IPOP

P R O S P E C T U S D A T E D 1 5 M AY 2 0 0 0
We have applied to the Singapore Exchange Securities

Trading Limited (SGX-ST) for permission to deal
in and for quotation of all our ordinary shares
of $0.10 each (Shares) already issued as
well as the new Shares (the New Shares)
which are the subject of this Invitation. Such
permission will be granted when we have been
admitted to the Official List of the SGX-MAIN BOARD.
Acceptance of applications will be conditional upon permission being granted to deal in and for quotation for all of
our issued Shares as well as the New Shares. Moneys paid in
respect of any application accepted will be returned without
An Integrated
Manufacturer
interest or any share of revenue earned or other benefit arising

therefrom and at your risk, if the said permission is not granted.
The SGX-ST assumes no responsibility for the correctness of
any of the statements made, reports contained or opinions expressed
of Essential
in this Prospectus. Admission to the Official List of the SGX-ST is not to

be taken as an indication of the merits of the Invitation, our Company, our subsidiaries, our
Shares or our New Shares.
A copy of this Prospectus has been lodged with and registered by the Registrar of Companies
Electrical and
Established in 1983, we are an integrated

manufacturer of essential electrical and
electronic devices, who offer design services
to our customers.
and Businesses in Singapore who takes no responsibility for its contents. Investing in the Shares
involves risks which are described under Risk Factors beginning on page 14 of this Prospectus.
P N E I N D U S T R I E S LT D
Electronic
Devices
Core Business Activities

Principally engaged in the design, development,
manufacture, marketing and distribution of:
( I n c o r p o r a t e d i n t h e R e p u b l i c o f S i n g a p ore o n 2 5 S e p t e m b er 1 9 9 9 )
Transformers and Electronic Controllers

Emergency Lighting Equipment and Electronic Ballasts
Key Financials
Invitation in respect of 51,138,000 new ordinary shares of $0.10 each comprising:-
PNE INDUSTRIES LTD

14 Senoko Loop
Singapore 758150
Tel: (65) 752-3833
(a) 10,228,000 Offer Shares at $0.26 for each Offer Share by way of public offer; and
(b) 40,910,000 Placement Shares by way of placement, comprising:(i) 35,797,000 Placement Shares at $0.26 for each Placement Share; and
(ii) 5,113,000 Reserved Shares at $0.26 for each Reserved Share to Directors
(including Independent Directors), management staff and other employees of the Group,
Profit Before Tax (S$ million)

36.8
33.2
30
4.6
4.2
32.2
4
28.8
3.4
3.2
payable in full on application.
20
1H
15.9
Manager
1H
1.5
10
Fax: (65) 752-8200

Website: http://www.pne.com.sg
Turnover (S$ million)
Underwriter and Placement Agent

0
FY97
FY98
FY99
FY00
Forecast
FY97
FY98
FY99
FY00
Forecast
An Integrated
Manufacturer

of Essential

Electrical and

to our customers.
PN E I N D U STRIES LT D
Electronic
Devices

(Incorporated in the Republic of Singapore on 25 September, 1999)

Key Financials
PNE INDUSTRIES LTD

14 Senoko Loop
Singapore 758150
Tel: (65) 752-3833

36.8
33.2
30
4.6
4.2
32.2
4
28.8
3.4
3.2
20
1H
15.9
Manager
1H
1.5
10
Fax: (65) 752-8200


0
FY97
FY98
FY99
FY00
Forecast
FY97
FY98
FY99
FY00
Forecast
Transformers
Electronic Controllers
Emergency Lighting Equipment & Electronic Ballasts
Key Products
Transformers
Electrical devices for converting the voltage
levels of alternating current either to a
higher or lower level
Used mainly in audio and video appliances
and electrical appliances
Manufacture on a made-to-order basis
Mainly of the EI lamination type, with
sizes ranging from EI28 to EI114
Modules employed in the control of the
operations of electrical appliances such
as room heaters, hair dryers, toasters
and irons
Manufacture in accordance with the
specifications and designs provided by
customers or with designs developed by
our own research and development team
Emergency Lighting Equipment
Lighting equipment that switches on or
remains on during a power failure
Manufacture a range of emergency

lighting equipment with various features
such as those with Exit sign, those for
indoor use and outdoor use
Electronic Ballasts
Electronic components used to ionize
the gas in fluorescent tubes to produce
light
Produce a range of medium to high
performance electronic ballasts for
various types of fluorescent tubes
Competitive Strengths
Quality products and services
numerous quality awards received
comprehensive quality control systems
ISO 9002 certified production process
Strategically located manufacturing bases
in Malaysia
lower costs
proximity to customers
Product design capability

value-added service to customers
received numerous PSB grants
Well established customer base
long-standing relationship with MNCs
over 90% repeat customers
Aiwa and Philips-DAP are customers of
more than 10 years
Experienced and committed management team
responsive to changes in the industry
Growth Prospects
Global emphasis on the protection of the
environment
trend towards adoption of electronic
ballasts due to its lower power
consumption and longer life span
Imposition of minimum standards for
emergency lighting equipment
competitive edge over those who have
yet to comply with these standards
Positive outlook of global economy

expected growth of electronics industry
and recovery of construction industry
Strategies for Growth

To tap on the potential growth in our markets,
we intend to:
increase sales to new Japanese customers
in Singapore and Malaysia
enhance existing products and develop
new designs for our customers
increase sales to existing customers
Transformers
Emergency Lighting Equipment & Electronic Ballasts
Key Products
Transformers
Electrical devices for converting the voltage
levels of alternating current either to a
higher or lower level
Used mainly in audio and video appliances
and electrical appliances
Manufacture on a made-to-order basis
Mainly of the EI lamination type, with
sizes ranging from EI28 to EI114
Modules employed in the control of the
operations of electrical appliances such
as room heaters, hair dryers, toasters
and irons
Manufacture in accordance with the
specifications and designs provided by
customers or with designs developed by
our own research and development team
Lighting equipment that switches on or
remains on during a power failure
Manufacture a range of emergency

lighting equipment with various features
such as those with Exit sign, those for
indoor use and outdoor use
Electronic Ballasts
Electronic components used to ionize
the gas in fluorescent tubes to produce
light
Produce a range of medium to high
performance electronic ballasts for
various types of fluorescent tubes
Competitive Strengths
Quality products and services
numerous quality awards received
comprehensive quality control systems
ISO 9002 certified production process
Strategically located manufacturing bases
in Malaysia
lower costs
proximity to customers
Product design capability

value-added service to customers
received numerous PSB grants
Well established customer base
long-standing relationship with MNCs
over 90% repeat customers
Aiwa and Philips-DAP are customers of
more than 10 years
Experienced and committed management team
responsive to changes in the industry
Growth Prospects
Global emphasis on the protection of the
environment
trend towards adoption of electronic
ballasts due to its lower power
consumption and longer life span
Imposition of minimum standards for
competitive edge over those who have
yet to comply with these standards
Positive outlook of global economy

expected growth of electronics industry
and recovery of construction industry
Strategies for Growth

To tap on the potential growth in our markets,
we intend to:
increase sales to new Japanese customers
in Singapore and Malaysia
enhance existing products and develop
new designs for our customers
increase sales to existing customers
CONTENTS
Page
CORPORATE INFORMATION ......................................................................................................
DEFINITIONS ................................................................................................................................
DETAILS OF THE INVITATION
Listing on the SGX-MAIN BOARD ......................................................................................
10
Indicative Timetable for Listing ............................................................................................
11
PROSPECTUS SUMMARY ..........................................................................................................
12
RISK FACTORS ............................................................................................................................
14
ISSUE STATISTICS ......................................................................................................................
18
SUMMARY OF PROFORMA GROUP FINANCIAL INFORMATION ..........................................
20
GENERAL INFORMATION ON OUR GROUP
Share Capital ........................................................................................................................
22
Shareholders .........................................................................................................................
24
Moratorium ............................................................................................................................
25
Restructuring Exercise .........................................................................................................
26
Group Structure ....................................................................................................................
28
History ...................................................................................................................................
29
Business ................................................................................................................................
31
Finance ..................................................................................................................................
44
Foreign Exchange .................................................................................................................
46
Review of Past Performance ...............................................................................................
47
Prospects and Future Plans ................................................................................................
52
Dividends ...............................................................................................................................
54
Profit Forecast ......................................................................................................................
54
Major Customers ..................................................................................................................
55
Major Suppliers .....................................................................................................................
56
Competition ...........................................................................................................................
58
Interested Person Transactions ...........................................................................................
60
Directors, Management and Staff ........................................................................................
65
Corporate Governance and Audit Committee .....................................................................
69
Service Agreements .............................................................................................................
70
Properties and Fixed Assets ................................................................................................
72
UNAUDITED PROFORMA CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX

MONTHS ENDED 31 MARCH 2000 ........................................................................................
74
LETTER FROM THE AUDITORS AND REPORTING ACCOUNTANTS IN RELATION TO

THE PROFORMA CONSOLIDATED PROFIT FORECAST FOR THE FINANCIAL YEAR
ENDING 30 SEPTEMBER 2000 ..............................................................................................
75
Page
LETTER FROM THE AUDITORS AND REPORTING ACCOUNTANTS IN RELATION TO
THE UNAUDITED PROFORMA CONSOLIDATED FINANCIAL STATEMENTS FOR
THE SIX MONTHS ENDED 31 MARCH 2000 ........................................................................
76
DIRECTORS REPORT .................................................................................................................
77
VALUERS REPORT .....................................................................................................................
78
ACCOUNTANTS REPORT ...........................................................................................................
86
GENERAL AND STATUTORY INFORMATION ............................................................................
105
APPENDIX
Terms and Conditions and Procedures for Application ......................................................
124
Additional Terms and Conditions for Applications using Printed Application Forms ........
127
Additional Terms and Conditions for Electronic Applications .............................................
130
Instructions for Electronic Applications through ATMs of the UOB Group and the
IB Web-site of UOB ..........................................................................................................
134
CORPORATE INFORMATION
Board of Directors
Mr Tan Kong Heng (Chairman)

Mr Tan Koon Chwee
Mr Tan Kong Leong
Ms Tan Bee Foon
Mr Tan Kong Boon
Mr Tan Kwong Soon
Mr Tan Kong Guan
Mr Tung Chee Weng
Mr Tan Lee Khiang
Company Secretary
Ms Tan Siew Tin, Sharon, ACIS
Registered Office
14 Senoko Loop
Singapore 758150
Registrar and Share Transfer Office
Compact Administrative Services Pte Ltd

95 South Bridge Road #10-10
Pidemco Centre
Singapore 058717
Auditors and Reporting Accountants
Deloitte & Touche

Certified Public Accountants
95 South Bridge Road #09-00
Pidemco Centre
Singapore 058717
Solicitors to the Invitation
Shook Lin & Bok

1 Robinson Road #18-00
AIA Tower
Singapore 048542
Property Valuers
KGV-Lambert Smith Hampton

Unit 9-01 Level 9
Johor Bahur City Square (Office Tower)
Nos 106-108 Jalan Wong Ah Fook
80000 Johor Bahru
Johor Darul Takzim
Malaysia
Manager
UOB Asia Limited

80 Raffles Place
UOB Plaza 1
Singapore 048624
United Overseas Bank Limited

80 Raffles Place
UOB Plaza 1
Singapore 048624
Principal Bankers

80 Raffles Place
UOB Plaza 1
Singapore 048624
Multi-Purpose Bank Berhad
Unit G128 Holiday Plaza
Jalan Dato Suleiman
Century Garden
80250 Johor Bahru
Johor Darul Takzim
Malaysia
DEFINITIONS
For the purpose of this Prospectus and the accompanying Application Forms, the following definitions
have, where appropriate, been used:Companies
Company or PNE
PNE Industries Ltd, a company incorporated in Singapore. The

terms we, our, our Company or us have correlative
meanings.
Focal Dynamic
Focal Dynamic Sdn Bhd, a company incorporated in Malaysia
PNE Appliance Controls
PNE Appliance Controls Pte Ltd, a company incorporated in

Singapore
PNE Electric
PNE Electric Sdn. Bhd., a company incorporated in Malaysia
PNE Electric (Spore)
PNE Electric Pte Ltd, a company incorporated in Singapore
PNE Electronics
PNE Electronics Sdn Bhd, a company incorporated in Malaysia
PNE Investment
PNE Investment Pte Ltd, a company incorporated in Singapore
PNE Group or Group
Our Group of companies, comprising our Company and its

subsidiaries following the Restructuring Exercise, treated in
existence since 1 October 1994. The term our Group shall have
the same correlative meaning
PNE Micron
PNE Micron Engineering Sdn Bhd, a company incorporated in

Malaysia
PNE PCB
PNE PCB Bhd, a company incorporated in Malaysia
PNE Plas
PNE Plas Sdn Bhd, a company incorporated in Malaysia
PNE Systems
PNE Systems Sdn. Bhd., a company incorporated in Malaysia
PNE Translite
PNE Translite Pte Ltd, a company incorporated in Singapore
Print N Etch
Print N Etch Pte Ltd, a company incorporated in Singapore
Aiwa
Aiwa Electronics (M) Sdn Bhd
Philips-DAP
Philips Electronics Singapore Pte Ltd DAP Administration

Department
Fujikura
Fujikura (Malaysia) Sdn Bhd
Kenwood
Kenwood Electronic Technologies (M) Sdn Bhd
Macglotech Steel
Macglotech Steel (M) Sdn Bhd
Saft
Saft Singapore Pte Ltd
Tatt Giap
Tatt Giap Metal Industries Sdn Bhd
Other companies
Other Organisations
BNM
Bank Negara Malaysia, the central bank of Malaysia
BOMBA
Jabatan Bomba dan Penyelamat Malaysia (also known as The

Fire & Safety Department of Malaysia)
CDP
The Central Depository (Pte) Limited
CPF
Central Provident Fund
EPU
The Economic Planning Unit, Prime Ministers Department,

Malaysia
FIC
The Foreign Investment Committee in the EPU
ISO
International Standards Organisation
MITI
Ministry of International Trade and Industry, Malaysia
PSB
The Singapore Productivity and Standards Board
SCCS
Securities Clearing & Computer Services (Pte) Ltd
SGX-ST or the Exchange
Singapore Exchange Securities Trading Limited
SIRIM
Institut Standard & Penyelidikan Perindustrian Malaysia (also

known as Standard & Industrial Research Institute of Malaysia)
UOB
UOBA or Manager
UOB Asia Limited
Act or Companies Act
The Companies Act (Cap. 50, Revised Ed. 1994), Singapore
Application Forms
The printed application forms to be used for the purpose of the

Invitation and which forms part of this Prospectus
Application List
The list for applications and subscription of the New Shares
ASEAN
Association of Southeast Asian Nations
ATM
Automated teller machine
Directors
The directors of the Company as at the date of this Prospectus
Electronic Applications
Applications for the Offer Shares made through an ATM of one

of the Participating Banks in accordance with the terms and
conditions of this Prospectus
FY
Financial year ended 30 September
ICA
Industrial Coordination Act 1975 of Malaysia
Invitation
Our invitation to the public to subscribe for the New Shares

subject to, and on the terms and conditions of, this Prospectus
General
Issue Price
$0.26 for each Offer Share and each Placement Share
Listing Manual
The Listing Manual of the Exchange
Market Day
A day on which the Exchange is open for trading in securities
NTA
Net tangible assets
New Shares
The 51,138,000 new Shares for which we invite applications to

subscribe, subject to and on the terms of this Prospectus
Offer
The offer by us to the public for subscription of the Offer Shares

at the Issue Price, subject to and on the terms and conditions
of this Prospectus
Offer Shares
The 10,228,000 New Shares which are the subject of the Offer
Participating Banks
The Development Bank of Singapore Ltd (including its POSBank

Services division); Keppel TatLee Bank Limited (KTB); OverseaChinese Banking Corporation Limited (OCBC) Group
(comprising OCBC and Bank of Singapore Limited); Overseas
Union Bank Limited (OUB) Group (comprising OUB and
International Bank of Singapore Limited); and United Overseas
Bank Limited (UOB) Group (comprising UOB, Far Eastern Bank
Limited and Industrial & Commercial Bank Limited)
Placement
The placement of the Placement Shares by the Placement Agent

on our behalf at the Placement Price subject to, and on the
terms and conditions of, this Prospectus
Placement Agent
UOBA
Placement Shares
The 40,910,000 New Shares which are the subject of the

Placement, including the Reserved Shares
Prospectus
The prospectus issued in connection with the Invitation
Reserved Shares
5,113,000 of the Placement Shares reserved for Directors

(including Independent Directors), management staff and other
employees of the Group
Restructuring Exercise
The restructuring exercise implemented in connection with the

Invitation, more fully described on page 26 of this Prospectus
Securities Account
The securities account maintained by a depositor with CDP
Shares
Ordinary shares of $0.10 each in the capital of our Company
Underwriter
UOB
UK
United Kingdom
USA
United States of America
sq ft
Square feet
sq m
Square metres
% or per cent.
Percentage
$ or S$ and Cents
Singapore dollars and cents respectively
RM
Malaysian Ringgit
US$
United States Dollar
GLOSSARY OF TECHNICAL TERMS

For the purpose of this Prospectus, the following technical terms and abbreviations have, where
appropriate, been used:bobbins
The mechanical structure around which enamelled copper wire

is wound to form the transformer
core shields
Steel plates enclosing the EI laminations to reduce the leakage

of magnetic fields from the transformer
electronic ballasts
The electronic components used to ionize the gas in fluorescent

tubes to produce light
electronic controllers
Modules to control the operation of electrical appliances and

lighting equipment, including the printed circuit board assemblies
which are encased in any form of chassis
Lighting equipment that switches on or remains on when a

power failure occurs
EI laminations
Laminated silicon steel sheets in the shape of the letters E

and I prior to assembly
jig
A device that holds a piece of work and guides the tools

operating on it
Statistical Process Control

or SPC
A systematic method of tracking, predicting and reducing

process variations. It involves sampling a process at regular
intervals. Sub-groups are then analyzed to determine if the
process is in statistical control and/or capable of meeting
requirements. If the process is found to be out of control and/
or not capable, it is analyzed to determine the sources of
unwanted variability. Once the sources are determined, steps
are taken to remove or reduce the adverse influences
transformers
Electrical devices for converting voltage levels of alternating

currents to a higher or lower level
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 defined in the Act or any statutory
modifications thereof and used in this Prospectus and the Application Forms, where applicable, shall
have the meaning assigned to it under the Act or statutory modification as the case may be.
Any reference in this Prospectus or the Application Forms to shares being allotted to an applicant
includes allotment to CDP for the account of that applicant.
Any reference to a time of day in this Prospectus and the Application Forms will be a reference to
Singapore time, unless otherwise stated.
DETAILS OF THE INVITATION

LISTING ON SGX-MAIN BOARD
We have applied to the SGX-ST for permission to deal in and for quotation for all the Shares
already issued as well as the New Shares on the SGX-ST. Such permission will be granted when
we have been admitted to the Official List of the SGX-MAIN BOARD. Acceptance of applications will
be conditional upon permission being granted to deal in and for quotation for all of our issued
Shares as well as the New Shares. Moneys paid in respect of any application accepted will be
returned, without interest or any share of revenue or other benefit arising therefrom and at the
applicants 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-MAIN
BOARD is not to be taken as an indication of the merits of the Invitation, our Company, our
subsidiaries, our Shares or our New Shares.
Our Directors collectively and individually accept full responsibility for the accuracy of the information
given in this Prospectus and confirm, having made all reasonable enquiries, that to the best of their
knowledge and belief, there are no other material facts the omission of which would make any
statement in this Prospectus misleading.
We have not authorised any person to give any information or to make any representation not
contained in this Prospectus in connection with the Invitation and, if given or made, such information
or representation must not be relied upon as having been authorised by us 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 our affairs or the affairs of our Group or in any statement of fact or
information contained in this Prospectus since the date of this Prospectus. Where such changes
occur, we may make an announcement of the same to the SGX-ST. All applicants should take note
of any such announcement and, upon the release of such an announcement, shall be deemed to
have notice of such changes. Save as expressly stated in the Prospectus, nothing herein is, or may
be relied upon as a promise or representation as to our or our subsidiaries future performance or
policies. This Prospectus has been prepared solely for the purpose of the Invitation and may not be
relied upon by any persons other than the applicants in connection with their application for our New
Shares or for any other purpose. This Prospectus does not constitute an offer of or invitation to
subscribe for our 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:UOB ASIA LIMITED
80 Raffles Place
UOB Plaza 1
Singapore 048624
and from branches of the UOB Group, members of the Association of Banks in Singapore, members
of the SGX-ST and merchant banks in Singapore.
The Application List will open at 10.00 a.m. on 23 May 2000 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 limitations under all applicable laws.
10
INDICATIVE TIMETABLE FOR LISTING

In accordance with the SGX-STs News Release of 28 May 1993 on the trading of initial public
offering shares on a when issued basis, the indicative timetable for trading in our Shares is set out
below for the reference of applicants:Indicative date/time
Event
23 May 2000, 12.00 noon
Close of Application List
24 May 2000
Balloting of applications, if necessary
25 May 2000, 9.00 a.m.
Commence trading on a when issued basis
1 June 2000
Last day of trading on a when issued basis
2 June 2000, 9.00 a.m.
Commence trading on a ready basis
7 June 2000
Settlement date for all trades done on a when issued basis and
for trades done on a ready basis on 2 June 2000
The above timetable is only indicative as it assumes that the closing date of the Application List is
23 May 2000, the date of admission of our Company to the Official List of the SGX-MAIN BOARD
is 25 May 2000, the SGX-ST shareholding spread requirement will be complied with and our New
Shares will be issued and fully paid-up prior to 25 May 2000. The actual date on which our Shares
will commence trading on a when issued basis will be announced when it is confirmed by the
SGX-ST.
The above timetable and procedure may be subject to such modifications as the SGX-ST may in its
discretion decide, including the decision to permit trading on a when issued basis and the
commencement date of such trading. The commencement of trading on a when issued basis will
be entirely at the discretion of the SGX-ST. You should note that 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, as the case
may be, have been allotted with or are otherwise beneficially entitled to. Such persons are
also exposed to the risk of having to cover their net sell positions earlier if when issued
trading ended sooner than the indicative date mentioned above. Persons who have a net sell
position traded on a when issued basis should close their position on or before the first
day of ready basis trading.
You should consult the SGX-ST announcement on ready listing date on the Internet (at the
SGX-ST website http://www.singaporeexchange.com), INTV or the newspapers, or check with your
brokers on the date on which trading on a ready basis will commence.
11
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and is subject to, the more detailed information
and financial information, appearing elsewhere in this Prospectus. Terms defined elsewhere in this
Prospectus have the same meanings when used herein. You should carefully consider the information
presented in this Prospectus, particularly the matters set out under Risk Factors.
OUR COMPANY
Our Company was incorporated in Singapore on 25 September

1999 under the Act as an exempt private limited company, under
the name of PNE Industries Pte Ltd. Our Company subsequently
converted to a public limited company on 19 April 2000 and
changed its name to PNE Industries Ltd.
OVERVIEW OF OUR GROUP
We are principally engaged in the design, development,

manufacture, marketing and distribution of transformers,
electronic controllers, emergency lighting equipment and
electronic ballasts.
We sell our emergency lighting equipment and electronic ballasts
under the PNE brand name, whereas our transformers and
electronic controllers are non-branded products. While the
designs of our transfomers and electronic controllers are
customised to the needs of our customers, our emergency
lighting equipment and electronic ballasts are generic products
which are not customised.
Our offices in Singapore and Malaysia sell our products to
businesses located in these markets. While sales are mainly in
the Singapore and Malaysian markets, our products are also
sold to other markets through our Singapore office. In respect
of emergency lighting equipment and electronic ballasts, we have
customers in Indonesia, Thailand and Brunei. In respect of
transformers and electronic controllers, we have customers in
Indonesia, Hong Kong, Australia and New Zealand.
All our manufacturing operations are located in West Malaysia
to take advantage of the lower operating costs there.
We are committed to providing quality products to our customers.
We have implemented stringent controls in our manufacturing
procedures to ensure production of high quality and reliable
products. Our factories in Johor and Pahang have been awarded
the ISO 9002 certification, as well as various quality awards by
our customers.
We believe that our competitive strengths are close and longstanding customer relations, cost advantages in our
manufacturing operations and the provision of design services
in respect of transfomers and electronic controllers.
With the current global emphasis on the protection of the
environment, there is a trend towards the adoption of electronic
ballasts in place of conventional ballasts. Further, the outlook
of the global economy is positive, the electronics industry is
expected to grow and the construction industry is recovering. In
view of these, we are optimistic of our future prospects.
12
THE INVITATION
Issue Size
51,138,000 New Shares, comprising 10,228,000 Offer Shares

and 40,910,000 Placement Shares, which will, when issued and
fully paid, rank pari passu in all respects with our existing issued
Shares.
Price
$0.26 for each New Share.
Purpose of Invitation
The purpose of the Invitation is to secure the admission of our

Company to the Official List of the SGX-MAIN BOARD to provide
the members of the public, our management, staff and business
associates with an opportunity to participate in our equity. Our
Directors consider that our listing and the quotation of our Shares
on the SGX-ST will enhance our public image and enable us to
tap the capital markets for the future expansion of our operations.
The proceeds of the issue of our New Shares will also provide
us with additional working capital to finance our business
expansion.
Use of Proceeds
The net proceeds attributable to us from the issue of our New

Shares (after deducting the estimated expenses in relation to
the Invitation) will be approximately $12.2 million.
The estimated net proceeds will be used as follows:(i)
approximately $1.4 million will be used to repay bank

borrowings. Please refer to page 63 of this Prospectus for
further details;
(ii) approximately $1.6 million will be used for the purchase of

new machineries and equipment; and
(iii) the balance of approximately $9.2 million will be used as
working capital to finance our continued growth and
development and for the expansion of our business
operations.
Pending the deployment of the net proceeds from the Invitation
as aforesaid, the net proceeds may be used to invest in such
short term money market instruments as our Directors may deem
fit.
Reserved Shares
5,113,000 of the Placement Shares will be reserved for our

Directors (including Independent Directors), management staff
and other employees 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 of the Placement Shares, to satisfy
applications from the members of the public for the Offer Shares.
Listing Status
Our Shares will be quoted on the Official List of SGX-MAIN

BOARD, subject to our admission to the Official List of SGXMAIN BOARD and permission for dealing in and for quotation
of our Shares being granted by the SGX-ST.
13
RISK FACTORS
Investing in our Shares involves significant risks. Prior to making an investment decision, you should
carefully consider the following information contained in the Prospectus including our consolidated
financial statements and related notes, before you decide to buy our Shares. If any of the following
risks were to materialise, our business, results of operations and financial condition would likely
suffer. In any such case, the market price of our Shares could decline, and you may lose all or part
of the money you paid to subscribe for our Shares or purchase our Shares after the Invitation.
We are vulnerable to increases in prices of raw material
Raw material costs constitute a significant proportion of production costs for our products. The costs
of copper wire and steel lamination accounted for 14.3%, 21.2% and 28.8% of our production costs
in FY1997, FY1998 and FY1999 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, significant price increases for these raw materials may result in lower
profits for us.
We are dependent on purchases of raw materials from PNE Plas and PNE Micron
We purchase plastic bobbins and toolings from PNE Plas and metal brackets and casing from PNE
Micron. Please refer to Interested Person Transactions on page 60 for further details.
Plastic bobbins, metal brackets and casing are used in the manufacture of our transformers, emergency
lighting equipment and electronic ballasts. Such purchases accounted for 3.1%, 4.4% and 8.0%
(PNE Plas) and 4.2%, 4.9% and 6.1% (PNE Micron) of our total purchases for FY1997, FY1998 and
FY1999 respectively.
PNE Plas and PNE Micron are our only suppliers of these materials. In the event that supplies from
PNE Plas and PNE Micron are cut off or are reduced significantly for any reason, we may not be
able to immediately source for an alternative supplier who is able to supply goods of comparable
quality and reliability. Our production will inevitably be disrupted and delayed which would in turn
result in our inability to satisfy customer orders. Consequently, our sales revenue and financial
performance would be adversely affected.
We are reliant upon a few major customers
We are dependent on two major customers, Aiwa and Philips-DAP, who collectively accounted for
43.7%, 56.8% and 56.9% of our total turnover in FY1997, FY1998 and FY1999 respectively. For
more details, please refer to Major Customers on page 55 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 significant reduction in orders from, these major customers could have a material
adverse impact on our financial position.
We are subject to foreign exchange risks
Approximately 57.9% of our sales in FY1999 are denominated in RM and 39.0% are denominated in
S$. In comparison, about 42.6% of our purchases and expenses are denominated in RM and 52.4%
are denominated in S$ in FY1999. Fluctuations in the exchange rate between RM and S$ will
therefore have an impact on us. With a higher proportion of sales than purchases and expenses
denominated in RM, any depreciation of RM against S$ will translate into higher reported purchases
and expenses relative to sales revenues and would therefore have an unfavorable impact on our
financial results.
14
Foreign currency monetary assets and liabilities are reported in the reporting currency of our Company
and the reporting currency of our subsidiaries at the exchange rates as at the balance sheet date.
All exchange adjustment gains and losses are dealt with in the profit and loss statement. Depending
on the amount of monetary assets and liabilities denominated in foreign currencies, significant
fluctuations of RM against foreign currencies and S$ against foreign currencies will result in exchange
gains and losses. Our foreign exchange gains/losses as a percentage of profit before tax have not
been significant except for FY1998. Please refer to Foreign Exchange on page 46 for details.
Presently, we do not have any formal hedging policy with respect to our foreign exchange exposure
and we do not intend to pursue such a policy in future.
We are subject to, and may be affected by, political and regulatory considerations in Malaysia
All our manufacturing operations are located in West Malaysia. In FY1997, FY1998 and FY1999,
52.7%, 43.9% and 57.9% of our total sales turnover were derived from our Malaysian operations.
Accordingly, our operating results and financial conditions may be affected by the political, economic
and regulatory developments in Malaysia.
(a)
Manufacturing licences in Malaysia

Our wholly-owned subsidiary, PNE Electric, is engaged in the manufacture of all our products.
PNE Electric was issued various manufacturing licences by MITI under the ICA for the
manufacture of our products. The terms of such licenses require us, inter alia, to export between
80-100% of our production of the respective products as stated in the relevant licences.
We require the above licences to permit us to conduct our manufacturing operations in Malaysia.
We would therefore have to continuously monitor and ensure that all the terms and conditions
set out in the licences are complied with, in particular, the requirement to export the specified
proportion of the specified class of products. We have, to date, complied with all the requirements
set out in the above licences. The revocation of the above licences or changes to the terms
and conditions thereto will adversely affect our ability to manufacture our products in Malaysia.
(b)
Approvals from the Foreign Investment Committee

Our Malaysian subsidiaries are subject to the Foreign Investment Committee (FIC) guidelines
issued by the Economic Planning Unit (EPU) in Malaysia, which inter alia, requires that approval
of the FIC be obtained when an acquisition is made in respect of 15% or more of the voting
shares of Malaysian companies.
There is no assurance that the current policy stance of the EPU pertaining to foreign ownership
as set out in the FIC guidelines would be maintained. Changes to existing FIC guidelines or
the introduction of new regulations governing foreign ownership could affect our investments in
our Malaysian subsidiaries, namely PNE Systems and PNE Electric.
In the event that we are required pursuant to the FIC guidelines to divest part of our interest in
PNE Systems and PNE Electric, we may not be able to retain full management control and our
operations in Malaysia may be affected. Accordingly, our financial performance could be adversely
affected.
15
(c)
Malaysian economic and political considerations

As 52.7%, 43.9% and 57.9% of our total turnover in FY1997, FY1998 and FY1999 respectively
were generated from our Malaysian operations, our financial performance will be affected by
the economic climate in Malaysia. Our turnover from our Malaysian offices has decreased from
$17.5 million in FY1997 to $14.1 million in FY1998 due, in part, to the recent regional economic
crisis.
Malaysia is still in the process of recovery from the recent economic crisis. We are uncertain if
such recovery can be sustained. If significant political or economic crisis occurs in Malaysia in
the future, our performance may be detrimentally affected. There is no guarantee that such
crisis will not recur.
In addition, our operations are affected by other economic and political 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.
We are dependent on the state of the electronics industry and on the construction industry
Our transformers and electronic controllers are supplied to manufacturers of audio and video
appliances (such as video cassette recorders, amplifiers and video compact disc players) and electrical
appliances (such as room heaters, hair dryers and irons). The demand for such appliances is affected
by the state of the electronics industry. Our sales of transformers and electronic controllers are
therefore indirectly dependent on the electronics industry. In FY1997, FY1998 and FY1999,
transformers and electronic controllers accounted for 61.2%, 71.6% and 71.2% of our total turnover
respectively.
Our emergency lighting equipment and electronic ballasts are supplied to members of the construction
industry, including wholesalers, contractors and lighting manufacturers. Our sales of emergency lighting
equipment and electronic ballasts are therefore, to a certain extent dependent on the state of the
construction industry. In FY1997, FY1998 and FY1999, emergency lighting equipment and electronic
ballasts accounted for 38.8%, 28.4% and 28.8% of our total turnover respectively.
We would like to highlight that the construction industry in Singapore and Malaysia was badly affected
by the economic slowdown in 1997 and 1998, when certain construction projects were postponed or
cancelled. Partly due to this slowdown, our sales for emergency lighting equipment and electronic
ballasts decreased by about 30% from $12.9 million in FY1997 to $9.1 million in FY1998. While both
Malaysia and Singapore are in the process of recovering from the economic crisis, there is no
guarantee that the construction industry will improve significantly in future or that such a downturn
will not recur.
We are subject to the cyclical nature of the construction industry and the electronics industry. Any
downturn in these industries will have an adverse effect on our financial performance.
We are dependent on 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 Koon Chwee and Tan Kong Leong, who are
collectively responsible for our operations, sales and marketing functions. We cannot assure you
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 you that we
will be able to recruit and retain a suitable replacement. Mr Tan Koon Chwee is our Executive
Managing Director while Mr Tan Kong Leong is our Executive Director. For further details of the
contributions of these key personnel, please refer to Directors, Management and Staff on page 65
of this Prospectus.
16
We rely upon Print N Etch for the licensing of the PNE trademark
Our electronic ballasts and emergency lighting equipment are marketed under the PNE trademark.
Print N Etch1 , our related party company has submitted applications for the registration of the PNE
trademark, details of which are set out on page 42 of this Prospectus.
We have licensed the PNE trademark from Print N Etch, which is wholly owned by Messrs Tan
Kong Heng, Tan Kong Boon, Tan Kwong Soon, Tan Kong Guan, Tan Koon Chwee, Tan Kong Leong,
Tan Kong Sin, Tan Kwang Hua and Tan Kong Hock. Messrs Tan Kong Heng, Tan Kong Boon, Tan
Kwong Soon, Tan Kong Guan, Tan Kong Sin and Tan Kwang Hua are directors of Print N Etch, and
with the exception of Messrs Tan Kong Sin and Tan Kwang Hua, they are also Directors of our
Company.
With effect from 1 October 1999, licence fees have been paid to Print N Etch for the right to use the
trademark. The licence fees are pegged to 0.3% of the sales of our electronic ballasts and emergency
lighting equipment. Prior to October 1999, no licence fees were paid. Aside from PNE Translite and
PNE Systems which use the trademark for the marketing of our electronic ballasts and emergency
lighting equipment, none of our related parties use the PNE trademark in their products. Please
refer to Trademarks on page 42 and Trademark Agreement on page 63 of this Prospectus for
more details.
We depend on the PNE trademark for brand recognition, repeat sales and customer loyalty. The
loss of the right to use such trademark could result in us having to market our electronic ballasts
and emergency lighting equipment under a new brand name. We cannot assure you that such new
brand name would enjoy the same level of goodwill and name recognition as the PNE trademark
which has been in use since 1991.
We are vulnerable to changes in the requirements and standards imposed by various regulatory
authorities
Certain minimum standards are imposed on emergency lighting equipment by the Singapore standards
authority (the Fire Safety Bureau) and the Malaysian standards authority (BOMBA and SIRIM). If
these standards are raised or new requirements are imposed, additional costs may be incurred by
us to ensure compliance with the new standards. There is no assurance that such additional costs
can be passed on to our customers and consequently, our financial performance would be adversely
affected.
1 Print N Etch is a company incorporated in Singapore. Its principal activities are the manufacturing of precision engineering
moulds and tools and dies. It is also an investment holding company.
17
ISSUE STATISTICS
Price for each New Share
26 cents
Net Tangible Assets

Our NTA per Share, based on our audited consolidated balance sheet as at
30 September 1999:
Before adjusting for the estimated net proceeds from the Invitation and
based on the pre-Invitation share capital of 138,862,300 Shares
10.9 cents
After adjusting for the estimated net proceeds from the Invitation and
based on the post-Invitation share capital of 190,000,300 Shares
14.4 cents
Premium of price per New Share over NTA per Share as at 30 September
1999:
Before adjusting for the estimated net proceeds from the Invitation
and based on the pre-Invitation share capital of 138,862,300 Shares
138.5%
After adjusting for the estimated net proceeds from the Invitation and
based on the post-Invitation share capital of 190,000,300 Shares
80.6%
Earnings
Our historical net earnings per Share for the year ended 30 September
1999 based on the pre-Invitation share capital of 138,862,300 Shares
2.5 cents
Our historical net earnings per Share had the Service Agreements set out
on page 70 to 71 of this Prospectus been in effect for the financial year
ended 30 September 1999 and based on the pre-Invitation share capital of
138,862,300 Shares
2.5 cents
Our forecast net earnings per Share for the year ending 30 September
2000 based on the weighted average share capital of 155,908,300 Shares(2)
2.2 cents
Our forecast net earnings per Share had the Service Agreements set out
on page 70 to 71 of this Prospectus been in effect for the financial year
ended 30 September 2000 and based on the weighted average share capital
of 155,908,300 Shares(2)
2.2 cents
Price Earnings Ratio

Our historical price earnings ratio based on the historical net earnings per
Share for the year ended 30 September 1999
10.4 times
Our historical price earnings ratio based on the historical net earnings per
Share had the Service Agreements set out on page 70 to 71 of this
Prospectus been in effect for the financial year ended 30 September 1999
10.4 times
Our forecast price earnings ratio based on the forecast net earnings per
Share for the year ending 30 September 2000 (based on weighted average
share capital of 155,908,300 Shares(2))
11.8 times
Our forecast price earnings ratio based on the forecast net earnings per
Share had the Service Agreements set out on page 70 to 71 of this
Prospectus been in effect for the financial year ending 30 September 2000
(based on weighted average share capital of 155,908,300 Shares(2))
11.8 times
18
Net Operating Cashflow(1)

Our historical net operating cashflow per Share for the year ended
30 September 1999 based on pre-Invitation share capital of 138,862,300
Shares
3.1 cents
Our forecast net operating cashflow per Share for the year ending 30
September 2000 based on the weighted average share capital of 155,908,300
Shares(2)
2.8 cents
Price to Net Operating Cashflow Ratio

Our ratio of Issue Price to historical net operating cashflow based on our
historical net operating cashflow per Share (based on the pre-flotation share
capital of 138,862,300 Shares) for the year ended 30 September 1999
8.4 times
Our ratio of Issue Price to forecast net operating cashflow based on our
forecast net operating cashflow per Share (based on the weighted average
share capital of 155,908,300 Shares) for the year ending 30 September
2000(2)
9.3 times
Dividends
Our forecast gross dividend per Share for the financial year ending 30
September 2000
0.5 cent
Our forecast gross dividend yield (based on the Issue Price of $0.26 each)
1.9%
Our forecast dividend cover
4.8 times
Market Capitalisation
Based on 190,000,300 Shares at the Issue Price of $0.26 each
$49.4 million
Notes:(1) Net operating cash flow is defined as profit after tax, adding back provision for depreciation.
(2) Weighted average share capital is calculated assuming that the Company has the use of the net proceeds from the
issue of 51,138,000 New Shares from 1 June 2000.
19
SUMMARY OF PROFORMA GROUP FINANCIAL INFORMATION

The following information should be read in conjunction with the full text of this Prospectus, including
the Accountants Report set out on page 86 of this Prospectus.
RESULTS OF OUR PROFORMA GROUP
$000
Audited
FY ended 30 September
1995
1996
1997
1998
1999
Unaudited
6 months
ended
31 March
2000
24,076
23,113
33,151
32,150
28,818
15,947
40
11
25
10
1,345
2,644
4,270
3,835
4,986
1,903
583
735
780
647
786
383
69
135
15
42
Net Income before income

tax
754
1,840
3,355
3,173
4,198
1,478
Income Tax
(90)
(1,344)
(1,015)
Net Income attributable to

the shareholders
664
1,596
2,011
2,158
3,526
1,333
Earnings per Share (cents)
0.5
1.1
1.4
1.6
2.5
1.0
<
Turnover
Other income(2)
Earnings before depreciation,
interest and tax
Depreciation
Interest expense
(244)
>
(672)
(145)
Notes:(1) Earnings per Share for each of the five financial years ended 30 September is computed based on the profit after tax
and minority interests but before extraordinary items of each financial year/period divided by the pre-Invitation issued
share capital of 138,862,300 Shares.
(2) Other income comprises interest income on bank deposits.
(3) Had the Service Agreements set out on page 70 of this Prospectus been in existence during the year ended 30
September 1999, the proforma consolidated profit before taxation and profit after taxation attributable to shareholders
would have been approximately $4,163,000 and $3,491,000 respectively. The earnings per share for the year ended 30
September 1999 would be 2.5 cents.
(4) There was a change in accounting year end for PNE Translite with effect from FY 1997 from May 1997 to September
1997 as well as PNE Systems with effect from FY 1996 from May 1996 to September 1996. The change in financial
year end for PNE Translite and PNE Systems was undertaken to standardize the financial year ends of all companies
to September. Where the reporting year ends of these subsidiaries were not co-terminous with the reporting year end
of the Company, we have used consistently the audited financial statements of these subsidiaries drawn up to the
different reporting year ends, without making adjustments to the relevant financial statements, as there was no significant
impact on the Proforma Group financial information presented.
20
FINANCIAL POSITION OF OUR PROFORMA GROUP

The audited consolidated balance sheets of our Proforma Group as at the end of each of the past
five financial years ended 30 September, including NTA per Share, are set out below:$000
Audited
FY ended 30 September
<
>
Unaudited
6 months
ended
31 March
2000
1995
1996
1997
1998
1999
7,002
9,458
8,653
6,885
9,354
9,452
259
259
CURRENT ASSETS
12,687
17,850
23,485
14,213
15,886
17,518
CURRENT LIABILITIES
10,195
16,290
19,694
10,784
9,640
10,032
2,492
1,560
3,791
3,429
6,246
7,486
FIXED ASSETS
OTHER INVESTMENTS
OTHER NON CURRENT
ASSETS
NET CURRENT ASSETS

NON-CURRENT LIABILITIES
SHAREHOLDERS EQUITY
NTA per Share (cents)
(28)
(27)
(496)
(452)
(452)
(452)
9,725
11,250
11,956
9,862
15,153
16,486
9,725
11,250
11,956
9,862
15,153
16,486
7.0
8.1
8.6
7.1
10.9
11.9
Notes:(1) The financial position of our Group as at the end of the past five financial years ended 30 September have been
prepared on a proforma basis, as if our Group had been in existence throughout the period under review.
(2) For comparative purposes, the NTA per share is calculated based on the pre-Invitation share capital of 138,862,300
Shares.
(3) There was a change in accounting year end for PNE Translite with effect from FY 1997 from May 1997 to September
1997 as well as PNE Systems with effect from FY 1996 from May 1996 to September 1996. The change in financial
year end for PNE Translite and PNE Systems was undertaken to standardize the financial year ends of all companies
to September. Where the reporting year ends of these subsidiaries were not co-terminous with the reporting year end
of the Company, we have consistently used the audited financial statements of these subsidiaries drawn up to the
different reporting year ends, without making adjustments to the relevant financial statements, as there was no significant
21
SHARE CAPITAL
We were incorporated under the Act in Singapore on 25 September 1999 as an exempt private
limited Company under the name PNE Industries Pte Ltd. Upon incorporation, our authorised share
capital was $100,000, comprising ordinary shares of $1.00 each, and our issued share capital was
$2 comprising 2 ordinary shares of $1.00 each, fully paid-up.
At an extraordinary general meeting held on 14 April 2000, our shareholders approved, inter alia, the
following:(a)
the increase of our authorised share capital from $100,000 to $40,000,000 consisting of
40,000,000 ordinary shares of $1.00 each;
(b)
the Restructuring Exercise, details of which are set out on page 26 of this Prospectus;
(c)
the capitalisation of $1,266,921 from the revaluation reserve on investment account by way of
bonus issue of 1,266,921 ordinary shares of $1.00 each at par to the existing shareholders of
PNE Electric (prior to the Restructuring Exercise);
(d)
the sub-division of the par value of each of our existing ordinary shares of $1.00 each in our
authorised share capital into 20 ordinary shares of $0.05 each;
(e)
the conversion of our Company into a public limited company and the change of our name to
PNE Industries Ltd;
(f)
the adoption of new Articles of Association;
(g)
the authorisation of our Directors, pursuant to Section 161 of the Act, to issue our Shares
(whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions
and for such purposes as our Directors may in their absolute discretion deem fit provided that
the aggregate number of Shares to be issued shall not exceed 50 per cent of our issued share
capital immediately prior to the proposed issue and provided that the aggregate number of
such Shares to be issued other than on a pro-rata basis to our then existing shareholders shall
not exceed 20 per cent of our issued share capital immediately prior to the proposed issue,
and, unless revoked or varied by us in general meeting, such authority shall continue in force
until the conclusion of our Annual General Meeting or the date by which our next Annual
General Meeting is required by law or by our Articles to be held whichever is the earlier.
At extraordinary general meetings held on 4 May 2000, our shareholders approved, inter alia, the
following:(a)
the consolidation of every two of our existing ordinary shares of $0.05 each in our authorised
share capital into one ordinary share of $0.10 each;
(b)
the issue of 51,138,000 New Shares pursuant to the Invitation. Our New Shares, when issued
and fully paid, will rank pari passu in all respects with our existing Shares; and
(c)
the approval for the Shareholders Mandate authorising members of our Group to enter into the
long term supply contracts with PNE Plas and PNE Micron (details of which are set out at page
63 of this Prospectus under Regulation of future transactions between the Group and PNE
Plas and PNE Micron).
22
The details of the changes in our issued and paid-up share capital since 30 September 1999, being
the date of our last audited financial statements, and our resultant issued and paid-up capital after
the issue of the New Shares are set out below:No. of Shares
Issued and paid-up share capital as at 30 September 1999
(prior to the Restructuring Exercise) comprising fully
paid ordinary shares of $1.00 each
12,619,307
12,619,307
1,266,921
1,266,921
13,886,230
13,886,230
Sub-division of ordinary shares of $1.00 each into 20 ordinary

shares of $0.05 each
277,724,600
13,886,230
Consolidation of every two ordinary shares of $0.05 each into

one ordinary share of $0.10 each
138,862,300
13,886,230
51,138,000
5,113,800
190,000,300
19,000,030
The issue of 12,619,307 ordinary shares in the Company

pursuant to the Restructuring Exercise detailed on page 26
Bonus share issue to capitalize revaluation surplus on
investment in subsidiary
Shares of $1.00 each before Invitation
New Shares to be issued in connection with the Invitation

Shares of $0.10 each after Invitation
The authorised share capital and the shareholders funds of the Company as at 30 September 1999
before and after adjustments to reflect the increase in authorised share capital, the Restructuring
Exercise, the sub-division of Shares and the issue of New Shares are set out below. This statement
should be read in conjunction with the Accountants Report set out on page 86 of this Prospectus.
As at
30 September 1999
$
As adjusted
After Invitation
$
Authorised Share Capital

Ordinary shares of $1.00 each
100,000
40,000,000
19,000,030
Shareholders Funds
Share Capital
Share Premium
7,089,580(1)
Capital Reserve
1,266,921
27,356,531
Note:(1) Net issue proceeds of approximately $12.2 million less par value of Shares.
23
SHAREHOLDERS
Our shareholders and their respective shareholdings, adjusted for the sub-division of shares, before
and immediately after the Invitation are set out below:-
Name of
Shareholders
Note
Before the Invitation

No. of
Shares
%
After the Invitation

No. of
Shares
%
Directors:
Tan Kong Heng
(1) (2)
5,250,000
3.7
5,250,000
2.7
Tan Kong Boon
(1) (2)
5,250,000
3.7
5,250,000
2.7
Tan Kwong Soon
(1) (2)
3,150,000
2.3
3,150,000
1.7
Tan Kong Guan
(1) (2)
3,150,000
2.3
3,150,000
1.7
Tan Koon Chwee
(1) (2)
3,150,000
2.3
3,150,000
1.7
Tan Kong Leong
(1) (2)
3,150,000
2.3
3,150,000
1.7
Tan Bee Foon
(1) (3)
Tung Chee Weng
(3)
Tan Lee Khiang
(3)
(2)
102,018,300
73.4
102,018,300
53.6
Shareholders of 5%
or more:
PNE Investment
Other Shareholders:
Tan Kong Hock
(1) (2)
3,150,000
2.3
3,150,000
1.7
Tan Kwang Hua
(1) (2)
4,375,000
3.2
4,375,000
2.3
Tan Kong Sin
(1) (2)
4,375,000
3.2
4,375,000
2.3
Chin Chew Khay
(3)
1,844,000
1.3
1,844,000
1.0
Public
(3)
51,138,000
26.9
138,862,300
100.0
190,000,300
100.0
Total
Notes:-
(1) Messrs Tan Kong Heng, Tan Kong Boon, Tan Kwong Soon, Tan Kong Guan, Tan Koon Chwee, Tan Kong Leong, Tan
Kwang Hua, Tan Kong Sin, Tan Kong Hock and Ms Tan Bee Foon are siblings.
(2) PNE Investment was incorporated on 23 May 1981. It is an investment holding company with, inter alia, investments in
residential properties for rental. It has an authorised share capital of $5,000,000 and an issued and paid-up share
capital of $2,000,000. Messrs Tan Kong Heng, Tan Kong Boon, Tan Kwong Soon and Tan Kong Guan are the directors
of PNE Investment. The shareholders of PNE Investment are Messrs Tan Kong Heng (15.0%), Tan Kong Boon (15.0%),
Tan Kwang Hua (12.5%), Tan Kong Sin (12.5%), Tan Kwong Soon (9%), Tan Kong Guan (9%), Tan Kong Hock (9%),
Tan Koon Chwee (9%) and Tan Kong Leong (9%). Accordingly, Messrs Tan Kong Heng, Tan Kong Boon, Tan Kwang
Hua, Tan Kong Sin, Tan Kwong Soon, Tan Kong Guan, Tan Kong Hock, Tan Koon Chwee and Tan Kong Leong are
deemed to be interested in all our Shares held by PNE Investment.
(3) The Company intends to allot Reserved Shares to the following persons:Messrs Tung Chee Weng and Tan Lee Khiang, our independent Directors, will be allotted 150,000 and 50,000 Reserved
Shares respectively
Ms Tan Bee Foon, one of our Directors, will be allotted 500,000 Reserved Shares.
Mr Chin Chew Khay, a Director and the General Manager of PNE Systems, will be allotted 500,000 Reserved Shares.
24
Ms Tan Meng Siew, our Financial Controller, will be allotted 100,000 Reserved Shares. Ms Tan Meng Siew is the
daughter of Mr Tan Kong Heng and the niece of Messrs Tan Koon Boon, Tan Koon Chwee, Tan Kong Leong, Tan Kwong
Soon, Tan Kong Guan, Tan Kong Sin, Tan Kwang Hua, Tan Kong Hock and Ms Tan Bee Foon.
Mr Tan Kian Chye, our Manager for lighting business, will be allotted 100,000 Reserved Shares. Mr Tan Kian Chye is
the son of Mr Tan Kong Boon and the nephew of Messrs Tan Kong Heng, Tan Koon Chwee, Tan Kong Leong, Tan
Kwong Soon, Tan Kong Guan, Tan Kong Sin, Tan Kwang Hua, Tan Kong Hock and Ms Tan Bee Foon.
Mr Eugene Tan Wei Kang, our Purchasing Manager, will be allotted 100,000 Reserved Shares. Mr Eugene Tan Wei
Kang is the son of Mr Tan Kong Hock and the nephew of Messrs Tan Kong Heng, Tan Kong Boon, Tan Koon Chwee,
Tan Kong Leong, Tan Kwong Soon, Tan Kong Guan, Tan Kong Sin, Tan Kwang Hua and Ms Tan Bee Foon.
Ms Wong Soon Lian, the Administration Officer of PNE Appliance Controls, will be allotted 100,000 Reserved Shares.
Ms Wong Soon Lian is the sister-in-law of Tan Koon Chwee.
If the above persons fully subscribe for the allotted Reserved Shares after our admission to the Official List of SGXMAIN BOARD, the percentage of shares in public hands will be 26.1% of the enlarged share capital. In the event that
the Reserved Shares are not fully taken up by our employees, Ms Tan Bee Foon, Mr Chin Chew Khay, Ms Tan Meng
Siew, Mr Tan Kian Chye, Mr Eugene Tan Wei Kang and Ms Wong Soon Lian may subscribe for additional Reserved
Shares. Under such circumstance, the percentage of shares in public hands will be at least 25% of the enlarged share
capital. The above persons may dispose of or transfer all or part of their respective shareholdings if they subscribe for
these Reserved Shares. Save as disclosed, none of the Directors (Executive and Non-Executive), substantial shareholders
or associates of the Directors and substantial shareholders will be alloted Reserved Shares.
Save as disclosed above, there are no other relationships among our Directors and our substantial
shareholders.
MORATORIUM
To demonstrate their commitment to our Group, Messrs Tan Kong Heng, Tan Kong Boon, Tan Kwong
Soon, Tan Kong Guan, Tan Koon Chwee, Tan Kong Leong, Tan Kong Hock, Tan Kwang Hua, Tan
Kong Sin and PNE Investment who, in aggregate, hold 137,018,300 Shares, representing 72.1% of
our issued and paid-up share capital after the Invitation, do not intend to dispose of or transfer any
part of their respective shareholdings in our Group for a period of 6 months commencing on the date
of our admission to the Official List of SGX-MAIN BOARD (the Initial Period). In addition, they do
not intend to reduce their aggregate shareholdings in us to below 50% of their original aggregate
shareholding for a period of 6 months after the Initial Period.
PNE Investment will hold 53.6% of the issued and paid-up share capital of our Group after the
Invitation. All the shareholders of PNE Investment (namely, Messrs Tan Kong Heng, Tan Kong Boon,
Tan Kwong Soon, Tan Kong Guan, Tan Koon Chwee, Tan Kong Leong, Tan Kwang Hua, Tan Kong
Sin and Tan Kong Hock) do not intend to dispose or transfer any part of their respective shareholdings
in PNE Investment during the Initial Period. In addition, they do not intend to reduce their aggregate
shareholdings in PNE Investment to below 50% of the issued and paid-up share capital of PNE
Investment for a period of 6 months after the Initial Period.
25
RESTRUCTURING EXERCISE
On 14 April 2000, the Company entered into respective share reconstruction agreements with Messrs
Tan Kong Heng, Tan Kong Boon, Tan Kwong Soon, Tan Kong Guan, Tan Koon Chwee, Tan Kong
Leong, Tan Kwang Hua, Tan Kong Sin, Tan Kong Hock and Chin Chew Khay, pursuant to which the
Company became the investment holding company of the Group. The rationale of the Restructuring
Exercise was to reorganize the various companies under the Company, thereby streamlining the
structure of the Group.
The Restructuring Exercise involved the following steps:1.
Acquisition of PNE Appliance Controls

The Company acquired the entire issued and paid-up capital of PNE Appliance Controls,
consisting of 2,000,000 existing ordinary shares of $1.00 each, together with all rights and
benefits attaching to those shares on and as of 1 October 1999, from Messrs Tan Kong Heng,
Tan Kong Boon, Tan Kwong Soon, Tan Kong Guan, Tan Koon Chwee, Tan Kong Leong, Tan
Kwang Hua, Tan Kong Sin and Tan Kong Hock (PNE Appliance Controls Shareholders) for a
purchase consideration equivalent to the audited net tangible assets of PNE Appliance Controls
as at 30 September 1999 of $3,219,765 which was satisfied by the issue of 3,219,765 ordinary
shares of $1.00 each at par, credited as issued and fully paid to the PNE Appliance Controls
Shareholders, with effect from 14 April 2000.
The PNE Appliance Controls Shareholders renounced all 3,219,765 ordinary shares of $1.00
each to PNE Investment.
2.
Acquisition of PNE Translite

The Company acquired the entire issued and paid-up capital of PNE Translite, consisting of
250,000 existing ordinary shares of $1.00 each, together with all rights and benefits attaching
to those shares on and as of 1 October 1999, from Messrs Tan Kong Heng, Tan Koon Chwee
and Tan Kong Leong (PNE Translite Shareholders) for a purchase consideration equivalent to
the audited net tangible assets of PNE Translite as at 30 September 1999 of $782,693 by the
issue of 782,693 ordinary shares of $1.00 each at par, credited as issued and fully paid to the
PNE Translite Shareholders, with effect from 14 April 2000.
The PNE Translite Shareholders renounced all 782,693 ordinary shares of $1.00 each to PNE
Investment.
3.
Acquisition of PNE Systems

The Company acquired the entire issued and paid-up capital of PNE Systems, consisting of
150,002 existing ordinary shares of RM1.00 each, together with all rights and benefits attaching
to those shares on and as of 1 October 1999 (but excluding the dividends declared with regard
to the financial year ended 30 September 1999), from Messrs Tan Kong Heng, Tan Koon Chwee,
Tan Kong Leong and Chin Chew Khay (PNE Systems Shareholders) for a purchase
consideration equivalent to the audited net tangible assets of PNE Systems as at 30 September
1999 of $500,102 by the issue of 500,102 ordinary shares of $1.00 each at par, credited as
issued and fully paid-up to the PNE Systems Shareholders, with effect from 14 April 2000.
Mr Chin Chew Khay retained his 100,023 ordinary shares of $1.00 each while the PNE Systems
Shareholders (except for Mr Chin Chew Khay) renounced their 400,079 ordinary shares of
$1.00 each to PNE Investment.
26
4.
Acquisition of PNE Electric

The Company acquired the entire issued and paid-up capital of PNE Electric, consisting of
8,000,000 existing ordinary shares of RM1.00 each, together with all rights and benefits attaching
to those shares on and as of 1 October 1999 (but excluding the dividends declared with regard
to the financial year ended 30 September 1999), from Messrs Tan Kong Heng, Tan Kong Boon,
Tan Kwong Soon, Tan Kong Guan, Tan Koon Chwee, Tan Kong Leong, Tan Kwang Hua, Tan
Kong Sin and Tan Kong Hock (PNE Electric Shareholders) for a purchase consideration
equivalent to the audited net tangible assets of PNE Electric as at 30 September 1999 of
$8,116,747 by the issue of 8,116,747 ordinary shares of $1.00 each at par, credited as issued
and fully paid to the PNE Electric Shareholders, with effect from 14 April 2000.
The PNE Electric Shareholders retained 2,233,077 ordinary shares of $1.00 each and renounced
proportionately 5,799,293 ordinary shares of $1.00 each and 84,377 ordinary shares of $1.00
each to PNE Investment and Chin Chew Khay respectively.
5.
Bonus Issue
The Company capitalised the amount of $1,266,921 from the revaluation reserve2 on the
investment account of the Company by way of a bonus issue of 1,266,921 ordinary shares of
$1.00 each at par credited as issued and fully paid proportionately to the PNE Electric
Shareholders.
The resultant shareholding structure upon the completion of the Restructuring Exercise described
above and the changes in the share capital of the Company described on page 22 under
Share Capital, both before and after the Invitation is set out under Shareholders on page 24
of this Prospectus.
2 The revaluation reserve refers to the surplus of $2,533,842 arising from the revaluation of the Groups factory building in
Johor, factory building in Pahang and vacant industrial land in Pahang. The valuation was undertaken by KGV-Lambert
Smith Hampton, a firm of independent valuers, as at 30 September 1999. Please refer to Properties and Fixed Assets on
page 72 of this Prospectus for details. Of this revaluation surplus, $1,266,921 (50% of total revaluation surplus) was capitalised
to issue the bonus shares.
27
GROUP STRUCTURE
Our current group structure, after the completion of the Restructuring Exercise described at page 26
of this Prospectus, is as follows:-
PNE
100%
100%
PNE Appliance
Controls
100%
PNE
Translite
100%
PNE
Systems
PNE
Electric
The details of our subsidiaries, as at the date of this Prospectus, are as follows:Name of
company
Date and
place of
incorporation
Principal business
Location in
which Principal
Business is
conducted
Issued and
paid-up
capital
% owned
PNE Appliance
Controls Pte Ltd
12 May 1983
Singapore
Manufacturers and
dealers in electronic
and electrical
appliances
Singapore
$2,000,000.00
100%
PNE Translite
Pte Ltd
29 January 1991 Manufacturers of

Singapore
emergency lighting
equipment, electrical
apparatus, light
fittings and related
products
Singapore
$250,000.00
100%
PNE Electric
Sdn Bhd
4 August 1986
Malaysia
Manufacturer of
electronic and
electrical products
Malaysia
RM8,000,000.00
100%
PNE Systems
Sdn Bhd
12 May 1993
Malaysia
Dealers in domestic
and commercial
electrical appliances
Malaysia
RM150,002.00
100%
None of our subsidiaries are listed on any stock exchange.

The abovementioned companies are deemed to be related to the Company by virtue of Section 6 of
the Act.
28
HISTORY
We were incorporated on 25 September 1999 as an exempt private limited company to serve as the
holding company for our Group.
We commenced operations in 1983 by the incorporation of PNE Appliance Controls to manufacture
transformers and electronic controllers. Production was carried out in a small flatted factory in Tanglin
Halt and the products were initially supplied mainly to appliance manufacturers in Australia.
Within three years, our business had grown and hence the manufacturing facilities we had in Tanglin
Halt were no longer sufficient to cater for our needs. Other than supplying to the appliance
manufacturers in Australia, we had also gained some new major customers who were located mainly
in Malaysia. At the same time, it was becoming increasingly expensive to manufacture products in
Singapore due to the high labour and overhead costs.
As such, we started manufacturing our transformers and electronic controllers in Malaysia in a factory
at Skudai, Johor Bahru, with the incorporation of PNE Electric in 1986. Such relocation enabled us
to control and reduce our manufacturing costs due to lower cost structures in Malaysia, particularly
labour costs and overheads. The move also resulted in our operations being closer to our major
customers in Malaysia. Although we started our manufacturing operations in Malaysia in 1986,
manufacturing of transformers and electronic controllers still continued in Singapore through PNE
Appliance Controls until 1991.
To keep pace with the increasing demand from our customers, larger production capacity was required.
In 1990, we shifted to a factory located at Jalan Firma 2 in the Tebrau Industrial Estate in Johor
Bahru. The premises was shared with PNE PCB.3 However, by the end of 1995 the capacity of this
factory was still unable to support our business growth. Hence, in 1996, we relocated to a new
factory located at Jalan Firma 1 within the same industrial estate. This new factory has a built-up
area of approximately 7,400 square metres and is operated solely by us.
We have another factory located in Muadzam Shah Industrial Estate, Pahang, Malaysia, with a builtup area of about 6,500 square metres. This factory was erected in 1994 to cater for the expansion
of our operations. The new factory was located in Pahang to take advantage of the lower labour and
overhead costs there. Currently, all our manufacturing activities and facilities are located in West
Malaysia due to the lower operating, manufacturing and logistics costs.
In 1991, we decided to diversify our business and reduce our reliance on the electronics industry, to
which we sell transformers and electronic controllers. In line with this strategy, we ventured into the
production of emergency lighting equipment for the Singapore market under the PNE brand name,
as we felt that emergency lighting equipment was complementary to our manufacturing operations
since it could be produced by our existing facilities without requiring any major investments in new
fixed assets.
In 1991, PNE Translite was incorporated to market our emergency lighting equipment. In 1991 and
1992, sales for emergency lighting equipment were made only to the Singapore market. In 1993,
PNE Systems was incorporated to market our emergency lighting equipment in the Malaysian market.
Currently, our emergency lighting equipment is marketed and sold to customers located in Indonesia,
Thailand and Brunei in addition to the Singapore and Malaysian markets.
3 We are related to PNE PCB. Print N Etch, which is wholly owned by Messrs Tan Kong Heng, Tan Kong Boon, Tan Kwong
Soon, Tan Kong Guan, Tan Koon Chwee, Tan Kong Leong, Tan Kwang Hua, Tan Kong Sin and Tan Kong Hock, holds 44.5%
of PNE PCB as at 31 December 1999. Messrs Tan Kong Heng, Tan Kong Guan and Tan Kwong Soon, who are Directors of
our Group, are also directors of PNE PCB. PNE PCB is a company incorporated in Malaysia and is principally engaged in
the manufacture and trading of printed circuit boards and other related products.
29
We started to manufacture and market electronic ballasts in 1997 under the PNE brand name. As
the customer segment for our electronic ballasts was similar to that of our emergency lighting
equipment, we were able to market our electronic ballasts to our existing pool of customers. We now
produce a complete range of electronic ballasts under the PNE brand name to meet the varied
requirements of our customers in the Asian markets. The electronic ballasts are manufactured by
PNE Electric and distributed by PNE Translite and PNE Systems.
Our factories in Johor Bahru and Pahang were awarded the ISO 9002 certification in July 1994 and
May 1999 respectively.
In 1995, we received our first grant of $98,000 from the Singapore Productivity and Standards Board
(PSB) for the development of electronic ballasts. This was followed by two other grants in 1996 and
1997 for the amounts of $145,000 and $34,000 respectively. These grants were given for the
development of our electronic ballasts in 1996 and for the design of our electronic controllers used
in heater systems in 1997. Recently, in 1999, we received a grant of $151,000 from PSB for the
development of our lighting test system.
30
BUSINESS
Principal Activities
We are currently engaged in the design, development, manufacture, marketing and distribution of the
following products:a.
transformers and electronic controllers; and
b.
emergency lighting equipment and electronic ballasts.
TRANSFORMERS AND ELECTRONIC CONTROLLERS

Our transformers and electronic controllers are supplied to manufacturers of audio and video appliances
(such as video cassette recorders, amplifiers and video compact disc players) and electrical appliances
(such as room heaters, hair dryers and irons) on a contract manufacturing basis. Our customers are
mainly multi-national companies (MNCs). These MNCs do not manufacture all the components they
require, preferring instead to outsource some of the required components. As a result, heavy reliance
is placed on companies in the supporting industry to supply such components on a reliable and
timely basis. Both transformers and electronic controllers are manufactured on a made-to-order basis
in accordance with our customers specifications and are not marketed under any brandname or
trademark.
Transformers
Transformers are electrical devices for converting the voltage levels of alternating current either to a
higher or lower level depending on the turn ratio of the primary and secondary windings. Most audio
and video appliances normally operate at lower voltages, hence there is a need to step-down the
higher voltage of the domestic electricity supply to the required voltage by the use of the transformer.
The voltage rating of domestic electricity supplies is normally fixed between 100 Volts to 240 Volts
and varies from country to country. Transformers are regarded as critical safety components, hence
the quality of transformers is a principal consideration for our customers.
Our transformers are manufactured on a made-to-order basis. Transformers produced by us are
mainly of the EI lamination type, with sizes ranging from EI28 to EI114 (with EI lamination widths of
28mm to 114mm respectively).
Due to the demands of increasingly sophisticated end-consumers, the majority of electrical appliances
are equipped with a number of intelligent features made possible by the use of microprocessors. We
manufacture electronic controllers incorporating such microprocessors. Electronic controllers are
modules employed in the control of the operations of electrical appliances such as room heaters,
hair dryers, toasters and irons.
Our electronic controllers are customised to meet the needs of our customers. We normally
manufacture electronic controllers either in accordance with the specifications and designs provided
by our customers or with designs developed by our own research and development team in accordance
to customers requirements. Our ability to design electronic controllers enables us to add value to the
manufacturing process and increases our competitive edge against our competitors.
31
EMERGENCY LIGHTING EQUIPMENT AND ELECTRONIC BALLASTS

industry, including wholesalers, contractors and lighting manufacturers. Our customers are mainly
small and medium enterprises (SMEs) in the construction industry. These SMEs generally do not
undertake capital intensive production activities and would source for the required equipment and
materials. Our emergency lighting equipment and electronic ballasts are generic products without
any customisation and are marketed under the PNE brand name.
Emergency lighting equipment refers to lighting equipment that switches on or remains on when a
power failure occurs. A type of such emergency lighting equipment is the Exit sign. Exit signs are
self-lit signage installed in buildings to indicate to occupants the direction and location of emergency
escape routes and/or exits. Regulations have been adopted in Singapore and Malaysia to impose
minimum standards on the specifications of emergency lighting equipment and to mandate the
installation of Exit signs and other emergency lighting equipment in public buildings.
Our range of emergency lighting equipment includes models with various features. For example, we
manufacture and distribute emergency lighting equipment with the wording Exit as well as those
without such wording. We also manufacture and distribute emergency lighting equipment for indoor
use and outdoor use (which are weather-proof).
Electronic ballasts
Electronic ballasts are electronic components used to ionize the gas in fluorescent tubes to produce
light. The fluorescent tube requires electricity of a very high voltage to ionize the gas in the tube
before it produces any light. Conventionally, a ballast and starter combination is used to provide this
high voltage to ignite the fluorescent tube. The recent trend has been to utilize electronic ballasts in
place of the conventional ballast and starter combination. Besides the benefit of lower power
consumption, electronic ballasts also prolong the life span of fluorescent tubes.
We produce, market and distribute a range of electronic ballasts ranging from medium to high
performance ballasts for various types of fluorescent tubes. Our electronic ballasts are suitable for
use in lamps whose wattage range from 13 watts to 58 watts. The electronic ballasts produced by us
are also used in our range of emergency lighting equipment.
PRODUCTION
Facilities
We currently operate two manufacturing facilities, one of which is located at Johor Bahru, Johor,
Malaysia and the other at Muadzam Shah, Pahang, Malaysia. These two facilities have a total builtup area of approximately 13,900 square metres. Both facilities are located on land with long term
leases, with the land at Johor Bahru and Muadzam Shah having respective remaining terms of 56
years and 59 years. Both factories are engaged in the production of the entire range of our products.
The annual output for our transformers and electronic controllers ranged from 3.8 million units to 4.9
million units over the past three financial years. The annual output for our emergency lighting equipment
and our electronic ballasts has been stable over the same period at 0.2 million units per year. Please
refer to Quality Control on page 37 of this Prospectus for information on our rejection rate.
Our factories in Johor and Pahang were awarded the ISO 9002 certification in July 1994 and May
1999 respectively.
32
MANUFACTURING PROCESS
The manufacturing processes for our products are described generally in the following sections.
(a)
Transformers
Materials from
Store
Varnishing Process
Material Preparation/
Sub-assembly
Post-Varnish
Auto-Testing
Front Line Process

Winding/Twisting/Tinning
Final Inspection
& Packing
Final Line Process

El Core Insertion/
Welding
Core Shield Insertion
Core Plate Insertion
Bracket Insertion
Outgoing Quality
Inspection
Shipment to
Customers
Pre-Varnish
Auto-Testing
The following is a brief description of each stage of the above process:Materials from Store
Materials are first arranged into kits based on the models to be run by store personnel in
accordance with the work orders in the production plan issued by our planning department. On
the day of production, our production material handlers would draw the materials from our
store.
Material Preparation/Sub-assembly
Some minor modifications are carried out on some of the materials to prepare them for use on
the main production lines. This is carried out in batches and performed away from the main
lines for greater efficiency.
33
Front Line Process

Enamelled copper wires are first wound over the bare plastic bobbins using automatic multispindle winding machines and semi-automatic winding machines. The windings are either
automatically twisted at the terminals of the bobbins (for the automatic machines) or done
manually by the operators (for the semi-automatic machines). The wound bobbins are then sent
through the tinning process where the terminations are soldered for electrical connectivity.
Final Line Process
EI laminations are inserted into the wound bobbins with the centre of the E lamination forming
the axis for the bobbins. Thereafter, the E and I laminations are welded together to enclose the
bobbins within the welded sections. Core shields are then added on and held in place by an
external metal bracket.
Pre-Varnish Auto-Testing
The finished transformers are then tested to ensure that they meet all the functional parameters
by using an automatic test jig. Rejected parts are taken off the line for fault analysis to allow
preventive measures to be taken.
Varnish Process
The finished and tested transformers are preheated to a controlled temperature prior to immersing
them in varnish. Thereafter, the transformers are sent through a conveyor belt oven to cure the
varnish on the transformers.
Post-Varnish Auto-Testing
As the condition of the parts may have changed during the varnishing and heating process, the
transformers are again tested to ensure that they meet all the functional parameters by using
an automatic test jig. Rejected parts are again taken off the line for fault analysis to enable
preventive measures to be taken.
Final Inspection & Packing
The transformers are checked for cosmetic defects prior to packing them into carton boxes. The
cartons are packed onto wooden pallets.
Outgoing Quality Inspection
The pallets of transformers are subject to sampling checks based on quality plans specified by
customers. Where none has been specified, we institute our in-house quality plan based on
established industrial norms to inspect the transformers.
Shipment to Customers
Upon passing the quality inspection stage, the transformers are sent to the warehouse for
shipment to our customers.
34
(b)
Electronic Controller, Emergency Lighting Equipment and Electronic Ballasts
Materials from
Store
In-Circuit-Testing
Station
Material Preparation/
Sub-assembly
Chassis & Final

Assembly Process
Machine Insertion
& Placement of
Components
Functional &
Final Testing
Manual Insertion
of Components
Final Inspection
& Packing
Machine Wave
Soldering Process
Outgoing Quality
Inspection
Inspection &
Touch up Process
Shipment to
Customers
The following is a brief description of each stage of the above process:Materials from Store
Materials are first arranged into kits based on the models to be run by store personnel in
accordance with the work orders in the production plan issued by our planning department. On
the day of production, our production material handlers would draw the materials from our
store.
Material Preparation/Sub-assembly
Some minor modifications are carried out on the materials to prepare them for use on the main
production lines. This is carried out in batches and performed away from the main lines for
greater efficiency.
35
Machine Insertion & Placement of Components

The printed circuit boards (without components) are sent to the machine rooms for insertion
and placement of components by automatic insertion machines and surface mount placement
machines.
Manual Insertion of Components
The boards are thereafter sent to the manual insertion lines where human operators will insert
additional components which have not been designed for machine insertion.
Machine Wave Soldering Process
The inserted boards would be subjected to a wave soldering process to solder the components
onto the boards and to ensure that the components are electrically connected to each other.
Inspection & Touch Up Process
The assembled boards are checked for soldering defects and manual soldering is carried out
on defective solder points by the inspectors. While the parameters on the wave soldering
machines are tuned to optimum settings to minimise defective soldering points on the boards,
there would still be solder points requiring manual rectification due to design constraints on the
circuit track works of the boards.
In-Circuit Testing Station
The boards are tested to ensure that the parameters of the inserted components are correct.
While the boards may still function when incorrect parameters of components are inserted,
electrical stress may occur resulting in premature failure of the parts.
Chassis & Final Assembly Process
The final assembly of mechanical components are carried out on the boards. Where required,
the finished products are then enclosed in a chassis.
Functional & Final Testing
The assembled units are tested functionally to ensure that all specifications are met by using
in-house customised test jigs.
Final Inspection & Packing
The units are checked for cosmetic defects prior to packing into carton boxes. The cartons are
packed onto wooden pallets.
Outgoing Quality Inspection
The pallets of finished goods are subject to sampling checks based on the quality plans specified
by customers. Where none have been specified, we will institute our in-house quality plan
based on established industrial norms to inspect the finished goods. For emergency lighting
equipment, batch testing by PSB is conducted to ensure compliance with the minimum standards
prior to distribution to our customers in Singapore.
Shipment to customers
Upon passing the quality inspection stage, the finished goods are sent to the warehouse for
shipment to our customers.
36
QUALITY CONTROL
Our factories in Johor Bahru and Pahang were awarded the ISO 9002 certification in July 1994 and
May 1999 respectively. The ISO 9002 certification is an internationally recognised award for quality
assurance in production, installation and servicing. This certification is granted by the relevant
accredited body affiliated to the International Standards Organisation only after stringent tests have
been administered and concluded in a satisfactory manner.
We have established a strict quality assurance and control system to ensure the consistency and
quality of our products. A team of quality control personnel has been trained to oversee the quality
control of the manufacturing processes in both our factories.
Our quality assurance and control system entails the following measures:(a)
Document and data control

The systems and processes are documented by the respective departments to ensure a common
understanding of the quality standards. Semi-annual audits are conducted by the quality
department to measure progress, anticipate problems, and ensure compliance with established
procedures.
(b)
Gauge control
All inspection, measuring and test equipment are checked for accuracy and sent for periodic
calibration by recognised laboratories and calibration centres. Records are kept and audited for
compliance with the calibration schedule.
(c)
Incoming quality assurance

The materials received are checked for compliance with specifications prior to acceptance by
the store. Materials that do not meet our specifications are not accepted and thus sent back to
the suppliers for correction or replacement. This ensures that only parts meeting our quality
standards are used on the production floor.
(d)
In-process quality control

A Statistical Process Control is implemented on the production floor, usually at the Final Line
Process stage for transformers, and Chassis and Final Assembly Process stage for electronic
controllers, emergency lighting equipment and electronic ballasts. The Statistical Process Control
is also performed during trial runs to ensure that the manufacturing process is within statistical
control and all parts produced will meet the specifications laid down.
(e)
Outgoing quality assurance

Sampling checks are conducted on the outgoing products to reduce the risk of defective parts
reaching our customers. For each batch of goods produced, a small quantity is selected and
checked for non-compliance with specifications.
Our reliability and quality control criteria include the mechanical dimension (e.g. size, length) and
electrical insulation properties (e.g. to ensure that there is no electrical leakage).
The strict implementation of the quality control process has enabled us to maintain the average
rejection rate for our products at approximately 0.4% of yearly production output for the last three
financial years ended 30 September 1999.
37
Product Quality Awards

Our factories have been awarded various quality awards for prompt delivery and high level of quality
performance. These awards are as follows:(a)
Silver award from Philips-DAP for 1991;
(b)
Gold award from Aiwa for 1993;
(c)
Silver award from Philips-DAP for 1998 and 1999; and
(d)
Zero Defect award from Aiwa for 1999.
In addition, the management of our factories have been invited to make presentations on quality
management at seminars organized by our customers. These seminars are usually organized to
discuss various ways of improving product quality and are held on an ad-hoc basis.
RESEARCH AND DEVELOPMENT

Our research and development activities involve the improvement and streamlining of our manufacturing
processes, as well as the design and development of all our products, with a focus on the latter. We
have an established team of research and development personnel comprising a manager and six
qualified engineers. Our research and development team continuously reviews, evaluates and, where
necessary, recommends changes to product specifications and manufacturing processes with an
objective to improve product quality, lower manufacturing costs and increase operating efficiency.
Our research and development expenditure as a percentage of turnover for the past three financial
years ended 30 September 1999 ranged from 0.6% to 0.9%.
Improvement of Manufacturing Processes
Manufacturing processes for all our products are evaluated on a continuous basis with a view to
reducing production costs. Production costs can be lowered by simplifying the manufacturing processes
through automation or by substituting existing materials with lower cost materials. These are done
without compromising the quality and reliability of our products. To facilitate such improvements, we
have instituted yield improvement programmes for the manufacturing processes. These programmes
aim to maximize the units of output with the same number of inputs.
Product Design and Development
We are actively involved in the design and development of all our products. To the best of our
Directors knowledge, the technology used by us in product design and development is non-proprietary.
There is therefore little or no risk of infringing the intellectual property rights of other companies.
Our transformers and electronic controllers are customised products. Customers may require us to
design these products according to certain specifications. New and improved transformers and
electronic controllers are usually developed annually as these products have a short product life
cycle of about 12 months before obsolescence sets in. The short product life cycle of transformers
and electronic controllers is due to the limited life span of consumer electronics products which are
susceptible to technological changes. As our transformers and electronic controllers are produced on
a made-to-order basis, our risk of stock obsolescence is therefore minimal.
While our emergency lighting equipment and electronic ballasts are generic products without
customisation, these products have to be redesigned to comply with the latest industry and regulatory
standards. For instance, we conducted a total redesign of our emergency lighting equipment to meet
the latest testing requirements of PSB. Over the past two years, we have introduced more than
twenty new models of emergency lighting equipment into the Singapore market.
38
In recognition of our efforts in product design and development, we have received several grants
from PSB over the years. In 1995, we received our first grant of $98,000 for the development of
electronic ballasts. This was followed by two other grants in 1996 and 1997 for the amounts of
$145,000 and $34,000 respectively. These grants were given for the development of our electronic
ballasts in 1996 and for the design of our electronic controllers used in heater systems in 1997.
Recently, in 1999, we received a grant of $151,000 from PSB for the development of our lighting
test systems.
Please see Product Development Process below for further details.
PRODUCT DEVELOPMENT PROCESS

An overview of our product development process and the various stages involved is set out below:(a)
Transformers
Our customer would provide the product specifications. Our engineers would thereafter draw up
a design of the transformer to meet the specifications. A prototype would be produced to assess
whether the design is suitable and a quotation is then given to our customer based on the
anticipated production volume. Upon acceptance of quotation, samples would be submitted to
customers for their evaluation and approval. Should there be changes in specifications, further
redesigns and sample submissions would be required. Once approved by customers, applications
would be made for necessary approval by Underwriters Laboratories and other similar
organisations to ensure compliance with standards set by these organisations. Such approval is
required by our customers. A product trial run would be conducted with a small quantity. Further
minor modifications would be carried out on the transformer if necessary prior to the mass
production of the final form of transformer.
The process is summarized in the following diagram:Generation of New
Product Specification
by Customer
Make Prototype
Issue Quotation
to Customer
Submission of
Samples to Customer
Approval of
Samples by Customer
Application for Product

Compliance to
Approbation Body
Product Trial Run
Mass Production Run
39
(b)
Electronic Controllers, Emergency Lighting Equipment and Electronic Ballasts

A product specification would be generated by our in-house design team. The specification for
electronic controllers will take into consideration the requirements of our customers, whereas
the specification for emergency lighting equipment and electronic ballasts will take into
consideration the statutory requirements by the standards authority in the relevant markets .
A mock-up model is first produced for the design team to assess and evaluate its design and
appearance. Our electronic engineers would then modify the design to meet the functional
specification of the product. A prototype would be produced for testing and evaluation. The
design will be further improved on and samples would be made in small batches for reliability
testing and further evaluation. Trial runs would be conducted after applications for the necessary
approvals from the relevant standards authority, i.e. PSB and SIRIM, have been made. Upon
approval, mass production runs would commence.
The process is summarized in the following diagram:-
Activation of New
Product to be developed
Design Assessment &

Preliminary Prototype
Electronic & Mechanical

Design Confirmation
Application for Product

Compliance to
Approbation Body
Product Trial Run
Mass Production Run
40
MARKETING AND DISTRIBUTION

We have offices in Singapore and Malaysia and our products are sold mainly to customers in these
markets. While our sales are concentrated in the Singapore and Malaysian markets, our products
are also sold in other markets. In respect of emergency lighting equipment and electronic ballasts,
we have customers in Indonesia, Thailand and Brunei. In respect of transformers and electronic
controllers, we have customers in Indonesia, Hong Kong, Australia and New Zealand.
Marketing and distribution of all our products in the Singapore and Malaysian markets are undertaken
by our offices in the respective countries. For other markets such as Indonesia, Thailand, Brunei,
Hong Kong, Australia and New Zealand, marketing and distribution is undertaken by our Singapore
office.
As transformers and electronic controllers are customised products whereas emergency lighting and
electronic ballasts are standardized products, our marketing strategies are adapted for the two product
types. Our marketing team consists of about 12 personnel, of which 3 are responsible for the marketing
of transformers and electronic controllers and the rest are responsible for the marketing of emergency
lighting equipment and electronic ballasts.
Our transformers and electronic controllers are marketed and distributed by PNE Appliance Controls,
which is located in Singapore and PNE Electric, which is located in Malaysia.
Our transformers and electronic controllers are supplied to manufacturers of audio and video appliances
(such as video cassette recorders, amplifiers and video compact disc players) and electrical appliances
(such as room heaters, hair dryers and irons). Most of these manufacturers are multi-national
companies, in particular Japanese manufacturing companies based in Malaysia and Singapore. These
Japanese manufacturing companies not only utilise our transformers and electronic controllers in the
production of their appliances but also distribute our transformers and electronic controllers to their
various associated production plants world-wide. Such arrangements have enabled us to tap a much
larger market compared to supplying the transformers and electronic controllers to manufacturers
who utilise them solely in-house.
For transformers and electronic controllers, new customers are secured through marketing calls by
our marketing personnel as well as through referrals from our Directors and our existing and past
customers. As new customers are usually acquired through referrals, it is critical that we maintain
good relationships with our existing customers.
Our emergency lighting equipment and electronic ballasts are marketed and distributed by PNE
Translite, which is located in Singapore and PNE Systems, which is located in Malaysia under the
PNE trademark.
industry, including wholesalers, contractors and lighting manufacturers. These customers are usually
small and medium enterprises (SMEs) and our lighting equipment and electronic ballasts are mostly
distributed in Singapore and Malaysia.
In addition to securing customers through marketing calls and referrals, we also engage in other
activities to market our emergency lighting equipment and electronic ballasts. We regularly advertise
our range of emergency lighting equipment and electronic ballasts in trade journals and newspapers.
To promote our emergency lighting equipment and electronic ballasts, we also participate in both
local and overseas trade fairs. These trade fairs offer us the opportunities to meet with potential
customers. Further, participation in the trade fairs also enables us to obtain information on general
market trends and situation as well as customer demands and preferences. Such information facilitates
the design and development of our emergency lighting equipment and electronic ballasts.
41
WARRANTIES
Our emergency lighting equipment and electronic ballasts are generally sold with a one-year warranty
from manufacturing defects. Where any manufacturing defect is discovered within the warranty period,
we would normally repair or replace the defective product and bear the costs of labour and replacement
parts. With respect to our transformers and electronic controllers which are contract manufactured,
there is no formal warranty policy. However, we will, where necessary, rectify any defect in such
goods.
For emergency lighting equipment and electronic ballasts, goods returned due to manufacturing defects
covered under the warranty program amount to approximately 0.2% of the products sales in FY1999.
The costs incurred on repairs or replacements were insignificant.
If defects are discovered after the warranty period, we would evaluate each request on a case by
case basis, taking into consideration the nature of the defects, the relationship with the customer
and the seriousness or extent of the problem. We would then decide whether to rework or replace
the product and if so, whether to charge the customers.
CREDIT POLICY
We extend credit terms to repeat customers with whom we have favourable and long-standing business
relationships. Depending on the transaction volume, financial background, payment history, creditworthiness and duration of relationship with us, the credit term ranges from 30 to 60 days. For new
customers, sales would normally be on a cash basis.
TRADEMARKS AND PATENTS

Patents
PNE Appliance Controls holds a patent for a toaster control which is registered in USA, UK and
Australia. The control is able to cut off the electric power supply to the toaster heating element
should there be an earth leakage fault in the heating element (which, for example, may occur when
a person not insulated from the ground accidentally touches the live heating element with a butter
knife). The control is also able to cut off electric power supply to the toaster once the toasting cycle
is over irrespective of the position of the bread carriage. We do not currently employ the patent.
Trademarks
In addition, PNE Appliance Controls owns the trademark for logo which incorporates the word Pyson.
This trademark has been registered for use in toasters in the Register of Trademarks of the
Commonwealth of Australia for seven years since 1 December 1993. Currently we do not employ
this trademark and do not intend to renew its registration.
Print N Etch, our related party company, 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. Print N Etch had also submitted similar applications on 20 July 1991 and
25 July 1991 with the Kementerian Perdagangan Dalam Negeri dan Hal Ehwal Pengguna Malaysia
- Bahagian Harta Intelek in Malaysia and the Pendaftaran Merek Perusahaan dan Merek Perniagaan,
Jakarta in Indonesia with respect to the registration of the trademark in Malaysia and Indonesia. Our
Directors understand from Print N Etch that they have been informed by their trademark agents that
the trademark applications in Singapore and Malaysia are still pending while the application in
Indonesia would be considered as abandoned. Print N Etch will be seeking advice from their trademark
agents on whether to re-submit an application in Indonesia.
42
We have entered into a trademark licensing agreement with Print N Etch for our Group to use the
PNE trademark with respect to the emergency lighting equipment and electronic ballasts
manufactured by us in Singapore, Malaysia and Indonesia. The agreement takes effect from 1 October
1999. Fees equivalent to 0.3% of the annual consolidated sales for emergency lighting equipment
and electronic ballasts would be charged, subject to a minimum of $10,000 per year. There will be
no maximum sum payable. The agreement will remain in force until terminated by either party by
giving one months notice.
Currently, the PNE trademark is used by PNE Translite and PNE Systems in emergency lighting
equipment and electronic ballasts. The PNE trademark is valuable to us as we depend on it for
brand recognition, repeat sales and customer loyalty. As minimum standards are required of lighting
products, it is a common practice in the lighting business to market lighting products under a trademark
so as to enable customers to identify with products of a certain quality and standards. The PNE
trademark enables our customers to differentiate our products from our competitors. Apart from PNE
Translite and PNE Systems, none of our related parties use the PNE trademark in their products.
Save as disclosed above, we do not have any other trademark, copyright or patent right which has
been registered or is pending registration. We also do not have any licensing agreement with any
third party and no royalty or licensing fee was received or paid in the last financial year.
STAFF TRAINING
Our human resource department formulates an annual work plan to implement the in-house training
programme on ISO procedures and statistical process control. Additional training sessions are
conducted periodically when required.
We strongly encourage and sponsor our employees to register for relevant self-improvement courses
that can assist them in their work. Annual team building programmes organised by us build close
rapport between, and strengthen the morale of, our employees.
Our expenditure on staff training for FY1997 to FY1999 amounted to less than 1% of total turnover.
YEAR 2000 (Y2K) COMPLIANCE

We understand Y2K compliance to mean that the performance and functionality of our information
systems will not be affected by data relating to dates prior to, during and after the year 2000. This
includes, but is not limited to, data calculation, comparing and sequencing from the years 1999 and
2000 and leap year calculation to the extent the other information technology used in combination
can properly exchange date and/or time data with it.
The computer systems at our main office are mainly used for accounting, payroll, inventory and data
management. We have spent approximately $100,000 in FY 1999 to purchase new computer systems
or to upgrade existing computer systems to ensure that they are Y2K compliant. The cost includes
hardware costs of approximately $40,000 and software costs of approximately $60,000, of which the
major items, amounting to approximately $50,000 are capitalised. The balance is expensed off. Vendors
of the computer systems have confirmed that the systems are Y2K compliant.
While we are making all efforts to ensure that the impact of Y2K problems is minimised, the
programmes and initiatives that we have implemented are also dependent on similar Y2K compliance
by key business partners and suppliers of goods and services.
We do not anticipate the Y2K issue to have any significant impact on our business, cost and revenue.
We will continue to monitor our information systems purchased from our suppliers. As at the date of
the Prospectus, we did not experience any problems relating to Y2K.
43
FINANCE
The growth of the Group has been financed through a combination of shareholders equity, retained
earnings and other credit facilities. As at 30 April 2000, the Group had total borrowings (including
hire purchases and finance leases) of $2.3 million on a secured basis.
Shareholders Funds
Shareholders equity in the Company comprised paid-up share capital, capital reserves and revenue
reserves. It decreased from $12.0 million as at 30 September 1997 to $9.9 million as at 30 September
1998 due to the declaration of dividends of $3.6 million and a translation loss of $0.6 million on the
consolidation of the Malaysian subsidiaries due to the depreciation of the RM. This was partially
offset by a profit of $2.2 million in FY1998. As at 30 September 1999, the shareholders equity
increased from $9.9 million in FY1998 to $15.2 million due to $3.5 million profit of the Group and
$2.5 million surplus on revaluation of properties4 less $0.8 million dividends declared.
Non-Current Assets
Non-current assets comprised fixed assets (property, plant and equipment) and unquoted investments.
Fixed assets decreased from $8.7 million in FY1997 to $6.9 million in FY1998 due to (i) the sale of
the Ulu Tiram property which had a net book value of $1.1 million as the Group sought to streamline
operations and dispose noncore assets, and (ii) the lower translated value of the RM denominated
fixed assets, as a result of the depreciation of the RM against the S$.
Fixed assets increased from $6.9 million in FY1998 to $9.4 million in FY1999 mainly due to a
revaluation surplus of $2.5 million recorded on the properties.4
Current Assets
Current assets comprised stocks, trade and other debtors, fixed deposit, cash and bank balances. It
decreased from $23.5 million as at 30 September 1997 to $14.2 million as at 30 September 1998
due to usage of funds to repay loans due to related parties amounting to $13.3 million. This repayment
was partially funded by the collection of loans due from related parties of $8.3 million as well as
$5.0 million cash. It then increased to $15.9 million as at 30 September 1999 because of a higher
level of inventory held due to the batch testing requirements imposed by PSB which required a
longer inventory holding period.
Current Liabilities
Current liabilities, comprising mainly trade and other creditors, hire purchase creditors, provision for
dividends and taxation and bank borrowings, decreased from $19.7 million in FY1997 to $10.8 million
in FY1998 and $9.6 million in FY1999.
The decline from FY1997 to FY1998 was due mainly to a repayment of loans to shareholders,
directors and related parties amounting to $13.3 million. This decline was offset by an increase in
bank overdraft of $3.4 million and a dividend payable of $0.9 million in FY1998. The decline from
FY1998 to FY1999 was mainly due to the repayment of bank borrowings amounting to $1.5 million.
4 Please refer to Properties and Fixed Assets on page 72 of this Prospectus for more details.
44
Working Capital
The Groups working capital position decreased slightly from $3.8 million as at 30 September 1997
to $3.4 million as at 30 September 1998. This was attributed mainly to the repayment of loans to
shareholders, directors and related parties amounting to net of $5.0 million which was offset by
higher bank borrowings of $3.4 million and the dividend payable of $0.9 million.
As at 30 September 1999, $2.7 million of the Groups borrowings were secured by pledge of fixed
deposits from Print N Etch, a related company (refer to page 63 of this Prospectus for further
details). The remaining $188,000 were secured by Directors and shareholders guarantees. The
Directors intend to withdraw their guarantees after the listing of the Company and replace the security
with pledges on the Groups fixed deposits and properties provided that this does not affect the
Groups banking facilities.
As at 30 September 1999, the working capital position doubled to $6.2 million mainly due to the
reduction of bank borrowings and an increase in the level of inventory.
Long Term Liabilities
Long term liabilities mainly comprised deferred tax liabilities. The deferred tax liabilities represent
mainly the tax effects of the timing differences between the book depreciation and the capital allowance
claimed on fixed assets. Deferred tax liabilities stood relatively unchanged at $0.5 million from FY1997
to FY1999.
45
FOREIGN EXCHANGE
The reporting currency of our Group is S$. Companies within the Proforma Group maintain their
books and records in their respective functional currencies. The functional currency of our subsidiaries
established in Malaysia, namely PNE Systems and PNE Electric, 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 time 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 profit and loss accounts
of the individual companies.
Upon consolidation, the financial statements of the subsidiaries whose functional currencies are
currencies other than S$ are translated into S$. Assets and liabilities of these subsidiaries are
translated into S$ at the exchange rates in effect at the balance sheet date. All profit and loss
accounts are translated using average exchange rates for the period. Exchange differences arising
on translation are accounted for as currency realignment in shareholders equity.
Approximately 57.9% of our sales in FY1999 are denominated in RM and 39.0% are denominated in
S$. In comparison, about 42.6% of our purchases and expenses are denominated in RM and 52.4%
are denominated in S$ in FY1999. Fluctuations in the exchange rate between RM and S$ will therefore
have an impact on us. With a higher proportion of sales than purchases and expenses denominated
in RM, any depreciation of RM against S$ will translate into higher reported purchases and expenses
relative to sales revenues and would therefore have an unfavorable impact on our financial results.
Presently, we do not have any formal hedging policy with respect to our foreign exchange exposure
and we do not intend to pursue such a policy in future. The impact of foreign exchange fluctuations
on our financial performance over the past three financial years was as follows:$000
Foreign Exchange gains/(losses)
As a percentage of profit before tax (%)
FY1997
FY1998
FY1999
(51)
(472)
57
1.4
* - not meaningful
The foreign exchange losses in FY1997 and FY1998 were due to the depreciation of RM against S$
as a substantial portion of our sales are denominated in RM. The foreign exchange gain in FY1999
was due to the slight appreciation of RM against S$.
46
REVIEW OF PAST PERFORMANCE

REVENUE AND COST ANALYSIS
We generate revenues from our transformers and electronic controllers, as well as our emergency
lighting equipment and electronic ballasts. Our transformers and electronic controllers are supplied to
manufacturers of audio and video appliances and electrical appliances while our emergency lighting
equipment and electronic ballasts are supplied to members of the construction industry.
Given that our transformers and electronic controllers are used in the audio and video appliances
and electrical appliances, strong demand for these appliances will create complementary demand for
our transformers and electronic controllers. As our emergency lighting equipment and electronic ballasts
are mostly sold to members of the construction industry including wholesalers, contractors and lighting
manufacturers, our lighting sales are affected by the performance of the construction industry and
the number of commercial, industrial and residential building projects. Increased activities in the
construction industry and upcoming commercial, industrial and residential building projects will create
work for our customers, who will in turn increase their orders of our emergency lighting equipment
and electronic ballasts. Our revenues are therefore subject to the cyclical nature of both the electronics
and construction industries.
Based on our past years experience, we usually record higher contract manufacturing sales in the
second half of our financial year, i.e. for the period from April to September. Manufacturers of consumer
electronic products usually increase their production output over this period in anticipation of higher
consumer demand during the holiday seasons at the calendar year end. As such, demand for our
transformers and electronic controllers is usually higher towards the second half of our financial year.
Aside from the above, other determinants of our revenue are industry competition and general
economic conditions of the countries in which we operate. Please refer to page 58 of this Prospectus
for details on our competitors.
Our cost components include payroll expenses, cost of raw materials, production overheads and
general and administrative expenses. Production overheads include depreciation expenses, factory
supplies, transport expenses, utility expenses and cost of packing materials. General and administrative
expenses consist primarily of salaries and benefits of administrative personnel and other miscellaneous
expenses.
Our major costs are cost of raw materials and payroll expenses which in aggregate account for
78.3%, 78.7% and 77.7% of our total expenses in FY1997, FY1998 and FY1999 respectively. Cost
of raw materials constitute a significant proportion of our production costs. The major raw materials
required for our production are copper wire and steel lamination. Cost of these raw materials is
primarily dependent on the demand and supply conditions in the market. Usage of copper wire and
steel lamination in the region, the number of raw material suppliers and the quantity of raw materials
supplied will affect the cost of the raw materials needed for our production. Further, our production
processes and the design of our products will affect the amount of materials used and hence affect
our expenses on raw materials. Payroll expenses constitute our second largest cost component.
Payroll expenses are dependent on the ease of availability of labour in the job market, the qualifications
and experience of the workers hired, charges imposed by the authorities (for example, the employers
contribution to the Central Provident Fund and the Employees Provident Fund and the foreign workers
levy), the number of head counts and the number of labour hours charged.
ANALYSIS OF TURNOVER AND PROFIT BEFORE TAX BY PRODUCTS

Our turnover and net profit before tax for the last three financial years ended 30 September 1999
are broken down into contract manufacturing and lighting businesses.
The type of products sold under the contract manufacturing business include transformers and
electronic controllers. These products are manufactured on a made-to-order basis and sold mainly to
manufacturers of audio and video appliances and electrical appliances.
47
The type of products sold under the lighting business include emergency lighting equipment and
electronic ballasts. These are standardized products sold to wholesalers, contractors and lighting
manufacturers in the construction industry
Turnover
FY1997
($000)
FY1998
($000)
FY1999
($000)
Contract Manufacturing
20,283
61.2
23,018
71.6
20,506
71.2
Lighting
12,868
38.8
9,132
28.4
8,312
28.8
Total
33,151
100.0
32,150
100.0
28,818
100.0
FY1997
($000)
FY1998
($000)
FY1999
($000)
902
26.9
1,200
37.8
1,919
45.7
Lighting
2,453
73.1
1,973
62.2
2,279
54.3
Total
3,355
100.0
3,173
100.0
4,198
100.0
Net Profit Before Tax
Contract Manufacturing
ANALYSIS OF TURNOVER AND PROFIT BEFORE TAX BY GEOGRAPHICAL MARKETS

Our turnover and net profit before tax for the last three financial years ended 30 September 1999
are categorised between our Singapore and Malaysian offices.
Both the Singapore and Malaysian offices distribute transformers and electronic controllers as well
as emergency lighting equipment and electronic ballasts.
Turnover
FY1997
($000)
FY1998
($000)
FY1999
($000)
Singapore
15,695
47.3
18,048
56.1
12,123
42.1
Malaysia
17,456
52.7
14,102
43.9
16,695
57.9
Total
33,151
100.0
32,150
100.0
28,818
100.0
48
Net Profit Before Tax
FY1997
($000)
FY1998
($000)
FY1999
($000)
Singapore
1,665
49.6
1,534
48.3
1,884
44.9
Malaysia
1,690
50.4
1,639
51.7
2,314
55.1
Total
3,355
100.0
3,173
100.0
4,198
100.0
YEAR-ON-YEAR REVIEW OF PAST PERFORMANCE

The following is a year-on-year review of our financial performance:-
FY1997 TO FY1998
Turnover
Turnover decreased by $1.0 million or 3.0% from $33.2 million in FY1997 to $32.2 million in FY1998.
Contract manufacturing sales increased by $2.7 million which was offset by a $3.7 million decrease
in lighting sales.
The increase in contract manufacturing sales was due mainly to the increase in sales to Philips by
$3.8 million due to higher demand as Philip DAP launched a new product Sensor Care in the US
market. This was however partially offset by lower sales to a related party, PNE Electric (Spore)
which was scaling down its operations.
The lower lighting sales was attributed to the following causes:
lower sales due to the general slowdown in the construction industry. The slowdown in the
construction industry led to less construction work and hence lower demand for our lighting
products.
depreciation of the RM. Sales denominated in terms of RM declined by a marginal RM1.8

million or 16.4% from RM11.0 million in FY1997 to RM9.2 million in FY1998. This was
exacerbated by an approximate 20% depreciation in RM arising from the regional economic
crisis. Lighting sales translated into S$ decreased by $2.1 million or 34.4%.
a change in the accounting period for PNE Translite in FY1997 from 31 May 1997 to 30
September 1997. This change resulted in a higher 1997 base. Turnover for lighting sales in
FY1997 was higher as PNE Translite accounted for 16 months turnover instead of 12 months
turnover.
increased prudence. In view of the regional economic crisis in 1998, and to reduce the possibility
of bad debts, we adopted a more stringent credit policy. For our lighting business, our Group
was more cautious and sold to customers who were deemed to be financially stronger. This
was because customers for our lighting business are relatively smaller and financially weaker
compared to the customers in our contract manufacturing business.
49
Net profit before tax

Our net profit before tax decreased by $0.2 million or 5.9% from $3.4 million in FY1997 to $3.2
million in FY1998. Net profit before tax for the contract manufacturing business increased by $0.3
million or 33.3% from $0.9 million in FY1997 to $1.2 million in FY1998 on the back of increased
contract manufacturing sales. This was offset by the decrease in net profit before tax of lighting
business. Net profit before tax for lighting sales fell by $0.5 million or 20.0% from $2.5 million in
FY1997 to $2.0 million in FY1998 due to lower sales.
Compared to the lighting business, contract manufacturing incurs higher material costs. Direct material
cost was higher in FY1998 than in FY1997 due to the increase in contract manufacturing sales. This
was however largely offset by a decrease in direct labour cost of about $0.6 million, arising from a
decrease in labour hours. The decrease in labour hours was due to the implementation of a more
stringent production measurement indicator which measures the quality, efficiency and labour usage
in production. This indicator takes into consideration the labour usage on a factory wide basis instead
of a departmental basis and thus encourages efficiency in labour usage in the entire factory.
The decrease in net profit before tax was greater than that of turnover due mainly to the increase in
exchange loss of $0.5 million on the trade receivables due to the depreciation of the RM as well as
an increase of $40,000 in provision for doubtful debts. The increase in provision for doubtful debts
was due to the higher default risk of our customers arising from the regional crisis.
The net profit was however propped up by lower interest expense of $120,000. Interest expense was
lower because we utilised fewer overdraft facilities from the bank as short-term interest-free loans
were obtained from the shareholders during the year.
FY1998 to FY1999
Turnover
Turnover decreased by $3.4 million or 10.6% from $32.2 million in FY1998 to $28.8 million in FY1999.
This was attributed to a $2.5 million decrease in contract manufacturing sales and a $0.8 million
decrease in lighting sales.
Contract manufacturing sales decreased mainly due to:
decrease of contract manufacturing sales by $4.4 million to Philips-DAP as compared to FY1998

when there was a major non-recurring order.
decrease of contract manufacturing sales by $1.0 million to Aiwa (S) due to the relocation of
their manufacturing operations from Singapore to Malaysia.
decrease of contract manufacturing sales by $0.2 million to other customers.
This decrease was partly offset by an increase of $2.6 million in the sales to Aiwa (M) to cope with
the higher production capacity arising from the transfer of their manufacturing operations from
Singapore to Malaysia, as well as sales to a new customer, Fisher-Rosemount, which amounted to
$0.5 million.
Lighting sales declined by $0.8 million during the year due to the continuing slump in the construction
industries in both Singapore and Malaysia which resulted in the lower demand for our lighting products.
In addition, we continued to exercise prudence by selling to customers who were financially stronger
in order to minimise the possibility of bad debts.
50

Net profit before tax increased by 31.3% or $1.0 million to $4.2 million in FY1999 despite the decline
in turnover. This was contributed mainly by:
a decrease in labour costs as a percentage of turnover of about 0.9% due to (i) the continued
emphasis on a more stringent production measurement indicator, (ii) the implementation of a
wage restraint policy in early FY1999 to further tighten labour costs, and (iii) the automation of
some of the production processes which resulted in shorter production time and a reduction in
the number of workers required in the production line.
a decrease in direct material costs as a percentage of turnover of about 4.3% mainly contributed
by a reduction in the copper and steel prices for our contract manufacturing business. As an
indication, the average of month-end copper prices in the US for FY1999 was approximately
13% lower than FY1998 (Source: Bloomberg).
$184,000 provision for doubtful debts made in FY1998 but no such provision was considered
necessary for FY1999. Further, there was a writeback of overprovision of doubtful debts
amounting to $0.3 million in FY1999 against provisions made in previous years. The provisions
were made initially in FY1997 and FY1998 as we were concerned about the ability of our
customers to pay in view of the economic crisis. However, having monitored the payments of
our customers over the past two years, we reckoned that most of our customers were financially
sound and thus, excess provisions were written back in FY1999.
profit in FY1998 was depressed by the exchange loss of $0.5 million due to the drastic
depreciation of RM during the year. Since the RM stabilised in FY1999, the huge exchange
loss did not recur. Instead, an exchange gain of $57,000 was recorded in FY1999.
While the above factors contributed to the higher net profit before tax in FY1999, the positive impact
was partially offset by:
a marginal increase in production overheads as a percentage of turnover of 1.4% due mainly to

the depreciation on fixed assets purchased during the year.
a decrease in rental income amounting to approximately $0.3 million as the rental income was
derived from the Ulu Tiram property previously held by our Group. The property was sold in
September 1998 and thus no longer derived any income for our Group.
Unaudited 6 months period ended 31 March 2000

Turnover
Turnover for the half year ended 31 March 2000 was $15.9 million. This comprised of $12.6 million
from contract manufacturing business and $3.3 million from lighting business.
Turnover from contract manufacturing business made up 79.2% of the total group turnover for the
half year ended 31 March 2000 compared with 71.2% in FY1999. The higher contract manufacturing
sales compared to lighting sales was due to the stronger recovery in the electronics industry compared
to the construction industry. With stronger recovery in the electronics sector, our sales of transformers
and electronic controllers increased due to the increasing orders from our existing customers.
For the half year ended 31 March 2000, the Group recorded a profit before tax of $1.5 million,
registering a profit margin of 9.4% compared to 14.6% in FY1999. The lower margin compared to
FY1999 was due mainly to an increase in material costs of 3.6% as a proportion of turnover. The
higher material costs was attributable to an increase in the price of copper. The price of copper has
increased by about 15% compared to FY1999. In addition, profit before tax in FY1999 included a
$0.3 million writeback of provision for doubtful debts which was equivalent to 1% of turnover in
FY1999. There was no such writeback of provision for the half-year ended 31 March 2000.
51
PROSPECTS AND FUTURE PLANS

PROSPECTS
Our Directors are optimistic about our prospects for the following reasons:Imposition of minimum standards for emergency lighting equipment
The Singapore standards authority, the Fire Safety Bureau, has required that emergency lighting
equipment to be installed in Singapore under building plans approved after 1 April 1997, be subject
to batch testing by the Productivity and Standards Board (PSB). The Malaysian standards authorities,
BOMBA and SIRIM, have also imposed more stringent controls of the testing standards. We have
been certified to have met the standards set by BOMBA and SIRIM. As our products already meet
or exceed these minimum standards, we have a competitive edge over those manufacturers who
have yet to comply with these standards.
In addition, we believe that the new standards would lead to higher entry costs for foreign
manufacturers who would have to adapt and redesign their products to comply with the local standards
before selling their products in Singapore and Malaysia.
Trend towards use of electronic ballasts
Due to the current global emphasis on the protection of the environment, there is a trend towards
the adoption of electronic ballasts in place of conventional ballasts. Besides being more efficient (i.e.
the power consumption is lower for the same wattage), electronic ballasts also extends the useful life
of fluorescent tubes by two times, compared to conventional ballasts. The use of electronic ballasts
has been escalating, as stated in an article on electronic ballasts in the November 1998 edition of
Building Operating Management titled Efficiency is only the Beginning.
The trend in Singapore has been for contractors (including those involved in large construction projects)
to request for electronic ballasts in their project specifications. In addition, we have experienced
increasing sales of our emergency lighting equipment utilising electronic ballasts. We therefore believe
that electronic ballasts would replace conventional ballasts in the near future.
Upward trend in the global economy and improvements in the electronics and construction
industries
In an article from the British Broadcasting Corporation (BBC) Online Network on 16 November
1999, it was stated that the world economy is set to grow as the economic recovery in Asia and
Europe gathers pace. It was also stated that the Organisation for Economic Cooperation and
Development (OECD) indicated that the world economy will grow by 3.5% in the first two years of
the new millennium.
In another article from the BBC Online Network on 22 September 1999, it was stated that the
forecast of the International Monetary Fund (IMF) was that the world economy appeared to be
improving, following the global slowdown in the wake of the Asian Crisis and the turmoil in Russia
and Brazil. In addition, the IMF predicted that the world economy would grow by 3.5% in the year
2000.
A healthy global economy would lead to an increase in the demand for audio and video appliances
as well as electrical appliances manufactured by our customers. This would, correspondingly, increase
the demand for our transformers and electronic controllers, both of which are used in the manufacture
of the above appliances.
The electronics industry in Malaysia and Singapore has been improving over the last few months
and is expected to continue to grow.
52
According to the trade figures released by Trade Development Board on 21 December 1999, exports
of electronic products in November 1999 were reported to have risen by 21.3% compared to the
same month of the previous year. This was an indication of a general improvement in the economy.
Non-oil exports in November 1999 had also increased by an unexpected 24.5% from the same
month of the previous year to hit a record $9.4 billion. It was reported that this signalled a faster
pace of manufacturing in the year ahead, which would lead to higher economic growth.
According to the figures released by Bank Negara on 25 November 1999, the Malaysian economy
grew by 8.1% year-on-year in the third quarter of 1999, with manufacturing accounting for about
30% of GDP contributing most to this economic growth. Electronic exports, which made up about
60% of Malaysias total exports, rose about 26% in the third quarter of 1999 from a year ago.
The construction industry in Singapore has been reported to be picking up. An article in the Straits
Times dated 21 December 1999 reported that the residential property market had experienced a
significant all-round recovery in 1999, citing CB Richard Ellis.
Given that our products are used by businesses in the electronics and construction industries, we
are affected by the performance of these industries. Strong growth in the electronics and construction
industries will create demand for products and services of our customers, who will in turn increase
their orders of our products. With favorable prospects in the electronic and construction industries,
we are confident of our growth potential.
We believe that the positive outlook of the world economy, the expected growth in the electronics
industry and the recovery of the construction industry will stimulate demand for our products and
fuel our future growth and expansion.
FUTURE PLANS
Our business plans and strategies can be summarized as follows:(a)
Market Expansion
We are striving to expand our markets by increasing our sales to new Japanese customers in
Singapore and Malaysia through marketing calls by our marketing staff as well as obtaining
contacts and referrals from our Directors and our existing and former customers. Nevertheless,
as transformers are viewed as critical safety components, the evaluation period by such
customers can be as long as two to three years before they accept us as a new supplier and
allocate a bigger portion of their purchases to us.
(b)
New Product Development

Enhancements to existing products and the introduction of new designs of all our products is a
continual process, which forms an integral part of our business operations. We will continue to
innovate and regularly introduce new equipment to the market, based on feedback received
from customers. Our designers obtain customer feedback during scheduled development meetings
where new ideas are brought up, discussed and evaluated before decisions are made to modify
or improve the designs.
(c)
ISO 14001 Implementation

We have placed a high priority on being an environmentally conscious manufacturer. As part of
our efforts to prevent pollution and protect the environment, we have embarked on the process
of obtaining ISO 14001 certification for our environmental management systems. We expect our
factory in Johor Bahru to be ISO 14001 certified by the end of FY2000. We believe that such
certification will enhance our corporate image and enable us to gain greater consumer
acceptance.
53
DIVIDENDS
Our Directors intend to recommend a final gross dividend of 5.0% for the financial year ending 30
September 2000.
Currently, we have not adopted any formal policy with regards to dividends. However, our decision
to declare or pay dividends in the future will depend upon the earnings and financial position of the
Company, our results of operations, our capital needs, plans for expansion and other factors deemed
relevant at the discretion of our board of Directors.
PROFIT FORECAST
Barring any unforeseen circumstances, we expect to achieve sales, profit before taxation and profit
after taxation of $36.8 million, $4.6 million and $3.4 million respectively for the current year ending
30 September 2000. These forecasts have taken into consideration the unaudited results for the six
months ended 31 March 2000 and are based on the assumptions set out below.
Based on the unaudited management accounts for the six months ended 31 March 2000, we recorded
sales, profit before taxation, and profit after taxation of $15.9 million, $1.5 million and $1.3 million
respectively.
Sales are expected to increase by $8.0 million or 27.8% from FY1999 to $36.8 million in FY2000.
This is mainly due to an expected increase in contract manufacturing sales. The contract manufacturing
sales are expected to increase in view of the positive outlook of the electronics sector. Given that
our transformers and electronic controllers are supplied to customers in the electronics industry,
strong growth in the electronics sector will create demand for products of our customers which will
in turn boost our contract manufacturing sales. Further, we usually record higher contract manufacturing
sales in the second half of our financial year as manufacturers of consumer electronic products
increase their production output over this period in anticipation of higher consumer demand during
the holiday seasons. Given the above, we expect that we will be able to meet our full year forecast
even though we have only achieved sales of $15.9 million for the half year ended 31 March 2000, or
43.2% of our full year forecast.
We expect our profit before tax to increase by $0.4 million or 9.5% from FY1999 to $4.6 million in
FY2000. In line with higher expected sales, we expect to record higher profits before tax for the
second half of the financial year as well. Profit margins are also expected to be higher in the second
half of the financial year since our fixed costs would be spread over a higher amount of sales.
Although profit before tax for FY2000 is expected to increase by $0.4 million or 9.5% from FY1999,
profit after tax for FY2000 is expected to decline marginally by $0.1 million or 2.9% from FY1999
due to the waiver of income tax granted by the tax authorities for our Malaysian subsidiaries in
FY1999. We do not expect any such waiver of income tax in FY2000.
Principal Bases and Assumptions Underlying the Profit Forecasts
(a)
There will be no material changes in the existing political, socio-economic and legal conditions
in the countries in which we operate.
(b)
There will be no material changes in the bases and the rates of taxation, tariffs, duties, levies,
currency exchange rates, inflation rates and interest rates from those prevailing at the date of
the forecast and which may affect our performance.
(c)
Our activities will not be adversely affected by any new governmental legislation, regulations
and controls.
(d)
There will be no significant disruptions to our activities arising from industrial disputes or any
other cause.
54
MAJOR CUSTOMERS
Our customers for transformers and electronic controllers are manufacturers of audio and video
appliances and electrical appliances. Our customers for emergency lighting equipment and electronic
ballasts are members of the construction industry, including wholesalers, contractors and lighting
manufacturers.
We maintain good relations with our customers and more than 90% of our total sales in FY1999
were derived from repeat customers who were satisfied with our products and services.
Our major customers who accounted for 5% or more of our total turnover for each of the last three
financial years are as follows:-
Name of Customer
FY1997
(%)
FY1998
(%)
FY1999
(%)
Philips DAP
16.9
29.2
17.0
Aiwa
26.8
27.6
39.9
2.1
7.5
2.4
Kenwood
Philips-DAP
Sales to Philips-DAP increased from 16.9% in FY1997 to 29.2% in FY1998 due to a major nonrecurring order for electronic controllers for hair dryers in FY1998. Accordingly, sales to Philips-DAP
in FY1999 decreased to 17.0% upon the completion of the orders for the hair dryers.
Aiwa
Sales of transformers to Aiwa for their hi-fi sets remained relatively constant at 26.8% and 27.6% in
FY1997 and FY1998 respectively. However, sales increased from 27.6% in FY1998 to 39.9% in
FY1999 due to orders for high value transformers during the year. Sales to Aiwa in the previous
years were usually of lower value transformers.
Kenwood
Sales to Kenwood increased from 2.1% in FY1997 to 7.5% in FY1998 due to a non-recurring order
for transformers in FY1998. Sales to Kenwood decreased to 2.4% in FY1999 following the completion
of this order.
We will continue to expand and diversify our customer base so as to reduce reliance on any one
major customer. We have been making active marketing efforts to acquire new Japanese manufacturers
located in Singapore and Malaysia. Please refer to Prospects and Future Plans on page 52 to 53
of this Prospectus.
None of our Directors or substantial shareholders have any substantial interest, direct or indirect, in
our major customers mentioned above.
55
MAJOR SUPPLIERS
Our major suppliers who accounted for 5% or more of our purchases for each of the last three
financial years are as follows:-
Name of Supplier
FY1997
(%)
FY1998
(%)
FY1999
(%)
13.1
18.7
10.3
Saft
6.8
5.1
3.8
Macglotech Steel
5.1
10.5
9.0
Fujikura
3.8
5.7
5.1
Tatt Giap
1.3
5.1
15.4
11.1
15.1
Philips-DAP
Other PNE Companies
(1)
Note:(1) The Other PNE Companies are PNE Plas, PNE Micron, PNE Electric (Spore) and PNE PCB. Please see Interested
Person Transactions on page 60 of this Prospectus.
Philips-DAP
We purchase electronic components including integrated circuits, switches and microprocessors, from
Philips-DAP which we assemble as electronic controllers before selling them back to Philips-DAP.
Purchases from Philips-DAP increased from 13.1% in FY1997 to 18.7% in FY1998 and then decreased
to 10.3% in FY1999. This corresponds with the trend in our sales to Philips-DAP. There is therefore
minimal risk of us being dependent upon Philips-DAP as our purchases made would correspond with
the orders received from them.
Saft
We purchase batteries from Saft to be installed in the lighting products. Purchases decreased from
6.8% in FY1997 to 5.1% in FY1998 and 3.8% in FY1999. This is in line with the decrease in sales
of our lighting products.
Macglotech Steel
Macglotech Steel supplies us with EI lamination used in the manufacture of transformers. El lamination
is a generic component and price is therefore a key consideration in our selection of the supplier.
Purchases from Macglotech Steel increased from 5.1% in FY1997 to 10.5% in FY1998 because we
purchased more from Macglotech Steel than other suppliers as their prices were more competitive.
Fujikura
Fujikura supplies enamelled copper wires to us which are used for manufacturing transformers. Like
EI lamination, copper wire is also a generic part. Purchases from Fujikura has remained fairly steady
over the past three financial years at 3.8% in FY1997, 5.7% in FY1998 and 5.1% in FY1999.
56
Tatt Giap
Tatt Giap began supplying us with EI lamination in FY1998. Purchases increased from 1.3% in
FY1998 to 5.1% in FY1999, as Tatt Giap had shown itself to be a reliable supplier. The increase in
purchases from Tatt Giap allowed us to reduce our reliance on Macglotech.
Other PNE Companies
Please refer to Interested Person Transactions on page 60 of this Prospectus for further details.
Save as set out above, none of our Directors or substantial shareholders have any substantial interest,
direct or indirect, in our major suppliers mentioned above.
57
COMPETITION
In Singapore and Malaysia, we have identified our competitors for transformers as Tamura Electronics
(M) Sdn Bhd, Sanken Transformer Sdn Bhd (formerly known as Shimoda Electric (M) Sdn Bhd),
Kami Electronics Industry (M) Sdn Bhd, Mitsuoka Electronics (M) Sdn Bhd and Bando Electronics
(M) Sdn Bhd.
Our electronic controllers are customised to the needs and specifications of our customers. While
there are numerous manufacturers in the region for electronic controllers, we believe that none offers
design services for these electronic controllers. To the best of our Directors knowledge, none of the
manufacturers in the ASEAN region compete with us in this aspect. We would regard Newtronics
Australia Pty Ltd in Australia and Eker GmBH in West Germany as our closest direct competitors.
For our emergency lighting equipment, we have identified our competitors in the Singapore market
as Maxspid Enterprise Pte Ltd, Samcom Electronics Pte Ltd and Denko Lighting Pte Ltd. We consider
Jumbohan Marketing Sdn Bhd, Syarikat Econlite (M) Sdn Bhd and Accu Pro Sdn Bhd as our main
competitors for emergency lighting equipment in the Malaysian market.
For electronic ballasts, the global market is dominated by large multi-national manufacturers such
as Philips Singapore Pte Ltd and Osram Singapore Pte Ltd. The other manufacturers of electronic
ballasts are Enersave Holdings Ltd in Singapore, and Polytron Resources Sdn Bhd and Micatronic
Sdn Bhd in Malaysia.
Our Directors believe that our key competitive advantages are:1.
Experienced Executive Directors

Two of our Executive Directors, Messrs Tan Koon Chwee and Tan Kong Leong, have more
than 10 years experience each in the electronic and lighting industries. As they are actively
involved in our daily operations, we are able to make critical decisions more quickly and are
more responsive to any changes in the industry.
2.
Quality Products and Service

We are committed to providing quality products to our customers. We have implemented stringent
controls in our manufacturing procedures to ensure products of high quality and reliability. Our
factories in Johor and Pahang have been awarded the ISO 9002 certification in July 1994 and
May 1999 respectively.
The consistent high quality of our products is greatly valued by our customers, who have shown
their appreciation by awarding us with several quality awards over the years. Some of these
awards achieved are set out on page 38 of this Prospectus.
3.
Close and Established Customer Relations

We have established strong relationships with many of our customers, as reflected in the high
proportion of repeat customers. For FY1999, repeat customers accounted for more than 90% of
our turnover. Our two major customers, Aiwa and PhilipsDAP, have been with us for more
than 10 years.
These close customer relations allow us to better understand our customers needs. Thus we
are more responsive to them and can tailor our products and services to suit each customer
accordingly.
4.
Cost Advantages
We enjoy cost advantages as most of our customers are located in Johor Bahru, which is close
to our factory in Tebrau, Johor. This close proximity to our customers in Johor reduces
transportation costs.
58
5.
Design Services
We provide value-added services by designing our transformers and electronic controllers to
meet the specific and varied needs of customers. By integrating both design and manufacture,
our customers enjoy savings in cost and time as they need only to deal with us from the design
to the production stage instead of with separate designers and manufacturers.
6.
Vertical Integration of Manufacturing Activities

Since the commencement of our business, we have placed a high priority on vertical integration.
We continuously assess the viability of operations and processes that can be integrated into,
and are beneficial to, our existing operations.
Nevertheless, this is balanced with our focus on outsourcing certain aspects of our manufacturing
process to increase efficiency and productivity. An analysis of the comparative advantages is
always conducted before a decision is made to outsource or incorporate any aspect for vertical
integration. A committee comprising of staff from our process engineering department and our
purchasing department carries out the evaluation before presenting their proposal to our
management for the final decision. In so doing, we are able to control costs and ensure greater
flexibility in production.
7.
Research and Development

Throughout the years, we have always focused on and invested in research and development
activities. We seek to improve the design of our products as well as streamline our manufacturing
processes. Our research and development activities have enabled us to provide valuable feedback
and suggestions to our customers during our marketing meetings with them. We have received
several grants from PSB for our research activities. Please refer to Research and Development
on page 38 of this Prospectus for more details.
59
INTERESTED PERSON TRANSACTIONS

Transactions with Directors, Executive Officers and Substantial Shareholders
Save as disclosed hereunder:
(i)
None of the Directors, Executive Officers or substantial shareholders of the Company have any
interest, direct or indirect, in any transactions to which the Group was or is to be a party;
(ii)
None of the Directors, Executive Officers or substantial shareholders have any interest, direct
or indirect, in any business carrying on a similar trade as the Group;
(iii)
or indirect, in any enterprise or company that is the Groups customer or supplier of goods or
services; and
(iv)
or indirect, in any material transactions undertaken by the Group within the last three years.
Transactions which took place between the Group and its interested persons (as defined in Chapter
9A of the Listing Manual) in the past three financial years are set out below.
(a)
Property Sale
Pursuant to a Sale and Purchase Agreement dated 20 November 1998 between PNE Electric
and PNE Electronics, PNE Electric sold to PNE Electronics a residential property (comprising
52 units of terrace houses) at Lot 2152 Mukim Plentong G.M. 526 Daerah Johor Bahru (Johor
Bahru Property) for RM2,400,000. The disposal enabled the Group to streamline its business
and to dispose its non-core assets. The purchase consideration was arrived at based on the
open market value of the property of $1.067 million (RM2,400,000) as at 30 September 1998
set out in the Valuers Report referred to at page 78 of this Prospectus. The amount has been
fully settled in FY1998.
(b)
Tenancies
(1) Pursuant to a Tenancy Agreement dated 1 August 1998 between PNE Electric and Focal
Dynamic, PNE Electric rented two shop houses, with a combined floor area of 12,320 sq.
ft. in Johor Bahru, Johor, Malaysia for use as staff hostels for a term of one year from 1
August 1998 at a monthly rental of RM4,800. The rental was at market rate.
(2) Pursuant to a Tenancy Agreement dated 10 August 1999 between PNE Translite and Print
N Etch, PNE Translite rented storage space of approximately 8,000 sq. ft. in a building at
14 Senoko Loop Singapore 758150 for a term of two years from 1 October 1999 at a
monthly rental of $5,000. The rental was at market rate.
(3) PNE Appliance Controls rented a residential property at 32 Jalan Shaer Singapore 769377
from PNE Investment for three years from 1 January 1999 at a monthly rental of $5,000.
The rental was at market rate. This agreement was terminated on 1 October 1999.
(4) PNE PCB rented from PNE Electric 52 terraces houses situated on the Johor Bahru Property
for an initial term of one year (renewable annually) at a monthly rental of RM49,000 since
1 January 1995. The rental was at market rate. The tenancy was renewed annually based
on the prevailing market rate until terminated pursuant to the disposal by PNE Electric of
the Johor Bahru Property, as described in paragraph (a) above.
60
The rentals paid to and received from the Groups interested persons are set out below.
Rental Received from/(Paid to):
FY1997
S$000
FY1998
S$000
FY1999
S$000
PNE Investment
(60)
(60)
(60)
Print N Etch
(90)
(6)
327
256
Focal Dynamic
PNE PCB
(c)
Sales and Purchases

1.
Purchases from PNE Plas

PNE Plas is principally engaged in the manufacturing and trading of plastic components
and products.
PNE Electrics purchases of materials and fixed assets (toolings) from PNE Plas in the
past three financial years are as follows:-
Materials
Fixed Assets (Toolings)
FY1997
S$000
FY1998
S$000
FY1999
S$000
651
3.1(1)
855
4.4(1)
1,372
8.0(1)
125
1.3(2)
Notes:(1)
As a percentage of the Groups purchases.
(2) As a percentage of the Groups fixed assets (net book value).
All the abovementioned transactions were at market value and on an arms length basis.
The Groups purchases of materials (plastic bobbins) from PNE Plas increased from 3.1%
of total Groups purchases in FY1997 to 8.0% in FY1999 due to the increase in transformer
sales.
The plastic bobbins purchased from PNE Plas are used as components in the manufacture
of transformers by PNE Electric. By purchasing from PNE Plas, PNE Electric is able to
obtain its orders in a timely manner. It can also be assured of the quality control procedures
and consistency aspects of the manufacturing process employed by PNE Plas compared
to other suppliers. There is greater assurance that the parts produced by PNE Plas are of
the standards required by PNE Electric.
Future transactions between the Group and PNE Plas will be regulated by supply
agreements, details of which are set out on page 63 of this Prospectus.
61
2.
Purchases from PNE Micron

PNE Micron is principally engaged in the manufacturing and trading of metal stamping,
tool and dies, speaker nets and perforation materials.
PNE Electrics purchases of materials and fixed assets (toolings) from PNE Micron in the
past three financial years are as follows:-
Materials
Fixed Assets (Toolings)
FY1997
S$000
FY1998
S$000
FY1999
S$000
882
4.2(1)
953
4.9(1)
1,051
6.1(1)
49
0.5(2)
Notes:(1)
(2)
As a percentage of the Groups fixed assets (net book value)
All the abovementioned transactions were at market value and on an arms length basis.
The Groups purchases of material parts (metal stamping parts) increased from 4.2% of
total Groups purchases in FY1997 to 6.1% in FY1999 mainly due to the increase in
transformer sales. This has been partly offset by a decrease in demand of such parts due
to the decline in lighting sales.
Metal stamping parts are components used for manufacturing transformers and lightings.
PNE Electric purchases metal stamping parts and toolings from PNE Micron as they are
able to provide support and meet the needs of PNE Electric during the critical development
phases of new models where prototypes are required to be made and delivered on time to
customers. Such responsiveness enables PNE Electric to develop prototypes for its
customers evaluation within a short time frame. This arrangement enables PNE Electric to
respond quickly to secure orders and grants it an edge over its other competitors. With a
third party supplier, PNE Electric may not have similar assurance that the supplies will be
delivered on time within the tight schedules.
Future transactions between the Group and PNE Micron will be regulated by supply
agreements, details of which are set out on page 63 of this Prospectus.
3.
Purchases of printed circuit boards from PNE PCB

PNE PCB is principally engaged in the manufacturing and trading of printed circuit boards
and related products.
The Groups purchases of printed circuit boards from PNE PCB in the past three financial
years are as follows:-
Materials
FY1997
S$000
FY1998
S$000
FY1999
S$000
359
1.7(1)
358
1.8(1)
179
1.0(1)
Note:(1)
All the above transactions were at market value and on an arms length basis.
The Group purchases printed circuit boards from PNE PCB due to its competitive pricing
and assurance that delivery will be on time. All future transactions will be subject to the
Review Procedures for Future Interested Person Transactions set out on page 64 of this
Prospectus.
62
4.
Sales to and purchases from PNE Electric (Spore)
(1)
PNE Electric (Spore) is an investment holding company. In FY1997, PNE Electric (Spore)
bought transformers from and sold transformers to the Group. There have not been such
transactions since then.
Sales to and purchases from PNE Electric (Spore) over the past three financial years
were as follows:-
Sales
Purchases
FY1997
S$000
FY1998
S$000
FY1999
S$000
1,617
4.9(2)
1,339
(3)
6.4
Notes:(1)
PNE Electric (Spore) is a company incorporated in Singapore and is not part of the Group. PNE Electric
Sdn. Bhd. is a company incorporated in Malaysia and is part of the Group.
(2)
As a percentage of the Groups sales.
(3)
All the above transactions were conducted at market prices and on an arms length basis.
We have ceased sales to and purchases from PNE Electric (Spore) as of FY1998 and do
not intend to make any such sales or purchases in future.
(d)
Trademark Agreement
Pursuant to a trademark licensing agreement dated 19 April 2000 between the Company and
Print N Etch, the Company was licensed to use the PNE trademark with respect to the
emergency lighting equipment and electronic ballasts manufactured by the Group. The agreement
enables the Group to use the trademark in Singapore, Malaysia and Indonesia.
The Company will pay fees equivalent to 0.3% of the annual consolidated sales of the
abovementioned products, subject to a minimum fee of $10,000 per annum. The fees payable
are not subject to any limit. Please see Trademarks set out on page 42 of this Prospectus for
more details of the agreement.
(e)
Pledge over fixed deposits by Print N Etch

Pursuant to a loan agreement dated 27 September 1999, PNE Electric obtained a term loan of
$2,670,000 (equivalent to RM6,000,000, based on the exchange rate of RM1.00 to $0.445 as
at 30 September 1999) from Multi-Purpose Bank Berhad at an interest rate equivalent to the
fixed deposit rate plus a margin of 1% per annum, the proceeds of which were used to repay
shareholders loans of the same amount due to the shareholders of PNE Electric. The term loan
was secured by a pledge over deposits dated 29 September 1999 executed by Print N Etch in
favour of Multi-Purpose Bank Berhad.
The Group intends to use $1.4 million from the proceeds of the Invitation to repay the term
loan, whereupon the pledge over deposits will be discharged.
Regulation of future transactions between the Group and PNE Plas and PNE Micron
Due to the time sensitive nature of the transactions, and in order to regulate future transactions,
between the Group and PNE Plas and PNE Micron, PNE Electric has entered into long term supply
agreements with PNE Plas and PNE Micron respectively for the supply of materials and fixed assets
(toolings).
63
The relevant party would supply the materials and/or fixed assets (toolings) from time to time as
may be required by PNE Electric at such price to be agreed upon on a case by case basis on an
arms length basis such that the transactions are transacted on terms and prices not more favourably
to the relevant party than if they were transacted with a third party and the parties have not been
disadvantaged in any other way. The supply agreements will be effective upon the listing and quotation
of the Shares on SGX-MAIN BOARD and will continue for as long as the listing continues and will
be subject to the provisions of Chapter 9A of the Listing Manual. The respective supply agreements
may be terminated only upon the mutual agreement of the relevant parties or if the shareholders
mandate is not renewed at any subsequent annual general meeting. There are no other circumstances
in which the agreements can be terminated. The agreements would be reviewed by the Audit
Committee at the end of each financial year.
As the value of the transactions under the respective supply agreements would exceed five per.
cent. (5%) of the latest audited consolidated NTA of the Group and therefore be classified as a
Threshold 2 transaction under the Listing Manual, the Company had obtained its shareholders
mandate at an extraordinary general meeting held on 4 May 2000 for PNE Electric to enter into the
relevant supply agreements. Such shareholders approval took effect from the date of the
abovementioned extraordinary general meeting and will remain effective until the next annual general
meeting of the Company. Thereafter, the Company would seek the approval from its shareholders at
each subsequent annual general meeting for approval to continue with the relevant supply agreements,
each such approval to be valid until the subsequent annual general meeting.
Review Procedures for Future Interested Person Transactions
Our Audit Committee will review all interested person transactions to ensure that they are on an
arms length basis, that is, the transactions will be on terms and prices not more favourable to the
interested person than if such transaction was with a third party and that the Group has not been
disadvantaged in any other way. The Company will prepare the relevant information to assist the
Audit Committee in its review.
Before any transaction not within the ordinary course of business of the Group is transacted, prior
approval would be obtained from the Audit Committee. In the event that a member of the Audit
Committee is interested in any interested person transaction, he will abstain from reviewing that
particular transaction. Any decision to proceed with such an agreement or arrangement would also
be recorded for review by the Audit Committee.
The Audit Committee will also review the internal controls relating to future interested person
transactions of the Group. It will ensure that all disclosure requirements on interested person
transactions, including those required by the Act and Chapter 9A of the Listing Manual, are complied
with and, if required by the Act and Chapter 9A of the Listing Manual, the Company will seek
shareholders approval for such transactions.
64
DIRECTORS, MANAGEMENT AND STAFF

Directors
Our Board of Directors is entrusted with the responsibility for the overall management of our Group.
The particulars of our Directors are listed below:Name
Age
Address
Country of
Principal
Residence
Position
Tan Kong Heng
59
34 Ah Hood Road
#10-01 Singapore 329978
Singapore
Non-Executive
Chairman
Tan Koon Chwee
44
24 Thomson Green
Singapore 574900
Singapore
Executive Managing
Director
Tan Kong Leong
39
32 Jalan Shaer
Singapore 769377
Singapore
Executive Director
Tan Bee Foon
40
32 Jalan Shaer
Singapore 769377
Singapore
Executive Director
Tan Kong Boon
63
255 Tagore Avenue

#06-01 Singapore 787796
Singapore
Non-Executive
Director
Tan Kwong Soon
55
7 Bassein Road #09-04

Pastoral View
Singapore 309837
Singapore
Non-Executive
Director
Tan Kong Guan
42
5 Springleaf View
Singapore 787911
Singapore
Non-Executive
Director
Tung Chee Weng
45
9 Munshi Abdullah Walk

Singapore 788589
Singapore
Independent
Director
Tan Lee Khiang
46
16 Cashew Link
Singapore 679714
Singapore
Independent
Director
Note:(1) Messrs Tung Chee Weng and Tan Lee Khiang are our independent directors (our Independent Directors). All our
Directors, with the exception of the Independent Directors, are siblings.
The business and working experience of our Directors are set out below:Mr Tan Kong Heng is our Non-Executive Chairman. He has been with us since our inception and is
currently responsible for the formulation of our corporate strategies and expansion plans. Mr Tan is
the founder and chairman of PNE PCB, a company listed on the Kuala Lumpur Stock Exchange 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. Given his many years of experience in the industry, Mr Tan has built up relationships with
many industry players. Mr Tan actively seeks new business opportunities and expansion possibilities
for our Group. He currently holds directorships in various other companies.
65
Mr Tan Koon Chwee is our Executive Managing Director. Mr Tan oversees the operations of all the
companies in our Group. His job responsibilities include the formulation and implementation of our
business strategies and financial management. He is also responsible for the marketing of our products.
Mr Tan contributed significantly to our Groups expansion into Malaysia by setting up PNE Electric.
Before joining us in 1987, Mr Tan worked as an Electrical Engineer in Public Utilities Board from
1981 to 1985 and as an electrical consultant with Indeco Consultants in 1986. Mr Tan holds a
degree in the Bachelor of Science in Electrical and Electronic Engineering (Second Class Upper
Honours) from the University of Strathclyde, Glasgow, Scotland. He has been registered as a
Professional Engineer since 1985.
Mr Tan Kong Leong is our Executive Director. Mr Tan assists our Executive Managing Director in
the management of our Group. He is primarily responsible for capital budgeting of projects and
purchasing of raw materials needed for our production. Mr Tan is also in charge of the information
technology function in our Group. Mr Tan joined us as an electronic engineer in 1986. He holds a
degree in the Bachelor of Engineering (Electrical) from the Nanyang Technological University.
Ms Tan Bee Foon is our Executive Director. Ms Tan is responsible for human resource management
and general administration in our Group. She is involved in the formulation of our human resource
policies and the preparation of training programmes for our staff. In addition, Ms Tan oversees all the
administrative matters in our Group. Ms Tan joined our Group on 1 October 1999. Prior to this, she
was with PNE PCB for 10 years where she was also involved in human resource management and
general administration work. Ms Tan holds a Diploma in Management from the Singapore Institute of
Management.
Mr Tan Kong Boon is our Non-Executive Director. He has been with us since 1983 and is involved
in initiating new investment opportunities for our Group. Mr Tan has held various positions before
joining us. In 1967, he was a logistics officer in International Spinning Mills Pte Ltd. In 1973 he
moved to Permanent Pte Ltd to become a Finance and Administrative Manager, where his main
duties included the setting up and supervising of the accounting and administrative functions of the
company.
Mr Tan Kwong Soon is our Non-Executive Director. He is also one of our founding members, having
been with us since 1983. As such, he has in-depth knowledge and understanding of our business.
Presently, he acts as an advisor on our accounting and financial operations. He is currently the
finance director as well as financial controller of PNE PCB Bhd. He holds a Diploma in Accounting
from the London Chamber of Commerce and Industry.
Mr Tan Kong Guan is our Non-Executive Director. He has been with us since 1983 as a Director of
PNE Appliance Controls, where he is responsible for the overall management of the company. Mr
Tan joined PNE Appliance Controls as a General Manager and a director. Subsequently in 1992, he
relinguished his position as the General Manager in PNE Appliance Controls and joined PNE PCB
Bhd as the Managing Director. However, he still remained as a director of PNE Appliance Controls
in view of his good knowledge of the industry and his ability to contribute to the operations of the
company. At PNE PCB, Mr Tan is responsible for the overall management, specifically its research
and development activities, as well as its marketing function. Mr Tan holds a degree in the Bachelor
of Arts in Business Administration from the Ottawa University, Kansas, United States of America, as
well as a Diploma in Production Engineering. He also completed an executive management program
with Asia INC School of Management, Hong Kong in 1995.
Mr Tung Chee Weng is our Independent Director. He is presently the Director (Service Division) of
U.S. Filter Asia Pacific Pte Ltd. From 1987 to 1998, he was with Seagate Technology International
where he held various positions before serving as Director (Strategic Planning & Industrial
Engineering). Prior to that, he worked in various companies in the construction and engineering
industries. He holds a Bachelor of Science (Mechanical Engineering) (Second Class Upper Honours)
from the University of Strathclyde, Glasgow, Scotland.
66
Mr Tan Lee Khiang is our Independent Director. He is presently the Director of TechnoMEC Engineers
Pte Ltd. From 1989 to August 1999, he was Senior Manager at Genisys Integrated Engineers Pte
Ltd. Prior to that, he worked in various engineering, manufacturing and construction firms for 10
years. He graduated with a Bachelor of Science (First Class Honours) in Mechanical Engineering
from the University of Strathclyde, Glasgow, Scotland and is a Professional Engineer in Singapore.
Audit Committee
Our Audit Committee comprises Mr Tan Koon Chwee and the Independent Directors. Mr Tung Chee
Weng will be the Chairman of the Audit Committee. Our Independent Directors do not have any
existing business or professional business relations with us or our other Directors or substantial
shareholders. They are also not related to any of our Directors or substantial shareholders.
Management
Our day-to-day operations are entrusted to our Executive Directors who are assisted by a team of
experienced key executive officers (Executive Officers). The particulars of our Executive Officers
are set out below:Name
Age
Address
Chin Chew Khay
45
No. 3 Jalan USJ9/5G

UEP Subang Jaya
47620 Subang Jaya
Toh Kheng Lip
44
Tan Meng Siew
Country of
Principal
Residence
Position
Malaysia
General Manager
Blk 503 Jelapang Road

#13-366 Singapore 670503
Singapore
General Manager
28
34 Ah Hood Road #10-01

Singapore 329978
Singapore
Financial Controller
Tan Kian Chye
32
255 Tagore Ave #06-01

Singapore 787796
Singapore
Manager (Lighting)
Tay Mui Kwang
63
81Q Jalan Senang

Singapore 418450
Singapore
Consultant/Advisor
Ms Tan Meng Siew is the daughter of Mr Tan Kong Heng and the niece of Messrs Tan Koon
Chwee, Tan Kong Leong, Tan Kong Boon, Tan Kwong Soon, Tan Kong Guan and Ms Tan Bee Foon.
Mr Tan Kian Chye is the son of Mr Tan Kong Boon and the nephew of Messrs Tan Kong Heng, Tan
Koon Chwee, Tan Kong Leong, Tan Kwong Soon, Tan Kong Guan and Ms Tan Bee Foon.
Save as disclosed, none of our Executive Officers have any relationship with any of our other Executive
Officer, director or substantial shareholder.
Further information on our Directors and the Executive Officers are contained under Information on
Directors and Executive Officers on pages 106 to 110 of this Prospectus.
67
Information on the working experience and areas of responsibility, of our Executive Officers is set
out below:Mr Chin Chew Khay is a Director and the General Manager of PNE Systems. He is responsible for
the daily operations of PNE Systems. Mr Chin has more than 12 years experience in selling and
marketing emergency lighting equipment. Prior to joining us in May 1993, Mr Chin was with Sykt.
Econlite (M) Sdn Bhd from 1988 to 1993 as the manager of sales and marketing in emergency
lighting equipment.
Mr Toh Kheng Lip is the General Manager of PNE Electric. He joined us in 1991 and is responsible
for the production in the two factories owned by PNE Electric. Prior to joining us, Mr Toh was with
Olivetti (S) Pte Ltd as a Production Manager for 8 years.
Ms Tan Meng Siew was appointed our Financial Controller on 1 October 1999. She is responsible
for our finance and accounting functions. There are 4 accounts personnel reporting to her. The
accounts personnel are in charge of the accounts of PNE Appliance, PNE Translite, PNE Electric
and PNE Systems respectively. Prior to joining PNE PCB Pte Ltd in 1996, Ms Tan was an Audit
Semi-senior with an international accounting firm. She joined the international accounting firm upon
graduation and as an auditor, she was engaged in the evaluation of internal control standards of
various companies as well as the preparation of statutory accounts and management reports. She
graduated from the Nanyang Technological University with a Second Class Upper Honours degree in
1994 and has been a Certified Public Accountant since 1999.
Mr Tan Kian Chye has been the sales manager of PNE Translite since 1996. He was with Singapore
Chemicon in 1994 and Pyson Clothing in 1995 before joining our Group. Mr Tan graduated with a
Merit degree in the Bachelor of Business Administration from the National University of Singapore.
Mr Tay Mui Kwang is the consultant and advisor of PNE Translite. He provides advice on the
manufacturing process as well as the design of new lighting products. He also helps to establish new
contacts in the industry. Mr Tay has been with us since 1991. Prior to joining us from 1981 to 1991,
he was with Elite Manufacturing Co. Pte Ltd as a Technical Manager. Mr Tay holds a Bachelor of
Science from the Nanyang University.
68
CORPORATE GOVERNANCE AND AUDIT COMMITTEE

Currently, our business and operations are under the management and close supervision of our
Managing Director and our Executive Directors. The management of our day-to-day operations is
overseen by all our Executive Directors.
Our Executive Directors will continue to manage our operations and our Audit Committee will provide
the necessary checks and balances. Our Audit Committee comprises our two Independent Directors,
namely Messrs Tung Chee Weng and Tan Lee Khiang, and Tan Koon Chwee. Tung Chee Weng is
the Chairman of our Audit Committee.
Recognising the importance of corporate governance and the need to offer the highest standards of
accountability to our shareholders, our Audit Committee intends to meet periodically to perform the
following functions:(i)
to review the audit plans of our external auditors;
(ii)
to review our external auditors evaluation of the system of internal control;
(iii)
to review our external auditors reports;
(iv)
to review the co-operation given by our officers to the external auditors;
(v)
to review our financial statements before their submission to our Board of Directors;
(vi)
to nominate external auditors for re-appointment; and
(vii) to review interested person transactions.

Apart from the duties listed above, our Audit Committee shall commission and review the findings of
internal investigations into matters where there is any suspected fraud or irregularity, or failure of
internal controls or infringement of any Singapore law, rule or regulation which has or is likely to
have a material impact on our operating results and/or financial position.
Staff
As at 15 April 2000, we had a total of about 892 employees who were on full-time employment. This
comprised 9 directors, 19 managers, 68 technical staff, 796 administrative, production and site staff.
Our employees are not unionised. The relationship between the management and staff has been
good. We have not had any industrial disputes in the past three years.
69
SERVICE AGREEMENTS
The Company and our wholly-owned subsidiary, PNE Electric, have entered into separate service
agreements with each of Messrs Tan Koon Chwee and Tan Kong Leong (collectively, the Executives
and individually, an Executive).
A service agreement governed by Malaysian law was entered into by each Executive and PNE
Electric as the immigration department in Malaysia requires them to be gainfully employed by PNE
Electric before valid working permits are issued to them.
All service agreements are valid for an initial period of three years from 1 October 1999, and may be
extended only upon the mutual agreement of both parties. Notwithstanding the foregoing, either
party may terminate the relevant service agreement by giving the other not less than six months
notice in writing. Either party (subject to the approval of the Company or PNE Electric respectively)
may pay salary in lieu of any notice period.
Details of the remuneration payable under each service agreement is stated in the table below:
Each Executives Contract with
COMPONENT
PNE
PNE Electric
Annual Aggregate Salary(1)
$217,728
$116,065 (RM260,820 (1))
Annual Wage Supplement
2 months salary
2 months salary
Employers contribution to the

Central Provident Fund(2)
$10,829
Nil
Total remuneration
$264,845
$135,409
Profit Sharing Scheme
1% of consolidated profit
before tax for each financial
year, provided that such
consolidated profit before tax
equals or exceeds $6 million.
Nil
Notes:(1) The Exchange rate at 30 September 1999 is RM1.00 to $0.445

(2) CPF rate is assumed to remain at 10%. The Company does not need to contribute to the Employees Provident Fund
for Messrs Tan Koon Chwee and Tan Kong Leong.
During the employment, PNE Electric shall provide a motor car to each Executive which shall be
held by each Executive on trust for the Company. PNE Electric shall pay for all related running
expenses. The Company and PNE Electric shall each acquire a country club membership in Singapore
and Malaysia respectively for each Executive, which shall be held by each Executive on trust for the
Company.
Had the proposed Service Agreements been in force for the last financial year ended 30 September
1999, the total remuneration payable (comprising directors fees, salaries, annual bonuses, incentive
bonuses and CPF thereon) to our Directors would have been $813,008 (approximately 16.3% of
profit before tax and directors remuneration) instead of $777,832 (approximately 15.6% of profit
before tax and directors remuneration). Our profit before tax and extraordinary items would have
decreased from approximately $4,198,381 to $4,163,205, an effective decrease of approximately
0.8%.
Save as disclosed above, there are no other existing or proposed service agreements between us or
our subsidiaries and any of our Directors or Executive Officers.
70
Directors Remuneration
The remuneration of our Directors on an aggregate basis and in remuneration bands for FY1998
and FY1999 are as follows:(a)
(b)
Aggregate directors remuneration by category

<
Executive
Directors
FY1998
NonExecutive
Directors
S$708,098
Total
>
<
Executive
Directors
FY1999
NonExecutive
Directors
S$708,098
S$777,832
>
Total
S$777,832
Number of directors in remuneration bands

<
Executive
Directors
FY1998
NonExecutive
Directors
>
Total
<
Executive
Directors
FY1999
NonExecutive
Directors
>
Total
$500,000 and above
$250,000 to $499,999
below $250,000
Remuneration of Employees related to Directors and Substantial Shareholders

In FY1999, there were 4 employees of the Group who were related to Directors and substantial
shareholders of the Group, namely Messrs Eugene Tan Wei Kang, Wong Soon Lian, Tan Meng Siew
and Tan Kian Chye. The nature of the relationship is set out on page 108 of this Prospectus. The
aggregate remuneration (including CPF contributions thereon and benefits) of these employees who
are related to Directors and substantial shareholders amounted to approximately $199,000 or 4.7%
of the Groups FY1999 consolidated profit before tax.
The total remuneration paid to the Directors, substantial shareholders and their relatives, assuming
that the Service Agreement is in effect, is $1.0 million or approximately 24.1% of the Groups FY1999
consolidated profit before tax.
The remuneration of employees who are related to the Directors and substantial shareholders will be
reviewed annually by the Audit Committee to ensure that their remuneration packages are in line
with the Companys staff remuneration guidelines and commensurate with their respective job scopes
and levels of responsibility.
Annual Report Disclosure
The total remuneration paid to the Directors and substantial shareholders of the Company and
employees who are related to them will be disclosed in the Companys Annual Report.
71
PROPERTIES AND FIXED ASSETS

The following are details of our major properties:Description/Location,
Area, Tenure and
Unexpired term and
Annual Return
(if leasehold)
1. A double-storey
detached factory-cumoffice at PTD
No. 53897, Mukim
of Tebrau, District of
Johor Bahru, State of
Johor Darul Takzim
Valuation1 Valuation
Net book
surplus
value as at
taken
30 September
into the
1999
books
($000)
($000)
($000)
Cost
Accumulated
Depreciation
($000)
($000)
Net Book
Value
before
adjustment
for surplus
($000)
Date of
Valuation
2,833
211
2,622
4,247
(RM 9,545)
1,625
4,247
30 Sept
1999
1,176
106
1,070
1,602
(RM 3,600)
532
1,602
30 Sept
1999
Land area
8,032.3 sq. m.
Tenure
Leasehold for 60 years
expiring on April 5, 2055.
Annual rental
RM1,170.00 per annum
2. A single-storey
detached factory, a
single-storey canteen
block, a guard house,
a prayer room-cumlocker room and other
ancillary buildings at
P.T. Nos. 3019, 3020
and 3021 (formerly
known as P.T. Nos.
859, 858 and 857)
Mukim of Keratong,
District of Rompin,
State of Pahang Darul
Makmur
Land area
P.T. 3019: 4,046.8 sq. m.
P.T. 3020: 4,046.8 sq. m.
P.T. 3021: 5,058.5 sq. m.
Tenure
Leasehold 66 years
expiring on January 3,
2058.
Annual rental
P.T. 3019: RM1,320
P.T. 3020: RM1,320
P.T. 3021: RM1,650
72
Description/Location,
Area, Tenure and
Unexpired term and
Annual Return
(if leasehold)
3. Vacant industrial land

at P.T. No. 17 Mukim
of Bebar, District of
Rompin, State of
Pahang Darul Makmur
Cost
Accumulated
Depreciation
($000)
($000)
Net Book
Value
before
adjustment
for surplus
($000)
17
17
Valuation1 Valuation
Net book
surplus
value as at
taken
30 September
into the
1999
books
($000)
($000)
($000)
394
(RM 885)
377
394
Date of
Valuation
30 Sept
1999
Land area
29,385.0 sq.m.
Tenure
Leasehold 99 years
expiring on December 22,
20962.
Annual rental
RM 3,940.00
Notes:(1) The valuation was carried out by KGV-Lambert Smith Hampton, a firm of independent valuers. The Valuers Report is
set out on page 78 of this Prospectus. The surplus of $2,533,842 arising from the revaluation of the above mentioned
properties has been recorded as at 30 September 1999. Of this surplus on revaluation, $1,266,921 (50% of total
revaluation surplus)has been capitalised to issue bonus shares pursuant to the Restructuring Exercise.
(2) PNE Electric is in the process of obtaining the leasehold title.
(3) The exchange rate at 30 September 1999 was RM1 to S$0.445.
All the properties described above are not intended for redevelopment.
In addition, we lease several properties for employee residential purposes and storage purposes.
Our fixed assets, comprising properties, plant and machinery, motor vehicles and furniture, fittings
and office equipment, had a net book value of approximately $9.4 million as at 30 September 1999
including a revaluation surplus of $2.5 million.
Other than the properties referred to above, the other fixed assets of the Group have not been
revalued for the purpose of the Invitation.
73
UNAUDITED PROFORMA CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 31 MARCH 2000
The Directors confirm that the unaudited proforma consolidated profit and loss account and balance
sheet of the Group for the six months ended 31 March 2000 set out below have been prepared on
the basis of accounting policies consistent with those adopted in the Accountants Report as set out
on page 94 to 95 of this Prospectus.
Unaudited Consolidated Proforma Profit and Loss Account for the six months ended 31 March
2000
$000
Turnover
15,947
Profit before income tax
1,478
Taxation
(145)
Profit attributable to Group
1,333
Unaudited Consolidated Proforma Balance Sheet as at 31 March 2000

$000
Property, plant and equipment
9,452
Current assets
Less: Current liabilities
17,518
(10,032)
Net current assets
7,486
Non-current liability:
Deferred income tax
(452)
16,486
Represented by:
Shareholders equity
16,486
74
LETTER FROM THE AUDITORS AND REPORTING ACCOUNTANTS

IN RELATION TO THE PROFORMA CONSOLIDATED PROFIT FORECAST
FOR THE FINANCIAL YEAR ENDING 30 SEPTEMBER 2000
15 May 2000
The Board of Directors
PNE Industries Ltd
14 Senoko Loop
Singapore 758150
Dear Sirs
PNE Industries Ltd and its subsidiaries (the Group)
Profit Forecast for the Financial Year Ending 30 September 2000
This letter has been prepared for inclusion in the Prospectus (the Prospectus) of PNE Industries
Ltd (the Company) to be dated 15 May 2000 in connection with the invitation in respect of 51,138,000
new ordinary shares of $0.10 each in the capital of the Company comprising 10,228,000 Offer
Shares and 40,910,000 Placement Shares.
We have examined the consolidated profit forecast of the Group for the financial year ending
30 September 2000 as set out in page 54 of this Prospectus in accordance with Singapore Standards
on Auditing applicable to the examination of prospective financial information. The Directors are
solely responsible for the consolidated profit forecast including the bases and assumptions set out
on page 54 of this Prospectus on which it is based. The forecast includes the results as shown in
the unaudited proforma consolidated financial statements of the Group for the six months ended
31 March 2000.
Based on our examination of the evidence supporting the assumptions, nothing has come to our
attention which caused us to believe that these assumptions do not provide a reasonable basis for
the consolidated profit forecast. Further, in our opinion, the consolidated profit forecast, so far as the
accounting policies and calculations are concerned, is properly prepared on the basis of the
assumptions, is consistent with the accounting policies normally adopted by the Company and the
Group, and is presented in accordance with Singapore Statements of Accounting Standard.
Yours faithfully
Deloitte & Touche

Singapore
Aric Loh Siang Khee
Partner
75
LETTER FROM THE AUDITORS AND REPORTING ACCOUNTANTS

IN RELATION TO THE UNAUDITED PROFORMA CONSOLIDATED
FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 MARCH 2000
15 May 2000
PNE Industries Ltd
14 Senoko Loop
Singapore 758150
Dear Sirs
Letter from the Auditors and Reporting Accountants in relation to the Unaudited Proforma
Consolidated Financial Statements for the six months ended 31 March 2000
This letter has been prepared for inclusion in the Prospectus (the Prospectus) of PNE Industries
Ltd (the Company) to be dated 15 May 2000 in connection with the invitation in respect of 51,138,000
new ordinary shares of $0.10 each in the capital of the Company comprising 10,228,000 Offer
Shares and 40,910,000 Placement Shares.
We have reviewed the unaudited consolidated profit and loss account and balance sheet of the
Company and its subsidiaries (the Group) for the six months ended 31 March 2000 included in the
Prospectus. All information included in the unaudited consolidated profit and loss account and balance
sheet is the responsibility of the management of the Company. Our responsibility is to issue a report
on these financial statements based on our review.
We conducted our review in accordance with the Singapore Standards on Auditing applicable to
review engagements. This Standard requires that we plan and perform the review to obtain moderate
assurance as to whether the financial statements are free of material mis-statement. A review is
limited primarily to inquiries of company personnel and analytical procedures applied to financial
data and thus provides less assurance than an audit. We have not performed an audit and, accordingly,
we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the financial
information as set out on page 74 of the Prospectus are not presented fairly, in all material respects,
in accordance with Singapore Statements of Accounting Standard.
Yours faithfully
Deloitte & Touche

Singapore
Aric Loh Siang Khee
Partner
76
DIRECTORS REPORT
15 May 2000
The Shareholders
PNE INDUSTRIES LTD
14 Senoko Loop
Singapore 758150
Dear Sirs
This report has been prepared for inclusion in the prospectus (the Prospectus) by PNE INDUSTRIES
LTD (the Company) to be dated 15 May 2000 in connection with the invitation in respect of
51,138,000 new ordinary shares of $0.10 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 1999, the date to 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 has, in the opinion of the Directors, been
satisfactorily maintained;
(b)
in the opinion of the Directors, no circumstances have arisen since the last Annual General
Meeting of the Company which would adversely affect the trading or the value of the assets of
the Company or any of its subsidiaries;
(c)
the current assets of the Company and its subsidiaries appear in the books at values which are
believed to be realisable in the ordinary course of business;
(d)
no contingent liabilities have arisen by reason of any guarantees given by the Company or any
of its subsidiaries; and
(e)
there have been no changes in the published reserves or any unusual factors affecting the
profits of the Company and its subsidiaries since the last audited accounts.
Yours faithfully
for and on behalf of
the Board of Directors
Chairman
PNE INDUSTRIES LTD
77
VALUERS REPORT
15 May 2000
PNE Industries Ltd
14 Senoko Loop
Singapore 758150
Dear Sirs
VALUATION OF VARIOUS PROPERTIES IN MALAYSIA HELD BY THE SUBSIDIARY OF PNE
INDUSTRIES LTD, PNE ELECTRIC SDN BHD
This report has been prepared for inclusion in the prospectus (the Prospectus) dated 15 May 2000
of PNE Industries Ltd (the Company) in connection with the invitation in new shares by PNE
Industries Ltd.
We confirm that we have carried out inspections, made all relevant searches and investigations and
obtained such information as we consider appropriate to provide you with our opinion of the open
market values of the properties owned by PNE Electric Sdn Bhd as at 30 September 1999.
We have valued the subject properties on the basis of open market value which we would defined
as intended to mean the best price at which an interest in a property might reasonably be expected
to be sold by private treaty at the date of valuation assuming:
(a)
a willing seller;
(b)
a reasonable period within which to negotiate the sale, taking into account the nature of the
property and the state of market;
(c)
values will remain static throughout the period;
(d)
the property will be freely exposed to the market; and
(e)
no account is to be taken of an additional bid by a special purchaser.
A summary of our valuation together with a brief description of the subject properties is shown in the
attached valuation certificate.
Information as to titles and areas is obtained from searches carried out at the Registry of Land and
Mines. We have also relied on information provided to us, particularly in relation to such matters as
tenancy details.
No allowance has been made in our valuation for any charges, mortgages or amounts owing on the
properties, nor for any expenses or taxation which may be incurred in effecting a sale. It is assumed
that the properties are free from encumbrances, restrictions and outgoings of an onerous nature
other than those mentioned in the report which could affect their values.
In no case have we undertaken a structural survey or arranged to test any of the services and have
not therefore given any warranty as to the individual properties. We are not able to report that the
buildings are free of rot, infestation or any defect. None of the services in the buildings was tested.
78
Neither the whole or part of this report nor any reference thereto may be included in any document,
circular or statement without our written consent of the form and context in which it will appear.
Yours faithfully
KGV-LAMBERT SMITH HAMPTON
SAMUEL W C TAN
Director
79
Valuation Certificate
Address of Property
PT Nos 3019, 3020 and 3021, Muadzam Shah Industrial Estate,

Phase I, Muadzam Shah, 26700 Pahang.
Type of Property
A single-storey detached factory cum-office, canteen block, a

prayer room-cum-locker room and a guardhouse.
Legal Description
PT Nos 3019, 3020 and 3021

Mukim of Keratong
District of Rompin
State of Pahang Darul Makmur
Age
Approximately 5 years old
Site Area
Approximately 13,152.1 sq m (141,570.0 sq ft)
Gross Floor Area
Factory-cum-office
Canteen block
Prayer-cum-locker rooms
Guard house
Tenure
66 years leasehold expiring on January 3 2058. They have an

unexpired term of approximately 59 years.
Brief Description
The subject property comprise a single-storey detached factorycum-office, a canteen block, a prayer-room-cum-locker room and
guardhouse erected on 3 contiguous near rectangular-shaped
lands slightly lower than access road level. Construction of the
factory-cum-office building is of steel portal framework, concrete
laid over hardcore floor and colourbond coated steel roof sheets.
The canteen block, prayer-cum-locker rooms and guardhouse
are of reinforced concrete structure, steel roof sheets. The walls
are of cement plastered brickwalls.
Town Planning Consideration
Industry
Market Value
RM3,600,000
(RINGGIT MALAYSIA THREE MILLION SIX HUNDRED
THOUSAND ONLY).
80
5,574.0
891.8
71.3
9.3
sq
sq
sq
sq
m
m
m
m
(60,000.0
( 9,600.0
( 767.0
( 100.0
sq
sq
sq
sq
ft)
ft)
ft)
ft)
Address of Property
PT No 17, Mukim of Bebar, District of Rompin, State of Pahang

Darul Makmur sited within Muadzam Shah Industrial Estate,
Phase 2, Muadzam Shah, 26700 Pahang.
Type of Property
Vacant industrial land
Legal Description
PT No 17
HS(D) No 3568
Mukim of Bebar
District of Rompin
State of Pahang Darul Makmur
Land Area
2.938 hectares (7.261 acres) or 29,385.0 sq m (316,300.1 sq ft)
Tenure
99 years leasehold expiring on December 22 2096. They have

an unexpired term of approximately 97 years.
Brief Description
The subject property of this valuation comprises a piece of vacant

industrial land identified as PT No 17, Mukim of Bebar, District
of Rompin, State of Pahang Darul Makmur sited within Muadzam
Shah Industrial Estate Phase 2, Muadzam Shah, 26700 Pahang
Darul Makmur.
Industry
Market Value
RM885,000
(RINGGIT MALAYSIA EIGHT HUNDRED AND EIGHTY-FIVE
THOUSAND ONLY).
81
Address of Property
Lot No 119, Jalan Firma 1, Tebrau Industrial Estate I, 81100

Johor Bahru, Johor
Type of Property
A double-storey detached factory-cum-office, a canteen block

and a guardhouse.
Legal Description
PTD No 53897
Mukim of Tebrau
District of Johor Bahru
State of Johor Darul Takzim
Age
Approximately 3 years
Site Area
Gross Floor Area
Factory cum-office
Canteen block
Guard house
Tenure
60 years leasehold expiring on April 5 2055. It has an unexpired

term of approximately 56 years.
Brief Description
The subject property comprise a double-storey detached factorycum-office, a canteen block and a guardhouse situated on a
regular piece of land. Construction of the factory-cum-office is
of steel portal framework, reinforced concrete floors and metal
roofing sheets. The canteen block and guardhouse are of cement
plastered brickwalls and the floors are of concrete laid over
hardcore.
Industry
Market Value
(as at 30 September 1999)
RM9,545,000
(RINGGIT MALAYSIA NINE MILLION FIVE HUNDRED AND
FORTY-FIVE THOUSAND ONLY).
82
6,906.2 sq m
447.2 sq m
9.0 sq m
(74,921.6 sq ft)
( 4,817.7 sq ft)
(
96.9 sq ft)
VALUERS REPORT
15 May 2000
PNE Industries Ltd
14, Senoko Loop
Singapore 758150
Dear Sirs
VALUATION OF PROPERTY LOCATED AT LOT 2152, MUKIM PLENTONG, 81800, ULU TIRAM,
JOHOR
This report has been prepared for inclusion in the prospectus (the Prospectus) dated 15 May 2000
of PNE Industries Ltd (the Company) in connection with the invitation in respect of new shares by
PNE Industries Ltd.
We confirm that we have carried out inspections, made all relevant searches and investigations and
obtained such information as we consider appropriate to provide you with our opinion of the open
market value of the property owned by PNE Electric Sdn Bhd as at 30 September 1998.
We have valued the subject property on the basis of open market value which we would defined as
intended to mean best price at which an interest in a property might reasonably be expected to be
sold by private treaty at the date of valuation assuming :
(a)
a willing seller;
(b)
a reasonable period within which to negotiate the sale, taking into account the nature of the
property and the state of market;
(c)
values will remain static throughout the period;
(d)
the property will be freely exposed to the market; and
(e)
no account is to be taken of an additional bid by a special purchaser.
A summary of our valuation together with a brief description of the subject property is shown in the
attached Valuation Certificate.
Information as to titles and areas is obtained from searches carried out at the Registry of Land and
Mines.
No allowance has been made in our valuation for any charges, mortgages or amounts owing on the
properties, nor for any expenses or taxation which may be incurred in effecting a sale. It is assumed
that the properties are free from encumbrances, restrictions and outgoings of an onerous nature
other than those mentioned in the report which could affect their values.
In no case have we undertaken a structural survey or arranged to test any of the services and have
not therefore given any warranty as to the individual propery. We are not able to report that the
buildings are free of rot, infestation or any defect. None of the services in the buildings was tested.
83
Neither the whole or part of this report nor any reference thereto may be included in any document,
circular or statement without our written consent of the form and context in which it will appear.
Yours faithfully
KGV-LAMBERT SMITH HAMPTON
SAMUEL W C TAN
Director
84
Address of Property
Lot No 2152, sited at the approximate 21.8th km (13.5th

milestone), Jalan Sungai Tiram, Ulu Tiram, Johor Bahru.
Type of Property
8 blocks of hostel and recreational centre
Legal Description
Lot No 2152
Grant Mukim No 526
Mukim of Plentong
District of Johor Bahru
State of Johor Darul Takzim
Age
Blocks 1 to 5 are approximately 9 years old and Block 6 to 8

are approximately 4 years old
Land Area
1.555 hectares (3.843 acres)
Gross Floor Area
Tenure
Freehold
Brief Description
The subject property comprises 8 blocks of hostel and a

recreational centre sited on an inverted L-shaped land. It lies
higher than the frontage road and its adjoining property.
Construction of the buildings is generally of cement plastered
brickwalls structure, concrete flooring and corrugated asbestos
cement sheets roofing.
Residential, specifically for hostel use
Market Value
(as at 30 September 1998)
RM2,400,000
(MALAYSIA RINGGIT TWO MILLION AND FOUR HUNDRED
THOUSAND ONLY).
85
ACCOUNTANTS REPORT
15 May 2000
PNE Industries Ltd
14 Senoko Loop
Singapore 758150
Dear Sirs
A.
INTRODUCTION
This report has been prepared for inclusion in the Prospectus to be dated 15 May 2000 (the
Prospectus) in connection with the invitation in respect of 51,138,000 new ordinary shares of
$0.10 each in the capital of PNE Industries Ltd (the Company) comprising 10,228,000 Offer
Shares at $0.26 per share by way of public offer; 5,113,000 Reserved Shares at $0.26 per
share by way of offer to Directors, management staff and other employees of the Group; and
35,797,000 Placement Shares at $0.26 per share by way of placement payable in full on
application.
The Company was incorporated in Singapore on 25 September 1999 as a private limited
company under the name of PNE Industries Pte Ltd. On 19 April 2000, the Company was
converted into a public limited company and its name was changed to PNE Industries Ltd.
The principal activities of the Company is that of an investment holding company.
At the date of incorporation, the authorised share capital of the Company was $100,000 divided
into 100,000 ordinary shares of $1 each. Two subscribers shares of $1.00 each were issued at
the date of incorporation.
The PNE Industries Ltd Group (PNE Group) was formed as a result of the Restructuring
Exercise, which was made effective as of 1 October 1999, undertaken for the purpose of the
Companys listing on the Stock Exchange of Singapore Limited. The Restructuring Exercise
involved the following:
(a) the acquisition by the Company of the entire issued share capital of PNE Appliance Controls
Pte Ltd of 2,000,000 ordinary shares of $1.00 each from the existing shareholders for a
consideration of $3,219,765, which was based on the net tangible assets of PNE Appliance
Controls Pte Ltd as at 30 September 1999. The consideration was satisfied by the issue
and allotment of 3,219,765 ordinary shares of $1.00 each at par in the capital of the
Company;
(b) the acquisition by the Company of the entire issued share capital of PNE Translite Pte Ltd
of 250,000 ordinary shares of $1.00 each from existing shareholders for a consideration of
$782,693, which was based on the net tangible assets of PNE Translite Pte Ltd as at 30
September 1999. The consideration was satisfied by the issue and allotment of 782,693
ordinary shares of $1.00 each at par in the capital of the Company;
(c) the acquisition by the Company of the entire issued share capital of PNE Electric Sdn Bhd
of 8,000,000 ordinary shares of RM1.00 each from existing shareholders for a consideration
of $8,116,747, which was based on the net tangible assets of PNE Electric Sdn Bhd as at
30 September 1999. The consideration was satisfied by the issue and allotment of 8,116,747
ordinary shares of $1.00 each at par in the capital of the Company;
86
A.
INTRODUCTION (Contd)
(d) the acquisition by the Company of the entire issued share capital of PNE Systems Sdn
Bhd of 150,002 ordinary shares of RM1.00 each from existing shareholders for a
consideration of $500,102, which was based on the net tangible assets of PNE Systems
Sdn Bhd as at 30 September 1999. The consideration was satisfied by the issue and
allotment of 500,102 ordinary shares of $1.00 each at par in the capital of the Company.
At an Extraordinary General Meeting held on 14 April 2000, the shareholders of the Company
approved, inter alia, the following:
(a) the increase in the authorised share capital of the Company from $100,000 to $40,000,000
divided into 40,000,000 ordinary shares of $1.00 each;
(b) the issue of 12,619,307 ordinary shares of $1.00 each in accordance with the Restructuring
Exercise to consolidate companies within the Group, details are set out on page 26 of this
Prospectus;
(c) the capitalisation of $1,266,921 from the revaluation reserve on investment account by
way of a bonus issue of 1,266,921 ordinary shares of $1.00 each at par to the existing
shareholders of PNE Electric Sdn Bhd;
(d) the sub-division of each ordinary share of $1.00 each in the authorised share capital of the
Company into 20 ordinary shares of $0.05 each in the capital of the Company;
(e) the conversion of the Company into a public limited company and the change of its name
to PNE Industries Ltd;
(f)
the adoption of a set of new Articles of Association of the Company; and
(g) the authorisation of the Companys directors, pursuant to Section 161 of the Companies
Act, to issue shares of the Company (whether by way of rights, bonus or otherwise) at any
time and upon such terms and conditions and for such purposes as the directors in their
absolute discretion deem fit provided that the aggregate number of the shares to be issued
does not exceed 50 percent of the Companys issued share capital immediately prior to
the proposed issue and provided that the aggregate number of such shares to be issued
other than on a pro-rata basis to the Companys then existing shareholders shall not exceed
20 percent of the Companys issued share capital immediately prior to the proposed issue
and, unless revoked or varied by the Company in the general meeting, such authority shall
continue in force until the conclusion of the Companys Annual General Meeting or the
date by which the Companys Annual General Meeting is required by law or by the
Companys Articles to be held whichever is earlier.
At an Extraordinary General Meeting held on 4 May 2000, the shareholders of the Company
(a) the consolidation of every two of the existing ordinary shares of $0.05 each in the authorised
share capital of the Company into one ordinary share of $0.10 each in the capital of the
Company;
(b) the issue of the New Shares which are the subject of the Invitation; and
(c) the approval for the Shareholders Mandate authorising members of the Group to enter
into long term supply contracts with interested parties, PNE Plas Sdn Bhd and PNE Micron
Engineering Sdn. Bhd.
87
B.
BASIS OF PRESENTATION OF FINANCIAL INFORMATION

The particulars of the subsidiaries in the Proforma Group which have been included in the
preparation of the Proforma Statement of Group Results and Proforma Statement of Group
Balance Sheets for each of the financial years ended 30 September 1995 to 1999 and Proforma
Statement of Net Assets as at 30 September 1999 are as follows:
Name of
subsidiaries
Place and Date

of Incorporation
and Operation
Issued and
Paid-Up
Capital
Effective Equity
Interest held
by the Group
%
PNE Appliance
Controls Pte Ltd
Singapore
12 May 1983
S$2,000,000
100
Manufacturers and dealers in

electronic and electrical
appliances
PNE Translite
Pte Ltd
Singapore
29 January 1991
S$250,000
100
Manufacturers of emergency
lightings, electrical apparatus
light fittings and related
products
PNE Electric
Sdn Bhd
Malaysia
4 August 1986
RM8,000,000
100
Manufacturer of electronic
and electrical products
PNE Systems
Sdn Bhd
Malaysia
12 May 1993
RM150,002
100
Dealers in domestic and

commercial electrical
appliances
The financial information set out in this report is expressed in Singapore dollars and shows the
Proforma Statement of Group Results and Proforma Statement of Group Balance Sheets for
each of the financial years ended 30 September 1995 to 1999 and the Proforma Statement of
Net Assets as at 30 September 1999. The Proforma Statement of Group Results, Proforma
Statement of Group Balance Sheets and Proforma Statement of Net Assets have been prepared
on the assumption that the current Group structure as outlined above had been in existence
throughout the period under review. The financial information has been prepared on the basis
of accounting policies set out in Section F and is based on the following after making such
adjustments which we considered necessary:
(a) audited financial statements of PNE Appliance Controls Pte Ltd and PNE Electric Sdn Bhd
for the financial years ended 30 September 1995 to 1999;
(b) audited financial statements of PNE Translite Pte Ltd for the financial years ended 30
September 1998 and 1999, the financial period from 1 June 1996 to 30 September 1997,
and the financial years ended 31 May 1995 and 1996;
(c) audited financial statements of PNE Systems Sdn Bhd for the financial years ended 30
September 1997 to 1999, the financial period from 1 June 1995 to 30 September 1996,
and the financial year ended 31 May 1995; and
(d) unaudited management accounts of PNE Industries Pte Ltd for the financial period from 25
September 1999 to 30 September 1999.
All material inter-company transactions and balances have been eliminated in the preparation
of the Proforma Group financial information.
Where the reporting year ends of certain subsidiaries were not co-terminous with the reporting
year end of the Company, we have used on a consistent basis the audited financial statements
of these subsidiaries drawn up to the different reporting year ends as there were no significant
88
B.
BASIS OF PRESENTATION OF FINANCIAL INFORMATION (Contd)

Deloitte & Touche Singapore has acted as auditors of the Company since the date of its
incorporation and of PNE Appliance Controls Pte Ltd and PNE Translite Pte Ltd for the financial
year ended 30 September 1999. A member firm of Deloitte Touche Tohmatsu acted as auditors
of PNE Electric Sdn Bhd and PNE Systems Sdn Bhd for the financial year ended 30 September
1999.
The financial statements of PNE Appliance Controls Pte Ltd, PNE Translite Pte Ltd, PNE Electric
Sdn Bhd and PNE Systems Sdn Bhd for the prior four financial years/periods were audited by
Foong Pak Leong & Co, Tan Ai Ming & Co, Chong & Associates and Chong & Associates
respectively. For the financial statements of the subsidiaries not audited by us during the
accounting periods covered by this report, we have performed a review or such audit work as
we considered necessary on those financial statements and are satisfied that the financial
statements are appropriate and proper for inclusion in the Statement of Proforma Group Results,
Statement of Proforma Group Balance Sheets and Statement of Proforma Group Net Assets.
There were no audit qualifications made to the audited financial statements of the subsidiaries
within the Proforma Group in the last five financial years/periods covered under this report.
C.
STATEMENT OF PROFORMA GROUP RESULTS

The Proforma Statement of Group Results for each of the five financial years up to 30 September
1999 prepared on the basis set out in paragraph B above, after making such adjustments as
we considered appropriate, are as follows:
<
Year Ended 30 September
Notes
1995
$000
1996
$000
1997
$000
1998
$000
1999
$000
Turnover
24,076
23,113
33,151
32,150
28,818
Profit before income tax
754
1,840
3,355
3,173
4,198
Income tax
(90)
(1,344)
(1,015)
2,011
2,158
664
(244)
1,596
Notes:
1.
Turnover
Turnover represents the invoiced value of goods sold less sales returns.
89
>
(672)
3,526
C.
STATEMENT OF PROFORMA GROUP RESULTS (Contd)

2.
Profit Before Income Tax

Profit before income tax has been arrived at after charging (crediting):
<
1995
$000
1996
$000
1997
$000
1998
$000
1999
$000
639
543
580
708
778
46
75
61
67
61
14
17
19
16
21
583
735
780
647
786
69
135
15
170
265
203
197
249
Provision (Reversal) for doubtful

receivables trade
144
184
(315)
Provision (Reversal) for inventories
(50)

written off
75
49
Foreign exchange adjustment

(gain)/loss
(91)
(53)
51
472
(57)
Interest income
(40)
(11)
(25)
(5)
(10)
(Gain)/Loss on disposal of plant

and equipment
(18)
(12)
(13)
>
Directors remuneration:
Directors of the Company
Directors of subsidiaries
Auditors remuneration
Depreciation of property, plant
and equipment
Interest expense
Research and development
expenditure
3.
Income Tax
<
1995
$000
1996
$000
1997
$000
1998
$000
1999
$000
Current tax
99
243
790
824
553
Deferred tax
(10)
(2)
539
205
15
(14)
119
90
244
1,344
Under (Over) provision in

prior year
Total
1,015
>
672
The income tax expense for 1995 and 1996 varied from applying the Singapore income
tax rate of 26% to profit before income tax as a result of non-taxable items.
The income tax expense for 1997 and 1998 varied from the amount of income tax expense
determined by applying the Singapore income tax rate of 26% to profit before income tax
as a result of non-allowable items and the higher tax rate of 28% for the Malaysian
subsidiaries.
The income tax expense for 1999 varied from applying the Singapore income tax rate of
26% to profit before income tax as a result of waiver of income tax for the Malaysian
subsidiaries.
90
C.
STATEMENT OF PROFORMA GROUP RESULTS (Contd)

4.
Related Party Transactions

Related parties are entities with common direct or indirect shareholders and/or directors.
Parties are considered to be related if one party has the ability to control the other party or
exercise significant influence over the other party in making financial and operating decision.
Some of the Companys transactions and arrangements are with related parties and the
effect of these on the basis determined between the parties are reflected in these financial
statements. The balances are without fixed repayment terms and interest unless stated
otherwise.
Significant related party transactions:
Sale of goods
<
1995
$000
1996
$000
1997
$000
(4,880)
(4,351)
(1,617)
Sale of property, plant and

equipment
5.
Rental income
(165)
Interest income
(40)
(289)
(327)
1998
$000
>
1999
$000
(1,067)
(256)
Purchase of goods
1,513
1,986
3,231
2,166
2,776
Rental of premises
295
214
150
60
66
Statement of Adjustments
The following adjustments have been made in arriving at the Statement of Proforma Group
results:
<
>
1995
$000
1996
$000
1997
$000
1998
$000
1999
$000
Per aggregation of financial

statements of proforma
group
35,948
35,024
47,797
49,737
43,565
Elimination of inter-company
sales
(13,472)
(14,248)
(18,613)
(20,170)
(14,747)
1,600
2,337
3,967
2,583
24,076
23,113
33,151
32,150
28,818
Turnover
Adjustment of sales
Per statement of proforma
group results
91
D.
PROFORMA GROUP BALANCE SHEETS

The Proforma Group Balance Sheets for each of the five financial years up to 30 September
1999 based on the basis set out in paragraph B above, after making such adjustments as we
considered appropriate, are as follows:
<
1995
$000
1996
$000
1997
$000
1998
$000
>
1999
$000
7,002
9,458
8,653
6,885
9,354
Other investments (unquoted)
259
259
12,687
17,850
23,485
14,213
15,886
(10,195)
(16,290)
(19,694)
(10,784)
(9,640)
2,492
1,560
3,791
3,429
6,246
Deferred expenditure
Current assets
Less: Current liabilities
Net current assets
Deferred income tax
(28)
(27)
(496)
(452)
(452)
9,725
11,250
11,956
9,862
15,153
9,725
11,250
11,956
9,862
15,153
Represented by:
Shareholders equity
The movements in the shareholders equity of the Proforma Group for each of the five financial
years were as follows:
Balance brought forward
<
1995
$000
1996
$000
>
1997
$000
1998
$000
1999
$000
9,026
9,725
11,250
11,956
9,862
664
1,596
2,011
2,158
3,526
Asset revaluation surplus
2,534
Asset revaluation surplus capitalised

to issue bonus shares
(1,267)
135
(100)
1,267
Dividends
Currency realignment
(71)
Balance carried forward
9,725
Add (deduct):
Issue of shares
Bonus share issued from
retained earnings
asset revaluation surplus
92
11,250
(1,305)
11,956
(3,627)
(625)
9,862
(778)
9
15,153
E.
STATEMENT OF PROFORMA GROUP NET ASSETS

The Proforma Statement of Net Assets of the Group and the Company as at 30 September
1999 is set out below:
Notes
Group
$000
Company
$000
ASSETS
Current assets:
Cash
1,457
Fixed deposit
128
Trade receivables
7,864
Other receivables and prepaid expenses
268
Inventories
6,169
15,886
Total current assets
9,354
Investment in subsidiaries
13,886
25,245
13,891
Deferred expenditure
Total
LIABILITIES AND SHAREHOLDERS EQUITY

Current liabilities:
Bank overdrafts
188
Bank loan
10
2,670
Trade payables
11
4,431
Other payables
12
881
Income tax payable
737
Proposed dividends
730
9,640
14
452
Share capital
15
13,886
13,886
Capital reserves
16
1,267
Total shareholders equity
15,153
13,886
Total
25,245
13,891
Obligations under hire purchase contracts
13
Total current liabilities

Deferred income tax
Shareholders equity:
93
F.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies which have been adopted in arriving at the financial information set out
in this report and which conform with accounting principles generally accepted in Singapore are
as follows:
ACCOUNTING CONVENTION The financial statements expressed in Singapore dollars are
prepared under the historical cost convention.
BASIS OF CONSOLIDATION The Statement of Proforma Group Results and Proforma Group
Balance Sheets incorporate the financial statements of the Groups subsidiaries made up to the
respective year/period ends from 1995 to 1999 and have been prepared on the assumption
that the current Group structure has been in existence throughout the period under review.
Where the reporting year ends of certain subsidiaries were not co-terminous with the reporting
year end of the Company, we have used on a consistent basis the audited financial statements
of these subsidiaries drawn up to the different reporting year ends as there were no significant
impact on the proforma Group financial information presented.
All significant intercompany transactions and balances within the Group are eliminated on
consolidation.
INVESTMENT IN SUBSIDIARIES Investment in subsidiaries in the Companys financial
statements is stated at cost less provision for any permanent impairment in value.
INVENTORIES Inventories are stated at the lower of cost (first-in-first out method) and net
realisable value. In the case of finished goods, manufactured cost includes direct labour, materials
and appropriate proportion of overheads.
FOREIGN CURRENCY TRANSACTIONS Transactions in foreign currencies are recorded in
Singapore dollars at the rate ruling at the date of transaction. At each balance sheet date,
recorded monetary balances that are denominated in foreign currencies are reported at the
rate ruling at the balance sheet date. All realised and unrealised exchange adjustment gains
and losses are dealt with in the profit and loss statement.
ASSETS UNDER HIRE PURCHASE Where assets are held under hire purchase agreements,
the assets are capitalised in the financial statements and the corresponding obligation treated
as liability. The assets so capitalised are depreciated in accordance with the Companys
accounting policy on depreciation of property, plant and equipment. The total interest, being the
difference between the total instalments payable and the capitalised amount, is charged to the
profit and loss statement to give a constant rate of charge on the remaining balance of the
obligation.
INCOME TAX Tax expense is determined on the basis of tax effect accounting, using the
liability method, and it is applied to all significant timing differences.
DEPRECIATION Depreciation is provided on gross carrying amounts in equal annual
instalments over the estimated lives of the assets. The annual rates of depreciation are as
follows:
Leasehold land
Leasehold buildings
Plant and machinery
Furniture, fittings and office equipment
Motor vehicles
Computers
Tools and dies
Lease term of 60 to 99 years

2%
10% to 20%
10% to 20%
10% to 20%
20% to 33.33%
20%
Fully depreciated assets still in use are retained in the financial statements.
94
F.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd)

PROVISION FOR DISCOUNT ALLOWED Provision for discount allowed is based on 5% of
the total trade receivable balance where the discount will be given to those debtors who are
expected to clear the trade debt within the term given.
DEFERRED EXPENDITURE Deferred expenditure is written off in the year when the Company
commences operations.
G.
NOTES TO STATEMENT OF PROFORMA GROUP NET ASSETS

AS AT 30 SEPTEMBER 1999
1.
General
The Company is incorporated in the Republic of Singapore. The principal activity of the
Company is that of investment holding.
2.
Related Party Transactions

Related parties are entities with common direct or indirect shareholders and/or directors.
Parties are considered to be related if one party has the ability to control the other party or
exercise significant influence over the other party in making financial and operating decision.
Some of the Companys transactions and arrangements are with related parties and the
effect of these on the basis determined between the parties are reflected in these financial
statements. The balances are without fixed repayment terms and interest unless stated
otherwise.
Significant related party transactions:
Group
$000
3.
Company
$000
Purchase of goods
2,776
Rental of premises
66
Fixed Deposit
The fixed deposit is placed with a bank as security for guarantee issued in favour of a third
party.
4.
Trade Receivables
Group
$000
Outside parties
8,023
Less: Provision for doubtful receivables

Provision for discount allowed
(68)
(91)
7,864
95
Company
$000
G.

AS AT 30 SEPTEMBER 1999 (Contd)
Movements in above provision for doubtful debts:
Group
$000
Balance at beginning of year
Company
$000
383
(315)
68
74
Charge to profit and loss
17
Balance at end of year
91
Reversal of provision
Movement in above provision for discount allowed:
5.
Other Receivables and Prepaid Expenses

Group
$000
Prepayments
207
Deposits
29
Related parties (Note 2)
16
Others
16
268
Total
6.
Company
$000
Inventories
Group
$000
Finished goods
Company
$000
1,591
570
Raw materials
4,008
Total
6,169
50
(50)
Work in progress
Movements in provision for inventories:

Reversal of provision
96
G.

7.
Property, Plant and Equipment

At
Valuation
<
>
At Cost
Furniture,
Leasehold
fittings
land and Plant and and office
buildings machinery equipment
$000
$000
$000
Motor
Tools
vehicles Computers and dies
$000
$000
$000
Total
$000
Group
Cost/Valuation:
At beginning of year
Additions
Surplus on revaluation
3,906
4,616
719
494
203
74
116
383
72
12
183
766
2,534
2,534
(5)
(136)
(162)
(477)
Disposals
(5)
Write off
(179)
Foreign currency exchange

adjustment
At end of year
10,012
11
6,560
4,820
656
495
53
257
12,841
Accumulated depreciation:
240
2,014
398
267
196
12
3,127
Depreciation for the year
77
529
61
81
10
28
786
Write off
(130)
(136)
(162)
(428)
Foreign currency exchange

adjustment
317
2,415
323
348
44
40
3,487
93
402
55
75
13
647
3,666
2,602
321
227
62
6,885
At end of year
6,243
2,405
333
147
217
9,354
At end of year
Depreciation for last year
Net book value:
The revaluation of a subsidiarys leasehold land and buildings is stated at directors valuation
on a fair market value basis as at 30 September 1999, which is equivalent to the independent
professional valuations amounting to $6,243,350 based on open market for existing use as
at 30 September 1999. The surplus on revaluation of $2,533,842 has been taken to Asset
Revaluation Reserve under Proforma Shareholders Equity.
Had the leasehold land and buildings been stated at cost less accumulated depreciation,
its net book value as at 30 September 1999 would have been $3,709,000.
Certain of the groups leasehold land and buildings with a total net book value of $4,247,000
have been mortgaged to a bank for banking facilities granted. These facilities have not
been drawn down as at 30 September 1999.
97
G.

8.
Investment in Subsidiaries
Group
$000
Company
$000
Unquoted equity shares, at cost
12,619
Surplus on revaluation of investment in subsidiary
1,267
13,886
Details of the subsidiaries are as follows:
Name of
Company
Place of
Incorporation/
Operation
Effective
Equity
Interest held
by the Group
%
PNE Appliance
Controls Pte Ltd
Singapore
100
Manufacturers and dealers

in electronic and electrical
appliances
PNE Translite
Pte Ltd
Singapore
100
Manufacturers of emergency
lightings, electrical apparatus
light fittings and related
products
PNE Electric
Sdn Bhd(a)
Malaysia
100
Manufacturer of electronic
and electrical products
PNE Systems
Sdn Bhd
Malaysia
100
Dealers in domestic and

commercial electrical
appliances
Cost of
Investment
$000
3,220
782
8,117
500
12,619
(a)
9.
The investment in PNE Electric Sdn Bhd is revalued to take into account the fair value of certain assets of
PNE Electric Sdn Bhd. The revaluation gain of $1,266,921 was utilised for bonus issue of new shares
(Notes 15 and 16).
Bank Overdrafts
The bank overdrafts and other credit facilities are secured by:
i)
a joint and several guarantee for $346,000 signed by two directors and a shareholder
of a subsidiary; and
ii)
a joint and several guarantee for $123,000 signed by three directors and shareholders
of another subsidiary.
10. Bank Loan

Group
$000
Bank loan (secured)
2,670
Company
$000
The bank loan is secured by a pledge from a related party of fixed deposits of RM6,000,000
(S$2,670,000), letter of set off and memorandum of deposit. The bank loan bears interest
at the rate of 4.75% per annum.
98
G.

11. Trade Payables
Group
$000
Company
$000
Outside parties
3,399
1,032
Total
4,431
12. Other Payables

Group
$000
Accrued expenses
Company
$000
738
Others
44
51
Interim dividends
48
881
Total
13. Obligations under Hire Purchase Contracts

Group
$000
Due within twelve months
Company
$000
The obligations under hire purchase contracts bear interest ranging from 5.75% to 7% per
annum.
14. Deferred Income Tax
Group
$000
Balance at beginning and end of year
452
This represents the tax effect of excess capital allowances over depreciation.
99
Company
$000
G.

15. Share Capital
Group
and
Company
$000
Authorised
100,000 ordinary shares of $1.00 each on incorporation
100
Increase in authorised share capital by the creation of an additional

39,900,000 ordinary shares of $1.00 each
39,900
Subdivision of 40,000,000 ordinary shares of $1 each into

Consolidation of 800,000,000 ordinary shares of $0.05 each into

40,000
Issued and paid-up

2 ordinary shares of $ 1.00 each issued on incorporation
12,619,307 ordinary shares of $1.00 each issued in accordance with the

Bonus issue of 1,266,921 ordinary shares of $1.00 each to
capitalise surplus on revaluation on investment in a subsidiary
12,619
1,267
Subdivision of 13,886,230 ordinary shares of $1.00 each

into 277,724,600 ordinary shares of $0.05 each
Consolidation of 277,724,600 ordinary shares of $0.05 each

into 138,862,300 ordinary shares of $0.10 each
138,862,300 ordinary shares of $0.10 each issued
13,886
16. Capital Reserves

Group
$000
Company
$000
Asset Revaluation Reserve:

Revaluation of leasehold buildings
2,534
(1,267)
1,267
Revaluation of investment in a subsidiary
1,267
Utilisation for bonus share issue
(1,267)
Utilisation for bonus share issue
Revaluation Reserve on Investment:
Total
100
1,267
G.

17. Contingent Liabilities
Group
$000
Guarantees unsecured
36
Company
$000
18. Operating Lease Commitments

Commitments in respect of operating leases with a term of more than one year are as
follows:
Group
$000
Company
$000
Within 1 year
198
Within 2 to 5 years
144
After 5 years
19. Capital Expenditure Commitments

Group
$000
Capital commitments for future capital expenditure
but not provided for in the financial statements
27
Company
$000
20. Subsequent Events

At an Extraordinary General Meeting held on 14 April 2000, the shareholders of the Company
(a) the increase in the authorised share capital of the Company from $100,000 to
$40,000,000 divided into 40,000,000 ordinary shares of $1.00 each;
(b) the issue of 12,619,307 ordinary shares of $1.00 each in accordance with the
Restructuring Exercise to consolidate companies within the Group, details are set out
on page 26 of this Prospectus;
(c) the capitalisation of $1,266,921 from the revaluation reserve on investment account by
way of a bonus issue of 1,266,921 ordinary shares of $1.00 each at par to the existing
shareholders of PNE Electric Sdn Bhd;
(d) the sub-division of each ordinary share of $1.00 each in the authorised share capital
of the Company into 20 ordinary shares of $0.05 each in the capital of the Company;
(e) the conversion of the Company into a public limited company and the change of its
name to PNE Industries Ltd;
(f)
the adoption of a set of new Articles of Association of the Company; and
101
G.

(g) the authorisation of the Companys directors, pursuant to Section 161 of the Companies
Act, to issue shares of the Company (whether by way of rights, bonus or otherwise) at
any time and upon such terms and conditions and for such purposes as the directors
in their absolute discretion deem fit provided that the aggregate number of the shares
to be issued does not exceed 50 percent of the Companys issued share capital
immediately prior to the proposed issue and provided that the aggregate number of
such shares to be issued other than on a pro-rata basis to the Companys then existing
shareholders shall not exceed 20 percent of the Companys issued share capital
immediately prior to the proposed issue and, unless revoked or varied by the Company
in the general meeting, such authority shall continue in force until the conclusion of
the Companys Annual General Meeting or the date by which the Companys Annual
General Meeting is required by law or by the Companys Articles to be held whichever
is earlier.
At an Extraordinary General Meeting held on 4 May 2000, the shareholders of the Company
(a) the consolidation of every two of the existing ordinary shares of $0.05 each in the
authorised share capital of the Company into one ordinary share of $0.10 each in the
capital of the Company;
(b) the issue of the New Shares which are the subject of the Invitation; and
(c) the approval for the Shareholders Mandate authorising members of the Group to enter
into long term supply contracts with interested parties, PNE Plas Sdn Bhd and PNE
Micron Engineering Sdn. Bhd.
102
H.
NET TANGIBLE ASSETS BACKING

The net tangible assets backing of the Proforma Group for each ordinary share of $0.10 is
based on the net tangible assets of the Proforma Group as at 30 September 1999 and after
taking into the account the following:
NET TANGIBLE ASSETS
Group
$000
Net tangible assets as at 30 September 1999
15,153
Proceeds from the issue of Shares at $0.26 per share

which is the subject of this Invitation
13,296
Less: Estimated issue expenses
(1,093)
Adjusted net tangible assets
27,356
ISSUED SHARE CAPITAL

Number of
Shares
Issued and fully paid ordinary shares of $1.00 each
as at 30 September 1999
New shares of $1.00 each issued pursuant to the Restructuring Exercise
Bonus share issue to capitalise surplus on revaluation on investment
in a subsidiary
2
12,619,307
1,266,921
13,886,230
Sub-division of 13,886,230 ordinary shares of $1.00 each into

277,724,600 ordinary shares of $0.05 each pursuant to the Stock Split
277,724,600
Consolidation of 277,724,600 ordinary shares of $0.05 each into

138,862,300
New Shares of $0.10 each which are subject of the Invitation

Post-Invitation number of shares of $0.10 each
NET TANGIBLE ASSETS BACKING PER ISSUED AND FULLY PAID

SHARE OF $0.10 EACH
51,138,000
190,000,300
Cents
Pre-invitation
10.9
Post-invitation
14.4
103
I.
DIVIDENDS
The Company has not paid or proposed any dividend since incorporation.
However, we set out below the amount of dividends declared and paid by the subsidiaries in
the Proforma Group for each of their respective five financial years from 1995 to 1999 for
information purposes.
Dividend paid/declared
Foreign
Rate of
Currency
S$ Amount/
Dividend
Amount Net
S$ Equivalent
S$
Financial year ended 30 September 1998
PNE Appliance Controls Pte Ltd
Interim less tax of 26%
Final proposed less tax of 26%
100%
29%
N/A
N/A
1,480,000
429,200
PNE Translite Pte Ltd

160%
190%
N/A
N/A
296,000
351,500
30%
RM1,728,000
751,304
330%
350%
RM356,405
RM378,005
154,959
164,350
PNE Electric Sdn Bhd

Final proposed (tax exempt)
10%
RM800,000
356,000
PNE Systems Sdn Bhd

Final proposed (tax exempt)
560%
100%
RM840,011
RM108,001
373,805
48,060
PNE Electric Sdn Bhd

PNE Systems Sdn Bhd
Financial year ended 30 September 1999
J.
AUDITED FINANCIAL STATEMENTS

No audited financial statements of the subsidiaries in the Proforma Group have been prepared
for any period subsequent to 30 September 1999.
No audited financial statements of the Company have been prepared since the date of
incorporation.
Yours faithfully
Deloitte & Touche

Singapore
Aric Loh Siang Khee
Partner
104
GENERAL AND STATUTORY INFORMATION

1.
SHARE CAPITAL
(a) As at the date of this Prospectus, there is only one class of shares in the capital of the
Company. There are no founder, management or deferred shares. The rights of and
privileges attached to the Shares are stated in the Articles of Association of the Company.
(b) The Company was incorporated on 25 September 1999. It presently has an authorised
share capital of $40,000,000 divided into 400,000,000 Shares of $0.10 each.
(c) Upon the completion of the Invitation, the issued and paid-up share capital of the Company
will be $19,000,030 divided into 190,000,300 Shares of $0.10 each.
(d) Save as disclosed below, there were no changes in the issued and paid-up share capital
of the Company or its subsidiaries within the two years preceding the date of this
Prospectus:Changes in the issued and paid-up share capital of the Company
Date
No. of shares
issued
Par Value
Resultant
capital
Event
25 Sept 1999
$1.00
$2.00
Incorporation
14 April 2000
12,619,307
$1.00
$12,619,309
Issue of new ordinary shares of

$1.00 each pursuant to the
14 April 2000
1,266,921
$1.00
$13,886,230
Bonus Issue
19 April 2000
NIL
NA
$13,886,230
Share Split
4 May 2000
NIL
NA
$13,886,230
Consolidation of Shares
(e) Save as disclosed above, no shares in or debentures of the Company or any of its
subsidiaries have been issued, or are proposed to be issued, as fully or partly paid-up, for
cash or for a consideration other than cash, within the two years preceding the date of this
Prospectus.
(f)
No person has been granted or is entitled to be granted an option to subscribe for shares
in, or debentures of the Company or any of its subsidiaries.
105
2.
INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS

(a) The names, addresses, ages and principal occupations of all the Directors and Executive
Officers of the Group are set out on pages 65 to 68 of this Prospectus.
(b) The list of present and past directorships of each Director as at the date of this Prospectus
and over the five years preceding the date of this Prospectus is as follows:Name
Present Directorships
Past Directorships
Mr Tan Kong Heng
Group Companies
PNE Translite
PNE Electric
Group Companies
Nil
Other Companies
PNE Investment Pte Ltd
Print N Etch Pte Ltd
PNE PCB Pte Ltd
PNE Micron Engineering Pte Ltd
PNE Electric Pte Ltd
Pacific Appliances Pte Ltd
Actrolite Sdn Bhd
PNE Circuits Sdn Bhd
Duolink Networks Sdn Bhd
PNE Electronics Sdn Bhd
General Leader (M) Sdn Bhd
PNE Micron Engineering Sdn Bhd
PNE PCB Bhd
PNE Plas Sdn Bhd
PNE Precision Sdn Bhd
Other Companies
Nil
Group Companies
PNE Translite
PNE Electric
PNE Systems
Group Companies
Nil
Other Companies
PNE Plas Pte Ltd
Duolink Networks Sdn Bhd
Focal Dynamic Sdn Bhd
PNE Plas Sdn Bhd
Other Companies
Nil
Group Companies
PNE Translite
PNE Electric
Group Companies
Nil
Other Companies
PNE Plas Pte Ltd
Pacific Appliances Pte Ltd
PNE Plas Sdn Bhd
Simi Ocean Sdn Bhd
Other Companies
Nil
Mr Tan Koon Chwee
Mr Tan Kong Leong
106
Name
Past Directorships
Ms Tan Bee Foon
Group Companies
Nil
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Mr Tan Kong Boon
Group Companies
Other Companies
Mr Tan Kwong Soon
Mr Tan Kong Guan
Mr Tung Chee Weng
Mr Tan Lee Khiang
Group Companies
PNE Electric
Group Companies
Nil
Other Companies
PNE PCB Pte Ltd
Actrolite Sdn Bhd
CED System Sdn Bhd
General Leader (M) Sdn Bhd
Hong Nam Industry (M) Sdn Bhd
PNE PCB Bhd
PNE Precision Sdn Bhd
Simi Ocean Sdn Bhd
Other Companies
Nil
Group Companies
Group Companies
Nil
Other Companies
PNE PCB Pte Ltd
PNE PCB Bhd
Other Companies
Nil
Group Companies
Nil
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Group Companies
Nil
Group Companies
Nil
Other Companies
TechnoMEC Engineers Pte Ltd
Other Companies
Genisys Integrated
Engineers Pte Ltd
107
(c) Save as disclosed below, none of the Executive Officers hold directorships in companies,
other than those held in the Company, as at the date of this Prospectus, or over the five
years preceding the date of this Prospectus:Name
Past Directorships
Mr Chin Chew Khay
Group Companies
PNE Systems
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Group Companies
Nil
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Group Companies
Nil
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Group Companies
Nil
Group Companies
Nil
Mr Toh Kheng Lip
Ms Tan Meng Siew
Mr Tan Kian Chye
Other Companies
Other Companies
Biztech Multimedia Pte Ltd
Dynatel Holdings Pte Ltd
Nil
Smart Communications Technologies
Pte Ltd
Mr Tay Mui Kwang
Group Companies
Nil
Group Companies
PNE Translite
PNE Systems
Other Companies
Midom Industries Pte Ltd
Takahi Pte Ltd
Other Companies
Wisma Electrical
Enterprise Pte Ltd
(d) Save as disclosed below, none of the Directors and Executive Officers is related to one
another or to any of the substantial shareholder:(i)
Messrs Tan Kong Heng, Tan Kong Boon, Tan Koon Chwee, Tan Kong Leong, Tan
Kwong Soon, Tan Kong Guan, Tan Kong Sin, Tan Kwang Hua, Tan Kong Hock and Ms
Tan Bee Foon are siblings.
(ii) Mr Tan Kian Chye, our Manager for lighting business, is the son of Mr Tan Kong Boon
and the nephew of Messrs Tan Kong Heng, Tan Koon Chwee, Tan Kong Leong, Tan
Kwong Soon, Tan Kong Guan, Tan Kong Sin, Tan Kwang Hua, Tan Kong Hock and Ms
Tan Bee Foon.
(iii) Mr Eugene Tan Wei Kang, our Purchasing Manager, is the son of Mr Tan Kong Hock
and the nephew of Messrs Tan Kong Heng, Tan Kong Boon, Tan Koon Chwee, Tan
Kong Leong, Tan Kwong Soon, Tan Kong Guan, Tan Kong Sin, Tan Kwang Hua and
Ms Tan Bee Foon.
108
(iv) Ms Tan Meng Siew, our Financial Controller, is the daughter of Mr Tan Kong Heng and
the niece of Messrs Tan Kong Boon, Tan Koon Chwee, Tan Kong Leong, Tan Kwong
Soon, Tan Kong Guan, Tan Kong Sin, Tan Kwang Hua, Tan Kong Hock and Ms Tan
Bee Foon.
(v) Ms Wong Soon Lian, the Administrative Officer of PNE Appliance Controls, is the
sister-in-law of Mr Tan Koon Chwee.
(e) The interests of the Directors and substantial shareholders in the Shares as 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:-
Shares registered in the

names of Directors and
substantial shareholders
Shares in which our

Directors and substantial
shareholders are deemed
to have an interest
No. of Shares
No. of Shares
Tan Kong Heng
5,250,000
3.7
102,018,300
53.6
Tan Kong Boon
5,250,000
3.7
102,018,300
53.6
Tan Kwong Soon
3,150,000
2.3
102,018,300
53.6
Tan Kong Guan
3,150,000
2.3
102,018,300
53.6
Tan Koon Chwee
3,150,000
2.3
102,018,300
53.6
Nil
Nil
Nil
Nil
3,150,000
2.3
102,018,300
53.6
102,018,300
73.4
Nil
Nil
Tan Kong Hock
3,150,000
2.3
102,018,300
53.6
Tan Kwang Hua
4,375,000
3.2
102,018,300
53.6
Tan Kong Sin
4,375,000
3.2
102,018,300
53.6
1,844,000
1.3
Nil
Nil
138,862,300
100.0
Directors
Tan Bee Foon

Tan Kong Leong
Holders of 5% or more
PNE Investment
Holders of less than 5% who
are related to Directors or
substantial shareholders
Others
Chin Chew Khay
TOTAL
Notes:-
(f)
(1)
Messrs Tan Kong Heng, Tan Kong Boon, Tan Kwong Soon, Tan Kong Guan, Tan Koon Chwee, Tan Kong
Leong, Tan Kwang Hua, Tan Kong Sin, Tan Kong Hock and Ms Tan Bee Foon are siblings.
(2)
The shareholders of PNE Investment are Tan Kong Heng (15.0%), Tan Kong Boon (15.0%), Tan Kwang
Hua (12.5%), Tan Kong Sin (12.5%), Tan Kwong Soon (9%), Tan Kong Guan (9%), Tan Kong Hock (9%),
Tan Koon Chwee (9%) and Tan Kong Leong (9%). These nine brothers are deemed to be interested in the
Shares held by PNE Investment.
There is no shareholding qualification for the Directors in the Articles of Association of the
Group.
109
(g) None of the Directors or Executive Officers is or was involved in any of the following
events:(i)
a petition under any bankruptcy laws filed in any jurisdiction against such person or
any partnership in which he was a partner or any corporation of which he was a
director or an executive officer;
(ii) a conviction for any offence, other than a traffic offence, or any judgement, including
findings in relation to fraud, misrepresentation or dishonesty, given against him in any
civil proceedings in Singapore or elsewhere, or is the subject of any investigation or
proceedings now pending which may lead to such conviction or judgement, or is aware
of or has any reasons to believe that there is any criminal investigation pending against
him; or
(iii) the subject of an order, judgement or ruling of a court of competent jurisdiction, tribunal
or government body, permanently or temporarily enjoining him from acting as an
investment adviser, dealer in securities, director or employee of a financial institution
and engaging in any type of business practice or activity.
(h) Save as disclosed on page 70 of this Prospectus, there are no existing or proposed service
agreements between the Directors and the Company or its subsidiaries.
(i)
The aggregate emoluments and remuneration (including CPF thereon) paid or distributed
by the Group to the Directors for services rendered in all capacities to the Company for
FY1999 amounted to $777,832. For FY2000, the forecast aggregate emoluments and
remuneration payable to the Directors under the arrangements with the Group in force as
at the date of this Prospectus, including the service agreements referred to on page 70 of
this Prospectus, are estimated to be approximately $1,042,368 (including profit sharing
and CPF thereon).
(j)
No option to subscribe for shares in, or debentures of the Company or its subsidiaries has
been granted to, or exercised by, any Director or Executive Officer during the last financial
year.
(k) Save as disclosed under Interested Person Transactions on page 60 to 64 of this

Prospectus, no Director is interested, directly or indirectly, in the promotion of, or in, any
assets acquired or disposed of by, or leased to, ourselves or our subsidiaries within the
two years preceding the date of this Prospectus, or in any proposal for such acquisition or
disposal or lease as aforesaid.
(l)
None of the Directors, Executive Officers or substantial shareholders have any interest,
direct or indirect, in any company carrying on the same trade as the Company or its
subsidiaries.
(m) No Director is materially interested in any existing contract or arrangement subsisting at

the date of this Prospectus which is significant in relation to the business of the Company
or its subsidiaries.
(n) No sum or benefit has been paid or has been agreed to be paid to any Director or to any
firm in which a Director is a partner or corporation in which such Director holds shares or
debentures, in cash or in shares or otherwise, by any person to induce him to become, or
to qualify him as, a Director or otherwise for services rendered by him or such firm or
corporation in connection with our promotion or formation.
110
3.
ARTICLES OF ASSOCIATION
The provisions in the Articles of Association of the Company relating to transfers of shares, the
voting rights of our shareholders, restrictions on the voting rights of the Directors, class rights
and the variation thereof, the borrowing powers of the Directors and the remuneration of the
Directors are as follows:Transfer of Shares
Article 33
All transfers of shares shall be effected by written instruments of transfer in the form for the
time being approved by the Directors and each stock exchange upon which the shares in the
Company may be listed. An instrument of transfer shall be signed by or on behalf of both the
transferor and the transferee and be witnessed, provided that CDP shall not be required to
sign, as transferee, any instrument of transfer relating to any transfer of shares to it during
such period as the Directors may think fit. The transferor shall be deemed to remain the holder
of the shares concerned until the name of the transferee is entered in the Register of Members
in respect thereof.
Article 34
The Registers of Members and of Transfers may be closed at such times and for such periods
as the Directors may from time to time determine, Provided Always that such Registers shall
not be closed for more than thirty days in any year, and that the Company shall give prior
notice of each such closure, as may be required, to any stock exchange upon which the
shares in the Company may be listed, stating the period and purpose or purposes for which
such closure is made.
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 36
All instruments of transfer which are registered may be retained by the Company.
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Article 37
The Company shall be entitled to destroy all instruments of transfer which have been registered
at any time after the expiration of six years from the date of registration thereof and all dividend
mandates and notifications of change of address at any time after the expiration of six years
from the date of recording thereof and all share certificates which have been cancelled at any
time after the expiration of six years from the date of the cancellation thereof and it shall
conclusively be presumed in favour of the Company that every entry in the Register of Members
purporting to have been made on the basis of an instrument of transfer or other document so
destroyed was duly and properly made and every instrument of transfer so destroyed was a
valid and effective instrument duly and properly registered and every share certificate so
destroyed was a valid and effective certificate duly and properly cancelled and every other
document hereinbefore mentioned so destroyed was a valid and effective document in
accordance with the recorded particulars thereof in the books or records of the Company,
Provided Always that:(a) the provisions aforesaid shall apply only to the destruction of a document in good faith and
without notice of any claim (regardless of the parties thereto) to which the document might
be relevant;
(b) nothing herein contained shall be construed as imposing upon the Company any liability in
respect of the destruction of any such document earlier than as aforesaid or in any other
circumstances which would not attach to the Company in the absence of this Article; and
(c) references herein to the destruction of any document include references to the disposal
thereof in any manner.
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:(d) the provisions in these presents relating to the transfers, transmissions or certification of
shares shall not apply to the transfer of book-entry securities (as defined in the Statutes).
Article 45
The holders of stock may transfer the same or any part thereof in the same manner and
subject to the same Articles as and subject to which the shares from which the stock arose
might previous to conversion have been transferred (or as near thereto as circumstances admit)
but no stock shall be transferable except in such units (not being greater than the nominal
amount of the shares from which the stock arose) as the Directors may from time to time
determine.
Voting Rights of Members
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 profits 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.
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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 final 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.
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.
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Article 70
(A) 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
officer of the corporation.
(B) 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 certified 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 specified 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 specified, at the Office) not less than
forty-eight hours before the time appointed for the holding of the meeting or adjourned meeting
or (in the case of a poll 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 Office 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.
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 fit 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.
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Restrictions on Voting Rights of Directors
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.
Class Rights
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.
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.
115
Variation of Rights
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
three-quarters 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 profits or assets
of the Company in some or all respects pari passu therewith but in no respect in priority
thereto.
Borrowing Powers of Directors
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.
Directors Remuneration
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 office 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 office. 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 fixed sum, and not by a commission
on or a percentage of profits or turnover.
116
Article 78
Any Director who holds any executive office, 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 fixed sum, and not by a commission on or a
percentage of profits 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 benefits to (or to any person in respect of) any Director for
the time being holding any executive office and for the purpose of providing any such pensions
or other benefits 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 office or place of profit (other than the
office 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 firm of which he is a
member) may act in a professional capacity for the Company or any such other company and
be remunerated therefor and in any such case as aforesaid (save as otherwise agreed) he
may retain for his own absolute use and benefit all profits and advantages accruing to him
thereunder or in consequence thereof.
Article 82(A)
The Directors may from time to time appoint one or more of their body to be the holder of any
executive office under the Company or under any other company in which the Company is in
any way interested (including, where considered appropriate, the office of Chairman or Deputy
Chairman) on such terms and for such period as they may (subject to the provisions of the
Statutes) determine and, without prejudice to the terms of any contract entered into in any
particular case, may at any time revoke any such appointment.
Article 86
The remuneration of a Managing Director shall from time to time be fixed by the Directors and
may subject to these presents be by way of salary or commission or participation in profits 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 96(D)
An alternate Director shall be entitled to contract and be interested in and benefit from contracts
or arrangements or transactions and to be repaid expenses and to be indemnified 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.
117
4.
MATERIAL CONTRACTS
The Company or its subsidiaries have entered into the following contracts, not being contracts
entered into in the ordinary course of business, within the two years preceding the date of this
Prospectus and are or may be material:(a) A Lease Agreement dated 23 November 1993 between PNE Electric and Lembaga Kemajuan
Pahang Tenggara whereby PNE Electric agreed to lease a property at P.T. Nos. 3019,
3020 and 3021, Mukim of Keratong, District of Rompin, State of Pahang Darul Makmur, for
66 years minus one day from 4 January 1992, at a total annual rental of RM4,290.00.
(b) Rental Agreement commencing on 1 January 1995 between PNE Electric and PNE PCB,
referred to under Interested Person Transactions at page 60 of the Prospectus.
(c) A Lease Agreement dated 6 May 1995 between PNE Electric and Perbadanan Kemajuan
Ekonomi Negeri Johor whereby PNE Electric agreed to lease a property at PLO No. 119
Tebrau 1 Industrial Estate for 60 years at an annual rental of RM1,170.00.
(d) A Tenancy Agreement dated 1 August 1998 between PNE Electric and Focal Dynamic,
whereby PNE Electric agreed to rent two shoplots in Johor Bahru for one year from 1
August 1998 at a monthly rental of RM4,800.00.
(e) A Lease Agreement dated 24 August 1998 between PNE Electric and Lembaga Kemajuan
Pahang Tenggara, Malaysia pursuant to which PNE Electric would lease the premises
located at PT. No. 17 Mukim of Bebar, District of Rompin, State of Pahang Darul Makmur
for 99 years expiring on 22 December 2096.
(f)
Letter of Set-off and Memorandum of Deposit dated 29 September 1999 from Print N Etch
to Multi-Purpose Bank.
(g) A Sale and Purchase Agreement dated 20 November 1998 between PNE Electric and
PNE Electronics whereby PNE Electric agreed to sell to PNE Electronics a property at Lot
2152 Mukim Plentong G.M. 526 Daerah Johor Bahru for RM2,400,000.00.
(h) A Tenancy Agreement dated 20 December 1998 between PNE Appliance Controls and
PNE Investment whereby PNE Appliance Controls agreed to rent a residential property at
32 Jalan Shaer Singapore 769377 from PNE Investment for three years at a monthly
rental of $5,000.
(i)
A Tenancy Agreement dated 10 August 1999 between PNE Translite and Print N Etch
whereby PNE Translite agreed to rent storage space of 8,000 square feet in a building at
14 Senoko Loop Singapore 758150 for two years from 1 October 1999 at a monthly rental
of $5,000.00.
(j)
A Share Reconstruction Agreement dated 14 April 2000 relating to PNE Appliance Controls
between the Company, Messrs Tan Kong Heng, Tan Kong Boon, Tan Kong Guan, Tan
Kwong Soon, Tan Koon Chwee, Tan Kong Leong, Tan Kwang Hua, Tan Kong Sin and Tan
Kong Hock referred to under Restructuring Exercise at page 26 of this Prospectus.
(k) A Share Reconstruction Agreement dated 14 April 2000 relating to PNE Translite between
the Company, Messrs Tan Kong Heng, Tan Koon Chwee and Tan Kong Leong, referred to
under Restructuring Exercise at page 26 of this Prospectus.
(l)
A Share Reconstruction Agreement dated 14 April 2000 relating to PNE Electric between
the Company, Messrs Tan Kong Heng, Tan Kong Boon, Tan Kwong Soon, Tan Kong Guan,
Tan Koon Chwee, Tan Kong Leong, Tan Kwang Hua, Tan Kong Sin and Tan Kong Hock,
referred to under Restructuring Exercise at page 26 of this Prospectus.
118
(m) A Share Reconstruction Agreement dated 14 April 2000 relating to PNE Systems between
the Company, Messrs Tan Kong Heng, Tan Koon Chwee, Tan Kong Leong and Chin Chew
Khay, referred to under Restructuring Exercise at page 26 of this Prospectus.
(n) The Service Agreement dated 4 May 2000 between the Company and Mr Tan Kong Leong,
referred to under Service Agreements at page 70 of this Prospectus.
(o) The Service Agreement dated 4 May 2000 between the Company and Mr Tan Koon Chwee,
(p) The Service Agreement dated 4 May 2000 between PNE Electric and Mr Tan Kong Leong,
(q) The Service Agreement dated 4 May 2000 between PNE Electric and Mr Tan Koon Chwee,
(r) The Supply Agreement dated 4 May 2000 between PNE Electric and PNE Micron, referred
to under Regulation of future transactions between the Group and PNE Plas and PNE
Micron.
(s) The Supply Agreement dated 4 May 2000 between PNE Electric and PNE Plas, referred to
under Regulation of future transactions between the Group and PNE Plas and PNE Micron.
(t)
Trademark Licensing Agreement dated 19 April 2000 between us and Print N Etch, referred
to under Trademarks at page 42 of this Prospectus.
(u) A Depository Agreement dated 11 May 2000 made between the Company and CDP pursuant
to which CDP agreed to act as a central depository for the securities of the Company
(including the Shares) for trade in such securities through the SGX-ST.
(v) Management and Underwriting Agreement dated 15 May 2000 made between the Company,
UOBA and UOB referred to in paragraph 10 on page 121 of this Prospectus.
(w) Placement Agreement dated 15 May 2000 made between the Company and UOB referred
to in paragraph 10 on page 121 of this Prospectus.
(x) Receiving Bank Agreement dated 15 May 2000 between the Company and UOB referred
to in paragraph 9 on page 121 of this Prospectus.
5.
WORKING CAPITAL
The Directors are of the opinion that, after taking into account the present banking facilities,
and the net proceeds from the issue of New Shares by the Group, we will have adequate
working capital for present operating requirements.
In the opinion of the Directors, there are no minimum amounts which must be raised by the
issue of the New Shares in order to provide for the following:(i)
The purchase price of any property purchased or to be purchased;
(ii) Estimated preliminary and issue expenses (including underwriting and placement
commission) for the Invitation payable by us;
(iii) The repayment of any money borrowed by us in respect of any of the foregoing matters;
and
(iv) Working capital.
No amount is to be provided in respect of the foregoing matters otherwise than out of the
proceeds from the issue of the New Shares.
119
6.
LOAN CAPITAL AND OTHER BORROWINGS

Save as disclosed in the Accountants Report, we had, as at 30 April 2000 no other borrowings
or indebtedness in the nature of borrowings, including bank overdrafts and liabilities under
acceptances (other than normal trading bills) or acceptance credits, mortgages, charges, hire
purchase commitments, guarantees or other material contingent liabilities.
7.
FINANCIAL CONDITION AND OPERATIONS OF OUR GROUP

Save as disclosed in this Prospectus, the Directors are not aware of any material information
including trading factors or risks which are unlikely to be known or anticipated by the general
public and which could materially affect the profits of the Company or its subsidiaries.
Save as disclosed in this Prospectus, the financial condition and operations of the Group are
not likely to be affected by any of the following:(i)
known trends or known demands, commitments, events or uncertainties that will result in
or are reasonably likely to result in our liquidity increasing or decreasing in any material
way;
(ii) material commitments for capital expenditure;

(iii) unusual or infrequent events or transactions or any significant economic changes that
materially affected the amount of reported income from operations; and
(iv) known trends or uncertainties that have had or that they expect to have a material favourable
or unfavourable impact on revenues or operating income.
8.
LITIGATION
Neither the Company nor its subsidiaries is engaged in any litigation either as plaintiff or
defendant in respect of any claims or amounts which are material in the context of the Invitation
and the Directors are not aware of any proceedings pending or threatened against the Company
or its subsidiaries any facts likely to give rise to any litigation, claims or proceedings which may
materially affect their financial position or business.
9.
GENERAL
(a) The nature of the Groups business has been stated earlier in this Prospectus. The
corporations which, by virtue of Section 6 of the Act, are deemed to be related to the
Company are set out under Subsidiaries on page 28 of this Prospectus.
(b) No Shares will be allotted or allocated or issued on the basis of this Prospectus later than
six months after the date of this Prospectus.
(c) The time of opening of the Application List is stated on page 10 of this Prospectus.
(d) The amount payable on application is $0.26 for each Invitation Share.
(e) Save as disclosed on page 22 of this Prospectus, there has been no previous issue of
Shares by the Group or offer for sale of the Shares to the public within the two years
preceding the date of this Prospectus.
120
(f)
No property has been purchased or acquired or is proposed to be purchased or acquired

by the Company or its subsidiaries which is to be paid for wholly or partly out of the
proceeds of the issue of New Shares or the purchase or acquisition of which has not been
completed at the date of this Prospectus other than property the contract for the purchase
or acquisition whereof was entered into in the ordinary course of business of the Company
or its subsidiaries, the contract not being made in contemplation of the Invitation nor the
Invitation in consequence of the contract.
(g) Save as disclosed in paragraph 10 hereof, no commission, discount or brokerage has

been paid or other special terms granted within the preceding two years 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 subscription for any shares in or
debentures of ourselves or our subsidiaries.
(h) No sums have been paid or are agreed to be paid to any Director or any firm in which a
Director is a partner in cash or in shares or otherwise or to any person to induce him to
become a Director or in connection with our promotion.
(i)
The estimated amount of the expenses of this issue and of the application for listing,
including underwriting and placement commission, brokerage, management fee and all other
incidental expenses in relation to this Invitation is approximately $1,100,000 which will be
borne by us. We do not have any preliminary or other expenses incurred or proposed to
be incurred.
(j)
No amount of cash, securities or benefit has been or is intended to be paid or given to any
promoter within the two years preceding the date of this Prospectus or is proposed or
intended to be paid or given to any promoter at any time.
(k) Application monies received by the Company in respect of successful applications (including
successfully balloted applications which are subsequently rejected) will be placed in a
separate non-interest bearing account with UOB (the Receiving Bank). In the ordinary
course of its business, the Receiving Bank will deploy these monies in the interbank money
market. Pursuant to an agreement entered into between the Company and the Receiving
Bank contained in a letter dated 15 May 2000 and accepted by us on 15 May 2000 (the
Receiving Bank Agreement), the Company and the Receiving bank have agreed that the
Company will receive 50% of any net revenue in excess of S$100,000 earned by the
Receiving Bank from the deployment of such monies in the interbank money market. Any
refund of all or part of the application monies to unsuccessful or partially successful
applicants will be made without any interest or any share of such net revenue.
(l)
10.
Messrs Deloitte & Touche are currently the auditors of the Company. The Directors do not
intend to change auditors after the admission of the Company to the Official List and
intend to continue to recommend Messrs Deloitte and Touche for appointment as auditors
of the Company in the foreseeable future.
MANAGEMENT, UNDERWRITING AND PLACEMENT AGREEMENTS, AND BROKERAGE

(a) Pursuant to the Management and Underwriting Agreement dated 15 May 2000, the Company
appointed UOBA to manage the Invitation. UOBA will receive a management fee from the
Company for its services rendered in connection with the Invitation.
(b) Pursuant to the Management and Underwriting Agreement dated 15 May 2000, the
Underwriters have agreed to underwrite the Offer Shares for a commission of 1.5% of the
Offer Price for each Offer Share.
(c) Pursuant to the Placement Agreement dated 15 May 2000, the Placement Agent has agreed
to subscribe or procure subscriptions for the Placement Shares for a commission of 1.5%
of the Placement Price for each Placement Share, payable by the Company.
121
(d) Brokerage will be paid by the Company on the New Shares at the rate of 1.0% of the Offer
Price for each Offer Share and 1.0% of the Placement Price for each Placement Share. In
respect of the Offer Shares, the brokerage will be paid to members of the Association of
Banks in Singapore, members of the SGX-ST and merchant banks in respect of successful
applications made on Application Forms bearing their stamps, or to the Participating Banks
in respect of successful applications made through Electronic Applications at their respective
ATMs. In respect of the Placement Shares, the brokerage will be paid to the Placement
Agent in accordance with the Placement Agreement.
(e) Save as aforesaid, no commission, discount or brokerage has been paid or other special
terms granted within the two years preceding the date of this Prospectus or is payable to
any 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, the Company or any of its subsidiaries.
(f)
The Management and Underwriting Agreement may be terminated by UOB at any time on
or before the close of the Application List on the occurrence of certain events. These
events include any changes in national or international monetary, financial, political or
economic conditions which result or are likely to result in, inter alia, the conditions in the
Singapore stock market being materially and adversely affected or the success of the
Invitation being materially prejudiced.
(g) In the event the Management and Underwriting Agreement is terminated, the Company
reserve the right, at the absolute discretion of the Directors, to cancel the Invitation.
(h) The Placement Agreement is conditional upon the Management and Underwriting Agreement
not being terminated or rescinded pursuant to the provisions of the Management and
Underwriting Agreement.
11.
CONSENTS
(a) The Auditors and Reporting Accountants have given and has not withdrawn their written
consent to the issue of this Prospectus with the inclusion herein of, and references to, the
Accountants Report and their name in the form and context in which they respectively
appear in this Prospectus and to act in such capacity in relation to this Prospectus.
(b) The Property Valuer, Manager, Underwriter and Placement Agent, the Registrar and Share
Transfer Office, the Principal Bankers and the Solicitors to the Invitation have each given
and have not withdrawn their written consent to the issue of this Prospectus with the
inclusion herein of, and references to, their respective names in the respective forms and
context in which they appear in this Prospectus and to act in those capacities in relation to
this Prospectus.
12.
STATEMENT BY THE MANAGER

UOBA acknowledges that, to the best of its knowledge and belief, based on the information
made available to it by us, this Prospectus constitutes full and true disclosure of all material
facts about the Invitation and us and it is not aware of any other facts the omission of which
would make any statements herein misleading. UOB is also satisfied that the profit forecast for
the financial year ending 30 September 2000 has been stated by the Directors after due and
careful enquiry.
122
13.
STATEMENT BY THE DIRECTORS

This Prospectus has been seen and approved by the Directors and they collectively and
individually accept full responsibility for the accuracy of the information given herein and confirm,
having made all reasonable enquiries, that to the best of their knowledge and belief, there are
no other facts the omission of which would make any statement herein misleading, and that
this Prospectus constitutes full and true disclosure of all material facts about the Invitation and
the Group. The Directors confirm that the profit forecast of the Group for the financial year
ending 30 September 2000 has been stated by them after due and careful enquiry.
The Company has no intention to change or appoint joint auditors after its listing.
14.
DOCUMENTS FOR INSPECTION

Copies of the following documents may be inspected at the registered office of the Company
during normal business hours for a period of six months from the date of this Prospectus:(a) the Memorandum and Articles of Association of the Company;
(b) the Accountants Report referred to on page 86 of this Prospectus;
(c) the Directors Report referred to on page 77 of this Prospectus;
(d) the Valuers Report referred to on page 78 of this Prospectus;
(e) the audited accounts of the Company and its subsidiaries for FY1997 to FY1999 and the
unaudited accounts of the Company for the six months ended 31 March 2000;
(f)
the letter from the Auditors and Reporting Accountants in relation to the proforma
consolidated profit forecast for the financial year ending 30 September 2000;
(g) the letter from the Auditors and Reporting Accountants in relation to the unaudited proforma
consolidated financial statements for the six months ended 31 March 2000;
(h) the material contracts referred to in paragraph 4 on pages 118 to 119 of this Prospectus;
(i)
the letters of consent referred to in paragraph 11 on page 122 of this Prospectus; and
(j)
the Service Agreements referred to on page 70 of this Prospectus.
123
APPENDIX
TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION

Applications are invited for the subscription of 51,138,000 New Shares at the Offer Price for each
Offer Share and the Placement Price for each Placement Share, subject to the following terms and
conditions:1.
APPLICATIONS MUST BE MADE IN LOTS OF 1,000 NEW SHARES AND INTEGRAL

MULTIPLES THEREOF. APPLICATIONS FOR ANY OTHER NUMBER OF SHARES WILL BE
REJECTED.
2.
Applications for Offer Shares may be made by way of Offer Shares Application Forms or by
way of Electronic Applications through ATMs of the Participating Banks (ATM Electronic
Applications) or through Internet Banking (IB) web-sites of the relevant Participating Banks
(Internet Electronic Applications, which together with ATM Electronic Applications, shall be
referred to as Electronic Applications). Applications for Placement Shares (other than for
Reserved Shares) may only be made by way of Placement Shares Application Forms.
Applications for Reserved Shares may only be made by way of Reserved Shares Application
Forms. APPLICANTS MAY NOT USE CPF FUNDS TO APPLY FOR THE NEW SHARES.
3.
Only one application may be made for the benefit of one person for either the Offer
Shares or the Placement Shares (other than Reserved Shares) in his own name. A person
submitting an application for Offer Shares by way of a printed Application Form MAY
NOT submit a separate 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.
A person, other than an approved nominee company, who is submitting an application in
his own name for Offer Shares should not submit any other applications for Offer Shares,
whether on a printed Application Form or through an Electronic Application, for any
other person. Such separate applications will be deemed to be multiple applications and
shall be rejected.
An applicant who has been procured by the Placement Agent to subscribe for Placement
Shares (other than Reserved Shares) shall not make any application for Offer Shares
either through an Electronic Application or by way of a printed Application Form. Such
separate applications shall be deemed to be multiple applications by such applicant and
shall be rejected.
Conversely, an applicant who has made an application for Offer Shares either through
an Electronic Application or by way of a printed Application Form shall not make any
application for Placement Shares (other than for Reserved Shares). Such separate
applications shall be deemed to be multiple applications by such applicant and shall be
rejected.
Joint or multiple applications will be rejected. Persons submitting or procuring submission
of multiple share applications (whether for Offer Shares, Placement Shares or both Offer
Shares and Placement Shares) may be deemed to have committed an offence under the
Penal Code (Chapter 224) of Singapore and the Securities Industry Act (Chapter 289) of
Singapore, and such applications may be referred to the relevant authorities for
investigations. Multiple applications or those appearing to be or suspected of being
multiple applications are liable to be rejected at the discretion of the Company.
124
An applicant for Reserved Shares using the Reserved Shares Application Form may
submit ONE separate application for Offer Shares in his own name by way of a printed
Application Form or by way of an Electronic Application or submit one separate application
for Placement Shares (other than for Reserved Shares) by way of a printed Application
Form, provided he adheres to the terms of this Prospectus. SUCH SEPARATE
APPLICATIONS SHALL NOT BE TREATED AS MULTIPLE APPLICATIONS.
4.
Applications will not be accepted from any person under the age of 21, undischarged bankrupts,
sole-proprietorships, partnerships, chops or non-corporate bodies, joint Securities Account holders
of CDP or applicants whose addresses (furnished in their printed Application Forms or, in the
case of Electronic Applications, contained in the records of the relevant Participating Banks, as
the case may be) bear post office box numbers.
5.
The existence of a trust will not be recognised. Any application by a trustee or trustees must
therefore be made in his/her/their own name(s) and without qualification or, where the application
is made by way of a printed Application Form, in the name(s) of an approved nominee company
or companies after complying with paragraph 6 below.
6.
NOMINEE APPLICATIONS MAY BE MADE BY APPROVED NOMINEE COMPANIES ONLY.

Approved nominee companies are defined as banks, merchant banks, finance companies,
insurance companies, licensed securities dealers in Singapore and nominee companies controlled
by them. Applications made by any persons acting as nominees other than approved nominee
companies shall be rejected.
7.
FOR NON-NOMINEE APPLICATIONS, EACH APPLICANT MUST MAINTAIN A SECURITIES

ACCOUNT WITH CDP IN HIS OWN NAME AT THE TIME OF APPLICATION. An applicant
without an existing Securities Account with CDP in his own name at the time of application will
have his application rejected (in the case of an application by way of a printed Application
Form) or will not be able to complete his Electronic Application (in the case of an Electronic
Application). An applicant with an existing Securities Account who fails to provide his Securities
Account number or who provides an incorrect Securities Account number in Section B of the
Application Form or in his Electronic Application, as the case may be, is liable to have his
application rejected. Subject to paragraph 8 below, an application is liable to be rejected if the
applicants particulars such as name, NRIC/passport number, nationality and permanent residence
status provided in his Application Form or in the records of the relevant Participating Bank at
the time of his Electronic Application, as the case may be, differ from those particulars in his
Securities Account maintained with CDP. If an applicant possesses more than one individual
direct Securities Account with CDP, his application will be rejected.
8.
IF THE ADDRESS OF AN APPLICANT STATED ON THE APPLICATION FORM OR IN THE

CASE OF AN ELECTRONIC APPLICATION, CONTAINED IN THE RECORDS OF THE
RELEVANT PARTICIPATING BANK, AS THE CASE MAY BE, IS DIFFERENT FROM THE
ADDRESS REGISTERED WITH CDP, THE APPLICANT MUST INFORM CDP OF HIS
UPDATED ADDRESS PROMPTLY, FAILING WHICH THE NOTIFICATION LETTER ON
SUCCESSFUL ALLOTMENT AND OTHER CORRESPONDENCE FROM CDP WILL BE SENT
TO HIS ADDRESS LAST REGISTERED WITH CDP.
9.
The Company reserves the right to reject or accept, in whole or in part, or to scale down or
ballot, any application without assigning any reason therefor, and no enquiry and/or
correspondence on the decision of the Company will be entertained. This right applies to
applications made by way of printed Application Forms and by way of Electronic Applications.
In deciding the basis of allotment, at the discretion of the Company, due consideration will be
given to the desirability of allotting or allocating New Shares to a reasonable number of applicants
with a view to establishing an adequate market for the Shares.
125
10.
The Company reserves the right to reject any application which does not conform strictly to the
instructions set out in the Application Forms and this Prospectus or which does not comply with
the instructions for Electronic Applications or with the terms and conditions of this Prospectus
or, in the case of an application by way of a printed Application Form, which is illegible,
incomplete, incorrectly completed or which is accompanied by remittances improperly drawn.
The Company further reserves the right to treat as valid any applications not completed or
submitted or effected in all respects in accordance with the instructions set out in the Application
Forms or the instructions for Electronic Applications and 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.
11.
Share certificates will be registered in the name of CDP and will be forwarded only to CDP.
CDP will send to each successful applicant, at his own risk, within 15 Market Days of the close
of the Application List, a statement of account stating that the applicants Securities Account
has been credited with the number of New Shares allotted and/or allocated to the applicant.
This will be the only acknowledgement of application moneys received and is not an
acknowledgement by the Company.
12.
Each applicant irrevocably authorises CDP to complete and sign on his behalf as transferee or
renouncee any instrument of transfer and/or other documents required for the issue or transfer
of New Shares allotted and/or allocated to the applicant. This authorisation applies to applications
made by way of printed Application Forms and by way of Electronic Applications.
13.
In the event of under-subscription for Offer Shares as at the close of the Application List, that
number of Offer Shares under-subscribed shall be made available to satisfy applications for
Placement Shares to the extent that there is an over-subscription for Placement Shares as at
the close of the Application List. Any of the Reserved Shares not taken up by the employees
and business associates of the Group will be made available to satisfy applications for the
Placement Shares to the extent that there is an over-subscription for Placement Shares. In the
event of an under-subscription for Placement Shares as at the close of the Application List,
that number of Placement Shares under-subscribed shall be made available to satisfy applications
for 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 over-subscription for Offer Shares as at the close of the Application List and/or
the number of Placement Shares are fully subscribed or oversubscribed as at the close of the
Application List, the successful applicants for Offer Shares shall be determined by ballot, or
otherwise as determined by the Directors and approved by the SGX-ST.
14.
By completing and delivering an Application Form or by making and completing an Electronic

Application by (in the case of an ATM Electronic Application) pressing the Enter or OK or
Confirm or Yes key on the ATM (as the case may be) or by (in the case of an Internet
Electronic Application) clicking Submit or Continue or Yes or Confirm on the IB web-site
screen (as the case may be) in accordance with the provisions herein, each applicant:(a) irrevocably offers to subscribe for the number of New Shares specified in his application
(or such smaller number for which the application is accepted) at the Offer Price and
agrees that he will accept such Shares as may be allocated to him, in each case on the
terms of, and subject to the conditions set out in, the Prospectus and the Memorandum
and Articles of Association of the Company; and
(b) warrants the truth and accuracy of the information in his application.
15.
No Shares will be allotted and/or allocated on the basis of this Prospectus later than six months
after the date of this Prospectus.
126
16.
Acceptance of applications will be conditional upon the Company being satisfied that:(a) permission has been granted by the SGX-ST to deal in and for quotation for all the existing
Shares and the New Shares on a when issued basis on the SGX-Mainboard; and
(b) the Management and Underwriting Agreement and Placement Agreement referred to on
page 121 of this Prospectus have become unconditional and have not been terminated.
17.
Each applicant irrevocably authorises CDP to disclose the outcome of his application including
the number of New Shares allotted and/or allocated to the applicant pursuant to his application,
to authorised operators.
18.
Any reference to the applicant in this section shall include a person applying for the Offer
Shares by way of Electronic Application or by way of printed Application Forms and a person
applying for the Placement Shares through the Placement Agent.
19.
Further terms and conditions for applications by way of printed Application Forms are set out
on pages 127 to 130 of this Prospectus.
20.
Further terms and conditions for applications by way of Electronic Applications are set out on
page 130 to 134 of this Prospectus.
21.
No application will be held in reserve.
ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATION

FORMS
Applications by way of printed Application Forms shall be made on, and subject to, the terms and
conditions of this Prospectus, including but not limited to the terms and conditions appearing below
and including those set out under the section on Terms and Conditions and Procedures for Application
found on page 124 to 127 of this Prospectus, as well as in the Memorandum and Articles of Association
of the Company.
1.
Applications must be made using the WHITE Application Forms and official envelopes A and
B for Offer Shares and the BLUE Application Forms for Placement Shares (other than Reserved
Shares) accompanying and forming part of this Prospectus. Care must be taken to follow the
detailed instructions set out in the respective Application Forms and this Prospectus for the
completion of the respective Application Forms. The Company reserved the right to reject
applications which do not conform strictly to the instructions set out in the Application
Forms and this Prospectus or to the terms and conditions of this Prospectus or which
are illegible, incomplete or incorrectly completed or which are accompanied by improperly
drawn remittances may be rejected.
2.
The Application Forms must be completed in English. Please type or write clearly in ink using
BLOCK LETTERS. All spaces in the Application Forms except those under the heading FOR
OFFICIAL USE ONLY, must be completed and the words NOT APPLICABLE or N.A. should
be written in any space that is not applicable.
3.
Individuals, corporations, approved nominee companies and trustees must give their names in
full. Applications must, in the case of individuals, be made in their full names as appearing in
their identity cards (if the applicants have such identification documents) or in their passports
and, in the case of corporations, in their full names as registered with a competent authority.
Applicants, other than individuals, completing the Application Forms under the hand of an official
must state the name and capacity in which that official signs. A corporation completing the
Application Form is required to affix its Common Seal (if any) in accordance with the
Memorandum and Articles of Association or the equivalent constitutive document(s) of the
corporation. If an application by a corporate applicant is successful, a copy of its Memorandum
and Articles of Association or the equivalent constitutive document(s) of the corporation must
be lodged with the Companys Share Registrar. The Company reserves the right to require any
applicant to produce documentary proof of identification for verification purposes.
127
4.
(a) All applicants must complete Sections A and B and sign page 1 of the Application Form.
(b) All applicants are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application
Forms. Where paragraph 7(a) is deleted, the applicant must also complete Section C of
the Application Form with particulars of the beneficial owner(s).
(c) Applicants who fail to make the required declaration in paragraph 7(a) or 7(b) (as the case
may be) on page 1 of the Application Forms are liable to have their applications rejected.
5.
Applicants may apply for New Shares using cash only. Each application must be accompanied
by a cash remittance in Singapore currency for the full amount payable, in respect of the
number of New Shares applied for, in the form of a BANKERS DRAFT, CASHIERS ORDER or
POSB CASHIERS ORDER drawn on a bank in Singapore, made out in favour of PNE SHARE
ISSUE ACCOUNT and crossed A/C PAYEE ONLY, or in the form of a UOB GROUP ATM
CASHIERS ORDER EQUIVALENT, with the name and address of the applicant written clearly
on the reverse side. Applications not accompanied by any payment or accompanied by ANY
OTHER FORM OF PAYMENT WILL NOT BE ACCEPTED. Remittances bearing the Not
Transferable or Non Transferable crossings will be rejected. No acknowledgement of receipts
will be issued by the Company or the Manager for applications and application moneys received.
6.
Individual and corporate applicants, whether incorporated or unincorporated and wherever

incorporated or constituted, will be required to declare whether they are citizens or permanent
residents of Singapore or corporations in which citizens or permanent residents of Singapore or
any body corporate constituted under any statute of Singapore have an interest in the aggregate
of more than 50 per cent. of the issued share capital of or interests in such corporations.
Approved nominee companies are required to declare whether the beneficial owner of the New
Shares is a citizen or permanent resident of Singapore or a corporation, whether incorporated
or unincorporated and wherever incorporated or constituted, in which citizens or permanent
residents of Singapore or any body corporate whether incorporated or unincorporated and
wherever incorporated or constituted under any statute of Singapore have an interest in the
aggregate of more than 50 per cent. of the issued share capital of or interests in such corporation.
7.
Unsuccessful applications are expected to be returned to the applicants by ordinary post at the
risk of the applicants within three Market Days after the close of the Application List (without
interest or any share of revenue or other benefit arising therefrom). Where an application is
rejected or accepted in part only, the full amount or the balance of the application moneys, as
the case may be, will be mailed to the applicant by ordinary post at his own risk (without
interest or any share of revenue or other benefit arising therefrom) within 14 Days after the
close of the Application List. Unsuccessful applicants using UOB Group ATM Cashiers Order
Equivalent will have the full amount of their application moneys (without interest or any share
of revenue or other benefit arising therefrom) automatically credited to their accounts maintained
with the banks within the UOB Group.
8.
Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the
meanings assigned to them in this Prospectus.
9.
In consideration of the Company having distributed the Application Form to the applicant and
agreeing to close the Application List at 12.00 noon on 23 May 2000 or such later time or date
as the Directors may in their absolute discretion decide and by completing and delivering the
Application Form, each applicant agrees that:(a) his application is irrevocable;
(b) his remittance will be honoured on first presentation and that any moneys returnable may
be held pending clearance of his payment, without interest or any share of revenue or
other benefit arising therefrom;
(c) in respect of New Shares for which his application has been received and not rejected,
acceptance of his application shall be constituted by written notification and not otherwise,
notwithstanding any remittance being presented for payment by or on behalf of the Company;
128
(d) he will not be entitled to exercise any remedy of rescission for misrepresentation at any
time after acceptance of his application; and
(e) all applications, acceptances and contracts resulting therefrom pursuant to the Invitation
shall be governed by and construed in accordance with the laws of Singapore and that he
irrevocably submits to the non-exclusive jurisdiction of the Singapore courts.
10. Application for Offer Shares
(a) Applications for Offer Shares MUST be made using the WHITE Offer Shares Application
Forms and the WHITE official envelopes A and B. ONLY ONE APPLICATION should
be enclosed in each envelope.
(b) The applicant must:(i)
enclose the WHITE Offer Shares Application Form, duly completed together with his
remittance in the WHITE envelope A which is provided;
(ii) in the appropriate spaces on envelope A:(aa) write his name and address;
(bb) state the number of Offer Shares applied for;
(cc) tick the box if cash payment is by UOB Group ATM Cashiers Order Equivalent;
and
(dd) affix adequate Singapore postage.
(c) SEAL THE OFFICIAL WHITE ENVELOPE A;
(d) write, in the appropriate box provided on the larger official WHITE envelope B addressed
to UOB ASIA LIMITED, 80 RAFFLES PLACE, #12-00, UOB PLAZA 1, SINGAPORE
048624, the number of Offer Shares for which the application is made; and
(e) insert WHITE official envelope A into WHITE official envelope B. The applicant must
seal the WHITE official envelope B , affix adequate Singapore postage on envelope B
(if despatching by ordinary post) and thereafter DESPATCH BY ORDINARY POST OR
DELIVER BY HAND at his own risk to UOB ASIA LIMITED, 80 RAFFLES PLACE, #12-00,
UOB PLAZA 1, SINGAPORE 048624 so as to arrive by 12.00 NOON ON 23 MAY 2000 or
such later date and time as the Company may, in its absolute discretion, decide. Local
Urgent Mail or Registered Post must NOT be used. No 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.
11.
Application for Placement Shares (other than Reserved Shares)

Applications for Placement Shares (other than Reserved Shares) must be made using the
BLUE Placement Shares Application Forms. The completed BLUE Placement Shares Application
Form and the applicants remittance in accordance with the terms and conditions of this
Prospectus must be enclosed and sealed in any envelope to be provided by the applicant. The
sealed envelope must be DESPATCHED BY ORDINARY POST OR DELIVERED BY HAND at
the applicants own risk to UOB Asia Limited, 80 Raffles Place, #12-00, UOB Plaza 1, Singapore
048624 so as to arrive by 12.00 NOON ON 23 MAY 2000 or such later date and time as the
Company may, in its absolute discretion, decide. Local Urgent Mail or Registered Post must
NOT be used. ONLY ONE APPLICATION should be enclosed in each envelope. No receipt or
acknowledgement will be issued for any application or remittances received.
129
12. Application for Reserved Shares

Application for Reserved Shares must be made using the PINK Reserved Shares Application
Forms. ONLY ONE APPLICATION should be enclosed in each envelope. The completed PINK
Reserved Shares Application Form and the applicants remittance in accordance with the terms
and conditions of this Prospectus must be enclosed and sealed in any envelope to be provided
by the applicant. The sealed envelope must be despatched by ORDINARY POST OR
DELIVERED BY HAND at the applicants own risk to the Companys registered office so as to
arrive by 12.00 NOON ON 23 MAY 2000 or such later date and time as the Company may, in
its absolute discretion, decide. Local Urgent Mail or Registered Post must NOT be used.
ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS

The procedures for Electronic Applications are set out on the ATM screens (in the case of ATM
Electronic Applications) and the IB web-site screens (in the case of Internet Electronic Applications)
of the relevant Participating Banks. Currently, UOB, DBS Bank and OUB are the only Participating
Banks through which Internet Electronic Applications can be made. For illustration purposes, the
procedure for Electronic Applications through ATMs of the UOB Group and the IB web-site of UOB
are set out respectively in the Steps for an ATM Electronic Application through the ATMs of UOB
Group and the Steps for an Internet Electronic Application through the IB web-site of UOB (the
Steps) on pages 135 and 136 of this Prospectus. 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 the Applicant in the terms and conditions for Electronic Applications and the
Steps shall mean the applicant who applies for Offer Shares through an ATM or the IB web-site of
a relevant Participating Bank. The Applicant must have an existing bank account with, and be an
ATM cardholder of, one of the Participating Banks before he can make an ATM Electronic Application
at an ATM of that Participating Bank. An ATM card issued by one Participating Bank cannot be used
to apply for the Offer Shares at an ATM belonging to any of the other Participating Banks. For an
Internet Electronic Application, the Applicant must have an existing bank account with and an IB
User Identification (User ID) and a Personal Identification Number/Password given by a relevant
Participating Bank. The Steps set out the actions that the Applicant must take at ATMs of the UOB
Group or the IB web-site of UOB to complete an Electronic Application. The actions that the Applicant
must take at ATMs or the IB web-sites of other Participating Banks are set out on the ATM screens
or the IB web-site screens of the relevant Participating Banks. Upon the completion of his ATM
Electronic Application transaction, the Applicant will receive an ATM transaction slip (Transaction
Record) confirming the details of his Electronic Application. Upon completion of his Internet Electronic
Application, there will be an on-screen confirmation (Confirmation Screen) of the application which
the Applicant can print for his record. The Transaction Record or printed record of the Confirmation
Screen is for retention by the Applicant and should not be submitted with any printed Application
Form.
An Applicant must ensure that he enters his own Securities Account number when using the
ATM card issued to him in his own name. Using his own Securities Account number with an
ATM card which is not issued to him in his own name will render his ATM Electronic Application
liable to be rejected. An Applicant operating a joint bank account with any of the Participating
Banks must ensure that he enters his own Securities Account number when using an ATM
card issued to him in his own name.
You must ensure, when making an Internet Electronic Application, that the mailing address of your
account selected for the application is in Singapore and the application is being made in Singapore.
Otherwise your application is liable to be rejected. In this connection, you will be asked to declare
that you are in Singapore at the time when you make your application.
All Electronic Applications shall be made on, and subject to, the terms and conditions appearing
below as well as those set out under the section on Terms and Conditions and Procedures for
Application found on pages 124 to 127 of this Prospectus.
130
1.
The Electronic Application shall be made in accordance with and subject to the terms of this
Prospectus and the Memorandum and Articles of Association of the Company.
2.
In connection with his Electronic Application for Offer Shares, the Applicant is required to confirm
statements to the following effect in the course of activating his Electronic Application:(a) that he 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 he consents to the disclosure of his name, NRIC/passport number, nationality
and permanent residence status, address, share application amount, CPF Investment
Account number (if applicable) and CDP Securities Account number (the Relevant
Particulars) from his account with the relevant Participating Bank to the CDP, SGXST, CPF, SCCS, Share Registrar, the Company and the Manager (the Relevant
Parties); and
(c) that this is his only application for Offer Shares and it is made in his own name and
at his own risk.
His application will not be successfully completed and cannot be recorded as a completed
transaction in the ATM or on the IB web-site unless he presses the Enter or Confirm or
Yes key in the ATM or click Confirm or OK on the IB web-site screen. By doing so, the
Applicant shall be treated as signifying his confirmation of each of the above three statements.
In respect of statement 2(b) above, such confirmation shall signify, and shall be treated as, his
written permission given in accordance with the relevant laws of Singapore, including Section
47(4) of the Banking Act (Chapter 19) of Singapore, to the disclosure by the relevant Participating
Bank of the Relevant Particulars to the Relevant Parties.
3.
An applicant may make an ATM Electronic Application at an ATM of any Participating Bank or
an Internet Electronic Application at the IB web-site of a relevant Participating Bank for New
Shares using cash only by authorising such Participating Bank to deduct the full amount payable
from his account with such Participating Bank.
4.
The Applicant irrevocably agrees and undertakes to subscribe for and to accept the number of
Offer Shares applied for as stated on the Transaction Record or the Confirmation Screen or
any lesser number of Offer Shares that may be allotted and/or allocated to him in respect of
his Electronic Application. In the event that the Company decides to allot and/or allocate any
lesser number of such Offer Shares or not to allot or allocate any Offer Shares to the Applicant,
the Applicant agrees to accept such decision as final. If the Applicants Electronic Application is
successful, his confirmation (by his action of pressing the Enter or Confirm or Yes key on
the ATM or clicking Confirm or OK on the IB web-site screen) of the number of Offer Shares
applied for shall signify, and shall be treated as, his acceptance of the number of Offer Shares
that may be allotted and/or allocated to him and his agreement to be bound by the Memorandum
and Articles of Association of the Company.
5.
The Applicant is deemed to have irrevocably requested and authorised the Company to:(a) register the Offer Shares allotted and/or allocated to the Applicant in the name of CDP for
deposit into his Securities Account;
(b) send the relevant Share certificate(s) to CDP;
(c) return (without interest or any share of revenue or other benefit arising therefrom) the
application moneys in Singapore currency should his Electronic Application be rejected, by
automatically crediting the Applicants bank account with the relevant Participating Bank
with the relevant amount within three Market Days after the close of the Application List;
and
131
(d) return (without interest or any share of revenue or other benefit arising therefrom) the
balance of the application moneys in Singapore currency should his Electronic Application
be accepted in part only, by automatically crediting the Applicants bank account with the
relevant Participating Bank with the relevant amount within 14 Days after the close of the
Application List.
6.
THE APPLICANT CONFIRMS THAT HE IS NOT APPLYING FOR OFFER SHARES AS

NOMINEE OF ANY OTHER PERSON AND THAT ANY ELECTRONIC APPLICATION THAT
HE MAKES IS MADE BY HIM AS BENEFICIAL OWNER.
THE APPLICANT SHALL MAKE ONLY ONE ELECTRONIC APPLICATION AND SHALL NOT
MAKE ANY OTHER APPLICATION FOR NEW SHARES (OTHER THAN RESERVED
SHARES), WHETHER AT THE ATMS OR THE IB WEB-SITES (IF ANY) OF THE
PARTICIPATING BANKS OR ON A PRESCRIBED PRINTED APPLICATION FORM.
7.
The Applicant irrevocably agrees and acknowledges that his Electronic Application is subject to
risks of electrical, electronic, technical and computer-related faults and breakdowns, fires, acts
of God and other events beyond the control of the Participating Banks, the Company and the
Manager and if, in any such event, the Participating Banks and/or the Company and/or the
Manager do not receive the Applicants Electronic Application, or data relating to the Applicants
Electronic Application or the tape containing such data is lost, corrupted, destroyed or not
otherwise accessible, whether wholly or partially for whatever reason, the Applicant shall be
deemed not to have made an Electronic Application and the Applicant shall have no claim
whatsoever against the Manager, the Participating Banks, or the Company for Offer Shares
applied for or for any compensation, loss or damage.
8.
Electronic Applications shall close at 12 noon on 23 May 2000 or such other time as the
Directors may, in their absolute discretion, decide. An Internet Electronic Application is deemed
to be received only upon its completion, that is, when there is an on-screen confirmation of the
application.
9.
All particulars of the Applicant in the records of the relevant Participating Banks at the time he
makes his Electronic Application shall be deemed to be true and correct and the relevant
Participating Bank and the Relevant Parties shall be entitled to rely on the accuracy thereof. If
there has been any change in the particulars of the Applicant after the time of the making of
his Electronic Application, the Applicant shall promptly notify the relevant Participating Bank.
10.
The Applicant must have sufficient funds in his bank account(s) with the relevant Participating
Bank at the time he makes his Electronic Application, failing which his Electronic Application
will not be completed. Any Electronic Application which does not strictly conform to the instructions
set out in this Prospectus or on the screens of the ATM or IB web-site through which that
Electronic Application is being made will be rejected. Any Electronic Application made at the
ATMs of the other Participating Banks which does not strictly conform to the instructions set
out on the ATM screens of such Participating Banks will be rejected.
11.
No applications will be kept in reserve. Where an Electronic Application is rejected, the full
amount of the application moneys will be refunded in Singapore currency (without interest or
any share of revenue or other benefit arising therefrom) to the Applicant by being automatically
credited to the Applicants bank account(s) with the relevant Participating Bank within three
Market Days after the close of the Application List. Trading on a when issued basis, if
applicable, is expected to commence after such refund has been made. Where an Electronic
Application is accepted in part only, the balance of the application moneys will be refunded
(without interest or any share of revenue or other benefit arising therefrom) to the Applicant by
being automatically credited to the Applicants bank account with his Participating Bank within
14 days after the close of the Application List.
132
If the Applicants ATM Electronic Application is made through the ATMs of KTB or UOB Group
and is unsuccessful, it is expected that a computer-generated notice will be sent to the Applicant
by the relevant Participating Bank (at the address of the Applicant stated in the records of the
relevant Participating Bank as at the date of his ATM Electronic Application) by ordinary post at
the Applicants own risk within three Market Days after the close of the Application List. If the
Applicants Electronic Application is made through the ATMs of OCBC Group, OUB Group or
DBS Bank (including those of its POSBank Service division) and is unsuccessful, no notification
will be sent by the relevant Participating Banks.
If your Internet Electronic Application made through the IB web-site of UOB, OUB or DBS Bank
is unsuccessful, no notification will be sent by such Participating Bank.
Applicants who make Electronic Applications through the ATMs of the following Participating
Banks may check the provisional results of their Electronic Applications as follows:Bank
Telephone
Other Channels
Operating Hours
Service expected from
DBS Bank* 1800-222 2222

1800-743 6336
Internet Banking
Internet Kiosk
www.dbs.com.sg
24 hours a day
7.00 pm on the
balloting day
KTB
222 8228
ATM
ATM 24 hours a day

Phone Banking
Mon Fri 0800-2200
Sat
0800-1500
ATM Evening of th
balloting day
Phone Banking
8.00 pm on the day
after the balloting day
OCBC
1800-363 3333
ATM
ATM 24 hours a day Evening of the balloting day

Phone Banking
Mon Fri 0800-2200
Sat
0800-1500
OUB*
1800-224 2000
OUB Personal
Internet Banking
Phone Banking/
Internet Banking
24 hours a day
Evening of the balloting day
www.oub2000.com.sg
OUB Mobile Buzz**
24 hours a day
OUB Mobile Buzz
UOB***
12.
1800-5335533
1800-2222121
ATM (Other
Transactions
IPO Enquiry)
Phone Banking/
ATM 24 hours a day
6.00 p.m. on the balloting

day
If you make your Internet Electronic Application through the IB web-site of OUB or DBS Bank, you may check
the result of your application through the same channels listed in the table above in relation to ATM Electronic
Applications made at ATMs of OUB or DBS Bank.
**
If you make your Electronic Application through the ATMs or IB web-site of OUB and have activated your OUB
Mobile Buzz service, you will be notified of the result of your Electronic Application via your mobile phone.
***
If you make your Electronic Application through the ATMs or IB web-site of UOB, you may check the results of
your application through UOB CyberBank, UOB Group ATMs or UOB PhoneBanking Services.
In consideration of the Company arranging for the Electronic Application facility through the
ATMs and the IB web-sites (if any) of the Participating Banks and agreeing to close the
Application List at 12.00 noon on 23 May 2000 or such later time or date as the Directors may
in their absolute discretion decide, and by making and completing an Electronic Application, the
Applicant agrees that:(a) his Electronic Application is irrevocable;
(b) his Electronic Application, the acceptance by the Company and the contract resulting
therefrom under the Invitation shall be governed by and construed in accordance with the
laws of Singapore and he irrevocably submits to the non-exclusive jurisdiction of the
Singapore courts;
133
(c) he will not be entitled to exercise any remedy of rescission for misrepresentation at any
time after acceptance of his application;
(d) neither the Company, the Manager nor the Participating Banks shall be liable for any delays,
failures or inaccuracies in the recording, storage or in the transmission or delivery of data
relating to his Electronic Application to the Company or CDP due to a breakdown or failure
of transmission, delivery or communication facilities or any risks referred to in paragraph 7
on page 132 of this Prospectus or to any cause beyond their control; and
(e) in respect of Offer Shares for which the Applicants Electronic Application has been
successfully completed and not rejected, acceptance of the Applicants Electronic Application
shall be constituted by written notification by or on behalf of the Company and not
otherwise, notwithstanding receipt of any payment by or on behalf of the Company.
13.
The existence of a trust will not be recognised. Any Electronic Application by a trustee must be
made in his own name and without qualification. The Company will reject any application by
any person acting as nominee.
14.
The Applicant should ensure that his personal particulars as recorded by both CDP and the
relevant Participating Bank are correct and identical, otherwise, his Electronic Application is
liable to be rejected. The Applicant should promptly inform CDP of any change in address,
failing which the notification letter on successful allotment and/or allocation will be sent to his
address last registered with CDP.
INSTRUCTIONS FOR ELECTRONIC APPLICATIONS THROUGH ATMs OF THE UOB GROUP AND
THE IB WEB-SITE OF UOB
The instructions for an Applicant making an Electronic Application will appear on the ATM screens
and the IB web-site screens of the respective Participating Banks. For illustration purposes, the
steps for making an Electronic Application through UOB Groups ATMs or through the IB web-site of
UOB are shown below. Instructions for Electronic Applications appearing on the ATM screens and
the IB web-site screens (if any) of the Participating Banks (other than UOB Group) may differ from
those represented below.
Due to space constraints on UOB Groups ATM screens, the following terms will appear in abbreviated
form:&
AND
A/C and A/CS
ACCOUNT and ACCOUNTS respectively
ADDR
ADDRESS
AMT
AMOUNT
APPLN
APPLICATION
CDP
THE CENTRAL DEPOSITORY (PTE) LIMITED
CPF
CENTRAL PROVIDENT FUND
CPFINVT A/C
CPF INVESTMENT ACCOUNT
ESA
ELECTRONIC SHARE APPLICATION
IC/PSSPT
NRIC or PASSPORT NUMBER
NO or NO.
NUMBER
PERSONAL NO
PERSONAL IDENTIFICATION NUMBER
REGISTRARS
SHARE REGISTRARS
SCCS
SECURITIES CLEARING & COMPUTER SERVICES (PTE) LTD
UOB/ICB CPFIS
UOB or ICB CPF INVESTMENT SCHEME
YR
YOUR
134
Steps for an ATM Electronic Application through the ATMs of UOB Group
1.
Insert your personal Unicard, Uniplus card or UOB VISA/MASTER card and key in your personal
identification number.
2.
Select OTHER TRANSACTIONS.
3.
Select SHARE APPLN.
4.
Select ESA - FIXED.
5.
Select the share counter you wish to apply for.
6.
Read and understand the following statements which will appear on the screen: THE PROSPECTUS IS AVAILABLE AT VARIOUS PARTICIPATING BANKS
A COPY OF THE PROSPECTUS HAS BEEN LODGED WITH AND REGISTERED BY
THE REGISTRAR OF COMPANIES AND BUSINESSES WHO TAKES NO RESPONSIBILITY
FOR ITS CONTENTS
Press the ENTER key to confirm that you have read and understood the above statements.
7.
Read and understand the following terms which will appear on the screen: YOU HAVE READ UNDERSTOOD & AGREED TO ALL TERMS OF THE PROSPECTUS &
THIS ELECTRONIC APPLICATION
YOU CONSENT TO DISCLOSE YR NAME IC/PSSPT NATIONALITY ADDR APPLN AMT
CPFINVT A/C NO & CDP A/C NO FROM YR A/CS TO CDP CPF SCCS REGISTRARS &
ISSUER/VENDOR(S)
THIS IS YR ONLY FIXED PRICE APPLN & IS IN YR NAME AND AT YR RISK
Confirm your consent to above terms by pressing the ENTER key.
8.
Key in your NRIC or passport number (the numerical portion only) and press the ENTER key.
9.
Select mode of payment i.e. CASH ONLY.
10.
After you have selected CASH ONLY:(a) key in your CDP Securities Account number (12 digits) and press the ENTER key;
(b) select your nationality status; and
(c) key in the number of Shares you wish to apply for and press the ENTER key.
11.
Check the details of your Electronic Application on the screen and press ENTER key to
confirm your Electronic Application.
12.
Select NO if you do not wish to make any further transactions and remove the Transaction
Record. You should keep the Transaction Record for your own reference only.
135
Owing to space constraints on UOBs IB web-site screen, the following terms will appear in abbreviated
form:CDP
The Central Depository (Pte) Limited
CPF
The Central Provident Fund
NRIC or I/C
National Registration Identity Card
PR
Permanent Resident
SGD
Singapore dollars
SCCS
Singapore Clearing & Computer Services (Pte) Ltd
SGX-ST
Singapore Exchange Securities Trading Limited
Steps for an Internet Electronic Application through the IB web-site of UOB

1.
Connect to UOB CyberBank web-site at http://www.uobcyberbank.com.sg
2.
Enter your Access Code/CIN and Password
3.
Select Applications & Purchases
4.
Select Initial Public Offerings (IPOs)
5.
Click Yes to declare that you are in Singapore and have a mailing address in Singapore
6.
Select the share counter you wish to apply for, the mode of payment and the account to debit
7.
Click confirm to confirm that:(a) You have read, understood and agreed to all the terms and conditions of the application
and prospectus;
(b) You consent to the disclosure of your name, I/C or passport number, address, nationality,
CDP securities account number, CPF Investment account number (if applicable), and
application details to the share registrars, SCCS, CDP, SGX-ST, CPF Board, issuer/vendor(s),
and lead issue manager;
(c) This application is made in your own name and at your own risk.
(d) For FIXED price share application, this is your only application. For TENDER price share
application, this is your only application at the selected tender price.
8.
Check the share counter, the payment mode and the account to debit are correct and click
submit.
9.
Fill in details for the IPO application

Select your Nationality, enter CDP Securities A/c No., and the number of shares applied for
Check your NRIC/Passport No.
Click submit
10.
Check details of your application and click confirm to confirm your application
11.
Print Confirmation Screen (optional) for your reference and retention only
136
An Integrated
Manufacturer

of Essential

Electrical and

to our customers.
PN E I N D U STRIES LT D
Electronic
Devices

(Incorporated in the Republic of Singapore on 25 September, 1999)

Key Financials
PNE INDUSTRIES LTD

14 Senoko Loop
Singapore 758150
Tel: (65) 752-3833

36.8
33.2
30
4.6
4.2
32.2
4
28.8
3.4
3.2
20
1H
15.9
Manager
1H
1.5
10
Fax: (65) 752-8200


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P R O S P E C T U S D A T E D 1 5 M AY 2 0 0 0

We have applied to the Singapore Exchange Securities

interest or any share of revenue earned or other benefit arising

in this Prospectus. Admission to the Official List of the SGX-ST is not to

Established in 1983, we are an integrated

Core Business Activities

Transformers and Electronic Controllers

Invitation in respect of 51,138,000 new ordinary shares of $0.10 each comprising:-

PNE INDUSTRIES LTD

Profit Before Tax (S$ million)

payable in full on application.

Fax: (65) 752-8200

Turnover (S$ million)

Underwriter and Placement Agent

interest or any share of revenue earned or other benefit arising

in this Prospectus. Admission to the Official List of the SGX-ST is not to

Established in 1983, we are an integrated

Core Business Activities

(Incorporated in the Republic of Singapore on 25 September, 1999)

Transformers and Electronic Controllers

Invitation in respect of 51,138,000 new ordinary shares of $0.10 each comprising:-

PNE INDUSTRIES LTD

Profit Before Tax (S$ million)

payable in full on application.

Fax: (65) 752-8200

Turnover (S$ million)

Underwriter and Placement Agent

Manufacture a range of emergency

Product design capability

Positive outlook of global economy

Strategies for Growth

Manufacture a range of emergency

Product design capability

Positive outlook of global economy

Strategies for Growth

DETAILS OF THE INVITATION

Listing on the SGX-MAIN BOARD ......................................................................................

Indicative Timetable for Listing ............................................................................................

PROSPECTUS SUMMARY ..........................................................................................................

RISK FACTORS ............................................................................................................................

ISSUE STATISTICS ......................................................................................................................

SUMMARY OF PROFORMA GROUP FINANCIAL INFORMATION ..........................................

GENERAL INFORMATION ON OUR GROUP

Share Capital ........................................................................................................................

Restructuring Exercise .........................................................................................................

Group Structure ....................................................................................................................

Foreign Exchange .................................................................................................................

Review of Past Performance ...............................................................................................

Prospects and Future Plans ................................................................................................

Profit Forecast ......................................................................................................................

Major Customers ..................................................................................................................

Major Suppliers .....................................................................................................................

Interested Person Transactions ...........................................................................................

Directors, Management and Staff ........................................................................................

Corporate Governance and Audit Committee .....................................................................

Service Agreements .............................................................................................................

Properties and Fixed Assets ................................................................................................

UNAUDITED PROFORMA CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX

LETTER FROM THE AUDITORS AND REPORTING ACCOUNTANTS IN RELATION TO

DIRECTORS REPORT .................................................................................................................

VALUERS REPORT .....................................................................................................................

ACCOUNTANTS REPORT ...........................................................................................................

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

Terms and Conditions and Procedures for Application ......................................................