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Achieva Limited240 MacPherson Road #02/03/04

Pines Industrial Building, Singapore 348574Tel: 6841 4898 Fax: 6841 4896Email: [email protected]

Website: http://www.achieva.com.sg

Extending

reachOptimizing

assets

Achieva Lim

ited Annual Report 2001

Achieva LimitedAnnual Report 2001

Contents

Introduction

1

Executive Chairman’s Report

2

Our Asia-Pacific Network

6

Operations Review

8

Corporate Information

10

Board of Directors & Senior Management

11

Group Financials Highlights

12

Financial Contents

13

Operating in 9 countries in the Asia-Pacific, the Achieva group of companies

is recognized as a forerunner in the knowledge economy. It is capitalizing on

its most competitive asset – its people – to achieve its mission to be thetop knowledge-based value-added distributor andsolutions provider in the Asia Pacific for electronicsand IT-related products and services; and a leadingcreator of innovative proprietary technology productsand solutions.

Achieva runs four core businesses:- Peripherals, parts and software including

data storage devices and componentsfor computer and IT-related products;

- Electronic components viz.semiconductor and electro-mechanical devices focusing onthe data communications,telecommunications and digitalconsumer markets;

- Data networking, design anddevelopment of proprietaryproducts and solutions for theelectronics industry.

- Strategic technologies encompassingintellectual property products,technological and knowledge-baseddevelopments, investments andproprietary products and services.

Introduction

01

02

Human Capital + New Frontiers: key to our growth

Year 2001 was one of the worst years in the history of the global

electronics industry. Electronics markets and capital spending

worldwide collapsed, weighed down by inventory overhang, sluggish

consumer demand and the burst of the Internet "bubble". This was

aggravated by the unprecedented September 11 terrorist attacks against

the United States. One of the worst hit was the semiconductor sector.

Semiconductor Equipment and Materials International (SEMI) reported

a 41% decline in semiconductor equipment sales and a 29% drop in

silicon wafers worldwide in 2001 compared to 2000. PC shipments

stayed flat while demand for networks and servers fell sharply due to

the end of the Internet bubble.

Against this difficult backdrop, Achieva managed to forge ahead

to stay profitable and focused on strategically building its businesses

and to plant the seeds of growth for the long-term.

We are never satisfied with what we are. We are forward-looking

and always pushing ourselves to achieve our

corporate mission.

We have secured new distributorships for

leading-edge technology products in the

telecommunications and advanced storage sectors.

Infineon Technologies AG, Western Digital

Corporation, Altera Corporation (for India), Stream

Machine Inc. and Transpoint Technology Inc. are

among the new global brands we represent.

Credible performance

The Group registered $482 million in

turnover in FY2001, compared to $340 million in FY2000. This represents

a 42% improvement over the same period of the previous year.

Strong demand for PC peripheral parts and electronic

components contributed to this healthy result, with each sub-group

accounting for 47% and 21% respectively of the Group’s turnover.

Demand for PC peripherals and parts was highest in China where

we expanded our operations last year, with the market growing by

$81 million over the previous year. We also registered growth in

Singapore, Malaysia, Australia, Philippines, Indonesia and Korea, another

new market acquired in FY2001. The higher demand for electronic

components came from the transfer of our operations via agents to

direct sales to our customers.

Unfortunately, our profitability last year was undermined by

intense competition in the PC industry and downturn in demand in

the global telecommunications and data communications industries.

The ailing economies of the United States and Europe led to dumping

of excess stock. The sharp loss of consumer

confidence after September 11 overturned what

was projected to be a worldwide market growth

of 20% to a 41% decline instead.

As a result of the unexpectedly steep fall

in the market, our Group’s profit before tax and

interest fell 52% from $14.8 million in FY2000

to $7.2 million in FY2001.

The contributing factors were lower

selling prices and margins, and increased

research and development costs in the strategic

technologies group.


03

“We are never satisfiedwith what we are. We are

forward-lookingand always pushing theCompany to achieve its

mission.”


04

As part of Achieva’s strategy toenhance its knowledge-based

activities, we have made

significantprogress

in the areas of Technology andR&D.


05

We did well in the first half of FY2001, having benefited from

our investments in value add engineering and solutions provider

services. However we faced very tough market conditions in the second

half, particularly in the third quarter. Although the market had picked

up somewhat by the fourth quarter, it was not sufficiently significant

to affect our results positively.

We rose to the occasion by managing our inventory very prudently

and reducing costs. Our core competence is in our cost effective supply-

chain management. We divested our business in Achieva-Tai Sol

Technologies Pte Ltd as this did not achieve synergy with our core interests.

While our net tangible assets per share rose from 11.63 cents to

12.03 cents, our earnings per share dropped to 0.92 cents from 2.38

cents. Our Group’s cash reserves increased from S$20.6 million in

FY2000 to S$30.1 million in FY2001.

Our commitment to a high level of corporate transparency also

earned us a place as runner-up in the Most Transparent Company Award

2001 (SESDAQ and Small Cap Category) from the

Securities Investors Association of Singapore.

Promising prospects

Although the world economy still suffers

from uncertainty and the outlook for FY2002

remains doubtful, we are confident that the

positioning we have secured to ride on the recovery

of the IT industry will yield clear dividends.

With the set up of two new subsidiaries in FY

2001, one each in Hong Kong and Singapore, we are

ready to make inroads into the high-growth IT

Henry Lim Yong Choon

Executive Chairman

8 April 2002

markets in China and India. We intend to set up an electronic components

distribution business in Taiwan in the second quarter of FY2002.

At the same time, we are accelerating our search for strategic

alliances to penetrate the Asian market, particularly in rapidly

developing China.

We continue to invest in our human assets, having pioneered a

Founder Shares Award Scheme in FY2001 to reward key employees

(“Founders”) in two of our subsidiaries. The Company will transfer up to

20% of the shares in these subsidiaries to their Founders over four years

to strengthen their sense of ownership and enhance their entrepreneurial

drive. An award each has since been given out to our two Founders in

Indonesia and the Philippines. On the corporate front, employees are

eligible to participate in the Employee Share Option Scheme.

In appreciation

We would not have come so far without the unstinting support

of our business partners, suppliers, shareholders

and employees.

On behalf of the Board,

I wish to thank the management

and our employees for their

consistent hard work and

understanding during a

very trying year.

We look forward

to yo u r co n t i n u e d

support as we welcome

brighter days ahead.


SingaporeMalaysia ThailandPhilippines


China

Hong Kong

India

Philippines

Thailand

Malaysia

Singapore

Indonesia

Australia

06

Vietnam

Vietnam

Australia

Indonesia

India

China

Hong Kong


Achieva is distributor for:

ADM Tek

Altera

APC

Arise

Asus

Aztech

Creative

Dexcel

Ecliptek

Flextronics

Gigabyte

Gloria

Infineon Technologies

Intel

LynuxWorks

Microsoft

2001 milestones

July Appointed authorised distributor by Infineon Technologies A G,Germany

August Acquired additional equity in two subsidiaries with operations inAustralia and Vietnam, making them wholly-owned

Established Joint Venture for expansion into China

Won 3 new distributorships in the telecommunications andadvanced storage sectors

Initiated a Founder Shares Award Scheme to reward key employees

September Named Runner-up in SIAS Most Transparent Company Award 2001(SESDAQ and Small Cap Category)

December Established Joint Venture for expansion into India

Won Altera distributorship in India

Divested subsidiary in Singapore

Motorola

PC Partner

Seagate

Semtech

Silicon Wave

Sinbon Electronics

Stratos Lightwave

Stream Machine

Synplicity

Task

Telecommunications Devices

Transpoint Technology

Tyco Electronics

Western Digital

Xiotech

Zilog

07

08

Capitalizing on our core competencies

In FY2001, Achieva continued to grow its core

businesses in the supply and distribution of PC peripherals

and electronic components.

It also expanded further into North Asia, significantly

opening up the Chinese market to take advantage of

opportunities arising from China’s entry into the World

Trade Organisation, and extended its business coverage

to South Korea.

This brought Achieva’s operations comprising four

operating divisions into 9 countries spanning a growing base

of 8,000 customers in the Asia-Pacific.

New distributorships

In addition to the wide range of products and

IT solutions that it was already marketing, Achieva

also won a prestigious distributorship from Infineon

Technologies AG, Germany, one of the world’s premier

suppliers of semiconductors.

Achieva was appointed in July 2001 to distribute

Infineon’s products for wired and wireless communications,

automative and industrial applications.

Four more distributorships in the telecommunications

and advanced storage sectors were secured.

The global brands represented are Western Digital

Corporation for hard drives used in desktop computers

and home entertainment electronic products; Altera

Corporation for system-on-a-programmable-chip solutions

for the Indian market; Stream Machine Inc.’s consumer digital

video and audio products; and Transpoint Technology Inc.’s

liquid crystal displays and liquid crystal modules.

Segmental market analysis

All markets within Achieva’s coverage achieved

healthy turnover last year, the only exception being

Vietnam.

China generated the strongest momentum,

multiplying its upward trend by close to 18 times

since we began operating there in December 2000.

At the same time, ongoing business development

of the Chinese market required a consistent injection

of funds.

Operations Review

Singapore and Malaysia, racked by recession, reflected

slower growth although the results due to e-infrastructure

spending exceeded that of the previous year.

Australia, in spite of its weak currency and still

recovering from recession, almost topped 20% growth.

Turnover nearly doubled in the Philippines.

Notwithstanding the difficulties of doing business

in Indonesia, its vast market potential yielded similarly

strong growth.

Segmental product analysis

Supply and demand for PC peripherals swung with

great volatility to razor-thin margins against a grim

backdrop of a creeping worldwide economic slowdown

from January 2001 and which the September 11 disaster

precipitated into a crisis.

Electronic components fared better, although its

prices were not spared sharp declines either.

Data network products scored a turnaround from a

loss-making status in FY2000.

Strategic Technologies, viz Nano Storage, continued

to consume huge investments in research and development.

09

Operations Review

Our success in securingdistributorships in this segment is

due largely to our

ability to provideelectronic design and applications

supportto our customers.


1

Henry Lim YongChoonExecutive Chairman

President & CEO

Audit Committee member

B Sc.

2

Goh Kian HweeIndependent Director

Audit Committee member

LLB (Honours)

3

Lew Syn PauIndependent Director

Audit Committee Chairman

M Sc (Engineering) & MBA

4

William PokTam SoonChief Operating Officer

B. Sc (Physics), Masters(Electrical Engineering)& Graduate Dip. inMarketing Management

5

Christopher NgChee SengExecutive Director

Senior Vice President,Achieva ComponentsPte Ltd

Dip. Electrical Engineering& Graduate Dip. inBusiness Administration

6

Raymond ChiaChong LeongExecutive Director

Vice President, AchievaTechnology Pte Ltd

7

Mark Soh Eng KuangExecutive Director

Vice President, AchievaElectronics Pte Ltd

B. Sc & MBA

Board of Directors

Henry Lim Yong Choon Executive ChairmanWilliam Pok Tam Soon

Christopher Ng Chee Seng

Mark Soh Eng Kuang

Raymond Chia Chong Leong

Lew Syn Pau (Independent Director)Goh Kian Hwee (Independent Director)Allan Yong Heng Chong (appointed on 13.7.2001)

Secretary

Adrian Chan Pengee (resigned on 1.11.2001)Leong Shiao Yee (resigned on 1.11.2001)Allan Yong Heng Chong (appointed on 1.11.2001)

Registered Office

240 MacPherson Road #02-02/03/04

Pines Industrial Building

Singapore 348574

Audit Committee

Lew Syn Pau ChairmanGoh Kian Hwee MemberHenry Lim Yong Choon Member

Share Option Committee

Lew Syn Pau ChairmanGoh Kian Hwee MemberHenry Lim Yong Choon Member

Auditors

Ernst & Young

Certified Public Accountants

Daniel Soh Chung Hian

Audit Partner

Principal Bankers

ABN AMRO Bank N.V.

BNP Paribas

Citibank, N.A.

Industrial & Commercial Bank Limited

KBC Bank N.V.

Keppel TatLee Bank Limited

The Development Bank of Singapore Ltd

8

Allan Yong HengChongChief Financial Officer &Director

B. Acc (Hons) & B. Law (Hons)

9

Goh Seng HuatVice President(Business Development)

B.Sc (Hons) & MBA

6 5 9 3 1 4 2 8 7

10


11

Group Financial Highlights

6 Years Financial Overview

In S$’000

1996 1997 1998 1999 2000 2001

Results of Operations

Revenue 43,508 135,380 190,470 229,216 340,019 482,244

Operating profit before taxation 1,292 2,566 5,463 7,215 13,583 5,908

Profit after taxation 903 1,367 4,347 5,344 9,889 3,186

Minority interests – – (256) (406) (1,038) 731

Extraordinary items – – – (388) – –

Profit attributable to shareholders 903 1,367 4,091 4,550 8,851 3,917

Earnings per share (cents) 0.29 0.44 1.32 1.46 2.38 0.92

Return on shareholders’ equity 19% 15% 29% 24% 18% 7%

Gross dividend – – – – 4% –

Balance sheets

Shareholders’ equity 4,651 9,068 14,123 18,660 48,779 58,275

Property, plant & equipment 3,648 3,761 3,939 2,661 3,564 3,939

Investment in associated company – – – – 97 139

Other investments 26 26 26 26 868 871

Goodwill – – – – 622 4,456

Current assets 14,525 44,400 61,031 61,954 121,504 96,012

Current liabilities (11,729) (37,360) (48,782) (44,115) (74,752) (46,068)

Net current assets 2,796 7,040 12,249 17,839 46,753 49,944

Long-term liabilities (1,819) (1,759) (1,499) (859) (341) (948)

Minority interests – – (592) (1,007) (2,784) (126)

4,651 9,068 14,123 18,660 48,779 58,275

Net tangible assets per share (cents) 1.50 2.92 4.55 6.01 11.63 12.03

Borrowings 7,071 11,765 8,946 17,715 16,904 18,848

Note(1) The financial position of the group was prepared on a proforma basis for the years 1996 to 1999, as if the group had been in existence throughout the periods under review.(2) For comparative purposes, the earnings per share and net tangible assets backing per share as at 31 December 1996 to 1999 was computed based on the pre-invitation share

capital of 310,607,740 shares.

6 Years Turnover (S$’000) 6 Years Profit After Tax (S$’000)

1996

1997

1998

1999

2000

2001

0 50 100 150 200 250 300 350 400 450 500

43,508

135,380

190,470

229,216

340,019

482,244

1996

1997

1998

1999

2000

2001

0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000

903

1,367

4,347

5,344

3,186

9,889

12

Financial Contents

Directors’ Report

14

Statement by Directors

21

Corporate Governance

22

Auditors’ Report

23

Profit and Loss Accounts

24

Balance Sheets

25

Statements of Changes in Equity

27

Consolidated Statement of Cash Flows

28

Notes to the Financial Statements

30

Shareholding Statistics

59

Notice of Annual General Meeting

60

Proxy Form

71

14

The Directors present their report together with the audited financial statements of the Company and of the Group for the year ended

31 December 2001.

1. Principal activitiesDuring the financial year, the principal activities of the Company were those of investment holding and provision of management

services. The activities of the subsidiary companies are disclosed in note 12 to the financial statements.

There have been no significant changes in the nature of these activities during the financial year.

2. Results for the financial yearGroup Company$’000 $’000

Profit/(loss) for the financial year 3,917 (3,150)

In the opinion of the Directors, the results of the operations of the Company and the Group during the financial year have not been

affected by any item, transaction or event of a material and unusual nature.

3. Transfers to/from reserves and provisionsDuring the financial year, there were no material transfers to or from reserves or provisions except as disclosed in the financial statements.

4. DividendsDuring the financial year, a final dividend of 0.20 cents per ordinary share less tax, amounting to $625,000 was paid in respect of the

previous financial year as proposed in the previous Directors’ Report.

No dividend was declared for the financial year ended 31 December 2001.

5. Share capital and debenturesDuring the financial year, the Company issued 33,245,436 ordinary shares of $0.05 each at a premium of $0.135 per share. The share issue

was made to finance the acquisition of Achieva Technology Pte Ltd’s 49% interest in Achieva Technology East Asia Pte Ltd and Achieva

Technology Australia Pte Ltd.

During the financial year, the subsidiary companies issued shares as follows:

(a) Achieva Components China Limited issued 2 subscribers’ shares of HK$1.00 each at par to incorporate the company.

(b) Achieva Components (India) Private Limited issued 2 subscribers’ shares of $1.00 each at par to incorporate the company.

(c) Achieva Technology China Limited issued 2 subscribers’ shares of HK$1.00 each at par to incorporate the company. Subsequently,

9,999,998 shares of HK$1.00 each were issued at par for additional working capital.

Directors’ Report Achieva Limited

15

5. Share capital and debentures (Cont’d)

(d) Achieva Technology Philippines Pte Ltd increased its authorised share capital from $100,000 divided into 100,000 ordinary

shares of $1.00 each to $1,000,000 divided into 1,000,000 ordinary shares of $1.00 each by the creation of an additional

900,000 ordinary shares of $1.00 each.

Achieva Technology Philippines Pte Ltd also issued 999,998 shares of $1.00 each at par for cash for additional working capital.

(e) Achieva Technology Indonesia Pte Ltd increased its authorised share capital from $100,000 divided into 100,000 ordinary

shares of $1.00 each to $1,000,000 divided into 1,000,000 ordinary shares of $1.00 each by the creation of an additional

900,000 ordinary shares of $1.00 each.

Achieva Technology Indonesia Pte Ltd also issued 999,998 shares of $1.00 each at par for cash for additional working capital.

(f) Achieva Technology Pte Ltd increased its authorised share capital from $1,000,000 divided into 1,000,000 ordinary shares of

$1.00 each to $8,000,000 divided into 8,000,000 ordinary shares of $1.00 each by the creation of an additional 7,000,000

ordinary shares of $1.00 each.

Achieva Technology Pte Ltd also issued 6,150,406 ordinary shares of $1.00 each at par to finance the acquisition of the remaining

49% interest each in Achieva Technology East Asia Pte Ltd and Achieva Technology Australia Pte Ltd.

Other than the aforesaid, no other shares or debentures were issued during the financial year.

6. Options on the shares in the Company

(a) Achieva Share Option Agreement

On 19 May 2000, the Company entered into an agreement with 10 selected employees of the Group, namely the Achieva

Share Option Agreement (the “SOA”), pursuant to which options to subscribe for an aggregate of 2,100,000 shares were

granted to 10 selected employees of the Group on a one-off basis at a consideration of $1.00 for each employee.

The options were granted with an exercise price of $0.10 per share. Such exercise price is approximately equal to the post-

invitation net tangible asset per share as at 31 December 1999. The employees may exercise the options to subscribe for not

more than 40% of the shares under such options on or after the date falling 2 years from the date of the Company being

admitted to the Official List of SGX-ST (1 June 2000) and may exercise the options to subscribe for the remaining shares on or

after the date falling 3 years from 1 June 2000, provided that

(i) no options shall be exercisable after 31 May 2004; and

(ii) the exercising employee remains an employee on the date of the exercise.

The Directors who have been appointed to administer the SOA are Mr. Henry Lim Yong Choon and Mr. William Pok Tam Soon

who are not participants of the SOA.

Directors’ ReportAchieva Limited

16

6. Options on the shares in the Company (Cont’d)

(a) Achieva Share Option Agreement (Cont’d)

In consideration of the payment of $1.00 for each employee, offers of options were granted to the 10 selected employees

pursuant to the SOA in respect of 2,100,000 unissued shares of $0.05 each in the Company at an offering price of $0.10

per share.

Number of unissued ordinary shares of $0.05 eachDate of Grant Balance at 1.1.2001 Cancelled Exercised Balance at 31.12.2001 Exercise price Expiry date

19.5.2000 1,800,000 – – 1,800,000 $0.10 31.5.2004

(b) Share Options Scheme

The Share Options Scheme (SOS) for the Non-Executive Directors and all employees of the Group was approved by the members

of the Company at an Extraordinary General Meeting held on 31 May 2001. Pursuant to the SOS, all the options granted will

have a maximum term of 10 years from the date of the grant.

The exercise price is at:

(i) a price which is equivalent to the Market Price or the nominal value of the Shares, whichever is greater; or

(ii) a price which is set at a discount to the Market Price, or the nominal value of the Shares, whichever is greater, provided

that the maximum discount shall not exceed 20% of the Market Price.

The options will vest one year after the date of grant.

The Committee administrating the scheme comprises the following Directors:

Henry Lim Yong Choon

Lew Syn Pau (Independent Director)Goh Kian Hwee (Independent Director)William Pok Tam Soon (resigned on 30 November 2001)Christopher Ng Chee Seng (resigned on 30 November 2001)

During the financial year, in consideration of the payment of $1.00 for each offer accepted, offers of options were granted to

the employees pursuant to the scheme in respect of 13,806,003 unissued shares of $0.05 each in the Company at an offering

price of $0.1547 per share.

At the end of the financial year, options to take up 13,806,003 unissued shares of $0.05 each in the Company were

outstanding:

Number of unissued ordinary shares of $0.05 eachDate of Grant Balance at date of grant Cancelled Exercised Balance at 31.12.2001 Exercise price Expiry date

18.10.2001 13,806,003 – – 13,806,003 $0.1547 18.10.2011


17

6. Options on the shares in the Company (Cont’d)

(b) Share Options Scheme (Cont’d)

The details of options granted and exercised by the following Directors under the SOS are as follows:

Options Aggregate Aggregategranted options granted options exercised Aggregateduring since since options

financial commencement commencement outstandingyear of scheme to end of scheme to end at end of

under of financial year of financial year Options financial yearName of Participants review under review under review lapsed under review

William Pok Tam Soon 300,000 300,000 – – 300,000

Christopher Ng Chee Seng 1,250,000 1,250,000 – – 1,250,000

Mark Soh Eng Kuang 350,000 350,000 – – 350,000

Raymond Chia Chong Leong 300,003 300,003 – – 300,003

Allan Yong Heng Chong 900,000 900,000 – – 900,000

Lew Syn Pau 100,000 100,000 – – 100,000

Goh Kian Hwee 100,000 100,000 – – 100,000

7. Acquisitions and disposals of subsidiary companiesDuring the financial year, the Company incorporated the following subsidiary companies:

Numberof ordinary Cost Percentage of

Name of company shares issued $’000 equity held %

Achieva Components China Limited 2 – 100

Achieva Components (India) Private Limited 2 – 100

Achieva Technology China Limited 2 – 50

During the financial year, the Group acquired additional interest in the following subsidiary companies:

EquityNet tangible interest

Name of company Consideration assets acquired$’000 $’000 %

Achieva Technology East Asia Pte Ltd 3,2 1 1 2,533 49

Achieva Technology Australia Pte Ltd 2,939 1,779 49

During the year, the Group disposed the following subsidiary company:

EquityNet tangible interest

Name of company Consideration liabilities disposed$’000 $’000 %

Achieva-Tai Sol Technologies Pte Ltd 60 (107) 60

There was no other acquisition or disposal of subsidiary companies.


18

8. DirectorsThe Directors of the Company in office at the date of this report are:

Henry Lim Yong Choon (Executive Chairman)William Pok Tam Soon

Christopher Ng Chee Seng

Mark Soh Eng Kuang

Raymond Chia Chong Leong

Allan Yong Heng Chong

Lew Syn Pau (Independent Director)Goh Kian Hwee (Independent Director)

According to the register required to be kept under Section 164 of the Companies Act, Cap. 50, the following Directors of the Company who

held office at the end of the financial year had an interest in shares of the Company and one of its subsidiary companies, as stated below:

Holding registered in the names of DirectorsName of Director At 1.1.2001/

date of appointment At 31.12.2001 At 21.01.2002

Ordinary shares of $0.05 each

The Company

Achieva Limited

Henry Lim Yong Choon 106,412,009 106,412,009 106,412,009

William Pok Tam Soon 36,305,064 36,305,064 36,305,064

Christopher Ng Chee Seng 30,232,116 30,232,116 30,232,116

Mark Soh Eng Kuang 22,746,825 22,746,825 22,746,825

Raymond Chia Chong Leong 28,968,851 28,968,851 27,968,851

Allan Yong Heng Chong 175,000 175,000 175,000

Ordinary shares of $0.10 each

Subsidiary company

Nano Storage Pte Ltd

William Pok Tam Soon 40,000 40,000 40,000

By virtue of Section 7 of the Companies Act, Cap. 50, Mr. Henry Lim Yong Choon with the above shareholdings is deemed to have

interests in all the related companies of the Company.

Other than as disclosed above, no Director who held office at the end of the financial year had an interest in shares or debentures of

the subsidiaries of the Company.

Neither at the end of the financial year nor at any time during that year, did there subsist any arrangements to which the Company was

a party whereby Directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the

Company or any other body corporate other than as disclosed under “Options on the shares in the Company” in this report.

Since the end of the previous financial year, no Director has received or has become entitled to receive benefits under contracts required

to be disclosed by Section 201(8) of the Companies Act, Cap. 50 except for those disclosed in note 6 to the financial statements.


19

9. Asset valuesBefore the profit and loss account and balance sheet of the Company were made out, the Directors took reasonable steps to

ascertain that:

(a) proper actions had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and

had satisfied themselves that all known bad debts, if any, have been written off and that where necessary adequate provision

has been made for doubtful debts; and

(b) any current assets that were unlikely to realise their book value in the ordinary course of business have been written down to their

estimated realisable values or adequate provision had been made for the difference between those values.

At the date of this report, the Directors are not aware of any circumstances that would render:

(c) any amount written off or provided for bad and doubtful debts in the Group inadequate to any substantial extent; and

(d) the values attributed to current assets in the consolidated financial statements misleading.

10. Charges and contingent liabilitiesSince the end of the financial year, no charge on the assets of the Company or any company in the Group has arisen which secures the

liabilities of any other person.

Since the end of the financial year, no contingent liability of the Company or any company in the Group has arisen.

No contingent or other liability of the Company or any company in the Group has become enforceable or is likely to become

enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may

substantially affect the ability of the Company and of the Group to meet their obligations as and when they fall due.

11. Other circumstances affecting the financial statementsAt the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the consolidated

financial statements that would render any amount stated in the financial statements of the Company and the consolidated financial

statements misleading.

12. Unusual items after the financial yearIn the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the

end of the financial year and the date of this report that would affect substantially the results of the operations of the Company or

of the Group for the financial year in which this report is made.


20

13. Audit committeeThe Audit Committee carried out its functions in accordance with the Companies Act, Cap.50 which included a review of the financial

statements of the Group and the Company for the financial year and the auditors’ report thereon.

The Committee recommends to the Board of Directors the nomination of Ernst & Young as external auditors at the forth-coming

annual general meeting of the Company.

14. AuditorsThe auditors, Ernst & Young, Certified Public Accountants, have expressed their willingness to accept reappointment.


Henry Lim Yong ChoonDirector

William Pok Tam SoonDirector

Singapore

8 April 2002


21

We, Henry Lim Yong Choon and William Pok Tam Soon, being two of the Directors of Achieva Limited, do hereby state that, in the opinion

of the Directors:

(a) the balance sheets, profit and loss accounts, statements of changes in equity and consolidated statement of cash flows together with

the notes thereto, set out on pages 24 to 58 are drawn up so as to give a true and fair view of the state of affairs of the Company and

of the Group as at 31 December 2001, the results and changes in equity of the Company and the Group and the cash flows of the Group

for the year ended 31 December 2001; and

(b) at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and when

they fall due.

The Board of Directors authorised these financial statements for issue on 8 April 2002.


Henry Lim Yong ChoonDirector

William Pok Tam SoonDirector

Singapore

8 April 2002

Achieva Limited Statement by DirectorsPursuant to Section 201(15)

22

Corporate Governance Achieva Limited

Presently, the business and the operations of the Group are under the management and supervision of the President and Executive Directors

of the Company, namely Messrs Henry Lim Yong Choon, William Pok Tam Soon, Christopher Ng Chee Seng, Mark Soh Eng Kuang, Raymond

Chia Chong Leong and Allan Yong Heng Chong. Generally, Mr. Henry Lim Yong Choon oversees management of the day-to-day operations of

the Group, while Messrs William Pok Tam Soon, Christopher Ng Chee Seng, Mark Soh Eng Kuang and Raymond Chia Chong Leong manage the

respective operating subsidiary groups.

The Audit Committee comprises the two independent directors and Mr. Henry Lim Yong Choon. Mr. Lew Syn Pau is the Chairman of

the Audit Committee.

Recognising the importance of corporate governance and the need to offer the highest standards of accountability to the shareholders of

the Company, the Audit Committee meets periodically to perform the following functions:

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

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

(iii) review the external auditors’ reports;

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

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

(vi) nominate external auditors for reappointment; and

(vii) review interested person transactions.

Apart from the duties listed above, the Audit Committee shall commission and review the findings of internal investigations into matters

where there is any suspected fraud or irregularity, or failure of internal controls or infringement of any Singapore law, rule or regulation which

has or is likely to have a material impact on the Group’s operating results and/or financial position.

23

We have audited the financial statements of Achieva Limited set out on pages 24 to 58. These financial statements comprise the balance

sheets of the Company and the Group as at 31 December 2001, and the profit and loss accounts and statements of changes in equity of the

Company and the Group and the statement of cash flows of the Group for the year then ended. These financial statements are the responsibility

of the Company’s Directors. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform the audit to

obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a

test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting

principles used and significant estimates made by the Directors, as well as evaluating the overall financial statement presentation. We believe

that our audit provides a reasonable basis for our opinion.

In our opinion,

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act (“Act”) and Singapore Statements

of Accounting Standard and so as to give a true and fair view of:

(i) the state of affairs of the Company and of the Group as at 31 December 2001, the results and changes in equity of the Company

and of the Group and the cash flows of the Group for the year ended 31 December 2001; and

(ii) the other matters required by Section 201 of the Act to be dealt with in the financial statements and consolidated financial

statements;

(b) the accounting and other records, and the registers required by the Act to be kept by the Company and by those subsidiaries incorporated

in Singapore, of which we are the auditors, have been properly kept in accordance with the provisions of the Act.

We have considered the financial statements and auditors’ report of all subsidiaries of which we have not acted as auditors, being financial

statements included in the consolidated financial statements. The name of the subsidiaries audited by our associated firms and those

audited by other firms are stated in Note 12.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company

are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements and we have

received satisfactory information and explanations as required by us for those purposes.

The auditors’ report on the financial statements of the subsidiaries were not subjected to any qualification and in respect of subsidiaries

incorporated in Singapore did not include any comment made under Section 207(3) of the Act.

ERNST & YOUNGCertified Public Accountants

Singapore

8 April 2002

Auditors’ Reportto the Members of Achieva Limited

Achieva Limited

24

Achieva Limited and Subsidiary CompaniesProfit & Loss Accountsfor the year ended 31 December 2001

(In Singapore dollars)

Group CompanyNote 2001 2000 2001 2000

$’000 $’000 $’000 $’000

Revenue 3 482,244 340,019 2,910 8,606

Cost of sales (453,473) (303,908) – –

28,771 36,111 2,910 8,606

Other revenue 4 2,336 1,331 1,525 1,098

Personnel expenses 12,487 11,637 2,006 1,230

Facilities expenses 1,217 794 211 132

Selling expenses 4,336 3,520 – 28

Administrative expenses 3,495 3,210 464 333

Other operating expenses 5 2,149 1,634 4,496 626

Operating expenses (23,684) (20,795) (7,177) (2,349)

Profit/(loss) from operating activities 6 7,423 16,647 (2,742) 7,355

Financial (expenses)/gain, net 7 (1,431) (3,033) 168 (190)

Share of associated company’s loss (84) (31) – –

Profit/(loss) before taxation 5,908 13,583 (2,574) 7,165

Taxation 8 (2,722) (3,694) (576) (2,081)

Profit/(loss) after taxation 3,186 9,889 (3,150) 5,084

Minority interest 731 (1,038) – –

Profit/(loss) for the financial year 3,917 8,851 (3,150) 5,084

Basic earnings per share (in cents) 9 0.92 2.38

Diluted earnings per share (in cents) 9 0.92 2.38

The accounting policies and explanatory notes on pages 30 to 58 form an integral part of the financial statements.

25

Achieva Limited and Subsidiary Companies Balance Sheetsas at 31 December 2001



$’000 $’000 $’000 $’000

Non-current assets

Property, plant and equipment 11 3,939 3,564 1,746 1,713

Investment in subsidiary companies 12 – – 13,064 8,800

Investment in associated company 13 139 97 – –

Long term receivable 14 871 868 – –

Goodwill 15 4,456 622 – –

9,405 5,151 14,810 10,513

Current assets

Stocks 16 21,738 65,531 – –

Trade debtors 17 36,219 29,813 1,082 1,169

Other debtors 18 7,898 5,517 188 525

Amounts due from subsidiary companies 19 – – 28,704 26,921

Amounts due from related parties 20 18 19 – –

Fixed deposits 21 18,697 10,683 1,401 3,669

Cash and bank balances 11,442 9,942 809 740

96,012 121,505 32,184 33,024

Deduct: Current liabilities

Amounts due to bankers, unsecured 22 18,357 16,664 – –

Trade creditors 19,240 46,518 – –

Other creditors 5,615 7,936 549 826

Amounts due to subsidiary companies 19 – – 5,793 4,863

Amounts due to a related party 20 – 9 – –

Term loans 23 – 21 – –

Obligations under finance lease contracts 24 129 34 84 –

Provision for taxation 2,727 3,570 – 109

46,068 74,752 6,426 5,798

Net current assets 49,944 46,753 25,758 27,226


26

Achieva Limited and Subsidiary Companies



$’000 $’000 $’000 $’000

Long term liabilities

Term loans 23 – 134 – –

Obligations under finance lease contracts 24 362 51 262 –

Deferred taxation 25 586 156 224 32

(948) (341) (486) (32)

58,401 51,563 40,082 37,707

Equity

Share capital 26 22,369 20,707 22,369 20,707

Reserves 27 35,906 28,072 17,713 17,000

58,275 48,779 40,082 37,707

Minority interests 126 2,784 – –

58,401 51,563 40,082 37,707


Balance Sheets

27

Achieva Limited and Subsidiary Companies Statements of Changes in Equityfor the year ended 31 December 2001


ForeignAccumulated currency

Share Share Capital profits/ translationNote capital premium reserve (losses) reserve Total

$’000 $’000 $’000 $’000 $’000 $’000

Group

Balance at 31 December 1999 10,178 927 502 7,256 (203) 18,660

Loss not recognised in the

profit and loss account -

Foreign currency translation – – – – (89) (89)

Bonus issue 5,352 (927) – (4,425) – –

Issue of shares at a premium 5,177 17,437 – – – 22,614

Expenses for Initial Public Offer

charged against share premium – (1,257) – – – (1,257)

Profit for the financial year – – – 8,851 – 8,851

Balance at 31 December 2000 20,707 16,180 502 11,682 (292) 48,779

Gain not recognised in the

profit and loss account -

Foreign currency translation – – – – 54 54



Dividend 10 – – – (625) – (625)

Balance at 31 December 2001 22,369 20,668 502 14,974 (238) 58,275

Company

Balance at 31 December 1999 10,178 927 – 161 – 11,266

Bonus issue 5,352 (927) – (4,425) – –


Expenses for Initial Public Offer

charged against share premium – (1,257) – – – (1,257)


Balance at 31 December 2000 20,707 16,180 – 820 – 37,707


Loss for the financial year – – – (3,150) – (3,150)

Dividend 10 – – – (625) – (625)

Balance at 31 December 2001 22,369 20,668 – (2,955) – 40,082


28

Achieva Limited and Subsidiary Companies


2001 2000$’000 $’000

Cash flows from operating activities:

Operating profit before taxation 5,908 13,583

Adjustments for:

Share of associated company’s loss 84 31

Amortisation of goodwill 414 35

Investment written off – 26

Depreciation 1,160 628

Gain on disposal of a subsidiary company (155) –

Provision for impairment in value of freehold property 457 –

Gain on disposal of property, plant and equipment (87) –

Property, plant and equipment written off 53 155

Interest expense 1,738 1,677

Interest income (571) (492)

Currency realignment 71 (139)

Operating income before reinvestment in working capital 9,072 15,504

Decrease/(increase) in stocks 43,569 (45,397)

Increase in debtors (9,040) (7,720)

(Decrease)/increase in creditors and trust receipts (27,051) 31,539

Cash generated from/(applied in) operations 16,550 (6,074)

Interest paid (1,738) (1,677)

Interest received 571 492

Income taxes paid (3,297) (2,853)

Net cash provided by/(used in) operating activities 12,086 (10,112)

Cash flows from investing activities:

Purchase of property, plant and equipment (2,216) (1,776)

Proceeds from sale of property, plant and equipment 818 110

Increase in long term receivables – (868)

Acquisition of subsidiary, net of cash acquired – 6

Disposal of subsidiary, net of cash disposed (92) –

Investment in associated company (126) (128)

Net cash used in investing activities (1,616) (2,656)


Consolidated Statement of Cash Flowsfor the year ended 31 December 2001

29

Consolidated Statement of Cash FlowsAchieva Limited and Subsidiary Companies


2001 2000$’000 $’000

Cash flows from financing activities:

Repayment of term loans (155) (708)

Repayment of finance lease (134) (77)

Repayment to related party (8) (1,657)

Repayment from related party – 48

Proceeds from issuance of shares – 21,357

Proceeds from issuance of shares to minority interests – 110

Dividend paid (625) –

Net cash (used in)/provided by financing activities (922) 19,073

Net increase in cash and cash equivalents 9,548 6,305

Cash and cash equivalents at beginning of year 20,591 14,286

Cash and cash equivalents at end of year (note 28) 30,139 20,591

The disposal of Achieva-Tai Sol Technologies Pte Ltd (“ATST”) has been shown in the consolidated statement of cash flows as a single item.

The effect on the individual assets and liabilities is set out below:

$’000

Property, plant and equipment 12

Stocks 224

Debtors 338

Cash and bank balances 152

Creditors (821)

(95)

Gain on disposal of subsidiary 155

Sales consideration 60

Less: cash of ATST disposed (152)

Cash flows on disposal, net of cash disposed (92)


30

Achieva LimitedNotes to the Financial Statementsfor the year ended 31 December 2001


1. Corporate informationThe financial statements of Achieva Limited for the year ended 31 December 2001 were authorised for issue in accordance with a

resolution of the Directors on 8 April 2002.

Achieva Limited is a public limited liability company listed on the Singapore Exchange, which is incorporated in the Republic of

Singapore with its registered office at 240 MacPherson Road, #02-02/03/04 Pines Industrial Building, Singapore 348574.

During the year, the principal activities of the Company were those of investment holding and provision of management services. The

activities of the subsidiary companies are disclosed in note 12 to the financial statements. There have been no significant changes in

the nature of the principal activities during the financial year.

As of the financial year ended 31 December 2001, the Group and Company employed 248 and 12 (2000: 221 and 12) employees respectively.

2. Summary of significant accounting policies

(a) Basis of preparation

The financial statements, which are expressed in Singapore dollars, are prepared under the historical cost convention. The

financial statements are prepared in accordance with Singapore Statements of Accounting Standard and the applicable provisions

of the Companies Act.

The accounting policies have been consistently applied by the Company and Group, and except for the changes in the accounting

policies, discussed more fully in (b) below, are consistent with those used in the previous year.

(b) Changes in accounting policies

The following accounting policies were changed/adopted with effect from 1 January 2001 with the adoption of

revised/new SAS:

(i) SAS 8 - Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies - whereas items

considered and reported as “Extraordinary Items” in the financial year ended 31 December 2000 have been reclassified

as “other operating expenses” and are presented before calculating “profit before taxation” in the financial year ended

31 December 2001.

(ii) In previous year, for inclusion in the consolidated financial statements, the results of foreign subsidiary companies were

translated at rates of exchange closely approximating those ruling at the balance sheet date.

With effect from this financial year, the results of the foreign subsidiary companies were translated monthly at average

exchange rates.

As the effect of this change is insignificant, this change in accounting policy has not been accounted for retrospectively.

31

Notes to the Financial StatementsAchieva Limited


2. Summary of significant accounting policies (cont’d)

(c) Principles of consolidation

The financial statements of the Group comprise the financial statements of the Company and its controlled subsidiary companies,

after the elimination of all material inter-company transactions.

Subsidiary companies are consolidated from the date the parent company obtains control until such time as control ceases.

Acquisitions of subsidiary companies are accounted for using the purchase method of accounting.

The financial statements of the subsidiary companies are prepared for the same reporting period as the parent company, using

consistent accounting policies.

(d) Goodwill

Any excess of the consideration paid over the fair values of the net assets of businesses acquired (positive goodwill) is included

in goodwill and is amortised on a straight line basis over 5 years.

Any excess of fair values of net assets acquired over the consideration paid (negative goodwill) is recorded as follows:

(i) to the extent that negative goodwill relates to expectation of future losses, it is recognised as income in the profit and

loss account when those future losses occur; and

(ii) to the extent that negative goodwill does not relate to expectation of future losses, the amount not exceeding the fair

values of identifiable non-monetary assets acquired is recognised as income in the profit and loss account on a systematic

basis over the remaining weighted average useful life of those non-monetary assets. Any amount in excess of identifiable

non-monetary assets is recognised as income immediately.

(e) Subsidiary companies

Investments in subsidiary companies are stated at cost. At each balance sheet date, the Company assesses whether there is any

indication of impairment. If any such indication exists, the recoverable amount is estimated and provision for impairment loss

is made, if any.

(f) Associated company

An associated company is defined as a company, not being a subsidiary, in which the Group has a long term interest of not less

than 20% of the equity and in whose financial and operating policy decisions the Group exercises significant influence.

The Group’s share of the results of associated companies is included in the consolidated profit and loss accounts. The

Group’s share of the post-acquisition reserves of the associated companies is included in the investments in the consolidated

balance sheet.

Investment costs in associated companies are stated in the Company’s balance sheet at cost and provision is made for impairment

in values.

32

Notes to the Financial Statements Achieva Limited



(g) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase

price and any directly attributable costs of bringing the asset to working condition for its intended use.

Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged

to the profit and loss account.

When assets are sold or retired, their cost and accumulated depreciation are removed from the financial statements and any

gain or loss resulting from their disposal is included in the profit and loss account.

The carrying amounts are reviewed at each balance sheet date to assess whether they are recorded in excess of their recoverable

amount, and if carrying values exceed this recoverable amount, assets are written down.

(h) Depreciation

Depreciation is calculated on the straight-line method to write off the cost or valuation of property, plant and equipment over

their estimated useful lives. The estimated useful lives of property, plant and equipment are as follows:

Office equipment, furniture and fittings - 2 - 5 years

Motor vehicle - 5 years

Renovation - 3 - 5 years

Freehold property - 100 years

Shop lot - 50 years

Machinery and tools - 3 - 5 years

Computer and Automated Equipment - 2 - 5 years

Fully depreciated assets are retained in the financial statements until they are no longer in use and no further charge for

depreciation is made in respect of these assets.

(i) Leased assets

Where assets are financed by lease agreements that give rights approximating to ownership (finance leases), the assets are

capitalised under property, plant and equipment as if they had been purchased outright at the values equivalent to the

present values of total rental payable during the periods of the leases and the corresponding lease commitments are

included under liabilities.

Lease payments are treated as consisting of capital and interest elements and the interests are charged to the profit and loss

account.

Depreciation on the relevant assets is charged to profit and loss account on the basis outlined in paragraph 2(h).

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

33




(j) Long term receivables

Long term receivables are stated at cost and provision is made for any impairment in values.

(k) Stocks

Stocks held for resale are stated at the lower of cost and net realisable value. Cost is arrived at on the first-in, first-out basis.

Net realisable value represents the estimated selling price less anticipated cost of disposal and after making allowance for

damaged, obsolete and slow-moving items.

(l) Trade and other receivables

Trade and other receivables are recognised and carried at original invoiced amount less an allowance for any un-collectible

amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are

written off as incurred.

Receivables from subsidiary companies and related parties are recognised and carried at cost less an allowance for any

un-collectible amounts.

(m) Cash and cash equivalents

Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid investments readily

convertible to known amounts of cash and which are subject to insignificant risk of changes in value.

Cash on hand and in banks and short-term deposits which are held to maturity are carried at costs.

For the purpose of the cash flows statement, cash and cash equivalents consist of fixed deposits, cash balances, bank balances

and bank overdrafts.

(n) Trade and other payables

Trade and other amounts payable are carried at cost, which is the fair value of consideration to be paid in the future for goods

and services received, whether or not billed to the Group.

Payables to subsidiary companies and related parties are carried at cost.

(o) Loans and borrowings

All loans and borrowings are recognised at cost, being the fair value of the consideration received and including acquisition

charges associated with the borrowings/loans.

(p) Deferred taxation

Deferred taxation is accounted for under the liability method whereby the tax charge for the year is based on the disclosed

book profit after adjusting for all permanent differences. The amount of taxation deferred on account of all timing differences

is reflected in the deferred taxation account. Deferred tax benefits are not recognised unless there is reasonable expectation of

their realisation.

34




(q) Foreign currencies

Transactions arising in foreign currencies during the year are converted at rates closely approximating those ruling on the

transaction dates. Foreign currency monetary assets and liabilities are translated into local currency at exchange rates ruling at

the balance sheet date. All exchange differences arising from conversion are included in the profit and loss account.

For inclusion in the consolidated financial statements, all assets and liabilities of foreign subsidiary companies are translated

into Singapore dollars at the exchange rates ruling at the balance sheet date and the results of foreign subsidiary companies are

translated into Singapore dollars at the average monthly exchange rates. Exchange differences due to such currency translations

are dealt with through the Group’s foreign currency translation reserve.

(r) Revenue recognition

Revenue from sale of goods is recognised upon passage of title to the customers, which generally coincides with their delivery

and acceptance.

Revenue from commission and management fees are recognised on accrual basis.

Dividend income is recorded gross in the profit and loss account in the accounting period in which the subsidiary and investee

companies declare a dividend payable.

(s) Employee benefits

The Company has in place the Achieva Limited Share Option Scheme for the granting of share options to eligible employees of

the Group to subscribe for ordinary shares in the Company. There is no charge to the profit and loss statement upon the grant

or exercise of the options as the exercise price approximates the market value of the shares at the date of grant. Details of the

Scheme are disclosed in Note 26 to the financial statements.

Defined contribution plan

As required by law, the companies in Singapore make contributions to the state pension scheme, the Central Provident Fund

(CPF). Certain of the Group’s companies outside Singapore make contributions to their respective countries’ pension scheme.

Such contributions are recognised as compensation expenses in the same period as the employment that gives rise to the

contributions.

Employee entitlements

Liabilities for annual leave are recognised and are measured as the amount unpaid at the balance sheet date at current pay rates

in respect of employee’s services up to that date.

Employee entitlements expected to be settled within one year together with entitlement arising from wages and salaries,

annual leave and sick leave which will be settled after one year, have been measured at their nominal amount. Other employee

entitlements payable later than one year have been measured at the present value of the estimated future cash outflows to be

made for those entitlements.

35




(t) Government grants

Grants from the government are recognised at their fair value where there is reasonable assurance that the grant will be

received and all attaching conditions will be complied with.

Income-related grants are credited to the profit and loss account over the periods necessary to match them on a systematic

basis to the costs that are intended to compensate.

Asset-related grants are accounted at the deducted fair value in arriving at the carrying amount of the related assets.

(u) Borrowing costs

Borrowing costs are charged to the profit and loss account when incurred.

3. RevenueRevenue of the Company represents management fee income and dividend income. Revenue of the Group represents the invoiced

value of goods supplied and services rendered to customers less returns and discounts, and sales commission income.

Transactions within the Group have been excluded in the Group’s revenue.

Group Company2001 2000 2001 2000

$’000 $’000 $’000 $’000

Sale of goods 481,866 338,922 – –

Commission income 378 1,097 – –

Management fees – – 961 965

Dividend income – – 1,949 7,641

482,244 340,019 2,910 8,606

36



4. Other revenueGroup Company

2001 2000 2001 2000$’000 $’000 $’000 $’000

Interest income:

- bank 571 492 73 94

- subsidiary companies – – 1,266 892

Marketing fees received 903 693 – –

Management fees received 23 – – –

Rental income 51 41 172 112

Write-back of provision for stock obsolescence 36 27 – –

Gain on disposal of property, plant and equipment 87 – – –

Write-back of provision for doubtful debts 26 – – –

Bad debts recovered 94 9 – –

Government grants 269 – – –

Gain on disposal of a subsidiary company 155 – – –

Other miscellaneous income 121 69 14 –

2,336 1,331 1,525 1,098

5. Other operating expensesGroup Company

2001 2000 2001 2000$’000 $’000 $’000 $’000

Provision for stock obsolescence 476 319 – –

Stocks written off 128 364 – –

Provision for doubtful debts

- trade 524 683 – –

- non-trade 23 24 – –

Provision for impairment in value of

investment in a subsidiary company – – 1,886 438

Provision for amount due from a subsidiary company – – 2,153 162

Bad debts written off 127 183 – –

Amortisation of goodwill 414 35 – –

Investment written off – 26 – 26

Provision for impairment in value of freehold property 457 – 457 –

2,149 1,634 4,496 626

37



6. Profit/(loss) from operating activitiesGroup Company

2001 2000 2001 2000$’000 $’000 $’000 $’000

Profit/(loss) from operating activities is stated after

charging/(crediting):

Auditors’ remuneration:

- auditors of the Group

- current year 123 142 45 45

- (over)/underprovision in prior year (1) 40 5 24

- others 34 31 – –

Depreciation 1,160 628 322 69

Directors’ emoluments:

- CPF 215 153 64 24

- salaries, bonus and other costs 3,257 4,733 1,048 573

Staff cost (excluding Executive Directors):

- CPF and other defined contributions 974 391 80 41

- salaries, bonus and other costs 7,569 6,470 754 547

Property, plant and equipment written off 53 155 – 36

Rental expenses 826 624 166 102

7. Financial expenses/(gain), netGroup Company

2001 2000 2001 2000$’000 $’000 $’000 $’000

Bank charges 667 104 1 2

Interest expense

- trust receipts 1,690 1,616 – –

- overdraft interest – – 1 –

- term loan 15 46 – 31

- hire purchase 33 15 10 –

- subsidiary companies – – 184 219

Net exchange (gain)/loss (974) 1,252 (364) (62)

1,431 3,033 (168) 190

38



8. TaxationGroup Company

2001 2000 2001 2000$’000 $’000 $’000 $’000

Provision for taxation in respect of profit for the year:

- current taxation 2,370 3,485 384 1,999

- deferred taxation 430 151 192 32

(Over)/under provision in respect of previous year (78) 58 – 50

2,722 3,694 576 2,081

The taxation charge for the Company arose because of certain non-deductible expenses.

The taxation charge for the Group differs from the amount determined by applying the Singapore income tax rate of 24.5%

(2000: 25.5%) to the pre-tax profits because of certain non-deductible expenses, losses incurred by certain subsidiary companies

which cannot be offset against profits by other subsidiary companies, partially offset by the utilisation of unabsorbed tax losses by

certain subsidiary companies.

Certain subsidiary companies have estimated tax losses amounting to approximately $4,284,000 (2000: $1,466,000) and unutilised

capital allowances of approximately $288,000 (2000: $203,000) available for set-off against future taxable income, subject to agreement

with the relevant authorities.

9. Earnings per shareBasic earnings per share are calculated by dividing the net profit for the year attributable to ordinary shareholders by the weighted

average number of ordinary shares outstanding during the year.

Diluted earnings per share are calculated by dividing the net profit attributable to ordinary shareholders by the weighted average

number of ordinary shares outstanding during the year (adjusted for the effects of dilutive options).

39



9. Earnings per share (cont’d)

The following reflects the income and share data used in the basic and diluted earnings per share computations for the years ended

31 December:

Group2001 2000

$’000 $’000

Group earnings used for the calculation of EPS:

Profit for the financial year 3,917 8,851

Number of shares used for the calculation of EPS:Number of shares

(In thousands)

Basic EPS:

Weighted average number of ordinary shares in issue during the year 425,442 371,148

Effect of dilutive securities:

Share options 1,161 724

Adjusted weighted average number of shares applicable to diluted earnings per share 426,603 371,872

There have been no other transactions involving ordinary shares or potential ordinary shares since the reporting date and before the

completion of these financial statements.

10. DividendGroup and Company

2001 2000$’000 $’000

Final dividend in respect of the previous financial year of 0.20 cents

per ordinary share less 24.5% tax (2000: nil) 625 –

40



11. Property, plant and equipmentOffice equipment,

computer, furniture Motor Freehold Machinery and fittings vehicles Renovation property Shop lot and tools Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Group

Cost:

As at 1 January 2001 2,639 382 717 1,228 292 65 5,323

Currency realignment 62 7 2 – 19 1 91

Additions 1,763 621 372 – – – 2,756

Disposals/written off (635) (59) (245) – (311) (9) (1,259)

Disposal of a subsidiary company (21) – – – – – (21)

Reclassifications 30 – (30) – – – –

Impairment loss – – – (457) – – (457)

As at 31 December 2001 3,838 951 816 771 – 57 6,433

Accumulated depreciation:

As at 1 January 2001 1,394 139 131 61 13 21 1,759

Currency realignment 51 6 1 – 1 – 59

Charge for the year 791 150 189 11 3 16 1,160

Disposals/written off (378) (38) (40) – (17) (2) (475)

Disposal of a subsidiary company (9) – – – – – (9)

As at 31 December 2001 1,849 257 281 72 – 35 2,494

Charge for 31 December 2000 468 68 56 12 3 21 628

Net book value:

As at 31 December 2001 1,989 694 535 699 – 22 3,939

As at 31 December 2000 1,245 243 586 1,167 279 44 3,564

41



11. Property, plant and equipment (cont’d)

Office equipment,computer, furniture Motor Freehold

and fittings vehicles Renovation property Total$’000 $’000 $’000 $’000 $’000

Company

Cost:

As at 1 January 2001 475 – 333 1,228 2,036

Additions 563 420 23 – 1,006

Disposals/written off (204) – (202) – (406)

Reclassifications 30 – (30) – –

Impairment loss – – – (457) (457)

As at 31 December 2001 864 420 124 771 2,179

Accumulated depreciation:

As at 1 January 2001 224 – 38 61 323

Charge for the year 198 72 41 11 322

Disposals/written off (173) – (39) – (212)

As at 31 December 2001 249 72 40 72 433

Charge for 31 December 2000 52 – 5 12 69

Net book value:

As at 31 December 2001 615 348 84 699 1,746

As at 31 December 2000 251 – 295 1,167 1,713

42



11. Property, plant and equipment (cont’d)Group

2001 2000$’000 $’000

(a) Net book value of motor vehicles and office

equipment includes assets under finance leases 502 143

(b) The Group’s property as at 31 December 2001 is:

Description Location Tenure/area

Flatted factory unit 37 Kallang Pudding Road Freehold

#09-03 Tong Lee Building

Blk B, Singapore 349314 Built-in area: 2,820 sq ft

(c) The impairment loss represents the write down of the company’s freehold property to its recoverable amount. The recoverable

amount is based on an independent valuation carried out by GSK Valuers & Property Consultants Private Limited. The valuation

has been carried out on the basis of open market valuation.

12. Investment in subsidiary companiesCompany

2001 2000$’000 $’000

Balance as at 1 January 9,238 5,003

Purchase of additional shares in a subsidiary company 6,150 –

Incorporation of a subsidiary company – 7,004

Distribution from pre-acquisition reserve – (2,769)

Balance as at 31 December 15,388 9,238

Provision for impairment in value of investment (2,324) (438)

13,064 8,800

Analysis of provision for impairment in value of investment:

Balance at beginning of financial year 438 –

Charge to profit and loss account 1,886 438

Balance at end of financial year 2,324 438

43



12. Investment in subsidiary companies (cont’d)

The subsidiary companies as at 31 December are:

Name of company Percentage(Country of Principal activities Cost of investment of equity heldincorporation) (place of business) to Company by the Group

2001 2000 2001 2000$’000 $’000 % %

Held by Achieva Limited

Achieva Electronics Distributor and commission agent of 500 500 100 100

Pte Ltd electronic inter-connectivity devices and

(Singapore) structured cabling and premise wiring

(Singapore)

Achieva Components Distributor and manufacturers’ 800 800 100 100

Pte Ltd representative of electronic

(Singapore) components and related products

(Singapore)

Achieva Technology Distributor of information 6,650 500 100 100

Pte Ltd technology computer peripherals,

(Singapore) components and software

(Singapore)

@ Stacks Holdings Investment holding, rental of 4,384 38 100 100

Sdn. Bhd. properties and general trading

(Malaysia) (Malaysia)

Achieva Investments Pte Ltd Investment holding 7,000 7,000 100 100

(Singapore) (Singapore)

15,388 9,238

Held through Achieva Electronics Pte Ltd

@ Achieva Electronics Distributor and commission agent – – 100 100

Sdn. Bhd. of electronic inter-connectivity devices

(Malaysia) and structured cabling products

(Malaysia)

* Achieva China Ltd Distributor and commission agent – – 60 60

(Hong Kong) of inter-connectivity devices and

structured cabling

(Hong Kong)

44





2001 2000 2001 2000$’000 $’000 % %

Held through Achieva Components Pte Ltd

@ Achieva Components Distributor and manufacturers’ – – 100 100

Sdn. Bhd. representative of electronic components

(Malaysia)

+ Achieva Components Importers and exporters of electronic – – 100 –

(India) Private Limited components and related products

(Singapore) (Singapore)

Held through Achieva Technology Pte Ltd

* Achieva Technology Distribution of information technology – – 100 100

Sdn. Bhd. computer peripherals parts, software

(Malaysia) and related products

(Malaysia)

Achieva Technology Distribution of information technology – – 100 51

East Asia Pte Ltd computer peripherals parts, software

(Singapore) and related products

(Singapore)


Australia Pte Ltd computer peripherals parts, software


(Singapore)


Philippines Pte Ltd computer peripherals parts, software


(Singapore)


Indonesia Pte Ltd computer peripherals parts, software

(formerly known as Achieva and related products

Technology Service Centre Pte Ltd) (Singapore)

(Singapore)

+@ Achieva Technology Distribution of information technology – – 51 –

China Limited computer peripherals, components

(Hong Kong) and software

(Hong Kong)

45





2001 2000 2001 2000$’000 $’000 % %

Held through Achieva Technology Sdn. Bhd.

* Achieva Service Centre Provide contract, repairs and maintenance – – 80 80

Sdn. Bhd. services of information technology

(Malaysia) systems and personal computers

(Malaysia)

Held through Achieva Technology Australia Pte Ltd

@ Achieva Technology Distributor of information technology – – 100 51

Australia Pty Ltd computer peripherals parts, software

(Australia) and related products

(Australia)

Held through Stacks Holdings Sdn. Bhd.

@ Stacks Technology Distribution of data networking products – – 100 100

Sdn. Bhd. and planning, configuration and

(Malaysia) installation of data networking systems

(Malaysia)

@ Mangrove Networks Distribution of data networking products – – 100 100

Sdn. Bhd. and providing contract maintenance

(Malaysia) services for data networking systems

(Malaysia)

@ Stacks Systems Trading in computer hardware and – – 100 100

Sdn. Bhd. software and all its related products

(Malaysia) and services

(Malaysia)

46





2001 2000 2001 2000$’000 $’000 % %

Held through Achieva Investments Pte Ltd

# Achieva-Tai Sol Distribution of CPU cooling solutions – – – 60

Technologies Pte Ltd (Singapore)

(Singapore)

Nano Storage Pte Ltd Development, marketing and support – – 65 65

(Singapore) of products for digital multimedia and

controller silicon needed to operate

digital multimedia storage

(Singapore)

Newtech Electronics Importers and exporters of all types of – – 100 100

Pte Ltd mechanical, electrical and electronic

(Singapore) machines, components and goods

(Singapore)

+@ Achieva Components Distributor of all types of, mechanical, – – 100 –

China Limited electrical and electronics components

(Hongkong) and goods

(Hong Kong)

* Audited by associated firms of Ernst & Young, Singapore

@ Audited by other firms

# Disposed during the year

+ Financial statements for the period ended 31 December 2001 are not required to be audited in the country of incorporation.

47



13. Investment in associated companyGroup

2001 2000$’000 $’000

Unquoted shares, at cost 254 128Share of post-acquisition losses (115) (31)

139 97

Details of the associated company are as follows:-

Name of company Principal activities Percentage of equity(Country of incorporation) (place of business) held by the Group

2001 2000% %

Dexcel Electronics Designs Design centre to provide design and 25 25Private Limited other consultancy services(India) (India)

14. Long term receivableGroup

2001 2000$’000 $’000

Due within 12 months (included in other debtors) 124 –

Due after 12 months 871 868

995 868

Long term receivable relates to a convertible note, which may be converted into preferred stock and warrants of the borrower, in

accordance with the terms of the note. It bears interest at 7% per annum and is receivable over eight quarterly instalments from

December 2002.

15. GoodwillGroup

2001 2000$’000 $’000

Cost

At 1 January 657 –

Acquisition of subsidiary companies 4,248 657

At 31 December 4,905 657

Accumulated amortisation

At 1 January 35 –

Amortisation for the year 414 35

At 31 December 449 35

Net carrying amount

At 31 December 4,456 622

48



16. StocksGroup

2001 2000$’000 $’000

Stocks are stated after deducting provision for stock obsolescence of 715 379

Analysis of provision for stock obsolescence:

Balance at beginning of year 379 108


Charge to profit and loss account 476 319

Written back to profit and loss account (36) (27)

Stocks written off against provision (113) (20)

Balance at end of year 715 379

Stocks written off directly to profit and loss account 128 364

17. Trade debtorsGroup

2001 2000$’000 $’000

Trade debtors are stated after deducting provision for doubtful debts of 1,171 755

Analysis of provision for doubtful debts:

Balance at beginning of year 755 384


Charge to profit and loss account 524 683

Written back to profit and loss account (26) –

Bad debts written off against provision (101) (308)

Balance at end of year 1,171 755

Bad debts written off directly to profit and loss account 127 183

49



18. Other debtorsGroup Company

2001 2000 2001 2000$’000 $’000 $’000 $’000

Deposits 197 616 52 430Prepayments 98 113 16 11Tax recoverable 85 139 85 –Others 7,518 4,649 35 84

7,898 5,517 188 525

Other debtors are stated afterdeducting provision for doubtful debts of 23 26 – –


Balance at beginning of year 26 2 – –Charge to profit and loss account 23 24 – –Bad debts written off against provision (26) – – –

Balance at end of year 23 26 – –

19. Amounts due from/(to) subsidiary companiesCompany

2001 2000$’000 $’000

Amounts receivable:

- trade 114 31- non-trade 30,769 27,969

Amounts payable:

- non-trade (26) (917)

30,857 27,083Provision for doubtful debts (2,153) (162)

Amounts due from subsidiary companies 28,704 26,921


Balance at beginning of year 162 –Bad debts written off against provision (162) –Charge to profit and loss account 2,153 162

Balance at end of year 2,153 162

Amounts receivable:

- trade 418 21- non-trade 523 2,328

Amounts payable:

- non-trade (6,734) (7,212)

Amounts due to subsidiary companies (5,793) (4,863)

50



19. Amounts due from/(to) subsidiary companies (cont’d)

Trade amounts receivable and payable from/(to) subsidiary companies are interest-free, unsecured and have no fixed terms of repayment.

Non-trade amounts receivable from subsidiary companies are unsecured, have no fixed terms of repayment and bear interest at SIBOR

rate plus 2/3 of the difference between trust receipt interest rate and SIBOR rate for U.S. dollar denominated loans and deposit rate

plus 2/3 of the difference between prime rate and deposit rate for Singapore dollar denominated loans.

Non-trade amounts payable to subsidiary companies are unsecured, have no fixed terms of repayment and bear interest at SIBOR rate

plus 1/3 of the difference between trust receipt interest rate and SIBOR rate for U.S. dollar denominated loans and deposit rate plus

1/3 of the difference between prime rate and deposit rate for Singapore dollar denominated loans.

20. Amounts due from/(to) related parties

The amounts due from related parties are unsecured, interest-free and are repayable on demand.

The amount due to a related party is unsecured, has no fixed terms of repayment and bears interest at 10% per annum.

The related parties refer to companies in which a Director of the Company is a common director and a substantial shareholder.

21. Fixed deposits

Fixed deposits of the Group amounting to $485,000 (2000: $222,000) has been pledged to banks as security for the use of banks’ facilities.

22. Amounts due to bankers, unsecuredGroup

2001 2000$’000 $’000

Trust receipts 18,357 16,630

Overdrafts – 34

18,357 16,664

23. Term loansGroup

2001 2000$’000 $’000

Due within 12 months – 21

Due after 12 months – 134

– 155

The Group’s term loan is secured on the Group’s shop lot and the joint and several guarantees of the subsidiary’s directors of which

certain directors are also Directors of the Company. The loan is repayable over 10 years and bears interest at between 1% to 1.7% per

annum above the bank’s base lending rate.

The term loan was fully repaid during the financial year.

51



24. Obligations under finance lease contractsThe Group and Company lease motor vehicles and office equipment under non-cancellable lease arrangements. Future minimum

lease payments under finance leases together with the present value of the net minimum lease payments are as follows:-

Present PresentMinimum value of Minimum value ofpayments payments payments payments

2001 2001 2000 2000$’000 $’000 $’000 $’000

Group

Within one year 150 129 41 34

After one year but not more than five years 414 362 71 51

Total minimum lease payments 564 491 112 85

Less amounts representing finance charges (73) – (27) –

Present value of minimum lease payments 491 491 85 85

Company

Within one year 95 84 – –

After one year but not more than five years 296 262 – –

Total minimum lease payments 391 346 – –

Less amounts representing finance charges (45) – – –

Present value of minimum lease payments 346 346 – –

25. Deferred taxationGroup Company

2001 2000 2001 2000$’000 $’000 $’000 $’000

Balance at beginning of year 156 5 32 –

Provided during the year 430 151 192 32

Balance at end of year 586 156 224 32

Deferred taxation arises as a result of:

Excess of net book value over tax written down

value of property, plant and equipment 196 27 147 17

Other timing differences 390 129 77 15

586 156 224 32

52



26. Share capitalCompany

2001 2000$’000 $’000

Authorised:

Balance at beginning of year

600,000,000 ordinary shares of $0.05 each

(2000: 30,000,000 ordinary shares of $1.00 each) 30,000 30,000

Sub-division of 30,000,000 ordinary shares of

$1.00 each to 600,000,000 ordinary shares

of $0.05 each during 2000 – –

Balance at end of year

60,000,000 ordinary shares of $0.05 each 30,000 30,000

Issued and fully paid:

Balance at beginning of year

414,147,740 ordinary shares of $0.05 each

(2000: 10,178,077 ordinary shares of $1.00 each) 20,707 10,178

Bonus issue of nil (2000: 5,352,310)

ordinary shares of $1.00 each – 5,352

Sub-division of 15,530,387 ordinary shares of $1.00 each

to 310,607,740 ordinary shares of $0.05 each during 2000 – –

Issue of 33,245,436 ordinary shares of $0.05 each at $0.185 per share

(2000: 103,540,000 ordinary shares of $ 0.05 each comprising

95,286,000 shares at $0.22 per share and 8,254,000 shares

at $0.20 per share) 1,662 5,177

Balance at end of year

447,393,176 (2000: 414,147,740 ) ordinary shares of $0.05 each 22,369 20,707

The Achieva Share Options Scheme (SOS) grants options to the Non-Executive Directors and employees of the Group. Options are

granted for terms of 10 years to purchase the shares of the Company at an exercise price of $0.1547. The options are exercisable

beginning on the first anniversary from the date the options are granted.

The Achieva Share Option Agreement (SOA) grants options to 10 selected employees of the Group. The employees may exercise the

options to subscribe for not more than 40% of the shares under such options on or after the date falling 2 years from 1 June 2000 and

may exercise the options to subscribe for the remaining shares on or after the date falling 3 years from 1 June 2000 provided the

exercising employee remains an employee on that date of exercise. No options should be exercisable after 31 May 2004.

53



26. Share capital (cont’d)

Information with respect to the number of options granted under the SOS and SOA is as follows:

CompanySOS SOA

2001 2000 2001 2000

Outstanding as at 1 January – – 1,800,000 –

Granted on 19/5/2000 – – – 1,800,000

Granted on 18/10/2001 13,806,003 – – –

Exercised – – – –

Cancelled – – – –

Outstanding as at 31 December 13,806,003 – 1,800,000 1,800,000

None of the share options are exercisable.

Details of share options granted during the financial year:

Expiry date 18.10.2011

Exercise price $0.1547

Aggregate proceeds if shares are issued ($’000) 2,136

27. ReservesGroup Company

2001 2000 2001 2000$’000 $’000 $’000 $’000

Share premium 20,668 16,180 20,668 16,180

Capital reserve 502 502 – –

Accumulated profits/(losses) 14,974 11,682 (2,955) 820

Foreign currency translation reserve (238) (292) – –

Total reserves 35,906 28,072 17,713 17,000

54



28. Cash and cash equivalents

Cash and cash equivalents included in the consolidated statement of cash flows comprise the following balance sheet amounts:

Group2001 2000

$’000 $’000

Fixed deposits 18,697 10,683

Cash and bank balances 11,442 9,942

Bank overdrafts (note 22) – (34)

30,139 20,591

29. Related party transactionsIn addition to the related party information disclosed elsewhere in the financial statements, significant related party transactions

entered into by the Group and the Company on terms agreed between the parties were as follows:

Group Company2001 2000 2001 2000$’000 $’000 $’000 $’000

Related parties

Sales (56,343) – – –

Purchases 3 – – –

Rental expense 25 96 – –

Marketing fees received (126) – – –

Management fee 210 – – –

Professional fee paid – 39 – –

Administrative fee paid – 2 – –

Subsidiary companies

Rental expense – – – 94

Rental income – – (134) (75)

Professional fee paid – – – 39

Marketing fees received – – – (134)

The related parties refer to companies in which a Director of the Company is a common director and a substantial shareholder and a

firm in which a Director of the Company is a partner.

55


30. CommitmentsGroup

2001 2000$’000 $’000

Future capital expenditure:

Commitments in respect of contracts placed:

- for purchase of plant and equipment – 156

- for investment – 982

– 1,138

Other commitments:

Commitments in respect of forward contracts placed 4,600 14,300

4,600 15,438

The Group’s exposure to net unrealised exchange losses on the above forward contracts which has not been recognised in the Group’s

financial statements amounted to $10,000 (2000: $282,000).

31. Financial Instruments

Financial risk management objectives and policies

The main risks faced by the Group are foreign currency risks, interest rate risks and credit risks that arise through its normal operations.

Foreign currency risks

Foreign currency risk arises from a change in foreign currency exchange rate, which is expected to have adverse effect on the Group in

the current reporting period and in future years. The Group operates within the Asia Pacific region and companies within the Group

maintain their books and records in their respective functional currencies. The Group’s accounting policy is to translate the

profits/losses of overseas companies using the monthly average exchange rates. Net assets denominated in foreign currencies and

held at the year end are translated into Singapore dollars, the Group’s reporting currency, at year end exchange rates. Fluctuations in

the exchange rate between the functional currencies and Singapore dollars will therefore have an impact on the Group. It is the

Group’s policy not to hedge exposures arising from such translations.

The Group and Company are exposed to the volatility in the foreign currency cash flows from sales and purchases denominated in

foreign currencies, primarily in USD. The Group and Company rely on natural hedging as a risk management tool.

The Group’s subsidiary company in Australia uses foreign currency forward exchange contracts with settlement period within one

month to manage foreign currency exposures arising from normal trading activities. The outstanding forward exchange contracts are

disclosed in Note 30 to the financial statements.


56



31. Financial Instruments (cont’d)

Interest rate risks

Interest rate risk is the risk that changes in interest rates will have an adverse financial effect on the Group’s financial conditions

and/or results. The primary source of the Group’s interest rate risk is its borrowings from banks and other financial institutions

in Singapore.

The Group does not hedge interest rate risks. The Group ensures that it obtains borrowings at competitive interest rates under the

most favourable terms and conditions.

Credit risks

Credit risk is the risk that companies and other parties will be unable to meet their obligations to the Group resulting in financial

loss to the Group. It is the Group’s policy to enter into transactions with a diversity of credit-worthy counterparties to mitigate

any significant concentration of credit risk. The Group and Company ensure that sales of products and services are made to

customers with appropriate credit history and have internal mechanisms to monitor the granting of credit and management of

credit exposures. The Group and Company have made provisions for potential losses on credits extended. The Group’s and Company’s

maximum exposure to credit risk in the event the counterparties fail to perform their obligations in relation to each class of

recognised financial assets is the carrying amounts of those assets as indicated in the balance sheet. The Group and Company have

no significant concentration of credit risk.

Fair value of financial assets and financial liabilities

The carrying amount of the long term receivable approximates its fair value which is equivalent to its net present value based on the

lending rate of 7%.

The carrying amounts of trade and other receivables, cash, trade and other payables and short-term loans approximate their fair

values due to their short-term nature.

57



32. Group segment informationBusiness segments: for management purposes, the Group is organised into four major sub-groups. The sub-groups are the basis on

which the Group reports its primary segment information. Revenue of the other segment relates to that of the Company and represents

principally management fee income and dividend income from the sub-groups, which had been eliminated on a group basis. Financial

information about business segments is presented as follows:

PC peripherals, Data networkingparts and Electronic products Strategicsoftware components and services Technologies Others Consolidated Eliminations

2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue

External revenue 406,479 275,046 73,239 60,696 2,508 4,277 18 – – – – – 482,244 340,019Intersegment

revenue 2 25 23 32 – – – – 2,910 8,606 (2,935) (8,663) – –

Total 406,481 275,071 73,262 60,728 2,508 4,277 18 – 2,910 8,606 (2,935) (8,663) 482,244 340,019

Result

Segment result 3,403 7,705 6,680 8,140 88 (462) (1,385) – (3,717) 7,029 2,090 (7,613) 7,159 14,799

Interest expense (1,738) (1,677)

Interest income 571 492

Profit beforetaxation 5,992 13,614

Share of associatedcompany’sloss (84) (31)

Taxation (2,722) (3,694)Minority interest 731 (1,038)

Profit for the financial year 3,917 8,851

Segment assets 69,987 91,262 34,279 31,555 934 1,803 728 – 46,908 43,537 (47,642) (41,737) 105,194 126,420Investment in

associatedcompany 139 97

Unallocated assets 84 139

Total assets 105,417 126,656

Segment liabilities 31,536 60,004 10,426 10,435 340 3,601 441 – 6,342 5,689 (5,873) (8,602) 43,212 71,127Unallocated

liabilities 3,804 3,966

Total liabilities 47,016 75,093

Other information:Capital expenditure 891 252 401 1,131 13 40 444 – 1,007 540 – – 2,756 1,963Depreciation 444 374 227 135 37 50 129 – 323 69 – – 1,160 628Amortisation

of goodwill 283 – 131 35 – – – – – – – – 414 35Impairment loss – – – – – – – – 457 – – – 457 –

58

32. Group segment information (cont’d)

Geographical segments: although the sub-groups manage the Group, they operate in eight principal countries. Each company in

the Group is classified by the key market(s) that each was set up to serve, irrespective of its country of incorporation or operations.

The markets are defined by reference to the billing address rather than the shipping destination of goods.

An analysis of geographical segment information is as follows:

Revenue Segment assets Capital expenditure2001 2000 2001 2000 2001 2000

$’000 $’000 $’000 $’000 $’000 $’000

Singapore 110,779 96,653 59,756 59,009 2,285 1,690

Malaysia 108,422 96,927 16,078 27,2 1 3 75 1 1 4

Australia 109,850 92,948 15,651 20,542 232 159

Vietnam 22,571 32,644 8,588 16,034 – –

PRC (including Hong Kong) 85,897 4,831 15 79 – –

Philippines 16,203 9,068 2,225 2,434 102 –

Indonesia 19,383 6,948 3,104 1,345 62 –

India 9,139 – – – – –

Total 482,244 340,019 105,417 126,656 2,756 1,963

35. Additional information required by the SGX-ST

The number of Directors of the Company whose emoluments fall within the following bands:

2001 2000

Non- Non-Executive Executive Executive Executivedirectors directors Total directors directors Total

$500,000 and above 2 – 2 1 – 1

$250,000 to $499,999 3 – 3 3 – 3

Below $250,000 1 2 3 1 2 3

6 2 8 5 2 7

36. Subsequent eventsOn 4 March 2002, Achieva Components Pte Ltd entered into a joint venture agreement with Tecnomic Marketing Service Private

Limited (“Tecnomic”) to operate Achieva Components (India) Private Limited (“AC India”). As at 31 December 2001, AC India is a wholly

owned subsidiary of Achieva Components Pte Ltd.

Pursuant to the agreement, AC India will increase its issued share capital from $2 divided into 2 ordinary shares of $1 each to $300,000

divided into 300,000 ordinary shares of $1 each. Achieva Components Pte Ltd and Tecnomic will own 65% and 35% respectively of the

enlarged share capital of AC India.

37. Comparative figuresCertain comparative amounts have been reclassified to conform with current year’s presentation.



59

Shareholding Statisticsas at 17 April 2002

Achieva Limited

Distribution of Shareholdings

Size of Shareholdings No. of Shareholders % No. of Shares %

1 – 1,000 356 9.79 356,000 0.08

1,001 – 10,000 1,839 50.58 10,531,000 2.35

10,001 – 1,000,000 1,418 39.00 82,852,450 18.52

1,000,001 and above 23 0.63 353,653,726 79.05

Total 3,636 100.00 447,393,176 100.00

Twenty Largest Shareholders

No. Name No. of Shares %

1 Citibank Nominees Singapore Pte Ltd 201,406,641 45.02

2 Christopher Ng Chee Seng 30,232,1 1 6 6.76

3 Huang Ting-Chu @ Tim Huang 22,237,826 4.97

4 Grand Folk Limited 15,886,011 3.55

5 Gui Yock Meng 13 ,002,752 2.9 1

6 Lo Ju Jie 12 ,805,815 2.86

7 Citibank Consumer Nominees Pte Ltd 1 1 ,498,034 2.57

8 Tan Phuan Lam 6,852,756 1 .53

9 Soh Kim Yong 5,1 57,000 1 . 1 5

10 OCBC Securities Private Ltd 4,440,000 0.99

11 Phillip Securities Pte Ltd 3,592,000 0.80

12 United Overseas Bank Nominees Pte Ltd 3,353,000 0.75

13 DBS Nominees Pte Ltd 3,195,000 0.7 1

14 Cheng Chee Khon 3,188,546 0.7 1

15 Kim Eng Ong Asia Securities Pte Ltd 2,7 19,740 0.61

16 Oh Chon Seng 2,345,489 0.52

17 DBS Vickers Securities (S) Pte Ltd 2,260,000 0. 5 1

18 Oversea-Chinese Bank Nominees Pte Ltd 2,1 72,000 0.49

19 Goh Lik Tuan 1,985,000 0.44

20 UOB Kay Hian Pte Ltd 1,945,000 0.43

Total 350,274,726 78.28

Substantial Shareholders

No. Name No. of Shares %

1 Henry Lim Yong Choon 106,412,009 23.78

2 William Pok Tam Soon 36,305,064 8 .1 1

3 Christopher Ng Chee Seng 30,232,1 1 6 6.76

4 Mark Soh Eng Kuang 22,746,825 5.08

60

Notice of Annual General Meeting Achieva Limited

Notice is hereby given that the Eighth Annual General Meeting of Achieva Limited will be held at 240 MacPherson Road, #02-02/03/04

Pines Industrial Building, Singapore 348574 on Friday, 31 May 2002 at 10.00 a.m. for the following business :-

Ordinary Business1. To receive and adopt the Directors’ Report and Audited Accounts for the year ended 31 December 2001. (Resolution 1)

2. To approve the payment of Directors’ Fees. (Resolution 2)

3. To re-elect Mr. Lew Syn Pau as a Director retiring under Article 110 of the Articles of Association of the Company. (Resolution 3)

4. To re-elect Mr. William Pok Tam Soon as a Director retiring under Article 110 of the Articles of Association of the Company.

(Resolution 4)

5. To re-elect Mr. Allan Yong Heng Chong as a Director retiring under Article 120 of the Articles of Association of the Company.

(Resolution 5)

6. To reappoint Messrs Ernst & Young as Auditors of the Company and authorise the Directors to fix their remuneration. (Resolution 6)

Special Business

To consider and, if thought fit, to pass the following Resolutions with or without any modification as Ordinary Resolutions :

7(a). “That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors be and are hereby authorised to issue and allot (including the

issue and allotment of shares pursuant to offers, agreements or options made or granted by the Company while this authority remains

in force) or otherwise dispose of shares in the Company (including making and granting offers, agreements and options which would or

which might require shares to be issued, allotted or otherwise disposed of) at any time, whether during the continuance of such

authority or thereafter, to such persons, upon such terms and conditions and for such purposes as the Directors may in their absolute

discretion deem fit without first offering such shares to the members of the Company provided that the aggregate number of shares to

be issued pursuant to this Resolution shall not exceed fifty (50) per cent. of the issued share capital of the Company for the time being,

and provided further that where members of the Company with registered addresses in Singapore are not given an opportunity to

participate in the same on a pro-rata basis, then the shares to be issued under such circumstances shall not exceed twenty (20) per cent.

of the issued share capital of the Company for the time being.” (Resolution 7)

7(b). “That pursuant to Section 161 of the Companies Act, Cap. 50, approval be and is hereby given to the Directors to exercise full powers of the

Company to allot, issue or otherwise dispose of shares in the Company pursuant to the exercise of options granted in connection with or

pursuant to the terms and conditions of the Achieva Share Option Agreement dated 19 May 2000 entered into between the Company and

10 selected employees of the Company and its subsidiaries approved by Shareholders of the Company (“Shareholders”) in general meeting

on 19 May 2000 and as may be amended from time to time (the “2000 Agreement”) (notwithstanding that such allotment and issue may

occur after the conclusion of the next or any ensuing annual general meeting of the Company).” (Resolution 8)

61

Notice of Annual General MeetingAchieva Limited

7(c). “That pursuant to Section 161 of the Companies Act, Cap. 50, approval be and is hereby given to the Directors to exercise full powers of

the Company to issue, allot or otherwise dispose of shares in the Company pursuant to the exercise of options granted in connection

with or pursuant to the terms and conditions of the Achieva Limited Share Option Scheme approved by Shareholders in general

meeting on 31 May 2001 and as may be amended from time to time (the “2001 Scheme”) (notwithstanding that such issue and allotment

may occur after the conclusion of the next or any ensuing Annual General Meeting of the Company) and, in connection with or

pursuant to the 2001 Scheme, to make and grant offers, agreements and options which would or may require shares to be issued,

allotted or otherwise disposed of, whether during the continuance of this authority or thereafter, upon such terms and conditions as

the Directors may in their absolute discretion deem fit.” (Resolution 9)

8. “That the Directors be and are hereby authorised to offer and grant, within a period of 30 days from the date of this Meeting, on the

terms of and pursuant to the Rules of the 2001 Scheme to Mr. Henry Lim Yong Choon, who is a Controlling Shareholder (as defined in

the 2001 Scheme) of the Company, options under the 2001 Scheme to subscribe for 900,000 shares of S$0.05 each in the capital of the

Company (“Shares”) at a subscription price equal to the volume-weighted average price of the Shares for the three (3) consecutive

market days on which dealings in Shares took place on the Singapore Exchange Securities Trading Limited immediately preceding the

date of this Meeting, such options being exercisable for a period commencing on (and including) the first anniversary and ending on

(and including) the tenth anniversary of the date of grant of such options, and to allot and issue shares upon the exercise of any such

options (notwithstanding that the exercise thereof or such allotment and issue may occur after the conclusion of the next or any

ensuing Annual General Meeting of the Company).” (Resolution 10)

9. “That the Directors be and are hereby authorised to make purchases (whether by way of market purchases or off-market purchases on

an equal access scheme) from time to time of ordinary shares of S$0.05 each (or such other nominal value for the time being) up to ten

(10) per cent. of the issued ordinary share capital of the Company as at the date of this Resolution at the price of up to but not

exceeding the Maximum Price as defined in the “Guidelines on Share Purchases” set out in the Appendix on pages 11 to 13 of the Circular

dated 12 November 2001 to the Shareholders (“Share Purchase Guidelines”), in accordance with the Share Purchase Guidelines, and this

mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the date that the next Annual

General Meeting of the Company is held or is required by law to be held, whichever is the earlier.” (Resolution 11)

10. Any other ordinary business which may be transacted at an Annual General Meeting.

BY ORDER OF THE BOARD

Mr. Allan Yong Heng ChongCompany Secretary

15 May 2002

62

Notes:

A member of the Company entitled to attend and vote at the above Meeting may appoint not more than two proxies to attend and vote in his stead.

Where a member appoints two proxies, he shall specify the proportion of his shareholdings to be represented by each proxy. A proxy need not be a member

of the Company.

The instrument appointing a proxy must be deposited at the Registered Office of the Company not less than 48 hours before the time appointed for

holding the Meeting.

If the member is a corporation, the instrument appointing the proxy must be under seal or the hand of an officer or attorney duly authorised.

Explanatory Note to Resolution 3:Mr. Lew Syn Pau, if re-elected, will remain as Chairman of the Audit Committee. He is considered by the Board of Directors to be an independent director.

Explanatory Notes to Special Business:

Resolution 7Resolution 7 above, if passed, empowers the Directors to issue shares in the Company up to an amount not exceeding fifty (50) per cent. of the issued

share capital of the Company for the time being, provided that where any such shares are to be issued under circumstances in which members of the

Company with registered addresses in Singapore are not given an opportunity to participate in the same on a pro-rata basis, then the shares to be issued

under such circumstances shall not exceed twenty (20) per cent. of the issued share capital of the Company for the time being, for such purposes as they

consider would be in the interest of the Company. This authority will, unless previously revoked or varied at a general meeting, expire at the conclusion

of the next Annual General Meeting of the Company or the expiration of the period within which the next Annual General Meeting is required by law

to be held, whichever is earlier.

Resolution 8Resolution 8 above, if passed, gives authority to the Directors to issue shares in connection with the 2000 Agreement. This authority will, unless

previously revoked or varied at a general meeting, expire at the conclusion of the next Annual General Meeting of the Company or the expiration of the

period within which the next Annual General Meeting is required by law to be held, whichever is earlier. This authority is in addition to the general

authority to issue shares sought under Resolution 7. A copy of the 2000 Agreement is available for inspection by Shareholders during normal office

hours at the Company’s registered office at 240 MacPherson Road, #02-02/03/04 Pines Industrial Building, Singapore 348574.

Resolution 9Resolution 9 above, if passed, empowers the Directors, to issue shares in connection with the 2001 Scheme and to grant offers, agreements and options

which could require shares to be issued. This authority will, unless previously revoked or varied at a general meeting, expire at the conclusion of the next

Annual General Meeting of the Company or the expiration of the period within which the next Annual General Meeting is required by law to be held,

whichever is earlier. This authority is in addition to the general authority to issue shares sought under Resolution 7 and the authority to issue shares

pursuant to the 2000 Agreement sought under Resolution 8. A copy of the 2001 Scheme is available for inspection by Shareholders during normal office

hours at the Company’s registered office at 240 MacPherson Road, #02-02/03/04 Pines Industrial Building, Singapore 348574.


63


Resolution 10Resolution 10 above, if passed, empowers the Directors, within a period of 30 days from the date of the above Meeting, to grant to Mr. Henry Lim Yong

Choon, who is a Controlling Shareholder of the Company, options under the 2001 Scheme to subscribe for 900,000 Shares at a subscription price equal

to the volume-weighted average price of the Shares for the three (3) consecutive market days on which dealings in Shares took place on the Singapore

Exchange Securities Trading Limited immediately preceding the date of this Meeting (the “Subscription Price”), and to issue Shares in connection

therewith. This authority is in addition to the general authority to issue shares sought under Resolution 7 and the authority to issue shares pursuant to

the 2000 Agreement sought under Resolution 8.

Further details regarding the options to be granted to Mr. Henry Lim Yong Choon are set out on page 64 of the Company’s Annual Report for the

financial year ended 31 December 2001.

Resolution 11Resolution 11 above, if passed, empowers the Directors of the Company to make purchases (whether by way of market purchases or off-market purchases on

an equal access scheme) from time to time of up to ten (10) per cent. of the issued ordinary share capital of the Company as at the date of the above Meeting

at the price up to but not exceeding the Maximum Price (as defined in the Circular dated 12 November 2001 to the Shareholders (the “Share Purchase

Mandate Circular”)) (the “Share Purchase Mandate”). The Share Purchase Mandate will, unless previously revoked or varied by the Company in general

meeting, expire at the conclusion of the next Annual General Meeting of the Company or the expiration of the period within which the next Annual General

Meeting is required by law to be held, whichever is the earlier.

A copy of the Share Purchase Mandate Circular is available for inspection by Shareholders during normal office hours at the Company’s registered office

at 240 MacPherson Road, #02-02/03/04 Pines Industrial Building, Singapore 348574. The rationale for the Share Purchase Mandate, the sources of funds

to be used for the Share Purchase Mandate (including the amount of financing), the impact of the Share Purchase Mandate on the Company’s financial

position and the implications arising as a result of the Share Purchase Mandate under The Singapore Code on Take-overs and Mergers are set out on

pages 65 to 70 of the Company’s Annual Report for the financial year ended 31 December 2001.

The shareholdings of the Directors of the Company according to the Company’s register of directors’ shareholdings as at 31 December 2001 are set

out on page 18 of the Company’s Annual Report for the financial year ended 31 December 2001. Save for the disposal by Mr. Raymond Chia Chong

Leong of 10,000,000 Shares, there has been no change to the shareholdings of the Directors of the Company between 31 December 2001 and the

Latest Practicable Date.

As at the Latest Practicable Date, 46.78 per cent. of the issued share capital of the Company is held by the public.

The Company did not buy back any Shares between 28 November 2001 and the Latest Practicable Date.

64

Annex 1

Grant of Share Options to Mr. Henry Lim Yong ChoonThe Company proposes to grant to Mr. Henry Lim Yong Choon, who is a Controlling Shareholder, as defined in the Achieva Limited Share

Option Scheme approved by Shareholders in general meeting on 31 May 2001 and as may be amended from time to time (the “2001 Scheme”)

of the Company, options under the 2001 Scheme to subscribe for 900,000 shares of S$0.05 each in the capital of the Company (“Shares”) at

a subscription price equal to the volume-weighted average price of the Shares for the three (3) consecutive market days on which dealings in

Shares took place on the Singapore Exchange Securities Trading Limited immediately preceding the date of this Meeting (the “Subscription

Price”), and to issue Shares in connection therewith.

The participation in the 2001 Scheme by Mr. Henry Lim Yong Choon was approved by the Shareholders in general meeting on 31 May 2001. As

at 17 April 2002, being the latest practicable date prior to the issue of this notice (the “Latest Practicable Date”), Mr. Henry Lim had a direct

interest of 23.78 per cent. in the Company and did not have any indirect interest in the Company.

Mr. Henry Lim is a co-founder of the Company and is currently the President as well as the Group Chief Executive Officer. He has been with

the Company and its subsidiaries (collectively, the “Group”) since 1993. As President and Group Chief Executive Officer, Mr. Henry Lim formulates

strategies, drives new business initiatives and sets the direction of the Group as a whole. He also plays an important role in ensuring that the

Group remains profitable by, inter alia, seeking growth and improved earnings for the Group. In this connection, he is instrumental in bringing

together strategic alliances with suitable joint venture partners and in the Group’s diversification into distributing new product lines. For

example, Mr. Henry Lim played an important role in the Group’s entry into joint ventures with, inter alia, Kent Ridge Digital Labs, Nanochip

Inc. and Tecnomic Marketing Services Private Limited and in its business expansion into new countries, including China and India. He has also

been involved in the expansion of the Group’s product lines to include batteries for phones, software-related operating systems, customised

design applications for telecommunications, data communications and the Internet.

At present, Mr. Henry Lim receives a monthly salary of S$25,000 and is entitled to an annual wage supplement equivalent to one (1) month’s

salary for every twelve (12) months of service. In addition, Mr. Henry Lim was given a S$150,000 car subsidy in January 2001 and is currently

entitled to be reimbursed for his expenditure on petrol, subject to a cap of S$300 monthly. Mr. Henry Lim is also entitled to participate in the

Group’s profit sharing scheme pursuant to which the directors and/or senior management members of each direct subsidiary of the Company

who have contributed significantly to the relevant subsidiary may participate. Generally, Mr. Henry Lim is entitled to not more than 1.5 per

cent. of the profit before tax (after minority interests, exceptional and extraordinary items but before provision for directors’ fees and profit

sharing) on a consolidated Group basis (“Profit Before Tax”) under the profit sharing scheme. For the financial year ended 31 December 2001,

Mr. Henry Lim received S$251,013 under the profit sharing scheme, being 3 per cent. of the Profit Before Tax.

The Company proposes to grant to Mr. Henry Lim options to subscribe for 900,000 Shares at the Subscription Price. For illustration purposes,

the number of Shares in respect of the options proposed to be granted to Mr. Henry Lim represents 1.34 per cent. of the 67,108,976 Shares

which may be granted under the 2001 Scheme (based on fifteen (15) per cent. of the issued share capital of the Company of S$22,369,659

divided into 447,393,176 Shares as at the Latest Practicable Date). The number of Shares in respect of which options are proposed to be

granted to Mr. Henry Lim and the Subscription Price had been set and approved by the committee comprising Directors of the Company duly

authorised by the Board of Directors of the Company to administer the 2001 Scheme (the “Committee”). The Committee took into consideration

the competitive total remuneration market practice and the significance of the contribution by Mr. Henry Lim to ensure that the number of

options proposed to be granted to Mr. Henry Lim is not excessive and that the Subscription Price is fair.


65

Annex 2

Proposed Share Purchase MandateThe proposed Share Purchase Mandate, when granted, will authorise the Directors, from time to time, to purchase Shares either through

market purchases (“Market Purchases”) or off-market purchases on an equal access scheme as defined in Section 76C of the Companies Act

(“Off-Market Purchases”) of up to a maximum of ten (10) per cent. of the issued ordinary share capital of the Company as at the date of this

Annual General Meeting at the price up to but not exceeding the Maximum Price as defined in the Circular dated 12 November 2001 to the

Shareholders.

The purchase price (excluding ancillary expenses such as related brokerage, goods and services tax, stamp duties and clearance fees) to be

paid for the Shares shall be determined by the Directors, provided that such price must not exceed five (5) per cent. above the average of the

closing market prices of the Shares over the five (5) market days on which transactions in the Shares were recorded, before the day on which

the Market Purchase was made by the Company or the day on which the Company makes an announcement of an offer under the Off-Market

Purchase Scheme (as the case may be).

The Share Purchase Mandate will, unless previously revoked or varied by the Company in general meeting, expire at the conclusion of the

next Annual General Meeting of the Company or the expiration of the period within which the next Annual General Meeting is required by

law to be held, whichever is the earlier.

Rationale For The Share Purchase MandateThe proposed Share Purchase Mandate will give the Directors the flexibility to purchase Shares when circumstances permit, with the objective

of enhancing the earnings per share and/or net asset value per share of the Group. Such flexibility will also allow the Directors to better

manage the Company’s capital structure, dividend payout and cash reserves, and to return surplus cash over and above its capital requirements

in an expedient and cost-effective manner.

The proposed Share Purchase Mandate will thus provide the Company with an efficient mechanism to enhance returns to Shareholders when

circumstances permit. Share purchases will only be effected when the Directors are of the view that such Share purchases will benefit the

Company and its Shareholders.

Source Of FundsThe Company may only apply funds for the Share purchase as provided in the Articles of Association, the Guidelines on Share Purchases and

in accordance with the applicable laws in Singapore. The Company may not purchase its Shares for a consideration other than cash or, in the

case of a Market Purchase, for settlement otherwise than in accordance with SGX-ST’s trading rules. The Company intends to use its internal

sources of funds to finance its purchase or acquisition of Shares. The Company does not intend to obtain or incur any borrowings to finance

the Share purchase.

Any purchases or acquisitions of Shares shall be made out of the Group’s distributable profits which are available for payment as dividends

but excludes any amount in the Company’s share premium account and the capital redemption reserve fund.


66

Financial Impact of the Share Purchase MandateThe impact of the Share Purchase Mandate (as defined in the Company’s Notice of Annual General Meeting) on the Company’s financial

position is set out below:-

The total number of issued shares of S$0.05 each (“Shares”) in the Company as at 17 April 2002, being the latest practicable date prior to the

issue of the Company’s Notice of Annual General Meeting (the “Latest Practicable Date”), is 447,393,176 Shares and the exercise in full of the

Share Purchase Mandate would result in the purchase of up to 44,739,317 Shares.

As the purchased Shares will be cancelled, the issued share capital of the Company will be reduced by the corresponding nominal value

of the purchased Shares. Accordingly, the net tangible assets of the Company and the Group will be reduced by the dollar value of the

Shares purchased.

The financial impact on the Company and its subsidiaries (collectively, the “Group”) arising from purchases or acquisition of Shares which

may be made pursuant to the Share Purchase Mandate will depend on, inter alia, the aggregate number of Shares purchased or acquired and

the consideration paid at the relevant time.

Based on the issued and paid-up share capital of the Company as at the Latest Practicable Date, assuming that the Company purchases

44,739,317 Shares at the maximum price of S$0.1911 per Share (being the price equivalent of five (5) per cent. above the average of the closing

market prices of the Shares for the five (5) consecutive market days on which transactions in the Shares were recorded immediately preceding

the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition of 44,739,317 Shares (excluding ancillary

expenses such as related brokerage, goods and services tax, stamp duties and clearance fees) is approximately S$8,550,000.

On the basis of the assumptions set out above, the financial impact of the acquisition of the 44,739,317 Shares by the Company pursuant to

the Share Purchase Mandate on the audited financial statements of the Group and Company for the financial year ended 31 December 2001

is set out below:-

Group Company

Before Share After Share Before Share After SharePurchase Purchase Purchase PurchaseS$’000 S$’000 S$’000 S$’000

Shareholders’ Funds 58,275 49,725 40,082 31,532

Net Tangible Assets 53,819 45,269 40,082 31,532

Current Assets 96,012 87,462 32,184 23,634

Current Liabilities 46,068 46,068 6,426 6,426

Total Borrowings 18,848 18,848 346 346

Number of Shares 447,393, 1 76 402,653,859 447,393,1 76 402,653,859

Financial Ratios

Net Tangible Assets per Share ($) 0.1 203 0.1 124 0.0896 0.0783

Earnings per Share (S$) 0.0088 0.0097 (0.0070) (0.0078)

Gearing Ratio (%) 0.323 0.379 0.009 0.01 1

Current Ratio (times) 2.08 1.90 5.0 1 3.68


67

As illustrated above, a purchase of a maximum of 44,739,317 Shares will result in a reduction of the net tangible assets of the Group

and the Company and a deterioration of the debt to equity ratios of the Group and the Company. The earnings per share of the

Group will be enhanced.

The Directors emphasise that they do not propose to exercise the Share Purchase Mandate to the extent that it will have a material

adverse impact on the gearing of the Group and the Company. The Share Purchase Mandate will be exercised in accordance with the

“Guidelines on Share Purchases” set out in the Appendix on pages 11 to 13 of the Circular dated 12 November 2001 to the Shareholders and

the Directors will be prudent in exercising the Share Purchase Mandate and only to such extent which the Directors believe will be

beneficial to the Group and the Shareholders from time to time giving consideration to the prevailing market conditions, the financial

position of the Group and other relevant factors.

Tax Implications Arising From The Share PurchasesUnder Section 10J of the Income Tax Act and the Tax Guide 1998/IT/II published on 31 December 1998 by the Inland Revenue Authority of

Singapore (“IRAS”) and IRAS’s press release of 28 February 2000, a company which buys back its own shares using its distributable profits will

be regarded as having paid a dividend to the shareholders from whom the shares are acquired. The company will thus have to provide for the

franking of share purchases at the prevailing corporate tax rate (24.5 per cent. for Year of Assessment 2002) in the same way as paying a taxed

dividend, the amount paid for the share purchase being the deemed net dividend. Franking is not required if the share purchase is out of

exempt profits that can be used to pay exempt dividends. The tax treatment of the receipt from a share purchase in the hands of the

shareholders will depend on whether the disposal arises from a Market Purchase or an Off-Market Purchase.

In relation to a Market Purchase, as the Company is listed on the SGX-ST, the Company may apply to the SGX-ST for a special trading counter

for the purposes of effecting the Market Purchase, subject to approval being obtained from Shareholders for the Share Purchase Mandate.

Proceeds received by Shareholders who sell their Shares to the Company in Market Purchases through the special trading counter set up on

the SGX-ST will, subject to the fulfilment of certain conditions by the Shareholders (including the holding of the Shares for a period of at

least 183 days prior to the sale), be treated for income tax purposes as the receipt of a dividend.

Proceeds received by Shareholders who sell their Shares to the Company in Market Purchases through the normal trading counters

will be treated for income tax purposes like any other disposal of shares and not as a dividend. Whether or not such proceeds are

taxable in the hands of such Shareholders will depend on whether such proceeds are receipt of an income or capital nature. Proceeds

received by Shareholders who sell their Shares to the Company in an Off-Market Purchase will be treated for income tax purposes as

the receipt of a dividend.

Shareholders should note that the foregoing is not to be regarded as advice on the tax position of any Shareholder. Shareholders who are

in doubt as to their respective tax positions or the tax implications of Share purchases by the Company, or who may be subject to tax

whether in or outside Singapore, should consult their own professional advisers.


68


Take-over Code Implications arising from Share PurchasesIf, as a result of any purchase or acquisition by the Company of its Shares, a Shareholder’s proportionate interest in the voting capital of the

Company increases, such increase will be treated as an acquisition for the purposes of The Singapore Code on Take-overs and Mergers (the

“Take-over Code”). If such increase results in the change of control, or, as a result of such increase, a Shareholder or group of Shareholders

acting in concert obtains or consolidates effective control of the Company, such Shareholder or group of Shareholders acting in concert

could become obliged to make a take-over offer for the Company under Rule 14 of the Take-over Code.

Under the Take-over Code, persons acting in concert comprise individuals or companies who, pursuant to an agreement or understanding

(whether formal or informal) co-operate, through the acquisition by any of them of shares in a company to obtain or consolidate effective

control of that company. Unless the contrary is established, the following persons will be presumed to be acing in concert, namely (a) a company

with any of its directors and (b) a company, its parent, subsidiaries and fellow subsidiaries, and their associated companies, and companies of

which such companies are associated companies, all with each other. For this purpose, ownership or control of at least twenty (20) per cent. but

not more than fifty (50) per cent. of the voting rights of a company will be regarded as the test of associated company status.

The circumstances under which Shareholders of the Company including Directors and persons acting in concert with them respectively will

incur an obligation to make a take-over offer under Rule 14 after a purchase or acquisition of Shares by the Company are set out in Rule 14 and

Appendix 2 of the Take-over Code.

The effect of Rule 14 and Appendix 2 of the Take-over Code is that, unless exempted (or if exempted, such exemption is subsequently

revoked), Directors and persons acting in concert with them will incur an obligation to make a take-over offer under Rule 14 if, as a result of

the Company purchasing or acquiring Shares, the voting rights of such Directors and their concert parties would increase to thirty (30) per

cent. or more, or if the voting rights of such Directors and their concert parties fall between thirty (30) per cent. and fifty (50) per cent. of the

Company’s voting rights, the voting rights of such Directors and their concert parties would increase by one (1) per cent. in any period of six

(6) months.

Based on the register of directors of the Company, as at the Latest Practicable Date, the shareholdings of the Directors of the Company

before and (assuming (a) the Company purchases the maximum amount of ten per cent. (10%) of the issued ordinary share capital of the

Company as at the date of the above Meeting, and (b) there is no change in the number of Shares held or deemed to be held by the Directors)

after the proposed Share Purchase Mandate will be as follows:-

Before Share Purchase After Share PurchaseDirect Deemed Total Direct Deemed Total

Name of Director Interest Interest Interest Interest Interest Interest% % % % % %

Henry Lim Yong Choon 23.78 – 23.78 26.43 – 26.43

William Pok Tam Soon 8.11 – 8.11 9.02 – 9.02

Christopher Ng Chee Seng 6.76 – 6.76 7.51 – 7.51

Raymond Chia Chong Leong 4.24 – 4.24 4.71 – 4.71

Mark Soh Eng Kuang 5.08 – 5.08 5.65 – 5.65

Allan Yong Heng Chong 0.04 – 0.04 0.04 – 0.04

Lew Syn Pau – – – – – –

Goh Kian Hwee – – – – – –

69


Based on the above information, as at the Latest Practicable Date, none of the Directors (together with persons acting in concert with

them) will become obligated to make a mandatory offer in the event that the Company purchases 44,739,317 Shares under the Share

Purchase Mandate.

Under Appendix 2 of the Take-over Code, a Shareholder and persons acting in concert with him will incur an obligation to make a take-over

offer after a share purchase if, inter alia, their voting rights increase to thirty (30) per cent. or more as a result of a share purchase by the

Company and they acquire any Shares between the date of the notice of resolution to authorise the Share Purchase Mandate and the next

Annual General Meeting of the Company, or, if they already hold between thirty (30) per cent. and fifty (50) per cent. of the Company’s voting

rights and as a result of a share purchase by the Company their voting rights increase by more than one (1) per cent. in any period of six (6)

months and they acquire Shares between the date of the notice of resolution to authorise the Share Purchase Mandate and the next Annual

General Meeting of the Company.

Under Appendix 2 of the Take-over Code, a Shareholder, not acting in concert with the Directors, will not be required to make a take-over

offer under Rule 14 if, as a result of the Company purchasing or acquiring its Shares, the voting rights of such Shareholder in the Company

would increase to thirty (30) per cent. or more, or, if such Shareholder holds between thirty (30) per cent. and fifty (50) per cent. of the

Company’s voting rights, the voting rights of such Shareholder would increase by more than one (1) per cent. in any period of six (6) months.

Such Shareholder need not abstain from voting in respect of the resolution authorising the Share Purchase Mandate.

Shareholders are advised to consult their professional advisers and/or the Securities Industry Council and/or the relevant authorities at the

earliest opportunity as to whether they would incur any obligation to make a take-over offer as a result of any purchase or acquisition of

Shares by the Company pursuant to the Share Purchase Mandate.

Based on the register of substantial shareholders of the Company, as at the Latest Practicable Date, save for Messrs. Henry Lim Yong Choon,

William Pok Tam Soon, Christopher Ng Chee Seng and Mark Soh Eng Kuang, the Company does not have any substantial shareholders. Save

as set out above, the Directors are not aware of any Shareholder or group of Shareholders acting in concert who may become obligated to

make a mandatory offer in the event that the Directors exercise the Share Purchase Mandate.

Disclosure Requirements For Substantial ShareholdersUnder Section 82 of the Companies Act, a person who is a substantial shareholder in a company shall, within two (2) days after becoming

a substantial shareholder, give notice in writing to the company stating his name and address and full particulars of the voting shares in

the company in which he has an interest or interests and full particulars of each such interest and of the circumstances by reason of

which he has that interest.

A substantial shareholder in a company is defined under the Companies Act as a person who has an interest or interests in one or more voting

shares in the company and the nominal amount of that share, or the aggregate nominal amount of those shares, is not less than give (5) per

cent. of the aggregate of the nominal amount of all the voting shares in the company.

Shareholders should note that a purchase of Shares by the Company may inadvertently cause the percentage shareholding of Shareholders,

particularly Shareholders whose current holding of Shares is close to five (5) per cent. to become a substantial shareholder in the Company

for the purposes of the Companies Act.

70

Listing Status On SGX-STThe Directors will use their best efforts to ensure that the Company does not effect a purchase of Shares if the purchase of Shares would

result in the number of Shares remaining in the hands of the public falling to such a level as to cause market illiquidity or adversely affect

the listing status of the Company. Under Clause 926 of the Listing Rules, a company should ensure that at least ten (10) per cent. of a class

of its listed securities is at all times held by the public. At the Latest Practicable Date, 46.78 per cent. of the issued share capital of the

Company is held by the public. Before deciding to effect a purchase of Shares, the Directors will ensure that, notwithstanding such

purchase, a sufficient float in the hands of the public will be maintained to provide for an orderly market for trading in the Shares.

Directors’ Responsibility StatementThe Directors collectively and individually accept full responsibility for the accuracy of the information given in this Notice and confirm

that, having made all reasonable enquiries, to the best of their knowledge and belief, the facts stated and opinions expressed in this

Notice are fair and accurate in all material respects as at the date of this Notice and there are no other material facts the omission of

which would make any information in this Notice misleading.

SGX-ST’s DisclaimerSGX-ST assumes no responsibility for the correctness of any statements made, reports contained or opinions expressed in this Notice.


71

Proxy FormA n n u a l G e n e r a l M e e t i n g

ACHIEVA LIMITED(Incorporated in the Republic of Singapore)

✄

IMPORTANT1. For investors who have used their CPF monies to buy the shares, the Annual Report is sent to them at the request of their

CPF Approved Nominees. FOR INFORMATION ONLY.

2. This proxy is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to beused by them.

*I/We _______________________________________________________________________________________________________________________________

of ______________________________________________________________________________________________________________________________________

being *a Member/Members of Achieva Limited (the “Company”), hereby appoint

or failing *him/them, the Chairman of the meeting, as *my/our *proxy/proxies to attend and vote for *me/us on *my/our behalf and ifnecessary to demand a poll, at the 8th Annual General Meeting of the Company to be held at 240 MacPherson Road, #02-02/03/04Pines Industrial Building, Singapore 348574 on 31 May 2002 at 10.00 a.m., and at any adjournment thereof.

Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the Resolutions as set out in theNotice of Annual General Meeting. In the absence of specific directions, the *proxy/proxies may vote or abstain as *he/they may think fit, as*he/they will on any other matter arising at the Annual General Meeting.

Signed this __________________ day of ______________________________ 2002.

________________________________________________________________________

Signature(s) of member(s) or Common Seal

Inportant: Please read notes overleaf.

* Delete as appropriate

Total Number of Shares Held

No. Resolution relating to For Against

1 Adoption of Directors’ Report and Audited Accounts

2 Approval of Directors’ fees

3 Re-election of Director – Mr. Lew Syn Pau

4 Re-election of Director – Mr. William Pok Tam Soon

5 Re-election of Director – Mr. Allan Yong Heng Chong

6 Appointment of Auditors and authorising Directors to fix their remuneration

7 Authority to issue and allot shares pursuant to Section 161 of the Companies Act, Cap. 50

8 Authority to issue and allot shares pursuant to the exercise of options underthe Achieva Share Option Agreement

9 Authority to issue and allot shares pursuant to the exercise of options underthe Achieva Limited Share Option Scheme

10 Authority to issue and allot shares to Mr. Henry Lim Yong Choon, a controlling shareholder,pursuant to the exercise of options under the Achieva Limited Share Option Scheme

11 Authority to purchase shares pursuant to the Share Purchase Mandate

12 Any other business

NRIC/Passport Proportion of ShareholdingName Address Number No. of Shares %

NRIC/Passport Proportion of ShareholdingName Address Number No. of Shares %

*and/or

72

Proxy Form Achieva Limited

Notes:1. A Member of the Company entitled to attend and vote at the meeting is entitled to appoint not more than two proxies to attend and

vote in his/her stead. Such proxy need not be a Member of the Company.

2. Where a Member appoints two proxies, the appointments shall be invalid unless he specifies the proportion of his shareholding to be

represented by each proxy.

3. This instrument appointing a proxy or proxies must be signed by the appointor or his/her duly authorised attorney. Where this

instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the

hand of its attorney or a duly authorised officer.

4. A Member which is a body corporate may also appoint an authorised representative or representatives in accordance with Section 179

of the Companies Act, Cap. 50, to attend and vote for and on behalf of such body corporate.

5. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register

(as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number of shares. If you have shares

registered in your name in the Register of Members of the Company, you should insert that number of shares. If you have

shares entered against your name in the Depository Register and registered in your name in the Register of Members, you

should insert the aggregate number of shares. If no number is inserted, this instrument appointing a proxy or proxies will be

deemed to relate to all the shares held by you.

6. This instrument appointing a proxy or proxies, duly executed, must be deposited at the Registered Office of the Company at

240 MacPherson Road #02-02/03/04 Pines Industrial Building, Singapore 348574 at least 48 hours before the time fixed for

holding the meeting.

7. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the letter or power of attorney or a

duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing

which the instrument may be treated as invalid.

GeneralThe Company shall be entitled to reject this instrument appointing a proxy or proxies if it is incomplete, improperly completed, illegible or

where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on this instrument appointing

a proxy or proxies. In addition, in the case of Members whose shares are deposited with The Central Depository (Pte) Limited (“CDP”), the

Company may reject any instrument appointing a proxy or proxies lodged if such Members are not shown to have shares entered against

their names in the Depository Register 48 hours before the time appointed for holding the meeting as certified by CDP to the Company.

Contents

Introduction

1


2


6

Operations Review

8


10


11

Group Financials Highlights

12

Financial Contents

13

Achieva Limited240 MacPherson Road #02/03/04

Pines Industrial Building, Singapore 348574Tel: 6841 4898 Fax: 6841 4896Email: [email protected]

Website: http://www.achieva.com.sg

Extending

reachOptimizing

assets

Achieva Lim

ited Annual Report 2001

Achieva LimitedAnnual Report 2001

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