Addvalue 1-28

Transcription

Addvalue 1-28

Prospectus dated 3 June 2000
addvalue
technologies
We are a “last-metre” digital wireless and
broadband communications solution provider
Addvalue Technologies Ltd
(Incorporated in the Republic of Singapore on 27 April 1996)
THE SHARES OFFERED INVOLVE A HIGH DEGREE OF RISK. ACCORDINGLY, PROSPECTIVE INVESTORS
SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED UNDER “RISKS RELATING TO BUSINESS
AND OPERATIONS” BEGINNING ON PAGE 18 OF THIS PROSPECTUS PRIOR TO SUBSCRIBING FOR
OR PURCHASING ANY SHARES.
We have applied to the Singapore Exchange Securities Trading Limited (the “SGX-ST” or the “Stock Exchange”) for
permission to deal in and for quotation for all our ordinary shares of par value S$0.025 each (the “Shares”) comprising
both existing issued and fully paid-up Shares (including the vendor Shares (the “Vendor Shares”)) and those new Shares
(the “New Shares”) which are the subject of the Invitation (as defined herein). Such permission will be granted when
we have been admitted to the Official List of the SGX-ST. Acceptance of applications will be conditional upon permission
being granted to deal in and for quotation for all of the issued Shares as well as the New Shares. Moneys paid in
respect of any application accepted will be returned, without interest or any share of revenue or other benefit arising
therefrom and at the applicant’s own risk, if the said permission is not granted.
The Stock Exchange assumes no responsibility for the correctness of any of the statements made, opinions expressed
or reports contained in this Prospectus. Admission to the Official List of the SGX-ST is not to be taken as an indication
of the merits of the Invitation (as defined herein), our Company, our subsidiaries or our Shares.
A copy of this Prospectus together with copies of the Application Forms, have been lodged with, and registered by,the
Registrar of Companies and Businesses in Singapore which takes no responsibility for its contents.
Invitation in respect of 71,000,000 ordinary shares of
S$0.025 each comprising 63,000,000 New Shares and
8,000,000 Vendor Shares as follows:
(a)
(b)
21,000,000 Offer Shares at S$0.28 for each Offer Share by way of
public offer; and
50,000,000 Placement Shares by way of placement, comprising:
(i) 7,000,000 Reserved Shares at S$0.28 for each Reserved Share
reserved for employees, Directors, business associates and those
who have contributed to the success of our Group; and
(ii) 43,000,000 Placement Shares at S$0.28 for each Placement Share,
payable in full on application
Manager, Underwriter and Placement Agent
Silver spot
Addvalue Technologies offers
wireless technology —
combined with innovative
product design ideas —
elevating good ideas into
new and enhanced solutions
for your business.
Addvalue Technologies is a “last metre” wireless and broadband
communications solution provider, offering turnkey product solutions,
technology innovation and design consulting services.
Capitalising on our expertise
Most of our work focuses on
Singapore
in both wired & wireless technology
“last metre” end-user applications or
and communication protocols —
devices, that span across traditional
Addvalue Communications Pte Ltd
backed by extensive design
and latest telecommunication
Addvalue Innovation Pte Ltd
experience with leading
infrastructure networks, with
750D Chai Chee Road
international telecommunication-
digital, wireless and/or broadband
#03-03 Technopark @ Chai Chee
based companies — we offer
capabilities. Working hand-in-hand
Singapore 469004
complete solutions that cover
with our customers as partners
Tel
the entire spectrum from initial
through our international offices
Fax +65 242 4555
product conceptualisation,
in Singapore and USA, we are
Email: [email protected]
product development, product
dedicated to providing innovative
www.addvaluetech.com
testing, quality requirements,
solutions for our clients.
product regulatory approval,
Addvalue Technologies is an
USA
preparation for manufacturing,
investment holding company with
Addvalue Communications, Inc
and final mass production.
three wholly-owned subsidiaries —
10 Almaden Boulevard Suite 988
San Jose CA 95113
(ISO 9001 certified),
United States of America
Addvalue Innovation Pte Ltd, and
Tel
Addvalue Communications, Inc (USA).
Fax +1 408 970 8887
+65 244 4828
+1 408 970 8888
Title:Addvalue Prospectus
addvalue
technologies
(a)
(b)
public offer; and
Silver spot
for your business.
Singapore
750D Chai Chee Road
Singapore 469004
Tel
Fax +65 242 4555
USA
San Jose CA 95113
Tel
Fax +1 408 970 8887
+65 244 4828
+1 408 970 8888
Addvalue Technical Roadmap
addvalue
technologies
Our clients
100
Current/Future
Established
Cable Modem
Chartered Electronics
Technologies
10
Our wireless and
broadband technologies
Satellite Digital Audio
(2.32 GHz)
ADSL
GE Thomson
Hello Direct
Bluetooth
(2.4 GHz)
1
IBM
Mbps
Spread Spectrum
(2.4 GHz)
Microsoft
DECT
(1.8/1.9 GHz)
0.1
National
Semiconductor
ISDN
NEC
Panasonic
Analog Modem
Satellite Digital Audio Receiver
0.01
We are engaged by NASDAQlisted Sirius Satellite Radio Inc.
Sirius Satellite Radio
Office or Room
Building
Stationary
Indoors
to develop satellite digital audio
Walking
Vehicle
Outdoors
VSAT Satellite
receivers for their satellite digital
audio radio service in the US.
This is our largest ongoing project
Satellites
with a total contract value of
approximately US$4.2 million
Home Networking
for the design phase.
We are a member of the
Network Service Provider
R&Bnet@Home technology alliance
initiated by the Infocomm Development
Broadband via Cable Modem
(Cable Network) or ADSL (Telephone Network)
Authority of Singapore (IDA), where
we collaborate with prominent
Singapore research and development
Terrestrial Repeaters
Home
Gateway
institutions — Kent Ridge Digital Labs,
Nanyang Technological University’s School
Infrared
of Electrical and Electronics Engineering
1394/USB
and the Centre for Signal Processing,
Remote Uplink Site
Telephone Line
Mobile Receiver
and the Institute of Microelectronics —
Power Line
in developing and commercialising
broadband wireless home networking
Radio Frequency
(Bluetooth, DECT,
Proprietary Protocol,
Home RF, SST)
Studio
solutions based on infra-red and
Bluetooth technologies.
Sirius Radio Estimated Revenues
2007
1989.1
1765.2
Home Networking Revenues: North America
2006
2000 to 2007
Annual Growth: 57.6%
2003
$1400
2005
1517.0
$1200
2002
2004
1229.4
618.1
2002
2001
292.6
82.4
2000
Source: The Hansen Report on Automotive Electronics, Vol. II, No. 10, January 1999.
(JL)
Year
US Dollars in millions
$1000
2003
925.1
2001
$800
2000
$600
$400
1999
$200 1998
Year
Source: TWICE (This Week In Consumer Electronics) magazine, 7 January 2000.
Job:05-27915 Title:Addvalue Prospectus
(800vA_175#) Dtp:49 Page:2
addvalue
technologies
Our clients
100
Current/Future
Established
Cable Modem
Technologies
10
Our wireless and
(2.32 GHz)
ADSL
GE Thomson
Hello Direct
Bluetooth
(2.4 GHz)
1
IBM
Mbps
Spread Spectrum
(2.4 GHz)
Microsoft
DECT
(1.8/1.9 GHz)
0.1
National
Semiconductor
ISDN
NEC
Panasonic
Analog Modem
0.01
Office or Room
Building
Stationary
Indoors
Walking
Vehicle
Outdoors
VSAT Satellite
Satellites
Home Networking
Home
Gateway
Infrared
1394/USB
Remote Uplink Site
Telephone Line
Mobile Receiver
Power Line
Radio Frequency
(Bluetooth, DECT,
Home RF, SST)
Studio
2007
1989.1
1765.2
2006
2000 to 2007
2003
$1400
2005
1517.0
$1200
2002
2004
1229.4
618.1
2002
2001
292.6
82.4
2000
(JL)
Year
$1000
2003
925.1
2001
$800
2000
$600
$400
1999
$200 1998
Year
(800vA_175#) Dtp:49 Page:2
addvalue
technologies
Our clients
100
Current/Future
Established
Cable Modem
Technologies
10
Our wireless and
(2.32 GHz)
ADSL
GE Thomson
Hello Direct
Bluetooth
(2.4 GHz)
1
IBM
Mbps
Spread Spectrum
(2.4 GHz)
Microsoft
DECT
(1.8/1.9 GHz)
0.1
National
Semiconductor
ISDN
NEC
Panasonic
Analog Modem
0.01
Office or Room
Building
Stationary
Indoors
Walking
Vehicle
Outdoors
VSAT Satellite
Satellites
Home Networking
Home
Gateway
Infrared
1394/USB
Remote Uplink Site
Telephone Line
Mobile Receiver
Power Line
Radio Frequency
(Bluetooth, DECT,
Home RF, SST)
Studio
2007
1989.1
1765.2
2006
2000 to 2007
2003
$1400
2005
1517.0
$1200
2002
2004
1229.4
618.1
2002
2001
292.6
82.4
2000
(JL)
Year
$1000
2003
925.1
2001
$800
2000
$600
$400
1999
$200 1998
Year
(800vA_175#) Dtp:49 Page:2
TABLE OF CONTENTS
Page
CORPORATE INFORMATION ......................................................................................................
3
DEFINITIONS
Companies Within Our Group ..................................................................................................
4
Other Companies And Organisations ......................................................................................
4
Other Definitions .......................................................................................................................
5
GLOSSARY OF TECHNICAL TERMS .........................................................................................
9
DETAILS OF THE INVITATION
Listing On The Stock Exchange ..............................................................................................
12
Indicative Timetable For Listing ...............................................................................................
13
PROSPECTUS SUMMARY
Overview Of Our Group ...........................................................................................................
14
The Invitation .............................................................................................................................
16
RISKS RELATING TO BUSINESS AND OPERATIONS
Risks Relating To Our Company Or The Industry ..................................................................
18
Risks Relating To Ownership Of Our Shares .........................................................................
23
FINANCIAL STATISTICS ..............................................................................................................
25
SELECTED FINANCIAL INFORMATION
Proforma Results Of Operations Of Our Group .....................................................................
27
Proforma Financial Position Of Our Group .............................................................................
28
RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS..................................................
29
BUSINESS
Overview ....................................................................................................................................
39
Industry Background And Outlook ...........................................................................................
41
Business Model .........................................................................................................................
47
Strategy ......................................................................................................................................
49
Competition ................................................................................................................................
51
Competitive Strengths ...............................................................................................................
51
Research And Development .....................................................................................................
55
Employees .................................................................................................................................
58
Components And Service Vendors ..........................................................................................
59
Customers ..................................................................................................................................
60
Past Projects .............................................................................................................................
61
1
Page
Current Projects ........................................................................................................................
61
Intellectual Property ..................................................................................................................
65
Telecommunications Regulations .............................................................................................
66
Litigation ....................................................................................................................................
67
DIRECTORS, MANAGEMENT AND STAFF ................................................................................
68
INTERESTED PERSON TRANSACTIONS .................................................................................
77
GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP
Share Capital .............................................................................................................................
79
Group Structure .........................................................................................................................
82
Ownership Structure And Principal Shareholders ...................................................................
82
Substantial Shareholders ..........................................................................................................
84
Moratorium .................................................................................................................................
84
Properties And Fixed Assets ....................................................................................................
85
DIRECTORS’ REPORT .................................................................................................................
87
ACCOUNTANTS’ REPORT ...........................................................................................................
88
GENERAL AND STATUTORY INFORMATION ............................................................................
102
APPENDIX: TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION ..............
119
2
CORPORATE INFORMATION
BOARD OF DIRECTORS
:
Dr Chan Kum Lok Colin (Chairman and CEO)
Tan Khai Pang
Tan Juay Hwa
Chan Fong Chee Caroline
Lim Han Boon
Chay Kwong Soon (Independent Director)
Tan Hock Chye Eric (Independent Director)
COMPANY SECRETARY
:
Lee Kay Beng, ACIS
REGISTERED OFFICE
:
750D Chai Chee Road, #03-03
Technopark @ Chai Chee
Singapore 469004
REGISTRAR AND SHARE
TRANSFER OFFICE
:
M&C Services Private Limited
16 Raffles Quay, #23-01
Hong Leong Building
Singapore 048581
MANAGER, UNDERWRITER AND
PLACEMENT AGENT
:
The Development Bank of Singapore Ltd
6 Shenton Way
DBS Building Tower One
Singapore 068809
AUDITORS AND REPORTING
ACCOUNTANTS
:
KPMG
Certified Public Accountants
16 Raffles Quay, #22-00
Hong Leong Building
Singapore 048581
SOLICITORS TO THE INVITATION
:
Rajah & Tann
4 Battery Road, #26-01
Bank of China Building
Singapore 049908
BANKERS TO OUR GROUP
:
Bank of China, Singapore Branch
4 Battery Road
Bank of China Building
Singapore 049908
Overseas Union Bank Limited
1 Raffles Place
OUB Centre
Singapore 048616
3
DEFINITIONS
In this Prospectus, the accompanying Application Forms and, in relation to Electronic Applications,
the instructions appearing on the screen of the ATMs of the Participating Banks or the Internet
Banking websites of the relevant Participating Banks, unless the context otherwise requires, the
following definitions apply throughout where the context so admits.
COMPANIES WITHIN OUR GROUP
“Addvalue”, “AVT” or the
“Company”
:
“AVC”
:
“AVI”
:
“AVC (USA)”
:
Addvalue Communications Inc.
OTHER COMPANIES AND ORGANISATIONS
“AKME”
:
Matsushita Electric Corporation of America, manufacturer of
Panasonic products
“CDP” or “Depository”
:
The Central Depository (Pte) Limited
“CE”
:
Conformite Europeenee
“CET Technologies”
:
CET Technologies Pte Ltd, a subsidiary of Singapore
Technologies Ltd
“CWC”
:
Centre for Wireless Communications, NUS
“DBS Bank”
:
“EDB”
:
Economic Development Board
“EEE”
:
Electrical and Electronics Engineering
“ETSI”
:
European Telecommunications Standards Institute
“FCC”
:
Federal Communications Commission of the US
“IDA”
:
InfoComm Development Authority of Singapore
“IEEE”
:
The Institute of Electrical and Electronics Engineers
“IME”
:
The Institute of Microelectronics
“ISO”
:
International Standards Organisation, a worldwide federation
of national standards bodies
“KRDL”
:
Kent Ridge Digital Labs
“NASDAQ”
:
National Association of Securities Dealers Automated Quotation
System
“NTU”
:
Nanyang Technological University of Singapore
4
“NUS”
:
National University of Singapore
“PSB”
:
Singapore Productivity and Standards Board
“SSRI”
:
Sirius Satellite Radio, Inc.
“Stock Exchange” or “Exchange”
or “SGX-ST”
:
Singapore Exchange Securities Trading Limited
“UL”
:
Underwriters Laboratories Inc.
“Act” or “Companies Act”
:
The Companies Act, Chapter 50 of Singapore
“Application Forms”
:
Printed application forms to be used for the purpose of the
Invitation and which form part of this Prospectus
“Application List”
:
List of applications for the subscription and/or purchase of
the Invitation Shares
“Articles of Association” or
“Articles”
:
Articles of Association of the Company
“ATM”
:
Automated teller machine
“Board”
:
Board of Directors of the Company
“Bonus Issue”
:
The bonus issue of 4,609,914 ordinary shares of S$1.00 each
fully paid in the capital of the Company prior to the Invitation
as described on page 79 of this Prospectus
“Business Day”
:
A day (excluding Saturdays and Sundays) on which the Stock
Exchange is open for trading in securities and commercial
banks in Singapore are open for business
“CEO”
:
Chief Executive Officer
“China”
:
The People’s Republic of China
“CPF”
:
The Central Provident Fund of Singapore
“Directors”
:
The directors of the Company as at the date of this
Prospectus, unless otherwise stated
“EC”
:
European Community
“Electronic Applications”
:
Applications for the Offer Shares made through an ATM of
one of the Participating Banks or the Internet Banking website
of one of the relevant Participating Banks in accordance with
the terms and conditions of this Prospectus
“Executive Officers”
:
The executive officers of the Group, whose names and details
are set out in the section entitled “Directors, Management and
Staff” on page 73 of this Prospectus
“FY”
:
The financial year ended or ending 31 March
“Group”
:
The Company and its subsidiaries
OTHER DEFINITIONS
5
“Heller Shares”
:
The 1,209 ordinary shares of S$1.00 each issued to Heller
Asia Capital (Singapore) Ltd pursuant to a contractual
agreement described in paragaphs 21(c) and 21(d) of “General
and Statutory Information” on page 114 of this Prospectus
“Incentive Shares”
:
The 320,000 new ordinary shares of S$1.00 each allotted and
issued to certain Directors and employees of the Company
and its subsidiaries at S$1.00 each, pursuant to the exercise
of options which were previously granted to them for their
contributions to the Group
“Independent Director”
:
A Director who is considered independent by virtue of the
fact that he does not have any relationship which, in the
opinion of the Board is likely to interfere with the exercise of
the independent judgement by such a Director in carrying out
the functions of an Audit Committee as described on pages
75 and 76 of this Prospectus
“Invitation”
:
The invitation by the Company and the Vendor to the public
to subscribe for and/or purchase the Invitation Shares, subject
to and on the terms and conditions of this Prospectus
“Invitation Price”
:
In the case of the Offer, the Offer Price and, in the case of
the Placement, the Placement Price
“Invitation Shares”
:
The 71,000,000 Shares which are the subject of the Invitation,
comprising 63,000,000 New Shares and 8,000,000 Vendor
Shares
“Market Day”
:
A day on which the Stock Exchange is open for trading in
securities
“Memorandum”
:
Memorandum of Association of the Company
“New Shares”
:
The 63,000,000 new Shares for which the Company invites
applications to subscribe, subject to and on the terms and
conditions of this Prospectus
“Non-executive Director”
:
A Director who does not perform executive functions
“NTA”
:
Net tangible assets
“Offer”
:
The offer by the Company and the Vendor of the Offer Shares
to the public in Singapore for subscription and/or purchase at
the Offer Price
“Offer Price”
:
S$0.28 for each Offer Share
“Offer Shares”
:
The 21,000,000 Invitation Shares which are the subject of the
Offer
“Participating Banks”
:
DBS Bank (including its POSBank Services division); Keppel
TatLee Bank Limited (“KTB”); Oversea-Chinese Banking
Corporation Limited (“OCBC”) Group (comprising OCBC and
Bank of Singapore Limited); Overseas Union Bank Limited
(“OUB”); and United Overseas Bank Limited (“UOB”) Group
(comprising UOB, Far Eastern Bank Limited and Industrial &
Commercial Bank Limited)
6
“Placement”
:
The placement by the Company and the Vendor of the
Placement Shares for subscription and/or purchase at the
Placement Price
“Placement Agent”
:
DBS Bank
“Placement Price”
:
S$0.28 for each Placement Share
“Placement Shares”
:
The 50,000,000 Invitation Shares which are the subject of the
Placement, including the Reserved Shares
“Post FY2000 Shares”
:
The 27,209 ordinary shares of S$1.00 each issued after the
financial year ended 31 March 2000 and comprising 26,000
Rights Shares and 1,209 Heller Shares
“Receiving Banker”
:
DBS Bank
“Reserved Shares”
:
The 7,000,000 Placement Shares reserved for employees,
Directors, business associates and those who have contributed
to the success of the Group
“R&D”
:
Research and Development
“Rights Shares”
:
The 26,000 ordinary shares of S$1.00 each issued after the
financial year ended 31 March 2000, as described on pages
79 to 81 of this Prospectus under “General Information of our
Company and our Group – Share Capital”
“Securities Account”
:
A securities account maintained by a depositor with CDP
“Shares”
:
Ordinary shares of par value S$0.025 each in the capital of
the Company
“Share Registrar”
:
M&C Services Private Limited
“sq m”
:
Square metre
“Sub-division of shares”
:
The sub-division of each ordinary share of S$1.00 each in
the authorised and issued and paid-up share capital of the
Company into 40 Shares, as described on page 79 of this
Prospectus
“Vendor”
:
Solid Resources (S) Holding Pte Ltd
“Vendor Shares”
:
The 8,000,000 issued and fully paid-up Shares for which the
Vendor invites applications to purchase, subject to and on the
terms and conditions of this Prospectus
“S$” or “$”
:
Singapore dollars, being the lawful currency of Singapore
“cents”
:
Singapore cents
“UK”
:
United Kingdom
“US”
:
“US$” or “US dollars”
:
United States dollars, being the lawful currency of the US
“%” or “per cent.”
:
Percentage or per centum
7
Any discrepancies in tables included herein between the amounts listed and the totals thereof are
due to rounding; accordingly, figures shown as totals in certain tables may not be an arithmetic
aggregation of the figures which precede them.
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing the masculine gender shall, where applicable, include the feminine and neuter genders
and vice versa. References to persons, where applicable, shall include corporations.
Unless otherwise indicated, any reference in this Prospectus and the Application Forms to any
enactment is a reference to that enactment as for the time being amended or re-enacted. Any word
defined under the Companies Act or any statutory modification thereof and used in this Prospectus
and the Application Forms shall have the meaning assigned to it under the Companies Act or statutory
modification, as the case may be.
Any reference in this Prospectus and the Application Forms to Shares being allotted to an applicant
includes allotment to CDP for the account of that applicant.
Any reference to a time and dates in this Prospectus shall be a reference to Singapore time and
dates, unless otherwise stated.
8
GLOSSARY OF TECHNICAL TERMS
To facilitate a better understanding of our business, the following glossary provides an explanation
on some of the technical terms and abbreviations used in this Prospectus.
“ADSL”
:
Asymmetric Digital Subscriber Line. ADSL works by transforming
the twisted copper pairs of wires in telephone wires into highspeed digital lines which can deliver data at a substantially faster
speed than currently available by other methods, such as analog
modem, and allows data and voice transmission to take place
simultaneously
“AM”
:
Amplitude Modulation, a RF modulation scheme
“ASIC”
:
Application-Specific Integrated Circuit, an IC customised for a
specific function
“bandwidth”
:
In respect of a transmitted communications signal, it is a measure
of the range of frequencies the signal occupies. Normally express
in cycles per second or hertz (Hz). In general, the greater the
bandwidth, the greater the transmission capacity
“Bluetooth”
:
A wireless technology standard that provides a standard short
range wireless interface for a variety of communications products
for high-speed wireless connectivity. Bluetooth technology uses
short range radio signals to connect devices, such as mobile
phones, mobile computers and handheld devices, to each other.
Bluetooth is a trademark owned by Telefonaktiebolaget L M
Erisson, Sweden
“broadband”
:
A class of communication techniques that is capable of supporting
a high rate of data transmission for real time multimedia
applications
“CAD/CAM”
:
Computer Aided Design/Computer Aided Manufacturing
“caller ID”
:
Caller Identification, a feature which displays the caller’s telephone
number and/or name
“DAB”
:
Digital Audio Broadcast, a digital signal processing method for
mass voice and data transmission through the radio
“DECT”
:
Digital Enhanced Cordless Telecommunications, a European
standard for wireless access technology
“e-commerce”
:
The buying and selling of goods and services on the Internet,
especially the World Wide Web
“e-mail”
:
The exchange
telecommunication
“firmware”
:
Software stored inside an IC chip
“FM”
:
Frequency Modulation, a RF modulation scheme
“FPGA”
:
Field Programmable Gate Array, a programmable logic IC chip
9
of
computer-stored
messages
by
“Home Gateway” or “gateway”
:
A hub for home networking that acts as a data flow controller
and processor for digital signals received from telephone, cable
and satellite pipelines and feeds the data to multiple connection
points inside the home or customer premises
“home networking”
:
A collection of elements that process, manage, transport and
store information, enabling the connection and integration of
multiple computing, control, monitoring and communication
devices in the home or at the customer premises
“GHz”
:
Gigahertz, 109 Hz
“Hz”
:
An oscillation measurement unit in cycles per second
“IC”
:
Integrated Circuit
“Internet”
:
An open global network of interconnected commercial, educational
and governmental computer networks that utilise a common
communications protocol
“Internet telephony”
:
A category of hardware and software that enables people to use
the Internet as the transmission medium for voice communication
“IP”
:
Internet Protocol, a common format managing the transmission
and routing of data packets over the Internet
“ISDN”
:
Integrated Services Digital Network, a category of wired digital
broadband network used for data communications
“ISP”
:
Internet Service Provider, an entity that provides individuals and
companies access to the Internet and other related services
“LAN”
:
Local Area Network, a computer network that is limited to a
specific area, usually a building or floor of a building
“last-metre”
:
The last link that enables end-users to access communications
infrastructure or devices. An example of a “last-metre” solution
is a set-top box that enables access to a cable television network
or an ISP
“Mbps”
:
Megabits per second
“MHz”
:
Megahertz, 106 Hz
“modem”
:
Modulator-demodulator. A modem is a device or program that
enables a computer to transmit analog signals over telephone
lines. Computer information is stored digitally, whereas information
transmitted over telephone lines is transmitted in the form of
analog signals
“PC”
:
Personal Computer
“protocol”
:
A set of rules for reliable transfer of data, voice and/or video
between two devices
“RF”
:
Radio Frequency
“S-band”
:
A radio frequency band of between 2 GHz and 3 GHz
10
“SDARS”
:
Satellite digital audio radio service
“SST”
:
Spread Spectrum Technology, a broadband digital modulation
scheme for voice, data and video transmission
“SWAP”
:
Shared Wireless Access Protocol, a 2.4 GHz wireless protocol
to support voice and data transmission
“USB”
:
Universal Serial Bus, being a cable bus standard that supports
data exchange between a host and a range of simultaneously
accessible peripherals
“Web” or “World Wide Web”
or “www”
:
The facility on the Internet which hosts and enables access to
pages of text, sound, graphics and video images
“website”
:
A collection of Web files on a particular subject and includes a
beginning file called a Home Page
“Y2K”
:
Year 2000
“Y2K problem”
:
The risk that an electronic system may not be able to differentiate
21st century dates from 20th century dates, leading to errors in
data and calculations beginning in the year 2000. The Y2K
problem is caused by the fact that many hardware operating
systems and application software were designed to work with
only a two-digit year field
11
DETAILS OF THE INVITATION
LISTING ON THE STOCK EXCHANGE
We have applied to the SGX-ST for permission to deal in and for quotation for all our Shares
already issued (including the Vendor Shares) as well as the New Shares on the SGX-ST. Such
permission will be granted when we have been admitted to the Official List of the SGX-ST. Our
allocation of the Invitation Shares will be conditional upon the completion of the Invitation, which is
subject to certain conditions, including the SGX-ST granting permission to deal in and for quotation
for all our issued Shares (including the Vendor Shares) as well as the New Shares. If the completion
of the Invitation does not occur because the SGX-ST’s permission is not granted or for any reason,
moneys paid in respect of any allocation will be returned to you at your own risk, without interest or
any share of revenue or other benefit arising therefrom and you will not have any claim against us
or the Manager.
The Stock Exchange assumes no responsibility for the correctness of any of the statements made,
opinions expressed or reports contained in this Prospectus. Admission to the Official List of the
SGX-ST is not to be taken as an indication of the merits of the Invitation, our Company, our
subsidiaries or our Shares.
A copy of this Prospectus together with copies of the Application Forms, have been lodged with, and
registered by, the Registrar of Companies and Businesses in Singapore which takes no responsibility
for its contents.
We have obtained approvals from our Directors and the Vendor for this Prospectus. Our Directors
and the Vendor individually and collectively accept full responsibility for the accuracy of the information
given in this Prospectus and confirm, having made all reasonable enquiries, that, to the best of their
knowledge and belief, the facts contained in this Prospectus are true and accurate and not misleading;
all expressions of opinion, intention and expectation contained herein are honestly held and made
after due and careful consideration; this Prospectus constitutes full and true disclosure of all material
facts about this Invitation and our Group and our Shares; and there are no other material facts the
omission of which would make any statement herein misleading.
The Invitation Shares are offered for subscription or purchase solely on the basis of the information
contained and the representations made in this Prospectus.
We have not authorised any person to give any information or to make any representation not
contained in this Prospectus in connection with the Invitation and, if given or made, such information
or representation must not be relied upon as having been authorised by our Company, the Vendor
or the Manager. Neither the delivery of this Prospectus and the Application Forms or any documents
relating to the Offer or the Placement nor the Invitation shall, under any circumstances, constitute a
continuing representation or create any suggestion or implication that there has been no change in
the affairs of our Company or our Group or any statement of fact or information contained in this
Prospectus since the date of this Prospectus. Where such changes occur, our Company may make
an announcement of the same to the SGX-ST. You should take note of any such announcement
and, upon release of such an announcement, shall be deemed to have notice of such changes.
Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as, a promise
or representation as to the future performance or policies of our Company or our subsidiaries.
This Prospectus has been prepared solely for the purpose of the Invitation and may only be relied
upon by you in connection with your application for the Invitation Shares and may not be relied upon
by any other person or for any other purpose.
This Prospectus does not constitute an offer of, or invitation or solicitation to subscribe for and/or to
purchase, the Invitation Shares in any jurisdiction in which such offer or invitation or solicitation is
unauthorised or unlawful nor does it constitute an offer or invitation or solicitation to any person to
whom it is unlawful to make such offer or invitation or solicitation.
12
Copies of this Prospectus and the Application Forms and envelopes may be obtained on request,
subject to availability, from:
6 Shenton Way
DBS Building Tower One
Singapore 068809
and from DBS Bank branches (including its POSBank Services division), members of the Association
of Banks in Singapore, members of the Stock Exchange and merchant banks in Singapore.
The Application List will open at 10.00 a.m. on 12 June 2000 and will remain open until 12.00
noon on the same day or for such further period or periods as our Directors and the Vendor
may, in consultation with the Manager decide, subject to any limitation under all applicable
laws.
INDICATIVE TIMETABLE FOR LISTING
In accordance with the Stock Exchange’s News Release of 28 May 1993 on the trading of initial
public offering shares on a “when issued” basis, an indicative timetable is set out below for the
reference of applicants:
Indicative Date/Time
Event
12 June 2000, 12.00 noon
Close of Application List
13 June 2000
Balloting of application, if necessary (in the event of an oversubscription for the Offer Shares)
14 June 2000, 9.00 a.m.
Commence trading on a “when issued” basis
22 June 1000
Last day of trading on a “when issued” basis
23 June 2000, 9.00 a.m.
Commence trading on a “ready” basis
28 June 2000
Settlement date for all trades in respect of the Shares done on a
“when issued” basis and for all trades done on a “ready” basis
on 23 June 2000
The above timetable is only indicative as it assumes that the date of closing of the Application List
will be 12 June 2000, the date of admission of our Company to the Official List of the SGX-ST will
be 14 June 2000, the Stock Exchange‘s shareholding spread requirement will be complied with and
the New Shares will be issued and fully paid prior to 14 June 2000. The actual date on which our
Shares will commence trading on a “when issued” basis will be announced when it is confirmed by
the Stock Exchange.
The above timetable and procedure may be subject to such modification as the SGX-ST may, in its
discretion, decide, including the decision to permit trading on a “when issued” basis and the
commencement date of such trading. The commencement of trading on a “when issued” basis
will be entirely at the discretion of the SGX-ST. All persons trading in our Shares on a “when
issued” basis do so at their own risk. In particular, persons trading in our Shares before their
Securities Accounts with CDP are credited with the relevant number of Shares do so at the
risk of selling Shares which neither they nor their nominees, if applicable, have been allotted
with or are otherwise beneficially entitled to. Such persons are also exposed to the risk of
having to cover their net sell positions earlier if “when issued” trading ends sooner than the
indicative date mentioned above. Persons who have a net sell position traded on a “when
issued” basis should close their position on or before the first day of “ready” basis trading.
Investors should consult the SGX-ST announcement on the “ready” listing date on the Internet (at
the SGX-ST website http://www.singaporeexchange.com), INTV or the newspaper, or check with
their brokers on the date on which trading on a “ready” basis will commence.
13
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and is subject to, the more detailed information
and financial statements (including the notes thereto) appearing elsewhere in this Prospectus. Terms
defined elsewhere in this Prospectus have the same meanings when used herein. Prospective
investors should carefully consider all the information presented in this Prospectus, particularly the
matters set out under “Risks Relating to Business and Operations” beginning on page 18 of this
Prospectus before making an investment decision.
OVERVIEW OF OUR GROUP
We are a one-stop “last-metre” digital, wireless and broadband communications solution provider.
We provide comprehensive design, turnkey solutions and project management for systems integration
and product development for our customers.
Our Company was incorporated in Singapore on 27 April 1996 as a private company limited by
shares. It was founded by several engineers, a group of individuals and a corporate investor to
engage in the design and development of communications technologies and products. Our customers
include global leaders in the communications, IT and electronics industries, such as Microsoft, GE
Thomson and National Semiconductor. With our comprehensive capabilities in product design, we
are able to offer our customers value-added solutions that meet their specific application requirements,
and provide shortened time-to-market for their products, reliable designs and flexibility in resource
allocation.
Our core competencies lie in the following areas:
•
Technical know-how. We possess the technical know-how in the implementation of
communications protocols and RF design, particularly in relation to voice and data applications.
•
Provision of comprehensive engineering solutions. In providing these solutions, we may be
involved in all or any combination of the following activities – software development, RF design,
electronics hardware and firmware design, mechanical design, reliability testing, regulatory
compliance and engineering support for mass production. This requires an overall understanding
of the various engineering disciplines and functional constraints imposed by conflicting design
considerations. We have the experience and expertise in managing a team of engineers with
diverse skill-sets.
•
Turnkey project management skills. Beyond technical know-how and the ability to provide
engineering solutions, our competence extends to the management of an entire project. This
includes managing relationships with third party consultants, vendors, contract manufacturers
and regulatory bodies.
Our communications applications make use of broadband technologies that are independent of any
specific infrastructure, whether wired or wireless. These technologies include:
•
Wireless access technologies such as satellite receiver, DECT and Bluetooth;
•
Wired access technologies such as cable modem and ADSL; and
•
Media streaming technologies relating to digital audio, digital video and voice.
14
The table below maps out the technological platforms that we have developed or are in the process
of being developed:
As these technologies can readily be deployed in diverse applications, we are well-positioned to
become a beneficiary of the increasing design services outsourcing trend by regional niche players
and major multi-nationals in the electronics and IT industries.
We have been engaged by NASDAQ-listed Sirius Satellite Radio, Inc. to develop satellite digital
audio receivers for its satellite digital audio radio service in the US. This is our Group’s largest
ongoing project, with a total contract value of approximately US$4.2 million for the design phase. In
addition, subject to the commercial success of SSRI’s radio service and the market acceptance of
our product, we may benefit from the subsequent supply of the receivers to SSRI.
Currently, we do not undertake manufacturing activities nor hold significant inventories. We also do
not engage in pure R&D activities, but undertake development activities that are project or program
driven, akin to that of a product or application development company. We are continuously enhancing
our technical capabilities and adding to our repertoire of in-house proprietary technologies. To this
end, we are a member of the R&Bnet@Home Alliance, an initiative promoted by the IDA, to utilise
Bluetooth and diffused infra-red technologies to develop solutions for applications in Singapore homes.
We have also collaborated with technology and industrial partners, such as Philips to develop Bluetooth
solutions and National Semiconductor on the Home Gateway project. Please refer to “Business –
Strategy – Developing Working Alliances” on page 49 of this Prospectus. We invest in in-house
development activities that take into account practical considerations, with a view to developing
voice, data and video communications products with innovative features.
15
The following are key elements of our strategy:
•
Developing working alliances;
•
Pursuing a global customer base through the establishment of overseas offices;
•
Improving and expanding our range of core technology and skills;
•
Expanding our design resources and capacity;
•
Attracting and retaining employees with core competencies; and
•
Engaging in the ongoing development of technology platforms and proprietary applications.
THE INVITATION
Issue Size
:
71,000,000 Invitation Shares comprising 21,000,000 Offer Shares and
50,000,000 Placement Shares. The New Shares will, upon issue and
allotment, rank pari passu in all respects with our existing issued
Shares.
Invitation Price
:
S$0.28 for each Invitation Share.
Purpose of the Invitation
:
Our Directors consider that the listing and quotation of our Shares
on the SGX-ST will enhance our Company’s public image and enable
us to tap the capital markets for the expansion of our business. In
particular, the Invitation will facilitate the implementation of our strategy
described below under “Use of Proceeds”. The Invitation will also
provide members of the public, our Group’s management, staff and
business associates an opportunity to participate in the equity of our
Company.
Use of Proceeds
:
The net proceeds from the issue of the New Shares (after deducting
the estimated issue expenses in relation to the Invitation) of
approximately S$16 million are expected to be utilised for general
corporate purposes, including business expansion and funding our
Group’s working capital requirements. A portion of the estimated net
proceeds may be used to carry out advertising and promotional
activities, acquire or invest in businesses, technologies, products,
services or strategic relationships that are complementary to our
Group’s business and/or invest in further R&D for applications. For
example, part of the proceeds may be used to invest in the
development of products for home networking and broadband access
communications, involving technologies such as ADSL, DAB, cable
modem and Bluetooth.
Pending the deployment of the net proceeds from the issue of the
New Shares for the above purposes, the net proceeds may be used
to reduce the borrowings of our Group or invested in short-term money
market instruments as our Directors may deem appropriate.
16
Reserved Shares
:
7,000,000 Placement Shares will be reserved for our employees,
Directors, business associates and those who have contributed to
the success of our Group. The Reserved Shares are offered on the
same terms as the other Placement Shares. In the event that any of
the Reserved Shares are not taken up, they will be made available
to satisfy applications made for the Placement Shares (other than
the Reserved Shares), or, in the event of an under-subscription for
the Placement Shares, to satisfy excess applications for the Offer
Shares.
Listing Status
:
Our Shares will be quoted on the Main Board of the SGX-ST, subject
to our admission to the Official List of the SGX-ST and permission
for dealing in and for quotation for our Shares being granted by the
SGX-ST.
17
RISKS RELATING TO BUSINESS AND OPERATIONS
You should carefully evaluate each of the following considerations and all of the other information
set forth in this Prospectus before deciding to invest in the Invitation Shares. Some of the following
considerations relate principally to the industry in which we operate and our business in general.
Other considerations relate principally to general economic and political conditions, the securities
market and ownership of the Invitation Shares, including possible future dilution in value of our
Shares.
If any of the following considerations and uncertainties develop into actual events, our business,
financial condition or results of operations could be materially adversely affected. In such case, the
trading price of our Shares could decline due to any of these considerations, and you may lose all
or part of your investment.
RISKS RELATING TO OUR COMPANY OR THE INDUSTRY
We have a history of operating losses
We incurred losses before taxation of approximately S$3.83 million in FY1999 and S$3.22 million in
FY2000. Investors should be aware that our ability to be profitable depends on a number of factors
beyond our control, such as premature termination of contracts due to change in business strategies
of customers or adverse changes in the economic and political environment. We cannot assure
investors that we will generate sufficient revenue or that our operating losses will not increase.
Please refer to “Results of Operations and Financial Conditions – Results of Operations” from pages
32 to page 35 of this Prospectus.
Our revenue is earned from only a few projects at any one time
We generally work on a few projects at any one time. Currently, about one-quarter of our workforce
is working exclusively on developing satellite digital audio receivers for SSRI, and this is expected to
continue until 2001 when the project is finally completed. Because we work on only a few projects
at any point in time, the failure of any particular project or the inability to secure payment from any
of our customers may severely impact our revenue stream. Further, our project contracts generally
represent a relatively large amount of revenue per order. Therefore, the loss of individual orders
could seriously hurt our revenue and operating results.
We bear part of the risk in developing certain new products
For strategic reasons, we may bear a percentage of the aggregate development costs for certain
new products. Our customers will reimburse us for the remainder of the development costs
progressively upon meeting specific project milestones. In the event that the commercialisation of a
new product fails or if market acceptance for the new product is unfavourable, we may not be able
to recover the development costs for that product in full.
A significant portion of our future revenue stream is highly dependent on the commercial
success of SSRI’s SDARS
We have been engaged by SSRI to develop a satellite digital audio receiver to be installed in car
radios for SSRI’s SDARS. Please refer to “Business - Current Projects – Design and Supply of
SDARS Receivers for SSRI” from page 62 to page 65 of this Prospectus. We aim to supply the
satellite digital audio receivers to SDARS equipment manufacturers and car manufacturers to generate
a steady revenue stream, but this is dependent on the market acceptance and commercial success
of satellite radio in the US. SSRI may engage other solution providers to develop an equivalent and/
or competing model of satellite digital audio receiver similar to our product. If such a model were
preferred by SDARS equipment manufacturers and car manufacturers over our design, we would
not be able to secure recurring revenue from the anticipated sale of our satellite digital audio receivers.
18
Fluctuations in our operating results could hurt our business and the market price of our
Shares
We provide design and consultancy services that generate a stream of revenue. This revenue stream
is project-based and is dependent on us meeting specific milestones. Investors should note that our
operating results may fluctuate as a result of a variety of factors, many of which are outside our
control. In the course of undertaking a project, we may face unforeseen technical problems or changes
in customers’ requirements, and may fail to meet project schedules. This will have an adverse impact
on the timing for progressive collections of design fees and may have a material adverse effect on
our revenue. Our limited operating history and inherent business risks make it difficult for us to
forecast our revenue or earnings accurately and our operating results in one or more future quarters
may fall below the expectations of securities analysts and investors.
We depend on the performance of selected third party vendors
We depend on third parties for component supplies, contract manufacturing and consulting services
to complement our services. Since we do not have manufacturing operations and do not hold significant
inventory of parts, we rely on third party contract manufacturers when providing turnkey solutions to
our customers. As we do not have comprehensive in-house testing facilities, we depend on external
organisations for some testing services. Further, we may engage external consultants to enhance
specific skill-sets not available in-house. In the event that any of these third parties fail to fulfil their
obligations on time, this may have an adverse impact on our project schedules and revenue stream.
Please refer to “Business – Components and Service Vendors” on pages 59 and 60 of this Prospectus.
We face intense global competition
The communications design industry is highly competitive. To be successful in this industry, we must
identify and develop innovative and cost competitive solutions and market them in a timely manner.
While we seek to be competitive, there can be no assurance that we will be successful.
Many of our current and potential competitors have significantly greater financial, marketing, technical
and other resources than we have. As a result, they may be able to respond more quickly to new
technologies or standards and market changes. In addition, it is possible that new competitors or
alliances among competitors may emerge and acquire a significant market share rapidly. Increased
competition is likely to result in price reductions, reduced operating margins and loss of market
shares, any of which could have a material adverse effect on our business, operating results or
financial condition. Please refer to “Business – Competition” on page 51 of this Prospectus.
We are dependent on certain key management and technical personnel
Our success depends on the continued effort and abilities of our management team and technical
personnel. Please refer to “Directors, Management and Staff” from page 68 to page 75 of this
Prospectus. Any of our key employees may voluntarily terminate their employment or we may be
obliged to terminate their employment with us at any time. The loss of the services of key personnel
and the inability to attract additional suitably qualified personnel (either as replacements or for
expansion) could have a material adverse effect on our business, operating results or financial
condition.
We experience difficulty in employing suitably qualified personnel
Our human resources are vital assets that can significantly influence our business and performance.
It is important that we attract and retain qualified and skilled personnel with the right combination of
technical skills. The competition for highly skilled employees is intense and the process of hiring
employees with the right combination of skills and qualification can be time-consuming. Our inability
to attract, train, motivate and retain employees would impair our development of new platforms and
solutions, our ability to provide design and consulting services and the management of our business.
This could have a material adverse effect on our business, operating results or financial condition.
19
Our failure to manage growth could harm us
We anticipate that a significant expansion of our employee headcount and facilities will be required
to address the anticipated growth of our customer base. We must expand our operational and
administrative systems and recruit additional managerial, technical, administrative and marketing
personnel. If we are unable to effectively do so or if we encounter unexpected difficulties in such
areas, our business, operating results or financial condition may be adversely affected.
Technological changes may render our technologies and design platforms obsolete
There is a continuing escalation in complexity of designs and solutions in the wired and wireless
communications industries. In order to build up our position as a “last-metre” digital wireless and
broadband communications solution provider, we have to meet these challenges by developing or
acquiring new platforms or technologies and revamping our existing design methodologies. We have
to constantly keep abreast of changes and to develop and introduce innovative and relevant solutions
in a timely manner. If we are unable to respond quickly and successfully to development and change,
we may lose our competitive edge and some of our technologies and design platforms will become
obsolete.
There may be a lack of acceptance of wireless communications devices
Our future revenue and profits depend on the widespread acceptance and use of wireless
communications technology and wireless communications devices. As a new and rapidly evolving
technology, the demand for and market acceptance of wireless communications devices are subject
to uncertainty and risk. It remains to be determined whether consumers will require and accept the
additional functionality offered by wireless communications devices.
The growth in the design services outsourcing trend may not be sustained
We are a beneficiary of the current design services outsourcing trend in the communications industry.
Please refer to “Business – Industry Background and Outlook – Growth of the Communications
Design Industry – The Design Services Outsourcing Trend” on pages 45 and 46 of this Prospectus.
In the event that the growth in the design services outsourcing trend is not sustained, for example,
because of an economic downturn or changes in business strategies of our customers, our business,
operating results or financial condition will be adversely affected.
Our failure to obtain intellectual property licences or adequately protect our proprietary rights
could seriously harm our business
Our success depends, in part, on our proprietary technology. Also, we generally rely on patents,
copyrights, trademarks and trade secret laws to establish and protect our proprietary rights in
technologies and products. Despite precautions we may take to protect our intellectual property, we
cannot assure you that third parties will not try to challenge, invalidate or circumvent these patents.
We also cannot assure you that the rights granted under our patents will provide us with any
competitive advantages, patents will be issued on any of our pending applications or future patents
will be sufficiently broad to protect our technology. Further, the laws of foreign countries may not
protect our proprietary rights in those countries to the same extent as Singapore law protects these
rights in Singapore. We cannot assure you that our reliance on patent, copyright, trademark and
trade secret protection will be enough to be successful and profitable in the industries in which we
compete.
20
Intellectual property infringement by or against us could seriously harm our business
In jurisdictions where the laws relating to intellectual property infringement are not well developed or
stringently enforced, it is possible that competitors may adopt product or service names similar to
ours, notwithstanding that our trademarks may be registered in those jurisdictions. These competitors
may try to prevent us from using our trademarks by claiming the trademarks to be theirs, thereby
impeding our ability to compete and build brand identity and leading to confusion among our customers.
Notwithstanding that we are in the process of registering our trademarks, we also cannot be certain
that our products and services do not or will not infringe upon valid patents, trademarks, designs,
copyrights or other intellectual property rights held by third parties. We may also be subject to legal
proceedings and claims from time to time relating to our use of the intellectual property of others in
the ordinary course of our business. If such claims do arise, we may incur substantial expense and
expend substantial resources in defending against these third party infringement claims regardless
of their merit. Any successful infringement claims against us may result in substantial monetary
liability or may materially disrupt the conduct of our business. Please refer to “Business – Intellectual
Property” on pages 65 and 66 of this Prospectus.
We need to constantly develop and maintain our reputation and brand name
Establishing and maintaining Addvalue’s brand name and reputation for quality service is important
for increasing and maintaining our customer base. Our brand name and reputation will in turn be
dependent on the success of our continuing effort in providing quality services to our customers.
Failure to consistently deliver quality services necessary to develop and maintain our reputation and
the goodwill associated with our name may adversely affect our ability to retain our customers or
secure new businesses, thereby hampering our future business growth in the global market.
We need to keep up with changes to existing regulations on network and wireless transmission
for voice and data
We need to constantly keep abreast of the latest developments in communications regulatory
requirements. We will have to redesign technological platforms and products to comply with any new
regulatory requirements. Our failure to keep pace with these changes will hamper our future business
growth. Please refer to ‘‘Business – Telecommunications Regulations’’ on page 66 of this Prospectus.
We may require additional financing
Based on our current anticipated operating plan, we believe that our present cash revenue and the
net proceeds from the issue of the New Shares will be sufficient to meet our current expenses and
capital requirements. Our expenses and capital requirements will be dictated by the level of resources
required to expand our customer and project base and the level of R&D for applications needed to
keep us abreast of the competition. Accordingly, the timing and amount of such expenses and capital
requirements cannot be accurately predicted. If our expenses and capital requirements vary materially
from those currently projected, we may require additional financing sooner than anticipated. We
currently have neither long-term debts nor commitments from any third party for any additional financing
and there can be no assurance that any such commitments can be obtained on favourable terms, if
at all. Further, any additional debt financing so obtained may contain restrictive conditions with respect
to dividends, future capital raising and other financial and operational matters. We may make a
public offering of new Shares on another stock exchange within the next three years to raise additional
capital to fund our growth. The issue price of such Shares may be at a discount to the then prevailing
market price of our Shares trading on the SGX-ST. In such an event, the shareholding of existing
shareholders may be diluted.
21
Our operations may be affected by foreign exchange rate fluctuations
Currently, we transact business mainly in US dollars and Singapore dollars. Over the past three
financial years from FY1998 to FY2000, approximately 95.0% of our turnover and approximately
33% of our purchases and operating expenses were denominated in US dollars. The rest of our
turnover, our purchases and operating expenses were denominated in Singapore dollars. Accordingly,
we are subject to exposure from adverse movements in US dollars exchange rate. Weakening of the
US dollars against Singapore dollars will have a harmful effect on our operating results. We currently
do not use any financial instruments to hedge against revenue and expenses denominated in foreign
currencies.
The net foreign currency exchange differences for the past three financial years relative to our profit/
(loss) before taxation are shown below:
S$’000
FY1998
Net foreign currency exchange gain/(loss)
(47)
Profit/(loss) before taxation
171
FY1999
62
(3,831)
FY2000
(16)
(3,217)
Our planned expansion overseas may expose us to foreign risks
We plan to expand our operations out of Singapore. Our future international operations may be
subject to foreign risks, including:
•
The adoption and expansion of government trade restrictions;
•
Volatile foreign exchange rates and currency conversion risks;
•
Limitations on repatriation of earnings;
•
Reduced protection of intellectual property rights in some countries;
•
Difficulties in managing foreign operations. These difficulties relate to human resources issues
such as staff recruitment and training, and other operational matters including sales, marketing,
logistics and development and management of distribution channels;
•
Political and economic instability;
•
Unexpected changes in regulatory requirements; and
•
The US government licensing requirements for export which make licenses difficult to obtain.
We may experience Y2K problems
Although we have passed the 1 January 2000 date without any problems, we cannot be certain that
the Y2K problem is fully resolved. Y2K errors or defects in our operations could result in delay or
loss of revenue, diversion of development resources or damage to our reputation, any of which
could materially and adversely affect our business, operating results or financial condition. There can
be no assurance that whatever actions we take can adequately address any Y2K problem that may
arise. Please refer to ‘‘Results of Operations and Financial Conditions – Finance – Year 2000
Compliance’’ on page 38 of this Prospectus.
22
RISKS RELATING TO OWNERSHIP OF OUR SHARES
Investors in our Shares may face dilution in the value of their investments
We intend to implement an employees’ share option scheme. The exercise price of any option to
acquire new Shares under the scheme may be below the then prevailing market price of the Shares.
In such a case, existing shareholders will suffer dilution in the value of their investments.
In addition, we may make a public offering of new Shares on another stock exchange within the next
three years to raise additional capital to fund our growth. The issue price of such Shares may be at
a discount to the then prevailing market price of our Shares trading on the SGX-ST and the
shareholding of existing shareholders may be diluted.
There has been no prior market for our Shares and this offering may not result in an active
or liquid market for these Shares
There has not been a public market for our Shares prior to this Invitation. Therefore, we cannot
assure investors that an active public market will develop or be sustained after the Invitation. The
Invitation Price was determined by negotiations between us and the representatives of the Manager
and may not be indicative of prices that will prevail in the trading market. Investors may not be able
to resell their Shares at or above the Invitation Price. Volatility in the trading price of our Shares may
be caused by factors outside our control and may be unrelated or disproportionate to our operating
results.
Our Directors and Executive Officers own a large percentage of our Company and could
significantly influence the outcome of actions
We anticipate that our Directors and Executive Officers will, in aggregate, beneficially own
approximately 49% of the issued share capital of our Company (excluding the Reserved Shares)
following the completion of the Invitation. These shareholders, if acting together, will be able to
significantly influence many matters requiring shareholders’ approval, including the election of directors
and the approval of transactions such as capital restructuring and business ventures.
Our Board will have a broad discretion over the allocation of proceeds from this Invitation
The net proceeds from the issue of the New Shares are estimated to be approximately S$16 million
after deducting the estimated expenses in relation to the Invitation. We expect to use the estimated
net proceeds for general corporate purposes. A portion of the estimated net proceeds may be used
to carry out advertising and promotional activities, acquire or invest in businesses, technologies,
products, services or strategic relationships that are complementary to our Group’s business and/or
invest in further R&D for applications. For example, part of the proceeds may be used to invest in
the development of products for home networking and broadband access communications, involving
technologies such as ADSL, DAB, cable modem and Bluetooth. Please refer to ‘‘Prospectus Summary
– The Invitation - Use of Proceeds’’ on page 16 of this Prospectus. Notwithstanding that the estimated
net proceeds will be deployed in the aforementioned manner, the Directors will still have broad
discretion over the specific allocations of these proceeds in terms of the timing for deployment,
amounts to be committed or projects to secure. Depending on how the proceeds are utilised,
shareholders may not deem such deployment desirable. In addition, we may be unable to yield a
significant return on any investment of the proceeds.
23
We expect to experience volatility in our Share price which could negatively affect an
investment in our Shares
The market price of our Shares may fluctuate as a result of many factors including variations in halfyearly operating results. These fluctuations may be exaggerated if the trading volume of our Shares
is low. In addition, due to the technology-intensive and emerging nature of our business, the market
price of our Shares may also rise and fall in response to:
•
announcements of technological or competitive developments;
•
acquisitions or strategic alliances;
•
the gain or loss of an important business partner;
•
conditions affecting the communications industry;
•
trends related to the fluctuations of share prices of Singapore companies or companies in the
region; and
•
changes in estimates of our financial performance or changes in recommendations by securities
analysts.
24
FINANCIAL STATISTICS
INVITATION PRICE FOR EACH INVITATION SHARE
S$0.28
NET TANGIBLE ASSETS
NTA per Share based on our Company’s audited consolidated balance sheet as
at 31 March 2000 adjusted for the Post FY2000 Shares, the Incentive Shares,
the Bonus Issue and Sub-division of shares referred to pages 79 to 81 of this
Prospectus:
(a)
(b)
before adjusting for the estimated net proceeds from the issue of the New
Shares based on the pre-Invitation share capital of 357,000,000 Shares
0.16 cents
after adjusting for the estimated net proceeds from the issue of the New
Shares based on the post-Invitation share capital of 420,000,000 Shares
3.95 cents
Premium of Invitation Price per Share over our Company’s NTA per Share as at
31 March 2000:
(a)
(b)
17,400%
609%
NET ASSETS
Net assets per Share based on our Company’s audited consolidated balance
sheet as at 31 March 2000 adjusted for the Post FY2000 Shares, the Incentive
Shares, the Bonus Issue and Sub-division of shares referred to pages 79 to 81
of this Prospectus:
(a)
(b)
0.55 cents
4.29 cents
Premium of Invitation Price per Share over our Company’s net assets per Share
as at 31 March 2000:
(a)
(b)
4,991%
553%
LOSS PER SHARE
Historical net loss per Share of the Group for the financial year ended
31 March 2000 based on the pre-Invitation share capital of 357,000,000
Shares
0.90 cents
NET OPERATING CASH FLOW(1)
Historical net operating cash flow per Share for the financial year ended 31
March 2000 based on the pre-Invitation share capital of 357,000,000 Shares
25
0.65 cents
PRICE TO NET OPERATING CASH FLOW
Historical price to net operating cash flow based on the historical net operating
cash flow per Share for the financial year ended 31 March 2000 based on the
pre-Invitation share capital of 357,000,000 Shares
43.1 times
Note:
(1) Net operating cash flow is defined as profit after taxation with provisions for depreciation and amortisation of development
expenditure and goodwill added back.
26
SELECTED FINANCIAL INFORMATION
The following selected financial information should be read in conjunction with the full text of this
Prospectus, including the Accountants’ Report set out on pages 88 to 101 of this Prospectus.
PROFORMA RESULTS OF OPERATIONS OF OUR GROUP
<
>
Audited
Year ended 31 March
S$’000
Turnover
1997
Proforma(1)
1998
Actual
1999
Actual
2000
Actual
1,806
5,936
4,181
1,147
(3,438)
(2,842)
Operating (loss)/profit before depreciation,
interest and taxation
(303)
358
Depreciation
24
124
351
311
Interest expense
17
63
88
112
(344)
171
Operating (loss)/profit
(2)
Other income
—
(Loss)/Profit before taxation
(344)
Taxation
—
(Loss)/Profit after taxation attributable to
shareholders of the Company
(Loss)/Profit per Share(3) (cents)
—
171
(107)
(3,877)
46
(3,831)
106
(3,265)
48
(3,217)
—
(344)
64
(3,725)
(3,217)
(0.10)
0.02
(1.04)
(0.90)
Notes:
(1) The results for the financial year ended 31 March 1997 include the results of AVC before it was acquired by AVT.
(2) Other income comprises mainly interest income from fixed deposits.
(3) For comparative purposes, the (loss)/profit per Share has been computed based on the profit/(loss) after taxation and
the pre-Invitation issued share capital of 357,000,000 Shares.
27
PROFORMA FINANCIAL POSITION OF OUR GROUP
<
>
Audited
As at 31 March
S$’000
1997
Actual
1998
Actual
1999
Actual
2000
Actual
Fixed assets
595
1,161
930
1,379
Unquoted equity investment
238
238
238
—
Development expenditure
1,554
1,976
931
505
Goodwill on consolidation
1,743
1,464
1,185
906
155
3,085
1,593
2,224
(2,591)
(2,356)
(3,444)
Current assets
Current liabilities
(1,035)
Net current (liabilities)/assets
(880)
494
(763)
(1,220)
Non-current liabilities
(131)
(279)
(35)
(114)
Share capital
Share premium
Share subscription monies
(1)
Accumulated losses
3,119
5,054
2,486
1,456
3,267
3,592
3,712
3,968
196
1,742
2,422
4,710
—
—
357
—
(344)
NTA per Share(2) (cents)
Net assets per Share(3) (cents)
(280)
(4,005)
(7,222)
3,119
5,054
2,486
1,456
(0.05)
0.45
0.10
0.01
0.87
1.42
0.70
0.41
Notes:
(1) These represent share subscription monies received for shares issued subsequent to the end of the year ended 31
March 1999.
(2) For comparative purposes, the net tangible assets per Share is calculated based on the pre-Invitation issued share
capital of 357,000,000 Shares.
(3) For comparative purposes, the net assets per Share is calculated based on the pre-Invitation issued share capital of
357,000,000 Shares.
28
RESULTS OF OPERATIONS AND FINANCIAL CONDITIONS
The following discussion has been prepared by our Company’s management and should be read in
conjunction with the consolidated financial information included in the Accountants’ Report for FY1997,
FY1998, FY1999 and FY2000 as set out on pages 88 to 101 of this Prospectus.
OVERVIEW
Our Company was incorporated in Singapore on 27 April 1996 as a private company limited by
shares. It was founded by several engineers, a group of individuals and a corporate investor to
engage in the design and development of communications technologies and products. Through the
course of our growth, we have evolved to become a communications solution provider, focusing on
wireless and digital technologies, comprehensive design and turnkey solutions and project management
for systems integration and product development for our customers.
Our Group began operations with the incorporation of AVC on 20 January 1994. AVC was founded
by Dr Chan Kum Lok Colin as a boutique telephony design company. In early 1996, AVC increased
its share capital and recruited additional technical personnel as part of an effort to expand its business.
The expansion was carried out with a view to broadening the service base of AVC, to include a
broader range of services and products that would be offered to a wider market spread over a larger
geographical area.
In 1996, AVC expanded its capabilities to offer full turnkey services to customers, from concept and
design to manufacturing support. In the same year, AVC started developing its own in-house proprietary
technology in digital wireless communications, beginning with DECT platforms and products. On 27
April 1996, AVT was incorporated as an investment holding company to acquire AVC as a whollyowned subsidiary and to fund AVC’s expansion. AVT was founded by the then prevailing shareholders
of AVC, several engineers who are now full-time employees of our Group, a group of individuals and
a corporate investor. AVI was incorporated on 15 June 1996 to focus on developing in-house
technology platforms and products, leaving AVC to focus on turnkey services. AVC(USA) was
incorporated in the State of Delaware, US on 23 February 2000 and has set up an office in San
Jose, US to gather information on the latest technology developments. Since the incorporation of
AVT, we have raised approximately S$6.70 million from shareholders of AVT and new investors.
Please refer to “Results of Operations and Financial Conditions – Finance – Liquidity and Capital
Resources” on pages 36 and 37 of this Prospectus.
Our Group has established itself as a one-stop digital wireless and broadband communications solution
provider, focusing on systems integration, product development and turnkey project management.
The personnel headcount of our Group has risen more than ten-fold, from five in 1994 to 64 as at
31 March 2000. In October 1999, AVC obtained the ISO 9001 certification.
We are a member of the R&Bnet@Home Alliance, an initiative promoted by the IDA under which a
group of Singapore R&D organisations are allied to focus on developing home networking solutions
and Internet appliances that communicate using wireless communications links. This alliance will
develop broadband wireless systems for home use based on the diffused infra-red and Bluetooth
technologies. The IDA aims to nurture this alliance and encourages all partners to create a pool of
Singapore-developed wireless technologies. Please refer to “Business – Research and Development
– Continuity of Applied R&D – R&Bnet@Home Alliance” on page 58 of this Prospectus.
Currently, we do not undertake manufacturing activities nor hold significant inventories. We also do
not engage in pure R&D activities, but undertake development activities that are project or program
driven, akin to that of a product or application development company. We continue to enhance our
technical capabilities and add to our repertoire of in-house proprietary technologies. We invest in inhouse development activities that take into account practical considerations, with a view to developing
voice, data and video communications products with innovative features. Our customer base includes
major global players in the communications, IT and electronics industries, and we take on projects
that demand increasingly complex and sophisticated technical solutions.
29
Our future prospects should be considered in the light of the risks frequently encountered by companies
involved in developing and implementing new technologies and entering new markets, particularly
the highly dynamic and competitive global communications market. The technologies and products
that we are currently developing are for new generations of digital or high frequency wireless
communications products. Some of these products are targeted at a nascent market, the ultimate
size of which remains unknown. Please refer to “Risks relating to Business and Operations” from
pages 18 to 22 of this Prospectus.
REVENUES AND EXPENSES
Revenues
Our revenue sources are derived principally from three streams, comprising:
•
Fees for providing product design services and engineering solutions
Such fees may include all or any combinations of the following activities – software development,
RF design, electronics hardware and firmware design, mechanical design, reliability testing,
regulatory compliance and engineering support for mass production. The fees are paid either
upon successful completion of the whole project or at key stages of a project. This source of
revenue is therefore dependent on the number of outstanding contracts that we have and new
contracts that we are able to secure. For the last four financial years from FY1997 to FY2000,
our fees, on average, accounted for more than 77% of our annual turnover.
•
Revenues arising from the sale of finished products designed by us
We may be engaged by customers to design and supply the finished products. Under such
contracts, after we have successfully delivered the product designs for which we are paid a
design fee, we will engage contract manufacturers to produce the final products for the customers.
Since we derive revenue from the sale of the finished products on a per-unit basis, our revenue
from this source are dependent on the volume of sales of the finished products. For the last
four financial years from FY1997 to FY2000, our average revenue arising from the sale of
these finished products represented approximately 1% of our annual turnover. However, as we
have been engaged by customers such as SSRI and Hello Direct Inc. to undertake significantly
large design and supply contracts, this source of revenue stream is expected to account for a
larger percentage of our annual turnover in FY2001 and FY2002.
•
Revenues arising from the sale of components embedded with our proprietary technologies
Customers may engage us to design and supply components only, as they have either the
capabilities to produce the finished products themselves or they may use their own preferred
contract manufacturers. We will engage chipset manufacturers to produce the chipset components
embedded with our proprietary software technologies after we have successfully completed the
design. Since our revenue are derived from the sale of the components on a per-unit basis, our
revenue will be directly dependent on the volume of sales of the components. For the last four
financial years from FY1997 to FY2000, our average revenue arising from the sale of components
embedded with our proprietary technologies represented approximately 22% of our annual
turnover.
Expenses
Based on our audited consolidated results for the last four financial years, our operating expenses,
including amortisation of goodwill, are as follows:
S$’000
Annual operating expenses
FY1997
FY1998
FY1999
FY2000
580
1,676
4,641
3,593
30
Our annual operating expenses comprise primarily:
(a)
salaries, bonuses and personnel-related costs;
(b)
amortisation, writing off and incurring of development expenditure;
(c)
depreciation and writing off of fixed assets;
(d)
amortisation of goodwill; and
(e)
miscellaneous operating expenses such as office rental and utilities.
Salaries, Bonuses and Personnel-related Costs
Being engaged in a knowledge-intensive business, our personnel and personnel-related costs form a
major proportion of our annual expenses. Our personnel and personnel-related costs for the last
four financial years that have not been capitalised are shown below:
S$’000
Salaries, bonus and other personnel-related
costs
FY1997
FY1998
FY1999
FY2000
64
263
380
798
Our personnel costs consist of salaries, bonus, CPF and allowances paid to administrative personnel.
Amortisation, Writing off and Incurring of Development Expenditure
Our development expenditure amortised, written off and incurred for the last four financial years are
shown below:
S$’000
FY1997
FY1998
FY1999
FY2000
Development expenditure amortised
—
325
42
291
Development expenditure written off and
incurred
20
30
2,470
928
Total
20
355
2,512
1,219
Our development costs relating to a definable product or process, which is demonstrated to be
technically and commercially feasible, are recognised as assets to the extent that such costs are
probably recoverable from related future economic benefits. Such costs comprise personnel, materials
and other direct costs incurred in the development of definable projects, technologies or processes.
We amortise development costs on a product-by-product basis over the estimated useful life from
the commencement of production or the ratio that current gross revenues bear to total estimated
gross revenues, whichever is the greater. Development costs not falling within the said criteria are
recorded as development expenditure incurred for the financial year in which they are incurred.
In FY1999 and FY2000, we incurred and wrote off an aggregate of approximately S$3.40 million in
development expenditure. Despite the benefits which we may continue to enjoy as a result of these
development efforts, the write-offs were made as a matter of prudence in accordance with generally
accepted accounting practices in Singapore. Our development costs that had been capitalised as
assets stood at approximately S$505,000 as at 31 March 2000.
31
Depreciation and Writing off of Fixed Assets
Our fixed assets comprised mainly laboratory equipment, office equipment and computers. The
depreciation and write-offs of our fixed assets over the last four financial years are as follows:
S$’000
Fixed assets depreciated and written-off
FY1997
FY1998
FY1999
FY2000
24
194
361
339
Amortisation of Goodwill
The goodwill on consolidation in our books arose as a result of AVT, our investment holding company,
acquiring AVC as a wholly-owned subsidiary in FY1996. At that point in time, the Directors considered
the nature and foreseeable life of the acquired business of AVC and the life-cycle of the industry to
which the goodwill relates and determined that seven years was a reasonable estimate of the useful
life of the goodwill. We started amortising the goodwill from FY1997 and this will last until FY2004.
Please refer to “Results of Operations and Financial Conditions – Financial Conditions – Fixed Assets
and Goodwill on Consolidation” on page 37 of this Prospectus. Amortisation of goodwill over the
last four financial years are shown below:
S$’000
Goodwill amortised
FY1997
FY1998
FY1999
FY2000
209
279
279
279
Miscellaneous Operating Expenses
Our miscellaneous operating expenses relate primarily to rental of office space, maintenance of
equipment, legal and professional consultancy fees and travelling expenses.
Overall, we expect our future costs to increase significantly as we continue to expand our operations
and undertake more projects. Please refer to “Business – Strategy” on page 49 of this Prospectus.
Specifically, we expect increases in our personnel costs, particularly in the areas of development
and marketing as we seek to develop more proprietary technologies, applications and solutions and
expand our global presence to promote them.
RESULTS OF OPERATIONS
For purposes of discussion, we have segmented our turnover by sources of revenues and geographical
regions. Our segmental turnover for geographical regions is based on the operational localities of our
customers. In line with our business strategy, we have grouped the geographical regions into three
regions, namely, US, Hong Kong and Singapore. We are, however, unable to provide breakdowns by
profit or loss before taxation, since our direct variable costs, comprising primarily personnel costs,
and our overheads cannot be meaningfully allocated among the revenue sources or geographical
regions as our resources for the various projects were derived from a common pool. Our discussion
on profitability is therefore on a Group basis.
Turnover Segmented By Sources of Revenues and Geographical Regions
Sources of Revenues
S$’000
FY1997
FY1998
FY1999
FY2000
Design and Engineering Fees
—
5,834
3,540
689
Revenues from sale of finished products
—
102
56
12
1,806
—
585
446
1,806
5,936
4,181
1,147
Revenues from sale of components
32
Geographical Regions
S$’000
FY1997
FY1998
FY1999
FY2000
—
5,936
2,604
597
1,806
—
459
444
—
—
1,118
106
1,806
5,936
4,181
1,147
US
Hong Kong
Singapore
Review of Financial Performance
FY1997
In FY1997, our turnover of approximately S$1.81 million was principally from the sale of components
for a cordless telephone design and development contract. The design phases of the contract were
completed in the previous financial year. These components, which were embedded with our proprietary
technologies and software, were used for the production of cordless telephones with digital answering
machines for a French retail company, Intermarche Groupe Bazar. While we were engaged to design
and develop the technologies and software for the components used in the cordless telephone,
Honor Tone Ltd, a contract manufacturer based in Hong Kong, was engaged to produce the telephone.
The components were therefore sold to Honor Tone Ltd. Please refer to “Business – Past Projects
– Cordless Telephones for Intermarche Groupe Bazar” on page 61 of this Prospectus. After taking
into account personnel costs, expenses incurred on depreciation, amortisation and write-offs and
miscellaneous operating expenses, we incurred a loss before taxation of approximately S$344,000
during the financial year.
FY1998 compared to FY1997
Revenues
Our turnover increased by approximately S$4.13 million to approximately S$5.94 million due primarily
to (a) design fee of approximately S$5.83 million from Microsoft for the design and development of a
PC cordless phone system and (b) revenue of approximately S$102,000 from sale of finished products
to customers in the US. These finished products were developed in-house. Please refer to “Business
– Customers” and “Business - Past Projects” on pages 60 and 61 of this Prospectus respectively.
Expenses
Our operating expenses increased by approximately S$1.1 million to approximately S$1.7 million due
primarily to the following reasons:
(a)
Our salaries, bonuses and personnel-related costs grew by about S$200,000 to approximately
S$263,000 as we increased our staff strength by two fold during the period to cater for the
increase in the amount of contract works secured for the period including a contract with Microsoft
to design and develop PC phone systems;
(b)
Our amortisation, incurring and write-off of development expenditure of approximately S$355,000
was in connection with the development of the DECT phone technology platform, and a cable
remote and phone project which we embarked on during the period. We did not amortise any
development expenditure in the previous year;
(c)
Our depreciation of fixed assets increased by approximately S$100,000 to approximately
S$124,000, as we acquired more new fixed assets, following the relocation and expansion of
our office premises; and
(d)
Our miscellaneous operating expenses also increased significantly by approximately S$314,000
to approximately S$577,000 due to the relocation and expansion of our office premises.
33
Profitability
As a result of the above, we achieved a profit before taxation of approximately S$171,000. For the
financial year, we were taxed approximately S$107,000, representing an effective tax rate of about
62.6% due to a deferred tax charge arising in that year. Consequently, we recorded a profit after
taxation of approximately S$64,000.
Revenue
Our total turnover decreased by S$1.76 million from approximately S$5.94 million to approximately
S$4.18 million. Our turnover for the year comprised design fees of approximately S$3.54 million and
revenues from sales of finished products designed by us and components embedded with our
proprietary technologies of approximately S$56,000 and S$585,000 respectively. Our design fees
were earned principally from Microsoft for part of an ongoing contract from the previous financial
year and a new design contract. The revenues of approximately S$56,000 were derived from sales
to customers in Singapore of finished products that were developed in-house. Our revenues from
sales of components to Hong Kong-based Honor Tone Ltd, Singapore-based CET Technologies and
Transtech Electronics Pte Ltd accounted for the rest of our turnover for the financial year. Please
refer to “Business – Customers” and “Business – Past Projects” on pages 60 and 61 of this Prospectus
respectively.
Expenses
Our operating expenses surged by about 177% or approximately S$3.0 million to approximately
S$4.6 million. The increase was attributable primarily to the following factors:
(a)
Our salaries, bonuses and personnel-related costs increased by approximately S$117,000 to
approximately S$380,000, as we continue to recruit new staff during the period to augment our
project capacities;
(b)
Our development expenditure written off and incurred increased significantly by more than 82
times or by about S$2.4 million to S$2.5 million compared to FY1998, as the Directors decided
to write off in-house product and platform development expenditure, including DECT technology
and cable Internet telephony technology. We wrote off the development expenditures as a matter
of prudence in accordance with the generally accepted accounting practices in Singapore, despite
the benefits which we may continue to enjoy as the result of these development efforts;
(c)
Our depreciation of fixed assets increased by about 182% to approximately S$351,000, as we
purchased additional equipment to augment our project capacities for customers; and
(d)
We also made provisions for stock obsolescence to the tune of approximately S$741,000 in
respect of slow moving stock, which suffered price erosion during the Asian financial crisis.
The stock was in relation to in-house developed products. Since then, we have adopted a
business policy of minimising our level of inventory.
The above was partly offset by:
(a)
Decrease in our amortisation of development expenditure by approximately S$284,000 to just
S$42,000, as most of development expenditure was either written off or expensed when incurred;
and
(b)
Decline in miscellaneous operating expenses from approximately S$577,000 to about S$368,000,
due to normalisation of miscellaneous operating expenses. Miscellaneous operating expenses
was higher in FY1998 due to the relocation and expansion of our office premises.
34
Profitability
Resulting from the above, we incurred a loss before taxation of approximately S$3.83 million for the
financial year. As we had a tax credit of approximately S$106,000 in FY1999 due to the reversal of
timing differences, our loss after taxation was moderated to approximately S$3.73 million.
Revenue
Our turnover decreased significantly by about S$3.0 million to approximately S$1.1 million, due
mainly to the premature termination of a major project that we have with Microsoft, resulting in our
revenue from Microsoft declining from approximately S$2.6 million in FY1999 to approximately
S$69,000 in FY2000. Please refer to “Business – Customers” and “Business – Past Projects” on
pages 60 and 61 of this Prospectus respectively. Our turnover of approximately S$1.1 million during
the year was achieved from design fees of approximately S$689,000 from various customers such
as Honor Tone Ltd, Hello Direct Inc. and AKME and revenues from the sales of finished products
and components embedded with our technologies of approximately S$12,000 and S$446,000
respectively.
Expenses
Our operating expenses of approximately S$3.6 million during the period was lower than the S$4.6
million incurred in FY1999. The decrease in operating expenses of approximately S$1.0 million was
due primarily to the following:
(a)
Our development expenditure written off and incurred has decreased by about S$1.5 million to
S$928,000. Development expenditure written off and incurred in FY2000 were for ADSL platform
digital wireless communication apparatus and 2.4 GHz wireless technology platform; and
(b)
Our provision for stock obsolescence has also dropped to just S$64,000 from S$741,000 in
FY1999, as we have less stocks recorded in our books.
The above factors were however partially offset by:
(a)
Doubling of our salaries, bonuses and other personnel-related costs to approximately S$798,000,
as we increased our staff intake to gear up for our planned business expansions; and
(b)
Provision for diminution in value of investment of approximately S$238,000, which was in respect
to a US technology company acquired by AVC in 1995. We had made the provision to more
accurately reflect the fair investment value of the shares.
Profitability
As a result of the above, we incurred a loss before taxation of approximately S$3.22 million for the
financial year.
Taxation
Except for FY1998, there were no tax charges for the other financial years under review in view of
the losses incurred. Our Group had unutilised tax losses and unabsorbed wear and tear allowances
of approximately S$2.75 million as at 31 March 2000. These unutilised tax losses and unabsorbed
wear and tear allowances are available for set off against future taxable profits, subject to approval
by the Comptroller of Income Tax and compliance with the relevant tax legislation.
35
In December 1999, AVC applied to the EDB for a pioneer status with respect to all its technical
design and development activities for high technology telecommunications products. As at the date
of this Prospectus, AVC has not received approval of its application for a pioneer status from the
EDB. Pioneer status, if approved, is usually granted for a period of five to ten years. Under the
pioneer status scheme, AVC’s qualifying income from approved activities will be exempt from income
tax. Dividends paid out of AVC’s exempt income will also be tax exempt when received by AVT. As
the holding company with a 100% beneficial interest in AVC, AVT may pass the exempt dividends
received to its own ordinary shareholders. Accordingly, the pioneer status, if awarded, is expected to
materially reduce our Group’s total tax expense.
FINANCIAL CONDITIONS
Liquidity and Capital Resources
Since the incorporation of AVT, we have experienced negative cashflows as a result of accumulated
losses from operations (including development expenditure) amounting to approximately S$7.22 million
as at 31 March 2000. We have relied primarily on equity funding from our existing and new
shareholders, supplemented by banking facilities, to finance our losses and capital expenditure. As
of the date of the prospectus, we have raised cash proceeds from equity issues amounting to
approximately S$6.7 million. Our Group’s outstanding banking and credit facilities amounted to
approximately S$1,732,000 as at 31 March 2000, and they comprised the following:S$
Bank overdrafts
1,256,000
Hire purchase creditors
298,000
Trust receipts
178,000
Total
1,732,000
The bank overdrafts are utilised by AVC, our wholly-owned subsidiary, and are secured by: (a) the
joint and several guarantees of certain Directors of our Company, namely, Dr Colin Chan, Messrs
Tan Khai Pang and Tan Juay Hwa; (b) two guarantees issued by our Company in the aggregate
amount of S$1.40 million; and (c) fixed deposits of US$500,000. As at 31 March 2000, we have fixed
deposits, cash and cash balance of in the aggregate of approximately S$1.1 million.
Save as disclosed above, our Group had no borrowings or indebtedness in the nature of borrowings
including bank overdrafts and liabilities under acceptances (other than normal trading bills) or
acceptance credits, mortgages, charges, hire purchase commitments, guarantees or other material
contingent liabilities.
Subsequent to the Invitation, the Directors concerned intend to request for a release of the guarantees
made by them to secure the Group’s banking facilities. Our Directors are confident that with our
Company’s listing status and its strengthened financial position from the expected net proceeds from
the issue of the New Shares, our credit rating should improve and we should be able to secure
further or alternative sources of credit facilities at the then prevailing interest rates should the
abovementioned facilities be terminated. However, should the interest rates imposed by the banks be
higher than our current interest rates, our financing costs should not materially increase.
Based on our current anticipated operating plan, we believe that our present cash revenues and the
net proceeds from the issue of the New Shares will be sufficient to meet our expenses and capital
requirements for the next two years. However, our expenses and capital requirements may be affected
by the rate of growth of our project base and the level of resources required to expand our development
and marketing operations needed to keep us abreast of the competition. Accordingly, the timing and
amount of such expenses and capital required cannot be accurately predicted. If our expenses and
capital requirements vary materially from those currently projected, we may require additional financing
sooner than anticipated. We currently have neither long-term debts nor commitments from any third
party for any additional financing and there can be no assurance that any such commitments can be
obtained on favourable terms in the future.
36
We may make a subsequent offering of new Shares on another stock exchange within the next three
years to raise additional capital to fund our growth. The issue price of such new Shares may or may
not be at a discount to the then prevailing market price of our Shares trading on the SGX-ST.
Grants
In late 1999, we applied to the EDB for two grants under the Innovation Development Scheme in
respect of two projects, namely, the design and development of the satellite digital audio receiver
currently being developed for SSRI’s SDARS and the development of a Home Gateway Communicator,
a device that provides integrated broadband Internet services. The details are provided in “Business
– Research and Development – Continuity of Applied R&D – Home Networking and Broadband
Connectivity” and “Business – Current Projects – Design and Supply of SDARS Receivers for SSRI”
on pages 57 and 62 of this Prospectus respectively.
As at the date of this Prospectus, we have not received approval for our grant applications and there
is no assurance that our applications for the grants will be approved. If approved, the grants are
expected to be disbursed over a period in the form of reimbursements based on a certain percentage
of our actual expenditure incurred on the two projects. The grants, if awarded, are expected to defray
our development expenses. In the event of a breach of any of the terms and conditions under which
the grants were made or termination of the projects without reasonable cause, it is expected that the
EDB will have the right to recover any amounts paid to us.
Exchange Rates
Transactions in foreign currencies throughout the financial year were recorded in Singapore dollars
using the approximate exchange rates prevailing on the corresponding transaction dates. Foreign
currency denominated monetary assets and liabilities at the balance sheet date were translated into
Singapore dollars at approximate exchange rates prevailing at that date. All exchange gains and
losses had been dealt with through the profit and loss account. For FY1999 and FY2000, we incurred
gains/(losses) on foreign exchange of approximately S$62,000 and S$(16,000) respectively.
Currently, we do not use any financial instruments to hedge against sales for goods sold or project
progress billings denominated in foreign currencies. Neither do we use any financial instruments to
hedge against the purchase of component parts denominated in foreign currencies. We assess the
need to utilise financial instruments to hedge currency exposure on an ongoing basis and will continue
to do so in the future.
Fixed Assets and Goodwill on Consolidation
Our fixed assets comprised mainly laboratory equipment, office equipment and computers. The book
values of our fixed assets net of accumulated depreciation were approximately S$595,000, S$1.16
million, S$930,000 and S$1.38 million as at FY1997, FY1998, FY1999 and FY2000 respectively. The
substantial increase in fixed assets in FY1998 and FY2000 were attributed mainly to the acquisition
of more new fixed assets brought about as a result of the relocation and expansion of our office
premises in FY1998 and the increased number of projects secured in FY2000.
Our goodwill on consolidation arose as a result of the acquisition of the entire share capital of AVC
by AVT in 1996 for a purchase consideration priced at a premium to the net asset value of AVC
through an exchange of shares between the then existing shareholders of AVC and AVT. The goodwill
on consolidation has been and is expected to continue to be written off on a straight-line basis to the
profit and loss account over its estimated useful life of seven years commencing from FY1997. As at
31 March 2000, the goodwill on consolidation stood at approximately S$906,000. Where future benefits
are not expected to be realised, the goodwill will immediately be written off to the profit and loss
account.
37
Current Assets
Our current assets, which consisted mainly of cash and trade debtors, stood at approximately
S$155,000, S$3.09 million, S$1.59 million and S$2.22 million as at 31 March 1997, 31 March 1998,
31 March 1999 and 31 March 2000 respectively. The increase/decease in our current assets over
the financial years under consideration were mainly due to the increase/decrease in trade debtors,
work-in-progress, fixed deposits and cash balances, which moved in tandem with the magnitude of
our business operations.
Current Liabilities
Our current liabilities, which comprised mainly bank overdrafts and trade creditors, increased from
approximately S$1.04 million as at 31 March 1997 to approximately S$3.44 million as at 31 March
2000. The increase in our current liabilities by approximately S$1.56 million in FY1998 was due
mainly to an increase in trade creditors, in line with the growth of our Group’s business operations.
For FY2000, our current liabilities increased by about S$1.0 million to S$3.4 million. During the
period, we billed our customers, SSRI, Hello Direct Inc. and National Semiconductor Manufacturer
Singapore Pte Ltd an aggregate amount of S$1.9 million for the amount for works that we have
done so far, while we incurred costs amounting to S$0.9 million to carry out those works. As the
costs incurred were in relation to development works for customers, we have capitalised the amount
of S$1.0 million as work-in-progress in our balance sheet. Because of our contractual arrangements
with these customers, we were not able to recognise our billings as revenues for the period, until
contract stipulated significant milestones have been reached. In line with Singapore accounting
practices, we have therefore booked the remaining amount of approximately S$1.0 million as our
current liabilities for the period. When the significant milestones are achieved in FY2001, the progress
billings together with the related costs and accured profits will then be transferred from the balance
sheet to the profit and loss account.
Shareholders’ Funds
Our shareholders’ funds changed during the last four financial years ended 31 March 2000 as a
result of new equity issues, offset by accumulated losses. Our shareholders’ funds were approximately
S$3.12 million, S$5.05 million, S$2.49 million and S$1.46 million as at 31 March 1997, 31 March
1998, 31 March 1999 and 31 March 2000 respectively.
Dividend Policy
We did not declare a dividend for the financial year ended 31 March 2000, in view of our accumulated
loss position.
Currently we do not have a dividend policy. In the future, whether or not we will declare and pay
dividends and the timing and amount of dividends to be paid will depend on our operating results,
financial condition, other cash requirements (including capital expenditure), the terms of our borrowing
arrangements (if any) and other factors deemed relevant by our Directors. There can, however, be
no assurance that dividends will be paid in the future or as to the amount or timing of any dividends
that are to be paid in the future.
Year 2000 Compliance
Since the beginning of 1999, we have taken precautionary steps to safeguard our operations from
possible Y2K problems. This includes upgrading of all PCs with our custom-made software and test
equipment to ensure Y2K compliance.
As our main business is in product design, we have also upgraded our product system test procedure
to include checks for Y2K compliance as part of the product design quality audit.
Although we have crossed over the millennium without experiencing any Y2K problem, we will continue
to be on guard against any potential Y2K problems as we cannot be assured that we will not face
such problems in the future.
38
BUSINESS
OVERVIEW
We are a “last-metre” digital wireless and broadband communications solution provider focusing on
the application of wireless and digital technologies for our customers, which include global leaders in
the communications, IT and electronics industries, such as Microsoft, GE Thomson and National
Semiconductor. As a “last-metre” digital wireless and broadband solutions provider, we design and
supply equipment and portable devices that enable end-users to access communications networks.
To illustrate, you may have a telecommunications network service provider providing connectivity
only up to the doorstep of a home or customer premises. Our focus is to bridge the gap by designing
and supplying telephone sets or gateway devices that enable users to access its network. A good
example is our project to design and supply the satellite digital audio receivers that enable users
throughout the US to gain access to the satellite broadcast radio service provided by one of our
customers, Sirius Satellite Radio, Inc.
With our comprehensive capabilities in product design, we are able to offer our customers valueadded solutions that meet their specific application requirements, and provide shortened time-tomarket for their products, reliable designs and flexibility in resource allocation.
Our core competencies lie in the following areas:
•
Technical know-how. We possess the technical know-how in the implementation of
communications protocols and RF design, particularly in relation to voice and data applications.
•
Provision of comprehensive engineering solutions. In providing these solutions, we may be
involved in all or any combination of the following activities – software development, RF design,
electronics hardware and firmware design, mechanical design, reliability testing, regulatory
compliance and engineering support for mass production. This requires an overall understanding
of the various engineering disciplines and functional constraints imposed by conflicting design
considerations. We have the experience and expertise in managing a team of engineers with
diverse skill-sets.
•
Turnkey project management skills. Beyond technical know-how and the ability to provide
engineering solutions, our competence extends to the management of an entire project. This
includes managing relationships with third party consultants, vendors, contract manufacturers
and regulatory bodies.
Our communications applications make use of broadband technologies that are independent of any
specific infrastructure, whether wired or wireless. These technologies include:
•
Wireless access technologies such as satellite receiver, DECT and Bluetooth;
•
Wired access technologies such as cable modem and ADSL; and
•
Media streaming technologies relating to digital audio, digital video and voice.
As these technologies can readily be deployed in diverse applications, we are well-positioned to
become a beneficiary of the increasing design services outsourcing trend by regional niche players
and major multi-nationals in the electronics and IT industries. In the face of fast-moving technologies
and changing market environment, it is becoming critical for these companies to focus on their core
businesses, control internal costs and respond swiftly to market needs by engaging external expertise
to provide design services. As complexities in product design and product realisation demand a
variety of skills, such skills may not necessarily be available within a company. Rather than building
an all-encompassing internal team, these companies concentrate on their core skills while seeking
external solution providers like us to provide the necessary complementary skills. Please refer to
“Business – Industry Background and Outlook – Growth of the Communications Design Industry –
The Design Services Outsourcing Trend” on pages 45 and 46 of this Prospectus.
39
While we do not limit our operations to any specific field within the communications industry, we
seek to capitalise on opportunities presented by technological changes and market trends. The
explosive growth and acceptance of the Internet and the concurrent expansion in wireless and wired
communications (evidenced by the rapid proliferation of cordless and mobile phones, hand-held and
portable devices, multi-functional Internet access appliances and multimedia devices) have created
extraordinary opportunities for us to grow our business. Our continuous pursuit in developing our
own proprietary technologies, applications and solutions and keeping current a range of our reference
designs or technology platforms in the wireless access, wired access and media streaming
technologies stands us in good stead to capitalise on this growth. In line with our focus, our ongoing
activities include developing satellite digital audio receivers and Internet access and home networking
devices. Please refer to “Business – Research and Development” and “Business – Current Projects”
on pages 55 and 61 of this Prospectus respectively.
40
INDUSTRY BACKGROUND AND OUTLOOK
Our business activities relate to the following growth sectors:
Sector
Our Involvement
Satellite Technology and Satellite
Communications
Development of satellite digital audio receivers for SSRI
(Please refer to “Business – Current Projects – Design and
Supply of SDARS Receivers for SSRI” from pages 62 to 65
of this Prospectus)
Wireless Technology and Internet
Applications
Development of in-house proprietary platforms and being a
member of the R&Bnet@Home Alliance (Please refer to
“Business – Research and Development” on pages 55 and
56 of this Prospectus)
—
—
—
—
DECT
SWAP
Wireless LAN
Bluetooth
Development of DECT telephones (Please refer to “Business
– Current Projects – Further Development of DECT” on page
62 of this Prospectus)
Establishment of alliance in the co-development of Bluetooth
solutions. (Please refer to “Business – Strategy – Developing
Working Alliances” on page 49 of this Prospectus)
Home Networking and Broadband
Connectivity
Development of an ADSL platfor m and being
a member of the R&Bnet@Home Alliance. (Please refer to
“Business – Research and Development – Continuity of Applied
R&D”, and “Business – Current Project – Development of Home
Gateway Products” on pages 57 and 62 of this Prospectus
respectively)
Development of Home Gateway reference design with National
Semiconductor and KRDL. (Please refer to “Business –
Strategy – Developing Working Alliance” on page 49 of this
Prospectus)
Cable and/or Internet Telephony
Development of working prototype of cable and/or Internet
Telephony for commercial application (Please refer to “Business
– Research and Development – Continuity of Applied R&D –
Cable and/or Internet Telephony” on page 58 of this
Prospectus)
Communications Design
Provision of reference design and finished product design
services (Please refer to “Business – Business Model” on
pages 47 and 48 of this Prospectus)
41
Growth of Satellite Technology and the Satellite Communications Sector
The satellite communications sector represents one of the fastest growing segments of the wireless
telecommunications industry. In its 23 June 1999 report, CIBC World Markets Inc. reported that since
1996, the satellite services sector has grown at an annual rate of nearly 30% from a market size of
approximately US$15 billion in 1996 to approximately US$26 billion in 1998. Over that time, the
entire satellite sector (including ground equipment, satellite manufacturing and launches) grew
approximately 20% annually (from a market size of approximately US$45 billion to approximately
US$66 billion). Satellite services revenue growth has led to a rise in its share of the overall satellite
industry from approximately 35% in 1996 to approximately 40% in 1998, a trend that is expected to
continue.
New wireless applications, resulting from increased satellite productivity, have emerged and are helping
to drive the industry’s overall growth. These applications include:
•
Direct-to-home digital television and radio broadcasting
•
Global mobile telephony
•
Wireless Internet access
•
Digital audio broadcast
•
Global Positioning Satellite (GPS)
CIBC World Markets Inc. also reported that the need for telecommunications infrastructure worldwide
is enormous - three billion people have never made a phone call; multi-channel penetration in
developing nations is at a fraction of the levels seen in the US; Internet use continues to double
every hundred days; and demand for fixed telephone lines is forecast to be 500 million (with a
current waiting list of approximately 50 million). Satellite technology has unique advantages over
wired technology that allow it to satisfy a material portion of the need for telecommunications
infrastructure worldwide and develop new areas of potential revenue growth. These advantages
include:
•
Instant infrastructure. Satellites can be launched to serve regions of the world significantly
faster than terrestrial-based technology. Once operational, assuming that ground equipment is
available, a satellite is capable of being accessed immediately by everyone within its footprint,
which is often as large as 40% of the earth’s surface. For a terrestrial network to address the
same number of consumers with the same level of quality service, it would require massive
expenditure and time to build the necessary infrastructure.
•
Coverage. A satellite is capable of simultaneously delivering large amounts of information
everywhere within its footprint on earth. Satellites are thus able to serve regions of the world
that terrestrial-based technology will unlikely ever be able to reach cost-effectively.
•
Quality of service. Once a satellite dish or handset is able to access the satellite, a user is
generally able to receive the same level of service, wherever he is located within the satellite’s
footprint.
•
Economics. Satellites can provide service for significantly less than the cost to build a terrestrial
alternative. The incremental cost of adding new satellite receivers is only limited by the price of
hardware such as a dish or handset.
42
Growth of Wireless Technology in Internet Applications
The last several years have seen an exponential growth of the Internet, which has become a critical
business tool and a daily essential for many home users. As wireless networks become more capable
of transferring data at higher rates, a shift in the way that businesses and individuals access the
Internet is taking place. Individuals are no longer bound to computers, and are increasingly turning
to wireless mobile communications devices such as personal digital assistants, laptops and cellular
phones to download timely information from the Web at the convenience of “anytime, anywhere”.
Information such as share prices, movie listings and weather reports are available at the touch of a
button. In particular, the widespread use of e-mail and e-commerce has fostered an increasing
acceptance of wireless mobile communications devices.
While the use of digital wireless communications is not new, the potential for growth is dramatic,
particularly in broadband wireless communications. In its 6 December 1999 report, the Strategis
Group’s report on the wireless broadband market predicted that by 2003, not less than 34% of the
US households and 45% of the US businesses will be serviceable by a broadband wireless network.
Similarly, Allied Business Intelligence reported that there were fewer than 100,000 wireless broadband
subscribers in 1998. By 2004, this number is expected to rise to over 4 million, or close to one-fifth
of the total broadband access pie. The market research firm, Dataquest, also predicted in its report
that revenue for wireless data services are expected to grow from approximately US$460 million in
1999 to US$3 billion in 2003.
Various wireless access options as follows are available to provide a range of broadband solutions:
DECT
DECT is a pan-European wireless access standard capable of supporting voice and data applications.
The most common application is its use in cordless telephony supporting simultaneous multiple
handset communications. According to Dataquest, the fastest growing market for cordless telephone
products is the residential telephone market. Shipments of cordless DECT telephones reached
approximately 11.6 million units in 1997 and had approximately a 33% share of total residential
telephones. This figure is expected to grow 34% by 2002.
SWAP
SWAP is a modified version of DECT and is becoming popular as a standard in the US market.
Supported by the Home RF Working Group that consists of over 40 members from leading consumer
electronics, PC and communications companies worldwide, SWAP defines a new, common interface
in the 2.4 GHz band to support both wireless voice and LAN data services in the home environment.
Wireless LAN
In industrial environments and the SOHO (Small Office/Home Office) environments, wireless LAN
provides a high degree of mobility and ease of reconfiguration of networking between PCs and
laptops. The IEEE 802.11 is the wireless LAN industry standard that enables wireless data transfers
of up to 11 Mbps.
Bluetooth
Bluetooth is a broadband wireless technology that is gaining increasing acceptance in the
communications industry. Bluetooth is a technology specification for small form factor, low cost, short
range wireless radio linked devices. For both consumer and corporate applications, Bluetooth
technology will enable mobility during a cordless connection of up to a 100-metre distance and
allows users to establish quick, ad hoc connections with colleagues, friends and office networks.
Bluetooth is backed by over 1,200 companies around the world, including Intel, Microsoft, IBM,
Lucent, Motorola and 3Com. Similarly, market research firm, Cahners In-Stat Group, estimated that
in 2003, manufacturers will ship over 200 million units of products that are Bluetooth-enabled. It
estimated conservatively that that number will triple by 2005.
43
Bluetooth Enabled Products
250
Million Units
200
150
100
50
0
1999
2000
2001
2002
2003
Year
Source: TWICE (This Week In Consumer Electronics) magazine, 7 January 2000
Growth of Home Networking and Broadband Connectivity
Home networking will enable wireless communications between devices in the home, and allow such
devices to be accessed from a remote location. At the centre of home networking is a Home Gateway
which serves as a hub for communicating, processing and flow control. Access from a remote location
to the Home Gateway may be through an existing network such as a telephone network or a cable
television network. Cahners In-Stat Group estimated that the worldwide market for broadband-centric
and set-top Home Gateway devices will grow to over 1 million units by 2000, and over 40 million
units by 2003.
The proliferation of the Internet has caused a paradigm shift in work and life styles. The increasing
trend of working from home is given a boost by the increased connectivity offered between devices.
The concept of home networking is driven by the following factors:
•
Telecommuters and home-based businesses
Concern over cost control and wastage in commuting time has resulted in an increasing number
of corporations making arrangements for their staff to work from home. It was reported in the
7 January 2000 issue of TWICE magazine that 6,000 employees of Pacific Bell, about half of
the company’s salaried workforce, are authorised to telecommute, resulting in an estimated
US$30 million savings between 1995 and 1997.
•
Communication-enabled consumer-based appliances
The confluence of communications and consumer electronics technologies is extending the
functionality of traditional consumer-based appliances. Traditional appliances such as set-top
boxes, telephones, hi-fi sets, refrigerators, air conditioners, water heaters and even coffee makers
will no longer be confined to their intrinsic functionality. Home networking connectivity standards
such as IEEE1394, IEEE802.11, Bluetooth, infra-red and SWAP are established to ensure that
such devices can communicate with each other within the home, while broadband connectivity
standards such as ADSL will provide the link from the home to the communications infrastructure
outside.
44
US$ million
Home Networking Revenues (North America)
1600
1400
1200
1000
800
600
400
200
0
1998
1999
2000
2001
2002
2003
Year
Source: TWICE (This Week In Consumer Electronics) magazine, 7 January 2000
Growth of Cable and/or Internet Telephony
Deregulation and converging technologies are allowing cable companies to enter the telephony service
businesses. While the Telecommunications Act of 1996 in the US officially permitted cable operators
to enter the market, it was from 1998 that the cable operators began to make a foray into the
market. The initial deployment of cable telephony service has used older circuit switched technology.
This technology is similar to that of the current telephone system, but is expected to be quickly
replaced with IP-based technology. Standards regulating IP-based telephony over a cable network
enables a cable operator to offer Public Switch Telephone Network (PSTN)–quality telephony services.
On 21 January 2000, the Singapore government announced its decision to bring forward the
introduction of full market competition in the telecommunications sector by two years to 1 April 2000.
Singapore Cable Vision, which has set up the cable infrastructure in Singapore to provide cable
television services, is well-positioned to provide telecommunications services via a cable network.
Singapore Cable Vision announced in The Straits Times on 25 January 2000 that it is targeting to
roll out an IP-based phone service on its broadband network and expects to complete the project by
the fourth quarter of this year. Please refer to “Business - Research and Development – Continuity
of Applied R&D – Cable and/or Internet Telephony” on page 58 of this Prospectus.
Growth of the Communications Design Industry
The communications design industry is characterised by two recent developments, namely, the
outsourcing of design services as well as the increasing demand for turnkey design services.
The Design Services Outsourcing Trend
In its report dated 9 May 1999, Knight-Ridder Tribune Business News reported that companies in the
telecommunications industry are in the process of embracing outsourcing and the major players that
are likely to outsource are Nortel, Lucent Technologies, Motorola, Siemens, Alcatel, Ericsson and
Nokia. In March 2000, Nikkei Electronics Asia reported that a market research study conducted by
EDA Today revealed that design services are growing at a rate of over 100% in North America. A
significant number of customers indicated a preference for engaging contract design service providers
as their outsourcing partners rather than contract manufacturers with design capabilities, with a 19:7
ratio in favour of contract design service providers.
Design services outsourcing is driven by three main forces: the scarcity of design engineers trained
in the relevant methodologies; the compression of design schedules and aggressive time-to-market
requirements; and the increasing complexity of design flows. As a consequence of escalating
complexity in design requirements and the need to enter new markets, many electronics and
communications companies now need to access technology areas outside their current areas of
expertise. These companies are relying increasingly on niche or boutique speciality solutions providers
to fill the gap in their design capabilities.
45
Rather than maintaining the fixed overhead of full-service in-house software and product design
capabilities, these companies find it more cost efficient to outsource certain design work requirements
to independent solutions providers. Other companies outsource to free up their in-house design
resources so that they can deploy their internal engineers on other design projects and handle more
projects concurrently. Even companies that have substantial R&D resources turn to outsourcing
because it allows them to select the most suitable design partner according to the specifications of
each project. This ultimately translates into a shorter design cycle and a faster time-to-market for
their products. These companies may also outsource part of their in-house design work so as to
focus on their core competencies as well as to hedge their business risk in case of a market downturn.
The Turnkey Design Services Trend
The ability to supply a complete solution – from the initial design phase through to the manufacture
of a product – provides additional functionality to companies that outsource. These companies are
able to focus on coherent solutions from start to finish rather than having to integrate diverse
components from multiple vendors. The enhanced ability to be a turnkey provider and one-stop
design services centre provides simplicity in terms of design solutions as well as point-of-contact. A
growing number of companies have embraced the competitive edge afforded by turnkey design
services. For example, in December 1999, NatSteel Electronics Limited, a contract manufacturer
listed on the Main Board of the SGX-ST, entered into an alliance with Accton Technology Corp., a
Taiwanese design company which provides design, software development, marketing and logistics
services for networking and communications products such as switches, hubs and routers. Cadence
Design Systems Inc., a leading developer of electronics design automation software for the electronics
systems manufacturing market, has also acquired a number of independent electronics design firms
to complement its existing electronics design services division, as shown in the table below:
Recent acquisitions of independent electronics design firms by Cadence Design Systems Inc.
Acquired Electronics
Design Firm
Business Activities
Date Acquired
Diablo Research Company
Design of wireless communications systems,
Global Positioning Satellite (GPS), home and
building automation systems and home networks
December 1999
Orcad Inc.
Supply of computer-aided engineering and
computer-aided design software and provision of
services for the printed circuit board industry
July 1999
Quickturn Design Systems
Inc.
Design, manufacture, sale and support of hardware
and software products for verification of the design
of computer IC chips and electronics systems
May 1999
Design Acceleration Inc.
Supply of design verification technology used in
System-On-a-Chip (SOC) design
January 1999
Ambit Design Systems Inc. Development of design automation technology
used in SOC design
September 1998
Excellent Design Inc.
Provision of ASIC and SOC design and library
development
April 1998
Symbionics Group Ltd
Provision of product development design services
to leading electronics manufacturers
April 1998
Source: SEC Filing by Cadence Design Systems Inc. dated 15 November 99
46
BUSINESS MODEL
With our in-house communications product design capabilities and knowledge of manufacturing and
production processes, we provide comprehensive solutions ranging from software development, RF
design, electronics hardware and firmware design, mechanical design, reliability testing, regulatory
compliance to engineering support for mass production. We also supply customised IC chips and IC
chipsets embedded with our proprietary software. In addition, to remain technologically relevant, we
engage in ongoing development of new in-house technology platforms in the field of emerging
communications technologies.
An overview of our business model is graphically represented below:
The following are representative of the types of projects undertaken by our Group:
Reference Design
Reference design work involves the design of product prototypes using IC chips from IC chip
manufacturers. The objective of reference design is to design and build a complete working prototype
(usually comprising a printed circuit sub-assembly and IC chips) which works to demonstrate the
possible uses and applications of the IC chip concerned and the functionality expected of the
application.
We usually develop and keep current a range of our own reference designs. For instance, we are
currently developing technological platforms such as Bluetooth, ADSL and DAB. These reference
designs may form a basis for us to undertake finished product design work as and when required by
our customers. Unlike finished product design, we do not design the exterior styling and appearance
of a product when we undertake reference design.
47
We are engaged by IC chip manufacturers to develop reference designs for them to demonstrate the
range of potential applications of their IC chips. Our reference designs will be used by the IC chip
manufacturers to demonstrate the potential applications when they promote and market their IC
chips to their customers. We are paid a design fee by our customers for reference design projects.
Whenever a customer buys IC chips from such IC chip manufacturers, we are well-positioned to be
engaged by the customer to undertake finished product design work for it, using our reference
design as a base to reduce the time-to-market for their products.
Finished Product Design
Typically from a reference design, we may move on to finished product design work where we
develop a product and deliver the final prototype together with manufacturing specifications to our
customer. Our finished product design capabilities extend to exterior styling and appearance, when
required. We are able to offer these aesthetic services by working closely with industrial design
companies in Singapore and overseas with whom we have developed non-exclusive working alliances.
We have undertaken finished product design work for companies such as Microsoft, AKME and GE
Thomson. We are paid an upfront design fee for our finished product design work and are typically
entitled to a revenue share from the sale of the finished products embedded with our proprietary
software.
Related Sales of IC Chipsets
These are in respect of finished product designs in which we supply IC chips and IC chipsets
embedded with our proprietary technologies. In our usual commercial arrangements with our
customers, we will purchase IC chips and IC chipsets, embed our proprietary software in the IC
chips and IC chipsets and supply them to our customers at a profit. In one instance, we designed a
DECT cordless telephone for a customer to whom we will eventually sell an IC chip embedded with
our proprietary software. In another instance, we designed a caller ID product and sold the IC chip
embedded with our proprietary caller ID software. In addition to receiving design and consulting
fees, we may be entitled to a share of revenue from the sale of components customised by us. In
such cases, we may earn per-unit licence fees and/or a one-time lump sum payment for a proprietary
right-to-use licence.
Providing Turnkey Solutions
In addition to finished product design, we have extended the range of our services to include providing
turnkey services from the initial design to supply of a manufactured product. We work closely with
leading contract manufacturers in the region as our respective capabilities can strategically complement
each other. We have a team of senior personnel with in-depth experience and expertise in
manufacturing and managing production processes. They are familiar with the sourcing of parts and
components from third party vendors. Where possible, we use off-the-shelf ICs. If this is not feasible,
we design using discrete components with the possibility of integrating them into an ASIC for cost
reduction and proprietary design protection.
For the provision of turnkey solutions, we earn design fees for designing and developing solutions
as well as profits from the sale of finished products to end-customers.
We are currently providing turnkey solutions to NASDAQ-listed SSRI, which has engaged us to
design, develop and supply satellite digital audio receivers for its satellite digital audio radio service
in the US. For this project, we will earn a design fee and profits from the supply of the satellite
digital audio receivers. Please refer to “Business - Current Projects – Design and Supply of SDARS
Receivers for SSRI” from pages 62 to 65 of this Prospectus. We have also been engaged by
NASDAQ-listed Hello Direct Inc. to design and supply a state-of-the-art 2.4 GHz Digital Wireless
Telephone Headset. Please refer to “Business – Current Projects – Development of 2.4 GHz Digital
Wireless Telephone Headset” on page 62 of this Prospectus.
48
Development of Proprietary Applications and Solutions
We have been and will continue to be engaged in the ongoing development of our in-house proprietary
technology in the field of digital wireless and broadband communications. For instance, we have
developed a digital wireless Communication Apparatus (with its patent pending) based on our
proprietary wireless communication protocol for full duplex voice and data communications. Please
refer to “Business – Research and Development – Established In-House Proprietary Platforms digital wireless and portable communications network designs based on DECT” on pages 55 and 56
of this Prospectus.
STRATEGY
In order to meet our business growth objectives, we will need to further develop and improve our
services and pursue customers globally. Specifically, our growth strategy includes the following key
elements:
Developing Working Alliances
We have been and will continue to work closely with contract manufacturers with the capability to
mass manufacture according to our product specifications. We collaborate with certain R&D institutions
and work with companies in complementary fields, such as digital signal processing. We intend to
maintain these alliances and to establish non-exclusive relationships with other design companies
and test service providers. We are constantly exploring and seeking new business and working
arrangements with participants in related industries to enhance our ability to provide turnkey solutions.
Our current strategy is not to undertake any manufacturing activities or hold significant inventories.
An additional prospective business strategy calls for us to capitalise on our expertise in reference
design by investing in promising start-up companies. In exchange for our reference design services,
we may seek to obtain an equity stake in these companies.
National Semiconductor and KRDL
In January 2000, through AVC, we forged a partnership with National Semiconductor and KRDL to
develop a reference design for Home Gateway products. This reference design will serve as a
platform for embedded system designs in the applications of home networking. Please refer to
“Business – Current Projects – Development of Home Gateway Products” on page 62 of this
Prospectus.
Philips Semiconductors International BV
In May 2000, through AVC, we entered into a strategic co-operation with Philips Semiconductors
International BV to jointly develop Bluetooth solutions with the aim to become a market leader in the
Bluetooth arena. The co-operation entails Philips to provide ICs, such as RF and baseband ICs
together with any software elements, and AVC to provide tools, software and system designs as well
as applications and product development support to the customers. Please refer to “Business –
Current Projects – Development of Bluetooth Solutions” on page 62 of this Prospectus
Pursuing a Global Customer Base through the Establishment of Overseas Offices
Through AVC(USA), we have established a marketing office in San Jose. While our design activities
are presently conducted in Singapore, we aim to pursue a global customer base by establishing
marketing offices in Europe and China and may expand our San Jose, US office to include
development activities. Our presence in San Jose, US is intended to serve as a channel to keep
abreast of the latest developments in Silicon Valley, US as well as to increase our profile and attract
new customers.
49
Improving and Expanding Our Range of Core Technology and Skills
We maintain a policy of not engaging in pure R&D activities that may be commercially remote. We
assume development activities that are project or program driven, similar to that of a product or
application development company. We continuously strive to improve and upgrade our core technology
and skills competency to meet customers’ requirements. Skills upgrading is accomplished through
the recruitment of qualified personnel, provision of on-the-job training and regularly sending existing
employees to seminars and courses conducted by professional organisations. A number of our
technical staff have in the course of their employment with us attended part-time masters degree
programs and diploma or advanced diploma courses in fields such as RF design, electronics
engineering, telecommunications engineering, software engineering and industrial and systems
engineering. We encourage sharing of design experience and knowledge by conducting in-house
seminars and talks on issues such as regulatory requirements, product development experience and
new technical specifications. We have sent our employees on short-term attachments to work with
our key customers. For example, two of our employees were attached to IBM Japan to gain expertise
and experience in real time operating systems.
Core technologies and skills are also obtained through the recruitment of personnel, licensing and
transfer of technologies from third parties as well as the possible acquisition of other design companies.
We strive to distinguish ourselves in the turnkey solutions industry by leveraging on our core functional
expertise in several technology sectors such as DAB, Bluetooth, ADSL and Home Gateway. For
example, we invest in emerging platforms such as Bluetooth with a view to achieve a shorter timeto-market for Bluetooth-enabled products. These sectors, outlined in “Business - Industry Background
and Outlook” from pages 41 to 44 of this Prospectus, are poised for rapid growth in the coming
years.
Expanding Our Design Resources and Capacity
To satisfy the demand for our services, we will continue to expand our design resources by increasing
our manpower and facilities. We also foresee the possibility of increasing resources through the
acquisition of other design companies or their businesses.
Attracting and Retaining Employees with Core Competencies
Our success is dependent on the abilities of our management and technical staff whose knowledge
and competencies are critical to our business. In order to attract and retain highly qualified employees,
we operate under an informal working environment with flexible working hours. All our confirmed
staff as at the date of this Prospectus have been offered Incentive Shares in our Company after its
conversion to a public company. We also intend to adopt an employees’ share option scheme to
promote equity ownership of our Company.
Engaging in Ongoing Development of Technology Platforms and Proprietary Applications
We engage in the ongoing development of emerging technology platforms or enhancement of existing
platforms for new applications such as ADSL and Bluetooth. With these platforms, we are confident
of maintaining our competitive edge by having a current range of proprietary reference designs that
form the basis for finished product design.
50
COMPETITION
We operate in a competitive business environment. We expect more independent design companies
to emerge as the demand for outsourcing of design services increases. In order to succeed and
remain competitive, we must quickly gain industry acceptance for our professional services and
expertise and offer better strategic concepts, technical solutions and response time, or a combination
of these factors, than our competitors. Our competitors include:
•
independent design houses in Europe, the US and Asia such as Inventel Systemes and RTX
Telecom A/S;
•
design divisions within a large telecommunications equipment manufacturer such as Vtech
Communications Inc., DBTel Incorporation, and LG Electronics, Inc.;
•
design tools (CAD/CAM) providers that provide turnkey design services such as Cadence Design
Systems Inc.;
•
media and PC companies diversifying into the communications product design industry such as
Acer Computer International Ltd; and
•
Internet phone companies providing product design such as Aplio Inc., US.
In the fast-paced technology business environment, our competitor for a particular project may turn
out to be our customer or vendor in another project. As time-to-market is a high priority, we may
subcontract part of our work to a competitor to exploit each other’s strengths in order to meet
customers’ schedules. Please refer to “Risks Relating to Business and Operations – Risks Relating
to Our Company or Industry – We face intense global competition” on page 19 of this Prospectus.
COMPETITIVE STRENGTHS
Our Directors consider the following to be the competitive strengths of our Group:
Ability to Provide Turnkey Project Management and Comprehensive Solutions
We have the ability to provide total turnkey solutions for both wired and wireless communications
systems. We have an in-depth understanding of the underlying commercial and practical considerations
required to mass produce commercially viable products at competitive costs. Our turnkey solutions
cover the entire spectrum from concept to design to obtaining regulatory approvals and to production.
Our in-house capabilities include:
•
Hardware and RF Design which encompasses RF, analog and digital circuit design and printed
circuit board design and implementation.
•
Software Design which covers embedded firmware design for device drivers, development of
communications protocols and FPGA implementation.
•
R&D Management which encompasses overall product development management, including
managing relationships with vendors, contract manufacturers, customers and regulatory bodies.
•
Test Development Engineering for the design and implementation of test methods and
procedure for mass production.
•
Quality Engineering which encompasses reliability analysis, filing necessary applications for
licenses of regulatory approvals, quality audit and engineering documentation control.
•
Manufacturing Support which encompasses vendor qualification, setting up of production lines
and test facilities and production coordination.
•
Mechanical Design which involves three-dimensional design of plastic, metal or rubber parts,
tooling supervision and assembly processes for encasing and packaging a product.
51
The engineering skill-sets and technical experience of our employees are detailed as follows:
Engineering Skillsets of Our Employees
as at 31 March 2000
8%
8%
30%
10%
6%
30%
8%
HARDWARE & RF DESIGN
MFG SUPPORT
MECHANICAL DESIGN
SOFTWARE DESIGN
QUALITY ENGR
R&D MGT
TEST DEVELOPMENT ENGR
Technical Experience of Our Employees as at 31 March 2000
Person-Years of
Experience
Number of
Technical
Employees
140
15
9.3
Software Design
91
15
6.1
R&D Management
56
4
14.0
Test Development Engineering
55
4
13.8
Quality Engineering
42
5
8.4
Manufacturing Support
39
4
9.8
Mechanical Design
21
3
7.0
444
50
8.9 (Average)
Disciplines
Hardware & RF Design
Total
Average
Person-Years
of Experience
Our turnkey capabilities allow us to capitalise on the growing trend among multi-national electronics
corporations that outsource their design and engineering work to independent solution providers. We
are able to offer a seamless service by taking on the responsibility of managing a project from start
to finish. Our turnkey solutions and comprehensive project management capabilities provide our
customers with a single contact point. This simplified point-of-service ultimately translates into better
quality products as well as savings in time and cost for our customers.
Competency in Communications Technologies
We have a competent technical team with a proven track record in the design and development of
communications products. Please refer to the chart entitled “Engineering Skill-sets of Our Employees
as at 31 March 2000” and table entitled “Technical Experience of Our Employees as at 31 March
2000” above. In particular, our RF design capabilities extend to the microwave range, which, coupled
with our in-depth understanding of communications protocol standards, allow us to provide innovative,
comprehensive and timely design solutions to our customers. In addition, we incorporate enhanced
features in these solutions that will subsequently become our proprietary technology.
52
We have a pool of wireless communications proprietary design platforms that have been used
successfully in a number of our projects. We have to date filed two patent applications for our
proprietary developments and are currently involved in developing platforms using emerging broadband
technologies such as Bluetooth and ADSL. Please refer to “Business – Intellectual Property – Patents”
on page 65 of this Prospectus and “Business – Research and Development – Continuity of Applied
R&D – Home Networking and Broadband Connectivity” on page 57 of this Prospectus.
We are represented on the Technical and Equipment Forum under the National Digital Audio Broadcast
Steering Committee established by the Singapore Broadcasting Authority to set standards for DAB in
Singapore. We are a member of the R&Bnet@Home Alliance, an initiative promoted by the IDA.
Please refer to “Business – Research & Development – Continuity of Applied R&D – R&Bnet@Home
Alliance” on page 58 of this Prospectus.
Ability to Provide Customised Solutions
Our track record shows that we understand our customers’ requirements and are able to provide
them with customised solutions that meet their complex needs. In most cases, we conduct a feasibility
study for our customers and provide a comparison of the various solutions available. As our
understanding of product specifications extends to regulatory requirements, our ability to provide
customised solutions includes obtaining the necessary regulatory approvals for telecommunications
products in North America, Europe and Asia.
Manufacturing Support Know-How and Experience, and Proximity to Low Cost Manufacturing
With our in-house manufacturing support team, we have an established track record in carrying
through the design process to oversee mass production of the final product by contract manufacturers.
This may include the setting up of production lines and test facilities, quality checks and optimising
process flows. Being based in Asia, we have the additional advantage of being close to contract
manufacturers which provide low cost manufacturing.
Flexible Business Model that Attracts Customers with Diverse Manufacturing Needs
As we do not own manufacturing operations, our customers are not limited in their choice of contract
manufacturer. We either recommend a contract manufacturer or engage the contract manufacturer
selected by our customer. By focusing on our core competencies in product development and
manufacturing support, we avoid the cost involved in maintaining factory operations and holding
inventory. Please refer to “Business – Industry Background and Outlook – Growth of the
Communications Design Industry – The Design Services Outsourcing Trend” on pages 45 and 46 of
this Prospectus.
Our Technology Platforms Span Major Communications Infrastructure
Our expertise in broadband access technologies covers established pervasive communications network
infrastructures such as satellite networks, Public Switch Telephone Networks (PSTN) and cable
television networks. We take advantage of the growth in each of these infrastructures by positioning
ourselves as a “last-metre” digital wireless and broadband communications solution provider. We
provide end-users with connectivity and innovative solutions and applications to the communications
infrastructure of their choice, whether wired or wireless.
Access to Local Technical Support and Infrastructure
Being located in Singapore, we have the advantage of low cost access to well-equipped testing
facilities with state-of-the-art equipment. This allows us to reduce our capital investment in expensive
test equipment that is required infrequently. We have, as an extended technical resource, ready
access to consultancy services provided by local research institutions. Further, we are able to benefit
from Singapore’s sophisticated broadband infrastructure by using the network as a test bed for
innovative products and services.
53
We are a People Oriented and Employee Owned Company
We are a people-oriented organisation and more than 95% of our employees are shareholders of
the Company as at the date of this Prospectus. Our organisational philosophy embraces the elements
of creativity, trust and respect, accountability and responsibility. Over the years we have built up an
organisational climate that cultivates personal excellence and teamwork. As such, our staff are
empowered and motivated. For example, each of our projects is spearheaded by a project leader
who is entrusted with the task of managing the project from conceptualisation to mass production. In
return for their contributions, all confirmed employees of our Group as at the date of this Prospectus
have been offered Incentive Shares in our Company after its conversion to a public company. As
evidence of their commitment, our Directors and Executive Officers, holding beneficially in aggregate
approximately 49% of the enlarged issued and paid-up share capital of our Company (excluding the
Reserved Shares) immediately following the completion of the Invitation, have undertaken not to
dispose of their respective interests in our Company as described in “General Information on Our
Company and Our Group – Moratorium” on pages 84 and 85 of this Prospectus.
Established Track Record
We have an established track record in providing comprehensive solutions to industry leaders. Over
the past four years, we have successfully completed a wide range of wired and wireless
communications projects for major global customers that include Microsoft and AKME. Our competence
is further demonstrated by the fact that we are a key solution provider selected by SSRI to design
and develop the satellite digital audio receivers for its SDARS in the US.
Established Documentation and Design Quality Audit System
We apply established and practical procedures in our product development process. AVC received
the ISO 9001 certification in October 1999 for its product design and development process, which
forms the core of its design quality audit system. These procedures include a design bug tracking
system that monitors the status of all design-related problems arising from testing, which serves as
a useful basis for design verification with our customers.
Our comprehensive documentation procedure periodically updates all engineering documents
generated on a project-by-project basis. Security measures on the backup system include control of
access and software storage of our product design information with an external professional security
organisation. In the course of our business, our proprietary knowledge acquired from time to time is
documented for preservation and dissemination to our employees. We protect our intellectual property
rights via copyrights and, where possible, through patent protection.
We adhere to a product design and development process which is described in the flowchart on
page 55 of this Prospectus.
54
Product Design and Development Process
Product Idea Formation /
Contract Negotiation Phase
Product Conceptualisation & Introduction- Plan
Phase
Design & Development Phase
y
y
y
y
Phase
Phase
Phase
Phase
1
2
3
4
/
/
/
/
Prototype Phase (Reference Design)
Alpha Run (Hand Made Sample)
Beta Run (Engineering Sample)
Pilot Run (Final Design)
Mass Production Phase
Product Handover Phase
RESEARCH AND DEVELOPMENT
R&D for Applications
We do not undertake any pure R&D activities that may be commercially remote. We undertake
development activities that are product or program driven, akin to those undertaken by product or
application development companies, taking into account the underlying commercial and practical
considerations required to mass produce commercially viable products at competitive costs.
Established In-House Proprietary Platforms
Over the years, we have established a variety of hardware and firmware platforms applicable to the
product designs undertaken for our customers. The following are examples of in-house proprietary
projects that we have developed:
55
Analog Cordless Telephone Products Ranging from 27 MHz to 900 MHz
Since the incorporation of AVC, we have developed several analog cordless telephones for residential
applications. In 1996, we designed an analog cordless phone with digital answering features for the
European market. In the same year, we also designed a cordless telephone with corded handset
features for a China-based company. Between 1997 and 1998, we incorporated our 900 MHz design
platform into a cordless telephone capable of interfacing with a PC that runs on Microsoft’s Call
Manager software; this project demonstrates our ability to apply known technology to new applications.
Wireless Digital Communications Designs based on DECT
In 1997, we successfully designed a DECT telephone that complies with Germany’s DECT regulatory
requirements. Our DECT telephone, which is capable of supporting multiple handsets, won a Singapore
Design Award from the Trade Development Board in 1998. Our competence in DECT technology,
particularly in firmware development, is clearly demonstrated in this achievement as all the
communications protocols were developed in-house.
Based on our DECT platform, we created a design that is able to support simultaneous digital voice
and data transmission as well as full-duplex digital voice conference supporting up to three parties
without a central base unit. We have filed a patent for this design. Please refer to “Business –
Current Projects – Development of a Digital Wireless and Protable Communication Network System”
and “Business - Intellectual Property – Patents” on page 65 of this Prospectus.
Telephones with Call Waiting Caller ID
Between 1998 and mid 1999, we designed several telephone models that were subsequently sold to
end-customers, including GE Thomson and AKME. These telephones were designed with call waiting
caller ID systems and voice mail functions that comply with telephone network standards laid down
by the US-based Bell Communications Research Inc. and Telecommunications Industry Association.
We modified our designs for similar products targeted at the French and Mexican markets. These
projects demonstrate our familiarity with the telephone network and data transmission protocol
requirements in the US, France and Mexico.
Portable Wireless Data Communications Devices
Between 1996 and 1997, we built a portable wireless data communications platform that was
subsequently developed into a portable wireless data communications network. In 1998, this design
was used in our project for CET Technologies. Please refer to “Business – Past Projects – Portable
Wireless Data Communications System for CET Technologies“ on page 61 of this Prospectus.
R&D Facilities
Presently, approximately 560 sq m or 60% of our premises is used for product development activities.
We have recently entered into a lease agreement, which takes effect from 22 June 2000, for an
additional 949 sq m of office space located adjacent to our present premises. The expansion of
office space will yield us a total floor space of approximately 1,900 sq m, of which we plan to utilise
approximately 1,000 sq m for product development activities. We have invested over S$1 million in a
wide range of test instruments and computer-aided design tools. Our test instruments cover analysis
and measurements of RF designs, telephony designs, electrostatic discharge and ADSL testing. We
also have an in-house temperature-humidity chamber used for ongoing testing of our product reliability.
We use CAD tools for three-dimensional mechanical design, multi-layer printed circuit board design,
circuit design simulations and FPGA design.
While we leverage on external test facilities to complement our in-house test capabilities for product
development, we also intend to continue to invest in new equipment and tools that are critical to the
implementation of our design. Please refer to “Business – Competitive Strengths - Access to Local
Technical Support and Infrastructure” on page 53 of this Prospectus.
56
Continuity of Applied R&D
Development Expenditure
From FY1999 to FY2000, we have incurred and written off approximately S$3.40 million in development
expenditure for various technology platforms which we have invested in. Despite the benefits which
we may continue to enjoy as a result of the development efforts, these investments have been
written-off as a matter of prudence, in accordance with generally accepted accounting practices in
Singapore. Please refer to the “Results of Operations and Financial Conditions – Revenues and
Expenses – Amortisation Writing Off and Incurring of Development Expenditure” on page 31 of this
Prospectus.
To maintain our competitive advantage, we continue to develop in-house proprietary platforms in the
field of wireless and wired broadband communications technologies. By building an array of readyto-use hardware and applications platforms, we are able to provide final product solutions that meet
customers’ expectations.
Home Networking and Broadband Connectivity
We focus on broadband communications such as ADSL, cable modem, Bluetooth and other 2.4 GHz
SST evolving from our DECT expertise. Our development in media streaming covers digital audio
and integrated digital voice and data transmission technologies. Our development activities in
embedded system design extend to ASIC in the arena of home networking. We believe that these
technology platform developments can be applied to the high growth areas of Internet access devices
such as Bluetooth-enabled devices, connectivity-enabled appliances and home networking.
57
R&Bnet@Home Alliance
As part of our initiative to prepare for home networking, we are a member of the R&Bnet@Home
Alliance. The R&Bnet@Home Alliance is an alliance of private companies and public research
organisations under an initiative promoted by the IDA in June 1999. The aim of the alliance is to
utilise both Bluetooth and diffused infra-red technologies to develop solutions to provide high-speed
broadband wireless access to multimedia information from homes in Singapore. The objective is to
provide a reference design for demonstration at international IT and communications exhibitions.
The other members of the R&Bnet@Home Alliance includes KRDL, NTU’s School of Electrical and
Electronics Engineering, Centre for Signal Processing and the Institute of Microelectronics.
Cable and/or Internet Telephony
We have developed a working prototype for the concept demonstration of cable telephony. Our solution
is a low cost product that can be retrofitted into General Instruments’ set-up boxes to support either
IP or conventional telephony. With the recent deregulation of the telecommunications industry, we
foresee a demand for such a product. As we have a lab-tested prototype, we are in a good position
to demonstrate our concept of a cost-effective, scalable and user-friendly cable telephony device to
cable service providers with relatively minimal modifications to our current prototype.
EMPLOYEES
As at 31 March 2000, we have 64 full-time employees. Please refer to the table entitled “Technical
Experience of Our Employees as at 31 March 2000” and the chart entitled “Engineering Skill-sets of
Our Employees as at 31 March 2000” on pages 52 and 58 of this Prospectus respectively.
The educational qualifications of our employees are set out in the chart below:
Educational Qualifications of Our Employees
as at 31 March 2000
5%
13%
17%
25%
34%
6%
PhD
Masters
Bachelor
Advanced Diploma
58
Diploma
Others
We have good relationships with our employees. Since 1996, our average monthly personnel turnover
has been less than 0.5%. We have had no material work stoppages or labour disagreements. None
of our employees is unionised. The number of our full-time employees is not affected by any seasonal
factors. The growth in our total staff strength over the past four years is shown in the chart as
follows:
Number of employees
Total Staff Strength
80
70
60
50
40
30
20
10
0
64
44
46
Mar 1998
Mar 1999
22
Mar 1997
Mar 2000
Year
COMPONENTS AND SERVICE VENDORS
As a solution provider, we determine and choose those components that best meet our product
development requirements. As a rule, we choose generic or readily available components which
reduce our risk of being too dependent on any particular supplier.
Component and service vendors accounting for 5% or more of our Group’s total purchases in each
of the past three financial years are as follows:
Components and Service Vendors
FY1998
FY1999
FY2000
Service
CWC
—
—
18%
Design Exchange Pte Ltd
—
—
14%
PSB
—
—
6%
—
—
29%
8%
—
8%
Achieva Components Pte Ltd(2)
—
30%
—
Alps Electric (S) Pte Ltd
—
8%
—
—
10%
—
7%
—
—
35%
—
—
Components
Maxisum Ltd(1)
Philips Singapore Pte Ltd
(3)
Semicon Components Pte Ltd
AE Technology Sdn Bhd
Omni Mold Ltd
Notes:
(1) Maxisum Ltd (HK) is a subsidiary of Memec Asia Pacific Ltd (HK) which is a distributor for Xilinx components.
(2) Achieva Components Pte Ltd is a distributor of Texas Instruments components.
(3) Semicon Components Pte Ltd is a distributor of Novatek microcontrollers.
59
In view of the substantial amount of time, effort and resources required to evaluate, implement and
complete a project, and given that sourcing of the key components is dependent on the specific
requirements of each project, we usually work with only a few key component vendors at any one
time. These vendors may not be repeat suppliers as evidenced in the table above.
As we do not have comprehensive in-house testing facilities, we depend on external organisations
for some testing services. Further, we may engage external consultants to enhance specific skill-sets
not available in-house. Due to the nature of our business, our choice of suppliers may vary according
to customer requirements on a project-by-project basis. Save for the consultancy services provided
by CWC, Design Exchange Pte Ltd and PSB, none of the testing service providers and external
consultants account for 5% or more of our Group’s annual purchase.
In addition to the above, we use the services of regional contract manufacturers, when providing
turnkey solutions to customers. Currently, none of these contract manufacturers account for more
than 5% of our Group’s total purchases.
CUSTOMERS
Our customers are established players in the communications, IT and electronics industries. Customers
accounting for 5% or more of our Group’s turnover in each of the past three financial years are as
follows:
FY1998
% Sales
Customers
FY1999
% Sales
FY2000
% Sales
Honor Tone Ltd
—
11%
31%
AKME
—
—
20%
Hello Direct Inc
—
—
15%
Semicon Components Pte Ltd
—
—
8%
A-Team Technology Ltd
—
—
8%
98%
62%
6%
Intraco Ltd
—
—
5%
CET Technologies
—
10%
—
Transtech Electronics Pte Ltd
—
14%
—
98%
97%
93%
Microsoft
Total
As at 31 March 2000, we have made progress billings to the following customers:
S$ million
Sirius Satellite Radio, Inc.
1.73
Hello Direct Inc.
0.13
AKME
0.17
National Semiconductor Manufacturer Singapore Pte Ltd
0.05
2.08
These progress billings are expected to be recognised as income when certain significant milestones
are achieved.
60
Please refer to “Past Projects” and “Current Projects” below for a description of the services we
performed for the key customers listed above. In FY1998, due to the constraint of our resources, we
could only deal with a couple of customers at any one time. However, with our expansion efforts
from FY1998, we have been able to increase our capacity to handle more projects concurrently from
FY1999. Consequently in FY2000, we were able to expand our customer base from four in FY1999
to nine in FY2000. Despite the increase in the number of customers in FY2000, our overall turnover
for FY2000 decrease from approximately S$4.2 million in FY1999 to approximately S$1.1 million.
Please refer to “Risks Relating to Business and Operations – Risks Relating to Our Company or
Industry” from pages 18 to 22 of this Prospectus.
PAST PROJECTS
Cordless Telephones for Intermarche Groupe Bazar
We were engaged by the French retail company, Intermarche Groupe Bazar, in 1996 to design and
supply cordless telephones with a digital answering system for use in the French market. For that
contract, Honor Tone Ltd was engaged as the contract manufacturer to produce the cordless
telephones. In addition to a design fee, we earned a revenue share from the sale of telephones to
end-customers.
PC Cordless Phone System for Microsoft
In April 1997, we were engaged by Microsoft to design, develop and produce a 900 MHz PC phone
system equipped with voice recognition and sophisticated call management features. The system,
which was among the first to be introduced to the global telecommunications market, was jointly
designed by Microsoft and us to run on Microsoft’s Call Manager application software. We were
responsible for developing the telephony hardware and software to interface with Microsoft’s Call
Manager application software.
GE Thomson Caller ID Products for Honor Tone Ltd
We were engaged by Honor Tone Ltd, a contract manufacturer for GE Thomson, in October 1998 to
develop several models of caller ID telephones which were sold under the GE Thomson brand
name. All designs were successfully completed in May 1999.
Portable Wireless Data Communications System for CET Technologies
In 1998, we were engaged by CET Technologies to design handheld wireless data communications
devices, a group of which can be configured into a communication network. The contract included
the supply of printed circuit board assemblies and IC chips embedded with our proprietary software.
The project has been completed successfully, with the final products delivered to the customer.
Caller ID Product for AKME
In April 1999, we were awarded a contract by AKME to develop a corded telephone with caller ID
features. AKME, whose products include the Panasonic range, is a leading global supplier of residential
telephony products. The design of the corded telephones, which was developed from our existing
caller ID technology platform, has been completed and production of the telephones began in
September 1999.
CURRENT PROJECTS
Development of 900 MHz Cordless Caller ID Telephone for AKME
We are engaged by AKME in August 1999 to design several cordless telephone models. One of
these models will incorporate our established caller ID platform. Production of these telephones is
expected to commence in the first quarter of 2001.
61
Development of 2.4 GHz Digital Wireless Telephone Headset
We successfully completed a feasibility study in February 2000 and have since been engaged by
Hello Direct Inc. (“Hello Direct”) to design and supply the state-of-the-art 2.4 GHz wireless telephone
headset for high-density applications. The product is intended for use in office environments that
employ PABX (Private Automatic Branch Exchange) and key telephone systems. By running on a
higher frequency coupled with our proprietary wireless technologies, these 2.4 GHz wireless telephone
headsets promise less interference and improved call clarity.
Hello Direct is a NASDAQ-listed company that is a developer and direct marketer of telephone
productivity products and a distributor of wireless headsets for office telephone systems.
Further Development of DECT
In 2000, we have been engaged by several customers in Asia to develop customised versions of the
DECT telephones based on the DECT platform which we developed in-house in 1997. Please refer
to “Business - Research and Development – Established In-House Proprietary Platforms – Digital
Wireless Communications Designs based on DECT” on page 56 of this Prospectus. These customised
models will be sold under the individual brand names of our customers. This project is ongoing and,
to date, we have received design fees. In addition, we will earn revenue from the sales of finished
products designed by us and component parts embedded with our proprietary technologies.
Development of a Digital Wireless and Portable Communications Network System
We are currently developing a digital wireless and portable communications network system which
offers unique, full duplex voice, data and video services. This system is unique in that it does not
need a stationary base station. It is a digital wireless and portable communications network. A working
prototype of the system has been developed. On 14 January 2000, we made a patent application in
Singapore for this unique invention. Please refer to “Business – Intellectual Property – Patents” on
page 65 of this Prospectus.
Development of Home Gateway Products
In September 1999, we embarked on a program to evaluate solutions for an ADSL modem and have
developed a reference design for an ADSL modem with USB interface. Our USB-ADSL modem can
download data at the rate of up to 8 Mbps or approximately 100 times faster than a standard analog
modem. It has been successfully tested with a broadband network service provider. In January
2000, we forged a partnership with National Semiconductor and KRDL to develop a reference design
for Home Gateway products, and will in due course be developing a Home Gateway product using
our USB-ADSL modem design.
Development of Bluetooth Solutions
In October 1999, we conducted a feasibility study on several emerging Bluetooth IC chipset solutions
in preparation for our technical platform development. In May 2000, we entered into a strategic cooperation agreement with Philips Semiconductors International BV to co-develop Bluetooth solutions
with the aim to become a market leader in the Bluetooth arena. In May 2000, we were also engaged
by Hello Direct, Inc., to design and supply a series of Bluetooth enabled wireless headset products
for business applications.
Design and Supply of SDARS Receivers for SSRI
We were engaged by SSRI in August 1999 to develop satellite digital audio receivers for its SDARS
in the US. This is our Group’s largest ongoing project, with a total contract value of approximately
US$4.2 million for the design phase. In addition, subject to the commercial success of SSRI’s venture
and the market acceptance of our satellite digital audio receivers, we may benefit from the subsequent
supply of our receivers to SSRI.
62
Information on SSRI and SDARS
SSRI is a US incorporated company which is listed on NASDAQ. As at 31 March 2000, it had a
market capitalisation of approximately US$1.75 billion. SSRI is in the process of building a SDARS
that will provide 100 channels of radio programming in the US on a subscription basis. SSRI is
currently one of two companies in the US that have been awarded a national satellite radio
broadcasting licence by the FCC. These licences allow digital audio and data broadcast services to
be provided in the US via satellite and terrestrial repeaters in the S-Band. The only other licencee is
XM Radio Inc., which is a subsidiary of American Home Satellite Corporation.
SSRI’s radio service will consist of 50 channels of advertisement-free, compact disc-quality music
and 50 channels of news, sports and entertainment programs, which will be obtained from third
party sources. While regular radio services cover a range of approximately 30 miles before reception
fades, SSRI’s radio service will cover the whole of the US, and is targeted at the estimated 200
million motorists in the US. The service will offer unique, broad content with an extensive array of
niche programming that is expected to appeal to all demographic groups as well as niche interests
across the US. For the third party originated services, SSRI has entered into agreements with some
of the world’s foremost creators of audio information and entertainment programs, including CNBC,
National Public Radio, USA Networks/SCI FI Channel, Bloomberg and the BBC. SSRI also has the
exclusive right to carry the nationally acclaimed “Car Talk” program on satellite radio.
SSRI’s radio service will be broadcast through its own custom designed and built satellite system,
currently under construction by Space Systems/Loral Inc. SSRI’s digital signal will be relayed from
three orbiting satellites to receivers installed in subscribers’ vehicles. A terrestrial repeater network
will be used to rebroadcast satellite signals blocked by buildings or tunnels. An extra satellite will be
standing by on ground should any of the three orbiting satellites need to be replaced. Satellite
launch is scheduled to be completed by October 2000 and radio broadcasting is expected to
commence in early 2001.
Subscribers to SSRI’s radio service will require a satellite antenna and a S-band receiver installed in
their vehicles. The receiver will process the satellite and terrestrial signals to enable the subscriber
to receive uninterrupted digital quality audio broadcast seamlessly. In order to pick-up SSRI’s line-ofsight satellite radio transmissions, a miniature diameter satellite dish antenna will be attached onto
the outside of the vehicle.
63
SSRI does not develop, manufacture or market the complete S-band receivers and will depend on
third party suppliers. In 1998, Lucent Technologies Inc. (“Lucent”) was engaged by SSRI to develop
and supply commercial IC chipsets for the development of SDARS receivers by third party
manufacturers. The complete range of Lucent’s IC chipsets are not expected to be commercially
available until 2001 for the production of the receiver by third party manufacturers.
Terms of the Engagement
We have been engaged to supply SSRI with satellite digital audio receivers in early 2001, subject to
the developmental receivers meeting subscriber performance expectations during field trials. Please
refer to “Risks Relating to Business and Operations - Risks Relating to Our Company and the
Industry – A Significant Portion of Our Future Revenue Stream is Highly Dependent on the Commercial
Success of SSRI’s SDARS” on page 18 of this Prospectus. Under the terms of our engagement, we
will be responsible for arranging the supply of critical components and materials and working with
contract manufacturers for the mass production of the receivers.
The term of our agreement with SSRI to develop the satellite digital audio receivers (the “SSRI
Agreement”) is for 24 months commencing from August 1999 and may be extended thereafter for a
successive two-year period, if the parties mutually agree in writing at least 90 days prior to the
expiration of the initial term or any renewed term. Either party may suspend or terminate work on
the receivers by giving 30 days’ notice in writing. In the event that we terminate the work, we must
refund in full all payments received for the work performed for SSRI. In the event that SSRI terminates
the work, we shall retain all payments received, and will bill SSRI for any outstanding work in the
prevailing work phase as well as for any other expenses to be borne by SSRI.
Under the SSRI Agreement, all intellectual property in the technical work relating to the development
of the satellite digital audio receivers will belong to SSRI. We have agreed that we will not in any
event undertake to perform any services or enter into any other business arrangement with any
other FCC licensee that provides a satellite based digital audio service in the S-band frequency.
Follow-on Business Opportunities
While initial subscribers to SSRI’s radio service will have to purchase the satellite antenna and
receivers for installation in the vehicle radios, it is intended that new vehicles will offer factoryinstalled receiving equipment. Consumers will thus be able to purchase a combined AM/FM/S-band
radio for their vehicles. To date, SSRI has entered into agreements with equipment manufacturers,
such as Alpine Electronics, Panasonic, Recoton and Delphi Delco, and car manufacturers, such as
Ford, Daimler Chrysler, BMW, Land Rover and Mazda, to install the receivers in new vehicles.
The potential business avenue of us manufacturing and supplying the receivers to SDARS equipment
manufacturers and car manufacturers will depend on the commercial acceptance of SSRI’s SDARS
in the US and the success of SSRI. As SSRI has not begun commercial operations, quantifying the
pace of subscriber growth and ultimate size of its customer base is a difficult task. SSRI expects
that within the next ten years, most cars in the US will be equipped with receivers capable of picking
up not only AM and FM radio signals but also SSRI’s S-band digital audio broadcast. To break even,
Credit Suisse First Boston Corporation estimated that a SDARS business will require a subscriber
base of at least 2.5 million. With 200 million registered cars and light trucks in the US, the market
targeted by SSRI is significant. The market opportunity for SDARS also includes three million
recreational vehicles and one million long distance truckers. Factors that will influence initial
subscription rates, such as pricing, distribution and equipment availability, have yet to be firmly
established. It is expected that the monthly subscription fee for SSRI’s SDARS will be in the region
of US$9.95 per subscriber, and it remains to be seen if the US motorists will be willing to pay a
monthly subscription fee, in addition to up-front equipment costs, for the radio service.
64
SSRI Estimated Revenues
2500
US$ million
2000
1500
1000
500
0
2000
2001
2002
2003
2004
2005
2006
2007
Year
Source: The Hansen Report on Automotive Electronics. Vol. 11, No. 10, January 1999.
INTELLECTUAL PROPERTY
Our success depends in part on our proprietary technology and other intellectual property. Many of
our solutions include proprietary designs and platforms that have been developed in-house. We rely
on a combination of intellectual property rights like patent, trademark, copyright laws, laws on
confidential information as well as contractual restriction to protect our proprietary rights.
Patents
We have filed patent applications for two of our inventions. A patent application for the first invention,
entitled “Signal Processing Apparatus”, for the invention of a device that provides greater flexibility
for access to Internet and in particular e-mail services, was filed in Singapore on 26 November 1996
and, based on that Singapore patent application, applications were filed under the Patent Cooperation
Treaty designating a European Patent, China, Japan, Indonesia and Singapore. In addition, separate
applications were also made in the US, Malaysia, Thailand and India. These patent applications are
currently pending before the relevant patent offices. A patent application for the second invention
entitled “Communication Apparatus”, for the invention of a unique, ad hoc communication network
for full duplex voice, data and video services, was filed in Singapore on 14 January 2000. Pending
the results of initial investigations, we may proceed to file the patent internationally. None of our
patent applications has been granted as at the date of this Prospectus. We may also from time to
time file other patent applications over our proprietary technology.
Trade Marks
We filed two trade mark applications on 11 February 1997 for our current logo. We have obtained
approval for advertisement of one of the two trade mark applications. We have since refined our
corporate logo and we are in the process of filing new trade mark applications in Singapore and in
several other countries to protect our new corporate logo.
Copyright and Designs
We have developed internal procedures for the recording of our designs and R&D for application.
However to date, we have not applied for any registered design registration. We may from time to
time file applications for registered design registration in respect of the designs that we develop.
65
Policy for Intellectual Property Registrations
We intend to pursue the patent and trade mark applications until registration. However there can be
no assurance that all our applications for patents or trademarks will be approved or granted by the
relevant authorities. It is our policy to maximise our competitive advantage by entering into agreements
with our customers to own or jointly own any intellectual property rights in the technology developed
for any particular project and any improvement thereto, whether developed by us or our customers.
All our employees have entered into confidentiality agreements with our Group. They have also
agreed to assign to our Group any intellectual property rights in technology which they may develop
in the course of their employment with our Group.
Licences
In order to remain competitive in the fast-changing technology environment, we may enter into licensing
arrangements with third parties to leverage on their developed technologies to shorten the time-tomarket for our products. We have in the past obtained non-exclusive technology and software licences,
covering communications protocols, from third parties for which we made a lump sum payment to
allow us to incorporate their technology or software in our products. These existing licences are for
indefinite periods, and each may be terminated by the licensor upon any breach by us of the terms
of the relevant licence agreement.
The termination, loss or inability to maintain or to obtain upgrades to these licences could result in
delays or breakdowns in our ability to continue developing our products.
TELECOMMUNICATIONS REGULATIONS
Commercial telecommunications products must comply with regulatory requirements in the following
areas:
•
•
•
Telecommunications network compatibility
RF transmission
Product safety
All countries have their own telecommunications regulatory requirements and product standards and
our products and solutions have to comply with the requirements of their intended end-markets.
In the US, the telecommunications industry is regulated by the FCC. Our communications product
designs generally are regulated by Part 15 of the FCC regulations, which covers RF devices, and/
or Part 68 of the FCC regulations, relating to connection of terminal equipment to the telephone
network. Telecommunications equipment must also conform to the product safety requirements of
UL.
ETSI is responsible for common standards for the EC. It regulates network links and services and
the inter-operability of equipment. For example, DECT telephones have to meet the Common Technical
Regulation (“CTR”) 6 for RF transmission, CTR 22 for generic access profile and CTR 37 for network
compatibility. These technical regulations are common to the EC. However, there are also countryspecific telephony requirements in some EC countries. In such cases, telephone products must be
designed to meet these specific requirements as well. The CE product safety marking is mandatory
for all products in the EC market. Electrical and electronics products regulated under Electromagnetic
Compatibility and Low Voltage Directive will also need the CE marking.
In Singapore, telecommunications products standards are regulated by the IDA in the areas of RF
transmission and network compatibility. PSB is the safety authority which ensure compliance with the
Singapore Consumer Protection (Safety Requirements) Registration Scheme.
With the converging functionality of telephony and computer products and the emergence of cable
and Internet telephony, we expect to see the introduction of new regulations that may affect our
solutions, platforms and/or products.
66
LITIGATION
We are not currently a party to any material legal proceedings. Please refer to “General and Statutory
Information – Litigation” on page 114 of this Prospectus.
67
DIRECTORS, MANAGEMENT AND STAFF
DIRECTORS
Our Board is entrusted with the responsibility for the overall management of our Company. The
particulars of our Directors are set out below:
Name
Age
Residential Address
Position
Chan Kum Lok Colin
43
477 River Valley Road, #03-03
Singapore 248362
Chairman &
Tan Khai Pang
41
6 Upper Bedok Road
Singapore 466639
Chief Technology Officer
Tan Juay Hwa
40
479 River Valley Road, #06-02
Singapore 248364
Executive Vice President,
Product Support
48
11 Balmoral Road, #03-01
Singapore 259796
Non-executive Director
Lim Han Boon
37
30 Bayshore Road, #17-01
Singapore 469974
Non-executive Director
Chay Kwong Soon
47
48 Coronation Road West, #03-04
Astrid Meadows
Singapore 269263
Independent Director
Tan Hock Chye Eric
59
1 Namly Garden
Singapore 267330
Independent Director
The business and working experience of our Directors are as follows:
Dr Chan Kum Lok Colin is the founder, Chairman and Chief Executive Officer of our Group.
Dr Chan is a Chartered Engineer and has more than 13 years of experience in R&D in communications
product design and manufacturing, marketing and management. Dr Chan was the R&D Manager of
Bell Laboratories, AT&T Consumer Product (S) Pte Ltd between 1987 to 1990, where he was incharge of telephony product design and design support. Between 1991 and 1993, he was the
managing director of Genesis Technologies International (S) Pte Ltd engaged in the design and
manufacture of telephony products. Dr Chan graduated with a Bachelor of Science degree in
Mechanical Engineering (First Class Honours) from the University of Strathclyde, UK, and was
conferred a PhD in Mechanical Engineering from the same university in 1984.
68
Mr Tan Khai Pang was appointed as an executive Director of our Company in March 1997 and is
the Chief Technology Officer of our Group.
Mr Tan joined AVC in 1996 as Senior Manager of Product Development. He has accumulated 15
years of experience in product development and project management in the field of telecommunications.
Between 1985 and 1987, he was an Engineer at Singapore Telecommunications Limited and was
involved in corporate planning and feasibility studies. Between 1987 and 1991, Mr Tan was a R&D
Engineer at Bell Laboratories, AT&T Consumer Product (S) Pte Ltd, where he was subsequently
promoted to Senior Engineer and then R&D Manager responsible for telephony product development.
Between 1991 and 1994, Mr Tan was a director in Genesis Technologies International (S) Pte Ltd,
where he was responsible for operations and engineering. In 1994, Mr Tan joined Comedge
Communications Pte Ltd as a management staff responsible for telecommunications product design
and operations. Mr Tan graduated from the University of Knoxville, US with a Bachelor of Science
degree in Electrical Engineering (Highest Honors). He holds a Masters of Science degree in
Engineering (Telecommunications) from the University of California, US. Mr Tan is a member of IEEE
and represents our Company on the Technical and Equipment Forum under the National Digital
Audio Broadcast Steering Committee established by the Singapore Broadcasting Authority to set
standards for DAB in Singapore.
Mr Tan Juay Hwa was appointed as an executive Director of our Company in June 1996 and is the
Executive Vice President of Product Support of our Group.
Mr Tan joined AVC in 1994 as Manager of Product Development. He has more than 13 years of
experience in cordless and corded phone design, proprietary software technology development for
communications products and product development management. Prior to joining AVC, Mr Tan was
a manager in Genesis Technologies International (S) Pte Ltd where he was responsible for the
company’s software telephone product development. Between 1987 and 1991, he was an Engineer
at Bell Laboratories, AT&T Consumer Product (S) Pte Ltd, where he was responsible for the design
of telephony products. Mr Tan holds a Diploma in Electronics from Ngee Ann Polytechnic and two
graduate Diplomas in Marketing Management and Business Administration from the Singapore Institute
of Management. He has just completed a course leading to a Masters degree in Business
Administration from the Open University, UK.
Ms Chan Fong Chee Caroline was appointed as a Non-executive Director of our Company in
January 1998.
Ms Chan is a Senior Vice President and the Chief Financial Officer of Transpac Capital Pte Ltd and
is responsible for financial management, investment control and compliance as well as investor
relations. Prior to joining Transpac Capital, Ms Chan was the Finance Manager of BP Asia Pacific
(“BP”) with responsibilities for corporate finance activities, in particular for BP’s private equity
investments and joint ventures in East Asia. Ms Chan is a member of the Institute of Certified Public
Accountants of Singapore and is a Fellow Member of the Association of Chartered Certified
Accountants of UK.
Mr Lim Han Boon was appointed as a Non-executive Director of our Company in October 1996.
Mr Lim is the General Manager of Solid Resources (S) Holding Pte Ltd, a Singapore-based investment
holding company, whose subsidiaries are principally engaged in property development and processing
of granite and marble in China. Prior to joining Solid Resources, he worked at DBS Bank, NIF
Management Singapore Pte Ltd and Murray Johnstone Asia Limited in providing investment banking
and private equity financing services. Mr Lim holds a Master of Business Administration (Finance)
degree from the City University, UK and a Bachelor of Accountancy degree from the NUS. He is a
member of the Institute of Certified Public Accountants of Singapore.
69
Mr Chay Kwong Soon was appointed as an Independent Director of our Company on 10 May
2000.
Mr Chay is the Chairman and Managing Director of IntreSource Systems International Pte Ltd. Prior
to founding IntreSource in late 1996, Mr Chay was a co-founder and the President of Creative
Technology Ltd (“Creative”). He led the effort in building up Creative’s sales and marketing network
in Asia, Europe and Latin America, and its manufacturing operations in Singapore, Malaysia, the US
and Ireland.
Mr Tan Hock Chye Eric was appointed as an Independent Director of our Company on 10 May
2000.
Mr Tan is a founder Partner of Foo, Kon & Tan, Certified Public Accountants. His working experience
spans mergers and acquisitions, accounting systems and procedures, corporate planning and
restructuring, financial audits, company secretarial work, company flotations and liquidations and
receiverships. He is a Fellow of the Australian Society of Practising Accountants, the Institute of
Chartered Accountants in Australia and the Institute of Chartered Secretaries and Administrators. He
has been a member of the Institute of Certified Public Accountants in Singapore since 1975, and is
a member of the Public Accountants Board of Singapore.
The list of present and past directorships of each Director, excluding those held in our Company,
over the past five years preceding the date of this Prospectus, are as follows:
Name
List of Present Directorships
List of Past Directorships
(within the past 5 years)
Chan Kum Lok Colin
Group Companies
Addvalue Communications, Inc.
Group Companies
UP Consultancy Pte Ltd
(Dissolved – members’ voluntary
winding up)
Asia Component Services Ltd
(Dormant – struck off)
Other Companies
Nil
Other Companies
Casson Consultants Limited
Group Companies
Group companies
(Dormant – struck off)
Other companies
Nil
Other companies
Nil
Group Companies
Group Companies
UP Consultancy Pte Ltd
(Dissolved – members’ voluntary
winding up)
(Dormant - struck off)
Other Companies
Nil
Other Companies
Livingstone (Asia) Pte Ltd
Tan Khai Pang
Tan Juay Hwa
70
Name
Chan Fong Chee
Caroline
Group Companies
Nil
Group Companies
Nil
Other Companies
Abbeygate Investments Limited
ATOP Holdings Pte Ltd
Bastion Associates Ltd
Beccles Ltd
Beijing Standard Int’l Investment
Consultant Co Ltd
Colburn Holdings Pte Ltd
Dunston Assets Ltd
FMA Development Company Limited
Foodstar Holdings Pte Ltd
Foodstar Trading Company Limited
Foodstar Management Company
Limited
Gentel Marketing Pte Ltd
Greater Goal International Ltd
Hongguo Holdings Pte Ltd
Hosa Limited
Huiji Investments Limited
Huiji Pte Ltd
Lantech Investment Ltd
Palette Trading Limited
Phenomenal Limited
RIC Management Pte Ltd
Transpac Capital Ltd
Transpac Holding Co Ltd
Transpac Investment Advisors Ltd
Transpac Investments Limited
Transpac Investment Management
Ltd
Transpac Managers I Ltd
Transpac Managers II Ltd
Transpac Managers III Ltd
Transpac Netherlands BV
Transpac Nominees Pte Ltd
Transpac (Thailand) Ltd
Transpac Trust Company Limited
Other Companies
Datacraft Asia Ltd
High Vacuum Technology Pte Ltd
Yuasa Holding Pte Ltd
Group Companies
Nil
Group Companies
Nil
Other Companies
Asia Infomedia Development
Pte Ltd
(Gazetted to be struck off)
Other Companies
Companies in which Mr Lim was
nominated and appointed as
representative director by his
previous employers which had
equity interests in those companies
are not shown here.
Lim Han Boon
71
Name
Chay Kwong Soon
Group Companies
Nil
Group Companies
Nil
Other Companies
IntreSource Systems International
Pte Ltd
IntreSource Sytems Pte Ltd
IntreSource Capital Pte Ltd
Bestrio Pte Ltd
Snowdon Investments Pte Ltd
Mucom Technology Pte Ltd
IT Resources Pte Ltd
Uraco Holdings Limited
Enspire Capital Pte Ltd
Team3 Associates Pte Ltd
Tinsel Glory Investments Limited
Singapore Chinese Orchestra
Company Limited
Logitech Inc.
Alacrity Communications Inc.
Talkway Inc.
Kun-Lun Holdings Corp
KLM Capital Management Inc.
Leadtek Research Inc.
Easent Communciations Inc.
YesVideo.com, Inc.
Other Companies
Creative Technology Ltd
3DLABS Inc. Ltd
Avidtek Co. Ltd
Beijing Chuang Tong Multimedia
Computer Ltd
Creative Holdings Inc.
Creative Integration Pte Ltd
Creative Labs International Pte Ltd
Creative Labs (HK) Ltd
Creative Labs (Proprietary) Ltd
Creative Labs Nordic A/S
Creative Labs A/S
Creative Labs BV
Creative Labs Inc.
Creative Labs International Pty Ltd
Creative Labs S.A.
Creative Labs S.r.l.
Creative Labs Sdn Bhd
Creative Labs (UK) Ltd
Creative Pacific Pty Ltd
Creative Realty Inc.
Creative Technology (Proprietary)
Ltd
Creative Technology Centre Pte Ltd
Creative Technology Korea Limited
Cubic Computer Services Pte Ltd
Cubic Electronics Sdn Bhd
Cubic Technology Sdn Bhd
Data Stream Corporation (S)
Pte Ltd
Data Stream Corporation
E-Mu International Sales
Corporation
E-Mu Systems Ltd
E-Mu Systems Inc.
Sharevision Technology Inc.
Voice Processing Corporation
V-Bits Inc.
Group Companies
Nil
Group Companies
Nil
Other Companies
Foo Kon & Tan Consultants Pte Ltd
G.T. Asiasearch (S) Pte Ltd
ICPAS Training Centre Pte Ltd
Association of Accounting
Technicians Singapore Ltd
Other Companies
Popular Holdings Ltd
Tan Hock Chye Eric
72
MANAGEMENT
Dr Chan Kum Lok Colin is the Chief Executive Officer of our Group responsible for general
management and business development. Mr Tan Khai Pang is the Chief Technology Officer of our
Group responsible for strategic technology and product development. Mr Tan Juay Hwa is the
Executive Vice President for Product Support responsible for product quality engineering, manufacturing
support and product transfer. They are supported by the following Executive Officers, whose particulars
are detailed below, in the day-to-day operations of our Group:
Name
Age
Residential Address
Position
Kay Wee Kiat
31
Blk 156 Bishan Street 13, #11-96
Singapore 570156
Manager,
Finance and Operations
E.M.L. Ekanayake
41
Blk 606 Hougang Avenue 8, #13-175
Singapore 530606
Manager, Electronics
Hardware Design
K. Kalaivanan
35
Blk 242 Serangoon Avenue 3, #05-182
Singapore 550242
Manager,
Communications Protocols
The business and working experience of our Executive Officers are as follows:
Mr Kay Wee Kiat is the Manager, Finance and Operations, of our Group. Mr Kay joined our Group
in January 2000 and is responsible for the finance and operational matters of our Group. Mr Kay
began his career as a corporate development trainee with the Lam Soon (H.K.) Limited Group,
where he was involved in the startup development of an edible oil refinery, a flour mill and wheat
silos in Shenzhen, People’s Republic of China. Subsequently, he was a finance and administrative
officer with flexible printed circuit board maker, Central-Midori (S) Pte Ltd; an accountant with contract
manufacturer, Fu Yu Manufacturing Ltd; an assistant manager for corporate planning with Huangpu
Holdings International Pte Ltd, a Group which was involved in property developments in China and
IT businesses in Singapore; a financial journalist with Smart Investor magazine in Singapore; a
finance and business manager with Huixing Industries (S) Pte Ltd, which owned granite and marble
processing factories in Xiamen and Shanghai, China, and he was frequently seconded to a related
company, Panman Investments Pte Ltd, which was developing a 22-storey office building in Beijng,
China. His last post, prior to joining our Group, was as a business manager of the contract publication
department of MPH Magazines (S) Pte Ltd. Mr Kay holds a Bachelor degree in Accountancy from
the NUS.
Mr E.M.L. Ekanayake is the Manager, Electronics Hardware Design, of our Group. Mr Ekanayake,
who joined our Group in 1996 as a Staff Engineer, has more than 11 years of experience in analog
and digital telephony-related product development and regulatory approval, with respect to cordless
and speaker telephones, caller ID systems and DECT. He graduated from the University of Peradeniya
(Sri Lanka) with a Bachelor of Science (Hons) degree in Engineering.
Mr K. Kalaivanan is the Manager, Communications Protocols, of our Group. He joined our Group in
1996 as a Staff Engineer and has more than ten years of experience in telecommunications R&D.
He specialises in data communications protocol implementation and project management, including
transmission control protocol and Internet protocol, file transfer protocol, DECT, proprietary modem
network management protocol, proprietary wireless communications protocol and proprietary frequency
hopping spread spectrum protocol. Mr Kalaivanan graduated from Annamalai University, India with a
Bachelor of Science degree in Electronics and Instrumentation. He also holds two Masters of Science
degrees, one in Engineering from Madras Institute of Technology, Anna University, India and another
in Communications Software Management from the University of Essex, UK.
None of our Executive Officers has any present or past directorships (including those held in our
Company) in the past five years preceding the date of this Prospectus.
73
The particulars of our Group’s advisers and key technical staff are as follows:
Name
Age
Residential Address
Position
Peter O. Schuh
62
121 Forest Knoll Lane
Fishers, Indiana
Technical Adviser
Phillip Corse
54
739 Longwood, Lake Forest
IL 60045
Marketing Adviser
Lim Lam Yong
39
Blk 937 Hougang Street 92, #10-81
Singapore 530937
Staff Engineer,
Broadband
Communications (Wired)
Design
Sasiraj s/o
Somarajan
32
Blk 145 Lorong Ah Soo, #04-145
Singapore 530145
Staff Engineer,
Communications Protocol
Khoo Tai Wee
29
Blk 181 Stirling Road, #02-204
Singapore 140181
Staff Engineer,
Radio Frequency Design
The business and working experience of our advisers and key technical staff are as follows:
Mr Peter O. Schuh is the Technical Adviser to our Group. He is based in the US, and is responsible
for advising our Group on technological development, intellectual property and regulatory issues. Mr
Schuh has 27 years of experience in the communications industry. Between 1963 and 1989, he held
several positions at Bell Laboratories, AT&T Consumer Products, US, including Technical Department
Head. Mr Schuh was responsible for the development of telecommunications terminals and systems
and advanced technology products and systems to support new telecommunications business
investigations. He was also entrusted by Bell Labs to establish the Singapore Bell Labs research
and development unit, which was the first offshore Bell Labs research and development unit.
Mr Phillip Corse is the Marketing Adviser to our Group. He is based in the US and is responsible
for marketing and promotion of our Group’s business. Mr Corse has 25 years of consulting experience
and has established and operated a wide variety of US and international distribution channels. He
has held key sales, marketing and general management positions in several US corporations and
was previously a Director of the marketing consulting practice at Ernst & Young, Chicago, US. Mr
Corse is an Adjunct Professor at the Kellogg School of Business, Northwestern University, US, and
is a distinguished faculty award winner in the Executive MBA program at the Lake Forest Graduate
School of Management, US, where he is a member of the Board of Directors and serves on its
Executive Committee.
Mr Lim Lam Yong is a Staff Engineer in Broadband Communications (Wired) Design. Mr Lim has
more than eight years of experience in RF/analog development, indoor cellular coverage design and
ADSL development, including three years of experience in project management and design and
testing. Mr Lim holds a Bachelor of Science degree in Electrical Engineering from the Florida Institute
of Technology, US. He also holds a Masters of Science degree in Electronics Engineering from the
same university.
Mr Sasiraj s/o Somarajan is a Staff Engineer in Communications Protocol. Mr Somarajan has six
years of experience in communications protocol software, microprocessor programming, integration
of software solutions into hardware and the development of production test software. He is also
experienced in communications protocol development. Mr Somarajan graduated from the NTU with a
Bachelor of Engineering degree (Electrical and Electronics). He is currently pursuing a Masters of
Science degree in Communications and Network Systems at the same university.
74
Mr Khoo Tai Wee is a Staff Engineer in RF Design. Mr Khoo has more than six years of experience
in the design and development of DECT RF modules, microwave digital radio transceivers, cordless
telephones and satellite radio. Mr Khoo holds a Bachelor of Engineering degree (First Class Honours)
in Electrical and Electronics Engineering from the NTU. He also holds a Masters of Science degree
in Communications and Networking from the NTU. Further, he was awarded two Motorola book
prizes for his outstanding achievement in microwave engineering and digital communications in 1994.
Directors’ Remuneration
The remuneration paid to our Directors on an aggregate basis and in remuneration bands for FY1999
and FY2000 are as follows:
(a)
Aggregate Directors’ remuneration (S$’000):
FY1999
<
(b)
>
<
Executive
Directors
NonExecutive
Directors
Total
Executive
Directors
FY2000
NonExecutive
Directors
347
0
347
377
0
>
Total
377
Number of Directors in remuneration bands:
<
FY1999
Executive
Directors
Nonexecutive
Directors
S$500,000 and above
—
S$250,000 to S$499,999
Below S$250,000
>
<
FY2000
>
Total
Executive
Directors
Nonexecutive
Directors
Total
—
—
—
—
—
—
—
—
—
—
—
3
3(1)
3
3
3(1)
3
Note:
(1) Our Non-executive Directors were Ms Chan Fong Chee Caroline, Mr Lim Han Boon and Mr Pek Lian Huat. Mr
Pek Lian Huat was an alternate Director to Mr Lim Han Boon and has resigned as a Director from 31 December
1999. During the period of their directorships, none of the Non-executive Directors were paid remuneration by our
Group.
Corporate Governance
Our Independent Directors are Messrs Chay Kwong Soon and Tan Hock Chye Eric.
Audit Committee
Our Audit Committee comprises Dr Chan Kum Lok Colin, Messrs Chay Kwong Soon and Tan Hock
Chye Eric. The Chairman of our Audit Committee is Mr Tan Hock Chye Eric. Messrs Chay Kwong
Soon and Tan Hock Chye Eric are Independent Directors and Dr Chan Kum Lok Colin is an executive
Director.
Our Audit Committee, which was created on 10 May 2000, will meet periodically to discuss and
review: (a) with the external auditors, the audit plan, their evaluation of the system of internal accounting
controls and the audit report; (b) the assistance to be given by our Group’s officers to the external
auditors; (c) the scope and the results of the internal audit to be carried out; (d) the financial statements
and the consolidated accounts of our Company; (e) the nomination of the external auditors for their
re-appointment; and (f) interested person transactions.
75
Our Audit Committee is also charged with the responsibility of commissioning and reviewing the
findings of internal investigations into matters where there is any suspected fraud or irregularity or
failure of internal controls or infringement of any Singapore law, rule or regulation which has or is
likely to have a material impact on our Group’s business, operating results and/or financial condition.
Compensation Committee
Our Compensation Committee comprises Messrs Tan Khai Pang, Chay Kwong Soon and Tan Hock
Chye Eric.
The Chairman of our Compensation Committee is Mr Chay Kwong Soon.
Our Compensation Committee oversees the general compensation of employees of our Group with
a goal to motivate, recruit and retain employees and Directors through competitive compensation
and progressive policies. In particular, our Compensation Committee is responsible for approving
and overseeing share incentives, including any employees’ share option scheme to be adopted by
our Company. Mr Tan Khai Pang, being an executive Director of our Company, shall abstain from
voting on issues pertaining to his remuneration package.
SERVICE AGREEMENTS
On 16 May 2000, our Company entered into separate service agreements (each a “Service Agreement”
and collectively the “Service Agreements”) with Dr Chan Kum Lok Colin, Messrs Tan Khai Pang and
Tan Juay Hwa, under which they were appointed by us as our Chairman and Chief Executive Officer,
Chief Technology Officer and Executive Vice President, Product Support respectively (each an
“Appointee”). Each of the Service Agreements took effect from 16 May 2000 and will continue for a
period of three years, unless otherwise terminated by either party giving not less than six months’
notice in writing to the other or payment of an amount equal to six months’ salary in lieu of notice.
Each of the Service Agreements may be terminated by our Company by summary notice upon the
occurrence of certain events, such as misconduct or a breach of the Appointee’s obligations.
Under the Service Agreements, the average monthly salary payable to each of the Appointees is
S$13,800. Each Appointee’s monthly salary will be reviewed annually by our Board and our
Compensation Committee. Further, each of them is entitled to other benefits including a yearly bonus
to be determined by our Compensation Committee based on the profitability of our Group, provided
that such yearly bonuses shall not be less than the equivalent of one month’s salary.
Had the Service Agreements been in place from the beginning of FY2000, the aggregate remuneration
(including contributions to CPF and other benefits) paid or provided to our Directors would have
been approximately S$0.54 million instead of S$0.38 million and our Group’s loss before taxation
would be approximately S$3.38 million instead of S$3.22 million. For the purpose of assessing the
impact of the Service Agreements on the Group’s profitability, we have assumed that the full amount
of the Directors’ aggregate remuneration has been charged to the Group’s profit and loss account.
Under normal circumstances, however, a portion of the Directors’ aggregate remuneration will be
capitalised as part of development expenditures, depending on the respective Directors’ involvement
in the various projects, and as such, may not be charged immediately to the Group’s profit and loss
account during the financial year. For the financial year FY2000, of the Directors’ aggregate
remuneration of S$0.38 million, approximately S$0.18 million or 47% were capitalised.
The aggregate emoluments payable to the present Directors in FY2001 under the arrangements in
force at the date of this Prospectus, including the Service Agreements, amount to approximately
S$1.0 million.
Our Group has also entered into letters of employment with all of our Executive Officers. Such
letters typically provide for the salary payable to our Executive Officers, their working hours, annual
leave, medical benefits, grounds for termination and certain restrictive covenants.
Save as disclosed above, there are no other existing or proposed service agreements between our
Company, our subsidiaries and any of our Directors or Executive Officers.
76
INTERESTED PERSON TRANSACTIONS
Save as disclosed below, none of our Directors, substantial shareholders of our Company or Executive
Officers has any interest in any material transactions undertaken by our Group in the past three
financial years.
CURRENT INTERESTED PERSON TRANSACTION
Through AVC(USA), we have recently set up an office in San Jose, US and are finalising an
arrangement to lease a temporary office space from KLM Capital Management Inc. (“KLM”) at a
commercial rate which is expected to be not more than US$500 per month. We intend to relocate to
permanent premises at a later date. KLM is the fund manager of KLM Capital Partner Fund, LP,
which owns approximately 3% of the issued share capital of our Company. Mr Chay Kwong Soon,
one of our Independent Directors, is a Director of KLM and is also an investor in KLM Capital
Partner Fund, LP.
Our Directors have reviewed the circumstances that led to the above transaction and have noted
that this is only a transitional arrangement, pending our finding a more permanent office space. In
addition, taking cognisance of the fact that KLM Capital Partner Fund, LP is only a minor shareholder,
with approximately 3% of the issued share capital of our Company, our Directors are of the view that
Mr Chay Kwong Soon’s interest in KLM Capital Partner Fund, LP and his directorship in KLM will not
impair his ability to carry out his duties as an Independent Director of our Company.
FUTURE INTERESTED PERSON TRANSACTIONS
Easent Communications Inc. (“Easent”) was incorporated in November 1999 in California, US. Mr
Chay Kwong Soon, one of our Independent Directors, is a founder of Easent and owns approximately
9% of Easent’s issued share capital. The principle business activity of Easent is to develop a wireless
gateway that will provide Bluetooth wireless connection within a home or SOHO (Small Office/Home
Office) environment. While there are presently no transactions between our Group and Easent, there
may be business opportunities or potential competition in the future.
Currently, Easent’s main business focus is to develop gateway and client access technology and
license them to business partners. Our Directors consider that there may be opportunities for our
Group to collaborate with Easent on joint development ventures, in which Easent supplies the
technology while we provide the overall gateway solutions within the home or SOHO environment.
We have not started to explore such opportunities with Easent nor have we initiated any discussion
with them in this regard. Nevertheless, in the event that such a collaborative arrangement is entered
into, we will apply our Group’s policy on interested person transactions (as described below)
accordingly, and Mr Chay Kwong Soon, being an interested party, will not be involved in our Audit
Committee’s review of the proposed transaction. Further, our Directors acknowledge that there may
be potential for conflict in the future should Easent expand into providing network solutions, which
may compete with us. In such a situation, Mr Chay Kwong Soon will be prohibited from participating
in discussions on matters relating to the competing activities and that he will abstain from voting on
such matters.
GROUP POLICY ON INTERESTED PERSON TRANSACTIONS
Our Audit Committee will review all existing and future interested person transactions on at least a
half-yearly basis to ensure that they are carried out on normal commercial terms and are not prejudicial
to the interests of our Company’s shareholders.
Our Audit Committee will also review all interested persons transactions to ensure that the then
prevailing rules and regulations of the SGX–ST (in particular Chapter 9A of the Listing Manual of the
SGX–ST) are complied with. Our Group will also endeavour to comply with the principles and best
practices set out in the “Best Practices Guide” of the Listing Manual of the SGX–ST.
77
Save as disclosed in “Current Interested Person Transactions” and “Future Interested Person
Transactions” above:
(a)
no Director, substantial shareholder of our Company or Executive Officer has any interest,
direct or indirect, in any transactions to which our Company or our subsidiaries was or is to be
a party;
(b)
direct or indirect, in any company carrying on the same business or carrying on a similar trade
as our Group; and
(c)
direct or indirect, in any enterprise or company that is our Group’s customer or supplier of
goods or services.
78
GENERAL INFORMATION ON OUR COMPANY AND OUR GROUP
SHARE CAPITAL
Our Company was incorporated in Singapore on 27 April 1996 under the Act as a private company
limited by shares under the name “Add Value Holdings Pte Ltd”. Our Company’s name was changed
to “Addvalue Technologies Pte Ltd” on 26 January 2000 and to “Addvalue Technologies Ltd” on
16 May 2000 in connection with our Company’s conversion to a public company limited by shares.
There is only one class of Shares in our Company, being ordinary shares of S$0.025 each. The
Articles of Association of our Company relating to the voting of shareholders are set out on pages
106 to 109 of this Prospectus.
At an Extraordinary General Meeting of our Company on 19 March 1999, our shareholders approved
a rights issue of shares to raise additional working capital. This mandate was extended at an Annual
General Meeting held on 30 November 1999. On 28 September 1999, some of the shareholders
accepted our Company’s offer and subscribed for 26,000 ordinary shares of par value S$1.00 at a
price of S$6.65 each (“Rights Shares”). These were issued on 19 April 2000. Further details can be
found in paragraph 15 of “General and Statutory Information” on pages 103 and 104 of this Prospectus.
Pursuant to a contractual arrangement described in paragraphs 21(c) and 21(d) of “General and
Statutory Information” on page 114 of this Prospectus, we issued 1,209 ordinary shares of par value
S$1.00 at a price of S$17.37 each to Heller Asia Capital (Singapore) Ltd (“Heller Shares”). This
issue was approved by our shareholders at the Annual General Meeting of our Company on 6 May
2000.
At an Extraordinary General Meeting of our Company held on 10 May 2000, the shareholders of our
Company approved, inter alia, the following:
(a)
the capitalisation of a sum of S$4,609,914 from our Company’s share premium account by way
of a bonus issue of 4,609,914 ordinary shares of S$1.00 each credited as fully paid to the
shareholders of our Company (the “Bonus Issue”);
(b)
the sub-division of each ordinary share of S$1.00 each in the authorised and issued and paidup share capital of our Company into 40 Shares of S$0.025 each (the “Sub-division of shares”);
(c)
the conversion of our Company into a public limited company and the change of its name to
“Addvalue Technologies Ltd”;
(d)
the adoption of a new set of Articles;
(e)
the allotment and issue of 63,000,000 New Shares pursuant to the Invitation on the basis that
the New Shares when issued and fully paid will rank pari passu in all respects with the existing
Shares of our Company; and
(f)
the authorisation of our Directors, pursuant to Section 161 of the Act, to issue, in addition to
the New Shares, such further Shares at any time to such persons, upon such terms and
conditions and for such purposes as our Directors may in their absolute discretion deem fit,
provided always that the aggregate number of Shares proposed to be issued shall not exceed
fifty per cent (50%) of the then existing issued share capital of our Company, and provided that
the aggregate number of Shares proposed to be issued other than on a pro-rata basis to the
then existing shareholders of our Company shall not exceed twenty per cent (20%) of the then
existing issued share capital of our Company, such authority to continue in force until the
conclusion of the next Annual General Meeting or the expiration of the period within which the
next Annual General Meeting is required by law to be held, whichever is earlier, unless previously
revoked or varied at a General Meeting of our Company.
79
Incentive Shares
On 16 May 2000, after the conversion of our Company to a public company, an aggregate of 320,000
Incentive Shares were allotted and issued to certain Directors and employees of our Company and
our subsidiaries (the “Grantees”) at S$1.00 each, pursuant to the exercise of options which were
granted to them on a one-off basis. The rationale behind this allotment are:
(a)
to reward the Grantees for their contributions to our Group;
(b)
to compensate the Grantees for the sacrifices they made in taking a pay cut effecting from
January 1999 as a result of the Asian financial crisis; and
(c)
to attract and retain skilled professionals and talents amidst the tight labour market.
After subscribing for the Incentive Shares, the holders of the Incentive Shares have each undertaken
not to transfer or dispose of their Incentive Shares (adjusted for the Bonus Issue and Sub-division of
shares) as described in “General Information on Our Company and Our Group - Moratorium” on
pages 84 and 85 of this Prospectus.
After adjusting for the Bonus Issue and the Sub-division of shares, the total number of Incentive
Shares held by the Grantees represented approximately 6.3% of the enlarged share capital of our
Company of 420,000,000 Shares.
Incentive Shares allotted and issued to Directors and Executive Officers are as follows:
Number of Incentive
Shares
Directors
Chan Kum Lok Colin
38,800
Tan Khai Pang
38,800
Tan Juay Hwa
38,800
6,000
Lim Han Boon
6,000
Executive Officers
Kay Wee Kiat
6,000
E.M.L. Ekanayake
6,500
K. Kalaivanan
6,500
Total
147,400
Adjusted Share Capital
As at the date of this Prospectus, the authorised share capital of our Company is S$12,000,000
comprising 480,000,000 Shares and the issued and paid-up share capital of our Company is
S$8,925,000 comprising 357,000,000 Shares. Upon the completion of the allotment and issue of the
63,000,000 New Shares, the issued and paid-up share capital of our Company will increase to
S$10,500,000 comprising 420,000,000 Shares.
80
The details of the issued ordinary share capital of our Company before and immediately after the
Invitation are as follows:
Number of Shares
S$
Issued and paid-up ordinary share capital comprising
fully paid ordinary shares of S$1.00 each before the
Bonus Issue and Sub-division of shares
4,315,086
4,315,086
Bonus Issue of ordinary shares of S$1.00 each
4,609,914
4,609,914
Share capital of ordinary shares of S$1.00 each after the
Bonus Issue
8,925,000
8,925,000
Sub-division of shares
357,000,000
8,925,000
Issued and paid-up ordinary share capital before the Invitation
357,000,000
8,925,000
63,000,000
1,575,000
420,000,000
10,500,000
New Shares to be issued pursuant to the Invitation
Issued and paid-up ordinary share capital immediately after
the Invitation
The authorised share capital of our Company and the consolidated shareholders’ funds of our Company
as at 31 March 2000, before and after adjustments to reflect the increase in authorised share capital
and the issue of 347,209 new ordinary shares of S$1.00 each, comprising 27,209 Post FY2000
Shares and 320,000 Incentive Shares, as well as the New Shares are set forth below:
As at
31 March
2000
After the
issue of
Incentive
Shares
After the
Bonus
Issue
After the
Sub-division
of shares
After the
issue of
the New
Shares
S$
After the
issue of
Post
FY2000
Shares
S$
S$
S$
S$
S$
5,000,000
5,000,000
5,000,000
12,000,000
12,000,000
12,000,000
8,925,000
10,500,000
266,988
16,331,988
Authorised Share Capital
Ordinary share of S$1.00 each
Ordinary Shares of S$0.025 each
Issued and fully paid ordinary
shares of S$1.00 each
3,967,877
3,995,086(1)
4,315,086(2)
8,925,000
Issued and fully paid shares
of S$0.025 each
Share Premium
Accumulated losses
Total shareholders’ funds
(1)
4,710,206
4,876,902
(7,222,557)
(7,222,557)
(7,222,557)
4,876,902
(7,222,557)
266,988
(7,222,557)
(7,222,557)
1,455,526
1,649,431
1,969,431
1,969,431
1,969,431
19,609,431
Note:
(1) These include the Post FY2000 Shares.
(2) These include the Incentive Shares.
The changes in the issued and paid-up share capital of our Company and our subsidiaries in the
last two years preceding the date of this Prospectus are set out from pages 102 to 104 of this
Prospectus under “General and Statutory Information”.
81
GROUP STRUCTURE
The following chart sets out our Group structure as at the date of this Prospectus:
Addvalue
Technologies Ltd
100%
100%
Addvalue
Communications
Pte Ltd
100%
Addvalue
Communications,
Inc.
Addvalue
Innovation Pte Ltd
OWNERSHIP STRUCTURE AND PRINCIPAL SHAREHOLDERS
The shareholders of our Company and their respective interests in the shareholdings before the
Bonus Issue and Sub-division of shares are summarised below:
Number of
shares of
S$1.00 each
(excluding
the
Incentive
Shares)
Direct Interest
Number of
shares of
S$1.00 each
(including
Number of
the
Incentive
Incentive
Shares(3)
Shares)
Deemed Interest
%
Number
of shares
of
S$1.00
each
%
Total Interest
Number
of shares
of
S$1.00
each
%
Directors
Chan Kum Lok Colin(1)
652,000
38,800
690,800
16.01
—
—
690,800
16.01
15.11
Tan Khai Pang
613,000
38,800
651,800
15.11
—
—
651,800
Tan Juay Hwa
151,000
38,800
189,800
4.40
—
—
189,800
4.40
Chan Fong Chee Caroline(1)
545,500
6,000
551,500
12.78
—
—
551,500
12.78
Lim Han Boon(2)
134,700
6,000
140,700
3.26
—
—
140,700
3.26
Chay Kwong Soon
—
—
—
—
46,289
1.07
46,289
1.07
Tan Hock Chye Eric
—
—
—
—
—
—
—
—
Solid Resources (S)
Holding Pte Ltd(2)
337,888
—
337,888
7.83
—
—
337,888
7.83
Philip Reginald Cunningham
222,112
—
222,112
5.14
—
—
222,112
5.15
Employees
(62 employees)
405,079
191,600
596,679
13.83
12,503
0.29
609,182
14.12
Others
(33 others)
933,807
—
933,807
21.64
—
—
933,807
21.64
3,995,086
320,000
4,315,086
100.00
Holders of 5% or more
Holders of less than 5%
Total
Notes:
(1) Dr Chan Kum Lok Colin and Ms Chan Fong Chee Caroline are siblings.
(2) Solid Resources (S) Holding Pte Ltd (“SRH”) is an investment holding company incorporated in Singapore on 16
September 1994. As at 31 December 1999, it had an authorised share capital of S$32,500,000 and an issued and paidup share capital of S$32,443,707. The principal subsidiaries of SRH are engaged in property development and processing
of granite and marble in China. SRH has been a shareholder of AVT since August 1996. Mr Lim Han Boon, our
Director, is the General Manager of SRH.
(3) These comprised an aggregate of 320,000 Incentive Shares of S$1.00 each issued to certain Directors and employees
of our Group at S$1.00 each after the conversion of our Company to a public company but prior to the Bonus Issue and
Sub-division of shares.
82
The shareholders of our Company and their respective interests in the shareholdings after the Bonus
Issue and Sub-division of shares but prior to the Invitation are summarised below:
Direct Interest
Number
of Shares
%
Deemed Interest
Number
of Shares
%
Total Interest
Number
of Shares
%
Directors
Chan Kum Lok Colin
57,151,960
16.01
—
—
57,151,960
16.01
Tan Khai Pang
53,925,360
15.11
—
—
53,925,360
15.11
Tan Juay Hwa
15,702,720
4.40
—
—
15,702,720
4.40
45,627,240
12.78
—
—
45,627,240
12.78
Lim Han Boon
11,640,560
3.26
—
—
11,640,560
3.26
Chay Kwong Soon
—
—
3,829,640
1.07
3,829,640
1.07
Tan Hock Chye Eric
—
—
—
—
—
—
Solid Resources (S) Holding
Pte Ltd
27,954,480
7.83
—
—
27,954,480
7.83
18,376,000
5.14
—
—
18,376,000
5.14
Employees
(62 employees)
49,365,000
13.83
1,034,400
0.29
50,399,400
14.12
Others (33 others)
77,256,680
21.64
—
—
77,256,680
21.64
357,000,000
100.00
Total
The shareholders of our Company and their respective interests in the shareholdings immediately
after the Invitation are summarised below:
Direct Interest
Number
of Shares
%
Deemed Interest
Number
of Shares
%
Total Interest
Number
of Shares
%
Directors
Chan Kum Lok Colin
57,151,960
13.61
—
—
57,151,960
13.61
Tan Khai Pang
53,925,360
12.84
—
—
53,925,360
12.84
15,702,720
3.74
—
—
15,702,720
3.74
45,927,240
10.94
—
—
45,927,240
10.94
11,940,560
2.84
—
—
11,940,560
2.84
300,000
0.07
3,829,640
0.91
4,129,640
0.98
—
—
—
—
—
—
Tan Juay Hwa
(1)
Lim Han Boon
(1)
Chay Kwong Soon
(1)
Tan Hock Chye Eric
(1)
Nil
83
Direct Interest
Number
of Shares
%
Deemed Interest
Number
of Shares
%
Total Interest
Number
of Shares
%
Solid Resources (S) Holding
Pte Ltd
19,954,480
4.75
—
—
19,954,480
4.75
18,376,000
4.38
—
—
18,376,000
4.38
Employees (62 employees)
49,365,000
11.75
1,034,400
0.25
50,399,400
12.00
Others (33 others)
77,256,680
18.39
—
—
77,256,680
18.39
Public
70,100,000
16.69
—
—
70,100,000
16.69
420,000,000
100.00
Total
Note:
(1) Ms Chan Fong Chee Caroline and Mr Lim Han Boon will each be allotted 300,000 Reserved Shares. Both Ms Chan
Fong Chee Caroline and Mr Lim Han Boon are Non-executive Directors of our Company and have been advising us on
financial and administrative matters since the inception of our Group in 1996.
Mr Chay Kwong Soon will be allotted 300,000 Reserved Shares. He is an Independent Director of our Company and is
a member of our Audit Committee.
If the above persons fully subscribe for the allotted Reserved Shares in conjunction with the Invitation, the percentage
of Shares held by persons other than the Directors, chief executive officer or substantial shareholders of our Company
will be approximately 56.0% of our Company’s enlarged share capital.
The above persons may dispose of or transfer all or part of the Reserved Shares allotted to them after they have
successfully subscribed for those Shares.
Save as disclosed, none of our Directors (executive and non-executive), substantial shareholders or associates of our
Directors and substantial shareholders will be allotted Reserved Shares.
SUBSTANTIAL SHAREHOLDERS
Save as disclosed on page 82 of this Prospectus, none of the substantial shareholders of our Company
are related to one another or to any Director. In addition, none of the employees of our Group are
related to any of our Company’s substantial shareholder or Director.
MORATORIUM
As evidence of their commitment to our Group, our Directors and Executive Officers, who beneficially
hold in aggregate approximately 49% of the enlarged issued and paid-up share capital of our Company
(excluding the Reserved Shares) immediately following the completion of the Invitation, have
undertaken not to:
(a)
sell, transfer or otherwise dispose of any part of their respective interests in our Company
(excluding the Reserved Shares) for a period of six months commencing on the date of listing
of our Company on the SGX–ST (the “Listing Date”); and
(b)
for the subsequent six months thereafter, sell, transfer or otherwise dispose more than 50% of
each of their respective interests held in our Company (excluding the Reserved Shares)
immediately after the Invitation.
84
In addition, employees of our Group who are the holders of the Incentive Shares (adjusted for the
Bonus Issue and Sub-division of shares) have each undertaken that, unless permitted otherwise in
writing by our Board, they will not transfer or dispose of any of their Incentive Shares (adjusted for
the Bonus Issue and Sub-division of shares) except as follows:
Period
Maximum number of Incentive Shares
(adjusted for the Bonus Issue and
Sub-division of shares) that may be
transferred or disposed of
Within the first six months of the Listing Date
None
From the day falling six months after the Listing
Date to the day before the first anniversary of the
Listing Date
Up to 25% of the Incentive Shares (adjusted
for the Bonus Issue and Sub-division of
shares)
From the first anniversary of the Listing Date up
to the day before the second anniversary of the
Listing Date
shares)
From the second anniversary of the Listing Date
up to the day before the third anniversary of the
Listing Date
shares)
If, within three years of the Listing Date, any holder of Incentive Shares (adjusted for the Bonus
Issue and Sub-division of shares) ceases to be in the full- time employment of our Group, he shall,
upon the instruction of our Company, be obliged to sell to our Company’s nominee(s) all of the
Incentive Shares (adjusted for the Bonus Issue and Sub-division of shares) in respect of which he is
not allowed to transfer or dispose of at their original subscription price (adjusted for the Bonus Issue
and Sub-division of shares).
PROPERTIES AND FIXED ASSETS
Properties
We currently operate from our corporate headquarters in Singapore. Our key management, operations,
customer support and development personnel are based in our Singapore office. We had sub-leased
an area of approximately 949 sq m at a monthly rental of approximately S$27.50 per sq m. This sublease was terminated on 31 January 2000 but has been extended for a term of two years, four
months and 21 days commencing from 1 February 2000 to 21 June 2002 at a rental of S$22 per sq
m per month, with an option to renew for another two years at a revised rental and on revised terms
and conditions. We have also entered into a sub-lease for the unit next to our present premises,
providing an additional area of approximately 949 sq m. The term of the sub-lease is two years
commencing from 22 June 2000, with an option to renew for another two years at a revised rental
and on revised terms and conditions. The monthly rental for the additional premises is S$22 per sq
m.
Through AVC(USA), we have recently set up an office in San Jose, US and are currently finalizing
an arrangement to lease a temporary office space from KLM Capital Management Inc., a company
related to our shareholder KLM Capital Partner Fund, LP, and our Independent Director, Mr Chay
Kwong Soon, at a commercial rate which is expected to be not more than US$500 per month.
Please refer to “Interested Person Transactions” on pages 77 and 78 of this Prospectus.
We believe that our existing lease arrangements are adequate to meet our current needs for the
next 12 months. If the need for additional space arises, we believe that we will be able to secure
additional space on normal commercial terms.
85
The following properties are leased by our Group:
Description and Location
Gross Floor
Area
Lease Period
Monthly Rental
750D Chai Chee Road,
#03-02 and #03-03
Technopark @ Chai Chee,
Singapore 469004
949 sq m
1 February 1998
to
31 January 2000
S$27.50 per sq m
#03-02 and #03-03
Singapore 469004
949 sq m
1 February 2000
to
21 June 2002
S$22.00 per sq m
#03-04 and #03-05
Singapore 469004
949 sq m
22 June 2000
to
21 June 2002
S$22.00 per sq m
Fixed Assets
The fixed assets of our Group as at 31 March 2000 are listed below:
As at 31 March 2000
Cost
S$’000
Accumulated
Depreciation
S$’000
Net Book
Value
S$’000
Office Equipment
57
13
44
Furniture and Fittings
35
14
21
792
282
510
1,222
487
735
Toolings
272
272
—
Renovations
154
85
69
2,532
1,153
1,379
Computers
Laboratory Equipment
Total
86
DIRECTORS’ REPORT
3 June 2000
The Shareholders
750D Chai Chee Road
Singapore 469004
Dear Sirs,
This report has been prepared for inclusion in the prospectus and the offering memorandum each to
be dated 3 June 2000 (together the “Prospectus”) in connection with the Invitation in respect of
71,000,000 ordinary shares of S$0.025 each in the capital of Addvalue Technologies Ltd (the
“Company”) by way of public offer.
On behalf of the Directors of the Company, I report that, having made due inquiry in relation to the
interval between 31 March 2000, the date to which the last audited accounts of the Company and its
subsidiaries were made up, and the date hereof:
(a)
in the opinion of the Directors, the business of the Company and its subsidiaries has been
satisfactorily maintained;
(b)
in the opinion of the Directors, no circumstances have arisen since the last Annual General
Meeting of the Company which would adversely affect the trading or the value of the assets of
the Company and any of its subsidiaries;
(c)
the current assets of the Company and its subsidiaries appear in the books at values which are
believed to be realisable in the ordinary course of business;
(d)
save as disclosed on pages 36, 37 and 100 of the Prospectus, there are no contingent liabilities
by reason of any guarantees given by the Company or its subsidiaries; and
(e)
save as disclosed on pages 81, 92 and 101 of the Prospectus, there has been no change in
the published reserves or any unusual factor affecting the profits of the Company and its
subsidiaries since the date that the last audited accounts were made up to.
Yours faithfully
For and on behalf of the
Board of Directors
Dr Chan Kum Lok Colin
87
ACCOUNTANTS’ REPORT
3 June 2000
The Board of Directors
750D Chai Chee Road #03-03
Technopark @ Chai Chee
Singapore 469004
Dear Sirs
1.
INTRODUCTION
1.1
This report has been prepared for inclusion in the Prospectus of Addvalue Technologies Ltd
(the “Company”) dated 3 June 2000 in connection with the Invitation in respect of 71,000,000
ordinary shares of S$0.025 each comprising 63,000,000 New Shares and 8,000,000 Vendor
Shares at the price of S$0.28 per share.
1.2
The Company, an investment holding company, was incorporated in the Republic of Singapore
on 27 April 1996 as a private limited company under the name of Add Value Holdings Pte Ltd.
It changed its name on 26 January 2000 to Addvalue Technologies Pte Ltd. The Company
was converted to a public limited company on 16 May 2000 and changed its name to Addvalue
Technologies Ltd. The principal activities of the Company and its subsidiaries (herein collectively
referred to as the “Group”) are those relating to the design and development of
telecommunications systems and hardware and related products.
1.3
At the date of this report, the Company holds shares in the following subsidiaries:
Name of Subsidiary
Principal Activities
Addvalue Communications
Pte Ltd (formerly known
as Add Value Enterprises
(Asia) Pte Ltd)
Design and
development of
telecommunications
systems and hardware
Addvalue Innovation Pte
Design and
Ltd (formerly known as
development of
Add Value Design Pte Ltd) telecommunications
systems and hardware
Addvalue Communications, Marketing and
Inc.
business promotion
1.4
Date and
Place of
Incorporation
Effective
Equity Held
By Group
%
Issued
Capital
20 January 1994
Singapore
100
S$2,500,000
15 June 1996
Singapore
100
S$690,000
23 February 2000
United States of
America
100
S$172
We have acted as auditors of the Company and Addvalue Innovation Pte Ltd since the date
of their incorporation. We have acted as auditors of Addvalue Communications Pte Ltd since
the financial year ended 31 March 1997. Prior to this, Addvalue Communications Pte Ltd was
audited by R Chan & Co from 20 January 1994 (date of incorporation) to 31 March 1995 and
by Richard Lim & Co from 1 April 1995 to 31 March 1996. Addvalue Communications, Inc. is
not required to be audited by law in the country of incorporation.
88
1.
INTRODUCTION (cont’d)
1.5
At the date of incorporation, the authorised share capital of the Company was S$5,000,000
comprising 5,000,000 ordinary shares of S$1 each, of which 2 shares of S$1 each were
issued and fully paid. There have been no changes in the authorised share capital of the
Company from the date of incorporation to 31 March 2000. Changes in the issued share
capital of the Company since incorporation to 31 March 2000 are set out below:
Issued Share Capital:
Ordinary shares of S$1 each
Number
of shares
S$
Consideration
Financial periods ended 31 March:
1997
Subscriber shares – at incorporation
2
2
2,392,821
2,392,821
465,498
465,498
Shares issued at par for cash
40,000
40,000
Shares issued at S$1.12 per share for cash
58,000
58,000
310,331
310,331
110,250
110,250
215,037
215,037
1999
120,300
120,300
2000
196,738
196,738
10,000
10,000
10,000
10,000
38,900
38,900
3,967,877
3,967,877
Shares issued in exchange for entire
issued share capital of Addvalue
Communications Pte Ltd
1998
Except as described above, the shares were issued to provide additional working capital for
the Company and the Group.
1.6
At an Extraordinary General Meeting held on 10 May 2000, the shareholders of the Company
approved, inter-alia, the following:
(a) the conversion of the Company into a public company and the change of its name to
Addvalue Technologies Ltd;
(b) the adoption of the new Articles of Association of the Company;
(c) the increase in the authorised share capital of the Company from S$5,000,000 divided
into 5,000,000 ordinary shares of S$1 each to S$12,000,000 by the creation of 7,000,000
new ordinary shares of S$1 each;
(d) the capitalisation of S$4,609,914 from the Company’s Share Premium account by way of
a bonus issue of 4,609,914 ordinary shares of S$1 each credited as fully paid at par;
(e) the sub-division of each ordinary share of S$1 each in the authorised and issued and
paid up share capital of the Company into 40 ordinary shares of S$0.025 each;
89
1.
INTRODUCTION (cont’d)
(f)
the issue of 63,000,000 New Shares of S$0.025 each which is the subject of this Invitation.
The New Shares, when allotted, issued and fully paid, will rank pari passu in all respects
with the existing ordinary shares of the Company; and
(g) the authorisation of the Directors, pursuant to Section 161 of the Companies Act, Chapter
50, to issue further shares at any time and from time to time to such persons, upon such
terms and conditions and for such purposes as the Directors may in their absolute
discretion deem fit, provided always that the aggregate number of shares to be issued
pursuant to such authority shall not exceed 50% of the issued share capital of the Company
immediately prior to the proposed issue, of which the aggregate number of shares to be
issued other than on a pro rata basis to the then existing shareholders shall not exceed
20% of the issued share capital of the Company immediately prior to the proposed issue,
such authority to continue in force until the conclusion of the next Annual General Meeting
or the date by which the next Annual General Meeting is required by law to be held,
whichever is earlier, unless previously revoked or varied at a general meeting of the
Company.
2.
BASIS OF PRESENTATION OF PROFORMA FINANCIAL INFORMATION
2.1
The financial information set out in this report is expressed in Singapore dollars and shows
the Proforma Statement of Group Results for the financial years ended 31 March 1996 to 31
March 2000, the Summary of Proforma Group Balance Sheets as at the end of each financial
year ended 31 March 1996 to 31 March 2000, and the Statement of Net Assets as at 31
March 2000 of the Group and the Company.
2.2
The Proforma Statement of Group Results and the Summary of Proforma Group Balance
Sheets have been prepared on the basis that the current Group structure as set out in
paragraph 1.3 above has been in existence throughout the financial years under review, or
since the respective dates of incorporation of the companies in the Group, if later.
2.3
The proforma financial information is based on the audited financial statements of the Company
and its subsidiaries for the accounting years covered by this report after making such
adjustments as we considered appropriate as set out in paragraph 7 and on the basis of the
accounting policies set out in paragraph 9. The financial statements of the Company and its
subsidiaries are prepared in accordance with Statements of Accounting Standard issued by
The Institute of Certified Public Accountants of Singapore.
3.
PROFORMA STATEMENT OF GROUP RESULTS
Note
1996
S$’000
Proforma
Turnover
4.1
520
Profit/(Loss) before taxation
4.2
95
Taxation
4.3
(7)
Profit/(Loss) after taxation
attributable to shareholders
of the Company
88
90
Year ended 31 March
1997
1998
1999
S$’000
S$’000
S$’000
Proforma
Actual
Actual
1,806
(344)
—
(344)
5,936
171
(107)
64
2000
S$’000
Actual
4,181
1,147
(3,831)
(3,217)
106
(3,725)
—
(3,217)
4.
NOTES TO PROFORMA STATEMENT OF GROUP RESULTS
4.1
Turnover
Turnover represents net invoiced value of sales and revenue from contracts and services.
4.2
Profit/(Loss) Before Taxation
The result before taxation of the Group has been arrived at after charging/(crediting) the
following:
1996
S$’000
Year ended 31 March
1997
1998
1999
S$’000 S$’000
S$’000
2000
S$’000
Amortisation of:
— Goodwill
—
209
279
279
279
— Development expenditure
—
—
325
42
291
— Directors of the Company
—
22
108
254
197
— Other directors
72
—
—
—
—
Fees paid to a company in which a
Director has a substantial interest
—
37
—
—
—
Depreciation of fixed assets
15
24
124
351
311
Development expenditure written off
and incurred
—
20
30
2,470
928
Fixed assets written off
—
—
70
10
28
Interest expense
—
17
63
88
112
Loss/(Gain) on foreign exchange
—
1
47
(62)
16
Provision for diminution in value of
investment
—
—
—
—
238
Provision for stock obsolescence
—
—
—
741
64
Interest income
—
—
—
(46)
(48)
Directors’ remuneration:
4.3
Taxation
1996
S$’000
Year ended 31 March
1997
1998
1999
S$’000 S$’000
S$’000
2000
S$’000
Based on results for the financial year:
— current taxation
(7)
—
— deferred taxation
—
—
(7)
—
(Charge)/Credit to profit and loss account
—
—
—
(107)
106
—
(107)
106
—
The tax charge in respect of the financial year ended 31 March 1998 is higher than that
arrived at by applying the applicable standard tax rate to the result before taxation as the loss
incurred by a subsidiary cannot be set off against the profit of the other subsidiary.
91
5.
SUMMARY OF PROFORMA GROUP BALANCE SHEETS
Note
1996
S$’000
Proforma
As at 31 March
1997
1998
1999
S$’000
S$’000
S$’000
Actual
Actual
Actual
2000
S$’000
Actual
Fixed Assets
66
595
1,161
930
1,379
Unquoted Equity
Investment
—
238
238
238
—
—
1,554
1,976
931
505
—
1,743
1,464
1,185
906
625
155
3,085
1,593
2,224
Current Liabilities
372
1,035
2,591
2,356
3,444
Net Current Assets/
(Liabilities)
253
6.1
Goodwill on Consolidation
Current Assets
6.1
Less:
Non-Current Liabilities
Net Assets
(3)
(880)
494
(763)
(1,220)
(131)
(279)
(35)
(114)
316
3,119
5,054
2,486
1,456
300
3,267
3,592
3,712
3,968
Share Premium
—
196
1,742
2,422
4,710
Share Subscription Monies
—
—
—
357
—
Unappropriated Profits/
(Accumulated Losses)
16
Represented by:
Share Capital
(344)
316
3,119
(280)
5,054
(4,005)
(7,222)
2,486
1,456
6.
NOTES TO THE SUMMARY OF PROFORMA GROUP BALANCE SHEETS
6.1
Development expenditure and work-in-progress include:
1996
S$’000
As at 31 March
1997
1998
1999
S$’000 S$’000
S$’000
2000
S$’000
Remuneration paid to Directors in
the financial year
—
485
252
93
180
Depreciation
—
85
165
18
78
92
7.
STATEMENT OF ADJUSTMENTS
The following adjustments have been made in arriving at the Proforma Statement of Group
Results and Summary of Proforma Group Balance Sheets:
Note
1996
S$’000
Taxation per audited financial
statements
Year ended 31 March
1997
1998
1999
S$’000 S$’000
S$’000
2000
S$’000
(7)
—
(226)
225
—
—
—
119
(119)
—
Taxation per Proforma
Statement of Group Results
(7)
—
(107)
106
—
Non-Current Liabilities per
audited financial statements
3
131
398
35
114
—
—
(119)
—
—
per Summary of Proforma
Group Balance Sheets
3
131
279
35
114
Accumulated Profits/(Losses)
per audited financial
statements
16
(344)
(399)
Adjustments:
Tax adjustments
(a)
Adjustments:
Deferred tax adjustment
(a)
(4,005)
(7,222)
Adjustments:
Tax adjustment
(a)
—
Accumulated Profits/(Losses)
per Summary of Proforma
Group Balance Sheets
16
—
(344)
119
(280)
Note:
(a) These relate to prior year’s taxes which have been re-allocated to the relevant years.
93
—
(4,005)
—
(7,222)
8.
STATEMENT OF NET ASSETS
The following statement sets out the assets and liabilities of the Group and of the Company
as at 31 March 2000:
Note
The
Group
S$’000
The
Company
S$’000
Fixed Assets
10.1
1,379
—
Investment
10.2
—
—
Interests in Subsidiaries
10.3
—
8,225
10.4
505
—
10.5
906
—
Current Assets
10.6
2,224
439
10.7
3,444
188
(1,220)
251
(114)
—
Less:
Current Liabilities
Net Current (Liabilities)/Assets
10.14
Net Assets
1,456
8,476
3,968
3,968
4,710
4,710
Representing:
Share Capital
10.15
Share Premium Account
Accumulated Losses
(7,222)
1,456
9.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
9.1
Basis of Financial Statements Preparation
(202)
8,476
The financial statements, expressed in Singapore dollars, are drawn up in accordance with
the historical cost convention.
9.2
Basis of Consolidation
(a) The consolidated financial statements include the financial statements of the Company
and its subsidiaries made up to the end of the financial period. All intra-group transactions
are eliminated on consolidation. The results of subsidiaries acquired and disposed of
during the period are included from the effective date of acquisition or to the effective
date of disposal, respectively.
(b) Any excess or deficiency of the purchase consideration over the net assets (at fair values
assigned by the Directors) at the date of acquisition is included in goodwill on consolidation
or capital reserve on consolidation, respectively. Goodwill on consolidation is written off
on the straight line basis to the profit and loss account over its estimated useful life of 7
years. Where future benefits are not expected to be realised, goodwill is immediately
written off to the profit and loss account.
94
9.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
9.3
Fixed Assets and Depreciation
Fixed assets are stated at cost less accumulated depreciation. Depreciation is calculated on
the straight line basis so as to write off the costs of fixed assets over their estimated useful
lives as follows:
Office equipment
10 years
Furniture and fittings
10 years
Computers
5 years
Laboratory equipment
5 years
Toolings
3 years
Renovations
4 years
No depreciation is provided in respect of fixed assets under construction or installation and
assets which have not been put into use or operations.
9.4
Investments
Investments held for long-term purposes are stated at cost. Provision for diminution in value
of investments is made when, in the opinion of the Directors, there has been a diminution,
other than a temporary decline, in the value of the investments.
9.5
Investments in Subsidiaries
Investments in subsidiaries are held for long-term purposes and are stated at cost. Provision
for diminution in value of investments is made when, in the opinion of the Directors, there has
been a diminution, other than a temporary decline, in the value of the investments.
9.6
Research Costs and Development Expenditure
Research costs are charged as an expense in the income statement in the period in which
they are incurred. Development costs which relate to a definable product or process that is
demonstrated to be technically and commercially feasible, and for which the Group has sufficient
resources to market, are recognised as assets to the extent that such costs are probably
recoverable from related future economic benefits. Such development costs are then allocated
on a systematic basis to future accounting years based on the number of years over which
the product or process is expected to be used or sold. Deferred development costs are currently
being amortised on a product-by-product basis over the estimated useful life from the
commencement of production or the ratio that current gross revenue bears to total estimated
gross revenue, whichever is the greater. Development costs not satisfying the established
criteria are recorded as an expense in the period in which they are incurred.
All deferred development costs are reviewed annually to determine the amount, if any, which
is no longer recoverable from expected future economic benefits. Any such amount is written
off and recognised as an expense in the period of write-off.
9.7
Work-in-Progress
Work-in-progress are stated at cost plus an appropriate proportion of attributable profit less
progress billings. Cost includes direct materials and labour costs and attributable overheads.
9.8
Stocks
Stocks are valued at the lower of cost and net realisable value. Cost is determined on the
first-in, first-out basis.
95
9.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
9.9
Income Recognition
Income from sale of goods is recognised on delivery. Income from contracts for the development
of systems and hardware is recognised on the percentage of completion method when the
outcome of the contract can be estimated reliably. The percentage of completion is measured
by the proportion that costs incurred for work performed to date bears to estimated total
contract costs. Losses, if any, are immediately recognised when their existence is foreseen.
9.10
Deferred Taxation
Deferred taxation is provided using the liability method on all material timing differences arising
from the different treatment of certain items for accounting and taxation purposes. Deferred
tax benefits, however, are not recognised in the financial statements except when there is a
reasonable expectation of realisation.
9.11
Foreign Currency Translation
Monetary assets and liabilities in foreign currencies are translated into Singapore dollars at
rates of exchange closely approximate to those ruling at the balance sheet date. Transactions
in foreign currencies are translated at rates ruling on transaction dates. Translation differences
are included in the profit and loss account.
10.
NOTES TO STATEMENT OF NET ASSETS
10.1
Fixed Assets
At Cost
S$’000
Accumulated
Depreciation
S$’000
Net Book
Value
S$’000
The Group
Office equipment
57
13
44
Furniture and fittings
35
14
21
792
282
510
1,222
487
735
Toolings
272
272
—
Renovations
154
85
69
2,532
1,153
1,379
Computers
Laboratory equipment
10.2
Investment
Unquoted equity investment, at cost
Less: Provision for diminution in value of investment
96
The
Group
S$’000
The
Company
S$’000
238
—
(238)
—
—
—
10.
NOTES TO STATEMENT OF NET ASSETS (cont’d)
10.3
Interests in Subsidiaries
The
Company
S$’000
Unquoted equity shares, at cost
5,267
Amount owing by subsidiary
2,958
8,225
10.4
Development expenditure
Less: Accumulated amortisation
10.5
The
Group
S$’000
The
Company
S$’000
672
—
(167)
—
505
—
The
Group
S$’000
The
Company
S$’000
1,952
—
(1,046)
—
Goodwill on consolidation
Less: Accumulated amortisation
906
10.6
—
Current Assets
Note
The
Group
S$’000
The
Company
S$’000
Stocks
10.8
22
—
Work-in-progress
10.9
145
—
466
—
Trade debtors
Other debtors, deposits and prepayments
10.10
480
414
Fixed deposits with bank
10.11
1,033
—
78
25
2,224
439
Cash and bank balances
97
10.
10.7
Current Liabilities
Note
Trade creditors
426
—
10.12
968
—
Other creditors and accruals
10.13
432
188
Hire purchase creditors
10.14
184
—
178
—
1,256
—
3,444
188
The
Group
S$’000
The
Company
S$’000
Raw materials
782
—
Finished goods
44
—
826
—
(804)
—
22
—
The
Group
S$’000
The
Company
S$’000
314
—
(169)
—
145
—
The
Group
S$’000
The
Company
S$’000
Recoverable deposits
25
—
Other debtors
41
—
Prepayments
414
414
480
414
Bank overdrafts (secured)
10.11
Stocks
Less: Provision for stock obsolescence
10.9
The
Company
S$’000
Excess of billings over work-in-progress
Trust receipts
10.8
The
Group
S$’000
Work-in-progress
Contract cost incurred
Less: Progress billings received and receivable
10.10 Other Debtors, Deposits and Prepayments
98
10.
10.11 Fixed Deposits With Bank/Bank Overdrafts
The bank overdrafts are utilised by a subsidiary under banking facilities secured by the joint
and several guarantees of certain Directors of the Company, guarantees issued by the Company
in the amount of S$1,400,000 and by fixed deposits of S$860,000.
10.12 Excess of Billings over Work-in-Progress
The
Group
S$’000
Contract cost incurred
943
Less: Progress billings
The
Company
S$’000
—
(1,911)
—
(968)
—
10.13 Other Creditors and Accruals
The
Group
S$’000
The
Company
S$’000
Accrued operating expenses
268
188
Other creditors
164
—
432
188
The
Group
S$’000
The
Company
S$’000
Hire purchase instalments payable
323
—
Less: Deferred interest
(25)
—
298
—
Within 12 months
184
—
After 12 months
114
—
298
—
10.14 Hire Purchase Creditors
Amounts falling due:
99
10.
10.15 Share Capital
The
Company
S$’000
Authorised:
5,000,000 ordinary shares of S$1 each
5,000
Issued share capital:
3,967,877 ordinary shares of S$1 each
3,968
10.16 Contingent Liability
The
Company
S$’000
10.17
Guarantee in respect of bank facilities granted to a subsidiary
(see note 10.11)
1,400
Guarantee in respect of hire purchase facilities obtained by a
subsidiary (see note 10.14)
800
Subsequent Events
Subsequent to 31 March 2000, the Company:
1.
increased its issued share capital through the following issue of shares:
(a) 26,000 ordinary shares of S$1 each for cash at a premium of S$5.65 per share to
provide additional working capital;
(b) 320,000 ordinary shares of S$1 each at par for cash to provide additional working
capital; and
(c) 1,209 ordinary shares of S$1 each at a premium of S$16.37 per share by way of
capitalisation of hire purchase liabilities,
2.
issued 4,609,914 bonus shares of S$1 each fully paid at par by the capitalisation of
S$4,609,914 from the Share Premium account;
3.
increased its authorised share capital from S$5,000,000 to S$12,000,000 by the creation
of 7,000,000 new ordinary shares of S$1 each; and
4.
sub-divided its authorised share capital into 480,000,000 ordinary shares of S$0.025 each
and its issued share capital into 357,000,000 ordinary shares of S$0.025 each.
100
11.
NET TANGIBLE ASSETS BACKING
The net tangible assets backing of the Group for each share of S$0.025 based on the financial
statements of the Group as at 31 March 2000, after taking into account the changes to the
issued share capital set out in the preceding paragraph, is set out below:
Net Tangible Assets
S$’000
Net tangible assets as at 31 March 2000
45
Add/(Less):
Proceeds from issue of 347,209 ordinary shares of S$1 each
514
Proceeds from issue of 63,000,000 New Shares of S$0.025 each at a
price of S$0.28 per New Share
17,640
Estimated issue expenses
(1,600)
Adjusted net tangible assets
16,599
Number of
Shares
Issued Share Capital
Ordinary shares of S$1 each fully paid as at 31 March 2000
3,967,877
Shares issued on 19 April 2000
26,000
Shares issued on 16 May 2000
320,000
Shares issued on 16 May 2000
1,209
Bonus shares issued on 16 May 2000
4,609,914
8,925,000
Sub-division of each ordinary share of S$1 each into 357,000,000
ordinary shares of S$0.025 each
Issue of 63,000,000 New Shares of S$0.025 each in connection with
the Invitation
Issued shares of S$0.025 each
63,000,000
420,000,000
Net tangible assets backing for each ordinary share of S$0.025
12.
357,000,000
3.95 cents
DIVIDENDS
No dividends have been declared by the Company since incorporation.
13.
AUDITED FINANCIAL STATEMENTS
No audited financial statements have been prepared in respect of any period subsequent to
31 March 2000.
Yours faithfully
KPMG
Certified Public Accountants
Philip Lee Jee Cheng
Partner-in-charge
101
GENERAL AND STATUTORY INFORMATION
INFORMATION ON OUR DIRECTORS AND EXECUTIVE OFFICERS
1.
The particulars, business and working experience of our Directors and Executive Officers, the
list of their present and past directorships, excluding those held in our Company, over the past
five years preceding the date of this Prospectus are set out on pages 68 to 75 of this Prospectus.
2.
Save as disclosed from pages 82 to 84 of this Prospectus, none of our Directors has any
shareholding in our Company.
3.
Dr Chan Kum Lok Colin and Ms Caroline Chan Fong Chee, who are both our Directors, are
siblings. Mr Lim Han Boon, another of our Directors, is the General Manager of the Solid
Resources (S) Holding Pte Ltd, a substantial shareholder of our Company prior to the Invitation.
Save as disclosed, none of our Directors, Executive Officers and substantial shareholders of
our Company are related to one another, and none of our Directors has any professional
relationship with our Company and our other Directors or substantial shareholders. Save as
disclosed, none of the employees of our Group is related to our Directors.
4.
Save as disclosed on pages 77 and 78 of this Prospectus, none of our Directors is interested,
directly or indirectly, in the promotion of, or in, any assets which have been acquired or disposed
of by, or leased to, our Company or any of our subsidiaries within the two years preceding the
date of this Prospectus, or are proposed to be acquired or disposed of by, or leased to, our
Group.
5.
Save as disclosed under “Interested Person Transactions” on pages 77 and 78 of this Prospectus,
none of our Directors, Executive Officers or substantial shareholders of our Company has any
interest, direct or indirect, in any company carrying on the same business or carrying on a
similar trade as our Group.
6.
No Director is materially interested in any existing contract or arrangement which is significant
in relation to the business of our Group taken as a whole.
7.
Save as disclosed on pages 84 and 85 of this Prospectus, none of our Directors has any
present intention to realise or transfer any part of his shareholding interest in our Company as
at the close of the Invitation within a period of one year after the admission of our Company to
the Official List of the SGX-ST.
8.
There is no shareholding qualification for our Directors under the Articles of Association of our
Company.
9.
The aggregate emoluments (including CPF contributions thereon) paid to the then existing
Directors of our Company for services in all capacities to our Group for FY2000 amounted to
approximately S$377,000. The aggregate emoluments payable to the present Directors in FY2001
under the arrangements in force at the date of this Prospectus, including the Service Agreements
referred to page 76 of this Prospectus, amount to approximately S$1.0 million.
10.
Save for the Incentive Shares, no person has been, or is entitled to be, given an option to
subscribe for any shares in or debentures of our Company or our subsidiaries.
11.
Save for the Incentive Shares, no option to subscribe for shares in or debentures of our Company
or our subsidiaries has been granted to, or has been exercised by, any Director or Executive
Officer within the last financial year.
12.
No sum or benefit has been paid or is agreed to be paid to any Director or expert, or to any
firm in which such Director or expert is a partner or any corporation in which such Director or
expert holds shares or debentures, in cash or shares or otherwise, by any person to induce
him to become, or to qualify him as a Director or otherwise for services rendered by him or by
such firm or corporation in connection with the promotion or formation of our Company.
102
13.
Save as disclosed below, no Director or Executive Officer is or was involved in any of the
following events:
(a) a petition under any bankruptcy laws filed in any jurisdiction against him or any partnership
in which he was a partner or any corporation of which he was a director or an executive
officer;
(b) a conviction of any offence, other than a traffic offence, or a judgement, including findings
in relation to fraud, misrepresentation or dishonesty, given against him in any civil proceeding
in Singapore or elsewhere or any proceeding now pending which may lead to such a
conviction or judgement;
(c) a conviction in a criminal proceeding or being a named subject of a pending criminal
proceeding and none of our Directors or Executive Officers is aware of any criminal
investigation pending against him; and
(d) the subject of any order, judgement or ruling of any court of competent jurisdiction, tribunal
or governmental body, permanently or temporarily enjoining him from acting as an investment
adviser, dealer in securities, director or employee of a financial institution and engaging in
any type of business practice or activity.
Two directors of Addvalue Technologies Ltd, Dr Chan Kum Lok Colin and Mr Tan Khai Pang, were
former directors of Genesis, a company in respect of which a winding-up petition was filed on 28
May 1994. Dr Chan and Mr Tan ceased to be directors of Genesis on 31 December 1993 and 24
January 1994 respectively. Tan Juay Hwa, a director of Addvalue Technologies Ltd, was a manager
of Genesis from May 1991 to January 1994.
Genesis was incorporated on 17 August 1990. It was engaged mainly in the design, manufacturing
and sales of telecommunications equipment such as cordless phones.
In 1993, Genesis’ anchor product was a cordless phone for the Holland market. Since initial sales
and sales forecasts of the product were promising, Genesis produced 80,000 to 90,000 units of this
cordless phone and entered into negotiations with various parties who proposed to invest in Genesis.
While these negotiations were progressing, the cordless phone product, suffered high field return
due to certain software problems (user operations) that had not been discovered during product
testing. When the company encountered high field return of this product, it resulted in a cash flow
squeeze. The cash flow difficulties were compounded when a major customer defaulted on payments
because of credit problems. As the result of the cash flow problem, the company was taken over by
a corporate shareholder of Genesis. Three months after Dr Chan Kum Lok Colin, Mr Tan Khai Pang,
and Mr Tan Juay Hwa ceased to be shareholders and/or directors of Genesis, a petition to wind up
Genesis was filed.
SHARE CAPITAL
14.
As at the date of this Prospectus, there is only one class of shares in the capital of our
Company. The rights and privileges of our Shares are stated in the Articles of Association of
our Company. There are no founder, management or deferred shares.
15.
The changes in the issued share capital of our Company and our subsidiaries within the two
years preceding the date of this Prospectus are as follows:
Number of
Shares
Date of Issue
Issued
Issue Price
Purpose of
Issue/Consideration
Resultant Issued
Share Capital
S$6.65
each
New issue for cash to
raise working capital
S$3,712,239
Our Company
3 April 1998
120,300
ordinary shares
of S$1.00 each
103
Number of
Shares
Date of Issue
Issued
Issue Price
Purpose of
Issue/Consideration
Resultant Issued
Share Capital
Our Company
28 May 1999
100,240
ordinary shares
of S$1.00 each
S$6.65
each
Rights issue to existing
shareholders and new
issue for cash to raise
working capital
S$3,812,479
30 November 1999
71,712
ordinary shares
of S$1.00 each
S$6.65
each
shareholders and new issue
for cash to raise
working capital
S$3,884,191
26 January 2000
24,786
ordinary shares
of S$1.00 each
S$6.65
each
shareholders for cash to
S$3,908,977
26 January 2000
10,000
ordinary shares
of S$1.00 each
S$13.00
each
S$3,918,977
31 January 2000
10,000
ordinary shares
of S$1.00 each
S$13.30
each
S$3,928,977
31 January 2000
30,000
ordinary shares
of S$1.00 each
S$25.00
each
S$3,958,977
1 March 2000
8,900
ordinary shares
of S$1.00 each
S$25.00
each
S$3,967,877
19 April 2000
26,000
ordinary shares
of S$1.00 each
S$6.65
each
shareholders for cash to
S$3,993,877
16 May 2000
320,000
ordinary shares
of S$1.00 each
S$1.00
each
Incentive Shares issued to
certain Directors and
employees of our Group
S$4,313,877
16 May 2000
1,209
ordinary shares
of S$1.00 each
S$17.37
each
New issue pursuant to a
prior contractual obligation
with Heller Asia Capital
(Singapore) Ltd
S$4,315,086
2,150,000
ordinary shares
of S$1.00 each
S$1.00
each
New issue pursuant to the
capitalisation of a loan
from AVT
S$2,500,000
290,000
ordinary shares
of S$1.00 each
S$1.00
each
New issue pursuant to the
capitalisation of a loan
from AVT
S$690,000
1,000,000
US$0.0001
each
Incorporation
US$100
AVC
22 October 1999
AVI
17 December 1999
AVC (USA)
23 February 2000
104
16.
Save as disclosed above and on pages 79 to 84, 103 and 104 of this Prospectus, no shares in
or debentures of our Company or any of our subsidiaries have been issued or are agreed to be
issued by our Company or any of our subsidiaries, as fully or partly paid-up and whether for
cash or for a consideration other than cash, within the two years preceding the date of this
Prospectus.
ARTICLES OF ASSOCIATION
17.
The provisions in the Articles of Association of our Company relating to the transfer of Shares,
the voting rights of the shareholders of our Company, restrictions on the voting rights of our
Directors, class rights and the variation thereof, the borrowing powers of our Directors and the
remuneration of our Directors are as follows:
TRANSFER OF SHARES
Article 21
Subject to these Articles, any Member may transfer all or any of his shares but every instrument
of transfer of the legal title in shares must be in writing and in the form for the time being
approved by the Directors and the Exchange. Shares of different classes shall not be comprised
in the same instrument of transfer. The Company shall accept for registration transfers in the
form approved by the Exchange.
Article 22
The instrument of transfer of a share shall be signed by or on behalf of the transferor and the
transferee and be witnessed, provided that an instrument of transfer in respect of which the
transferee is the Depository shall not be ineffective by reason of it not being signed or witnessed
for by or on behalf of the Depository. The transferor shall be deemed to remain the holder of
the share until the name of the transferee is entered in the Register of Members.
Article 23
No share shall in any circumstances be transferred to any infant, bankrupt or person of unsound
mind.
Article 24
(a) Subject to these Articles, the Act or as required by the Exchange, there shall be no restriction
on the transfer of fully paid-up shares (except where required by law or by the rules, byelaws or listing rules of the Exchange) but the Directors may in their discretion decline to
register any transfer of shares upon which the Company has a lien and in the case of
shares not fully paid-up may refuse to register a transfer to a transferee of whom they do
not approve. If the Directors shall decline to register any such transfer of shares, they shall
give to both the transferor and the transferee written notice of their refusal to register as
required by the Act.
(b) The Directors may decline to register any instrument of transfer unless:
(i)
such fee not exceeding S$2.00 (or such other sum as may be approved by the
Exchange from time to time) as the Directors may from time to time require, is paid to
the Company in respect thereof;
(ii) the instrument of transfer, duly stamped in accordance with any law for the time being
in force relating to stamp duty, is deposited at the Office or at such other place (if any)
as the Directors appoint accompanied by the certificates of the shares to which it
relates, and such other evidence as the Directors may reasonably require to show the
right of the transferor to make the transfer and, if the instrument of transfer is executed
by some other person on his behalf, the authority of the person so to do; and
(iii) the instrument of transfer is in respect of only one class of shares.
105
Article 26
The Register of Members and the Depository Register may be closed at such times and for
such period as the Directors may from time to time determine, provided always that the Registers
shall not be closed for more than thirty days in the aggregate in any year. Provided Always that
the Company shall give prior notice of such closure as may be required to the Exchange,
stating the period and purpose or purposes for which the closure is made.
Article 27
(a) Nothing in these Articles shall preclude the Directors from recognising a renunciation of the
allotment of any share by the allottee in favour of some other person.
(b) Neither the Company nor its Directors nor any of its Officers shall incur any liability for
registering or acting upon a transfer of shares apparently made by sufficient parties, although
the same may, by reason of any fraud or other cause not known to the Company or its
Directors or other Officers, be legally inoperative or insufficient to pass the property in the
shares proposed or professed to be transferred, and although the transfer may, as between
the transferor and transferee, be liable to be set aside, and notwithstanding that the Company
may have notice that such instrument of transfer was signed or executed and delivered by
the transferor in blank as to the name of the transferee or the particulars of the shares
transferred, or otherwise in defective manner. And in every such case, the person registered
as transferee, his executors, administrators and assigns, alone shall be entitled to be
recognised as the holder of such shares and the previous holder shall, so far as the
Company is concerned, be deemed to have transferred his whole title thereto.
VOTING RIGHTS
Article 10
(a) If at any time the share capital is divided into different classes, the special rights attached
to any class (unless otherwise provided by the terms of issue of the shares of that class)
may, subject to the provisions of the Act, whether or not the Company is being wound up,
only be made, varied or abrogated with the sanction of a Special Resolution passed at a
separate General Meeting of the holders of shares of the class and to every such Special
Resolution the provisions of Section 184 of the Act shall, with such adaptations as are
necessary, apply. To every such separate General Meeting the provisions of these Articles
relating to General Meetings shall mutatis mutandis apply; but so that the necessary quorum
shall be two persons at least holding or representing by proxy or by attorney one-third of
the issued shares of the class and that any holder of shares of the class present in person
or by proxy or by attorney may demand a poll. Provided always that where the necessary
majority for such a Special Resolution is not obtained at the Meeting, consent in writing if
obtained from the holders of three-fourths of the issued shares of the class concerned
within two months of the Meeting shall be as valid and effectual as a Special Resolution
carried at the Meeting.
(b) The repayment of preference capital other than redeemable preference capital or any other
alteration of preference shareholder rights, may only be made pursuant to a Special
Resolution of the preference shareholders concerned. PROVIDED ALWAYS that where the
necessary majority for such a Special Resolution is not obtained at the Meeting, consent in
writing if obtained from the holders of three-fourths of the preference shares concerned
within two months of the Meeting, shall be as valid and effectual as a Special Resolution
carried at the Meeting.
106
Article 76
Subject and without prejudice to any special privileges or restrictions as to voting for the time
being attached to any special class of shares for the time being forming part of the capital of
the Company each Member entitled to vote may vote in person or by proxy or attorney, and (in
the case of a corporation) by a representative. On a show of hands every Member who is
present in person or by proxy or attorney, or in the case of a corporation by a representative,
shall have one vote provided that if a Member is represented by two proxies, only one of the
two proxies as determined by their appointor shall vote on a show of hands and in the absence
of such determination, only one of the two proxies as determined by the Chairman (or by a
person authorised by him) shall vote on a show of hands and on a poll, every Member who is
present in person or by proxy, attorney or representative shall have one vote for each share
which he holds or represents Provided Always That notwithstanding anything contained in these
Articles, a Depositor shall not be entitled to attend any General Meeting and to speak and vote
thereat unless his name is certified by the Depository to the Company as appearing in the
Depository Register not earlier than forty-eight hours before that General Meeting (the “cut-off
time”) as a Depositor on whose behalf the Depository holds shares in the Company. For the
purpose of determining the number of votes which a Depositor or his proxy may cast on a poll,
the Depositor or his proxy shall be deemed to hold or represent that number of shares entered
in the Depositor’s Securities Account at the cut-off time as certified by the Depository to the
Company, or where a Depositor has apportioned the balance standing to his Securities Account
as at the cut-off time between two proxies, to apportion the said number of shares between the
two proxies in the same proportion as specified by the Depositor in appointing the proxies; and
accordingly no instrument appointing a proxy of a Depositor shall be rendered invalid merely by
reason of any discrepancy between the number of shares standing to the credit of that
Depositor’s Securities Account as at the cut-off time, and the true balance standing to the
Securities Account of a Depositor as at the time of the relevant General Meeting, if the instrument
is dealt with in such a manner as aforesaid.
Article 77
Where there are joint holders of any share any one of such persons may vote and be reckoned
in a quorum at any Meeting either personally or by proxy or by attorney or in the case of a
corporation by a representative as if he were solely entitled thereto but if more than one of
such joint holders is so present at any Meeting then the person present whose name stands
first in the Register of Members or the Depository Register (as the case may be) in respect of
such share shall alone be entitled to vote in respect thereof. Several executors or administrators
of a deceased Member in whose name any share stands shall for the purpose of this Article be
deemed joint holders thereof.
Article 78
If a Member be a lunatic, idiot or non-compos mentis, he may vote whether on a show of
hands or on a poll by his committee, curator bonis or such other person as properly has the
management of his estate and any such committee, curator bonis or other person may vote by
proxy or attorney, provided that such evidence as the Directors may require of the authority of
the person claiming to vote shall have been deposited at the Office not less than forty-eight
hours before the time appointed for holding the Meeting.
Article 79
Subject to the provisions of these Articles, every Member either personally or by attorney or in
the case of a corporation by a representative and every proxy shall be entitled to be present
and to vote at any General Meeting and to be reckoned in the quorum thereat in respect of
shares fully paid and in respect of partly paid shares where calls are not due and unpaid.
107
Article 80
No objection shall be raised to the qualification of any voter except at the Meeting or adjourned
Meeting at which the vote objected to is given or tendered and every vote not disallowed at
such Meeting shall be valid for all purposes. Any such objection made in due time shall be
referred to the Chairman of the Meeting whose decision shall be final and conclusive.
Article 81
On a poll votes may be given either personally or by proxy or by attorney or in the case of a
corporation by its representative and a person entitled to more than one vote need not use all
his votes or cast all the votes he uses in the same way.
Article 82
(a) A Member may appoint not more than two proxies to attend and vote at the same General
Meeting.
(b) If the Member is a Depositor, the Company shall be entitled:
(i)
to reject any instrument of proxy lodged if the Depositor is not shown to have any
shares entered in its Securities Account as at the cut-off time as certified by the
Depository to the Company; and
(ii) to accept as validly cast by the proxy or proxies appointed by the Depositor on a poll
that number of votes which corresponds to or is less than the aggregate number of
shares entered in its Securities Account of that Depositor as at the cut-off time as
certified by the Depository to the Company, whether that number is greater or smaller
than the number specified in any instrument of proxy executed by or on behalf of that
Depositor.
(c) Where a Member appoints more than one proxy, he shall specify the proportion of his
shareholding to be represented by each proxy. If no such proportion or number is specified
the first named proxy may be treated as representing 100% of the shareholding and any
second named proxy as an alternate to the first named.
(d) Voting right(s) attached to any shares in respect of which a Member has not appointed a
proxy may only be exercised at the relevant General Meeting by the Member personally or
by his attorney, or in the case of a corporation by its representative.
(e) Where a Member appoints a proxy in respect of more shares than the shares standing to
his name in the Register of Members, or in the case of a Depositor, standing to the credit
of that Depositor’s Securities Account, such proxy may not exercise any of the votes or
rights of the shares not registered to the name of that Member in the Register of Members
or standing to the credit of that Depositor’s Securities Account as at the cut-off time, as the
case may be.
Article 83
A proxy or attorney need not be a Member, and shall be entitled to vote on a show of hands
on any question at any General Meeting.
108
Article 84
Any instrument appointing a proxy shall be in writing in the common form approved by the
Directors under the hand of the appointor or his attorney duly authorised in writing or, if the
appointor is a corporation, under seal or under the hand of its attorney duly authorised and the
Company shall accept as valid in all respects the form of proxy approved by the Directors for
use at the date relevant to the General Meeting in question.
Article 85
The instrument appointing a proxy, together with the power of attorney or other authority, if any,
under which the instrument of proxy is signed or a duly certified copy of that power of attorney
or other authority (failing previous registration with the Company) shall be attached to the
instrument of proxy and must be left at the Office or such other place (if any) as is specified for
the purpose in the notice convening the Meeting not less than forty-eight hours before the time
appointed for the holding of the Meeting or adjourned Meeting (or in the case of a poll before
the time appointed for the taking of the poll) at which it is to be used failing which the instrument
may be treated as invalid. An instrument appointing a proxy shall, unless the contrary is stated
thereon, be valid as well for any adjournment of the Meeting as for the Meeting to which it
relates Provided that an instrument of proxy relating to more than one Meeting (including any
adjournment thereof) having once been so delivered for the purposes of any Meeting shall not
be required again to be delivered for the purposes of any subsequent Meeting to which it
relates. An instrument of proxy shall be deemed to include the power to demand or concur in
demanding a poll on behalf of the appointer. Unless otherwise instructed, a proxy shall vote as
he thinks fit. The signature on an instrument appointing a proxy need not be witnessed.
Article 86
A vote given in accordance with the terms of an instrument of proxy (which for the purposes of
these Articles shall also include a power of attorney) shall be valid notwithstanding the previous
death or insanity of the principal or revocation of the proxy, or of the authority under which the
proxy was executed or the transfer of the share in respect of which the proxy is given, provided
that no intimation in writing of such death, insanity, revocation or transfer shall have been
received by the Company at the Office (or such other place as may be specified for the deposit
of instruments appointing proxies) before the commencement of the Meeting or adjourned
Meeting (or in the case of a poll before the time appointed for the taking of the poll) at which
the proxy is used.
Article 87
Any corporation which is a Member may by resolution of its directors or other governing body
authorise such person as it thinks fit to act as its representative at any Meeting of the Company
or of any class of Members and the persons so authorised shall be entitled to exercise the
same powers on behalf of the corporation as the corporation could exercise if it were an
individual Member of the Company. The Company shall be entitled to treat a certificate under
the seal of the corporation as conclusive evidence of the appointment or revocation of
appointment of a representative under this Article.
109
DIRECTORS’ VOTING POWERS
Article 96
(a) No Director or intending Director shall be disqualified by his office from contracting or
entering into any arrangement with the Company either as vendor, purchaser or otherwise
nor shall such contract or arrangement or any contract or arrangement entered into by or
on behalf of the Company in which any Director shall be in any way interested be avoided
nor shall any Director so contracting or being so interested be liable to account to the
Company for any profit realised by any such contract or arrangement by reason only of
such Director holding that office or of the fiduciary relation thereby established but every
Director shall observe the provisions of Section 156 of the Act relating to the disclosure of
the interests of the Directors in contracts or proposed contracts with the Company or of
any office or property held by a Director which might create duties or interests in conflict
with his duties or interests as a Director and any contract or arrangement to be entered
into by or on behalf of the Company in which any Director shall be in any way interested
shall be subject to any requirements that may be imposed by the Exchange. No Director
shall vote in respect of any contract, arrangement or transaction in which he is so interested
as aforesaid or in respect of any allotment of shares in or debentures of the Company to
him and if he does so vote his vote shall not be counted but this prohibition as to voting
shall not apply to:
(i)
any arrangement for giving to him any security or indemnity in respect of money lent
by him or obligations undertaken by him for the benefit of the Company; or
(ii) any arrangement for the giving by the Company of any security to a third party in
respect of a debt or obligation of the Company for which he himself has assumed
responsibility in whole or in part under a guarantee or indemnity or by the deposit of
a security; or
(iii) any contract by him to subscribe for or underwrite shares in or debentures of the
Company; or
(iv) any contract or arrangement with any other company, corporation or body in which he
is interested only as a director or other officer or creditor of or as a shareholder in or
beneficially interested in the shares thereof.
(b) A Director, notwithstanding his interest, may be counted in the quorum present at any
meeting where he or any other Director is appointed to hold any office or place of profit
under the Company, or where the Directors resolve to exercise any of the rights of the
Company (whether by the exercise of voting rights or otherwise) to appoint or concur in
the appointment of a Director to hold any office or place of profit under any other company,
or where the Directors resolve to enter into or make any arrangements with him or on his
behalf pursuant to these Articles or where the terms of any such appointment or
arrangements as hereinbefore mentioned are considered, and he may vote on any such
matter other than in respect of the appointment of or arrangements with himself or the
fixing of the terms thereof. Notwithstanding Articles 96(b)(i) to (iv) above, a Director shall
not vote in respect to any contract or arrangement or proposed contract or arrangement in
which he has directly or indirectly a personal material interest.
(c) The provisions of this Article may at any time be suspended or relaxed to any extent and
either generally or in respect of any particular contract, arrangement or transaction by the
Company in General Meeting, and any particular contract, arrangement or transaction carried
out in contravention of this Article may be ratified by Ordinary Resolution of the Company.
110
Article 97
(a) A Director may hold any other office or place of profit under the Company (except that of
Auditor) and he or any firm of which he is a member may act in a professional capacity for
the Company in conjunction with his office of Director, and on such terms as to remuneration
and otherwise as the Directors shall determine. A Director of the Company may be or
become a director or other officer of, or otherwise interested in, any company promoted by
the Company or in which the Company may be interested as vendor, purchaser, shareholder
or otherwise, and no such Director shall be accountable to the Company for any
remuneration or other benefits received by him as a director or officer of, or from his
interest in, such other company unless the Company otherwise directs.
(b) The Directors may exercise the voting power conferred by the shares in any company held
or owned by the Company in such manner and in all respects as the Directors think fit in
the interests of the Company (including the exercise thereof in favour of any resolution
appointing the Directors or any of them to be directors of such company or voting or
providing for the payment of remuneration to the directors of such company) and any such
Director of the Company may vote in favour of the exercise of such voting powers in the
manner aforesaid notwithstanding that he may be or be about to be appointed a director of
such other company.
Article 98
The Directors may from time to time appoint one or more of their body to be Managing Director
or Managing Directors of the Company (or any equivalent appointment(s) howsoever described)
and may from time to time (subject to the provisions of any contract between him or them and
the Company) remove or dismiss him or them from office and appoint another or others in his
or their places. Where an appointment is for a fixed term such term shall not exceed five years.
BORROWING POWERS OF DIRECTORS
Article 124
The Directors may at their discretion exercise every borrowing power vested in the Company by
its Memorandum of Association or permitted by law and may borrow or raise money from time
to time for the purpose of the Company and secure the payment of such sums by mortgage,
charge or hypothecation of or upon all or any of the property or assets of the Company including
any uncalled or called but unpaid capital or by the issue of debentures (whether at par or at
discount or premium) or otherwise as they may think fit.
REMUNERATION OF DIRECTORS
Article 92
(a) The fees of the Directors shall be determined from time to time by the Company in General
Meetings and such fees shall not be increased except pursuant to an Ordinary Resolution
passed at a General Meeting where notice of the proposed increase shall have been given
in the notice convening the Meeting. Such fees shall be divided among the Directors in
such proportions and manner as they may agree and in default of agreement equally,
except that in the latter event any Director who shall hold office for part only of the period
in respect of which such fee is payable shall be entitled only to rank in such division for
the proportion of fee related to the period during which he has held office.
(b) Any Director who is appointed to any executive office or serves on any committee or who
otherwise performs or renders services, which, in the opinion of the Directors, are outside
his ordinary duties as a Director, may be paid such extra remuneration as the Directors
may determine, subject however as is hereinafter provided in this Article.
111
(c) Notwithstanding Article 92(b), the remuneration in the case of a Director other than an
Executive Director shall be payable by a fixed sum and shall not at any time be by
commission on or percentage of the profits or turnover, and no Director whether an Executive
Director or otherwise shall be remunerated by a commission on or percentage of turnover.
Article 93
The Directors shall be entitled to be repaid all travelling or such reasonable expenses as may
be incurred in attending and returning from meetings of the Directors or of any committee of
the Directors or General Meetings or otherwise howsoever in or about the business of the
Company in the course of the performance of their duties as Directors.
Article 94
Subject to the Act, the Directors on behalf of the Company may pay a gratuity or pension or
allowance on retirement to any Director or former Director who had held any other salaried
office or place of profit with the Company or to his widow or dependants or relations or
connections and may make contributions to any fund and pay premiums for the purchase or
provision of any such gratuity, pension or allowance.
Article 95
The Directors may procure the establishment and maintenance of or participate in or contribute
to any non-contributory or contributory pension or superannuation fund or life assurance scheme
or any other scheme whatsoever for the benefit of and pay, provide for or procure the grant of
donations, gratuities, pensions, allowances, benefits or emoluments to any persons (including
Directors and other Officers) who are or shall have been at any time in the employment or
service of the Company or of the predecessors in business of the Company or of any subsidiary
company, and the wives, widows, families or dependants of any such persons. The Directors
may also procure the establishment and subsidy of or subscription and support to any institutions,
associations, clubs, funds or trusts calculated to be for the benefit of any such persons as
aforesaid or otherwise to advance the interests and well-being of the Company or of any such
other company as aforesaid or of its Members and payment for or towards the insurance of
any such persons as aforesaid, and subscriptions or guarantees of money for charitable or
benevolent objects or for any exhibition or for any public, general or useful object.
Article 97(a)
A Director may hold any other office or place of profit under the Company (except that of
Auditor) and he or any firm of which he is a member may act in a professional capacity for the
Company in conjunction with his office of Director, and on such terms as to remuneration and
otherwise as the Directors shall determine. A Director of the Company may be or become a
director or other officer of, or otherwise interested in, any company promoted by the Company
or in which the Company may be interested as vendor, purchaser, shareholder or otherwise,
and no such Director shall be accountable to the Company for any remuneration or other
benefits received by him as a director or officer of, or from his interest in, such other company
unless the Company otherwise directs.
Article 100
The remuneration of a Managing Director (or any Director holding an equivalent appointment)
shall from time to time be fixed by the Directors and may subject to these Articles be by way
of salary or commission or participating in profits or by any or all of these modes but he shall
not under any circumstances be remunerated by a commission on or a percentage of turnover.
112
Article 109
Any Director of the Company may at any time appoint any person who is not a Director or an
alternate of another Director and who is approved by a majority of his Co-Directors to be his
Alternate Director and may at any time remove any such Alternate Director from office. An
Alternate Director so appointed shall be entitled to receive from the Company such proportion
(if any) of the remuneration otherwise payable to his appointor as such appointor may by
notice in writing to the Company from time to time direct, but save as aforesaid he shall not in
respect of such appointment be entitled to receive any remuneration from the Company. Any
fee paid to an Alternate Director shall be deducted from the remuneration otherwise payable to
his appointor.
BANK BORROWINGS AND WORKING CAPITAL
18.
As at the date of this Prospectus, our Company has given guarantees to financial institutions to
secure borrowings made by AVC. Save as disclosed on pages 36, 98 to 100 of this Prospectus,
our Group had no borrowings or indebtedness in the nature of borrowings including bank
overdrafts and liabilities under acceptances (other than normal trading bills) or acceptance
credits, mortgages, charges, hire purchase commitments, guarantees or other material contingent
liabilities.
19.
In the opinion of our Directors, no minimum amount must be raised by the issue of the New
Shares in order to provide for the following items:
(a) the purchase price of any property purchased or to be purchased which is to be defrayed
in whole or in part out of the proceeds from the issue of the New Shares;
(b) any preliminary expenses payable by our Company, and any commission so payable to any
person in consideration of his agreeing to subscribe for, or of his procuring or agreeing to
procure subscriptions for, any shares in our Company;
(c) the repayment of any money borrowed by our Company in respect of any of the foregoing
matters; and
(d) working capital.
Although no minimum amount must be raised to provide for the items set out above. the
amount to be provided for those items is proposed to be provided out of the proceeds of the
Invitation and/or of other sources of funding including banking facilities and the issuance of
securities.
20.
Our Directors are of the opinion that, taking into account the current cash reserves of our
Group and the net proceeds from the Invitation, our Group has adequate working capital for its
present requirements.
MATERIAL CONTRACTS
21.
The following contracts (not being contracts entered into in the ordinary course of business by
our Group) have been entered into by our Company and our subsidiaries, within the two years
preceding the date of this Prospectus and are or may be material:
(a) Sub-Lease dated 5 February 1998 between Wan Tien Realty (Pte) Ltd (“WTR”) and AVC
pursuant to which WTR sub-leased to AVC the property at 750D Chai Chee Road, #03-02
and #03-03 Technopark @ Chai Chee, Singapore 469004 with an area of approximately
949 square metres, for a term of two years with effect from 1 February 1998, at a monthly
rental of S$27.50 per square metre.
113
(b) Letter of Offer dated 27 December 1999 from DBS Property Services Pte Ltd, as agent for
WTR, to AVC relating to the extension of the sub-lease for the property at 750D Chai Chee
Road, #03-02 and #03-03 Technopark @ Chai Chee, Singapore 469004 for a term of two
years, four months and 21 days with effect from 1 February 2000 at a monthly rental of
S$22 per square metre, and the property at 750D Chai Chee Road, #03-04 and #03-05
Technopark @ Chai Chee, Singapore 469004 with an area of approximately 949 square
metres for a term of two years with effect from 22 June 2000 at a monthly rental of S$22
per square metre.
(c) Letter of Offer dated 7 December 1999 from Heller Asia Capital (Singapore) Ltd (“Heller”)
to AVC (the “Facility Letter”) pursuant to which AVC was granted a credit facility of S$800,000
to acquire machinery and equipment on hire purchase, under which, in the event of an
Initial Public Offer (IPO) launch by AVT or AVC, Heller shall be provided with an option to
subscribe for the invitation shares of up to 30% of the amount drawn down from the credit
facility as at the date immediately prior to the IPO, at a 25% discount to the IPO price or
the maximum discount permitted by the relevant stock exchange, whichever is lower.
(d) Letter dated 28 April 2000 from AVC to Heller, the terms of which were accepted by Heller
on 11 May 2000, relating to variation of the terms of the Facility Letter mentioned in (c)
above such that AVC procures AVT to offer Heller a subscription of 1,209 new ordinary
shares of S$1.00 each in its share capital prior to the Invitation at a discount of 25% of the
Offer Price or a maximum of S$46,010, whichever is lower, subject to: (i) AVT receiving inprinciple approval from the SGX-ST for the listing of AVT’s shares; and (ii) AVT having
received from the Registrar of Companies and Businesses a Certificate of Incorporation
upon conversion to a public company.
(e) Receiving Banker’s Agreement dated 30 May 2000 entered into between DBS Bank, our
Company and the Vendor pursuant to which DBS Bank was appointed as the receiving
banker in relation to the Invitation.
(f)
Management and Underwriting Agreement dated 3 June 2000 entered into between our
Company, the Vendor and DBS Bank referred to page 115.
(g) Placement Agreement dated 3 June 2000 entered into between our Company, the Vendor
and DBS Bank referred to page 115.
(h) Depository Agreement dated 19 May 2000 entered into between CDP and our Company
pursuant to which CDP agreed to act as share depository for our Company.
LITIGATION
22.
Our Group is not engaged in any litigation as plaintiff or defendant in respect of any claims or
amounts which are material in the context of the Invitation and our Directors have no knowledge
of any proceedings which are pending or threatened against our Company or any of our
subsidiaries or of any facts likely to give rise to any litigation, claims or proceedings which
might materially affect the position or the business of our Company or our Group in the context
of the Invitation.
114
MANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS
23.
(a) Pursuant to the Management and Underwriting Agreement dated 3 June 2000 (the
“Management and Underwriting Agreement”) entered into between our Company, the Vendor
and DBS Bank, our Company and the Vendor appointed DBS Bank to manage the Invitation
and underwrite the Offer Shares.
(b) DBS Bank will receive a management fee from our Company and the Vendor in the
proportion in which the number of Invitation Shares offered by each of them pursuant to
the Invitation bears to the total number of Invitation Shares, for its services rendered in
connection with the Invitation. DBS Bank will also receive an underwriting commission of
1.5 per cent. of the Offer Price for each Offer Share, payable by our Company and the
Vendor, in the proportion in which the number of Invitation Shares offered by each of them
pursuant to the Invitation bears to the total number of Invitation Shares, for subscribing for
and/or purchasing and/or procuring subscribers and/or purchasers for any Offer Shares not
subscribed for and/or purchased by the public pursuant to the Invitation and will pay or
procure payment to our Company and the Vendor for such Offer Shares at the Offer Price.
(c) Pursuant to the Placement Agreement dated 3 June 2000 (the “Placement Agreement”)
entered into between our Company, the Vendor and the Placement Agent, the Placement
Agent agreed to subscribe for and/or purchase or procure subscribers and/or purchasers
for the Placement Shares for a placement commission of 1.5 per cent. of the Placement
Price for each Placement Share, payable by our Company and the Vendor in the proportion
in which the number of Invitation Shares offered by each of them pursuant to the Invitation
bears to the total number of Invitation Shares.
(d) Brokerage will be paid by our Company and the Vendor, in the proportion in which the
number of Invitation Shares offered by it pursuant to the Invitation bears to the total number
of Invitation Shares, at the rate of 1.0 per cent. of the Invitation Price for each Invitation
Share on the Invitation Shares. In respect of the Offer Shares, the brokerage will be paid
to DBS Bank, members of the SGX-ST, merchant banks and members of the Association
of Banks in Singapore in respect of successful applications made on Application Forms
bearing their respective stamps, or to the Participating Banks in respect of successful
Electronic Applications. In respect of the Placement Shares, the brokerage will be paid to
the Placement Agent in respect of successful applications made on Application Forms bearing
its stamp.
(e) Save as aforesaid, no commission, discount or brokerage has been paid or other special
term granted within the two years preceding the date of this Prospectus or is payable to
any Director, promoter, expert, proposed director or any other person for subscribing or
agreeing to subscribe or procuring or agreeing to procure subscriptions for any shares in
or debentures of our Company or any of our subsidiaries.
(f)
The Management and Underwriting Agreement may be terminated by the Underwriter at
any time before the close of the Application List on the occurrence of certain events including,
inter alia, any change or prospective changes in the political, financial, industrial, economic,
legal or monetary conditions in Singapore or internationally which would in the opinion of
the Underwriter, inter alia, be likely to result in a material adverse fluctuation or adverse
conditions in the stock market in Singapore or prejudice the success of the Invitation.
(g) The Placement Agreement is conditional upon the Management and Underwriting Agreement
not having been terminated or rescinded pursuant to the provisions of the Management
and Underwriting Agreement.
115
MISCELLANEOUS
24.
The nature of the business of our Company is stated on pages 39 and 40 of this Prospectus.
At the date of this Prospectus, all the corporations listed below, none of which is listed on any
stock exchange, are by virtue of Section 6 of the Act, deemed to be related to our Company:
Name of Company
Date and Place
of Incorporation
Addvalue Communications
Pte Ltd
20 January 1994
Singapore
Design and supply of
communication solutions
and products
100%
15 June 1996
Singapore
Design and supply of
communication solutions and
products
100%
Addvalue Communications,
Inc.
23 February 2000
US
Market research and Technical
information gathering
100%
Principal Business
Equity Held by
our Company
25.
The time of opening of the Application List is set out on page 13 of this Prospectus.
26.
The amount payable on application is S$0.28 for each Invitation Share. Save as disclosed from
pages 79 to 84 and pages 103 to 105 of this Prospectus, there has been no previous issue of
shares by our Company or offer for subscription of its shares to the public within the two years
preceding the date of this Prospectus.
27.
Application moneys received by our Company and the Vendor in respect of successful
applications (including successfully balloted applications which are subsequently rejected) will
be placed in a separate non-interest bearing account with the Receiving Banker. In the ordinary
course of business, the Receiving Banker will deploy these moneys in the inter-bank money
market. Pursuant to the agreement constituted by a letter dated 30 May 2000 from the Receiving
Banker, our Company, the Vendor and the Receiving Banker have agreed that our Company
and the Vendor will receive for their own account a 50 per cent. share of any net revenue in
excess of S$50,000 earned by the Receiving Banker from the deployment of such moneys in
the inter-bank money market. Any refund of all or part of the application moneys to unsuccessful
or partially successful applicants will be made without any interest or share of revenue or other
benefit arising therefrom.
28.
No property has been purchased or acquired or proposed to be purchased or acquired by our
Group which is to be paid for, wholly or partly, out of the proceeds of the Invitation or the
purchase or acquisition of which has not been completed at the date of this Prospectus, other
than property the contract for the purchase or acquisition whereof was entered into in the
ordinary course of business of our Company or our subsidiaries, such contract not being made
in contemplation of the Invitation nor the Invitation in consequence of the contract.
29.
The estimated amount of the expenses in connection with the Invitation, including underwriting
commission, placement commission, brokerage, management fee and other incidental expenses
in relation to the Invitation, is in aggregate approximately S$1.6 million, which amount is payable
by our Company and the Vendor in the proportion in which the number of Invitation Shares
offered by each of them pursuant to the Invitation bears to the total number of Invitation Shares.
The listing fee and other fees payable to the SGX-ST for the listing application are payable by
our Company.
30.
No amount, benefit, cash or securities has been paid or given to any promoter within the two
years preceding the date of this Prospectus or is proposed or intended to be paid or given to
any promoter.
116
31.
Our Directors are not aware of any material information, including trading factors or risks,
which are not mentioned elsewhere in this Prospectus and which are unlikely to be known or
anticipated by the general public and which could materially affect the profits of our Company
and our subsidiaries.
32.
Save as disclosed in this Prospectus, the financial condition and operations of our Group are
not likely to be affected by any of the following:
(a) known trends, demands, commitments, events or uncertainties that will result in or that are
reasonably likely to result in our Group’s liquidity increasing or decreasing in any material
way;
(b) material commitments for capital expenditure;
(c) unusual or infrequent events or transactions or significant economic changes that had
affected or will materially affect the amount of reported income from operations; or
(d) known trends or uncertainties that have had or that our Group reasonably expects will
have a material favourable or unfavourable impact on revenue or operating income.
33.
No Shares will be allotted on the basis of this Prospectus later than six months after the date
of this Prospectus.
34.
Our Company currently intends to continue to appoint KPMG as the auditors of our Company
and our subsidiaries after the listing of our Company on the Official List of the SGX-ST.
CONSENTS
35.
(a) The Auditors and Reporting Accountants have given and have not withdrawn their written
consent to the issue of this Prospectus with the inclusion herein of the Accountants’ Report,
in the form and context in which they are respectively included, and references to their
name in the form and context in which they appear in this Prospectus and to act in such
respective capacities in relation to this Prospectus.
(b) The Manager, Underwriter and Placement Agent, the Solicitors to the Invitation, the Share
Registrar and the Bankers to our Group have each given and have not withdrawn their
respective written consents to the issue of this Prospectus with the inclusion herein of and
references to their respective names in the form and context in which they respectively
appear in this Prospectus and to act in such respective capacities in relation to this
Prospectus.
STATEMENT BY THE MANAGER
36.
DBS Bank, as the Manager, confirms that, to the best of its knowledge and belief and based
on information made available to it by our Group, this Prospectus constitutes full and true
disclosure of all material facts about the Invitation and our Group and it is not aware of any
other material facts the omission of which would make any statements herein misleading.
RESPONSIBILITY STATEMENT BY OUR DIRECTORS AND THE VENDOR
37.
This Prospectus has been seen and approved by our Directors and the Vendor and they
collectively and individually accept full responsibility for the accuracy of the information given in
this Prospectus and confirm, having made all reasonable enquiries, that to the best of their
knowledge and belief, there are no other material facts the omission of which would make any
statement herein misleading and that this Prospectus constitutes full and true disclosure of all
material facts about the Invitation, our Company and our subsidiaries.
117
DOCUMENTS FOR INSPECTION
38.
Copies of the following documents may be inspected at the registered office of our Company
during normal business hours for a period of six months from the date of this Prospectus:
(a) the Memorandum and Articles of Association of our Company;
(b) the Accountants’ Report (including the statement of adjustments) as set out on pages 88 to
101 of this Prospectus;
(c) the Directors’ Report as set out on page 87 of this Prospectus;
(d) the Service Agreements referred to on pages 76 of this Prospectus;
(e) the material contracts referred to on pages 113 and 114 of this Prospectus;
(f)
the letters of consent referred to on page 117 of this Prospectus; and
(g) the audited accounts of our Company and our subsidiaries for the financial years ended 31
March 1997, 31 March 1998, 31 March 1999 and 31 March 2000.
118
APPENDIX
TERMS AND CONDITIONS AND PROCEDURES FOR APPLICATION
Applications are invited for the subscription and/or purchase of the Invitation Shares at the Invitation
Price subject to the following terms and conditions set out herein:
1.
Applications for the Offer Shares may be made by way of the Offer Shares Application Forms
or by way of Electronic Applications through ATMs belonging to the Participating Banks (“ATM
Electronic Applications”) or through the Internet Banking (“IB”) website of the relevant Participating
Banks (“Internet Electronic Applications”, which together with ATM Electronic Applications, shall
be referred to as “Electronic Applications”). Applications for Placement Shares may only be
made by way of the Placement Shares Application Forms, and applications for Reserved Shares
may only be made by way of the Reserved Shares Application Forms. Applicants may not
use their CPF Funds to apply for the Invitation Shares.
2.
ONLY ONE APPLICATION MAY BE MADE FOR THE BENEFIT OF ONE PERSON FOR EITHER
THE OFFER SHARES OR THE PLACEMENT SHARES (OTHER THAN THE RESERVED
SHARES) IN HIS OWN NAME. A PERSON SUBMITTING AN APPLICATION FOR THE OFFER
SHARES BY WAY OF THE OFFER SHARES APPLICATION FORM MAY NOT SUBMIT
ANOTHER APPLICATION BY WAY OF ELECTRONIC APPLICATION AND VICE VERSA. SUCH
SEPARATE APPLICATIONS WILL BE DEEMED TO BE MULTIPLE APPLICATIONS AND SHALL
BE REJECTED.
A PERSON, OTHER THAN AN APPROVED NOMINEE COMPANY, WHO IS SUBMITTING AN
APPLICATION IN HIS OWN NAME SHOULD NOT SUBMIT ANY OTHER APPLICATIONS,
WHETHER ON A PRINTED APPLICATION FORM OR THROUGH AN ELECTRONIC
APPLICATION, FOR ANY OTHER PERSON. SUCH SEPARATE APPLICATIONS WILL BE
DEEMED TO BE MULTIPLE APPLICATIONS AND SHALL BE REJECTED.
AN APPLICANT WHO HAS AGREED WITH THE PLACEMENT AGENT TO SUBSCRIBE FOR
AND/OR PURCHASE THE PLACEMENT SHARES (OTHER THAN FOR THE RESERVED
SHARES) OR WHO OTHERWISE SUBSCRIBES FOR PLACEMENT SHARES FROM THE
PLACEMENT AGENT SHALL NOT MAKE OR PROCURE ANY SEPARATE APPLICATION FOR
THE OFFER SHARES EITHER BY WAY OF AN OFFER SHARES APPLICATION FORM OR
THROUGH AN ELECTRONIC APPLICATION. SUCH SEPARATE APPLICATIONS WILL BE
DEEMED TO BE MULTIPLE APPLICATIONS AND SHALL BE REJECTED.
CONVERSELY, AN APPLICANT WHO HAS MADE AN APPLICATION FOR THE OFFER
SHARES EITHER BY WAY OF THE OFFER SHARES APPLICATION FORM OR THROUGH
AN ELECTRONIC APPLICATION SHALL NOT MAKE OR PROCURE TO BE MADE ANY
SEPARATE APPLICATION FOR THE PLACEMENT SHARES (OTHER THAN FOR THE
RESERVED SHARES). SUCH SEPARATE APPLICATIONS WILL BE DEEMED TO BE MULTIPLE
APPLICATIONS AND SHALL BE REJECTED.
JOINT OR MULTIPLE APPLICATIONS WILL BE REJECTED. PERSONS SUBMITTING OR
PROCURING SUBMISSIONS OF MULTIPLE SHARE APPLICATIONS (WHETHER FOR THE
OFFER SHARES, PLACEMENT SHARES OR BOTH THE OFFER SHARES AND PLACEMENT
SHARES) MAY BE DEEMED TO HAVE COMMITTED AN OFFENCE UNDER THE PENAL
CODE (CHAPTER 224) OF SINGAPORE AND THE SECURITIES INDUSTRY ACT (CHAPTER
289) OF SINGAPORE, AND SUCH APPLICATIONS MAY BE REFERRED TO THE RELEVANT
AUTHORITIES FOR INVESTIGATION. MULTIPLE APPLICATIONS OR THOSE APPEARING
TO BE OR SUSPECTED OF BEING MULTIPLE APPLICATIONS WILL BE LIABLE TO BE
REJECTED AT THE DISCRETION OF OUR COMPANY AND THE VENDOR.
119
AN APPLICANT MAKING AN APPLICATION FOR THE RESERVED SHARES USING THE
RESERVED SHARES APPLICATION FORM MAY SUBMIT ONE SEPARATE APPLICATION
FOR THE OFFER SHARES IN HIS OWN NAME EITHER BY WAY OF THE OFFER SHARES
APPLICATION FORM OR THROUGH AN ELECTRONIC APPLICATION OR SUBMIT ONE
SEPARATE APPLICATION FOR THE PLACEMENT SHARES (OTHER THAN FOR THE
RESERVED SHARES), PROVIDED HE ADHERES TO THE TERMS AND CONDITIONS OF
THIS PROSPECTUS. SUCH SEPARATE APPLICATIONS WILL NOT BE TREATED AS
MULTIPLE APPLICATIONS.
3.
Applications will not be accepted from any person under the age of 21, undischarged bankrupts,
sole proprietorships, partnerships, chops or non-corporate bodies, joint Securities Account holders
of CDP and applicants whose addresses (furnished in their printed Application Forms or, in the
case of Electronic Applications, contained in the records of the relevant Participating Banks, as
the case may be) bear post office box numbers.
4.
The existence of a trust will not be recognised. Any application by a trustee or trustees must
be made in his/their own name(s) and without qualification or, where the application is made by
way of a printed Application Form, in the name(s) of approved nominee companies after
complying with paragraph 5 below.
5.
Nominee applications may be made by approved nominee companies only. Approved
nominee companies are defined as banks, merchant banks, finance companies, insurance
companies, licensed securities dealers in Singapore and nominee companies controlled by
them. Applications made by persons acting as nominees other than approved nominee companies
will be rejected.
6.
For non-nominee applications, each applicant must maintain a Securities Account with CDP in
his own name at the time of application. An applicant without an existing Securities Account
with CDP in his own name at the time of application will have his application rejected (in the
case of an application by way of an Application Form) or will not be able to complete his
Electronic Application (in the case of an Electronic Application). An applicant with an existing
Securities Account with CDP who fails to provide his Securities Account number or who provides
an incorrect Securities Account number in Section B of the Application Form or in his Electronic
Application, as the case may be, is liable to have his application rejected. Subject to paragraph
7 below, an application may be rejected if the applicant’s particulars such as his name, NRIC
or passport number, nationality and permanent residence status provided in his Application
Form or, in the case of an Electronic Application, contained in the records of the relevant
Participating Bank at the time of his Electronic Application, as the case may be, differ from
those particulars in his Securities Account as maintained with CDP. If the applicant possesses
more than one individual direct Securities Account with CDP, his application will be rejected.
7.
If the address of an applicant stated in the Application Form or, in the case of an Electronic
Application, contained in the records of the relevant Participating Bank, as the case may
be, is different from the address registered with CDP, the applicant must inform CDP of
his updated address promptly, failing which the notification letter on successful allotment
and/or allocation and other correspondence from CDP will be sent to his address last
registered with CDP.
8.
Our Company and the Vendor reserve the right to reject or accept, in whole or in part, or to
scale down or ballot, any application without assigning any reason therefor, and no enquiry
and/or correspondence on the decision of our Company or the Vendor will be entertained. This
right applies to applications made by way of printed Application Forms and by way of Electronic
Application. In deciding the basis of allotment and/or allocation, at the discretion of our Company
and the Vendor, due consideration will be given to the desirability of allotting the Invitation
Shares to a reasonable number of successful applicants with a view to establishing an adequate
market for our Shares.
120
9.
Our Company and the Vendor reserve the right to reject any application which does not conform
strictly to the instructions set out in the Application Form and this Prospectus or which does not
comply with the instructions for Electronic Applications or with the terms and conditions of this
Prospectus or, in the case of applications by way of printed Application Forms, which is illegible,
incomplete, incorrectly completed or which is accompanied by an improperly drawn up or
improper form of remittance. Our Company and the Vendor further reserve the right to treat as
valid any applications not completed or submitted or effected in all respects in accordance with
the terms and conditions of this Prospectus, the instructions set out in the Application Forms
and this Prospectus or the instructions for Electronic Applications and also to present for payment
or other processes all remittances at any time after receipt and to have full access to all
information relating to, or deriving from, such remittances or the processing thereof.
10.
Share certificates will be registered in the name of CDP and will be forwarded only to CDP. It
is expected that CDP will send to each successful applicant at his own risk, within 15 Market
Days after the close of the Application List, a statement of account stating that the applicant’s
Securities Account has been credited with the number of Invitation Shares allotted and/or
allocated to the applicant. This will be the only acknowledgement of application moneys received
and is not an acknowledgement by our Company or the Vendor. Each applicant irrevocably
authorises CDP to complete and sign on his behalf as transferee or renouncee any instrument
of transfer and/or other documents required for the issue or transfer of the Invitation Shares
allotted and/or allocated to the applicant. This authorisation applies for applications made both
by way of printed Application Forms and by way of Electronic Applications.
11.
By completing and delivering an Application Form and, in the case of an ATM Electronic
Application, by pressing the “Enter” or “OK” or “Confirm” or “Yes” key on the ATM, or in the
case of an Internet Electronic Application, by clicking “Submit” on the Internet screen, in
accordance with the provisions herein, each applicant:
(a) irrevocably offers to subscribe for and/or purchase the number of Invitation Shares specified
in his application (or such smaller number for which the application is accepted) at the
Invitation Price for each Invitation Share and agrees that he will accept such Shares as
may be allotted and/or allocated to him, in each case on the terms of, and subject to the
conditions set out in, this Prospectus and the Memorandum and Articles of Association of
our Company; and
(b) warrants the truth and accuracy of the information in his application.
12.
Applications made by way of the printed Application Forms or by way of Electronic Applications
must be made in lots of 1,000 Invitation Shares or in higher integral multiples of 1,000 Invitation
Shares. Applications for any other number of Invitation Shares will be rejected.
13.
No Shares will be allotted and/or allocated on the basis of this Prospectus later than six months
after the date of this Prospectus.
14.
In the event of an under-subscription for the Offer Shares as at the close of the Application
List, that number of Offer Shares under-subscribed shall be made available to satisfy applications
for the Placement Shares to the extent that there is an over-subscription for the Placement
Shares as at the close of the Application List. Any of the Reserved Shares not taken up by the
employees, Directors and business associates of our Group will be made available to satisfy
applications for the Placement Shares to the extent that there is an over-subscription for the
Placement Shares. In the event of an under-subscription for the Placement Shares as at the
close of the Application List, that number of Placement Shares under-subscribed shall be made
available to satisfy applications for the Offer Shares to the extent that there is an over-subscription
for the Offer Shares as at the close of the Application List.
15.
In the event of an over-subscription for the Offer Shares as at the close of the Application List
and/or the number of Placement Shares are fully subscribed or over-subscribed as at the close
of the Application List, the successful applications for the Offer Shares shall be determined by
ballot, or otherwise as determined by our Directors and the Vendor and approved by the SGXST.
121
16.
Acceptance of applications will be conditional upon our Company and the Vendor being satisfied
that:
(a) permission has been granted by the SGX-ST to deal in and for quotation for all our existing
Shares and the New Shares on a “when issued” basis on the Main Board of the SGX-ST;
and
(b) the Management and Underwriting Agreement and Placement Agreement referred to on
page 115 of this Prospectus have become unconditional and have not been terminated or
cancelled prior to such date as our Company and the Vendor may determine.
17.
Additional terms and conditions for applications by way of printed Application Forms are set out
on pages 122 to 125 of this Prospectus.
18.
Additional terms and conditions for applications by way of Electronic Applications are set out
on pages 126 to 132 of this Prospectus.
19.
Each applicant irrevocably authorises CDP to disclose the outcome of his application, including
the number of Invitation Shares allotted and/or allocated to the applicant pursuant to his
application, to authorised operators.
20.
Any reference to the “applicant” in this section shall include a person applying for the Offer
Shares by way of an Electronic Application or by way of the Offer Shares printed Application
Form and a person applying for the Placement Shares through the Placement Agent.
21.
No application will be held in reserve.
ADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATION
FORMS
Applications by way of printed Application Forms shall be made on, and subject to, the terms and
conditions of this Prospectus, including but not limited to the terms and conditions appearing below
and those set out under the section on “Terms and Conditions and Procedures for Application” found
on pages 119 to 122 of this Prospectus, as well as the Memorandum and Articles of Association of
our Company:
1.
Applications for the Offer Shares must be made using the WHITE Application Forms and official
envelopes “A” and “B”, applications for the Placement Shares (other than for the Reserved
Shares) must be made using the BLUE Application Forms, and applications for the Reserved
Shares must be made using the PINK Application Forms, accompanying and forming part of
this Prospectus. Care must be taken to follow the instructions set out in the respective Application
Forms and this Prospectus for the completion of the respective Application Forms. Our Company
and the Vendor reserve the rights to reject applications which do not conform strictly to these
instructions or to the terms and conditions of this Prospectus or which are illegible, incomplete,
incorrectly completed or which are accompanied by improperly drawn up or improper form of
remittances.
2.
The Application Forms must be completed in English. Please type or write clearly in ink using
BLOCK LETTERS. All spaces in an Application Form, except those under the heading “FOR
OFFICIAL USE ONLY”, must be completed and the words “NOT APPLICABLE” or “N.A.” should
be written in any space that is not applicable.
122
3.
Individuals, corporations, approved nominee companies and trustees must give their names in
full. Applications must be made, in the case of individuals, in their full names as appearing in
their identity cards (if applicants have such identification documents) or passports and, in the
case of corporations, in their full names as registered with a competent authority. Applicants,
other than individuals, completing the Application Form under the hand of an officer, must state
the name and capacity in which that officer signs. A corporation completing an Application
Form is required to affix its Common Seal (if any) in accordance with its Memorandum and
Articles of Association or the equivalent constitutive documents of the corporation. If an application
by a corporate applicant is successful, a copy of its Memorandum and Articles of Association
or its equivalent constitutive documents must be lodged with our Company’s Share Registrar.
Our Company and the Vendor reserve the right to require any applicant to produce documentary
proof of identification for verification purposes.
4.
(a) All applicants must complete Sections A and B and sign page 1 of the Application Form.
(b) All applicants are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application
Form. Where paragraph 7(a) is deleted, the applicant must also complete Section C of the
Application Form with particulars of the beneficial owner(s).
(c) Applicants who fail to make the required declaration in paragraph 7(a) or 7(b) (as the case
may be) on page 1 of the Application Form are liable to have their applications rejected.
5.
Applicants may apply for the Invitation Shares using cash only. Each application must be
accompanied by a remittance in Singapore currency for the full amount payable, in respect of
the number of Invitation Shares applied for. Applicants must make their payment in Singapore
dollars in the form of a POSB CASHIER’S ORDER, CASHIER’S ORDER or BANKER’S DRAFT
drawn on a bank in Singapore, made out in favour of “ADDVALUE SHARE ISSUE ACCOUNT”
crossed “A/C PAYEE ONLY”, or in the form of a DBS AUTOBANK CASHIER’S ORDER
EQUIVALENT, and with the name and address of the applicant written clearly on the reverse
side. Applications not accompanied by any payment or accompanied by any other form of
payment will not be accepted. Remittances bearing “Not Transferable” or “Non Transferable”
crossings will be rejected. No acknowledgement of receipt will be issued by our Company, the
Vendor or the Manager, for applications and application moneys received.
6.
Individual applicants will be required to declare whether they are citizens or permanent residents
of Singapore. Corporate applicants, whether incorporated or unincorporated and wherever
incorporated or constituted will be required to declare whether they are corporations in which
citizens or permanent residents of Singapore or any body corporate constituted under any
statute of Singapore have an interest in the aggregate of more than 50% of the issued share
capital of or interests in such corporations. Approved nominee companies are required to declare
whether the intended beneficial owner of the Invitation Shares is a citizen or permanent resident
of Singapore or a corporation, whether incorporated or unincorporated and wherever incorporated
or constituted, in which citizens or permanent residents of Singapore or any body corporate
constituted under any statute of Singapore have an interest in the aggregate of more than 50%
of the issued share capital of or interests in such corporation.
7.
Unsuccessful applications and those not successfully balloted or accepted are expected to be
returned to the applicants by ordinary post, at the risk of the applicants, within three Market
Days after the close of the Application List, without interest or any share of revenue or other
benefit arising therefrom. Where an application is rejected or accepted in part only, the full
amount or the balance of the application moneys, as the case may be, will be refunded to the
applicant by ordinary post at his own risk (without interest or any share of revenue or other
benefit arising therefrom) within 14 days after the close of the Application List, provided that
the remittance accompanying such application which has been presented for payment or other
processes has been honoured and the application moneys received in the designated share
issue account. Unsuccessful applicants using DBS Autobank Cashier’s Order Equivalent will
have the full amount of their application moneys (without interest or any share of revenue or
other benefit arising therefrom) automatically credited to their accounts maintained with DBS
Bank.
123
8.
Capitalised terms used in the Application Forms and defined in this Prospectus shall bear the
meanings assigned to them in this Prospectus.
9.
In consideration of our Company and the Vendor having distributed the Application Form to the
applicant and agreeing to close the Application List at 12.00 noon on 12 June 2000 or such
later time or date as our Directors and the Vendor may, in consultation with the Manager,
decide and by completing and delivering the Application Form, each applicant agrees that:
(a) his application is irrevocable;
(b) his remittance will be honoured on first presentation and that any moneys returnable may
be held pending clearance of his payment and he will not be entitled to any interest or any
share of revenue or other benefit arising therefrom;
(c) in respect of the Invitation Shares for which his application has been received and not
rejected, acceptance of his application shall be constituted by written notification by or on
behalf of our Company and the Vendor and not otherwise, notwithstanding any remittance
being presented for payment by or on behalf of our Company and the Vendor;
(d) he will not be entitled to exercise any remedy of rescission for misrepresentation at any
time after acceptance of his application;
(e) all applications, acceptances and contracts resulting therefrom under the Invitation shall be
governed by and construed in accordance with the laws of Singapore and that he irrevocably
submits to the non-exclusive jurisdiction of the Singapore courts; and
(f)
in making this application, reliance is being placed solely on the information contained in
this Prospectus and that none of our Company, the Vendor, the Placement Agent or any of
their directors or any other parties involved in the Invitation shall have any liability for any
information not so contained.
10. Applications for Offer Shares
(a) Applications for Offer Shares must be made using the WHITE Application Forms and
BROWN official envelopes “A” and “B”.
(b) The applicant must:
(i)
enclose the WHITE Application Form for the Offer Shares, duly completed and signed,
together with the correct remittance, in accordance with the terms and conditions of
this Prospectus, in the BROWN official envelope “A” which is provided;
(ii) in the appropriate spaces on the BROWN official envelope “A”:
(A) write his name and address;
(B) state the number of Offer Shares applied for;
(C) tick the relevant box to indicate the form of payment; and
(D) affix adequate Singapore postage;
(iii) SEAL THE OFFICIAL BROWN ENVELOPE “A”;
(iv) write, in the appropriate box provided on the larger official BROWN envelope “B”
addressed to DBS BANK, 6 SHENTON WAY #28-00, DBS BUILDING TOWER ONE,
SINGAPORE 068809, the number of Offer Shares for which the application is made;
and
124
(v) insert BROWN official envelope “A” into BROWN official envelope “B”, seal BROWN
official envelope “B”, affix adequate Singapore postage on envelope “B” (if despatching
by ordinary post) and thereafter DESPATCH BY ORDINARY POST OR DELIVER BY
HAND at his own risk to DBS BANK, 6 SHENTON WAY #28-00, DBS BUILDING
TOWER ONE, SINGAPORE 068809, so as to arrive by 12.00 noon on 12 June 2000
or such later time or date as our Directors and the Vendor may, in consultation with
the Manager, decide. Local Urgent Mail or Registered Post must NOT be used.
Applications that are illegible, incomplete or incorrectly completed or accompanied by an
improperly drawn up or improper form of remittance are liable to be rejected.
(c) ONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of
receipt will be issued for any application or remittance received.
11.
Applications for Placement Shares (other than Reserved Shares)
(a) Applications for Placement Shares (other than Reserved Shares) must be made using the
BLUE Application Forms for the Placement Shares.
(b) The completed and signed BLUE Placement Shares Application Form and the applicant’s
remittance for the full amount payable in respect of the number of Placement Shares applied
for, in accordance with the terms and conditions of this Prospectus, must be enclosed and
sealed in any envelope to be provided by the applicant. The applicant must affix adequate
Singapore postage on the envelope (if despatching by ordinary post) and thereafter the
sealed envelope must be despatched by ORDINARY POST OR DELIVERED BY HAND at
the applicant’s own risk to DBS Bank, 6 Shenton Way #28-00, DBS Building Tower One,
Singapore 068809, for the attention of Capital Markets, so as to arrive by 12.00 noon on
12 June 2000 or such later time or date as our Directors and the Vendor may, in consultation
with the Manager, decide. Local Urgent Mail or Registered Post must NOT be used.
(d) Alternatively, the applicant may remit his application moneys by electronic transfer to the
account of DBS Bank, Shenton Way Branch, Current Account No. 001-045657-1, in
favour of “ADDVALUE SHARE ISSUE ACCOUNT” for the number of Placement Shares
applied for. Applicants who remit their application moneys via electronic transfer should
send a copy of the telegraphic transfer advice slip to DBS Bank, 6 Shenton Way #28-00,
DBS Building Tower One, Singapore 068809, for the attention of Capital Markets, so as
to arrive by 12.00 noon on 12 June 2000 or such later time or date as our Directors and
the Vendor may, in consultation with the Manager, decide.
12.
Applications for Reserved Shares
(a) Applications for Reserved Shares must be made using the PINK Application Forms (“Priority
Application Forms”).
(b) The completed and signed PINK Reserved Shares Application Form and the applicant’s
remittance for the full amount payable in respect of the number of Reserved Shares applied
for, in accordance with the terms and conditions of this Prospectus, must be enclosed and
sealed in an envelope to be provided by the applicant. The applicant must affix adequate
Singapore postage on the envelope (if despatching by ordinary post) and thereafter the
sealed envelope must be despatched by ORDINARY POST OR DELIVERED BY HAND at
the applicant’s own risk to our Company’s registered office presently at 750D Chai Chee
Road, #03-03 Technopark @ Chai Chee, Singapore 469004, so as to arrive by 12.00 noon
on 12 June 2000 or such later time or date as our Directors and the Vendor may, in
consultation with the Manager, decide. Local Urgent Mail or Registered Post must NOT be
used.
125
ADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS
The procedures for Electronic Applications are set out on the ATM screens (in the case of ATM
Electronic Applications) and the Internet Banking website screens (in the case of Internet Electronic
Applications) of the relevant Participating Banks (the “Steps”). Currently, DBS Bank, OUB and UOB
are the only Participating Banks through which the Internet Electronic Applications can be made. For
illustration purposes, the procedures for Electronic Applications through ATMs and the Internet Banking
website of DBS Bank are set out in the “Steps for ATM Electronic Applications” and the “Steps for
Internet Electronic Applications” appearing on pages 131 and 132 of this Prospectus respectively.
Please read carefully the terms of this Prospectus, the Steps and the terms and conditions for
Electronic Applications set out below carefully before making an Electronic Application. An ATM card
issued by one Participating Bank cannot be used to apply for Offer Shares at an ATM belonging to
other Participating Banks.
Any reference to the “Applicant” in these Terms and Conditions for Electronic Applications and the
Steps shall mean the applicant who applies for the Offer Shares through an ATM of a Participating
Bank or the Internet Banking website of a relevant Participating Bank.
For an ATM Electronic Application, an Applicant must have an existing bank account with, and be an
ATM cardholder of, one of the Participating Banks before he can make an ATM Electronic Application
at the ATMs of that Participating Bank. For an Internet Electronic Application, the Applicant must
have an existing bank account with and a User Identification (“User ID”) and a Personal Identification
Number (“PIN”) given by a relevant Participating Bank. The Steps set out the actions that the Applicant
must take at ATMs or the Internet Banking website of DBS Bank to complete an Electronic Application.
The actions that the Applicant must take at the ATMs or the Internet Banking websites of the other
Participating Banks are set out on the ATM screens or the Internet Banking website screens of the
relevant Participating Banks. Upon completion of his ATM Electronic Application transaction, the
Applicant will receive an ATM transaction slip (“Transaction Record”), confirming the details of his
ATM Electronic Application. The Transaction Record is for the Applicant’s retention and should not
be submitted with any printed Application Form. Upon completion of his Internet Electronic Application,
there will be an on-screen confirmation (“Confirmation Screen”) of the application which can be
printed out by the Applicant for his record. This printed record should not be submitted with any
printed Application Form.
An Applicant must ensure that he enters his own Securities Account number when using the
ATM card issued to him in his own name. Using his own Securities Account number with an
ATM card not issued to him in his own name will render his application liable to be rejected.
An Applicant, including one who has a joint bank account with a Participating Bank, must
use an ATM card issued to him in his own name and must enter his own Securities Account
number.
An Applicant making an Internet Electronic Application must ensure that his mailing address is in
Singapore and declare that the application is made in Singapore, otherwise his appication is liable to
be rejected.
An Electronic Application shall be made on, and subject to, the terms and conditions of this Prospectus
including but not limited to the terms and conditions appearing below as well as those set out under
the section on “Terms and Conditions and Procedures for Application” found on pages 119 to 122 of
this Prospectus, as well as the Memorandum and Articles of Association of our Company.
126
1.
In connection with his Electronic Application for the Offer Shares, the Applicant is required to
confirm statements to the following effect in the course of activating the Electronic Application:
(a) that he has received a copy of this Prospectus and has read, understood and agreed
to all the terms and conditions of application for the Offer Shares and this Prospectus
prior to effecting the Electronic Application and agrees to be bound by the same;
(b) that he consents to the disclosure of his name, NRIC or passport number, address,
nationality and permanent residence status, CDP Securities Account number, CPF
Investment Account number (if applicable) and share application amount (the
“Relevant Particulars”) from his account with that Participating Bank to the Share
Registrar, SCCS, CDP, CPF Board, the Company, the Vendor and the Manager (the
“Relevant Parties”); and
(c) that this application is his only application for the Offer Shares and it is made in his
name and at his own risk.
His application will not be successfully completed and cannot be recorded as a completed
transaction in the ATM unless he presses the “Enter” or “OK” or “Confirm” or “Yes” key on the
ATM or clicks “Confirm” on the Internet screen. By doing so, the Applicant shall be treated as
signifying his confirmation of each of the above three statements. In respect of statement 1(b)
above, his confirmation, shall signify and shall be treated as his written permission, given in
accordance with the relevant laws of Singapore, including Section 47(4) of the Banking Act
(Chapter 19) of Singapore, to the disclosure by that Participating Bank of the Relevant Particulars
of his account(s) with that Participating Bank to the Relevant Parties.
2.
An Applicant may make an ATM Electronic Application at an ATM of any Participating Bank or
an Internet Electronic Application at the Internet Banking website of a relevent Participating
Bank for the Offer Shares using cash only by authorising such Participating Bank to deduct the
full amount payable from his account with such Participating Bank.
3.
The Applicant irrevocably agrees and undertakes to subscribe for and to accept the number of
Offer Shares applied for as stated on the Transaction Record or on the Confirmation Screen or
any lesser number of Offer Shares that may be allotted and/or allocated to him in respect of
his Electronic Application. In the event that our Company and the Vendor decide to allot
and/or allocate any lesser number of such Offer Shares or not to allot and/or allocate any Offer
Shares to the Applicant, the Applicant agrees to accept the decision as final. If the Applicant’s
Electronic Application is successful, his confirmation (by his action of pressing the “Enter” or
“OK” or “Confirm” or “Yes” key on the ATM or clicking “Confirm” on the Internet screen) of the
number of Offer Shares applied for shall signify and shall be treated as his acceptance of the
number of Offer Shares that may be allotted and/or allocated to him and his agreement to be
bound by the Memorandum and Articles of Association of our Company
4.
The Applicant irrevocably requests and authorises our Company and the Vendor to:
(a) register the Offer Shares allotted and/or allocated to him in the name of CDP for deposit
into his Securities Account;
(b) send the relevant Share certificate(s) to CDP;
(c) return (without interest or any share of revenue or other benefit arising therefrom) the
application moneys, should his Electronic Application not be accepted, by automatically
crediting the Applicant’s bank account with his Participating Bank with the relevant amount
within three Market Days after the close of the Application List; and
(d) return (without interest or any share of revenue or other benefit arising therefrom) the
balance of the application moneys, should his Electronic Application be accepted in part
only, by automatically crediting the Applicant’s bank account with his Participating Bank
with the relevant amount within 14 days after the close of the Application List.
127
5.
BY MAKING AN ELECTRONIC APPLICATION, THE APPLICANT CONFIRMS THAT HE IS
NOT APPLYING FOR THE OFFER SHARES AS NOMINEE OF ANY OTHER PERSON AND
THAT ANY ELECTRONIC APPLICATION THAT HE MAKES IS THE ONLY APPLICATION
MADE BY HIM AS BENEFICIAL OWNER.
THE APPLICANT SHALL MAKE ONLY ONE ELECTRONIC APPLICATION AND SHALL NOT
MAKE ANY OTHER APPLICATION FOR THE INVITATION SHARES (OTHER THAN THE
RESERVED SHARES), WHETHER AT THE ATMs OF ANY PARTICIPATING BANK OR THE
INTERNET BANKING WEBSITE (IF ANY) OF ANY PARTICIPATING BANK OR ON THE
PRESCRIBED PRINTED APPLICATION FORMS.
6.
The Applicant irrevocably agrees and acknowledges that his Electronic Application is subject to
risks of electrical, electronic, technical and computer-related faults and breakdowns, fires, acts
of God and other events beyond the control of the Participating Banks, our Company, the
Vendor and the Manager and if, in any such event, the Participating Banks and/or our Company
and/or the Vendor and/or the Manager do not record or receive the Applicant’s Electronic
Application, or data relating to the Applicant’s Electronic Application or the tape containing such
data is lost, corrupted, destroyed or not otherwise accessible, whether wholly or partially for
whatever reason, the Applicant shall be deemed not to have made an Electronic Application
and the Applicant shall have no claim whatsoever against the Participating Banks, our Company,
the Vendor or the Manager for the Offer Shares applied for or for any compensation, loss or
damage.
7.
Electronic Applications shall close at 12.00 noon on 12 June 2000 or such other time as our
Directors and the Vendor may, in consultation with the Manager, decide. All Internet Electronic
Applications must be received by 12 June 2000. An Internet Electronic Application is deemed
to be received only upon its completion, that is, when there is an on-screen confirmation of the
application.
8.
All particulars of the Applicant in the records of his Participating Bank at the time he makes his
Electronic Application shall be deemed to be true and correct and the relevant Participating
Bank and the Relevant Parties shall be entitled to rely on the accuracy thereof. If there has
been any change in the particulars of the Applicant after the time of the making of his Electronic
Application, the Applicant shall promptly notify his Participating Bank.
9.
The Applicant must have sufficient funds in his bank account(s) with his Participating Bank at
the time he makes his Electronic Application, failing which his Electronic Application will not be
completed or accepted. Any Electronic Application made at ATMs or the Internet Banking websites
of the relevant Participating Banks which does not strictly conform to the instructions set out in
this Prospectus will be rejected. Any Electronic Application made at the ATMs of the Participating
Banks which does not strictly conform to the instructions set out on the ATM screens of such
Participating Banks will be rejected.
10. No reserve application will be kept. Where an Electronic Application is not accepted, it is
expected that the full amount of the application moneys will be refunded in Singapore dollars
(without interest or any share of revenue or other benefit arising therefrom) to the Applicant by
being automatically credited to the Applicant’s account with the relevant Participating Bank
within three Market Days of the close of the Application List. Trading on a “when issued”
basis, if applicable, is expected to commence after such refund has been made. Where
an Electronic Application is accepted in part only, the balance of the application moneys will be
refunded (without interest or any share of revenue or other benefit arising therefrom) to the
Applicant by being automatically credited to the Applicant’s account with his Participating Bank
within 14 days after the close of the Application List.
128
If the Applicant’s Electronic Application is made through the ATMs of KTB or the UOB Group
and is unsuccessful, it is expected that a computer-generated notice will be sent to the Applicant
by the relevant Participating Bank (at the address of the Applicant as stated in the records of
the relevant Participating Bank at the date of his Electronic Application) by ordinary post at the
Applicant’s own risk within three Market Days after the close of the Application List. If the
Applicant’s Electronic Application is made through the ATMs of the OCBC Group, OUB
or DBS Bank (including its POSBank Services division) and is unsuccessful, no
notification will be sent by the relevant Participating Bank.
If the Applicant’s Internet Electronic Application made through the Internet Banking website of
DBS Bank, UOB or OUB is unsuccessful, no notification will be sent by such Participating
Bank.
Applicants who make Electronic Applications through the ATMs of the following banks may
check the provisional results of their Electronic Applications as follows:
Bank
Telephone
Other Channels
Operating Hours
Service expected from
DBS
Bank
1800-222 2222
327 4767
Internet Banking or
Internet Kiosk
www.dbs.com.sg*
24 hours a day
Evening of the
balloting day
KTB
222 8228
ATM
ATM – 24 hours a day
Phone Banking –
Mon – Fri 0800-2200
Sat
0800-1500
ATM – Evening of the
balloting day
Phone Banking –
8.00 am on the day
after the balloting day
OCBC 1800-363 3333
ATM
ATM – 24 hours a day
Phone Banking –
24 hours a day
Evening of the balloting day
OUB
OUB Personal Internet
Banking
Phone Banking/
Internet Banking –
24 hours a day
Evening of the balloting day
1800-224 2000
www.oub2000.com.sg*
UOB
11.
1800-5335533
1800-2222121
OUB Mobile Buzz
OUB Mobile Buzz** –
24 hours a day
ATM (Other Transactions –
Phone Banking/ATM*** –
“IPO Enquiry”)
24 hours a day
www.uobcyberbank.com.sg***
6.00 p.m. on the balloting
day
*
Applicants who have made Internet Electronic Applications through the Internet Banking website of DBS Bank or
OUB may also check the result of their applications through the same channels listed in the table above in
relation to ATM Electronic Applications made at the ATMs of DBS Bank or OUB.
**
Applicants who have made Electronic Applications through the ATMs or the Internet Banking website of OUB
and who have activated their OUB Mobile Buzz services will be notified of the results of their Electronic
Applications, via their mobile phones.
***
Applicants who have made Electronic Applications through the ATMs or the Internet Banking website of UOB,
may check the results of their applications through UOB CyberBank, UOB Group’s ATMs or UOB Phone Banking
services.
By making and completing an Electronic Application, the Applicant agrees that:
(a) in consideration of our Company and the Vendor making available the Electronic Application
facility, through the ATMs of the Participating Banks and at the Internet Banking websites
of the relevant Participating Banks:
(i)
his Electronic Application is irrevocable; and
(ii) his Electronic Application, the acceptance of his Electronic Application by our Company
and the Vendor and the contract resulting therefrom under the Invitation shall be
governed by and construed in accordance with the laws of Singapore and he irrevocably
submits to the non-exclusive jurisdiction of the Singapore courts;
129
(b) none of our Company, the Vendor, the Manager or the Participating Banks shall be liable
for any delays, failures or inaccuracies in the recording, storage or in the transmission or
delivery of data relating to his Electronic Application to our Company or the Vendor or CDP
due to a breakdown or failure of transmission, delivery or communication facilities or any
risks referred to in paragraph 6 on page 128 of this Prospectus or to any cause beyond
their respective controls;
(c) he will not be entitled to exercise any remedy of rescission for misrepresentation at any
time after acceptance of his application; and
(d) in respect of the Offer Shares for which his Electronic Application has been successfully
completed and not rejected, acceptance of the Applicant’s Electronic Application shall be
constituted by written notification by or on behalf of our Company and the Vendor and not
otherwise, notwithstanding any payment received by or on behalf of our Company and the
Vendor.
(e) in making his application, reliance is placed solely on the information contained in the
Prospectus and that none of the Company, the Manager, the Underwriter, the Placement
Agent nor any other person involved in the Invitation shall have any liability for any information
not so contained.
12. The Applicant should ensure that his personal particulars as recorded by both CDP and
the relevant Participating Banks are correct and identical. Otherwise his Electronic
Application may be rejected. The Applicant should promptly inform CDP of any change in his
address, failing which the notification letter on successful allotment and/or allocation will be
sent to his address last registered with CDP.
13.
The existence of a trust will not be recognised. Any Electronic Application by a trustee or
trustees must be made in his/their own name and without qualification. Our Company and the
Vendor will reject any application by any person acting as nominee.
130
Steps for Electronic Applications through ATMs of DBS Bank (including its POSBank Services
division)
Instructions for ATM Electronic Applications will appear on the ATM screens of the Participating
Banks. For illustrative purposes, the steps for making an ATM Electronic Application through a DBS
Bank or POSBank ATM are shown below. Certain words appearing on the screen are in abbreviated
form (“A/C”, “amt”, “appln”, “ &”, “I/C” and “No.” refer to “Account”, “amount”, “application”, “and”,
“NRIC” and “Number” respectively). Instructions for Electronic Applications on the ATM screens of
Participating Banks (other than DBS Bank) may differ slightly from those represented below.
Step 1: Insert your personal DBS Bank or POSBank ATM Card
2: Enter your Personal Identification Number
3: Select “CASH CARD & MORE SERVICES”
4: Select “ESA – IPO/SHARE/BOND/RIGHTS”
5: Select “ELECTRONIC SECURITY APPLICANTION (IPO – SHARE/BOND) TO “ADDVALUE”
6: Press the “ENTER” key again to acknowledge:
— You have read, understood & agreed to all terms of appln & the Prospectus
— You consent to disclose your name, I/C/Passport No., address, nationality, CDP
Securities A/C No., CPF Investment A/C No. & share appln amount from your
Bank Account(s) to share registrar, SCCS, CDP, CPF Board and issuer/vendor(s)
— For FIXED price share appln, this is your only appln and it is made in your own
name and at your own risk
— You are not a US Person as referred to in the Prospectus/Document where
applicable
7: Select your nationality
8: Select the DBS Bank account (Autosave/Current/Savings/Savings Plus) or the POSBank
account (current/savings) from which to debit your application moneys
9: Enter the number of Offer Shares you wish to apply for using cash
10: Enter your own 12-digit CDP Securities Account number. (Note: This step will be omitted
automatically if your CDP Securities Account number has already been stored in the Bank’s
records)
11: Check the details of your share application, your IC/passport number and CDP Securities
Account number and the number of shares on the screen and press the “ENTER” key to
confirm application
12: Remove the Transaction Record for your reference and retention only
131
Steps for Internet Electronic Applications through the Internet Banking website of DBS Bank
For illustrative purposes, the steps for making an Internet Electronic Application through the DBS
Bank Internet Banking website is shown below. Certain words appearing on the screen are in
abbreviated form (“A/C”, “&”, “I/C” and “No.” refer to “Account”, “and”, “NRIC” and “Number”
respectively).
Step 1: Click on to DBS Bank website (www.dbs.com.sg)
2: Login to Internet Banking
3: Enter your User ID and PIN
4: Select “Electronic Share Application”
5: Click “Yes” to proceed and to warrant that you have observed and complied with all
applicable laws and regulations
6: Click on “ADDVALUE”
7: Click “Confirm” to confirm:
— You have read, understood & agreed to all terms of application and the
Prospectus
— You consent to disclose your name, IC/Passport No., address, nationality, CDP
Securities A/C No., CPF Investment A/c No. & share application amount from
your DBS/POSBank Account(s) to share registrar, SCCS, CDP, CPF Board and
issuer/vendor(s)
— This application is made in your own name and at your own risk
— For FIXED price share application, this is your only application. For Tender price
securities application, this is your only application at the selected tender price
8: Fill in details for share application and click “Submit”
9: Check the details of your share application, your IC/passport number and the number of
shares on the screen and click “OK” to confirm your application
10: Print Confirmation Screen (optional) for your reference and retention only
132
addvalue
technologies
(a)
(b)
public offer; and
Silver spot
for your business.
Singapore
750D Chai Chee Road
Singapore 469004
Tel
Fax +65 242 4555
USA
San Jose CA 95113
Tel
Fax +1 408 970 8887
+65 244 4828
+1 408 970 8888

Addvalue 1-28

Transcription

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