Business Overview

5.1 OVERVIEW OF THE MALAYSIAN ECONOMY Economic expansion strengthened further, with growth in real gross domestic product (“GOP”) rising at the pace of 7.6% in the fIrst quarter of 2004 from 6.6% in the fourth quarter of 2003. Growth was broad-based across all sectors. The key contributor to the strong GOP performance was the strengthening in growth of the manufacturing and services sectors. Growth in the manufacturing sector strengthened to 12.5%. contributing 3.8 percentage points to GOP. The expansion was supported by stronger growth in export-oriented industries and sustained growth in domestic-oriented industries. The growth reflected stronger extemal demand, in particular for electronics, and the improving domestic demand and continued recovery in the investment cycle. (Source: Economic and Fi”ancial Developments in the Malaysian Economy in the First Quarter of2004 -Bank Negara Malaysia) 5.2 OVERVIEW OF THE ICT, EMS, AND DEFENCE AND PUBLIC SAFETY INDUSTRIES The Comcorp Group operates in the ICT industry through the Comintel Group mainly in the area of systems integration, with a focus on defence and public safety communication. Through BCM, it is also involved in the EMS industry, which is a sub-sector or supporting industry of the E&E manufacturing industry. The following sections provide an overview of e.chofthe JCT, EMS and public safety industries.
5.2.1 ICT Industry Malaysia is one of the ASEAN countries that is experiencing positive growth in terms of both its economy and the JCT industry. The growth of the JCT industry can be measured in terms of personal computer and internet penetration rates. The Malaysian Communications and Multimedia Commission’s industry statistics put the total number of internet subscribers at 3.15 million, with 9.4 million internet users as at Quarter I of 2004 . Additionally, the growth rate of internet subscribers in 2003 as compared with 2002 was 10.8%. The number of personal computers installed increased from 610,000 in 1995 to 4.2 million in 2003. The Networked Readiness Index (“NRI”), which is defined as a nation’s or community’s degree of preparation to participate in and benefit from ICT developments, ranks Malaysia at 26th amongst 102 countries. The NRI captures key factors relating to the envirornnent, the readiness and the usage of the three (3) stakeholders in the Networked Readiness Framework (individuals, businesses, and government). This index can be used to understand the performance of a nation or a region with regards to ICT readiness and usage and is useful as a relative indicator of a nation’s ICT excellence. It is expected that the spending on ICT software and services would rise to 63.9% as a percentage of total IT expenditure worldwide by 2005, based on an annual growth rate of 12.1%. The demand for ICT products and serviceshas generatedaglobal market that reachednearlyUSD1trillion in200I and is projected to surpass the USDI.4 trillion mark by 2005. Statistics show that the ICT industry in Malaysia has grown and is on an upward trend. 5. INDUSTRY OVERVIEW (CONT’Dj During the period of the 7th Malaysia Plan (1996 to 2000) as well as in the 8th Malaysia Plan period (2001 to 2005), the Malaysian Government set forth several growth initiatives in relation to the lCT indusCIy. A summary of these initiatives which assisted in the exponential growth experienced by the indusCIy is as follows: (i) Ensure the Widespread application of lCT within and across sectors to stimulate productivity and competitiveness as well as improving quality of life; (Ii) Increase awareness in ICT among the population with the implementation of the MSC, as well as the continuing provision of new and/or the upgrading of the present telecommunication infrastructure; (iii) The expansion of ICT education and training in line with the anticipated demand for ICT related skills, knowledge and expertise; (iv) The review of legislation that might impede the development of ICT;
(v) The promotion and development of lhe ICT indusCIy, in terms of design and

production of innovative products] systems and services_ To generate new growth opportunities as well as skills and employment in high-tech areas and developing Malaysia into an ICT hub with internationallCT companies operating in Malaysia; and (vi) Expand ICT infrastructure, particularly to the rural areas to bridge the digital divide and enable all citizens to have equitable access to knowledge and information. For the remaining 8th Malaysia Plan period of 2004 to 2005, the government had set aside RM2.5 billion in terms of development expenditure for lCT-related progrannnes, where the focus will be on tlte computerisation of schools and government agencies. The entire ICT indusCIy is still very much in the developmental stage. with new technologies being introduced almost every 3 to 6 months, globally. Within Malaysia, newer technologies take a longer time to catch on due to availability of equipment, infrastructure and human resources. As such, there is still a largely untapped market in the counCIy for many of the ICT­related products and services. The development of the indusCIy is also dependent on the speed in which Malaysians are able to embrace technology and utilise ICT in their daily activities. The demand for lCT products and services are not subject to any seasonal fluctuations, but llOwever thrive on stable political conditions and a prosperous economy for accelerated growth. By the end of 2005, over 2 billion people will be connected by networked systems. This will create a huge demand for the introduction of new technologies and innovative ICT products and services. ICT, in particular the teleconnnunication market in Malaysia, has developed over the years at a rate much higher than the world’s rate. The govennnent has placed emphasis on the growth oflCT as the competitiveness ofany corporation is driven by its information resources and the skills and competence of its managers and staff in using and exploiting these resources. 5. INDUSTRY OVERVIEW (CONT’D) 5.2.2 The 8th Malaysia Plan will focus on further strengthening the human resource capabilities in the ICT iudustrY as well as building a critical mass of small-medium enterprises and internet uSerS to enable Malaysia to transform itself into a developed nation with a knowledge-based society. During the years from 2001 to 2005, a total of RM5.2 billion will be allocated for lCT-related programmes and projects, with 35.4% used to rollout MSC flagship applications. In addition, the Deputy Finance Minister on 9 September 2002, launched a Knowledge-based Economy Masterplan. This plan outlines 7 strategic thrusts that would drive the transformation of the countrY’s economy from a largely production­based economy to a knowledge-based economy. The plan contains 136 recommendations for the development of human resources, institutional frameworks, info-structure and infrastructure, science and technology capacity, role of the public sector, a knowledge-based civil service, as well as efforts to bridge the knowledge and digital divides. The Energy, Communications and Multimedia Ministry and the Association of the Computer and Multimedia industrY of Malaysia (PIKOM) have also announced a third package for the PC Gemilang programme, which seeks to make available affordable personal computers to the Malaysian public. Among its primary objectives are to increase the number of personal computer and Internet users in the countrY, particularly in rural areas and lower-income groups. Further, the second phase of the MSC, to take the project nationwide and create more knowledge workers, was launched by the former Malaysian Prime Minister. Tun Dr Mahathir Mohamad on 5 September 2003. It will involve expanding the MSC to other cyber cities in the countrY, and later, various parts of the world. The move will see an increase in the number of Malaysians working in high-skilled jobs with beller pay. By training the people and creating opportunities for them to work in higher paid jobs, the MSC will then contribute towards the progress of the country and make it a developed nation. The second phase, which is to last until 20I0, will also involve the participation of 250 world-class companies in the MSC, the selling of global standards in the MSC’s Flagship Applications, and the development of a harmonized global framework of cyber laws. The Government is also considering extending the incentives currently enjoyed by MSC-status companies to other cyber cities in Malaysia. The rules governing the involvement of public university researchers in R&D initiatives with tbe private sector would have to be relaxed in order to encourage greater university-industrY collaboration. (Source: Independent Market Research Report by ACN dated 2/ November 2003 and the Executive Summary Report by ACN dated 20 July 2004) EMS Industry EMS providers have become critical to the success of technology OEMs by acting as expert manufacturing partners to OEMs (such as Cisco Systems, Inc, Motorola and Nortel Networks) and adding value through management of customers’ supply chains. The concept of EMS providers as a source of end-to-end solutions developed in the early 1990s. During the 1990-91 recession, OEMs sought to slash operating costs and turned to outside manufacturing as a logical answer. The industrY’s momenrum increased as OEMs became comfortable outsourcing manufacturing, which allowed them to re-focus resources from in-house manufacturing to their core competencies of R&D and product marketing. While the bulk of outsourcing still consists of PCB and print wiring board assembly, other value-added services include global supply chain management, design-for-manufacturing, quick-turn prototyping, system enclosure manufacturing, sub-system and full system assembly, and logistics management. 5. INDUSTRY OVERVIEW (CONT’D) Established OEMs face pressure from smaller, nimble competitors and need to focus the R&D process on quick time-lo-market. Partnering with an EMS provider gives these companies access to state-of-the-art manufacturing equipment, an expert partner to plan the manufacturing process during the R&D phase and produce prototypes, and the ability to scale rapidly into mass production. EMS providers are often closely involved in cnstomers’ R&D processes and the larger EMS companies employ hundreds of in-house engineers. During the production phase, the EMS partner handles inventory procurement, and is often able to obtain beller pricing and better access to components than OEMs due to their volume purchases for multiple customers. EMS providers often minimise inventory risk by requiring a “take or pay” arrangement with customers in that the customers may cancel the order, but they would have to pay for the raw materials. EMS providers are expert manufacturing forecasters and can scale headcount to meet a particular OEM programme need and rotate new programmes into their facilities as older ones wind down. Another challenge for OEMs is the increasingly global environment, which requires them to maintain pbysicallocations near customers and respond quickly to region or country-specific equipment demands. EMS providers help with this process by maintaining manufacturing presence worldwide and aiding with global distribution. Financial considerations are another challenge for OEMs. By outsourcing manufacturing, OEMs are able to reduce working capital needs and capital expenditures, thereby strengthening the balance sheet. Also, given the efficiencies of using an expert manufacturing partner (and not expensing as much depreciation on physical assets), OEMs often have a lower cost of goods for outsourced products, giving them greater pricing flexibility in the marketplace. Asian-based EMS providers have been instrumental in providing contract manufacturing services to many of their MNC customers in the USA which include value-added services such as component procurement, concurrent engineering, product design, production of sub-assemblies, product assembly, testing and distribution. MIDA Chairman, Tan Sri Zainal Abidin Sulong recently said that domestic investment in the electronics industry has also increased from 15.2% (RMI.03 billion) in 1999 to 26.3% (RM1.3 billion) in 2003. He added that many MNCs were increasingly outsourcing their manufacturing activities to EMS companies. The global EMS market in 2003 was about RM342 billion and is expected to increase to RM547.2 billion by 2007. The EMS industry in the Asia Pacific region is forecast to grow at 20% per annum and the presence of many EMS companies here will surely see the growth in the electronic industry. This will in turn increase opportunities for the local supporting industries. In Malaysia, the growth potential for EMS providers can be approximated by growth in the E&E manufacturing sector. The unfilled orders of electronic products and communication devices in the USA have also risen steadily since early 2003. Growth in the electronics industry would be driven mainly by the wireless and personal computer market, dne to rising demand for wireless application as well as the personal computer replacement cycle, as companies invest again following their huge spending prior to the Y2K period. This would be further augmented by tbe growth in the consumer electronics products segment as demand for new technology and multi­functional devices such as camera phones, personal digital assistants and DVDs gain momentum. 5. INDUSTRY OVERVIEW (CONT’D) 5.2.3 With MNCs progressively outsourcing more and more of the manufacruring of their products, the role of EMS providers is growing in importance and they are increasingly a strategic long-term option for the MNCs. As such, it is believed that the EMS industry should continue to experience rapid growth. By outsourcing production to EMS providers, MNCs can focus on their core competencies, such as R&D and product innovation, and achieve greater flexibility in capacity and faster product time to market. This tends to lower production costs, optimise working capital utilisation, and instantly increases production capacities for the MNCs who are then able to properly allocate resources for their key competencies. As such, it is believed that MNCs are increasingly considering EMS providers to be their strategic partners in sharpening their competitive edge and those leading the trend in outsourcing among MNCs presently are the communications and medical equipment/instrumentation sectors, which should have a higher than average trend towards outsourcing over the next few years. (Source: Independent Market Research Report by ACN dated 21 November 2003 and Executive Summary Report dated 20 July 2004) Defence and Public Safety Industries With respect to the defence industry, the Government sector is generally the key market and spending in relation to this industry is largely driven by the public sector budget. The public safety industry encompasses both private and internal safety and security. The private security industry has moved forward rapidly from the mere use of a watchman, to a competitive one supplemented largely by advanced technological equipment. Securiry equipment has by and large become an integral part of the business environment where security aspects are necessary to ensure protection and safety of individuals and assets. Since the terrorist attack in the USA on II September 2001, large multinational organisations and public access places have increased their security requirements, especially in derecrion of unsolicited goods and monitoring/surveillance systems. Internal security mainly relates to the activities of the police department, which has over 80,000 uniformed personnel in the country. As crime and the threat of terrorist activity increases, police are increasing their efforts to address the situation. The table below provides an indication of the crime trends in Malaysia, the numbers of which are providing an impetus to the internal security agencies to invest further in public safety communication equipment in an effort to provide better monitoring and surveillance activities. (The rest of this page is intentionally left blank) So INDUSTRY OVERVIEW (CQNT’D) Malaysia: Crime Statistics for 1999 to 2004 (as at February 2004) 1999 2000 2001 2002 2003 2004 Violent C..-imes Murder 588 551 608 516 565 Attempted Murder 5243 68 64 77 Anned Gang Robbery 74896573 45 Unarmed Gang Robbery 1,482 1,681 1,697 1,704 1,920 307 Anned Robbery 700 722 566 425 381 62 Unarmed robbery 11,494 12,204 11 ,333 12,203 13,963 2,179 Rape 1,457 1,110 10354 1,418 1,471 307 Bodily Harm 50310 50 104 4,699 4,440 4,368 685 Total 21,157 21,604 20,390 20,843 22,790 3,671 Property Related Crin,ea Housebreaking and Theft 9,401 8,675 7,449 6,821 6,928 995 (Daytime) Housebreaking and Theft 26,535 24,238 21,003 18,444 18,861 3,023 (Nighttime) Lorry f Vall Theft. 3,485 3,698 4,306 4,570 5,551 777 Car Theft 6,196 7,278 8,520 8,544 8,531 1,310 Motorcycle Theft 41,905 45,903 47,223 47,137 50,212 8,204 Snatch Theft 15,082 14,368 14,640 15,198 2,273 Other Theft 60,436 54,881 33,210 28,043 27,638 4,833 Total 147,958 159,155 136,019 128,199 133,525 21,475 GRAND TOTAL 169,115 181,359 156,469 149,041 156,315 25,146 Note: • 11:e snatch theft cases [or the year 1999 hns noJ been separatedfrom other cases a/theft. (Sollrce:htlp:/,mylrmp3Islatjsjindeks 04.htm) With regards to public security, the Government is the driver of growth for this industry. The Government has allocated RM12.l6 billion for defence and internal security during the years 2001-2005, of which at least 60% are allocated to defence spending. Exporting countries to Malaysia are varied; the main criteria being thaI the equipment meets with the required specification and application; notable sources are tbe UK, USA, Europe, Japan and Australia. The tables below show the trends relating to the Malaysian Federal Government’s spending on security which provides an indication oftbe growth potential in this segment. 5. INDUSTRY OVERVIEW (CONT’D) Malaysia: Federal Government Operating Expenditure for Security (RM Million) 2000 2001 2002’j 2003-il 2004-m Defence 3,972 4,779 5,119 5,840 6,482 Year On Year Growth NlA 20.3% 7.1% 14.1% 11.0%
Internal Security  2,987  3,531  3,910  4,171  4,622  Year On Year Growth  NIA  18.2%  10.7%  6.7%  10.8%  Total Security Expenditure  6,959  8,310  9,029  10,011  11,104  Year On Year Growth  NIA  19.4%  8.7%  10.9%  10,9%
Malaysia: Federal Government Development Expenditure for Security (RM Million) 2000 200 I 2002’j 2003 ‘jj 2004 ‘iii Defence  1,854  2,572  3,385  3,326  2,089  Year On Year Growth  NIA  38.7%  31.6%  (1.7%)  (37.2%)  lntemal Security  478  715  948  737  594  Year On Year Growth  NIA  49.6%  32.6%  (22.3%)  (19.4%)  Total Security Expenditure  2,332  3,287  4,333  4,063  2,683  Year 00 Year Growth  NIA  41.0%  31.8%  (6.2%)  (34.0%)  Notes:  ‘j  Estimated Actual  -ii  Revised Estimate  ‘iii  Budget  Allocation  (In  relation  to  the  Federal  Government’s  development
expenditurefor security, the amount excludes RM2.0 billion contingency reserve) (Source: Department a/Statistics; Economic Report 2003/2004) With respect to the public safety and defence industries, there has recently been a spate of hijacking, piracy and gangsterism, including “tonto” activities as well as robheries and thefts including snatch thefts, To overcome these problems, the Government will increase and strengthen security and enforcement. The police force will step up their security surveillance throughout the country. The Government will review the operations of several departments of the Royal Malaysian Police with a view to increasing their capacity and effectiveness through the provision of equipment and special training. Apart from this, the Government has also established the Malaysian Maritime Enforcement Force (APMM) in its efforts to increase surveillance in our waters, such as the Straits ofMalacca. A sum of RM4.6 billion for operating expenditure is provided for internal security while RM6.5 billion is allocated 10 the Ministry of Defence for 2004, For development expenditure, allocations of about 600 million and RM2.1 billion have been provided, respectively to equip and modernise the defence and security systems of the nation, Generally, relating to these two categories of expenditure, there has been an overall uptrend, (Source: hIdependent Market Research Report by ACN dated 21 November 2003 and Executive Summary Report dated 20 July 2004) 5. INDUSTRY OVERVIEW (CONT’D) RELEVANT LAWS AND REGULAnONS GOVERNING THE ICT INDUSTRY In the Government’s efforts to promote the use of ICT and to encourage tbe growtb of tbe Malaysian ICT industry, various laws and regulations were enacted. The following are some of sucb legislations: (i) Digital Signature Act 1997
Enforced on I October 1998, it enables tbe development of electronic-commerce, by providing an avenue for secure and legally recognised online transactions through the use of digital signatures. It serves as a framework for the licensing and regulation of certification authorities, and the recognition of digital signatures. There are currently 2 certification authorities that have been appointed, namely Digicert Sdn Bhd and MSC Trustgate Sdn Bhd.
(ii) The Copyright (Amendment) Act 1997

This Copyright (Amendment) Act 1997 amended the Copyrigbt Act 1987 and came into force on I April 1999. It makes unauthorised transmissions of copyright works over the intemet an infringement of copyright. It is also an infringement of copyright to circumvent any effective teclmological measures aimed at restricting access to works, tbus protecting intellectual property rigbts for companies investing in the ICT industry. (iii) Computer Crimes Act 1997 This Computer Crimes Act 1997 was brought into effect on I June 2000. It governs activities relating to the misuse of computers, for example, lUl3uthorised access to computer materials, unauthorised access with the intent to commit other offences, and unauthorised modification of computer contents. (iv) Telemedicine Act 1997
Provides a framework for licensed medical practllloners to provide telemedical services using audio, visual and data communications. The Telemedicine Act 1997 has not yet come into effect.
(v) Communications and Multimedia Act 1998

This Communications and Multimedia Act 1998 came into effect in stages, commencing on 1 April 1999. It proVides a regulatory framework to cater for the convergence of the telecommunications, broadcasting and computing industries. This will assist in making Malaysia a major global hub for communications and multimedia information and content services. The Communications and Multimedia Act 1998 repealed the Telecommunications Act 1950 and the Broadcasting Act 1988. The Malaysian Commission for Communications and Multimedia, appointed on I November 1998 is the sole regulator of the new regulatory regime. (Source: Independem Market Research Report by ACNdated 21 November 2003) 6. INFORMATION ON THE COMCORP GROUP
6.1 INCORPORATION AND GROUP STRUCTURE Comcorp was incorporated in Malaysia under the Act on 2 October 2003 as a private limited company under the name of Comintel Corporation Sdn Bhd. Subsequently, on 10 November 2003, it was converted into a public limited company under its present name. The principal activity of Comcorp is that of investment holding. The subsidiaries of Comcorp, further details of which are set out in Section 6.5 of this Prospectus, are as follows: Effective Date! loterest in Country of Issued and paid­ordiDary Name Ineorporatlon up share capital share capital Principal activities % Subsidiaries of Comcorp Comintel  20.10. t984; Malaysia  RM 13,000,000  100.00  Turnkey engineermg design and integratlon. programme management, installation and commissioning as well as investment holding  BCM  20.08.t993; Malaysia  RM32,869,878  100.00  Manufacturer and assembler of electronic components  Subsidiaries of Cominttl
tCSB  06.07.1985; Malaysia  RM I00,000  100.00  Provision of R&D services and dealers in all kinds of teleconununication and  electronic equipment and the provision of related services  CHK  07.03.1996; Hong Kong, Special Administrative Region  HKDt,OOO  100.00  Trading of electronie, engineering and telecommunication equipment and the provision of related services  CSB  15.10.1997; Malaysia  RM I ,500,000  70.00  Electronic systems lesting and repair, development of test programs and provision of integrated logistic support  LWT  24.05.1993; Malaysia  RMl00,002  70.00  Carry oUI R&D photonics products  work  in  LNC  27.04.2004; Republic of Korea  KRWIOO,OOO,OOO  60.00  As at the date of this Prospectus, LNC has not commenced operations. However, the principal activities of LNC are intended  to be the manufacture, development. selhng and export of electronic components and engaging in all related business activities  incidental foregoing  to  any  of  the
6. INFORMATION ON THE COMCORP GROUP (CONT’D) The group structure of the Comcorp Group is as follows: Comcorp .! ~JOO% ~lOO% BCM ~lOO% ~100% ~ 70″/0 ~ 60% ICSB CHK LWT LNC Comintel  700/0
6.2 SHARE CAPITAL The authorised share capital of Comcorp is RM200,000,OOO comprising 400,000,000 Comcorp Shares. The issued and paid-up share capital of Comcorp is RM60,290,000 comprising 120,580,000 Comcorp Shares. The changes in the issued and paid-up share capital of Comcorp since its incorporation are as follows: No. of Cumulative ordinary issued Date of sbares and paid-Up allotment allotted Par value Consideration ,hare capllal RM RM 02.10.2003 2 1.00 Cash 2 28.10.2003 4 0.50 Sub-division of par value of ordinary 2 shares from RM 1.00 to RM0.50 each 11.06.2004 68,957,859 0.50 Acquisition of BCM 34,478,932 )1.06.2004 51,622,137 0.50 Acquisition of Cominrel 60,290,000 6.3 RESTRUCTURING AND LISTING SCHEME 6.3.1 The Pre-IPO Restructuring Scheme In conjunction with and as an integral part of the Listing, the Company undertook a restructuring exercise i.e. the Pre-IPQ Restructuring, which was approved by tbe SC and SC (on behalf of FIC) on 29 March 2004 and the MIT! on 3 March 2004, involving the following: (i) Acquisition of BCM Qn 8 November 2003, Comcorp entered into a conditional sale and purchase agreement with Power-One and JTSB for the acquisition oflbe entire issued and paid-up share capital of HCM comprising 32,869,878 HCM Shares for a total purchase consideration of RM46,365,822 satisfied by an issue of 68,957,859 new Comcorp Shares at an issue price of approximately RMO.67 per Share, credited as fully paid-up. 6. INFORMAnON ON THE COMCORP GROUP (CONT’D) The new Comcorp Shares were issued to ITSB and Power-One in the following maruter: Equity interest in BCM acqu.ired by <—-Comcorp—-> Vendors  No.ofBCM Shares  %  Consideration RM  No. of Comcorp Shares issued  JTSB  29,418,541  89.50  41,497,411  61,717,284  Power-One  3,451,337  10.50  4,868,411  7,240,575  Total  32,869,878  100.00  46,365,822  68,957,859
The 32,869,878 BCM Shares were acquired free from all charges, liens, pledges, trusts and other encwnbrances and with all rights, benefits and entitlements attaching thereto from II June 2004, being the date of completion of the acquisition. The purchase consideration for the Acquisition of BCM was arrived at on a willing-buyer willing-seller basis, based on the nnaudited NTA of BCM as at 30 September 2003. The audited NTA ofBCM as at 30 September 2003 was RM46,446,419. The property asset of BCM was valued as at 3 October 2003 to be RM29.5 million based on a valuation by the Valuers using the comparison method. However, as the difference hetween the revalued amount and the unaudited NBV of the property asset as at 30 September 2003 of RM29.9 million is not deemed material, the revaluation deficit was not taken into account in the determination of the above purchase consideration. The audited NBV of the property asset of BCM as at 30 September 2003 was approximately RM29.9 million. (ii) Acquisition of Comintel On 8 November 2003, Comcorp entered into a conditional sale and purcbase agreement with Leng Keng Hok @ Lim Keng Hock, Moharnadon bin Abdullah, Noor Azleezam bin Mobamed Azmi, Tan Sri Dato’ Samshuri bin Arshad, Omnilite, Sagittarius and AMG (collectively known as “Cominte] Vendors”) for the acquisition of the entire issued and paid-up share capital of Comintel comprising 13,000,000 Comintel Shares for a total purchase consideration of RM34,709,645 satisfied by an issue of 51,622,137 new Comcorp Shares at an issue price of approximately RMO.67 per Share, credited as fully paid-up. (Tbe rest of this page is intentionally left blank] 6. INFORMATION ON THE COMCORP GROUP (CONT’D) The  new  Comcorp Shares  were  issued  to  the Comintel Vendors in the  following manner:  Equity ioterest in  Comiotel acquired by  No. of  <—Comcorp—–>  Comcorp  Comintel  No. of Comintel  Shares  Vendors  Shares  %  Consideration  issued  RM  long Keng Hok @  2,080,000  16.00  5,553,543  8,259,542  Lim Keng Hock  Mohamadon bin  520,000  4.00  1,388,386  2,064,885  Abdullah  Noor Azleezam bin  650,000  5.00  1,735,482  2,581,107  Mohamed Azmi  Tan Sri Dato’  780,000  6.00  2,082,579  3,097,328  Samshuri bin  Arshad  Omnilite  520,000  4.00  1,388,386  2,064,885  Sagittarius  5,850,000  45.00  15,619,340  23,229,962  AMG  2,600,000  20.00  6,941,929  10,324,428
Total 13,000,000 100.00 34,709,645 51,622,137 The 13,000,000 Corninte1 Shares were acquired free from all cbarges, liens, pledges, trusts and other encwnbrances and with all rights, benefits and entitlements attaching thereto from 11 June 2004, being the date of completion of tbe acquisition. The purchase consideration for the Acquisition of Cornintel was arrived at on a willing-buyer willing-seller basis, after taking into consideration the adjusted unaudited NTA of the Cornintel Group as at 30 September 2003, derived as follows: Notes  RM  Unaudited NTA ofthe Comintel Group as at 30 September 2003  43,008,838  Less: Payment ofdividends Less; Carrying value of investment in JTSB  (i) (ii)  (8,299,193) (1,706,414)  Add:  Proceeds from disposal ofinvestment in JTSB  (ii)  1,706,414  Adjusted NTA oflhe Comintel Group  34,709,645  Notl!s:
m On J7 October 2003 and ]7 October 2001 respectively, Comimel declared andpaid dMdends of approximately 88.67 sen less tax 28% on each of the J3.000.000 Comi”tel Shares. amounting to RM8.299,19J. to its then shareJwldcrs­(il) On 8 November 1003, Com;ntel entered into D condirionaJ snle and purchase agreement to dispnse ofits entire holding of56,000 ordinary shares ofRMl.OO each in JTSB. representing 28% equity interest therein, to Leng Keng Hok @ Lim Keng Hodjor a cnsh consideration to be determined later (“JTSB Shore Sale”). The final purchase consideration of the disposal was fixetl at approximately RM5.7 million. whil:h was arrived oj On a willing-buyer willing-seller basis after taking itlto consideration the unuudited NBV of Ct1mintel’s investment in JTSB as at the date ofthe disposal. The JTSB Share Sale did not result in any gains or losses /0 the Cominle! Group. The dispoSlll was completed on 8 June 2004. The audited NTA of the Comintel Group as at 31 January 2004 was RM37,464,061. 6. INFORMAnON ON THE COMCORP GROUP (CONT’D) The property assets of Comintel were valued to be approximately RM9.6 million based on the valuations by the Valuers using the comparison method. However, as the difference between the revalued amount and the unaudited NBV of the property assets as at 30 September 2003 of approximately RM9.6 million is deemed not material, the revaluation was not taken into account in the detennination of the above purchase consideration. The audited NBV of the property assets of Comintel as at 31 January 2004 was approximately RM9.6 million. (iii) Pre-IPO Placement FolJowing the completion of the Acquisitions, on 29 June 2004 Leng Keng Hok @ Lim Keng Hock, JTSB and Power-One colJectively placed out a total of 11,026,718 Comcorp Shares to Bumiputera placees nominated by them, in order for Comcorp to comply with the 30% Bumiputera shareholding requirement of the National Development PolicylNational Vision Policy, upon the Listing. The respective portions of the Comcorp Shares placed out by Leng Keng Hok@ Lim Keng Hock, JTSB and Power-One were as follows: No. of Comcocp Shareholders Share, placed out Leng Keng Hok @ Lim Keng Hock 8,259,542 JTSB 2,497,522 Power-One 269,654 Total 11,026,718 The Bumiputera placees for the Pre-IPO Placement and the respective number ofComcorp Shares placed to them were as follows: No. of Comcorp Placees Shares placed to Mohamadon bin Abdullah 2,000,000 Tan Sri Datu’ Samshuri bin Arshad 2,000,000 Sagittarius 5,626,718 Abdul Majid bin Omar 1,400,000 Tocal 11,026,718 6.3_2 The IPO In conjunction with the Listing, the folJowing will be undertaken: (i) Puhlic Issue A public issue of a total of 19,420,000 Shares by the Company at an issue price of RMO.85 per Share to eligible Directors, employees and business partners of the Comcorp Group, identified investors by way of private placement and Malaysian citizens, companies, societies, co-operatives and institutions. 6. INFORMATION ON THE COMCORP GROUP (CONT’D) (ii) Offer for Sale An offer for sale of 9,220,000 Shares by the Offeror at an offer price of RMO.85 per Share to identified investors by way ofprivate placement. Upon the completion of the Public Issue, the issued and paid-up share capital of Comcorp will increase from RM60,290,000 comprising 120,580,000 Comcorp Shares 10 RM70,000,000 comprising 140,000,000 Comcorp Shares. Gross proceeds from the Public Issue amounting to RM16.507 million will be utilised in the manner set out in Section 3.8 of this Prospectus. The gross proceeds from the Offer for Sale shall accrue entirely to the Offeror and not the Company. Further details of the lPO are set out in Section 3 of this Prospectus. 6.3.3 The Listing and Quotation The listing and quotation is for the entire enlarged issued and paid-up share capital of COlOCOrp comprising 140,000,000 Comcorp Shares on the Second Board of Bursa Securities. 6.4 BUSINESS OVERVIEW AND FUTURE PROSPECTS The entire Section 6.4, except for Section 6.4.17 and where indicated otherwise, has been sourced from the Independent Market Research Report dated 21 November 2003 and Executive Summary Report dated 20 July 2004, both prepared by ACN. 6.4.1 Business Activities of the Group The business activities of the companies in the Comcorp Group, except for that of LNC’, can be summarised in the following diagram:
System Engineering Design and Integration f(‘J(‘ ComrmtrciaJ, p()bllc Slife1y and Miliblry Concerns Radio CommuniCatiOns Systems VOlCq and Dala Encryption Eleetron~ Warfare Wireless CommUfllcstion Systems Tel8metryl Te~a’ic (Radio Nelworlt. M(JllitoTing SystfJms) Reated 5efVices tTandSy.llt(lm Eng/neff/fig Integrall’Jd Education Manegemern System Tolal Heallhcare Man</gemen/ System Syl>tll1ms ‘nlegTalion (e.g. Comm~nd Con/rol Genlrtl $olVliOn) Flelated Products
Related $etvt;ss High-End Tumke’y COrt~8cIM~nu~cturl”g Services Manufac:turing PCBA and comp~t81;Jax-/)/Jilaproduct assembiY’lor r:ommercial I industrial and OOr’Isumer p10duas EMS Pf’ovider For the c;ommvnications and ‘fie conSulllSr line indusfrles Ior:u$ing on splilr;;;nli:;ea commerciBll /tIc/ustridl products In fhl! hi9fl-miJIl k:Jw·to-moaerate volume marker. Handling suPPlY chan manaoement fOf principal:; (customers) Integflued Logi.tic ${)ppOl1 ;,nd 3”’ Level MS;f’lten8nce Focusing Ofl defence lfPPlicattons Includes services $ueh liS thet tn:XJbleshooting ana repairing of all kinds or PCBs, moaufes & sub­sssemblles, radar & commlXltcalion systems. command & C{lntrol sY5″‘lIms, missOe sysfems andsooi:’ alld itlso PlOYidiflg on-sile maintenance and repair 01 combat sys’ems R&D R&D services as well as bMg a detJJer in 8/1 kinds of lehu:ommuniclltion iUld e1ec/rOfJic equipment i’lf’ld In til9 prcMsiofl of refared 5Srvli::eS. LWT Photonics RUNrch R&O on phOlonic _~Is ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) Note: LNC was incorporated on 27 April 2004. LNC has no( commenced opera/iom as ai/he date of this ProsfJITlus. However, the principal activities of LNC are intended /0 be the manufacture, development, selling and export ofelectronic components and engaging in all related business activities lndden/alto any oftheforegoing. The following sets out a brief background on the business activities of companies within the Group. Corniniel Comintel was established on 20 October 1984 in Kuala Lumpur, Malaysia. It first started as a consultant and an agent servicing a number of principals from world leading manufacturers. Hence, the business was initially very much focused towards servicing the needs of the telecommunication users. Having successfully become one of the leading local systems integration solution providers for specialised sectors of the domestic telecommunication systems industry, Comintel embarked on the provision of total IT and systems integration services. The company has since developed capabilities and expertise in systems integration work. Its strength and ability to differentiate itself in the competitive systems integration sector lies in its ability to combine RF components (its core competency) with IT systems. Its involvement in several reasonably sizeable projects, in particular projects relating to the Malaysian Government concerns, is testimony to its position and proven track record as a preferred supplier in the systems integration sector. The local leT industry is highly competitive with numerous technology carried by key technology providers that can address the needs of Comintel’s target customers. However, not all the technology providers are able to provide optimal solutions to cater to each customer’s needs. What differentiates Commtel from its competitors is that it is able to provide its customers with comprehensive and optimal solutions to meet their unique and sophisticated requirements by incorporating RF solutions in the provision of its total communication systems and integration services. It does this by being committed to the understanding of the complicated needs and requirements of its customers and using its strong teclmical know-how in RF technology and in·depth product understanding of available technology for integration work, as supplied by various key teclmology providers, in determining the optimal solution for each of its customers. Where necessary, Commtel will design and produce the required components and write the relevant software solutions required for the integration work. One of the more prominent projects handled by Commtel is the C4I system, an initiative that is a part of its client’s computerisation programme. The C41 system generally relates to the integration of all base operations of an organisation across a very wide area for command and control purposes. This system encompasses an integrated communication system that enables the end-user to react more quickly to problems that arise by linking all operation bases to hodines, enabling the organisation to respond more swiftly after incidents are reported. Within the system, the automated message handling system and network also enables information and pictures of incidents in different parts of the area covered to be transmitted onto the computer screen at the touch ofa key. 6. INFORMATION ON THE COMCORP GROUP (CONT’D) RCM BCM was incorporated in Malaysia on 20 August 1993 W1der the name of Bakti Comintel Manufacturing Sdn Bhd (“BCMSB”). BCMSB was established pursuant to a technology transfer agreement between Motorola Inc and Comintel to jointly develop manufacturing capabilities in line with the Malaysian Government’s efforts to promote tecimology transfer to local companies. BCM fIrst commenced operations in October 1993 with 36 employees and one (I) assembly line at its rented factory in Prai, Penang, providing manual assembly and fW1ctional testing services for Motorola’s Rapid and Compact Chargers on a consignment basis. In 1994, Motorola Technology Sdn Bhd, then known as Motorola Electronics Sdn Bhd, transferred a substantial portion of the back-end assembly of its accessories manufacturing activities to BCM. From early 1995, BCM began providing back-end services to a wider range of customers and for an expanded range of products. By mid-1995, BCM had migrated from manual assembly services to automated front-end assembly and it acquired its first SMT machine to support the production lines. By 1997, BCM was operating four (4) SMT production lines assembling over 120 different products. In order to support such facilities, the workforce was expanded to over 450 employees. BCM’s progression was from production on a consignment basis to securing contracts on a tmnkey basis whereby BCM was responsible for not only the production line but also for the sourcing of relevant materials and components for such production. In line with its goal to move from consignment to tmnkey manufacturing, BCM invested in managerial and technical personnel. Strict quality controls with the implementation of the Six Sigma methodology for quality assurance management was adopted. A Materials Requirement Planning system was introduced to facilitate the shift into turnkey manufacturing. In April 1997, BCM secured its fIrst turnkey contract from Motorola Inc for the manufacture of their mobile microphones. It was from this point onwards that BCM began to expand rapidly, gaining the confidence of existing customers, securing new customers and diversifying its product portfolio. Another milestone was achieved in the third quarter of 1997 when BCM was involved in its first concurrent engineering project with Motorola Inc, where its concurrent design and engineering team worked with Motorola Inc to provide early supplier involvement in the manufacturing design platform of a product. This has led to more concurrent engineering projects in respect ofother products. By late 1997, the technical capabilities were developed to provide full turnkey box~build services for RF products to a more advanced level, with the ability to cany out test-system engineering where systems for testing the customers’ products were acquired and developed. ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’Dj Since then, more than 90% ofBCM’s manufacturing contracts have been on a turnkey basis and its flexible manufacturing capabilities enable it to manufacture a wide range of products. RCM is currently manufacturing about 600 different product items. The new facility at the Kulim Hi-Tech Park commenced operations in mid-lOaO. The second phase of this factory was completed in October 2002. The current production facility provides a total of 200,000 square feet of factory space. RCM’s turnover has grown over the years with a last audited turnover of RM249.8 million for the financial year ended 30 September 2003. In tandem with the rapid expansion in recent years of the electronics manufacturing sector, BCM has received increasingly larger orders from its existing major customers such as Motorola Inc and Power-One. Customers such as Symbol Technologies Inc, Flextronics Technology (Malaysia) Sdn Bhd, Midas Communication Technology Pvt Ltd and Sony Electronics (M) Sdn Bhd, provide BCM with diversification of its existing customer base. The company is also accredited with the MS ISO 14001:1997 systems (environmental standard with respect to the operations of its plant) and MS ISO 9001:2000 Quality Management Systems Requirements (for PCBA manufacturing). ICSB ICSB was a company established to provide R&D services as well as being a dealer in all kinds of telecommunication and electronic equipment, and to provide related services. It is engaged in development work with a specific focus on systems design interfacing for technical proposals submitted by Comintel. In this regard, it supports Comintel by providing the integration of hardware and software as well as service solutions that enable Comintel to integrate various third party software programmes (often purchased off the shelf) and systems to create customised systems for specific customers. CSB CSB began in 1997 as a joint-venture company between Finmeccanica, a company incorporated in Italy, and Comintel. Finmeccanica is a leading Italian company and one of the world’s top producers in the arena of advanced technologies for defence applications. Subsequently, Finmeccanica’s equity interest in CSB was transferred to AMS, a company jointly owned by Finmeccanica and BAE Systems pic indirectly. CSB was initially formed to undertake warranty maintenance contracts for Alenia Difesa, which is the naval system division of Finmeccanica. Its specific focus at that time was to perform maintenance for the systems on board the two (2) high-tech Italian corvettes, which are amongst the most advanced ships in the Royal Malaysian Navy’s fleet. Since then, CSB has moved on to increase its coverage and operations in the field of integrated logistics support, systems maintenance, documentation control, electronics systems testing and repairing. Through the said joint-venture, CSB is able to acquire and leverage on both the know-how from AMS, and the local expertise and experience of the domestic defence communications market from Comintel. 6. INFORMATION ON THE COMCORP GROUP (CONT’D) LWT LWT was set up due to Comintel’s forward-looking stance in relation to the development of new teclmology and applications for use in the communications sector in which it operates. LWT specialises in the field of photonics research. Photonics is the science and technology relating to the transmission, generation and manipulation of photons i.e. light. LWT’s operations are specifically focused on the study of fibreoptics components applied in telecommunications and broadband transmission. CHK CHK deals principally in the trading of electronic, engineering and telecommunication equipment and the provision of related services. Tbis company was formed with the intention of providing cost competitive sourcing of raw materials. LNC LNC is a joint-venture company between Comintel and a Korean individual, which is intended to initially carry out R&D activities in relation to the design of product components, catered for the ICT industry. Eventually, LNC is expected to carry out the manufacturing and marketing of these product components which will be manufactured using I:MD production processes. As at the date of this Prospectus, LNC has not commenced operations. 6.4.2 Synergies between Companies in the Group The s)1lergies between the companies in the Comcorp Group, can be summarised in the diagram below:
Reputable Products and Services?–_~_  Technical Support from Principa~I~””  Systems Integration Projects ManufaciuringiSupplyrrrading  Strategic Alliances  Maintenance & Upgrading work  Excellent Job Credentials  Consultancy
~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) In brief, whilst separate, the core businesses of the Comcorp Group are also complementary and together, they provide a sense of synergy to the Group’s overall operations. Through Comintel, knowledge and skills on the application of products, equipment and also the relevant software used in communications with emphasis on the Public Safety and Defence sector, is acquired. Its position as one of the leaders in Malaysia in the application ofRF technology, used in conjunction with various other leT components, also provides the Group with a competitive edge. Through implementation experience in the systems integration business, specialised knowledge is also gained in relation to the unique features of the local environment and local clients (especially in relation to the Government). BCM, through its involvement in EMS-type production enables the Comcorp Group to accumulate more knowledge and skills relating to the manufacturing process and also the products used in communications, with emphasis on the Public Safety and Defence sector. BCM is also able to tap on Cornintel’s product application knowledge when troubleshooting manufacturing problems. It can leverage on this to move one step up the EMS ladder whereby not just product manufacturing process expertise is required hut holistic knowledge of the actual product, enabling BCM to provide more value­added services to its customers. CSB, on the other hand, provides the Group with expertise in the maintenance of defence systems, to enable the lifetime extension of the systems. Initial experience and knowledge on the local environment and on specific clients gained during the systems integration process provide the Group with an added advantage in this arena. Through ICSB, knowledge on the future application of the products and systems integration services is obtained. LWT in particular focuses on R&D in an exciting and progressive area oftelecommunications called photonics, which studies, amongst other things, how light can be used in data transmission and how the potential of fibreoptics can be maximised. In this manner, the Group ensures that it is at the forefront of any product development in the ICT technology and EMS life cycles. Specifically, Comintel will be able to leverage on this new technology in its systems integration work to promote faster transmission of data between subsystems whilst BCM’s manufacturing facilities and expertise can be harnessed during the mass production phase ofthe components developed relating to this new technology. Further, coupled with the know-how in IMD technology procured by the Korean shareholder together with BCM’s expertise as an EMS provider, the set-up ofLNC is intended to initially focus on the carrying out of R&D activities relating to the design of product components, catering to the ICT industry, which will be manufactured using IMD production processes. As at the date of this Prospectus, LNC has not commenced operations. Initial product components intended to be produced comprise keypads and windows for mobile phones and two-way radios. The production of keypads and window components for communication equipment by LNC will enable the Comcorp Group to provide further value added components to some of the Group’s various communication products which are currently manufactured and assembled by BCM for principals such as Motorola. LNC may also market the said products to the other players within the ICT industry. Specific discussion of the principal activities, types of services and products in the following sections will focus on the core businesses of the company, namely systems integration for Public Safety and Defence communication applications, the provision ofEMS and also photonics R&D. 6. ]NFORMATION ON THE COMCORP GROUP (CONT’D) 6.4.3 Types of Services and Products
Total]T communication systems and integration services provider Through Comintel, the Group is able to provide total IT communication systems and integration services. Comintel is principally a total IT and telecommunication system solutions company with vast experience in systems engineering design and integration for both commercial and military applications. These include local area networks (“LAN”) and systems that range from small-office LAN to sophisticated secmed mission­critical nationwide wide area network (“WAN”) systems for the Government with coverage throughout the country. Comintel’s IT capabilities and business activities have extended to major projects including: (il  State-of-the-,rt n,tionwide integrated ‘dvooce secllled voice  communication systems;  (ii)  Secured WAN and LAN implementation for commercial and  government agencies;  (iii)  Integrated office automation and workflow solutions;  (iv)  Secured automatic message handling systems, emergency response  systems and command and control systems;  (v)  Total healthcare management systems;  (vi)  Internet firewall security systems;  (vii)  High Frequency (UHF”) communication systems for military and  civilian applications;  (viii)  Civilian and military air traffic control communication systems;  (ix)  Off-shore platfonns micmw,ve oommuoi”tioo systems;  (x)  Audio teleconferencing solutions;  (xi)  Voice and data encryption solutions;  (xii)  Automatic vehicle location system with geographical infonnation  systems;  (xiii)  Mobile data communication systems;  (xiv)  Mobile commerce;  (xv)  Fixed and wireless broadband solutions; and  (xvi)  Electronic media broadcasting systems.
]n addition. it also has experience in providing systems integration services that includes systems consultation, progrannne/project management, design, development, implementation, integration and commissioning of services. Comintel’s ability to provide comprehensive in-country after-sales maintenance and training support has resulted in the lifetime extension of its customers’ systems and high system availability for mission readiness. ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D)
Years of working on Public Safety and Defence communication applications have inculcated the necessary discipline the company needs in order to be a key player in its field. This has also resulted in a workforce which is able to meet the myriad complex requirements in total IT and telecommunication solutions, with a focus on Public Safety and Defence communications. ICSB provides support to Comilltel in this area of the Group’s business by engaging in development work with a specific focus on systems design for technical proposals submitted by Comintel. In this regard, it enhances Comintel’s service offerings by developing and continuously improving the integration of hardware, software and service solutions that enables Comintel to integrate various third party software programmes (often purchased off the shelf) and systems to create customised systems for specific customers. EMS provider Through BCM, the Group provides high-end turnkey contract manufacturing services, including PCBA and complete box-build product assembly for communications and consumer-line industries focusing on specialised commercial and industrial products in the high-mixllow-to-moderate volume market. Ibis focus differentiates the Group from the relatively more crowded low-mix and high-volume PCBA market. The comprehensive range of box-build services that the Group provides includes the follov.ring: (il A”i,ting eu,tom”, with th, de.ign and developm,nt of pwduct prototypes; (ii) During the initial product design stage, the Group’s concurrent design and engineering team advises its customers on product design, with the objective of optimising the manufacturability and quality of the product; (iii) Procurement and inspection of components and materials used in the manufacture of customers’ products, as well as the sourcing of newly qualified suppliers; (iv) Assembling of PCBs and functional testing of completed PCBs including phenolic and fibreglass mu1ti~layer PCBs, flex assemblies and ceramic boards;
(v) Integration of sub-assemblies into functional products; and
(vi) Conduct of final tests for specification compliance.

More than 90% of the Group’s manufacturing contracts are executed on a turnkey basis where the Group is responsible for the procurement of materials and components, as well as the manufacturing process. The remaining contracts are on a consignment basis. 6. INFORMATION ON THE COMCORP GROUP (CONT’D)
Defence maintenance programme services provider Through ese, the Group provides integrated logistk support and 3rd level maintenance involving testing, troubleshooting and the repairing of all kinds of PCBs, modules and sub-assemblies, radar and communication systems, command and control systems, weapon systems and sonic_ It also provides onwsite maintenance and repair otcombat systems, CSB utilises !lIe latest state-of-thNirt Automated Test Equipment consisting of~ (i) Intermediate Frequency (UIF”J/RF Test Station with frequencies ranging from direct current to 20 Gigahertz, The frequency can be extended beyond these parameters as and when the need arises, TIte company designs and manufactures the hardware interface while at the same time developing software diagnostic! troubleshooting and test programmes for aU types ofRF modules;
(ii) Digital Test Stations. All kinds. of digital printed circuit modules are repaired and serviced using these test stations. The methodology employed is the same as that used fur the TFJRF Test Station. Hardware interfaces as required are designed and constructed in conjunction with software programme de\’elopment to perfunn diagnosis and tests via extensive digital wave fbrm generation and measurement in the active mode, instead ofpassive, to obtain better and more reliable and stable results; and

{iii) Hybrid Analogue and Digital Test StatioU6, As per both the equipment categories mentioned above, hardware inte-rfaces and software programmes are developed to perfQnn active te&ting and diagnostics. on hybrid modules. A fully equipped worksOOp enables CSB to pcrtorm repairs from the total systems level to equipment, modules and down to the J;omponents level including mechanical repairs. After repairs have been carried out, secondary processes sucb as reconditioning, cleaning and resinating are perfonne-d to ensure the equipment complies \vith the military standards. The services provided by CSB are particularly necessary forlhe following: (i) Defence system end~users, as it is strategically important to have in~countri’ autonomy and the reducti()D oftum-around time; and {ii) High technology system users whQ require a local partner to provide them with professional service support for restoring, in very short cycle time, the 1:omplete performance ofthe system and for rooucing the system life cycle costs. R&D Details of R&D \\’Ork carried Qut by the Comcorp Group are SCl out in Section 6.4.8 of this Prospectus. ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D)
6.4.4 Process Flows for Principal Products and Services 6.4.4,1 Total IT and communication systems and integration services provider Opportunity Assessment and Requirements Definition +
Conduct New Client Assessment
Initiating Process +
Prepare Proposal/ Participate in Tender Process
End of Process Contract Accepted? No Delivery and Implementation Process
/”  Ye,  Resource Planning and Solution Design  Delivery and Implementation ofSolution  “­
Project Completion (The rest of this page is intentionally left blank] 6. INFORMATION ON THE COMCORP GROUP (CONT’Dj The process relating to the provision of total IT and communication systems and integration services can be summarised as follows: (;) Initiating pm”” The initiating process involves all the preliminary work perfonned to secure the contract and consists ofthe following steps: (a) Opportunity assessment and requirements definition
This step is perfonned in all major proposal efforts to assess the opportunity to provide a range of total IT communication systems and integration services to potential clients. This is done by obtaining the necessary infonnation to understand the clients’ requirements, needs and expectations and to map it to the product and service offerings of the Comcorp Group. This will provide the basis for the proposal.
(b) Conduct new client assessment
The purpose of conducting this step is to strengthen the screening of prospective clients who are new to the Group, or of existing clients that have had significant changes in principal investors or senior management. Assessments on the background of prospective new clients would include a review of the reputation and character of the principal investors and key management persOimel, and analyses of the financial history and current fmancial position of the relevant organisation. As most of the Group’s customers in this business line are government bodies, the assessments are nonnally carried out without much difficulty.
(c) Prepare proposal/participate in tender process

Once the necessary infonnation on the client’s requirements and specifications are obtained and mapped to the relevant product and service offerings of the Group, a proposal is then prepared for the client. The Group will also determine the general design for the system at this stage to enable it to estimate the fee, cost and expense. The relevant personnel will then participate in the tender process. (The rest of this page is intentionally left blank) ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) (ii) Delivery and implementation process This process involves all the work perfonned after the contract has been successfully secured (and the necessary administrative documentation done) and consists of the following steps: (a) Resource planning and solution design This step is perfonned by planning for the resources required for the project and also encompasses planning for the timing of any quality assurance reviews that need to be perfanned on the system at various checkpoints. This step also involves detailed solutions design whereby all the necessary components of the proposed system are mapped out in a blueprint together with the necessary steps to deliver and implement the system. (b) Delivery and implementation ofsolution This step involves deploying the relevant resources, products and services to deliver and implement the solution in accordance with the contract. The Group works closely with the relevant teclmology partners at this stage using the blueprint and the necessary steps required to deliver and implement the system as a guide. This step therefore encompasses systems installation, commissioning and acceptance. Acceptance of the system is detennined through a quality control procedure called the Factory Acceptance Test. Acceptable parameters that will fulfil the system needs are determined together with the customer and testing is done to ensure that these are complied with. Once the solution has been successfully implemented and meets the client’s requirements, needs and expectations, the project is considered completed. However, the Group continues to provide its clients with warranty and after-warranty maintenance and upgrading services. (The rest of this page is intentionally left blank) 6. INFORMATION ON THE COMCORP GROUP (CONT’D) EMS provider Paste Printing … Glue Dispensing …
Chip Placement …
IC Placement Front-end Process
Solder Reflow .I.
Inspection and QA Buy-off
Manual Insertion ..
Wave Soldering ..  Back-end Process  II  Cleaning • Assembly .I. Functional Tests •QA Inspection  ,,­ .. Integration of Sub-assemblies  .I.
Final Testing Integration Process
.I. Final Inspection and Customer QA Buy-off .. Packaging and “­Shipping ~ny No.: 630068-T I 6. INFORMATION ON mE COMCORP GROUP (CONT’D) When a project is secured, a project team consisting of engineers, QA specialists, procurement personnel, and planning and production representatives is appointed with a project leader to co-ordinate the various project activities. To ensure that process specifications and problems are identified and resolved before the production process begins, pilot runs are lUldertaken for all new products as part of the validation/qualification process. Mass production will commence in accordance with the approved manufacturing process upon achieving successful results from the pilot runs. BCM’s current design and engineering team also constantly reviews the design of the products and works closely with many of its customers to optimise the manufacturahility oftheir products. The Group’s contract manufacturing processes can be broadly divided into three (3) stages, namely the front-end process, the back-end process and the integration process. A complete box-build contract would include all three (3) stages, whilst in the case of less complex products, a complete box-build may only involve the front-end process and the back-end process. The manufacturing process can he sununarised as follows: 0) Fmn’-<nd pm”,,, The front-end process essentially involves the assembly of PCBs. PCBs are hoards made from insulated material on which electronic circuits are printed via the application of photographic, chemical and electroplating processes. They form the main component of electronic or electrical products as almost all electronic equipment require the use of at least one (1) PCB as a compact base to make an electrical connection between the various components of the equipment. The front-end process can be summarised as follows: (a) Paste printing
The first step is the deposit of solder paste onto the pads of the bare PCB through a printing process. The paste height and printing accuracy are critical parameters that must be monitored closely.
(b) Glue dispensing
Glue is applied to the relevant areas in order to prevent the components from dropping off the PCB during the solder reflow process.
(c) Chip placement
This is the core activity of the front-end process and involves the mounting of tape and reel components onto the PCB via a pick-and-place procedure using a SMT machine.
(d) lC placement

Following the chip placement, IC and other odd-shaped components may be mounted onto the PCB using an IC placer machine. Such components would include fine pitch ball grid arrays, chip scale package and other odd­shaped connectors up to 74 rnillimetres in length, which are usually found in highly populated PCBAs. 6. INFORMATION ON THE COMCORP GROUP (CONT’D) (ii) (e) Solderreflow The seide-ring reflow process is used 10 socure components onto the PCB. The PCB will be passed through an Qven w;th the printed solder pads forming solder joints through this process. At this stage, conveyor belt speed and oven profile temperature are critical parameters:. {f} Inmeclion and QA bUJ-off Following the solder reflew process, the PCBAs will be inspected. Any defoctive PCBAs will be reworked and :inspeJ;:ted again. The inspection is followed by a quality check on random samples ta ensure the quality of the products before the PCBA process carries on to the next stage, (g) Manual insertion Any leaded components that ClOliOOt be placed using the SMT or Ie placer machines are 1l1£U1ually inserted ODIO the PCB. (h) :Wave wldering Components that are manually inserted are socured onto the PCB using a wave soldering process. The PCB is placed on a conveyor and passed through a molten solder. The solder joint is made when t~ component lead, solder pad and molten solder make coo!i’lct witb each other. Any excess spider or wire leads are tben removed and trimmed. (i) Cleam!!g In the PCBA process for certain customers, there is an additional step in which the PCBAs ate cleaned using a de-ionised water washing machine to remove any tlux SUill on the PCBs. This takes place once the wave soldering process is complete and prior to in-circuit testing. Back-end process The back-end process is a continuation of the frouI·end p(Ol;ess whereby assembly of 11 prnduct continues, lL<;ing completed PCBAs and other materials including metal and plastic pam. The assembly process may be broken dO”W”ll into a series ofsteps. which are gronped into mechanical assembly, alignment checking, power~ up, and other forms of testing. TIle materials and components are staged at various stations and the product is built~up as it tlows down the conveyor belt thmugh the stations at t~ assembly line. The back-end pmcess can be summarised as follows: (a) Assembly At the assembty stage, sub-assernhlies are assembted togetber. lfiill process is generally carried out manuaUy, ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) (b) Functional tests The assembled products are subjected to functional tests, such as radio functional tests at low to high frequency bandwidths and audio tests for microphones, rather than component level tests, due to the high quality parts and front-end assembled products. The functional tests that are perfonned are divided into four (4) main categories, namely RF communication tests which cover frequency hands such as low band VHF, high band VHF and UHF, audio conrrnunication tests, power tests and digital to analogue tests. (c) QA inspection A QA inspection will be carried out by the production line prior to the products being inspected by the QA department. (iii) Integration process The integration process is the final stage in the manufacturing process and is required for complete box-build of more complex products such as RF products. The integration process can be summarised as follows; (a) Integration of sub-assemblies
Completed PCBAs are mounted onto chassis and integrated with other sub-assemblies to form functional products.
(b) Final testing
The products are tested to ensure that all features are functional and comply with the customer’s specifications.
(c) Final inspection and customer QA buy-off
This is the final stage at which the QA department conducts thorough mechanical and electrical checks before the products are released for delivery.
(d) Packaging and shipping

The tested products are packed and shipped to the customers or to distribution centres designated by the customers. (The rest of this page is intentionally left blank) 6. INFORMATION ON THE COMCORP GROUP (CONT’D) Defence maintenance programme services provider

Systems Optimisation Against Perfonnance Specifications  Meet Systems Specification?  No Identification of Hardware Non-Performance  Test and Tune to Meet Hardware Perfonnance Specifications  Militarisation Process  Meet Hardware Perfonnance Specifications?  Test and Tune to Meet Module Perfonnance Specifications  No  Identify Defective Module  Repair Defective Module  Replacement Module  No
Available? ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) The process relating to the provision of defence maintenance contract services can be summarised as follows: (ij Systems optimisation against performance specifi”tions The existing system is first measmed against specific hardware performance requirements to ensure that it continues to meet with system specifications. If it is found adhering to hardware performance specifications, the system is assessed to be still ready for use. (ii) Identification of hardware non-performance If the system is found not adhering to hardware performance specifications, identification of the particular non-performing hardware needs to be done. (iii) Test and tune to meet hardware performance spedfications The non-performing hardware is then tested and tuned to meet the required hardware perfonnance specifications. Once this is done, there needs to be an assessment to detennine if the necessary hardware performance specifications have now been met. (iv) Identification of defective module If the hardware is still found not adhering to performance specifications, identification of the particular defective module needs to be done. If a replacement module is available in the customer’s store, the defective module is replaced with a good module and the relevant testing and tuning activities performed to ensure that the relevant hardware and system performance specifications are met. (v) Repair of defective module Repair of the defective module will be carried out if a replacement module is not available to replace the defective module. The repaired module will then be subjected to the relevant module testing and tuning activities to ensure that the module is now ready for use. Thereafter, the militarisation process will be carried out on the repaired module. (vi) Militarisation process The militarisation process is to ensure that the module is ready for military re-resining (e.g. able to withstand specified levels of humidity, temperature etc.). Once this process is completed, the module is tested again to ensure that it meets with the required hardware performance specifications. If yes, the repaired module will be reinput into the system to ensure confonnity with the stipulated hardware specifications. If not, the module will go through the loop again Wltil it is fit for use. Ifthe replacement module is available in the customer’s store to replace the defective module, where possible, the defective module will be repaired and subject to the militarisation process of steps (v) and (vi) above respectively. In this regard, the repaired module will be kept in the customer’s store for future use. 6. INFORMATION ON THE COMCORP GROUP (CONT’D) 6.4.5 QC and QA As a total IT communication systems and integration services provider, the Comcorp Group seeks to continuously improve on the quality of its services through several in­house initiatives. One such initiative is its current efforts to prepare Comintel’s processes for ISO 9000:2000 certification. Comintel also practices quality assurance procedures which are substantially based on Total Quality Management concepts and generally starts with defining quality requirements for the solutions, which in turn, dictate quality requirements for the development and management processes. The procedures for the above practice may be classified into the following stages: (i) A,,,pt,n,, PI’ll’ In-ho”” t”m, wo<k dming the initi,1 ,u.g” of “,h project to ensure that the required level of quality for the solution has been defined and is measurable;
(ii) Development and Testing: In-house teams will ensure that throughout the project cycle, testing and control procedures are implemented to ensure the quality of deliverables;

(iii) Project Monitoring Record: In-house teams will assess the quality of the processes used to produce the deliverables; and (iv) Solutions Standards; Comintel will ensure that the standard of its solutions provided are in accordance with various criteria including functional specifications, design specifications, conversion specifications, system manuals and user manuals. With respect to the Group’s role as an EMS provider, BCM employs the Six Sigma methodology of quality control to improve processes and drastically reduce product and process defects. Today, Six Sigma has developed into an internationally used and recognised methodology that is employed by prominent MNCs including Motorola, General Electric, Sony Corporation and Allied Signal Inc. Six Sigma is a method of controlling process variation and establishing design specifications and is measured as the variation from a desired result. It is a statistical measure expressed as the rate of defects introduced by a process or built into a product. Six Sigma is equal to a 3.4 defects per million opportunities or a 99.9997% defect free level. Six Sigma is thus the defect free level which corporations employing this methodology strive to achieve. In general, a corporation operating at 5.2 sigma, i.e. less than 108 defects per million opportunities, would be considered to have achieved a very high level ofquality. The number of defects in BCM’s products were closely monitored and based on defects encountered over the past twelve (12) months until and including 30 June 2004 (as updated by the management of BCM subsequent to ACN’s Independent Market Research Report dated 21 November 2003), BCM has been operating at an average of 5.6 sigma, i.e. it experiences about 16 defects per million opportunities (99.9984% of its products are defect free). BCM believes that its use of an internationally recognised system of quality control such as the Six Sigma methodology, which many of its customers are familiar with, provides its customers with a measure of assurance on its standard of quality. This is reflected in the fact that contracts with its customers are dock-to-stock. That is, the principals have such confidence in the quality ofthe products manufactured by BCM that the products can be shipped directly to the end-customers without having to undergo the quality assurance procedures ofthe mentioned principals. ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) 6.4.6 Technology Utilised In providing total IT and communication systems and integration, and defence maintenance programme services, Comintel and CSB do not produce their own components and thus, the components applied are sourced from reputable principals. Many of these principals are well known in the arena of public safety and defence communications systems, such as: (i)  Motorola Inc;  (ii)  AMS;  (iii)  Grintek Electronics Systems;  (iv)  Technical Communications Corporation;  (v)  Comptek Federal Systems Inc;  (vi)  Thales Communications;  (vii)  Sunair Electronics Inc;  (viii)  L3 Communications Corporation; and  (ix)  Watkins-Johnson Company.
Components supplied by the above principals include; (i) Radio communication ‘y,tom pcodu,” und” fom (4) main mb-cat,go,i”, namely VHF/ UHF, HF, low-band and mid-band;
(ii) Radio encryption products relating to items such as secure conununication systems -data fax and voice products which encompass military ciphering systems, network security solutions, voice and fax security systems as well as key and network management;

(iii) Electronic warfare products relating to manpack, base station, vehicle and airborne electronic counter-counter measure radios. There are also products such as special vehicle conununication systems, radio frequency signals intelligence, direction finders equipment, communication jammers, tactical electronic counter (“Ee”) systems, threat jammer simulators, Ee platfonn simulation, stimulation and target platforms, electronic warfare test laboratories and range support; (iv) SateJlite telephony systems products consisting of international marine satellite, mobile satellite communications and mobile satellite communication terminal products;
(v) Wireless communication systems products such as interconnect products, dual telephone products, tone panels radio consoles, dispatch telephone, paging terminals, trunking controllers, alannlstatus/control systems and voice/data system networks RF products;
(vi) Radio network monitoring systems which deal with communications system enhancement products; and

(vii) Various computer, network and security products. 6. INFORMATION ON lHE COMCORP GROUP (CONT’D) 6.4.7 In addition to supplying Comintel and CSB with the necessary components for their systems integration and defence systems maintenance work, these principals also work closely with Comintel and CSB in a technology and knowledge transfer capacity as well as to design customised solutions that address the end customers’ needs in an optimal manner. Staff from Comintel are constantly invited to seminars and training programmes by these principals to upgrade their product knowledge and related skills. Comintel and CSB are also able to benefit from these strategic alliances in that they are always assured of the availability and choice of the most advanced technology and more importantly, the ability to use and integrate the various suitable technologies needed to provide its customers with the optimal and comprehensive technology solutions. With respect to BCM and its provision of EMS services, the SMT machines utilised by the company for this purpose are able to handle the smallest available chip component currently in production which is O.5mm x O.25mm in size, an indication of the advanced nature of these machines. Thus, in this respect, the risk of obsolescence in relation to such machines is low due to the fact that there is no foreseeable technology at this juncture that will facilitate the manufacture ofproducts using chips smaller than that mentioned. These machines are also flexible enough to handle numerous products from many different customers; this is further evidenced by BCM’s strength in the high-mix and low-to-moderate volume box-build arena where low volumes of a wide mix of products are manufactured and numerous machine set-ups have to be done regularly. IP and Licence Rights Generally, the proprietary software developed by the Group for its ICT business relates to software designed for purposes of integrating the various components, equipment and systems of different component providers. Due to the nature of the ICf business which is project based and involves a very high degree of specification, such software is normally for single purpose use only. Hence, the risk of the source codes being used for unauthorised purposes is low. In the provision of its EMS business, the Group does not have any proprietary products. As such, the Group does not foresee a need to register IP rights for its software, and hence, as at to date, the Group does not have any registered IP rights in relation to its products and services. Notwithstanding the above, the Group has developed a software product for use for the general administration and management of education institutions, which the Group will consider registering for IP rights in the future. Nevertheless, the product does not constitute part ofthe main business ofthe Group. On the other hand, Comintel receives license rights from the key component providers, which include the right to use third party software for purposes of distributing such software to the customers of the Group. These licenses are generally personal, non-assignable, non-transferable and/or non-exclusive. CSB also receives rights to use information and data supplied by its principals to the extent required to perform its obligations under the relevant supply agreements entered into with these principals. ~ny No.: 630068-T I 6. INFOR1\1AnON ON THE COMCORP GROUP (CONT’D) 6.4.8
R&D The Co:mcQJp Group believes that innovation is one of the key factors to ensure that the Group maintains the competitive advantage over its competitors, and hence, much emphasis has been and will continue to be placed on R&D. Technical seminars-and symposiums are frequently held to keep its employees updated on I~W technologies. Besides, as outlined under its gro’Wth strategies plan, the Group ComlS strategic alliances with its existing principal suppliers in developing new interactive management systems, In the provision of the leI business, which involves the provision of integration services relating 10 specifk projects, reSB generally carries out the necessary research on Ute latest available technology in the field and using its technical knowledge, experience and available database determines the optimal wmtiQIlS design and mix of equipmem to cater to the requirements of the ¢:UStQmers of CominteL Based on the proposed design, leSB will carry out development work of writing the interface software necessary to integrat.e die various hardwate components in whicb Colllintel will use in its integration services. To meet the increasingly exigent needs ofits customers., ReM’s process development engineering team is responsible ror process development and refinement activities to improve its manufacturing process. Through its process development effOTt$, SCM aims to continuously improve its manufacturing processes so as to achieve better quality and production time as well as to reduce costs. It<; expenditure on process development is below 1% ofits revenue for each of the past three (3) fmnncial years ended 30 September 2003, In addition, BCM’s cwrent design and engineering learn constantly reviews the design of the products and works closely with many of its customers to optimise the manufactumbiHty of their products. Often, this would be by way of early supplier involvement, for example with customers sucb as Motorola !IK: and Power..()ne, whereby its concurrent design and engineering team would be involved at the initial design stage of a product. LWT specialises in the field of phQtorUcs research. Photonics is the sticnce and technology relating to the transnrissioll, generation and manipulation of photons Le. light. This branch of SC1ellCe encompasses a wide area, covering the study ofoptical data storage, fibreoptics communications, tbe use of such te>:hnology in medical applications (e.g. medical sensors, biopbotonics etc,), display functions (such as liquid crystal displays screens) amongst various otber applications. LWT’s operations in this area are spedflcally focused on the study of fibrenptics components applied in telecmnrnuoicatioos. Tner<: has been increased interest in this tei:hnology as it provides for the faster transmission ofdata and for iong distance communication services such as vldoo-C1Hlemand and video conferencing. the use of fibrooptics is the preferred solution. Currently, R&D work is ongoing mthin LWT with respect to components such as couplers, power splitters, ‘W’avelength division multiplexers, dense wavelength division multiplexers and laser amplifters, all ofwhichhelp to enhance and maximisc band”,idth in fibreoptics, enabling morc data to be transferred at greater speeds and without compromising Otl. quality, They also facilitate more effective maintenance of such data transmission systems, Such oomponents have the potential to bring about cost savings in terms of oommunications infrastructure and will be of interest to companies that build equipment t() carry large amounts of bandwidth. These include companies sucb as Cisco Systems, Inc, Nortet Networks and Lu~nt Technologies amongst others. Aside from the abolle, the company may look into expanding into the application of photonics in other capacities such as the use of photonics tedmology in liquid crystal display screens etc. 6. INFORMATION ON THE COMCORP GROUP (CONT’D) LNC is intended to initially focus on R&D activities relating to the design of product components, catered to the ICT industry, which will be manufactured using IMD production processes. As at the date of this Prospectus, LNC has not commenced operations. Initial product components intended to be developed comprise keypads and windows for mobile phones and two (2)-way radios. The Korean shareholder will procure the necessary expertise on IMD technology, whilst BCM as an EMS provider will provide its know-how and expertise relating to the setting up of manufacturing processes which will be adopted in the IMD production process. It is expected that LNC will also work with its target customers in the design of tbe product components. LNC has made applications to the Korea Patent Office to register two (2) patents in the Republic of Korea, namely (i) the New Invention Patent for the hologram and mirror design film; and (ii) Practical Usage Patent for utilising the aforementioned film, on 6 May 2004 and 7 May 2004 respectively. The film will be used to produce the aforementioned product components using the IMD production process. The registration of the said patents is currently pending. 6.4.9 Production/Operating Capacities The Group’s production and operating capacities can be discussed from the standpoint of the machinery and equipment applied in its operations, the capacity utilisation of such assets as well as the experience and expertise ofits manpower. From the perspective of Comintel and CSB, due to its skill-intensive operations, the major asset would be its human capital. Comintel and CSB are at a point of their operations where the experienced technical workforce employed has already stabilised and thus, learning curves are at a manageable level with respect to new systems integration projects. The key challenge in this area would be to continue to maintain this workforce to ensure continuity in operations. Notwithstanding the above, the Group continues to give emphasis on staff development and training to ensure that they are updated with the knowledge of the latest technology available and the necessary technical skills in applying and integrating such technology. With respect to the Group’s role as an EMS provider via HCM, the existing production capacity is as follows: Capacity  Installed f Available capacity  Actual capacity utilised  utilisatiou  Direct labour  184,558 hours/month  164,795 hours/month  89%
Total available hours Based on the average monthly maximum direct labour hours available for the period between September 2003 ami June 2004 Total standard hours Based on the average monthly stamiard hours required to meet production output for the period between September 2003 andJune 2004 Factory space 80,000 sq, ft. 47,200 sq. ft. 59% Production floor space available AClUal utilisation ofproduction floor space (currently utilised) Machines (SMT 1,413 shifts/month 629 shifts/month 45% machines) Based on the average monthly Based on the average monthly shifts per day available for the actual shifts utilised 10 meet period between September 2003 the aClUal production output and JWle 2004 for the period between September 2003 and June 2004 (Source: Management ofBCM) ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) 6.4.10
Based on the above, it can be seen that BCM has excess capacity in tenns of direct labour, factory space and machine shifts, to undertake more revenue generating production orders should the need arise and when suitable contracts are secured. Major Customers In the area oftota1 systems integration, the Comintel Group’s key customers are from the local Malaysian market. The primary target markets for the Comintel Group are as follows: (i)  Governments and government related bodies and facilities;  (ii)  Education institutions;  (iii)  Healthcare providers; and  (iv)  Corporate sector.
Notwithstanding the above, in the longer term, the Comintel Group plans to capitalise on the current growth trend to further expand the market share of its products and services to the Asia Pacific region. In this regard, the Comintel Group aims to make its Malaysian operations the hub for its Asia Pacific expansion. Generally, the Comintel Group’s end-users in this business segment range from corporate businesses and government agencies to education and healthcare institutions. Substantially, the Cornintel Group’s work in this area is with the Malaysian Government where for the financial year ended 31 January 2004, the revenue contribution from the Malaysian Government represented mOre than 90% of total revenue. The Comintel Group’s existing portfolio ofprojects with the Malaysian Government include the following projects, further details ofwhich are not disclosed due to their confidential nature: (i) Supply, installatiou, testing “”d oummissiuning of Vuice Communication Control System and Ground to Air-Radio for Pangkalan Tentera Udara Di­Raja Malaysia by Comintel;
(ii) Design, cunstruction, supply, “sembling, testing and cummissioning of the C41 system for the Royal Malaysian Police by Comintel;

(iii) Supply of Integrated Very High Frequency Spare Parts for the Royal Malaysian Police by Comintel; (iv) Supply and delivery by Comintel of spare parts for the High Frequency Transceiver RT9000 for the Royal Malaysian Navy;
(v) Supply of spare parts and/or services for the maintenance of A.244/S MOD.l Torpedo and Torpedo System by CSB;
(vi) Supply of spare parts and/or services for the maintenance of 76/62 SRGM, 40170nun Gun and LDL I02nun ChaffofOto Melara S.p.A by CSB;

(vii) Supply of spare parts and/or services for the maintenance of the combat system of Corvettes by CSB; (viii) Provision of services for KD Laksamana Class of Ships in PSC-Naval Dockyard Sdn Bhd at Lumut, Perak Darnl Ridzuan by CSB; (ixl Supply of eiglit (8) CTI2000 Display Co”,oles fm the Laksamana Com.e Upgrading Project to AMS by CSB; and 6. INFORMATION ON THE COMCORP GROUP ICONT’J)) (x) Supply aod delivery of spare parts of combat system of <:orvettes for the Royal Malaysian Navy (as updated by the management of Comiutel subsequent te ACN’s Independent Market Research Report dated 21 November lOOJ)” In the telecommunications sector, various milestunes have been achieved. These include state-of~the~art nan()I1:……ide integrated secured communication solutions for government agencies; civilian and military air traffic oontrol, HF, VHF and tJHF oommurucation systems; sophiMkated microwave corrmnmication systems for off­shore platf{)tfllS; nationwide s¢(:ured automatic message handling system and networking; telemetry and control systems with customised graphical displays. Allhough the Comintel Group has more than 17 years of working relationship with Motorola Inc, with respect to BCM and its provision of EMS services, the first contract from Motorola Inc was secured in 1993, the year it oommern:ed business. This was for the provision of back~end assembly and functional testing ofMotnrola’s rapid and compact chargers. Siul7.e then. BCM has develt>ped dose working relationships with customers woo are considered major players in the field of radio communication systems, These include Mutooola Inc, Powcr·One and Symbol Technologies, Inc. CSB, on the other hand, deals mainly with the servicing and maintenance contracts with respect to shipboard combat and “,’Capons systems. It is the priocipaJ agent for the provision of such services for systems supplied by Finmeccanica, a long established player in this arena. The nature of its work relating to services for extending the lifespan of such shipboard combat and weapons systems as well as its good working relationship with Finmeecanica (i.e. Firuneccanica has an interest in the business of CSB via AMS) provide greater assurance on the continuity of the operations ofCSB within the foreseeable future, Details of the Group’s major customers, being the top ten (10) customers of the Comcorp Group rogether with their percentage of proforma Group sales for the flDancial year -ended 31 January 2004, are as follows; PHcentage of  proforma Group  Slit« fqr the  financial yell.r  Country nf  Pwiorl of  ended 31  Cu~tomer$  T~ ofbn$lnell~S  origin  relatlenshi(l  JIURlII’1′ 2OG4  {%)  Motorola In:;:.  Various radio  USA  Since t987’!  4l  COffil\1lJ!licalion  products  Po”m..(}ne  De,.i£!l and  USA  SiflCe ZOOI  ,.  manufacture of  power COll’ltef!l.101l  pmtlocts  K.emenlerlan Dalam  Public safety  Malaysi;)  SillCe 19&5  20  Negeri, M”Uysill..  Kemtnkrian  National  Mataysia  Since 19S8  ,  PtTtllhoo:m, Malay;sia”ii  deferu;e  Thatf$. Corr.mlUlic>ition  Airborne ~}’StelW  F_  $moo200Z  Po}arnid (UK). Limited  Various types vf  UK  Sine<: 1999  cameras and installt  came=  (‘4D Technologills Inc  E1.llCtrK:a! po….-er  USA  Sintll 1999  5t0r3ge and  coo.eriioo products
~ny No.: 630068-T I 6. INFORMATION ON mE COMCORP GROUP (CONT’D) Customers  Type of businesses  Country of origin  Period of relationship  Percentage of proforma Group sales for the financial }’ear ended 31 January 2004 (%)  Smart Modular Technologies Sdn Bhd  S}1lchronous dynamic random access memory for computers  Malaysia  Since 2002  <1  Symbol Technologies, 1″  5.xure mobile information systems  USA  Since 2004  <1  Solectron Technology Sdn Bhd  Provider of manufacturing services to OEMS  Malaysia  Since 1998  <1
Notes: ” Motorola Inc initially became a customer ofComintel in 1987 and since the commencement of opera/ions ofBeM in 1993, it became the major customer o[RCM. ‘jj The key customers of the Com/mel Group are Kernen/erion Dolam Negeri (lnd Kernenterian Perfahanon, The Comimel Grou.p is currently the main con/ribUlor to the profits of the Comcorp Group and is expected to remain so in the immediatefuture. (Source: Management ofComintellBCMICSBj Relating to the provision of services pertaining to the integration and maintenance of public safety and defence communications systems, due to the nature of this area of work being highly specialised and tied closely with public sector spending, there are only a handful of government agencies for the Group to choose from to widen its spectrum of customers. This small customer base is also true with respect to the provision of EMS services. Although the top four (4) customers of the Group collectively contributed to approximately 90% of the proforma Group sales, over-dependency on these customers is somewhat mitigated by the long-term relationship with them as well as its proven track record in dealing with them. Comintel Group’s familiarity with its local customers such as the relevant agencies of the Government of Malaysia and its in-depth knowledge of the local environment, provides it with an added advantage as compared to its foreign competitors. Similarly for BCM, its close working relationship with many of its customers is evidenced by, amongst others, the ability of BCM to participate in the initial design stage of certain products of some of its major customers as well as Power-One, a key customer of BCM, becoming a shareholder of Comcorp. The Group has developed long and healthy business relationships with its key customers as set out below: Period of relationship  (Approximately  in years)  Kementerian Dalam Negeri  19  Motorola Inc  17  Kementerian Pertahanan  16  Power-One  3
6. INFORMATION ON THE COMCORP GROUP (CONT’D) 6.4.11 Major Suppliers The Comintel Group’s suppliers are mostly technology providers who supply hardware, equipment, machinery, spare parts, tools and software, and in terms of its manufacturing business through BCM, the requisite raw materials. Almost all of these suppliers are international corporations, with the majority being from the USA. Whilst the major hardware, equipment and machinery are imported, certain modifications are carried out locally to suit domestic conditions. Details of the Group’s major suppliers, being the top ten (10) suppliers of the Comcorp Group, together with their percentage of the profonna Group purchases for the fmandal year ended 31 January 2004, are as follows: Pertentage of  proforma Group  purehases for the  Country of  Period of  finaneial }’ear  Suppliers  Type of businesses  origin  relationship  ended 31 Jannary  2004 (%)  Power-One  Various power  USA  Since 2001  10  conversion  materials  Motorola Inc  Various radio  USA  Since 1985  9  communication  systems  Arrow Electronics Asia  Electronic  Singapore  Since 1997  6  (S) Pte Ltd  components  Hical Magnetics Private  Magneticsl  India  Since 2001  6  Limited  transformers  Golden Bridge Electric  Cables/housing  Taiwan!  Since 1997  2  Co Ltd  China  SCI Enclosures, Inc  Housing  USA  Since 1997  2  Multi Fineline  Flexible printed  USA  Since 2000  Electronix, Inc  circuit  Fusungta (Hongkong)  Speakers  Taiwan  Since 1996  Co, Ltd  Taiwan Green Point  Housing  Taiwanl  Since 1997  Enterprise Ltd  China  General Dynamics  VHFIUHF radios  USA  Since 2001  Decision Systems, Inc
(Source: Management ofComintel/BCM) The suppliers of Comintel and CSB are primarily foreign, as the highly advanced technology products required for the respective systems integration and defence maintenance projects are not available in the country. Strategic alliances with these suppliers have enabled both Connntel and CSB to establish and leverage upon special bonds and unique relationships with these parties. All other resources required are readily available in the country. In relation to human capital, Connntel and CSB recruit personnel based on the technical skills required, and where necessary for replacement or for expansion purposes, from the local employment market. ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) 6.4.12 Both eomiotel and CSB are not dependent on any individual supplier in relation to their businesses. The procurement/purchasing departments in both companies are responsible for evaluating the suppliers in tenns of pricing, quality, product and after­sales service as well as the suitability ofthe products for use in the relevant projects. The principals are responsible for providing product technical support and training to Comintel and eSB, whilst Comintel and CSB are respectively responsible for the design, supply, installation, testing, commissioning, integration, after-sales service and provision of maintenance services to its local customers. Todate, there have not been any supplier/dealer relationship problems. HCM uses a wide range of suppliers and tends to obtain materials and components in two (2) ways: (i) On a turnkey b”i” wh”, mat,da~ and compon,n” aco p,”c””d from suppliers designated or approved by the customers; and
(ii) On consignment basis, where the customers directly purchase and supply the materials required for the manufacture oftheir products.

Generally, the procurement of components is on a turnkey basis except for proprietary components which the customers prefer to maintain control. These components are consigned. HCM’s revenue is substantially derived from turnkey contracts whereby for the financial year ended 30 September 2003, it represented 98.5% of the total revenue of HCM. The procurement of materials and components is the responsibility of the materials procurement department that comprises experienced professional buyers and procurement engineers. Over the years, the procurement department has developed close working relationships with many suppliers worldwide. Whilst the choice of suppliers is usually limited to the approved vendors list supplied by the customers, the procurement department also assists customers in sourcing for and qualifying alternative suppliers of materials and components. Future Plans, Strategies and Prospects of the Comcorp Group The Group adopts a pro-active marketing strategy approach, focusing on the principal customers ofthe Comintel Group such as the Government ofMalaysia, the principals in its EMS business and the education and healthcare providers, and also has plans to develop a dealers’ network in major states in Malaysia. In order to remain competitive, the Group will continue to provide quality products and services, which are teclmologically capable of meeting the objectives of its customers at an affordable cost, with good after-sales services and maintenance. For the EMS sector in particular, marketing agents in the USA and Europe have also been engaged to complement the efforts to identify and source for new customers. As part of the Group’s business strategy, marketing efforts are focused on corporations in the high growth niche industries where customers have the potential for rapid expansion. The Group’s growth strategy is to capitalise on the growing demand for tecimoiogically advanced systems and infrastructure generated by the ICT and the EMS Provider industries. The Group’s key focus and growth strategies with respect to its key companies include the following: (i) Comintel The near term focus of Comintel in the next one to two years would be to carry on developing its expertise in systems integration work with a continuing focus on public safety and defence communication systems. This would enable the Group to provide in-country capability in this critical area of the public sector whilst increasing its reach into the private sector markets. 6, INFOfu’\lATION ON THE COMCORP GROUP (CONT’D) (ii) Whilst having 3CCCSS to the tnO$t advanced technology in this sector of communications via the strategic alliances with its principals, the long-tenn comnutment (If O:lmintel is to provide tbe most functional, atiordable and versatile solutions from the wide range of available technology. This will require the Group to monitor and assess the latest available technology in the field and incorporate such technology into its versatile solutions design in a cost·effective maMer to meet the needs ofits target customers. In the longer tenn, to expand its total ICY systems and integration opel’a1ions and to provide an impet1.IS for the future growth of the Group, Comintel plans to carry out the following: (a) Leverage on its experience and tap into its increasing systems knowledge and pmdoct database to help identify other niche areas or target markets in which tbe Group can expand into in offering its services;
(b) COmlniel intends to provide fl1(}1e extensive back-up services to its existing clients. especially in areas such as end-user training, namely operational training and systems maintenance training, to enable clients to keep their systems fiperaling at nptimum level; and
(c) To provide upgrading and expansion services tQ its existing clients in respect of tlie systems which have been designed and set up on a modular basis, In this regard, the Group \\111 C{)Iltinue to ensure tbat all systems designed for clients will be based on a modulat basis to eater for future expansion and upgrades to suit the fiJtufe needs of its clients. In essence, its commitment in facilitating a lifetime extension to the customers’ systents as a result of its eomprehensive support offerings, ensures that it will continue to remain an important longAem1 local player in the market,

BCM In tem1S of its role as an EMS provider via BQlvI, the Group hopes [Q maintain its competitive strength in the high-mix and low-to-medium volume box-build product range with a focus on RF products whilst exploring opportunities 10 move into the low~mlx and higlHoiume arena. The high-mix and lmv-to-medium volume box-bnild product Ql.nge is less susceptible to competition from new entrants, This is because of the large amo\mt oftime and effort required to huild up a skilled workfurce with the necessary experience and know-how to facilitate flexible manufacturing practices and quick yet eflective machine set-ups required fur such a product range_ Tbe low_mix and lUgh-volume lxix-build arena is easier to penetrate, especially for companies like BCM who bas already developed expertise in the more complex high-mix and low~«Hnediurn volume manumcturing processes. (The rest of this i»’-ge is intentionally left blank] ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) (iii) In the immediate term, BCM also hopes to leverage on Camintel’s product knowledge to enable it to enhance its current expertise in manufacturing, so that it may provide more value to its principals. One area in which BCM hopes to provide such value is in the deviation design relating to its principals’ existing products, for which it believes there is a ready market and demand. Deviation design relates to product designs that encompass slight variations in terms of existing product designs. Deviation design related products may not be cost effective for principals to look into as they are time-consuming to develop; such principals prefer to spend their time and costs looking into more revolutionary new product designs. Such a service offering not only enhances the value-added component of BCM’s services to its principals but also alleviates its standing in relation to its principals as it demonstrates to these principals that it has in-depth understanding of the principal’s products. In the longer tenn, BCM hopes to work closely with its principals to move into Own Design Manufacturing (“ODM”). The concept of ODMs arise due to situations where the principal may not have a particular product in its existing product range and agrees to engage an EMS provider such as BCM to design and manufacture such a product under the principal’s labellbrandname. The ODM products that BCM would like to look into would be products within its current area of strength, namely the radio conununications platform. CSB CSB’s current operations relate to the provision of defence maintenance progranune services, with a specific focus on combat and weapons systems. Its main work relates to the repair and maintenance of such systems, to ensure that the systems continue to operate at an optimum level and are always in a state of readiness. One of the major projects of CSB relates to the maintenance of the combat and weapons systems in four (4) corvette warships owned by the Malaysian Navy. In the near future, CSB hopes to expand its range of services and expertise relating to the maintenance of the combat and weapons systems in corvettes to encompass similar systems in frigate warships. This is based on the view that although different warships can be seen as different platforms for this type of maintenance work, the combat and weapons systems are in essence, in the opinion of the Group, the same with respect to intents and purposes. Hence, the Group will be able to adapt its experience in the provision of such maintenance services for corvette warships to that of frigate warships. In the longer term, CSB hopes to capitalise on its experience and technical know-how to expand its services to cover the provision of services relating to the upgrading of such combat and weapons systems, which comprise greater value added services. (The rest of this page is intentionally left blank] 6. INFORMATION ON THE COMCORP GROUP (CONT’D) (iv) LWT As mentioned earlier, LWT specialises in R&D relating to photonics. Its focus in this area is principally on the use of fibreoptic components applied in telecommunication high speed broadband transmission. Currently, R&D work is ongoing with respect to the use of components such as couplers, power splitters, wavelength division multiplexers, dense wavelength division multiplexers and laser amplifiers, all of which are components used in systems and communications infrastructure and will be of interest to companies such as telecommunication service providers and equipment manufacturers, including Cisco Systems, Inc, Nortel Networks and Lucent Technologies which build equipment to carry large amounts of bandwidth, both wireline and wireless. However, as the demand for wireline bandwidth at this point in time is at a lull, the Group hopes to build up its understanding and knowledge of such components during this time so as to be ready to capitalise on it when such technology is in greater demand and moves into mass adoption. (v) LNC As mentioned earlier, it is intended for LNC to initially focus on R&D activities relating to the design of product components, catered for the ICT industry, using the IMD production process. As at the date of this Prospectus, LNC has yet to commence operations. Initial product components intended to be produced comprise keypads and windows for mobile phones and two (2)-way radios. The successful design of the aforementioned product components is expected to provide the Comcorp Group with leverage in providing value-added components to the communication products currently manufactured and assembled by its manufacturing arm, namely BCM, for its existing clients. In addition, LNC may also market the said product components to other players within the telecommunication industry. The said product components are expected to have the benefits of providing the end products with more durable and attractive exteriors in a more cost-effective manner. The above is expected to enable the Comcorp Group to capitalise on the growth of the ICT industry, which is expected to ultimately result in the increased application of keypads and windows for commWlication equipment. Further, the knowledge and experience expected to be derived by LNC from the R&D and manufacturing process hereunder may in future be extended towards the design and production of other product components. Barring any unforeseen circumstances, LNC is expected to commence its R&D activities on the product components in the later part of the second half of year 2004. Production activities will only commence later, subject to, amongst others, the outcome ofthe R&D activities. The Comcorp Group is expected to continue to retain its niche in the Malaysian ICT market. In view of its core competencies, it is expected that the Group will have the ability to sustain growth as one of the market leaders for providing ICT related products, services and infrastructure, and ICT systems integration focusing on the Public Safety and Defence Communication sector in Malaysia. With the expertise, technical skills, quality products and ample project experiences in both the public and private sectors, the Group is expected to continue to satisfy the demands of its customers. Based on its past track record, the strength of the Group and the anticipated future uptrend of the ICT industry, the Company is of the view that the Comcorp Group is well-positioned to secure a sizeable portion of the market share in the country with respect to its niche market. ~ny No.: 630068-T I 6. INFORMATION ON mE COMCORP GROUP (CONT’D) Comcorp also has plans to capitalise on new opportunities in expanding its revenue base through new product development, strategic alliances with international players and other investments. The Group also recognises that different markets in the region will mature/develop at a different pace and thus, has plans to move into foreign markets cautiously, conducting research where relevant and adopting the smart-partnerships approach with local well-established players. The Group will also aggressively penetrate deeper into the niche sector of public safety and defence connnunication where the growth potential and the need for technological innovation will allow Comcorp to contribute significantly in this sector. Overall, the Group’s strong commitment towards innovation, the development of its people, continuous improvement in productivity/efficiency and close interactions with the market place has strategically positioned itself to face future challenges ahead. 6.4.13 Interruptions to Business Activities There have been no interruptions to the Group’s business activities during the past twelve (12) months which have had a significant effect on the operations of the Group. 6.4.14 Employees As at 30 June 2004, the Comcorp Group has 1,533 employees. The employees of the Group do not belong to any labour union and enjoy a cordial relationship with the management. There have been no instances of any strike action by the employees since the Group started its operations. The employment structure of the Comcorp Group and the length of its employees’ service as at 30 June 2004 are set out below: < -Number of employees——> Category of employees < 1 year 1 -5 years > 5 years Total Managerial and professional 10 16 42 68 Technical and supervisory 81 136 89 306 Administration and clerical 7 42 29 78 Skilled workers 215 507 211 933 Field workers (contractual) 148 148 Total 461 701 371 1,533 (The rest of this page is intentionally left blank] 6. INFORMATION ON THE COMCORP GROUP (CONT’D)
6.4.15 To ensure that the Group will continue to provide quality services and products to its customers, it strives to provide comprehensive training through external and in·house training programmes to its staff force. Such training programmes undertaken by the Comcorp Group can be summarised into the following programmes depending on the category of employees:  Category of employees  Type of programmes  Management  Management development  Technical and supervisory  New  product  technologies,  product  training,  project  implementations,  product  knowledge  and  knowledge  upgrades  Administration and clerical  Knowledge updates and upgrades  SkilJed and field workers  Product training
On-the-job training under the close supervision and guidance of senior engineers and management team is also provided to all employees of the Comcorp Group to ensure that they have the skills necessary for their job functions. Management Succession Plan The loss of any key personnel of the Comcorp Group could adversely affect the Group’s performance and this has been identified as one of the risk factors set out in Section 4.9 of this Prospectus. As such, the Comcorp Group recognises the need to ensure continuity in its management and the importance of its ability to attract and retain skilled personnel in order to be able to continue to provide competitive services in its business undertakings. To achieve this, the Group regularly reviews its staff remuneration and incentive policies and strives to benchmark against the industry average to promote loyalty and commibnent among its employees and to attract new qualified professionals. In addition, the Board has allocated approximately 20.1 % of the Comcorp Shares available for subscription pursuant to the IPO comprising 5,748,500 new Comcorp Shares to its non-Director employees in conjunction with the listing of Comcorp. The Group also provides on-going external and in-house training programmes to increase the competency of its existing employees. Where applicable, the Group also ensures that its employees are provided with the opportunity to work on various tasks/assignments to enable them to be able to work on numerous roles as well as to have a comprehensive understanding of the Group’s overall operations. This provides the Group with greater flexibility in its staff-force deployment, and hence enhances its service/production capability and flexibility. These training programmes serve to groom the lower and middle management staff to gradually assume the responsibilities ofsenior management as part ofits employee career advancement programme and to ensure a smooth transition in the management team should any changes occur. In addition to the above, during the recent economic downturn that had adversely affected its EMS business, the Group did not deliberately reduce the nwnber of its staff-force. This was made with the view to maintain personnel which the Group has groomed to take on greater responsibilities and to ensure that the quality of its management team as well as its succession is not jeopardised. Moreover, the above was also aimed at maintaining the quality of the Group’s staff·force and to enhance its relationship with its employees and their morale. ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) 6.4.16 Key AchievementslMilestones/Awards of the Group The Comintel Group and its business partners are registered authorised specialists with the relevant government authorities such as the Pusat Khidmat Kontraktor (Contractor Service Center) and the Constructions Industry Development Board. The Group is also registered with the Ministry of Finance, Malaysia and is “ePerolehan” enabled, which are prerequisites to bid for government contracts and seek government-related business opportunities. The quality of the Group’s products and services have been recognised by its customers and its commitment to excellence is evident in the following awards/commendations it has received: (i) Comintel (a) 1992 Distributor of the Year Award for the highest level of teamwork and achievement in 1992 from Motorola Inc;
(h) 1996 Special Appreciation Award for the Royal Malaysian Police Automated Message Handling System Program from Motorola Space and Electronics Inc;
(e) 1997 Award to connnemorate the successful launching and commissioning of the Royal Malaysian Police Integrated Teleconnnunication System in East Malaysia;
(d) 1998 Award to commemorate the successful implementation of the Integrated Telecommunication System for the 16th Commonwealth Games, Kuala Lumpur 1998;

(,) 2002 Best Asymmetric Digital Subscriber Line Contractor 2002 for Customer Access Network (“CAN”) Development Selangor Timur awarded by Telekom Malaysia Berhad; (0 2002 Best Supplier 2002 for CAN Development Perak by Telekom Malaysia Berhad; and (g) 2003 Award by Motorola in recognition of the wilUling partnership in relation to the Royal Malaysian Police Securenet Expansion. (ii) HeM (a) 1997 Excellence in Continuing Contribution to Quality Improvement Award from Motorola, Penang;
(h) 1997-Delivery and Quality Excellence Award from Sony; 1998
(e) 1999 Six Sigma Perfonnance Award since 1997 from Motorola Distribution Centre, Europe;
(d) 2000 Industry Excellence Award 2000 (Export Excellence Award) from MITI; and

(,) 2001 Outstanding Supplier Award from Motorola Inc in appreciation of the outstanding perfonnance and leadership demonstrated during the New York City Crisis ofSeptember 2001. 6. INFORMATION ON THE COMCORP GROUP (CONflfJ) In addition, BCM was a\’,rarded an E:nterpri$e 50 Award in 1998, ra:nking 14th out of the top 50 emerging Malaysian companies by Andersen Consulting Malaysia (currently known as Accenture. Malaysia) in association with the Small and Medlum Industrial Development Corporation, a division of MITt This \\’tIS based on criteria such as development engineering capability, professkmalism, dynamics of leadership and m.icro StKcess factors. BCM was also awarded the MS ISO 9001:2000 Qualify Management Requirement (for PCBA Manufacturing) Systems certification tor quality assurance in production, installation and servicing by the Standards and Industrial Research Institute of Malaysia for complying and implementing the system with respoct to its peBA processes, It was also accredited to the MS ISO 14001:1997 enviromneutal standard with respect to the operations ofits plant. 6.4.17 Location uf OperatioN TIleprincipalplaces ofbusinessoftheComcorpGroup arc as follows: Company Description Address Com/utel I-lead Oftlce IlA & 15, Jalan PJS 7/21 Bandar Sunway 46150 PetaHng Jaya SeIangor Daml Ehsan Sabah Branch No.4, Block E Ground Floor SadangJaya 88000 Kota Klnabalu Sabah SaTawak Branch No. 174, Ground Floor Central Road West 93300 Kuching Sarawak Lnnmt Branch 60, Persiaran Venice Sutera 1 Desa Manjung Raya (Phase lA) 32200 Lumui Perak Darul Ridzuan CSB Head Office No. 12, Jalan PJS7J21 Bandar Sunway 46150 Petaling Jaya Selangor Darnl Ehsan Lumut Branch 60, Persiaran Venice Sutera 1 Desa Manjllilg Raya (Phase fA) 32200 Lumut Pcrak Darul Ridzuan lCSB Office llA &. is, Jalan PJS 7/21 Bandar Sunway 46150 Peta1ing Jaya Selangor Darul Ehsan LWT Office No_ 17. JalanPJS 7/21 Bandar Sunway 46150 Petaling Jaya Selangor Daml F..hsan CHK Office 7th Floor. Allied Kajima Building 138, GIQui;ester Road Hong Kong ~ny No.: 630068-T I 6, INFORMCATION ON THE COMCORP GROUP (CONT’D)
Company Description Address BCM Office and factory Plot21. JalanHi~tecb4 Kulim Hi·Tech Park, Phase I 09000 Kulim Kedah Darul Arnan LNC Office #2 Ba~I07 Sihwu Industrial Complex 2171~6, Jeongwang~Ollg Siheung-shi Republic ofKorea N(1/<: • 1’he offit’i! I’n whieh BCM oJMrmes corr.prises office space as well as the production fadlitiesrelatingto theEMSbusiness, Thedctails oftheproductioncapacity oftne produ.ction facilities are set {JUt in Section 6.4.9 oJthis Prospectus, 6,5 SUBSIDIARIES AND ASSOCIATED COMPANIES As at the date hereof, Co.mcorp does not have any associated companies. The details on the subsidiaries ofComcorp are as follows: 6,5.1 Cuminte) (i) History and business Conrintel was incorporated in Malaysia under the Act on 20 October 1984 as a private limited company under the name of Hock Bin Engineering Sdn BM, On 3 Thecember 191M, it changed its name to COm1ntel (M) Sdn BM and on 26 Manch 1997, it changed its name again to Comintel Sdn Bhd. On 6 May 1997, it was converted to a public company under tbe name of Comlntd Berharl. On 2 {){:tober 2003, it was re-oonverted to a private limited company and adopted its present name. Comintel is principally engaged in tmnkey -engincering design and integratinn, programme management, installation and commissi<Jning as well as investment holding. (il) Share capital ‘rhe authorised share capital of Comintel is ll’A.50,OOO,OOO comprising 50,000,000 Ccruiutel Shares. The issued and paid~up share capital ofComintel is RMI3,OOO.OOO comprising 13,000,000 Comintel Shares. The changes in the :issued and paid-up share capital of COmllite! since iis incorporation are as follows: No. of Cumulative Cumiotel ‘””,«I Date of Shares and paid-up allotment alllltted Par-value Coosidenrtij)n shaR ;,;apltal R.i\1 RM 25.1O.1~84 2 1.00 eM’ 2 14.02.1985 50,000 1.00 Cash 50,002 03.04.1985 50,000 1.00 Cash 100,002 1)7.12.1990 99,998 1.00 Bonus issue 200,000 (approxima-re-1y [:1) to.09. [992 200,000 1.00 Bonus issue (t: I) 400,000 31.0Ll997 600,000 1.00 c,'” 1,000,000 31.01.1997 t2,OOO,OOO “00 Bonus Issue (l2: I) 13.000,000 6. INFORMATION ON THE COMCORP GROUP (CONT’Dj (iii)  Substantial shareholder  Comintcl is a whol1y~owned subsidiary of Cameotp.  (iv)  Subsidiaries and llSSO(lated t:umpanies  Details of the subsidiaries of Comtnlel are as follows.:  Eff«tiVf;  Interest in’)’  DatelCountry qf  share:  N.nre  Incorporation  capital  Prlncipal activities  %  lCSB  06J)7.1985;  I{/(W  Provision  of  R&D  services  Malaysia  and 4;:-alers  in  all  kinds  of  tde’Communication  and  ele-ctronk equipment and the  provision ofrclaloo. services  CHK  (\7,03.1996;  100,0  Trading  of  ele~troni~,  Hoog: Kons,  engineering  and  Special  telecommunication equipment  Administrative  and the provision of related  Regioo.  services  CSB  15.10.1997;  70.0  Electronic systems lesting and  Malaysia  f¢pllir,  development  of  lest  programs  and  provision  of  integrated logistic support  LWT  24.05.1993;  70.0  Carry  out  R&D  work  in  Malaysia  photooies products  LNC  21.()4.2004;  6(W  As at the date hereof, LNC  Republic of  has  not  ool»mencOO  Korea  operations  However,  the  principal activities of LNC are  iatended  to  be  the  manufacture,  development,  ;;elHng  and  export  of  clectnmic  vnmponents  and  engaging  m  all  related  activities  incidental  1(1 any ofthe foregoing  As at the date bereot~ Cominte! does not have any associated companies.  6.5.2  ReM  (i)  History and business  RCM was incorporated in Malaysia under the Act on 20 August 1993 as a  private limited company under the name of Bakti Comintel Manufacturing  Sdu Bhd. Subsequently on  18 August 1997, it adopted its present name,  The company is principally  a  manufacturer and assembler of electronic  components.
~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) (ii)  Share capital  The authorised share capital of BeM is RMlOO,OOO,OOO comprising  100,000,000 HCM Shares. The issued and paid-up share capital of HCM is  RM32,869,878 comprising 32,869,878 BeM Shares.  The changes in the issued and paid-up share capital of HCM since its  incorporation are as follows:  No. of Cumulative  RCM issued  SharesDate of and paid-up  Allotted Par value Considerationallotment share capital  RM 8M  20.08.1993 2 LOa C~h 2  21.04.1994 999,998 1.00 Cash 1,000,000  21.06.1994 1,500,000 1.00 Cash 2,500,000  23.10.1997 2,500,000 1.00 Cash 5,000,000  28.06.1999 7,000,000 1.00 Cash 12,000,000  25.01.2000 5,500,000 1.00 Cash 17,500,000  28,06.2000 2,500,000 1.00 Cash 20,000,000  12,10.2000 4,000,000 1.00 Cash 24,000,000  28.02.2001 3,167,564 1.00 Cash 27,167,564  02.09.2003 2,250,977 1.00 Bonus issue (0.0829: I) 29,418,541  02.09.2003 3,451,337 1.00 Exchange of fixed 32,869,878  assets worth  USD4,327,790 from  Power-One  (iii)  Substantial shareholder  BCM is a wholly-owned subsidiary of Comcorp.  (iv)  Subsidiaries and associated companies  As at the date hereof, BCM does not have any subsidiaries or associated  companies.  6.5.3  ICSB  (i)  History and business  ICSB was incorporated in Malaysia under the Act on 6 July 1985 as a  private limited company. The principal activities ofICSB are the provision  of R&D services, dealers in all kinds of telecommunication and electronic  equipment and the provision ofrelated services.  (ii)  Share capital  The authorised share capital of ICSB is RM100,000 comprising 100,000  ordinary shares of RM1.00 each. The issued and paid-up share capital of  ICSB is RM100,000 comprising 100,000 ordinary shares ofRM1.00 each.
6, IN}’ORMATION ON THE COMCORP GROUP (CONT’Dj The changes in the issued and paid-up share capi.taI of ICSB since its incQrporation are as folJows: NI). uf Ctun’\llalm urdllLft”Y issued Da…, aDd paid-up…'” P” allotment allotted vaillc Consideration share capital RM RM 06.07.1985 Z Loo Cash 2 14.11.1990 50,000 1.00 C~h 50,002 25,llU991 49,998 1.00 Cash. 100,000 (ill) Sub$ta.ntial sbareholder K’SB is it wholly-owned subsidiary Qf tumintel, which in tum, is a wltolly­owned subsidiary ofComcoTp, (Iv) Subsidiaries and associated. companies As at the date hereof, ICSB does not have any subsidiaries 01 associated companies. 6.5.4 CHK (‘J Hill’ory and b””ness CHK was incorporated in Hong Kong, Special Administrative Region under the Col1lJ’anies Ordinance on 7 March 19% as a private limited company. The principal activities of CHK are the trading of electronic, engineering and le1eoommunication equipmenl 3lld the provision ofrelated services. (Ii) Share capital The al1’tlmrised share capital of CHK is HKDIO,OOO comptlSttig 10,000 ordinary shares of HKD1.00 each. The issued and paid-up share capella} Qf aIK is HKDl ,000 comprising 1,000 ordinary shares ofHKDLOO each. The changes in the issued and paid~up share capila1 of CHK sinCe i.ts inoorporation are as follows: NH. of Cumulative urdlnary issued Date of shar-es Po< and paid-ull allotment allotted value Consideratlun sbare capital HKD HKD 07.03.1996 2 1.00 CllSh 2 0&.03.19% 99S LOO Cash 1,000 (iii) Substantial sbarchl,lJder CHK is a wholly-owned subsidiary of Comintel, which in turn, is a wholly­Qvmed subsidiary ofComcotp. (iv) Subsidiaries and associated companies As at the date hereof, CHK does not have aay subsidiaries OJ associated companies, ~ny No.: 630068-T I 6. INFORMATION ON THE COMCORP GROUP (CONT’D) 6.5.5  CSB  (i)  History and business  eSB was incorporated in Malaysia under the Act on 15 October 1997 as a  private limited company. The company is principally involved in electronic  systems testing and repair, development of test programs and provision of  integrated logistic support.  (ii)  Share capital  The authorised share capital of eSB is RM3,OOO,OOO comprising 3,000,000  ordinary shares ofRMI.OO each. The issued and paid·up share capital of eSB  is RMl,500,OOO comprising 1,500,000 ordinary shares ofRMl.OO each.  The changes in the issued and paid-up share capital of eSB since its  incorporation are as follows:  No. of Cumulative  ordinary issued  Date of shares Poe and paid-up  allotment allotted value Consideration share capital  RM RM  15.10.1997 750,000 1.00 Cash 750,000  31.01.1999 750,000 1.00 Cash 1,500,000  (iii)  Substantial shareholders  CSB is a 70.0%-owned subsidiary of Comintel, which in tum, is a wholly­ owned subsidiary of Comcorp. The other substantial shareholder of CSB is  AMS, a company incorporated in Italy, which holds the remaining 30.0%  equity interest in CSB.  (iv)  Subsidiaries and associated companies  As at the date hereof, CSB does not have any subsidiaries or associated  companies.  6.5.6  LWT  (i)  History and business  LWT was incorporated in Malaysia under the Act on 24 May 1993 as a  private limited company under the name of Mestika Klasik Sdn Bhd. It  subsequently adopted its present name on 24 October 2002. The company is  principally involved in carrying out R&D work in photonics products.  (ii)  Share capital  The authorised share capital of LWT is RMl,OOO,OOO comprising 1,000,000  ordinary shares ofRMI.OO each. The issued and paid-up share capital of LWT  is RMlOO,OO2 comprising 100,002 ordinary shares ofRMI.OO each.
6. INFOR’l-IATION ON mE COMCORP GROUP (CONT’D) Tile changes in the issued and paid~up share capital of LWT since its  incorporation are as tollows:  No. t>f Cumtllath”t  ordinary Inned  Date of sbares 1′”, and pllld~up  aJlotmoot allotted value Conslderatlol1 share capital  RM RM  24.05.1993 2 1.00 Cash 2  23,(14,2003 100,000 1.00 Cash 100,002  (Ill)  Substantial shareholder  LWT is a 70,OOAo-ow-ned subsidiary of Cornintel, which in tum, js a wholly~  owned subsidiary of Comcorp. The other substantial shareholder of L\V1′ is  Photon AnlZ Technologies Sdn Boo, a company incorporated m Malaysia,  which holds the remaining 30JJ’:;11 equity interest in LWT.  (Iv)  Subsidiaries and associated companies  As at the date bereof, LWT does not have any subsjdiaries or associated  companies,  6.5.7  LNC  (i)  History and business  LNC ‘WaS inoorpornted in the Republic of Korea under the laws of tire  Republie on 27 April 2004 as a joint stock company and as a foreign  invested company. As a1 the date hereof, LNC has not commenced  operations. However, 1he principal activities of LNC are intended to be the  manufacture. development, selling and export of electronic components and  engaging in all related business activities incidental to any of the foregoing.  (ii)  Share Capltlll  The authorised share capital of we is KRW400,OOO,OOO comprising  800,000 ordinary shares of KRW50Q each. The issued and paid-up share  capital of LNC is KRWIOO,OOO,OOO comprising 200,000 ordinar), shares of  KRW500 each.  There have been no changes in the issued and paid-up share capital of LNC  since its incorporation.  (iii)  Substantial Shareholders  LNC is a 6OJWo-QWUed subsidiary of Comintel, which in tum, is a wholly­ owned subsidiary of ComcOlp, The other substantial shareholder of LNC is  Kyung Seob Cho who holds the remaining 40.O”h equity interest in LNC.  (iv)  Subsidiaries and Associated Companies  As at the date hereof, LNC does not have any subsidiaries or associated  comparucs.


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