Business Overview

4. INFORMATlON ON TIlE NVB GROUP 4. INFORMATlON ON TIlE NVB GROUP 4.1 History 4.1.1 Incorporation and Principal Activities NVB was iocorporated in Malaysia on 19 December 2003 under the Companies Act, 1965 as a public company limited by shares. It was established to become the investment holding company of the Group in conjunction with the listing of the Company on the MESDAQ Market. The core business activities of the Group are carried out by its subsidiaries, namely, NVSB, NTSB, IPSB, KPSB, DTSB and SISB, These include: • volume manufacturing of high precision components, notably, for the lIDD industry using CNC technologies;
• research, design, development and fabrication of jigs and fixtures comprising the air cnuck assembly and pump Chucking systems for CNC applications;
• design, development and fabrication of specialised cutting tools, moulds and dies;
• volume manufacturing of high precision micro components for digital cameras and HOD components using CNC auto-lathe technology; and
• design of tooling and volume manufacturing of high precision appearance parts using progressive die stamping for digital cameras, MP3 players and otner consumer electronic devices.

 

4.1.2 History of the Business The history of the NVB Group dates back to 1995 witn the incorporation of NVSB 00 22 September 1995. Under the leadership and managemeot of its fouoder, Chon Wing Hong, NVSB started off as a specialist in precision engineering, utilising turning, tapping and drilling CNC machioes. Over the years, the company nas improved on and invested in, inter-alia, precision technologies, R&D on product and process development, product quality and capital expenditure on plant equipment in order to equip itself with the latest technologies and know-how to carry on volume manufacturing of high precision components while maintaining consistently high quality. Under the helm of Choo Wing Hong, the Group Managing Director, who has more than 19 years io­depth experience in the specialised high precision machining industry, NVSB bas successfully expanded from a small outfit to one of the leading locat high precisioo machining houses in Malaysia that is capable of volume manufacturing high precision components to a tolerance of +/-1 microo. Since its ioaption, NVSB has become an approved vendor to numerous MNC manufacturers / assemblers after venturing into mass production of metal precision parts for micro motors, lIDO, computers, air-conditioners, automobiles, camera and audio-visual equipment. Currently, the NVB Group is an approved vendor of the following MNCs; • Asahi Kosei (M) Sdn Bhd for the supply of lIDO disk clamps, automotive components and digital camera components;
• MKE fat the supply of spindle motor hubs;
• Western Digital for the supply of lIDO disk clamps and spacer rings;
• Konica Minolta Optical Products (Shanghai) Co., Ltd., Kenica Minolta Optical Technologies (Sb.anghai) Co., Ltd. and Konica Minolta Precision Engineering (M) Sdn Bbd for the supply of digital and filmed camera components;

4. INFORMATION ON THE NVB GROUP (Com’d) • Diamet Klang (M) Sdn Bbd (part of tbe Mitsubisbi group of companies) for the supply of automotive and air conditioner sintered parts;
• Kenseisha (M) Sdn Bhd for the supply nf HDD disk clamps, spacer rings and other computer

components; • Canon Opto (M) Sdn Bhd (part of tbe Canon Inc. group of companies) for tbe supply of digital and filmed camera components;
• Nidec-Copal (M) Sdn Bhd (part of the Nidec Corporation group of companies) for the supply

 

 

of audio visual components; • Hitacbi Air-Conditioning Products (M) Sdn Bhd (part of the Hitacbi Limited, Japan group of companies) for the supply of air conditioner components. In terms of production facilities, NVSB began operations with a production facility of 2,000 square feet, 4 CNC macbines and 10 operators, By 1997, NVSB had tripled its production machinery and had added a mechanised lapping facility to its setup. In the same year also, NVSB set up a new production facility at Balakong with production space of 12,000 square feet to produce non-HDD high precision parts and to provide belter logistic and customer service. In 2001, NVSB moved into its new manufacturing plant in Meru, Klang, with a total production space of 33,000 square feet with 115 machines comprising CNC lathes, CNC tap and drill machines, lapping and ultrasonic washing machines supported by a workforce of 160 operators, 12 specialist engineers and a biotech quality control facility. The Balakong plant’s machinery increased to 63 CNC lathes, and CNC tap and drill macbines supported by 70 operators and 6 specialist engineers. Presently, the Group operates from seven (7) plants situated within Meru, Klang and Balakong, Selangor Darul Ehsan. The Directors of NVB, however, do have the intention to consolidate its operations together with its headquarters within a single plant. The Group intends to utilise part of the proceeds from the Public Issue to acquire a piece of industrial land in Klang witb the intention of constructing a factory to house the Group’s headquarters and manufacturing plant. The Group envisions itself to be a leader and world-class specialist and manufacturer of high precision components for the HDD, consumer electronics, semiconductor, plastic and automotive industries, and a provider of ancillary services, using state-<>f-the-art high precision technology. The NVB Group aims to be a major player in the engineering and data storage industry by offering value chain activities, otherwise known as a “one-stop” service provider, ranging from manufacturing capabilities to innovative engineering solutions and services for the global HDD industry, specialising in consumer electronics. 4.1.3 Share capital and Changes in Share Capital As at the date of this Prospectus, the authorised and issued and paid-up share capital of NVB are set out below:­RM Authorised share capital 50,000,000 500,000,000 Shares Issned and fuUy paid-up share capital 218,159,760 Shares 21,815,976 4. INFORMATION ON THE NVB GROUP (Cont’d) The changes in the issued and paid-up share capital of NVB since its incorporation are as follows: No. of Total issued and ordinary paid-up sbare Date of sbares Par value capital aUotment aUotted (RM) Cousideration (RM) 19.12.2003 2 1.00 Subscribers’ shares 2 15.02.2004 20 0.10 Sub-division of shares on the 2 basis of one (1) ordinary share of RM1.00 each into ten (10) ordinary shares of RMO.lO each 31,01.2005 218,159,740 0,10 Shares issued pursuant to the 21,815,976 Acquisitions by NVB at an issue price of RMO.10 per Share Upon completion of the Public Issue, the enlarged issued and paid-up share capital of NVB shall be RM29,315,976 comprising 293,159,760 NVB Shares.

4.1.4 Restructuring and Listing Scbeme In conjunction with and as an integral part of the Listing, NVB implemented a restructuring exercise which was approved by the following authorities: (i) MITl, vide its letters dated 29 April 2004 and 4 February 2005;
(ii) SC and FIe (via sq, vide its letters dated 27 December 2004 and 18 March 2005; and

(iii) Bursa Securities, vide its letter dated 29 December 2004. Approval-in-principle has also been obtained from Bursa Securities on 29 December 2004 for the admission of NVB to the Official List of the MESDAQ Market and for the listing of and quotation for the entire enlarged issued and paid-up ordinary shares of NVB on the MESDAQ Market. The restructuring scheme entails the following: (i) Acquisitions On 31 January 2005, NVB entered into several conditional sale and purchase agreements for the following: (a) Acquisition of 6,115,920 ordinary shares of RM1.00 each representing the entire issued and paid-up share capital of NVSB for a purchase consideration of RM21,659,055 to be satisfied by the issuance of 216,590,550 new NVB Shares at an issue price of RMO.lO per Share;
(b) Acquisition of 125,367 ordinary shares of RM1.00 eacb representing 10% equity interest in NTSB for a purchase consideration of RM137,746 to be satisfied by the issuance of 1,377,460 new NVB Shares at an issue price of RMO.lO per Share; and
(c) Acquisition of 20,000 ordinary shares of RM1.oo each representing 10% equity interest in KPSB for a purchase consideration of RM19,173 to be satisfied by the issuance of 191,730 new NVB Shares at an issue price ofRMO.10 per Share,

4. INFORMATION ON THE NVB GROUP (Cont’d) NVSB then transferred to NVB all the shares held by it in its subsidiaries, namely 80% equity interest in NTSB, 100% equity interest in IPSB, 80% equity interest in KPSB, 80% equity interest in DTSB and 60% equity interest in SISB, at book value for cash. The internal restructuring exercise was completed on 31 January 2005, whereupon NVB became the holding company of NVSB, NTSB, IPSB, KPSB, DTSB and SISB. The total purchase consideration of RM21,815,974 for the Acquisitions was arrived at based on the aggregated adjusted audited consolidated NTA of the acquiree companies as at 30 September 2003. The new NVB Shares issued and allotted to the Vendors pursuant to the Acquisitions as consideration are as follows: No. of shares held in  No. of new Shares  aequiree companies  issued by NVB as  Vendors of NVSB  disposed to NVB  consideration  Thoo Chow Fah  1,376,082  48,732,873  Choo Wing Hong  1,834,776  64,977,165  Choo Wing 000  1,376,082  48,732,873  Lee Tian Yoke  611,592  21,659,055  Choo Wing Yew  305,796  10,829,528  Chao Wing Leong  305,796  10,829,528  Choo Wing Kin  305,796  10,829,528
6,115,920 216,590,550 Vendor nfNTSB Lee Chee Keung 125,367 1,377,460 VendorofKPSB Ee Meng Pin 20,000 191,730 Total 218,159,740 The Acquisitions was completed on 31 January 2005. Upon completion of the Acquisitions, the issued and paid-up share capital of NVB increased from RM2 comprising 20 Shares to RM21,815,976 comprising 218,159,760 Shares. (ii) Public Issue Following the completion of the Acquisitions, in conjunction with the listing of NVB on the MESDAQ Market, the Company will implement a public issue of 75,000,000 new Shares at an issue price of RMO.63 each. Upon completion of the Public Issue, the issued and paid-up share capital of NVB will be increased from RM21,815,976 comprising 218,159,760 NVB Shares to RM29,315,976 comprising 293,159,760 NVB Shares, The Public Issue Shares shall rank pari passu in all respects with the other existing issued and paid-Up ordinary shares of NVB including voting rights and dividends and/or distribution that may be declared subsequent to the date of allotment of the Public Issue Shares and any surplus in the event of the liquidation of the Company. 4. INFORMATION ON THE NVB GROUP (Cont’d) (iii) Listing Pursuant to the Public Issue, NVB will seek admission to the Official List of Bursa Securities and the listing of and quotation for the entire enlarged issued and paid-up share capital of NVB ofRM29,315.976 comprising 293,159,760 NVB Shares on the MESDAQ Market. 4.2 Business Overview To the best ofNVB Directors’ knowledge and belief, the NVB Group is one of the few fully integrated precision components and tools manufacturer based in Malaysia, with an extensive range of CNC machinery and technology to offer a one-stop solution in satisfYing customer needs. It is capable of providing comprehellSive multi-capabilities, covering end-to-end products and engineering solutions, for the HOD, consumer electronics and other targeted industries, [n 2004. there were two domestic companies involved in the supply of disk clamps and spacer rings to Western Digital, which is the sole HOD assembler in Malaysia, The NVB Group is one of the two domestic companies supplying HDD components to Western Digital. In terms of revenue, the NVB Group was the top supplier and commanded between 38% to 42% market share of the local demand for HOD disk clamps and spacer rings, in 2004. (Source: Frost & Sullivan., Executive Summary: Strategic Insights ofthe Hard Disk Drive Market. March 2005) Design and volume manufacturing of high precision components and tools for the HOD industry will remain the mainstay of the Group’s business focus and activities, Nevertheless, the Group intends to reduce its reliance on the traditional computing HOD industry and is diversifying its products mix to cater for other industries, namely the HOD market for consumer electronics applications and non-HOD markets such as components for digital cameras. The Group is also focusing on extending and increasing its scope of activities to include the design, fabrication and development of high precision specialised tools, dies, jigs and fixtures for sale to MNCs and heavy industrial companies, given the growing demand from MNCs for a domestic tooling industry. 4.2.1 Group Structure The NVB Group consists of NVB and its six (6) subsidiaries, namely, NVSB, NTSB, IPSB, KPSB, DTSB and SISB. A diagrammatic illustration ofthe NVB Group’s structure is set out below: NVB

THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK
4. INFORMATION ON THE NVB GROUP (Com’d) 4.2.2 Principal Activities The subsidiary companies of NVB and the principal activities of each of them are summarised below:­Subsidiary NVSB NTSB IPSB DTSB KPSB SISB Date/ Country of Incorporation 22.09.1995 Malaysia 20,06.2002 Malaysia 17.07.2000 Malaysia 10,12,2003 Malaysia
25.01.2000 Malaysia 16,06.2004 Malaysia % effective equity interest (‘?o) 100% 90% 100% 80% 90% 60% Issued & paid-up capital (RM) 6,115,920 1,253,675 100,000 50,000 200,000 300,000 Principal Activities Design and volume production of high precision metal machining of HDD,
computer, consumer electronic and electrical and automotive industries’ components, and related R&D actiVities. Design, development and modification of cutting tool geometry, regrind or re­sharpen special cutting tools using CNC tool & cutter grinder and other grinding operations and marketing of diamond abrasive grinding wheels, PCD & PCBN inserts. Design, development, manufacture and marketing of precision jigs & fixtures, tools & dies for stamping, precision mould parts for plastic injection, trim & form tools for semiconductor industry and precision machine parts for lhe automotive and other high-value added industries. R&D activities leading to the design and production of the air cbuck assembly system for soft clamping, lool-bolders, gauges, dies, collets and lathe chucks for use by CNC machining applications. Design and development leading to tbe mass production of high precision micro pans and related R&D activities. Design of tooling and volume manufacturing of high preCISion appearance parts using progressive die stamping for digital cameras, MP3 players and other consumer electronic devices, 4. lNFORMATION ON THE NVB GROUP (CoIlI’d) 4.2.3 Products The products manufactured by the NVB Group are as follows;­Product Description/Features IIDD Spindle Motor Hub IIDD Disk aamp IIDD Spacer Ring Camera Cam Barrel Various Camera Parts • Kola Pins • Lens Locking Ring Air Conditioner Parts • Compressor Bearings Automotive Components Special Cuning Tools Cuning and Forming Punch and Die, Modifications of Die-Set, complete Die-Set Design and Fabrication Application A component in IIDD electromotor assembly. The spindle motor prnvides the hub for anaehment of tbe media, spacers and disk clamp as well as tbe armature and bearin~ to spin the media under the sliders at bigh rotational speeds. A clamping component in the HOD platter assembly. A metallic disc installed via interference pressing or screws attachment to boJd the media platter aod disk spacer rings in place on the motor hub. A spacer oomponent between planers in lIDO. The spacer ring is used to control the disk-to­disk spacing of the disk stack in the IIDD. A zoom oompoocot in cameras. The Cam Barrel enables tbe camera to cbange the focal length of its lenses. Various applications in the camera • Kola pin is an internal zoom lens guide mechanism.
• Lens locking ring is a component to lock

the lens of the camera. Inlernal components for borne air­oooditiooers. Engine components suclt as gears, couplings, etc. Used as specialised cutting tools in industrial beavy-duty applications-Tool and die for precision metal stamping industry, Technical SpecificalioDS CNC turning and tapping fIom forged aluminium material. Finished product is stain·free and blemisb-tree. CNC turning and tapping fIom bar aluminium material. CNC turning and lapping from aluminium tube material. CNC turning 4-a.is and anodising from tube aluminium material. CNC turning and tapping from steel and aluminium material and CNC auto-lathe. CNC turning and tapping from aluminium tube material. CNC turnittg and tapping from sintered and forged steel. CNC turning and tapping from sintered and forged steel. CNC 5-..is grinding of solid carbide rods. CNC wire-cut EDM machining from steel material. 4. INFORMATION ON THE NVIl GROUP (Cont’d) Product DescriptioolFeatures Application Technical Specifications Cutting and Forming Punch Tools and mould parts for the semiconductor EDM. precision grinding and and Die, Locating Safety Pin. industry. wire-cut EDM machining of Modification of Die-Set, steel material. complete tool set design and fabrication. Cavity, Carbide gate insert, Runner and Cull Block, Port and Plunger and Ejector Pin
Jigs aDd Fixtures For CNC tap and drill application to be used Precision grinding, CNC milling in-house and by semiconductor and and tapping from steel material electronics industries. and fixtures. Air Chuck Assembly For in-bouse and external high precision Wi”, cut EDM, CNC turning. CNC lathe work holding application. milling and tap & drill. Progressive Die Tooling For tluee-dimensional metal stamping. Wire cut EDM, CNC luming, milling and lap & drill. Digital Camera Body Lens An external component used for reinforcing Progressive die metal stamping, Ring the lens bole and provides aesthetic value. CNC turning and miUing. silk screening and tempo printing.
4.2.4 Technology Used The NVB Group’s expertise lies in its ability to value-add to the different core CNC technologies utilised to design and manufacture high precision components and tools for its customers. This ability rests largely on its design engineers and skilled technicians, which are honed through in-house R&D activities. CNC technology offers three main benefits in the manufacturing of parts and components. namely, as follows: • improves automation, which produces side benefits such as reducing operator fatigue and human errors. and increasing the consistency of production and predictable time for each
workpiece; • ability to produce mass copies of work pieces with consistent accuracy and repeatability; and
• flexibility to produce different work pieces using different tools with just a mere change of lhe CNC program, which is an important feature in Ihe age of lust-In-Time manufacturing,

The manufacturing facility of the NVB Group is equipped with an extensive range of CNC machinery and technology required for the HDD. consumer electronics and other targeted industries covering end­to-end products and engineering solutions, as well as for internal R&D uses. The Group constantly invest in additional machinery and equipment to complement its existing pool of high precision equipment. in order to keep abreast with the latest advances in technology as well as to increase its production capacity. The different types of CNC machines used by the NVB Group are as follows: CNC Machines Primary Application CNC Latbes Using computer digital commands to remove material from a rotating work piece using a moving CUlling tool to form a cylindrical product. 4. INFORMATION ON THE NVB GROUP (ConJ’d) CNC Machines Primary Application Auto-Loader CNC Similar to a CNC lathe but with aD added feature of a robotic arm which lathes loads aDd unloads work piece automatically. CNC Tap and Orill Using CNC commands to actuate drill/tap cUlliDg tool to machine work pieces which are clamped to a jig & fixture affixed on a moviDg pallet. CNC MachiniDg CeDtres Similar to a CNC tap and drill but mainly end milliDg besides drilliDg, tapping, reaming, and counter-boring operations. CNCEDM Using CNC commaDds to cause electric spark erosioD OD very hard metal blanks to form specified shapes. CNC Wire Cut EOM Using CNC commands on a moving wire to remove materials by means of rapid coDtrolled repetitive spark discbarges. CNC Automatic-lathe Using digital commands to operate automatic bar-stock turning material OD a slidiDg headstock that keeps tbe work piece supported near the tool contact. Primarily used for produciDg sometimes slender or micro precisioD parts. CNC Tool & Cutter Using CNC commands to operate a 5 axes preclslon machine for Grinder grinding using diamond coated wheels to machine either carbide or high speed steel blanks into special CUlling tools sucb as eDd mills, step drills, etc. The desired three-dimensional geometrical cUlliDg flutes and tool shape will be programmed usiDg CAD/CAM software. Apart from the abovementioned core CNC applications used by tbe Group in producing higb precision parts and components. the Group also relies OD other technologies iDcluding progressive die metal stampiDg, silk screening, tempo printiDg, lapping, deburring! polishing, wirecut EOM, grindiDg aDd milling, ultrasonic washing and hydrocarboD washiDg. The NVB Group also uses CAD technology to help its eDgineers to desigD tools, jigs, fixtures, dies and other components according to tbe specifications of its customers. 4.2.5 Patents, Trademarks and Licences The Group bas filed the following patent application with the Intellectual Property Corporation of Malaysia: Patent Title Application No. Filing Date Status and Remarks An Air Cbuck PI 20040045 8 January 2004 Preliminary examination completed. Assemhly Substantial examination is still peDding. The Air Chuck Assembly system was designed and developed by the Group’s in-bouse R&D team. The Air Chuck Assembly uses pneumatic-driven power to soft clamp very delicate aluminium work pieces during the CNC machiniDg process, without causing distortion to the work pieces. 4. INFORMATION ON THE NVlJ GROUP (Conl’d) The Group’s invention provides a more efficient work ~olding system, which can reduce if not eliminate long downtime and considerable effort in conducting collet chuck changes when a different product needs machining. It is a highly critical and value-adding system process to the entire CNC process, in particular when forming high precision parts. With the Air Chuck Assembly, the Group is able to carry out rapid production ramp-up output for different component types consistently without sacrificing on quality issues. The application for the abovementioned patent was filed in tbe name of NVSB. which has given DTSB the right to manufacture and marleet the Air Chuck Assembly. Save for the above, the NVB Group currently does not bold any franchises from any third party nor any trademarks, industrial designs or patents registered with the Malaysian authorities. Going forward, the NVB Group intends to protect its intellectual property rights by patenting some of its products and solutions it has developed or will be invented in future.
4.2.6 Production Processes The generic schematic diagram below depicts the vertically integrated production process of the producls of the NVB Group coupled with mass production technologies (where applicable) of the various subsidiaries in the NVB Group: THE RESf OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON THE NVB GROUP (Conl’d) Generic production process of the NVB Croup
+
ENGINEERING PROCESS (including choice of machines, tooling and processes) +
Outgoing Quality Check • Metrology -use of quality check equipment
• Statistical Process

Control ~ .. • i
…….
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r–J-IG-S-&-P-IX-T-l!..JRE-S-D-ES-IGN—-,.1 Technology input ,………….. • MetalJurgy -Material anal)”sis ·CAD/CAM Software ,……… !· Produetion engiOCCfing technology ·Work study -tinw: and motion
Auto-loading -robotics! CNC PRECISION MACHINING , automation system ….-II Programming ofeNC &(turning, drilling. lapping, milling) configuration NC lapping SURFACE FINISHING
Ultra-sonic washing • EJectro-magneti(: washing(de.burring. lapping. washing & De-ionised water system drying) Hydrocmbon washing system • Drying system .. • De-burring system BAR·CODING AND lNDUSTlUAL LABELLING PACKING SHIPMENT TO CUSTOMERS I
l.. CNC~iJljngl;;;;;fu;~~r;;;’—i Wire-eut EDM ofjigs I Pneumatics -air actuator design I Fixture design &. configuration _,1’Jjg design & configuration ….._­CNC tumingldri 11ingltappinglm iII ing Design of special cutting toolsl11olders NC programming Design ofclamp & stud)’ of cutting media Research/study on chip fonnalion Research tool cuniog anglcldepth! speed ~_ …. f–·__·· __ H.··~W .. w. I CNC machining I

4. INFORMATION ON THE NVB GROUP (Conl’d) A brief description of the production process of the NVB Group is set out below: 1. Design Stage During the design stages, the Group receives the specification of a product or the physical object from the customer. The working team, comprising both operations and R&D, using their knowledge of metallurgy, production engineering and tooling design capabilities, will decide on the optimum choice of CNC machines, cutting tools aud engineering processes to manuf.cture the specific product. 2. Manufacture of Prototype for Customer’s Approval
Prototypes of the product will he manufactured for scrutiny by the working team, who will ensure that the samples meet tbe stringent design and product specifications of the MNC customer. This includes precision tolerance within one (1) micron range during mass production of the said product. Subsequently, the prototypes are forwarded to the customer for approval.
3. Commencement of ManufacturiOlj: Process

Upon receipt of customer’s approval, the manufacturing process commences, which typically involves CNC precision machining. The CNC technology utilised includes wire-eut EDM. EOM, turning, drilling, tapping and milling (depending on tbe producls). During this stage, the R&D th.t went into the following aspects, amongst otbers, would be appreciated for facilitating production efficiency and quality consistency, and reducing downtime: • design of special CUlling tools, bolders, clamping devices, etc;
• studies into the CUlling speed of the customised CUlling tools;
• formation and removal of metal chips during machining; and
• design of jigs and fixtures used for balding multiple workpieces in CNC tap & drill machines.

4. Surface finishing, dc-burring. lapping, washing and drying Surface finishing involves surface treatment on high precision micro parts for cleanliness as well as for protective coating. Other processes include de-burring, lapping, washing and drying to ensure a smooth. un-dimpled surface which prevents adhesion of foreign and unwanted particles and prOVide an exacting fit of HOD components during the assembling of HODs. As the producls produced by the Group are primarily high-precision customised products, the quality control procedures commence right from the time the Group secures the job order to the point where the producls are packed and shipped to customers. On-going quality checks take place all along the production line. The quality procedures include dimensional inspection verification using the science of precision measurement or otherwise known as metrology. Statistical process control is a vital element in controlling the manUfacturing process. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON THE NVB GROUP (Coni’d)
4.2.7 Estimated Markel Coverage, Position and Share To the best of the knowledge of the Group’s directors, there are few local manufaclorers of HOD and other ultra-precision components and tools thai possess the same technical expertise and capabilities as the Group. Such expertise provides the Group with a competitive edge over its local competitors. Whilst tbere are competitors in tbe high-precision engineering industry, the Group is of the opinion that it does not presently have a direct competitor who competes identically in all of the Group’s business areas. While Malaysian Industrial Development Authority (“MIDA”) estimates the presence of 150 companies specializing in metal precision engineering in Malaysia, the majority of them do not have high precision capabilities and/or capacity to serve global MNCs such as Western Digital. Therefore, comparisons of the Group’s competitors are on the basis of similar products and services offered. [n 2004, there were two domestic companies involved in the supply of disk clamps and spacer rings to Western Digital, which is the sole HOD assembler in Malaysia. The NVB Group is one of the two domestic companies supplying HOD components to Western Digital. In terms of revenue, the NVB Group was the top supplier and commanded between 38% to 42% market share of the local demand for HDD disk clamps and spacer rings, in 2004. (Source: Frost & Sullimn, ExecutW~ Summary: Strotegi<: Insights ofthe Hard DiskDrive Marke4 March 2(05)
4.2.8 Principal Markets, Marketing and Distribution The existing products of the NVB Group are sold in 3 target markets, namely: (i) the HOD industry, io respect of the supply of disk clamps, spindle motor hubs and spacer rings;
(ii) the digital camera industry, in respect of the supply of cam-barrels, high precision micro components, die-stamped parts for digital cameras, and other digital and filmed camera parts; and

(iii) the automotive, semiconductor, wafer fabrication, precision metal stamping and other high precision machining industries for the supply of diamond-cutting wheels, custom carbide cutting tools and custom made cutting tools for these industries. In FYE 2004, export sales contributed approximately 61 % to the totallumover of tbe Group, The NVB Group supplies component parts to the HDD market directly through their sales offices, without the use of marketing intermediaries like industrial distributors or manufacturer’s representatives, This is mainly due to the fact that these products are not available off-the-shelves in the typical computer outlet and value added retailer. Each manufacturing order is custom-made according to the end-users’ specifications and requirements. There are also only a handful of HOD manufacturers in the world, unlike consumer goods, which require an extensive network of marketing intermediaries for a wide coverage,
4.2.9 Types, Sources and Availability of Raw Material! Input The Group has established good relationships with most of its raw materials suppliers over the past years, thus, enabling it to maintain a lower cost position and to ensure high quality and availability of goods on a timely basis. The total raw material imports constituted approximately 37% of the Group’s cost of sales in FYE 2004. The bulk of the Group’s raw materials comprise aluminium in the form of tubings, coils and hars. Apart from aluminium, the other major raw materials consist of cutting tools and PCD inserts, cutting oils and paraffin, and out-sourced services such as EN plating and anodising. 4. INFORMATION ON THE NVB GROUP (Conl’d) All dealings and business relationships with the suppliers are conducted on an arms’ length basis. None of the Directors or substantial shareholders has any interest, direct or indirect with the suppliers. The major raw material or components of the Company’s products and the source of supply of the same is disclosed in Section 4.6 of this Prospectus,
4.2.10 Quality Control The NVB Group believes in providing the best quality of their products hy meeting and exceeding customer’s requirements. To ensure that the Group consistently delivers high quality products and services, the Group has embedded quality control procedures in its daily operations. The quality control procedures commence right from the time the Group secures the job order to the point where the products are packed and shipped to the customers, Quality has always been one of the important priorities of the Group in view of the nature of its products, which have very tight tolerances in the micron range. The quality assurance department uses statistical production control methods and Pareto Analyses as process control tools for ensuring minimum product rejects. The Group owns a complete range of quality control automated and semi-automated equipment to ensure quality consistency across the manufacturing process. Quality control tools such as Pareto Charts and Statistical Process Omtrol is also used to ensure quality standards are maintained and tracked. The NVB Group’s commitment to quality has been recognised by it being approved vendors to MNCs such as Western Digital, Kenseisha (M) Sdn Bhd, MKE, Canon Opto (M) Sdn Bhd and Konica Minolta Precision Engineering (M) Sdn Bhd. To become an approved vendor for MNCs, the Group needs to undergo various levels of audits, not only on product quality conformance, but also manufacturing and process control requirements. 4.2.11 R&D Ove”,kw The NVB GTOUp’S strength in the area of R&D is in designing and produeing jigs, tools, fixtures, progressive dies, electronic and mechanical assemblies to be used with their CNC systems. The R&D capability is a very essential and value-adding activity offered by the NVB Group in order to develop, manufacture and produce high precision components and parts that will meet customers’ specifications and quality requirements. Apart from meeting customers’ specifications and quality requirements, the continuous R&D activities undertaken by the NVB Group helps value-add to the NVB Group’s business in terms of: • Innovating and developing new capabilities, systems/processes and products that will allow the Group to have a competitive edge in the market.
• Improving and refining its engineering processes and technologies to meet customers’ zero defect demand;
• Ensuring consistency in producing products of the highest quality standard;
• Reducing waste, thus lowering the cost of operation; and
• Innovating and developing new capabilities, systems/processes and products that will allow the Group to have a competitive edge in the market.

4. INFORMATION ON THE NVB GROUP (Cont’d) R&D Policy Tbe Group’s R&D activities is primarily divided inlo two streams: (i) New Product Development In this stream, tbe NVB Group will undertake R&D initiatives on parts and components received from customers, whicb require further development before mass production to ensure all samples meet lhe stringenl requirements sel by its MNC customers, Some of the key activities include developing a PCP, designing and producing jigs and fixtures and progressive dies for each production process, incorporating engineering metrology for quality control requirements, developing CNC programs via machining research and conducting research to develop the appropriate tools. (ii) Existing Product Improvemelll R&D is carried out on its mass produced components in order to enhance product quality, productivity and effectiveness in engineering processes and technology. The scope of the R&D activities for product improvement involves changes and lbe modification of engineering processes, improving jigs and fixtures and improving safety features to minimize exposure to accidents, carrying oul machining researcb to improve on the relevant CNC programs to enbance productivity, and researching on tooling and the types of lubricant to eubance effectiveness. R&D Personnel The Group’s R&D activities are carried out by a thirteen (B)-member R&D team, headed by Choo Wing Hong, the Group’s Managing Director, The primary R&D team personnel comprised within the Group’s R&D team and their respective responsibilities are set out below:­Name  R&D Designation  Responsibility  Choo Wing Hong  Head of R&D  Responsible for formulating, implementing and leading  the Group’s R&D strategy.
Ee Meng Pin Researcb Manager Responsible for implementing special R&D projects and motivating the R&D team to achieve desired goals. Choo Wing Leong Metrology Study of new machining processes and implementing Engineer inspection sbeets, dimensional verification and Quality and Assurance compliance. Machining Section leader of CNC machining division andNgKokSing Research Engineer coordinating the R&D projects, problem solving and feedback to top management. Chow Yew Meng Design Engineer Utilising CAD/CAM software and three-dimensional drawing for designing certain precision parts before tbe machining processes are established. Yong Kim Seng Progressive Die / Utilising CAD/CAM software and three-dimensional Tooling Manager drawing for designing progressive die for metal stamping. 44 4. INFORMATION ON THE NVB GROUP (Cont’d) Present Status ofR&D The R&D projects of tbe NVB Group that are carried out constantly are sUlllll1arised as follows: Vear 1995-ongoing 1995-ongoing 1995-ongoing 1996-ongoing 1997-ongoing 1998-ongoing 2004-ongoing R&D Design and production of a large assortment of specialised jigs and fIXtures for applications in the manufacture of individual precision products. Design and production of a large assortment of precision pin gauges for accurate determination of tolerable dimensions of machined parts. Design and development of CNC cutting tool holders for accurate securing of cutting tools during tbe production process. Design and development of pump chuck collets for CNC latbes applications. Design and development of CNC clamping system for clamping parts during turning operation. Design and development of special carbide cutting tools requiring complicated multi-dimensional geometry. Design and development of progressive die tooling for metal stamping. Achievements in R&D Tbe R&D efforts of the NVB Group have resulled in several achievements for the NVB GrouP. as highlighted in the table below: Year R&D Projects Completed 2002 o Designed an automated washing with mechanized agitation system for cleaning of HDD components. • Designed and developed tbe motorized adhesive applicator system for HOD componenls adhesive application. 2003 o Designed and developed an air chuck assembly for soft clamping in CNC latbes application known as the Air Cbuck Assembly System. This is being patented for protection of design and innovation (see furtber details in Section 4.2.5 of tbis Prospectus). o Redesigned and reverse engineered air plug micrometer for precision measurement of lIDD components.
o Commenced and completed R&D for submission of first sample approval for 2,5″ HDD spindle motor hub.

2004 o Commenced and completed the R&D for the production of 2.5″ HOD spacer ring using DHS-l slainless steel. o Commenced and completed R&D for the design of progressive die tooling used to facilitate tbe manufacture of tbe body lens ring for digital camera. • Commenced and completed R&D for the production of 1.8″ and 2.5″ HOD spindle motor hubs. o Completed and implemented improvements to the aqueous washing system with additional vacuuming features.
o Commenced and completed R&D for the manufacture of the lens bar guide for digital cameras.

45 4. INFORMATION ON THE NVB GROUP (Conl’d) R&DProduct Roadmapfor zoos -Z009 Some of the major R&D product/process development milestones that the Group has and will undertake from 2005 -2009 are illustrated in the table below: Year R&D Activities 2005 • R&D to enable sub-micron machining capability. • First article qualification and production of 1.8″ HDD spindle motor hubs, spacer rings and disk clamps using either DHS-l stainless steel or other machinable ferritic stainless steel.
• Automation of yoke assembly onto the spindle motor hub to reduce labour cost, improve productivity and minimise human error.
• R&D to produce PeD inserts for rotary tools, which will provide a new business opportunity,
• R&D to develop high precision mould parts for the semiconductor industry.

2006 • R&D to incorporate a new downstream activity -Electroless-Nickel Plating Process (EN Plating) for greater vertical integration of the manufacturing process. • R&D for fIrst article qualification and production of 1.0″ HOD spindle motor hubs, spacer rings and disk clamps using eitber DHS-l stainless steel or other machinable ferritic stainless steel. Mid Term R&D • R&D for first article qualification and production of the spindle motor hubs. Roadmap spacer rings and disk clamps for 0.85″ HOD using either DHS-l stainless steel or other machinable ferritic stainless steel, • R&D to be undertaken together witb a Korean company to co-develop prototype cubic jigs and fixtures for tbe automobile master model.
• R&D of an automated inspection system to improve quality control and eliminate human error during inspection.

Long Term • OEM Assembly for Small Form Factor HOD (1.8″ HOD and belOW). R&D Roadrnap • To develop MEMS (micro-electrical mechanical system) technology for applications in the sub-micron components segment of the HDD, semi­conductor and medical industries. Investments in R&D The total investments made by the NVB Group in R&D for the last three (3) fInancial years was approximately RM3.08 million, which represented 3.1 % of the total revenue of the NVB Group for the same period. 4.2.12 Interruptions in Operations The NVB Group did not experience any disruption in business which had a significant effect on its operations during the twelve (12}-month period prior to the date of this Prospectus. 4. INFORMATION ON THE NVB GROUP (Cont’d)
4.2.13 lAformation on Employees Number ofEmployees As at 15 April 2005, the Group has 431 employees, of which 274 are foreign employees under contractual employment. The tenure of the employment contracts ranges between two (2) to five (5) years, of which tbe majority of such contracts are for a period of three (3) years. The human resource needs of the Group are expected to increase in tandem with the increase in the Group’s sales and production growth due to an increase in activities and contribution from new and regional business opportunities. The Group aims to be at the forefront in its technology by conducting cross-training programs for its staff to ensure that they develop multiple skills and are kept abreast with related technological advancements. The Board of Directors of NVB has confirmed tbat aU of its foreign workers hold valid working permits and are not in breach of any immigration laws in Malaysia, The total number of employees and length of service as at 15 April 2005 are as follows: t-…………Lengtb ofservice-·············>
More than  5108  2105  Less than  Categories of stalT–_•..  8 yes  yea  years  2 years  Total  Management & Professional  5  8  3  4  20  Technical & Supervisory  6  11  21  25  63  Clerical and related operations  7  7  General workers  1  3  4  Factory Workers:  Skilled  10  3  51  224  288  Non·Skilled  1  17  31  49  TOTAL  21  24  92  294  431
TraiJ.ing and Development Progmmme The Group endeavours to provide a series of continuous training and development programmes for its employees, which include in-house workshops to update aU the employees on the new developments in the Group. The employees receive technical and production training from the Group’s in-bouse experts. The main objective of the training and development programme is to keep its staff informed about recent developments in HOD and consumer electronics industries and to furtber encourage overall productivity and efficiency. 10 addition, the Group also encourages its employees to attend seminars and workshops to identify, evaluate and manage risks, to enhance management qUality, staff benefits and to increase the competency level of its employees, The external training and development programmes that the staff have participated in include management courses, engineering courses and infonnation technology troining, Labour Union andIndustrial Disputes The employees of tbe NVB Group are not members of aoy labour unions. There have not been any industrial disputes in tbe past between the employees and management. 4. INFORMATION ON THE NVB GROUP (Cont’d) 4.2.14 Key Achievements or Milestones Summarised below are the key achievements of the NVB Group for the past nine (9) years:
Year Development Milestones o1995 NVSB became and still is a vendor to Diamet Klang (M) Sdn Bhd (part of the Mitsubishi Group) for the supply of automotive and air conditioner sintered parts. 1997 • NVSB was appointed as and still is a vendor to both Asahi Kosei (M) Sdn Bhd for machining mainly industrial aluminium components and Kenseisha (M) Sdn Bhd for HOD spacer rings and olber components. o1998 NVSB became and still is a vendor to Nidec-Copal (M) Sdn Bhd (part of the Nidec Corporation group of companies) for the supply of audio-visual components. o NVSB commenced mass production of non-HOD components to Sharp-Roxy Corporation (M) Sdn Bhd, LG Electronics, Inc. and Akai Group. 1999 • NVSB became and still is a vendor to Konica-Minolta Precision Engineering (M) Sdn Bhd for the supply of digital and filmed camera components. o NVSB became and still is a vendor to Hitachi Air-Conditioning Products (M) Sdn Bhd for lbe supply of air conditioner components. 2000 NVSB commenced supply of HOD disk clamps to Asahi Kosei (M) Sdn Bhd. 0 2001 NVSB became and still is a vendor to Canon Opto (M) Sdn Bhd for the supply of0 digital and filmed camera components. • NVSB was appointed one of lbe key suppliers to manufacture the “cam barrel”, a camera zoom component for both Kanica-Minolta Optical Products (Shanghai) Co., Ud and Konica-Minolta Optical Technologies (Shanghai) Co., Ltd. based in Shanghai, China. 2002 • NTSB supplied special inspection jigs to a local car manufacturer. • NVSB was appointed as an approved vendor by Western Digital for the supply of HDD disk clamps, o NVSB received the BS EN ISO 9001: 2000 certification for its commitment to quality management. 2003 NVSB became and still is a vendor to MKE to supply spindle motor hubs to two 0 major HDD manufacturers. • In terms of revenue, NVSB was the top supplier of disk clamps to Western Digital, accounting for 38% of lbe disk clamp and spacer ring market share in 2003. o Developed an air chuck assembly system, which uses pneumatic-driven power to soft clamp very delicate aluminium work pieces for the production of HOD components. • IPSB became a vendor/supplier to an MNC for the design and manufacture of automation parts. 4. INFORMATION ON THE NVB GROUP (Conl’d) Year Developmeot Milestooes 0 KPSB commenced mass production of Kola pins for Canon Opto (M) Sdn Bhd. o An investment of approximately RMI3.5 million in new plant and machinery was made by the Group.
o In terms of revenue, NVSB was the top supplier of disk clamps to Western Digital and commanded between 38% to 42% market share of the local HDD disk clamp and spacer ring market in 2004.

2005 SISB received orders to supply digital camera parts directly from Asahi Kosei (M) 0 Sdn Bhd,

4.2.15 Locatioo 01 Business Currently, the production facilities of tbe NVB Group are situated at lbe following locations, aU of which are rented premises with the exclusion of item (vi): Dale of Certificate IssuiDg Locatioos of Filness Authority (i) Lot 5028, Ialan Teralai, 10 Iuly 1998 Klang Municipal Council Batu 5%, Jalan Mern, 41050 Klang, Selangor Darnl Ehsan
(ii) P.T, 17230-17232 Mukim Kapar, 10 December 1993 Klang Municipal Council Batu 5V” Ialan Mern, 41050 Klang, Selangor Darul Ehsan

(iii) No 1,3 & 5, Jalan 115, 10Ianuary 1998 Kajang Municipal Council Taman Industrial Selesa laya, 43300 Balakong, Selangor Darnl Ehsan (iv) P.T. 17243 Mukim Kapar, 10 December 1993 Klang Municipal O:lUncil Balu 5V” Ialan Mern, 41050 Klang, Selangor Darul Ehsan
(v) No.7, Ialan Terunlom 20/KU08, 23 Iune 2004 Klang Municipal Council Taman Mern Seria,

Mcru, 41050 Klang, Selangor Darnl Ebsan
(vi) No. 11 and llA, Ialan Ternntum 23 Iune 2004 Klang Municipal Council 20/KU08, Taman Mern Seria, Balo 5~ lalan Mern, 41050 Klang, Selangor Darnl Ehsan 4. INFORMATION ON THE NVB GROUP (Conl’d) Date of Certificate IssuiDg Locations of Fitness Authority (vii) No. 21, Jalan Ternntum 20/KU08, 23 June 2004 Klang Municipal Council Taman Mern Seria, Meru, 41050 Klang, Selangor Darnl Ehsan

4.2.16 Production Capacity aod Output As at 15 April 2005, the GToup operates from the seven (7) manufacturing plants disclosed in Section 4.2.15 of this Prospectus. The factories listed under items (I), (li), (iii), (iv) and (vii) operate two (2) eight (8)-hour shifts with tl1ree (3) hours extra time, while the remaining two (2) factories operate a single eight (B)-hour shift. The optimal maximum production capacity, which the existing manufacturing plant and available facilities of the Group may sustain, is 90% of total capacity. The Group is currently running at 80% of its optimal maximum production capacity. In line with its expansion plan, the NVB GToup will purchase a piece of industrial land in Klang to construct a new factory 10 house the Group’s headquarters and manufacturing plant. The new factory is scheduled to be completed by FYE 2006, and is expected to contribute an additional approximate 30% increase in production capacity.
4.2.17 Competitive Advantages The directors of the NVB Group believe that the following are the strengths and competitive advantages of the NVB Group: (i) One-stop and fully integrated precision components and tools manufacturer and solution provider
The Group provides a fully integrated manufacturing facility covering both upstream and downstream activities. with an extensive range of CNC machinery and technology 10 offer a one-stop solution in satisfying its customers needs. The Directors of NVB believe that the GToup is one of the few local HDD component manufacturers that can provide such comprehensive multi-capabilities and competencies for the HOD, consumer electronic and other targeted industries.
(ii) Introduction of new product lines

The Group has and will continue to introduce new product lines and mix via its product diversification strategy. The aim of this strategy is to enable the Group to cross sell current and new products across its existing customers. At the same time, by introducing new products, the Group aims to also tap into new markets such as small precision component markels for the camera, fibre optics, walch, prinler shaft and micro molor shaft industries. (iii) Proven capabilities and know-how The fact that the GToup supplies (directly or indirectly) to well-known MNCs such as Western Digital, Maxtor Corporation, Hitachi GST, Canon Opto (M) Sdn Bhd, Victor Company of Japan, Ltd. (JVC), Matsushita Electric Industrial Co., Ud. and Konica Minolta Precision Engineering (M) Sdn Bhd, which are known to have high global standards and requirements for their products and its related components, is testament of the NVB Group’s capabilities and technical competencies. 4. INFORMATION ON THE NVB GROUP (Cont’d) The capabilities and know-how of tbe Group is not only limited to being able to understand its customers’ product specifications but also encompasses the ability to translate those specifications into actual production capabilities. (iv) Strong and Car sighted management The Group is fortunate to bave with them a strong and faIsighted management team, which possesses the necessary technical and business experience relating to tbeir business. The management team bas over the years proven Ihemselves to be capable of managing and improving on key technologies used in the Group, evidenced by the quality of their products and orderly manner of their manufacturing process. At thc same time, the Group’s management has also shown its ability to develop and maintain strong working relationships with global MNCs such as Western Digital and with key suppliers 10 MNCs. The Group’s management continues 10 commit to enhancing the Group’s technical capabilities via R&D and improving key relationships with existing and new customers. The majority of the Group’s key management and key technical personnei, including Ihe managing director and the senior management in the operations, marketing & sales, R&D/technical and production divisions, have at least 10 years or more of relevant working experience in the precision machining business. (v) Skilled emplnyees The Group recognises the need for skilled employees in view of the technical nature of its business, whicb is in the production of high precision components. The Group’s manufacturing capabilities need to be strongly supported by high value-adding activities such as the research, design and development of tools, dies, moulds, jigs, fixtures and electro­mechanical assemblies. The Group has in its employment experienCed and ablc engineers, technical pcrsoonel, machinists and top management staff who are technically competent in understanding customer requirements and translating them into deliverables that meet the customer’s specifications. (vi) Investment ill high precision eogilleeriDg technology Since its inception until 31 December 2004, the Gronp has invested RM49.6 million towards the acquisition of high technology machinery and systems capable of producing high precision components and parts for its customers. AI the same time the Group has invested into R&D to enhance the system’s efficiency and add value to its productive capabilities. (vii) Commitment to Quality Assurance The Group is committed to product quality and has established a quality assurance system that places great empbasis on achieving consistently high quality products, whicn is vital for the industries it is serving. The Group’s commitment to quality has been recognized by being an approved vendor of various MNCs and major customers, and by it being awarded the BS EN ISO 9001:2000 certification in 2002. (viii) R&D 10 order to succeed in this business, and to meet the stringent requirements for every new product or component to be manufactured, the Group has to undertake R&D activities in­nouse prior to consignment for mass production. 4. INFORMATION ON THE NVB GROUP (Cont’d) The R&D activities will result in development of high value-added products and processes that will complement lhe ultra-precision macllining systems and processes to ensure consistency and reliability in product quality across the thousands of units manufacture<! each day. These high value-added products will also ensure the reduction of industrial metal waste by optimizing the use of raw materials. These R&D products can also achieve improvement in machine operator safety and prevention of system downtime, thus increasing production capacily and revenues for the Group. The Group’s R&D capabilities have been demonstrated by its many in·house developments of supporting jigs, fixtures and tools to support its COre principal activity, (ix) Leadership in time-to-market, time·to-volume, time-to-response, time-to-quality and time-to-retool performance Serving customers in industries characterized by relatively ‘short to medium’ term product life cycle, such as the HOD and consumer electronics industries, where constant innovations will result in the introduction of new models into the market is a constant challenge for the Group, The Group needs to be able to cater and embrace these challenges inberent within their customers’ industries. The Group has proven its ability to offer time-to-market capability, i.e., being able to produce high precision components for its customers in time to meet market demands. It has also demonstrated its ability to provide time-to-volume capability by understanding its customers’ needs quickly and to be able to organize and ramp up production from virtually zero units to several thousand units per day meeting the higb volume requiremenls of its customers by possessing time-to-volume, time-to-response, time-lo-relool and time-to-quality capabilities. 4.2.18 Barriers of Entry (i) Controlled number of suppliers to maintain quality issue
HDD MNCs, in general, tend to limit its pool of approved “compooent” vendors in order to control product quality and consistency, as well as supplies lines. Tbus, only component suppliers whicb are able to meet the slandard requirements of MNCs will be inviled to participate in its product qualification programs (an average of 1 or 2 companies per program).
(li) Capabilities to manufacture at higb volume

The requirements of the industry for suppliers to mass produce high precisioo components with the same consistent quality is demanding. In addition, the approved vendors are also required to be completely flexible in their production planning, which allows for quick responses in production ramp-up io order to fulfiltime-to-market orders from MNCs. (iii) Rigorous process and long lead time to obtain approved vendor status A new competitor will have to undergo about a year or more of evaluation by a HOD MNC before it becomes an approved vendor to the MNC and proceeds with mass production. This serves as a barrier to entry as the costs and risks associated with such qualification is high. New competitors would need to invest in expensive machineries and other associated processes and materials without guarantee of contract. 4. INFORMATION ON THE NVB GROUP (Coll/’d) (iv) Commitment to investment in resources, design capabilities and machinery during pre­mass production pbase Competitors will need to have strong financial resources for investment in plant and macbinery and R&D capabilities to support the customers, particularly during the trial runs leading to mass production. It is normally a leogthy period ranging from 6 to 9 months before the purchase orders are secured. Aspiring new entrants may face difficulties in committing the necessary high level of resources, botb in terms of financial resources and engineering expertise. 4.3 Subsidiaries 4.3.1 Information on NVSB (i) Histnry and Business
NVSB was incorporated in Malaysia on 22 September 1995 as a private limited company under the Companies Act, 1965. NVSB is principally involved in design and volume production of high precision metal machining of HOD, computer, consumer electronic and electrical and automotive industries’ components, and related R&D activities.
(6) Sbare Capital

As at 15 April 2005, the authorised and issued and paid-up share capital of NVSB are as follows: RM Autborised Ordinary shares of RM1.00 each 10,000,000 Issued and paid-up Ordinary shares of RM1.oo each 6,115,920 (iii) Changes in Share Capital The changes in the paid-up share capilal of NVSB since its incorporation up to 15 April 2005 are as follows: C.mulative issued and Date of paid-up sbare capital aUotmeot No. of sbares allotted Consideration RM 22.09.1995 2 Subscribers’ shares 2 21.10.1995 99,998 Cash 100,000 22.03.1996 200,000 Cash 300,000 05.05.1998 300,000 Cash 600,000 28.09.1999 300,000 Cash 900,000 11.09.2000 600,000 1,500,000Cash 13.08.2002 700,000 Cash 2,200,000 03.12.2003 1,000,000 Casb 3,200,000 15.02.2004 2,915,920 Cash 6,115,920 4. INFORMATION ON THE NVB GROUP (Colll’d) (iv) Substantial Shareholder
As at the date of this Prospectus, NVSB is wholly-owned by NVB.
(v) Subsidiary and Associate Company

As at the date of this Prospeclus, NVSB does not bave any subsidiary or associate company. 4.3.2 Information on NTSB (i) History and Business
NTSB was incorporated in Malaysia on 20 June 2002 under the Companies Act, 1965 as a private limited company, The company commenced operation in 2 September 2002 and is principally engaged in design, development and modification of cutting tool geometry, regrind or re-sharpen special cutting tools using CNC tool and cuttcr grinder and other grinding operations, and marketing of diamond abrasive grinding wheels, PCD and PCBN inserts.
(ii) Share Capital

As at 15 April 2005, the authorised and issued and paid-up share capital of NTSB are as follows: RM Authorised OrdiJIary shares of RMl.OO each 5,000,000 Issued and paid.up Ordinary shares of RMl.oo each 1,253,675 (iii) Chauges in Share Capilal The changes in the paid-up share capital of NTSB since its incorporation up to 15 April 2005 are as follows: Cumulative issued and Date of paid·up sbare capital aUotment No. of shares allotted Consideration RM 20.06.2002 2 Subscribers’ Shares 2 19.05,2003 199,998 Cash 200,000 02.12.2003 200,000 Cash 400,000 15,02.2004 853,675 Cash 1,253,675 THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 4. INFORMATION ON THE NVB GROUP (Conl’d) (iv) SubstaDlial Sha…,holders The substantial shareholders of NTSB and their respective sharcholdings as at the date of this Prospectus are as follows: Sha…,holder No_ ofshares iD NTSB % iDlerest NVB 1,128,307 90 Lee Chee Keong 125,368 10 1,253,675 100 (v) Subsidiary and Associated Company As at 15 April 2005, NTSB does nol have any subsidiary or associated company. 4.3.3 Information on IPSB (i) History and BusiDess
IPSB was incorporated in MaLaysia on 17 July 2000 as a private limited company under the Companies Act, 1965. IPSB is principally involved in design, development, manufacture and marketing of precision jigs and fIxtures, tools and dies for stamping, precision mould parts for plastic injection, trim and form tools for semiconductor industry, and precision machine parls for the automotive and other high value-added industries.
(ii) Share Capital

As at 15 April 2005, the autborised aod issued and paid-up sbare capital of IPSB are as follows: RM Authorised Ordinary shares of RM1.00 eacb 100,000 Issued and paid-up Ordinary shares of RM1.oo each 100,000 (Iii) Changes iD Sbare Capital The changes in lhe paid-up share capital of IPSB since its incorporation up to 15 April 2005 are as follows: Cumulative issued and Date of paid-up sha…, capital allotment No. ofshares aDotted Consideration RM 17.Q7.2ooo 2 Subscribers’ shares 2 21.01.2003 29,998 Cash 30,000 25.09.2003 70,000 Cash 100,000 (iv) Suhstantial Shareholders As at the date of this Prospectus, IPSB is wholly-owned by NVB. 55 4. INFORMATION ON THE NVB GROUP (CoIlI’d) (v) Subsidiary and Ass””iate CompaDy As at the date of this Prospectus, IPSB does not have any subsidiary or associate company. 4.3.4 IDformation on DTSB (i) History and Business DTSB was incorporated in Malaysia on 10 Decemtler 2003 as a private limited company under the Companies Act, 1965. DTSB is principally involved in R&D activities leading to the design and production of the air chuck assemtlly system for soft clamping, tool-holders, gauges, dies, collets and lathe chucks for use by CNC machining applications. (ti) Sbare Capital As at 15 April 2005, the autborised and issued and paid-up share capital of DTSB are as follows: RM Autborised Ordinary shares of RMl.OO each 100,000 Issued and paid-up Ordinary shares of RMl.OO each 50,000 (iii) CbaDges in Share Capital The changes in tbe paid-up share capital of DTSB siDce its incorporation up to 15 April 2005 are 3S follows: Cumulative issued and Date of paid·up sbare capital aUotmeDt No. of shares aUotted ConsideratioD RM 10.12,2003 100 Sutlscritlers’ shares 100 18.02.2004 49,900 Cash 50,000 (iv) Substantial Sbareholders The substantial shareholders of DTSB and their respective shareholdings as at the date of this Prospectus are as follows: Sbareholder No. of shares in DTSB % interest NVB 40,000 80 Gan Iiin Luen 7,500 15 Tan Cbee Bin 2,500 5 50,000 100 4. INFORMATION ON THE NVB GROUP (CoIlI’d) (v) Subsidiary and Associate Company As at the date of this Prospectus, DTSB does not have any subsidiary Or associate company. 4.3.5 Information on KPSB (i) History and Business KPSB was incorporated in Malaysia on 25 January 2000 as a private limiled company under the Companies Acl, 1965, KPSB is principally involved in design and developmenlleading to the mass produclion of high precision micro parts and relaled R&D activities. (il) Share Capital As al 15 April 2005, the authorised and issued and paid-up share capital of KPSB are as follows: RM Authorised Ordinary shares of RM1.00 each 500,000 Issued and paid-up Ordinary shares of RMl.00 each 200,000 (iii) Changes in Share Capital The changes in the paid-up share capital of KPSB since its incorporation up to 15 April 2005 are as follows: Cumulative issued and Dateol paid·up share capital allotment No. of shares allotted Consideration RM 25.01.2000 2 Subscribers’ shares 2 27.01.2004 199,998 Cash 200,000 (iv) Substantial Shareholders The substantial shareholders of KPSB and Iheir respective shareholdings as at the date of this Prospectus are as follows: Shareholder No. of shares in KPSB % interest NVB 180,000 90 Ee Meog Pin 20,000 10 200,000 100 (v) Snbsidiary and Associate Company As at the date of this Prospectus, KPSB does not have any subsidiary or associate company. 4. INFORMATION ON THE NVB GROUP (Cont’d) 4.3.6 Information on SISB (i) History and Business SISB was incorporated in Malaysia on 16 Iune 2004 as a private limited company under the Companies Act, 1965. SISB is principally involved in design of tooling and volume manufacturing of high precision appearance parts using progressive die stamping for digital cameras, MP3 players and other consumer electronic devices. (Ii) Share Capital As at 15 April 2005, the authorised and issued and paid-Up share capital of SISB are as follows: RM Authorised Ordinary shares of RMl.oo each 500,000 Issued and paid-up Ordinary shares of RM1.00 each 300,000 (iii) Changes in Share Capital The changes in tbe paid-Up share capital of SISB since its incorporation up to 15 April 2005 are as follows: Cnmulative issued and Date of paid-up share capital allotment No. of shares allotted Consideration RM 16.06.2004 2 Subscribers’ sbares 2 20.09.2004 299,998 Cash 300,000 (iv) Substantial Sbareholders The substantial sharebolders of SISB and their respective sbareholdings as at the date of this Prospectus are as follows: Shareholder No. of shares in SISB % interest NVB 180,000 60 Foo Kee Pack 60,000 20 Urn Cboon Sing 30,000 10 Yong Kim Seng 30,000 10 300,000 100 (v) Subsidiary and Associate Company As at the date of this Prospectus, SISB does Dot bave any subsidiary or associate company. 4. INFORMATION ON THE NVB GROUP (Cant’d) 4.4 Industry Overview 4.4.1 The Malaysian Economy Malaysia’s growth momentum continues into 2004 after recording a strong growth in 2003. Unlike 2003, when the global economy was affected by the war in Iraq and Severe Acute Respiratory Syndrome, thc external environment in 2004 has improved markedly with an upswing in the global electronics demand as well as favourable commodity prices. This enabled the Malaysian economy to expand steadily from 7.6% in the first quarter of 2004 to 8% in the second quarter, the highest since tbe third quarter of 2000, The robust domestic economic activities, which supported growtb in 2002 through to 2004, are further augmented by a favourable external environment. The build-up in international reserves arising from larger current account surplus and inflows of foreign capital continues to strengthen Malaysia’s macroeconomic fundamentals. Consequently, national income in current prices is envisaged to increase by 10.8% to RM411,794 million, with per capita income rising by 8.5% to reach RMI6,098 (2003:RM14,838). Similarly, per capita income in tcrms of purchasing power parity income is estimated to increase by 9.3% to USDlO,I63 (2003:USD9,295). In an environment of increasing external uncertainties, domestic demand, led by the private sector, remains sturdy and contributes significantly to overaU economic growth in 2004. As consumer sentiment remains positive and investor confidence gains momentum, domestic demand in real terms (excluding cbange in stocks) is expected to increase by 6.7% and contribute 6.1 percentage points to overall GDP growtb. The outlook for 2005 will generally remain favourable although global growth is expected to moderate on account of high oil prices, inflationary pressures, interest rate hikes and a probable slowdown in China’s economy. The emergence of these risks, that became apparent in the second balf of 2004, are expected to continue into 2005. The stronger macroeconomic fundamentals and resilience, backed by sturdy domestic demand and broad-based growth, will however, continue to support Malaysia’s GDP growth, forecast at 6% in 2005. (Source: Economic Report 2004/Z005, Ministry ofFioonce, MalaysiIJ) 4.4.2 The HOD Industry 4.4.2.1 Current Stage and Development nver Time Technological changes and discoveries have made dramatic changes to the data storage industry. IBM introduced the first HOD in 1956, whereby. to store 5 megabytes of data, it bad to use 50 platters measuring 24 inches in diameter. The initial significant development was IBM’s introduction of the “thin ftlm induction” head. It utilized a single element to read and write data to and from the disk. As hard disk drives expanded in storage capacity, the magnetic domains had to be miniaturized so as to accommodate more of them on a platter. In 1991, IBM introduced the first “anisotropic magneto-resistive” (AMR) read heads for HDDs. With the creation of AMR read heads, HOD manufacturers were able to increase storage densities by approximately 60% a year during the nineties. However, this could not keep up to the demands of customers who requested ever higher-density HDDs. 4. INFORMATION ON THE NVB GROUP (Cont’d) In the meantime. ffiM’s Almaden Research Centre in San Jose, California had been experimenting with ways of increasing the storage density by using a technique called sputtering. By the end of 1997, IBM was ready to introduce the revolutionary giant magneto-resistive (GMR) head. This was the scientific and technological breakthrough that boosted the capacity of HODs from a few gigabytes to 100 gigabytes and more. In the process, storage densities have rose from 1 to 2 gigabytes per square inch of the first GMR HOD to about 100 gigabytes per square inch presently, The record is a pocket-sized 120-gigabyte HOD manufactured by Western Digital. Overall, the USA has a slight technology lead in the overall data storage technology, especially in the 3.5-inch form factor for HODs. The Japanese manufacturers, who are leaders in miniaturization technology, are leading in the 2.5-inch form factor and below for HODs, (Sourr;;e: Frost & Sullivan. Executive Summory: Strdtegk Insights ofthe Hard Disk Drive Marker. March 2fXJ5) 4.4.2.2 Industry Structnre The HOD cluster is quite established in Malaysia as a result of a huge inflow of foreign direct investments into this industry during the early to mid-nineties, These inflows were diverted from Singapore when production costs became too high. Due to the tight competitive conditions in the disk drive market, lower-end production of disk drives and removable drives was relocated from Singapore to Malaysia in the late eighties. Correspondingly, a number of supporting industries in the value chain has also been established in the areas of disk media, disk substrates, magnetic recording heads, actuators, head gimbals, arm assembly, spindle motors, bearings and PCB (printed circuit board) fabrication. Altogether, lhere are approximately 35 companies involved in the production and assembly of data storage devices in Malaysia; many arc located in both Penang and the Kulim Hi-Tech Park in neigbboring Kedah, The major peripheralS and component parts manufactured are: • HODs -Western Digital
• Disk media -Fuji Electric (Malaysia) Sdn. Bhd. and Kamag USA (Malaysia) Sdn, Bhd,
• Disk substrates -Advanced Disk Technology (Malaysia) Sdn. Bhd., Toyo Memory Technology Sdn, Bhd” and Fuji Electric (Malaysia) Sdn. Bbd.
• Magnetic recording heads -Penang Seagate Industries (M) Sdn, Bhd.
• Actuators -Eng Technology Sdn. Bhd,
• Head gimbal assemblies -Penang Seagate Industries (M) Sdn. Bhd.
• Voice coil motors -Shin-Etsu (Malaysia) Sdn. Bhd.
• Spindle motors -Sankyo Precision (Malaysia) Sdn. Bhd.

(Source: Frost & S14Ui1ll2’1, Executive Summary: Strategic Insights ofthe Hard-DiskDrive Markel, March 2(05) 4.4.2.3 HOD Market Dynamics Although demand for HODs has been largely flat in the period from 2000 to 2001, HOD demand has turned positive and is seen to be growing steadily with improvements seen in Asia and the US, The worldwide HOD shipment is expected to grow positively at a CAGR of 8.3% over the period 2004 to 2008. The sources for HOD industry growth in the years ahead are poised to come from two major arcas: the computer market and consumer electronics market. The computer market is further subdivided into 3 segments, which are the server market, personal compuler market and notebook market. Growth from the respective segments of the HOD industry is highlighted below: 4. INFORMATION ON THE NVB GROUP (Cont’d) • The global HDD shipment is projected to grow at a CAGR of8.3% from 2004 to 2008.
• The global server market is projected 10 grow at a CAGR of 9.7% from 2004 to 2008.
• The desktop / personal computers market is projected to grow at a CAGR of 6.8% from 2004 to 2008.
• The notebook market is projected to grow at a CAGR of 13.7% from 2004 to 2008.
• The non-traditional computing applications, namely consumer electronics market, with built in HOD, are projected to expand at a CAGR of 52,7% during the period 2004 to 2008. Nevetheless, personal computers and notebooks continue to be tbe main products that consume most of the HDD productions.

(Sou~e; Frost & Sullivan, ExecutiveSummary;SlTtUegk.InsightsoftheHardDiskDrive Market,March2(05) 4.4.2.4 Computer Market The computer market is subdivided into 3 segments, which are the server market, personal computer market and notebook market. The market for servers is dependent on both business sentiments and business expansions, as they arc mainly used in large corporations. To ensure the integrity and security of information, business corporations focus on data replication, and hence, data storage in servers. The telecommunications industry has been a major end-user influencing data storage demand. The global server market is projected to grow at a CAGR of 9.7% during the forecast period 2004 to 2008. The market in Malaysia is anticipated to expand at a lower pace, registering a CAGR of 8.4% during the corresponding period. Over the last few years, there has been a gradual migration from desktop personal computers to the notebook platform. In addition, computer assemblers are keener to market notebooks, as they provide higher margins compared to desktops. The popularity of mobile electronics among consumers is also driving the notebook market. The advent of wireless LAN (local area network) and public Wi-Fi (wireless fidelity) hotspots bas driven the sales of notebooks over the past two years, Declining Wi-Fi chipset prices have also accelerated the migration to notebooks. Unit shipment of personal computers in the global market is anticipated to increase at a CAGR of 6,8% during the forecast period 2004 to 2008, surpassing the forecasted unit shipment CAGR in Malaysia, which is projected to be 6.1% during the corresponding period, On the other hand, unit shipment of notebooks in tbe global market is anticipated at a strong CAGR of 13.7% for the same forecast period. whicb is slightly higher than the unit shipment CAGR of 12.9% that is projected for the Malaysian market, (Source: Frost & Sullivan, Executive Summary: Strategic Insights ofthe Hard Disk Drive Mark.er, March 2005) 4.4.2.5 Consumer Electronics Market Most HOD manufacturers are now focusing on the rising demand for data storage from consumer electronics. A majority of such products would initially be consumed in the more developed countries like the USA, Europe and Japan, due to the relatively higher per capital income and better digital infrastructure. Global unit shipments of consumer electronics like digital still cameras, camera phones, personal digital assistants, digital camcorders, portable digital music players, gaming consoles, digital video disk recorders and car navigation systems are collectively anticipated to grow at a CAGR of 26.3% during the forecast period 2004 to 2008, However, consumer electronics witb built-in hard disk drives are projected to expand at a much stronger CAGR of 52,7% during the same forecast period. 4. INFORMATlON ON THE NVB GROUP (Com’d) A projected growth summary of certain consumer electronics products using HOD applications, for the period 2004 to 2008, are indicated helow: • Unit shipment of digital cameras with built-in HDDs is forecasted to expand at a CAGR of 70.7%.
• Unit shipment of camera phones is projected to expand at a CAGR of 33.4%.
However, the growth of camera phones incorporating high·end features, which include functioos of the PDA and compressed digital music, and incorporating a digital still camera, may possibly cannibalise the sales of the stand alone digital cameras, PDAs and portable digital music players in the market.
• Unit shipment of digital video recorders with buill-in HODs is projected to expand at a CAGR of75.3%.
• Unit shipment of gaming consoles with a built-in HOD is projected to grow at a CAGR of 41.1%.
• Unit shipment of POAs with built-in HODs is expected to chart a strong CAGR of 72.0%.
• Unit shipment of digital camcorders is projecled to grow at a CAGR of 9.7%.
• Car navigatioo systems incorporating the HDDs are anticipated to expand at a CAGR of 49.5%.

(Sourc.e: Frost de. SulliJ-‘a'” Executive Summary: Slrategic Insigltl£ oftlte Hard Disk Drive Markel, Maren. 2(05) 4.4.3 The Automotive Component Parts Market In 2004, the Malaysian automotive component market was estimated at RM3.8 billion. This increase stems from higher consumption of OEM (original equipment market) component parts due to growing sales of new vehicles since 1998. OEM sales account for almost 60 percent of market revenues, while the aftermarket contributes the remaining 40 percent. In the OEM, parts sales mirror the production of new vehicles. Aftermarket revenues are derived from the existing vehicle population. Local component parts manufacturers focus on the OEM, while foreign parts manufacturers target the aftermarket. National vehicles provide a guaranteed and captive market for these OEM manufacturers who continue to thrive from the local content policy and high tariffs on new vehicles. Malaysian manufacturers have become more proficient at making car component parts ever since the Proton project was implemented and thus were able to secure orders for component parts from other car assemblers in Malaysia as well as from other ASEAN countries. There are many opportunities for local automobile component producers to take advantage of the ASEAN Free Trade Area (“AFfA”) to export these components. Under AFfA requirements, automotive imports must satisfy the “local content requiremenl,” which meaDS that at least 40% of the products content must originale from any single/cumulative ASEAN member(s). Increasing competitioo in the region is forcing Malaysiao parts manufacturers to reduce costs to become competitive. Some shifted overseas aod collaborate with foreign partners to reduce costs, gain access to foreign markets through overseas network, and develop and share proprietary technologies. In addition. manufacturers can build parts component that lean towards the international market and conform to global standards rather than rely solely on the limited Malaysian market. (Source: Frost &: SuOivan, Executive Summary: Strategic lnsiglw ofthe H4rd Disk Drive Marker. March 2(05) 4. INFORMATION ON THE NVB GROUP (Com’d) 4.4.4 Government Legislation, Policies and Incentives The Industrial Coordination Act 1975 requires any company engaging in manufacturing activities with shareholders’ funds of RM2.5 million or more, or which employs 75 or more full-lime employees, to obtain a manufacturing licence from MITI. Applications for manufacturing licences are processed by MIDA. Manufacturing licences issued by MITI are generally subject to conditions. Failure to comply with stipulated conditions may ultimately result in the revocation of the licence. Please refer to Section 8.1 of this Prospectus on the manufacturing licences that are held by the NVB Group and the terms and condilions imposed by MIT!. 4.4.5 Prospects and Outlook of the Industry Due to its basic importance and extensive forward and backward linkages, tbe precision engineering industry plays a key role in the country’s manufacturing process that is far greater than its proportional contribution to the total manufacturing output and employment might suggest. The trend in corporate outsourcing, instead of having precision machining and looling workshops appended to principal manufacturers, has also translated into more demand for the services of independent precision machining and tooling companies, Multinationals favor outsourcing because it leads to more flexibility in planning and production, as well as rednced capital expenditures, working capital, business risks and fixed overhead costs. Manufacturing processes with higher levels of precision and miniaturization will continue to be the objective of manufacturing engineering worldwide. A wide range of advanced technology products is totally dependent on precision engineering. A, a high technology product, the assembly of hard disk drives is heavily dependent on precision engineering component parts with exacting fit. Faster central processing unit (“CPUs”) and bus slandards make it possible to process aU the new data­intensive applications and files in the computer. This in return, requires increased hard disk drive capacity and performance in order to read and write the data at a speed that matches the rest of the system’s capabilities. Hence, in today’s environment of almost limitless data, the capability of the hard disk drive component of a compuler is a critical element in the overall perfonmance of the system. With computers firmly entrenched, the need for storage has never been greater. There is no doubt that the data storage needs of modem society will increase astronomically in the coming years. Improvements in data storage technologies are providing lower cost per gigabyte storage every year, a fact not missed by many end-users. The hard disk drive still appears to have a considerable remaining lifespan, although a slnwing rate of progress is anticipated due to significant technical challenges, there is a widely held view that no alternative technology is likely to provide serious competition over the next ten years, The price of a hard disk drive typically constitutes less than 10 percent of the total cost of the systems it goes into, and present alternative technologies arc still about two orders of magnitude more expensive than the hard disk drive, thus ruling them out as storage devices in the computing industry, except for consumer electronics. High-speed semiconductor memory could compete with hard disk drives in the future. Semiconductor memory is much faster than magnclic disk drives, but currently is not competitive from a cost standpoint. Flash memory, a non-volatile semiconductor memory, is currently more costly and while it has a higher “read” performance than hard disk drives, it has a lower “write” performance. As both computers and consumer electronics become more commoditizcd, price differentiation, and not product differentiation in the market become the key consumer attribute in the decision to purchase. Flash memory could become competitive in the near future for applications requiring less data storage capacity than that prOVided by hard disk drives. (Soun:e: Frost & Sullivan, Exa:utive Summary: Strategic Insights ofthe Hard Disk Drive Marke4 March 2(05) 4. INFORMATION ON THE NVB GROUP (Conl’d) 4.5 MDjor Customers Below is a list of the Group’s major customers, which the Group has successfully continued to serve since commencement oftbe business relationships, as at 15 April 2005. %of Years of  Revenue  Components  Business  as at FYE  Name of Customer  Supplied  Relationship  2004  MKE  HOD Spindle Motor Hubs  2  24,4%  Western Digital  HDD Disk Clamps and Spacer Rings  2  22.5%  Western Digital Corporation  HDD Disk Clamps and Spacer Rings  1  13.1%  (Tbailand) Co”  Ltd  Asahi Kosei (M) Sdn Bhd  HOD Disk Clamps and Automobile  8  10.2%  Components and Digital Camera parts  Diamet Klang (M) Sdn Bhd  Automotive and Air Conditioner  10  8.0%  Sintered parts  Kenseisha (M) Sdn Bhd  HOD Disk Clamps, Spacer Rings and  8  6.4%  Computer Components  Canon Opto (M) Sdn Bbd  Digital and Filmed Camera: Lens  3  3.0%  Locking Rings and Kola Pins  Konica Minolta group of  Digital and Filmed Camera: Cam Barrels  2-5  2.3%  companies *’  Jia Hui Sdn Bhd  HOD Spacer Rings  6  2,6%  Nidec-Copal (M) Sdn Bbd  Audio Visual Components  6  0.3%  Note:
• The companieswithinthe KOllicaMinolla groupofcompanieswhichtrclnsactwiththeGroupareas follow: Name o/CUjwmer Y”an 01Business RelatioruJUp KOIIiaJ Minolla Precision Engineering (M) Sdn 8M 5 KOllka Minoaa Optil::al Products (Shanghai) Co., Ltd. 2 Kmli<a Minolto Opticol Technologies (Shanghai) Co.. Ltd. 2 THE REST OF THIS PAGE IS INTENTIONALLY LEJIT BLANK 4. INFORMATION ON THE NVB GROUP (Clmt’d) 4.6 Major Suppliers The Group is not dependent OD any single supplier of products/services purchased. The Group has established good working relationships with several of its key raw materials suppliers in order to maintain a lower cost position and to ensure high quality aDd availability of goods OD a timely basis. A list of the Group’s major suppliers as at 15 April 2005 is set out below: %of Years of Purcbases Business asatFYE Name of Supplier Procurement/Purchases Relationship 2004 Wei Shin Aluminium Co Ud, Aluminium Tubings and Bars 8 21.8% Taiwan Enal Industries Pte.Ud EN Plating 1 15.3% Dipsol Chemicals (M) Sdn Bhd EN plating 2 4.4% SKB Aluminium Industries Sdo Aluminium Tubings and Bars 6 4.2% Bhd TLC Tool Suppliers Sdn Bhd Cutting Tools Supplies 4 3.6% Tensidchem SdD Bhd Cutting Oils & Paraffin 10 3.2% Kennametal (M) Sdn Bhd Inserts and Tool Holders 10 2.7% Mec-Mart Toolings Sdn Bhd Cutting Tools and Inserts 7 1.7% Kyowa Petrochemical (M) Sdn Cutting Oil 5 1.3% Bhd CKL Technology Works Anodising Aluminium Parts 3 1% 4.7 Future Plans and Outlook The Group has outlined various growth strategies for the next 5 years, which is summarised in the Summary of its Business Developmenl Plan set out in Section 10 of this Prospectus. Meanwhile, the Group aims to be at the technological forefront in the provision of high precision components, tools, moulds and dies for its targeted industries. The NVB Group intends 10 focus and endeavour to bring to fruition the R&D activities, which the Group bas outlined in its R&D Product Roadrnap for 2005 ­2009, detailed in Section 4.2.11 of this Prospectus. THE REST OF THIS PAGE IS INTENTIONALLY LEYI’ BLANK

 

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