems, as well as new e-business models and
technologies.




                                                   63
LICENCES, PATENTS AND TRADEMARKS
Licence
We have entered into a Memorandum of Understanding with 3M Singapore Pte Ltd (‘‘3M’’) dated 14 July
2000 in respect of the proposed grant of an exclusive licence of 3M’s intellectual property rights relating
to the 3M Integrated Fleet Operations (‘‘INFO’’) System to us. This system is a computer-based
information system that provides bus fleet operators with the means to monitor, communicate and
manage their bus fleets and drivers, including while they are on the road.

Patents
We have filed patent applications for two of our inventions:−

(a) A Portable Weapons Scoring System and the Method of Scoring Using the Same
      We started our R&D efforts with pioneering work done in the area of 3-D image processing. This
      technology incorporates the use of image processing software algorithms and innovative
      engineering which ultimately formed the basis for many of our subsequent innovations. This
      technology was packaged into a fully automatic, portable and accurate weapons impact scoring
      system on both land and water. Patent applications for a ‘‘Portable Weapons Scoring System and
      the Method of Scoring Using the Same’’ have been filed in Singapore, Australia, Taiwan, Thailand
      and Malaysia. Such applications were initially filed in the name of Dr David Chew Khien Meow and
      subsequently assigned (for nominal consideration) to SSPL in December 1999. The applications
      are still pending. When Super BullsEyeTM (the product’s commercial name) was launched in 1996,
      after more than one year’s R&D effort, it was the first of its kind in the world. The Computer Vision
      expertise and intellectual capital that was developed as a result of the Super BullsEyeTM initiative
      was subsequently applied to the development of advanced computer vision-based applications for
      the civilian marketplace.

(b)   Intelligent Car Park System
      To tap on our expertise in ITS, we embarked on the development of a vehicular management
      system that leverages on vision-based motor vehicle detection and identification technologies to
      develop an automatic, vision-based car park management technology solution called SmartParkTM.
      Patent applications for an ‘‘Intelligent Car Park System’’ have been filed in Singapore, Australia,
      Hong Kong, Korea, Malaysia, Thailand and New Zealand. These applications were initially filed
      under the names of Dr David Chew Khien Meow and Dr Kennedy Chew Khien Mien and
      subsequently assigned (for nominal consideration) to SSPL. Such patent applications are still
      pending.


Trademarks
We also own the following trademarks:−

(a)   Stratech®

(b)   SmarTown®

We are in the process of applying for trademark registration for the following:−

(a)   SmartCareTM

(b)   SmartParkTM

(c)   SuperAucTM

(d)   Super BullsEyeTM

(e)   Super-eHubTM

(f)   Safe-EX.comTM

(g)   SmarTown.comTM


                                                    64
There is always the possibility that third parties may unlawfully copy, obtain and use our intellectual
property. We cannot be certain that currently employed precautions adequately protect against
unauthorised use of our technology. Moreover, in Internet-related businesses, the laws on validity,
enforceability and scope of protection of intellectual property are still developing and evolving and there
is still uncertainty. The law on intellectual property rights and protection in some countries may not be as
developed as some others.

We also cannot be certain that our products and services do not or will not infringe upon valid patents,
trademarks, copyrights or other intellectual property rights held by third parties. In the event that
third-party infringement claims are brought against us, we may incur substantial expenses and resources
defending against them, regardless of their merit. Any substantial infringement claims against us may
result in substantial monetary liability or may materially disrupt the conduct of our business.


INSURANCE
We have insurance coverage for protection against the various risks that may affect us in the course of
carrying out a contract, such as the following policies:−

$’000                                                                                    Sum Assured
Erection All Risks                                                                           6,299
All Risks Insurance                                                                          2,000
Public Liability                                                                             5,000
Professional Liability                                                                       5,000
Workmen’s Compensation                                                                         785

We have also effected other general insurance coverage in respect of Workmen’s Compensation
(Common Law), Group Term Life, Group Personal Accident, Group Hospital and Surgical, Burglary Theft,
Public Liability, Fire Policy, Electronic Equipment, Directors and Officers Liability.

We are in the process of sourcing for, assessing and arranging for suitable insurance coverage to protect
us against the various risks that may affect us in the course of our e-Business core activities, such as:−

(1)   For inadvertent infringement of patents, content injury such as infringement of copyright and
      trademark, defamation and privacy violation;

(2)   For internet and network wrongful acts such as security breaches and errors and omissions causing
      damage to others;

(3)   Protection for, amongst others, electronic data and other electronic materials against cyberspace
      perils such as computer viruses;

(4)   Coverage for business income and extra expenses incurred due to disruption, interruption, delay or
      suspension of internet and network activities caused by defined cyberspace perils; and Coverage
      for computer crime, theft of computer system resources and extortion;

(5)   related to computer systems and electronic data.




                                                    65
GOVERNMENT REGULATIONS
To date, regulations have not materially affected the results of our business operations. Regulations have
also not materially restricted the use of our technology, products and services. Our products,
technologies and services must comply with all the relevant regulations, standards and requirements in
their respective targeted geographical markets.

As our e-business activities and large-scale systems do involve the use of the Internet, the legal
environment in Singapore relating to the use of the Internet is relevant to us. The Singapore
Broadcasting Authority (‘‘SBA’’) regulates Internet content in Singapore. As an internet content provider
who provides information on the Internet (for example, SmarTown.com TM), we are required to ensure
that our services and content are not used for any purpose that is against the public order, public interest,
national harmony or that offends good taste, and that they comply with the Codes of Practice issued by
the SBA.

Changes in government regulation could have an adverse effect on our costs or could prevent us from
delivering our services and products via the Internet. It could also reduce the growth of Internet usage
and affect demand for our services and products. Further deregulation of the telecommunications and
Internet service provider industry could lower Internet access costs and increase Internet penetration,
and increase demand for our services and products.

Our technologies and systems also involve the use of wireless telecommunications technologies and
frequencies. Commercial products that involve the use of telecommunications must comply with
regulatory requirements in the following areas: radio frequency transmission, network compatibility
(include electro-magnetic interference) and product safety. Every country (or even city or geographical
district) have their own relevant local telecommunications regulatory requirements and standards. Our
products, technologies and services must comply with all the relevant requirements in their targeted
markets.

In Singapore, the telecommunications industry and product standards are regulated by the IDA in the
areas of radio frequency transmission and allocation, and network compatibility. The Productivity and
Standards Board (‘‘PSB’’) is the relevant safety authority that ensures compliance with consumer product
safety requirements. In the future, with the convergence of telecommunications and computers and IT,
we expect new regulations to be introduced that could affect our solutions, products, technologies and
services.

In the US, the Federal Communications Commission (‘‘FCC’’) regulates the telecommunications
industry. Our design of communications equipment generally adheres to Part 15 of the FCC regulations.
In Europe, European Telecommunications Standard Institute (‘‘ETSI’’) is responsible for setting
telecommunications standards for the European Union.

Our work in the medical robotics area involves the development of new techniques and tools for use on
human patients by the medical profession. In the US, the use of new techniques and medical devices
and instruments on human patients in clinical trials, as well as in normal practice, are regulated mainly
by the federal government’s Food and Drug Administration (‘‘FDA’’). In Singapore, the government
authority for this is the Ministry of Health.

Non-compliance with regulations or the lack of necessary approvals will prevent or delay our ability to put
our medical robotics and related technologies on critical clinical trials and on the market to be used by
surgeons. Traditionally, in the medical field, the time it takes to obtain approval to perform human trials,
perform the necessary number of successful trials and to obtain final approval for normal use can take
from several months to more than a year. As a result, this process can be costly.




                                                     66
PROSPECTS — INDUSTRY OVERVIEW
Computer Vision
The increasing ability of computer systems or other electronic systems to ‘‘see’’ and recognise or know
what they are ‘‘seeing’’ is gaining in importance. Computer vision technology for building the ‘‘seeing’’
ability for computers and machines will facilitate developments in many aspects of human to machine
interaction.

The widespread application of computer vision had been held back previously as it required large
computer power and high camera resolution. With cheaper computing power and advances in video and
electro-optics, it is now possible to have continuously operating real-time computer vision systems.

Participants in the computer vision industry come primarily from research and academic institutions, or
commercial corporations that tend to emphasise computer vision used in manufacturing or inspection
systems in controlled environments.

We are mainly engaged in the use of 3-D computer vision and image processing technology for
commercial applications in real-world scenarios. Our commercial applications, initially targeted at the
aerospace, defence and security industries, have now expanded to other commercial areas such as
naval vessel monitoring and tracking, intelligent car park systems as well as computer-aided surgery.

Medical Robotics/Computer-Aided Surgery
Computer-aided surgery using medical robotics is an industry that combines robotics technology,
computer vision, and artificial intelligence with medical and surgical expertise. The area of minimally
invasive surgery (‘‘MIS’’) offers scope for R&D and commercial development in medical robotics. MIS
refers to surgical procedures that require only very small (in the range of a few millimetres) puncture
holes to be made in the patient’s body.

Theta Reports, an US-based research firm, released a report on ‘‘Advances in MIS’’ in 1998 which
projected that the overall market for MIS or endoscopy would grow at an annual rate of between 10% and
16%1. Sales were projected to climb to US$5 billion worldwide (including US$4.3 billion in the USA) by
2001, a substantial increase of 65% with the situation seen as being very optimistic for manufacturers
and healthcare providers2. The report forecasts the best competitive market opportunities would come
from the introduction of breakthrough technologies such as the use of robotics in cardiovascular, general
surgery, gynaecology and neurology applications. Most would include the latest endoscopic systems and
integration with robotics and its family of surgical devices.

Our focus on MIS aims to develop wired and wireless telesurgery techniques and technology that involve
MIS performed by a surgeon or a team of surgeons on a patient who is remotely located from the
surgeon(s) through the use of modern telecommunications, information technologies, robotics and virtual
reality interfaces. The global market for MIS is already over US$3 billion, though less than 15% of all
current hospital-based procedures use MIS3. On a long-term perspective, we intend to engage in the
development of new treatment and surgical procedures involving micro- and nano-machines.

We believe our investment in medical robotics will pay off in time as we leverage on our first mover
advantage in the region. Laporoscopic gallbladder surgery was introduced in 1987 but took five years
before it became standard procedure4. Similarly computer-aided surgery may require a period of
adjustment before it is accepted as a norm or preferred choice.




__________________
1
  Theta Reports: Advances in MIS, Report No. 711, November 1998, New York: Theta Reports, 1998, pp 1, 15, 129.
2
  Ibid.
3
  Michael Webster, ‘‘Cardiac MIS and TMR: Market Opportunity or Investor’s Nightmare’’, Clinica Reports: Industry Alert, CBS 742,
  Surrey, UK: PJB Publications Ltd, 29 July 1998. See also Theta Reports, p 123.
4
  Gurney Williams III, ‘‘Shrinking the Surgeon’’, Discover, April 2000, p 59.



                                                              67
Intelligent Transport Systems
We believe that the global market for intelligent transport systems (‘‘ITS’’) will experience rapid growth
within the next couple of years due to worsening traffic congestion, increasing traffic volume and number
of vehicles on the road. According to a 1999 report on ITS in Allied Business Intelligence, the in-vehicle
information systems market for personal and commercial vehicles will rise from US$300 million in 1999
to US$5.1 billion in 20035. In-vehicle navigation is projected to account for a global market of US$16
billion by end-20046.

According to the Singapore government’s White Paper ‘‘A World Class Land Transport System’’,
published in 1996, in an effort to build a more comprehensive land transport network, LTA is looking into
harnessing technology to maximise the capacity of roads in Singapore by upgrading and installing
intelligent traffic management systems. Given the rapid technology advances, there is also a need to
replace the first electronic road pricing (‘‘ERP’’) system to rationalise the current road tax structure and
revamp the way electronic road pricing is implemented. For this, we expect the LTA to begin working on
the second ERP system soon, which could possibly involve the use of electronic positioning
technologies, similar to satellite or GPS (‘‘global positioning system’’) technology, that will provide better
service to the motoring public, and enable LTA to manage usage of roads more sensitively and
accurately. In this aspect, we intend to leverage on our expertise in ITS and offer our services and
technologies to LTA as and when LTA starts to develop the second ERP system. We also expect many
other large Asian cities to consider the use of similar ERP systems in the near future.

In 2000, about 1.6 million cars in Japan (about half of all new cars sold in Japan) will carry navigation
gear using a global positioning system (‘‘GPS’’)7. Matsushita Communication Industrial estimates that by
2003, 40% of all cars sold in Japan will have on-board computers with Internet access, up from less than
1% today8. By 2015, Japan’s smart cars may constitute a market worth US$67 billion a year in hardware
and software combined, compared to today’s US$8 billion9.

In the world of business, as companies optimise their supply chain, logistics and transportation
management is becoming critical to increasing efficiency, competitiveness and profitability. The direct
marketing models of e-commerce are also forcing companies to restructure their logistics, delivery and
order fulfilment processes. Integrated logistics and e-business solutions incorporating ITS promise to
play a very significant role in helping these companies address these requirements and in the process,
drive down logistics and transportation costs while providing better customer service. With our expertise
in ITS, we are in a position to assist these companies in this area.


e-Business
Internet Penetration
Internet users in Asia (excluding Japan, Australia and New Zealand) are expected to reach 66 million by
200310. By 2005, 42 million will join this pool, adding up to a figure of 108 million Asian Internet users11.
Overall Internet revenue, comprising network services, e-commerce and advertising, is expected to grow
from US$1.3 billion in 1999 to US$24.1 billion in 2003 and US$92 billion in 200512.




__________________
 5
     Larry Swasey, ‘‘Intelligent Transport Systems’’, Allied Business International, ABI Annual ’99: Intelligent Transportation Systems:
     In-Vehicle Navigation and Communication Technologies, Global Markets & Forecasts, 1999.
 6
     Ibid.
 7
     Emily Thornton, ‘‘Cover Story: Digital Wheels’’, Business Week, April 10, 2000, pp 50−51.
 8
     Ibid.
 9
     Ibid.
10
     Salomon Smith Barney, ‘‘The Asian eFeast: Fine Imported Ingredients, Few Local Recipes’’, Global Equity Research, 24
     February 2000, p 3.
11
     Ibid.
12
     Ibid.



                                                                   68
Salomon Smith Barney estimates that by 2005, 108 million people in Asia Pacific will have access to the
Internet compared to 18.4 million in 199913. China will have the largest number of Internet users, growing
from 1.2 million in 1998, to 4 million in 1999, to an estimated 7.2 million in 2000, culminating in 44.2
million in 200514. The Internet penetration rate in Singapore is the highest in Asia Pacific, standing at
26.7% in 1999 and growing to 68.7% in 200515. Hong Kong follows closely after Singapore, with a
penetration rate of 21% in 1999, rising to 57.6% in 200516.


e-Commerce Transactions
In February 2000, the Gartner Group reported that the worldwide market for B2B e-commerce will
expand to US$403 billion in 2000, US$953 billion in 2001, US$2.18 trillion in 2002, and US$3.95 trillion
in 200317. Growing from US$145 billion in 1999, B2B e-commerce will reach US$7.29 trillion by 2004,
more than 50 times larger than in 199918. This figure will represent about 7% of total global sales
transactions, estimated at US$105 trillion19.

E-business is forcing companies to rearchitect all or part of their IT infrastructures. This is where our track
record of systems integration and development and e-business expertise, can play a significant role.

Application Service Provider (‘‘ASP’’)
An ASP manages and delivers application capabilities to multiple entities from data centres across a
wide area network. ASPs give customers a viable alternative to procuring, implementing and maintaining
complex systems themselves. In some cases, ASPs provide customers with a comprehensive alternative
to building and managing internal IT operations. ASP customers also are able to control more precisely
the total cost of technology ownership through scheduled payment schemes. ASPs offer individuals or
enterprises access over the Internet/ intranets/ extranets to application programs and related services
that would otherwise have to be located in their own personal or enterprise computers. We see potential
for us to act as an ASP for our range of e-business solutions, services and tools.


FUTURE PLANS
The plan set out below is based on our existing plans and intentions. As such intentions and plans are
based on assumptions of future events and market conditions, which by their nature are subject to
uncertainty, our actual course of action may vary from the plans set out below and there is no assurance
that our plans will materialise or our plans will be implemented as scheduled.

In addition to the specific plans and on-going projects that have been described in the section on our
business and technology divisions and activities, the key elements of our plan for growth and expansion
include the following:−

Deepen existing markets and develop new industry uses for our Computer Vision and ITS
We have successfully developed computer vision-based systems and ITS that have commercial value
in local and international markets. We expect to be innovative and flexible in applying our core
competencies in computer vision and ITS to new industry uses, and to combine them with Internet
services and technologies. Our Technology-intensive IT systems, applications and services provide a
platform of technology options that can be combined in new ways to Internet-enable targeted
brick-and-mortar companies. We are targeting military forces, public transport bodies, government
agencies, automotive and transportation industries as potential markets for our computer vision systems
and ITS.

__________________
13
     Salomon Smith Barney Inc estimates, op cit, p 122.
14
     Ibid.
15
     Salomon Smith Barney Inc estimates, op cit, p 125.
16
     Ibid.
17
     A Reuters Report, ‘‘Business-to-Business e-Commerce to Soar’’, February 1, 2000, http://www.planetit.com/techcenters/docs/
     e-commerce/news/PIT20000201S0054.
18
     Ibid.
19
     Ibid.



                                                               69
Hire more talent and strengthen manpower resources to reach global markets
We recognise that the key to success is our personnel assets or human capital, and we are committed
to developing our human resources in an innovative and focused manner. We intend to continue to build
a nimble and flexible organisation with first-class resources to recruit and retain the best people. We
intend to provide attractive compensation with stock options for staff (Employee Stock Option Scheme
or ESOS), equity for key players in spin-offs, and a positive working environment that promotes creativity
and collaboration. We expect to establish overseas development centres where we will hire foreign talent
such as software developers and technology researchers to work in their respective countries, including
China and India.


Develop strategic R&D relationships with industry and research institutes
We plan to form an international advisory board and invite reputable leaders from industry, R&D
institutions and e-business to join this board.

We intend to expand our collaborative network of R&D partners to accelerate growth and gain early
access to emerging technologies in the marketplace. These partners can provide strategic linkages and
cross-selling or marketing opportunities.

Key elements of our R&D strategy are as follows:−
‰   Increasing our R&D manpower and resources;
‰   Collaborating in joint R&D with industry partners, corporations and institutions;
‰   Investing in or acquiring businesses with technologies or R&D which can support our business; and
‰   Developing and investing in new Internet-based IT services, infrastructure and solutions.

Expand our range of e-business competencies, applications and services
We intend to expand our services into Asia, in conjunction with our Super-eHubTM effort, to be a
technology partner for e-businesses in Asia. We expect to continuously expand our e-business services
and infrastructure offering through R&D, acquisitions and joint ventures, and incubator services for
Internet and Technology-intensive IT startups. We will also be establishing strategic alliances with
e-business technology partners, including implementation and consulting allies.

Leverage on our unique range of IT expertise to provide quality, complete end-to-end customer
systems and solutions
The many areas of synergy are depicted in the diagram on page 51 and discussed in greater detail
earlier on page 52.

Strengthen our marketing resources
We have developed commercial systems in computer vision and ITS. We plan to establish strong
marketing and business development presence in key markets outside of Singapore. We will focus on
Asia and Australia, and pay special attention to Hong Kong SAR and Japan. We also plan to find
partners, and appoint representatives and distributors in other countries to widen our marketing reach
and achieve a significant presence in the global market.




                                                   70
Internet-enable brick-and-mortar businesses
A competitive edge that we have is our expertise in the area of sensing, detecting, recording, digitally
processing and computerising events and objects in the real world, often under real, harsh operating
conditions, and linking and transforming these to the virtual digital world. An example is computer vision
technology and expertise that is able to monitor a waterway and automatically detect their entry and
movement, identify and monitor ships using the waterway. Another example is expertise in imaging and
vision technologies to identify and monitor vehicles as they enter and leave a car park or travel along
roads. Another example is the generation, transmission and collection of dynamic location and status
information from a large number of vehicles and other mobile assets. The real-time, dynamic location
information is processed and when combined with historical data and artificial intelligence software, it is
used to predict future location and travel time delays, and compute recommended routes and dynamic
schedules.

Leveraging on these strengths and experiences and our e-business expertise, we are now pursuing
alliances with market leaders in several industries such as education, real estate, manufacturing and
transportation. We are prepared to invest as joint venture partners to help these companies to transform
their businesses, in whole or in part, into e-businesses. The market position of these players also means
that these e-businesses can potentially lead their respective sectors, and serve as industry-wide
platforms for e-commerce, by combining their domain expertise with our technical capabilities. This
strategy enables our solutions and staff to quickly acquire essential industry specific domain expertise.
The resultant e-businesses and e-commerce platforms represent new recurring revenue sources and/or
potential equity appreciation for us. We also intend to be a one-stop partner for e-business in Asia by
expanding our services through our Super-eHubTM, a network of data centres (broadband points-of-
presence) to be established in key cities in the region. Together with our experience and capabilities in
Internet-enabling brick-and-mortar businesses, we will use these centres to attract regional businesses
and partners from the USA and Europe.


Pursue large-scale IT contracts and projects in the public sector
We have expanded and our growth fueled from IT projects awarded to us by the government and public
sector in Singapore. In delivering these projects, we have successfully played the roles of prime
contractor, systems developer and integrator, as well as technology partner and developer. Initially the
projects were for computer vision and ITS. We then undertook larger IT contracts which incorporated our
growing Internet expertise.

Our strategy is to pursue large-scale IT contracts and projects in the public sector in Singapore and in
large Asian cities and places that are embarking on aggressive IT plans, for example, Hong Kong SAR.
We believe that large-scale IT systems and projects for the public sector would grow and incorporate
Internet connectivity, infrastructure and technology as governments worldwide embrace the Internet in
the way their systems function.


Expand our product range and capability by investments, acquisitions and joint ventures
In order to maintain and extend our competitive advantage in technology development and to gain
access to new complementary and emerging technologies and markets, we plan to invest through
acquisitions and joint ventures. We plan to use a portion of the proceeds of the Invitation to invest in such
future business expansion, including the acquisition of related technologies and companies. We intend
to make a strategic investment in a company that has developed a mature radio frequency identification
(‘‘RFID’’) capability that will enable us to enter the specific foreign markets and add to our existing
tracking capability in ITS.

In addition, we intend to purchase a 35% stake by investing $3.5 million from the net proceeds of the
Invitation in a new company, called Mobiwave Pte Ltd (‘‘Mobiwave’’), to be set up by a group of 10
individuals (referred herein as the ‘‘Founding Members’’) with experience and expertise in wireless
communications to develop products, systems and services which involve wireless communications,
such as Bluetooth technology. Bluetooth is a new wireless communications standard that will enable
broadband data exchange between devices like computers, mobile phones and electronic personal
organisers that are in close proximity to one another.



                                                     71
We are in the process of drafting and preparing the Subscription Agreement with Mdm Leong Sook Ching
(our existing shareholder and director) and one of the Founding Members, as the 2 subscribers of one
share each of $1 per share. Mdm Leong Sook Ching will transfer her one share of Mobiwave to our
Company as soon as practicable upon incorporation and execution of the Subscription Agreement. The
Founding Members will be full time executives of the Company.

We decided to embark upon this investment as we are of the view that there is synergy between
Mobiwave and us, in that we incorporate or intend to incorporate wireless communications technology
into many of our products, systems and services. As a result of this investment, we will have access to
wireless technology expertise without having to build up the capability ourselves.

The 10 Founding Members are Lee Kok Seng, Soh Kok Hong, Lim Choon Shyan, Lim Siong Huat, Sagar
Pai, Chia Hang Poh, Ler Kwok Wah, Kee Hwang Kiat, Mariani Tjandra and Tan Thye San.




                                                  72
                           DIRECTORS, MANAGEMENT AND STAFF


DIRECTORS
The Board of Directors is entrusted with the responsibility for the overall management of our Company.
The Directors’ particulars are listed below:−

Name                                Age       Address                             Position

David Chew Khien Meow                42       52 Bayshore Road #09-02             Chairman and Chief Executive
                                              Singapore 469978

Kennedy Chew Khien Mien              38       6 Dover Rise, #20-10, Tower C,      Deputy Chief Executive and
                                              Heritage View                       Chief Technology Officer
                                              Singapore 138678

Leong Sook Ching                     34       52 Bayshore Road #09-02             Deputy Chief Executive
                                              Singapore 469978

Lucy Ng @ Hwang Fei Fung             66       52 Bayshore Road #09-02             Non-Executive Director
                                              Singapore 469978

Liow Voon Kheong                     49       10 Lakepoint Drive #10-57           Non-Executive Director
                                              Singapore 648927

Hang Chang Chieh                     52       39 Jalan Kampong Chantek            Independent Director
                                              Singapore 588616

Tjio Kay Loen                        62       3 Park Vale                         Independent Director
                                              Singapore 288562

Seah Chin Yew                        28       44 Jalan Girang                     Independent Director
                                              Singapore 359212

Note:−
Dr David Chew Khien Meow and Mdm Leong Sook Ching are spouses. Mdm Lucy Ng @ Hwang Fei Hung is the mother of both
Dr David Chew Khien Meow and Dr Kennedy Chew Khien Mien. Dr David Chew Khien Meow and Dr Kennedy Chew Khien Mien
are brothers.


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

Dr David Chew Khien Meow is the founder of our Company and has been our Chairman and Chief
Executive since our establishment in September 1989. Dr David K.M. Chew holds a PhD in Business
Administration from the University of Southern California and has more than 18 years of experience in
the IT and advanced technology industries. He is responsible for the management of our Company and
our financial well-being, and plays a key role in charting out our strategic direction. Over the last decade,
Dr David Chew had been instrumental in the expansion of our Company’s business with annual turnover
growing from approximately S$3.02 million in 1997 to S$11.44 million in 1999. Today, Dr David Chew is
the driving force behind our Company’s business and operations. Dr David Chew is the Rotary-ASME
Entrepreneur of the Year 1999 and under his leadership, our Company was recognised as an Enterprise
50 company in 1999.

Dr Kennedy Chew Khien Mien is the Deputy Chief Executive and Chief Technology Officer. He assists
the Chief Executive in charting and implementing new business and technology directions of our
Company, including the establishment of key strategic alliances. As Chief Technology Officer, he leads
the teams which oversee the technology implementation, technology roadmap, and research and
development activities of our Company. Before joining our Group in 1996, Dr Kennedy Chew was a
member of the Technical Staff and Chief Architect of several national projects at the Information
Technology Institute (‘‘ITI’’), NCB. Some of the national projects he was involved in were the
Student-Teacher Workbench for the Ministry of Education and the Integrated Criminal Justice System. Dr
Kennedy Chew was awarded an NCB Undergraduate Scholarship to study Computer Science at the
University of Toronto and an NCB postgraduate scholarship to study at the University of Texas (at Austin)
where he graduated with a PhD in Computer Science.

                                                       73
Mdm Leong Sook Ching has been the Deputy Chief Executive of our Company in charge of Legal and
Corporate Affairs since 1995. Her role in the Group includes the handling of legal matters, business
development, administrative and financial affairs. Between 1990 to 1991, Mdm Leong held the position
of Legal Assistant in a local law firm, Koh & Choo. Thereafter, she joined Thomas Tham & Co, another
Singapore law firm where she later became one of the firm’s partners. Mdm Leong graduated with a
Bachelor of Law degree from the National University of Singapore.

Mdm Lucy Ng @ Hwang Fei Fung is currently a Non-executive Director. Mdm Ng has been a director
of our Company since its establishment in 1989.

Mr Liow Voon Kheong was appointed as a Non-executive Director of our Company in March 2000, as
the nominee director for PLE Investments Pte Ltd, a shareholder of our Company. Mr Liow holds
numerous appointments with the Singapore Economic Development Board (‘‘EDB’’). He is currently the
Assistant Managing Director (Operations) of EDB as well as the General Manager of EDB Investment
Pte Ltd, EDB Ventures Pte Ltd and EDB Ventures II Pte Ltd. Mr Liow has a Bachelors degree in Electrical
Engineering and a Diploma in Business Administration. Mr Liow is also currently on the Board of
Directors of many companies.

Professor Hang Chang Chieh has been appointed an Independent Director of our Company on 17 July
2000. Professor Hang currently holds the position of Deputy Vice-Chancellor (Research & Development)
of the National University of Singapore (‘‘NUS’’). Professor Hang has also held other positions in NUS
as Vice-Dean of the Faculty of Engineering between 1985 and 1994, the Head of the Department of
Electrical Engineering between 1990 to 1994 and Director of Research between 1994 and 1999.
Professor Hang was the Deputy Chairman of the National Science and Technology Board until 1999 and
is currently a Board member of EDB. He holds a PhD in Electrical Engineering.

Mr Tjio Kay Loen has been appointed an Independent Director of our Company on 17 July 2000. Mr Tjio
is currently a financial consultant. He has spent over 10 years as a General Manager in commercial and
investment banking in the Oversea-Chinese Banking Corporation (‘‘OCBC’’). He was formerly a Board
Member of the Public Utilities Board of Singapore and Telecommunications Authority of Singapore. Mr
Tjio was for many years Executive Director of Palmco Holdings Bhd, a listed company in Malaysia. He
has a Bachelor of Science degree in Mathematics.

Mr Seah Chin Yew has been appointed an Independent Director of our Company on 17 July 2000. Mr
Seah has a Master’s degree in Business Administration. He is currently the Chairman and President of
Wizoffice.com Ltd, and Corporate Advisor to Goodwill Communication Inc and Japan Asia Securities
Group. His past experience includes being the Deputy Head of Capital Markets/ Swaps in Norddeutsche
LandesBank, Singapore and a Manager of London Forfaiting Asia Ltd, Hong Kong.

The list of present and past directorships of each Director (other than their directorships in our Company)
for the last five years is set out below:−

Name                                  Present Directorships                 Past Directorships

Dr David Chew Khien Meow              Group Companies                       Group Companies
                                      Strategic Technologies Pte Ltd        Nil
                                      Stratech Life Sciences Pte Ltd
                                      Stratech Vision Pte Ltd

                                      Other Companies                       Other Companies
                                      Stratech (Hong Kong) Limited          Stratech International, Inc
                                      Cisco Technologies Sdn Bhd
                                        (Malaysia)
                                      Indopura Technologies Pte Ltd
                                        (in the process of liquidation)
                                      CommerceNet Singapore Limited




                                                     74
Name                           Present Directorships                Past Directorships

Dr Kennedy Chew Khien Mien     Group Companies                      Group Companies
                               Strategic Technologies Pte Ltd       Nil
                               Stratech Life Sciences Pte Ltd
                               Stratech Vision Pte Ltd

                               Other Companies                      Other Companies
                               Stratech (Hong Kong) Limited         Nil

Mdm Leong Sook Ching           Group Companies                      Group Companies
                               Strategic Technologies Pte Ltd       Nil
                               Stratech Life Sciences Pte Ltd
                               Stratech Vision Pte Ltd

                               Other Companies                      Other Companies
                               Stratech (Hong Kong) Limited         Stratech International, Inc
                               Cisco Technologies Sdn Bhd
                               Indopura Technologies Pte Ltd

Mdm Lucy Ng @ Hwang Fei Fung   Group Companies                      Group Companies
                               Strategic Technologies Pte Ltd       Nil
                               Stratech Life Sciences Pte Ltd
                               Stratech Vision Pte Ltd

                               Other Companies                      Other Companies
                               Nil                                  Nil

Mr Liow Voon Kheong            Group Companies                      Group Companies
                               Nil                                  Nil

                               Other Companies                      Other Companies
                               Chartered Semiconductor Mfg Ltd      Hitachi Electronic Devices
                               PLE Investments Pte Ltd                Pte Ltd
                               Advanced Systems Automation Ltd      IntelliCard Systems Pte Ltd
                               Advanpack Solutions Pte Ltd          Educational Trend Pte Ltd
                               Aretae Interactive Pte Ltd           KRDL Holdings Pte Ltd
                               Chartered Silicon Partners Pte Ltd   KRDL Pte Ltd
                               Dynatech Ventures Pte Ltd            Microfits and Methods Pte Ltd
                               EDB Ventures 2 Pte Ltd               PI Electronics Pte Ltd
                               EDB Ventures Pte Ltd                 SCM Microsystems (Asia)
                                                                     Pte Ltd
                               Frontline Technologies Pte Ltd
                               GulTech International Pte Ltd
                               Hitachi Electronic Devices (S)
                                 Pte Ltd
                               Hitachi Nippon Steel
                                 Semiconductor S’pore Pte Ltd
                               Infotech Ventures Pte Ltd
                               IPC Peripherals (Pte) Ltd
                               Life Science Investments Pte Ltd
                               Microfits Pte Ltd




                                              75
Name                         Present Directorships               Past Directorships

Mr Liow Voon Kheong          Other Companies                     Other Companies
  (continued)                M-Commerce Ventures Pte Ltd
                             Pacven Investment Ltd
                             Questech Solutions Pte Ltd
                             Regional Investment Co Ltd
                             RIC Management Pte Ltd
                             Seed Ventures III Pte Ltd
                             Seed Ventures Limited
                             Seed Ventures Management
                               Pte Ltd
                             Singapore Bio-Innovations Pte Ltd
                             ST Assembly Test Services Ltd
                             Systems on Silicon
                             Manufacturing Company Pte Ltd
                             TECH Semiconductor S’pore
                               Pte Ltd
                             Translink Express Pte Ltd

Professor Hang Chang Chieh   Group Companies                     Group Companies
                             Nil                                 Nil

                             Other Companies                     Other Companies
                             Amplus Communication Pte Ltd        DSO National Laboratories
                             Arcasia Land Pte Ltd                Sembcorp Systems Pte Ltd
                             Advanpack Solutions Pte Ltd         Singapore Technologies
                             Australasia Technology                Electronics Limited
                             Corporation Pte Ltd
                             Beaver Networks Pte Ltd
                             Questech Solutions Pte Ltd

Mr Tjio Kay Loen             Group Companies                     Group Companies
                             Nil                                 Nil

                             Other Companies                     Other Companies
                             Warren Securities Ltd               Palmco Holdings Bhd
                             KCS Investment Ltd                  Acidchem Bhd
                             Marwick Developments Ltd            W A Holdings Pte Ltd
                             Scorpio Holdings Pte Ltd
                             Leonaris Pacific Pte Ltd
                             Masterbulk Pte Ltd
                             Shining Corporation Ltd
                             Research-works.com Pte Ltd
                             Research-works.com (HK) Ltd




                                            76
Name                                 Present Directorships                 Past Directorships

Mr Seah Chin Yew                     Group Companies                       Group Companies
                                     Nil                                   Nil

                                     Other Companies                       Other Companies
                                     Seah Holdings Pte Ltd                 Nil
                                     LEHS Engineering Construction
                                       Pte Ltd
                                     Eastwood Land Pte Ltd
                                       (in voluntary liquidation)
                                     WizOffice.com Ltd
                                     WizCorp.com Pte Ltd
                                     WizOffice (HK) Ltd
                                     WizOffice.com Japan Inc
                                     GCM International Ltd


MANAGEMENT TEAM
The day-to-day operations of our Group are entrusted to the Executive Directors and an experienced and
qualified team of Executive Officers responsible for the different functions of our Group. The particulars
of the Executive Officers are set out below:−

Name                       Age       Address                               Current Occupation
Liew Tet Min                33       Blk 42 Sims Drive #11-295             General Manager (Finance)
                                     Singapore 380042

Simon Gong Shikang          44       Blk 106 Bukit Purmei Road #10-126,    Assistant Chief Executive
                                     Singapore 090106

Grace Goh Bee Kheng         33       453 Upper East Coast Road #02-01      General Manager
                                     The Summit                            (Human Resources and
                                     Singapore 466503                      Administration)

Peter Nwee Kok Thai         37       Blk 714 Clementi West                 General Manager
                                     Street 2 #11-13I                      (Intelligent Transport Systems)
                                     Singapore 120714

David Moh Sail Cheng        35       Blk 558 Hougang Street 51 #06-378,    General Manager
                                     Singapore 530558                      (Advanced Technologies)

Lam Ah Wah                  39       Blk 285 Choa Chu Kang                 General Manager
                                     Avenue 3 #04-298                      (Business Development/Project)
                                     Singapore 680285

Ong Soo Chin                41       131 Serangoon Avenue 3 #03-02,        General Manager
                                     Singapore 556112                      (Application Service Provider)

Su Li Shee                  47       Blk 637A Yishun Street 61 #04-130     Director (e-Business)
                                     Singapore 761637

Ling Su Yuen                34       81 Chun Tin Road                      Chief Information Officer
                                     Singapore 599657

Koh Boon Check              41       70, Lorong M, Telok Kurau             General Manager
                                     Singapore 425380                      (Corporate Development)

Koh Chee Kiong              40       14 Ghim Moh Road #04-07               Chief Operations Officer
                                     Singapore 270014

Alex Tan Kia Hwee           39       275, Lorong Chuan                     Director (e-Commerce)
                                     Singapore 556769




                                                     77
Information on the business and working experience of the Executive Officers of the Group is given
below:−

Mr Liew Tet Min joined our Company as General Manager (Finance) in July 1999. Mr Liew has been a
professional in finance and accounting for the last nine years. His past experience includes being an
Auditor in Ernst & Young, an Accountant with Sime Darby Singapore Ltd, the Regional Finance Manager
(Asia Pacific) of Dornier Asia Medical Systems (a subsidiary of Singapore Technologies Precision
Engineering), and the Assistant Manager of the Corporate Finance Department of Asia Pulp & Paper Co
Ltd. He has a Bachelor’s Degree in Accountancy and is a member of the Institute of Certified Public
Accountants, Singapore.

Mr Simon Gong Shikang, a Canadian national, joined our Company in May 1996 and is currently our
Company’s Assistant Chief Executive. Prior to joining our Company, Mr Gong was a Project Manager/
Regional Manager for Offshore Systems Ltd, a Canadian public company. Mr Gong has a Master’s
Degree in Computer Science and has more than 10 years of project and product development
experience in Canadian IT and defence industries. Today, Mr. Gong assists the Chief Executive in our
Company’s daily business and operation.

Ms Grace Goh Bee Kheng joined our Company as General Manager (Human Resources &
Administration) in January 2000. Ms Goh’s present role includes the strategic planning and control of
human resources and office administration. Prior to joining our Company, Ms Goh worked as the
Business Process Auditor of the Phillips Petroleum Company (Houston), a Consultant (Hong Kong) in
charge of investment evaluations and the Regional Financial Controller of Smurfit Toyo Holdings Pte Ltd
(Singapore), the Finance Controller of International Beverages Corporation Pte Ltd (Shanghai). She has
a Bachelor’s Degree in Accountancy and Master’s Degree in Business Administration. She is also a
certified Internal Auditor, a member of the Institute of Internal Auditors, Houston and a member of the
Institute of Certified Public Accountants, Singapore.

Mr Peter Nwee Kok Thai is our Company’s General Manager (Intelligent Transport Systems). Mr Nwee
supervised the PTTIS Project and is currently working on the SmartFleet/ Automatic Vehicle
Management System with his team. Prior to joining our Company in November 1998, Mr Nwee worked
as a Research and Development Manager at Radac Pte Ltd for seven years. He has a Bachelor’s
Degree in Engineering and a Postgraduate Diploma in Telecommunications Software.

Mr David Moh Sail Cheng is the General Manager (Advanced Technologies) of our Company. Mr Moh
is responsible for the management and supervision of all projects under the purview of the Computer
Vision Division. Prior to joining the Group in December 1999, Mr Moh managed and led the Advanced
Technology Centre at Systems & Computer Organisation. He has a Bachelor’s Degree in Computer
Science and is a certified IT project manager under the National IT Skills Certification Programme.

Mr Lam Ah Wah is the General Manager (Business Development/Projects) in charge of our Group’s
business development. Mr Lam joined our Group in March 1997. He is mainly responsible for the
tendering of multi-million dollar public projects. He has contributed to the business development of
SmartCare TM, Vehicle Entry Permit System/ Toll System and online COE open bidding system. Before
Mr Lam joined the Group, he held various staff and operational appointments during his 18 years of
service in the Republic of Singapore Navy, including the position of Commanding Officer of a navy ship.
He has a Master of Science degree in Systems, Control and Information Technology.

Mr Ong Soo Chin is the General Manager (Application Service Provider) of our Company. Before joining
the Group in August 1999, Mr Ong was an MIS Manager at NEC Singapore Pte Ltd, and a Senior Project
Manager at Eutech Cybernetics Pte Ltd. Mr Ong also provided technical and consultancy services
through the Company, TeleQA Pte Ltd of which he was previously a director. He has two Bachelor’s
degrees in Physics, and Information & Computer Science.




                                                  78
Mr Su Li Shee is the Director of e-Business in our Company. He is heading the SuperAuc TM team and
is responsible for the business aspects of the online COE open bidding system and other online dynamic
pricing businesses. Before joining our Company in November 1999, Mr Su was the General Manager of
SuRebon International and the Regional MIS Manager at Informix Asia-Pacific. Mr Su held concurrent
portfolios at Societe Internationale de Telecommunications Aeronqutiques (‘‘SITA’’) as their Regional IT
Manager and Regional Security Manager, and also at Citibank N.A where he was the Quality Assurance
Director and Service Director. Mr Su has also been Deputy Director and Information Systems Manager
at the National Computer Board, with portfolios for the Economic Development Board, the Auditor-
General’s Office and the National Computer Board Headquarters. Mr. Su is a Colombo Plan Scholar and
holds a Bachelor’s Degree in Civil Engineering.

Ms Ling Su Yuen is the Chief Information Officer responsible for the overall direction of the Internet and
e-business strategy for our Company. She is in charge of technology direction and business
collaboration for our Company’s growth in the Internet arena. Prior to joining our Company in March
2000, Ms Ling was the Assistant Director of Electronic Commerce at IDA. In this capacity, she was
responsible for national e-commerce strategies. She coordinated the e-commerce efforts of multiple
government agencies and was the main author of the e-Commerce Masterplan (1998). Ms Ling has
received an Individual Excellence Award from NCB for her contribution to the Singapore ONE Project. Ms
Ling is a NCB Scholar and holds a Master of Science degree in Computer Science.

Major (NS) Koh Boon Check is the General Manager (Corporate Development) in our Company. Prior
to joining the Group in March 2000, Major (NS) Koh was running his own business in creative design
services. Major (NS) Koh has held various management, marketing and project management positions
after serving in the Singapore Armed Forces for over 18 years. He received an SAF Overseas Training
Award Scholarship to the Royal Military Academy, Sandhurst, UK in 1979.

Mr Koh Chee Kiong is the Chief Operating Officer responsible for the Company’s operations of our
Company. Prior to joining our Company in April 2000, Mr Koh was the General Manager in the
Supervisory Control & Data Acquisition Systems Department at Power Automation Pte Ltd. Mr Koh had
previously worked as the Managing Director of Straessle Singapore Pte Ltd, a Senior Manager of Landis
& Gyr (SEA) Pte Ltd, and as an Engineer with the Public Utilities Board. Mr Koh holds a Bachelor’s
Degree in Electrical Engineering.

Mr Alex Tan Kia Hwee is the Director of e-commerce in our Company. Prior to joining our Company in
April 2000, Mr Tan was the Vice President of the CitiGroup Global Technology Infrastructure,
Asia-Pacific. He was in charge of the LAN/WAN/voice-based technology infrastructure of the CitiGroup
Asia Pacific Trade Processing Centre in addition to regional LAN implementation responsibilities. Mr Tan
had previously worked as the General Manager of Group IT & Business Process of Cycle & Carriage
Limited. Mr Tan has been involved in formulating a nation-wide IT Masterplan for emergency-related
projects including disaster recovery planning, security control and project management for NCB. Mr Tan
holds a Bachelor’s Degree in Business Administration (with distinction) and is a member of the Chartered
British Computer Society, UK.




                                                   79
The list of present and past directorships of each Executive Officer for the last five years is set out
below:−

Name                                        Present Directorships                                  Past Directorships

Mr Liew Tet Min                             Nil                                                    Nil

Mr Simon Gong Shikang                       Nil                                                    Nil

Ms Grace Goh Bee Kheng                      Nil                                                    Nil

Mr Peter Nwee Kok Thai                      Nil                                                    Nil

Mr David Moh Sail Cheng                     Nil                                                    Nil

Mr Lam Ah Wah                               Nil                                                    Nil

Mr Ong Soo Chin                             Nil                                                    TeleQA Pte Ltd

Mr Su Li Shee                               N.Thony Quann Pte Ltd                                  Nil

Ms Ling Su Yuen                             Nil                                                    Nil

Major Koh Boon Check                        Sen Asia Pte Ltd                                       Micron Hydraulics Asia Pte Ltd
                                            Marsh Design International Pte Ltd                     Kennedy-Ayeyarwady (Singapore)
                                                                                                   Pte Ltd

Mr Koh Chee Kiong                           Straessle Singapore Pte Ltd                            Nil

Mr Alex Tan Kia Hwee                        Nil                                                    Nil


Our management organisation chart is as follows:−


                                                               David Chew K.M.
                                                                   Chairman
                                                                      and
                                                                Chief Executive



     Leong Sook Ching                                                            Simon Gong                   Kennedy Chew
   Deputy Chief Executive                                                  Assistant Chief Executive       Deputy Chief Executive
                                                                                                                    and
                                                                                                          Chief Technology Officer


                                                                                   Koh Chee                   Ling Su Yuen
                                                                                      Kiong                        Chief
                                                                                       Chief                   Information
                                                                                   Operations                  Officer (CIO)
                                                                                  Officer (COO)




 Grace Goh      Liew Tet Min   Su Li Shee           Alex Tan    Ong Soo Chin       David Moh           Peter Nwee       Koh Boon     Lam Ah Wah
 GM - HR/       GM - Finance    Director            Director        GM -              GM -                 GM -           Check         GM -
   Admin                       e-business         e-commerce     Application        Advanced            Intelligent       GM -         Business
                                                                   Service        Technologies          Transport       Corporate    Development/
                                                                  Provider                               System        Development     Projects




                                                                     80
COMMITTEES OF THE BOARD OF DIRECTORS
Audit Committee
The Audit Committee comprises Mdm Leong Sook Ching, Mr Tjio Kay Loen and Mr Seah Chin Yew with
Mr Tjio Kay Loen as the Chairman of the Audit Committee. The Audit Committee will meet periodically
to discuss and review the following:−

(a)   The audit plan, the system of internal accounting controls and the audit report in conjunction with
      the external auditors;

(b)   The assistance given by our Company’s officers to the external auditors;

(c)   The accounts of our Company and the consolidated accounts of the Group;

(d)   The integrity of any financial information presented to our shareholders;

(e)   Interested person transactions, if any; and

(f)   Our administrative, operating and internal accounting controls and procedures.

Our 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 law,
rule or regulation which has or is likely to have material impact on our Group’s operating results and/or
financial position.


Stratech Systems Limited Share Option Scheme 2000 (‘‘Stratech ESOS’’) Committee
Our Stratech ESOS Committee who will implement and administer the Stratech ESOS comprises
Dr David Chew Khien Meow, Mdm Leong Sook Ching and Mr Tjio Kay Loen. The Chairman of the
Stratech ESOS Committee is Dr David Chew Khien Meow.

Staff
We believe that our people make the difference. As at 30 April 2000, we have 110 full-time employees,
of whom 90 are engineers. Nineteen are involved in project management and implementation.
Seventy-one form our R&D team. Apart from our 90 engineers, 20 are involved in management, finance
and administration. About 65% to 70% of our staff has served less than 1 year as a result of our staff
strength almost doubling in the last 12 months.

The relationship between management and staff are good and there has not been any industrial disputes
between our Company or our subsidiaries and our employees in the past. None of our employees are
members of any union.


SERVICE AGREEMENTS
On 21 July 2000, our Company entered into separate service agreements (each a ‘‘Service Agreement’’
and collectively, the ‘‘Service Agreements’’) with Dr David Chew Khien Meow, Dr Kennedy Chew Khien
Mien and Mdm Leong Sook Ching (each an ‘‘Appointee’’ and collectively, the ‘‘Appointees’’) pursuant to
which they were appointed Chairman and Chief Executive, Deputy Chief Executive and Chief
Technology Officer and Deputy Chief Executive in charge of Legal/Corporate Affairs respectively. Each
of the Service Agreements takes effect from 1 January 2000 and will continue for a period of five years
which is renewable for periods of two years each by the mutual consent of our Company and the relevant
Appointee.

Save for the first five-year period, either party may terminate the Service Agreement by giving not less
than six months’ notice in writing to the other or payment of an amount equal to six months salary in lieu
of notice. Each of the Service Agreements may be terminated by our Company by summary notice upon
the occurrence of certain events, such as grave misconduct or a breach of the Appointee’s obligations.




                                                      81
Under the Service Agreements, the monthly salaries of the Appointees are as follows:−
(a)   In relation to Dr David Chew Khien Meow, his basic monthly salary is $25,200;
(b)   In relation to Dr Kennedy Chew Khien Mien, his basic monthly salary is $18,000;
(c)   In relation to Mdm Leong Sook Ching, her basic monthly salary is $12,858.

Our Company will gross up the respective salaries of the Appointees in the following year in order to
cover payment of their income tax (on the basis that all other income will be disregarded) within 30 days
of the Appointees filing their income tax returns.

Pursuant to the Service Agreements, each of the Appointees will be entitled to annual increments of no
less than 16% of the amount of his salary immediately preceding such increment and a minimum bonus
equal to 3 months’ salary (exclusive of the thirteenth month Annual Wage Supplement).

Dr David Chew Khien Meow, Dr Kennedy Chew Khien Mien and Mdm Leong Sook Ching are also
entitled to participate in 1.5%, 1% and 0.5% respectively of the audited consolidated net profits before
tax and extraordinary items and after minority interest of the Group.

The salary, bonus and profit sharing shall be subject to annual review by the Board.

In FY1999, the remuneration paid to Dr David Chew, Dr Kennedy Chew and Mdm Leong Sook Ching
totalled $920,011. Had the service agreements been in place in FY1999, the estimated total
remuneration paid to the three said directors would have been $1,070,349 instead of $920,011, i.e. an
increase of $150,338. Of the increase in remuneration of $150,338, $127,028 would have been
capitalised to development expenditure, as part of the three said directors’ effort are spent on product
development activities. As such, the Group’s consolidated profit before tax for FY1999 would have been
approximately $5,889,690 instead of $5,913,000, had the service agreement been in place in FY1999.

Save as disclosed above, there are no other existing or proposed service agreements between our
Company and any of the Directors or Executive Officers.


Directors’ Remuneration
The remuneration of the Directors on an aggregate basis and in remuneration bands for FY 1998 and
FY1999 are as follows:−

(a) Aggregate Directors’ Remuneration

      $                                                                          FY1998         FY1999
      Executive Directors                                                        476,312         920,011
      Non-Executive Directors                                                     91,437         131,087

      Total                                                                      567,749       1,051,098


(b) Number of Directors in Each Remuneration Bands

                                     —————— FY1998 ——————                 —————— FY1999 ——————
                                    Executive     Non-Executive           Executive   Non-Executive
                                    Directors       Directors     Total   Directors     Directors     Total
      $500,000 and above                 —                 —       —         —             —             —
                             (1)
      $250,000 to $499,000               —                 —       —         2             —             2
      $0 to $249,999                     3                 1       4         1             1             2

      Total                              3                 1       4         3             1             4


      Note:−
      (1)   Comprises Dr David Chew and Dr Kennedy Chew.


                                                           82
STRATECH SHARE OPTION SCHEME 2000 (‘‘STRATECH ESOS 2000’’)
We have also adopted an employee share option scheme that will be implemented following the close
of the Invitation (the ‘‘Stratech ESOS 2000’’ or the ‘‘Scheme’’). The terms of the Scheme are set out in
Appendix A of this Prospectus.

We recognise the importance of acknowledging contributions made by the employees and Directors of
our Group to the success and development of our Group. The Scheme will serve to motivate employees
and Directors to optimise their performance standards, dedication and efficiency. The Scheme is also a
strong incentive to attract and recruit new employees with abilities and expertise which are crucial to the
long-term growth and profitability of our Group.

The Scheme will be administered by the Committee which will determine the terms and conditions of the
grant of options, the vesting periods which may be over and above the minimum vesting periods
prescribed by the Listing Manual of the SGX-ST. The number of Shares which may be offered to an
employee or director of the Group shall be determined by taking into account criteria such as rank,
performance, years of service and potential for future development of the particular employee or director.

Under the Scheme, the Committee has the ability to grant options to present and future employees of the
Group and Directors of the Group (whether executive or non-executive). Controlling Shareholders and
associates of Controlling Shareholders (save for Dr Kennedy Chew Khien Mien) are not entitled to
participate in the Stratech ESOS 2000.

The exercise price of the options to be granted under the Stratech ESOS 2000 shall be pegged to the
prevailing market price of the Shares on the relevant date of grant of the option. No discounts to the
market price will be granted.

Based on current factors and market conditions, it is proposed that the number of shares comprised in
options to be granted to employees of the Company in each year be determined by the Committee based
on the following formulae:−

In relation to a participant:−
No. of shares             =      A × *Total basic salary                     Divided         Relevant exercise price
comprised in options                 (less annual wage                         by
                                     supplements and bonuses)

Note:−
Where A ranges from 1⁄12 to 6⁄12 depending on seniority, position and performance of the participant.


(*The total basic salary shall be calculated by taking the relevant employee’s salaries earned from the
date of his appointment (where it relates to the first grant of options to him) or from the date of the last
grant of options to him (where it relates to the second or subsequent grant of options to him), as the case
may be, until the relevant date of grant of options).

The above formula is merely a guideline to assist the Committee in making its decisions. It will not always
be possible for the above formula to be applied in every single case or be applicable throughout the
entire duration of the Scheme as factors such as (i) the financial performance of the Company and Group
(ii) the individual performance and contribution of the employee in question (iii) the potential of the
employee and (iv) the prevailing market conditions would have to be taken into account. The Committee
will therefore have the discretion and flexibility to revise, vary or replace the formula on such terms as
they deem fit to suit different circumstances.

Participation by Dr Kennedy Chew Khien Mien
It is proposed that our Deputy Chief Executive and Chief Technology Officer, Dr Kennedy Chew Khien
Mien be granted options under the Scheme. Dr David Chew is a controlling shareholder within the
meaning of the Listing Manual and Dr Kennedy Chew, being his brother is considered his associate.




                                                              83
The objective of granting options to Dr Kennedy Chew is consistent with the overall objectives of the
Scheme which include the motivation of employees to achieve long term growth for the Group, the
maintenance of a high level of performance, the promotion of greater commitment and dedication and
the retention of a talented and experienced group of executives. Such objectives equally apply to Dr
Kennedy Chew who has substantially contributed to the growth, success and development of the Group.
The grant of options to Dr Kennedy Chew would therefore serve as both a reward for his past
contributions and dedicated services as well as an incentive for him to take a long term view of the
Group. He is the Chief Technology Officer and an integral member of the management team, responsible
for driving the growth of the Group. We are of the opinion that he should be treated on the same basis
as the other employees as he holds only 4.72% of the post-flotation share capital and we are proposing
to provide incentives to him by his participation in the Scheme.

Dr Kennedy Chew is the Deputy Chief Executive and Chief Technology Officer. He was a scholar of the
then NCB. Upon completion of his Doctorate degree from The University of Texas, at Austin, Dr Kennedy
Chew was put in charge of architecting several high profile national programs. He left the then NCB to
assist in the Group’s business in 1996 which was then in its initial stages of operations and which was
a riskier venture in comparison to his then current job.

To preserve the working capital of the Group, often, Dr Kennedy Chew’s salaries and bonuses were
delayed or only partly paid. He has only recently received the balance of some of his salaries and
bonuses payable as far back as 1998.

Dr Kennedy Chew has in the past taken on significant personal liabilities in the form of personal
guarantees and collateral in connection with the business of the Group. (Please refer to ‘‘Liquidity and
Capital Resources’’ on page 43 for more details)

Dr Kennedy Chew has been instrumental and indispensable in the development of all the products and
advanced technology solutions of the Group. Together with his brother, Dr David Chew, he invented the
Super BullsEyeTM and SmartParkTM (both of which are patent-pending). Most, if not all of the products
and services provided by the Group are the results of his and his brother’s substantial efforts. For these
reasons, we consider Dr Kennedy Chew integral to the business of the Group and his contributions,
invaluable. Accordingly, it would be a substantial loss to the Group if Dr Kennedy Chew ceases to be a
director.

For FY1999, Dr Kennedy Chew’s remuneration fell between $250,000 and $499,000. We are of the view
that Dr Kennedy Chew is not currently adequately compensated in comparison with a person of the same
experience, capabilities, qualifications and calibre (even after having taken into account his service
agreement with the Company referred to on page 81). Dr Kennedy Chew, being a first batch NCB
Scholar and first batch PhD Scholar from NCB, and having being put in-charge to architect two large
nation-wide projects, such as the Student Teacher Workbench and Integrated Criminal Justice System
early in his career upon return to NCB from his PhD, it can be expected that by now he would have been
promoted in line with his peers. Had he stayed on in the United States of America where he obtained his
PhD, as Chief Technical Officer in a multinational company, his remuneration would have far exceeded
his remuneration package now.

In view of his contributions to the Group, it is proposed that:−

Dr Kennedy Chew shall be entitled within 4 weeks from the Invitation to be granted options to subscribe
for not more than 280,205 Shares (comprising not more than 0.7% of the total number of shares
available under the Scheme) at an exercise price of $1.10 per Share. Such options shall be exercisable
within the first (1st) anniversary and tenth (10th) anniversary of the Date of Grant.

The proposed grant of the aforesaid 280,205 Shares to Dr Kennedy Chew was determined by application
of the formula referred to on page 83. As compared to other persons in the same industry, we are of the
view that Dr Kennedy Chew’s salaries and remuneration are below market rate. In order to incentivise
and adequately compensate him, we are proposing to further remunerate him by granting these options
to him. As a newly listed company, it would be important to preserve our cash flow for the first one or two
years. The proposed grant of the aforesaid options to Dr Kennedy Chew will serve to achieve this
purpose as the options will have no direct impact on the cash flow of the Company whilst at the same
time, they will serve to motivate and incentivise him to increase his contributions and optimise his
performance, thereby increasing the Group’s performance.



                                                    84
It is also the present intention that Dr Kennedy Chew shall be entitled, after the first grant referred to
above to be offered options throughout the remaining 9 years of the Scheme and the number of Shares
to be comprised in such options shall be determined based on the application of the formula referred to
on page 83, or such other formula adopted by the Committee from time to time to apply to senior
management employees of the Group provided that the total number of Shares comprised in options to
be granted to Dr Kennedy Chew throughout the entire Scheme shall not exceed 10% of the total number
of Shares available under the Scheme. Save for the first grant of options referred to above, any grants
of options in any year to the Dr Kennedy Chew will require the prior approval of independent
shareholders in separate resolutions in general meeting. For such purposes, in order to allow the
shareholders to make an informed decision, circulars would be distributed to shareholders setting out
specific justifications for the respective grants as well as the proposed number of options to be granted
and terms of the options.


Participation by Non-Executive Directors
It is desired by the Company that it should have a share option scheme which caters to non-executive
directors who, although not employed within the Group, work closely with the Company and/or its
subsidiaries and who, by reason of their relationship with the Company and/or Group are in a position
to input and contribute their experience, knowledge and expertise to the development and prosperity of
the Group. By allowing Non-Executive Directors to participate in the Scheme, the Company will be able
to provide persons who, while they are not executive directors, are nevertheless closely associated with
the business operations of the Group, an opportunity to participate in the equity of the Company. In doing
so, the Company will enhance its working relationship with the non-executive directors by instilling in
them a greater sense of involvement and belonging to the Group.

The discretion to grant options to non-executive directors of the Group will of course be exercised
carefully and judiciously. Currently, we have identified two non-executive directors who are eligible to
participate in the Scheme. They are Professor Hang Chang Chieh and Mr Tjio Kay Loen who are our
Independent Directors. The reasons and justifications for their participation are as follows:−

Professor Hang Chang Chieh
Professor Hang is Professor of Electrical Engineering in the National University of Singapore. He is
world-renowned for his research in electronics and automation, and was the first Singaporean to be
elected a Fellow of the Institute of Electrical and Electronics Engineers (‘‘IEEE’’), USA . As such, he
stands in a unique position to value add and contribute to the Group with his various contacts with R&D
groups. Professor Hang’s efforts will ensure that the Group will have access to state-of-the-art, new or
breakthrough technologies to stay in the forefront of technology. His participation in the Scheme will allow
our Company to ensure that Professor Hang will be properly incentivised and compensated for his
contributions to our Company’s success.

Mr Tjio Kay Loen
Mr Tjio has many years of financial expertise and experience having spent over 10 years as a General
Manager in commercial and investment banking in the Oversea-Chinese Banking Corporation
(‘‘OCBC’’). He will be able to provide valuable advice and contacts which he has built up on his many
years in the financial arena.

It is anticipated that the grant of options to each of the Independent Directors will comprise Shares not
exceeding 0.2% of the total Shares available under the Scheme in any one year. We are of the opinion
that such number of Shares is insignificant and will not affect their independence of judgement in their
decision-making or Audit Committee functions.


The First Grant of Options Pursuant to Stratech ESOS 2000
In addition to the grant of options to Dr Kennedy Chew referred to on page 83, options to subscribe for
approximately 1,116,000 Shares and 150,000 Shares will be granted to 110 employees (including 12
Executive Officers) and the two Independent Directors respectively at an exercise price of $1.10 per
Share. Such options shall be exercisable between the first (1st) anniversary and tenth (10th) anniversary
of the Date of Grant. The objective of the grant of options is to motivate employees and Directors to
optimise their performance, dedication and efficiency.

                                                    85
Size of the Scheme
The total number of Shares to be issued under the Stratech ESOS 2000 will not exceed 15% of the total
issued share capital of our Company from time to time. Our Company believes that a key consideration
in the remuneration package for employees within the industry is the amount of options granted to
employees. With a significant portion of our Company’s issued share capital set aside for the Scheme,
the Scheme will be perceived by employees and directors as our Company making a significant effort to
reward them for their efforts and contributions by providing greater opportunities to enable them to
participate in the equity of our Company. Through implementing the Scheme, a performance based
incentive scheme, our Company hopes to provide an opportunity to as many employees of the Group as
possible, to own shares in our Company. With an increased participation in the equity interest of our
Company, the Directors believe that the Group’s employees’ and directors’ sense of involvement in the
Group would be enhanced. Implementing the Scheme with the maximum amount of Shares allowed
under the Listing Manual will enable our Company to maintain flexibility and remain competitive in the
industry.

The 15% scheme size is intended to accommodate the potential pool of participants arising from a broad
base of eligible participants, and support the use of share options in the Group’s overall long-term
compensation strategy. Based on information available as at 30 April 2000, approximately 110
employees of the Group (including executive and non-executive directors), would potentially qualify for
selection by the Committee to participate in the Scheme. The Group anticipates that the pool of
participants under the Scheme will increase even further pursuant to its future expansion plans.

Purely for illustration purposes, based on post-Invitation share capital of the Company of 267,051,580,
options potentially over a maximum of 40,057,737 new Shares may be granted pursuant to the scheme
size of 15% of the issued ordinary share capital of the Company. Assuming that options over an equal
number of Shares were to be granted in each year for the 10-year duration of the Scheme, options over
4,005,774 Shares would be granted in each year. It should, however, be noted that that the latter may
not necessarily be representative of the actual options and/or actual number of Shares available for the
grant of options, as the absolute number of Shares available for the grant of options under the Scheme
would increase proportionally with an increase in the issued share capital base of the Company during
the life of the Scheme and the quantum of Shares over which the options may be granted in a particular
year would depend on factors such as the number of participants in the Scheme at the relevant point in
time, and differences in the number of Shares comprised in options granted to such participants based
on criteria such as their rank, past performance, years of service and potential for future development,
or their contribution to the success and development of the Group.

Potential Cost
Options for Shares in the Company have an intrinsic value attached to them. Under the Scheme, a
nominal consideration of $1.00 is payable by each participant for options granted. As a consequence, if
the option granted to the participant is for a consideration which is less than the option’s fair market
value, the difference between the fair market value and actual consideration paid by the participant will
represent a cost to the Company. Had this compensation cost been recognised in the Company’s
accounts, the cost to the Company arising from the options will be charged to the Company’s profit and
loss account at the time when the options are granted and the Company’s profits will be reduced by this
cost. The fair market value of an option depends on the length of period during which such option can
be exercised. The fair market value of an option is directly proportionate to the length of the option period,
that is, the longer the option period, the greater the fair market value of the option.

The relevant details of the grants of options to Directors of the Company, participants who are associates
of controlling shareholders and participants (not being any of the aforementioned persons) who receive
5% or more of the total number of options available under the Scheme will be disclosed in our Annual
Reports.




                                                     86
INTERESTED PERSON TRANSACTIONS
Provision of services by STPL to Stratech (Hong Kong) Limited (‘‘SHK’’)
SHK, a company incorporated in Hong Kong, is owned by Dr David Chew Khien Meow, Dr Kennedy
Chew Khien Mien and Mdm Leong Sook Ching, Executive Directors of our Company.

STPL currently provides to SHK management, business development and marketing, administrative,
accounting and financial management services. In consideration of the provision of these services, SHK
pays to STPL management fees which are computed based on the time costs and rates of the relevant
personnel of STPL who are engaged to provide such services. The Directors are of the view that such
rates commensurate with market standards.

A summary of the amounts paid by SHK to STPL over the last three years for the provision of the
aforesaid services are as follows:−

             FY1997                              FY1998                              FY1999

               —                               S$400,000                                  —

As SHK was mostly inactive in FY1999, the amount of services provided by STPL were nominal. If further
services are provided by STPL to SHK in future, we will ensure that such transactions would continue to
be on an arms’ length basis.


Shareholders’ Loans
STPL had in the past given and received loans or advances to and from our shareholders, namely, Dr
David Chew Khien Meow, Dr Kennedy Chew Khien Mien, Mdm Lucy Ng and Mdm Leong Sook Ching.
Such loans or advances were non-interest bearing. The loans and advances extended by STPL to the
shareholders were for the purposes of setting up SSPL, SLSPL and SVPL. Such companies were, prior
to the Restructuring, owned directly by Dr David Chew Khien Meow, Dr Kennedy Chew Khien Mien, Mdm
Lucy Ng and Mdm Leong Sook Ching. Pursuant to the Restructuring, these companies were folded into
the Group. The net amounts outstanding as at the date of the balance sheet for the respective financial
periods are as follows:−

($’000)                                                           FY1997         FY1998         FY1999
Net Amounts owing from shareholders                                    0          3,180            0
Net Amounts owing to shareholders                                   194               0            0

As at 8 December 1999, all loans and advances due to and owing from the shareholders have been fully
repaid. Such loans and advances are not expected to recur in the future.


Sale/Purchase of Vehicle
Dr David Chew Khien Meow, a Director of our Company, had in 1997 purchased a Mercedes Benz 200E
from STPL for a purchase consideration of $73,367. The sale consideration was based on STPL’s
original acquisition cost of $170,000 in 1991 and took into account accumulated depreciation of $96,633.

Indopura Technologies Pte Ltd
Indopura Technologies Pte Ltd (formerly known as Stratech Advanced Technologies Pte Ltd)
(‘‘Indopura’’) is a Singapore company with an issued and paid-up capital of 2 ordinary shares of par value
S$1.00 each. Dr David Chew Khien Meow and Mdm Leong Sook Ching hold 1 share each. Indopura was
initially set up in January 1997 for the purposes of a joint venture between Dr David Chew Khien Meow
and an Indonesian national, for the purposes of developing and implementing information technology
and advance technology systems for the Indonesian and Vietnamese markets.




                                                   87
In accordance with the joint venture arrangement between Dr David Chew and the Indonesian national,
Indopura was to be 50-50 owned by both parties. It was also the intention that Dr David Chew would
transfer his entire shareholding in Indopura to the Group such that it would form part of the Group, thus
the initial name of ‘‘Stratech Advanced Technologies Pte Ltd’’. STPL commenced work on developing a
software for the Indonesian credit information bureau system for Indopura and this entailed development
costs of about $1.5 million. Due to the Asian financial crisis, the joint venture failed to take-off. The
development of the software stalled and was not completed. Such amount of S$1.5 million has been fully
repaid by Indopura and Dr David Chew personally to STPL in 1998 and 1999.

Indopura is in the process of being voluntarily wound up.


SHAREHOLDERS’ MANDATE FOR FUTURE INTERESTED PERSON TRANSACTIONS
On 14 July 2000, the shareholders of our Company passed a resolution which granted a mandate (‘‘the
Shareholders’ Mandate’’) to our Company, its subsidiary and target associated companies (if any, as
defined in Chapter 9A of the SGX-ST Listing Manual (‘‘the Listing Manual’’), to enter into transactions in
the ordinary course of their respective businesses with SHK (‘‘Interested Person’’).

Chapter 9A of the Listing Manual
Under Chapter 9A of the Listing Manual, where a listed company or any of its subsidiaries or target
associated companies (other than a subsidiary or target associated company that is listed on a foreign
stock exchange) proposes to enter into a transaction with the listed company’s interested persons,
shareholders’ approval and/or an immediate announcement is required in respect of the transaction if the
value of the transaction is equal to or exceeds certain financial thresholds. In particular, shareholders’
approval is required where:−

(a)   the value of such transaction (a ‘‘Threshold 2 transaction’’) is:−
      (i)    equal to or above 3 per cent of the latest audited consolidated NTA of the listed company; and
      (ii)   below 5 per cent of the latest audit consolidated NTA of the listed company (‘‘Threshold 2’’);
      and such amount, when aggregated with the values of all other Threshold 2 transactions previously
      entered into with the same interested person in the current financial year, is equal to or exceeds
      Threshold 2; or

(b)   the value of such transaction is equal to or exceeds Threshold 2.

Based on the latest audited consolidated NTA of the Group at 31 December 1999 of $2,898,721, a
Threshold 2 transaction would be one which is entered in FY2000 with an Interested Person and the
value of which is equal to or above $86,962 and below $144,936.

Definitions under the Listing Manual
Under the Listing Manual:−

(a)   a listed company’s ‘‘target associated company’’ is an associated company of the listed company
      where the listed group, or the listed group and its interested person, is the largest shareholder and
      that associate company is not listed on a foreign stock exchange;

(b)   the term ‘‘interested person’’ is defined to mean a director, chief executive officer, or substantial
      shareholder, of the listed company or an associate of any such director, chief executive officer or
      substantial shareholder; and

(c)   the term ‘‘associate’’ is defined to include an immediate family member (that is, the spouse, child,
      step child, sibling or parent) of such director, chief executive officer or substantial shareholder, and
      any company in which the director/his immediate family, the chief executive officer/his immediate
      family or substantial shareholder/his immediate family has an aggregate interest (directly or
      indirectly) of 25 per cent or more, and where a substantial shareholder is a corporation, its
      subsidiary or holding company or fellow subsidiary or a company in which it and/or they have
      (directly or indirectly) an interest of 25 per cent or more.


                                                      88
Shareholders’ Mandate
As disclosed under ‘‘Interested Person Transactions’’ set out on pages 87 and 88 of this Prospectus, the
directors expect that our Company, its subsidiary and target associated companies (if any) would, in the
ordinary course of their respective businesses, enter into Interested Person Transactions. It is likely that
such transactions may occur with some degree of frequency and could arise at any time and from time
to time.

Due to the time-sensitive nature of commercial transactions, the Directors have sought and obtained
approval from the shareholders of our Company on 14 July 2000 for the Shareholders’ Mandate for our
Company, its subsidiary and target associated companies (if any) to enter into transactions relating to the
provision of management, business development and marketing, administrative, accounting and
financial management services to the Interested Person, provided such transactions are made at arm’s
length and on normal commercial terms.

The Shareholders’ Mandate takes effect from 14 July 2000 until the next Annual General Meeting of our
Company. Thereafter, approval from shareholders of our Company for a renewal of the Shareholders’
Mandate will be sought at each Annual General Meeting of our Company.

Transactions which do not fall within the ambit of the Shareholders’ Mandate shall be subject to the
relevant provisions of the Listing Manual.


Review of Procedures for Interested Person Transactions
The Group has implemented the following procedures to ensure that the Interested Person Transactions
are undertaken on an arms’ length basis and on normal commercial terms:−

(a)   In general, the Audit Committee will ensure that the terms of the Interested Person Transactions are
      consistent with the Group’s usual business practices and policies, which are generally no more
      favourable to the Interested Person that those extended to unrelated third parties.

(b)   In addition, the Group will monitor the Interested Person Transactions entered into by the Group by
      categorising the transactions as follows:−
      (i)    a Category 1 Interested Person Transaction is one where the value thereof is below or equal
             to $1,000,000; and
      (ii)   a Category 2 Interested Person Transaction is one where the value thereof is in excess of
             $1,000,000.

A Category 1 Interested Person Transaction need not be approved by the Audit Committee prior to the
entry but shall be reviewed on a quarterly basis by the Audit Committee. A Category 2 Interested Person
Transaction must be reviewed and approved by the Audit Committee prior to entry.

A register will be kept by the Group to record all Interested Person Transactions (and the basis, including
the quotations obtained to support such basis, on which they are entered into) which are entered into
pursuant to the Shareholder’s Mandate. The annual internal audit plan shall incorporate a review of all
Interested Person Transactions entered into pursuant to the Shareholders’ Mandate.

The Audit Committee shall review the internal audit reports to ascertain that the guidelines and
procedures established to monitor Interested Person Transactions have been complied with. In the event
that a member of the Committee is deemed to have an interest in the Interested Person, he will abstain
from reviewing that Interested Person Transaction.

Benefit to Shareholders
The grant of the Shareholders’ Mandate and its renewal (with or without modification) on an annual basis
would eliminate the need to convene separate general meetings from time to time to seek shareholders’
approval as and when potential interested person transactions with a specified class of interested
persons arise, thereby reducing substantial administrative time and expenses in convening such
meeting, without compromising the corporate objectives and adversely affecting the business
opportunities available to the Group.


                                                    89
A shareholders’ mandate is intended to facilitate transactions in the ordinary course of business of the
Group which are transacted from time to time with the Interested Person provided that they are carried
out at arm’s length and on normal commercial terms and are not prejudicial to shareholders.

Disclosure will be made in the annual report of the Company of the aggregate value of the Interested
Person Transactions conducted pursuant to the Shareholders’ Mandate during FY2000, and in the
annual reports for the subsequent financial years during which the shareholders’ mandate is in force.

Audit Committee’s review
In future, all Interested Person Transactions will be documented and submitted quarterly to the Audit
Committee for their review to ensure that such transactions are carried out at arm’s length and on normal
commercial terms. In the event that a member of the Audit Committee is deemed to have an interest in
an Interested Person Transaction, he will abstain from reviewing that particular transaction. The Audit
Committee will include the review of Interested Person Transactions as part of the standard procedures
during the Audit Committee’s examination of the adequacy of the Group’s internal controls.

If during the periodic reviews by the Audit Committee, the Audit Committee is of the view that the
established guidelines and procedures are not sufficient to ensure that the Interested Person
Transactions will be on normal commercial terms and will not be prejudicial to the interests of the
shareholders, the Company will revert to the shareholders for a fresh mandate based on new guidelines
and procedures with Interested Persons.

The Board will also ensure that all disclosure and approval requirements for Interested Person
Transactions, including those required by the prevailing legislation, the SGX-ST listing rules and the
applicable accounting standards, as the case may be, are complied with.


POTENTIAL CONFLICTS OF INTEREST
Stratech (Hong Kong) Limited (‘‘SHK’’)
SHK is a company incorporated in Hong Kong and currently owned by Dr David Chew Khien Meow, Dr
Kennedy Chew Khien Mien and Mdm Leong Sook Ching.

SHK was established in May 1996 for the purposes of undertaking a satellite communications project in
Beijing which did not materialise.

In October 1999, SHK tendered a bid for a project in Hong Kong relating to the development of an IT
based resource package comprising a CD-ROM and a website to support the teaching and learning of
Secondary One Science in Hong Kong (the ‘‘Hong Kong Project’’). The Hong Kong Project is
commissioned by the Information Systems Division of the Hong Kong Education Department. In October
1999, SHK was awarded the tender for the Hong Kong Project.

Before the award of the tender to SHK in Hong Kong, SHK was largely inactive.

It is not currently the intention of our Company to fold SHK into the Group. The reasons are that:−

(a)   The main purpose of the establishment of SHK was to undertake a satellite communications project
      in Beijing which has been aborted; and

(b)   The reason why SHK submitted the tender (and not any of the Singapore companies within the
      Group) is because it was a requirement of the Hong Kong Education Department that the tenderer
      be a Hong Kong company.

To mitigate the potential conflict of interest with the Group, Dr David Chew Khien Meow, Dr Kennedy
Chew Khien Mien and Mdm Leong Sook Ching have given their undertaking to our Company that they
will procure that SHK will not enter into any other projects or business similar or competing with the
Group’s business without first giving the right of first refusal to our Company to undertake such projects.




                                                    90
Furthermore, Dr David Chew Khien Meow, Dr Kennedy Chew Khien Mien and Mdm Leong Sook Ching
(the ‘‘Grantors’’) entered into an option agreement with us on 21 July 2000, pursuant to which the
Grantors granted to us an option, exercisable within a 10-year period from the date of the Agreement,
to purchase from the Grantors, all the shares in SHK at a price which is equal to the net tangible asset
value per share of SHK. In the event that such net tangible asset value is negative, the option price would
be a nominal value of HK$1.00. This will enable us to later purchase all the shares in SHK from the
Grantors should we feel that there is considerable potential for SHK to undertake follow-up or spin-off
projects resulting from the Hong Kong Project which would be profitable to the Group.


Cisco Technologies Sdn Bhd
Cisco Technologies Sdn Bhd (‘‘Cisco’’) was incorporated in August 1997 as a Malaysian joint venture for
the provision of remote monitoring technology to exploit our Company’s expertise in high-technology
burglar alarm and security systems. Dr David Chew holds 30% shareholding in Cisco on trust for our
Company. Both Dr David Chew and Leong Sook Ching are also directors of Cisco. Due mainly to the
regional economic crisis, the joint venture has not taken off and Cisco has remained dormant. In the
circumstances, arrangements are currently being made for Dr David Chew and Leong Sook Ching to
resign as directors of Cisco and for Dr David Chew to dispose of all his shareholding interest in Cisco.

Save as disclosed in ‘‘Interested Party Transactions’’ and ‘‘Potential Conflicts of Interest’’ above:−

(a)   No Director, substantial shareholders or Executive Officer of the Group has any interest, direct or
      indirect, in any transactions to which our Company was or is to be a party.

(b)   No Director, substantial shareholders 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.

(c)   No Director, substantial shareholders or Executive Officer of the Group has any interest, direct or
      indirect, in any enterprise or company that is our Company’s customer or supplier of goods or
      services.


PROPERTIES AND FIXED ASSETS
We currently lease the following properties:−

Description/Location               Tenure       Gross Area      Annual Rental              Lessor
1 International Business Park     3 years         526 sq m         $187,686        Jurong Town Corporation
  The Synergy #05-13            commencing
  Singapore 609917                 from
                                1 July 1999

1 International Business Park      3 years        455 sq m         $151,949        Jurong Town Corporation
  The Synergy #05-14            commencing
  Singapore 609917                  from
                                1 June 1997

1 International Business Park     3 years         455 sq m         $162,352        Jurong Town Corporation
  The Synergy #04-16            commencing
  Singapore 609917                 from
                                1 April 2000

As long as there is no breach of the terms and conditions in the tenancy agreements with Jurong Town
Corporation, we have the option to renew the tenancy agreements. Thus, there is little risk of us not being
able to renew the tenancy agreements when they expire.




                                                    91
We intend to lease the following properties, which are currently under construction:−

                                                   Total Gross
Description/Location                 Tenure           Area       Annual Rental           Lessor

(Private Lot A19532)                 10 years      5,928 sq m     $2,062,944     Jurong Town Corporation
  International Business Park      (Temporary
  The Strategy #05-00 and #06-00   Occupation
  Singapore 609917                     Permit
                                    (‘‘TOP’’) is
                                   expected in
                                       2001)

A deposit of $515,736 in the form of an insurance guarantee has been furnished by our Company to
Jurong Town Corporation. We have been granted a first right of refusal to lease a further 3,823 sq m on
the fourth storey of the building, up to 6 months from the date of TOP.




                                                    92
                         GENERAL INFORMATION ON THE GROUP


SHARE CAPITAL
Our Company was incorporated in Singapore on 19 November 1996 under the Companies Act (Chapter
50) as a private company. On 17 July 2000, our Company was renamed ‘‘Stratech Systems Limited’’ in
line with its conversion to a public company limited by shares. There is only one class of shares in our
Company. The Articles of Association of our Company relating to the voting rights of shareholders are set
out in pages 128 to 130 of this Prospectus.

As at 31 December 1999, our Company had an authorised share capital of $20,000,000 divided into
20,000,000 shares of $1.00 each and an issued and paid-up share capital of $6,700,000 divided into
6,700,000 shares of $1.00 each.

At an Extraordinary General Meeting held on 14 July 2000, the shareholders of the Company approved
the conversion of redeemable convertible bonds into such number of ordinary shares of $1.00 each in
the Company in accordance with the Investment Agreement dated 26 November 1999 entered into
between Mdm Lucy Ng @ Hwang Fei Fung, Dr David Chew Khien Meow, Dr Kennedy Chew Khien Mien
and Mdm Leong Sook Ching of the first part, the Company of the second part and PLEi and Infocomm
Investment of the third part (‘‘Bond Conversion’’). Pursuant to this, the directors resolved that 234,383
shares and 77,346 shares of $1.00 each is to be issued to PLEi and Infocomm Investment respectively
pursuant to the Bond Conversion. This calculation is based on the valuation of the Group being 20 times
the net profit after tax of the Group for the financial year ended 31 December 1999.

At an Extraordinary General Meeting held on 14 July 2000, the shareholders of our Company approved,
inter alia, the following:−

(a)   An increase in the authorised share capital of our Company from $20,000,000 divided into
      20,000,000 ordinary shares of $1.00 each to $40,000,000 divided into 40,000,000 ordinary shares
      of $1.00 each;

(b)   The capitalisation of up to $3,670,000 out of share premium by way of a bonus issue of 3,670,000
      ordinary shares of $1.00 each in the capital of our Company fully paid to the shareholders;

(c)   The conversion of our Company into a public limited company and the change of the name of our
      Company to ‘‘Stratech Systems Limited’’;

(d)   The sub-division of each of the ordinary shares of $1.00 each in the capital of our Company into
      20 ordinary shares of $0.05 each in the capital of our Company;

(e)   The adoption of the new Articles of Association of our Company;

(f)   The issue of up to 53,417,839 New Shares which, when fully paid, will rank pari passu in all respects
      with the existing shares of our Company; and

(g)   That authority be given to our Directors to issue Shares in our Company (whether by way of rights,
      bonus or otherwise) at any time and upon such terms and conditions and for such purposes and to
      such persons as our Directors may in their absolute discretion deem fit provided that the aggregate
      number of Shares to be issued does not exceed 50 per cent of the issued share capital of our
      Company for the time being, of which the aggregate number of Shares to be issued other than on
      a pro-rata basis to shareholders of our Company does not exceed 20 per cent of the issued share
      capital of our Company for the time being, and unless revoked or varied by our Company in general
      meeting, that such authority shall continue in force until the conclusion of the next annual general
      meeting of our Company or the date by which the next annual general meeting of the Company is
      required by law or by the Bye-laws of our Company to be held, whichever is the earlier;




                                                    93
(h)   That the Company, its subsidiaries and target associated companies (if any) to enter into
      transactions, in the ordinary course of business, with a certain interested person, as described
      under ‘‘Shareholder’s Mandate for Future Interested Person Transactions’’ on pages 88 to 90 of this
      Prospectus;

(i)   The ‘‘Stratech Systems Limited Share Option Scheme 2000’’ (the ‘‘Stratech ESOS’’), the rules of
      which are set out in Appendix A to this Prospectus; and

(j)   The grant of options to Dr Kennedy Chew under the Stratech ESOS, based on the rationale set out
      on page 83 of this Prospectus.

Details of the issued and paid-up share capital of our Company at and changes since 31 December
1999, being the date of the last audited accounts of our Company and the issued and paid-up capital
immediately after the Invitation, are as follows:−
                                                                                      Number of
                                                                                       shares             $
Issued and fully paid ordinary shares of $1.00 each as at 31 December 1999              6,700,000      6,700,000
Issue of new ordinary shares of $1.00 each pursuant to the Bond Conversion                 311,729       311,729
Bonus issue of ordinary shares of $1.00 each                                            3,670,000      3,670,000

                                                                                       10,681,729     10,681,729

Sub-division of ordinary shares of $1.00 each into ordinary shares of $0.05
  each                                                                                213,634,580     10,681,729
New Shares to be issued for Invitation                                                 53,417,000      2,670,850

Post-Invitation share capital                                                         267,051,580     13,352,579


The authorised share capital and the shareholders’ funds of our Company as at 31 December 1999
before and after adjustments to reflect inter alia, the increase in the authorised share capital of our
Company, the Restructuring Exercise, the Bond Conversion, the sub-division of the ordinary shares from
$1.00 each to 20 ordinary shares of $0.05 each and the issue of New Shares are set forth below. These
statements should be read in conjunction with the Accountants’ Report set out on pages 105 to 123 of
this Prospectus.
                                                                     As at 31 December 1999          As adjusted
                                                                                  $                      $
Authorised Share Capital
Ordinary shares of $1.00 each                                                 20,000,000                 —
Ordinary shares of $0.05 each                                                    —                   40,000,000

Shareholders’ Funds
Issued and fully paid shares                                                   6,700,000             13,352,579
Share premium reserves                                                           —                   52,096,121
Retained earnings                                                              4,319,000              4,319,000

Shareholders’ funds                                                           11,019,000             69,767,700




                                                       94
DESCRIPTION OF OUR ORDINARY SHARES
The discussion below provides information about our share capital, the main provisions of our Articles of
Association and the laws of Singapore relating to our shares. This description is only a summary and is
qualified by reference to Singapore law and our Articles of Association.

Ordinary Shares
Our authorised share capital is $40,000,000 consisting of 800,000,000 ordinary shares of par value
$0.05 each. We have only one class of shares, namely, our ordinary shares, which have identical rights
in all respects and rank equally with one another. Our Articles of Association provide that we may issue
shares of a different class with preferential, deferred, qualified or other special rights, privileges or
conditions as our Board of Directors may determine and may issue preference shares which are, or at
our option are, liable to be redeemed, subject to certain limitations. Our Directors may issue shares at
a premium. If shares are issued at a premium, a sum equal to the aggregate amount or value of the
premium will, subject to certain exceptions, be transferred to a share premium account.

As at the date of this Prospectus, 213,634,580 ordinary shares of par value $0.05 are issued and
paid-up. All of our ordinary shares are in registered form. We may, subject to the provisions of the
Companies Act and the rules of the SGX-ST, purchase our own ordinary shares. However, we may not,
except in circumstances permitted by the Companies Act, grant any financial assistance for the
acquisition or proposed acquisition of our own ordinary shares.


New Ordinary Shares
New ordinary shares may only be issued with the prior approval of our shareholders in a general meeting
of our shareholders. The approval, if granted, will lapse at the conclusion of the annual general meeting
following the date on which the approval was granted. Our shareholders have given us general authority
to issue any remaining approved but unissued ordinary shares prior to our next Annual General Meeting.
Subject to the foregoing, the provisions of the Companies Act and any special rights attached to any
class of shares currently issued, all new ordinary shares are under the control of our Board of Directors
who may allot and issue the same with such rights and restrictions as they may think fit. Our
shareholders are not entitled to pre-emptive rights under our Articles of Association or Singapore law.


Shareholders
Only persons who are registered in our register of shareholders and, in cases in which the person so
registered is the CDP, the persons named as the depositors in the depository register maintained by the
CDP for our ordinary shares, are recognised as our shareholders.

We will not, except as required by law, recognise any equitable, contingent, future or partial interest in
any ordinary share or other rights for any ordinary share other than the absolute right thereto of the
registered holder of the ordinary share or of the person whose name is entered in the depository register
for that ordinary share. We may close the register of shareholders for any time or times if we provide the
Registrar of Companies and Business of Singapore at least 14 days’ notice. However, the register may
not be closed for more than 30 days in aggregate in any calendar year.

Transfer of Ordinary Shares
Save as disclosed under ‘‘Moratorium’’ set out on page 101, there is no restriction on the transfer of our
fully paid ordinary shares except where required by law. Our Board of Directors may only decline to
register any transfer of ordinary shares which are not fully paid shares or ordinary shares on which we
have a lien. Our ordinary shares may be transferred by a duly signed instrument of transfer in any form
acceptable to our Board of Directors. Our Board of Directors may also decline to register any instrument
of transfer unless, among other things, it has been duly stamped and is presented for registration
together with the share certificate and such other evidence of title as they may require. We will replace
lost or destroyed certificates for our ordinary shares if we are properly notified and if the applicant pays
a fee which will not exceed $1.00 and furnishes any evidence and indemnity that our Board of Directors
may require.



                                                    95
General Meetings of Shareholders
We are required to hold an Annual General Meeting every year. Our Board of Directors may convene an
extraordinary general meeting whenever it thinks fit and must do so if shareholders representing not less
than 10% of the total voting rights of all shareholders request in writing that such a meeting be held. In
addition, two or more shareholders holding not less than 10% of our issued share capital may call a
meeting. Unless otherwise required by Singapore law or by our Articles of Association, voting at general
meetings is by ordinary resolution, requiring an affirmative vote of a simple majority of the votes cast at
that meeting. An ordinary resolution suffices, for example, for the appointment of Directors. A special
resolution, requiring the affirmative vote of at least 75% of the votes cast at the meeting, is necessary for
certain matters under Singapore law, including the voluntary winding up of our company, amendments
to our Memorandum and Articles of Association, a change of our corporate name and a reduction in our
share capital, share premium account or capital redemption reserve fund. We must give at least 21 days’
notice in writing for every general meeting convened for the purpose of passing a special resolution.
Ordinary resolutions generally require at least 14 days’ notice in writing. The notice must be given to
every shareholder who has supplied us with an address in Singapore for the giving of notices and must
set forth the place, the day and the hour of the meeting and, in the case of special business, the general
nature of that business.

Voting Rights
A shareholder is entitle to attend, speak and vote at any general meeting, in person or by proxy. A proxy
need not be a shareholder. A person who holds ordinary shares through the CDP book-entry clearance
system will only be entitled to vote at a general meeting as a shareholder if his name appears on the
depository register maintained by CDP 48 hours before the general meeting.

Except as otherwise provided in our Articles of Association, two or more shareholders must be present
in person or by proxy to constitute a quorum at any general meeting. Under our Articles of Association,
on a show of hands, every shareholder present in person and each proxy shall have one vote and, on
a poll, every shareholder present in person or by proxy shall have one vote for each ordinary share held.
A poll may be demanded in certain circumstances, including by the chairman of the meeting or by any
shareholder present in person or by proxy and representing not less than 10% of the total voting rights
of all shareholders having the right to attend and vote at the meeting or by any two shareholders present
in person or by proxy and entitled to vote.


Dividends
We may, by ordinary resolution, declare dividends at a general meeting, but we may not pay dividends
in excess of the amount recommended by our Board of Directors. Any dividend we pay must be paid out
of our profits or pursuant to Section 69 of the Companies Act. Our Board of Directors may also declare
an interim dividend. All dividends are paid pro rata among the shareholders in proportion to the amount
paid upon each shareholder’s ordinary shares, unless the rights attaching to an issue of any ordinary
share provides otherwise. Unless otherwise directed, dividends are paid by cheque or warrant sent
through the post to each shareholder at his registered address. Notwithstanding the foregoing, our
payment to the CDP of any dividend payable to a shareholder whose name is entered in the depository
register shall, to the extent of payment made to the CDP, discharge us from any liability to that
shareholder in respect of that payment.


Bonus and Rights Issue
Our Board of Directors may, with the approval of our shareholders at a general meeting, capitalise any
reserves or profits (including profit or monies carried and standing to any reserve or to the share premium
account) and distribute the same as bonus shares credited as paid-up to our shareholders in proportion
to their shareholdings. Our Board of Directors may also issue rights to take up additional ordinary shares
to shareholders in proportion to their shareholdings. Such rights are subject to any conditions attached
to such issue.




                                                     96
Takeovers
The Companies Act and the Singapore Code on Takeovers and Mergers regulate the acquisition of
ordinary shares of public companies and contain certain provisions that may delay, deter or prevent a
future takeover or change in control of out Company. Any person acquiring an interest, either acting
singly or together with other parties acting in concert with him, in 25% or more of our voting shares must
extend a takeover offer for the remaining voting shares in accordance with the provisions of the
Singapore Code on Takeovers and Mergers.

‘‘Parties acting in concert’’ include a company and its related and associated companies, a company and
its directors (including their relatives), a company and its pension funds, a person and any investment
company, unit trust or other fund whose investment such person manages on a discretionary basis, and
a financial adviser and its client in respect of shares held by the financial adviser and shares in the client
held by funds managed by the financial adviser on a discretionary basis. An offer for consideration other
than cash must be accompanied by a cash alternative at not less than the highest price paid by the
offeror or parties acting in concert with the offeror within the preceding 12 months. A mandatory takeover
offer is also required to be made if a person holding, either singly or together with parties acting in concert
with him, between 25% and 50% of the voting shares acquires additional voting shares representing
more than 3% of the voting shares in any 12-month period.

Liquidation or Other Return of Capital
If our Company is liquidated or in the event of any other return of capital, holders of our ordinary shares
will be entitled to participate in any surplus assets in proportion to their shareholdings, subject to any
special rights attaching to any other class of shares then existing.


Indemnity
As permitted by Singapore law, our Articles of Association provide that, subject to the Companies Act, we
will indemnify our Board of Directors and officers against any liability incurred in defending any
proceedings, whether civil or criminal, which relate to anything done or omitted to have been done as an
officer, director or employee. We may not indemnify directors and officers against any liability which by
law would otherwise attach to them in respect of any negligence, default, breach of duty or breach of trust
of which they may be guilty in relation to our Company.


Limitations on Rights to Hold or Vote Ordinary Shares
Except as described in ‘‘Voting Rights’’ and ‘‘Takeovers’’ above, there are no limitations imposed by
Singapore law or by our Articles of Association on the rights of non-resident shareholders to hold or vote
our ordinary shares.


Minority Rights
The rights of minority shareholders of Singapore-incorporated companies are protected under Section
216 of the Companies Act, which gives the Singapore courts a general power to make any order, upon
application by any shareholder, as they think fit to remedy any of the following situations:−
‰   our affairs are being conducted or the powers of our Board of Directors are being exercised in a
    manner oppressive to, or in disregard of the interests of, one or more of our shareholders; or
‰   we take an action, or threaten to take an action, or our shareholders pass a resolution, or threaten
    to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to, one or more
    of our shareholders, including the applicant.

    Singapore courts have wide discretion as to the reliefs they may grant and those reliefs are in no way
    limited to those listed in the Companies Act itself.




                                                      97
Without prejudice to the foregoing, Singapore courts may:−
‰     direct or prohibit any act or cancel or vary any transaction or resolution;
‰     regulate our affairs in the future;
‰     authorise civil proceedings to be brought in the name of, or on behalf of, our Company by a person
      or persons and on such terms as the court may direct;
‰     provide for the purchase of a minority shareholder’s shares by our other shareholders or by our
      Company and, in the case of a purchase of shares by us, a corresponding reduction of our share
      capital;
‰     provide that our memorandum and Articles of Association be amended; or
‰     provide that our Company be wound up.


RESTRUCTURING EXERCISE
To streamline and rationalise the Group structure and shareholding structure, the Restructuring Exercise
was carried out. A diagram showing the corporate structure of the Group after the Restructuring and the
Invitation is set out below. Pursuant to the Restructuring, the following transactions were effected:−

(a)    On 22 June 1999 pursuant to a Share Swap Agreement dated 22 June 1999, our Company
       acquired the entire issued and paid-up share capital of STPL comprising a total of 2,800,000
       ordinary shares of $1.00 each from Dr David Chew Khien Meow, Dr Kennedy Chew Khien Mien,
       Mdm Leong Sook Ching and Mdm Lucy Ng @ Hwang Fei Fung (collectively, the ‘‘Restructuring
       Vendors’’) for a total purchase consideration of $4,200,000. The consideration for the acquisition
       was arrived at based on STPL’s audited net asset value as at 31 December 1998 and was satisfied
       by the issuance of a total of 4,200,000 ordinary shares of $1.00 each in our Company to the
       Restructuring Vendors;

(b)    On 22 June 1999 pursuant to a Share Swap Agreement dated 22 June 1999, our Company
       acquired the entire issued and paid-up share capital of SLSPL comprising a total of 500,000
       ordinary shares of $1.00 each from the Restructuring Vendors for a total purchase consideration of
       $500,000. The consideration for the acquisition was arrived at based on SLSPL’s audited net asset
       value as at 31 December 1998 and was satisfied by the issuance of a total of 500,000 ordinary
       shares of $1.00 each in our Company to the Restructuring Vendors;

(c)    On 21 December 1999 pursuant to a Sale and Purchase Agreement dated 21 December 1999, our
       Company acquired the entire issued and paid-up share capital of SVPL comprising a total of 2
       ordinary shares of $1.00 each from Dr David Chew Khien Meow and Mdm Leong Sook Ching for
       a total purchase consideration of $2; and

(d)    On 16 May 2000, we acquired the entire issued and paid-up share capital of SAPL (formerly known
       as Starstyle Enterprises Pty Ltd) comprising 100,000 ordinary shares of A$1.00 each from Dr David
       Chew Khien Meow and Dr Kennedy Chew Khien Mien for a cash consideration of $5,000. Dr David
       Chew and Dr Kennedy Chew had in April 2000 acquired the said shares from Koh Boon Check and
       Redcliffe Pty Ltd for the same consideration with the intention that they would subsequently be
       transferred to SSPL.




                                                      98
OUR GROUP STRUCTURE
The current Group structure is shown below:–


                                                                Stratech Systems
                                                                     Limited

                                                                  (Incorporated in
                                                                     Singapore)



                 100%                                      100%                          100%                         100%


 Strategic Technologies                            Stratech Vision           Stratech Life Sciences          Stratech Australia
         Pte Ltd                                       Pte Ltd                       Pte Ltd                      Pty Ltd

        (Incorporated in                           (Incorporated in             (Incorporated in             (Incorporated in
           Singapore)                                 Singapore)                   Singapore)                    Australia)



SHAREHOLDERS
The shareholdings in our Company before and after the Invitation, after taking into account of the
Restructuring Exercise, Bond Conversion, Bonus Issue and Stock Split are set out below:−

                                                                             — Before Invitation —         — After Invitation —
Directors                                                                    No. of Shares         %      No. of Shares         %
                                         (1)
Dr David Chew Khien Meow                                                      132,617,700        62.08    132,617,700        49.66
Dr Kennedy Chew Khien Mien(1)                                                  12,609,100          5.90     12,609,100          4.72
                         (1) (2)
Leong Sook Ching                                                               20,413,680          9.56     13,737,680          5.14
                                         (1) (2)
Lucy Ng @ Hwang Fei Fung                                                       10,191,320          4.77      3,514,320          1.32
                         (3)
Liow Voon Kheong                                                                     —             —           —                —
Professor Hang Chang Chieh(4)                                                        —             —           —                —
                 (4)
Tjio Kay Loen                                                                        —             —           —                —
                   (4)
Seah Chin Yew                                                                        —             —           —                —

Other Shareholders
PLEi(5) (6)                                                                     7,141,220          3.34      7,141,220          2.67
                               (5) (7)
Infocomm Investment                                                             2,356,600          1.10      2,356,600          0.88
Citicorp Investment Bank (Singapore) Limited(8)                                10,278,040          4.81     10,278,040          3.85
         (9)
Others                                                                         18,026,920          8.44     18,026,920          6.76
         (10)
Public                                                                               —             —        66,770,000       25.00

Total                                                                         213,634,580       100.00    267,051,580      100.00




                                                                        99
Note:−
 (1)   Dr David Chew Khien Meow and Mdm Leong Sook Ching are spouses. Mdm Lucy Ng @ Hwang Fei Fung is the mother of
       both Dr David Chew Khien Meow and Dr Kennedy Chew Khien Mien. Dr David Chew Khien Meow and Dr Kennedy Chew
       Khien Mien are brothers.
 (2)   Mdm Leong Sook Ching and Mdm Lucy Ng @ Hwang Fei Fung, are selling 6,676,000 shares (32.7% of her existing
       shareholding) and 6,677,000 Shares (65.6% of her existing shareholding) respectively pursuant to the Invitation. Both are
       shareholders and Directors of our Company and currently own 20,413,680 shares and 10,191,320 shares respectively,
       representing 9.56% and 4.77% of our Company’s pre-flotation share capital. After the sales, their shareholdings will be
       reduced to 5.14% and 1.32% respectively of our Company’s post-flotation share capital.
 (3)   Mr Liow Voon Kheong is a director of PLEi and nominated by PLEi to sit on the board of our Company.
 (4)   The Independent Directors, Mr Tjio Kay Loen, Professor Hang Chang Chieh and Mr Seah Chin Yew will each be allotted
       50,000 Reserved Shares, representing in aggregate 0.056% of the post-flotation share capital of our Company. Should they
       accept the Reserved Shares, they may hold, dispose of or transfer all or part of their respective shareholding in our Company
       after the Shares are listed on the SGX.ST.
 (5)   Pursuant to the Investment Agreement dated 26 November 1999 entered into Mdm Lucy Ng @ Hwang Fei Fung, Dr David
       Chew Khien Meow, Dr Kennedy Chew Khien Mien and Mdm Leong Sook Ching of the first part, the Company of the second
       part and PLEi and Infocomm Investment of the third part supplemented by a Supplemental Agreement dated 28 March 2000,
       PLEi and Infocomm Investment subscribed for redeemable convertible bonds in our Company in the principal amount of
       $3,990,000 (the ‘‘Bonds’’). In accordance with the Investment Agreement, the Bonds are convertible into ordinary shares of
       par value $1.00 each in our Company based on an agreed formula. PLEi and Infocomm Investment had on 14 July 2000
       exercised their rights to convert the Bonds into 234,383 and 77,346 ordinary shares of par value $1.00 each in our Company
       respectively. These shares were subsequently subdivided into shares of $0.05 each.
 (6)   PLEi is a subsidiary of EDB Investment Pte Ltd, the equity investment arm of the EDB.
 (7)   Infocomm Investment is the investment arm for IDA.
 (8)   Pursuant to an Option Agreement dated 7 December 1999, Dr David Chew Khien Meow granted an option to Citibank N.A.
       to purchase a certain number of shares in the capital of the Company from him. This Option was subsequently assigned to
       Citicorp Investment Bank (Singapore) Limited. Upon the exercise of the said option, 513,902 ordinary shares of $1.00 par
       value each, have been transferred by Dr David Chew Khien Meow to Citicorp Investment Bank (Singapore) Limited. These
       shares were subsequently subdivided into shares of $0.05 each.
 (9)   Others include 14 individuals, Japan Asia Nominees Ltd (on behalf of itself and on trust for GCM International Ltd), NIF Asian
       Pre-IPO Ltd, and Hikaritsushin Partners L.P.
(10)   Pursuant to this Invitation, 2,570,000 Shares, 100,000 Shares and 10,680,000 Shares will be allocated to K1 Investments
       (HK) Limited, Keppel TatLee Finance Limited and Apsilon Ventures Pte Ltd (members of the Keppel Corporation group)
       respectively. Should they fully subscribe for the allocated placement shares, in conjunction with the Invitation, their total
       shareholdings will represent approximately 5% of our Company’s enlarged share capital.


Significant change in percentage ownership held by major shareholders during the past 3 years
In November 1999, Dr Kennedy Chew Khien Mien transferred an aggregate of 173,124 shares in the
Company to Sun Islands Investments Pte Ltd, representing approximately 2.58% of the then issued and
paid-up capital of the Company.

In December 1999, Mdm Ng Lucy @ Hwang Fei Fung transferred an aggregate of 86,416 shares in the
Company to Sun Islands Investments Pte Ltd, representing approximately 1.29% of the then issued and
paid-up capital of the Company.

In March 2000:−

(i)    Dr Kennedy Chew Khien Mien transferred an aggregate of 83,031 shares in the Company to NIF
       Asian Pre-IPO Ltd, representing approximately 1.24% of the then issued and paid-up capital of the
       Company; and

(ii)   Mdm Ng Lucy @ Hwang Fei Fung transferred an aggregate of 249,093 shares to Hikaritsushin
       Partners, L.P., GCM International Limited and Japan Asia Nominees Limited, representing
       approximately 3.72% of the then issued and paid-up capital of the Company.

Before the aforesaid transfers, Dr Kennedy Chew Khien Mien and Mdm Lucy Ng @ Hwang Fei Fung
each held 10% of the issued and paid-up capital of the Company respectively.

Immediately after the aforesaid transfers, and prior to the bonus issue, the issue of shares to PLEi and
Infocomm Investment, and the Invitation, the percentage ownership of Dr Kennedy Chew Khien Mien
and Mdm Lucy Ng @ Hwang Fei Fung were reduced to approximately 6.18% and 4.99% respectively.



                                                                100
MORATORIUM
To demonstrate their commitment to the Group, Dr David Chew Khien Meow, Dr Kennedy Chew Khien
Mien, Mdm Leong Sook Ching and Mdm Lucy Ng who collectively own 162,478,800 shares representing
60.84% of our Company’s share capital after the Invitation, have given an undertaking not to realise or
transfer any part of their respective interests in our Company for a period of 6 months commencing from
the date of admission of our Company to the Official List of SGX-ST (‘‘Date of Listing’’) and for a period
of 6 months thereafter, not to reduce their respective interest in our Company to below 50% of their
original shareholdings as at the Date of Listing.

In addition, K1 Investments (HK) Limited, Keppel TatLee Finance Limited and Apsilon Ventures Pte Ltd
(members of the Keppel Corporation group) will subscribe, pursuant to the Placement, for an aggregate
of 13,350,000 shares, representing 5% of our Company’s post-Invitation share capital. They have given
an undertaking not to realise or transfer any part of their respective interests in our Company for a period
of 6 months commencing from the Date of Listing.




                                                    101
                                       DIRECTORS’ REPORT


24 July 2000

The Shareholders
Stratech Systems Limited
1 International Business Park
#05-14 The Synergy
Singapore 609917

Dear Sirs


This report has been prepared for inclusion in the Prospectus of 24 July 2000 (‘‘Company’’) to be dated
24 July 2000 in connection with the Invitation in respect of 66,770,000 ordinary shares of $0.05 each in
the capital of our Company (‘‘Shares’’).

On behalf of the Directors of our Company, I report that, having made due inquiry in relation to the interval
between 31 December 1999, the date to which the last audited accounts of our Company were made up,
and the date hereof:−

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

(b)   no circumstances have, in the opinion of the Directors, arisen since the last Annual General Meeting
      of our Company which would adversely affect the trading or the value of the assets of our Company
      or our subsidiaries;

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

(d)   save as disclosed on page 43 of this Prospectus, no contingent liabilities have arisen by reason of
      any guarantees given by our Company or our subsidiaries; and

(e)   save as disclosed on pages 40, 93 and 94, 105 to 107 and 122 of this Prospectus, there have been
      no changes in the published reserves or any unusual factors affecting the profit of our Company and
      our subsidiaries since the last audited accounts.




Yours faithfully
for and on behalf of the
Board of Directors




David Chew Khien Meow
Chairman
Stratech Systems Limited




                                                    102
     LETTER FROM THE AUDITORS AND REPORTING ACCOUNTANTS
IN RELATION TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
             FOR THE FOUR MONTHS ENDED 30 APRIL 2000


24 July 2000

The Board of Directors
Stratech Systems Limited
1 International Business Park
#05-14 The Synergy
Singapore 609917

Dear Sirs,


This letter has been prepared for inclusion in the prospectus to be dated 24 July 2000 (the ‘‘Prospectus’’)
in connection with the invitation in respect of 66,770,000 ordinary shares of S$0.05 each (‘‘Shares’’) in
the capital of Stratech Systems Limited (the ‘‘Company’’) comprising 53,417,000 New Shares and
13,353,000 Vendor Shares.

We have made a review of the unaudited consolidated profit and loss statement and balance sheet of
the Company and its subsidiaries (the ‘‘Group’’) for the 4 months ended 30 April 2000 included in the
Prospectus. All information included in the unaudited consolidated profit and loss account and balance
sheet of the Group is the representation of the management of the Company.

Our review consisted principally of obtaining an understanding of the system for the preparation of
financial information, enquiries of management of the Company and those personnel responsible for
financial and accounting matters and analytical procedures applied to financial data. It is substantially
less in scope than an examination in accordance with the Companies Act, Cap.50 or in accordance with
Singapore Standards on Auditing, the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an opinion.

Our review was designed to enable us to confirm that the unaudited consolidated profit and loss account
and balance sheet of the Group are based upon the unaudited management accounts of the Group and
are presented in accordance with accounting policies consistent with those appearing in the Accountants’
Report set out on pages 105 to 123 of the Prospectus.

Based on our review, we are not aware of any material modifications that should be made to the financial
information set out on page 104 of the Prospectus for it to be in conformity with the accounting policies
adopted by the Group.




Yours faithfully,




ERNST & YOUNG
Certified Public Accountants
Partner — Tan Chian Khong
Singapore




                                                   103
                      UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                       FOR THE FINANCIAL PERIOD ENDED 30 APRIL 2000


The Directors confirm that the unaudited consolidated profit and loss account and balance sheet of the
Group for the financial period ended 30 April 2000 set out below have been prepared on the basis of
accounting policies consistent with those appearing in the Accountants’ Report as set out on pages 105
to 123 of this Prospectus.

Results of Operations
                                                                                             Group
                                                                                              $’000
Turnover                                                                                       852

Loss before taxation                                                                         (1,612)
Taxation                                                                                       362

Loss after taxation and attributable to the shareholders                                     (1,250)

Financial Position
Fixed assets                                                                                  3,405
Development expenditure                                                                       9,981
Deferred expenditure                                                                           108
Patents and trademarks                                                                          35
Current assets                                                                                7,271
Current liabilities                                                                          (8,817)
Net current liabilities                                                                      (1,546)
Hire purchase creditors                                                                      (1,404)
Deferred taxation                                                                              (810)

                                                                                              9,769

Representing:
Shareholders’ interest                                                                        9,769




                                                       104
                                     ACCOUNTANTS’ REPORT


24 July 2000

The Board of Directors
Stratech Systems Limited
1 International Business Park
#05-14 The Synergy
Singapore 609917

Dear Sirs,


A.   INTRODUCTION
     This report has been prepared for inclusion in the Prospectus of Stratech Systems Limited (the
     ‘‘Company’’) to be dated 24 July 2000 in connection with the invitation (the ‘‘Invitation’’) in respect
     of 66,770,000 ordinary shares of $0.05 each (‘‘Invitation Shares’’) in the capital of the Company.

     The Invitation Shares comprise 53,417,000 New Shares and 13,353,000 Vendor Shares and will be
     offered to the public as follows:−

     (a)   15,600,000 Offer Shares at $1.10 for each Offer Share by way of public offer; and

     (b)   51,170,000 Placement Shares by way of placement, comprising:−
            (i)   3,100,000 Reserved Shares at $1.10 for each Share reserved for the employees and
                  business associates of the Group; and
           (ii)   48,070,000 Placement Shares at $1.10 for each Placement Share,

     payable in full upon application.


     (1)   The Company
           The Company was incorporated in the Republic of Singapore on 19 November 1996 as a
           private limited company under the name of Stratech Systems Pte Ltd. At the date of
           incorporation, the authorised share capital of the Company was $1,000,000 divided into
           1,000,000 ordinary shares of $1 each. 2 ordinary shares of $1 each fully paid at par for cash
           were issued to the subscriber shareholders upon incorporation.

           In 1997, the Company issued 999,998 ordinary shares of $1 each for cash at par.

           At an Extraordinary General Meeting held on 30 March 1998, the shareholders of the Company
           approved the increase of the authorised share capital of the Company from $1,000,000 divided
           into 1,000,000 ordinary shares of $1 each to $2,000,000 divided into 2,000,000 ordinary shares
           of $1 each. On the same date, 500,000 ordinary shares were issued for cash at par. On 12
           October 1998, 500,000 ordinary shares were issued for cash at par.

           At an Extraordinary General Meeting held on 13 May 1999, the shareholders of the Company
           approved the increase of the authorised share capital of the Company from $2,000,000 divided
           into 2,000,000 ordinary shares of $1 each to $10,000,000 divided into 10,000,000 ordinary
           shares of $1 each.

           In June 1999, the Company issued 4,700,000 new ordinary shares at the par value of $1 each
           in the capital of the Company pursuant to the Restructuring Exercise as mentioned below.




                                                    105
(1)   The Company (continued)
      On 17 August 1999, the authorised share capital of the Company was increased from
      $10,000,000 to $20,000,000 by the creation of an additional 10,000,000 shares of $1 each.

      At an Extraordinary General Meeting held on 23 December 1999, the shareholders of the
      Company approved the conversion of redeemable convertible bonds into 311,729 ordinary
      shares of $1 each in the Company (‘‘Bond Conversion’’).

      At an Extraordinary General Meeting held on 14 July 2000, the shareholders of the Company
      approved, inter alia, the following:−

      (a)   An increase in the authorised share capital of the Company from $20,000,000 divided into
            20,000,000 ordinary shares of $1 each to $40,000,000 divided into 40,000,000 ordinary
            shares of $1 each;

      (b)   The capitalisation of up to $3,670,000 out of share premium by way of a bonus issue of
            3,670,000 ordinary shares of $1 each in the capital of the Company fully paid to the
            shareholders;

      (c)   The conversion of the Company into a public limited company and the change of the name
            of the Company to ‘‘Stratech Systems Limited’’;

      (d)   The sub-division of each of the ordinary shares of $1 each in the capital of the Company
            into 20 ordinary shares of $0.05 each in the capital of the Company;

      (e)   The adoption of the new Articles of Association of the Company;

      (f)   The issue of up to 53,417,839 New Shares which, when fully paid, will rank pari passu in
            all respects with the existing shares of the Company;

      (g)   That authority be given to the Directors to issue Shares in the Company (whether by way
            of rights, bonus or otherwise) at any time and upon such terms and conditions and for
            such purposes and to such persons as the Directors may in their absolute discretion deem
            fit provided that the aggregate number of Shares to be issued does not exceed 50 per cent
            of the issued share capital of the Company for the time being, of which the aggregate
            number of Shares to be issued other than on a pro-rata basis to shareholders of the
            Company does not exceed 20 per cent of the issued share capital of the Company for the
            time being, and unless revoked or varied by the Company in general meeting, that such
            authority shall continue in 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 or by the Bye-laws of the Company to be held, whichever is the earlier;

      (h)   That the Company, its subsidiaries and target associated companies (if any) to enter into
            transactions, in the ordinary course of business, with a certain interested person, as
            described under ‘‘Shareholder’s Mandate for Future Interested Person Transactions’’ on
            pages 88 to 90 of this Prospectus;

      (i)   The ‘‘Stratech Share Option Scheme 2000’’ (the ‘‘Stratech ESOS’’), the rules of which are
            set out in Appendix A to this Prospectus; and

      (j)   The grant of options to Dr Kennedy Chew under the Stratech ESOS, based on rationale
            set out on page 83 of this Prospectus.




                                                106
(2)   The Restructuring Exercise
      The Group (as defined below) undertook a Restructuring Exercise in connection with the
      Invitation. The Restructuring Exercise involved the following:−

      (a)   the acquisition by the Company of the entire issued and paid-up share capital of Strategic
            Technologies Pte Ltd (‘‘STPL’’) from the existing shareholders for an aggregate
            consideration of $4,200,000 based on the audited net assets of STPL as at 31 December
            1998. The consideration was satisfied by the issue and allotment of 4,200,000 ordinary
            shares of $1 each at par in the capital of the Company.

      (b)   the acquisition by the Company of the entire issued and paid-up share capital of Stratech
            Life Sciences Pte Ltd (‘‘SLSPL’’) from the existing shareholders for an aggregate
            consideration of $500,000 based on the audited net assets of SLSPL as at 31 December
            1998. The consideration was satisfied by the issue and allotment of 500,000 ordinary
            shares of $1 each at par in the capital of the Company.

      (c)   the acquisition by the Company of the entire issued and paid-up share capital of Stratech
            Vision Pte Ltd (‘‘SVPL’’) from the existing shareholders for a consideration of $2, based on
            the audited net liabilities of SVPL as at 30 September 1999. As at 30 September 1999, the
            total liabilities of SVPL exceeded its total assets by $4,000.

            The financial information relating to this Restructuring Exercise is given below:−

                                                          Net assets/                       Percentage
            Name of companies acquired                    (liabilities)   Consideration      of equity
                                                             $’000            $’000
            Strategic Technologies Pte Ltd (‘‘STPL’’)        4,155            4,200              100
            Stratech Life Sciences Pte Ltd (‘‘SLSPL’’)         496              500              100
            Stratech Vision Pte Ltd (‘‘SVPL’’)                  (4)             —*               100

                                                                              4,700


            *Cost of investment of $2.


      Upon the completion of the Restructuring Exercise referred to above, the Company has
      wholly-owned subsidiaries (collectively known as the ‘‘Proforma Group’’) as detailed in
      paragraph (3). After the Restructuring exercise, the issued and paid-up share capital of the
      Company was $6,700,000 comprising 6,700,000 ordinary shares of $1 each.

      As at the date of this Prospectus, there is only one class of shares in the Company, being
      ordinary shares of $0.05 each. Upon the allotment of the New Shares, the resultant issued and
      paid-up share capital of the Company will be increased to $13,352,579 comprising
      267,051,580 shares.

      The principal activities of the Company are the design, development, integration,
      implementation, maintenance and project management of information technology and
      advanced technology systems.




                                                   107
(3)   The Proforma Group
      The subsidiary companies of Stratech Systems Limited as at the date of this report are as
      follows:−
                                                                                Percentage
                                    Date and country          Issued and         of equity
                                    of incorporation            paid-up           held by         Principal
      Name of company                and operation           share capital      the Group         activities

      Strategic Technologies       19 September 1989            $2,800,000           100          Design,
        Pte Ltd                    Singapore                                                      development
                                                                                                  integration,
                                                                                                  implementation,
                                                                                                  maintenance and
                                                                                                  project
                                                                                                  management of
                                                                                                  information
                                                                                                  technology and
                                                                                                  advanced
                                                                                                  technology
                                                                                                  systems.
      Stratech Life Sciences       25 February 1998               $500,000           100          Development of
        Pte Ltd                    Singapore                                                      advanced
                                                                                                  technologies for
                                                                                                  application in the
                                                                                                  medical field.
      Stratech Vision Pte Ltd      2 October 1998                        $2          100          Design,
                                   Singapore                                                      development
                                                                                                  integration,
                                                                                                  implementation,
                                                                                                  maintenance and
                                                                                                  project
                                                                                                  management of
                                                                                                  information
                                                                                                  technology and
                                                                                                  advanced
                                                                                                  technology
                                                                                                  systems.

      *Stratech (Australia)        12 April 2000                     A$100           100          Dormant
        Pty Ltd                    Australia

      *The company is dormant. The operating results and financial position of this company is not incorporated in the
       proforma statement of the Group results and proforma balance sheets of the Group because the company was
       acquired after 31 December 1999. The results and net assets of this company is not material to the Group.




                                                      108
B.   BASIS OF PRESENTATION OF FINANCIAL INFORMATION
     The objective of the proforma financial information of the Group is to show what the historical
     information might have been, had the Proforma Group as described above existed from the
     beginning of the period covered in this Report. However, the proforma financial information of the
     Proforma Group is not necessary indicative of the results of the operations or the related effects on
     the financial position that would have been attained if the Proforma Group as described above,
     actually existed earlier.

     The financial information set out in this report is expressed in Singapore dollars and shows the
     Proforma Statement of Group Results for the five years ended 31 December 1995 to 31 December
     1999, the Proforma Balance Sheets of the Group as at each of the five financial years ended 31
     December 1995 to 31 December 1999 and the Proforma Statement of Net Assets at 31 December
     1999 of the Group and the Company. The Proforma Statement of Group Results, Proforma Balance
     Sheets and Proforma Statement of Net Assets have been prepared on the assumption that the
     current Group structure as outlined above had been in existence throughout the period covered by
     the report, or since the respective dates of incorporation of the companies in the Group, if later. The
     proforma financial information is based on the audited financial statements of each company in the
     Group after making such adjustments which we considered appropriate in order to present the
     proforma financial statements on a consistent and comparable basis. Such financial information is
     presented on the basis of the accounting policies set out in Section E of this report.

     All material inter-group transactions and balances have been eliminated in the preparation of the
     Proforma Statement of Group Results, Proforma Balance Sheets of the Group and Proforma
     Statement of Net Assets.

     We have been auditors of the Company with effect from its date of incorporation on 19 November
     1996.

     We have acted as auditors of Strategic Technologies Pte Ltd with effect from the financial year
     ended 31 December 1993 and of Stratech Life Sciences Pte Ltd and Stratech Vision Pte Ltd since
     their date of incorporation.

     The auditors’ report of the Company and its subsidiary companies for the financial years ended 31
     December 1995 to 31 December 1999 were not subject to any qualification.


C.   PROFORMA STATEMENT OF THE GROUP RESULTS
     The following Proforma Statement of Group Results sets out the Group results for the financial years
     ended 31 December 1995 to 31 December 1999. This statement is based on the audited financial
     statements of the Group after making such adjustments as we considered necessary:−

                                                      —————— Year ended 31 December ——————
                                           Note        1995       1996        1997       1998        1999
                                                       $’000      $’000       $’000      $’000       $’000
     Turnover                                F1       1,316       2,429      3,016       6,040      11,443

     Profit/(loss) before taxation           F2        (794)        362      1,057       2,350       5,913
     Taxation                                F3           —         —          (14)       (490)     (1,603)

     Profit/(loss) after taxation                      (794)        362      1,043       1,860       4,310

     Profit/(loss) attributable to
       shareholders of the Company                     (794)        362      1,043       1,860       4,310




                                                    109
D.   PROFORMA BALANCE SHEETS OF THE GROUP
     The following statement of proforma balance sheets of the Group sets out the Group balance sheets
     as at the end of each of the financial years ended 31 December 1995 to 31 December 1999. This
     statement is based on the audited financial statements of the Group after making such adjustments
     as we considered necessary:−

                                                       —————— Year ended 31 December ——————
                                                        1995       1996        1997     1998      1999
                                                        $’000      $’000       $’000    $’000    $’000
     Fixed assets                                           140        244      322      324      2,860
     Development expenditure                                —          231     1,489    3,034     7,951
     Deferred expenditure                                   —          287      215      152       136
     Patents & trademarks                                   —          —        —         14        33
     Current assets
       Contract work-in-progress                             52        —        —        —          73
       Stocks                                               —           18       17       12        10
       Amounts due from related companies                   —          105      106      244       178
       Trade debtors                                        118    1,715       1,282    1,694     6,285
       Other debtors                                         35            8    181      117       698
       Amounts due from a director                          —           14       21     3,180      —
       Fixed deposits                                       —          140      146      162       159
       Cash and bank balances                               113        —        662       45      4,890
                                                            318    2,000       2,415    5,454    12,293
     Current liabilities
       Contract work-in-progress                            —          829          1    —         —
       Deferred income                                      —          —        —         30       —
       Trade creditors and accruals                         671        579      883     1,684     4,355
       Amounts due to a related company                     —           25      —        —         —
       Amounts due to a director                            621        —        104      —         —
       Amounts due to a shareholder                         —          —         90      —         —
       Hire purchase creditors                               22        —        —        —         396
       Convertible bonds                                    —          —        —        —        3,990
       Provision for taxation                               —          —        —        —         759
       Bank overdrafts, unsecured                           —           23      —         51       —
                                                       1,314       1,456       1,078    1,765     9,500
     Net current assets/(liabilities)                   (996)          544     1,337    3,689     2,793
     Non-current liabilities
     Hire purchase creditors                                —          —        —        —       (1,406)
     Deferred taxation                                      —          —         (14)    (504)   (1,348)

                                                        (856)      1,306       3,349    6,709    11,019

     Represented by:−
     Share capital and reserves                         (856)      1,306       3,349    6,709    11,019


     The movement in the share capital and reserves are as follows:−
     Balance brought forward                                (62)       (856)   1,306    3,349     6,709
     Add/(deduct):
     —    Group profit/(loss) for the year (Note C)     (794)          362     1,043    1,860     4,310
     —    Issue of shares                                   —      1,800       1,000    1,500      —

                                                        (856)      1,306       3,349    6,709    11,019




                                                      110
E.   SIGNIFICANT ACCOUNTING POLICIES
     The accounting policies which have been consistently applied in preparing the financial information
     set out in this report are as follows:−

     (a) Basis of accounting
           The accounts of the Company and of the Group, which are expressed in Singapore dollars, are
           prepared under the historical cost convention and in accordance with accounting principles
           generally accepted in Singapore.

     (b) Basis of consolidation
           The accounting year of the Company and all its subsidiary companies in the Group ends on 31
           December and the consolidated accounts incorporate the accounts of the Company and all its
           subsidiary companies.

           Subsidiary companies are those companies in which the Company holds more than 50% of the
           issued share capital and in which the Group exercises management control.

           The excess of the cost of control of a subsidiary over the fair value of the net underlying assets
           acquired is dealt with as goodwill arising on consolidation. Such goodwill is written off against
           revenue reserve in the year of acquisition.

     (c) Subsidiary companies
           Shares in subsidiary companies are stated at cost in the accounts of the Company. Provision
           is made for permanent diminution in values.

     (d) Revenue recognition
           Revenue and attributable profits on contract work-in-progress are recognised using the
           percentage-of-completion method by reference to physical progress on each contract, after
           making appropriate provision for uncertainties and estimated costs to complete including
           remedial work that may be necessary. Claims are included in revenue when the outcome can
           be reasonably ascertained and for which the amounts so recognised are based on independent
           valuation.

           Provision, in full, is made for estimated losses on incomplete contracts in the year in which such
           losses are anticipated, regardless of the stage of the completion of the contracts.

           Revenue from the sale of goods are recognised upon passage of title to the customers which
           generally coincides with their delivery and acceptance.

           Revenue from rendering of services are recognised on completion of services.

     (e) Government grants
           Government grants related to development expenditure that are capitalised are recognised and
           recorded as reductions to the development expenditure capitalised.

     (f)   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
           accounts and any gain or loss resulting from their disposal is included in the profit and loss
           account.




                                                     111
E.   SIGNIFICANT ACCOUNTING POLICIES (continued)
     (g) 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 (h) below.

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

     (h) 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:−
           Renovation                                                     —     5 years
           Office equipment                                               —     5 years
           Computers, telecommunication & robotic equipment               —     5 years
           Furniture & fittings                                           —     10 years
           Motor vehicles                                                 —     10 years

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

     (i)   Development expenditure
           Cost comprising mainly engineers’ salaries and related expenses incurred for the design,
           development and integration of information technology and advanced technology systems are
           capitalised and written off to profit and loss account on a straight line basis over 5 years
           commencing from the date of billings to the customers. The unamortised balance is written off
           to the profit and loss account when the amount is unable to generate future revenue.

     (j)   Deferred expenditure
           Deferred expenditure comprises amounts paid in consideration for the release of one of the
           directors from his previous employment, club membership entrance fees and incorporation
           expenses which are written off to profit and loss account on a straight line basis over a 5 year
           period.

     (k) Patents & trademarks
           Patents relate to professional fees incurred for the application of exclusive rights to the
           information technology and advanced technology systems developed.

           Trademarks relate to professional fees incurred for the application of exclusive rights to the
           design of the Group’s Corporate logo.

           These are stated at cost and amortised over estimated useful life of 5 years.

     (l)   Contract work-in-progress
           Contract work-in-progress comprises uncompleted contracts. It is stated at cost plus
           attributable profits less anticipated losses and progress billings. Full provision is made for
           estimated losses to completion where applicable.

           Provisions are made to cover contingency and remedial work that may be necessary.

           Costs comprise material and other directly related expenses.

                                                     112
E.   SIGNIFICANT ACCOUNTING POLICIES (continued)
     (m) Stocks
           Stocks are stated at the lower of cost and net realisable value. In arriving at net realisable
           value, due allowances are made for all obsolete, damaged and slow-moving items.

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

     (o) 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.

     (p) Cash and cash equivalents
           Cash and cash equivalents consists of cash and bank balances less bank overdrafts, but
           exclude secured bank overdrafts which are used for financing activities.


F.   NOTES TO PROFORMA STATEMENT OF GROUP RESULTS
     1.   Turnover
          Turnover of the Group represents value of goods supplied less returns, services rendered,
          certified progress billings on contract work-in-progress and commission income. It excludes
          dividends, interest income and transactions within the Group.

          Turnover can be analysed as follows:−
                                                     —————— Year ended 31 December ——————
                                                     1995        1996       1997        1998       1999
                                                     $’000      $’000       $’000      $’000       $’000
          Sales of goods                               107        168         321        841          55
          Rendering of services                       —           —           127      2,341       1,940
          Progress billings on contracts             1,144      2,226       2,387      2,678       9,441
          Commission income                              65        35         181        180           7

                                                     1,316      2,429       3,016      6,040      11,443




                                                   113
F.   NOTES TO PROFORMA STATEMENT OF GROUP RESULTS (continued)
     2.   Profit/(loss) before taxation
                                                         —————— Year ended 31 December ——————
                                                         1995       1996    1997       1998       1999
                                                         $’000      $’000   $’000     $’000       $’000
          Profit/(loss) before taxation is stated
            after charging/(crediting):−
          Depreciation of fixed assets                    27         46      66         75         283
          Directors’ remuneration                        148        164     277        212         346
          Bad debts written off
            —    trade                                    15         —       —          —          —
            —    non-trade                                14         —       —          —          —
          Exchange loss/(gain)                            —            1    (213)      (50)            4
          Interest expense
            —    bank overdraft                           —          —         1        —              5
            —    bank loans                               —          —       —          —           21
            —    convertible bonds                        —          —       —          —           12
            —    others                                       6        6     —           5             5
          Interest income                                     (1)    —        (6)      (16)          (6)
          Loss on disposal of fixed assets                —          —         3         2           —
          Provision for/(write-back of) doubtful debt     —          —       20          (7)       —
          Amortisation of development expenditure         —          58     220        743       1,036
          Amortisation of deferred expenditure            —          72      72         71          75
          Amortisation of patents & trademarks            —          —       —           3             5



     3.   Taxation
                                                         —————— Year ended 31 December ——————
                                                         1995       1996    1997       1998       1999
                                                         $’000      $’000   $’000     $’000       $’000
          Taxation in respect of profit for the year:
            Current taxation                              —          —       —          —           759
            Deferred taxation                             —          —        14       490          844

                                                          —          —        14       490        1,603



     4.   Related party transactions
          The Group has significant transactions with related parties on terms agreed between the parties
          as follows:−
                                                         —————— Year ended 31 December ——————
                                                         1995       1996    1997       1998       1999
                                                         $’000      $’000   $’000     $’000       $’000
          Services rendered to a related party            —          —       —        (1,468)      —
          Management fees paid to a related party         —          —       —          400        —
          Sale of a motor vehicle to a Director           —          —       (73)       —          —


          Related parties relate to companies in which one or more of the Directors or shareholders have
          a beneficial interest and/or are in a position to exercise significant influence.


                                                        114
G. PROFORMA STATEMENT OF NET ASSETS
   The Proforma Statement of Net Assets of the Company and the Group as at 31 December 1999,
   prepared on the basis set out in Section B above, after making such adjustments as we consider
   appropriate, is as follows:−
                                                               Note      Group        Company
                                                                          $’000         $’000
   Fixed assets                                                 H1        2,860           989
   Development expenditure                                      H2        7,951          6,011
   Deferred expenditure                                         H3          136           —
   Patents & trademarks                                         H4           33           —
   Subsidiary companies                                         H5         —            4,700

   Current assets
   Contract work-in-progress                                    H6           73            73
   Stocks                                                                    10           —
   Amounts due from related parties                             H7          178           —
   Trade debtors                                                H8        6,285         2,514
   Other debtors                                                H9          698           549
   Fixed deposits                                                           159           —
   Cash and bank balances                                                 4,890         4,861

                                                                         12,293         7,997
   Current liabilities
   Amounts due to subsidiary companies                         H10         —            3,269
   Trade creditors and accruals                                H11        4,355         3,044
   Hire purchase creditors                                     H12          396             —
   Convertible bonds                                           H13        3,990         3,990
   Provision for taxation                                                   759             —

                                                                          9,500        10,303
   Net current assets/(liabilities)                                       2,793         (2,306)
   Long-term liabilities
   Hire purchase creditors                                     H12       (1,406)          —
   Deferred taxation                                           H14       (1,348)         (708)

                                                                         11,019         8,686

   Capital and reserves
   Share capital                                               H15        6,700         6,700
   Reserves                                                               4,319         1,986

                                                                         11,019         8,686




                                              115
H.   NOTES TO STATEMENT OF PROFORMA NET ASSETS
     1.   Fixed Assets
          Group
                                                                    Computers,
                                                               telecommunication   Furniture
                                          Office                    and robotic       and            Motor
                                        equipment   Renovation      equipment       fittings        vehicles   Total
                                          $’000       $’000          $’000          $’000            $’000     $’000
          Cost
          Balance at 1 January 1999        33           56             267           144              —          500
          Additions                        47           50            2,279          118              325      2,819

          Balance at 31 December 1999      80          106            2,546          262              325      3,319

          Accumulated depreciation
          Balance at 1 January 1999        12           31             104            29              —          176
          Charge for the year              11           15             236            21              —          283

          Balance at 31 December 1999      23           46             340            50              —          459

          Net book value
          At 31 December 1999              57           60            2,206          212              325      2,860


          The net book value of assets acquired under hire purchase agreements for the Group is
          $1,542,397.


          Company
                                                                                        Office
                                                                  Computers           equipment                Total
                                                                     $’000               $’000                 $’000
          Cost
          Balance at 1 January 1999                                     42                  —                    42
          Additions                                                  1,068                     2               1,070

          Balance at 31 December 1999                                1,110                      2              1,112

          Accumulated depreciation
          Balance at 1 January 1999                                       4                 —                      4
          Charge for the year                                          119                  —                   119

          Balance at 31 December 1999                                  123                  —                   123

          Net book value
          At 31 December 1999                                          987                      2               989




                                                      116
H.   NOTES TO STATEMENT OF PROFORMA NET ASSETS (continued)
     2.   Development expenditure
                                                                               Group           Company
                                                                               $’000             $’000
          Cost
          Balance at 1 January 1999                                             4,055            1,595
          Additions                                                             6,531            5,946
          Less: Government grants awarded                                        (578)            (450)

          Balance at 31 December 1999                                          10,008            7,091

          Accumulated amortisation
          Balance at 1 January 1999                                             1,021             303
          Charge for the year                                                   1,036             777

          Balance at 31 December 1999                                           2,057            1,080

          Net book value
          At 31 December 1999                                                   7,951            6,011


          The development expenditure include the following expenses for the financial year:−

                                                                               Group           Company
                                                                               $’000             $’000
          Directors’ remuneration                                               705               595
          Interest                                                               49                17



     3.   Deferred expenditure
          Group
                                                                                     Club
                                                               Incorporation     membership
                                                  Staff bond     expenses        entrance fees     Total
                                                    $’000          $’000               $’000       $’000
          Balance at 1 January 1999                  359             8                   —          367
          Additions                                     —            9                   50             59

          Balance at 31 December 1999                359            17                   50         426

          Accumulated amortisation
          Balance at 1 January 1999                  215            —                    —          215
          Charge for the year                           72          —                     3             75

          Balance at 31 December 1999                287            —                     3         290

          Net book value
          At 31 December 1999                           72          17                   47         136




                                                  117
H.   NOTES TO STATEMENT OF PROFORMA NET ASSETS (continued)
     4.   Patents & trademarks
                                                                                                        Group
                                                                                                        $’000
          Cost
          Balance at 1 January 1999                                                                       17
          Additions                                                                                       24

          Balance at 31 December 1999                                                                     41

          Accumulated amortisation
          Balance at 1 January 1999                                                                        3
          Charge for the year                                                                             5

          Balance at 31 December 1999                                                                      8

          Net book value
          At 31 December 1999                                                                             33



     5.   Subsidiary companies
          The subsidiary companies as at 31 December 1999 are:−

                         Name of company                                                  Percentage of equity
          (Country of incorporation and place of business)                        Cost     held by the Group
                                                                                  $’000
          Strategic Technologies Pte Ltd
            (Singapore)                                                           4,200           100
          Stratech Life Sciences Pte Ltd
            (Singapore)                                                            500            100
          Stratech Vision Pte Ltd
            (Singapore)                                                            —              100

                                                                                  4,700



     6.   Contract work-in-progress
                                                                                          Group and Company
                                                                                                $’000
          Current asset
            Being costs and attributable profits in excess of progress billings                    73

          This can be analysed as follows:−
            Cost incurred and attributable profits                                              6,043
            Less: Progress billings received and receivable                                     (5,970)

                                                                                                   73




                                                        118
H.   NOTES TO STATEMENT OF PROFORMA NET ASSETS (continued)
      7.   Amounts due from related parties
           Related parties relate to companies in which one or more of the Directors or shareholders have
           a beneficial interest and/or are in a position to exercise significant influence.

           The amounts due from related parties are unsecured, non-trade in nature, interest-free and
           have no fixed terms of repayment.


      8.   Trade debtors
           Included in the Group’s trade debtors is an amount of $988,645 which is the subject of a legal
           suit taken out by Strategic Technologies Pte Ltd against a customer. Judgement has been
           awarded by the Singapore Court in favour of the company recently. In view of this, the
           Directors are of the opinion that no provision is necessary for this receivable.


      9.   Other debtors
                                                                                Group         Company
                                                                                 $’000          $’000
           Prepayments                                                             78               4
           Deposits                                                                41               4
           Grant receivable                                                       450            450
           Others                                                                 129             91

                                                                                  698            549



     10.   Amounts due to subsidiary companies
           The amounts due to subsidiary companies are analysed as follows:−
                                                                                              Company
                                                                                                $’000
           Trade                                                                                3,858
           Non-trade                                                                             (589)

                                                                                                3,269


           The amounts due to subsidiary companies are unsecured, interest-free and have no fixed
           terms of repayment.


     11.   Trade creditors and accruals
                                                                                Group         Company
                                                                                 $’000          $’000
           Trade creditors                                                       3,540          3,015
           Other accruals                                                          815             29

                                                                                 4,355          3,044




                                                   119
H.   NOTES TO STATEMENT OF PROFORMA NET ASSETS (continued)
     12.   Hire purchase creditors
                                                                                           Group
                                                                                           $’000
           Repayable within one year                                                        396
           Repayable after one year                                                        1,406

           Principal portion                                                               1,802


           The future repayments under hire purchase agreements are as follows:−
           2000                                                                             498
           2001                                                                             498
           2002                                                                             463
           2003                                                                             438
           2004                                                                             304
           Remaining years                                                                   75

                                                                                           2,276
           Amounts representing interest                                                    (474)

                                                                                           1,802



     13.   Convertible bonds
                                                                                     Group and Company
                                                                                           $’000
           Redeemable convertible bonds due 2000                                           3,990


           The redeemable bonds are issued at par value of $1 each and are convertible into ordinary
           shares at par value of $1 each in the capital of the Company. The bonds will be redeemed at
           100% of their nominal amount on 30 September 2000 unless previously converted to ordinary
           shares.

           The bonds bear interest from issue date of 23 December 1999 at the rate of 12% compounded
           per annum which is accumulated and payable on the redemption date or the maturity date.

           The bonds are jointly and severally guaranteed by each of the existing shareholders.

     14.   Deferred taxation
                                                                                   Group      Company
                                                                                   $’000           $’000
           Balance at 1 January 1999                                                504              33
           Provided during the year                                                 844             675

           Balance at 31 December 1999                                             1,348            708


           The balance comprises mainly of net timing differences of net book value over tax written down
           value of development expenditure.




                                                    120
H.   NOTES TO STATEMENT OF PROFORMA NET ASSETS (continued)
     15.   Share capital
                                                                                    Group and Company
                                                                                            $’000
           Authorised:−
             Balance at 1 January 1999
                 2,000,000 ordinary shares of $1 each                                        2,000
             Increase during the year
                 18,000,000 ordinary shares of $1 each                                      18,000

             Balance at 31 December 1999
                 20,000,000 ordinary shares of $1 each                                      20,000

           Issued and fully paid:−
             Balance at 1 January 1999
                 2,000,000 ordinary shares of $1 each                                        2,000
             Increase during the year
                 4,700,000 ordinary shares of $1 each                                        4,700

             Balance at 31 December 1999
                 6,700,000 ordinary shares of $1 each                                        6,700



     16.   Operating lease commitments
           The Group and Company leases certain properties, computer and equipment under lease
           agreements that are non-cancellable within a year. Future minimum lease payments for all
           leases with initial or remaining terms of one year or more are as follows:−

                                                                                  Group        Company
                                                                                  $’000             $’000
           2000                                                                    387               136
           2001                                                                    300               112
           2002                                                                    129                35



     17.   Subsequent events
           (1)    On 12 April 2000, the Company acquired 100% of the issued share capital of Starstyle
                  Enterprises Pty Ltd, a company incorporated in Australia for a purchase consideration of
                  $5,000. Starstyle Enterprises Pty Ltd was subsequently renamed Stratech (Australia) Pty
                  Ltd.

           (2)    At an Extraordinary General Meeting held on 14 July 2000, the shareholders of the
                  Company approved increase in the authorised share capital of the Company, bonus
                  issue, a share split and issue of new shares as detailed in Section A of this Report.




                                                         121
I.   NET TANGIBLE ASSETS BACKING
     The proforma net tangible assets backing of the Group for each ordinary share of $0.05 each is
     based on the Proforma Statement of Net Assets of the Group as at 31 December 1999 after taking
     into account the Bond Conversion, the proceeds and estimated expenses from the issue of the New
     Shares, which form part of the Invitation.
                                                                                           Group
                                                                                           $’000
     Net assets as per Proforma Balance Sheet                                                11,019
     Deduct: Development expenditure                                                          (7,951)
             Deferred expenditure                                                              (136)
             Patents & trademarks                                                                (33)

                                                                                              2,899
     Add: Bond Conversion                                                                     3,990

                                                                                              6,889
     Add: Proceeds from the issue of 53,417,000 New Shares of $1.10, the subject of
            this Invitation                                                                  58,759
     Less: Estimated expenses of the issue of the New Shares                                  (4,000)

     Adjusted net tangible assets after the issue of the New Shares                          61,648



                                                                                      Number of shares
     Issued share capital
     Issued and fully paid up ordinary shares of $1 each as at 31 December 1999           6,700,000
     Issue of new ordinary shares of $1 each pursuant to the Bond Conversion                311,729
     Bonus issue of ordinary shares of $1 each                                            3,670,000

                                                                                         10,681,729

     Sub-division of 10,681,729 ordinary shares of $1 each into ordinary shares of
       $0.05 each                                                                       213,634,580
     Issue of 53,417,000 ordinary shares of $0.05 each which is the subject of this
        Invitation                                                                       53,417,000

                                                                                        267,051,580

     Net Tangible Assets Backing for each ordinary share of $0.05 each
     After Restructuring Exercise and Bond Conversion but before issue of the New
        Shares                                                                           3.22 cents

     After Restructuring Exercise, Bond Conversion and issue of the New Shares           23.08 cents




J.   DIVIDENDS
     There were no dividends declared and paid by the Company and its subsidiary companies for the
     five financial years ended 31 December 1995 to 31 December 1999.




                                                      122
K.   AUDITED ACCOUNTS
     No audited accounts of the Company and the Group have been prepared for any period subsequent
     to 31 December 1999.


L.   STATEMENT OF ADJUSTMENTS
     The Group’s results have been arrived at after taking into account the following adjustments:−

                                                       —————— Year ended 31 December ——————
                                                        1995    1996      1997       1998       1999
                                                        $’000   $’000     $’000     $’000      $’000
     (i) Turnover
         Turnover of the Group as stated in the
           audited financial statements                1,316    2,429    3,742      6,712      11,443
         Elimination of intercompany turnover               —    —        (726)      (672)       —

         Turnover of the Group as stated in this
           report                                      1,316    2,429    3,016      6,040      11,443

     (ii) Profit/(Loss) before taxation
         Profit/(loss) before taxation as stated in
           the audited financial statements             (794)    362     1,057      2,376      5,891
         Adjustment with respect to:
            Elimination of intercompany profit              —    —         —          (26)        26
            Elimination of pre-acquisition profit           —    —         —          —               (4)

         Profit/(loss) before taxation as stated in
           this report                                  (794)    362     1,057      2,350      5,913




Yours faithfully,




ERNST & YOUNG
Certified Public Accountants
Partner — Tan Chian Khong
Singapore




                                                      123
                         GENERAL AND STATUTORY INFORMATION


INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS
1.   The names, ages, addresses and current occupations of the Directors of our Company and
     Executive Officers of the Group are set out on pages 73 and 77 of this Prospectus.

2.   No Director or Executive Officer is or was involved in any of the following events:−

     (a)   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

     (b)   a conviction of any offence, other than a traffic offence, or a 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 a conviction or
           judgement, or any criminal investigation pending against him; or

     (c)   the subject of an order, judgment or ruling of any court, 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.

3.   The aggregate emoluments (including CPF contributions thereon) paid to the then existing Directors
     for services rendered in all capacities to our Company and our subsidiaries in FY99 amounted to
     approximately $1,051,098. The estimated aggregate emoluments payable to the present Directors
     in FY2000 under the arrangements in force at the date of this Prospectus, including the service
     agreements referred to on pages 81 and 82 of this Prospectus, is approximately $1,471,523.

4.   Save as disclosed on pages 81 and 82 of this Prospectus, there are no existing or proposed service
     contracts between the Directors and our Company or its subsidiaries.

5.   Save as disclosed on page 100 of this Prospectus, the Directors and Executive Officers are
     unrelated by blood or marriage to one another nor are they so related to any substantial shareholder
     of our Company.

6.   No option to subscribe for shares in, or debentures of, our Company or its subsidiaries has been
     granted to, or was exercised by, any Director or Executive Officer within the last financial year.

7.   Pursuant to the Investment Agreement dated 26 November 1999 entered into between Mdm Lucy
     Ng @ Hwang Fei Fung, Dr David Chew Khien Meow, Dr Kennedy Chew Khien Mien and Mdm Leong
     Sook Ching of the first part, the Company of the second part and PLEi and Infocomm Investment of
     the third part supplemented by a Supplemental Agreement dated 28 March 2000, PLEi and
     Infocomm Investment subscribed for redeemable convertible bonds in our Company in the principal
     amount of $3,990,000 (the ‘‘Bonds’’). In accordance with the Investment Agreement, the Bonds are
     convertible into ordinary shares of par value $1.00 each in our Company based on an agreed
     formula. PLEi and Infocomm Investment had on 14 July 2000 exercised their rights to convert the
     Bonds into 234,383 and 77,346 ordinary shares of par value $1.00 each in our Company
     respectively.

     Pursuant to an Option Agreement dated 7 December 1999, Dr David Chew Khien Meow granted an
     option to Citibank N.A. to purchase a certain number of shares in the capital of the Company from
     him. This Option was subsequently assigned by Citibank N.A. to Citicorp Investment Bank
     (Singapore) Limited. Upon the exercise of the said option, 513,902 ordinary shares of $1.00 par
     value each, have been transferred by Dr David Chew Khien Meow to Citicorp Investment Bank
     (Singapore) Limited.




                                                    124
      Save as disclosed above, no person has been, or is entitled to be, given an option to subscribe for
      any shares in or debentures of our Company or its subsidiaries.

 8.   Save as disclosed on page 87, no Director or expert is interested, directly or indirectly, in the
      promotion of, or in any assets acquired or disposed of by, or leased to, our Company or its
      subsidiaries within two years preceding the date of this Prospectus, or in any proposal for such
      acquisition or disposal or lease as aforesaid.

 9.   No Director has any interest in any existing contract or arrangement which is significant in relation
      to the business of the Group taken as a whole.

10.   Save as disclosed on pages 90 and 91, no Director, substantial shareholder or Executive Officer
      has any interest, direct or indirect, in any business carrying on a similar trade as our Company or
      its subsidiaries.

11.   There is no shareholding qualification for Directors in the Articles of Association of our Company.

12.   The interests of the Directors and substantial shareholders in the Shares at the date of this
      Prospectus and as recorded in the Register of Directors’ Shareholdings and the Register of
      Substantial Shareholders maintained under the provisions of the Companies Act (Chapter 50) are
      as follows:−
                                                  Number of Shares                  Number of Shares
                                                    registered in                 in which the Directors
                                                    the names of                      and substantial
                                                    Directors and                    shareholders are
                                                     substantial                     deemed to have
      Name                                           shareholder           %            an interest            %
      Directors
      Dr David Chew Khien Meow(1)                    132,617,700         49.66                —                —
                                      (1)
      Dr Kennedy Chew Khien Mien                       12,609,100          4.72               —                —
      Mdm Leong Sook Ching(1)                          13,737,680          5.14               —                —
      Mdm Lucy Ng @ Hwang Fei Fung(1)                   3,514,320          1.32               —                —
      Mr Liow Voon Kheong                                  —               —                  —                —
      Professor Hang Chang Chieh                           —               —                  —                —
      Mr Tjio Kay Loen                                     —               —                  —                —
      Mr Seah Chin Yew                                     —               —                  —                —

      Substantial Shareholders
      None


      Note:−
      1.   Dr David Chew Khien Meow and Mdm Leong Sook Ching are spouses. Mdm Lucy Ng @ Hwang Fei Fung is the mother
           of both Dr David Chew Khien Meow and Dr Kennedy Chew Khien Mien. Dr David Chew Khien Meow and Dr Kennedy
           Chew Khien Mien are brothers.


      Save as disclosed above, no Director has any interest in the Shares, including the New Shares
      which are the subject of this Invitation.

13.   No sum has been paid or has been agreed to be paid to any Director or to any firm in which a
      Director is a partner in cash or in shares or otherwise by any person to induce him to become a
      Director in connection with the promotion or formation of our Company.




                                                        125
SHARE CAPITAL
14.   As at the date of this Prospectus, there is only one class of shares in the capital of our Company.
      The rights and privileges attached to the Shares are stated in the Articles of Association of our
      Company. There are no founder, management or deferred shares. The substantial shareholders of
      the Company are not entitled to any different voting rights from the other shareholders.

15.   Save as disclosed herein, there were no changes in the issued share capital of our Company or its
      subsidiaries within the last two years preceding the date of this Prospectus.
                           Number of                                                           Resultant
                            Shares        Issue                                                  Issued
      Date of Issue         Issued        Price       Purpose of Issue/ Consideration         Share Capital
      Our Company
      12 October 1998         500,000     $1.00     Working capital/Par value                     $2,000,000

      22 June 1999          4,700,000     $1.00     Swap for shares in STPL and SLSPL/            $6,700,000
                                                    Par value

      14 July 2000            311,729     $1.00     Conversion of redeemable convertible          $7,011,729
                                                    bonds by PLEi and Infocomm
                                                    Investment/$3,990,000
      14 July 2000          3,670,000     $1.00     Bonus issue — capitalisation of share        $10,681,729
                                                    premium/Par value

      Stratech Vision
        Pte Ltd
      2 October 1998                2     $1.00     Subscriber shares/Par value                           $2

16.   Save as disclosed above, no shares or debentures were issued or were agreed to be issued by our
      Company or its subsidiaries for cash or for a consideration other than cash during the last two years
      preceding the date of this Prospectus.

17. ARTICLES OF ASSOCIATION
      The provisions in the Articles of Association of our Company relating to transfers of shares, the
      voting rights of shareholders of our Company, restrictions on the voting rights of the Directors, class
      rights and the variation thereof, the borrowing powers of the Directors and the remuneration of the
      Directors are as follows:−

      Transfer Of Shares
      Article 21
      Subject to these Articles, any Member may transfer all or any of his shares but every instrument of
      transfer of the legal title in shares must be in writing and in the form for the time being approved
      by the Directors and the Exchange. Shares of different classes shall not be comprised in the same
      instrument of transfer. Our Company shall accept for registration transfers in the form approved by
      the Exchange.

      Article 22
      The instrument of transfer of a share shall be signed by or on behalf of the transferor and the
      transferee and be witnessed, provided that an instrument of transfer in respect of which the
      transferee is the Depository shall not be ineffective by reason of it not being signed or witnessed
      for by or on behalf of the Depository. The transferor shall be deemed to remain the holder of the
      share until the name of the transferee is entered in the Register of Members.




                                                    126
Article 23
No share shall in any circumstances be transferred to any infant, bankrupt or person of unsound
mind.

Article 24
(1)   Subject to these Articles, the Act or as required by the Exchange, there shall be no restriction
      on the transfer of fully paid up shares (except where required by law or by the rules, bye-laws
      or listing rules of the Exchange) but the Directors may in their discretion decline to register any
      transfer of shares upon which our Company has a lien and in the case of shares not fully paid
      up may refuse to register a transfer to a transferee of whom they do not approve. If the
      Directors shall decline to register any such transfer of shares, they shall give to both the
      transferor and the transferee written notice of their refusal to register as required by the Act.

(2)   The Directors may decline to register any instrument of transfer unless:−

       (i)    such fee not exceeding S$2 (or such other sum as may be approved by the Exchange
              from time to time) as the Directors may from time to time require, is paid to our Company
              in respect thereof;

      (ii)    the instrument of transfer, duly stamped in accordance with any law for the time being in
              force relating to stamp duty, is deposited at the Office or at such other place (if any) as
              the Directors appoint accompanied by the certificates of the shares to which it relates,
              and such other evidence as the Directors may reasonably require to show the right of the
              transferor to make the transfer and, if the instrument of transfer is executed by some
              other person on his behalf, the authority of the person so to do; and

      (iii)   the instrument of transfer is in respect of only one class of shares.

Article 26
The Register of Members and the Depository Register may be closed at such times and for such
period as the Directors may from time to time determine, provided always that the Registers shall
not be closed for more than thirty days in the aggregate in any year. Provided Always that our
Company shall give prior notice of such closure as may be required to the Exchange, stating the
period and purpose or purposes for which the closure is made.

Article 27
(1)   Nothing in these Articles shall preclude the Directors from recognising a renunciation of the
      allotment of any share by the allottee in favour of some other person.

(2)   Neither our Company nor its Directors nor any of its Officers shall incur any liability for
      registering or acting upon a transfer of shares apparently made by sufficient parties, although
      the same may, by reason of any fraud or other cause not known to our Company or its
      Directors or other Officers, be legally inoperative or insufficient to pass the property in the
      shares proposed or professed to be transferred, and although the transfer may, as between
      the transferor and transferee, be liable to be set aside, and notwithstanding that our Company
      may have notice that such instrument of transfer was signed or executed and delivered by the
      transferor in blank as to the name of the transferee or the particulars of the shares transferred,
      or otherwise in defective manner. And in every such case, the person registered as transferee,
      his executors, administrators and assigns, alone shall be entitled to be recognised as the
      holder of such shares and the previous holder shall, so far as our Company is concerned, be
      deemed to have transferred his whole title thereto.




                                                 127
Voting Rights
Article 10
(1)   If at any time the share capital is divided into different classes, the special rights attached to
      any class (unless otherwise provided by the terms of issue of the shares of that class) may,
      subject to the provisions of the Act, whether or not our Company is being wound up, only be
      made, varied or abrogated with the sanction of a Special Resolution passed at a separate
      General Meeting of the holders of shares of the class and to every such Special Resolution
      the provisions of Section 184 of the Act shall, with such adaptations as are necessary, apply.
      To every such separate General Meeting the provisions of these Articles relating to General
      Meetings shall mutatis mutandis apply; but so that the necessary quorum shall be two persons
      at least holding or representing by proxy or by attorney one-third of the issued shares of the
      class and that any holder of shares of the class present in person or by proxy or by attorney
      may demand a poll. Provided always that where the necessary majority for such a Special
      Resolution is not obtained at the Meeting, consent in writing if obtained from the holders of
      three-fourths of the issued shares of the class concerned within two months of the Meeting
      shall be as valid and effectual as a Special Resolution carried at the Meeting.

(2)   The repayment of preference capital other than redeemable preference capital or any other
      alteration of preference shareholder rights, may only be made pursuant to a special resolution
      of the preference shareholders concerned. PROVIDED ALWAYS that where the necessary
      majority for such a special resolution is not obtained at the Meeting, consent in writing if
      obtained from the holders of three-fourths of the preference shares concerned within two
      months of the Meeting, shall be as valid and effectual as a special resolution carried at the
      Meeting.

Article 76
Subject and without prejudice to any special privileges or restrictions as to voting for the time being
attached to any special class of shares for the time being forming part of the capital of our Company
each Member entitled to vote may vote in person or by proxy or attorney, and (in the case of a
corporation) by a representative. On a show of hands every Member who is present in person or
by proxy or attorney, or in the case of a corporation by a representative, shall have one vote
provided that if a Member is represented by two proxies, only one of the two proxies as determined
by their appointor shall vote on a show of hands and in the absence of such determination, only one
of the two proxies as determined by the Chairman (or by a person authorised by him) shall vote on
a show of hands and on a poll, every Member who is present in person or by proxy, attorney or
representative shall have one vote for each share which he holds or represents Provided Always
That notwithstanding anything contained in these Articles, a Depositor shall not be entitled to attend
any General Meeting and to speak and vote thereat unless his name is certified by the Depository
to our Company as appearing on the Depository Register not earlier than 48 hours before that
General Meeting (the ‘‘cut-off time’’) as a Depositor on whose behalf the Depository holds shares
in our Company. For the purpose of determining the number of votes which a Depositor or his proxy
may cast on a poll, the Depositor or his proxy shall be deemed to hold or represent that number of
shares entered in the Depositor’s Securities Account at the cut-off time as certified by the
Depository to our Company, or where a Depositor has apportioned the balance standing to his
Securities Account as at the cut-off time between two proxies, to apportion the said number of
shares between the two proxies in the same proportion as specified by the Depositor in appointing
the proxies; and accordingly no instrument appointing a proxy of a Depositor shall be rendered
invalid merely by reason of any discrepancy between the number of shares standing to the credit
of that Depositor’s Securities Account as at the cut-off time, and the true balance standing to the
Securities Account of a Depositor as at the time of the relevant general meeting, if the instrument
is dealt with in such manner as aforesaid.




                                               128
Article 77
Where there are joint holders of any share any one of such persons may vote and be reckoned in
a quorum at any Meeting either personally or by proxy or by attorney or in the case of a corporation
by a representative as if he were solely entitled thereto but if more than one of such joint holders
is so present at any meeting then the person present whose name stands first in the Register of
Members or the Depository Register (as the case may be) in respect of such share shall alone be
entitled to vote in respect thereof. Several executors or administrators of a deceased Member in
whose name any share stands shall for the purpose of this Article be deemed joint holders thereof.

Article 78
If a Member be a lunatic, idiot or non-compos mentis, he may vote whether on a show of hands or
on a poll by his committee, curator bonis or such other person as properly has the management of
his estate and any such committee, curator bonis or other person may vote by proxy or attorney,
provided that such evidence as the Directors may require of the authority of the person claiming to
vote shall have been deposited at the Office not less than forty-eight hours before the time
appointed for holding the Meeting.

Article 79
Subject to the provisions of these Articles, every Member either personally or by attorney or in the
case of a corporation by a representative and every proxy shall be entitled to be present and to vote
at any General Meeting and to be reckoned in the quorum thereat in respect of shares fully paid and
in respect of partly paid shares where calls are not due and unpaid.

Article 80
No objection shall be raised to the qualification of any voter except at the Meeting or adjourned
Meeting at which the vote objected to is given or tendered and every vote not disallowed at such
Meeting shall be valid for all purposes. Any such objection made in due time shall be referred to the
Chairman of the Meeting whose decision shall be final and conclusive.

Article 81
On a poll votes may be given either personally or by proxy or by attorney or in the case of a
corporation by its representative and a person entitled to more than one vote need not use all his
votes or cast all the votes he uses in the same way.

Article 82
(1)   A Member may appoint not more than two proxies to attend and vote at the same General
      Meeting.

(2)   If the Member is a Depositor, our Company shall be entitled:−

      (i)    to reject any instrument of proxy lodged if the Depositor is not shown to have any shares
             entered in its Securities Account as at the cut-off time as certified by the Depository to our
             Company; and

      (ii)   to accept as validly cast by the proxy or proxies appointed by the Depositor on a poll that
             number of votes which corresponds to or is less than the aggregate number of shares
             entered in its Securities Account of that Depositor as at the cut-off time as certified by the
             Depository to our Company, whether that number is greater or smaller than the number
             specified in any instrument of proxy executed by or on behalf of that Depositor.

(3)   Where a Member appoints more than one proxy, he shall specify the proportion of his
      shareholding to be represented by each proxy. If no such proportion or number is specified the
      first named proxy may be treated as representing 100% of the shareholding and any second
      named proxy as an alternate to the first named.




                                                 129
(4)   Voting right(s) attached to any shares in respect of which a Member has not appointed a proxy
      may only be exercised at the relevant general meeting by the member personally or by his
      attorney, or in the case of a corporation by its representative.

(5)   Where a Member appoints a proxy in respect of more shares than the shares standing to his
      name in the Register of Members, or in the case of a Depositor, standing to the credit of that
      Depositor’s Securities Account, such proxy may not exercise any of the votes or rights of the
      shares not registered to the name of that Member in the Register of Members or standing to
      the credit of that Depositor’s Securities Account as at the cut-off time, as the case may be.

Article 83
A proxy or attorney need not be a Member, and shall be entitled to vote on a show of hands on any
question at any General Meeting.

Article 84
Any instrument appointing a proxy shall be in writing in the common form approved by the Directors
under the hand of the appointor or his attorney duly authorised in writing or, if the appointor is a
corporation, under seal or under the hand of its attorney duly authorised and our Company shall
accept as valid in all respects the form of proxy approved by the Directors for use at the date
relevant to the General Meeting in question.

Article 85
The instrument appointing a proxy, together with the power of attorney or other authority, if any,
under which the instrument of proxy is signed or a duly certified copy of that power of attorney or
other authority (failing previous registration with our Company) shall be attached to the instrument
of proxy and must be left at the Office or such other place (if any) as is specified for the purpose
in the notice convening the Meeting not less than forty-eight hours before the time appointed for the
holding of the Meeting or adjourned Meeting (or in the case of a poll before the time appointed for
the taking of the poll) at which it is to be used failing which the instrument may be treated as invalid.
An instrument appointing a proxy shall, unless the contrary is stated thereon, be valid as well for
any adjournment of the Meeting as for the Meeting to which it relates Provided that an instrument
of proxy relating to more than one meeting (including any adjournment thereof) having once been
so delivered for the purposes of any meeting shall not be required again to be delivered for the
purposes of any subsequent meeting to which it relates. An instrument of proxy shall be deemed
to include the power to demand or concur in demanding a poll on behalf of the appointer. Unless
otherwise instructed, a proxy shall vote as he thinks fit. The signature on an instrument appointing
a proxy need not be witnessed.

Article 86
A vote given in accordance with the terms of an instrument of proxy (which for the purposes of these
Articles shall also include a power of attorney) shall be valid notwithstanding the previous death or
insanity of the principal or revocation of the proxy, or of the authority under which the proxy was
executed or the transfer of the share in respect of which the proxy is given, provided that no
intimation in writing of such death, insanity, revocation or transfer shall have been received by our
Company at the Office (or such other place as may be specified for the deposit of instruments
appointing proxies) before the commencement of the Meeting or adjourned Meeting (or in the case
of a poll before the time appointed for the taking of the poll) at which the proxy is used.

Article 87
Any corporation which is a Member may by resolution of its directors or other governing body
authorise such person as it thinks fit to act as its representative at any Meeting of our Company or
of any class of Members and the persons so authorised shall be entitled to exercise the same
powers on behalf of the corporation as the corporation could exercise if it were an individual
Member of our Company. Our Company shall be entitled to treat a certificate under the seal of the
corporation as conclusive evidence of the appointment or revocation of appointment of a
representative under this Article.




                                               130
Directors’ Voting Powers
Article 96
(1)   No Director or intending Director shall be disqualified by his office from contracting or entering
      into any arrangement with our Company either as vendor, purchaser or otherwise nor shall
      such contract or arrangement or any contract or arrangement entered into by or on behalf of
      our Company in which any Director shall be in any way interested be avoided nor shall any
      Director so contracting or being so interested be liable to account to our Company for any
      profit realised by any such contract or arrangement by reason only of such Director holding
      that office or of the fiduciary relation thereby established but every Director shall observe the
      provisions of Section 156 of the Act relating to the disclosure of the interests of the Directors
      in contracts or proposed contracts with our Company or of any office or property held by a
      Director which might create duties or interests in conflict with his duties or interests as a
      Director and any contract or arrangement to be entered into by or on behalf of our Company
      in which any Director shall be in any way interested shall be subject to any requirements that
      may be imposed by the Exchange. No Director shall vote in respect of any contract,
      arrangement or transaction in which he is so interested as aforesaid or in respect of any
      allotment of shares in or debentures of our Company to him and if he does so vote his vote
      shall not be counted but this prohibition as to voting shall not apply to:−

       (i)    any arrangement for giving to him any security or indemnity in respect of money lent by
              him or obligations undertaken by him for the benefit of our Company; or

      (ii)    any arrangement for the giving by our Company of any security to a third party in respect
              of a debt or obligation of our Company for which he himself has assumed responsibility
              in whole or in part under a guarantee or indemnity or by the deposit of a security; or

      (iii)   any contract by him to subscribe for or underwrite shares or debentures of our Company;
              or

      (iv)    any contract or arrangement with any other company, corporation or body in which he is
              interested only as a director or other officer or creditor of or as a shareholder in or
              beneficially interested in the shares thereof.

(2)   A Director, notwithstanding his interest, may be counted in the quorum present at any meeting
      where he or any other Director is appointed to hold any office or place of profit under our
      Company, or where the Directors resolve to exercise any of the rights of our Company
      (whether by the exercise of voting rights or otherwise) to appoint or concur in the appointment
      of a Director to hold any office or place of profit under any other company, or where the
      Directors resolve to enter into or make any arrangements with him or on his behalf pursuant
      to these Articles or where the terms of any such appointment or arrangements as herein
      before mentioned are considered, and he may vote on any such matter other than in respect
      of the appointment of or arrangements with himself or the fixing of the terms thereof.
      Notwithstanding Articles 96(1)(i) to (iv) above, a Director shall not vote in respect to any
      contract or arrangement or proposed contract or arrangement in which he has directly or
      indirectly a personal material interest.

(3)   The provisions of this Article may at any time be suspended or relaxed to any extent and either
      generally or in respect of any particular contract, arrangement or transaction by our Company
      in General Meeting, and any particular contract, arrangement or transaction carried out in
      contravention of this Article may be ratified by Ordinary Resolution of our Company.




                                                131
Article 97
(1)   A Director may hold any other office or place of profit under our Company (except that of
      Auditor) and he or any firm of which he is a member may act in a professional capacity for our
      Company in conjunction with his office of Director, and on such terms as to remuneration and
      otherwise as the Directors shall determine. A Director of our Company may be or become a
      director or other officer of, or otherwise interested in, any company promoted by our Company
      or in which our Company may be interested as vendor, purchaser, shareholder or otherwise,
      and no such Director shall be accountable to our Company for any remuneration or other
      benefits received by him as a director or officer of, or from his interest in, such other company
      unless our Company otherwise directs.

(2)   The Directors may exercise the voting power conferred by the shares in any company held or
      owned by our Company in such manner and in all respects as the Directors think fit in the
      interests of our Company (including the exercise thereof in favour of any resolution appointing
      the Directors or any of them to be directors of such company or voting or providing for the
      payment of remuneration to the directors of such company) and any such Director of our
      Company may vote in favour of the exercise of such voting powers in the manner aforesaid
      notwithstanding that he may be or be about to be appointed a director of such other company.

Article 98
The Directors may from time to time appoint one or more of their body to be Managing Director or
Managing Directors of our Company (or any equivalent appointment(s) howsoever described) and
may from time to time (subject to the provisions of any contract between him or them and our
Company) remove or dismiss him or them from office and appoint another or others in his or their
places. Where an appointment is for a fixed term such term shall not exceed five years.

Borrowing Powers of Directors
Article 124
The Directors may at their discretion exercise every borrowing power vested in our Company by its
Memorandum of Association or permitted by law and may borrow or raise money from time to time
for the purpose of our Company and secure the payment of such sums by mortgage, charge or
hypothecation of or upon all or any of the property or assets of our Company including any uncalled
or called but unpaid capital or by the issue of debentures (whether at par or at discount or premium)
or otherwise as they may think fit.

Remuneration Of Directors
Article 92
(1)   The fees of the Directors shall be determined from time to time by our Company in General
      Meetings and such fees shall not be increased except pursuant to an Ordinary Resolution
      passed at a General Meeting where notice of the proposed increase shall have been given in
      the notice convening the Meeting. Such fees shall be divided among the Directors in such
      proportions and manner as they may agree and in default of agreement equally, except that
      in the latter event any Director who shall hold office for part only of the period in respect of
      which such fee is payable shall be entitled only to rank in such division for the proportion of
      fee related to the period during which he has held office.

(2)   Any Director who is appointed to any executive office or serves on any committee or who
      otherwise performs or renders services, which, in the opinion of the Directors, are outside his
      ordinary duties as a Director, may be paid such extra remuneration as the Directors may
      determine, subject however as is hereinafter provided in this Article.

(3)   Notwithstanding Article 92(2), the remuneration in the case of a Director other than an
      Executive Director shall be payable by a fixed sum and shall not at any time be by commission
      on or percentage of the profits or turnover, and no Director whether an Executive Director or
      otherwise shall be remunerated by a commission on or percentage of turnover.




                                               132
Article 93
The Directors shall be entitled to be repaid all travelling or such reasonable expenses as may be
incurred in attending and returning from meetings of the Directors or of any committee of the
Directors or General Meetings or otherwise howsoever in or about the business of our Company
in the course of the performance of their duties as Directors.

Article 94
Subject to the Act, the Directors on behalf of our Company may pay a gratuity or pension or
allowance on retirement to any Director or former Director who had held any other salaried office
or place of profit with our Company or to his widow or dependants or relations or connections and
may make contributions to any fund and pay premiums for the purchase or provision of any such
gratuity, pension or allowance.

Article 95
The Directors may procure the establishment and maintenance of or participate in or contribute to
any non-contributory or contributory pension or superannuation fund or life assurance scheme or
any other scheme whatsoever for the benefit of and pay, provide for or procure the grant of
donations, gratuities, pensions, allowances, benefits or emoluments to any persons (including
Directors and other officers) who are or shall have been at any time in the employment or service
of our Company or of the predecessors in business of our Company or of any subsidiary company,
and the wives, widows, families or dependants of any such persons. The Directors may also
procure the establishment and subsidy of or subscription and support to any institutions,
associations, clubs, funds or trusts calculated to be for the benefit of any such persons as aforesaid
or otherwise to advance the interests and well-being of our Company or of any such other company
as aforesaid or of its Members and payment for or towards the insurance of any such persons as
aforesaid, and subscriptions or guarantees of money for charitable or benevolent objects or for any
exhibition or for any public, general or useful object.

Article 97
(1)   A Director may hold any other office or place of profit under our Company (except that of
      Auditor) and he or any firm of which he is a member may act in a professional capacity for our
      Company in conjunction with his office of Director, and on such terms as to remuneration and
      otherwise as the Directors shall determine. A Director of our Company may be or become a
      director or other officer of, or otherwise interested in, any company promoted by our Company
      or in which our Company may be interested as vendor, purchaser, shareholder or otherwise,
      and no such Director shall be accountable to our Company for any remuneration or other
      benefits received by him as a director or officer of, or from his interest in, such other company
      unless our Company otherwise directs.

Article 100
The remuneration of a Managing Director (or any Director holding an equivalent appointment) shall
from time to time be fixed by the Directors and may subject to these Articles be by way of salary
or commission or participating in profits or by any or all of these modes but he shall not under any
circumstances be remunerated by a commission on or a percentage of turnover.

Article 109
(1)   Any Director of our Company may at any time appoint any person who is not a Director or an
      alternate of another Director and who is approved by a majority of his Co-Directors to be his
      Alternate Director and may at any time remove any such Alternate Director from office. An
      Alternate Director so appointed shall be entitled to receive from our Company such proportion
      (if any) of the remuneration otherwise payable to his appointor as such appointor may by
      notice in writing to our Company from time to time direct, but save as aforesaid he shall not
      in respect of such appointment be entitled to receive any remuneration from our Company.
      Any fee paid to an Alternate Director shall be deducted from the remuneration otherwise
      payable to his appointor.




                                               133
BANK BORROWINGS AND WORKING CAPITAL
18.   Save as disclosed on page 43 of this Prospectus and in the Accountants’ Report, our Company and
      our subsidiaries had as at 31 December 1999, no other borrowings or indebtedness in the nature
      of borrowings including bank overdrafts and liabilities under acceptances (other than normal trading
      bills) or acceptances credits, mortgages, charges, hire purchase commitments, guarantees or other
      material contingent liabilities.

19.   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 items:−

      (a)   The purchase price of any property purchased or to be purchased which is to be defrayed in
            whole or in part out of the proceeds of the Invitation;

      (b)   Estimated preliminary and issue expenses (including underwriting and placement
            commission) for this Invitation payable by our Company;

      (c)   The repayment of any money borrowed by our Company in respect of any of the foregoing
            matters; and

      (d)   Working capital.

      No amount is required to be provided in respect of the matters aforesaid otherwise than out of the
      proceeds from the issue of the New Shares.

20.   The Directors are of the opinion that, after taking into account the present banking facilities and the
      net proceeds from the Invitation, the Group has adequate working capital for its present
      requirements.


MATERIAL CONTRACTS
21.   The following contracts not being contracts entered into in the ordinary course of business of our
      Company and its subsidiaries (as the case may be) have been entered into by our Company and
      its subsidiaries (as the case may be) within the two years preceding the date of this Prospectus and
      are or may be material:−

      (a)   Investment Agreement dated 26 November 1999 entered into between Mdm Lucy Ng @
            Hwang Fei Fung, Dr David Chew Khien Meow, Dr Kennedy Chew Khien Mien and Mdm Leong
            Sook Ching of the first part, the Company of the second part and PLEi and Infocomm
            Investment of the third part supplemented by a Supplemental Agreement dated 28 March
            2000, as referred to and described in paragraph 7 on page 124.

      (b)   A Receiving Banker’s Letter dated 18 July 2000 entered into between our Company and DBS
            Bank appointing DBS Bank as the receiving banker in relation to the Invitation.

      (c)   A Management and Underwriting Agreement dated 24 July 2000 entered into between our
            Company, the Vendors, DBS Bank and Citicorp pursuant to which our Company appointed
            DBS Bank to manage the Invitation and DBS Bank and Citicorp to underwrite the Offer
            Shares, referred to in paragraph 23(a) on page 135 below.

      (d)   A Placement Agreement dated 24 July 2000 entered into between our Company, the Vendors,
            DBS Bank and Citicorp pursuant to which DBS Bank and Citicorp agreed to subscribe or to
            procure subscription for the Placement Shares, referred to in paragraph 23(c) on page 135
            below.

      (e)   A Depository Agreement dated 24 July 2000 entered into between our Company and CDP
            pursuant to which CDP will act as share depository for our Company for trades in the
            securities of our Company through the SGX-ST.




                                                    134
      (f)   A Share Swap Agreement dated 22 June 1999 entered into between our Company and Dr
            David Chew Khien Meow, Dr Kennedy Chew Khien Mien, Mdm Leong Sook Ching and Mdm
            Lucy Ng @ Hwang Fei Fung (collectively, the ‘‘Restructuring Vendors’’) pursuant to which our
            Company acquired the entire issued and paid-up share capital of STPL, referred to in
            paragraph (a) on page 98.

      (g)   A Share Swap Agreement dated 22 June 1999 entered into between our Company and the
            Restructuring Vendors pursuant to which our Company acquired the entire issued and paid-up
            share capital of SLSPL, referred to in paragraph (b) on page 98.

      (h)   A Sale and Purchase Agreement dated 21 December 1999 entered into between our
            Company and Dr David Chew Khien Meow and Mdm Leong Sook Ching pursuant to which our
            Company acquired the entire issued and paid up share capital of SVPL.


LITIGATION
22.   We have developed and filed a patent application on one of our intelligent transport systems, which
      is currently installed in two sites (‘‘said system’’).

      Early this year, we discovered that a third party had procured and implemented a system very
      similar to the said system in certain buildings. It has also come to our attention that they have been
      marketing their system and there has been confusion that this third party’s system and ours are one
      and the same.

      As such, we have proceeded to issue two Letters of Demand on 19 July 2000 to the third party, on
      grounds of breach of confidentiality, unauthorised use of information and passing off.

      Save as disclosed above of this Prospectus, neither our Company nor any of its subsidiaries is
      engaged in any litigation or arbitration proceedings either as plaintiff or defendant in respect of any
      claims or amounts which may have or have had during the previous 12 months a significant effect
      on the Group’s financial position and the Directors have no knowledge of any proceedings, litigation
      or claims of material importance which are pending or threatened against our Company or any of
      its subsidiaries or of any facts likely to give rise to any such litigation, arbitration or claim.


MANAGEMENT AND UNDERWRITING AND PLACEMENT ARRANGEMENTS
23.   (a)   Pursuant to the management and underwriting agreement (the ‘‘Management and
            Underwriting Agreement’’) dated 24 July 2000, our Company appointed DBS Bank to manage
            the Invitation and DBS Bank and Citicorp to underwrite the Offer Shares. DBS Bank will
            receive a management fee from our Company for its services rendered in connection with the
            Invitation in the amount as agreed in the Mandate Letter dated 22 July 1999 from the Manager
            to our Company and accepted by our Company on 24 July 1999.

      (b)   Pursuant to the Management and Underwriting Agreement, DBS Bank and Citicorp agreed to
            underwrite the Offer Shares for a commission of 1.5% of the Issue Price for the total number
            of Offer Shares.

      (c)   Pursuant to the placement agreement (the ‘‘Placement Agreement’’) dated 24 July 2000, DBS
            Bank and Citicorp agreed to subscribe or procure subscriptions for the Placement Shares for
            a placement commission of 1.5% of the Issue Price for the total number of Placement Shares.

      (d)   Brokerage will be paid by our Company, to members of the SGX-ST, merchant banks and
            members of the Association of Banks in Singapore in respect of accepted applications made
            on Application Forms bearing their respective stamps, or to Participating Banks in respect of
            successful applications made through Electronic Applications at the ATMs of the relevant
            Participating Banks, at the rate of 1% of the Offer Price for each Offer Share and at a rate of
            1% of the Placement Price for each Placement Share.




                                                    135
      (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
            Director, promoter, expert, proposed Director or any other person for subscribing or agreeing
            to subscribe or procuring or agreeing to procure subscriptions for any shares in or debentures
            of our Company.

      (f)   The Management and Underwriting Agreement may be terminated by the Underwriter at any
            time on or before the closing of the Application List on the occurrence of certain events
            including, inter alia, changes in political, financial or economic conditions in Singapore or
            abroad which result, inter alia, in the Singapore stock market being materially and adversely
            affected.

      (g)   The Placement Agreement is conditional upon the Management and Underwriting Agreement
            not having been terminated or rescinded pursuant to the provisions of the Management and
            Underwriting Agreement.


MISCELLANEOUS
24.   The nature of the business of our Company is stated on pages 49 to 59 of this Prospectus. At the
      date of this Prospectus, all the corporations listed below are by virtue of Section 6 of the Companies
      Act (Chapter 50) deemed to be related to our Company:−

      Subsidiaries of our Company
      Strategic Technologies Pte Ltd
      Stratech Life Sciences Pte Ltd
      Stratech Vision Pte Ltd
      Stratech Australia Pty Ltd

25.   The time of opening of the Application List is set out on page 15 of this Prospectus.

26.   The amount payable on application is $1.10 for each Invitation Share. There has been no previous
      issue of Shares by our Company or offer for sale of its Shares to the public within the two years
      preceding the date of this Prospectus.

27.   Application moneys received by our Company and the Vendors in respect of successful
      applications (including successful balloted applications which are subsequently rejected) will be
      placed in a separate non-interest bearing account with DBS Bank (the ‘‘Receiving Bank’’). In the
      ordinary course of business, the Receiving Bank will deploy these moneys in the interbank money
      market. Pursuant to an agreement contained in a letter dated 18 July 2000, our Company, the
      Vendors and the Receiving Bank have agreed that our Company and the Vendors will receive for
      their own accounts an aggregate of a 50% share of any net revenue in excess of $50,000 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 revenue or any other benefits.

28.   No property has been purchased or acquired or proposed to be purchased or acquired by our
      Company or its subsidiaries which is to be paid for wholly or partly out of the proceeds of the
      Invitation or the purchase or acquisition of which has not been completed at the date of the issue
      of this Prospectus other than property the contract for the purchase or acquisition whereof was
      entered into in the ordinary course of business of our Company or its subsidiaries, the contract not
      being made in contemplation of the Invitation nor the Invitation in consequence of the contract.




                                                    136
29.   The estimated amount of the expenses of this issue and of the application for listing, including
      underwriting and placement commission, brokerage, management fee and all other incidental
      expenses in relation to this Invitation is in aggregate approximately $4 million, which will be borne
      by our Company and the Vendors in proportion to the number of Invitation Shares and Vendor
      Shares. The listing fee and other fees payable to the SGX-ST for the listing are payable by our
      Company.

30.   No amount of cash or securities or benefit has been 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.

31.   Save as disclosed in this Prospectus, the Directors are not aware of any relevant material
      information including trading factors or risks not mentioned elsewhere in the Prospectus which is
      unlikely to be known or anticipated by the general public and which could materially affect the
      profits of our Company and its subsidiaries.

32.   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 expenditures;

      (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 reasonably expects to have a
            material favourable or unfavourable impact on revenue or operating income.


CONSENTS
33.   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 it appears in this Prospectus and to act in such
      capacity in relation to this Prospectus.

34.   The Manager, Underwriters and Placement Agents, the Solicitors to the Invitation, the Principal
      Bankers and the Share Registrars have given and have not withdrawn their consent to the issue
      of this Prospectus with the inclusion herein of their names in the form and context in which they
      appear in this Prospectus and to act in those capacities in relation to this Prospectus.




                                                     137
DOCUMENTS AVAILABLE FOR INSPECTION
35.   Copies of the following documents may be inspected at the registered office of our Company at
      1 International Business Park, #05-14 The Synergy, Singapore 609917, during normal business
      hours for a period of six months from the date of this Prospectus:−

      (a)   the Memorandum and Articles of Association of our Company;

      (b)   the Accountants’ Report;

      (c)   the letter from the Reporting Accountants on pages 103 and 104;

      (d)   the material contracts referred to on pages 134 of this Prospectus;

      (e)   the letters of consent referred to on page 137 of this Prospectus;

      (f)   the audited accounts of the Group for the last two financial years ended 31 December 1998
            and 31 December 1999; and

      (g)   the service agreements referred to on pages 81 of this Prospectus.


STATEMENT BY DIRECTORS OF OUR COMPANY AND THE VENDORS
36.   This Prospectus has been seen and approved by our Directors and the Vendors and they
      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 statements herein
      misleading, and that this Prospectus constitutes full and true disclosure of all material facts about
      the Invitation and our Company and its subsidiaries.


STATEMENT BY DBS BANK
37.   DBS Bank acknowledges that, to the best of its knowledge and belief, based on information
      furnished to it by the Group, this Prospectus constitutes a full and true disclosure of all the material
      facts about the Invitation and the Company and its subsidiaries and it is not aware of any other facts
      the omission of which would make any statements herein misleading.




                                                      138
                                                                                             APPENDIX A

                      RULES OF THE STRATECH SYSTEMS LIMITED
                            SHARE OPTION SCHEME 2000


1.   DEFINITIONS
     1.1   In this Scheme, unless the context otherwise requires, the following words and expressions
           shall have the following meanings:−

           ‘‘Act’’ means the Companies Act. Chapter 50;

           ‘‘Adoption Date’’ means the date upon which the Scheme is adopted by the resolution of
           Shareholders at a general meeting;

           ‘‘Aggregate Subscription Cost’’ means the total amount payable for Shares which may be
           acquired on the exercise of an Option;

           ‘‘Associate(s)’’ shall have the meaning ascribed to it in the SGX-ST Listing Manual (as
           amended from time to time);

           ‘‘Auditors’’ means the auditors of the Company for the time being;

           ‘‘Board’’ means the Board of Directors of the Company for the time being;

           ‘‘CDP’’ means The Central Depository (Pte) Limited;

           ‘‘Control’’ means the capacity to dominate decision making, directly or indirectly in relation to
           the financial and operating policies of the Company;

           ‘‘Controlling Shareholder’’ means, in accordance with the SGX-ST Listing Manual, a person
           exercising Control over the Company and unless rebutted, a person who controls directly or
           indirectly a shareholding of 15% or more of the Company’s issued share capital shall be
           presumed to be a ‘‘Controlling Shareholder’’, or such other definition as the SGX-ST Listing
           Manual may provide from time to time;

           ‘‘Committee’’ means a committee comprising Directors who are duly authorised and appointed
           by the Board to administer the Scheme;

           ‘‘Company’’ means STRATECH SYSTEMS LIMITED;

           ‘‘Date of Grant’’ means the date on which an Option is granted pursuant to Rule 6;

           ‘‘Depositor’’but does not include a holder of a sub-account maintained with a Depository
           Agent;

           ‘‘Depository Agent’’ means an entity registered as a Depository Agent with CDP for the
           purpose of maintaining securities sub-accounts for its account and for the account of others;

           ‘‘Depository Register’’ means the register maintained by CDP pursuant to the Act;

           ‘‘Director’’ means a director of the Company for the time being;

           ‘‘Eligible Director’’ shall have the meaning ascribed to it in Rule 3.2;

           ‘‘Employee’’ means any full-time confirmed employee of the Company or any of its
           Subsidiaries selected by the Committee to participate in the Scheme in accordance with
           Rule 3;

           ‘‘Executive Director’’ means a Director of the Company or any of its Subsidiaries who is a
           full-time Employee and performs an executive function;

           ‘‘Group’’ means the Company and its Subsidiaries from time to time and ‘‘Group Company’’
           shall mean any one of them;

                                                    139
           ‘‘Market Day’’ means a day on which the SGX-ST is open for trading in securities;

           ‘‘Non-Executive Director’’ means a Director of the Company or any of its Subsidiaries who is
           not an Executive Director;

           ‘‘Option’’ means the right to subscribe for Shares granted or to be granted pursuant to the
           Scheme and for the time being subsisting;

           ‘‘Option Period’’ means subject as provided in Rules 10 and 14, a period commencing after the
           Vesting Date and expiring on the tenth (10th) anniversary of the Date of Grant Provided That
           Options granted to non-executive Directors of the Group shall expire on the fifth (5th )
           anniversary of the Date of Grant

           ‘‘Participant’’ means a holder of an Option;

           ‘‘SGX-ST’’ means The Singapore Exchange Securities Trading Limited;

           ‘‘Scheme’’ means the Stratech Systems Limited Share Option Scheme 2000 as amended from
           time to time;

           ‘‘Shareholders’’ means registered holders of Shares or in the case of Depositors, Depositors
           who have Shares entered against their names in the Depository Register;

           ‘‘Shares’’ means fully-paid ordinary shares of $0.05 each in the capital of the Company;

           ‘‘Subscription Price’’ means the price at which a Participant shall subscribe for each Share
           upon the exercise of an Option as determined in accordance with Rule 8;

           ‘‘Subsidiary’’ means a company which is, from time to time, a subsidiary of the Company as
           defined pursuant to Section 5 of the Act;

           ‘‘Vesting Date’’ means, in relation to an Option, a date determined by the Committee at their
           sole and absolute discretion and in any event, shall not be a date falling before the first
           anniversary of the relevant Date of Grant; and

           ‘‘$’’ means Singapore dollars.

     1.2   Words importing the singular shall, where applicable, include the plural and vice versa and
           words importing the masculine shall, where applicable, include the feminine and neuter gender.

     1.3   Any reference to any enactment is a reference to that enactment as for the time being amended
           or re-enacted. Any word defined under the Act or any statutory modification thereof and used
           in the Scheme shall have the meaning assigned to it under the Act.

     1.4   Any reference to a time of a day in the Scheme is a reference to the Singapore time.


2.   ADMINISTRATION OF THE SCHEME
     2.1   The Scheme shall be administered by the Committee in its absolute discretion with such
           powers and duties as are conferred on it by the Board.

     2.2   The Committee shall have the power, from time to time, to make and vary such regulations (not
           being inconsistent with the Scheme) for the implementation and administration of the Scheme
           as it deems fit.

     2.3   Any decision of the Committee, made pursuant to any provision of the Scheme (other than a
           matter to be certified by the Auditors), shall be final and binding (including any decision
           pertaining to disputes as to interpretation of the Scheme or any rule, regulation, procedure
           thereunder or as to any rights under the Scheme).

     2.4   Any Director participating in the Scheme who is a member of the Committee shall not be
           involved in the Committee’s deliberations in respect of any Options granted to him.

                                                   140
3.   ELIGIBILITY
     3.1   To be eligible to participate in the Scheme, an Employee must:−

           3.1.1   be confirmed in his employment with the Company or any Subsidiary and not on
                   probation; and

           3.1.2   have attained the age of 21 years on or before the Date of Grant.

     3.2   Any Director of the Group (whether an Executive Director or Non-Executive Director)
           (collectively referred to as the ‘‘Eligible Directors’’) shall be eligible to participate in the Scheme.

     3.3   Save for Dr Kennedy Chew Khien Mien who is an associate of a Controlling Shareholder, no
           Controlling Shareholder or associate of a Controlling Shareholder shall be eligible to participate
           in the Scheme.

     3.4   Dr Kennedy Chew Khien Mien shall be eligible to participate in the Scheme only if his
           participation in the Scheme is specifically approved by independent shareholders in separate
           resolutions. No Option shall be granted to Dr Kennedy Chew unless the actual number and
           terms of Options to be granted shall be approved by independent shareholders in separate
           resolutions. A circular, letter or notice to shareholders proposing such resolutions shall include
           clear rationale for the proposed participation by Dr Kennedy Chew. Such circular, letter or
           notice to Shareholders shall also include clear rationale for the number and terms (including the
           subscription price) of the Options to be granted.

     3.5   Subject to the Act and any requirement of the SGX-ST or any other stock exchange on which
           the Shares may be listed or quoted, the terms of eligibility for participation in the Scheme may
           be amended from time to time at the absolute discretion of the Board.

4.   MAXIMUM ENTITLEMENT
     4.1   Subject to Rule 3, the number of Shares which may be offered to an Employee or an Eligible
           Director for subscription in accordance with the Scheme shall be determined at the discretion
           of the Committee who shall take into account criteria such as rank, performance, years of
           service and potential for future development of the Employee or Eligible Director.

     4.2   Subject to such adjustments as may be made pursuant to the Scheme as a result of any
           variation in the capital structure of the Company, not more than ten per cent. (10%) of the total
           number of Shares in respect of which the Company may grant Options under the Scheme may
           be offered in to Dr Kennedy Chew Khien Mien.

5.   SIZE OF THE SCHEME
     The total number of Shares which may be granted under the Scheme shall not exceed fifteen per
     cent. (15%) of the issued share capital of the Company at any time and from time to time.


6.   DATE OF GRANT
     6.1   An Option may be granted each year within the period of 90 days, commencing after the fifth
           (5th) market day following the date of announcement of the Company’s interim or final results
           (whichever the case may be). The aforesaid 90-day period may be extended at the discretion
           of the Committee.

     6.2   The Letter of Offer to grant the Option shall be in or substantially in the form set out in Schedule
           A, subject to such modifications as the Committee may determine from time to time.




                                                       141
7.   ACCEPTANCE OF OPTIONS
     7.1   Options are personal to the Employees or Eligible Directors to whom they are granted and may
           not be transferred, charged, assigned or otherwise disposed of or encumbered in whole or in
           part unless approved in writing by the Committee, but may be exercised by the Employee’s or
           Eligible Director’s legal personal representative as provided in Rule 10.5 in the event of the
           death of the Employee or the Eligible Director.

     7.2   The grant of an Option by the Committee to an Employee or Eligible Director shall be accepted
           by the Employee or Eligible Director within thirty (30) days after the relevant Date of Grant and
           not later than 5.00 p.m. on the thirtieth (30th) day from such Date of Grant by completing,
           signing and returning the Acceptance Form in or substantially in the form set out in Schedule
           B, subject to such modification as the Committee may from time to time determine,
           accompanied by payment of $1.00 as consideration.

     7.3   The Employee or Eligible Director may accept or refuse the whole or part of the offer. If only part
           of the offer is accepted, the Employee or Eligible Director shall accept the offer in multiples of
           1,000 Shares. The Committee shall within fifteen (15) market days of receipt of the Acceptance
           Form and consideration acknowledge receipt of the same.

     7.4   If a grant of an Option is not accepted in the manner as provided in this Rule 7, such offer shall,
           upon the expiry of the thirty (30) day period, automatically lapse and shall thereafter be null and
           void and of no effect.

8.   SUBSCRIPTION PRICE
     Subject to any adjustment pursuant to Rule 9, the Subscription Price payable for each Share in
     respect of which an Option is exercisable shall be payable on the exercise of an Option and shall be
     at the average of the last dealt prices per Share, as determined by reference to the Business Times,
     for the three (3) consecutive market days in which trades were done in the Shares immediately
     preceding the Date of Grant, or its nominal value, whichever is higher. The Subscription Price shall
     not be less than the nominal amount of the Share.


9.   VARIATIONS OF CAPITAL
     9.1   If a variation in the issued share capital of the Company occurs (whether by way of a
           capitalisation of profits or reserves or a rights issue, reduction, subdivision or consolidation of
           Shares), then:−

           9.1.1   the Subscription Price for the Shares, the nominal value, class and/or number of Shares
                   comprised in the Option to the extent unexercised; and/or

           9.1.2   the nominal value, class and/or number of Shares over which additional Options may be
                   granted under the Scheme

           shall be adjusted in such manner as the Committee may determine to be appropriate and,
           except in relation to a capitalisation issue, upon the written confirmation by the Auditors (acting
           only as experts and not as arbitrators), that in their opinion, such adjustment is fair and
           reasonable. Such adjustments (if any) shall give the Participant the same proportion of the
           equity capital as that to which he was previously entitled.

           For this purpose, any issue of options by the Company to subscribe for new Shares at less than
           the price as ascertained by reference to Rule 8 shall be deemed to amount to a variation in the
           issued share capital of the Company.




                                                     142
      9.2    Notwithstanding the provisions of Rule 9.1 no such adjustment shall be made:−

              (i)    if as a result, the Subscription Price shall fall below the nominal value of a Share and if
                     such an adjustment would but for this paragraph (i) result in the Subscription Price being
                     less than the nominal value of a Share, the Subscription Price payable shall be the
                     nominal value of a share;

             (ii)    if as a result, the number of Shares which a Participant shall be entitled to subscribe for
                     pursuant to the exercise of Options granted to him shall be reduced; and

             (iii)   unless the Committee after considering all relevant circumstances, considers it
                     equitable to do so.

      9.3    The issue of securities as consideration for or in connection with an acquisition by the
             Company or a private placement of securities will not be regarded as a circumstance requiring
             adjustment under the provisions of this Rule. Any increase in the issued share capital of the
             Company as a consequence of the exercise of the options issued from time to time by the
             Company entitling holders thereof to subscribe for new Shares in the capital of the Company
             (including the exercise of any Options granted pursuant to this Scheme) will also not be
             regarded as a circumstance requiring adjustment. In addition, the cancellation of issued
             shares purchased or acquired by the Company by way of a market purchase of such shares
             undertaken by the Company on the SGX-ST during the period when a share purchase
             mandate granted by the Shareholders of the Company (including any renewal of such
             mandate) is in force shall not be regarded as a circumstance requiring adjustment.

      9.4    The restriction of the number of Shares to be offered to an Employee or Eligible Director under
             Rule 4 shall not apply to the number of additional Shares or Options over additional Shares
             issued by virtue of any adjustment to the number of Shares or Options pursuant to this
             Rule 9.

      9.5    Upon any adjustment required to be made pursuant to this Rule 9, the Company shall notify
             the Participant (or his duly appointed legal personal representatives) in writing and deliver to
             him (or his duly appointed legal personal representatives) the Subscription Price thereafter in
             effect and the nominal value, class and/or number of Shares thereafter to be issued on the
             exercise of the Option. Any adjustment shall take effect upon such written notification being
             given.


10.   OPTION PERIOD
      10.1     An Option shall be exercisable during the relevant Option Period, in whole or in part
               (provided that an Option may be exercised in part only in respect of 1,000 Shares or any
               multiple thereof). Upon the expiry of the relevant Option Period, the corresponding Options
               shall immediately become null and void.

      10.2     An Option shall, to the extent unexercised, immediately lapse and become null and void and
               a Participant shall have no claim against the Company:−

              10.2.1     subject to Rules 10.3 and 10.4, in relation to an Employee upon the Employee
                         ceasing to be in full-time employment of the Company or its Subsidiaries for any
                         reason whatsoever or in relation to an Eligible Director, upon the ceasing of his
                         appointment as an Eligible Director or upon the ceasing of his employment with the
                         Company or its Subsidiaries (whichever is the later); or

              10.2.2     upon the bankruptcy of the Participant or the happening of any event which results
                         in his being deprived of the legal and beneficial ownership of such Option; or

              10.2.3     in the event of misconduct on the part of the Participant, as determined by the
                         Committee in its discretion.

              For the purpose of Rule 10.2.1, a Participant shall be deemed to have ceased to be so
              employed as of the date the notice of termination of employment is tendered by or is given
              to him, unless such notice shall be withdrawn prior to its effective date.

                                                        143
      10.3   If a Participant ceases to be employed by the Company or its Subsidiaries by reason of his:−

             10.3.1   ill health, injury or disability as certified by a medical practitioner approved by the
                      Committee;

             10.3.2   redundancy;

             10.3.3   retirement at or after his statutory retirement age; or

             10.3.4   retirement before that age with the consent of the Committee;

             or for any other reason approved in writing by the Committee, he may exercise any
             unexercised Options within the relevant Option Period.

      10.4   If a Participant ceases to be employed by a Subsidiary:−

             10.4.1   by reason of the Subsidiary by which he is principally employed ceasing to be a
                      Group Company or the undertaking or part of the undertaking of such Subsidiary
                      being transferred otherwise than to another Group Company; or

             10.4.2   for any other reason, provided the Committee gives its consent in writing;

             he may at the discretion of the Committee exercise any unexercised Options within the
             relevant Option Period.

      10.5   If a Participant dies and at the date of his death holds any unexercised Options, such Option
             may, at the discretion of the Committee, be exercised by the duly appointed legal personal
             representatives of the Participant within the relevant Option Period.


11.   EXERCISE OF OPTIONS, ALLOTMENT AND LISTING OF SHARES
      11.1   An Option may be exercised, in whole or in part, (provided that an Option may be exercised
             in part only in respect of 1,000 Shares or any multiple thereof) by a Participant giving notice
             in writing to the Company in or substantially in the form set out in Schedule C, subject to such
             modification as the Committee may from time to time determine. Such notice must be
             accompanied by a remittance for the Aggregate Subscription Cost and any other
             documentation the Committee may require. An Option shall be deemed to be exercised upon
             the receipt by the Company of the said notice duly completed and the Aggregate
             Subscription Cost and any other documentation the Committee may require.

             All payments shall be made by cheque, cashiers’ order, bank draft made out in favour of the
             Company.

      11.2   The Company shall, as soon as practicable after the exercise of an Option, allot and issue
             the relevant Shares and apply to the SGX-ST and any other stock exchange on which the
             Shares are quoted, for permission to deal in and for quotation of such Shares. Shares which
             are allotted on the exercise of an Option by a Participant shall be issued in the name of CDP
             or its nominees for credit to the Participant’s securities accounts with CDP, or the
             Participant’s sub-account maintained with a Depository Agent (as the case may be) and
             shall, on allotment, be subject to the provisions of the Memorandum and Articles of
             Association of the Company. Subject to such consents or other required action of any
             competent authority under regulations or enactments for the time being in force as may be
             necessary and subject to compliance with the Rules of the Scheme, the Company shall
             within 10 market days after the exercise of the Option allot the Shares and within 5 market
             days from the date of such allotment, issue and despatch to CDP certificates in respect of
             the Shares by ordinary post (or such other mode as the Committee may deem fit).




                                                    144
      11.3     Shares which are allotted on the exercise of an Option to a Participant who is not a
               Singapore citizen shall be issued in the name of CDP to be credited to a separate securities
               sub-account to be opened by that Participant with a Depository Agent appointed by that
               Participant which has been selected by the Company and shall, for so long as the Shares are
               beneficially owned by the Participant, remain so registered. Such securities sub-account
               shall be opened by that Participant solely for the purpose of transacting in Shares allotted to
               that Participant pursuant to the Scheme. All charges levied by the Depository Agent including
               transaction charges and all expenses incurred by the Depository Agent from time to time
               shall be borne by that Participant. Shares which are allotted on the exercise of an Option to
               a Participant who is a Singapore citizen shall be issued in the name of CDP to be credited
               to the direct securities account of that Participant.

      11.4     Shares allotted and issued on exercise of an Option shall be subject to all the provisions of
               the Memorandum and Articles of Association of the Company, and shall rank pari passu in
               all respects with the then existing issued Shares in the capital of the Company, save for any
               dividends, rights, allotments or other distributions, the record date (‘‘Record Date’’) for which
               falls on or before the relevant exercise date of the Option. ‘‘Record Date’’ means the date as
               at the close of business on which Shareholders must be registered in order to participate in
               any dividends, rights, allotments or other distributions.

      11.5     The Company shall keep available sufficient unissued Shares to satisfy the full exercise of
               all Options for the time being remaining capable of being exercised.

12.   ALTERATIONS AND MODIFICATIONS TO THE SCHEME
      Any or all the provisions of the Scheme may be modified and/or altered at any time and from time
      to time by resolution of the Committee except that:−

       (i)    no modification or alteration shall alter adversely the rights attaching to any Option granted
              prior to such modification or alteration except with the consent in writing of such number of
              Participants who, if they exercised their Options in full, would thereby become entitled to not
              less than three-quarters (3⁄4) in nominal amount of all the Shares which would fall to be issued
              and allotted upon the exercise in full of all Outstanding Options;

      (ii)    the definitions of ‘‘Employee’’, ‘‘Eligible Director’’, ‘‘Participant’’ and ‘‘Subscription Price’’ and
              the provisions of Rules 2, 3, 4, 5, 6, 7, 8, 9, 10, 11.4, 14 and this Rule 12 shall not be altered
              to the advantage of Participants except with the prior approval of Shareholders at a general
              meeting; and

      (iii)   no modification or alteration shall be made without the prior approval of SGX-ST or any other
              stock exchange on which the Shares are quoted or listed, and such other regulatory
              authorities as may be necessary.

      Written notice of any modification or alteration made in accordance with this Rule shall be given to
      all Participants.

13.   DURATION OF SCHEME
      13.1     The Scheme shall continue to be in force at the discretion of the Committee, subject to a
               period of twenty (20) years commencing on the Adoption Date with an offer of Options in
               every financial year of the Company up to the tenth (10th) financial year commencing with
               the financial year in which the first Date of Grant in respect of an offer pursuant to Rule 6
               occurs, provided always that the Scheme may continue beyond the above stipulated period
               with the approval of Shareholders by ordinary resolution at a general meeting and of any
               relevant authorities which may then be required.

      13.2     The Scheme may be terminated at any time by the Committee or by resolution of the
               Shareholders at a general meeting subject to all other relevant approvals which may be
               required.




                                                        145
      13.3   The termination or discontinuance or expiry of the Scheme shall be without prejudice to the
             rights accrued to Options which have been granted and accepted as provided in Rule 7,
             whether such Options have been exercised (whether fully or partially) or not.


14.   TAKEOVER AND WINDING UP OF THE COMPANY
      14.1   In the event of a takeover offer being made for the Company, Participants (including
             Participants holding Options which are then not exercisable pursuant to the provisions of
             Rule 10.1) holding Options as yet unexercised shall be entitled to exercise such Options in
             full or in part in the period commencing on the date on which such offer is made or, if such
             offer is conditional, the date on which the offer becomes or is declared unconditional, as the
             case may be, and ending on the earlier of:−

             14.1.1   the expiry of six (6) months thereafter (unless prior to the expiry of such six-month
                      period, at the recommendation of the offeror and with the approvals of the
                      Committee and the SGX-ST, such expiry date is extended to a later date (being a
                      date falling not later than the date of expiry of the Option Period relating thereto));
                      or

             14.1.2   the date of the expiry of the Option Period relating thereto, whereupon any Option
                      then remaining unexercised shall lapse and be null and void.

             Provided always that if during such period the offeror becomes entitled or bound to exercise
             the rights of compulsory acquisition of the Shares under Section 215 of the Act and, being
             entitled to do so, gives notice to the Participants that it intends to exercise such rights on a
             specified date, the Option shall remain exercisable by the Participants until the specified date
             or the expiry of the Option Period relating thereto, whichever is earlier. Any Option not so
             exercised by the said specified date shall lapse provided that the rights of acquisition or
             obligations to acquire stated in the notice shall have been exercised or performed, as the
             case may be.

             For the avoidance of doubt, the provisions of this Rule 14.1 shall not come into operation in
             the event that a take-over offer which is conditional does not or is not declared unconditional.

      14.2   If under the Act the court sanctions a compromise or arrangement, proposed for the
             purposes of, or in connection with, a scheme for the reconstruction of the Company or its
             amalgamation with another company or companies, Participants (including Participants
             holding Options which are then not exercisable pursuant to the provisions of Rule 10.1) shall
             be entitled, subject to Rule 14.5 below, to exercise any Option then held by them during the
             period commencing on the date upon which the compromise or arrangement is sanctioned
             by the court and ending either on the expiry of 60 days thereafter or the date upon which the
             compromise or arrangement becomes effective, whichever is later (but not after the expiry
             of the Option Period relating thereto), whereupon any unexercised Option shall lapse and
             become null and void.

      14.3   If an order or an effective resolution is passed for the winding up of the Company on the
             basis of its insolvency, all Options, to the extent unexercised, shall lapse and become null
             and void.

      14.4   In the event of a Shareholders’ solvent voluntary winding up (other than for amalgamation or
             reconstruction), Participants (including Participants holding Options which are then not
             exercisable pursuant to the provisions of Rule 10.1) shall be entitled within 30 days of the
             passing of the resolution of such winding up (but not after the expiry of the Option Period
             relating thereto) to exercise in full any unexercised Option, after which such unexercised
             Option shall lapse and become null and void.




                                                    146
      14.5     If in connection with the making of a general offer referred to in Rule 14.1 above or a scheme
               referred to in Rule 14.2 above or the winding up referred to in Rule 14.4 above,
               arrangements are made (which are confirmed in writing by the Auditors, acting only as
               experts and not arbitrators, to be fair and reasonable) for the compensation of the
               Participants, whether by the continuation of their Options or the payment of cash or the grant
               of other options or otherwise, a Participant holding an Option, which is not then exercisable,
               may not, at the discretion of the Committee, be permitted to exercise that Option as provided
               for in this Rule.

      14.6     To the extent that an Option is not exercised within the periods referred to in this Rule 14,
               it shall lapse and become null and void.

15.   LISTING OF SHARES
      Options under the Scheme will not be listed or quoted on the SGX-ST or any other stock exchange
      on which the Shares may be listed or quoted until the Options are exercised in accordance with
      Rule 11 above, whereupon the Company will apply to the SGX-ST (and/or other stock exchange on
      which the Shares may be listed or quoted) for the listing of and quotation for such Shares, and will
      use its best endeavours to obtain permission to deal in and for the listing of and quotation for such
      Shares.

16.   ANNUAL REPORT
      The Company shall, as required by law or the SGX-ST or other relevant authority, make the
      following disclosures in its annual report:−

      (a)    The names of the members of the Committee administering the Scheme; and

      (b)    The information required in the table below for the following participants of the Scheme:−

              (i)    Directors of the Company;

             (ii)    Participants who are associates of Controlling Shareholders;

             (iii)   Participants, other than those in (i) and (ii) above, who receive 5% or more of the total
                     number of Options available under the Scheme.

                                               Options
                                                             Aggregate          Aggregate
                                               granted                                          Aggregate
                                                          options granted         options
                                             during the                                           options
                                                                since        exercised since
                                              financial                                        outstanding
                                                          commencement       commencement
                      Name of Participant        year                                          as at the end
                                                           of the scheme      of the scheme
                                                under                                           of financial
                                                              to end of          to end of
                                               review                                           year under
                                                           financial year     financial year
                                             (including                                           review
                                                           under review       under review
                                                terms)




17.   NOTICES
      17.1     Any notice required to be given by an Employee, an Eligible Director or a Participant to the
               Company shall be sent or made to the registered office of the Company or such other
               addresses as may be notified by the Company to him in writing.

      17.2     Any notices or documents required to be given to an Employee, an Eligible Director or a
               Participant or any correspondence to be made between the Company and the Employee,
               Eligible Director or Participant shall be delivered to him by hand or sent to his home address
               according to the records of the Company and if sent by post, shall be deemed to have been
               given on the day following the date of posting.



                                                       147
18.   TERMS OF EMPLOYMENT UNAFFECTED
      The terms of employment of a Participant shall not be affected by his participation in the Scheme
      which shall neither form part of such terms nor entitle him to take into account such participation
      in calculating any compensation or damages on the termination of his employment for any reason.

19.   TAXES
      All taxes (including income tax) arising from the exercise of any Option granted to any Participant
      under the Scheme shall be borne by that Participant.


20.   COSTS AND EXPENSES OF THE SCHEME
      20.1   Each Participant shall be responsible for all the fees of CDP relating to or in connection with
             the issue and allotment of any Shares in CDP’s name, the deposit of share certificate(s) with
             CDP, the Participant’s securities account with CDP, or the Participant’s securities sub-
             account with a CDP Depository Agent (collectively, the ‘‘CDP Charges’’).

      20.2   Save for the taxes referred to in Rule 19 and the fees referred to in Rule 20. 1, all fees, costs
             and expenses incurred by the Company in relation to the Scheme including but not limited
             to the fees, costs and expenses relating to the issue and allotment of Shares pursuant to the
             exercise of any Option shall be borne by the Company.


21.   DISCLAIMER OF LIABILITY
      Notwithstanding any provisions contained herein and subject to the Act, the Board, the Committee
      and the Company shall not under any circumstances be held liable to any Employee, Eligible
      Director, Participant or any other person whatsoever for any costs, losses, expenses and damages
      whatsoever and howsoever arising in connection with the Scheme or the administration thereof,
      including but not limited to the Company’s delay in issuing the Shares or applying for or procuring
      the listing of and quotation for the Shares on the SGX-ST in accordance with Rule 15 (and any
      other stock exchange on which the Shares are quoted or listed).


22.   DISPUTES
      Any disputes or differences of any nature in connection with the Scheme shall be referred to the
      Committee and its decision shall be final and binding in all respects.


23.   CONDITION OF OPTION
      Every Option shall be subject to the condition that no Shares shall be issued pursuant to the
      exercise of an Option if such issue would be contrary to any law or enactment, or any rules or
      regulations of any legislative or non-legislative governing body for the time being in force in
      Singapore or any other relevant country having jurisdiction in relation to the issue of Shares hereto.

24.   GOVERNING LAW
      The Scheme shall be governed by and construed in accordance with the laws of the Republic of
      Singapore. The Participants, by accepting Options in accordance with the Scheme, and the
      Company irrevocably submit to the exclusive jurisdiction of the courts of Singapore.




                                                     148
                                                                                         SCHEDULE A

                               STRATECH SYSTEMS LIMITED
                               SHARE OPTION SCHEME 2000

                                         LETTER OF OFFER

                                                                      Serial No: __________________
Private and Confidential

[Date]

To:   Name
      Designation
      Address

Dear Sir/Madam

We have the pleasure of informing you that you have been nominated by the Committee of the Board of
Directors of STRATECH SYSTEMS LIMITED (the ‘‘Company’’) to participate in the Stratech Systems
Limited Share Option Scheme 2000 (the ‘‘Scheme’’).

Accordingly, an offer is hereby made to grant you an Option (as defined in the Scheme), in consideration
of the payment of a sum of $1.00, to subscribe for and be allotted ordinary shares of $0.05 each in the
capital of the Company (the ‘‘Shares’’) at the price of $____________ per Share. The Option Period
during which the Option is exercisable is from __________________ to __________________ (both
dates inclusive). The Option shall be subject to the rules of the Scheme, a copy of which is enclosed
herewith. The Option is personal to you and shall not be transferable, assignable or chargeable to or
pledged with any other person whomsoever.

If you wish to accept the offer, please sign and return the enclosed Acceptance Form with a sum of $1.00
not later than ________ (a.m./p.m.) on the ______ day of __________________ 20___, failing which
this offer shall automatically lapse and shall thereafter be null and void.




Yours faithfully




[Authorised Signatory]
for and on behalf of

STRATECH SYSTEMS LIMITED
enc




                                                  149
                                                                                                          SCHEDULE B
                                         STRATECH SYSTEMS LIMITED
                                         SHARE OPTION SCHEME 2000

                                                    ACCEPTANCE FORM

                                                                                     Serial No: __________________
Private and Confidential
To:     The Committee,
        Stratech Systems Limited Share Option Scheme 2000
        STRATECH SYSTEMS LIMITED
        1 International Business Park
        #05-14 The Synergy
        Singapore 609917

Closing Time and Date for Acceptance of Offer                                    :    _________________________

Number of Shares offered                                                         :   $ ________________________
Subscription Price per Share                                                     :   $ ________________________
Total amount payable for the Shares (exclusive of the relevant                   :   $ ________________________
CDP charges)

I have read your Letter of Offer dated __________________ (Date of Grant) and agree to be bound by
the rules of the Stratech Systems Limited Share Option Scheme 2000 stated therein. I hereby accept the
Option to subscribe for Shares at $____________ per Share and enclose a *cheque/cash for $1.00 in
payment for the purchase of the Option.

I understand that I am not obliged to exercise the Option.

I also understand that I shall be responsible for all the fees of CDP relating to or in connection with the
issue and allotment of any Shares in CDP’s name, the deposit of share certificate(s) with CDP, my
securities account with CDP, or my securities sub-account with a CDP Depository Agent (as the case
may be) (collectively, the ‘‘CDP Charges’’).

I further acknowledge that you have not made any representation to induce me to accept the offer and
that the terms of the Letter of Offer and this Acceptance Form constitute the entire agreement between
us relating to the offer.

Please print in block letters
Name in Full                      :       ________________________________________________________
Designation                       :       ________________________________________________________
Address                           :       ________________________________________________________
Nationality                       :       ________________________________________________________
*NRIC/Passport No.                :       ________________________________________________________
Signature                         :       ________________________________________________________
Date                              :       ________________________________________________________

*Delete accordingly.

Notes:−
1.    Shares must be accepted in full or in multiples of 1,000;
2.    The Acceptance Form must be forwarded to the Committee in an envelope marked ‘‘Private and Confidential’’; and
3.    The Participant shall be informed by the Company of the relevant CDP Charges payable at the time of the exercise of an
      Option.



                                                                  150
                                                                                             SCHEDULE C
                                  STRATECH SYSTEMS LIMITED
                                  SHARE OPTION SCHEME 2000

                                 EXERCISE OF OPTION TO SUBSCRIBE
Private and Confidential

To:    The Committee
       Stratech Systems Limited Share Option Scheme 2000
       STRATECH SYSTEMS LIMITED
       1 International Business Park
       #05-14 The Synergy
       Singapore 609917


Total number of ordinary shares of S$0.05 each (the ‘‘Share’’)         :    _________________________
offered at $____________ per Share under an Option granted
on __________________ (Date of Grant)
Number of Shares previously allotted and issued under the              :    _________________________
Option
Outstanding balance of Shares to be allotted and issued under          :    _________________________
the Option
Number of Shares now to be subscribed                                  :    _________________________


1.    Pursuant to your Letter of Offer dated (Date of Grant) and my acceptance thereof, I hereby exercise
      the Option to subscribe for Shares in STRATECH SYSTEMS LIMITED (the ‘‘Company’’) at
      $____________ per Share.

2.    I hereby request the Company to allot and issue the number of Shares specified in paragraph 1
      above in the name of The Central Depository (Pte) Limited (‘‘CDP’’) to the credit of my securities
      account with CDP or my securities sub-account with a CDP Depository Agent specified below and
      to deliver the share certificate(s) relating thereto to CDP. I further agree to bear such fees or other
      charges as may be imposed by CDP (the ‘‘CDP Charges’’) in respect thereof:−

      *(a)   Direct Securities Account Number: _____________________________________________

      *(b)   Securities Sub-Account Number:     ______________________________________________

      Name of Depository Agent: ________________________________________________________

3.    I enclose a *cheque/cashier’s order/bank draft for $____________ in payment for the subscription
      of $____________ for the total number of the said Shares and the CDP Charges of $____________.

4.    I agree to subscribe for the Shares subject to the terms of the Letter of Offer, the Stratech Systems
      Limited Share Option Scheme 2000 and the Memorandum and Articles of Association of the
      Company.

5.    I declare that I am subscribing for the Shares for myself and not as a nominee for any other person.




                                                     151
Please print in block letters
Name in Full                     :       ________________________________________________________
Designation                      :       ________________________________________________________
Address                          :       ________________________________________________________
Nationality                      :       ________________________________________________________
*NRIC/Passport No.               :       ________________________________________________________
Signature                        :       ________________________________________________________
Date                             :       ________________________________________________________

*Delete accordingly.


Notes:−
1.   An Option may be exercised, in whole or in part, provided that an Option may be exercised in part only in respect of 1,000
     Shares or any multiple thereof; and
2.   The form entitled ‘‘Exercise Of Option To Subscribe’’ must be forwarded to the Company Secretary at 1 International Business
     Park, #05-14 The Synergy, Singapore 609917 in an envelope marked ‘‘Private and Confidential’’.




                                                              152
                                                                                               APPENDIX B

         TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION


Applications are invited for the subscription and/or purchase of the Invitation Shares at the Issue Price
subject to the following terms and conditions:−

1.   Applications for the Offer Shares may be made by way of the Offer Shares Application Forms or by
     way of electronic applications through the Automated Teller Machine (‘‘ATMs’’) belonging to the
     Participating Banks (‘‘ATM Electronic Applications’’) or through the Internet Banking (‘‘IB’’) web-site
     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 may only be made by way of the Placement Shares Application Forms, and applications for
     Reserved Shares may only be made by way of the Reserved Shares Application Forms. Applicants
     may not use their CPF Funds to apply for the Invitation Shares.

2.   ONLY ONE APPLICATION MAY BE MADE FOR THE BENEFIT OF ONE PERSON FOR EITHER
     THE OFFER SHARES OR THE PLACEMENT SHARES (OTHER THAN THE RESERVED
     SHARES) IN HIS OWN NAME. A PERSON SUBMITTING AN APPLICATION FOR THE OFFER
     SHARES BY WAY OF THE OFFER SHARES APPLICATION FORM MAY NOT SUBMIT ANOTHER
     APPLICATION BY WAY OF ELECTRONIC APPLICATION AND VICE VERSA. A PERSON
     SUBMITTING AN APPLICATION FOR THE 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 WILL 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 AGREED WITH THE PLACEMENT AGENT TO SUBSCRIBE FOR
     AND/OR PURCHASE PLACEMENT SHARES (OTHER THAN FOR THE RESERVED SHARES)
     OR WHO OTHERWISE PURCHASES AND/OR SUBSCRIBES FOR PLACEMENT SHARES FROM
     THE PLACEMENT AGENT SHALL NOT MAKE OR PROCURE ANY SEPARATE APPLICATION
     FOR OFFER SHARES EITHER BY WAY OF THE OFFER SHARES APPLICATION FORM OR
     THROUGH AN ELECTRONIC APPLICATION. SUCH SEPARATE APPLICATIONS WILL BE
     DEEMED TO BE MULTIPLE APPLICATIONS AND SHALL BE REJECTED.

     CONVERSELY, AN APPLICANT WHO HAS MADE AN APPLICATION FOR OFFER SHARES
     EITHER BY WAY OF THE OFFER SHARES APPLICATION FORM OR THROUGH AN
     ELECTRONIC APPLICATION SHALL NOT MAKE OR PROCURE TO BE MADE ANY SEPARATE
     APPLICATION FOR THE PLACEMENT SHARES (OTHER THAN FOR THE RESERVED
     SHARES). SUCH SEPARATE APPLICATIONS WILL BE DEEMED TO BE MULTIPLE
     APPLICATIONS AND SHALL BE REJECTED.

     JOINT OR MULTIPLE APPLICATIONS WILL BE REJECTED. PERSONS SUBMITTING OR
     PROCURING SUBMISSIONS 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
     INVESTIGATION. MULTIPLE APPLICATIONS OR THOSE APPEARING TO BE OR SUSPECTED
     OF BEING MULTIPLE APPLICATIONS WILL BE LIABLE TO BE REJECTED AT THE DISCRETION
     OF OUR COMPANY AND THE VENDORS.




                                                     153
     AN APPLICANT MAKING AN APPLICATION FOR THE RESERVED SHARES USING THE
     RESERVED SHARES APPLICATION FORM MAY SUBMIT ONE SEPARATE APPLICATION FOR
     OFFER SHARES IN HIS OWN NAME EITHER BY WAY OF THE OFFER SHARES APPLICATION
     FORM OR THROUGH AN ELECTRONIC APPLICATION OR SUBMIT ONE SEPARATE
     APPLICATION FOR PLACEMENT SHARES (OTHER THAN FOR THE RESERVED SHARES) BY
     WAY OF A PLACEMENT SHARE APPLICATION FORM, PROVIDED HE ADHERES TO THE
     TERMS AND CONDITIONS OF THIS PROSPECTUS. SUCH SEPARATE APPLICATIONS WILL
     NOT BE TREATED AS MULTIPLE APPLICATIONS.

3.   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 and 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.

4.   The existence of a trust will not be recognised. Any application by a trustee or trustees must be made
     in his/their own name(s) and without qualification or, where the application is made by way of a
     printed Application Form, in the name(s) of approved nominee companies after complying with
     paragraph 5 below.

5.   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 persons acting as nominees other than approved nominee companies will be rejected.

6.   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 an 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 with CDP
     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 7 below, an application may be rejected
     if the applicant’s particulars such as his name, NRIC or 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 the applicant possesses more than one individual direct Securities Account with CDP, his
     application will be rejected.

7.   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/or
     allocation and other correspondence from CDP will be sent to his address last registered with
     CDP.

8.   Our Company and the Vendors reserve 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 our Company or the Vendors 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 and/or allocation, at the discretion of our Company
     and the Vendors, due consideration will be given to the desirability of allotting the Invitation Shares
     to a reasonable number of successful applicants with a view to establishing an adequate market for
     our Shares.




                                                    154
 9.   Our Company and the Vendors reserve the right to reject any application which does not conform
      strictly to the instructions set out in the Application Form 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 applications by way of printed Application Forms, which is illegible,
      incomplete, incorrectly completed or which is accompanied by an improperly drawn up or improper
      form of remittance. Our Company and the Vendors further reserve the right to treat as valid any
      applications not completed or submitted or effected in all respects in accordance with the terms and
      conditions of this Prospectus, the instructions set out in the Application Forms and this Prospectus
      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.

10.   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 of account showing that his Securities Account
      has been credited with the number of Invitation Shares allotted to him. This will be the only
      acknowledgement of application moneys received and is not an acknowledgement by our
      Company or the Vendors. 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 the Invitation Shares allotted and/or allocated to the applicant. This
      authorisation applies for applications made both by way of printed Application Forms and by way
      of Electronic Applications.

11.   By completing and delivering an Application Form and, in the case of an ATM Electronic Application,
      by pressing the ‘‘Enter’’ or ‘‘OK’’ or ‘‘Confirm’’ or ‘‘Yes’’ or any other relevant key on the ATM, or in
      the case of an Internet Electronic Application, by clicking ‘‘Submit’’ or ‘‘Continue’’ or ‘‘Yes’’ or
      ‘‘Confirm’’ or any other relevant button on the Internet screen in accordance with the provisions
      herein, each applicant:−

      (a)   irrevocably offers to subscribe for and/or purchase the number of Invitation Shares specified
            in his application (or such smaller number for which the application is accepted) at the Issue
            Price for each Invitation Share and agrees that he will accept such Shares as may be allotted
            and/or allocated to him, in each case on the terms of, and subject to the conditions set out in,
            this Prospectus and the Memorandum and Articles of Association of our Company, and

      (b)   warrants the truth and accuracy of the information in his application.

12.   Applications must be made in lots of 1,000 Invitation Shares or higher integral multiples of 1,000
      Invitation Shares. Applications for any other number of Invitation Shares will be rejected.

13.   No Shares will be allotted and/or allocated on the basis of this Prospectus later than six months
      after the date of this Prospectus.

14.   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 the 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 that there is an over-subscription for the
      Offer Shares as at the close of the Application List.

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




                                                     155
16.    Acceptance of applications will be conditional upon our Company and the Vendors being satisfied
       that:−

       (a)   permission has been granted by the SGX-ST to deal in, and for quotation for, all our existing
             Shares and the New Shares on a ‘‘when issued’’ basis on Main Board of the SGX-ST; and

       (b)   the Management and Underwriting Agreement and Placement Agreement referred to on
             page 135 of this Prospectus have become unconditional and have not been terminated or
             cancelled prior to such date as our Company and the Vendors may determine.

17.    Additional terms and conditions for applications by way of printed Application Forms are set out on
       pages 156 to 159 of this Prospectus.

18.    Additional terms and conditions for applications by way of Electronic Applications are set out on
       pages 160 to 164 of this Prospectus.

19.    Each applicant irrevocably authorises CDP to disclose the outcome of his application, including the
       number of Invitation Shares allotted and/or allocated to the applicant pursuant to his application, to
       authorised operators.

20.    Any reference to the ‘‘applicant’’ in this section shall include a person applying for the Offer Shares
       by way of an Electronic Application or by way of the Offer Shares printed Application Form and a
       person applying for the Placement Shares through the Placement Agent and a person applying for
       the Reserved Shares by way of a Reserved Shares Application Form.

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
those set out under the section on ‘‘Terms and Conditions and Procedures for Application’’ found on
pages 153 to 156 of this Prospectus, as well as the Memorandum and Articles of Association of our
Company.

1.    Applications for the Offer Shares must be made using the WHITE Application Forms and official
      envelopes ‘‘A’’ and ‘‘B’’ and applications for the Placement Shares (other than for the Reserved
      Shares) must be made using the BLUE Application Forms, and applications for the Reserved Shares
      must be made using the PINK Application Forms accompanying and forming part of this Prospectus.
      Care must be taken to follow the instructions set out in the respective Application Forms and this
      Prospectus for the completion of the respective Application Forms. Applications which do not
      conform strictly to these instructions or to the terms and conditions of this Prospectus or which are
      illegible, incomplete, 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 an Application Form, 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.




                                                     156
3.   Individuals, corporations, approved nominee companies and trustees 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 applicants have such identification documents) or 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 an Application Form is required to affix
     its Common Seal (if any) in accordance with its Memorandum and Articles of Association or the
     equivalent constitutive documents of the corporation. If an application by a corporate applicant is
     successful, a copy of its Memorandum and Articles of Association or its equivalent constitutive
     documents must be lodged with our Company’s Share Registrar. Our Company and the Vendors
     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 Form are liable to have their applications rejected.

5.   Applicants may apply for the Invitation Shares using cash only. Each application must be
     accompanied by a cash remittance in Singapore currency for the full amount payable, in respect of
     the number of Invitation Shares applied for, in the form of a BANKER’S DRAFT, CASHIER’S ORDER
     or POSB CASHIER’S ORDER drawn on a bank in Singapore, made out in favour of ‘‘STRATECH
     SHARE ISSUE ACCOUNT’’ crossed ‘‘A/C PAYEE ONLY’’, or in the form of a DBS AUTOBANK
     CASHIER’S ORDER EQUIVALENT, 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 our Company, the
     Vendors 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 by any statute of
     Singapore have an interest in the aggregate of more than 50% of the issued share capital of or
     interests in such corporations. Approved nominee companies are required to declare whether the
     beneficial owner of the Invitation Shares is a citizen or permanent resident of Singapore or a
     corporation, whether incorporated or unincorporated and wherever incorporated or constituted, in
     which citizens or permanent residents of Singapore or any body corporate incorporated or
     constituted under any statute of Singapore have an interest in the aggregate of more than 50% of
     the issued share capital of or interests in such corporation.

7.   Unsuccessful applications and those not successfully balloted or accepted are expected to 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
     DBS Autobank 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 DBS Bank.




                                                     157
 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 our Company and the Vendors having distributed the Application Form to the
      applicant and agreeing to close the Application List at 12.00 noon on 31 July 2000 or such later time
      or date as our Directors and the Vendors 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 the Invitation 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 our
            Company and the Vendors and not otherwise, notwithstanding any remittance being
            presented for payment by or on behalf of our Company and the Vendors;

      (d)   he will not be entitled to exercise any remedy of rescission for misrepresentation at any time
            after acceptance of his application;

      (e)   all applications, acceptances and contracts resulting therefrom under the Invitation shall be
            governed by and construed in accordance with the laws of Singapore and that he irrevocably
            submits to the non-exclusive jurisdiction of the Singapore courts; and

      (f)   in making this application, reliance is being placed solely on the information contained in this
            Prospectus and that none of our Company, the Vendors, the Manager, the Underwriters, the
            Placement Agents or any other parties involved in the Invitation shall have any liability for any
            information not so contained.

10. Applications for Offer Shares
      (a)   Applications for Offer Shares must be made using the WHITE Application Forms and PINK
            official envelopes ‘‘A’’ and ‘‘B’’.

      (b)   The applicant must:−

             (i)   enclose the WHITE Application Form for the Offer Shares, duly completed and signed,
                   together with the correct remittance, in accordance with the terms and conditions of this
                   Prospectus in the PINK official envelope ‘‘A’’ which is provided;

            (ii)   in the appropriate spaces on the PINK official envelope ‘‘A’’:−

                   (A)   write his name and address;

                   (B)   state the number of Offer Shares applied for;

                   (C) tick the relevant box to indicate the form of payment; and

                   (D) affix adequate Singapore postage;

            (iii) SEAL THE OFFICIAL PINK ENVELOPE ‘‘A’’;

            (iv)   write, in the appropriate box provided on the larger official PINK envelope ‘‘B’’ addressed
                   to DBS BANK, 6 SHENTON WAY #28-00, DBS BUILDING TOWER ONE, SINGAPORE
                   068809, the number of Offer Shares for which the application is made; and




                                                      158
            (v)   insert PINK official envelope ‘‘A’’ into PINK official envelope ‘‘B’’, seal PINK official
                  envelope ‘‘B’’, affix adequate Singapore postage on envelope ‘‘B’’ (if despatching by
                  ordinary post) and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY
                  HAND at his own risk to DBS BANK, 6 SHENTON WAY #28-00, DBS BUILDING
                  TOWER ONE, SINGAPORE 068809, so as to arrive by 12.00 noon on 31 July 2000 or
                  such later time or date as our Directors and the Vendors may, in their absolute discretion,
                  decide. Local Urgent Mail or Registered Post must NOT be used.

            Applications that are illegible, incomplete or incorrectly completed or accompanied by an
            improperly drawn up or improper form of remittance are liable to be rejected.

      (c)   ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
            receipt will be issued for any application or remittance received.

11.   Applications for Placement Shares (other than for the Reserved Shares)
      (a)   Applications for Placement Shares (other than for the Reserved Shares) must be made using
            the BLUE Application Forms.

      (b)   The completed and signed BLUE Placement Shares Application Form and the applicant’s
            remittance for the full amount payable in respect of the number of Placement Shares applied
            for, 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
            Singapore postage on the envelope (if despatching by ordinary post) and thereafter the sealed
            envelope must be despatched by ORDINARY POST OR DELIVERED BY HAND at the
            applicant’s own risk to DBS Bank, 6 Shenton Way #28-00, DBS Building Tower One,
            Singapore 068809, for the attention of Capital Markets, so as to arrive by 12.00 noon on 31
            July 2000 or such later time or date as our Directors and the Vendors may, in their absolute
            discretion, decide. Local Urgent Mail or Registered Post must NOT be used.

      (c)   ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
            receipt will be issued for any application or remittance received.

      (d)   Alternatively, the applicant may remit his application moneys by electronic transfer to the
            account of DBS Bank, Shenton Way Branch, Current Account No. 001-045665-2, in
            favour of ‘‘STRATECH SHARE ISSUE ACCOUNT’’ for the number of Placement Shares
            applied for by 12.00 noon on 31 July 2000. Applicants who remit their application moneys via
            electronic transfer should send a copy of the telegraphic transfer advice slip to DBS Bank, 6
            Shenton Way #28-00, DBS Building Tower One, Singapore 068809, for the attention of
            Capital Markets, so as to arrive by 12.00 noon on 31 July 2000 or such later time or date as
            our Directors and the Vendors may, in their absolute discretion, decide.

12. Applications for Reserved Shares
      (a)   Applications for Reserved Shares must be made using the PINK Application Forms.

      (b)   The completed and signed PINK Reserved Shares Application Form and the applicant’s
            remittance in accordance with the terms and conditions of this Prospectus for the full amount
            payable in respect of the number of Reserved Shares applied for must be enclosed and
            sealed in an envelope to be provided by the applicant. The Applicant must affix adequate
            Singapore postage on the envelope (if despatching by ordinary post) and thereafter the sealed
            envelope must be despatched by ORDINARY POST OR DELIVERED BY HAND at the
            applicant’s own risk to our Company’s registered office presently at 1 International Business
            Park #05-14 The Synergy, Singapore 609917, so as to arrive by 12.00 noon on 31 July 2000
            or such later time or date as our Directors and the Vendors may, in their absolute discretion,
            decide. Local Urgent Mail or Registered Post must NOT be used.

      (c)   ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
            receipt will be issued for any application or remittance received.




                                                     159
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 Internet Banking website screens (in the case of Internet Electronic Applications)
of the relevant Participating Banks (the ‘‘Steps’’) Currently, DBS Bank, OUB, UOB and Citibank are the
only Participating Banks through which Internet Electronic Applications can be made. For illustration
purposes, the procedures for Electronic Applications through ATMs and the IB web-site of DBS Bank are
set out in the ‘‘Steps for Electronic Applications through ATMs’’ and the ‘‘Steps for Internet Electronic
Applications’’ appearing on pages 165 and 166 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
carefully before making an Electronic Application. An ATM card issued by one Participating Bank cannot
be used to apply for Offer Shares at an ATM belonging to other Participating Banks.

Any reference to the ‘‘Applicant’’ in these Terms and Conditions for Electronic Applications and the Steps
shall mean the applicant who applies for the Offer Shares through an ATM of a Participating Bank or the
IB website of a relevant Participating Bank. For an ATM Electronic Application, an 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 the ATMs of that Participating Bank. For an Internet Electronic
Application, the Applicant must have an existing bank account with and a User Identification (‘‘User ID’’)
and a Personal Identification Number (‘‘PIN’’) given by a relevant Participating Bank. The Steps set out
the actions that the Applicant must take at ATMs or the Internet Banking website of DBS Bank to
complete an Electronic Application. The actions that the Applicant must take at the ATMs or the Internet
Banking websites of the other Participating Banks are set out on the ATM screens or the Internet Banking
website 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. The Transaction Record is for the Applicant’s
retention and should not be submitted with any printed Application Form. Upon completion of his Internet
Electronic Application, there will be an on-screen confirmation (‘‘confirmation screen’’) of the application
which can be printed out by the Applicant for his record. This printed record should not be submitted with
any printed Application Form.

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
not issued to him in his own name will render his application liable to be rejected. An Applicant,
including one who has a joint bank account with a Participating Bank, must use an ATM Card
issued to him in his own name and must enter his own Securities Account number. 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 making an Internet Electronic Application must ensure that his mailing address is in
Singapore and declare that the application is made in Singapore, otherwise his application is liable to be
rejected.

An Electronic Application 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 as well as those set out under the
section on ‘‘Terms and Conditions and Procedures for Application’’ found on pages 153 to 156 of this
Prospectus, as well as the Memorandum and Articles of Association of our Company.

1.   In connection with his Electronic Application for the Offer Shares, the Applicant is required to confirm
     statements to the following effect in the course of activating the Electronic Application:−

     (a) that he has received a copy of this Prospectus and has read, understood and agreed to
         all the terms and conditions of application for the Offer Shares and this Prospectus prior
         to effecting the Electronic Application and agrees to be bound by the same;

     (b) that he consents to the disclosure of his name, NRIC or passport number, address,
         nationality and permanent residence status, CDP Securities Account number, CPF
         Investment Account number (if applicable) and share application amount (the ‘‘Relevant
         Particulars’’) from his account with that Participating Bank to the Share Registrars,
         SCCS, CDP, CPF, our Company, the Vendors and the Manager (the ‘‘Relevant Parties’’);
         and

                                                    160
     (c) that this application is his only application for the Offer Shares and it is made in his name
         and at his own risk.

     His application will not be successfully completed and cannot be recorded as a completed
     transaction in the ATM unless he presses the ‘‘Enter’’ or ‘‘OK’’ or ‘‘Confirm’’ or ‘‘Yes’’ key 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 website screen. By doing so, the Applicant shall be treated as signifying his
     confirmation of each of the above three statements. In respect of statement 1(b) above, his
     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 that Participating Bank of the Relevant Particulars of his account(s) with that
     Participating Bank to the Relevant Parties.

2.   An Applicant may make an ATM Electronic Application at an ATM of any Participating Bank or any
     Internet Electronic Application at the Internet Banking website of a relevant Participating Bank for the
     Offer Shares using cash only by authorising such Participating Bank to deduct the full amount
     payable from his account with such Participating Bank.

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 and/or allocated to him in respect of his Electronic
     Application. In the event that our Company and the Vendors decides to allot and/or allocate any
     lesser number of such Offer Shares or not to allot and/or allocate any Offer Shares to the Applicant,
     the Applicant agrees to accept the decision as final. If the Applicant’s Electronic Application is
     successful, his confirmation (by his action of pressing the ‘‘Enter’’ or ‘‘OK’’ or ‘‘Confirm’’ or ‘‘Yes’’ key
     or any other relevant key on the ATM or clicking ‘‘Confirm’’ or ‘‘OK’’ of ‘‘Submit’’ or ‘‘Continue’’ or ‘‘Yes’’
     or any other relevant button on the IB website 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
     and/or allocated to him and his agreement to be bound by the Memorandum and Articles of
     Association of our Company.

4.   The Applicant irrevocably requests and authorises our Company and the Vendors to:−

     (a)   register the Offer Shares allotted and/or allocated to him in the name of CDP for deposit into his
           Securities Account;

     (b)   send the relevant Share certificate(s) to CDP;

     (c)   return (without interest or any share of revenue or other benefit arising therefrom) the
           application moneys, should his Electronic Application not be accepted, by automatically
           crediting the Applicant’s bank account with his Participating Bank with the relevant amount
           within three Market Days after the close of the Application List; and

     (d)   return (without interest or any share of revenue or other benefit arising therefrom) the balance
           of the application moneys, should his Electronic Application be accepted in part only, by
           automatically crediting the Applicant’s bank account with his 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 THE 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.

     THE APPLICANT SHALL MAKE ONLY ONE ELECTRONIC APPLICATION AND SHALL                                       NOT
     MAKE ANY OTHER APPLICATION FOR THE INVITATION SHARES (OTHER THAN                                         THE
     RESERVED SHARES), WHETHER AT THE ATMs OF ANY PARTICIPATING BANK OR                                       THE
     INTERNET BANKING WEBSITE (IF ANY) OF ANY PARTICIPATING BANK OR ON                                        THE
     PRESCRIBED PRINTED APPLICATION FORMS.




                                                        161
 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, our Company, the Vendors and
      the Manager and if, in any such event, the Participating Banks and/or our Company and/or the
      Vendors 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 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 Participating Banks, our Company, the Vendors or the Manager
      for the Offer Shares applied for or for any compensation, loss or damage.

 7.   Electronic Applications shall close at 12.00 on 31 July 2000 or such other time as our Directors and
      the Vendors may in consultation with the Manager decide. All Internet Electronic Applications must
      be received by 31 July 2000. 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.

 8.   All particulars of the Applicant in the records of his Participating Bank 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 his Participating Bank.

 9.   The Applicant must have sufficient funds in his bank account(s) with his Participating Bank at the
      time he makes his Electronic Application, failing which his Electronic Application will not be
      completed or accepted. Any Electronic Application made at ATMs or the Internet Banking websites
      of the relevant Participating Banks which does not strictly conform to the instructions set out in this
      Prospectus will be rejected.

10. No reserve application will be kept. Where an Electronic Application is not accepted, it is
    expected that the full amount of the application moneys will be refunded in Singapore dollars
    (without interest or any share of revenue or other benefit arising therefrom) to the Applicant by
    being automatically credited to the Applicant’s account 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 balance of the application moneys will be
    refunded (without interest or any share of revenue or other benefit arising therefrom) to the
    Applicant by being automatically credited to the Applicant’s account with his Participating Bank
    within 14 days after the close of the Application List.

      If the Applicant’s Electronic Application is made through the ATMs of KTB or the 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 as stated in the records of the relevant
      Participating Bank at the date of his 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 Electronic
      Application is made through the ATMs of OCBC Group, OUB Group or DBS Bank (other than
      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 Internet Banking website
      of DBS Bank, UOB, or OUB is unsuccessful, no notification will be sent by such
      Participating Bank.




                                                    162
      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 balloting day
       Bank         327 4767        Internet Kiosk
                                    www.dbs.com.sg*

       KTB          222 8228        ATM                         ATM — 24 hours a day     ATM-Evening of the balloting day

                                                                Phone Banking:           Phone Banking:
                                                                Mon-Fri: 0800−2200       8.00 a.m. on the day after the balloting day
                                                                Sat:     0800−1500

       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          1800-533 5533   ATM (Other Transactions —   Phone Banking/ATM‡:      6.00pm on the balloting day
                    1800-222 2121   ‘‘IPO Enquiry’’)            24 hours a day
                                    www.uobcyberbank.com.sg‡

      *Applicants who have made Internet Electronic Applications through the Internet Banking website of DBS Bank or OUB may
       also check the result of their applications through the same channels listed in the table above in relation to ATM Electronic
       Applications made at the ATMs of DBS Bank or OUB.
      †Applicants who have made Electronic Applications through the ATMs or the Internet Banking website of OUB and who have
       activated their OUB Mobile Buzz services will be notified of the results of their Electronic Applications, via their mobile
       phones.
      ‡Applicants who have made Electronic Applications through the ATMs or the Internet Banking website of UOB may check
       the results of their applications through UOB CyberBank, UOB Group’s ATMs or UOB Phone Banking services.


11.   By making and completing an Electronic Application, the Applicant agrees that:−

      (a)    in consideration of our Company and the Vendors making available the Electronic Application
             facility, through the ATMs of the Participating Banks and at the Internet Banking websites of
             the relevant Participating Banks:−

              (i)   his Electronic Application is irrevocable; and

             (ii)   his Electronic Application, the acceptance of his Electronic Application by our Company
                    and the Vendors 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;

      (b)    none of our Company, the Vendors, the Manager or the Participating Banks shall be liable for
             any delays, failures or inaccuracies in the recording, storage or in the transmission or delivery
             of data relating to his Electronic Application to our Company, the Vendors or CDP due to a
             breakdown or failure of transmission, delivery or communication facilities or any risks referred
             to in paragraph 6 on page 162 of this Prospectus or to any cause beyond their respective
             controls;

      (c)    he will not be entitled to exercise any remedy of rescission for misrepresentation at any time
             after acceptance of his application; and




                                                                163
      (d)   in respect of the Offer Shares for which his 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 our Company and the Vendors and not
            otherwise, notwithstanding any payment received by or on behalf of our Company and the
            Vendors.

      (e)   in making his application, reliance is placed solely on the information, contained in the
            Prospectus and that none of our Company, the Vendors, the Manager, the Underwriters, the
            Placement Agents nor any other person involved in the Invitation shall have any liability for any
            information not so contained.

12. The Applicant should ensure that his personal particulars as recorded by both CDP and the
    relevant Participating Banks are correct and identical. Otherwise his Electronic Application
    may be rejected. The Applicant should promptly inform CDP of any change in his address, failing
    which the notification letter on successful allotment and/or allocation will be sent to his address last
    registered with CDP.

13.   The existence of a trust will not be recognised. Any Electronic Application by a trustee or trustees
      must be made in his/their own name and without qualification. Our Company and the Vendors will
      reject any application by any person acting as nominee.




                                                     164
Steps for Electronic Applications through ATMs of DBS Bank (including its POSBank Services
division)
Instructions for ATM Electronic Applications will appear on the ATM screens of the Participating Banks.
For illustrative purposes, the steps for making an ATM Electronic Application through a DBS Bank or
POSBank ATM are shown below. Certain words appearing on the screen are in abbreviated form (‘‘A/c’’,
‘‘amt’’, ‘‘appln’’, ‘‘&’’, ‘‘I/C’’ and ‘‘No.’’ refer to ‘‘Account’’, ‘‘amount’’, ‘‘application’’, ‘‘and’’, ‘‘NRIC’’ and
‘‘Number’’, respectively). Instructions for Electronic Applications on the ATM screens of Participating
Banks (other than DBS Bank) may differ slightly from those represented below.

Step 1:     Insert your personal DBS Bank or POSBank ATM Card

       2:   Enter your Personal Identification Number

       3:   Select ‘‘CASHCARD & MORE SERVICES’’

       4:   Select ‘‘ESA — IPO/SHARE/BOND/RIGHTS’’

       5:   Select ‘‘ELECTRONIC SECURITY APPLICATION (IPO — SHARE/BOND) TO ‘‘STRATECH’’

       6:   Press the ‘‘ENTER’’ key to acknowledge:−
            — You have read, understood & agreed to all terms of appln & Prospectus
            — You consent to disclose your name, I/C/Passport No., address, nationality, CDP
              Securities A/c No., CPF Investment A/c No. & share appln amount from your Bank
              Account(s) to share registrars, SCCS, CDP, CPF, issuer/vendor(s).
            — For FIXED price share appln, this is your only appln and it is made in your own
              name and at your own risk
            — You are not a US Person as referred to in the Prospectus/Document where
              applicable.

       7:   Select your nationality

       8:   Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSBank
            account (current/savings) from which to debit your application moneys

       9:   Enter the number of Offer Shares you wish to apply for using cash

      10:   Enter your own 12-digit CDP Securities Account number. (Note: This step will be omitted
            automatically if your CDP Securities Account number has already been stored in the Bank’s
            records)

      11:   Check the details of your share application, your NRIC/passport number and CDP Securities
            Account number and the number of shares on the screen and press the ‘‘ENTER’’ key to
            confirm application

      12:   Remove the Transaction Record for your reference and retention only




                                                         165
Steps for Internet Electronic Applications through the Internet Banking website of DBS Bank
For illustrative purposes, the steps for making an Internet Electronic Application through the DBS Bank
Internet Banking website is shown below. Certain words appearing on the screen are in abbreviated form
(‘‘A/C’, ‘‘&’’, ‘‘I/C’’ and ‘‘No.’’ refer to ‘‘Account’’, ‘‘and ‘‘, ‘‘NRIC’’ and ‘‘Number’’ respectively),

Step 1:    Click on to DBS web-site (www.dbs.com.sg)

      2:   Login to Internet banking

      3:   Enter your User ID and PIN

      4:   Select ‘‘Electronic Share Application’’

      5:   Click ‘‘Yes’’ to proceed and to warrant that you have observed and complied with all applicable
           laws and regulations

      6:   Click on ‘‘STRATECH’’

      7:   Click ‘‘Confirm’’ to confirm:−
           — You have read, understood & agreed to all terms of application and Prospectus
           — You consent to disclose your name, IC/passport No., address, nationality, CDP
             Securities A/C No., CPF Investment A/C No. & share application amount from your
             DBS/POSBank Account(s) to share registrars, SCCS, CDP, CPF Board and issuer/
             vendor(s)
           — This application is made in your own name and at your own risk
           — For FIXED price share application, this is your only application. For TENDER price
             securities application, this is your only application at the Selected tender price

      8:   Fill in details for share application and click ‘‘Submit’’

      9:   Check details of your application, your IC/passport No. and number of shares on the screen
           and click ‘‘OK’’ to confirm your application

     10:   Print Confirmation Screen (optional) for your reference & retention only




                                                     166

				
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