IPO (Final)

PROSPECTUS DATED 27 MARCH 2002
Application has been made to the Singapore Exchange Securities Trading Limited (the SGX-ST) for permission to deal in and for quotation for all the
ordinary shares of S$0.08 each (the Shares) in the capital of PNE Micron Holdings Ltd (the Company) already issued, the new Shares which are
the subject of this Invitation (the New Shares) as well as the New Shares arising from the exercise of options granted under our PNE Micron
Employees Share Option Scheme. Such permission will be granted when our Company has been admitted to the Official List of the Stock Exchange
of Singapore Dealing and Automated Quotation System (the SGX-Sesdaq). Acceptance of applications will be conditional upon, inter-alia, permission being granted to deal in and for quotation for all of the issued Shares of our Company, the New Shares, which are the subject of the Invitation
as well as the New Shares arising from the exercise of options granted under our PNE Micron Employees Share Option Scheme. Quotations of
and dealing in the Shares will be in Singapore dollars.
Monies paid in respect of any application accepted will, subject to applicable laws, be returned, without interest or any share of revenue or other
benefit arising therefrom and at the applicants own risk, if the said permission is not granted. The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in this Prospectus. Admission to the Official List of the SGX-Sesdaq is not
to be taken as an indication of the merits of the Invitation, our Company, our subsidiaries, our PNE Micron Employees Share Option Scheme, our
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.
PNE MICRON HOLDINGS LTD

(Incorporated in the Republic of Singapore on 7 September 2001)
Invitation in respect of 62,000,000 New Shares of S$0.08 each comprising:(1) 1,500,000 Offer Shares at S$0.22 each by way of public offer; and
Commenced operations in 1992 as a tool & die designer and

manufacturer; developed into a specialist ED coating service provider
(2) 60,500,000 Placement Shares by way of placement comprising:-
CORE BUSINESS
(i)
a minimum of 45,000,000 Placement Shares at S$0.22 each; and
(ii) up to 15,500,000 Reserved Shares at S$0.22 each reserved for management, Independent Directors, employees,
business associates and those who have contributed to our success,
payable in full on application.
Manager
SBI E2-Capital Securities Limited
SNP SPrint Pte Ltd 62-2075-9
The Group also engages in sub-assembly of micro-motors on a contract

manufacturing basis
Joint Lead Placement Agents

UOB Kay Hian Private Limited
DBS Vickers Securities (Singapore) Pte Ltd
J. M. Sassoon & Co. (Pte) Ltd.

Co-Placement Agents
Millennium Securities Pte Ltd
The Group has three core businesses:a) manufacture and sale of perforated materials, speaker nets and
other metal components
b) ED coating services
c) tool & die design and manufacturing
Phillip Securities Pte Ltd
Underwriters for Public Offer




CORE BUSINESS
(i)
Manager

manufacturing basis


Co-Placement Agents

COMPETITIVE STRENGTHS
One Stop Service
- wide variety of products and services
Good Relationships with Customers
- more than 90% repeat customers
Broad and Diversified Customer Base
- customers in consumer electronics and electronics industries for products
such as televisions, personal computers and home appliances
Product Quality and Services Reliability
- 3 major subsidiaries awarded ISO certifications
PNE Micron Engineering (Msia)
PNE Precision
Hong Nam
- the ISO certifications are internationally

recognised industry accreditations for
companies with sound documentation
control, good quality management systems
and adherence to good manufacturing practices
Experienced Management Team
- senior management has an average of more than 15 years experience in
the business
FUTURE GROWTH STRATEGIES

Expansion of our ED Coating Services
- expand ED coating services to capture a bigger market
share in the automobile industry
- setting up a fourth ED coating line in Malaysia to cater
to the automobile industry
- currently conducting a market research on the
possibility of setting up an ED coating line in the PRC
and Thailand
Expansion into the PRC
- plan to set up production facilities for perforated
materials and other metal components
Production and Assembly of Complete Micro-motors
- intend to carry out the complete range of processes
for the production of micro-motors
New Geographical Markets
- intend to penetrate new markets in the USA and
Europe
COMPETITIVE STRENGTHS
One Stop Service
- wide variety of products and services
Good Relationships with Customers
- more than 90% repeat customers
Broad and Diversified Customer Base
- customers in consumer electronics and electronics industries for products
such as televisions, personal computers and home appliances
Product Quality and Services Reliability
- 3 major subsidiaries awarded ISO certifications
PNE Micron Engineering (Msia)
PNE Precision
Hong Nam
- the ISO certifications are internationally

recognised industry accreditations for
companies with sound documentation
control, good quality management systems
and adherence to good manufacturing practices
Experienced Management Team
- senior management has an average of more than 15 years experience in
the business
FUTURE GROWTH STRATEGIES

Expansion of our ED Coating Services
- expand ED coating services to capture a bigger market
share in the automobile industry
- setting up a fourth ED coating line in Malaysia to cater
to the automobile industry
- currently conducting a market research on the
possibility of setting up an ED coating line in the PRC
and Thailand
- plan to set up production facilities for perforated
materials and other metal components
Production and Assembly of Complete Micro-motors
- intend to carry out the complete range of processes
for the production of micro-motors
New Geographical Markets
- intend to penetrate new markets in the USA and
Europe
TABLE OF CONTENTS
Page
CORPORATE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
GLOSSARY OF TECHNICAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
EXCHANGE RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
11
DETAILS OF THE INVITATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
LISTING ON THE SGX-SESDAQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
INDICATIVE TIMETABLE FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . .
13
RESULTS OF APPLICATION AND DISTRIBUTION . . . . . . . . . . . . . . . . . . . . .
13
PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
THE INVITATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS . . . . . . . .
22
ISSUE STATISTICS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23
DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
GROUP FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
PROFORMA STATEMENT OF GROUP RESULTS . . . . . . . . . . . . . . . . . . . . . .
25
PROFORMA GROUP BALANCE SHEETS . . . . . . . . . . . . . . . . . . . . . . . . . .
26
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
27
REVIEW OF PAST PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .
29
REVIEW OF RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . .
30
REVIEW OF PAST FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . .
32
LIQUIDITY AND CAPITAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . .
37
CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . .
40
DILUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41
GENERAL INFORMATION ON OUR GROUP . . . . . . . . . . . . . . . . . . . . . . .
42
SHARE CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
42
SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
44
MORATORIUM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
RESTRUCTURING EXERCISE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
45
GROUP STRUCTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
49
Page
HISTORY AND BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51
MAJOR SUPPLIERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
58
MAJOR CUSTOMERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
59
COMPETITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
61
PROSPECTS, BUSINESS STRATEGY AND FUTURE PLANS . . . . . . . . . . . . . . .
63
PROSPECTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
63
BUSINESS STRATEGY AND FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . .
64
GOVERNMENT REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65
INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . .
67
PAST INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . .
67
SHAREHOLDERS' MANDATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76
REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS . . . . . .
78
POTENTIAL CONFLICTS OF INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . .
79
CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
79
DIRECTORS, MANAGEMENT AND STAFF . . . . . . . . . . . . . . . . . . . . . . . .
80
DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
80
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
84
SERVICE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
87
THE PNE MICRON EMPLOYEES' SHARE OPTION SCHEME . . . . . . . . . . . . . .
90
PROPERTIES AND FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . .
96
DIRECTORS' REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
98
ACCOUNTANTS' REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
99
GENERAL AND STATUTORY INFORMATION . . . . . . . . . . . . . . . . . . . . . . .
120
APPENDIX A RULES OF THE PNE MICRON EMPLOYEES' SHARE OPTION

SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
146
APPENDIX B DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO

SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
163
APPENDIX C DESCRIPTION OF SINGAPORE LAW AND REGULATIONS RELATING

TO TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
167
APPENDIX D TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION

AND ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . .
170
CORPORATE INFORMATION
BOARD OF DIRECTORS
Tan Kong Heng (Non-Executive Chairman)

Tan Kong Sin (Chief Executive Ofcer)
Tan Kwong Soon (Executive Director)
Tan Kong Leong (Non-Executive Director)
Sitoh Yih Pin (Independent Director)
Soh Lup Chee (Independent Director)
COMPANY SECRETARY
Lee Kay Beng, CPA
REGISTERED OFFICE
14 Senoko Loop
Singapore 758150
SHARE REGISTRAR AND

SHARE TRANSFER OFFICE
M & C Services Private Limited

138 Robinson Road
#17-00 The Corporate Ofce
Singapore 068906
MANAGER
SBI E2-Capital Pte Ltd

5 Shenton Way
#09-07 UIC Building
Singapore 068808
UNDERWRITERS FOR
PUBLIC OFFER

80 Rafes Place
# 30-01 UOB Plaza 1
Singapore 048624
8 Cross Street,
# 02-01 PWC Building
Singapore 048424
JOINT LEAD PLACEMENT

AGENTS

20/F Henley Building
5 Queen's Road Central
Hong Kong
80 Rafes Place
# 30-01 UOB Plaza 1
Singapore 048624
8 Cross Street,
# 02-01 PWC Building
Singapore 048424
CO-PLACEMENT AGENTS

1 Rafes Place
# 43-00 OUB Centre
Singapore 048616
80 Robinson Road # 02-00
Singapore 068898
95 South Bridge Road
# 11-17 Pidemco Centre
Singapore 058717
AUDITORS AND REPORTING

ACCOUNTANTS
KPMG
Certied Public Accountants
16 Rafes Quay
#22-00 Hong Leong Building
Singapore 048581
SOLICITORS TO THE
INVITATION
Shook Lin & Bok

1 Robinson Road
#18-00 AIA Tower
Singapore 048542
PRINCIPAL BANKER
United Overseas Bank Limited

80 Rafes Place
UOB Plaza 1
Singapore 048624
DEFINITIONS
For the purpose of this Prospectus and the accompanying Application Forms, the following denitions
have, where appropriate, been used:
Group Companies
``CED System''
CED System Sdn. Bhd.
``Company'' or ``PNE Micron''
PNE Micron Holdings Ltd
``Hong Nam''
Hong Nam Industry (M) Sdn. Bhd.
``Macore''
Macore Technology (M) Sdn. Bhd.
``PNE-Gin Lin''
PNE-Gin Lin Sdn. Bhd.
``PNE Micron Engineering (M'sia)''
PNE Micron Engineering Sdn. Bhd.
``PNE Micron Engineering (S'pore)''
PNE Micron Engineering Pte Ltd
``PNE Precision''
PNE Precision Sdn. Bhd.
`Àctrolite''
Actrolite Sdn Bhd
``Casio''
Casio Singapore Pte Ltd (formerly known as Asahi

Electronics (S) Pte Ltd)
``Casio Group of Companies''
Comprising Casio and Asahi Industries (M) Sdn Bhd
``CDP''
The Central Depository (Pte) Limited
``Co-Placement Agents''
J. M. Sassoon & Co. (Pte) Ltd, Millennium Securities

Pte Ltd and Phillip Securities Pte Ltd and ``CoPlacement Agent'' means any of them
``DBS Vickers''
`ÈPU''
The Economic Planning

Department, Malaysia
``FIC''
The Foreign Investment Committee in the EPU
``Formosa Group of Companies''
Comprising mainly Formosa Prosonic Industries Bhd,

a listed company on the KLSE, Formosa Prosonic
Technics Sdn Bhd and Formosa Prosonic
Manufacturing Sdn Bhd
``Foster Electric''
Foster Electric (S) Pte Ltd
``Joint Lead Placement Agents''
SBI E2-Capital Securities, UOB Kay Hian and DBS

Vickers and ``Placement Agent'' means any of them
``KLSE''
Kuala Lumpur Stock Exchange
``Likom Group of Companies''
Comprising mainly Likom Computer System Sdn Bhd

and Likom Caseworks Sdn Bhd
``MAEM''
Matsushita Electronic Motor Sdn Bhd
``MESA''
Matsushita Electronics (S) Pte Ltd
Other Companies or bodies
Unit,
Prime
Minister's
``MIDA''
Malaysian Industrial Development Authority
``MITI''
Ministry of International Trade and Industry, Malaysia
``Mitsubishi''
Mitsubishi Electronics Manufacturing Pte Ltd
``PNE Electric''
PNE Electric Sdn Bhd
``PNE Electronics''
PNE Electronics Sdn Bhd
``PNE Industries''
PNE Industries Ltd
``PNE Investment''
PNE Investment Pte Ltd
``PNE PCB''
PNE PCB Berhad
``PNE PCB (S)''
PNE PCB (S) Pte Ltd
``PNE Plas (M'sia)''
PNE Plas Sdn Bhd
``PNE Plas (S'pore)''
PNE Plas Pte Ltd
``Print N Etch''
Print N Etch Pte Ltd
``SBI E2-Capital'' or ``Manager''
``SBI E2-Capital Securities''
``SGX-Sesdaq''
Stock Exchange of Singapore Dealing and Automated

Quotation System
``SGX-ST''
Singapore Exchange Securities Trading Limited
`Ùnderwriters''
UOB Kay Hian Private Limited and DBS Vickers as

Underwriters for the Public Offer
`ÙOB Kay Hian''
`Àct''
The Companies Act, Chapter 50, of Singapore
`ÀTM''
Automated teller machine
`Àpplication Forms''
The ofcial application forms to be used for the

purpose of the Invitation and which form part of this
Prospectus
`Àpplication List''
List of applications for subscription and/or purchase

of the New Shares
`Àudit Committee''
The audit committee of our Company
``CPF''
Central Provident Fund
``Directors''
The directors of our Company as at the date of this

Prospectus, unless otherwise stated
`Èlectronic Applications''
Applications for the Offer Shares through an ATM of

one of the Participating Banks or the IB website of
one of the relevant Participating Banks in
accordance with the terms and conditions of this
Prospectus
General
`Èxecutive Directors''
The executive directors of our Company as at the

date of this Prospectus
`Èxecutive Ofcers''
The executive ofcers of our Group as at the date of

this Prospectus
``FY''
Financial year ended or ending 30 September
``Group''
The proforma group of companies comprising the

Company and its subsidiaries, following the
completion of the Restructuring Exercise, treated as
if the group structure had been in existence since
1 October 1998
`ÌB''
Internet Banking
`Ìnvitation''
The invitation by our Company to the public to

subscribe for and/or purchase the New Shares,
subject to and on the terms of this Prospectus
`Ìssue Price''
$0.22 for each New Share
`ÌSO''
International Organisation for Standardisation, a

world-wide federation of national standards bodies
`ÌSO 9000''
Series of international standards on quality

management and quality assurance developed by
the ISO Technical Committee 176 in 1987, which has
been adopted by more than 30 countries, including
the United Kingdom and the USA, as their national
quality system standard
`ÌSO 9001:2000''
A constituent part of the ISO 9000 series which states

the requirement for a quality management system
and covers the following eight management
principles: customer focus, leadership, involvement
of people, process approach, system approach
management,
continual
improvement,
factual
approach to decision making and mutually benecial
supplier relationship
`ÌSO 9002 certication''
A constituent part of the ISO 9000 series which

covers the following nineteen areas: management
responsibility; quality system; contract review;
document and data control; purchasing; control of
customer-supplied product; product identication
and traceability; process control; inspection and
testing; control of inspection, measurement and test
equipment; inspection and test status; control of
non-conforming products; corrective and preventive
action; handling, storage, packaging, preservation
and delivery; control of quality records; internal
quality audits; training; servicing and statistical
techniques
``Market Day''
A day on which the SGX-ST is open for trading in

securities
``MNC''
Multi-national corporation
``New Shares''
The 62,000,000 new Shares for which our Company

invites applications to subscribe for pursuant to the
Invitation, subject to and on the terms and
conditions of this Prospectus
``NTA''
Net tangible assets
`Òffer''
The offer by our Company of the Offer Shares to the

public for subscription and/or purchase at the Issue
Price, subject to and on the terms and conditions of
this Prospectus
`Òffer Shares''
The 1,500,000 New Shares which are the subject of

the Offer
``Participating Banks''
United Overseas Bank Limited (including Overseas

Union Bank (`ÒUB'')) and its subsidiaries, Far
Eastern Bank Limited (``FEB'') and Industrial &
Commercial Bank Limited (`ÌCB'') (the `ÙOB''
Group''); The Development Bank of Singapore Ltd
(including its POSBank Services division) (``DBS'');
and Oversea-Chinese Banking Corporation Limited
and its subsidiary, Bank of Singapore Limited (the
`ÒCBC Group'')
``Placement''
The placement of the Placement Shares by the

Placement Agents on behalf of our Company for
subscription and/or purchase at the Issue Price,
subject to and on the terms and conditions of this
Prospectus
``Placement Shares''
The 60,500,000 New Shares (including the Reserved

Shares) which are the subject of the Placement
``PRC''
People's Republic of China
``Prospectus''
This Prospectus published in respect of the Invitation
``Reserved Shares''
Up to 15,500,000 Placement Shares reserved for our

Group's
management,
Independent Directors,
employees, business associates and those who have
contributed to the success of our Group
``Restructuring Exercise''
The restructuring exercise implemented in connection

with the Invitation, more fully described on pages 45
to 48 of this Prospectus
``Securities Account''
Securities account maintained by a depositor with

CDP
``Service Agreements''
The service agreements entered into between our

Company and certain key management staff, as
described on pages 87 and 88 of this Prospectus.
``Shares''
Ordinary shares of $0.08 each in the capital of our

Company
``subsidiaries''
The subsidiaries of a Company (as dened in Section

5 of the Act) and ``subsidiary'' shall be construed
accordingly.
``Tan Brothers''
Tan Kong Hock, Tan Kong Boon, Tan Kong Heng,

Tan Kwong Soon, Tan Kwang Hua, Tan Kong Sin,
Tan Koon Chwee, Tan Kong Guan and Tan Kong
Leong
`ÙS'' or `` USA''
United States of America
``RM''
Malaysian ringgit
``S$'' or ``$'' and ``cents''
Singapore dollars and cents respectively, unless

otherwise stated
`ÙS$''
US dollars
``sq ft''
Square feet
``sq m''
Square metres
``%''
Percentage or per centum
Currencies, Units and Others
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing the masculine gender shall, where applicable, include the feminine and neuter genders and
vice versa. References to persons shall include corporations.
Any reference in this Prospectus and the Application Forms to any enactment is a reference to that
enactment as for the time being amended or re-enacted. Any word dened under the Act or any
statutory modication thereof and used in this Prospectus and the Application Forms shall have the
meaning assigned to it under the said Act or statutory modication 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.
A reference to a time of day in this Prospectus and the Application Forms shall be a reference to
Singapore time unless otherwise stated.
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 relating to our Group's industry.
`àrmature''
The coil through which voltage is induced by motion through a

magnetic eld
`àrmature core''
The laminated iron part of the armature, formed from thin sheets or
disks of steel, on which the windings are placed
``bush tting''
To install a cylindrical metal lining into the armature core
``CNC''
Computer numerical control
`ÈD coating''
Electro-deposition coating
`èlectric motor''
A motor that converts electricity to mechanical work
`ÒEM''
Original equipment manufacturer
``PCB''
Printed circuit board
``pitch''
The distance between the center of 2 adjacent perforated holes
``shaft tting``
The act of inserting a shaft into the armature core
10
EXCHANGE RATES
The following exchange rates are used throughout this Prospectus to translate the historical accounts
of foreign subsidiaries, unless otherwise stated. The exchange rates are made with reference to
exchange rates published in the Business Times on the last day of each month.
For prot and loss statement, the average exchange rates used for the following nancial years are as
follows:
FY1999
FY2000
FY2001
RM
S$
0.445
0.450
0.467
US$
S$
1.702
1.710
1.770
For balance sheet, the exchange rates as at the end of the following nancial years:
FY1999
FY2000
FY2001
RM
S$
0.448
0.458
0.465
US$
S$
1.703
1.741
1.781
11
DETAILS OF THE INVITATION

LISTING ON THE SGX-SESDAQ
Application has been made to the SGX-ST for permission to deal in and for quotation for all the
Shares already issued, the New Shares which are the subject of the Invitation as well as the New
Shares arising from the exercise of options granted under our PNE Micron Employees' Share Option
Scheme on the Ofcial List of the SGX-Sesdaq. Such permission will be granted when our Company
has been admitted to the Ofcial List of the SGX-Sesdaq. Acceptance of applications will be
conditional upon permission being granted to deal in and for quotation for all the issued Shares, the
New Shares which are the subject of the Invitation as well as the New Shares arising from the exercise
of options granted under our PNE Micron Employees' Share Option Scheme. Monies paid in respect
of any application accepted will be returned, without interest or any share of revenue or benet 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 Ofcial List of the SGX-Sesdaq is
not to be taken as an indication of the merits of the Invitation, our Company, our subsidiaries, our PNE
Micron Employees' Share Option Scheme, our Shares or our New Shares.
The Directors individually and collectively accept full responsibility for the accuracy of the information
given in this Prospectus and conrm, 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 our Company or the Manager. Neither the
delivery of this Prospectus and the Application Forms nor the Invitation shall, under any
circumstances, constitute a continuing representation or create any suggestion or implication that
there has been no change in the affairs of our Company or of our subsidiaries or in any statements
of fact or information contained in this Prospectus since the date of this Prospectus. Where such
changes occur, our 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 our Company or our 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 New Shares or for any other purpose. This
Prospectus does not constitute an offer of, or invitation to subscribe for or purchase of, the New
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:
5 Shenton Way
UIC Building, # 09-07
Singapore 068808

80 Rafes Place # 30-01
UOB Plaza 1
Singapore 048624
DBS Vickers Securities

(Singapore) Pte Ltd
8 Cross Street # 02-01
PWC Building
Singapore 048424
and from members of the Association of Banks in Singapore, members of the SGX-ST and merchant
banks in Singapore.
The Application List will open at 10.00 a.m. on 4 April 2002 and will remain open until 12.00 noon
on the same day or for such further period or periods as our Directors may, in their absolute
discretion, decide, subject to any limitation under all applicable laws.
12
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
4 April 2002, 12 noon
Closing date and time for applications
5 April 2002
Balloting of applications, if necessary
8 April 2002, 9.00 a.m.
Commence trading on a ``when issued'' basis
16 April 2002
Last day of trading on a ``when issued'' basis
17 April 2002, 9.00 a.m.
Commence trading on a ``ready'' basis
22 April 2002
Settlement date for all trades done on a ``when issued'' basis

and for all trades done on a ``ready'' basis on 17 April 2002
The above timetable is only indicative as it assumes that the closing of the Application List is 4 April
2002, the date of admission of our Company to the Ofcial List of the SGX-Sesdaq will be 8 April
2002, the SGX-ST's shareholding spread requirement will be complied with and the New Shares will
be issued and fully paid up prior to 8 April 2002. The actual date on which the Shares will commence
trading on a ``when issued'' basis will be announced when it is conrmed by the SGX-ST.
The above timetable and procedure may be subject to such modications as the SGX-ST may in its
discretion decide, including the decision to permit trading on a ``when issued'' basis, the
commencement date of such trading. All persons trading in our Shares on a ``when issued'' basis do
so at their own risk. In particular, persons trading in our 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 with or are otherwise
benecially 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 rst day of ``ready'' basis trading.
Investors should consult the SGX-ST announcement on the ``ready'' listing date on the Internet (at the
SGX-ST website http://www.sgx.com), INTV or the newspapers, or check with their brokers on the
date on which trading on a ``ready'' basis will commence.
RESULTS OF APPLICATION AND DISTRIBUTION
We will publicly announce the level of subscription and the results of the distribution of the New
Shares pursuant to the Invitation, as soon as it is practicable after the closing date for applications:
(i)
in the local English and/or Chinese newspapers; and
(ii)
through a MASNET announcement to be posted on the Internet at the SGX-ST web-site

http://www.sgx.com.
13
PROSPECTUS SUMMARY
The information contained in this summary is derived from and should be read in conjunction with the
full text of this Prospectus.
Our Company
We were incorporated in the Republic of Singapore on 7 September

2001 under the name PNE Micron Holdings Pte Ltd as a private
company limited by shares. On 12 March 2002 we were converted to
a public limited company and changed our name to PNE Micron
Holdings Ltd.
To prepare for a listing on the SGX-Sesdaq pursuant to the Invitation,
the Restructuring Exercise was undertaken to rationalise our
shareholding structure and to consolidate the principal entities of our
Group as wholly-owned subsidiaries under our Company.
Our registered ofce is located at 14 Senoko Loop, Singapore 758150.
Our telephone number is (65) 6752 3833 and our facsimile number is
(65) 6752 8200. Our website address is at http://www.pne.com.sg.
Information contained on our website does not constitute part of
this Prospectus.
Overview of our
Group
We are principally engaged in the following 3 main areas of business:
the manufacture and sale of perforated materials, speaker nets

and other metal components
the provision of ED coating services
the design and manufacture of tool and die
The perforated materials and speaker nets that we produce are used
mainly in audio and computer speakers. The metal components that
we produce are used largely in audio and video appliances and by
OEMs of computer peripherals.
We provide ED coating services mainly to the consumer electronics
industry and for micro-motors. We also extend such services to the
automobile industry. During the ED coating process, we apply a
surface nishing technology onto metal products to prevent them
from rusting and corroding. ED coating produces a superior surface
nishing quality and durability as compared to normal spray-painting.
Our ED coating process is fully automated.
In the design and manufacture of tool and die, we design, develop and
fabricate moulds used in the manufacture of perforated materials,
speaker nets, other metal components and PCBs.
All our manufacturing operations are located mainly in West Malaysia
to take advantage of the lower operating costs. Our manufacturing
operations are managed by our subsidiaries, CED System, Hong
Nam, PNE-Gin Lin, PNE Micron Engineering (M'sia) and PNE
Precision. Our sales and marketing activities are conducted via our
Singapore subsidiary, PNE Micron Engineering (S'pore).
While sales are mainly to the Singapore and Malaysian markets, our
products are also sold to other countries such as the PRC and Japan
through our Singapore subsidiary.
14
Quality assurance and control plays an important role in every stage of

our production process. We conduct regular checks and controls on
our products, equipment and machinery to ensure that our products
meet the requirements of our customers in terms of quality and
specications. Our major operating subsidiaries, PNE Micron
Engineering (M'sia), PNE Precision and Hong Nam are ISO 9001:
2000 certied.
We believe that our competitive strengths are:
.
Our wide variety of products and services, such as design and

mould fabrication, production of metal components and
nishing activities such as spraying, silk-screening and ED
coating which enables us to provide a one-stop service to our
customers.
Our broad and diversied base of customers which provides a

more consistent and regular demand for our products and
services throughout the year and enables us to maintain a
regular number of orders which allows us to optimise our
capacity.
We maintain good relationships with our customers. More than

90% of our total sales in FY2001 were derived from repeat
customers.
Our ability to provide consistent product quality, competitive

pricing and timely delivery to our customers. We have in place
a quality assurance program in accordance with the ISO 9002
and ISO 9001: 2000 quality systems to ensure the quality and
standards of our products.
Our experienced management team, led by our Chief Executive

Ofcer and one of our founders, Mr Tan Kong Sin, who is
familiar with the business and whom we believe will be able to
lead our Group forward to continued growth and protability.
Please refer to ``Competitive Strengths'' on pages 61 and 62 of this

Prospectus for more details.
Our business strategy and future plans are:
.
To expand our ED coating services to capture a bigger market

share in the automobile industry and to set up additional ED
coating lines in Malaysia and the PRC.
To carry out the complete range of processes for the production

of micro-motors through our subsidiary, Macore.
To increase our supply of tool and die, perforated materials and

semi-nished speaker nets to existing and new customers in the
PRC.
To expand our customer base in new geographical markets

such as the USA and Europe.
Please refer to ``Business Strategy and Future Plans'' on page 64 of

this Prospectus for more details.
15
THE INVITATION
Issue Size
62,000,000 New Shares, comprising 1,500,000 Offer

Shares and 60,500,000 Placement Shares, which will,
upon registration in the name of CDP or its nominee, rank
pari passu in all respects with the existing issued Shares.
Issue Price
$0.22 for each New Share.
Purpose of the Invitation
Our Directors consider that the listing of our Company and

the quotation of the Shares on the SGX-Sesdaq will
enhance our Group's public image. It will also provide
members of the public, as well as the management, staff
and business associates of our Group with an opportunity
to participate in the equity of our Company.
Reserved Shares
Up to 15,500,000 of the 60,500,000 Placement Shares will

be reserved for our Group's employees, Independent
Directors, 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.
Use Of Proceeds
The net proceeds from the issue of the New Shares (after
deducting estimated expenses in relation to the Invitation)
of approximately S$12.1 million will be utilised as follows:
(a)
approximately S$6.1 million for expansion of our

operations and upgrading of our machinery so as to
expand our production capacity. Please refer to
``Business Strategy and Future Plans'' on page 64
for further details on our plans for expansion of
production capacity;
(b)
approximately S$1.9 million for repayment of bank

borrowings; and
(c)
the balance of approximately S$4.1 million for

working capital to nance our continued growth and
development.
Pending the deployment of net proceeds as aforesaid, the

net proceeds will be added to our Group's working capital
or used for investment in short-term money market
instruments and/or to repay short-term bank borrowings
as our Directors may deem appropriate.
Listing Status
The Shares will be quoted on the SGX-Sesdaq, subject to

admission of our Company to the Ofcial List of the SGXSesdaq and permission for dealing in and quotation of the
Shares being granted by the SGX-ST.
16
RISK FACTORS
Prospective subscribers of our Shares should carefully evaluate each of the
the other information contained in this Prospectus. Certain of the following
the industry in which we operate and our business in general. Other risks
economic and political conditions and the securities market and ownership
possible future sales of our Shares.
following risks and all of

risks relate principally to
relate mainly to general
of our Shares, including
If any of the following risks and uncertainties develop into actual events, our business, results of
operations and nancial condition could be materially and adversely affected. In such cases, the
trading price of our Shares could decline due to any of these risks and investors may lose all or part
of their investment.
This Prospectus also contains forward-looking statements that involve risks and uncertainties. Our
results could differ materially from those anticipated in these forward-looking statements as a result
of certain factors, including the risks we face described below and elsewhere in this Prospectus.
RISKS RELATING TO THE INDUSTRY
We are dependent on the state of the consumer electronics and electronics industries and any
downturn in these industries will have an adverse effect on our nancial performance
Our customers are mainly manufacturers of consumer electronics and audio products such as video
cassette recorders, ampliers, audio speakers, and video compact disc players and OEMs of
computer peripherals (such as computer monitors and keyboards). From time to time, the consumer
electronics industry and the electronics industry experienced slowdowns due to cyclical uctuations in
product supply and demand and/or a decline in the general economic conditions which resulted in
price erosion. We expect the cyclical trends to continue in the future. Any downturn in the consumer
electronics and electronics industries will have an adverse effect on our nancial performance.
We may be adversely affected by competition from other manufacturers of similar products
We face competition from other manufacturers of similar products. Our customers expect good
quality, manufacturing competence, timely delivery and competitive pricing. Should our competitors
become more successful in meeting these requirements of our customers and gain market share at
our expense, our future growth and protability will be adversely affected.
The threat of new entrants to our areas of business and failure to compete successfully with
them may adversely affect our business and nancial performance
The market we operate in is highly competitive and has few barriers to entry. Additionally, given the
growth potential in the industries that we operate in, there is no assurance that we will not face
competition from new entrants and that we can compete successfully against such new entrants. As
a result, such competitive pressures faced by us and any signicant increase in the level of
competition in our targeted market segment in the future may materially and adversely affect our
business and nancial performance.
Our ability to compete successfully is dependent on our ability to adapt to technological
changes
The electronics industry is characterised by rapid technological changes. With the improvements in
technology, new products are continually being developed by our customers, such as compact or
portable electronic goods. We must be agile in adapting to such technological changes in order to
cater to the ever changing needs of our customers. If we are not able to meet these changes
effectively, or at all, we may lose our customers, or potential customers to our competitors who are
able to do so. In addition, if our customers are not able to adapt their products to keep pace with the
rapid technological changes in their respective product segments to meet the evolving demands in the
market place, their sales would be affected. This would in turn affect their demand for our goods and
services and therefore have an adverse impact on our nancial performance.
17
Although we have successfully adapted to technological changes in the past, we may encounter
difculties in catching up with the rapidly changing technological advancements in the future. Our
ability to acquire new technologies may also be hindered by nancial constraints.
RISKS RELATING TO OUR GROUP
Any signicant change in the Malaysian economy in which we have our manufacturing
operations will adversely affect our nancial performance and business operations
All our manufacturing operations are located in West Malaysia. In FY1999, FY2000 and FY2001,
93.2%, 85.6% and 72.9% of our total sales turnover were derived from our Malaysian operations.
Accordingly, our operating results and nancial conditions are affected by the economic, political,
regulatory and social developments in Malaysia.
(a)
Pioneer Status
Our subsidiary, PNE Precision, was accorded pioneer status by MITI on 6 September 2001. The
status is valid for 5 years commencing 1 November 1999 and ending 31 October 2004. Subject
to compliance of the conditions imposed by MITI as set out in the approval letter and such other
conditions as may be notied from time to time by MITI, the pioneer status accorded to PNE
Precision is required to be renewed.
PNE Precision enjoys tax reliefs under this pioneer status. 70% of its net prot before tax is
exempted from the imputation of tax payable. In FY2001, the tax relief enjoyed by PNE
Precision amounted to approximately S$162,000.
There is, however, no assurance that PNE Precision will continue to enjoy its pioneer status. In
the event that PNE Precision loses its pioneer status, we will lose the tax incentive attached to
such a status.
The loss of the pioneer status will have an adverse impact on the nancial performance of PNE
Precision.
(b)
Malaysian economic, political, regulatory and social conditions

As 93.2%, 85.6% and 72.9% of our total turnover in FY1999, FY2000 and FY2001 respectively
were generated from our Malaysian operations, our nancial performance will be affected by the
economic, political, regulatory and social conditions in Malaysia such as capital control
measures introduced by Bank Negara Malaysia, changes in labour conditions, burdens and
costs of compliance with Malaysian laws, increases in taxation and limitations on imports and
exports. Any economic downturn faced by Malaysia or any changes in its political, regulatory
and social conditions that are detrimental to our business could materially and adversely affect
our operations and nancial performance.
Please refer to ``Government Regulations'' on page 65 of this Prospectus for more details.
We are vulnerable to increases in the prices of raw materials

Raw material costs constitute a signicant proportion of our cost of sales. Non-ferrous metals such as
aluminium, ferrous metals such as steel, ink and ED paints are the main raw materials used by us. The
cost of these raw materials accounted for 49%, 55% and 48% of our cost of sales in FY1999, FY2000
and FY2001 respectively. We are therefore vulnerable to increases in the prices of these raw materials.
We cannot assure you that any increase in such costs can be passed on to our customers. Therefore,
signicant price increases in these raw materials may result in lower prots for us. Failure to minimise
the impact of such increases in raw material prices through the amount of stocks held in inventory on
a regular basis will also affect our operating prot adversely.
18
The table below shows the average prices of raw materials paid by our Group for the past 3 nancial
years. The trend for aluminum prices has been relatively at over the past three years, averaging
RM8,370 per metric tonne whilst the prices of steel have declined by 15% from RM2,419 per metric
tonne in 1999 to RM2,078 per metric tonne in 2001.
Average prices of raw materials paid in past 3 years

9000
Ringgit/Tonne
8000
7000
6000
5000
Steel
4000
Aluminum
3000
2000
1000
0
1999
2000
2001
Year
Failure of our major suppliers to meet our demand will affect our sales revenue and nancial
performance
For FY2001, our top 3 major suppliers accounted for 34% of our purchases. Please refer to ``Major
Suppliers'' on page 58 for further details on our major suppliers. There is no guarantee that these
suppliers will continue to supply their products to us. The failure of our suppliers to meet increasing
demands may also prevent them from supplying to us as and when we require them to. In the event
that these suppliers cease or limit the supply of their products or increase their selling prices and we
are unable to nd timely replacements or alternative sources for such products at competitive prices,
our production will inevitably be disrupted and delayed. This would in turn result in our inability to
satisfy customer orders. Consequently, our sales revenue and nancial performance would be
adversely affected.
We are reliant upon a few major customers for a signicant portion of our revenues. If we lose
these customers, our sales and nancial performance will be adversely affected
We are dependent on 3 major customers, MESA, Foster Electric and Casio, who collectively
accounted for 23%, 28% and 43% of our total turnover in FY1999, FY2000 and FY2001
respectively. For more details, please refer to ``Major Customers'' at page 59 of this Prospectus.
There is no assurance that we will be able to decrease our dependence on these major customers
over time and there can be no assurance that these major customers will continue to place orders
with us at current levels. The loss of, or a signicant reduction in orders from, these major
customers could have a material adverse impact on our nancial position.
We are dependent on the continued employment and performance of certain key management
personnel
The continued success of our Group is dependent to a large extent on our ability to retain our key
management personnel, in particular, Messrs Tan Kong Sin and Tan Kwong Soon, who are
collectively responsible for our operations, sales, marketing and nancial functions. Mr Tan Kong Sin
is our Chief Executive Ofcer while Mr Tan Kwong Soon is our Executive Director. We cannot assure
that we will be able to retain our key management personnel. The loss of our key management
personnel will have an adverse impact on our operations. In addition, we cannot assure that we will
be able to nd and attract a suitable replacement, and retain that qualied individual. For further
details of the contributions of these key personnel, please refer to ``Directors, Management and
Staff'' at pages 80 to 86 of this Prospectus.
19
We are subject to uctuations in foreign exchange rates which could result in us incurring
foreign exchange losses
Approximately 52% and 45% of our Group sales are in RM and US$ whilst approximately 76% and
21% of our Group purchases are in RM and US$ respectively. Fluctuations in the exchange rates
between RM and S$ and between US$ and S$ will therefore have an impact on us.
We would incur foreign exchange losses arising from the depreciation and appreciation of the
currencies as a result of timing differences from credit terms given by our suppliers and to our
customers.
Foreign exchange gains or losses will also result in translation gains or losses on consolidation as S$
is our reporting currency. Any such translation gains or losses will be recorded as translation reserves
or decits as part of our shareholders' equity.
In view of the nature of our business which spans several countries, foreign exchange risks will
continue to be an integral aspect of our risk prole in the future. Our foreign exchange gains/losses
for the past 3 nancial years ended 30 September 2001 are as follows:
FY1999
FY2000
FY2001
(27)
37
151
1.9
4.0
Net foreign exchange (losses)/gains ($'000)

Percentage of prot before tax
* not meaningful
Presently, we do not have any formal hedging policy with respect to our foreign exchange exposure
as our foreign exchange gains and losses over the past 3 nancial years had been relatively low. Our
management believes that it is more efcient for us to assess the need to hedge for each transaction
individually. We will continue to monitor our foreign exchange exposure in future and will consider
hedging any material foreign exchange exposure should the need arise. Please refer to ``Foreign
Currency Exchange Exposure'' on page 35 of this Prospectus for more details.
RISKS RELATING TO THIS INVITATION AND INVESTING IN OUR SHARES
Future sale of Shares could adversely affect the Share price
Any future sale or availability of Shares can have a downward pressure on our Share price. The sale of
a signicant amount of Shares in the public market after the Invitation, or the perception that such
sales may occur, could materially affect the market price of our Shares. These factors also affect our
ability to sell additional equity securities. Except as otherwise described in ``Moratorium'' as set out on
page 45 of this Prospectus, there will be no restriction on the ability of our substantial shareholders to
sell their Shares either on the SGX-Sesdaq or otherwise.
Control by existing shareholders may limit your ability to inuence the outcome of decisions
requiring the approval of shareholders
Upon completion of this Invitation, our Directors and shareholders of more than 5% in our equity and
their associates will collectively own approximately 72.5% of our issued share capital. These
shareholders, if acting together, would be able to signicantly inuence all matters requiring approval
by our shareholders, including the election of directors and the approval of signicant corporate
transactions, and will have veto power with respect to any shareholder action or approval requiring a
majority vote. This concentration of ownership could have the effect of delaying or preventing a
change in control of our Company or otherwise discouraging a potential acquirer from attempting to
obtain control of us through corporate actions such as mergers or takeover attempts (notwithstanding
that the same may be synergistic or benecial to our Group) in a manner that could conict with the
interests of our public shareholders.
20
Investors in our Shares would face immediate and substantial dilution in the book value per
Share and may experience future dilution
Our Issue Price of S$0.22 is substantially higher than our Proforma Group's NTA per Share of S$0.11
as at 30 September 2001 after adjusting for net proceeds from the Invitation. Thus, there is an
immediate and substantial dilution in the book value per Share for investors who purchase our
Shares. Please refer to ``Dilution'' on page 41 of this Prospectus for more details.
Our Share price may be volatile, which could result in substantial losses for investors
purchasing Shares pursuant to this Invitation
Prior to this Invitation, you could not buy or sell our Shares publicly. An active public market for our
Shares may not develop or be sustained following this Invitation. You may be unable to sell your
Shares at or above the Issue Price. Further, the market price of our Shares may fluctuate
significantly and rapidly in response to, inter alia, the following factors, some of which are beyond
our control:
.
Variations in our operating results
Changes in securities analysts' estimates of our financial performance
Changes in market valuations of similar companies
Announcements by our competitors or ourselves of gain or loss of significant contracts,

acquisitions, strategic partnerships, joint ventures or capital commitments
Fluctuations in stock market price and volume
Involvement in litigation
There has been no prior market for our Shares and this Invitation may not result in an active or
liquid market for these Shares
Prior to this Invitation, there has been no public market for our Shares. The Issue Price may not be
indicative of the market price for our Shares after the completion of this Invitation. We have applied
to the SGX-ST for the listing and quotation for our Shares on the SGX-Sesdaq. However, no
assurance can be given that an active trading market for our Shares will develop or, if developed,
will be sustained.
21
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

All statements contained in this Prospectus, statements made in press releases and oral statements
that may be made by our Company or our ofcers, Directors or employees acting on our behalf, that
are not statements of historical fact, constitute ``forward-looking statements''. Some of these
statements can be identied by forward-looking terms such as `èxpect'', ``believe'', ``plan'',
`ìntend'', `èstimate'', `ànticipate'', ``may'', ``will'', ``would'', and ``could'' or similar words. However,
these words are not the exclusive means of identifying forward-looking statements. All statements
regarding our Group's expected nancial position, business strategy, plans and prospects are
forward-looking statements. These forward-looking statements, including statements as to our
Group's revenue and protability, cost measures, planned strategies and any other matters
discussed in this Prospectus regarding matters that are not historical facts are only predictions.
These forward-looking statements involve known and unknown risks, uncertainties and other factors
that may cause our Group's actual results or performance to be materially different from any future
results or performance expressed or implied by such forward-looking statements.
Given the risks and uncertainty that may cause our Group's actual future results or performance to be
materially different from that expected, expressed or implied by the forward-looking statements in this
Prospectus, undue reliance must not be placed on those statements. We are not warranting or
representing to you that our actual future results or performance will be as discussed in those
statements. Further, we disclaim any responsibility to update any of those forward-looking
statements or publicly announce any revisions to those forward-looking statements to reect future
developments, events or circumstance. We are, however, subject to the provisions of the Listing
Manual of the SGX-ST regarding corporate disclosure and the requirements of the Act.
22
ISSUE STATISTICS
Issue Price for each Offer Share and each Placement Share
$0.22
NET TANGIBLE ASSETS

NTA per Share based on the consolidated balance sheet of the proforma Group
as at 30 September 2001, after taking into account the sub-division of shares
referred to on page 42 of this Prospectus:
(a)
before adjusting for the estimated net proceeds from the issue of the New
Shares and based on the pre-otation share capital of 145,404,725 Shares;
7.73 cents
(b)
had the Service Agreements been effected for the nancial year ended
30 September 2001 and before adjusting for the estimated net proceeds
from the issue of the New Shares and based on the pre-otation share
capital of 145,404,725 Shares; and
7.13 cents(1)
(c)
after adjusting for the estimated net proceeds from the issue of the New
Shares and based on the post-otation share capital of 207,404,725 Shares.
11.27 cents
Premium of Issue Price of $0.22 per Share over the NTA per Share above:(a)
before adjusting for the estimated net proceeds from the issue of the New
Shares and based on the pre-otation share capital of 145,404,725 Shares;
184.6%
(b)
had the Service Agreements been effected for the nancial year ended
30 September 2001 and before adjusting for the estimated net proceeds
from the issue of the New Shares and based on the pre-otation share
capital of 145,404,725 Shares; and
208.6%(1)
(c)
after adjusting for the estimated net proceeds from the issue of the New
Shares and based on the post-otation share capital of 207,404,725 Shares.
95.2%
EARNINGS
Historical net earnings per Share of our Group for the nancial year ended
30 September 2001 based on the pre-otation share capital of 145,404,725
Shares.
2.11 cents
Historical net earnings per Share of our Group had the Service Agreements been
effected for the nancial year ended 30 September 2001, based on the
pre-otation share capital of 145,404,725 Shares.
1.51 cents(1)
PRICE EARNINGS RATIO

Historical price earnings ratio based on the historical net earnings per Share of
our Group for the nancial year ended 30 September 2001.
10.43 times
Historical price earnings ratio based on the historical net earnings per Share of
our Group had the Service Agreements been effected for the nancial year
ended 30 September 2001.
14.57 times
NET OPERATING CASH FLOW(2)

Historical net operating cash ow per Share for the nancial year ended
30 September 2001, based on the pre-otation share capital of 145,404,725
Shares.
2.83 cents
Notes:
(1) Had the Service Agreements been in effect for the nancial year ended 30 September 2001, the Proforma consolidated
prot before taxation, prot after taxation and NTA would have been approximately $2,729,000, $2,195,000 and
$10,368,000 respectively.
(2) Net operating cash ow is dened as net prot after tax with provision for depreciation added back.
23
DIVIDEND POLICY
Our Company has not declared any dividends since our incorporation on 7 September 2001.
However, the following interim dividends were declared by our subsidiaries in FY2001 payable to
their respective registered shareholders as at 30 September 2001:
Company
Net Dividend Declared
PNE Micron Engineering (S'pore)
S$170,000
PNE Micron Engineering (M'sia)
RM4,026,000
PNE Precision
RM2,434,000
CED System
RM1,501,200
Hong Nam
RM1,500,000
PNE Micron Engineering (M'sia) intends to pay the net dividend of RM4,026,000 declared in FY2001
after 30 September 2002 as and when its cashow allows it to do so. Our Group maintains a healthy
working capital position and posseses adequate funds to repay its outstanding dividends. In deciding
whether to repay these dividends, the Directors would consider the effect on the Group's business
plans and growth requirements arising from this cashow.
We currently do not have a xed dividend policy. In considering the amount of dividend payable, our
Directors will consider, among other things, our future earnings, operations, capital requirements, cash
ow and nancial conditions, as well as general business conditions and other factors which our
Directors may consider adequate. In addition, we must pay all dividends out of our prots, however,
we may capitalise our share premium account and apply it to pay the dividends, if such dividends are
satised by the issue of Shares to shareholders of our Company.
We may, by ordinary resolution of our shareholders, declare dividends at a general meeting, but we
may not pay dividends in excess of the amount recommended by our board of Directors. Our board
of Directors may also declare an interim dividend without the approval of our shareholders.
All dividends are paid pro rata among the shareholders in proportion to the amount paid up on each
shareholder's Shares, unless the rights attaching to an issue of any share provides otherwise.
Unless otherwise directed, dividends are paid by cheque or by warrant send through the post to each
shareholder at his registered address. Notwithstanding the foregoing, the payment by our Company to
CDP of any dividend payable to a shareholder whose name is entered in the depository register shall,
to the extent of payment made to CDP, discharge our Company from any liability to that shareholder
in respect of that payment.
The repayment of future dividends declared, if any, after our Company is listed, will depend on both
our Group's ability to settle our outstanding dividends and our protability.
24
GROUP FINANCIAL INFORMATION

The following nancial information should be read in conjunction with the full text of this Prospectus,
including the Accountants' Report set out on pages 99 to 119 of this Prospectus.
PROFORMA STATEMENT OF GROUP RESULTS
----- Year ended 30 September ----1999
2000
2001
S$'000
S$'000
S$'000
Revenue
17,259
22,590
24,693
Cost of sales
(14,953)
(19,214)
(18,603)
2,306
3,376
6,090
Other income
314
632
652
Distribution costs
(280)
(384)
(307)
(1,398)
(1,595)
(2,465)
Other operating expenses
(118)
(1)
(93)
Prot from operations
824
2,028
3,877
Finance costs
(170)
(63)
(63)
Prot before taxation
654
1,965
Taxation
(152)
(376)
Net prot attributable to shareholders of the Company
502
1,589
3,069(1)
Earnings per share (cents)(2)
0.35
1.09
2.11(1)
Gross prot
Administrative expenses
3,814(1)
(745)
Notes:
(1) Had the Service Agreements set out on pages 87 and 88 of this Prospectus been in existence during FY2001, the
consolidated prot before taxation and after taxation of the Group and earnings per Share would have been approximately
$2,729,000, $2,195,000 and 1.51 cents respectively. Our Directors did not receive any remuneration from our Group for the
past 3 nancial years. Please refer to the section under ``Service Agreements'' on pages 87 and 88 for more details.
(2) For comparative purposes, earnings per Share has been calculated based on the prot after taxation and the pre-otation
issued share capital of 145,404,725 Shares.
25
PROFORMA GROUP BALANCE SHEETS

-------------- As at 30 September ------------1999
2000
2001
S$'000
S$'000
S$'000
10,120
11,777
13,058
Inventories
1,491
2,185
3,712
Trade receivables
4,407
4,788
3,870
Other receivables
482
416
418
Amounts due from related parties (trade)
626
606
426
Amounts due from related parties (non-trade)
839
906
176
Cash and cash equivalents
381
1,076
1,038
8,226
9,977
9,640
Non-current assets
Property, plant and equipment
Current assets
Less:
Current liabilities
Bank overdraft (secured)
344
142
318
Trade payables
2,179
2,552
2,572
Other payables
1,616
1,487
1,101
5,986
5,240
151
166
75
1,935
259
187
2,493
10,292
9,756
8,757(3)
(2,066)
221
883(3)
249
500
518
Amounts due to related parties (trade)

Amounts due to related parties (non-trade)
Current portion of interest-bearing loans and borrowings
Provision for taxation
Dividends payable
Net current (liabilities)/assets
Less:
Non-current liabilities
Interest-bearing loans and borrowings
Dividends payable
1,873
140
258
308
389
758
2,699
7,665
11,240
11,242(3)
Share capital
9,821
11,632
11,632
Reserves
(2,156)
(392)
(390)
7,665
11,240
11,242
5.27
7.73
Deferred taxation
Net Assets
Capital and Reserves
NTA per share (cents)(2)
7.73(3)
Notes:
(1) The Proforma Group Balance Sheet had been prepared on the basis that our Proforma Group had been in existence
throughout the periods under review.
(2) For comparative purposes, the NTA per Share is calculated based on the pre-otation share capital of 145,404,725 Shares
(3) Had the Service Agreements been in effect for the nancial year ended 30 September 2001, the amount due to the
Directors pertaining to the Service Agreements, provision for taxation, current liabilities, net current assets, NTA and NTA
per share would have been approximately $1,086,000, $(25,000), $9,631,000, $9,000, $10,368,000 and 7.13 cents,
respectively.
26
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS
This information should be read in conjunction with the Accountants' Report as set out on pages 99 to
119 of this Prospectus and the related notes thereto. All gures discussed below are net of interdivision sales unless otherwise stated.
Revenue
Our revenue is derived from the sale of perforated materials, speaker nets and other metal
components, provision of ED coating services and the sale of tool and die to our customers.
The gures shown in the breakdown of turnover by business activities includes inter-division
transactions to better reect the size of the different business activities as these transactions were
signicant.
Our perforated materials, speaker nets and other metal components division has been the main
contributor to our Group, accounting for 93.1%, 80.8% and 78.9% of our overall Group's revenue in
FY1999, FY2000 and FY2001 respectively. Under this division, we sell custom-made perforated
materials, speaker nets and other metal components to MNCs and their OEMs, who are themselves
manufacturers of audio and consumer appliances and computer peripherals.
We provide ED coating services to customers who require their metal products to be coated with a
protective layer of paint to prevent rusting or corrosion. These services contributed approximately
6.9%, 12.3% and 17.5% of our Group revenue in FY1999, FY2000 and FY2001 respectively.
Our tool and die division contributed approximately 6.9% and 3.6% of our Group's revenue in FY2000
and FY2001 respectively. Operations for our tool and die business began in late 1999 by one of our
subsidiaries, PNE Precision. We design, develop and fabricate moulds used in the manufacture of
perforated materials, speaker nets, other metal components and PCBs under this division.
Our revenue may be affected by the following factors:
(a)
our ability to compete against our competitors. In the event that our competitors are able to
provide comparable manufacturing services and products at a lower cost and better quality,
our sales will be significantly affected;
(b)
global demand for our products from our customers in the consumer electronics and electronics
industries. These industries are characterised by rapid technological changes and our customers
may not be able to keep up with these changes, thereby rendering their existing products
obsolete. Demand for their products would then be significantly reduced, which in turn would
impact our sales adversely;
(c)
our reliance on our major customers. Our sales would be significantly lower if our major
customers decide not to continue with our services or reduce their purchases from us in the
future. There is also a possibility of these customers shifting their operations overseas in the
future. We may not be able to set up our own overseas manufacturing facilities in each of the
countries which our customers shift to and may subsequently lose their business should they
decide to source for their parts and components from suppliers located nearer to their
overseas production facilities;
(d)
the seasonality nature of the electronics industry. The electronics industry is known to exhibit a
degree of seasonality, experiencing more sales in the second half of the calendar year as
compared to the first. Our perforated materials, speaker nets and other metal components
division typically receives more orders in the months leading up to the year-end festive season,
as the demand for audio and consumer electronic devices pick up; and
27
(e)
the foreign exchange rate uctuations of the S$ against RM. The average S$: RM exchange rate
declined from S$1.00: RM2.25 in FY1999 to S$1.00: RM2.22 in FY2000 and S$1.00: RM2.14 in
FY2001. The translation from the functional currency of our Malaysian subsidiaries, RM, to our
reporting currency, S$, would result in either a gain or loss in Group turnover should the S$:
RM weaken or strengthen respectively. For example, had the average S$: RM exchange rate
been maintained at FY1999 levels, we would have recorded a turnover of S$23.5 million
instead of S$24.7 million in FY2001.
Cost of Sales
Our cost of sales comprise mainly raw materials, direct labour and sub-contract costs. The remaining
costs relate to factory and machinery depreciation, utility charges, packing expenses and other
indirect factory overheads.
Factors that can affect our cost of sales include:
(a)
fluctuations in the prices of raw materials such as non-ferrous metals, ferrous metals, steel
blocks, mould accessories, ink and ED paints. A worldwide increase in demand for such raw
materials will increase the cost of the finished product. Should we fail to pass on the increase
in the prices of raw materials to our customers on a timely basis or find a cheaper source of
supply when there is a significant increase in the prices of raw materials, our cost of sales or
gross margins will be adversely affected;
(b)
direct labour costs. Our work force includes both skilled and semi-skilled labour, some of whom
are foreign workers. The direct labour costs for both skilled and semi-skilled labour are
determined by the supply and demand of such workers in the labour market. In the event of
shortage in the supply for skilled and semi-skilled labour, coupled by a higher demand for such
labour, our direct labour costs would increase and this will ultimately affect our overall cost of
sales; and
(c)
sub-contracting costs. We sub-contract part of our manufacturing activities to third party subcontractors when our manufacturing capacities are unable to fulll our customers' occasional
surge in demands. As the costs of hiring these sub-contractors are sometimes not directly
under our control, it is possible that cost overruns may occur. The unexpected increase in cost
of using the services of sub-contractors could signicantly affect our overall cost of sales.
Indirect costs
Indirect costs comprise approximately 11.6%, 9.6% and 13.6% of our total costs for FY1999, FY2000
and FY2001 respectively. The components of indirect costs are administrative expenses, distribution
costs, other operating expenses and nance costs.
Percentage of Indirect Costs (%)
FY1999
FY2000
FY2001
71.1
78.1
84.2
Distribution costs
14.3
18.8
10.5
6.0
3.2
Finance costs
8.6
3.1
2.1
100.0
100.0
100.0
Total
Administrative expenses comprise mainly of salaries, bonus, staff welfare, development and training,
travelling expenses, telephone and postage, rental, printing and stationery and general depreciation.
Distribution costs comprise mainly of transport and freight charges.
Other operating expenses comprise mainly of allowance for doubtful receivables and foreign
exchange differences.
28
Finance costs are mainly interest expense payable on our obligations under nance leases, which
were to nance the purchases of motor vehicles and plant and equipment. Finance costs also
included interest expenses incurred from interest bearing loans that were taken to nance the
purchase of two factory buildings in Malaysia.
REVIEW OF PAST PERFORMANCE
Breakdown of Past Performance by Activities
A breakdown of our turnover and prot before tax by activities and geographical regions for the past
three nancial years ended 30 September 2001 is set out below. This analysis should be read in
conjunction with the Accountants' Report as set out on pages 99 to 119 in this Prospectus.
Turnover
Perforated materials, speaker nets and other metal components

ED Coating Services
Tool & Die
Less: Inter-division transactions
Total
FY1999
FY2000
FY2001
$'000
$'000
$'000
16,070*
18,251*
19,488*
1,782*
3,817*
5,413*
2,541*
2,618*
(593)
(2,019)
(2,826)
17,259
22,590
24,693
* includes Group inter-division transactions.
Prot Before Tax

FY1999
$'000
FY2000
%
$'000
FY2001
%
$'000
Perforated materials, speaker nets and other metal

components
406
62.1
145
7.4
1,047
27.4
ED Coating Services
238
36.4
1,121
57.0
1,833
48.1
10
1.5
699
35.6
934
24.5
654
100.0
1,965
100.0
3,814
100.0
Tool & Die

Total
Breakdown of Past Performance by Geographical Region

Turnover
FY1999
$'000
Singapore
FY2000
%
$'000
FY2001
%
$'000
1,174
6.8
3,264
14.4
6,699
27.1
Malaysia
16,085
93.2
19,326
85.6
17,994
72.9
Total
17,259
100.0
22,590
100.0
24,693
100.0
29
The above table is based on the sales invoices issued by our subsidiaries from the respective
countries in which they operate and it does not reect the actual geographical location of the users
of our products. Our Directors believe that a signicant portion of our Group's products are
ultimately shipped to end destinations like the USA, Japan, the PRC, Malaysia, Philippines, Thailand,
Indonesia and Europe.
Prot before Tax
FY1999
$'000
FY2000
%
$'000
FY2001
%
$'000
Singapore
(191)
(29.2)
16
0.8
27
0.8
Malaysia
845
129.2
1,949
99.2
3,787
99.2
Total
654
100.0
1,965
100.0
3,814
100.0
REVIEW OF RESULTS OF OPERATIONS

FY1999 to FY2000
Turnover
Turnover increased by $5.3 million (or approximately 30.6%) from $17.3 million in FY1999 to $22.6
million in FY2000 due mainly to the contributions from both our ED coating services and tool and die
operations, which began operations in early FY2000.
Our perforated materials, speaker nets and other metal components division contributed 80.8% to our
Group's turnover in FY2000. The increase of $2.2 million (or approximately 13.7%) from $16.1* million
in FY1999 to $18.3* million in FY2000 was due mainly to an increase in the sales of speaker nets to a
particular MNC which experienced increased demand for its car audio products.
ED coating services contributed 12.3% to our Group's turnover in FY2000. Turnover from our ED
coating services increased signicantly by $2.0 million (or approximately 111.1%) from $1.8* million
in FY1999 to $3.8* million in FY2000 as we were successful in marketing our ED coating services to
our new customers, as well as our existing customers from the perforated materials, speaker nets and
other metal components division.
Our tool and die division contributed 6.9% to our Group's turnover in FY2000, which was the
division's rst nancial year in operation. Turnover for our tool and die business was $2.5* million in
FY2000. We sold mainly to 2 customers, PNE Micron Engineering (M'sia) and PNE PCB.
Cost of Sales
Cost of sales increased by $4.2 million (or approximately 28.0%) from $15.0 million in FY1999 to $19.2
million in FY2000. The increase was in line with the 30.6% increase in turnover.
Accordingly, gross prots increased by $1.1 million or 47.8%, from $2.3 million in FY1999 to $3.4
million in FY2000.
Indirect costs
Indirect costs increased by $0.1 million (or approximately 5.0%) from $2.0 million in FY1999 to $2.1
million in FY2000. The $0.3 million increase in administrative expenses and distribution costs were
partially offset by decreases in nance and other operating expenses, resulting in a relative smaller
percentage increase compared to our Group's increase in turnover.
30
Prot before Tax

Prot before tax increased by $1.3 million (or approximately 185.7%) from $0.7 million in FY1999 to
$2.0 million in FY2000. We experienced an improvement in the prot margins for our ED coating
division as we secured better margin contracts performing ED coating services for micro-motors
under our subsidiary, Hong Nam. This was achieved despite a slight decrease in margins for
perforated materials, speaker nets and other metal components. Overall, this resulted in the increase
of approximately 185.7% in prot before tax despite an increase of only 30.6% for turnover in the
same period.
FY2000 to FY2001
Turnover
Turnover increased by $2.1 million (or approximately 9.3%) from $22.6 million in FY2000 to $24.7
million in FY2001 due mainly to increased contributions from our perforated materials, speaker nets
and other metal components division and ED coating division.
Our perforated materials, speaker nets and other metal components division contributed 78.9% to our
Group's turnover in FY2001. The increase of $1.2 million (or approximately 6.8%) from $18.3* million
in FY2000 to $19.5* million in FY2001 was due mainly to an increase in the sales of metal components
to a particular MNC which experienced increase demand for its heat sink products.
ED coating services contributed approximately 17.5% to our Group's turnover in FY2001. Turnover
from our ED coating services increased by another $1.6 million (or approximately 42.1%) from $3.8*
million in FY2000 to $5.4* million in FY2001 as we were successful in actively marketing our ED
coating services to new customers. Furthermore, our existing customers from the perforated
materials, speaker nets and other metal components division, who are also our ED coating
customers, increased their usage of our ED coating services.
Our tool and die division contributed approximately 3.6% to our Group's turnover in FY2001, which
was the division's second nancial year in operation. The marginal increase of $0.1 million (or
approximately 4.0%) from $2.5* million in FY2000 to $2.6* million in FY2001 was mainly due to an
increase in the sales of tool and die for the manufacture of perforated materials.
Cost of Sales
Cost of sales decreased by $0.6 million (or approximately 3.1%) from $19.2 million in FY2000 to $18.6
million in FY2001. The marginal decrease despite an increase in our Group's turnover is due mainly to
better cost management and cost cutting by sourcing for cheaper raw materials from overseas
suppliers and also negotiating for lower fees from our existing and new sub-contractors.
Gross prots increased by $2.7 million (or approximately 79.4%), from $3.4 million in FY2000 to $6.1
million in FY2001.
Indirect costs
Indirect costs increased by $0.8 million (or approximately 38.1%) from $2.1 million in FY2000 to $2.9
million in FY2001. There was a $0.8 million increase in administrative expenses due to the increase in
administrative staff costs. We recruited additional administrative staff and personnel to cater for the
further expansion and setting up of new manufacturing operations for both our perforated materials,
speaker nets and other metal components and ED coating divisions in Malaysia.
31
Prot before Tax

Prot before tax increased by $1.8 million (or approximately 90.0%) from $2.0 million in FY2000 to
$3.8 million in FY2001. There were 2 contributing factors for the higher prots before tax: (i) an
improvement in the prot margins for our ED coating division, which was a result of higher
productivity from our workforce as ED coating turnover increased despite a reduction in overall
headcount, and securing of contracts for ED coating of automobile parts; and (ii) securing more
higher gross prot margin contracts for the manufacture of metal components. We achieved an
increase in prot before tax of 90.0% despite an increase in turnover of only 9.3% for the same
period.
REVIEW OF PAST FINANCIAL POSITION
From FY1999 to FY2001, our operations have been nanced through a combination of shareholders'
equity, retained earnings, external borrowings and advances from directors, related parties and
shareholders. We have secured adequate bank facilities to nance our business operations. As at 30
September 2001, our Group had total borrowings (including nance leases but excluding bank
overdraft) of approximately $2.5 million on a secured basis. Save as disclosed above and under the
heading ``Capitalisation and Indebtedness'' on page 40 of this Prospectus, our Company and our
subsidiaries had, as at 30 September 2001, no other borrowings or indebtedness in the nature of
borrowings including liabilities under acceptances (other than normal trading bills) or acceptance
credits, mortgages, charges, nance lease commitments and other material contingent liabilities.
Property, Plant and Equipment
Our Group's property, plant and equipment comprise mainly freehold and leasehold properties as well
as plant and machinery.
Property, plant and equipment increased from approximately $10.1 million as at 30 September 1999
to approximately $11.8 million as at 30 September 2000 due mainly to the acquisition of additional
plant and machinery to support our Group's growing business volume. In FY2000, our Group
acquired a factory building, together with its land, and purchased additional plant and machinery to
expand our ED coating services for micro-motors under Hong Nam. In addition, the increase was
also due to our Group's commencement of tool and die fabrication services in our plant in
Cemerlang, Johor Bahru in October 1999, which involved the purchase of machinery.
Property, plant and equipment increased from $11.8 million as at 30 September 2000 to $13.1 million
as at 30 September 2001 due mainly to the revaluation of our present land and factory buildings in
Malaysia, which resulted in a revaluation reserve of $1.2 million. For more details, please refer to the
`Àccountants' Report'' on pages 99 to 119 of this Prospectus.
Current Assets
Our Group's current assets comprise mainly of inventories, trade receivables as well as xed deposits
and cash balances.
On the back of the growth in business activities and in-line with turnover growth, current assets have
increased by $1.8 million from $8.2 million as at 30 September 1999 to $10.0 million as at
30 September 2000. Current assets decreased by $0.4 million from $10.0 million as at 30 September
2000 to $9.6 million as at 30 September 2001. The decrease was due to lower trade receivables'
turnover days from 90 days in FY1999 to 84 days in FY2000, offset by an increase in inventories
balance. Cash received from the trade receivables was used to repay mainly trade payables.
32
Inventories
Our inventories increased from $1.5 million as at 30 September 1999 to $2.2 million as at
30 September 2000 as a result of higher level of nished goods, work-in-progress and raw materials
held as inventory, consistent with our higher levels of business activities. Our nished goods and raw
materials continued to increase and our inventories as at 30 September 2001 stood at $3.7 million.
The increase in stock was a result of higher turnover achieved in FY2001 by our perforated
materials, speaker nets and other metal components division. We purchased and stocked higher
levels of raw materials like aluminium sheets for the production of heat sinks as we secured more of
such contracts from our customers during FY2001.
Trade receivables
Trade receivables increased in tandem with the growth in our Group's turnover, from $4.4 million as at
30 September 1999 to $4.8 million as at 30 September 2000. The decrease in trade receivables by
$0.9 million to $3.9 milllion as at 30 September 2001 was achieved despite the increase in our
Group's turnover mainly because our management adopted a more active policy in the recovery of
outstanding amounts due from our customers.
Our Group generally extends credit terms of between 60 to 90 days to our customers, which our
Directors believe is in line with the industry practice. The trade receivables' turnover days, which was
calculated using the aggregate of both external and inter-division trade receivables, has been
maintained at between 72 days and 90 days over the past 3 nancial years. The trade receivables'
turnover days decreased by 6 days from 90 days in FY1999 to 84 days in FY2000 mainly due to the
prompt payment from some of our larger MNC customers. Trade receivables' turnover days further
decreased by 12 days to 72 days in FY2001 because of the faster recovery of outstanding amounts
due from our customers.
Other receivables and Amounts due from related parties (trade)
The aggregate of other receivables and amounts due from related parties (trade) gradually decreased
from $1.1 million as at 30 September 1999 to $0.8 million as at 30 September 2001 because there
was a slight drop in the level of trade with our related parties.
Amounts due from related parties (non-trade) refers to funds supplied to our related parties (trade) for
their working capital purposes. This amount has been gradually reduced from $0.8 million as at 30
September 1999 to $0.2 million as at 30 September 2001 as we sought to gradually clear
outstanding non-trade related debts owing to us from related parties in view of our public listing.
Fixed deposits and cash balances
Fixed deposits and cash balances rose from approximately $0.4 million as at 30 September 1999 to
$1.1 million as at 30 September 2000 due to the inow of funds from the repayment of receivables by
some of our larger MNC customers and proceeds from the issue of shares by one of our subsidiaries.
Fixed deposits and cash balances have decreased marginally by $0.1 million to $1.0 million as at 30
September 2001.
Current Liabilities
Our Group's current liabilities comprise mainly trade payables, bank overdrafts and other payables,
amounts due to related parties, current portion of obligations under nance leases and current
portion of interest-bearing bank loans, provision for taxation, as well as, dividends payable.
Current liabilities decreased by $0.5 million from $10.3 million as at 30 September 1999 to $9.8 million
as at 30 September 2000. The decline was attributed mainly to the settlement of amounts owing to
our related parties.
33
Current liabilities decreased by $1.0 million from $9.8 million as at 30 September 2000 to $8.8 million
as at 30 September 2001. The decrease was due mainly to the repayment of amounts owing to our
related parties, directors, shareholders and other payables amounting to approximately $5.4 million,
which was offset by the drawdown of secured bank loans of about $1.9 million and interim dividends
payable of $2.5 million.
The outstanding amount of bank overdraft declined from $0.3 million as at 30 September 1999 to $0.1
million as at 30 September 2000 as our Group reduced our reliance on bank overdrafts to nance our
business operations in FY2000. The outstanding amount of bank overdraft increased by $0.2 million to
$0.3 million as at 30 September 2001 as our business volume increased in the same period, therefore
increasing our need for such short-term nancing as working capital.
Trade payables
Trade payables increased from $2.2 million as at 30 September 1999 to $2.6 million as at
30 September 2000. The increase of $0.4 million was consistent with the growth experienced by our
business in FY2000. Trade payables remained at $2.6 million as at 30 September 2001 mainly
because the average cost of our raw material purchases decreased despite the longer credit terms
negotiated from our suppliers in FY2001 as we purchased our raw materials in greater quantities as
compared to FY2000.
Creditors' turnover days ranged from between 45 days and 57 days over the past 3 nancial years.
Creditors' turnover days decreased from 57 days in FY1999 to 45 days in FY2000 and subsequently
increased by 5 days to 50 days in FY2001.
Other payables
Other payables have gradually decreased from $1.6 million as at 30 September 1999 to $1.5 million as
at 30 September 2000 and subsequently to $1.1 million as at 30 September 2001. As we expanded
our in-house manufacturing activities, the level of sub-contracting outsourcing was reduced, hence
lowering the amounts payable to these sub-contractors.
Amounts due to related parties (non-trade) refers to mainly funds advanced to our Group from our
related parties. These funds were used mainly for the purpose of our Group's working capital
requirements and also for the acquisition of property, plant and equipment in relation to our business
expansion. This amount has been reduced from $6.0 million as at 30 September 1999 to $5.2 million
as at 30 September 2000. Amounts due to related parties (non-trade) further decreased by $5.0 million
from $5.2 million as at 30 September 2000 to $0.2 million as at 30 September 2001. This is due mainly
to the repayment of amounts owing to our related parties, directors and shareholders amounting to
approximately $5.0 million, to gradually reduce the amount owing to related parties for the purpose
of our Company's public listing. Please refer to `Ìnterested Person Transactions'' under ``Transaction
with PNE Plas (M'sia)'' on pages 72 and 73 for further details on the amount due to related parties
(non-trade).
Current portion of interest-bearing loans and borrowings decreased from $0.2 million as at
30 September 1999 to $0.1 million as at 30 September 2000. This amount increased by $1.8 million
to $1.9 million as at 30 September 2001 as we undertook secured bank loans of $1.9 million to repay
the amounts owing to our related parties, directors and shareholders.
34

In line with our Group's increasing protability in FY2000, provision for taxation rose to $0.3 million as
at 30 September 2000. However, provision for tax decreased to $0.2 million as at 30 September 2001
due to monthly instalment payments instead of yearly payments to the Malaysian tax authorities.
Dividends payable
None of our subsidiaries declared any dividends in FY1999 and
subsidiaries declared and made provisions equivalent to $4.4
payable to their then shareholders. $2.5 million of the $4.4 million
liabilities and $1.9 million under non-current liabilities. For more
Policy'' on page 24 of this Prospectus.
FY2000. In FY2001, some of our

million for net interim dividends
declared is included under current
details, please refer to ``Dividend
Non-current liabilities comprise mainly deferred taxation, dividend payable, interest-bearing loans and
borrowings.
Non-current liabilities increased from $0.4 million as at 30 September 1999 to $0.8 million as at
30 September 2000 and increased to $2.7 million as at 30 September 2001, due mainly to the
deferment of dividend payable amounting to $1.9 million as described below.
Deferred taxation increased from $0.1 million as at 30 September 1999 to $0.3 million as at
30 September 2000 and remained at $0.3 million as at 30 September 2001 mainly due to the
additional purchase of plant and equipment in FY2000.
Interest-bearing loans and borrowings increased from $0.2 million as at 30 September 1999 to $0.5
million as at 30 September 2000 as we secured bank loans to nance our purchase of a factory
building, including land, at Sungei Petani, Malaysia, for the expansion of ED coating services under
Hong Nam. The amount of interest-bearing loans and borrowings remained at $0.5 million as at 30
September 2001.
The payment of dividend payable as at 30 September 2001 of $1.9 million was deferred to after
30 September 2002 and hence this amount has been classied as a non-current liability. For more
details, please refer to ``Dividend Policy'' on page 24 of this Prospectus.
Shareholders' Equity
Our Group's shareholders' equity comprise of paid-up share capital, retained earnings, foreign
currency translation reserve, revaluation reserve and merger decit. Shareholders' equity grew from
approximately $7.7 million as at 30 September 1999 to $11.2 million as at 30 September 2000 and
remained at $11.2 million as at 30 September 2001. Our issued and paid-up share capital was
increased from $10.0 million as at 30 September 1999 to $11.6 million as at 30 September 2000.
Foreign Currency Exchange Exposure
The reporting currency of our Group is S$. Companies within our Group maintain their books and
records in their respective functional currencies. The functional currency of our subsidiaries
established in Malaysia is RM.
Transactions in currencies other than the functional currencies during the period are translated into the
respective functional currencies at exchange rates in effect at the date of the transactions. Monetary
assets and liabilities denominated in currencies other than the functional currencies at the balance
sheet date are translated into the respective functional currencies at the rates of exchange in effect
at the balance sheet date. Exchange gains and losses are dealt with in the prot and loss accounts
of the individual subsidiaries.
35
Upon consolidation, the nancial statements of our subsidiaries whose functional currencies are
currencies other than S$ are translated into S$. Assets and liabilities of our subsidiaries are
translated into S$ at the exchange rates in effect at the balance sheet date. All prot and loss
accounts are translated using average exchange rates for the period. Share capital is translated at
historical rates and the exchange differences arising on translation are included in the foreign
currency translation reserve.
Our sales are mainly denominated in RM and US$, whilst our purchases and expenses are
denominated mainly in RM and S$. Fluctuations in the exchange rates between S$ against RM and
S$ against US$ would therefore have an impact on our Group's results.
Presently, we do not have any formal hedging policy with respect to our foreign exchange exposure.
In future, we may hedge our material foreign exchange transactions after considering the foreign
currency amount, exposure period and transaction costs. The impact of foreign exchange
uctuations on our nancial performance over the past 3 nancial years were as follows:
Foreign exchange gains/(losses)

As a percentage of prot before tax (%)
FY1999
FY2000
FY2001
($'000)
($'000)
($'000)
(27)
37
151
1.9
4.0
* not meaningful
The foreign exchange loss in FY1999 was due to the appreciation of S$ against US$ as a substantial
portion of our sales were denominated in US$. Foreign exchange gains in FY2000 and FY2001 were
due to the depreciation of S$ against US$ in the corresponding period.
36
LIQUIDITY AND CAPITAL RESOURCES

The growth of our Group has been nanced through a combination of shareholders' equity, retained
earnings, bank borrowings and loans from our related parties, directors and shareholders. We
nanced our operations primarily through the issuance of ordinary shares to our shareholders and
obtaining loans from our related parties, directors and shareholders. Our Group's issued and paid-up
share capital as at 30 September 1999, 2000 and 2001 were $10.0 million, $11.6 million and $11.6
million respectively. In August 2000, our subsidiary, PNE Precision, issued an additional 4,000,000
new ordinary shares of RM1.00 each for the purpose of expanding our tool and die division. The
aggregate amounts owing to our related parties, directors and shareholders were approximately $6.0
million, $5.2 million and $0.2 million as at 30 September 1999, 2000 and 2001 respectively.
Our Group has secured adequate banking facilities at commercial rates to meet our business
requirements. Based on our Group's consolidated balance sheet as at 30 September 2001, the total
bank borrowings outstanding, comprising bank overdrafts and term loans, amounted to approximately
$2.8 million. As at September 2001, we had outstanding short-term loans amounting to approximately
$1.9 million secured by collateral provided by a related party. For more details, please refer to ``Past
Interested Person Transactions'' on pages 67 to 76 of this Prospectus.
Our Directors are condent that with our listed status and strengthened nancial position from the
expected net proceeds from the Invitation, we would be able to secure alternative sources of
banking facilities and negotiate better terms without relying on the credit support of our related
parties.
As at 30 September 2001, we had outstanding bankers' guarantees amounting to approximately $0.1
million secured by legal mortgages on our land and buildings in Malaysia and pledges of xed
deposits. Save as disclosed above and in the Accountants' Report, we have not provided any
guarantees to any other party and have no other material contingent liabilities.
Our Group's proforma cash ow summary in the last 3 nancial years ended 30 September 2001 is as
follows:
Net cash (used in)/generated from operating activities
FY1999
FY2000
FY2001
($'000)
($'000)
($'000)
(768)
2,623
4,040
Net cash used in investing activities
(1,110)
(2,317)
(911)
Net cash generated from/(used in) nancing activities
2,110
595
(3,300)
Net increase/(decrease) in cash and cash equivalents
232
901
(171)
(184)
37
934
Effect of exchange rate changes on balances held in foreign

currency
(11)
(4)
(43)
Cash and cash equivalents(1) at end of nancial year
37
934
720
(1)
at beginning of nancial year
Note:
(1) For the purpose of the cash ow summary, cash and cash equivalents are presented net of bank overdrafts.
37
NET CASH USED IN OR GENERATED FROM OPERATING ACTIVITIES

In FY1999, we generated net cash from operating activities before changes in working capital of
approximately $1.9 million. The decrease in cash as a result of increased working capital
requirements amounted to approximately $2.6 million. Income tax paid amounted to approximately
$0.1 million in FY1999. Net cash outow from operating activities amounted to approximately $0.8
million in FY1999.
Net cash generated from operating activities was $2.6 million in FY2000. The increase of $3.4 million
from FY1999 to FY2000 was due mainly to higher operating prot generated during the nancial year,
which resulted in positive cash ow after adjusting for non-cash items such as depreciation of
property, plant and equipment and inventories written down, as well as changes in working capital.
In FY2001, we generated net cash from operating activities before changes in working capital
requirements of approximately $5.5 million. Net decrease in cash as a result of increased working
capital requirements amounted to approximately $0.7 million. The decrease in cash of $2.5 million
due to increase in inventories and decrease in trade and other payables was partially offset by a
decrease in trade and other receivables of $1.8 million. Income tax paid amounted to $0.8 million.
Net cash outow from operating activities amounted to approximately $4.0 million in FY2001.
NET CASH USED IN INVESTING ACTIVITIES
Cash used in investing activities was mainly for the acquisition of property, plant and equipment.
In FY1999, we recorded a net cash outow of approximately $1.1 million from investing activities due
solely to the purchase of property, plant and equipment to cater to our Group's growing business
activities.
In FY2000, net cash used in investing activities was approximately $2.3 million as we continued to
expand our operations. During the year, we acquired a factory building together with its land, and
purchased additional plant and machinery to expand our ED coating services for micro-motors in
one of our subsidiaries. We also purchased plant and machinery for commencement of our Group's
tool and die fabrication services in Malaysia.
In FY2001, cash used in investing activities was approximately $0.9 million due mainly to acquisition
of property, plant and equipment.
NET CASH GENERATED FROM OR USED IN FINANCING ACTIVITIES
Cash generated from nancing activities was mainly from issuance of shares and proceeds from draw
down of interest-bearing bank loans and our related parties' loans. Cash used in nancing activities
was mainly for repayment of our related parties' loans.
Net cash generated from nancing activities was $2.1 million in FY1999. We recorded a net cash
inow from nancing activities in FY1999 owing to the further issuance of $1.8 million of ordinary
shares in 2 of our subsidiaries in the perforated materials, speaker nets and other metal components
and tool and die divisions and the proceeds from draw down of our related parties' loans amounting
to approximately $2.9 million. The increase was partially offset by repayment of interests, bank loans,
our related parties' loans and nance leases amounting to an aggregate of approximately $2.6 million.
As we continued to expand our operations in the tool and die division, the relevant subsidiary had
another round of fund raising in FY2000 through the issue of $1.8 million of ordinary shares to the
then existing shareholders. In addition, we received approximately $3.6 million from drawdown of
interest-bearing bank loans, our related parties' loans and our shareholders' loans. The increase was
partially offset by repayment of interests, bank loans, our related parties' loans and nance leases
amounting to approximately $4.8 million, which resulted in a net cash inow from nancing activities
of $0.6 million.
38
Net cash used in nancing activities was $3.3 million in FY2001. During the nancial year, we made
repayments of interests, bank loans, our related parties' loans and nance leases amounting to
approximately $6.4 million. This was partially offset by proceeds from draw down of interest-bearing
bank loans and our related parties' loans of $3.1 million.
CAPITAL EXPENDITURE AND INVESTMENTS
We plan to expand our production capacity in our Malaysian factories. The total expenditure for the
expansion of approximately $6.1 million from the proceeds of the Invitation will be utilised to nance
the upgrade and/or purchase of machinery.
Our Directors believe that the cash ows generated from our operations, together with existing cash
and cash equivalents, net proceeds from the Invitation and our banking facilities, will be sufcient to
meet our working capital requirements and potential business expansion for the next 12 to 24 months.
39
CAPITALISATION AND INDEBTEDNESS

You should read this table in conjunction with the Accountants' Report set out on pages 99 to 119 in
this Prospectus and the section entitled ``Management's Discussion and Analysis of Financial
Condition and Results of Operations'' on pages 27 to 29 of this Prospectus.
The following table shows the cash and cash equivalents, debt and capitalisation of our Group as at
30 September 2001:
(i)
based on our unaudited proforma Group consolidated balance sheet; and
(ii)
as adjusted after taking into account the Restructuring Exercise referred to on pages 45 to 48 of
this Prospectus, the allotment and issue of New Shares pursuant to the Invitation and the net
proceeds, based on an Issue Price of $0.22 per Share, after deducting estimated expenses.
($'000)
Cash and cash equivalent
As at
30 September 2001
As adjusted for
the Invitation
1,038
13,178
318
318
Indebtedness
Short-Term Debt
Finance lease liabilities (secured)
35
35
1,900
1,900
2,253
2,253
438
438
80
80
518
518
2,771
2,771
Proforma shareholders' Equity
11,242
23,382
Total Capitalisation
14,013
26,153
Secured bank loans
Long-Term Debt
Secured bank loans
Finance lease liabilities (secured)
Total Indebtednesss
As at 30 September 2001, we had total borrowings of approximately $2.8 million comprising

approximately $0.4 million of secured bank overdraft, $1.9 million of short-term secured bank loans
and nance lease liabilities and $0.5 million of long-term secured bank loans and nance lease
liabilities. The repayment period of our short-term secured bank loans is up to December 2002.
Please refer to page 116 of this Prospectus on the 'Accountants' Report' for details on the interest
rates of our borrowings. Based on our shareholders' equity of approximately $11.2 million as at 30
September 2001, our gearing, dened by total indebtedness divided by shareholders equity, was
0.25 times. We have been able to service our loan repayments on a timely basis.
The bank loans and bank overdrafts are secured on certain properties of our Group, collateral
provided by a related corporation and also joint and several guarantees from the directors of one of
our subsidiaries for approximately $0.5 million. We intend to use part of the Invitation Proceeds to
repay the loan secured by collateral provided by a related corporation. We also intend to procure the
discharge of the said guarantees from the banks concerned by providing our corporate guarantees
upon listing and quotation of our Shares on the SGX-Sesdaq. Should the banks not agree to the
discharge of the said guarantees, the substantial shareholders of that subsidiary will continue to
guarantee such loans.
40
DILUTION
Dilution is the amount by which the price paid by the purchasers of our New Shares in the Invitation
exceeds the NTA per Share after the Invitation. NTA per Share is determined by subtracting our total
liabilities from the total book value of our tangible assets and dividing the difference by the number of
Shares deemed to be outstanding on the date as of which the book value is determined. Our NTA per
Share after adjusting for the Restructuring Exercise as described in pages 45 to 48 of this Prospectus
was 7.73 cents.
Pursuant to the Invitation in respect of 62,000,000 New Shares at the Issue Price of $0.22 per Share,
our Group's NTA per Share, after adjusting for the estimated net proceeds from the Invitation and
based on the post-Invitation paid up share capital of 207,404,725 Shares would have been 11.27
cents. This represents an immediate increase in NTA of 3.54 cents per Share to our existing
shareholders and an immediate dilution in NTA of 10.73 cents per Share to new investors.
The following table illustrates this per Share dilution as at 30 September 2001:
Issue Price per Share
22.00 cents
NTA per Share after the Restructuring Exercise based on the pre-Invitation issued
share capital of 145,404,725 Shares
7.73 cents
NTA per Share after the Invitation
11.27 cents
Increase in NTA per Share attributable to existing shareholders
3.54 cents
Dilution in NTA per Share to new investors after the Invitation
10.73 cents
The following table summaries the total number of Shares held by our existing shareholders and the
total number of Shares purchased from us, the total consideration paid to us and the average price
paid per Share by our new investors pursuant to the Invitation.
Shares
Existing shareholders
New investor
Total
Average Price
Per Share
Amount
Number
145,404,725
70.1
11,632,378
46.0
8.0
62,000,000
29.9
13,640,000
54.0
22.0
207,404,725
100.0
25,272,378
100.0
41
S$
Cents
GENERAL INFORMATION ON OUR GROUP

SHARE CAPITAL
Our Company was incorporated in Singapore under the name of PNE Micron Holdings Pte Ltd on
7 September 2001 under the Act as a private limited company. We changed our name to PNE
Micron Holdings Ltd on 12 March 2002 in connection with our 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 our shareholders are set out in pages 136 and 137 of
this Prospectus.
As at 30 September 2001, our Company had an authorised share capital of S$100,000 divided into
100,000 ordinary shares of S$1.00 each, and an issued and paid-up share capital of S$2.00 divided
into 2 shares of S$1.00 each.
At an Extraordinary General Meeting held on 11 March 2002, our shareholders approved, inter alia, the
following:
(a)
an increase in the authorised share capital from S$100,000 to S$30,000,000 comprising

30,000,000 ordinary shares of S$1.00 each;
(b)
the issue of 11,632,376 new ordinary shares of S$1.00 each pursuant to the Restructuring
Exercise;
(c)
the consolidation of 2 ordinary shares of S$1.00 each into 1 ordinary share of S$2.00 each;
(d)
the sub-division of each ordinary share of S$2.00 each in the capital of our Company into
25 ordinary shares of $0.08 each;
(e)
the conversion of our Company into a public limited company and the change of its name to
PNE Micron Holdings Ltd;
(f)
the adoption of a new set of Articles of Association of our Company;
(g)
adoption of the PNE Micron Employees' Share Option Scheme and that the Directors of our
Company be authorised to allot and issue Shares upon the exercise of Options granted under
the said scheme;
(h)
the issue of up to 62,000,000 New Shares which, when fully paid, allotted and issued, will rank
pari passu in all respects with the existing Shares of our Company; and
(i)
that authority be given pursuant to Section 161 of the Companies Act to our Directors to allot
and issue Shares in our Company (whether by way of rights, bonus issue or otherwise) at any
time and upon such terms and conditions and for such purposes and to such persons as our
Directors shall in their absolute discretion deem fit, provided that the aggregate number of
shares to be issued pursuant to such authority shall not exceed 50 per cent. of the issued
share capital of our Company immediately prior to the proposed issue and that the aggregate
number of shares to be issued other than on a pro-rata basis to the then existing shareholders
of our Company shall not exceed 20 per cent. of the issued share capital of our Company
immediately prior to the proposed issue, and, unless revoked or varied by our Company in
general meeting, such authority shall continue in full force until the conclusion of the next
annual general meeting of our Company or the date by which the next annual general meeting
of our Company is required by law to be held, whichever is earlier.
42
Details of the changes in the issued and paid-up share capital of our Company since 30 September
2001 and its issued and paid-up share capital immediately after the Invitation, are as follows:
Number of
shares
Issued and fully paid ordinary shares of S$1.00 each as at 30 September
2001
11,632,376
11,632,376
11,632,378
11,632,378
5,816,189
11,632,378
145,404,725
11,632,378
62,000,000
4,960,000
207,404,725
16,592,378
Issue of ordinary shares of S$1.00 each pursuant to the Restructuring

Exercise
Consolidation of 2 ordinary shares of S$1.00 each into 1 ordinary share of

S$2.00 each (the ``Consolidation'')
Sub-division of each ordinary share of S$2.00 each into 25 ordinary shares
of S$0.08 each (the ``Sub-division'')
New Shares to be issued pursuant to the Invitation
Post-Invitation share capital comprising ordinary shares of S$0.08 each
S$
The authorised share capital and the shareholders' funds of our Company as at 30 September 2001
before and after adjustments to reect the Restructuring Exercise, the Consolidation, the Sub-division
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 99 to 119 of this Prospectus.
As at
30 September 2001
As adjusted
S$
S$
Authorised Share Capital

Ordinary shares of $1.00 each
100,000
Ordinary shares of $0.08 each
30,000,000
As adjusted after
the Restructuring
Exercise, the
Consolidation and
the Sub-division
After the
Invitation
(S$)
(S$)
Shareholders' Funds
Issued and fully paid shares
11,632,378
16,592,378
Share premium
7,180,000
Other reserves
(390,000)
(390,000)
11,242,378
23,382,378
Shareholders' funds
43
SHAREHOLDERS
The direct shareholdings in our Company before the Invitation and after the Invitation are set out
below:
Name of Shareholders
Notes
Before Invitation
Number of
Shares
After Invitation
Number of
Shares
Directors:
Tan Kong Heng
(1), (3)
4,661,400
3.1
4,661,400
2.2
Tan Kong Sin
(1), (3)
3,878,200
2.6
3,878,200
1.8
Tan Kwong Soon
(1), (3)
2,796,800
2.0
2,796,800
1.4
Tan Kong Leong
(1), (3)
2,796,800
2.0
2,796,800
1.4
Sitoh Yih Pin
(2)
Soh Lup Chee
(2)
(3)
114,341,525
78.6
114,341,525
55.1
4,661,400
3.1
4,661,400
2.2
Shareholders of 5% or more:
Print N Etch
Other Shareholders of less than 5% who are
related to our Directors or substantial
shareholders:
Tan Kong Boon
(1), (3)
Tan Kwang Hua
(1), (3)
3,878,200
2.6
3,878,200
1.8
Tan Koon Chwee
(1), (3)
2,796,800
2.0
2,796,800
1.4
Tan Kong Guan
(1), (3)
2,796,800
2.0
2,796,800
1.4
Tan Kong Hock
(1), (3)
2,796,800
2.0
2,796,800
1.4
62,000,000
29.9
145,404,725
100.0
207,404,725
100.0
Public
(4)
Total
Notes:
(1) Messrs Tan Kong Hock, Tan Kong Boon, Tan Kong Heng, Tan Kwong Soon, Tan Kwang Hua, Tan Kong Sin, Tan Koon
Chwee, Tan Kong Guan and Tan Kong Leong are siblings and therefore are deemed interested in each other's
shareholdings.
(2) Messrs Sitoh Yih Pin and Soh Lup Chee who are independent Directors, will each be allocated 300,000 Reserved Shares. If
they subscribe for the said Reserved Shares, they may dispose of or transfer all or part of their shareholdings in our
Company after our admission to the Ofcial List of the SGX-Sesdaq.
(3) Print N Etch is an investment holding company. The shareholders of Print N Etch are Messrs Tan Kong Hock (9.0%), Tan
Kong Boon (15.0%), Tan Kong Heng (15.0%), Tan Kwong Soon (9.0%), Tan Kwang Hua (12.5%), Tan Kong Sin (12.5%),
Tan Koon Chwee (9.0%), Tan Kong Guan (9.0%) and Tan Kong Leong (9.0%).
(4) Includes 5 million Reserved Shares to related Executive Ofcers namely Messrs Tan Kian Hie (3 million) and Tan Tee Ching
(2 million). Mr Tan Kian Hie is the son of Mr Tan Kong Boon, our substantial shareholder and Mr Tan Tee Ching is the son of
Mr Tan Kwong Soon, our Executive Director and substantial shareholder.
Save as disclosed above, there are no other relationships among our Directors and substantial
shareholders.
44
MORATORIUM
To demonstrate their commitment to our Group, our Company's substantial shareholders, namely the
Tan Brothers and Print N Etch, who collectively hold an aggregate of 145,404,725 Shares in our
Company, representing approximately 70.1% of our Company's enlarged issued and paid-up capital
after the Invitation, have undertaken not to dispose of or transfer any part of each of their direct and
indirect interests in our Company for a period of 12 months from the date of our Company's
admission to the Ofcial List of the SGX-Sesdaq, and for a period of 12 months thereafter, they shall
not reduce each of their shareholdings to below 50% of their original interests in our Company.
The shareholders of Print N Etch, the Tan Brothers, who collectively own 100% of Print N Etch have
each undertaken not to dispose of or transfer any part of their respective interests in Print N Etch for a
period of 24 months from the date of our Company's admission to the Ofcial List of the SGX-Sesdaq.
RESTRUCTURING EXERCISE
To streamline and rationalise our corporate and shareholding structure, the Restructuring Exercise
was carried out. The Restructuring Exercise involved the following steps:
(a)
Pursuant to an agreement dated 11 March 2002, PNE Micron acquired from the Tan Brothers the
entire issued and paid-up share capital of PNE Micron Engineering (S'pore), comprising
2,000,000 ordinary shares of S$1.00 each with effect from 1 October 2001. The purchase
consideration was satised by the issue of 2,001,806 ordinary shares of S$1.00 each as fully
paid at par in the capital of PNE Micron as follows:
Name
No. of shares
in the capital of
PNE Micron
Engineering
(S'pore) sold
% of
shareholding in
PNE Micron
Engineering
(S'pore)
No. of ordinary
shares of S$1.00
each in the capital
of PNE Micron
issued
Tan Kong Heng
300,000
15.0
300,272
Tan Kong Boon
300,000
15.0
300,272
Tan Kong Sin
250,000
12.5
250,226
Tan Kwang Hua
250,000
12.5
250,226
Tan Kwong Soon
180,000
9.0
180,162
Tan Kong Guan
180,000
9.0
180,162
Tan Kong Leong
180,000
9.0
180,162
Tan Koon Chwee
180,000
9.0
180,162
Tan Kong Hock
180,000
9.0
180,162
2,000,000
100.0
2,001,806
The said purchase consideration of S$2,001,806 was based on the audited NTA of PNE Micron
Engineering (S'pore) of S$2,001,806 as at 30 September 2001. Pursuant to the acquisition, PNE
Micron Engineering (S'pore) became a wholly-owned subsidiary of PNE Micron.
45
(b)
Pursuant to an agreement dated 11 March 2002, PNE Micron acquired from the following the
entire issued and paid-up share capital of PNE Micron Engineering (M'sia), comprising
5,000,000 ordinary shares of RM1.00 each with effect from 1 October 2001 at a consideration
of S$3,631,614. The purchase consideration was satised by the issue of 3,631,614 ordinary
shares of S$1.00 each as fully paid at par in the capital of PNE Micron:
Name
Print N Etch
No. of shares in
the capital of
PNE Micron
Engineering
(M'sia) sold
% of
shareholding in
PNE Micron
Engineering
(M'sia)
No. of ordinary
shares of S$1.00
each in the capital
of PNE Micron
issued
2,000,000
40.0
1,452,647
Tan Kong Heng
450,000
9.0
326,845
Tan Kong Boon
450,000
9.0
326,845
Tan Kong Sin
375,000
7.5
272,371
Tan Kwang Hua
375,000
7.5
272,371
Tan Kwong Soon
270,000
5.4
196,107
Tan Kong Guan
270,000
5.4
196,107
Tan Kong Leong
270,000
5.4
196,107
Tan Koon Chwee
270,000
5.4
196,107
Tan Kong Hock
270,000
5.4
196,107
5,000,000
100.0
3,631,614
The said purchase consideration of S$3,631,614 was based on the audited NTA of PNE Micron
Engineering (M'sia) of S$3,631,614 as at 30 September 2001 (at an agreed exchange rate of
$1.00: RM2.15). Pursuant to the acquisition, PNE Micron Engineering (M'sia) became a whollyowned subsidiary of PNE Micron.
(c)
Pursuant to an agreement dated 11 March 2002, PNE Micron acquired with effect from 1 October
2001 the entire issued and paid-up share capital of PNE Precision comprising 5,000,000 ordinary
shares of RM1.00 each from the Tan Brothers, at a consideration of S$3,081,564. The purchase
consideration was satised by the issue of 3,081,564 ordinary shares of S$1.00 each as fully
paid at par in the capital of PNE Micron as follows:
Name
No. of shares in
the capital of PNE
Precision sold
% of
shareholding in
PNE Precision
No. of ordinary
shares of S$1.00
each in the capital
of PNE Micron
issued
Tan Kong Heng
750,000
15.0
462,236
Tan Kong Boon
750,000
15.0
462,236
Tan Kong Sin
625,000
12.5
385,196
Tan Kwang Hua
625,000
12.5
385,196
Tan Kwong Soon
450,000
9.0
277,340
Tan Kong Guan
450,000
9.0
277,340
Tan Kong Leong
450,000
9.0
277,340
Tan Koon Chwee
450,000
9.0
277,340
Tan Kong Hock
450,000
9.0
277,340
5,000,000
100.0
3,081,564
46
The said purchase consideration of S$3,081,564 was based on the audited NTA of PNE
Precision of S$3,081,564 as at 30 September 2001 (at an agreed exchange rate of
$1.00: RM2.15). Pursuant to the acquisition, PNE Precision became a wholly-owned subsidiary
of PNE Micron.
(d)
Pursuant to an agreement dated 1 October 2001, CED acquired in cash with effect from
1 October 2001, 225,000 ordinary shares of RM1.00 each (representing 30% of the total issued
share capital) in the capital of PNE-Gin Lin from Mr Lin Cheng Ming. The consideration of
RM225,000 was based on the cost invested by Mr Lin Cheng Ming at the time of setting up
PNE-Gin Lin in January 2001. As at 30 September 2001, PNE-Gin Lin had an audited NTA of
$194,354. Pursuant to this acquisition, PNE-Gin Lin became a wholly-owned subsidiary of CED
System.
(e)
Pursuant to an agreement dated 1 December 2001, Messrs Tan Kong Heng and Tan Kong Sin
collectively acquired with effect from 1 October 2001, 931,400 ordinary shares of RM1.00 each
(representing 50% of the total issued share capital) in the capital of Hong Nam as follows:
No. of shares
in the capital of
Hong Nam sold
% of
shareholding
in Hong Nam
Consideration
(RM)
Name of Purchaser
Name of vendor
Tan Kong Heng
Seow Choon Long
465,700
25.0
2,125,000
Tan Kong Sin
Seow Choon Long
9,314
0.5
40,000
456,386
24.5
2,085,000
931,400
50.0
4,250,000
Lim Kim Ba
The total purchase consideration for the above acquisition of RM4.25 million was on a willing
buyer, willing seller basis and satised by way of cash. The consideration paid was based on a
valuation of RM8.5 million for Hong Nam, which is approximately a 72% premium over its
audited NTA of S$2,296,772 as at 30 September 2001.
(f)
Pursuant to an agreement dated 11 March 2002, PNE Micron subsequently acquired with effect
from 1 October 2001, 931,400 ordinary shares of RM1.00 each in the capital of Hong Nam at a
consideration of S$1,148,386 from Messrs Tan Kong Heng and Tan Kong Sin. The purchase
consideration was satised by the issue of 1,148,386 ordinary shares of S$1.00 each in the
capital of PNE Micron as follows:
Name
No. of shares in
the capital of
Hong Nam sold
% of
shareholding in
Hong Nam
No. of ordinary
shares of S$1.00
each in the capital
of PNE Micron
issued
Tan Kong Heng
465,700
25
574,193
Tan Kong Sin
465,700
25
574,193
931,400
50
1,148,386
The said purchase consideration of S$1,148,386 was arrived at based on 50% of the audited
NTA of Hong Nam of S$2,296,772 as at 30 September 2001 (at an agreed exchange rate of
S$1.00: RM2.15).
(g)
Pursuant to an agreement dated 11 March 2002, Print N Etch acquired with effect from 1 October
2001, 931,400 ordinary shares of RM1.00 each (representing 50% of the total issued share
capital) in the capital of Hong Nam from Actrolite at a consideration of S$1,148,386, based on
50% of the audited NTA of Hong Nam of S$2,296,772 as at 30 September 2001 (at an agreed
exchange rate of S$1.00: RM2.15).
47
Pursuant to the same agreement, Actrolite disposed of its 1,125,000 ordinary shares of RM1.00
each (representing 75% of the total issued share capital) in CED System with effect from
1 October 2001, to Print N Etch at a consideration of S$620,620, based on 75% of the audited
NTA of CED System of S$827,493 as at 30 September 2001 (at an agreed exchange rate of
S$1.00: RM2.15). The purchase consideration of S$1,148,386 and S$620,620 are represented
as inter-company loans between Actrolite and Print N Etch which are interest-free and payable
upon 30 days notice in writing.
Print N Etch subsequently disposed of its shareholdings in Hong Nam and CED System with
effect from 1 October 2001, to PNE Micron at a consideration equivalent to its cost of
purchase of S$1,148,386 and S$620,620 respectively. This purchase consideration was
satised by the issue of 1,769,006 ordinary shares of S$1.00 each in the capital of PNE Micron.
Pursuant to these acquisitions, Hong Nam became a wholly-owned subsidiary of PNE Micron,
and CED System became a subsidiary of PNE Micron.
(h)
Pursuant to an agreement dated 11 March 2002, CED System disposed of the entire issued and
paid-up share capital of PNE-Gin Lin comprising 750,000 ordinary shares of RM1.00 each to
PNE Micron at a consideration of S$195,354, with effect from 1 October 2001. The said
purchase consideration of S$195,354 was based on the audited NTA of PNE-Gin Lin of
S$195,354 as at 30 September 2001 (at an agreed exchange rate of $1.00: RM2.15). This
purchase consideration is represented as an inter-company loan between PNE Micron and
CED System which is interest free and payable upon 30 days notice in writing. Pursuant to the
acquisition, PNE-Gin Lin became a wholly-owned subsidiary of PNE Micron.
(i)
Pursuant to an agreement dated 11 March 2002, Hong Nam disposed of 375,000 ordinary
shares of RM1.00 each (representing 25% of the total issued share capital) of CED System to
PNE Micron with effect from 1 October 2001 at a consideration of S$206,873. The said
purchase consideration of S$206,873 was based on 25% of the audited NTA of CED System
of S$827,493 as at 30 September 2001 (at an agreed exchange rate of $1.00: RM2.15). This
purchase consideration is represented as an inter-company loan between Hong Nam and PNE
Micron which is interest free and payable upon 30 days' written notice. Pursuant to the
acquisition, CED System became a wholly-owned subsidiary of PNE Micron.
(j)
Pursuant to an agreement dated 11 March 2002, PNE Micron acquired with effect from 1 October
2001, 110 ordinary shares of RM1.00 each (representing 55% of the total issued share capital) in
the capital of Macore from Hong Nam (100 ordinary shares) and Chitacon Electronics (Kedah)
Sdn Bhd (10 ordinary shares) for a nominal cash consideration of S$1.00. The purchase
consideration was based on a willing buyer, willing seller basis. As at 30 Septermber 2001,
Macore had a negative NTA of RM3,630. Pursuant to the acquisition, Macore became a
subsidiary of PNE Micron.
(k)
Renouncement by Tan Brothers to Print N Etch

Following the Restructuring Exercise above, the Tan Brothers renounced the following amounts
of their entitlements of shares in the capital of PNE Micron to Print N Etch:
No. of PNE Micron ordinary shares
of S$1.00 renounced
Name
Tan Kong Heng
1,290,635
Tan Kong Boon
716,441
Tan Kong Sin
1,171,731
Tan Kwang Hua
597,537
Tan Kwong Soon
429,865
Tan Kong Guan
429,865
Tan Kong Leong
429,865
Tan Koon Chwee
429,865
Tan Kong Hock
429,865
5,925,669
48
GROUP STRUCTURE
The structure of our Group after the Restructuring Exercise and the Invitation is set out below:
Print N Etch
Public
Tan Brothers
15.5%
55.1%
29.9%
PNE MICRON
100%
PNE Micron
Engineering
(S'pore)
100%
PNE Micron
Engineering
(M'sia)
100%
PNE
Precision
100%
100%
PNE-Gin Lin
100%
CED System
Hong Nam
55%
Macore
Our Subsidiaries
The details of each subsidiary in our Group are as follows:
Issued and
paid-up capital
Effective
interest
owned by
our Group
Interest held
by third
party
Name of company
Date and
place of
incorporation
PNE Micron
Engineering (S'pore)
5 March 1992
Singapore
S$2,000,000
100%
Marketing and sale of

metal components, tool
and die, speaker nets and
perforated materials
PNE Micron
Engineering (M'sia)
22 April 1992
Malaysia
RM5,000,000
100%
Manufacture and sale of

metal components,
speaker nets and
PNE Precision
20 November 1995
Malaysia
RM5,000,000
100%
Design and manufacture of

tool and die for the
production of perforated
materials, speaker nets,
metal components and
PCBs
PNE-Gin Lin
11 December 2000
Malaysia
RM750,000
100%

metal components,
speaker nets and
CED System
18 February 1998
Malaysia
RM1,500,000
100%
Provision of ED coating for

metal components,
speaker nets and other
automotive parts
Hong Nam
22 July 1997
Malaysia
RM1,862,800
100%
Provision of ED coating for

metal components,
speaker nets, automative
parts and micro-motors
Macore
10 July 2001
Malaysia
RM200
55%
45%
(held by
Chitacon
Electronics
(Kedah)
Sdn Bhd)
49
Principal business

electronic motors
HISTORY AND BUSINESS

HISTORY
We commenced operations in 1992 when PNE Micron Engineering (S'pore) was incorporated to
manufacture tool and die which it sold to PCB manufacturers. We also manufactured metal brackets
used in transformers and metal casings for emergency lighting equipment. Production was carried out
at 14 Senoko Loop, Singapore 758150.
In April 1992, we incorporated PNE Micron Engineering (M'sia) to supply metal brackets and casings
to our customers such as PNE Electric and Asahi Industries (M) Sdn Bhd which had manufacturing
facilities in Malaysia. We also purchased a factory in Taman Desa Cemerlang, Johor Bahru, Malaysia
in 1992 to house the production facilities of PNE Micron Engineering (M'sia) which was originally
operating out of rented premises.
Recognising the market potential for speaker nets and our ability to leverage on our then customer
base, PNE Micron Engineering (S'pore) acquired the equipment for the manufacture of speaker nets
in 1993. The production of speaker nets was carried out at our factory in Senoko Loop.
In 1996, we shifted all our manufacturing operations to Malaysia due to the high labour and overhead
costs in Singapore. We rented an additional 1,675 sq m of production oor space in Kawasan
Perindustrian Dewani, Johor Bahru. PNE Micron Engineering (S'pore) then undertook our Group's
sales and marketing function for metal components.
In 1995, PNE Precision was established in Johor Bahru, Malaysia and undertook the design and
fabrication of metal and PCB moulds in 1999 from PNE Micron Engineering (M'sia). In 1997, we saw
the need to offer a more comprehensive range of component products and services to our OEM and
contract manufacturing customers. To this end, we acquired a 50% stake in Hong Nam, a company in
Sungei Petani, Malaysia that specialises in ED coating for metal components and speaker nets. ED
coating is essential to achieve a superior surface nish quality and reliability in nished products.
Hong Nam supported our Group's needs for ED coating as well as providing such services to other
non-related third parties. We set up CED System in Johor Bahru the following year to carry out similar
services to support our customers in Singapore and the southern part of Malaysia. In 2000, Hong Nam
set up a new ED coating line to cater for the ED coating of micro motors.
PNE Micron Engineering (M'sia) and PNE Precision were awarded the ISO 9002 certication in 1997
and 1998 respectively. Hong Nam was awarded the ISO 9001: 2000 certication in 2001. The ISO
9002 and the ISO 9001: 2000 certications are internationally recognised industry accreditations for
companies with sound documentation control, good quality management systems and adherence to
good manufacturing practices.
In 2001, PNE-Gin Lin was set up in Sungei Petani, Malaysia to cater to our customers' needs to
produce and supply speaker nets to the northern region of Malaysia. It commenced operations in the
month of April.
As at 30 September 2001, our main areas of business are the manufacture and sale of perforated
materials, speaker nets and other metal components, the provision of ED coating services and the
design and manufacture of tool and die, which contributed approximately 78.9%, 17.5% and 3.6%
of our Group's sales respectively. Our major customers include Casio, Foster Electric and MESA.
To rationalise our Group structure, we undertook the Restructuring Exercise described on pages 45 to
48 of this Prospectus upon receipt of the in-principal approval of the SGX-ST for the Invitation,
whereby PNE Micron became the holding company of our Group.
50
BUSINESS
We are currently engaged in 3 main areas of business:
Manufacture and sale of perforated materials, speaker nets and other metal components
ED coating services
Design and manufacture of tool and die
Manufacture and Sale of Perforated Materials, Speaker Nets and other Metal Components
We manufacture and supply metal components such as perforated materials, speaker nets and other
metal components to manufacturers of audio and video appliances and OEMs of computer
peripherals on a contract manufacturing basis. Our customers are mainly MNCs or their OEMs such
as MESA, Foster Electric and Casio.
(a)
Perforated Materials
Perforated materials are metal sheets or coils which are pierced or punched with holes. The
holes come in varying sizes and pitch. They are produced by progressive stamping method
using appropriate tool and die loaded on a press machine. Perforated materials are supplied in
either coil or sheet form. They are commonly used in the production of speaker nets and roller
shutters. They are also used for aesthetic reasons, for example, in the design of furniture and
furnishings.
(b)
Speaker Nets
Speaker nets are perforated metal sheets shaped or moulded in accordance with our customers'
specications and are used in audio and computer speakers. Our speaker nets undergo the ED
coating process (described below) to give the product a superior and durable nish. Our speaker
nets are typically black in colour and may be spray-painted to yield any other colour that our
customers may require.
(c)
Other Metal Components

The other metal components that we manufacture include contact terminals, integrated circuit
(`ÌC'') clips, heat sinks (used to dissipate heat in IC chips), back panels and bottom casings of
video and audio products. They are produced by a stamping process (illustrated below) whereby
the shape of the end product is formed by the forceful pressing of the loaded tool and die
against the metal sheet or coil through the up-and-down motion of the stamping press. The
type of metal used may be stainless steel, aluminium, electro-galvanised steel or others. Some
of these stamped metal components may undergo further secondary processes such as tapping,
tumbling, riveting, degreasing, spray-painting and silk-screening, all of which are carried out inhouse.
ED Coating
ED coating is a surface nishing technology to prevent rust and corrosion. This process employs a
special coating method whereby water-based paint is electrically deposited on the surface of metal
parts which are immersed in paint to form a uniform and water-insoluble lm. This produces a
superior surface nish quality as compared to surfaces that are coated using the traditional spraypainting method. Products coated by the ED coating method are more durable as there is greater
adhesion of the water-based paint to the surface of the metal components.
As our ED coating process is fully automated, it enhances productivity and labour efciency. Over the
years, our customers have raised their expectations on the cosmetic requirements of their products.
Through the immersion of the metal parts in the paint as compared to the traditional spray-painting
method, our ED coating process has not only met our customers' expectations but is also more cost
efcient as there is less wastage of paint.
51
The ED coating services that we provide are mainly for metal parts used in the consumer electronics
industry and for the production of micro-motors. We also extend such services to the automobile
industry.
We carry out bush tting and shaft tting sub-assembly services for MAEM. These sub-assembled
parts of the micro-motors are sent to MAEM or its OEMs after the ED coating process for the
complete assembly of the micro-motors.
Design and Manufacture of Tool and Die
We design and manufacture tool and die for the production of perforated materials, speaker nets,
other metal components and PCBs. Our customers provide us the product drawings and
specications upon which we will design, develop and fabricate the moulds. Currently, the majority
of the moulds we make are for use in our own manufacturing of stamped metal components and
speaker nets. We also sell our moulds to PNE PCB and PNE PCB (S).
Our Manufacturing Processes
Perforated Materials, Speaker Nets and Metal Components
A diagrammatic illustration of the manufacturing process is set out as follows:
Material preparation
Set up tools on machine
Approval set up for

mass production
Stamping / Perforation /
Forming
In-process
Quality control
Secondary
process
In-process inspection
Packing
Out-going inspection
Store
Delivery
52
At the commencement of the manufacturing process, appropriate materials are withdrawn from the
store for production.
The correct mould is then set up on the press machine. The dimensions of the rst 5 samples
produced by the press machine are veried by our quality control department. Upon approval, mass
production will begin.
Perforated materials, speaker nets and metal components are produced either by progressive
stamping or manual stamping. In progressive stamping, a progressive die is used. A progressive die
performs a series of sheet-metal operations such as cutting, piercing and forming at 2 or more
stations within the die until the metal component is completed. In manual stamping, a few
compound die will be needed to complete the metal component. A compound die performs only
1 operation within the die. Thus to complete the metal component, 2 or more die performing
different operations will be used. Whether progressive stamping or manual stamping is employed
would depend on the complexity of the stamping operations, the quantity required and the prole of
the metal component.
In-process quality control involves the checking at regular intervals of the components produced by
the press machines to ensure conformity. After checking, the components may undergo secondary
processes, if required, or packed as finished goods for delivery. The secondary process services we
provide in-house include:
tumbling, a process whereby burrs are removed from the surface of the stamped part using a
vibration dish;
tapping, a process whereby internal threads are cut into the cylindrical surface of the metal;
degreasing, a process to remove oil stains and grease from the surface of the product through
the use of cleaning chemicals by air-bubbling action and ultrasonic agitation;
spray-painting, a process to apply a finishing coat of paint to metal parts, usually for aesthetic
reason;
silk-screening, a stencil printing process; and
ED coating.
Secondary process services for perforated materials, speaker nets and metal components other than
the above, such as electro-plating, are currently sub-contracted out.
After the secondary process services are completed, the nished parts are packed accordingly and
subjected to out-going inspection before being transferred to our store.
53
ED Coating
The production ow of the ED coating process is illustrated in the diagram below:
Material preparation
Pre-loading
inspection
Loading of parts
onto jigs
Degreasing &
surface-treatment
ED coating
Curing
Unload for
quality inspection
Packing according to
customer specification
Store
Metal components to be ED coated are sent to our in-coming quality inspectors for inspection on a
sampling basis. During inspection, the metal components are checked for defects such as dents or
scratches. Upon approval by our in-coming quality inspectors, the metal components are loaded
onto the appropriate jigs before they are sent into the coating line by an automatic conveyor.
In the system, the metal components will undergo a series of degreasing processes and surface
treatments before they are dipped into the paint bath. The surface treatments are for the purpose of
preparing the metal components' surface for paint adhesion. When the metal components enter the
paint bath, paint is electrically deposited on their surface to form a uniform and water-insoluble lm.
Thereafter, the metal components are conveyed into an oven for curing. Curing is a process whereby
the paint is dried and the surface hardened.
At the end of the ED coating line, the metal components are unloaded for nal inspection, packed in
accordance with our customers' specications and then sent to our store.
54
Tool and Die

A diagrammatic illustration of the tool and die manufacturing process is set out as follows:
Review product and data from
customer
Tooling concept
Tooling design
and review
Issue detailed design
drawing
Computer numerical control
machining and
wire-cutting according to
design specification
Tooling assembly
Produce samples
First article review

and approval
Product drawings, specications and relevant data supplied by our customers will rst be reviewed by
our design team who will then provide the tooling concept taking into consideration the anticipated
costs, the manufacturability, quality of the end product as well as the other engineering aspects.
Mould design and development is then carried out on computer-aided design (``CAD'') workstations
and other customised drafting software. Once the design is nalised, a design drawing is issued and
tool fabrication commences. The different parts of the moulds are cut, milled and drilled according to
specications laid down by the design team. Tool fabrication is facilitated with computer-aided
machining (``CAM'') workstations.
To achieve precise specications in dimensions, CNC machining is applied. High accuracy proles for
die plates and punches are achieved through the use of wire electro-discharge machines. Completed
die plates and punches will undergo quality inspection before they are assembled. Once tooling is
completely assembled, sample parts will be produced and sent for rst article review to ensure that
the customers' specications are strictly complied with.
Quality Control
Quality assurance and control spans across every aspect of our work process. We have a quality
assurance plan in which work procedures are clearly spelt out and checks and controls are
implemented at every stage of our production process. Work procedures are also documented to
keep proper records which allows for future verication by our customers and ourselves.
We maintain our equipment and machinery regularly to ensure that our products consistently meet the
requirements of our customers in terms of quality and specications.
55
The 3 stages of our quality assurance plan and our work process are as follows:
(a)
Incoming quality control

The raw materials used in our production are subject to inspection to ensure that they comply
with our relevant specications. Our suppliers are also subject to our vendor qualication survey.
(b)
In-process quality control

We attempt to achieve zero defects in our products by incorporating mid-stream quality
assurance measures throughout the production processes. We carry out visual and
dimensional checks at hourly intervals on a sampling basis. Defects are identied and rectied
at an early stage to minimise reworking and rejection rates.
(c)
Outgoing quality control

Final quality inspection is performed visually on 100% of our completed products before
packing. We also conduct dimensional inspection on a sampling basis. Any item which fails the
outgoing quality inspection is rejected or reworked, if possible.
Our major operating subsidiaries, PNE Micron Engineering (M'sia), PNE Precision and Hong Nam are
ISO 9001: 2000 certied. PNE Micron Engineering (M'sia) and PNE Precision obtained their ISO
certications in 1997 and 1998 respectively under the then ISO 9002. The ISO certication is an
internationally recognised standard. This is in recognition that we have attained the standards set for
quality assurance, documentation control and our adherence to good manufacturing practices. The
accreditations are subject to annual surveillance audits before they are renewed. Since our
certication, we have passed every surveillance audit and maintained our ISO accreditations.
Marketing and Distribution
Mr Tan Kong Sin, our Chief Executive Ofcer, is responsible for formulating our Group's overall
marketing and sales strategy. He is supported by a team of marketing and sales personnel based in
Singapore and Malaysia. Our marketing team maintains and develops existing accounts and is also
responsible for securing new customers. We recognise the importance of maintaining good
relationships with our customers and are committed to strengthening these relationships between
our customers and ourselves. In this respect, all our Executive Directors and marketing managers
keep regular contact with our customers in order to maintain and further develop our relationships.
Our regular contacts with our customers also enable us to further understand their business needs
and to keep abreast of any changes in the market requirement for our products.
The marketing of our products are conducted mainly either by direct marketing to target customers or
through business referrals from existing customers or suppliers. As our Executive Directors each have
at least 15 years of experience in the manufacturing business, they have built up a network of
contacts within the industry which is invaluable to our marketing efforts.
Inventory Management
Each factory manager is responsible for his own factory stock. We have established inventory control
procedures to track in-coming and out-going inventory categorised according to the types of raw
material and components.
Full stock counts are taken on a bi-annual basis and reports on the amount of raw material and
nished goods are generated and reviewed by each factory's management team on a monthly basis.
Our inventory level is closely monitored and any abnormality will be highlighted to our management
during the monthly meeting. Slow and non-moving stocks will be identied and provisions made to
recognise their fair value.
56
We maintain 1 to 2 months' stock of raw materials and aim to keep not more than 1 month's stock of
nished goods. All raw materials and nished goods are managed on a rst-in-rst-out basis to
minimise stock obsolescence.
Our manufacturing facilities, all raw materials and nished goods are insured against re.
Credit Policy
We extend credit terms of between 60 to 90 days to our repeat customers with whom we have
established long-term business relationships. In respect of our other customers, including new
customers, we generally extend to them credit terms of up to 30 days, depending on the transaction
volume, nancial background, payment history and credit worthiness of the customer.
Our management will review the credit terms provided to our customers and the debtors' aging report
prepared by our accounting department on a monthly basis and may revise their credit terms
accordingly. In addition, we closely monitor outstanding accounts receivable or debts through
fortnightly management meetings. Pursuant to such meetings, our marketing personnel will increase
their efforts to recover outstanding balances.
We have provided for doubtful debts in FY1999, FY2000 and FY2001 in the amounts of S$47,040,
S$46,718 and S$135,780 respectively. The increase of provision for bad debts in FY2001 was due to
the provision of bad debts outstanding from Transtech Electronics Pte Ltd. We have, however, not
written-off any bad debts except in FY2001 when we wrote off S$4,650.
We do not make general provision for doubtful debts. Specic provision is made as and when it is
considered doubtful by our Directors, for example, when a customer is in nacial difculty.
Research and Development
As we are a sub-contractor, product design and development comes under the purview of our
customers. However, we sometimes play a minor role in product development when our engineers
provide inputs on the manufacturability and testability of the product design. We focus our
development efforts on keeping our manufacturing capabilities abreast of the changes in technology
and the needs of our customers.
Licences, Patents and Trademarks
We currently do not own any patents or trademarks. We market our products and services under the
``PNE'' trademark which we have licensed from Print N Etch.
We have on 11 March 2002 entered into a trademark licensing agreement with Print N Etch for our
Group to use the ``PNE'' trademark in Singapore and Malaysia. The agreement takes effect from
11 March 2002. A nominal fee of $1.00 will be charged for the use of the ``PNE'' trademark. The
agreement will remain in force until terminated by either party upon 1 month's notice. For more
details of the agreement, please refer to `Ìnterested Person Transactions'' on page 70 of this
Prospectus.
Print N Etch, our substantial shareholder, had submitted applications on 11 August 1998 for the
registration of the ``PNE'' trademark (as shown below) as a trademark with the Registry of
Trademarks and Patents in Singapore (now known as the Intellectual Property Ofce of Singapore).
Print N Etch had also submitted similar applications on 20 July 1991 with the Kementerian
Perdagangan Dalam Negeri dan Hal Ehwal Pengguna Malaysia Bahagian Harta Intelek in Malaysia
with respect to the registration of the trademark in Malaysia. The trademark applications in Singapore
and Malaysia are still pending.
57
Production Facilities and Capacity

Perforated Materials, Speaker Nets and Other Metal Components
The manufacture of perforated materials, speaker nets and other metal components is carried out by
PNE Micron Engineering (M'sia) and PNE-Gin Lin. PNE Micron Engineering (M'sia) manufactures
speaker nets and other metal components from the factory situated in Taman Perindustrian
Cemerlang, Johor, Malaysia, with a total production oor space of approximately 52,000 sq ft. It
manufactures perforated materials from the factory located in Kawasan Perindustrian Dewani, Johor,
Malaysia, with a total production oor space of 12,000 sq ft. PNE-Gin Lin carries out manufacturing
activities at Plots 9 and 10, Jalan PKNK 1/10, Eastern Parade Industrial Park, Taman Ria Jaya, 0800
Sungei Petani, Penang, Malaysia. This factory has a production oor space of 12,000 sq ft.
As at 30 September 2001, we have a total of 55 press machines at the abovementioned 3 factories.
At present, each of these 55 press machines are operating approximately 48 hours per week.
ED Coating
Hong Nam and CED System are in the business of ED coating. Hong Nam operates from 2 factories
situated at Rancang Industrial Park, Sungei Petani, Malaysia, with a total production oor space of
approximately 60,000 sq ft.
CED System has a factory located at Taman Perindustrian Cemerlang, Johor, Malaysia. The total
production oor space of this factory is 12,000 sq ft.
We currently have a total of 3 ED coating lines. Of these, 2 are catered for general metal components
which are used in the consumer electronics and automobile industries. The third line was specially
built to coat micro-motors for insulation purposes. At present, each of these 3 ED coating lines are
operating approximately 48 hours per week.
Design and Manufacture of Tool and Die
PNE Precision carries out our business of design and manufacture of tool and die from 2 factory units
with a total production oor space of 18,000 sq ft located at Taman Perindustrian Cemerlang, Johor,
Malaysia. As at 30 September 2001, we have a total of 12 precision machines employed in the tool
and die manufacturing process. At present, each of these 12 precision machines are operating
approximately 120 hours per week.
The utilisation rates for the machines and ED coating lines stated above are based on our best
estimation and may vary or uctuate when there is a surge of orders, especially when there are jobs
on an urgent basis.
MAJOR SUPPLIERS
The suppliers accounting for 5% or more of our Group's purchases during each of the past 3 nancial
years are set out below:
Percentage of Total Purchases
Supplier
FY1999
FY2000
FY2001
Tat Hong Trading Pte Ltd
1.0
3.0
16.0
Sumikkin Bussan Sdn Bhd
9.9
8.9
9.5
8.2
Steel Centre (M) Sdn Bhd
5.3
7.3
5.6
Johor Aluminium (1974) Sdn Bhd
2.4
12.1
1.0
12.8
4.8
2.8
Glory Flavour International Ltd
Pandai Steel Industries Pte Ltd
58
Tat Hong Trading Pte Ltd, Johore Aluminum (1974) Sdn Bhd and Glory Flavour International Ltd
We purchase aluminum materials from the abovementioned suppliers. They are based in Singapore,
Malaysia and Taiwan respectively. The increase in the percentage of total purchases from them over
the past 3 years was consistent with more new models requiring the use of aluminium materials being
awarded to us by our customers.
Sumikkin Bussan Sdn Bhd, Steel Centre (M) Sdn Bhd and Pandai Steel Industries Pte Ltd
We purchase steel materials such as electro-galvanised steel, tin plates and cold rolled steel from the
abovementioned coil centers. Sumikkin Bussan Sdn Bhd and Steel Centre (M) Sdn Bhd are based in
Malaysia while Pandai Steel Industries Pte Ltd is based in Singapore. The drop in percentage of
overall purchases over the past 3 years was due to a decrease in percentage of steel products of
our Group turnover.
None of our Directors or substantial shareholders has any interest, direct or indirect, in any of the
above suppliers.
The credit terms extended by our major suppliers are generally around 60 days. For our overseas
purchases, payment is usually settled by means of letters of credit or telegraphic transfers.
MAJOR CUSTOMERS
The customers accounting for 5% or more of our Group's turnover during each of the past 3 nancial
years are listed below. Customers who are related to one another have been grouped together and
treated as a single customer. More than 90% of our Group turnover in FY2001 were derived from
repeat customers.
Percentage of Total Turnover
Customer
FY1999
FY2000
FY2001
MESA
2.2
9.4
26.7
Foster Electric
9.2
7.4
9.3
12.0
11.5
7.2
3.1
6.9
Formosa Group of Companies
4.2
8.0
5.9
PNE Electric
6.6
6.2
5.2
PNE PCB (S)
9.9
2.6
2.4
Likom Group of Companies
9.6
2.6
0.8
Casio Group of Companies

MAEM
MESA
MESA is a major manufacturer of consumer electronics and audio products in Singapore. Aggregate
sales to MESA accounted for 2.2%, 9.4% and 26.7% of our Group turnover for FY1999, FY2000 and
FY2001 respectively. The increase in sales to MESA over the past 3 years was a result of our good
quality and service which led to more new models being awarded to us.
Foster Electric
Foster Electric is an OEM of consumer electronic products. Sales to Foster were mainly speaker nets
used in car audio products. Sales dropped from 9.2% of our total turnover in FY1999 to 7.4% in
FY2000 due to the obsolescence of some models. In FY2001, sales increased to 9.3% due to
production of new models.
59
Casio Group of Companies

Casio is a manufacturer of consumer electronic products. Sales to the Casio Group of Companies,
largely speaker nets and other metal components, accounted for 12%, 11.5% and 7.2% of our
Group turnover for FY1999, FY2000 and FY2001 respectively. The slight drop in sales from 12% in
FY1999 to 11.5% in FY2000 was due to the end of the product life for some models. Sales to the
Casio Group of Companies further decreased from 11.5% in FY2000 to 7.2% in FY2001 due to
models being transferred to Batam and the PRC for production.
MAEM
MAEM is a manufacturer of motors used in electronic devices. Sales to MAEM were mainly ED coating
services provided to coat micro-motors. Sales also included sub-assembled parts of micro-motors for
the complete assembly of the micro-motors in-house or through the OEMs of MAEM. We commenced
business with MAEM in FY2000 and sales grew in the following year due to their satisfaction with our
quality and high productivity.
Formosa Group of Companies
The Formosa Group of Companies is an OEM of consumer electronic products and computer
peripherals. Sales to the Formosa Group of Companies were largely speaker nets and other metal
components. Sales grew from 4.2% of our Group turnover in FY1999 to 8% in FY2000 due to more
new models in production. Sales in FY2001 dropped to 5.9% due to the obsolescence of some older
models.
PNE Electric
PNE Electric manufactures transformers, electronic controllers, emergency lighting equipment and
electronic ballasts. Sales to PNE Electric was 6.6% and 6.2% in FY1999 and FY2000 respectively.
Sales in FY2001 dropped to 5.2% due to the non-recurrence of orders of some of the products.
PNE PCB (S)
PNE PCB (S) manufactures PCBs used in most electronic products. Sales to PNE PCB (S) amounted
to 9.9%, 2.6% and 2.4% of our Group turnover in FY1999, FY2000 and FY2001 respectively. In
FY1999, sales to PNE PCB (S) included tooling supplied to PNE PCB. In FY2000, the sale of tooling
was made directly to PNE PCB, which resulted in the decline in turnover in FY2000.
Likom Group of Companies
The Likom Group of Companies is an OEM of consumer electronic products and computer
peripherals. Sales to the Likom Group of Companies accounted for 9.6%, 2.6% and 0.8% of our
Group turnover for FY1999, FY2000 and FY2001 respectively. The decline was due to a reduction in
our reliance on the Likom Group of Companies. We only continued to supply metal components for
their existing models until the models were obsolete.
Save for PNE PCB (S) and PNE Electric, none of our Directors or substantial shareholders has any
interest, direct or indirect, in any of the above customers. (For further details of the shareholdings of
PNE PCB (S) and PNE Electric, please see pages 67 and 71 of this Prospectus under `Ìnterested
Person Transactions''.
60
COMPETITION
Competition in the business of manufacture and sale of metal components is keen. This area of
business is characterised by a few major players and many small private companies. The barriers to
entry in this business are low, in particular, with regards to the capital investment and start-up costs
for the manufacture of metal components. Therefore competition from existing competitors in this
industry is intense. Furthermore, growth in this area could attract the entry of new companies in this
industry, thereby increasing the level of competition.
As there are no published sources with respect to our market share and industry statistics, we are
unable to provide the same with respect to such information.
The following table lists our major competitors for our 3 main areas of business:
Area of Business
Manufacture and sale of perforated materials, speaker nets and
Major Competitors
Sino Metal Sdn. Bhd.
Han Tong Metal Sdn. Bhd.
Robex Sdn. Bhd.
Miyoshi Precision Ltd
ED coating services
Ya Shing CED Coating Industry

Sdn Bhd
Design and manufacture of tool and die
Pratech Technology Sdn. Bhd.
None of our Directors or substantial shareholders of our Group have any interest, direct or indirect, in
any of the above competitors.
Competitive Strengths
Our Directors believe that we are able to compete effectively against these companies with the
following competitive advantages:
One-stop Service
We offer a wide variety of products and services, such as design and mould fabrication, production of
stamped metal components and nishing activities such as spraying, silk-screening and ED coating.
With our current range of metal components and services, we are able to provide a one-stop service
to our customers. This enables us to respond to changes in product specications quickly and
shorten our production lead time.
Our customers also benet from shorter procurement lead time, lower unit cost price and less logistic
problems relating to the use of multiple suppliers. Consequently, they are able to re-deploy their
resources to other areas such as product development.
Broad and diversied customer base
We have a broad and diversied base of customers. We have customers who are involved in the
manufacture of a wide range of products in the consumer electronics and electronics industries such
as televisions, audio and video equipment, personal computers and home appliances. This helps to
provide a more consistent and regular demand for our products and services throughout the year.
We are thus able to maintain a regular number of orders which allows us to optimise the utilisation
of our capacity.
61
Good relationship with customers

We maintain good relationships with our customers. Our sales to major customers such as MESA
have increased from 2.2% in FY1999 to 9.4% in FY2000 and further increased to 26.7% in FY2001.
We have received MESA's highest rating for quality in the last 2 years.
We have managed to achieve and maintain a close working relationship with our customers through
regular visits and consultations by our sales and marketing personnel. Our technical staff also
participate from time to time in our customers' product development activities. More than 90% of
our total sales in FY2001 were derived from repeat customers who were satised with our products
and services.
Product quality and service reliability
We pride ourselves as a value-added supplier that provides consistent product quality, competitive
pricing and timely delivery to our customers. We place high importance on quality and continually
emphasise such importance to our employees through our staff training programmes. We have in
place a quality assurance program in accordance with the ISO 9001:2000 quality systems to ensure
the quality and standards of our products. Please refer to ``Quality Control'' on page 55 of this
Prospectus for more details on our quality assurance.
Experienced management team
We have an experienced management team who is familiar with the business and whom we believe
will be able to lead our Group forward to continued growth and protability. We are led by our Chief
Executive Ofcer and one of our founders, Mr Tan Kong Sin, who has more than 20 years of
experience in the relevant manufacturing business. He has through the years groomed a senior
management team to assist him in the daily management of the business operations of our Group.
Each of these senior managers have at least 10 years of experience behind him or her. As a result of
years of experience in this industry, our management team has built a network within the industry
which is invaluable to our business expansion and development. This will be elemental to our future
expansion and development.
62
PROSPECTS, BUSINESS STRATEGY AND FUTURE PLANS

PROSPECTS
Our Directors believe that the prospects of our Group for the next few years are as follows:
General conditions of the Malaysian economy
According to the April-June 2001 edition of the Malaysia Industrial Digest, a quarterly bulletin
published by MIDA, the Malaysian government will be implementing the Eighth Malaysia Plan
covering the period from 2001 to 2005. During this period, the Malaysia government expects the
manufacturing sector to grow by 8.9% per annum from 2001 to 2005, contributing to 35.8% of
gross domestic product of Malaysia by 2005. The electrical and electronics products industry will
continue to be the major contributor to total exports from Malaysia. During this 5-year period, the
electrical and electronics product industry is targeted to grow at an annual rate of 8.8%.
Consumer electrical and electronics industry
We have seen a compounded average annual growth rate of 19.6% in our Group's turnover in the last
3 nancial years ended 30 September 2001. We mainly supply to and service manufacturers of audio
and video appliances and OEMs of computer peripherals. Our growth is therefore dependent on the
state of this industry.
According to Gartner Dataquest*, consumer electronics production in the Asia-Pacic region grew
4.7% in 2000. Gartner Dataquest expects consumer electronics production in the Asia-Pacic region
to grow at an 8.2% compound annual rate, from US$72 billion in 2000 to US$112 billion in 2005.
* Asia/Pacic Consumer Electronics Semiconductor Market, published 5 September 2001 Gartner Inc..
ED coating
Our ED coating services division's turnover has seen a strong compounded average annual growth
rate of 91% from FY1999 to FY2001. Since FY2000, our Group has relied mainly on ED coating
services for the majority of our prots. Our ED coating services division contributed approximately
36.4%, 57.0% and 49.5% of our Group's prot before tax in FY1999, FY2000 and FY2001
respectively.
ED coating has gradually, over the years, gained acceptance among the consumer electrical and
electronics manufacturers we service as they become convinced of the quality and reliability of ED
coating as compared to traditional coating methods such as spray painting.
In addition to customers in the electronics and consumer electronics industry, we also provide ED
coating services to manufacturers of micro-motors and to both the automobile industry and the
furniture industry. Currently, we are experiencing increasing orders from automobile parts
manufacturers who are switching from traditional spray painting to ED coating. Similarly, we were
able to secure orders from furniture manufacturers who have increasingly requested for ED coating
services.
Production and sub-assembly of micro-motors
Our Directors also believe that there are growth opportunities in the production and sub-assembly of
micro-motors. As more electronic products are becoming more compact, the components used in such
products are correspondingly reduced in size. Hence, there is an increasing demand for micro-motors.
Micro-motors are commonly used in all types of compact electronic gadgets that require mechanical
movements in their operations, for example, mobile phones and personal compact disc players.
Following the terrorist attacks in the US on 11 September 2001 both our sales and protability had
been reduced as compared to its corresponding periods. Although the global economic environment
had improved recently, it is not clear what will be the extent and speed of the economic recovery, or
whether such a recovery, if already started, can be sustained.
63
Bearing in mind the impact from the adoption of a prot sharing scheme for our subsidiaries'
employees, and the entering of the Service Agreements with our Executive Directors, we are likely to
experience a material decline in our prots before tax for FY2002 although we expect to remain
protable.
BUSINESS STRATEGY AND FUTURE PLANS
Our business strategy and future plans are summarised as follows:
Expansion of our ED coating services
With the increasing use and acceptance of ED coating, our Directors expect and intend to expand our
ED coating services to capture a bigger market share in the automobile industry. The contribution
from our ED coating services to our Group's turnover has increased from 6.9% in FY1999 to 17.5%
in FY2001. We plan to set up a fourth ED coating line in Shah Alam, Malaysia by end of FY2002, to
cater for the automobile industry in addition to our current facilities in Johor and Sungei Petani,
Malaysia. Our subsidiary, CED system, has on 26 March 2002, entered into a sale and purchase
agreement shortly to purchase a factory at HICOM Industrial Estate. The purchase consideration of
approximately S$2.0 million will be funded from the Invitation Proceeds. In addition, there are plans
to set up ED coating facilities in the PRC by end of FY2002.
Through our customers' feedback and surveys conducted by ourselves, we have also identied a
need to provide ED coating services to manufacturers of consumer electronics products in Thailand.
We are currently conducting a market research on the possibility of setting up an ED coating line
there.
Production and assembly of complete micro-motors
We currently provide ED coating services and sub-assembly of micro-motors such as bush and shaft
tting. These processes are the initial stages of the production of a micro-motor. The coated and subassembled micro-motors are sold to our customers who will complete the assembly of the micromotors in-house or through their OEMs. We intend to carry out the complete range of processes for
the production of micro-motors through our subsidiary, Macore.
Many manufacturers of consumer electronics products, including a majority of our customers, have
set up production facilities in the PRC. In early 2000, we commenced supplying tool and die,
perforated materials and semi-nished speaker nets to our customers in the PRC. We intend to
continue and increase our supply to our customers in the PRC and market to new customers in the
PRC. We may consider setting up production facilities for perforated materials and other metal
components at the appropriate time.
New geographical markets
We intend to expand our customer base in new geographical markets such as the USA and Europe.
Currently, PNE Industries' wholly-owned subsidiary, PNE International Pte Ltd, has a presence in the
USA, through a 50% associate company, PNE International, LLC. We intend to leverage on PNE
Industries' presence initially to gain a market presence in the USA and Europe.
The relationship between PNE Industries and our Company is described in the section `Ìnterested
Person Transactions'' on page 67 of this Prospectus.
64
GOVERNMENT REGULATIONS
Manufacturing License
Two of our Malaysian subsidiaries namely PNE Precision and Hong Nam hold manufacturing licences
issued by MITI. Another Malaysian subsidiary, PNE Mircon Engineering (M'sia), has recently received
approval for its application for a manufacturing license from MITI.
A manufacturing licence is required when the shareholders' funds of a manufacturing company
exceeds RM2.5 million or its workforce exceeds 75 full-time employees.
The manufacturing licence issued by MITI may be subject to conditions such as, inter alia:
(a)
approval of the Department of Environment;
(b)
the shares in the company which are held by non-Malaysian citizens cannot be sold without the
prior written approval from MIDA;
(c)
the company must, as far as possible, appoint Malaysian citizens to its board of directors and
MIDA must be informed of such appointment and any changes in its board of directors;
(d)
the company must employ and train Malaysian citizens;
(e)
a report from an independent valuer must be given and written approval must be obtained from
MIDA before the company may use used machineries for its operations;
(f)
written approval of MIDA must be obtained prior to the execution of any agreement for
technology transfer with foreign parties. Such agreements include joint venture agreements,
technical assistance and know-how agreements, license agreements, trademark and patent
agreements, turnkey contract agreements and management agreements;
(g)
the company's product quality must meet the standards acceptable to the Malaysian
government; and
(h)
the company must, as far as possible, appoint companies owned by Malaysian citizens to
distribute its products locally and must appoint bumiputra distributors to distribute at least 30%
of its sales in Malaysia. The appointment of foreign companies as distributors can only be made
with the prior written approval of MIDA.
Whilst our other Malaysian subsidiaries namely, CED System, PNE-Gin Lin and Macore are currently
not required to hold such a licence, they may in the future, be required to apply for one if their
respective shareholders' funds or full-time work force reach the relevant thresholds.
Exchange Controls
Based on the exchange control regulations in Malaysia issued by Bank Negara Malaysia in September
1999 and modified in February 2001, foreign funds and the profits made therefrom are subject to the
following rules:
(a)
the principal amount of the foreign funds brought into Malaysia when repatriated will not attract
any levy; and
(b)
all profits realised in the utilisation of such foreign funds in portfolio investments, when
repatriated 12 months starting from the month the profits are realised, will attract a standard
10% levy. No such levy is imposed on the repatriation of profits made from the sale of other
types of assets, including real property. The criteria set by Bank Negara Malaysia in
determining whether an investment is considered a portfolio investment include:
(i)
it is a short-term investment with concern on safety of capital, returns and likelihood of a

appreciation;
(ii)
the investor has no significant influence over the operations of the investee company; and
(iii)
the investor holds less than 10% of the equity or voting rights in the investee group of
companies.
65
Whilst there is no restriction on the repatriation of non-levyable prots from Malaysia, including
dividends, interests, commissions and rental incomes, Bank Negara Malaysia requires documentary
evidence to be furnished to the remitting banks to show that the funds to be remitted are not
subject to levy.
To-date, we have not encountered any adverse experience in respect of the exchange control
requirements discussed above.
FIC
Our Malaysian subsidiaries are subject to the FIC guidelines issued by the FIC which is a committee of
the EPU. The FIC guidelines provide, inter alia, that for any proposed acquisition of 15% or more of
the voting power by any one foreign interest or foreign associated group or by foreign interests in the
aggregate of 30% or more of the voting power of a Malaysian company, the approval of the FIC must
be obtained.
We have received a letter from the EPU stating that the FIC has no objection to our Restructuring
Exercise described on page 45 of this Prospectus.
66
INTERESTED PERSON TRANSACTIONS

PAST INTERESTED PERSON TRANSACTIONS
Save as disclosed below, none of the Directors, substantial shareholders or Executive Ofcers of our
Company has any interest in any material transactions undertaken by our Group in the past 3 nancial
years.
All gures shown in this section relating to shareholdings of PNE Industries have been extracted from
the annual report for the nancial year ended 30 September 2001.
All amounts shown in this section are based on the exchange rates set out in the section `Èxchange
Rates'' at page 11 of this Prospectus.
Transactions with PNE Electric
PNE Electric is a wholly-owned subsidiary of PNE Industries, a company listed on the main board of
the SGX-ST. Print N Etch (38.9%) and PNE Investment (16.7%) are substantial shareholders of PNE
Industries. PNE Investment and Print N Etch are wholly-owned by the Tan Brothers. Print N Etch owns
55.1% of our enlarged issued and paid-up capital after the Invitation. The Tan Brothers collectively
own 15.0% of our enlarged issued and paid-up capital after the Invitation and are also deemed
interested in the Shares held by Print N Etch.
Our Directors, Messrs Tan Kong Heng, Tan Kong Sin, Tan Kwong Soon and Tan Kong Leong are also
directors of PNE Electric. Messrs Tan Kong Heng, Tan Kwong Soon and Tan Kong Leong are
directors of PNE Industries.
PNE Micron Engineering (M'sia) supplies metal components to PNE Electric. The value of these
transactions for the past 3 nancial years ended 30 September 2001 are set out below:
Value of transactions (S$'000)
% of Group's turnover
% of Group's NTA
FY1999
FY2000
FY2001
1,132
1,397
1,295
6.6
6.2
5.2
14.8
12.4
11.5
The above transactions were conducted on arms' length basis and on normal commercial terms which
we offer to other unrelated third parties.
PNE Micron Engineering (M'sia) entered into a long-term supply agreement dated 4 May 2000 with
PNE Electric for the sale of metal components, tool and die and engineering samples (the ``PNE
Electric Supply Agreement''). Subject to the review and approval of the Audit Committee, our Group
will supply metal components, tool and die and engineering samples to PNE Electric from time to time
as may be required by PNE Electric. The prices for these products will be agreed upon on a case to
case basis at arms' length such that the transactions will be on terms and prices not less favourable
than if they were transacted with a third party and the parties shall not be disadvantaged in any other
way. The PNE Electric Supply Agreement commenced on 15 May 2000 and will continue for as long
as the PNE Industries' shares are listed on the SGX-ST. It is a term of the PNE Electric Supply
Agreement that it will terminate immediately if the mandate of the shareholders of PNE Industries at
any annual general meeting is not given for its renewal. Apart from the non-renewal of the agreement
as aforesaid, the PNE Electric Supply Agreement may be terminated only upon mutual agreement of
the parties.
Transactions with PNE Electronics
PNE Electronics is wholly-owned by the Tan Brothers, our substantial shareholders. Our Directors,
Messrs Tan Kong Heng, Tan Kwong Soon and Tan Kong Leong are also directors of PNE Electronics.
PNE Micron Engineering (M'sia) is currently renting the factory at No. 3 Jalan Tiga, Kawasan
Perindustrian Dewani, 81100 Johor Bahru, Johor, Malaysia from PNE Electronics. Under the latest
lease agreement dated 1 October 2000, the said factory is leased for a period of 2 years
commencing 1 October 2000 at a monthly rental of RM10,000.
67
The rentals paid to PNE Electronics over the last 3 nancial years are set out as follows:
FY1999
FY2000
FY2001
Rental paid (per annum) (S$'000)
16
16
56
0.1
0.1
0.2
% of Group's NTA
0.2
0.1
0.5
For FY1999 and FY2000, the rentals paid by PNE Micron Engineering (M'sia) were below the then
prevailing market rates. In FY2001, PNE Micron Engineering (M'sia) and PNE Electronics entered into
a new lease agreement with effect from 1 October 2000. The new monthly rental was revised in line
with prevailing market rates comparable to the rental rates applied in the same area.
We intend to renew the current lease upon expiry on commercial terms and on arms' length basis
such that the terms will not be less favourable compared to what PNE Micron Engineering (M'sia)
would be charged by third party landlords. Such terms will also be subject to the review and
approval of our Audit Committee.
Transactions with Print N Etch
The shareholders of Print N Etch are the Tan Brothers, our substantial shareholders. Our Directors,
Messrs Tan Kong Heng, Tan Kong Sin and Tan Kwong Soon are also directors of Print N Etch.
(a)
By PNE Micron Engineering (S'pore)

Print N Etch has been providing production support services to PNE Micron Engineering (S'pore)
since its incorporation in 1992. The production support services include administrative, nance
and corporate secretarial services, CAD-CAM services, utilities, logistics, warehousing and
transportation services (the ``Services''). The annual value of the Services for the last 3 nancial
years is set out in the following table:
FY1999
FY2000
FY2001
Cost of Services (S$'000)
414
98
428
2.4
0.4
1.7
% of Group's NTA
5.4
0.9
3.0
In FY2000, we reduced our reliance on Print N Etch as PNE Micron Engineering (M'sia) assumed
some of the Services. However, as our Singapore based customers preferred to deal directly
with PNE Micron Engineering (S'pore) due to proximity reasons, we reverted to our original
arrangement with Print N Etch in FY2001 and the value of the Services rendered by Print N
Etch increased accordingly.
It has been the practice of Print N Etch to centralise the provision of the Services to some of its
Singapore subsidiaries located in the same premises. This is because it has the facilities,
equipment and personnel with the necessary experience and know-how to provide the
Services. As we were sharing common premises, we also took advantage of the availability of
these Services for cost effectiveness. We intend to continue with this arrangement as it is
neither practical nor cost effective for our Group to acquire equipment and engage our own
personnel to undertake the Services. To this end, we have entered into a long-term
management and production support services agreement with Print N Etch (the ``Management
and Production Support Services Agreement'').
68
Subject to the review and approval of the Audit Committee, Print N Etch will provide the Services
(other than CAD-CAM ) to our Group pursuant to the Management and Production Support
Services Agreement. The fee for the Services will be on arms' length basis such that the
provision of the Services will not be on terms less favourable than if they were provided by a
third party and the parties shall not be disadvantaged in any other way. The Management and
Production Support Services Agreement will be effective upon the listing and quotation of our
Shares on the SGX-Sesdaq and will continue for as long as the listing continues and subject to
the provisions of Chapter 9A of the Listing Manual of the SGX-ST. The Management and
Production Support Services Agreement may be terminated only upon mutual agreement of the
parties.
(b)
By PNE Micron Engineering (M'sia)

(i)
Lease
PNE Micron Engineering (M'sia) leases part of the premises at 14 Senoko Loop, Singapore
758150 from Print N Etch for use as an ofce and warehouse. Under the latest lease
agreement dated 1 October 2000, the total leased premises comprises an area of
approximately 15,000 sq ft for a term of 24 months commencing 1 October 2000 at a
monthly rental of $9,000.
The rentals paid to Print N Etch over the last 3 nancial years are set out as follows:
FY1999
FY2000
FY2001
Rental paid (S$'000)
60
108
0.3
0.4
% of Group's NTA
0.8
10.0
We intend to renew the current lease upon expiry on commercial terms and on arms' length
basis such that the terms will not be less favourable compared to what PNE Micron
Engineering (M'sia) would obtain from any third party landlords. Such terms will also be
subject to the review and approval of our Audit Committee.
(ii)
Loan
PNE Micron Engineering (M'sia) had received advances from Print N Etch in the past.
The advances from Print N Etch were non-interest bearing, unsecured and had no xed
tenures. The aggregate amounts outstanding as at the date of the balance sheets for the
respective past 3 nancial years ended 30 September 2001 are as follows:
FY1999
FY2000
FY2001
Outstanding loan amount (S$'000)
677
426
% of total Group's liabilities
6.3
4.1
The aforesaid amounts have since been fully repaid. We do not intend to obtain any further
loans in the future.
69
(c)
By PNE Precision
PNE Precision had received advances from Print N Etch in the past.
The advances from Print N Etch were non-interest bearing, unsecured and had no xed tenures.
The aggregate amounts outstanding as at the date of the balance sheet for the respective past 3
nancial years are as follows:
FY1999
FY2000
FY2001
12
0.03
0.1
The aforesaid amounts have since been fully repaid. We do not intend to obtain any further loans
in the future.
(d)
By PNE Micron
We have on 11 March 2002 entered into a trademark licensing agreement with Print N Etch for
our Group to use the ``PNE'' trademark in Singapore and Malaysia, (the ``Licensing Agreement'').
The agreement takes effect from 11 March 2002. A nominal fee of $1.00 will be charged for the
use of the ``PNE'' trademark. The agreement will remain in force until terminated by either party
upon 1 month's notice.
Transactions with PNE PCB

Print N Etch (38.9%) and PNE Investment (16.7%) are substantial shareholders of PNE Industries,
which in turn is a substantial shareholder (43%) of PNE PCB. Print N Etch and PNE Investment are
wholly-owned by the Tan Brothers. Print N Etch and the Tan Brothers hold 55.1% and 15.0%
respectively of our enlarged issued and paid-up capital after the Invitation.
Our Non-Executive Chairman, Mr Tan Kong Heng and our Executive Directors Messrs Tan Kong Sin
and Tan Kwong Soon are also Directors of PNE PCB.
(a)
By PNE Precision
PNE Precision supplies tool and die to PNE PCB. The value of these transactions for the past 3
nancial years ended 30 September 2001 are set out below:
FY1999
FY2000
FY2001
256
271
1.1
1.1
% of Group's NTA
2.3
2.4
PNE PCB is one of our only 2 customers with respect to PCB tool and die, the other customer
being PNE PCB (S). We charge PNE PCB based on our standard costing, with a mark up which
is consistent with the prevailing market rates of the tool and die industry.
(b)

PNE Micron Engineering (M'sia) supplies scrap metal chips to PNE PCB. The value of these
FY1999
FY2000
FY2001
0.02
% of Group's NTA
0.1
70
The above transactions were conducted on an arms' length basis and on normal commercial terms
which we offer to other unrelated third parties.
In order to regulate future transactions with PNE PCB, our Company has entered into a long term
supply agreement with PNE PCB on 11 March 2002 for the sale of tool and die and the supply of
scrap metal chips (the ``PNE PCB Supply Agreement''). Subject to the review and approval of our
Audit Committee, our Group will supply tool and die and scrap metal chips to PNE PCB from time to
time as may be required by PNE PCB. The prices for these products will be agreed upon on a case to
case basis at arms' length such that the transactions will be on terms and prices not less favourable
than if they were transacted with a third party and the parties shall not be disadvantaged in any other
way. The PNE PCB Supply Agreement will be effective upon the listing and quotation of our Shares on
the SGX-Sesdaq and will continue for as long as the listing continues and subject to the provisions of
Chapter 9A of the Listing Manual of the SGX-ST. The PNE PCB Supply Agreement may be terminated
only upon mutual agreement of the parties.
Transactions with PNE PCB (S)
PNE PCB (S) is a wholly-owned subsidiary of PNE PCB, a company listed on the main board of the
KLSE.
PNE PCB is 43% owned by PNE Industries. Print N Etch (38.9%) and PNE Investment (16.7%) are
substantial shareholders of PNE Industries. PNE Investment and Print N Etch are wholly-owned by
our substantial shareholders, the Tan Brothers. Print N Etch and the Tan Brothers hold 55.1% and
15.0% respectively of our enlarged issued and paid-up capital after the Invitation.
Our Directors, Messrs Tan Kong Heng, Tan Kong Sin and Tan Kwong Soon are also Directors of PNE
PCB (S).
(a)
By PNE Precision
PNE Precision supplies tool and die to PNE PCB (S). The value of these transactions for the past
3 nancial years ended 30 September 2001 are set out below:
FY1999
FY2000
FY2001
577
600
2.6
2.4
% of Group's NTA
5.1
5.3
The above transactions were conducted on arms' length basis and on normal commercial terms
which we offer to other unrelated third parties.
In order to regulate future transactions with PNE PCB (S), our Company has on 11 March 2002
entered into a long-term supply agreement with PNE PCB (S) for the sale of tool and die (the
``PNE PCB (S) Supply Agreement''). Subject to the review and approval of the Audit
Committee, our Group will supply tool and die to PNE PCB (S) from time to time as may be
required by PNE PCB (S). The prices for these products will be agreed upon on a case by case
basis at arms' length such that the transactions will be on terms and prices not less favourable
than if they were transacted with a third party and the parties shall not be disadvantaged in any
other way. The PNE PCB (S) Supply Agreement will be effective upon the listing and quotation of
our Shares on the SGX-Sesdaq and will continue for as long as the listing continues and subject
to the provisions of Chapter 9A of the Listing Manual of the SGX-ST. The PNE PCB (S) Supply
Agreement may be terminated only upon mutual agreement of the parties.
(b)

PNE Micron Engineering (M'sia) supplied metal components and tool and die to PNE PCB (S) in
FY1999. The value of these transactions was S$1,708,000. The said transactions were
conducted on an arms' length basis and on normal commercial terms which we offer to other
unrelated third parties. Our Directors do not expect such transactions to recur in the future.
71
Transactions with PNE Plas (M'sia)

PNE Plas (M'sia) is wholly-owned by the Tan Brothers, our substantial shareholders. Our Directors,
Messrs Tan Kong Heng and Tan Kong Leong, are also directors of PNE Plas (M'sia).
(a)

(i)
Loan
PNE Micron Engineering (M'sia) had obtained loans from PNE Plas (M'sia) in the past.
These loans were non-interest bearing and unsecured with no xed term of repayment.
The amounts owing by us to PNE Plas (M'sia) over the last 3 nancial years ended
30 September 2001 were as follows:
FY1999
FY2000
5,089
4,468
47.6
42.5
Outstanding Loan Amount (S$'000)

FY2001
All amounts owing to PNE Plas (M'sia) have been fully repaid as at 30 September 2001.
There are no current outstanding amounts owing to or from PNE Plas (M'sia). We do not
intend to obtain any further loans in the future.
(ii)
Sub-lease of hostel
PNE Plas (M'sia) had rented part of a hostel at No. 8 Jalan Johar 9, Taman Desa
Cemerlang, 81800 Ulu Tiram, Johor, Malaysia from PNE Micron Engineering (M'sia). Under
the sub-lease agreement dated 1 October 2000, 4,160 sq ft of the said property was leased
for a period of 2 years commencing 1 November 2000 at a monthly rental of RM750. The
said lease agreement was terminated on 30 September 2001.
(iii)
Sale of metal components

The total value of metal components that PNE Micron Engineering (M'sia) sold to PNE Plas
(M'sia) over the last 3 nancial years ended 30 September 2001 were as follows:
FY1999
FY2000
FY2001
Transaction Amount (S$'000)
11
57
50
0.1
0.3
0.2
% of Group's NTA
0.1
0.5
0.4
The above transactions were conducted on arms' length basis and on normal commercial
terms which we offer to other unrelated third parties.
(iv)
Purchase of plastic components from PNE Plas (M'sia)

The total value of plastic components that PNE Micron Engineering (M'sia) acquired from
PNE Plas (M'sia) over the last 3 nancial years ended 30 September 2001 were as follows:
FY1999
FY2000
FY2001
Transaction Amount (S$'000)
142
0.6
% of Group's NTA
1.3
The above transactions were conducted on arms' length basis and on normal commercial
terms which we offer to other unrelated third parties.
72
(v)
Pledge
PNE Micron Engineering (M'sia) has a loan of RM4 million with a Malaysian bank which is
pledged with collateral provided by PNE Plas (M'sia). We intend to use part of the Invitation
proceeds to repay this loan in full.
(vi)
Sale of Machinery
PNE Micron Engineering (M'sia) had sold one unit of Komatsu Power Press machine to
PNE Plas (M'sia) in FY2001. The net book value of this machine was RM6,475 and the
consideration paid by PNE Plas (M'sia) for this machine was RM10,500. This was a oneoff transaction.
(b)
By PNE Precision
(i)
Loans by PNE Precision

PNE Precision had in FY1999, received loans from PNE Plas (M'sia) for the purchase of
Nos 21, 23 and 25 Jalan Gemilang 3, Taman Perindustrian Cemerlang, 81800 Ulu Tiram,
Johor DRUL Takzim, Malaysia. The amount outstanding as at 30 September 1999 was
S$1,404,000.
The loans from PNE Plas (M'sia) were non-interest bearing, unsecured and had no xed
tenures and have since been repaid. We do not intend to obtain any further loans in the
future.
(ii)
Loans from PNE Precision

PNE Plas (M'sia) had in FY2000 received loans from PNE Precision. The amount
outstanding as at 30 September 2000 was S$267,000. The loans from PNE Precision
were non-interest bearing, unsecured and had no xed tenures and have since been fully
repaid. We do not intend to make any further loans in the future.
(iii)
Repairing and maintenance of tooling parts

PNE Precision provides repairing and maintenance services for tooling parts to PNE Plas
(M'sia). The value of these transactions for the past 3 nancial years ended 30 September
2001 are set out below:
FY1999
FY2000
FY2001
0.004
0.008
% of Group's NTA
0.01
0.02
In order to regulate future transactions with PNE Plas (M'sia), our Company has entered into a long
term supply agreement with PNE Plas (M'sia) on 11 March 2002 for the supply of metal components
to PNE Plas (M'sia), purchase of plastic components from PNE Plas (M'sia) and the supply of repair
and maintenance services for tooling parts (the ``PNE Plas (M'sia) Supply Agreement''). Subject to the
review and approval of the Audit Committee, our Group will purchase plastic components from PNE
Plas (M'sia) and supply metal components and repair and maintenance services for tooling parts to
PNE Plas (M'sia) from time to time as may be required. The prices for these products and services
will be agreed upon on a case to case basis at arms' length such that the transactions will be on
terms and prices not less favourable than if they were transacted with a third party and the parties
shall not be disadvantaged in any other way. The PNE Plas (M'sia) Supply Agreement will be
effective upon the listing and quotation of our Shares on the SGX-Sesdaq and will continue for as
long as the listing continues and subject to the provisions of Chapter 9A of the Listing Manual of the
SGX-ST. The PNE Plas (M'sia) Supply Agreement may be terminated only upon mutual agreement of
the parties.
73
Transactions with Actrolite

Actrolite is a wholly-owned subsidiary of Print N Etch, our substantial shareholder. Print N Etch is
wholly-owned by the Tan Brothers who collectively hold 15.0% of our enlarged issued and paid-up
capital after the Invitation. Our Directors, Messrs Tan Kong Heng, Tan Kong Sin and Tan Kwong
Soon are also directors of Print N Etch and Actrolite.
(a)
By Hong Nam
Hong Nam had received advances from Actrolite in the past. Our Executive Ofcers, Messrs
Seow Choon Long and Lim Kim Ba are directors of Hong Nam. They were also substantial
shareholders of Hong Nam during the period when the advances were made.
The advances from Actrolite were non-interest bearing, unsecured and had no xed tenures. The
aggregate amounts outstanding as at the date of the balance sheets for the respective past 3
nancial years are as follows:
FY1999
FY2000
FY2001
28
120
0.3
1.1
The aforesaid amounts have as at the date of this Prospectus been fully repaid. We do not
intend to obtain any further loans in the future.
(b)

(i)
Loans by PNE Micron Engineering (M'sia)

PNE Micron Engineering (M'sia) had in FY2000 received loans from Actrolite. The amount
outstanding as at 30 September 2000 was S$33,000. The loans from Actrolite were noninterest bearing, unsecured and had no xed tenures and have since been fully repaid.
We do not intend to obtain any further loans in the future.
(ii)
Loans from PNE Micron Engineering (M'sia)

Actrolite had in FY1999 received loans from PNE Micron (M'sia). The amount outstanding
as at 30 September 1999 was S$4,000. The loans from PNE Micron (M'sia) were noninterest bearing, unsecured and had no xed tenures and have since been repaid. We do
not intend to make any further loans in the future.
(c)
By CED System
(i)
Loans by CED System

CED System had in FY1999 received loans from Actrolite. The amount outstanding as at
30 September 1999 was S$34,000. The loans from Actrolite were non-interest bearing,
unsecured and had no xed tenures and have since been fully repaid. We do not intend
to obtain any further loans in the future.
(ii)
Loans from CED System

Actrolite had in FY2001 received advances from CED System totalling S$50,000. The
advances from CED System were non-interest bearing, unsecured and had no xed
tenures and have since been fully repaid. We do not intend to make any further loans in
the future.
74
Transactions with PNE Aquaculture Sdn Bhd (``PNE Aquaculture'')

PNE Aquaculture is 90% owned by Actrolite which is a wholly-owned subsidiary of Print N Etch, our
substantial shareholder. The other 10% is owned by an unrelated third party.
Print N Etch is wholly-owned by the Tan Brothers who collectively hold 15.0% of our enlarged issued
and paid-up capital after the Invitation. Our Directors, Tan Kong Heng and Tan Kong Sin are also
directors of PNE Aquaculture.
(i)
Sale of lorry
PNE Micron Engineering (M'sia) sold a lorry to PNE Aquaculture in FY2001. The net book value
of the lorry was RM1.00. The consideration paid by PNE Aquaculture was RM16,000. This was a
one-off transaction.
(ii)
Provision of services
PNE Micron Engineering (M'sia) had provided nancial and administrative services to PNE
Aquaculture since PNE Aquaculture's incorporation in 2001. The value of these services is
S$11,000 for FY2001 (0.04% and 0.09% of Group turnover and Group NTA respectively). Upon
our listing, we will discontinue with this arrangement.
Transactions with PNE Appliance Controls Pte Ltd (``PNE Appliance'')

PNE Appliance is wholly-owned by PNE Industries. PNE Investment and Print N Etch own 16.7% and
38.9% respectively of the shareholdings of PNE Industries. Messrs Tan Koon Chwee and Tan Kong
Leong each own 0.1% of the issued and paid-up share capital of PNE Industries. PNE Investment and
Print N Etch are wholly-owned by the Tan Brothers. Print N Etch owns 55.1% of our enlarged issued
and paid-up capital after the Invitation. The Tan Brothers collectively own 15.0% of our enlarged
issued and paid-up capital after the Invitation and are also deemed interested in the Shares held by
Print N Etch.
Our Directors, Messrs Tan Kong Heng, Tan Kong Sin, Tan Kwong Soon and Tan Kong Leong are also
Directors of PNE Electric. Messrs Tan Kong Heng, Tan Kwong Soon and Tan Kong Leong are
directors of PNE Industries.
PNE Micron Engineering (M'sia) supplies metal components to PNE Appliance. The value of these
FY1999
FY2000
FY2001
119
0.5
% of Group's NTA
1.1
In order to regulate future transactions with PNE Appliance, our Company has entered into a long term
supply agreement with PNE Appliance on 11 March 2002 for the supply of metal components to PNE
Appliance (the ``PNE Appliance Supply Agreement''). Subject to the review and approval of the Audit
Committee, our Group will supply metal components to PNE Appliance from time to time as may be
required. The prices for these products will be agreed upon on a case to case basis at arms' length
such that the transactions will be on terms and prices not less favourable than if they were transacted
with a third party and the parties shall not be disadvantaged in any other way. The PNE Appliance
Supply Agreement will be effective upon the listing and quotation of our Shares on the SGX-Sesdaq
and will continue for as long as the listing continues and subject to the provisions of Chapter 9A of the
Listing Manual of the SGX-ST. The PNE Appliance Supply Agreement may be terminated only upon
mutual agreement of the parties.
75
Transactions with our Directors

(a)

(i)
Lease of Premises
PNE Micron Engineering (M'sia) is currently renting a hostel at No. 8 Jalan Johar 9, Taman
Desa Cemerlang, 81800 Ulu Tiram, Johor, Malaysia from our Director, Mr Tan Kong Heng.
Under the latest lease agreement dated 1 November 2000, 4,160 sq ft of the said property
is leased for a period of 2 years commencing 1 November 2000 at a monthly rental of
RM1,500. We intend to renew the current lease upon expiry on normal commercial terms
and on an arms' length basis such that the terms will not be any less favourable
compared to what PNE Micron Engineering (M'sia) would obtain from unrelated third
parties. Such terms will also be subject to the review and approval of our Audit Committee.
(ii)
Loans from Shareholders

PNE Micron Engineering (M'sia) had in the past received advances from the Tan Brothers,
our substantial shareholders. The advances from them were non-interest bearing,
unsecured and had no xed tenures. The aggregate amounts outstanding as at the date
of the balance sheet for the FY2000 was S$137,460. This amount has, at the date of this
Prospectus, been fully repaid and we do not intend to obtain any further loans in future.
(b)
Restructuring Exercise
The transactions carried out as part of the Restructuring Exercise are interested persons
transactions. For details on the Restructuring Exercise, please see pages 45 to 48 of this
Prospectus.
Transaction with our Executive Ofcer

Our Executive Ofcer, Mr Seow Choon Long, managing director of Hong Nam, PNE-Gin Lin and
Macore, had provided loans totalling RM62,500 in FY1999 to Hong Nam. The loans from Mr Seow
Choon Long were non-interest bearing, unsecured and had no xed tenures. This amount was
repaid in FY2001. We do not intend to obtain any further loans from Mr Seow Choon Long in the
future.
SHAREHOLDERS' MANDATE
Classes of Interested Person Transactions
(a)
Transactions governed by long-term agreements

In order to regulate future transactions contemplated under the PNE Electric Supply Agreement,
the Management and Production Support Services Agreement, the Licencing Agreement, the
PNE PCB Supply Agreement, the PNE PCB (S) Supply Agreement, the PNE Plas (M'sia) Supply
Agreement and the PNE Appliance Supply Agreement (the `Àgreements''), we have obtained
shareholders' approval at an extraordinary general meeting held on 11 March 2002 therefor.
Pursuant to this approval, our Company had entered into the Agreements on 11 March 2002
(the PNE Electric Supply Agreement was entered into on 4 May 2000). All transactions pursuant
to the Agreements will be summarised and submitted to the Audit Committee for quarterly review
to ensure that the terms of the Agreements, including those relating to the determination of
pricing, are adhered to and are on arm's length basis.
The transactions covered by the Agreements will be subjected to the review procedures set out
in the section ``Review Procedures For Future Interested Person Transactions'' on page 78 of
this Prospectus.
New investors who subscribe for our Shares are deemed to have approved the Agreements.
76
(b)
Transactions not governed by long term agreements

Our Directors envisage that other than the Agreements, our Group may, in the ordinary course of
business, enter into interested persons transactions (the ``Possible Continuing IPTs'') with
interested persons of our Company (`Ìnterested Person''), as dened in Chapter 9A of the
Listing Manual of the SGX-ST (the ``Listing Manual''), in the future.
The Possible Continuing IPTs which have been discussed on pages 67, 69 and 76 are:
(i)
tenancy agreements with PNE Electronics for the lease of No 3 Jalan Tiga, Kawasan
Perindustrian Dewani, 81100 Johor Bahru, Johor, Malaysia;
(ii)
tenancy agreements with Print N Etch for the lease of part of the premises at 14 Senoko
Loop, Singapore 758150; and
(iii)
tenancy agreements with Mr Tan Kong Heng for the lease of No 8 Jalan Johor 9, Taman
Desa Cemerlang, 81800 Ulu Tiram, Johor, Malaysia.
Under Chapter 9A of the Listing Manual, a listed company may seek shareholders' mandate for
recurrent transactions of a revenue or trading nature or those necessary for its day-to-day
operations, which may be carried out with the listed company's interested person, but not for
the purchase or sale of assets, undertakings or businesses.
Due to the time sensitive nature of commercial transactions, our Directors have sought and
obtained approval from the shareholders of our Company on 11 March 2002 (the
``Shareholders' Mandate'') for the Possible Continuing IPTs set out above, provided that such
transactions are made at arms' length and on normal commercial terms.
The Possible Continuing IPTs covered by the Shareholders' Mandate will be subject to the
review procedures set out in the section ``Review Procedures For Future Interested Person
Transactions'' on page 78 of this Prospectus.
Transactions which do not fall within the ambit of the Shareholders' Mandate shall be subject to
the relevant provisions of the SGX-ST Listing Manual.
The Shareholders' Mandate takes effect from the date of the passing of the resolutions until the
next annual general meeting of our Company. Thereafter, approval from the shareholders of our
Company for a renewal of the Shareholders' Mandate will be sought at each subsequent annual
general meeting of our Company. New investors who subscribe for our Shares are deemed to
have approved of the Possible Continuing IPTs that are covered by the Shareholders' Mandate.
Benets To Shareholders
The Agreements and the Shareholders' Mandate and the renewal thereof on an annual basis
eliminates the need to convene separate general meetings from time to time to seek shareholders'
approval as and when the need to enter or renew the transactions with interested persons arises,
thereby reducing substantially the administrative time and expenses in convening such meetings,
without compromising the corporate objectives and adversely affecting the business opportunities
available to us.
The Agreements and the Shareholders' Mandate are intended to facilitate transactions contemplated
therein which are entered into in our normal course of business, and which are transacted from time to
time with the interested person, provided that they are carried out at arms' length and on normal
commercial terms and are not prejudicial to shareholders.
Disclosure will be made in our annual report of the aggregate value of such transactions covered by
the Agreements and the Shareholders' Mandate during the nancial year reported thereon, and in the
annual reports for the subsequent nancial years during which the Agreements and a Shareholders'
Mandate are in force.
77
Our internal control procedures will ensure that the interested person transactions covered by the
Agreements and the Shareholder's Mandate are conducted on an arms' length basis and on normal
commercial terms in accordance with our guidelines listed in the ``Review Procedures For Future
Interested Person Transactions'' section. The Audit Committee will during its periodic review carry
out ratication of records for these transactions to ensure that they comply with the internal control
procedures. The review includes the examination of the nature of the transactions and the
supporting documents or such other data deemed necessary by the Audit Committee.
REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS
Our Audit Committee will review and approve all interested person transactions as dened by the
Listing Manual (`Ìnterested Person Transactions'') to ensure that they are on normal commercial
terms and arms' length basis, that is, the transactions are transacted on terms and prices not more
favourable to the interested persons than if they were transacted with a third party and are not
prejudicial to the interests of our shareholders in any way.
During its periodic review or such other review deemed necessary by them, our Audit Committee will
carry out review of records of all Interested Person Transactions in respect of the Agreements and
Possible Continuing IPTs and future Interested Person Transactions to ensure that they are carried
out in accordance with the following internal control procedures:
(i)
All Interested Persons Transactions above $100,000 are to be approved by a Director who shall
not be an Interested Person in respect of the particular transaction. Interested Person
Transactions below $100,000 do not require such approval. Any sale or purchase contracts to
be made with an Interested Person shall not be approved unless the pricing is:
(a)
determined in accordance with our usual business practices and policies;
(b)
consistent with the usual margin given or price received by us for the same or substantially
similar type of transactions between us and unrelated parties; and
(c)
the terms are no more favourable to the Interested Person than those extended to or
received from unrelated parties.
For the purposes above, contracts for the same or substantially similar type of transactions
entered into between us and unrelated third parties, if any, will be used as a basis for
comparison to determine whether the price and terms offered to or received from the Interested
Person are no more favourable than those extended to unrelated parties.
(ii)
In addition, we shall monitor all Interested Person Transactions that are not covered under the
Agreements and the Shareholder's Mandate entered into by us and categorise these
transactions as follows:
(a)
a Category 1 Interested Person Transaction is one where the value thereof is in excess of
5% of the NTA of our Group; and
(b)
a Category 2 Interested Person Transaction is one where the value thereof is below or
equal to 5% of the NTA of our Group.
All Category 1 Interested Person Transactions must be approved by our Audit Committee prior
to entry whereas Category 2 Interested Person Transactions need not be approved by our Audit
Committee prior to entry but shall be reviewed on a quarterly basis by our Audit Committee.
We will prepare relevant information to assist our Audit Committee in its review.
Before any agreement or arrangement that is not in the ordinary course of business of our Group is
transacted, prior approval must be obtained from our Audit Committee. In the event that a member of
our Audit Committee is interested in any of the Interested Person Transactions, he will abstain from
reviewing that particular transaction. Any decision to proceed with such an agreement or
arrangement would be recorded for review by our Audit Committee.
78
Our Audit Committee will also review all Interested Person Transactions to ensure that the prevailing
rules and regulations of the SGX-ST (in particular, Chapter 9A of the SGX-ST Listing Manual) are
complied with.
We will also comply with the provisions in Chapter 9A of the Listing Manual in respect of all future
Interested Person Transactions, and if required under the Listing Manual or the Act, we will seek our
shareholders' approval (where necessary) for such transactions.
All the independent and non-executive directors, who are members of our Audit Committee, are of the
view that the review procedures and systematic monitoring mechanism of all Interested Parties
Transactions as mentioned above, are adequate in ensuring that such transactions will be on normal
commercial terms and will not be prejudicial to the interests of our shareholders in any way.
POTENTIAL CONFLICTS OF INTEREST
Save as disclosed in `Ìnterested Person Transactions'' above during the last 3 financial years ended
30 September 2001:
(a)
none of our Directors, Executive Officers or substantial shareholders has had any interest, direct
or indirect, in any material transactions to which we were or are to be a party;
(b)
none of our Directors, Executive Officers or substantial shareholders has any interest, direct or
indirect, in any company carrying on the same business or carrying on a similar trade as us; and
(c)
none of our Directors, Executive Ofcers or substantial shareholders has any interest, direct or
indirect, in any enterprise or company that is our customer or supplier of goods or services.
CORPORATE GOVERNANCE
Presently, our business and operations are under the management and close supervision of our
Executive Directors, namely, Messrs Tan Kong Sin and Tan Kwong Soon. Our Audit Committee,
which is made up of Messrs Sitoh Yih Pin, Soh Lup Chee and Tan Kong Leong, will provide the
necessary checks and balances.
Our Directors recognise the importance of corporate governance and the offering of high standards of
accountability to the shareholders of our Company. Our Audit Committee shall meet periodically to
perform the following functions:
(a)
reviewing the audit plans of our Company's external auditors;
(b)
reviewing the external auditors' reports;
(c)
reviewing the co-operation given by our Company's officers to the external auditors;
(d)
reviewing the scope and results of the internal audit procedures;
(e)
reviewing the financial statements of our Company and our Group before their submission to the
board of Directors;
(f)
nominating external auditors for appointment or re-appointment;
(g)
review our Group's compliance with such functions and duties as may be required under the
relevant statutes or the Listing Manual, and by such amendments made thereto from time to
time;
(h)
reviewing Interested Person Transactions; and
(i)
reviewing the remuneration packages of employees who are related to our Directors and
substantial shareholders.
Apart from the duties listed above, our Audit Committee shall commission and review the ndings of
internal investigations into matters where there is any suspected fraud or irregularity, or failure of
internal controls or infringement of any Singapore and other applicable law, rule or regulation which
has or is likely to have material impact on our Company's operating results and/or nancial position.
79
DIRECTORS, MANAGEMENT AND STAFF

The following chart shows our current management organisation structure.
BOARD OF DIRECTORS
TAN KONG SIN

Chief Executive Officer
SEOW CHOON LONG

Managing Director
Hong Nam
PNE-Gin Lin
Macore
TAN KIAN HIE

Managing Director
PNE Precision
CED System
TAN BENG HUAT, RAYMOND

Director of Sales and Marketing
PNE Micron Engineering
(S'pore)
TAN KWONG SOON

Executive Director
PANG PENG KUAN

Director of Production
CED System
LIM KIM BA
Techical Director
Hong Nam
TAN TEE CHING

Group Financial Controller
SONG TEIK CHUAN

Director of Production
Hong Nam
DIRECTORS
Our 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
Tan Kong Heng
61
700 Toa Payoh Lorong 1,

# 21-15 Trellis Tower,
Singapore 319773
Non-Executive Chairman
Tan Kong Sin
47
10 Springleaf Rise,
Singapore 787990
Chief Executive Ofcer
Tan Kwong Soon
56
7 Bassein Road
# 09-04 Pastoral View
Singapore 309837
Executive Director
Tan Kong Leong
40
32, Jalan Shaer,

Singapore 769377
Non-Executive Director
Sitoh Yih Pin
38
6 Fernwood Terrace,
Singapore 458539
Independent Director
Soh Lup Chee
50
45, Faber Walk,

Singapore 128973
Independent Director
Messrs Tan Kong Heng, Tan Kong Sin, Tan Kwong Soon and Tan Kong Leong are siblings.
80
The Independent Directors are Messrs Sitoh Yih Pin and Soh Lup Chee. The Audit Committee
comprises Messrs Sitoh Yih Pin, Soh Lup Chee and Tan Kong Leong. The Chairman of the Audit
Committee is Mr Sitoh Yih Pin.
Information on the business and working experience of our Directors is set out below:
Mr Tan Kong Heng is our Non-Executive Chairman. Mr Tan Kong Heng is the founder and chairman
of PNE PCB, a company listed on the KLSE in Malaysia. He started his career in the electronics
industry in 1970 when he joined a local printed circuit board manufacturer as a Material Manager
before establishing the PNE PCB group of companies in 1976. He is currently also serving as the
Non-Executive chairman of PNE Industries, and sits on the board of various other companies set out
in the table below. Given the more than 30 years of experience in the manufacturing industry, Mr Tan
has built up relationships with many industry players. Mr Tan actively explores for new business
opportunities and expansion possibilities for our Group. He currently holds directorships in various
other companies.
Mr Tan Kong Sin is our Chief Executive Ofcer. He is one of the founders of our Company. He is
responsible for the formulation of our corporate strategies and expansion plans. He is also actively
involved in the marketing and sales of our business. He has been in the manufacturing business for
more than 20 years, and has very strong understanding and knowledge of our business. Mr Tan is
also a non-executive director of PNE PCB, a company listed on the Kuala Lumpur Stock Exchange
in Malaysia. He also sits on the board of various other companies set out in the table below.
Mr Tan Kwong Soon is our Executive Director. He is one of the founding members of our Company,
having been with us since inception. As such, he has in-depth knowledge and understanding of our
business. He is currently a non-executive director of PNE Industries and PNE PCB and sits on the
board of various other companies set out in the table below. Mr Tan holds a Diploma in Accounting
from London Chamber of Commerce and Industry.
Mr Tan Kong Leong is our Non-Executive Director. He plays an advisory role to our Company on
matters relating to development of our Company and on our information management system. He is
also one of the founding members of our Company. He is currently an executive director of PNE
Industries, and sits on the board of various other companies set out in the table below. He holds a
degree in the Bachelor of Engineering (Electrical) from the Nanyang Technological University.
Mr Sitoh Yih Pin was appointed as an Independent Director of the Company on 14 March 2002. Mr
Sitoh is a Certied Public Accountant. He is a partner of a certied public accounting rm, Tan & Sitoh
Associates. Currently, Mr Sitoh is the Advisor to Potong Pasir grassroots organisations. He is also a
director of several public listed companies. Mr Sitoh holds a Bachelor of Accountancy (Honours)
degree from the National University of Singapore and is an Associate Member of the Institute of
Chartered Accountants in Australia.
Mr Soh Lup Chee is our Independent Director, and was appointed on 14 March 2002. Mr Soh is
currently a director of TechnoMEC Engineers Pte Ltd, a position he has assumed since March 2001.
Prior to that, Mr Soh was the executive director of Genisys Integrated Engineers Pte Ltd, where he
was responsible for the overall management and day-to-day operation of the company. Between
1987 and 1988, Mr Soh was the assistant general manager of Indeco Engineers Pte Ltd, where he
was involved in the tendering process of the company and project implementation. Between 1979
and 1987, Mr Soh was an engineer with the Public Works Department (Changi Airport Development
Division), where he was responsible for the design, project implementation and maintenance of
airport electrical services. Prior to that, Mr Soh worked as a Scientic Branch Ofcer for the Ministry
of Science and Technology, where he was involved in the administration of research grants granted by
the Ministry of Science and Technology, technology transfer and tertiary level manpower. Mr Soh is
qualied as a professional engineer and is a member of the Institute of Engineers, Singapore. He is
also a Licensed Electrical Engineer with the Public Utilities Board. He graduated in 1973 with a
Bachelors of Engineering from Monash University, Melbourne, Australia, and has a Masters of
Science (Industrial) from the National University of Singapore (``NUS''). He has also received a
Diploma in Business Administration from NUS.
81
The list of present and past directorships of each Director other than those held in our Company for
the last 5 years is set out below:
Name
Present Directorships
Past Directorships
Tan Kong Heng
Group Companies
Group Companies

PNE Precision
Nil
Other Companies
Other Companies
Actrolite Sdn Bhd

Brilliance Resources Sdn Bhd
Duolink Networks Sdn Bhd
General Leader (M) Sdn Bhd
Pacic Appliances Pte Ltd
PNE Appliance Controls Pte Ltd
PNE Aquaculture Sdn Bhd
PNE Circuits Sdn Bhd
PNE Electric Pte Ltd
PNE Electric
PNE Electronics
PNE Industries
PNE Investment
PNE Marine Farming Sdn Bhd
PNE PCB
PNE PCB (S)
PNE Plas (M'sia)
PNE-Sino Pte Ltd
PNE Translite Pte Ltd
Print N Etch
Nil
Group Companies
Group Companies
CED System
Hong Nam
Macore
PNE Precision
Nil
Other Companies
Other Companies
Actrolite Sdn Bhd

PNE Aquaculture Sdn Bhd
PNE Electric
PNE Industries
PNE Marine Farming Sdn Bhd
PNE PCB
PNE PCB (S)
PNE-Sino Pte Ltd
Print N Etch
SGN Technology Sdn Bhd
Nil
Tan Kong Sin
82
Name
Past Directorships
Tan Kwong Soon
Group Companies
Other Companies
CED System
Hong Nam
PNE Precision
Nil
Other Companies
Other Companies
Actrolite Sdn Bhd

General Leader (M) Sdn Bhd
PNE Electric
PNE Electronics
PNE Industries
PNE Investment
PNE PCB
PNE PCB (S)
Print N Etch
Simi Ocean Sdn Bhd
Nil
Group Companies
Group Companies

PNE Precision
Nil
Other Companies
Other Companies
Pacic Appliances Pte Ltd

PNE Electric
PNE Electronics
PNE Industries
PNE International Pte Ltd
PNE Plas (M'sia)
PNE Plas (S'pore)
PNE Translite Pte Ltd
Simi Ocean Sdn Bhd
Nil
Tan Kong Leong
83
Name
Past Directorships
Sitoh Yih Pin
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Allcom Technologies Limited

Asia Quest Associates Pte Ltd
KS Tech Ltd.
Chinese Development Assistance
Council
Cytech Software Limited
Fin2Biz.com Pte Ltd
Labroy Marine Limited
Lian Beng Group Ltd
Meiban Group Ltd
Nera Telecommunications Ltd
Takenaka Partners Globalink Pte
Ltd
Nexia TS Pte Ltd (formerly known
as Tan & Sitoh Management
Consultants Pte Ltd)
TSA Capital Pte Ltd
TSA Recruitment Consultants Pte
Ltd
Red Chips Pte Ltd (formerly known
as U T Direct.com Pte Ltd)
United Food Holdings Limited
ABC Consultants (Singapore) Pte

Ltd
Greenvest Pte Ltd
Kaki Bukit Industrial Park Pte Ltd
Mountamount (S'pore) Pte Ltd (in
liquidation)
OM Global Ventures Pte Ltd
Onemedhub Pte Ltd
Singapore Institute of Directors
SM Laundry & Linen Pte Ltd
(formerly known as AQA
Associates Pte Ltd)
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
E2Build Pte Ltd

TechnoMEC Engineers Pte Ltd
Linkcom System Pte Ltd
Dalian Genlays Ltd.

Genisys Co Ltd
Genisys Integrated Engineers
Pte Ltd
Syntech Genisys Co. Ltd
UEM Genisys Sdn. Bhd.
Soh Lup Chee
MANAGEMENT
The day-to-day operations of our Group are entrusted to our Executive Directors and an experienced
and qualied team of Executive Ofcers responsible for the different functions of our Group. The
particulars of our Executive Ofcers are set out below:
Name
Age
Address
Position
Tan Kian Hie
32
25 Hume Avenue
# 07-03
Singapore 598730
Managing Director of PNE Micron

Engineering (S'pore),
PNE Micron Engineering (M'sia),
PNE Precision and CED System
Tan Tee Ching
29
7 Bassein Road
# 09-04 Pastoral View
Singapore 309837
Group Financial Controller
84
Name
Age
Address
Position
Tan Beng Huat, Raymond
57
Blk 175 Bishan Street 13

# 06-155
Singapore 570175
Director of Sales and Marketing of

and PNE Micron Engineering
(M'sia)
Seow Choon Long
36
G-345, Lorong 28
Taman Sejati Indah
0800 Sungai Petani
Kedah, Malaysia
Managing Director of Hong Nam,

PNE-Gin Lin and Macore
Lim Kim Ba
35
G-281, Lorong 30
Taman Sejati Indah
0800 Sungai Petani
Kedah, Malaysia
Technical Director of Hong Nam
Song Teik Chuan
31
81, Tingkat Seringdit Satu

Taman Desa Jawi
14200 Sungai Jawi
Penang, Malaysia
Director of Production of Hong

Nam
Pang Peng Kuan
36
No. 42 Jalan Saga 5,

Taman Desa Cemerlang,
81800 Ulu Tiram, Johor,
Malaysia
Director of Production of CED

System
Mr Tan Kian Hie is the son of Mr Tan Kong Boon, our substantial shareholder. Mr Tan Tee Ching is the
son of Mr Tan Kwong Soon, our Executive Director. Messrs Tan Kian Hie and Tan Tee Ching are also
cousins.
Information on the business and working experience of our Executive Ofcers of our Group is given
below:
Mr Tan Kian Hie is the Managing Director of PNE Micron Engineering (M'sia), PNE Micron
Engineering (S'pore), PNE Precision and CED System. As Managing Director of these companies, he
is responsible for their overall operations. Mr Tan joined PNE Micron Engineering (S'pore) in 1995 as
an engineer and subsequently his responsibilities within the company were increased to include
overseeing the production, quality, logistic and purchasing functions of the company and that of the
other 3 companies. Prior to joining PNE Micron Engineering (S'pore), he worked as an engineer with
Micropolis (S) Pte Ltd between 1994 and 1995. Mr Tan holds a degree in the Bachelor of Engineering
(Electrical) from the Nanyang Technological University.
Mr Tan Tee Ching is our Group Financial Controller. He joined our Group in November 2000. As our
Group Financial Controller, he is responsible for our Group's nance and accounting functions. Prior
to joining our Group, Mr Tan was an Audit Senior with KPMG. As an auditor, he was engaged in the
evaluation of internal control standards of various companies as well as the preparation of statutory
nancial statements and management reports. Mr Tan graduated from the Grifth University with a
Bachelor of Commerce in Accounting and Finance in 1996 and obtained his Masters of Commerce
in Accounting and Finance in 1998. He has been a CPA of the Australian Society of Certied Public
Accountants since 2001.
Mr Tan Beng Huat, Raymond is the Marketing and Sales Director of PNE Micron Engineering
(S'pore) and PNE Micron Engineering (M'sia). He joined PNE Micron Engineering (S'pore) since its
inception in 1992, where he served as an operations manager before he took over the marketing and
sales functions of these 2 companies in 1995. Prior to joining PNE Micron Engineering (S'pore), he
was employed by Print N Etch in 1991 as its Personnel Manager and Shipping Manager. Prior to
1991, Mr Tan was a police ofcer with the Port of Singapore Authority Police in 1990.
85
Mr Seow Choon Long is the Managing Director of Hong Nam, PNE-Gin Lin and Macore. He is one of
the founders of Hong Nam. Mr. Seow is in-charge of our business operations in the northern part of
Malaysia. He is actively involved in the marketing of our businesses. Prior to setting up Hong Nam, he
was an Assistant General Manager with Ya Shing CED Coating Industry Sdn Bhd (``Ya Shing'') for a
period of 5 years. He was sent by Hong Nam to Taiwan for training in the technical aspects of ED
Coating.
Mr Lim Kim Ba is the Technical Director of Hong Nam. He is one of the founders of Hong Nam. Mr
Lim gained his knowledge and experience in ED Coating when he was sent to Taiwan for training.
Presently, he oversees all technical aspects of ED coating. Prior to joining Hong Nam, he was a
plant manager with Ya Shing for 5 years.
Mr Song Teik Chuan is the Director of Production of Hong Nam and is responsible for the overall
factory's productivity and quality. Mr Song joined Hong Nam in 1997 as an Assistant Plant Manager
and was promoted to his current position in 1998. Prior to joining Hong Nam, Mr Song worked as a
supervisor in Ya Shing in 1997.
Mr Pang Peng Kuan is the Director of Production of CED System, and oversees all aspects of
production and quality in CED System. He is also involved in the marketing of CED System's ED
coating services. He joined Hong Nam as an assistant plant manager in 1997. He was appointed as
a director of CED System in February 1998. Mr Pang has more than 8 years of experience in the
manufacturing sector and has a good knowledge of the ED coating system. He was a supervisor
with Ya Shing for a year prior to joining Hong Nam.
The list of present and past directorships of each Executive Ofcer for the last 5 years is set out
below:
Name
Past Directorships
Tan Kian Hie
Group Companies
Group Companies
CED System
Hong Nam
PNE-Gin Lin
Nil
Other Companies
Other Companies
SGN Technology Sdn Bhd
Nil
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
Nil
Nil
Group Companies
Group Companies
Nil
Nil
Other Companies
Other Companies
TIV Pte Ltd

(currently being wound up)
Nil
Group Companies
Group Companies
CED System
Hong Nam
Macore
Nil
Tan Tee Ching
Tan Beng Huat, Raymond
Seow Choon Long
86
Name
Lim Kim Ba
Song Teik Chuan
Pang Peng Kuan
Past Directorships
Other Companies
Other Companies
Nil
Nil
Group Companies
Group Companies
Hong Nam
Nil
Other Companies
Other Companies
Nil
Nil
Group Companies
Group Companies
Hong Nam
CED System
Group Companies
Group Companies
CED System
Nil
Other Companies
Other Companies
Nil
Nil
Staff
As at 30 September 2001, our Group had 504 full-time employees, out of which there are 460 factory
workers, comprising 416 full-time and 44 contract workers. We do not experience any signicant
seasonal uctuations in the number of employees. Save as disclosed under the section ``Litigation''
on page 142, relationships between management and staff are good and there have not been any
industrial disputes in our Company or our subsidiaries since we commenced operations.
Staff Training
Our business depends on the quality, skill and expertise of our staff. Hence, we place great emphasis
on training.
New employees are trained according to the requirements as set out in our quality manual which is
prepared according to the guidelines of ISO 9000. First, they have to be familiar with internal
procedures, manuals or work instructions. Then on-the job training will be provided to ensure they
will have the knowledge to perform their respective tasks correctly. We have 42 supervisory staff in
each of the respective business sections to guide new employees until they have acquired sufcient
skills and knowledge to perform their individual tasks.
From time to time, we conduct in-house workshops and seminars to disseminate new knowledge and
share our work experience. We also send our employees for external courses conducted by training
institutions approved by the relevant authorities such as the Human Resource Development Council of
Malaysia.
SERVICE AGREEMENTS
Our Executive Directors, Messrs Tan Kong Sin and Tan Kwong Soon (the `Èxecutives'') have entered
into separate Service Agreements on 26 March 2002 with our Company pursuant to which Mr Tan
Kong Sin has been appointed as Chief Executive Ofcer and Mr Tan Kwong Soon has been
appointed as our Executive Director.
87
The Service Agreements will continue with effect from the date of appointment unless otherwise
terminated by either party giving not less than 6 months notice in writing to the other. The Service
Agreements may also be terminated if any of the Executives commits a breach of the Service
Agreements, such as being convicted of any offence involving fraud or dishonesty or being
adjudicated bankrupt. Except where the Service Agreements are terminated due to a breach of the
Service Agreements as mentioned above, upon termination, the Executives will be entitled to receive
the Incentive Bonus in an amount pro-rated for the period commencing on the rst day of the nancial
year in which his employment is terminated to the last day of the employment in that nancial year.
There are no other benets payable to the Executives upon termination of their employment with our
Company. The Service Agreements cover the terms of employment, specically salaries and bonuses.
Directors' fees do not form part of the terms of the Service Agreements, as these require the approval
of shareholders in our Company's annual general meeting.
Under the Service Agreements, the Executives will each be paid S$30,000 per month. They will each
be entitled to annual increments as decided by our Board of Directors and an annual wage
supplement in line with our Company's policy for our staff.
In addition, Messrs Tan Kong Sin and Tan Kwong Soon shall each be entitled to participate in a prot
sharing scheme (``PSS''). Under the terms of the PSS, they will each be entitled to an amount
equivalent to 3% of our Group's prot before tax of that particular nancial year. The prot before
tax for this purpose means our audited prot before tax before taking into account the sum set aside
for the PSS.
The Service Agreements also state that Messrs Tan Kong Sin and Tan Kwong Soon will each be
entitled to a car. All traveling and travel-related expenses, entertainment expenses and other out-ofpocket expenses reasonably incurred by both of them in the process of discharging their duties on our
behalf will also be borne by our Company.
Our Company shall acquire a country club membership in Singapore and Malaysia for each of the
Executives and shall pay for all subscription fees and expenses in respect of entertaining connected
with the Company's business.
The Executives did not receive any remuneration for the last 3 nancial years ended 30 September
2001. Had the proposed Service Agreements been in force at the beginning of FY2001, the total
remuneration payable to our Directors would have been S$1,086,223 (approximately 28.5% of prot
before income tax and Directors' remuneration) and the prot before income tax would have been
S$2,728,531 instead of S$3,814,754.
Save as disclosed above, there are no other existing or proposed service agreements between our
Company or our subsidiaries and any Director or Executive Ofcer.
Directors' Remuneration
Our Directors did not receive any remuneration from our Group in FY1999, FY2000 and FY2001.
Remuneration of Employees Related to Directors and Substantial Shareholders
As at 30 September 2001, we have 2 renumerated employees who are related to our Directors and
substantial shareholders. They are Mr Tan Kian Hie and Mr Tan Tee Ching, both of whom are our
Executive Ofcers. The basis of determining the remuneration of these related employees is the
same as the basis of determining the remuneration of other unrelated employees. In FY2001, the
annual remuneration gures (including CPF contributions and bonuses), on an individual basis, for Mr
Tan Kian Hie and Mr Tan Tee Ching were $104,646 and $51,423 respectively. The aggregate
remuneration of these 2 related employees for FY2001 was $156,069. This represented
approximately 3.9% of our prot before tax, adding back the remuneration of these 2 employees for
FY2001.
88
The aggregate remuneration (including CPF contributions and bonuses) paid to our Directors and the
2 employees who are related to them, assuming that the Service Agreements have been in existence
during the nancial year ended 31 September 2001, is approximately $1,242,292 or approximately
31.3% of our prot before tax, adding back the remuneration of our Directors and the 2 employees
for FY2001.
Adjustments to the remuneration packages for these employees who are related to our Directors and
substantial shareholders will be reviewed annually by our Audit Committee to ensure that they are in
line with our staff remuneration guidelines and commensurate with their job scope and level of
responsibility. In the event that a member of the Audit Committee is related to the employee under
review, he will abstain from the review. The total remuneration to our Directors, substantial
shareholders and employees who are related to our Directors and substantial shareholders will be
disclosed in our annual reports.
89
THE PNE MICRON EMPLOYEES' SHARE OPTION SCHEME

We have implemented a share option scheme that will be in place after the Invitation known as the
PNE Micron Employees' Share Option Scheme (the ``Scheme''). The Scheme was approved by the
Shareholders of our Company at the Extraordinary General Meeting held on 11 March 2002. The
terms and the rules of the Scheme are more particularly set out in Appendix A of this Prospectus
(the ``Rules''), and are in compliance with Practice Note 9h of the Listing Manual of the SGX-ST.
Purpose of the Scheme
The Scheme, when adopted, will provide an opportunity for Employees (as dened in the Rules) and
Group Directors (whether serving in an executive or non-executive capacity) who meet the eligibility
criteria and who have contributed to the growth and development of our Group to participate in the
equity of our Company as well as to motivate these participants (the ``Participants'') to optimise their
performance.
The Scheme is a share incentive scheme. The Scheme is proposed on the basis that it is important to
acknowledge the contributions made by the Participants, who are essential to the growth and
development of our Group, and to give recognition to such Participants. Our Company, by adopting
the Scheme, will give the Participants an opportunity to have a personal stake in our Company,
thereby aligning the interests of the Participants with those of our Shareholders. The Scheme will
also help to achieve the following objectives:
(a)
attract and retain key Employees and Group Directors whose contributions are important to the
long-term growth and profitability of our Group;
(b)
motivate the staff to optimise their performance, efficiency and productivity;
(c)
develop a participatory style of management that will instil loyalty among our Employees and
Group Directors and motivate them to work towards the growth and prosperity of our Group; and
(d)
foster an ownership culture within our Group which aligns the interests of the Participants with
the interests of our shareholders.
Certain Employees who are not Directors or who do not hold the rank of executives may also
contribute to the success of our Group by contributing their experience, knowledge and expertise to
the development of our Group. Allowing them to participate in the Scheme is an effective way of
providing such motivation by ensuring that the interest of such persons are aligned with the interests
of our Group which includes, inter alia, maintaining a sustainable increase in shareholder value over
time.
Size of the Scheme
The size of the Scheme (the ``Scheme Size'') is 15 per cent. of our issued share capital on the relevant
date of grant of Options. We believe this Scheme Size to be reasonable, taking into account the size
of our share capital, the nature of our business, and the need to reward and retain our key Employees
and Directors.
Our Company believes that the Scheme should be of a sufcient size to enable us to have the
exibility to structure remuneration and incentive packages and to offer Options over a signicant
number of Shares to new and existing employees. Such number of Shares ought to be signicant
enough to serve as a meaningful incentive in the recruitment of new employees as well as a reward
to existing employees for their contribution to our Group. If the number of Shares available under the
Scheme is too small, the number of Options available may not be sufciently attractive to achieve the
objectives of the Scheme. Taking into account the current issued share capital of our Company, the
current number of employees and the possible increase in headcount should the business activities of
our Company increase in the future during the duration of the Scheme, our Directors estimate that
15% of the issued share capital would be required to provide sufcient Shares over which Options
may be granted to achieve the objectives of the Scheme.
90
Eligibility
Conrmed full-time Employees of our Group (including Employees of our subsidiaries) who have
attained the age of 21 years and above on or before the relevant date of offer of an Option and who
meet the Performance Criteria will be eligible to participate in the Scheme.
Our Directors (whether serving in an executive or non-executive capacity), all of whom have attained
the age of 21 years, will also be eligible to participate in the Scheme, except for Controlling
Shareholders, who will not be participating in the Scheme.
It is proposed that Options be granted to associates (as dened in the Listing Manual of the SGX-ST)
of our Controlling Shareholders (the `Àssociates''). In this respect, the eligible Associates as at the
date of this Prospectus are Messrs Tan Kian Hie and Tan Tee Ching. Messrs Tan Kian Hie and Tan
Tee Ching are the nephews of our Directors, Messrs Tan Kong Heng, Tan Kong Sin, Tan Kwong Soon
and Tan Kong Leong.
Mr Tan Kian Hie's father, Mr Tan Kong Boon, is one of our substantial shareholders holding 7,473,900
Shares (4.0%) in our Company and 15% of the shareholdings of Print N Etch.
Mr Tan Tee Ching's father, Mr Tan Kwong Soon, is one of our substantial shareholders holding
4,484,300 Shares (2.4%) in our Company and 9% of the shareholdings of Print N Etch.
Rationale for participation of Mr Tan Kian Hie
Mr Tan Kian Hie is the Managing Director of PNE Micron Engineering (M'sia), PNE Micron Engineering
(S'pore), PNE Precision and CED System. As the Managing Director of these companies, he is
responsible for their overall operations. Mr Tan Kian Hie joined PNE Micron Engineering (S'pore) in
1995 as an engineer and subsequently his responsibilities within the company were increased to
include overseeing the production, quality, logistic and purchasing functions of the company and
that of the other 3 companies. Prior to joining PNE Micron Engineering (S'pore), he worked as an
engineer with Micropolis (S) Pte Ltd between 1994 and 1995. Having considerable experience in the
manufacturing activities conducted by our Group, Mr Tan Kian Hie's contribution towards the
efciency and strategic direction of our Group is invaluable.
We believe that there is substantial potential future development and contribution that may be made
by Mr Tan Kian Hie towards enhancing the efciency and competitiveness of our Group and that we
have much to benet from his continued directorship of our subsidiaries. As at the date of this
Prospectus, Mr Tan Kian Hie does not hold any Shares in our Company. Therefore we are proposing
to provide incentives to Mr Tan Kian Hie by the grant of Options under the Scheme. For the foregoing
reasons, it is proposed that Mr Tan Kian Hie be a Participant in the Scheme.
The participation of Mr Tan Kian Hie in the Scheme will take place only after the listing of our
Company on the SGX-Sesdaq and his participation in the grant of Options to him will by separate
resolution approved by independent Shareholders of our Company in general meeting. Clear
justication or rationale for participation, the specic grants to be made and any discount shall be
disclosed in the circular seeking such approval. Details of the number of Options granted, the
number of Options exercised and the subscription price (including any discount) will be disclosed in
the annual report of our Company.
Rationale for participation of Mr Tan Tee Ching
Mr Tan Tee Ching is our Group Financial Controller. He joined our Group in November 2000. As Group
Financial Controller, he is responsible for our Group's nance and accounting functions. Prior to
joining our Group, Mr Tan Tee Ching was an Audit Senior with KPMG, where he was engaged in the
evaluation of internal control standards of various companies as well as the preparation of statutory
nancial statements and management reports. His contribution towards the efciency and
effectiveness of our internal controls and accounting functions is therefore invaluable.
91
We believe that there is substantial potential future development and contribution that may be made
by Mr Tan Tee Ching towards enhancing the efciency and competitiveness of our Group. Mr Tan Tee
Ching currently does not hold any Shares in our Company. Therefore we are proposing to provide
incentives to Mr Tan Tee Ching by the grant of Options under the Scheme. For the foregoing
reasons, it is proposed that Mr Tan Tee Ching be a Participant in the Scheme.
The participation of Mr Tan Tee Ching in the Scheme will take place only after the listing of our
Company on the SGX-Sesdaq and his participation in the grant of Options to him will by separate
resolution approved by independent Shareholders of our Company in general meeting. Clear
justication or rationale for participation, the specic grants to be made and any discount shall be
disclosed in the circular seeking such approval. Details of the number of Options granted, the
number of Options exercised and the subscription price (including any discount) will be disclosed in
the annual report of our Company.
Rationale for participation of non-executive Directors
Directors serving in a non-executive capacity bring to our Company their wealth of knowledge,
business expertise and contacts in the business community. They play an important role in helping
our Company shape our business strategy by allowing us to draw on the backgrounds and diverse
working experience of these individuals. It is crucial for our Company to attract, retain and
incentivise our non-executive Directors, especially when our Company has to compete with other
locally listed companies for a limited pool of talented individuals to serve as non-executive Directors.
By aligning the interests of our non-executive Directors with the interests of our shareholders in this
manner, our Company aims to inculcate a sense of commitment on the part of our non-executive
Directors towards serving the short and long-term objectives of our Group. Further, by granting our
Company the ability to supplement the current cash based remuneration by way of director's fees to
non-executive Directors for their services, our Company will be able to remain competitive in the total
remuneration of our non-executive Directors when other listed companies offer share options to their
non-executive Directors. As the services and contribution of these non-executive Directors cannot be
measured in the same way as those of employees of the Group, our Directors are of the view that
including them in the Scheme will show our token of appreciation for their contribution towards the
success of the Group.
It should be noted however that the non-executive Directors would in the main, continue to be
remunerated for their services by way of Directors' fees. As such, it is envisaged that such offers
and grants of Options would comprise only a relatively small portion (in terms of frequency of grants
and/or numbers of shares offered under the Options) of the options that would be offered and
granted.
Maximum Entitlement
The number of Scheme Shares to be offered to an Employee shall be determined at the absolute
discretion of the Committee (as hereinafter defined) who shall take into account criteria such as the
seniority of position, performance, length of service and potential for future development of the
Employee, subject always to the following limitations:
(i)
the total number of Scheme Shares to be offered to Associates as a whole under the Scheme
shall not exceed twenty-five (25) per cent. of the total number of Scheme Shares;
(ii)
the total number of Scheme Shares to be offered to each Participant who is an Associate shall
not exceed ten (10) per cent. of the number of Scheme Shares; and
(iii)
the maximum number of Scheme Shares in respect of which Options may be granted on any
date, when added to the number of Scheme Shares issued and issuable in respect of all
Options granted under the Scheme, shall not exceed fteen (15) per cent. of the issued share
capital of our Company on the day preceding the Date of Grant of the Options. The Committee
(as hereinafter dened) shall exercise its discretion in deciding the number of Scheme Shares to
grant to each Employee which will depend on the performance and value of the Employee to our
Group and shall have the exibility in deciding whether to issue Shares up to this prescribed
limit.
92
Administration of the Scheme

The Scheme is administered by a committee (the ``Committee'') with such powers and duties as are
conferred on it by our Directors. The Committee will consist of Directors who may be participants in
the Scheme. A member of the Committee who is also a Participant must not be involved in its
deliberations in respect of Options granted or to be granted to him.
Exercise Price
Under the rules of our Scheme, Options will be granted at exercise prices:
(i)
at the prevailing market price of our Shares based on the average of the last dealt price per
Share as indicated in the daily official list or any other publication published by the SGX-ST for
the 5 consecutive trading days immediately preceding the Date of Grant (the ``Market Price''); or
(ii)
at a price which is set at a discount to the Market Price, provided that:

(1)
the maximum discount shall not exceed 20 per cent. of the Market Price;
(2)
the Committee shall exercise any decision to offer Options with an exercise price set at a
discount in good faith and only when circumstances require;
(3)
if and only if the Committee verily believes that the discount and the quantum thereof
would be in furtherance of the core objectives of the Scheme and would be in the best
interests of our Company and the prevailing market conditions. In making any
determination as to the actual discount applicable to any Option, the Committee shall
take into account such criteria as the Committee may, in its absolute discretion, deem
appropriate, in particular:
(a)
the performance of our Company and our subsidiaries, on the basis of our Group's
sales, revenues, profit and/or any other financial parameters as the Committee may,
in its absolute discretion, deem appropriate;
(b)
the individual performance of the Participant, his effectiveness and contribution to the
success and development of our Group; and/or
(c)
the potential for future development of the Participant to the success and
development of our Group.
The grant of Options at discounts to the Market Price is intended to achieve the following
objectives:
(a)
to give the Committee the flexibility to cushion against the volatility and uncertainty inherent
in the stock market which may not always be related to the financial performance of our
Company;
(b)
the perception that the exercise of Options with discounted subscription prices would be
more likely to result in a gain in the future is expected to provide greater motivation to the
grantees who would be encouraged to continually work towards improving the
performance of our Company in order to realise their Options at a higher value;
(c)
to reward or incentivise key Participants, with a view to optimising their performance

standards, dedication and efficiency, or to attract key individuals to join our Group to
enhance the overall performance of our Group; and
(d)
to enable our Company to maintain competitive remuneration packages to its employees

should the practice of granting options with discounted subscription prices become
common among local listed companies.
Where the exercise price as determined above is less than the par value of the Share, the exercise
price shall be the par value.
93
Financial Effects of the Scheme

The Scheme will increase our issued share capital to the extent of the new Shares that will be issued
and allotted pursuant to the exercise of Options.
The grant of the Options will have no impact on our protability under the Statements of Accounting
Standards in Singapore as no cash outlay would be expended by us at the time of grant of such
Options as compared with the payment of cash bonuses. However, as shareholders may be aware,
any Options granted to subscribe for new Shares (whether the exercise price is set at the market
price of the Shares at the date of grant or otherwise) have a fair value at the time of grant. The fair
value of an Option is an estimate of the amount that a willing buyer would pay a willing seller for the
Option on the grant date. Options are granted to Participants at a nominal consideration of $1.00.
Insofar as such Options are granted at a consideration that is less than their fair value at the time of
grant, there will be a cost to our Company in that we will receive from the participant upon the grant of
the Option a consideration that is less than the fair value of the Option.
As and when the Options are exercised, the cash ow will add to our NTA and our issued share
capital base will grow. The effect of the issue of new Shares upon the exercise of the Options on our
NTA per Share is accretive if the exercise price is above the NTA per Share, but dilutive otherwise.
Option Period
Options granted with the exercise price set at Market Price shall only be exercisable, in whole or in
part (provided that an Option may be exercised in part only in respect of 1,000 Shares or any
multiple thereof) as follows:
(i)
up to thirty per cent (30%) of the Option at any time after twelve (12) months of the Date of Grant
of that Option;
(ii)
the next thirty per cent (30%) of the Option at any time after eighteen (18) months of the Date of
Grant of that Option; and
(iii)
the balance forty per cent (40%) of the Option at any time after twenty four (24) months of the
Date of Grant of that Option;
Provided Always that an Option shall be exercised before the end of one hundred and twenty (120)
months (or sixty (60) months where the Participant is a non-executive Director) of the Date of Grant
of that Option and subject to such other conditions as may be introduced by the Committee from
time to time.
Options granted with the Exercise Price set at a discount to Market Price shall only be exercisable by
a participant, 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) as follows:
(i)
up to thirty per cent (30%) of such Option any time after two (2) years from the Date of Grant of
that Option;
(ii)
the next thirty per cent (30%) of such Option at any time after thirty (30) months of the Date of
Grant of that Option; and
(iii)
the balance forty per cent (40%) of the Option at any time after thirty-six (36) months of the Date
of Grant of that Option;
Provided Always that such Option shall be exercised before the end of one hundred and twenty (120)
months (or sixty (60) months where the Participant is a non-executive Director) of the Date of Grant of
that Option and subject to such other conditions as may be introduced by the Committee from time to
time.
94
We believe that these option periods will promote staff retention as the cost of leaving our Group
would be compounded by the loss of unvested Options. In addition, as we intend to issue further
Options on a regular basis throughout the duration of the Scheme, we believe that the Scheme
should encourage our employees and Directors to remain with us thereby promoting our interests in
the long term.
The SGX-ST requirements
While the Scheme is structured such that we have the discretion to make the appropriate allotments
depending on the prevailing circumstances of our Group, the Scheme conforms with the requirements
as set out in the Listing Manual of the SGX-ST for employee share option schemes.
In-principle approval has been obtained from the SGX-ST for the listing and quotation of the new
Shares to be issued pursuant to the Scheme. This is not an indication of the merits of the Scheme
or the new Shares to be issued pursuant to the Scheme.
Details of the number of Options granted, the number of Options exercised, and the Subscription
Price will be disclosed in our annual report.
Duration of the Scheme
The Scheme shall be in force up to a maximum period of 10 years from the date on which the Scheme
was implemented. The Scheme may continue beyond the said stipulated period or terminated at any
time with the approval of shareholders by way of an ordinary resolution passed at a general meeting
and of any relevant authorities which may then be required.
95
PROPERTIES AND FIXED ASSETS

Our Group currently owns the following properties:
Net book
value as at
30 September
2001
Description/Location
Tenure
Gross
Area
(sq ft)
No. 29 Jalan Cemerlang 3,

Taman Perindustrian Cemerlang,
81800 Ulu Tiram,
Johor, Malaysia
Freehold
14,400
PNE Micron
Engineering (M'sia)
RM1.4 million
No. 16 Jalan Mahir 5,

Taman Perindustrian Cemerlang
81800 Ulu Tiram,
Johor Darul Takzim, Malaysia
Freehold
55,118
PNE Micron
Engineering (M'sia)(1)
RM3.8 million
No. 21 Jalan Gemilang 3,

81800 Ulu Tiram,
Freehold
18,475
PNE Precision
RM1.8 million

81800 Ulu Tiram,
Freehold
18,475
PNE Precision
RM2.1 million

81800 Ulu Tiram,
Freehold
14,400
PNE Precision
RM1.4 million

Taman Perindustrian Cemerlang
81800 Ulu Tiram
Freehold
14,400
PNE Precision
RM1.4 million
Plot 97 Jalan PKNK 1/16,

Rancang Industrial Park,
Taman Ria Jaya
08000 Sungei Petani
Kedah, Malaysia
Freehold
35,153
Hong Nam(2)
RM1.2 million
Lot No. 100 Jalan PKNK 1,

Rancang Industrial Park,
Taman Ria Jaya
08000 Sungei Petani
Kedah, Malaysia
Freehold
32,484
Hong Nam(3)
RM1.1 million
Registered Owner
Notes:
(1) Mortgaged to RHB Bank Berhad (formerly known as United Malayan Banking Corporation) to secure banking facilities of up
to RM2.5 million.
(2) Mortgaged to Eon Bank Berhad to secure banking facilities of up to RM910,000.
(3) Mortgaged to Bumiputra-Commerce Bank Berhad to secure banking facilities of up to RM750,000.
96
Our Group currently rents/leases the following properties:
Description/Location
Tenure
Gross
Area
(sq ft)
Annual
Rental
Lessor
No 14 Senoko Loop
Singapore 758150
2 years with
effect from
1 October 2000
15,000
S$108,000
Print N Etch
No. 3 Jalan Tiga,

Kawasan Perindustrian Dewani,
81100, Johor Bahru, Malaysia
2 years with
effect from
1 October 2000
20,066
RM120,000
PNE Electronics
Plot 9 & 10, Jalan PKNK 1/10,

Eastern Parade Industrial Park,
Taman Ria Jaya,
08000 Sungei Petani,
Kedah, Malaysia
2 years with
effect from
1 January 2001
27,680
RM60,000
Eastern Parade
Development Sdn Bhd
No. 49, Jalan Keris 7,

Taman Puteri Wangsa,
81800 Ulu Tiram,
Johor, Malaysia
1 year with
effect from
1 March 2002
27,680
RM8,400
Ms Lay Ee Fah
No. 1551 Lorong Inai 4

Taman Ria Jaya
08000 Sungei Petani,
Kedah, Malaysia
1 year with
effect from
1 March 2002
1,750
RM3,600
Mr Lim Ah Chooi
No. 52 Jalan Ara 20,

81800 Ulu Tiram,
Johor, Malaysia
4 years with
effect from
1 April 1998
1,400
RM8,400
Ms Ng Mui Mui
No. 27 Jalan Lanjut 13,

81800 Ulu Tiram,
Johor, Malaysia
1 year with
effect from
15 July 2001
1,300
RM7,800
Mdm Li Hong Siew
No. 9 Jalan Kekabu 7,

81800 Ulu Tiram,
Johor, Malaysia
2 years with
effect from
1 September 2000
1,400
RM7,200
Mr Mohd. Zin Bin Pin
No. 31 Jalan Kembia 12,

Taman Puteri Wangsa,
81800 Ulu Tiram,
Johor, Malaysia
2 years with
effect from
1 August 2001
1,540
RM8,400
Mr Bee Joo Sheang
2 years with
effect from
1 November 2000
4,160
RM18,000
Mr Tan Kong Heng
E-293 Lorong 25,

Taman Sejati Indah,
08000 Sungei Petani
Kedah, Malaysia
2 years with
effect from
1 August 2001
1,400
RM6,000
Messrs Ooi Chong

Ghee and Chee Saw Im
No. 42 Jalan Saga 5,

81800 Ulu Tiram,
Johor, Malaysia
1 year with
effect from
1 March 2002
1,760
RM7,800
Mr Ng Fhatt Oon
No. 8 Jalan Johar 9,

81800 Johor Bahru, Malaysia
Our Group's major plant and machinery had a net book value of approximately S$5 million as at
30 September 2001.
97
DIRECTORS' REPORT
27 March 2002
The Shareholders
C/o PNE Micron Holdings Ltd
14 Senoko Loop
Singapore 758150
Dear Sirs
This report has been prepared for inclusion in the prospectus (the ``Prospectus'') of PNE Micron
Holdings Ltd (the ``Company'') to be dated 27 March 2002 in connection with the Invitation in
respect of 62,000,000 new ordinary shares of S$0.08 each in the capital of the Company.
On behalf of the Directors of the Company, I report that, having made due inquiry in relation to the
period between 30 September 2001, the date of which the last audited consolidated Proforma
accounts of the Company and its subsidiaries were made up, and the date hereof:
(a)
the business of the Company and its subsidiaries have, in the opinion of the Directors, been
satisfactorily maintained;
(b)
in the opinion of the Directors, no circumstances have arisen which would adversely affect the
business or the value of the assets of the Company or any of its subsidiaries;
(c)
the current assets of the Company and its subsidiaries appear in the books at values which are
believed to be realisable in the ordinary course of business;
(d)
no contingent liabilities have arisen by reason of any guarantees given by the Group; and
(e)
save as disclosed on pages 45 to 48 of this Prospectus, there have been no changes in the
published reserves or any unusual factors affecting the prots of the Group since the last
audited nancial statements.
Yours faithfully
For and on behalf of the Board of Directors
Tan Kong Sin

Chief Executive Ofcer
98
ACCOUNTANTS' REPORT
27 March 2002
The Board of Directors
14 Senoko Loop
Singapore 758150
Dear Sirs
1.
INTRODUCTION
1.1
This report has been prepared for inclusion in the Prospectus of PNE Micron Holdings Ltd
(``the Company'') dated 27 March 2002 in connection with the Invitation by the Company in
respect of the issue of 62,000,000 new ordinary shares of S$0.08 each at the price of S$0.22
per share.
1.2
The Company, whose principal activities are those relating to an investment holding company,
was incorporated in the Republic of Singapore on 7 September 2001 as a private limited
company under the name of PNE Micron Holdings Pte Ltd. On 12 March 2002, the Company
changed its name to PNE Micron Holdings Ltd when it was converted to a public company.
The Company was incorporated for the purpose of acquiring the shares in PNE Micron
Engineering Pte. Ltd. (``Micron (S)''), PNE Micron Engineering Sdn. Bhd. (``Micron (M)''), PNE
Precision Sdn. Bhd. (``Precision''), Hong Nam Industry (M) Sdn. Bhd. (``Hong Nam''), CED
System Sdn. Bhd. (``CED''), PNE Gin-Lin Sdn. Bhd. (``Gin-Lin'') and Macore Technology (M)
Sdn. Bhd. (``Macore'') as part of a restructuring exercise as set out in Section 1.4.
1.3
At the date of incorporation, the authorised share capital of the Company was S$100,000
divided into 100,000 ordinary shares of S$1.00 each, of which two subscribers' shares of
S$1.00 each were issued fully paid at par.
1.4
To streamline and rationalise the corporate structure and shareholding structure, a

restructuring exercise (the ``Restructuring Exercise'') was carried out. The Restructuring
Exercise involved the following steps:
(a)
Pursuant to an agreement dated 11 March 2002, the Company acquired from the
existing shareholders of Micron (S), the entire issued and paid-up share capital of
Micron (S) of 2,000,000 ordinary shares of S$1.00 each with effect from 1 October
2001. The existing shareholders of Micron (S) were Messrs Tan Kong Heng, Tan Kong
Boon, Tan Kong Sin, Tan Kwang Hua, Tan Kwong Soon, Tan Kong Guan, Tan Kong
Leong, Tan Koon Chwee and Tan Kong Hock (collectively the ``Tan Brothers''). The
purchase consideration of S$2,001,806 was satised by the issue of 2,001,806 ordinary
shares of S$1.00 each as fully paid at par in the capital of the Company to the Tan
Brothers.
The purchase consideration of S$2,001,806 was based on the audited net tangible
assets value (``NTA'') of Micron (S) of S$2,001,806 as at 30 September 2001. Pursuant
to the acquisition, Micron (S) became a wholly-owned subsidiary of the Company.
(b)
Pursuant to an agreement dated 11 March 2002, the Company acquired from the
existing shareholders of Micron (M), the entire issued and paid-up share capital of
Micron (M) of 5,000,000 ordinary shares of RM1.00 each with effect from 1 October
2001 at a consideration of S$3,631,614. The existing shareholders of Micron (M) were
Print N Etch Pte. Ltd. (``Print N Etch'') and the Tan Brothers. The purchase
consideration was satised by the issue of 3,631,614 ordinary shares of S$1.00 each as
fully paid at par in the capital of the Company to Print N Etch and the Tan Brothers.
99
1.
INTRODUCTION (cont'd)
The purchase consideration of S$3,631,614 was based on the audited NTA of Micron (M)
of S$3,631,614 as at 30 September 2001 (at an agreed exchange rate of $1.00: RM2.15).
Pursuant to the acquisition, Micron (M) became a wholly-owned subsidiary of the
Company.
(c)
Pursuant to an agreement dated 11 March 2002, the Company acquired with effect from
1 October 2001, the entire issued and paid-up share capital of Precision comprising
5,000,000 ordinary shares of RM1.00 each from the Tan Brothers, the existing
shareholders, at a consideration of S$3,081,564. The purchase consideration was
satised by the issue of 3,081,564 ordinary shares of S$1.00 each as fully paid at par in
the capital of the Company to the Tan Brothers.
The purchase consideration of S$3,081,564 was based on the audited NTA of Precision
of S$3,081,564 as at 30 September 2001 (at an agreed exchange rate of
S$1.00: RM2.15). Pursuant to the acquisition, Precision became a wholly-owned
subsidiary of the Company.
(d)
Pursuant to an agreement dated 1 October 2001, CED acquired in cash with effect from
1 October 2001, 225,000 ordinary shares of RM1.00 each (representing 30% of the total
issued share capital) in the capital of Gin-Lin from Mr Lin Cheng Ming, the existing
shareholder. The purchase consideration of RM225,000 was based on the cost invested
by Mr Lin Cheng Ming at the time of setting up Gin-Lin in January 2001. Pursuant to this
acquisition, Gin-Lin became a wholly-owned subsidiary of CED.
(e)
Pursuant to an agreement dated 1 December 2001, Messrs Tan Kong Heng and Tan
Kong Sin collectively acquired with effect from 1 October 2001, 931,400 ordinary shares
of RM1.00 each (representing 50% of the total issued share capital) in the capital of
Hong Nam from Messrs Seow Choon Long and Lim Kim Ba, the existing shareholders,
at a consideration of RM4.25 million. The purchase consideration was on a willing buyer,
willing seller basis and was satised by cash.
Pursuant to an agreement dated 11 March 2002, the Company subsequently acquired
with effect from 1 October 2001, 931,400 ordinary shares of RM1.00 each (representing
50% of the total issued share capital) in the capital of Hong Nam at a consideration of
S$1,148,386 from Messrs Tan Kong Heng and Tan Kong Sin. The purchase
consideration was satised by the issue of 1,148,386 ordinary shares of S$1.00 each as
fully paid at par in the capital of the Company to Messrs Tan Kong Heng and Tan Kong
Sin.
The purchase consideration of S$1,148,386 was arrived at based on 50% of the audited
NTA of Hong Nam of S$2,296,772 as at 30 September 2001 (at an agreed exchange rate
of S$1.00: RM2.15).
(f)
Pursuant to an agreement dated 11 March 2002, Print N Etch acquired 931,400 ordinary
shares of RM1.00 each (representing 50% of the total issued share capital) in the capital
of Hong Nam from Actrolite Sdn. Bhd. (`Àctrolite''), an existing shareholder, with effect
from 1 October 2001 at a consideration of S$1,148,386, based on 50% of the audited
NTA of Hong Nam of S$2,296,772 as at 30 September 2001 (at an agreed exchange
rate of S$1.00: RM2.15).
Pursuant to the same agreement, Actrolite, an existing shareholder of CED, disposed of
its 1,125,000 ordinary shares of RM1.00 each (representing 75% of the total issued share
capital) in CED with effect from 1 October 2001 to Print N Etch at a consideration of
S$620,620, based on 75% of the audited NTA of CED of S$827,493 as at 30 September
2001 (at an agreed exchange rate of S$1.00: RM2.15).
The purchase consideration of S$1,148,386 and S$620,620 are represented as
inter-company loans between Actrolite and Print N Etch which are interest-free and
payable upon 30 days notice in writing.
100
1.
Print N Etch subsequently disposed of its shareholdings in Hong Nam and CED with
effect from 1 October 2001 to the Company at a consideration equivalent to its cost of
purchase of S$1,148,386 and S$620,620 respectively. This purchase consideration was
satised by the issue of 1,769,006 ordinary shares of S$1.00 each in the capital of the
Company. Pursuant to these acquisitions, Hong Nam became a wholly-owned
subsidiary of the Company, and CED became a subsidiary of the Company.
1.5
(g)
Pursuant to an agreement dated 11 March 2002, CED disposed of the entire issued and
paid-up share capital of Gin-Lin comprising 750,000 ordinary shares of RM1.00 each to
the Company at a consideration of S$195,354, with effect from 1 October 2001. The
purchase consideration of S$195,354 was based on the audited NTA of Gin-Lin of
S$195,354 as at 30 September 2001 (at an agreed exchange rate of S$1.00: RM2.15).
This purchase consideration is represented as an inter-company loan between the
Company and CED which is interest-free and payable upon 30 days notice in writing.
Pursuant to the acquisition, Gin-Lin became a wholly-owned subsidiary of the Company.
(h)
Pursuant to an agreement dated 11 March 2002, Hong Nam disposed of 375,000

ordinary shares of RM1.00 each (representing 25% of the total issued share capital) of
CED to the Company with effect from 1 October 2001 at a consideration of S$206,873.
The purchase consideration of S$206,873 was based on 25% of the audited NTA of CED
of S$827,493 as at 30 September 2001 (at an agreed exchange rate of S$1.00: RM2.15).
This purchase consideration is represented as an inter-company loan between Hong
Nam and the Company which is interest-free and payable upon 30 days' written notice.
Pursuant to the acquisition, CED became a wholly-owned subsidiary of the Company.
(i)
Pursuant to an agreement dated 11 March 2002, the Company acquired with effect from
1 October 2001, 110 ordinary shares of RM1.00 each (representing 55% of the total
issued share capital) in the capital of Macore from Hong Nam (100 ordinary shares) and
Chitacon Electronics (Kedah) Sdn. Bhd. (10 ordinary shares) for a nominal cash
consideration of S$1.00. The purchase consideration was based on a willing buyer,
willing seller basis. As at 30 September 2001, Macore had a negative NTA of RM3,630.
Pursuant to the acquisition, Macore became a subsidiary of the Company.
In addition, at an Extraordinary General Meeting held on 11 March 2002, the shareholders of

the Company approved, inter-alia, the following:
(a)
an increase in the authorised share capital from S$100,000 to S$30,000,000 comprising

30,000,000 ordinary shares of S$1.00 each;
(b)
the issue of 11,632,376 new ordinary shares of S$1.00 each pursuant to the
Restructuring Exercise;
(c)
the consolidation of 2 ordinary shares of S$1.00 each into 1 ordinary share of S$2.00
each;
(d)
the sub-division of each ordinary share of S$2.00 each in the capital of the Company into
25 ordinary shares of S$0.08 each;
(e)
the conversion of the Company into a public limited company and the change of its
name to PNE Micron Holdings Ltd;
(f)
the adoption of a new set of Articles of Association of the Company;
(g)
the issue of up to 62,000,000 New Shares which, when fully paid, allotted and issued, will
rank pari passu in all respects with the existing Shares of the Company; and
(h)
that authority be given pursuant to Section 161 of the Companies Act to the Directors to
allot and issue Shares in the Company (whether by way of rights, bonus issue or
otherwise) at any time and upon such terms and conditions and for such purposes and
to such persons as the Directors shall in their absolute discretion deem t, provided that
the aggregate number of shares to be issued pursuant to such authority shall not exceed
50 per cent. of the issued share capital of the Company immediately prior to the
proposed issue and that the aggregate number of shares to be issued other than on a
pro-rata basis to the then existing shareholders of the Company shall not exceed 20 per
101
1.
cent. of the issued share capital of the Company immediately prior to the proposed
issue, and, unless revoked or varied by the Company in general meeting, such authority
shall continue in full force until the conclusion of the next annual general meeting of the
Company or the date by which the next annual general meeting of the Company is
required by law to be held, whichever is earlier.
1.6
Upon completion of the Restructuring Exercise set out in Section 1.4 and at the date of this
report, the Company holds shares in the following subsidiaries (referred to collectively with the
Company as the ``Proforma Group''):
Name of Company
Effective
Equity
Held
%
Issued
Capital
Marketing and sales of

metal components,
tool and die, speaker
nets and materials
5 March 1992
Singapore
100
S$2,000,000
# PNE Micron
Manufacture and sale

of metal components,
speaker nets and
22 April 1992
Malaysia
100
RM5,000,000
# PNE Precision
Design and
manufacture of tool
and die for the
production of
perforated materials,
speaker nets, metal
components and
PCBs
20 November 1995
Malaysia
100
RM5,000,000
# CED System Sdn. Bhd.
Provision of electro
deposition coating for
metal components,
speaker nets and
other automotive parts
18 February 1998
Malaysia
100
RM1,500,000
# # Hong Nam Industry (M)
Provision of electro
deposition coating for
metal components,
speaker nets,
automotive parts and
micro-motors
22 July 1997
Malaysia
100
RM1,862,800
PNE Gin-Lin Sdn. Bhd.

of metal components,
speaker nets and
11 December 2000
Malaysia
100
RM 750,000
Macore Technology (M)

Sdn. Bhd.

of electronic motors
10 July 2001
Malaysia
55
RM200
*PNE Micron
Engineering Pte. Ltd.
Engineering Sdn. Bhd.
Sdn. Bhd.
Sdn. Bhd.
1.7
Principal Activities
Date and Place

of Incorporation
audited by CT Chng & Co since incorporation until 30 September 2000.
#
##
audited by Chong & Associates since incorporation until 30 September 2000.

audited by E.K. Tang & Co since incorporation until 30 September 2000.
KPMG and other member rms of KPMG International were appointed as auditors of all the
companies in the Proforma Group for nancial years or periods ended 30 September 2001.
102
1.
1.8
The auditors' reports on the nancial statements of all the companies within the Proforma
Group for the nancial years/periods covered by this report were not subject to any
qualication.
2.
BASIS OF PRESENTATION OF PROFORMA FINANCIAL INFORMATION
2.1
The proforma nancial information set out in this report has been prepared on the basis that
the Proforma Group structure had been in place throughout the periods covered by this report.
2.2
It has been prepared in accordance with the accounting policies of the Proforma Group set out
in Section 10 of this report and is based on the audited nancial statements of the companies
in the Proforma Group for the period from 1 October 1998 or since their date of incorporation,
whichever is later, to 30 September 2001. The Company was incorporated on 7 September
2001 and therefore, no audited nancial statements of the Company have been prepared.
2.3
In arriving at the nancial information of the Proforma Group, we have made such
reclassications and adjustments as we considered necessary in order to present the
nancial statements on a consistent and comparable basis. It illustrates what effects on
results and net assets of the Proforma Group might have been if the acquisition of the
subsidiaries, as set out in paragraph 1.4, had occurred on 1 October 1998 or their date of
incorporation, whichever is later. It is not necessarily indicative of the results of the
operations or related effects on the nancial position that would have been attained had the
Proforma Group actually existed as of that date.
2.4
No adjustments have been made to take account of the changes in the nancial position of
the Proforma Group after 30 September 2001. In particular, no account is taken of the
estimated costs and expenses payable by the Company in connection with the otation.
3.
PROFORMA GROUP STATEMENT OF RESULTS

The statement of results of the Proforma Group for each of the 3 nancial years ended
30 September 2001, prepared on the bases as set out in Section 2, are as follows:
----- Year ended 30 September -----
Revenue
1999
2000
2001
Note
S$'000
S$'000
S$'000
4.1
17,259
22,590
24,693
(14,953)
(19,214)
(18,603)
2,306
3,376
6,090
314
632
652
(280)
(384)
(307)
(1,398)
(1,595)
(2,465)
(118)
(1)
(93)
Cost of sales
Gross prot
Other income
4.2
Distribution costs
Prot from operations
4.3
824
2,028
3,877
Finance costs
4.4
(170)
(63)
(63)
654
1,965
3,814
(152)
(376)
(745)
502
1,589
3,069
Prot from ordinary activities before taxation

Taxation
4.5
Net prot attributable to shareholders of the Company
103
4.
NOTES TO THE PROFORMA GROUP STATEMENT OF RESULTS
4.1
Revenue
Revenue of the Proforma Group represents invoiced value of goods sold and services
provided to customers, net of discounts and returns. All intra-group transactions are
excluded from the revenue of the Proforma Group.
4.2
Other Income
2000
2001
S$'000
S$'000
S$'000
Interest income
59
Rental income
19
31
27
Gain on sale of property, plant and equipment
32
293
590
523
11
314
632
652
Scrap sales
Management fee
4.3
Prot from Operations

2000
2001
S$'000
S$'000
S$'000
14,952
19,214
18,611
743
926
1,043
Exchange loss/(gain) (net)
27
(37)
(151)
Inventories written down
320
211
446
89
121
49
228
Prot from operations is arrived at after charging/(crediting):

Bad debts written off (trade)
Cost of inventories
Depreciation of property, plant and equipment
Loss on revaluation
Operating lease expenses
Preliminary expenses written off
Property, plant and equipment written off
Allowances made for
doubtful trade receivables
46
46
135
doubtful other receivables
3,577
4,197
4,756
Staff costs
104
4.
NOTES TO THE PROFORMA GROUP STATEMENT OF RESULTS (cont'd)
4.4
Finance Costs
2000
2001
S$'000
S$'000
S$'000
37
33
47
Interest paid and payable to:
4.5
banks
directors
others
106
27
30
16
170
63
63
Taxation
2000
2001
S$'000
S$'000
S$'000
Current taxation
298
687
Deferred taxation
52
78
52
376
689
100
(35)
11
35
45
152
376
745
Based on results for the year:
Under/(over) provision in respect of prior years:

Current taxation
Deferred taxation
The tax charge is lower than that derived at by applying the statutory tax rate of 24.5%
(2000: 25.5%; 1999: 26.0%) to the prot before tax mainly due to the following:
(a)
utilisation of tax losses, capital allowances and reinvestment allowances brought forward
from previous nancial years; and
(b)
a subsidiary has been granted pioneer status by the Ministry of International Trade and
Industry of Malaysia for the production of moulds, tools and dies for electrical and
electronics industries for a period of 5 years from 1 November 1999.
As at 31 December 2001, the Proforma Group has unutilised tax losses, capital allowances
and reinvestment allowances amounting to approximately $270,000 (2000: $175,000; 1999:
$191,000), Nil (2000: $53,000; 1999: $113,000) and $1,856,000 (2000: $2,492,000; 1999:
$2,416,000), respectively, available for set off against future prots, subject to agreement by
the tax authorities and compliance with tax regulations in the respective countries in which
the subsidiaries operate.
4.6
Signicant Related Party Transactions

Parties are considered to be related to the Proforma Group if the Proforma Group has the
ability, directly or indirectly, to control the party or exercise signicant inuence over the
party in making nancial and operating decisions, or vice versa, or where the Proforma
Group and the party are subject to common control or common signicant inuence. Related
parties may be individuals or other entities.
Some of the Proforma Group's transactions and arrangements are between related parties and
the effect of these, on the terms and basis determined between the parties concerned, are
reected in these reports.
105
5.
SUMMARISED PROFORMA GROUP BALANCE SHEETS

The summarised balance sheets of the Proforma Group at the end of each of the 3 nancial
years ended 30 September 2001, prepared on the bases as set out in Section 2, are as
follows:
-------------- As at 30 September ------------1999
2000
2001
S$'000
S$'000
S$'000
10,120
11,777
13,058
Inventories
1,491
2,185
3,712
Trade receivables
4,407
4,788
3,870
Other receivables
482
416
418
Non-current assets
Current assets
626
606
426
839
906
176
381
1,076
1,038
8,226
9,977
9,640
344
142
318
Trade payables
2,179
2,552
2,572
Other payables
1,616
1,487
1,101
Less:
Current liabilities
Amounts due to related parties (trade)

Current portion of interest
bearing loans and borrowings
Dividends payable
Net current (liabilities)/assets
5,986
5,240
151
166
75
1,935
259
187
2,493
10,292
9,756
8,757
(2,066)
221
883
249
500
518
Less:
Dividends payable
1,873
140
258
308
389
758
2,699
7,665
11,240
11,242
Share capital
9,821
11,632
11,632
Reserves
(2,156)
(392)
(390)
Proforma Shareholders' Equity
7,665
11,240
11,242
Deferred taxation
Net Assets
Represented by:
106
6.
PROFORMA GROUP STATEMENT OF CHANGES IN EQUITY

The movements in shareholders' equity of the Proforma Group for the 3 nancial years ended
30 September 2001 are as follows:
2000
2001
S$'000
S$'000
S$'000
Balance brought forward
5,336
7,665
11,240
Issue of shares
1,791
1,811
36
175
111
502
1,589
3,069
Net surplus on revaluation
1,235
Interim dividends
(4,413)
7,665
11,240
11,242
Exchange differences on translation of nancial statements of

subsidiaries denominated in foreign currencies
Prot for the year
7.
PROFORMA GROUP CASH FLOW STATEMENTS

The cash ow statements of the Proforma Group for each of the 3 nancial years ended
30 September 2001, prepared on the bases as set out in Section 2 are as follows:
2000
2001
S$'000
S$'000
S$'000
654
1,965
3,814
743
170
(2)
320
46
3
926
3
(4)
63
(7)
211
46
1,043
(32)
63
(59)
446
139
7
4
89
Operating prot before working capital changes
1,934
3,203
5,514
Changes in working capital:

Inventories
Trade and other receivables
Trade and other payables
(496)
(479)
(1,614)
(859)
(274)
554
(1,928)
1,863
(590)
Cash (used in)/generated from operations

Income tax paid
Dividends paid
Interest received
(655)
(115)
2,624
(8)
4,859
(847)
(31)
59
Net cash (outow)/inow from operating activities
(768)
2,623
4,040
Cash ows from operating activities:

Prot from operating activities before taxation
Adjustments for:
Depreciation of property, plant equipment
Property, plant and equipment written off
Gain on sale of property, plant and equipment
Interest expense
Interest income
Inventories written down
Allowances made for doubtful trade and other receivables
Preliminary expenses written off
Bad debts written off (trade)
Loss on revaluation
107
7.
PROFORMA GROUP CASH FLOW STATEMENTS (cont'd)

Cash ows from investing activities:

Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Loan to a related party
8.
1999
2000
2001
S$'000
S$'000
S$'000
(1,110)
(2,345)
28
(920)
59
(50)
Net cash outow from investing activities
(1,110)
(2,317)
(911)
Cash ows from nancing activities:

Proceeds from/(repayment of) shareholders' loans
Repayment of obligations under nance leases
Repayment of interest-bearing bank loans
Repayment of related parties loans
Proceeds from interest-bearing bank loans
Proceeds from related parties loans
Interest paid
Issue of shares
(129)
(10)
(2,329)
2,957
(170)
1,791
135
(140)
(17)
(4,551)
292
3,128
(63)
1,811
(135)
(67)
(36)
(6,054)
1,868
1,187
(63)
Net cash inow/(outow) from nancing activities
2,110
595
(3,300)
Net increase in cash and cash equivalents
232
901
(171)
Cash and cash equivalents at beginning of the year
(184)
37
934
Effect of exchange rate changes on balances held in

foreign currency
(11)
(4)
(43)
Cash and cash equivalents at end of the year
37
934
720
STATEMENT OF ADJUSTMENTS
In preparing the proforma nancial information, the following adjustments have been made to
the audited nancial statements of the companies in the Proforma Group for the respective
nancial years covered by this report:
Revenue
Revenue from summation of audited nancial statements
Elimination of intercompany sales
Adjusted revenue as stated in the Proforma Group Statement of
Results
Prot from ordinary activities before taxation
Prot from ordinary activities before taxation from summation of
audited nancial statements
Elimination of unrealised gain on intercompany sales
Elimination of intercompany gross dividend
Elimination of unrealised (gain)/loss on intercompany sales of
property, plant and equipment
Adjustment to account for foreign exchange differences arising
from elimination of intercompany balances
Elimination of share of results of associate
Adjusted prot from ordinary activities before taxation as stated
in the Proforma Group Statement of Results
108
1999
2000
2001
S$'000
S$'000
S$'000
18,414
(1,155)
27,437
(4,847)
33,532
(8,839)
17,259
22,590
24,693
635
(3)
2,119
(14)
4,067
(243)
(207)
12
10
77
(10)
(12)
654
1,965
3,814
9.
STATEMENT OF NET ASSETS

The following sets out the net assets of the Proforma Group and of the Proforma Company as
at 30 September 2001, prepared on the bases as set out in Section 2:
Note
The
Proforma
Group
The
Proforma
Company
S$'000
S$'000
Non-current assets
11.1
Investments in subsidiaries unquoted equity shares,

at cost
13,058
12,655
Current assets
Inventories
11.2
3,712
Trade receivables
11.3
3,870
Other receivables
11.4
418
426

11.5
176
11.6
1,038
9,640
318
2,572
Less:
Current liabilities
11.6
Trade payables
Other payables
11.7
1,101
11.5
151
1,023
11.8
1,935
187
2,493
8,757
1,023
883
(1,023)

Dividends payable
11.9
Net current assets/(liabilities)

Less:
11.8
518
Dividends payable
11.9
1,873
308
2,699
11,242
11,632
Deferred taxation
Net Assets
Represented by:
Share capital
11.10
11,632
11,632
Reserves
11.11
(390)
11,242
11,632
Proforma Shareholders' Equity
109
10.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
10.1
Basis of Preparation
The nancial information of the Proforma Group and of the Proforma Company, expressed in
Singapore dollars, are prepared in accordance with Singapore Statements of Accounting
Standard (including Interpretations of Statements of Accounting Standard) issued by the
Institute of Certied Public Accountants of Singapore and on the historical cost basis except
that certain property, plant and equipment are stated at valuation.
10.2
Basis of Consolidation
(i)
The Proforma Group nancial information include the nancial statements of the
Company and its subsidiaries made up to the end of each nancial year. The nancial
statements of the subsidiaries are included in the Proforma Group nancial information
on the basis that the Proforma Group had been in existence since 1 October 1998.
All signicant intra-group transactions, balances and unrealised gains are eliminated on
consolidation. Unrealised losses are eliminated in the same way as unrealised gains, but
only to the extent that there is no evidence of impairment.
In the preparation of the Proforma Group nancial information, subsidiaries are
accounted for using the purchase method, except for the Company's interests in
certain subsidiaries which resulted from the amalgamation of enterprises under
common control. As the amalgamation of these companies constitutes a uniting of
interests, the pooling of interests method has been adopted.
(ii)
Under the purchase method of accounting, goodwill arising on acquisition represents the
excess of the cost of acquisition over the fair value of the Proforma Group's share of the
identiable net assets acquired. Goodwill is stated at cost less accumulated amortisation
and impairment losses. Goodwill is amortised from the date of initial recognition over its
estimated useful life of not more that 20 years.
Negative goodwill arising on acquisition represents the excess of the fair value of the
identiable net assets acquired over the cost of acquisition.
To the extent that negative goodwill relates to an expectation of future losses and
expenses that are identied in the plan of acquisition and can be measured reliably, but
which have not yet been recognised, it is recognised in the prot and loss account when
the future losses and expenses are recognised. Any remaining negative goodwill, but not
exceeding the fair values of the non-monetary assets acquired, is recognised in the prot
and loss account over the weighted average useful life of those assets that are
depreciable or amortisable. Negative goodwill in excess of the fair values of the nonmonetary assets acquired is recognised immediately in the prot and loss account.
On disposal of a subsidiary, any attributable amount of purchased goodwill not
previously amortised through the prot and loss account or which has previously been
dealt with as a movement in the Proforma Group reserves is included in the calculation
of the prot or loss on disposal.
(iii)
10.3
Under the pooling of interests method, the combined assets, liabilities and reserves of
the pooled enterprises are recorded at their existing carrying amounts at the date of
amalgamation. The excess or deciency of the amount recorded as share capital issued
by the Proforma Company over the nominal value of the shares of subsidiaries acquired
is recorded as a merger reserve/decit.
Subsidiaries
Investments in subsidiaries in the Proforma Company's balance sheet are stated at cost.
110
10.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont'd)
10.4

Items of property, plant and equipment are stated at cost or valuation less accumulated
depreciation and impairment losses. Depreciation is calculated on the straight line basis so
as to write off the cost of the property, plant and equipment over their estimated useful lives.
The annual rates in use are as follows:
Freehold buildings
50 years
Leasehold land
over the lease period of 60 years
Leasehold buildings
50 years
Plant and equipment
10 years
Renovation and installation
5 years
Furniture, ttings and ofce equipment
10 years
Motor vehicles
5 years
Computers
3 to 10 years
No depreciation is provided on freehold land.

Subsequent expenditure relating to property, plant and equipment that has already been
recognised is added to the carrying amount of the asset when it is probable that future
economic benets, in excess of the originally assessed standard of performance of the
existing asset, will ow to the Proforma Group. All other subsequent expenditure is
recognised as an expense in the period in which it is incurred.
There is no xed policy with regards to the frequency of revaluation of property, plant and
equipment. Where property, plant and equipment are revalued, the surplus or decit on
revaluation is taken to the revaluation reserve account except where there are insufcient
surpluses, in which case, the shortfall is written off to the prot and loss account.
10.5
Assets under Finance Lease

Leases in terms of which the Proforma Group assumes substantially all risks and rewards of
ownership are classied as nance leases. Property, plant and equipment acquired by way of
nance leases is capitalised at an amount equal to the lower of its fair value and the present
value of the minimum lease payments at the inception of the lease, less accumulated
depreciation and impairment losses. Lease payments are apportioned between nance
charges and reduction of the lease liability so as to achieve a constant rate of interest on the
remaining balance of the liability. Finance charges are charged directly against income.
Capitalised leased assets are depreciated over the shorter of the economic useful life of the
asset and the lease term.
10.6
Operating Leases
Where the Proforma Group has the use of assets under operating leases, payments made
under the leases are recognised in the prot and loss account on a straight line basis over
the terms of the respective leases. Lease incentives received are recognised in the prot and
loss account as an integral part of the total lease payments made. Contingent rentals are
charged to the prot and loss account in the accounting period in which they are incurred.
10.7
Employees Benet Dened Contribution Plan

Obligations for contributions to dened contribution pension plans are recognised as an
expense in the prot and loss account as incurred.
111
10.
10.8
Inventories
Inventories are stated at the lower of cost, determined on the rst-in-rst-out method, and net
realisable value.
Cost of work-in-progress and nished goods comprises cost of materials, direct labour and an
appropriate proportion of production overheads as determined by the management.
Net realisable value is the estimated selling price in the ordinary course of business less
estimated costs of completion and the estimated costs necessary to make the sale.
Due allowance is made for all deteriorated, damaged, obsolete and slow moving inventories.
10.9
Trade and Other Receivables

Trade and other receivables are stated at their cost less allowance for doubtful receivables.
10.10 Trade and Other Payables

Trade and other payables are stated at cost.
10.11 Interest-bearing Loans and Borrowings
Interest-bearing loans and borrowings are stated at cost.
10.12 Revenue Recognition
Revenue from sale of goods is recognised when the signicant risk and rewards of ownership
have been transferred to the buyer. Revenue excludes goods and services or other sales taxes
and is after deduction of any trade discounts. No revenue is recognised if there are signicant
uncertainties regarding recovery of the consideration due, associated costs or the possible
return of goods.
10.13 Deferred Taxation
Deferred taxation is provided using the liability method in respect of the taxation effect arising
from all material timing differences between the accounting and tax treatment of income and
expenditure, which are expected with reasonable probability to crystallise in the foreseeable
future.
Deferred tax benets are recognised in the nancial statements only to the extent of any
deferred tax liability or when such benets are reasonably expected to be realisable in the
near future.
10.14 Finance Costs
Interest expense and similar charges are expensed in the prot and loss account in the period
in which they are incurred, except to the extent that they are capitalised as being directly
attributable to the acquisition, construction or production of an asset which necessarily takes
a substantial period of time to get ready for its intended use or sale.
The interest component of nance lease payments is recognised in the prot and loss account
using the effective interest rate method.
112
10.
10.15 Foreign Currency Translation

Monetary assets and liabilities in foreign currencies are translated into the reporting currencies
at rates of exchange closely approximate to those ruling at the balance sheet date.
Transactions in foreign currencies are translated at rates ruling on transaction dates.
Translation differences are included in the prot and loss account.
The Proforma Group's foreign operations are not considered as an integral part of the
Proforma Company's operations. Accordingly, the assets and liabilities of foreign operations,
including goodwill and fair value adjustments arising on consolidation, are translated to
Singapore dollars at the rates of exchange ruling at the balance sheet date. The results of
foreign operations are translated at the average exchange rates for the year. Exchange
differences arising on translation are recognised directly in equity.
10.16 Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances and bank deposits. For the purpose of the
Proforma Group cash ow statements, cash and cash equivalents are presented net of bank
overdrafts which are repayable on demand and which form an integral part of the Proforma
Group's cash management.
10.17 Impairment
The carrying amounts of the Proforma Group's assets, other than inventories, are reviewed at
each balance sheet date to determine whether there is any indication of impairment. If any
such indication exists, the asset's recoverable amount is estimated.
An impairment loss is recognised whenever the carrying amount of an asset or its cash
generating unit exceeds its recoverable amount. An impairment loss in respect of land and
buildings carried at revalued amount is recognised in the same way as a revaluation
decrease. All other impairment losses are recognised in the prot and loss account.
The recoverable amount is the greater of the asset's net selling price and value in use. In
assessing value in use, the estimated future cash ows are discounted to their present value
using a pre-tax discount rate that reects current market assessments of the time value of
money and the risks specic to the asset. For an asset that does not generate cash inows
largely independent of those from other assets, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset's
carrying amount does not exceed the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had been recognised. A reversal of an
impairment loss in respect of land and buildings carried at revalued amount is recognised in
the same way as a revaluation increase. All other reversals of impairment are recognised in
the prot and loss account.
An impairment loss in respect of goodwill is not reversed unless the cost was caused by a
specic external event of an exceptional nature that is not expected to recur, and the
increase on recoverable amount relates clearly to the reversal of the effect of that specic
event.
113
11.
NOTES TO STATEMENT OF NET ASSETS
11.1

At Cost
At
Valuation
Total
Accumulated
Depreciation
Net Book
Value
S$'000
S$'000
S$'000
S$'000
S$'000
The Proforma Group

Freehold land
1,927
1,927
1,927
Freehold buildings
3,654
3,654
3,654
Leasehold land
479
479
479
166
1,080
1,246
1,246
7,718
7,718
2,841
4,877
Renovation and installation
174
174
112
62
Furniture, ttings and ofce

equipment
907
907
343
564
Motor vehicles
423
423
224
199
60
60
10
50
9,448
7,140
16,588
3,530
13,058
Leasehold buildings
Plant and equipment
Computers
The carrying amount of property, plant and equipment of the Proforma Group includes
amounts totalling S$397,000 as at 30 September 2001 in respect of plant and equipment
and motor vehicles held under nance leases. The amounts outstanding under the nance
leases are set out in note 11.8.
Freehold land and buildings and certain leasehold land and buildings of the Proforma Group
were revalued as at September 2001 by independent valuers having appropriate professional
qualications and recent experience in the location and category of the property being valued,
at open market values on an existing use basis.
The carrying amount of freehold land and buildings and leasehold land and buildings of the
Proforma Group would have been S$4,897,000 and S$1,097,000, respectively, had the
freehold land and buildings and leasehold land and buildings been carried at cost less
accumulated depreciation.
11.2
Inventories
The
Proforma
Group
S$'000
Raw materials
2,156
Work-in-progress
671
Finished goods
885
3,712
114
11.
NOTES TO STATEMENT OF NET ASSETS (cont'd)
11.3
Trade Receivables
The
Proforma
Group
S$'000
Trade receivables
4,177
Less:
Allowance for doubtful receivables
(307)
3,870
11.4
Other Receivables
The
Proforma
Group
S$'000
Deposits
214
Prepayments
60
Other debtors
148
Less:
Allowance for doubtful receivables
(4)
418
11.5
Amounts Due from and to Related Parties (Non-Trade)

The non-trade amounts due from and to related parties are interest-free, unsecured and have
no xed terms of repayment.
11.6
Cash and Cash Equivalents

The
Proforma
Group
S$'000
Fixed deposits with nancial institutions
252
Cash at bank and in hand
786
1,038
(318)
720
The bank overdraft is secured on certain land and buildings of the Proforma Group (refer to
note 11.8).
Fixed deposits amounting to approximately S$12,000 have been pledged to nancial
institutions in respect of bankers' guarantees issued.
115
11.
11.7
Other Payables
The
Proforma
Group
S$'000
Accrued operating expenses
456
Other creditors
635
Deposits received
10
1,101
11.8
Interest-Bearing Loans and Borrowings

The
Proforma
Group
S$'000
Current liabilities
Secured short-term bank loans
1,861
Current portion of:

Secured long-term bank loans
39
Finance lease liabilities
35
1,935
Secured long-term bank loans
438
Finance lease liabilities
80
518
Term and debt repayment schedule of bank loans:
Total
Within
1 year
After
1 year
but within
5 years
S$'000
S$'000
S$'000
After
5 years
S$'000
Secured bank loans:

RM variable rate at 8.4% to 8.8%
199
17
84
98
RM variable rate at 7.65% to 8.05%
278
22
111
145
1,861
1,861
2,338
1,900
195
243
RM variable rate at 3.61%
The bank loans, bank overdraft (refer to note 11.6) and bankers' guarantees of approximately
S$90,000 are secured by the following as at 30 September 2001:
(i)
mortgages over certain freehold and leasehold land and buildings of the Group with a
carrying value of S$3,466,000.
(ii)
pledge of collateral provided by a related corporation.
(iii)
joint and several guarantees from directors of certain subsidiaries.
116
11.

Finance Leases Liabilities
Finance leases liabilities are repayable as follows:
Payments
Interest
Principal
S$'000
S$'000
S$'000
As at 30 September 2001
Repayable within 1 year
44
35
Repayable after 1 year but within 5 years
99
19
80
143
28
115
Under the term of the lease agreement, no contingent rent is payable. There are also no noncancellable sub-leases as at 30 September 2001.
11.9
Dividends Payable The Proforma Group

Included in dividends payable is an amount of S$1,873,000 which is payable only after 30
September 2002 to the then shareholders of a subsidiary.
11.10 Share Capital The Proforma Group and the Proforma Company
S$'000
Authorised:
30,000,000 ordinary shares of S$1 each
30,000
Issued and fully paid:

11,632,378 ordinary shares of S$1 each
11,632
11.11 Reserves
The
Proforma
Group
S$'000
Foreign currency translation reserve
(175)
Revaluation reserves
1,235
Merger decit
(3,454)
Unappropriated prots
2,004
(390)
The foreign currency translation reserve comprises all foreign exchange differences arising
from the translation of the nancial statements of foreign operations that are not integral to
the operation of the Proforma Group.
The revaluation reserves comprise the net cumulative increase in the fair value of freehold and
leasehold land and buildings.
The merger decit arises from the difference between the nominal value of shares issued by
the Company and the nominal value of shares of subsidiaries acquired under the pooling of
interests method of accounting.
117
11.
11.12 Contingent Liabilities

A claim was made in October 1997 by a former employee against a subsidiary for unfair
dismissal. The subsidiary led its defence in December 1997 and the matter was heard
before the Malaysian Industrial Court in January 2001. The court's decision is currently
pending. If held to be guilty, the subsidiary may be liable to reinstate the former employee to
his former position or a ne of up to 2 years of his last drawn salary which amount to
approximately S$42,000. The subsidiary is of the view that there is no basis to this claim and
accordingly, no provision has been made for this amount.
12.
NET TANGIBLE ASSETS BACKING

The net tangible assets backing of the Proforma Group for each share of S$0.08 based on the
nancial statements of the Proforma Group as at 30 September 2001 is set out below after
taking into account the following:
(a)
the issue of 11,632,376 ordinary shares of S$1.00 each in the Proforma Company to the
shareholders of Micron (S), Micron (M), Precision, Hong Nam, CED, Gin-Lin and Macore,
pursuant to the restructuring exercise described in Section 1.4;
(b)
the consolidation of 2 ordinary shares of S$1.00 each to 1 ordinary share of S$2.00 each;
(c)
the sub-division of each ordinary share of S$2.00 each in the capital of the Company into
25 ordinary shares of S$0.08 each; and
(d)
the issue of 62,000,000 New Shares of S$0.08 each which are the subject of this
Invitation.
Net Tangible Assets

S$'000
Net tangible assets as at 30 September 2001
11,242
Add/(Less):
Proceeds from issue of 62,000,000 New Shares of S$0.08 each
at a xed price of S$0.22 per New Share
13,640
Estimated issue expenses
(1,500)
Adjusted net tangible assets
23,382
Issued Share Capital

Number of
Shares
'000
145,404,725 ordinary shares of S$0.08 each
145,405
Issue of 62,000,000 New Shares of S$0.08 each in connection

with the Invitation
Adjusted share capital
62,000
207,405
Net Tangible Assets backing for each ordinary share of

S$0.08 (in cents)
118
11.27
13.
DIVIDENDS
No dividends have been paid or proposed to be paid by the Company or its subsidiaries for
nancial years ended 30 September 1999 and 30 September 2000.
For the nancial year ended 30 September 2001, the following subsidiaries declared
dividends:
Rate of
dividend
Name of Company
PNE Micron Engineering Pte. Ltd.
PNE Micron Engineering Sdn. Bhd.
PNE Precision Sdn. Bhd.
CED System Sdn. Bhd.

Hong Nam Industry (M) Sdn. Bhd.
14.
Issued
ordinary
shares
Net
dividend
declared
Net
dividend
paid
S$'000
S$'000
S$'000
11.3%
2,000
170
69%
16%
2,609
1,611
269
1.1%
0.3%
33.9%
18.7%
2,258
26
5
792
314
26
5
56%
83%
639
282
419
16.7%
51.4%
37.3%
846
145
322
233
AUDITED FINANCIAL STATEMENTS

No audited nancial statements of the Company have been prepared since its incorporation.
No audited nancial statements of the subsidiaries have been prepared in respect of any
period subsequent to 30 September 2001.
Yours faithfully
KPMG
Certied Public Accountants
Singapore
119
GENERAL AND STATUTORY INFORMATION

INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS
1.
The names, ages, addresses and current occupations of our Directors of our Company and
Executive Ofcers of our Group are set out on pages 80 to 86 of this Prospectus.
2.
Information on the business and working experiences of our Directors is set out on page 81 of
this Prospectus.
3.
The list of present and past directorships of each Director for the last 5 years is set out on pages
82 to 84 of this Prospectus.
4.
Information on the business and working experiences of our Executive Ofcers of our Group is
set out on pages 85 and 86 of this Prospectus.
5.
The list of present and past directorships of each Executive Ofcer for the last 5 years is set out
on pages 86 and 87 of this Prospectus.
6.
None of our Directors or Executive Officers is or was involved in any of the following events:
(i)
a petition under any bankruptcy laws filed in any jurisdiction against him or any partnership
in which he was a partner or any corporation of which he was a director or an executive
officer in the last 10 years;
(ii)
unsatisfied judgments outstanding against him;
(iii)
a conviction of any offence, in Singapore or elsewhere, involving fraud or dishonesty

punishable with imprisonment for 3 months or more, or charged for violation of any
securities laws or any such pending criminal proceeding against him;
(iv)
a conviction of any offence, in Singapore or elsewhere, involving a breach of any securities

or financial market laws, rules or regulations;
(v)
the subject of judgment in any civil proceeding in Singapore or elsewhere in the last 10
years involving fraud, misrepresentation or dishonesty or any such pending civil
proceeding against him;
(vi)
a conviction in Singapore or elsewhere of any offence in connection with the formation or

management of any corporation;
(vii) disqualification from acting as a director of any company, or from taking part in any way
directly or indirectly in the management of any company;
(viii) the subject of any order, judgment or ruling of any court of competent jurisdiction, tribunal
or governmental body permanently or temporarily enjoining him from engaging in any type
of business practice or activity; and
(ix)
the management or conduct of affairs of any company or partnership which has been
investigated by an inspector appointed under the provisions of the Act, or other securities
enactment or by any other regulatory body in connection with any matter involving the
company or partnership occurring or arising during the period when he was so concerned
with the company or partnership.
7.
Our Existing Directors did not receive any remuneration from our Group in FY1999, FY2000 and
FY2001.
8.
Save as disclosed on pages 87 and 88 of this Prospectus, there are no existing or proposed
service contracts between our Directors and our Company or our subsidiaries.
120
9.
Save as disclosed below, none of our Directors and Executive Officers are related by blood or
marriage to one another nor are they so related to any substantial shareholder of our Company:
(i)
Messrs Tan Kong Hock, Tan Kong Boon, Tan Kong Heng, Tan Kwong Soon, Tan Kwang
Hua, Tan Kong Sin, Tan Koon Chwee, Tan Kong Guan and Tan Kong Leong are siblings.
(ii)
Mr Tan Kian Hie, our Managing Director, is the son of Mr Tan Kong Boon and the nephew
of our substantial shareholders, Messrs Tan Kong Hock, Tan Kong Heng, Tan Kwong
Soon, Tan Kwang Hua, Tan Kong Sin, Tan Koon Chwee, Tan Kong Guan and Tan Kong
Leong.
(iii)
Mr Tan Tee Ching, our Group Financial Controller, is the son of Mr Tan Kwong Soon and
the nephew of our substantial shareholders, Messrs Tan Kong Hock, Tan Kong Boon, Tan
Kong Heng, Tan Kwang Hua, Tan Kong Sin, Tan Koon Chwee, Tan Kong Guan and Tan
Kong Leong.
10.
No option to subscribe for shares in, or debentures of, our Company or our subsidiaries has
been granted to, or was exercised by, any Director or Executive Ofcer within the last nancial
year. No option has been granted pursuant to the PNE Micron Employees' Share Option
Scheme.
11.
No person has been, or is entitled to be, given an option to subscribe for any shares in or
debentures of our Company or any of our subsidiaries and no shares in, or debentures of, our
Company or any of our subsidiaries are under option or agreed conditionally or unconditionally
to be put under option.
12.
Save as disclosed on pages 67 to 76 of this Prospectus, 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 our subsidiaries within 2 years preceding the date of this Prospectus, or in
any proposal for such acquisition or disposal or lease as aforesaid.
13.
Save as disclosed on pages 67 to 76 of this Prospectus, no Director has any interest in any
existing contract or arrangement that is signicant in relation to the business of our Group
taken as a whole.
14.
No Director, substantial shareholder or Executive Ofcer has any interest, direct or indirect, in
any business carrying on a similar trade as our Company or our subsidiaries.
15.
There is no shareholding qualication for Directors in the Articles of Association of our Company.
16.
The interests of our Directors and substantial shareholders in our 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 Act are as follows:
--------------- Direct Interests -------------Name
Number of Shares
------------- Indirect Interests -----------Number of Shares
Directors
Tan Kong Heng
4,661,400
2.2
140,743,325
67.9
Tan Kong Sin
3,878,200
2.0
141,526,525
68.2
Tan Kwong Soon
2,796,800
1.3
142,607,925
68.8
Tan Kong Leong
2,796,800
1.3
142,607,925
68.8
Sitoh Yih Pin
Soh Lup Chee
114,341,525
55.1
Substantial shareholders
Print N Etch
121
--------------- Direct Interests -------------Name
Number of Shares
------------- Indirect Interests -----------Number of Shares
Other Shareholders:
Tan Kong Boon
4,661,400
2.2
140,743,325
67.9
Tan Kwang Hua
3,878,200
2.0
141,526,525
68.2
Tan Koon Chwee
2,796,800
1.3
142,607,925
68.8
Tan Kong Guan
2,796,800
1.3
142,607,925
68.8
Tan Kong Hock
2,796,800
1.3
142,607,925
68.8
Save as disclosed above, no Director has any interest in our Shares, including the New Shares,
which are the subject of this Invitation.
17.
No sum or benet has been paid or is agreed to be paid to any Director or expert, or to any rm
in which a Director or expert is a partner or any corporation in which such Director or expert,
holds shares or debentures, in cash or in shares or otherwise, by any person to induce him to
become, or to qualify him as, a Director, or otherwise for services rendered by him or by such
rm or corporation in connection with the promotion or formation of our Company.
SHARE CAPITAL
18.
19.
(a)
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.
(b)
The Company was incorporated on 7 September 2001. It presently has an authorised share
capital of S$30,000,000 divided into 375,000,000 ordinary shares of S$0.08 each.
(c)
Upon completion of the Invitation, the issued and paid-up share capital of the Company will
be increased to S$16,592,378 divided into 207,404,725 Shares.
Save as disclosed herein and on page 43 of this Prospectus, there were no changes in the
issued and paid-up share capital of our Company or its subsidiaries within the 3 years
preceding the date of this Prospectus.
Company
PNE Micron
PNE Precision
PNE-Gin Lin
Macore
PNE Micron Engineering
(M'sia)
20.
Date of
Issue
Number
of Shares
Issued
Issue
Price
Purpose of
Issue/
Consideration
Resultant
Issued
ShareCapital
7/9/2001
$1.00
Incorporation
$2.00
11/3/2002
11,632,376
$1.00
Restructuring
Exercise
$11,632,378
14/6/1999
999,997
RM1.00
Working capital
RM1,000,000
30/8/2000
4,000,000
RM1.00
Working capital
RM5,000,000
11/12/2000
RM1.00
Incorporation
3/9/2001
749,997
RM1.00
Working capital
10/7/2001
200
RM1.00
Incorporation
5/4/1999
3,000,000
RM1.00
Working capital
RM3.00
RM750,000
RM200
RM5,000,000
Save as disclosed above, no shares or debentures were issued or were agreed to be issued by
our Company or our subsidiaries for cash or for a consideration other than cash during the last 3
years preceding the date of this Prospectus.
122
21.
MEMORANDUM AND ARTICLES OF ASSOCIATION

Memorandum of Association
Objects and Purposes
The Memorandum of Association of the Company states, among others, that the liability of
members of our company is limited, and that the objects for which our Company is established
include those of a holding and investment company.
The objects of our Company are set out in full in Clause 3 of the Memorandum of Association
which is available for inspection at our registered ofce as stated in the section titled
``Documents Available for Inspection''.
The complete listing of our objects and purposes can be found at pages 1 to 4 of our
Company's Memorandum of Association.
Articles of Association
The provisions in the Articles of Association with respect to: (a) a director's power to vote on a
proposal, arrangement or contract in which the director is materially interested; (b) the directors'
power, in the absence of an independent quorum, to vote compensation to themselves or any
members of their body; (c) borrowing powers exercisable by the directors and how such
borrowing powers can be varied; (d) retirement or non-retirement of directors under an age limit
requirement; (e) number of shares, if any, required for director's qualication; and (f) directors'
remuneration, are as follows:
Article 75
Subject as hereinafter provided, the Directors, all of whom shall be natural persons, shall not be
less than two nor more than nine in number. The Company may by Ordinary Resolution from
time to time vary the maximum number of Directors.
Article 76
A Director shall not be required to hold any shares of the Company by way of qualication. A
Director who is not a member of the Company shall nevertheless be entitled to receive notice
of and to attend and speak at General Meetings.
Article 77
The ordinary remuneration of the Directors, which shall from time to time be determined by an
Ordinary Resolution of the Company, 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 General Meeting and shall (unless such resolution otherwise
provides) be divisible among the Directors as they may agree, or failing agreement, equally,
except that any Director who shall hold ofce for part only of the period in respect of which
such remuneration is payable shall be entitled only to rank in such division for a proportion of
remuneration related to the period during which he has held ofce. The ordinary remuneration
of an executive Director may not include a commission on or a percentage of turnover and the
ordinary remuneration of a non-executive Director shall be a xed sum, and not by a commission
on or a percentage of prots or turnover.
123
Article 78
Any Director who holds any executive ofce, or who serves on any committee of the Directors,
or who otherwise performs services which in the opinion of the Directors are outside the scope
of the ordinary duties of a Director, may be paid such extra remuneration by way of salary,
commission or otherwise as the Directors may determine, other than by a commission on or
percentage of commission or turnover, Provided that such extra remuneration (in case of an
executive Director) shall not by way of commission on or a percentage of turnover and (in the
case of a non-executive Director) shall be by a xed sum, and not by a commission on or a
percentage of prots or turnover.
Article 79
The Directors may repay to any Director all such reasonable expenses as he may incur in
attending and returning from meetings of the Directors or of any committee of the Directors or
General Meetings or otherwise in or about the business of the Company.
Article 80
The Directors shall have power to pay and agree to pay pensions or other retirement,
superannuation, death or disability benets to (or to any person in respect of) any Director for
the time being holding any executive ofce and for the purpose of providing any such pensions
or other benets to contribute to any scheme or fund or to pay premiums.
Article 81
A Director may be party to or be in any way interested in any contract or arrangement or
transaction to which the Company is a party or in which the Company is in any way interested
and he may hold and be remunerated in respect of any ofce or place of prot (other than the
ofce of Auditor of the Company or any subsidiary thereof) under the Company or any other
company in which the Company is in any way interested and he (or any rm of which he is a
member) may act in a professional capacity for the Company or any such other company and
zbe remunerated therefor and in any such case as aforesaid (save as otherwise agreed) he may
retain for his own absolute use and benet all prots and advantages accruing to him thereunder
or in consequence thereof.
Article 86
The remuneration of a Managing Director shall from time to time be xed by the Directors and
may subject to these presents be by way of salary or commission or participation in prots or by
any or all these modes but he shall not under any circumstances be remunerated by a
commission on or a percentage of turnover.
Article 88
The Company may by Ordinary Resolution appoint any person to be a Director either as an
additional Director or to ll a casual vacancy. Without prejudice thereto the Directors shall also
have power at any time so to do, but so that the total number of Directors shall not thereby
exceed the maximum number xed by or in accordance with these presents. Any person so
appointed by the Directors shall hold ofce only until the next Annual General Meeting and
shall then be eligible for re-election, but shall not be taken into account in determining the
number of Directors who are to retire by rotation at such meeting.
124
Article 89
At each Annual General Meeting, one-third of the Directors for the time being (or, if their number
is not a multiple of three, the number nearest to but not less than one-third) shall retire from
ofce by rotation, Provided that no Director holding ofce as Managing Director shall be
subject to retirement by rotation or be taken into account in determining the number of
Directors to retire. For the avoidance of doubt, each Director (other than a Director holding
ofce as Managing Director) shall retire at least once every three years.
Article 90
The Directors to retire by rotation shall include (so far as necessary to obtain the number
required) any Director who is due to retire at the meeting by reason of age or who wishes to
retire and not to offer himself for re-election. Any further Directors so to retire shall be those of
the other Directors subject to retirement by rotation who have been longest in ofce since their
last re-election or appointment and so that as between persons who became or were last reelected Directors on the same day, those to retire shall (unless they otherwise agree among
themselves) be determined by ballot. A retiring Director shall be eligible for re-election.
Article 91
The Company at the meeting at which a Director retires under any provision of these presents
may by Ordinary Resolution fill the office being vacated by electing thereto the retiring Director
or some other person eligible for appointment. In default, the retiring Director shall be deemed to
have been re-elected except in any of the following cases:
(a)
where at such meeting it is expressly resolved not to fill such office or a resolution for the
re-election of such Director is put to the meeting and lost; or
(b)
where such Director has given notice in writing to the Company that he is unwilling to be
re-elected; or
(c)
where the default is due to the moving of a resolution in contravention of the next following
Article; or
(d)
where such Director has attained any retiring age applicable to him as Director.
The retirement shall not have effect until the conclusion of the meeting except where a resolution
is passed to elect some other person in the place of the retiring Director or a resolution for his reelection is put to the meeting and lost and accordingly a retiring Director who is re-elected or
deemed to have been re-elected will continue in ofce without a break.
Article 92
A resolution for the appointment of two or more persons as Directors by a single resolution shall
not be moved at any General Meeting unless a resolution that it shall be so moved has rst been
agreed to by the meeting without any vote being given against it, and any resolution moved in
contravention of this provision shall be void.
Article 93
No person other than a Director retiring at the meeting shall, unless recommended by the
Directors for election, be eligible for appointment as a Director at any General Meeting unless
not less than eleven clear days and not more than forty-two days (inclusive of the date on
which the notice is given) before the date appointed for the meeting there shall have been
lodged at the Ofce notice in writing signed by some member (other than the person to be
proposed) duly qualied to attend and vote at the meeting for which such notice is given of his
intention to propose such person for election and also notice in writing signed by the person to
be proposed of his willingness to be elected, Provided that in the case of a person
recommended by the Directors for election, not less than nine clear days' notice shall be
necessary and notice of each and every such person shall be served on the members at least
seven days prior to the meeting at which the election is to take place.
125
Article 94
The office of a Director shall be vacated in any of the following events, namely:
(a)
if he shall become prohibited or disqualified by the Statutes or any other law from acting as
a Director; or
(b)
if (not being a Director holding any executive office for a fixed term) he shall resign by
writing under his hand left at the Office or if he shall in writing offer to resign and the
Directors shall resolve to accept such offer; or
(c)
if he shall become bankrupt or have a receiving order made against him or shall make
arrangement or composition with his creditors generally; or
(d)
if he becomes of unsound mind, or if in Singapore or elsewhere an order shall be made by

any court claiming jurisdiction in that behalf on the ground (however formulated) of mental
disorder for his detention or for the appointment of a guardian or for the appointment of a
receiver or other person (by whatever name called) to exercise powers with respect to his
property or affairs; or
(e)
is absent, for more than six months and without leave of the Directors, from meetings of the
Directors held during that period; or
(f)
if he is removed by the Company in General Meeting pursuant to these presents.
Article 95
The Company may in accordance with and subject to the provisions of the Statutes, by Ordinary
Resolution of which special notice has been given, remove any Director from ofce
(notwithstanding any provision of these presents or of any agreement between the Company
and such Director, but without prejudice to any claim he may have for damages for breach of
any such agreement) and appoint another person in place of a Director so removed from ofce,
and any person so appointed shall be treated for the purpose of determining the time at which
he or any other Director is to retire by rotation as if he had become a Director on the day on
which the Director in whose place he is appointed was last appointed a Director.
Article 96
(A)
Any Director may at any time by writing under his hand and deposited at the Ofce, or
delivered at a meeting of the Directors, appoint any person (other than another Director or
a person who has already been appointed alternate for another Director) to be his alternate
Director and may in like manner at any time terminate such appointment. Such
appointment, unless previously approved by a majority of the Directors, shall have effect
only upon and subject to being so approved.
(B)
The appointment of an alternate Director shall determine on the happening of any event
which if he were a Director would cause him to vacate such ofce or if the Director
concerned (below called ``his principal'') ceases to be a Director.
(C)
An alternate Director shall (except when absent from Singapore) be entitled to receive
notices of meetings of the Directors and shall be entitled to attend and vote as a Director
at any such meeting at which his principal is not personally present and generally at such
meeting to perform all functions of his principal as a Director, and for the purposes of the
proceedings at such meeting the provisions of these presents shall apply as if he (instead
of his principal) were a Director. If his principal is for the time being absent from Singapore
or temporarily unable to act through ill health or disability, his signature to any resolution in
writing of the Directors shall be as effective as the signature of his principal. To such extent
as the Directors may from time to time determine in relation to any committees of the
Directors, the foregoing provisions of this paragraph shall also apply mutatis mutandis to
any meeting of any such committee of which his principal is a member. An alternate
Director shall not (save as aforesaid) have any power to act as a Director nor shall he be
deemed to be a Director for any other purposes of these presents.
126
(D)
An alternate Director shall be entitled to contract and be interested in and benet from
contracts or arrangements or transactions and to be repaid expenses and to be
indemnied to the same extent mutatis mutandis as if he were a Director but he shall not
be entitled to receive from the Company in respect of his appointment as alternate Director
any remuneration except only such part (if any) of the remuneration otherwise payable to
his principal as such principal may by notice in writing to the Company from time to time
direct.
Article 100
A Director shall not vote in respect of any contract or arrangement or any other proposal
whatsoever in which he has any interest, directly or indirectly. A Director shall not be counted
in the quorum at a meeting in relation to any resolution on which he is debarred from voting.
Article 108
Subject as hereinafter provided and to the provisions of the Statutes, the Directors may exercise
all the powers of the Company to borrow money, to mortgage or charge its undertaking,
property and uncalled capital and to issue debentures and other securities, whether outright or
as collateral security for any debt, liability or obligation of the Company or of any third party.
Provisions relating to rights, preferences and restrictions attaching to Shares
The provisions in the Articles of Association relating to the rights, preferences and restrictions
attaching to each class of the shares, including: (a) dividend rights, including the time limit after
which dividend entitlement lapses and an indication of the party in whose favour this entitlement
operates; (b) voting rights, including whether directors stand for re-election at staggered intervals
and the impact of that arrangement where cumulative voting is permitted or required; (c) rights to
share in the company's prots; (d) rights to share in any surplus in the event of liquidation; (e)
redemption provisions; (f) sinking fund provisions; (g) liability to further capital calls by the
company; and (h) any provision discriminating against any existing or prospective holder of
such securities as a result of such shareholder owning a substantial number of shares, are as
follows:
Article 4(A)
(A)
Subject to these presents, no shares may be issued by the Directors without the prior
approval of the Company in General Meeting pursuant to Section 161 of the Act, but
subject thereto and the terms of such approval, and to Article 5, and to any special rights
attached to any shares for the time being issued, the Directors may allot (with or without
conferring a right of renunciation) or grant options over or otherwise dispose of the same
to such persons on such terms and conditions and for such consideration and at such time
and whether or not subject to the payment of any part of the amount thereof in cash or
otherwise as the Directors may think fit, and any shares may, subject to compliance with
Sections 70 and 75 of the Act, be issued with such preferential, deferred, qualified or
special rights, privileges, conditions or restrictions, whether as regards dividend, return of
capital, participation in surplus, voting, conversion or otherwise, as the Directors may think
fit, and preference shares may be issued which are or at the option of the Company are
liable to be redeemed, the terms and manner of redemption being determined by the
Directors in accordance with the Act, Provided Always that:
(a)
no shares shall be issued to transfer a controlling interest in the Company without the
specific prior approval of the Company in General Meeting; and
(b)
no shares shall be issued at a discount or options granted over unissued shares

except in accordance with the Act.
127
Article 8
(A)
In the event of preference shares being issued, the total nominal value of issued preference
shares shall not at any time exceed the total nominal value of the issued ordinary shares
and preference shareholders shall have the same rights as ordinary shareholders as
regards receiving of notices, reports and balance-sheets and attending General Meetings
of the Company, and preference shareholders shall also have the right to vote at any
meeting convened for the purpose of reducing capital or winding-up or sanctioning a sale
of the undertaking of the Company or where the proposal to be submitted to the meeting
directly affects their rights and privileges or when the dividend on the preference shares is
more than six months in arrear.
(B)
The Company has power to issue further preference capital ranking equally with, or in
priority to, preference shares already issued.
Article 9
(A)
Whenever the share capital of the Company is divided into different classes of shares, the
variation or abrogation of the special rights attached to any class may, subject to the
provisions of the Act, be made either with the consent in writing of the holders of threequarters in nominal value of the issued shares of the class or with the sanction of a
Special Resolution passed at a separate General Meeting of the holders of the shares of
the class (but not otherwise) and may be so made either whilst the Company is a going
concern or during or in contemplation of a winding-up. To every such separate General
Meeting all the provisions of these presents relating to General Meetings of the Company
and to the proceedings thereat shall mutatis mutandis apply, except that the necessary
quorum shall be two or more persons holding at least one-third in nominal value of the
issued shares of the class present in person or by proxy or attorney and that any holder
of shares of the class present in person or by proxy or attorney may demand a poll and
that every such holder shall on a poll have one vote for every share of the class held by
him where the class is a class of equity shares within the meaning of Section 64(1) of the
Act or at least one vote for every share of the class where the class is a class of preference
shares within the meaning of Section 180(2) of the Act, Provided Always that where the
necessary majority for such a Special Resolution is not obtained at such General Meeting,
the consent in writing, if obtained from the holders of three-quarters in nominal value of the
issued shares of the class concerned within two months of such General Meeting, shall be
as valid and effectual as a Special Resolution carried at such General Meeting.
(B)
The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of preference
capital (other than redeemable preference capital) and any variation or abrogation of the
rights attached to preference shares or any class thereof.
(C)
The special rights attached to any class of shares having preferential rights shall not unless
otherwise expressly provided by the terms of issue thereof be deemed to be varied by the
creation or issue of further shares ranking as regards participation in the prots or assets of
the Company in some or all respects pari passu therewith but in no respect in priority
thereto.
Article 18
The Directors may from time to time make calls upon the members in respect of any moneys
unpaid on their shares (whether on account of the nominal value of the shares or, when
permitted, by way of premium) but subject always to the terms of issue of such shares. A call
shall be deemed to have been made at the time when the resolution of the Directors
authorizing the call was passed and may be made payable by instalments.
128
Article 19
Each member shall (subject to receiving at least fourteen days' notice specifying the time or
times and place of payment) pay to the Company at the time or times and place so specied
the amount called on his shares. The joint holders of a share shall be jointly and severally liable
to pay all calls in respect thereof. A call may be revoked or postponed as the Directors may
determine.
Article 21
Any sum (whether on account of the nominal value of the share or by way of premium) which by
the terms of issue of a share becomes payable upon allotment or at any xed date shall for all
the purposes of these presents be deemed to be a call duly made and payable on the date on
which by the terms of issue the same becomes payable. In the case of non-payment, all the
relevant provisions of these presents as to payment of interest and expenses, forfeiture or
otherwise shall apply as if such sum had become payable by virtue of a call duly made and
notied.
Article 23
The Directors may if they think t receive from any member willing to advance the same all or
any part of the moneys (whether on account of the nominal value of the shares or by way of
premium) uncalled and unpaid upon the shares held by him and such payment in advance of
calls shall extinguish pro tanto the liability upon the shares in respect of which it is made and
upon the moneys so received (until and to the extent that the same would but for such
advance become payable) the Company may pay interest at such rate (not exceeding eight per
cent. per annum) as the member paying such sum and the Directors may agree. Capital paid on
shares in advance of calls shall not, whilst bearing interest, confer a right to participate in prots.
Article 42
A reference to a member shall be a reference to a registered holder of shares in the Company, or
where such registered holder is CDP, the Depositors on behalf of whom CDP holds the shares,
Provided that:
(a)
a Depositor shall only be entitled to attend any General Meeting and to speak and vote
thereat if his name appears on the Depository Register maintained by CDP forty-eight (48)
hours before the General Meeting as a Depositor on whose behalf CDP holds shares in the
Company, the Company being entitled to deem each such Depositor, or each proxy of a
Depositor who is to represent the entire balance standing to the Securities Account of the
Depositor, to represent such number of shares as is actually credited to the Securities
Account of the Depositor as at such time, according to the records of CDP as supplied
by CDP to the Company, and where a Depositor has apportioned the balance standing to
his Securities Account between two proxies, to apportion the said number of shares
between the two proxies in the same proportion as previously 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
proportion of Depositor's shareholding specified in the instrument of proxy, or where the
balance standing to a Depositor's Securities Account has been apportioned between two
proxies the aggregate of the proportions of the Depositor's shareholding they are
specified to represent, and the true balance standing to the Securities Account of a
Depositor as at the time of the General Meeting, if the instrument is dealt with in such
manner as is provided above;
(b)
the payment by the Company to CDP of any dividend payable to a Depositor shall to the
extent of the payment discharge the Company from any further liability in respect of the
payment;
129
(c)
the delivery by the Company to CDP of provisional allotments or share certificates in

respect of the aggregate entitlements of Depositors to new shares offered by way of
rights issue or other preferential offering or bonus issue shall to the extent of the delivery
discharge the Company from any further liability to each such Depositor in respect of his
individual entitlement; and
(d)
the provisions in these presents relating to the transfers, transmissions or certication of

shares shall not apply to the transfer of book-entry securities (as dened in the Statutes).
Article 46
The holders of stock shall, according to the amount of stock held by them, have the same rights,
privileges and advantages as regards dividend, return of capital, voting and other matters, as if
they held the shares from which the stock arose; but no such privilege or advantage (except as
regards participation in the prots or assets of the Company) shall be conferred by an amount of
stock which would not, if existing in shares, have conferred such privilege or advantage, and no
such conversion shall affect or prejudice any preference or other special privileges attached to
the shares so converted.
Article 59
At any General Meeting a resolution put to the vote of the meeting shall be decided on a show of
hands unless a poll is (before or on the declaration of the result of the show of hands) demanded
by:
(a)
the chairman of the meeting; or
(b)
not less than two members present in person or by proxy and entitled to vote; or
(c)
any member present in person or by proxy, or where such a member has appointed two
proxies any one of such proxies, or any number or combination of such members or
proxies, holding or representing as the case may be not less than one-tenth of the total
voting rights of all the members having the right to vote at the meeting; or
(d)
any member present in person or by proxy, or where such a member has appointed two
proxies any one of such proxies, or any number or combination of such members or
proxies, holding or representing as the case may be shares in the Company conferring a
right to vote at the meeting being shares on which an aggregate sum has been paid up
equal to not less than one-tenth of the total sum paid on all the shares conferring that right,
Provided Always that no poll shall be demanded on the choice of the chairman of the meeting or
on a question of adjournment. A demand for a poll may be withdrawn only with the approval of
the meeting.
Article 60
Unless a poll is required, a declaration by the chairman of the meeting that a resolution has been
carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect in
the minute book, shall be conclusive evidence of that fact without proof of the number or
proportion of the votes recorded for or against such resolution. If a poll is required, it shall be
taken in such manner (including the use of ballot or voting papers or tickets) as the chairman of
the meeting may direct, and the result of the poll shall be deemed to be the resolution of the
meeting at which the poll was demanded. The chairman of the meeting may (and if so directed
by the meeting shall) appoint scrutineers and may adjourn the meeting to some place and time
xed by him for the purpose of declaring the result of the poll.
Article 61
In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the
meeting at which the show of hands takes place or at which the poll is demanded shall be
entitled to a casting vote.
130
Article 62
A poll demanded on any question shall be taken either immediately or at such subsequent time
(not being more than thirty days from the date of the meeting) and place as the chairman of the
meeting may direct. No notice need be given of a poll not taken immediately. The demand for a
poll shall not prevent the continuance of the meeting for the transaction of any business other
than the question on which the poll has been demanded.
Article 63
Subject to any special rights or restrictions as to voting attached by or in accordance with these
presents to any class of shares, on a show of hands every member who is present in person or
by proxy shall have one vote, the chairman of the meeting to determine which proxy shall be
entitled to vote where a member is represented by two proxies, and on a poll every member
who is present in person or by proxy shall have one vote for every share of which he is the
holder. A member who is bankrupt shall not, while his bankruptcy continues, be entitled to
exercise his rights as a member, or attend, vote or act at any meeting of the Company.
Article 64
In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in
person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders
and for this purpose seniority shall be determined by the order in which the names stand in the
Register of Members or, as the case may be, the order in which the names appear in the
Depository Register in respect of the joint holding.
Article 65
Where in Singapore or elsewhere a receiver or other person (by whatever name called) has been
appointed by any court claiming jurisdiction in that behalf to exercise powers with respect to the
property or affairs of any member on the ground (however formulated) of mental disorder, the
Directors may in their absolute discretion, upon or subject to production of such evidence of
the appointment as the Directors may require, permit such receiver or other person on behalf of
such member, to vote in person or by proxy at any General Meeting, or to exercise any other
right conferred by membership in relation to meetings of the Company.
Article 66
No member shall be entitled in respect of shares held by him to vote at a General Meeting either
personally or by proxy or to exercise any other right conferred by membership in relation to
meetings of the Company if any call or other sum payable by him to the Company in respect of
such shares remains unpaid.
Article 67
No objection shall be raised as to the admissibility of any vote except at the meeting or
adjourned meeting at which the vote objected to is or may be given or tendered and every vote
not disallowed at such meeting shall be valid for all purposes. Any such objection shall be
referred to the chairman of the meeting whose decision shall be nal and conclusive.
Article 68
On a poll, votes may be given either personally or by proxy 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.
131
Article 69
(A)
A member shall not be entitled to appoint more than two proxies to attend and vote at the
same General Meeting, Provided that if a member shall nominate two proxies then the
member shall specify the proportion of his shares to be represented by each such proxy,
failing which the nomination shall be deemed to be alternative.
(B)
A proxy need not be a member of the Company.
Article 70
(A)
(B)
An instrument appointing a proxy for any member shall be in writing in any usual or
common form or in any other form which the Directors may approve and:
(a)
in the case of an individual member, shall be signed by the member or his attorney
duly authorised in writing; and
(b)
in the case of a member which is a corporation shall be either given under its
common seal or signed on its behalf by an attorney duly authorised in writing or a
duly authorized ofcer of the corporation.
The signatures on an instrument of proxy need not be witnessed. Where an instrument

appointing a proxy is signed on behalf of a member by an attorney, the letter or power of
attorney or a duly certied copy thereof shall (failing previous registration with the
Company) be lodged with the instrument of proxy pursuant to the next following Article,
failing which the instrument of proxy may be treated as invalid.
Article 71
An instrument appointing a proxy must be left at such place or one of such places (if any) as may
be specied for that purpose in or by way of note to or in any document accompanying the
notice convening the meeting (or, if no place is so specied, at the Ofce) not less than fortyeight hours before the time appointed for the holding of the meeting or adjourned meeting or
(in the case of a poll taken otherwise than at or on the same day as the meeting or adjourned
meeting) for the taking of the poll at which it is to be used, and in default shall not be treated as
valid. The instrument 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 require again to be delivered for
the purposes of any subsequent meeting to which it relates.
Article 72
An instrument appointing a proxy shall be deemed to include the right to demand or join in
demanding a poll and to speak at the meeting.
Article 73
A vote cast by proxy shall not be invalidated by the previous death or insanity of the principal or
by the revocation of the appointment of the proxy or of the authority under which the
appointment was made provided that no intimation in writing of such death, insanity or
revocation shall have been received by the Company at the Ofce at least one hour before the
commencement of the meeting or adjourned meeting or (in the case of a poll taken otherwise
than at or on the same day as the meeting or adjourned meeting) the time appointed for the
taking of the poll at which the vote is cast.
132
Article 74
Any corporation which is a member of the Company may by resolution of its directors or other
governing body authorize such person as it thinks t to act as its representative at any meeting
of the Company or of any class of members of the Company. The person so authorized shall be
entitled to exercise the same powers on behalf of such corporation as the corporation could
exercise if it were an individual member of the Company and such corporation shall for the
purposes of these presents be deemed to be present in person at any such meeting if a person
so authorized is present thereat.
Article 89
At each Annual General Meeting, one-third of the Directors for the time being (or, if their number
is not a multiple of three, the number nearest to but not less than one-third) shall retire from
ofce by rotation, Provided that no Director holding ofce as Managing Director shall be
subject to retirement by rotation or be taken into account in determining the number of
Directors to retire. For the avoidance of doubt, each Director (other than a Director holding
ofce as Managing Director) shall retire at least once every three years.
Article 90
The Directors to retire by rotation shall include (so far as necessary to obtain the number
required) any Director who is due to retire at the meeting by reason of age or who wishes to
retire and not to offer himself for re-election. Any further Directors so to retire shall be those of
the other Directors subject to retirement by rotation who have been longest in ofce since their
last re-election or appointment and so that as between persons who became or were last reelected Directors on the same day, those to retire shall (unless they otherwise agree among
themselves) be determined by ballot. A retiring Director shall be eligible for re-election.
Article 122
The Directors may from time to time set aside out of the prots of the Company and carry to
reserve such sums as they think proper which, at the discretion of the Directors, shall be
applicable for any purpose to which the prots of the Company may properly be applied and
pending such application may either be employed in the business of the Company or be
invested. The Directors may divide the reserve into such special funds as they think t and may
consolidate into one fund any special funds or any parts of any special funds into which the
reserve may have been divided. The Directors may also, without placing the same to reserve,
carry forward any prots. In carrying sums to reserve and in applying the same, the Directors
shall comply with the provisions of the Statutes.
Article 124
If and so far as in the opinion of the Directors, the prots of the Company justify such payments,
the Directors may declare and pay the xed dividends on any class of shares carrying a xed
dividend expressed to be payable on xed dates on the half-yearly or other dates prescribed
for the payment thereof and may also from time to time declare and pay interim dividends on
shares of any class of such amounts and on such dates and in respect of such periods as they
think t.
Article 125
Unless and to the extent that the rights attached to any shares or the terms of issue thereof
otherwise provide, all dividends shall (as regards any shares not fully paid throughout the
period in respect of which the dividend is paid) be apportioned and paid pro rata according to
the amounts paid on the shares during any portion or portions of the period in respect of which
the dividend is paid. For the purposes of this Article, no amount paid on a share in advance of
calls shall be treated as paid on the share.
133
Article 126
No dividend shall be paid otherwise than out of prots available for distribution under the
provisions of the Statutes or, pursuant to Section 69 of the Act and in the form of stock
dividends, out of the share premium account. Any dividend unclaimed after six (6) years from
the date of declaration shall be made forfeit and revert to the Company.
Article 129
The waiver in whole
under seal) shall be
entitled to the share
the Company and if
Company.
or in part of any dividend on any share by any document (whether or not

effective only if such document is signed by the member (or the person
in consequence of the death or bankruptcy of the holder) and delivered to
or to the extent that the same is accepted as such or acted upon by the
Article 130
The Company may upon the recommendation of the Directors by Ordinary Resolution direct
payment of a dividend in whole or in part by the distribution of specic assets (and in particular
of paid-up shares or debentures of any other company) and the Directors shall give effect to
such resolution. Where any difculty arises with regard to such distribution, the Directors may
settle the same as they think expedient and in particular, may issue fractional certicates, may
x the value for distribution of such specic assets or any part thereof, may determine that cash
payments shall be made to any member upon the footing of the value so xed in order to adjust
the rights of all parties and may vest any such specic assets in trustees as may seem expedient
to the Directors.
Article 132
If two or more persons are registered in the Register of Members or (as the case may be) the
Depository Register as joint holders of any share, or are entitled jointly to a share in
consequence of the death or bankruptcy of the holder, any one of them may give effectual
receipts for any dividend or other moneys payable or property distributable on or in respect of
the share.
Article 133
Any resolution declaring a dividend on shares of any class, whether a resolution of the Company
in General Meeting or a resolution of the Directors, may specify that the same shall be payable to
the persons registered as the holders of such shares in the Register of Members or (as the case
may be) the Depository Register at the close of business on a particular date and thereupon the
dividend shall be payable to them in accordance with their respective holdings so registered, but
without prejudice to the rights inter se in respect of such dividend of transferors and transferees
of any such shares.
Article 134
The Directors may, with the sanction of an Ordinary Resolution of the Company, capitalize any
sum standing to the credit of any of the Company's reserve accounts as representing prots
available for distribution under the provisions of the Statutes or, pursuant to Sections 69 or 70
of the Act, the Company's share premium account or capital redemption reserve, by
appropriating such sum to the persons registered as the holders of shares in the Register of
Members or (as the case may be) the Depository Register at the close of business on the date
of the resolution (or such other date as may be specied therein or determined as therein
provided) in proportion to their then holdings of shares and applying such sum on their behalf
in paying up in full unissued shares or (subject to any special rights previously conferred on
any shares or class of shares for the time being issued) unissued shares of any other class not
being redeemable shares, for allotment and distribution credited as fully paid up to and amongst
them as bonus shares in the proportion aforesaid. The Directors may do all acts and things
considered necessary or expedient to give effect to any such capitalization, with full power to
134
the Directors to make such provisions as they think t for any fractional entitlements which
would arise on the basis aforesaid (including provisions whereby fractional entitlements are
disregarded or the benet thereof accrues to the Company rather than to the members
concerned). The Directors may authorize any person to enter on behalf of all the members
interested into an agreement with the Company providing for any such capitalization and
matters incidental thereto and any agreement made under such authority shall be effective and
binding on all concerned.
Article 146
If the Company shall be wound up (whether the liquidation is voluntary, under supervision, or by
the court) the Liquidator may, with the authority of a Special Resolution, divide among the
members in specie or in kind the whole or any part of the assets of the Company and whether
or not the assets shall consist of property of one kind or shall consist of properties of different
kinds, and may for such purpose set such value as he deems fair upon any one or more class or
classes of property and may determine how such division shall be carried out as between the
members of different classes of members. The Liquidator may, with the like authority, vest any
part of the assets in trustees upon such trusts for the benet of members as the Liquidator with
the like authority shall think t, and the liquidation of the Company may be closed and the
Company dissolved, but so that no contributory shall be compelled to accept any shares or
other property in respect of which there is a liability.
Provisions relating to variation of rights of Shareholders
The provisions in the Articles of Association relating to the actions necessary to change the
rights of holders of the stock, are as follows:
Article 9
(A)
Whenever the share capital of the Company is divided into different classes of shares, the
variation or abrogation of the special rights attached to any class may, subject to the
provisions of the Act, be made either with the consent in writing of the holders of threequarters in nominal value of the issued shares of the class or with the sanction of a
Special Resolution passed at a separate General Meeting of the holders of the shares of
the class (but not otherwise) and may be so made either whilst the Company is a going
concern or during or in contemplation of a winding-up. To every such separate General
Meeting all the provisions of these presents relating to General Meetings of the Company
and to the proceedings thereat shall mutatis mutandis apply, except that the necessary
quorum shall be two or more persons holding at least one-third in nominal value of the
issued shares of the class present in person or by proxy or attorney and that any holder
of shares of the class present in person or by proxy or attorney may demand a poll and
that every such holder shall on a poll have one vote for every share of the class held by
him where the class is a class of equity shares within the meaning of Section 64(1) of the
Act or at least one vote for every share of the class where the class is a class of preference
shares within the meaning of Section 180(2) of the Act, Provided Always that where the
necessary majority for such a Special Resolution is not obtained at such General Meeting,
the consent in writing, if obtained from the holders of three-quarters in nominal value of the
issued shares of the class concerned within two months of such General Meeting, shall be
as valid and effectual as a Special Resolution carried at such General Meeting.
(B)
The provisions in Article 9(A) shall mutatis mutandis apply to any repayment of preference
capital (other than redeemable preference capital) and any variation or abrogation of the
rights attached to preference shares or any class thereof.
(C)
The special rights attached to any class of shares having preferential rights shall not unless
otherwise expressly provided by the terms of issue thereof be deemed to be varied by the
creation or issue of further shares ranking as regards participation in the prots or assets of
the Company in some or all respects pari passu therewith but in no respect in priority
thereto.
135
Provisions relating to Annual General Meeting and Extraordinary General Meetings

The provisions in the Articles of Association relating to the manner in which annual general
meetings and extraordinary general meetings of shareholders are convoked, including the
conditions of admission, are as follows:
Article 42
A reference to a member shall be a reference to a registered holder of shares in the Company, or
where such registered holder is CDP, the Depositors on behalf of whom CDP holds the shares,
Provided that:
(A)
a Depositor shall only be entitled to attend any General Meeting and to speak and vote
thereat if his name appears on the Depository Register maintained by CDP forty-eight (48)
hours before the General Meeting as a Depositor on whose behalf CDP holds shares in the
Company, the Company being entitled to deem each such Depositor, or each proxy of a
Depositor who is to represent the entire balance standing to the Securities Account of the
Depositor, to represent such number of shares as is actually credited to the Securities
Account of the Depositor as at such time, according to the records of CDP as supplied
by CDP to the Company, and where a Depositor has apportioned the balance standing to
his Securities Account between two proxies, to apportion the said number of shares
between the two proxies in the same proportion as previously specied 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
proportion of Depositor's shareholding specied in the instrument of proxy, or where the
balance standing to a Depositor's Securities Account has been apportioned between two
proxies the aggregate of the proportions of the Depositor's shareholding they are
specied to represent, and the true balance standing to the Securities Account of a
Depositor as at the time of the General Meeting, if the instrument is dealt with in such
manner as is provided above;
(B)
the payment by the Company to CDP of any dividend payable to a Depositor shall to the
extent of the payment discharge the Company from any further liability in respect of the
payment;
(C)
the delivery by the Company to CDP of provisional allotments or share certicates in

respect of the aggregate entitlements of Depositors to new shares offered by way of
rights issue or other preferential offering or bonus issue shall to the extent of the delivery
discharge the Company from any further liability to each such Depositor in respect of his
individual entitlement; and
(D)
the provisions in these presents relating to the transfers, transmissions or certication of

shares shall not apply to the transfer of book-entry securities (as dened in the Statutes).
Article 47
An Annual General Meeting shall be held once in every year, at such time (within a period of not
more than fteen months after the holding of the last preceding Annual General Meeting) and
place as may be determined by the Directors. All other General Meetings shall be called
Extraordinary General Meetings.
Article 48
The Directors may whenever they think t, and shall on requisition in accordance with the
Statutes, proceed with proper expedition to convene an Extraordinary General Meeting.
136
Article 49
Any Extraordinary General Meeting at which it is proposed to pass a Special Resolution or (save
as provided by the Statutes) a resolution of which special notice has been given to the
Company, shall be called by twenty-one days' notice in writing at the least and an Annual
General Meeting or any other Extraordinary General Meeting, by fourteen days' notice in writing
at the least. The period of notice shall in each case be exclusive of the day on which it is served
or deemed to be served and of the day on which the meeting is to be held and shall be given in
manner hereinafter mentioned to all members other than such as are not under the provisions of
these presents entitled to receive such notices from the Company, Provided that a General
Meeting notwithstanding that it has been called by a shorter notice than that specified above
shall be deemed to have been duly called if it is so agreed:
(a)
in the case of an Annual General Meeting by all the members entitled to attend and vote
thereat; and
(b)
in the case of an Extraordinary General Meeting by a majority in number of the members

having a right to attend and vote thereat, being a majority together holding not less than
95 per cent. in nominal value of the shares giving that right;
Provided also that the accidental omission to give notice to or the non-receipt of notice by any
person entitled thereto shall not invalidate the proceedings at any General Meeting. At least
fourteen days' notice of any General Meeting shall be given by advertisement in the daily press
and in writing to any stock exchange upon which the shares in the Company may be listed,
Provided Always that in the case of any Extraordinary General Meeting at which it is proposed
to pass a Special Resolution, at least twenty-one days' notice in writing of such Extraordinary
General Meeting shall be given to any stock exchange upon which the shares in the Company
may be listed.
Article 50
(A)
Every notice calling a General Meeting shall specify the place and the day and hour of the
meeting, and there shall appear with reasonable prominence in every such notice a
statement that a member entitled to attend and vote is entitled to appoint a proxy to
attend and vote instead of him and that a proxy need not be a member of the Company.
(B)
In the case of an Annual General Meeting, the notice shall also specify the meeting as such.
(C)
In the case of any General Meeting at which business other than routine business (``special
business'') is to be transacted, the notice shall specify the general nature of such business,
and if any resolution is to be proposed as a Special Resolution, the notice shall contain a
statement to that effect.
Article 52
Any notice of a General Meeting to consider special business shall be accompanied by a
statement regarding the effect of any proposed resolution on the Company in respect of such
special business.
Provisions relating to rights of non-resident or foreign Shareholders
The provisions in the Articles of Association relating to the rights to own Shares, including the
rights of non-resident or foreign shareholders to hold or exercise voting rights on their Shares,
are as follows:
Article 5
(A)
Subject to any direction to the contrary that may be given by the Company in General
Meeting and as permitted by the rules of the Designated Stock Exchange, all new shares
shall before issue be offered to such persons who as at the date (as determined by the
Directors) of the offer are entitled to receive notices from the Company of General
137
Meetings in proportion, as nearly as the circumstances admit, to the amount of the existing
shares to which they are entitled. The offer shall be made by notice specifying the number
of shares offered, and limiting a time within which the offer, if not accepted, will be deemed
to be declined, and, after the expiration of that time, or on the receipt of an intimation from
the person to whom the offer is made that he declines to accept the shares offered, the
Directors may dispose of those shares in such manner as they think most benecial to
the Company. The Directors may likewise so dispose of any new shares which (by reason
of the ratio which the new shares bear to shares held by persons entitled to an offer of new
shares) cannot, in the opinion of the Directors, be conveniently offered under this
Article 5(A).
(B)
The Company may, notwithstanding Article 5(A) above, authorize the Directors not to offer
new shares to members to whom by reason of foreign securities laws, such offers may not
be made without registration of the shares or a prospectus or other document, but to sell
the entitlements to the new shares on behalf of such members on such terms and
conditions as the Company may direct.
Article 35
(A)
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 any stock exchange on which the shares
in the Company may be listed) but the Directors may in their discretion decline to register
any transfer of shares upon which the Company has a lien, and in the case of shares not
fully paid up, may refuse to register a transfer to a transferee of whom they do not approve,
Provided Always that in the event of the Directors refusing to register a transfer of shares,
the Company shall within ten market days after the date on which the application for a
transfer of shares was made, serve a notice in writing to the applicant stating the facts
which are considered to justify the refusal as required by the Statutes.
(B)
The Directors may decline to register any instrument of transfer unless:

(a)
such fee not exceeding S$2.00 as the Directors may from time to time require is paid
to the Company in respect thereof;
(b)
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 may 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
(c)
the instrument of transfer is in respect of only one class of shares.
Article 43
Except as required by the Statutes or law, no person shall be recognized by the Company as
holding any share upon any trust, and the Company shall not be bound by or compelled in any
way to recognize (even when having notice thereof) any equitable, contingent, future or partial
interest in any share, or any interest in any fractional part of a share, or (except only as by
these presents or by the Statutes or law otherwise provided) any other right in respect of any
share, except an absolute right to the entirety thereof in the registered holder and nothing in
these presents contained relating to CDP or to Depositors or in any depository agreement
made by the Company with any common depository for shares shall in any circumstances be
deemed to limit, restrict or qualify the above.
138
Provisions relating to delay, deferment or prevention of a change in control our Company

The provision of our Articles of Association that would have an effect of delaying, deferring or
preventing a change in control of the company and that would operate only with respect to a
merger, acquisition or corporate restructuring involving our Company is as follows:
Article 4(A)
Subject to these presents, no shares may be issued by the Directors without the prior approval
of the Company in General Meeting pursuant to Section 161 of the Act, but subject thereto and
the terms of such approval, and to Article 5, and to any special rights attached to any shares for
the time being issued, the Directors may allot (with or without conferring a right of renunciation)
or grant options over or otherwise dispose of the same to such persons on such terms and
conditions and for such consideration and at such time and whether or not subject to the
payment of any part of the amount thereof in cash or otherwise as the Directors may think fit,
and any shares may, subject to compliance with Sections 70 and 75 of the Act, be issued with
such preferential, deferred, qualified or special rights, privileges, conditions or restrictions,
whether as regards dividend, return of capital, participation in surplus, voting, conversion or
otherwise, as the Directors may think fit, and preference shares may be issued which are or at
the option of the Company are liable to be redeemed, the terms and manner of redemption being
determined by the Directors in accordance with the Act, Provided Always that:
(a)
no shares shall be issued to transfer a controlling interest in the Company without the
specific prior approval of the Company in General Meeting; and
(b)
no shares shall be issued at a discount or options granted over unissued shares except in
accordance with the Act.
BANK BORROWINGS AND WORKING CAPITAL

22.
Save as disclosed on page 40 of this Prospectus and in the Accountants' Report, our Company
and its subsidiaries had as at 30 September 2001, 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.
23.
In the opinion of our 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 expenses (including placement and underwriting commission and brokerage) 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.
24.
Our Directors are of the opinion that, after taking into account the present banking facilities, and
the net proceeds from the Invitation, our Group has adequate working capital for its present
requirements.
139
MATERIAL CONTRACTS
25.
The following contracts, not being contracts entered into in the ordinary course of business of
our Company and our subsidiaries (as the case may be), have been entered into by our
Company and our subsidiaries (as the case may be) within the 2 years preceding the date of
this Prospectus and are or may be material:
(a)
Tenancy Agreement dated 1 October 2000 between Print N Etch as landlord and PNE
Micron Engineering (M'sia) as tenant for the lease of the premises at 14 Senoko Loop,
Singapore 758150 at a monthly rent of S$9,000 for a period of 2 years commencing
1 October 2000;
(b)
Tenancy Agreement dated 1 October 2000 between PNE Electronics as landlord and PNE
Micron Engineering (M'sia) as tenant for the lease of the premises at No. 3 Jalan Tiga,
Kawasan Perindustrian Dewani, 81100 Johor Bahru, Malaysia, at a monthly rent of
RM10,000 for a period of 2 years commencing 1 October 2000;
(c)
Tenancy Agreement dated 1 October 2000 between PNE Micron Engineering (M'sia) as
landlord and PNE Plas as tenant for the lease of the premises at No. 8 Jalan Johar 9,
Taman Perindustrian Cemerlang, 81800 Ulu Tiram, Johor, Malaysia, at a monthly rent of
RM750 for a period of 2 years commencing 1 October 2000. The Agreement was
terminated by the parties on 30 September 2001;
(d)
Tenancy Agreement dated 1 November 2000 between Mr Tan Kong Heng as landlord and
PNE Micron Engineering (M'sia) as tenant for the lease of the premises at No. 8 Jalan Johar
9, Taman Desa Cemerlang, 81800 Johor Bahru, Malaysia, at a monthly rent of RM1,500 for
a period of 2 years commencing 1 November 2000;
(e)
Tenancy Agreement dated 11 January 2001 between Eastern Parade Developments Sdn
Bhd as landlord and PNE-Gin Lin as tenant for the lease of Plot 9 & 10, Jalan PKNK 1/10,
Eastern Parade Industrial Park, Taman Ria Jaya, 08000 Sungei Petani at a monthly rent of
RM5,000 for a period of 24 months commencing 1 January 2001, with an option to renew
for a further period of 24 months by the tenant;
(f)
Tenancy Agreement dated 1 February 2001 between PNE Precision as landlord and PNE
Micron Engineering (M'sia) as tenant for the lease of the factory at No. 23 Jalan Gemilang
3 Taman Perindustrian Cemerlang, 81800 Johor Bahru, Malaysia, at a monthly rent of
RM7,500 for a period of 2 years commencing 1 February 2001;
(g)
Sale and Purchase Agreement dated 1 February 2001 between PNE Micron Engineering
(M'sia) as vendor and PNE Precision as purchaser for the sale and purchase of plot of
land known as Lot No. PTD 115399 HS (D) No. 237443 Mukim Plentong, Daerah Johor
Bahru, located at No. 27 Jalan Gemilang 3, Taman Perindustrian Cemerlang, 80800 Ulu
Tiram, Johor Darul Takzim, Malaysia, for a consideration of RM1,300,000;
(h)
Tenancy Agreement dated 1 March 2001 between PNE Precision as landlord and CED
System as tenant for the lease of a factory at PTD 115396 Taman Perindustrian
Cemerlang 81800 Ulu Tiram Johor, Malaysia, at a monthly rent of RM7,500 for a period of
1 year commencing 1 March 2001, with an option to renew for a further period of 1 year;
(i)
Tenancy Agreement dated 1 March 2001 between Ms Lay Ee Fah as landlord and PNE
Micron Engineering (M'sia) as tenant for the lease of the premises at No.53 Jalan Badik
13, Taman Puteri Wangsa, 81800 Ulu Tiram, Johor, Malaysia, at a monthly rent of RM700
for a period of 1 year commencing 1 March 2001;
(j)
Tenancy Agreement dated 18 March 2001 between Mr Lau Bak Teck as landlord and
PNE-Gin Lin as tenant for the lease of the premises at No. 1497 Lorong Inai 4, Taman Ria
Jaya, Sungei Petani, 08000 Kedah, Malaysia, at a monthly rent of RM300 for a period of
1 year commencing 20 March 2001;
(k)
Tenancy Agreement dated 29 March 2001 between Goh Wai Gor as landlord and CED
System as tenant for the lease of a factory at No. 9 Jalan Saga 6, Taman Desa
Cemerlang, 81800 Ulu Tiram Johor, Malaysia, at a monthly rent of RM750 for a period of
1 year commencing 1 March 2001, with an option to renew for a further period of 1 year;
140
(l)
Tenancy Agreement dated 15 July 2001 between Ms Li Hong Siew as landlord and PNE
Micron Engineering (M'sia) as tenant for the lease of the premises at No.27 Jalan Lanjut
13, Taman Desa Cemerlang, 81800 Ulu Tiram, Johor, Malaysia, at a monthly rent of
RM650 for a period of 1 year commencing 15 July 2001;
(m)
Tenancy Agreement dated 1 August 2001 between Mr Mohd. Zin Bin Pin as landlord and
PNE Precision as tenant for the lease of the premises at No.9 Jalan Kekabu 7, Taman Desa
Cemerlang, 81800 Ulu Tiram, Johor, Malaysia, at a monthly rent of RM600 for a period of
2 years commencing 1 September 2000;
(n)
Tenancy Agreement dated 17 September 2001 between Mr Bee Joo Sheang as landlord
and PNE Precision as tenant for the lease of the premises at No.31 Jalan Kembia 12,
Taman Puteri Wangsa, 81800 Ulu Tiram, Johor, Malaysia, at a monthly rent of RM7000 for
a period of 1 year commencing 1 August 2001;
(o)
An agreement dated 1 October 2001 between CED System and Mr Lin Cheng Ming for the
acquisition with effect from 1 October 2001 by CED System in cash at par value, 225,000
ordinary shares of RM1.00 each (representing 30% of the total issued share capital) in the
capital of PNE-Gin Lin;
(p)
Tenancy Agreement dated 4 December 2001 between Messrs Ooi Chong Ghee and Chee
Saw Im as landlords and Hong Nam as tenant for the lease of the premises at E-293
Lorong 25, Taman Sejati Indah, 08000 Sungei Petani Kedah, Malaysia, at a monthly rent
of RM500 for a period of 2 years commencing 1 August 2001;
(q)
A tenancy agreement dated 21 February 2002 between Mr Lim Ah Chooi as landlord and
PNE-Gin Lin as tenant for the lease of the premises at 1551, Lorong Inai 4, Taman Ria
Jaya, 08000 Sungei Petani, Kedah, at a monthly rent of RM300 for a period of 1 year
commencing 1 March 2002;
(r)
A tenancy agreement dated 1 March 2002 between Mr Ng Fhatt Oon as landlord and CED
system as tenant for the lease of the premises at No. 42 Jalan Saga 5, Taman Desa
Cemerlang, 81800 Ulu Tiram, Johor, Malaysia, at the monthly rent of RM650 for a period
of 1 year commencing 1 March 2002;
(s)
A tenancy agreement dated 1 March 2002 between Ms Lee Ee Fah as landlord and PNE
Micron Engineering (M'sia) as tenant for the lease of No. 49, Jalan Keris 7, Taman Putri
Wangsa, 81800 Ulu Tiram, Johor, at a monthly result of RM700 for a period of 1 year
commencing 1 March 2002;
(t)
An agreement dated 11 March 2002 between PNE Micron and the Tan Brothers for the
acquisition by PNE Micron of the entire issued and paid-up share capital of PNE Micron
Engineering (S'pore), comprising 2,000,000 ordinary shares of S$1.00 each with effect
from 1 October 2001, purchase consideration of which was satisfied by the issue of
2,001,806 ordinary shares of S$1.00 each as fully paid at par in the capital of PNE Micron;
(u)
An agreement dated 11 March 2002 between PNE Micron, Print N Etch and the Tan
Brothers for the acquisition by PNE Micron of the entire issued and paid-up share capital
of PNE Micron Engineering (M'sia), comprising 5,000,000 ordinary shares of RM1.00 each
with effect from 1 October 2001 at a consideration of RM5,000,000 which was satisfied by
the issue of 3,631,614 ordinary shares of S$1.00 each as fully paid at par in the capital of
PNE Micron;
(v)
An agreement dated 11 March 2002 between PNE Micron and the Tan Brothers for the
acquisition by PNE Micron with effect from 1 October 2001 of the entire issued and paidup share capital of PNE Precision comprising 5,000,000 ordinary shares of RM1.00 each at
a consideration of S$3,081,564, which was satisfied by the issue of 3,081,564 ordinary
shares of S$1.00 each as fully paid at par in the capital of PNE Micron;
(w)
An agreement dated 11 March 2002 between PNE Micron, Print N Etech and Messrs Tan
Kong Heng and Tan Kong Sin for the acquisition by PNE Micron with effect from 1 October
2001, 1,862,800 ordinary shares of RM1.00 each in the capital of Hong Nam, at a
consideration of S$2,296,772 which was satisfied by the issue of 2,296,772 ordinary
shares of S$1.00 each in the capital of PNE Mircon;
141
(x)
An agreement dated 11 March 2002 between Print N Etch and PNE Micron for the
acquisition by PNE Mircon with effect from 1 October 2001, 1,125,000 ordinary shares of
RM1.00 each in the capital of CED System at a purchase consideration of S$620,620. The
purchase consideration was satisfied by the issue of 620,000 ordinary shares of S$1.00
each in the capital of PNE Micron;
(y)
An agreement dated 11 March 2002 between Hong Nam and PNE Micron for the
acquisition by PNE Micron with effect from 1 October 2001, 375,000 ordinary shares of
RM1.00 each in the capital of CED System at a consideration of S$206,873;
(z)
An agreement dated 11 March 2002 between PNE Micron and CED System for the
acquisition by PNE Micron with effect from 1 October 2001, the entire issued and paid-up
share capital of PNE-Gin Lin comprising 750,000 ordinary shares of RM1.00 each at a cash
consideration of S$195,354;
(aa) An agreement dated 11 March 2002 between PNE Micron, Hong Nam and Chitacon
Electronics (Kedah) Sdn Bhd for the acquisition by PNE Micron with effect from 1 October
2001 of 110 ordinary shares of RM1.00 each (representing 55% of the total issued share
capital) in the capital of Macore for a nominal cash consideration of S$1.00;
(bb) A sale and purchase agreement dated 26 March 2002 between Maha Tenaga Sdn Bhd as
vendor and CED System as purchaser for the acquisition of No. 19 Jayasetia 26/3 Section
26, Shah Alam, for a cash consideration of RM4.3 million.
(cc) Depository agreement dated 26 March 2002 between our Company and CDP pursuant to
which CDP agreed to act as central depository for our securities for trades in the securities
of our Company through the SGX-Sesdaq;
(dd) Management and Underwriting Agreement dated 26 March 2002 between our Company,
SBI E2-Capital as the Manager and the Underwriter referred to in paragraph 27 below;
(ee) Placement Agreement dated 26 March 2002 between our Company, the Joint Lead
Placement Agents and the Co-Placement Agents referred to in paragraph 27 below.
LITIGATION
26.
Save as disclosed below, neither our Company nor any of our subsidiaries is engaged in any
litigation or arbitration either as plaintiff or defendant in respect of any claims or amounts which
may have or have had during the previous 12 months a signicant effect on our Group's nancial
position. The Directors have no knowledge or are not aware of any proceeding, litigation or claim
of material importance which are pending or threatened against our Company or any of our
subsidiaries or of any facts likely to give rise to any such litigation, arbitration or claim. Our
Directors are also not aware of any legal or arbitration proceedings involving third parties which
may have or have had in the past 12 months any material adverse effects on the nancial
position or protability of our Group.
A claim was made in October 1997 by a former employee against PNE Micron Engineering
(M'sia) for unfair dismissal. PNE Micron Engineering (M'sia) led its defence in December 1997
and the matter was heard before the Malaysian Industrial Court in January 2001. The court's
decision is currently pending. If held to be guilty, PNE Micron Engineering (M'sia) may be liable
to reinstate him to his former position or ne of up to 2 years of his last drawn salary which
amounts to RM90,000. We have not made any provision in the accounts for this amount.
MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS

27.
(a)
Pursuant to the management and underwriting agreement (``Management and Underwriting

Agreement'') dated 26 March 2002, our Company appointed SBI E2-Capital to manage the
Invitation and the Underwriters to underwrite the Offer Shares. SBI E2-Capital will receive a
management fee from our Company for its services rendered in connection with the
Invitation as Manager.
142
(b)
Pursuant to the Management and Underwriting Agreement, each of the Underwriters

agreed to underwrite the Offer Shares for a commission of 1.5% of the Issue Price for
each Offer Share.
(c)
Pursuant to the Placement Agreement dated 26 March 2002, each of the Joint Lead
Placement Agents and the Co-Placement Agents agreed to subscribe or procure
subscriptions for the Placement Shares for a placement commission of 2.5% of the Issue
Price for each Placement Share.
(d)
Brokerage will be paid by our Company to members of the Stock Exchange, merchant
banks and members of the Association of Banks in Singapore in respect of accepted
applications made on Application Forms bearing their respective stamps, or to
Participating Banks in respect of successful applications made through Electronic
Applications at the ATMs of the relevant Participating Banks, at the rate of 1.0% of the
Offer Price for each Offer Share and at a rate of 1.0% of the Placement Price of each
Placement Share.
(e)
Save as aforesaid, no commission, discount or brokerage, has been paid or other special
terms granted within the 2 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 Underwriters 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)
In the event the Management and Underwriting Agreement is terminated, our Company
reserves the right, at the absolute discretion of our Directors, to cancel the Invitation.
(h)
The Placement Agreement is conditional upon the Management and Underwriting

Agreement not having been terminated or rescinded pursuant to the provisions of the
Management and Underwriting Agreement.
MISCELLANEOUS
28.
The nature of the business of our Company and our subsidiaries is stated on pages 51 and 52 of
this Prospectus. At the date of this Prospectus, the corporations which, by virtue of Section 6 of
the Act, are deemed to be related to our Company are set out in the section ``Group Structure
Our Subsidiaries'' on page 49 of this Prospectus.
29.
The time of opening of the Application List is set out on page 12 of this Prospectus.
30.
The amount payable on application is $0.22 for each Offer Share and $0.22 for each Placement
Share. Save as disclosed in this Prospectus, there has been no previous issue of Shares by our
Company or offer for sale of our Shares to the public within the 2 years preceding the date of
this Prospectus.
31.
Application monies received by our Company in respect of successful applications (including

successful balloted applications which are subsequently rejected) will be placed in a separate
non-interest bearing account with United Overseas Bank Limited (the ``Receiving Bank''). In the
ordinary course of business, the Receiving Bank will deploy these monies in the interbank money
market.
143
32.
No property has been purchased or acquired or proposed to be purchased or acquired by our

Company or our 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 our
subsidiaries, the contract not being made in contemplation of the Invitation nor the Invitation in
consequence of the contract.
33.
The preliminary expenses paid by our Company amounted to approximately S$5,000. The
estimated amount of the expenses in connection with the Invitation, including underwriting and
placement commission, brokerage, management fee (including professional fee) and all other
incidental expenses in relation to this Invitation is approximately $1,500,000. The breakdown of
these estimated expenses is as follows:
S$'000
Listing fees
Professional fees
854
Underwriting commission, placement commission and brokerage
341
Miscellaneous expenses
300
Total estimated expenses of the Invitation
1,500
34.
Save as disclosed on pages 67 to 76 under `Ìnterested Person Transactions'' and in paragraph

27 hereof, no amount of cash or securities or benet has been paid or given to any promoter
within the 2 years preceding the date of this Prospectus or is proposed or intended to be paid
or given to any promoter at any time in respect of this Invitation.
35.
Save as disclosed in this Prospectus, our 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
prots of our Company and our subsidiaries.
36.
Save as disclosed in this Prospectus, the financial condition and operations of our Group are not
likely to be affected by any of the following:
(a)
known trends or known demands, commitments, events or uncertainties that will result in
or are reasonably likely to result in our Group's liquidity increasing or decreasing in any
material way;
(b)
material commitments for capital expenditures;
(c)
unusual or infrequent events or transactions or any significant economic changes that will
materially affected the amount of reported income from operations; and
(d)
known trends or uncertainties that have had or that our Group reasonably expects to have
a material favourable or unfavourable impact on revenues or operating income.
37.
This Prospectus is dated 27 March 2002. No Shares will be allotted or allocated on the basis of
this Prospectus later than 6 months after the date of issue of this Prospectus.
38.
Our Directors currently have no intention of changing the auditors of the various companies in
our Group after the listing of our Company on the SGX-Sesdaq.
144
CONSENTS
39.
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 the Accountants' Report
and references to their name in the form and context in which it appears in this Prospectus and
references thereto in the form and context in which they appear in this Prospectus and to act in
such capacity in relation to this Prospectus.
40.
The Manager, Underwriters and Placement Agents, the Solicitors to the Invitation, the Principal
Bankers and the Share Registrar have each given and have not withdrawn their respective
written consents 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 references thereto in the form
and context in which they appear in this Prospectus and to act in those capacities in relation to
this Prospectus.
DOCUMENTS AVAILABLE FOR INSPECTION

41.
Copies of the following documents may be inspected at the registered office of our Company at
14 Senoko Loop, Singapore 758150, during normal business hours for a period of 6 months from
the date of this Prospectus:
(a)
the Memorandum and Articles of Association of our Company;
(b)
the Directors' Report as set out on page 98 of this Prospectus;
(c)
the Accountants' Report as set out on pages 99 to 119 of this Prospectus;
(d)
the material contracts referred to on pages 140 to 142 of this Prospectus;
(e)
the letters of consent referred to on page 145 of this Prospectus; and
(f)
the audited accounts of our subsidiaries for the last 3 nancial years ended 30 September
1999, 30 September 2000 and 30 September 2001.
STATEMENT BY DIRECTORS OF OUR COMPANY

42.
This Prospectus has been seen and approved by our Directors and they collectively and
individually accept full responsibility for the accuracy of the information given in this Prospectus
and conrm, having made all reasonable enquiries, that to the best of their knowledge and belief,
the facts stated and the opinions expressed in this Prospectus are fair and accurate in all
material respects as at the date thereof and that 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 our subsidiaries.
STATEMENT BY SBI E2-CAPITAL

43.
SBI E2-Capital acknowledges that, having made due and careful enquiries, to the best of its
knowledge and belief, based on information furnished to it by our Group, this Prospectus
constitutes a full and true disclosure of all the material facts about the Invitation and our
Company and our subsidiaries and it is not aware of any other facts the omission of which
would make any statements herein misleading.
145
APPENDIX A
RULES OF THE PNE MICRON EMPLOYEES' SHARE OPTION SCHEME

1.
Name of Scheme
This Scheme shall be called the ``PNE Micron Employees' Share Option Scheme''.
2.
Denitions
In this Scheme, unless the context otherwise requires, the following words and expressions shall
have the following meanings:
`Àct''
The Companies Act (Chapter 50) of Singapore, as

amended or modied from time to time
`Àggregate Subscription Cost''
The total amount payable for Scheme Shares which may

be acquired on the exercise of an Option
`Àssociate''
shall bear the meaning assigned to it by the Listing

Manual of the Singapore Exchange Securities Trading
Limited
`Àuditors''
The auditors of the Company for the time being
``Board of Directors''
The board of Directors of the Company
``Committee''
The committee comprising the Committee of Directors

of the Company appointed by the Board of Directors to
administer the Scheme
``Controlling Shareholder''
A shareholder who has the capacity to dominate

decision making, directly or indirectly, in relation to the
nancial and operating policies of the Company and
unless rebutted, a person having shareholding of fteen
per cent (15%) or more of the Company's issued capital
shall be presumed to be a Controlling Shareholder
``Date of Grant''
The date on which an Option is granted to an Employee

pursuant to Rule 5
``Director''
A Director of the Company for the time being
`Èmployee''
An employee (including an employee holding a nonmanagerial position) of the PNE Micron Group including
any Associate, Executive Director and Non-Executive
Director selected by the Committee to participate in the
Scheme in accordance with Rule 5(a) of the Scheme
`Èxecutive Director''
A Director who performs an executive function
``Market Day''
A day on which the Stock Exchange is open for trading

in securities
146
``Market Price''
The average of the last dealt prices per Share

determined by reference to the daily ofcial list
published by the Stock Exchange for a period of ve (5)
consecutive market days immediately prior to the
relevant Date of Grant provided always that in the case
of a market day on which the Shares of the Company
are not traded on the Stock Exchange, the last dealt
price for Shares on such market day shall be deemed
to be the last dealt price of the Shares on the
immediately preceding market day on which the Shares
were traded
``Non-Executive Director''
A Director of the Company who does not perform an

executive function
`Òffer''
The Company's offer to a Selected Employee of an

Option to subscribe for Shares under the Scheme
`Òption''
The right to subscribe for Shares granted or to be

granted pursuant to the Scheme
`Òption Period''
Subject as provided in Rule 7, Rule 9.2 and Rule 12 and

any other additional conditions as may be introduced by
the Committee from time to time, a period commencing
the date as provided in Rule 7(a) and expiring at the end
of one hundred and twenty (120) months (or sixty (60)
months where the Participant is a Non-Executive
Director) after such Date of Grant
``Participant''
The holder of an Option
``Performance Criteria''
The performance criteria from time to time approved by

the Chairman of the Board of Directors for the
determination of the eligibility of Employees to
participate in the Scheme
``PNE Micron'' or the ``Company''
PNE Micron Holdings Ltd, a company incorporated in

the Republic of Singapore
``PNE Micron Group''
The Company and its Subsidiaries for the time being
``Rules''
Rules of the Scheme and any reference to a particular

Rule shall be construed accordingly
``Scheme''
The PNE Micron Employees' Share Option Scheme, as

the same may be amended from time to time pursuant
to the terms and conditions set out herein
``Scheme Shares''
Shares to be issued under the Scheme
``Selected Employee''
An Employee eligible under Rule 5 below and who has

been selected by the Committee for the purposes of
making an Offer
``Shares''
Fully-paid ordinary shares of par value $0.08 each (or

such other par value) in the capital of the Company
``Shareholders''
The registered holders of the Shares and in the case of

Depositors, Depositors who have Shares entered
against their names in the Depository Register
``Stock Exchange'' or ``SGX-ST''
The Singapore Exchange Securities Trading Limited
147
``Subscription Price''
The price at which a Participant shall subscribe for each

Share upon the exercise of an Option as determined in
accordance with Rule 9
``Subsidiaries''
The subsidiaries of a company (as dened in Section 5

of the Act) and ``Subsidiary'' shall be construed
accordingly
``$'' and ``cents''
Singapore dollars and cents respectively
The terms ``Depositor'', ``Depository'' and ``Depository Register'' shall have the meanings
ascribed to them respectively by Section 130A of the Act.
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing the masculine gender shall, where applicable, include the feminine and neuter genders.
Any reference in this Scheme to any enactment is a reference to that enactment as for the time
being amended or re-enacted. Any word dened under the Act or any statutory modication
thereof and used in this Scheme shall have the meaning assigned to it under the said Act.
Any reference to a time of a day in the Scheme is a reference to Singapore time.
3.
Duration of the Scheme

This Scheme shall continue to be in force at the discretion of the Committee, subject to a
maximum period of ten (10) years commencing on the date upon which the Scheme is adopted
by the Shareholders at a general meeting; Provided Always that the Scheme may continue
beyond the above stipulated period with the approval of the Shareholders by way of an
ordinary resolution passed at a general meeting and of any relevant authorities which may then
be required.
The Scheme may be terminated at any time by the Committee or by an ordinary resolution
passed by the Shareholders at a general meeting subject to all other relevant approvals which
may be required and if the Scheme is so terminated no further Options shall be offered by the
Company hereunder.
The termination or discontinuance or expiry of the Scheme, for any reason, shall not affect
Options which have been granted and accepted as provided in Rule 5(f), whether such Options
have been exercised (whether fully or partially) or not.
4.
Limitation on the Size of the Scheme

The total number of Scheme Shares in respect of which Options may be granted on any date,
when added to the number of Scheme Shares issued and issuable in respect of all Options
granted under this Scheme, shall not exceed fteen per cent (15%) of the issued share capital
of the Company on the day preceding that date.
5.
Grant of Options
(a)
The following persons shall be eligible to participate in the Scheme at the absolute
discretion of the Committee:
(i)
confirmed Employees (including confirmed part-time Employees) who have attained

the age of twenty-one (21) years and above on or before the Date of Grant and who
meet the Performance Criteria, if applicable;
148
(ii)
Associates of Controlling Shareholder(s) who qualify under (a)(i) above who are
selected to participate in the Scheme except that no Option shall be granted to such
person unless his or her participation in the Scheme and the actual number and the
terms of the Options (including the Subscription Price) to be granted to him or her
have been approved by the Shareholders in separate resolutions for each such
person. The resolution for the actual number and terms of options to be granted for
each of the Associates of Controlling Shareholder(s) should also be separate from the
resolution for their participation. The following information shall be disclosed in the
Circular seeking such approval:
(i)
clear justification or rationale for allowing the participation of such Associate;
(ii)
clear justification or rationale for the specific grants to be made to such

Associate; and
(iii)
the rationale and justification for any discount granted pursuant to Rule 9.2 of
the Scheme Shares under the grants made to such Associate.
Such Associate shall abstain from voting on the resolution in relation to his or her
participation in the Scheme and the grant of Options to him or her; and
(iii)
Any Director (including a Non-Executive Director) or any Employee who has been
selected by the Committee shall be eligible to participate in the Scheme Provided
That a Director or Employee who is a member of the Committee shall not be
involved in the Committee's deliberations in respect of Options to be granted to that
Director or Employee or his Associates.
Persons who are controlling Shareholders shall not be eligible to participate in the Scheme
(not withstanding that they meet the eligibility criteria in this Rule).
(b)
An Employee shall be entitled to participate in more than one share option scheme of the
Company or any of its Subsidiaries.
(c)
An Employee shall, at the discretion of the Committee, be entitled to participate in the

share option scheme of companies in which he is not principally employed.
(d)
Subject to such adjustment pursuant to Rule 10, the number of Scheme Shares to be
offered to an Employee in accordance with the Scheme shall be determined at the
absolute discretion of the Committee. In determining the extent of participation of an
eligible Employee, the Committee shall take into account criteria such as the seniority of
position, performance, length of service and potential for future development of the
Employee, subject always to the following limitations:
(i)
the total number of Scheme Shares to be offered to the Associates of Controlling

Shareholder(s) as a whole under the Scheme shall not exceed twenty-five per cent
(25%) of the total number of Scheme Shares;
(ii)
the total number of Scheme Shares to be offered to each Participant who is an

Associate of Controlling Shareholder(s) shall not exceed ten per cent (10%) of the
number of Scheme Shares; and
(iii)
the maximum number of Scheme Shares in respect of which Options may be granted
on any date, when added to the number of Scheme Shares issued and issuable in
respect of all Options granted under the Scheme, shall not exceed fteen per cent
(15%) of the issued share capital of the Company on the day preceding the Date of
Grant of the Options. The Committee shall exercise its discretion in deciding the
number of Scheme Shares to grant to each Employee which will depend on the
performance and value of the Employee to the PNE Micron Group and shall have the
exibility in deciding whether to issue Shares up to this prescribed limit.
149
(e)
Offers may be made at such time as the Committee may determine.

The Letter of Offer to grant the Option shall be in or substantially in the form set out in
Appendix A-I (subject to such modications as may be made by the Committee from time
to time).
6.
(f)
An Option granted to an Employee by the Committee must be accepted by the Employee

within fourteen (14) days from the Date of Grant of that Option, and in any event not later
than 5.00 p.m. on the fourteenth (14th) day from such Date of Grant, by completing, signing
and returning the Acceptance Form in or substantially in the form set out in Appendix A-II
(subject to such modications as may be made by the Committee from time to time),
accompanied by the payment of $1.00 as consideration. The Employee may accept or
refuse the whole or any part of the Offer. The Committee shall within fteen (15) Market
Days of receipt of the Acceptance Form and consideration thereof, acknowledge receipt
of the same.
(g)
An Option which is granted to a Participant is personal to him and may not be transferred,
charged, assigned, pledged or otherwise disposed of or encumbered in whole or in part
without the prior written approval of the Committee.
(h)
Offers shall cease and lapse forthwith automatically and shall no longer be available for
acceptance in the following events:
(i)
the Offer is not accepted within the time stated therein; or
(ii)
the death of the Selected Employee prior to his acceptance of the Offer;
(iii)
the Selected Executive ceases to be in the employment of the PNE Micron Group for
any reason whatsoever; or
(iv)
the liquidation of the Company.
(i)
Failure by the Selected Executive to complete the Company's prescribed Acceptance Form
in accordance with its requirements may render invalid the Selected Executive's
acceptance of an Offer. Any Acceptance Form received after the closing date shall not be
valid. The Offer is deemed not accepted until actual receipt by the Company of the
Acceptance form.
(j)
In the event that a grant of an Option results in a contravention of any applicable law or
regulation, such grant shall be null and void and of no effect and the relevant Participant
shall have no claims whatsoever against the Company.
Administration of Scheme
(a)
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 of Directors.
(b)
The Committee shall have the power, from time to time, to make and vary such regulations
(not being inconsistent with this Scheme) for the implementation and administration of the
Scheme as they deem t.
(c)
Any decision of the Committee, made pursuant to any provisions of the Scheme (other than
a matter to be certied by the Auditors), shall be nal and binding (including any decisions
pertaining to disputes as to interpretation of the Scheme or any rule, regulation, or
procedure thereunder as to any rights under the Scheme).
150
(d)
The Company shall make the following disclosure in its annual report:
(i)
The names of the members of the Company administering the scheme;
(ii)
The information required in the table below for the following Participants:
(1)
Directors;
(2)
Participants who are Associates of the Controlling Shareholders of the

Company; and
(3)
Participants, other than those in (1) and (2) above, who receive 5% or more of
the total number of Options available under the Scheme.
Name of
Participant
(iii)
7.
Options
granted during
financial year
under review
(including terms)
Aggregate
Options
granted since
commencement
of the Scheme
to end of
financial year
under review
Aggregate
Options
exercised since
commencement
of the Scheme
to end of
financial year
under review
Aggregate
Options
outstanding
as at end of
financial year
under review
In respect of Options granted at a discount, the following disclosure shall be made:

(1)
the number and proportion of Options granted at a discount of ten per cent
(10%) or less during the financial year under review; and
(2)
the number and proportion of Options granted at a discount of more than ten
per cent (10%) during the nancial year under review.
Rights to Exercise Option

(a)
A Participant may exercise an Option (other than an Option granted at a discount) in whole
or in part as follows:
(i)
up to thirty per cent (30%) of the Option at any time after twelve (12) months of the
Date of Grant of that Option;
(ii)
the next thirty per cent (30%) of the Option at any time after eighteen (18) months of
the Date of Grant of that Option; and
(iii)
the balance forty per cent (40%) of the Option at any time after twenty four (24)
months of the Date of Grant of that Option;
Provided Always that an Option shall be exercised before the end of one hundred and
twenty (120) months (or sixty (60) months where the Participant is a Non-Executive
Director) of the Date of Grant of that Option and subject to such other conditions as may
be introduced by the Committee from time to time.
(b)
An Option shall, to the extent unexercised, immediately lapse without any claim against the
Company:
(i)
subject to Rules 7(c), (d) and (e), upon the Participant ceasing to be in the
employment of any member of the PNE Micron Group for any reason whatsoever; or
(ii)
upon the bankruptcy of the Participant or the happening of any other event which
results in his being deprived of the legal or beneficial ownership of or interest in such
Options;
(iii)
in the event of any misconduct on the part of the Participant, as determined by the
Committee in its absolute discretion or any breach of any regulation of the Company
or PNE Micron Group, such breach being regarded as serious by the Committee in its
absolute discretion; or
151
(iv)
in the event the Participant ceases to be an employee and joining a competitor or

competitors of the PNE Micron Group.
For the purpose of Rules 7(b)(i) and (iv) above, 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.
8.
(c)
If a Participant ceases to be employed by the PNE Micron Group by reason of ill-health,

injury, disability (in each case, as evidenced to the satisfaction of the Committee),
redundancy, retirement or for any other reason approved in writing by the Committee, he
may, at the discretion of the Committee, but subject to Rule 7(a), exercise any
unexercised Option within the period of thirty (30) days after the date of such cessation of
employment or before the end of one hundred and twenty (120) months (or sixty (60)
months where the Participant is a Non-Executive Director) of the Date of Grant of that
Option, whichever is earlier, or such other period as approved by the Committee in
writing. Upon expiry of such period, the Option shall lapse.
(d)
If a Participant ceases to be employed by the PNE Micron Group by reason of the company
in which he is principally employed ceasing to be a member of the PNE Micron Group or
the undertaking or part of the undertaking of such company being transferred otherwise
than to another company within the PNE Micron Group, provided the Committee gives its
consent in writing and subject to Rule 7(a), he may, at the discretion of the Committee,
exercise any unexercised Option(s) within the period of thirty (30) days after the date of
such cessation of employment or before the end of one hundred and twenty (120) months
(or sixty (60) months where the Participant is a Non-Executive Director) of the Date of Grant
of that Option, whichever is earlier, or such other period as approved by the Committee in
writing. Upon the expiry of such period, the Option shall lapse.
(e)
If a Participant dies and at the date of his death the Participant holds any unexercised
Option, such Option may at the absolute discretion of the Committee, but subject to Rule
7(a), be exercised by the duly appointed personal representative(s) of the Participant within
the period of twelve (12) months after his death or before the end of one hundred and
Director) of the Date of Grant, whichever is earlier. Upon the expiry of such period, the
Option shall lapse.
Exercise of Options, Allotment and Listing of Shares and Non-Exercise of Options in

Certain Situations
(A)
Exercise of Options, Allotment and Listing of Shares

(a)
An Option may be exercised in multiples of 1,000 Scheme Shares only and may be
exercised, in whole or in part, by a Participant giving notice in writing to the
Company in the form or substantially in the form set out in Appendix A-Ill (subject to
such modifications as may be made by the Committee from time to time). Such notice
must be accompanied by a remittance for the Aggregate Subscription Cost, the
relevant Depository charges and such other documentation as the Committee may
require. An Option shall be deemed to be exercised only upon the receipt by the
Company of the said notice duly completed and the Aggregate Subscription Cost,
the relevant Depository charges and such other documentation as the Committee
may require. All payments pursuant to this Clause shall be made by cheque,
cashier's order, bank draft or postal order made out in favour of the Company.
(b)
The Company shall, as soon as practicable after the exercise of an Option allot and
issue the relative Scheme Shares to the Participant and shall apply to the Stock
Exchange for permission to deal in and for quotation of such Scheme Shares.
Scheme Shares which are allotted and issued on the exercise of an Option by a
Participant shall be issued, as the Participant may elect, in the Participant's name or
in the name of the Depository and credited to the securities account of that
Participant or that Participant's securities sub-account with a Depository Agent.
Subject to such consents or other required action of any competent authority under
152
such regulations or enactments for the time being in force as may be necessary and
subject to compliance with the rules of the Scheme and the Memorandum and
Articles of Association of the Company, the Company shall, within ten (10) Market
Days after the exercise of an Option, allot and issue the relative Scheme Shares and,
within five (5) Market Days after the date of such allotment and issue, despatch to the
Participant or the Depository (as the case may be) the relative share certificates by
ordinary post or such other mode as the Committee may deem fit.
(B)
(c)
The Scheme Shares shall be subject to all the provisions of the Articles of Association
and shall rank in full for all dividends declared or recommended in respect of the then
issued Shares the Record Date of which is on or after the date of the exercise of the
Option. The Scheme Shares will rank pari passu in all respects with the then issued
Shares of the Company. ``Record Date'' means the date on which Shareholders
must be registered in order to participate in any dividends or other distributions or
other rights.
(d)
The Company shall maintain sufcient unissued reserved Shares to satisfy the
exercise in full of all Options for the time being remaining capable of being exercised.
Non-exercise of Options in Certain Situations

Upon the expiry of any Option to which a Participant is entitled (which Option has not been
exercised or fully exercised), or upon receipt of an irrevocable notice in writing from a
Participant to the effect that he does not wish to exercise his entitlement or balance of his
entitlement to any Option granted to and accepted by him, the Company shall forthwith
cancel the relevant Option or Options and refund to that Participant all monies (if any)
paid under Rule 5(f) without interest, benet, compensation or other share of revenue (if
any) arising from the use of the said monies for the meantime.
9.
Determination of Subscription Price
9.1
Subject to the provisions of Rules 9.2 and 10 below, the Subscription Price per Share to be paid
by way of subscription upon exercise of an Option shall be equal to the Market Price.
9.2
The Subscription Price of the Options may, at the discretion of the Committee, be set at such
discount as may be determined by the Committee, subject to the following conditions:
(i)
the maximum discount shall not be at a discount rate exceeding twenty per cent (20%) of
the Market Price;
(ii)
the Committee shall exercise any decision to offer Options with an exercise price set at a
discount in good faith and only when circumstances require ;
(iii)
if and only if the Committee verily believes that the discount and the quantum thereof
would be in furtherance of the core objectives of the Scheme and would be in the best
interests of the Company and the prevailing market conditions. In making any
determination as to the actual discount applicable to any Option, the Committee shall
take into account such criteria as the Committee may, in its absolute discretion, deem
appropriate, in particular:
(1)
the performance of the Company and its Subsidiaries, on the basis of the PNE Micron
Group's sales, revenues, profit and/or any other financial parameters as the
Committee may, in its absolute discretion, deem appropriate;
(2)
the individual performance of the Participant, his effectiveness and contribution to the
success and development of the PNE Micron Group; and/or
(3)
the potential for future development of the Participant to the success and
development of the PNE Micron Group; and
153
(vi)
the Options may only be exercised after two (2) years from the Date of Grant as follows:
(1)
up to thirty per cent (30%) of such Option any time after two (2) years from the Date of
Grant of that Option;
(2)
the next thirty per cent (30%) of such Option at any time after thirty (30) months of the
Date of Grant of that Option; and
(3)
the balance forty per cent (40%) of the Option at any time after thirty-six (36) months
of the Date of Grant of that Option;
Provided Always that such Option shall be exercised before the end of one hundred and
Director) of the Date of Grant of that Option and subject to such other conditions as may
be introduced by the Committee from time to time.
9.3
In addition to the fullment of the above conditions, in the event the Committee decides to offer
any discount to the exercise price of Options granted to the Associates of the Controlling
Shareholder(s), the amount of the discount and the specic Subscription Price of the Options
shall be approved by independent Shareholders in separate resolutions for each such person
by the Company in general meeting.
10.
Variation of Capital
(a)
If a variation in the issued share capital of the Company (whether by way of a capitalisation
of profits or reserves or rights issue, capital reduction, sub-division or consolidation of
Shares) shall take place or if there is an offer or invitation made by the Company to
Shareholders whereunder they may acquire rights to acquire or subscribe for Shares, then:
(i)
the Subscription Price;
(ii)
the nominal value, class and/or number of Scheme Shares comprised in an Option to
the extent unexercised; and/or
(ii)
the nominal value, class and/or number of Scheme Shares over which additional
Options may be granted to the Participants;
may be adjusted in such manner as the Committee may determine to be appropriate,

except in relation to a capitalisation issue, upon the written conrmation of the Auditors
(acting only as experts and not as arbitrators) that in their opinion, such adjustment is fair
and reasonable.
(b)
Notwithstanding the provisions of Rule 10(a) above, no such adjustment shall be made if,
as a result the Subscription Price shall fall below the nominal value of a Share (in which
event the Subscription Price shall be the nominal value of a Share) unless the Committee,
after considering all relevant circumstances, considers it just and equitable to do so.
(c)
The issue of securities as consideration for an acquisition or a private placement of

securities will 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 SGX-ST during the period when a
share purchase mandate granted by Shareholders of the Company (including any renewal
of such mandate) is in force shall not be regarded as a circumstance requiring adjustment.
Upon any adjustment made pursuant to this Rule 10, the Company shall notify the Participants
(or their duly appointed legal personal representatives) in writing of the Subscription Price
thereafter in effect and the nominal value, class and/or number of Scheme Shares thereafter to
be issued on the exercise of the Option. Any adjustment shall take effect upon such written
notication being despatched.
154
11.
Alteration of the Scheme

Subject to the Rules, the Scheme may be modified or amended in any respect by a resolution of
the Committee except that:
(a)
no modification or amendment shall alter adversely the rights attaching to any Options
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 Scheme Shares
which would fall to be issued and allotted upon exercise in full of all outstanding Options;
(b)
the definitions of ``Committee'', `Èmployee'', `Òption Period'', ``Participant'', ``Subscription

Price'' and the provisions of Rules 4, 5(a), 5(b), 5(c), 5(d), 5(e), 5(f), 6, 7, 8(A)(c), 8(A)(d), 9, 10
and this Rule 11 shall not be altered to the advantage of Participants except with the prior
sanction of the Shareholders at a general meeting; and
(c)
no modication or amendment shall be made without the prior approval of the Stock
Exchange and/or any other relevant competent regulatory authorities.
Written notice of any modication or alteration made in accordance with this Rule shall be given
to all Participants.
12.
Take-over and Winding Up of the Company

(a)
In the event of a take-over offer being made for the Company, a Participant holding an
Option shall, subject to Rule 7, Rule 9.2 and Rule 12(e), be entitled within six (6) months
of the date on which such offer is made or, if such offer is conditional, within six (6)
months of the date on which the offer becomes or is declared unconditional (but not after
the expiry of the Option Period relating thereto), to exercise in full or in part any Option as
yet unexercised. However, if during such period of six (6) months, a party becomes entitled
or bound to exercise rights of compulsory acquisition of the Shares under the provisions of
any applicable law and gives notice to the Participant that it intends to exercise such rights
on a specified date, the Option shall remain exercisable by the Participant until the expiry of
such specified date or the expiry of the Option Period relating thereto, whichever is earlier.
Any Option not so exercised shall lapse unless the rights of acquisition or obligations to
acquire shall have been exercised or performed, as the case may be. If such rights or
obligations have not been exercised or performed, the Option shall, subject to Rule 7,
Rule 9.2 and Rule 12(e), remain exercisable until the expiry of the Option Period relating
thereto.
For the avoidance of doubt, the provisions of this Rule 12(a) shall not come into operation
in the event that a take-over offer which is conditional does not become or is not declared
unconditional.
(b)
If under any applicable law, 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, each Participant shall
be entitled, subject to Rule 7, Rule 9.2 and Rule 12(e), to exercise any Option then held by
him during the period commencing on the date upon which the compromise or
arrangement is sanctioned by the court and ending either on the expiry of sixty (60) days
thereafter or the date upon which it becomes effective, whichever is later (but not after the
expiry of the Option Period relating thereto), whereupon the Option shall automatically
lapse and so thereafter become null and void.
(c)
In the event of a members' solvent voluntary winding-up (other than for amalgamation or
reconstruction) of the Company, the Participant shall be entitled within thirty (30) days of
the passing of the resolution of such winding-up (but in any event prior to the expiration
of the Option Period relating thereto) to exercise in full any unexercised Option, after
which such unexercised Option shall, subject to Rules 7, 9.2 and 12(e), lapse and become
null and void.
155
13.
(d)
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 automatically lapse and
thereafter be null and void.
(e)
If in connection with the making of a general offer referred to in Rule 12(a) or the scheme
referred to in Rule 12(b) or the winding up referred to in Rule 12(c), arrangements are made
(which are conrmed in writing by the Auditors, acting only as experts and not as
arbitrators, to be fair and reasonable) for the compensation of Participants, whether by the
continuation of their Options or the payment of cash or the grant of other options or
otherwise, a Participant holding an Option, which is not then exercised, shall not, except
at the discretion of the Committee, be permitted to exercise that Option as provided for in
this Rule 12.
(f)
To the extent that an Option is not exercised within the periods referred to in this Rule 12, it
shall lapse.
Rights and Obligations of Executives as Employees Unaffected

The terms of employment of a Participant shall not be affected by his participation in this
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 such
Participant's employment for any reason.
14.
15.
Notices
(a)
Any notice required to be given by a Participant to the Company shall be sent or made to
the registered ofce of the Company or such other address as may be notied by the
Company to him in writing.
(b)
Participants shall be entitled to receive copies of all notices, reports and accounts of the
Company sent to Shareholders. Such notices or documents required to be given to a
Participant shall be delivered to him by hand or sent to him at his home address
according to the records of the Company and if delivered personally, shall be deemed to
have been given on the date of delivery and if sent by post, shall be deemed to have
been given on the day following the date of posting.
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.
16.
17.
Costs and Expenses of Scheme

(a)
Each Participant shall be responsible for all fees of the Depository relating to or in
connection with the issue and allotment of any Scheme Shares, the deposit of share
certicate(s) with the Depository, the Participant's securities account with Depository, or
the Participant's securities sub-account with a Depository Agent (collectively, the
``Depository Charges'').
(b)
Save for the taxes referred to in Rule 15 and the fees referred to in Rule 16(a), 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 the Shares of the
Company pursuant to the exercise of any Option shall be borne by the Company.
Disputes
Any disputes or differences of any nature arising thereunder shall be referred to the Committee
and its decision shall be nal and binding in all respects.
156
18.
Disclaimer of Liability
Notwithstanding any provisions contained herein and subject to applicable laws, the Committee
and the Company shall not under any circumstances be held liable for any costs, losses,
expenses and damages whatsoever and howsoever arising in any event, including but not
limited to the Company's delay in issuing the Scheme Shares or procuring the listing of the
Scheme Shares on the Stock Exchange in accordance with Rule 8A(b) (and any other stock
exchange on which the Shares are quoted or listed).
19.
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 the
jurisdiction of Singapore or any other relevant country.
20.
Governing Law
This Scheme shall be governed by and construed in accordance with the laws 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.
21.
Listing of Shares
Options under the Scheme will not be listed or quoted on the SGX or any other stock exchange
on which the Shares may be listed or quoted until the Options are exercised in accordance with
Rule 8 above, whereupon the Company will apply to the SGX (and/or other stock exchange on
which the Shares may be listed or quote) for the listing of and quotation of such Shares, and will
use its best endeavours to obtain permission to deal in and for the listing of and quotation of
such Shares.
157
APPENDIX A-I
PNE MICRON
EMPLOYEES' SHARE OPTION SCHEME
LETTER OF OFFER
Serial No. ____________________
Private & Condential
Date:
To:
_________________________
Name
Designation
Address
Dear Sir/Madam
We have the pleasure of informing you that you have been nominated by the Committee of Directors
of PNE Micron Holdings Ltd (the ``Company'') to participate in the PNE Micron Employees' Share
Option Scheme (the ``Scheme'').
Accordingly, an offer is hereby made to grant you an Option (as dened in the Scheme), in
consideration of the payment of a sum of $1.00, to subscribe for and be allotted
______________________ ordinary shares of $0.08 each in the issued and paid-up share capital of
Company (the ``Shares'') at the price of $_____________ per Share. 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 any other person in whole or in part save as
provided in the Scheme.
If you wish to accept the offer, please sign and return the enclosed Acceptance Form with a sum of
$_____________ not later than _________ (a.m./p.m.) on _______________, failing which this offer shall
automatically lapse and shall thereafter be null and void.
Yours faithfully
The Committee
Employees' Share Option Scheme
158
APPENDIX A-II

ACCEPTANCE FORM
Serial No.: ____________________
To:
The Company Secretary

14 Senoko Loop
Singapore 758150
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 Charges)
: $___________________________________________
____________________________________________
I have read your Letter of Offer dated ____________________ (Date of Grant) and agree to be bound by
the Rules of the PNE Micron Employees' Share Option Scheme stated therein. I hereby accept the
Option to subscribe for _____________ Shares at $______________ for each Share and enclose a
*cheque/cashier's order/banker's draft postal order for $_____________ as consideration for the grant
of the Option.
I am aware that I am not obliged to exercise my Option.
# I acknowledge and conrm that I shall be responsible for the payment (if any) of all fees of the
Depository relating to or in connection with the allotment and issue of any Shares in the
Depository's name, the deposit of share certicate(s) with the Depository, my securities account with
the Depository or my securities sub-account with a Depository Agent (as the case may
be)(collectively, the ``Depository Charges'').
I further acknowledge and conrm that you have not made any representation to induce me to accept
this offer in respect of the said Option and that the terms of the Letter of Offer and this Acceptance
Form constitute the entire agreement between us relating to the offer.
159
Please print in block letters

Name in Full
______________________________________________________________
Designation
______________________________________________________________
Address
______________________________________________________________
______________________________________________________________
Nationality
______________________________________________________________
*NRIC/Passport No
______________________________________________________________
Signature
______________________________________________________________
Date
______________________________________________________________
Notes:
(1) Shares must be accepted in full or in multiples of 1,000.
(2) The Acceptance Form must be forwarded to the Company Secretary in an envelope marked ``Private and Condential''.
(3) The Participant shall be informed by the Company of the relevant Depository Charges payable at the time of the exercise of
an option, if any.
*
Delete accordingly
If applicable
160
APPENDIX A-III
PNE MICRON
EXERCISE NOTICE
Serial No.: ____________________
To:
The Company Secretary

14 Senoko Loop
Singapore 758150
Total number of ordinary shares of $_____________

each (the ``Shares'') offered at $_____________ for
each Share under the Scheme on ________________
(Date of Grant)
Number of Shares previously allotted and issued

thereunder
Outstanding balance of Shares to be allotted and

issued thereunder
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 the capital of
PNE Micron Holdings Ltd at $_____________ per Share.
2.
I hereby request the Company to allot and issue the number of Shares specified in paragraph 1
above *in my name/in the name of ______________________________ to the credit of my
securities account with the Depository or my securities sub-account with the Depository Agent
specified below and to deliver the share certificate(s) relating thereto to me/the Depository. @I
further agree to bear such fees or other charges as may be imposed by the Depository (the
``Depository Charges'') in respect thereof:
*(a)
Direct Securities Account Number
______________________________
or
3.
*(b) Sub-Account Number
______________________________
Name of Depository Agent
______________________________
I enclose a *cheque/cashier's order/bank draft/postal order no. _____________ of $_____________

in payment for the following:
*(a)
Subscription of $_____________ for the total number of the said shares; and
*(b) # Depository Charges of $_____________.

4.
I agree to subscribe for the said Shares subject to the terms of the Letter of Offer, the PNE
Micron Employees' Share Option Scheme and the Memorandum and Articles of Association of
the Company.
5.
I declare that I am subscribing for the said Shares for myself and not as a nominee for any other
person.
161
Please print in block letters

Name in Full
______________________________________________________________
Designation
______________________________________________________________
Address
______________________________________________________________
______________________________________________________________
Nationality
______________________________________________________________
*NRIC/Passport No
______________________________________________________________
Signature
______________________________________________________________
Date
______________________________________________________________
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.
(2) The Exercise of Option to Subscribe must be forwarded to the Company Secretary in an envelope marked ``Private and
Condential''.
*
Delete accordingly
if applicable
162
APPENDIX B
DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO SHARES

The following statements are brief summaries of the rights and privileges of shareholders conferred by
the laws of Singapore and the Articles of Association (the `Àrticles'') of our Company. These
statements summarise the material provisions of the Articles but are qualied in entirely by reference
to the Articles.
Ordinary Shares
All of our Shares are in registered form. We may, subject to the provisions of the Act and the rules of
the SGX-ST, purchase our own Shares. However, we may not, except in circumstances permitted by
the Act, grant any nancial assistance for the acquisition or proposed acquisition of our Shares.
New Shares
New Shares may only be issued with the prior approval in a general meeting of the shareholders of our
Company. The aggregate number of Shares to be issued pursuant to such approval may not exceed
50% (or such other limit as may be prescribed by the SGX-ST) of our issued share capital for the time
being, of which the aggregate number of Shares to be issued other than on a pro rata basis to our
shareholders may not exceed 20% (or such other limit as may be prescribed by the SGX-ST) of our
issued share capital for the time being. The approval, if granted, will lapse at the conclusion of the
annual general meeting following the date on which the approval was granted or the date by which
the annual general meeting is required by law to be held, whichever is the earlier. Subject to the
foregoing, the provisions of the Act and any special rights attached to any class of shares currently
issued and all new Shares are under the control of the board of Directors who may allot and issue
the same with such rights and restrictions as it may think t.
Shareholders
Only persons who are registered in the register of shareholders of our Company and, in cases in which
the person so registered is CDP, the persons named as the depositors in the depository register
maintained by CDP for the Shares, are recognised as shareholders of our Company. Our Company
will not, except as required by law, recognise any equitable, contingent, future or partial interest in
any Share or other rights for any Share other than the absolute right thereto of the registered holder
of that Share. We may close the register of shareholders for any time or times if we provide the
SGX-ST at least 10 clear market days' notice. However, the register may not be closed for more
than 30 days in aggregate in any calendar year. We typically close the register to determine
shareholders' entitlement to receive dividends and other distributions.
Transfer of Shares
There is no restriction on the transfer of fully paid Shares except where required by law or the listing
rules or the rules or by-laws of any stock exchange on which our Company is listed. The Board of
Directors may decline to register any transfer of Shares which are not fully paid Shares or Shares on
which we have a lien. Shares may be transferred by a duly signed instrument of transfer in a form
approved by any stock exchange on which our Company is listed. The 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 certicate and such other evidence of title
as they may require. We will replace lost or destroyed certicates for Shares if we are properly
notied and if the applicant pays a fee which will not exceed S$2 and furnishes any evidence and
indemnity that the board of Directors may require.
163
General Meeting of Shareholders

We are required to hold an annual general meeting every year. The board of Directors may convene an
Extraordinary General Meeting whenever it thinks t 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 law or by the Articles, voting at general meetings is by
ordinary resolution, requiring an afrmative vote of a simple majority of the votes cast at the meeting.
An ordinary resolution sufces, for example, for the appointment of directors. A special resolution,
requiring the afrmative vote of at least 75% of the votes cast at the meeting, is necessary for
certain matters under Singapore law, including voluntary winding up, amendments to the
Memorandum of Association and the Articles, a change of the corporate name and a reduction in
the share capital, share premium account or capital redemption reserve fund. Our Company must
give at least 14 days' notice in writing for every general meeting convened for the purpose of
passing an ordinary resolution. Special resolutions generally require at least 21 days' notice in
writing. The notice must set forth the place, the day and the hour of the meeting and, in the case of
special business, the general nature of that business.
Voting Rights
A shareholder is entitled to attend, speak and vote at any general meeting, in person or by proxy.
Proxies need not be a shareholder. A person who holds Shares through the SGX-ST book-entry
settlement 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 the Articles, two or more shareholders must be present in person or by proxy
to constitute a quorum at any general meeting. Under the Articles, on a show of hands, every
shareholder present in person and by proxy shall have one vote, and on a poll, every shareholder
present in person or by proxy shall have one vote for each Share which he holds or represents. 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 any two shareholders
present in person or by proxy and entitled to vote.
Dividend
Our Company may, by ordinary resolution of our shareholders, declare dividends at a general meeting,
but we may not pay dividends in excess of the amount recommended by the board of Directors. We
must pay all dividends out of our prots; however, we may capitalise our share premium account and
apply it to pay dividends, if such dividends are satised by the issue of Shares to our shareholders.
See ``Bonus and Rights Issue''. The Board of Directors may also declare an interim dividend without
the approval of our shareholders. All dividends are paid pro rata among our shareholders in proportion
to the amount paid up on each shareholder's Shares, unless the rights attaching to an issue of any
Share provides otherwise. Unless otherwise directed, dividends are paid by cheque or warrant sent
through the post to each shareholder at his registered address. Notwithstanding the foregoing, the
payment by our Company to CDP of any dividend payable to a shareholder whose name is entered
in the depository register shall, to the extent of payment made to CDP, discharge us from any liability
to that shareholder in respect of that payment.
Bonus and Rights Issues
The board of Directors may, with approval of our shareholders at a general meeting, capitalise any
reserves or prots (including prot or moneys 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. The board of Directors may also issue rights to take up additional
Shares to shareholders in proportion to their shareholdings. Such rights are subject to any conditions
attached to such issue and the regulations of any stock exchange on which we are listed.
164
Takeovers
From 1 January 2002, a revised Singapore Code on Take-overs and Mergers (``Revised Take-over
Code'') issued by the Monetary Authority of Singapore pursuant to Section 321 of the Securities and
Futures Act 2001 has come into effect. Under the Revised Take-over Code, any person acquiring an
interest, either on his own or together with persons acting in concert with him, in 30% (instead of 25%
under the Singapore Take-over Code) or more of our voting shares must extent a takeover offer for the
remaining voting shares in accordance with the provisions of the Revised Take-over Code. In addition,
a mandatory takeover offer is also required to be made if a person holding, either on his own or
together with persons acting in concert with him, between 30% and 50% of the voting shares
acquires additional voting shares representing more than 1% of the voting shares in any 6-month
period.
Under the Revised Take-over Code, the following individuals and companies will be presumed to be
persons acting in concert with each other unless the contrary is established:
(a)
the following companies:

(i)
a company;
(ii)
the parent company of (i);
(iii)
the subsidiaries of (i);
(iv)
the fellow subsidiaries of (i);
(v)
the associated companies of any of (i), (ii), (iii) or (iv); and
(vi)
companies whose associated companies include any of (i), (ii), (iii), (iv) or (v);
(b)
a company with any of its directors (together with their close relatives, related trusts as well as
companies controlled by any of the directors, their close relatives and related trusts);
(c)
a company with any of its pension funds and employee share schemes;
(d)
a person with any investment company, unit trust or other fund whose investment such person
manages on a discretionary basis, but only in respect of the investment account which such
person manages;
(e)
a financial or other professional adviser, including a stockbroker, with its client in respect of the
shareholdings of:
(i)
the adviser and persons controlling, controlled by or under the same control as the adviser;
and
(ii)
all the funds which the adviser manages on a discretionary basis, where the shareholdings
of the adviser and any of those funds in the client total 10% or more of the client's equity
share capital;
(f)
directors of a company (together with their close relatives, related trusts and companies
controlled by any of such directors, their close relatives and related trusts) which is subject to
an offer or where the directors have reason to believe a bona fide offer for their company may
be imminent;
(g)
partners; and
(h)
the following persons and entities:

(i)
an individual;
(ii)
the close relatives of (i);
(iii)
the related trusts of (i);
(iv)
any person who is accustomed to act in accordance with the instructions of (i); and
(v)
companies controlled by any of (i), (ii), (iii), or (iv).
165
Under the Revised Take-over Code, a mandatory offer made with consideration other then cash must
be accompanied by a cash alternative at not less than the highest price paid by the offeror or any
person acting in concert with the offeror within the preceding 6 months.
Liquidation or Other Return of Capital
If our Company liquidates or in the event of any other return of capital, holders of 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.
Indemnity
As permitted by Singapore law, the Articles provide that, subject to the Act, the board of Directors and
ofcers shall be entitled to be indemnied by our Company 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 ofcer, director or employee and in which judgement is given in their favour or in which they are
acquitted or in connection with any application under any statute for relief from liability in respect
thereof in which relief is granted by the court. We may not indemnify directors and ofcers against
any liability which by law otherwise attach to them in respect of any negligence, default, breach of
duty or beach of trust of which they may be guilty in relation to our Company.
Limitations on Rights to Hold or Vote Shares
Except as described in ``Voting Rights'' and ``Takeovers'' above, there are no limitations imposed by
Singapore law or by the Articles on the rights of non-resident shareholders to hold or vote Shares.
Minority Rights
The rights of minority shareholders of Singapore-incorporated companies are protected under Section
216 of the Act, which gives the Singapore courts a general power to make any order, upon application
by any of our shareholders, as they think fit to remedy any of the following situations:
(a)
the affairs of our Company are being conducted or the powers of the Board of Directors are
being exercised in a manner oppressive to, or in disregard of the interests of, one or more of
the shareholders; or
(b)
our Company takes an action, or threatens to take an action, or the shareholders pass a
resolution, or propose to pass a resolution, which unfairly discriminates against, or is otherwise
prejudicial to, one or more of the 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 Act itself. Without prejudice to the foregoing, Singapore courts may:
(a)
direct or prohibit any act or cancel or vary any transaction or resolution;
(b)
regulate the conduct of the affairs of our Company in the future;
(c)
authorise civil proceedings to be brought in our name, or on our behalf, by a person or

persons and on such terms as the court may direct;
(d)
provide for the purchase of a minority shareholder's Shares by the other shareholders or by
our Company and, in the case of a purchase of Shares by our Company, a corresponding
reduction of our share capital;
(e)
provide that the Memorandum of Association or the Articles be amended; or
(f)
provide that our Company be wound up.
166
APPENDIX C
DESCRIPTION OF SINGAPORE LAW AND REGULATIONS RELATING TO

TAXATION
The discussion below is not intended to constitute a complete analysis of all tax consequences
relating to ownership of our Shares. Prospective purchasers of our Shares should consult their
tax advisors concerning the tax consequences of their particular situations. This description is
based on laws, regulations and interpretations now in effect and available as of the date of this
Prospectus.
The laws, regulations and interpretations, however, may change at any time, and any change could be
retroactive to the date of issuance of our Shares. These laws and regulations are also subject to
various interpretations and the relevant tax authorities or the courts could later disagree with the
explanations or conclusions set out below.
Singapore Taxation
The following discussion describes the material Singapore income tax, capital gains tax, stamp duty
and estate duty consequences of the purchase, ownership and disposal of our Shares.
Income Tax
General
Singapore resident taxpayers, which include individuals who are residing in Singapore and companies
which are controlled or managed in Singapore, are subject to Singapore income tax on:
(a)
income accruing in or derived from Singapore; and
(b)
foreign income received in Singapore.
A company will be regarded as being resident in Singapore if the control and management of its
business is exercised in Singapore (for example, if the company's board of directors meets and
conducts the business of the company in Singapore). An individual will be regarded as being
resident in Singapore in a year of assessment if, in the preceding year, he was physically present in
Singapore or exercised employment in Singapore (other than as a director of a company) for 183 days
or more, or if he ordinarily resides in Singapore. Non-Singapore resident corporate taxpayers, subject
to certain exceptions, are subject to Singapore income tax on:
(a)
income that is accrued in or derived from Singapore; and
(b)
foreign income received in Singapore.
Non-Singapore resident individuals, subject to certain exceptions, are subject to Singapore income
tax only on income accruing in or derived from Singapore. The corporate tax rate in Singapore is
currently 24.5%.
Subject to the provisions of any applicable tax treaty, non-Singapore resident taxpayers who derive
certain types of income from Singapore are subject to a withholding tax currently at 24.5% or
generally 15% in the case of interest, royalty and rental of movable equipment.
167
Dividend Distributions
Under Singapore's taxation system, the tax paid by our Company at the prevailing corporate tax rate
is in effect imputed to, and deemed to be paid on behalf of our shareholders. Shareholders receive
dividends net of such tax. Shareholders are taxed on the gross amount of dividends (that is, on the
amount of net dividends plus an amount equal to the amount of gross dividends multiplied by the
prevailing corporate tax rate). The tax paid by our Company effectively becomes available to our
shareholders as a tax credit to offset their Singapore income tax liability on the gross amount of
dividends paid by our Company.
Singapore does not impose withholding tax on dividends paid to Singapore citizen or non-Singapore
resident shareholders. As the tax paid by our Company at the prevailing corporate tax rate is deemed
to be paid by our shareholders, no further Singapore income tax liability is imposed on dividends
received by such non-resident shareholders. Conversely, such non-resident shareholders who do not
have deductible expenses which are accepted by the Inland Revenue Authority of Singapore (`ÌRAS'')
as attributable to such dividend income will normally not receive any refund from the IRAS. Singapore
taxpayers are taxed on dividends received from our Company at the income tax rates applicable to
each taxpayer. Where their income tax liabilities on the dividends are lower (or, as the case may be,
higher) than the tax deducted at source from such dividends at the prevailing corporate rate, such
resident shareholders may receive a refund from (or, as the case may be, have to pay further tax to)
the IRAS.
Where our Company receives foreign income that qualies for double taxation relief, unilateral tax
relief or Commonwealth tax relief, our Company may pay tax exempt dividends out of the foreign
income received in Singapore. The amount of tax exempt dividend is equal to (i) the foreign tax
credit allowed divided by the prevailing corporate tax rate less (ii) the foreign tax paid. Our Company
will credit such amounts to a special account (known as the ``Section 13E account''). Any subsequent
dividends paid by our Company out of this account to our shareholders (other than on any shares of a
preferential nature) will be tax exempt subject to certain conditions.
Gains on disposal of the ordinary shares
Singapore does not impose tax on capital gains. However, gains may be construed to be of an
income nature and subject to tax if they arise from activities which the IRAS regards as the carrying
on of a trade in Singapore. Any prots from the disposal of ordinary shares are not taxable in
Singapore unless the seller is regarded as having derived gains of an income nature, in which case,
the disposal prots would be taxable.
Stamp Duties
No stamp duty is payable on the issue of new Shares of our Company.
Stamp duty is payable on the instrument of transfer of Shares of our Company at the rate of S$2.00
for every S$1,000 market value of such Shares. Pursuant to the Second Off-Budget Measures
announced on 12 October 2001, the stamp duty rate will be reduced by 30% in respect of the
instrument of transfer of shares executed during the period from 13 October 2001 to 31 December
2002 (both dates inclusive). Effectively, the applicable stamp duty on the instrument of transfer of
our Shares will be S$1.40 for every S$1,000.00 market value of the Shares registered in Singapore if
the instrument is effected from 13 October 2001 to 31 December 2002.
The purchaser is liable for stamp duty, unless there is an agreement to the contrary. No stamp duty is
payable if no instrument of transfer is executed or the instrument of transfer is executed outside
Singapore. However, stamp duty may be payable if the instrument of transfer which is executed
outside Singapore is received in Singapore. The above stamp duty is not applicable to electronic
transfer of our Shares through the CDP.
168
Estate Duties
Singapore estate duty is imposed on the value of most movable and immovable property situated in
Singapore owned by individuals who are not domiciled in Singapore, subject to specic exemption
limits. Singapore estate duty is imposed on the value of most immovable property situated in
Singapore and on most movable property, wherever it may be, owned by individuals who are
domiciled in Singapore, subject to specic exemption limits. Our Company's Shares are considered
to be movable property situated in Singapore as our Company is a company incorporated in
Singapore and the share register is maintained in Singapore.
Accordingly, our Company's Shares held by an individual are subject to Singapore estate duty upon
such individual's death, whether or not such individual is domiciled in Singapore. Singapore estate
duty is payable to the extent that the value of the Shares aggregated with any other assets subject
to Singapore estate duty exceeds S$600,000. Unless other exemptions apply to the other assets, for
example, the separate exemption limit for residential properties, any excess beyond S$600,000 will be
taxed at 5% on the rst S$12,000,000 of the individual's Singapore chargeable assets and thereafter
at 10%. Individuals should consult their own tax advisors regarding the Singapore estate duty
consequences of their ownership of our Company's Shares.
169
APPENDIX D
TERMS AND CONDITIONS AND PROCEDURES

FOR APPLICATION AND ACCEPTANCE
You are invited to apply and subscribe for the 62,000,000 New Shares at the Issue Price for each Offer
Share and each Placement Share subject to the following terms and conditions:
1.
YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 NEW SHARES AND INTEGRAL
MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF NEW
SHARES WILL BE REJECTED.
2.
Your application for Offer Shares may be made by way of printed Offer Shares Application Forms
or by way of Electronic Applications through ATMs of the Participating Banks (`ÀTM Electronic
Applications'') or through Internet Banking (`ÌB'') web-sites of the relevant Participating Banks
(`Ìnternet Electronic Applications'' which, together with ATM Electronic Applications, shall be
referred to as `Èlectronic Applications''). Your application for the Placement Shares may only
be made by way of Placement Shares Application Forms. YOU MAY NOT USE CPF FUNDS
TO APPLY FOR THE NEW SHARES.
3.
You are allowed to submit only one application in your own name for the Offer Shares. If
you submit an application for Offer Shares by way of an Application Form, you MAY NOT
submit another application for Offer Shares by way of an Electronic Application and vice
versa. Such separate applications shall be deemed to be multiple applications and shall
be rejected.
If you submit an application for Offer Shares by way of Internet Electronic Application, you
MAY NOT submit another application for Offer Shares by way of ATM Electronic
Application and vice versa. Such separate applications shall be deemed to be multiple
applications and shall be rejected.
If you (being other than an approved nominee company) have submitted an application for
Offer Shares in your own name, you should not submit any other application for Offer
Shares, whether by way of an Application Form or by way of an Electronic Application,
for any other person. Such separate applications shall be deemed to be multiple
If you have made an application for Placement Shares, you should not make any
application for Offer Shares either by way of an Application Form or by way of an
Electronic Application and vice versa. Such separate applications shall be deemed to be
multiple applications and shall be rejected.
Conversely, if you have made an application for Offer Shares either by way of an Electronic
Application or by way of an Application Form, you may not make any application for
Placement Shares. Such separate applications shall be deemed to be multiple
Joint applications shall be rejected. If you submit or procure submissions of multiple share
applications for Offer Shares, Placement Shares or both Offer Shares and Placement
Shares, you may be deemed to have committed an offence under the Penal Code,
Chapter 224 of Singapore and the Securities Industry Act, Chapter 289 of Singapore, and
your applications may be referred to the relevant authorities for investigation. Multiple
applications or those appearing to be or suspected of being multiple applications will be
liable to be rejected at our discretion.
4.
We will not accept applications from any person under the age of 21 years, undischarged
bankrupts, sole-proprietorships, partnerships, chops or non-corporate bodies, joint Securities
Account holders of CDP and from applicants whose addresses (furnished in their Application
170
Forms or, in the case of Electronic Applications, contained in the records of the relevant
Participating Banks) bear post ofce box numbers.
5.
We will not recognise the existence of a trust. Any application by a trustee or trustees must be
made in his/their own name(s) and without qualication or, where the application is made by way
of an Application Form, in the name(s) of an approved nominee company or approved nominee
companies after complying with paragraph 6 below.
6.
WE WILL NOT ACCEPT APPLICATIONS FROM NOMINEES EXCEPT THOSE MADE BY

APPROVED NOMINEE COMPANIES ONLY. Approved nominee companies are dened as
banks, merchant banks, nance companies, insurance companies, licensed securities dealers
in Singapore and nominee companies controlled by them. Applications made by persons acting
as nominees other than approved nominee companies shall be rejected.
7.
IF YOU ARE NOT A NOMINEE COMPANY, YOU MUST MAINTAIN A SECURITIES

ACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you
do not have an existing Securities Account with CDP in your own name at the time of your
application, your application will be rejected (if you apply by way of an Application Form), or
you will not be able to complete your Electronic Application (if you apply by way of an
Electronic Application). If you have an existing Securities Account but fail to provide your
Securities Account number or provide an incorrect Securities Account number in Section B of
the Application Form or in your Electronic Application, as the case may be, your application is
liable to be rejected. Subject to paragraph 8 below, your application shall be rejected if your
particulars, such as name, NRIC/passport number, nationality and permanent residence status
provided in your Application Form or in the records of the relevant Participating Bank at the
time of your Electronic Application, as the case may be, differ from those particulars in your
Securities Account as maintained with CDP. If you possess more than one individual direct
Securities Account with CDP, your application shall be rejected.
8.
If your address as stated in the Application Form or, in the case of an Electronic
Application, in the records of the relevant Participating Bank, as the case may be, is
different from the address registered with CDP, you must inform CDP of your updated
address promptly, failing which the notication letter on successful allotment will be sent
to your address last registered with CDP.
9.
We reserve the right to reject any application which does not conform strictly to the
instructions set out in the Application Form and in this Prospectus or which does not
comply with the instructions for Electronic Applications or with the terms and conditions
of this Prospectus or, in the case of an application by way of an Application Form, which
is illegible, incomplete, incorrectly completed or which is accompanied by an improperly
drawn remittance. We 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 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.
We reserve the right to reject or to accept, in whole or in part, or to scale down or to ballot any
application, without assigning any reason therefor, and we will not entertain any enquiry and/or
correspondence on our decision. This right applies to applications made by way of Application
Forms and by way of Electronic Applications. In deciding the basis of allotment, we will give due
consideration to the desirability of allotting the New Shares to a reasonable number of applicants
with a view to establishing an adequate market for the Shares.
11.
Share certicates will be registered in the name of CDP and will be forwarded only to CDP. It is
expected that CDP will send to you, at your own risk, within 15 Market Days after the close of
the Application List, a statement of account stating that your Securities Account has been
credited with the number of New Shares allotted to you. This will be the only acknowledgement
of application moneys received and is not an acknowledgement by us. You irrevocably authorise
CDP to complete and sign on your behalf as transferee or renouncee any instrument of transfer
171
and/or other documents required for the issue or transfer of the New Shares allotted to you. This
authorisation applies to applications made by way of Application Forms and by way of Electronic
Applications.
12.
In the event of an under-subscription for Offer Shares as at the close of the Application List, we
will make available that number of Offer Shares under-subscribed to satisfy applications for
Placement Shares to the extent that there is an over-subscription for Placement Shares as at
the close of the Application List.
In the event of an under-subscription for Placement Shares as at the close of the Application
List, we will make available that number of Placement Shares under-subscribed to satisfy
applications for Offer Shares to the extent that there is an over-subscription for Offer Shares as
at the close of the Application List.
In the event of an over-subscription for Offer Shares as at the close of the Application List and
Placement Shares are fully subscribed or over-subscribed as at the close of the Application List,
the successful applications for Offer Shares will be determined by ballot or otherwise as
determined by our Directors and approved by the SGX-ST.
13.
You irrevocably authorise CDP to disclose the outcome of your application, including the number
of New Shares allotted to you pursuant to your application, to authorised operators.
14.
Any reference to the ``you'' in this section shall include an individual, a corporation, an approved
nominee and trustee applying for the Offer Shares by way of an Application Form or by way of an
Electronic Application and a person applying for the Placement Shares through the Joint Lead
Placement Agents.
15.
By completing and delivering an Application Form or by making and completing an Electronic

Application by (in the case of an ATM Electronic Application) pressing the `Ènter'' or `ÒK'' or
``Confirm'' or ``Yes'' key on the ATM (as the case may be) or by (in the case of an Internet
Electronic Application) clicking ``Submit'' or ``Continue'' or ``Yes'' or ``Confirm'' on the IB
website screen (as the case may be) in accordance with the provisions of this Prospectus, you:
16.
(a)
irrevocably offer to subscribe for the number of New Shares specified in your application (or
such smaller number for which the application is accepted) at the Issue Price and agree
that you will accept such New Shares as may be allotted to you, in each case on the
terms of this Prospectus and on the terms of the conditions set out in, this Prospectus
and the Bye-Laws of our Company; and
(b)
warrant the truth and accuracy of the information provided in your application.
Our acceptance of applications will be conditional upon, inter alia, we 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 the SGX-Sesdaq; and
(b)
the Management and Underwriting Agreement and the Placement Agreement referred to on
page 142 of this Prospectus have become unconditional and have not been terminated or
cancelled prior to such date as our Company may determine.
17.
We will not hold any applications in reserve.
18.
We will not allot Shares on the basis of this Prospectus later than 6 months after the date of this
Prospectus.
19.
Additional terms and conditions for applications by way of Application Forms are set out on
pages 173 to 175 of this Prospectus.
20.
Additional terms and conditions for applications by way of Electronic Applications are set out on
pages 175 to 181 of this Prospectus.
172
ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING APPLICATION FORMS

You shall make an application by way of Application Forms made on and subject to the terms and
conditions of this Prospectus including but not limited to the terms and conditions appearing below
as well as those set out under the section on ``TERMS AND CONDITIONS AND PROCEDURES FOR
APPLICATION AND ACCEPTANCE'' on pages 170 to 181 of this Prospectus, as well as the
Memorandum and Article of Association of our Company.
1.
Your application must be made using the WHITE Application Forms for Offer Shares and the
BLUE Application Forms for Placement Shares accompanying and forming part of this
Prospectus. We draw your attention to the detailed instructions contained in the respective
Application Forms and this Prospectus for the completion of the Application Forms which must
be carefully followed. We reserve the right to reject applications which do not conform
strictly to the instructions set out in the Application Forms and this Prospectus or to the
terms and conditions of this Prospectus or which are illegible, incomplete, incorrectly
completed or which are accompanied by improperly drawn remittances.
2.
Your Application Forms must be completed in English. Please type or write clearly in ink using
BLOCK LETTERS.
3.
All spaces in the Application Forms except those under the heading ``FOR OFFICIAL USE
ONLY'' must be completed and the words ``NOT APPLICABLE'' or ``N.A.'' should be written in
any space that is not applicable.
4.
Individuals, corporations, approved nominee companies and trustees must give their names in
full. You must make your application, in the case of individuals, in your full names appearing in
your identity cards (if applicants have such identication documents) or in your passports and, in
the case of corporations, in your full names as registered with a competent authority. If you are a
non-individual completing the Application Form under the hand of an ofcial, you must state the
name and capacity in which that ofcial signs. If you are a corporation completing the
Application Form, you are required to afx your Common Seal (if any) in accordance with your
Memorandum and Articles of Association or equivalent constitutive documents. If you are a
corporate applicant and your application is successful, a copy of your Memorandum and
Articles of Association or equivalent constitutive documents must be lodged with our Share
Registrar and Share Transfer Ofce. We reserve the right to require you to produce
documentary proof of identication for verication purposes.
5.
(a)
You must complete page 1 and Sections A and B of the Application Forms.
(b)
You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Forms.
Where paragraph 7(a) is deleted, you must also complete Section C of the Application
Forms with particulars of the beneficial owner(s).
(c)
If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be, on
page 1 of the Application Forms, your application is liable to be rejected.
6.
You (whether you are an individual and corporate applicant, whether incorporated or
unincorporated and wherever incorporated or constituted) will be required to declare whether
you are a citizen or permanent resident of Singapore or a corporation in which citizens or
permanent residents of Singapore or any body corporate constituted under any statute of
Singapore have an interest in the aggregate of more than 50 per cent. of the issued share
capital of or interests in such corporations. If you are an approved nominee company, you are
required to declare whether the benecial owner of the New Shares is a citizen or permanent
resident of Singapore or a corporation, whether incorporated or unincorporated and wherever
incorporated or constituted, in which citizens or permanent residents of Singapore or any body
corporate whether incorporated or unincorporated and wherever incorporated or constituted
under any statute of Singapore have an interest in the aggregate of more than 50 per cent. of
the issued share capital of or interests in such corporation.
7.
Your application must be accompanied by a remittance in Singapore currency for the full amount
payable, in respect of the number of New Shares applied for, in the form of a BANKER'S DRAFT
173
or CASHIER'S ORDER drawn on a bank in Singapore, made out in favour of ``PNE MICRON
SHARE ISSUE ACCOUNT'' crossed `À/C PAYEE ONLY'', with your name and address written
clearly on the reverse side. We will not accept applications accompanied by ANY OTHER FORM
OF PAYMENT. We will reject remittances bearing ``NOT TRANSFERABLE'' or ``NON
TRANSFERABLE'' crossings. No acknowledgement or receipt will be issued by us or the
Manager for applications and application moneys received.
8.
Unsuccessful applications are expected to be returned (without interest or any share of revenue
or other benet arising therefrom) to you by ordinary post within 3 Market Days after the close of
the Application List at your own risk. Where your application is rejected or accepted in part only,
the full amount or the balance of the application moneys, as the case may be, will be refunded
(without interest or any share of revenue or other benet arising therefrom) to you by ordinary
post at your own risk within 14 days after the close of the Application List.
9.
Capitalised terms used in the Application Forms and dened in this Prospectus shall bear the
meanings assigned to them in this Prospectus.
10.
By completing and delivering the Application Form, you agree that:

(a)
in consideration of us having distributed the Application Form to you and agreeing to close
the Application List at 12.00 noon on 4 April 2002 or such other time or date as our
Directors may, in consultation with the Manager, decide and by completing and delivering
the Application Form, you agree that:
(i)
your application is irrevocable; and
(ii)
your remittance will be honoured on first presentation and that any moneys returnable
may be held pending clearance of your payment without interest or any share of
revenue or other benefit arising therefrom;
(b)
all applications, acceptances and contracts resulting therefrom under the Invitation shall be
governed by and construed in accordance with the laws of Singapore and that you
irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;
(c)
in respect of the New Shares for which your application has been received and not
rejected, acceptance of your application shall be constituted by written notification and
not otherwise, notwithstanding any remittance being presented for payment by or on our
behalf;
(d)
you will not be entitled to exercise any remedy of rescission for misrepresentation at any
time after acceptance of your application; and
(e)
in making your application, reliance is placed solely on the information contained in this
Prospectus and none of the Company, the Manager, the Underwriters, the Joint Lead
Placement Agents or any other person involved in the Invitation shall have any liability for
any information not so contained.
Applications For Offer Shares

1.
Your applications for Offer Shares MUST be made using the WHITE Offer Shares Application
Forms and WHITE ofcial envelopes `À'' and ``B''. ONLY ONE APPLICATION should be
enclosed in each envelope.
2.
You must:
(a)
enclose the WHITE Offer Shares Application Form, duly completed and signed, together
with your remittance in the WHITE envelope `À'' provided;
(b)
in the appropriate spaces on WHITE envelope `À'':

(i)
write your name and address;
(ii)
state the number of Offer Shares applied for;
(iii)
tick the relevant box to indicate the form of payment; and

174
(iv)
3.
affix adequate Singapore postage;
(c)
SEAL WHITE ENVELOPE `À'';
(d)
write, in the special box provided on the larger WHITE envelope ``B'' addressed to M&C
Services Private Limited, the number of Offer Shares you have applied for; and insert
WHITE envelope `À'' into WHITE envelope ``B'', seal WHITE envelope ``B'' and thereafter
DESPATCH BY ORDINARY POST OR DELIVER BY HAND at your own risk to 138
Robinson Road, # 17-00 The Corporate Ofce, Singapore 068906, to arrive by 12.00
noon on 4 April 2002 or such other time as we may, in consultation with the
Manager, decide. Local Urgent Mail or Registered Post must NOT be used. No
acknowledgement of receipt will be issued for any application or remittance received.
Applications that are illegible, incomplete or incorrectly completed or accompanied by

improperly drawn remittances are liable to be rejected.
Applications for Placement Shares

1.
Your application for Placement Shares MUST be made using the BLUE Placement Shares
Application Forms. ONLY ONE APPLICATION should be enclosed in each envelope.
2.
The completed BLUE Placement Shares Application Form and your remittance in accordance
with the terms and conditions of this Prospectus for the full amount payable in respect of the
number of Placement Shares applied for, with your name and address written clearly on the
reverse side, must be enclosed and sealed in an envelope to be provided by you. The sealed
envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND at your
own risk to M&C Services Private Limited, 138 Robinson Road, #17-00 The Corporate
Ofce, Singapore 068906, to arrive by 12.00 noon on 4 April 2002 or such other time as
we may, in consultation with the Manager, decide. Local Urgent Mail or Registered Post
must NOT be used. No acknowledgement of receipt will be issued for any application or
remittance received.
3.
Alternatively, you may remit your application moneys by electronic transfer to the account of
United Overseas Bank Limited, account number 101-325-559-3, in favour of ``PNE MICRON
SHARE ISSUE ACCOUNT'' for the number of Placement Shares applied for. If you remit your
application moneys via electronic transfer, you should fax and send a copy of the remittance
advice to SBI E2-Capital Pte Ltd at fax number 6227 3936.
ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS

The procedures for Electronic Applications at ATMs are set out on the ATM screens (in the case on
ATM Electronic Applications) and the IB website screens (in the case of Internet Electronic
Applications) of the relevant Participating Banks. Currently, DBS and the UOB group are the only
Participating Banks through which Internet Electronic Applications can be made. For illustration
purposes, the procedures for Electronic Applications through ATMs of DBS and the IB website of
DBS are set out respectively in the ``Steps for Electronic Applications through ATMs of DBS and the
IB website of DBS (the ``Steps'') appearing on pages 179 to 181 of this Prospectus.
The Steps set out the actions that you must take at an ATM of DBS or the IB website of DBS to
complete an Electronic Application. Please read carefully the terms of this Prospectus, the Steps
and the terms and conditions for Electronic Applications set out below before making an Electronic
Application. Any reference to ``you'' in the additional terms and conditions for Electronic Applications
and the Steps shall refer to you making an application for Offer Shares through an ATM or the IB
website of a relevant Participating Bank.
You must have an existing bank account with and be an ATM cardholder of one of the Participating
Banks before you can make an Electronic Application at the ATMs. An ATM card issued by one
Participating Bank cannot be used to apply for Offer Shares at an ATM belonging to other
Participating Banks. For an Internet Electronic Application, you must have an existing bank account
with and an IB User Identication (`Ùser ID'') and a Personal Identication Number/Password given
175
by a relevant Participating Bank. The Steps set out the actions that you must take at ATMs of DBS or
the IB website of DBS to complete an Electronic Application. The actions that you must take at ATMs
or the IB websites of other Participating Banks are set out on the ATM screens or the IB website
screens of the relevant Participating Banks. Upon the completion of your Electronic Application
transaction, you will receive an ATM transaction slip (``Transaction Record'') conrming the details of
your Electronic Application. Upon completion of your Internet Electronic Application, there will be an
on-screen conrmation (``Conrmation Screen'') of the application which you can print out for your
record. The Transaction Record or your printed record of the Conrmation Screen is for your
retention and should not be submitted with any Application Form.
You must ensure that you enter your own Securities Account number when using the ATM card
issued to you in your own name. If you operate a joint bank account with any of the
Participating Banks, you must ensure that you enter your own Securities Account number
when using the ATM card issued to you in your own name. Using your own Securities Account
number with an ATM card which is not issued to you in your own name will render your
Electronic Application liable to be rejected.
You must ensure, when making an Internet Electronic Application, that your mailing address is in
Singapore and the application is being made in Singapore and you will be asked to declare
accordingly. Otherwise, your application is liable to be rejected. You shall make an Electronic
Application on the terms and subject to the conditions of this Prospectus including but not limited to
the terms and conditions appearing below and those set out under the section on ``TERMS AND
CONDITIONS AND PROCEDURES FOR APPLICATION AND ACCEPTANCE'' on pages 170 to 181 of
this Prospectus as well as the articles of our Company.
2.
In connection with your Electronic Application for Offer Shares, you are required to confirm
statements to the following effect in the course of activating the ATM for your Electronic
Application:
(a)
that you have received a copy of this Prospectus and has read, understood and
agreed to all the terms and conditions of application for Offer Shares and this
Prospectus prior to effecting the Electronic Application and agrees to be bound by
the same;
(b)
that you consent to the disclosure of your name, NRIC/passport number, address,
nationality, permanent resident status, CDP Securities Account number, and share
application amount (the ``Relevant Particulars'') from your account with that
Participating Bank to the Share Registrar, CDP, SCCS, the Company and the
Manager (the ``Relevant Parties''); and
(c)
that this is your only application and it is made in your own name and at your own
risk.
Your application will not be successfully completed and cannot be recorded as a completed
transaction in the ATM unless you press the `Ènter'' or `ÒK'' or ``Conrm'' or ``Yes'' key. By
doing so, you shall be treated as signifying your conrmation of each of the above three
statements. In respect of statement 1(b) above, your conrmation, by pressing the `Ènter'' or
`ÒK'' or ``Conrm'' or ``Yes'' key, shall signify and shall be treated as your written permission,
given in accordance with the relevant laws of Singapore including Section 47(4) of the Banking
Act (Chapter 19) of Singapore to the disclosure by that Participating Bank of the Relevant
Particulars to the Relevant Parties.
BY MAKING AN ELECTRONIC APPLICATION, YOU CONFIRM THAT YOU ARE NOT
APPLYING FOR OFFER SHARES AS NOMINEE OF ANY OTHER PERSON AND THAT ANY
ELECTRONIC APPLICATION THAT YOU MAKE IS THE ONLY APPLICATION MADE BY YOU
AS BENEFICIAL OWNER.
YOU SHOULD MAKE ONLY ONE ELECTRONIC APPLICATION FOR OFFER SHARES AND
SHOULD NOT MAKE ANY OTHER APPLICATION FOR OFFER SHARES, WHETHER AT
THE ATM OR THE IB WEBSITES OF ANY PARTICIPATING BANK OR ON THE
APPLICATION FORMS. IF YOU HAVE MADE AN APPLICATION FOR OFFER SHARES ON
176
AN APPLICATION FORM, YOU SHALL NOT MAKE AN ELECTRONIC APPLICATION FOR

OFFER SHARES AND VICE VERSA.
3.
You must have sufcient funds in your bank account with your Participating Bank at the time you
make your Electronic Application, failing which your Electronic Application will not be completed.
Any Electronic Application which does not conform strictly to the instructions set out on
the screens of the ATM or IB website through which your Electronic Application is being
made shall be rejected.
4.
You irrevocably agree and undertake to subscribe for and to accept the number of Offer Shares
applied for as stated on the Transaction Record or any lesser number of Offer Shares that may
be allotted to you in respect of your Electronic Application. In the event that we decide to allot
any lesser number of such Offer Shares or not to allot any Offer Shares to you, you agree to
accept such decision as nal. If your Electronic Application is successful, your conrmation (by
your action of pressing the `Ènter'' or `ÒK'' or ``Conrm'' or ``Yes'' key on the ATM or clicking
``Conrm'' or `ÒK'' on the IB website screen) of the number of Offer Shares applied for shall
signify and shall be treated as your acceptance of the number of Offer Shares that may be
allotted to you and your agreement to be bound by the articles of our Company.
5.
We will not keep any applications in reserve. Where your Electronic Application is
unsuccessful, the full amount of the application moneys will be refunded (without interest or
any share of revenue or other benet arising therefrom) to you by being automatically credited
to your account with your Participating Bank within 3 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 your Electronic Application is rejected or accepted in part only, the full amount or the
balance of the application moneys, as the case may be, will be refunded (without interest or
any share of revenue or other benet arising therefrom) to you by being automatically credited
to your account with your Participating Bank within 14 days after the close of the Application
List.
Responsibility for timely refund of application moneys arising from unsuccessful or
partially successful Electronic Applications lies solely with the respective Participating
Banks. Therefore, you are strongly advised to consult your Participating Bank as to the
status of your Electronic Application and/or the refund of any moneys to you from
unsuccessful or partially successful Electronic Application, to determine the exact
number of Offer Shares allotted to you before trading the Offer Shares on the SGXSesdaq. Neither the SGX-ST, the CDP, the SCCS, the Participating Banks, ourselves or
the Manager assume any responsibility for any loss that may be incurred as a result of
you having to cover any net sell positions or from buy-in procedures activated by the
SGX-ST.
6.
If your Electronic Application is made through the ATMs of DBS (including its POSBank Services
division), the OCBC Group or the UOB Group and is unsuccessful, no notication will be sent by
such Participating Banks.
If your Internet Electronic Application made through the IB website of DBS or the UOB group is
unsuccessful, no notication will be sent by such Participating Bank.
If you make Electronic Applications through the ATMs of the following banks, you may check the
results of your Electronic Applications as follows:
177
Bank
DBS
Telephone
1800 339 6666 (for
POSB account
holders)
Available at
Internet Banking or Internet
Kiosk
Operating Hours
Service
expected from
24 hours a day
7 p.m. on the
balloting day
1800 111 1111 (for

www.dbs.com(2)
DBS account holders)
OCBC
Group
1800 363 3333
ATM
ATM/Phone Banking
24 hours a day
Evening of the
balloting day
UOB
Group
1800 533 5533

1800 222 2121
(for UOB/ICB/FEB)
ATM (Other Transactions ATM/Phone Banking

`ÌPO Enquiry'')(1)
24 hours a day
6 p.m. on the
balloting day
Evening of the
balloting day
1800 224 2000

(for OUB)
http://www.uobgroup.com
(for UOB/ICB/FEB)(1) (2)
Internet Banking
24 hours a day
http://www.oub.com.sg(2)
(for OUB)
OUB Personal Banking
OUB Mobile Buzz
OUB Mobile Buzz(3)

24 hours a day
Notes:
(1) If you have madeyour Electronic Application through the ATMs of the UOB, you may check the results of your
application through UOB Personal UniBanking, UOB ATMs or UOB PhoneBanking Services.
(2) If you have made your Internet Electronic Applications through the IB web-site of DBS or the UOB Group, you may
check the result through the same channels listed in the table above in relation to ATM Electronic Applications made
at ATMs of DBS or the UOB Group.
(3) If you make your Electronic Applications through the ATMs or IB web-site of OUB and have activated your OUB
Mobile Buzz services, you will be notied of the results of your Electronic Applications viayour mobile phone.
7.
Electronic Applications shall close at 12.00 noon on 4 April 2002 or such other time as we may,
in consultation with the Manager, decide. An Internet Electronic Application is deemed to be
received when it enters the designated information system of the relevant Participating Banks.
8.
You are deemed to have requested and authorised us to:
9.
(a)
register the Offer Shares allotted to you in the name of CDP for deposit into your Securities
Account;
(b)
send the relevant Share certificate(s) to CDP;
(c)
return or refund (without interest or any share of revenue earned or other benefit arising
therefrom) the application moneys, should your Electronic Application be rejected, by
automatically crediting your bank account with your Participating Bank with the relevant
amount within 3 Market Days after the close of the Application List; and
(d)
return or refund (without interest or any share of revenue or other benet arising therefrom)
the balance of the application moneys, should your Electronic Application be accepted in
part only, by automatically crediting your bank account with your Participating Bank with
the relevant amount within 14 days after the close of the Application List.
You irrevocably agree and acknowledge that your Electronic Application is subject to risks of
electrical, electronic, technical and computer-related faults and breakdowns, res, acts of God
and other events beyond the control of the Participating Banks and if, in any such event, we,
the Manager and/or the relevant Participating Bank do not receive your Electronic Application,
or data relating to your Electronic Application is lost, corrupted or not otherwise accessible,
whether wholly or partially for whatever reason, you shall be deemed not to have made an
Electronic Application and you shall have no claim whatsoever against us, the Manager and/or
the relevant Participating Bank for Offer Shares applied for or for any compensation, loss or
damage.
178
10.
We do not recognise the existence of a trust. Any Electronic Application by a trustee must be
made in your own name and without qualication. We will reject any application by any person
acting as nominee.
11.
All your particulars in the records of your Participating Bank at the time you make your Electronic
Application shall be deemed to be true and correct and your Participating Bank and the Relevant
Parties shall be entitled to rely on the accuracy thereof. If there has been any change in your
particulars after making your Electronic Application, you shall promptly notify your Participating
Bank.
12.
You should ensure that your personal particulars as recorded by both CDP and the
relevant Participating Bank are correct and identical, otherwise, your Electronic
Application is liable to be rejected. You should promptly inform CDP of any change in
address, failing which the notication letter on successful allotment will be sent to your address
last registered with CDP.
13.
By making and completing an Electronic Application, you are deemed to have agreed that:
(a)
in consideration of us making available the Electronic Application facility, through the

Participating Banks acting as our agents, at the ATMs and the IB websites (if any):
(i)
your Electronic Application is irrevocable; and
(ii)
your Electronic Application, our acceptance and the contract resulting therefrom
under the Invitation shall be governed by and construed in accordance with the laws
of Singapore and you irrevocably submit to the non-exclusive jurisdiction of the
Singapore courts;
(b)
none of us, the Manager or the Participating Banks shall be liable for any delays, failures or
inaccuracies in the recording, storage or in the transmission or delivery of data relating to
your Electronic Application to us or CDP due to breakdowns or failure of transmission,
delivery or communication facilities or any risks referred to in paragraph 9 above or to any
cause beyond their respective controls;
(c)
in respect of Offer Shares for which your Electronic Application has been successfully
completed and not rejected, acceptance of your Electronic Application shall be
constituted by written notification by or on our behalf and not otherwise, notwithstanding
any payment received by or on our behalf;
(d)
you will not be entitled to exercise any remedy of rescission for misrepresentation at any
time after acceptance of your application; and
(e)
reliance is placed solely on information contained in this Prospectus and that none of our
Company, the Manager, the Underwriters, the Joint Lead Placement Agents nor any other
person involved in the Invitation shall have any liability for any information not so contained.
Steps for Electronic Applications through ATMs of DBS (including its POSBank Services
Division)
Instructions for ATM Electronic Applications will appear on the ATM screens of the Participating Bank.
For illustration purposes, the steps for making an ATM Electronic Application through a DBS Bank or
POSBank ATM are shown below. Certain words appearing on the screen are in abbreviated form (`À/
c'', `àmt'', `àppln'', ``&'', `Ì/C'' and ``No.'' refer to `Àccount'', `àmount'', `àpplication'', `ànd'',
``NRIC'' and ``Number'' respectively. Instructions for ATM Electronic Applications on the ATM
screens of Participating Banks (other than DBS Bank (including its POSBank Services Division)), may
differ slightly from those represented below.
Step 1:
Insert your personal DBS or POSBank ATM Card
2:
Enter your Personal Identication Number
3:
Select ``CASHCARD & MORE SERVICES''
179
4:
Select `ÈSA-IPO SHARE/BOND/RIGHTS''
5:
Select `ÈLECTRONIC SECURITY APPLICATION (IPO-SHARE/BOND)'' to ``PNE MCRN''
6:
Press the `ÈNTER'' key to acknowledge:

.
You have read, understood and agreed to all terms of the application & the
Prospectus.
You consent to disclose your name, I/C/Passport No., address, nationality, CDP
Securities A/c No., and share application amount from your Bank Account(s) to
share registrars, SCCS, CDP, CPF, issuer.
For FIXED price share application, this is your only application 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 account (Autosave/Current/Savings/Savings Plus) or the POSBank account

(current/savings) from which to debit your application moneys
9:
Enter the number of securities 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 I/C/passport number and CDP Securities
Account number and number of securities on the screen and press the `ÈNTER'' key to
conrm application
12:
Remove the Transaction Record for your reference and retention only
Steps for an Internet Electronic Application through the IB web-site of DBS

For illustrative purposes, the steps for making an Internet Electronic Application the DBS IB website is
shown below. Certain words appearing on the screen are in abbreviated form (`À/C'', ``&'', `Ì/C'' and
``No.'' refer to `Àccount'', ``NRIC'' and ``Number'' respectively).
Step 1:
Click on to DBS web-site (www.dbs.com)
Step 2:
Login to Internet Banking
Step 3:
Enter your User ID and PIN
Step 4:
Select `Èlectronic Security Application''
Step 5:
Click ``Yes'' to proceed and to warrant that you have observed and complied with all
applicable laws and regulations
Step 6:
Click on ``PNE MCRN''
Step 7:
Click ``Conrm'' to conrm

(1)
You have read, understood & agreed to all terms and application and Prospectus
180
(2)
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 Accounts(s) to share registrars, SCCS, CDP, CPF Board and issuer(s)
(3)
This application is made in your name and at your own risk
(4)
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
(5)
You are not a US person as referred to in the Prospectus/Document, where applicable
Step 8:
Fill in details for share application and click ``Submit''
Step 9:
Check details of your application, your IC/passport No. and no. of shares on the screen
and click `ÒK'' to conrm your application
Step 10:
Print Conrmation Screen (optional) for your reference & retention only
181
This page has been intentionally left blank.



CORE BUSINESS
(i)
Manager

manufacturing basis


Co-Placement Agents


IPO (Final)

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

IPO (Final)

Uploaded by

Copyright:

Available Formats

PROSPECTUS DATED 27 MARCH 2002

PNE MICRON HOLDINGS LTD

Commenced operations in 1992 as a tool & die designer and

(2) 60,500,000 Placement Shares by way of placement comprising:-

a minimum of 45,000,000 Placement Shares at S$0.22 each; and

SBI E2-Capital Securities Limited

SNP SPrint Pte Ltd 62-2075-9

The Group also engages in sub-assembly of micro-motors on a contract

Joint Lead Placement Agents

J. M. Sassoon & Co. (Pte) Ltd.

Phillip Securities Pte Ltd

Underwriters for Public Offer

PROSPECTUS DATED 27 MARCH 2002

PNE MICRON HOLDINGS LTD

Commenced operations in 1992 as a tool & die designer and

(2) 60,500,000 Placement Shares by way of placement comprising:-

a minimum of 45,000,000 Placement Shares at S$0.22 each; and

SBI E2-Capital Securities Limited

SNP SPrint Pte Ltd 62-2075-9

The Group also engages in sub-assembly of micro-motors on a contract

Joint Lead Placement Agents

J. M. Sassoon & Co. (Pte) Ltd.

Phillip Securities Pte Ltd

Underwriters for Public Offer

PNE Micron Engineering (Msia)

- the ISO certifications are internationally

FUTURE GROWTH STRATEGIES

PNE Micron Engineering (Msia)

- the ISO certifications are internationally

FUTURE GROWTH STRATEGIES

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

DETAILS OF THE INVITATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

LISTING ON THE SGX-SESDAQ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

INDICATIVE TIMETABLE FOR LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . .

RESULTS OF APPLICATION AND DISTRIBUTION . . . . . . . . . . . . . . . . . . . . .

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

GROUP FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .

PROFORMA STATEMENT OF GROUP RESULTS . . . . . . . . . . . . . . . . . . . . . .

PROFORMA GROUP BALANCE SHEETS . . . . . . . . . . . . . . . . . . . . . . . . . .

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

REVIEW OF PAST PERFORMANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . .

REVIEW OF RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . .

REVIEW OF PAST FINANCIAL POSITION . . . . . . . . . . . . . . . . . . . . . . . . . .

LIQUIDITY AND CAPITAL RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . .

CAPITALISATION AND INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . .

GENERAL INFORMATION ON OUR GROUP . . . . . . . . . . . . . . . . . . . . . . .

PROSPECTS, BUSINESS STRATEGY AND FUTURE PLANS . . . . . . . . . . . . . . .

BUSINESS STRATEGY AND FUTURE PLANS . . . . . . . . . . . . . . . . . . . . . . .

INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . .

PAST INTERESTED PERSON TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . .

REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS . . . . . .

POTENTIAL CONFLICTS OF INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . .

DIRECTORS, MANAGEMENT AND STAFF . . . . . . . . . . . . . . . . . . . . . . . .

THE PNE MICRON EMPLOYEES' SHARE OPTION SCHEME . . . . . . . . . . . . . .

PROPERTIES AND FIXED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

APPENDIX A RULES OF THE PNE MICRON EMPLOYEES' SHARE OPTION

APPENDIX B DESCRIPTION OF SINGAPORE COMPANY LAW RELATING TO

APPENDIX C DESCRIPTION OF SINGAPORE LAW AND REGULATIONS RELATING

APPENDIX D TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION

Tan Kong Heng (Non-Executive Chairman)

Lee Kay Beng, CPA

SHARE REGISTRAR AND