SINGAPORE COMPUTER SYSTEMS LIMITED

CIRCULAR DATED 24 SEPTEMBER 2008

THIS CIRCULAR IS IMPORTANT AS IT CONTAINS THE RECOMMENDATIONS OF THEINDEPENDENT DIRECTORS OF SINGAPORE COMPUTER SYSTEMS LIMITED AND THE ADVICEOF CIMB-GK SECURITIES PTE. LTD. THIS CIRCULAR REQUIRES YOUR IMMEDIATE ATTENTIONAND YOU SHOULD READ IT CAREFULLY.

If you are in any doubt as to the action you should take, you should consult your stockbroker,bank manager, accountant, solicitor or other professional adviser immediately.

If you have sold or transferred all your shares in the capital of Singapore Computer Systems Limited(Company), you should immediately forward this Circular to the purchaser or transferee or to the bank,stockbroker or other agent through whom the sale or transfer was effected for onward transmission to thepurchaser or the transferee.

The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of anyof the statements made, reports contained or opinions expressed in this Circular.

SINGAPORE COMPUTER SYSTEMS LIMITED(Company Registration No.: 198000071W)

(Incorporated in the Republic of Singapore)

CIRCULAR TO SHAREHOLDERS IN RELATION TO THEMANDATORY CONDITIONAL CASH OFFER

by

ANZ SINGAPORE LIMITED(Company Registration No.: 198602937W)(Incorporated in the Republic of Singapore)

for and on behalf of

COMPUTER SYSTEMS HOLDINGS PTE. LTD.(Company Registration No.: 200816481N)


to acquire all the issued ordinary shares in the capital of the Company other than thosealready owned, controlled or agreed to be acquired by Computer Systems Holdings Pte. Ltd.

Independent Financial Adviser to the Independent Directors of the Company

CIMB-GK SECURITIES PTE. LTD.(Company Registration No.: 198701621D)


Shareholders should note that the Offer Document states that acceptances should be received by 5.30 p.m. on 17 October 2008 or on such later date(s) as may be announced from time to time by oron behalf of the Offeror.

Page

DEFINITIONS...................................................................................................................................... 2

CAUTIONARY NOTE .......................................................................................................................... 5

LETTER TO SHAREHOLDERS .......................................................................................................... 6

1. INTRODUCTION ...................................................................................................................... 6

2. THE OFFER.............................................................................................................................. 7

3. OPTIONS .................................................................................................................................. 8

4. RATIONALE FOR THE OFFER ................................................................................................ 9

5. THE OFFEROR’S INTENTIONS FOR THE COMPANY .......................................................... 10

6. BENCHMARKING THE OFFER................................................................................................ 11

7. CHANGE OF NAME UNDERTAKINGS .................................................................................... 11

8. ADVICE AND RECOMMENDATIONS ...................................................................................... 13

9. OVERSEAS SHAREHOLDERS................................................................................................ 14

10. ACTION TO BE TAKEN BY SHAREHOLDERS........................................................................ 15

11. CONSENTS .............................................................................................................................. 15

12. DIRECTORS’ RESPONSIBILITY STATEMENT ........................................................................ 15

13. DOCUMENTS AVAILABLE FOR INSPECTION ...................................................................... 16

APPENDIX 1 : LETTER FROM CIMB-GK TO THE INDEPENDENT DIRECTORS OFSINGAPORE COMPUTER SYSTEMS LIMITED IN RESPECT OF THE OFFER .... 17

APPENDIX 2 : GENERAL INFORMATION ........................................................................................ 47

APPENDIX 3 : INFORMATION ON THE OFFEROR AND NCS ........................................................ 71

APPENDIX 4 : UNAUDITED CONSOLIDATED FINANCIAL STATEMENT OF THE GROUP FORHY2008 ...................................................................................................................... 72

APPENDIX 5 : STATEMENT OF PROSPECTS.................................................................................. 80

APPENDIX 6 : REPORT OF AUDITORS ON THE STATEMENT OF PROSPECTS.......................... 82

APPENDIX 7 : LETTER FROM CIMB-GK IN RELATION TO THE STATEMENT OFPROSPECTS .............................................................................................................. 83

APPENDIX 8 : VALUATION SUMMARY REPORT ............................................................................ 84

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CONTENTS

DEFINITIONS

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For the purpose of this Circular, the following definitions apply throughout unless the context otherwiserequires or unless otherwise stated:

Acquisition : The acquisition by the Offeror of 93,144,501 Shares from Green Dot

ANZ : ANZ Singapore Limited

Articles : The Articles of Association of the Company

Board : The board of Directors of the Company

CCS : Competition Commission of Singapore

CDP : The Central Depository (Pte) Limited

CEO : Chief Executive Officer

Closing Date : 5.30 p.m. on 17 October 2008 or such later date(s) as may beannounced from time to time by or on behalf of the Offeror, being thelast day for the lodgement of acceptances for the Offer

Code : The Singapore Code on Take-overs and Mergers

Company or SCS : Singapore Computer Systems Limited

Companies Act : The Companies Act, Chapter 50 of Singapore, as amended or modifiedfrom time to time

Despatch Date : 12 September 2008, being the date of despatch of the Offer Document

Directors : The directors of the Company as at the Latest Practicable Date

Encumbrances : All liens, equities, charges, encumbrances, rights of pre-emption andany other third party rights or interests of any nature whatsoever

FAA : Form of Acceptance and Authorisation, which forms part of the OfferDocument

FAT : Form of Acceptance and Transfer, which forms part of the OfferDocument

Favourable Decision : Has the meaning ascribed to it in Section 2.5.2 of this Circular

First Closing Date : 5.30 p.m. on 17 October 2008

FY : Financial year ended or, as the case may be, ending 31 December

Green Dot : Green Dot Capital Pte Ltd

Group : The Company and its subsidiaries

HY : Half year ended or, as the case may be, ending 30 June

IFA or CIMB-GK : CIMB-GK Securities Pte. Ltd., the independent financial adviser to theDirectors

DEFINITIONS

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IFA Letter : The letter from CIMB-GK to the Directors dated 24 September 2008 onthe Offer

Latest Practicable Date : The latest practicable date prior to the printing of this Circular, being 17 September 2008

Listing Manual : SGX-ST Listing Manual

Market Day : A day on which the SGX-ST is open for securities trading

Merger Control Event : Has the meaning ascribed to it in Section 2.5.1 of this Circular

NCS : NCS Pte. Ltd.

Offer : The mandatory conditional cash offer made by ANZ, for and on behalfof the Offeror, to acquire all the Offer Shares on the terms and subjectto the conditions set out in the Offer Document, as may be amended,extended or revised from time to time by or on behalf of the Offeror

Offeror : Computer Systems Holdings Pte. Ltd.

Offer Announcement : The announcement of the Offeror’s intention to make the Offer, whichwas released on the Offer Announcement Date

Offer Announcement : 25 August 2008, being the date of the Offer AnnouncementDate

Offer Document : The document (incorporating the FAA and FAT) dated 10 September2008 issued by ANZ for and on behalf of the Offeror in respect of theOffer, and any other document(s) which may be issued by or on behalfof the Offeror to amend, revise, supplement or update the aforesaiddocument(s) from time to time. References to Offer Document shallinclude the FAA and FAT

Offer Period : The period from the Offer Announcement Date until the Closing Date

Offer Price : S$1.50 in cash for each Offer Share

Offer Shares : All the Shares to which the Offer relates, and Offer Share shall meanany one of the Offer Shares

Options : Options to subscribe for new Shares granted under the Plans

Options Proposal : Has the meaning ascribed to it in Section 3.1 of this Circular

Optionholder : Grantee of Options pursuant to the Plans

Overseas Shareholders : Shareholders whose addresses are outside Singapore as shown in theregister of Members of the Company or, as the case may be, in therecords of the CDP, and Overseas Shareholder means any one ofthem

per cent. or % : Per centum or percentage

Phase 2 Review : Has the meaning ascribed to it in Section 2.4 of this Circular

DEFINITIONS

Plans : SCS’ Executives’ Share Option Scheme and SCS’ Share Option Plan

S$ and cents : Singapore dollars and cents, respectively

Securities Account : A securities account maintained by a Depositor with CDP but does notinclude a securities sub-account

SGXNET : A system network used by listed companies to send information andannouncements to the SGX-ST or any other system network prescribedby the SGX-ST

SGX-ST : Singapore Exchange Securities Trading Limited

Share Purchase : The share purchase agreement dated 25 August 2008 made among Agreement Green Dot, the Offeror and NCS in respect of the Acquisition

Share Registrar : M & C Services Private Limited

Shareholders : Persons who are registered as holders of the Shares in the Register ofMembers of the Company or, where CDP is the registered holder, theterm Shareholders shall in relation to such Shares mean theDepositors who have Shares entered against their names in theDepository Register

Shares : Issued ordinary shares in the capital of the Company

SIC : Securities Industry Council of Singapore

SingTel : Singapore Telecommunications Limited

subsidiary or : Shall be construed in accordance with Sections 5 and 5B of the subsidiaries Companies Act

The expression acting in concert shall have the meaning ascribed to it in the Code.

The terms Depositor and Depository Register shall have the meanings ascribed to them respectively inSection 130A of the Act.

Words importing the singular shall, where applicable, include the plural and vice versa. Words importingthe masculine gender shall, where applicable, include the feminine and neuter genders. References topersons shall include corporations.

Any reference in this Circular to any enactment is a reference to that enactment as for the time beingamended or re-enacted. Any word defined under the Act or any statutory modification thereof and nototherwise defined in this Circular shall have the same meaning assigned to it under the Act or anystatutory modification thereof, as the case may be.

Any reference to a time of day in this Circular is made by reference to Singapore time unless otherwisestated.

The headings in this Circular are inserted for convenience only and shall be ignored in construing thisCircular.

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CAUTIONARY NOTE

All statements contained in this Circular which are not statements of historical facts are or may constitute“forward-looking statements”. Some of these statements can be identified by forward-looking terms suchas “expect”, “believe”, “plan”, “intend”, ‘estimate”, “anticipate”, “may”, “will”, “would”, “should”, “shall”,“could” and “can” or other similar words. However, these words are not the exclusive means of identifyingforward-looking statements. Such forward-looking statements involve known and unknown risks,uncertainties and other factors which may cause our actual results, performance or achievements to bematerially different from any future results, performance or achievements expressed or implied by suchforward-looking statements.

Given the risks and uncertainties that may cause our actual results, performance or achievements to bematerially different than expected, expressed or implied by the forward-looking statements in this Circular,you are advised not to place undue reliance on those statements. Further, the Company disclaims anyresponsibility to update any of those forward-looking statements or publicly announce any revisions tothose forward-looking statements to reflect future developments, events or circumstances for any reason,even if new information becomes available or other events occur in the future, subject to compliance withall applicable laws and regulations and/or rules of the SGX-ST and/or any regulatory or supervisory bodyor agency.

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LETTER TO SHAREHOLDERS

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Singapore Computer Systems Limited(Company Registration No. 198000071W)


Directors Registered Office

Peter Seah Lim Huat (Chairman) 7 Bedok South Road Boon Swan Foo (Deputy Chairman) Singapore 469272Philip Eng Heng NeeWilliam Liu Wei HaiTan Cheng HanDonald Albert RambleVenkatachalam KrishnakumarTan Tong Hai (President & CEO)

24 September 2008

To: The Shareholders of Singapore Computer Systems Limited

Dear Sir/Madam

INTRODUCTION

1.1 Introduction

On 25 August 2008, ANZ, for and on behalf of the Offeror, announced that :-

(a) the Offeror had acquired 93,144,501 Shares for S$1.50 in cash per Share from Green Dot,representing approximately 60 per cent. of all the Shares as of 25 August 2008; and

(b) as a result of the Acquisition, the Offeror was obliged, and intended, to make a mandatoryconditional cash offer for the Offer Shares in accordance with Rule 14 of the Code andSection 139 of the Securities and Futures Act, Chapter 289 of Singapore.

A copy of the Offer Announcement is available on the website of the SGX-ST at www.sgx.com.

Shareholders should by now have received a copy of the Offer Document which contains theformal offer by ANZ, for and on behalf of the Offeror, to acquire all the Offer Shares and which wasdespatched to Shareholders on the Despatch Date. Shareholders are advised to read the termsand conditions contained therein.

1.2 Purpose of Circular

The purpose of this Circular is to provide Shareholders with information relating to the Offer and toset out the recommendation of the Directors and the advice of the IFA to the Directors in relation tothe Offer.

Shareholders should note that all the Directors are considered independent for the purpose ofmaking a recommendation to Shareholders in respect of the Offer.

1.3 The Offeror

Information on the Offeror is set out in Appendix 3 to this Circular.


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2. THE OFFER

Based on the information set out in the Offer Document, the Offeror has offered to acquire theOffer Shares on the terms and subject to the conditions set out in the Offer Document on thefollowing basis:

2.1 Offer Price

As stated in Section 2.1 on page 10 of the Offer Document, the Offer Price is:

for each Offer Share: S$1.50 in cash.

Shareholders should note that it is stated in the Offer Document that the Offeror does not intend torevise the Offer Price.

2.2 Offer Shares

The Offer is in relation to all the Shares, other than those already owned, controlled or agreed tobe acquired by the Offeror. The Offer is also extended on the same terms and conditions, to allnew Shares unconditionally issued or to be issued (i) pursuant to the valid exercise of any Optionsgranted under the Plans and (ii) pursuant to the valid release of any awards under SCS’Performance Share Plan and SCS’ Restricted Stock Plan, each prior to the close of the Offer. Forthe purposes of this Offer, the expression “Offer Shares” shall include such new Shares.

2.3 No Encumbrances

The Offer Shares will be acquired:

(a) fully-paid;

(b) free from all Encumbrances; and

(c) together with all rights, benefits and entitlements attached thereto as at the OfferAnnouncement Date and thereafter attaching thereto, including the right to receive andretain all dividends, rights and other distributions which may be announced, declared, paidor made by the Company on or after the Offer Announcement Date. If any dividend, otherdistribution or return of capital is declared, paid or made on or after the Offer AnnouncementDate, the Offeror has reserved the right to reduce the Offer Price by the amount of suchdividend, distribution or return of capital.

2.4 Condition

The Offer will be subject to the condition that it is established that the CCS will not (i) refer theproposed acquisition of SCS by the Offeror, or any matter arising from or relating to that proposedacquisition, to a more detailed assessment pursuant to the CCS Guidelines on Merger Procedures(the “Phase 2 Review”) or (ii) issue a direction that will prohibit the Offeror from acquiring votingrights in SCS.

The Offer is not conditional upon a minimum number of acceptances being received by theOfferor.

2.5 Merger Control Event.

2.5.1 Merger Control Event: The Offer shall lapse in the event (each, a “Merger Control Event”)that the CCS (i) refers the proposed acquisition of SCS by the Offeror, or any matter arisingfrom or relating to that proposed acquisition, to a Phase 2 Review or (ii) issues a directionthat prohibits the Offeror from acquiring voting rights in SCS, before the First Closing Date.


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2.5.2 Lapse: If the Offer lapses as a result of a Merger Control Event, the effects are that theOffer will cease to be capable of further acceptance and both the Shareholders and theOfferor will cease to be bound by prior acceptances of the Offer. If, following the lapse of theOffer as a result of a Merger Control Event, the CCS issues a decision that the proposedacquisition of SCS by the Offeror will not infringe Section 54 of the Competition Act, Chapter50B of Singapore (the “Favourable Decision”), the Offer will be reinstated on the sameterms and at the Offer Price as soon as practicable following the date of issue of theFavourable Decision.

2.6 Duration of the Offer

First Closing Date : Based on the Offer Document, the Offer is open for acceptance byShareholders for at least 28 days from the Despatch Date, unless the Offer is withdrawn with theconsent of the SIC and every person released from any obligation incurred thereunder.Accordingly, the Offer will close at 5.30 p.m. on 17 October 2008, being the First Closing Dateor such later date(s) as may be announced from time to time by or on behalf of the Offeror.

Subsequent Closing Date. If the Offer is extended and :-

(a) is not unconditional as at the date of such extension, the announcement of the extensionmust state the next Closing Date; and

(b) is unconditional as at the date of such extension, the announcement of the extension neednot state the next Closing Date but may state that the Offer will remain open until furthernotice. In such a case, the Offeror must give Shareholders at least 14 days’ prior notice inwriting before it may close the Offer.

No Obligation to Extend the Offer. The Offeror is not obliged to extend the Offer if the conditionspecified in Section 2.4 of the Offer Document is not fulfilled by the Closing Date(s).

2.7 Warranty

Shareholders should note Section 4 of the Offer Document which states that a Shareholder whotenders his Offer Shares in acceptance of the Offer will be deemed to warrant that he sells suchOffer Shares as or on behalf of the beneficial owner(s) thereof, (a) fully-paid; (b) free from allEncumbrances and (c) together with all rights, benefits and entitlements attached thereto as at theOffer Announcement Date and thereafter attaching thereto, including all voting rights, the right toreceive and retain all dividends, rights and other distributions announced, declared, paid or madeby the Company on or after the Offer Announcement Date.

2.8 Details of the Offer

Further details of the Offer are set out in the Offer Document, including details on (a) the durationof the Offer, (b) the settlement of the consideration for the Offer, (c) the requirements relating to theannouncement of level of acceptances of the Offer, and (d) the right of withdrawal of acceptancesof the Offer.

3. OPTIONS

3.1 Plans

As of the Latest Practicable Date, there are outstanding Options. Under the rules of the Plans, theOptions are not transferable by the Optionholders. In view of this restriction, ANZ, on behalf of theOfferor, will not make an offer to acquire the Options (although, for the avoidance of doubt, theOffer will be extended to all new Shares issued or to be issued pursuant to the valid exercise of theOptions on or prior to the close of the Offer). Instead, ANZ will, on behalf of the Offeror, make aproposal (the “Options Proposal”) to Optionholders on the following terms:

(a) subject to the Offer becoming or being declared unconditional; and

(b) the relevant Options continuing to be exercisable into new Shares,


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the Offeror will pay to such Optionholders a cash amount (determined as provided below) (the“Option Price”) in consideration of such Optionholders agreeing:

(i) not to exercise any of such Options into new Shares; and

(ii) not to exercise any of their rights as Optionholders,

in each case from the date of their acceptance of the Options Proposal to the respective dates ofexpiry of such Options. Further, if the Offer becomes or is declared unconditional, Optionholderswho have accepted the Options Proposal will also be required to surrender all of their Options forcancellation. If the Offer lapses or is withdrawn or if the relevant Options cease to be exercisableinto new Shares, the Options Proposal will lapse accordingly.

3.2 Option Price

The Option Price is computed on a “see-through” basis. In other words, the Option Price in relationto any Option is the amount by which the Offer Price is in excess of the exercise price of thatOption. Where the exercise price of an Option is equal to or in excess of the Offer Price, the OptionPrice for each Option will be fixed at S$0.001.

3.3 Offer and Options Proposal Mutually Exclusive

As stated in the Offer Document, for the avoidance of doubt, whilst the Options Proposal isconditional upon the Offer becoming or being declared unconditional, the Offer will not beconditional upon acceptances received in relation to the Options Proposal. The Offer and theOptions Proposal are separate and are mutually exclusive. The Options Proposal does not formpart of the Offer, and vice versa. Without prejudice to the foregoing, if Optionholders exercise theirOptions in order to accept the Offer in respect of the new Shares to be issued pursuant to suchexercise, they may not accept the Options Proposal in respect of such Options. Conversely, ifOptionholders wish to accept the Options Proposal in respect of their Options, they may notexercise those Options in order to accept the Offer in respect of the new Shares to be issuedpursuant to such exercise.

3.4 Options Proposal

According to the Offer Document, details of the Options Proposal would be despatched to theOptionholders on the Despatch Date.

4. RATIONALE FOR THE OFFER

The rationale for the Offer has been extracted from the Offer Document and is set out in italicsbelow.

“The proposed acquisition of SCS will accelerate the overseas expansion plans of NCS byproviding the scale of operations and enlarged regional footprint that are critical in servicing andcompeting for regional customers in a market that is increasingly characterised by competition fromlarge multinational service providers. The combination of NCS’ and SCS’ businesses will also betterposition the enlarged group to compete locally and regionally with large multinational serviceproviders in the information and communications technology service sector and to meet anychallenges posed by the current operating environment.

The Offeror is further making the Offer with a view to exercising its rights of compulsory acquisitionunder Section 215(1) of the Companies Act, in the event that the Offeror becomes entitled to doso, and delisting SCS from the SGX-ST thereafter.”


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5. THE OFFEROR’S INTENTIONS FOR THE COMPANY

5.1 The Offeror’s Intentions for the Company

According to the Offer Document, following the acquisition of SCS, the Offeror currently intends tosynergise the business and operations of SCS with the business and operations of NCS and to thisend, the Offeror will undertake a comprehensive review of the organisation, businesses andoperations of SCS and its subsidiaries, and intends to work closely with SCS to developappropriate measures to maximise business value.

Following such a review and until such time when a decision is made, the Offeror presently has nointention to (i) introduce any major changes to the business of SCS (save for the actions to betaken pursuant to the Change of Name Undertakings), (ii) redeploy the fixed assets of SCS or (iii)discontinue the employment of the employees of SCS and its subsidiaries.

The Offeror retains the flexibility at any time to consider any options in relation to SCS and itssubsidiaries which may present themselves and which they may regard to be in the interest of theOfferor.

5.2 Compulsory Acquisition

According to the Offer Document, pursuant to Section 215(1) of the Companies Act, if the Offerorreceives acceptances pursuant to the Offer for not less than 90 per cent. of the Shares (other thanthose already held by the Offeror, its related corporations or their respective nominees as at thedate of the Offer, including the Shares purchased from Green Dot under the Share PurchaseAgreement), the Offeror will exercise its right under Section 215(1) of the Companies Act tocompulsorily acquire, at the Offer Price, all the Shares of Shareholders who have not accepted theOffer and proceed to delist the Company from the SGX-ST.

In addition, pursuant to Section 215(3) of the Companies Act, if the Offeror acquires such numberof Shares which, together with Shares held by it, its related corporations and their respectivenominees, comprise 90 per cent. or more of the Shares, Shareholders who have not accepted theOffer have a right to require the Offeror to acquire their Shares at the Offer Price.

5.3 Delisting

Under Rule 1105 of the Listing Manual, in the event that the Offeror and parties acting in concertwith it, as a result of the Offer or otherwise, own or control more than 90 per cent. of the Shares(excluding treasury shares), the SGX-ST may suspend the listing of the Shares until such timewhen the SGX-ST is satisfied that at least 10 per cent. of the Shares (excluding treasury shares)are held by at least 500 shareholders who are members of the public.

In addition, under Rule 724 of the Listing Manual, if the percentage of the Shares (excludingtreasury shares) held in public hands falls below 10 per cent., the Company must, as soon aspracticable, announce that fact and the SGX-ST may suspend trading of all the Shares. UnderRule 1303(1) of the Listing Manual, where the Offeror succeeds in garnering acceptancesexceeding 90 per cent. of the Shares (excluding treasury shares), thus causing the percentage ofSCS’ total number of Shares (excluding treasury shares) held in public hands to fall below 10 percent., the SGX-ST will suspend trading of Shares at the close of the Offer.

Rule 725 of the Listing Manual states that the SGX-ST may allow SCS a period of three months,or such longer period as the SGX-ST may agree, to raise the percentage of Shares in public handsto at least 10 per cent., failing which the Company may be delisted.

Shareholders should note that it is stated in the Offer Document that the Offeror intends to makeSCS its wholly-owned subsidiary and does not intend to preserve the listing status of SCS.Accordingly, the Offeror does not intend to take steps for any trading suspension of theShares by the SGX-ST to be lifted in the event that, inter alia, less than 10 per cent. of theShares (excluding treasury shares) are held in public hands.


6. BENCHMARKING THE OFFER

The following information on the benchmarking of the Offer has been extracted from the OfferDocument and is set out in italics below. Unless otherwise defined, all terms and expressions usedin the extract below shall have the same meaning as those defined in the Offer Document.

Benchmark Premium over thePrice6 benchmark price

S$0.96 56.3%

S$1.31 14.5%

S$1.18 27.0%

S$1.15 30.5%

S$1.08 39.2%

5 This is the day on which SCS responded to the query by the SGX-ST regarding trading activity and announced thatGreen Dot is evaluating options with respect to its stake in SCS.

6 The figures set out in Section 11.2 of this Offer Document are based on data extracted from Bloomberg.

7. CHANGE OF NAME UNDERTAKINGS

As stated in the Offer Document, pursuant to Clause 5.1 of the Share Purchase Agreement, eachof the Offeror and NCS has undertaken (on a joint and several basis) with Green Dot that,following the completion of the Acquisition under the Share Purchase Agreement, it shall :-

(a) not later than 180 days after the Offer closes:

(i) (aa) if at the close of the Offer, it holds 75 per cent. or more of the total voting rights inthe Company, procure the removal of the term “Singapore” from the name of theCompany and (bb) if at the close of the Offer, it holds less than 75 per cent. of thetotal voting rights in the Company, use its reasonable endeavours to procure that ageneral meeting is held by the Company at which a resolution for the removal of theterm “Singapore” from the name of the Company will be proposed, and vote in favourof such resolution;

(ii) where the names of the subsidiaries and associated companies of the Companycontain the term “Singapore Computer Systems Limited”, (aa) procure the removal ofthe term “Singapore” from the respective names of the 75% Controlled Subsidiaries ofthe Company and (bb) use its reasonable endeavours to procure that a generalmeeting is held by each of the Other Group Entities of the Company at which aresolution for the removal of the term “Singapore” from its name will be proposed, andvote in favour of such resolution;

(iii) procure the removal of the term “Green Dot” from the name of Green Dot InternetServices Pte Ltd; and

(iv) procure that the Company uses its reasonable endeavours to procure that a generalmeeting is held by Trusted Hub Ltd at which a resolution for the removal of the term“Trusted” from the name of “Trusted Hub Ltd” will be proposed, and vote in favour ofsuch resolution;

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(i) Last transacted price as quoted on the SGX-ST on 29 July 2008 (being the last trading date prior to 30 July20085)

(ii) Last transacted price as quoted on the SGX-ST on 21 August 2008 (being the last full trading date prior tothe Announcement Date)

(iii) VWAP on the SGX-ST for the one month period up to21 August 2008

(iv) VWAP for the three month period up to 21 August 2008

(v) VWAP for the six month period up to 21 August 2008


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(b) procure that the subsidiaries of the Company incorporated after the Offer closes do notcontain the term “Trusted” or “Green Dot” in their respective names;

(c) in relation to entities whose names contain the term “Trusted” or “Green Dot” and which areacquired after the Offer closes, not later than 180 days from the respective dates ofacquisition of such entities (i) for the 75% Controlled Subsidiaries of the Company, procurethat they do not use the term “Trusted” or “Green Dot” in their respective names and (ii) forthe Other Group Entities of SCS, use its reasonable endeavours to procure that a generalmeeting is held by each of the Other Group Entities at which a resolution to remove the term“Trusted” or “Green Dot” (as the case may be) from its name will be proposed, and vote infavour of such resolution;

(d) in respect of (i) the 75% Controlled Subsidiaries of SingTel as at the close of the Offer orwhich are acquired after the Offer closes, not later than 180 days from the date the Offercloses or the respective dates of acquisition of such 75% Controlled Subsidiaries, as thecase may be, or (ii) the subsidiaries of SingTel which are incorporated after the Offer closes,procure that such relevant subsidiaries not use the term “Singapore Computer SystemsLimited” in their respective names; and

(e) in respect of the Other Group Entities of SingTel whose names contain the terms “SingaporeComputer Systems Limited” as at the close of the Offer or which are acquired after the Offercloses, not later than 180 days from the date the Offer closes or the respective dates ofacquisition of such Other Group Entities, as the case may be, use its reasonable endeavoursto procure that a general meeting is held by each of such Other Group Entities at which aresolution for the removal of the term “Singapore Computer Systems Limited” from its namewill be proposed and vote in favour of such resolution,

Provided that if a subsidiary or associated company of the Company or SingTel adopts, or isacquired with, a name on or after the close of the Offer which causes the Offeror and/or NCS to bein breach of their respective obligations as stated in paragraphs (b) to (e) above:-

(a) Green Dot shall give notice of such breach to the Offeror and NCS as soon as Green Dotbecomes aware of such breach and shall allow the Offeror and NCS a period of 30 daysfrom the date of receipt of such notice to remedy such breach; and

(b) the Offeror and NCS shall, as soon as either of them becomes aware of such breach (otherthan by reason of a notice from Green Dot), remedy the breach within 30 days thereafter.

For the purpose of this Section 7 :-

(a) Other Group Entities means, in relation to a company, the subsidiaries and associatedcompanies of such company other than the 75% Controlled Subsidiaries of such company;

(b) 75% Controlled Subsidiaries means, in relation to a company, the subsidiaries of suchcompany in which such company is able to control 75 per cent. or more of the total votingrights;

(c) the word subsidiary shall have the same meaning as its definition in the Companies Act;and

(d) the word associated company shall have the same meaning as its definition in the Code.


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8. ADVICE AND RECOMMENDATIONS

8.1 CIMB-GK has been appointed as the independent financial adviser to the Directors in respect ofthe Offer. Shareholders should read and consider carefully the advice of CIMB-GK in its letterdated 24 September 2008 to the Independent Directors on the Offer (IFA Letter) and therecommendations of the Directors before deciding on whether to accept or reject the Offer.

CIMB-GK’s advice on the Offer is set out in the IFA Letter, which is reproduced at Appendix 1 tothis Circular.

8.2 Evaluation of the Offer by the IFA

The key factors taken into consideration by the IFA in arriving at its recommendation have beenextracted from the IFA Letter and set out in italics below. Unless otherwise defined, all terms andexpressions used in the extract below shall have the same meaning as those defined in the IFALetter. Shareholders should read the following extract in conjunction with, and in the context of thefull text of, the IFA Letter.

“In assessing the financial terms of the Offer, we have considered the following:-

(i) Market quotation and trading activity of the Shares;

(ii) Valuation ratios of the Company implied by the Offer Price versus those of selectedcomparables listed companies;

(iii) Book net tangible assets (“NTA”) and Revalued NTA of the Group;

(iv) Premium paid in other take-overs of companies listed on the SGX-ST;

(v) Premium paid in recent merger and acquisition transactions in the information technologiesindustry;

(vi) Analysts’ estimates of price targets for the Shares;

(vii) Dividend track record of the Company; and

(viii) Other relevant considerations which have a significant bearing on our assessment.”

8.3 Advice of the IFA

The advice of the IFA to the Directors in respect of the Offer has been extracted from the IFALetter and set out in italics below. Unless otherwise defined, all terms and expressions used in theextract below shall have the same meaning as those defined in the IFA Letter. Shareholders shouldread the following extract in conjunction with, and in the context of the full text of, the IFA Letter.

“Unless Shareholders are confident and optimistic about the prospects of the Group under thecontrol of the Offeror, they should either ACCEPT the Offer or sell their Shares in the open marketif they can obtain a price higher than the Offer Price (after deducting all related expenses) by doingso. In addition, we wish to bring to Shareholders’ attention that the Offer shall lapse and the Offerorwill cease to be bound by prior acceptances of the Offer in the event a Merger Control Eventoccurs. Shareholders are advised to read Sections 6.2 and 6.3 of our letter carefully in relation tothe Merger Control Event.

Shareholders who do not wish to accept the Offer should be aware that they will be subject to thegeneral risks associated with share investments, including but not limited to fluctuations in the priceand trading liquidity of the Shares. They should also note that the market price and/or tradingliquidity of the Shares may not be sustained at the current level after the Closing Date and tradingin the Shares may be suspended if the SGX-ST’s shareholding spread requirements are not met.”


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8.4 Recommendation of the Directors

The Directors, having considered carefully the terms of the Offer and the advice given by the IFA inthe IFA Letter, agree with the advice of the IFA in respect of the Offer. Accordingly, the Directors’unanimous recommendations in respect of the Offer are set out in Section 8.3 above.

SHAREHOLDERS ARE ADVISED TO READ THE IFA LETTER SET OUT IN APPENDIX 1 TOTHIS CIRCULAR CAREFULLY BEFORE DECIDING WHETHER TO ACCEPT OR REJECT THEOFFER. SHAREHOLDERS SHOULD NOTE THAT THE IFA’S OPINION SHOULD NOT BERELIED UPON BY ANY SHAREHOLDER AS THE SOLE BASIS FOR DECIDING WHETHER ORNOT TO ACCEPT THE OFFER.

In making their recommendation, the Directors have not had regard to the specific objectives,financial situation, tax status, risk profiles or unique needs and constraints of any individualShareholder. Accordingly, the Directors recommend that any individual Shareholder who mayrequire advice in the context of his specific investment portfolio should consult his stockbroker,bank manager, solicitor, accountant, tax adviser or other professional adviser immediately.

9. OVERSEAS SHAREHOLDERS

9.1 Overseas Shareholders

Based on the Offer Document, the availability of the Offer to Overseas Shareholders may beaffected by the laws of the relevant overseas jurisdictions. Accordingly, all Overseas Shareholdersshould inform themselves about, and observe, any applicable legal requirements in their ownjurisdictions.

It is the responsibility of any Overseas Shareholder who wishes to accept the Offer to satisfyhimself as to the full observance of the laws of the relevant jurisdictions in that connection,including the obtaining of any governmental or other consent which may be required, orcompliance with other necessary formalities or legal requirements.

Any Overseas Shareholder who is in doubt about his position should consult hisprofessional adviser in the relevant jurisdiction.

9.2 Copies of Circular

Potential restrictions in sending this Circular and any related documents to overseas jurisdictionscould result in such documents not being sent to any Overseas Shareholder. Copies of the Circularmay however be obtained from the office of the Share Registrar, M & C Services Private Limited,at 138 Robinson Road, #17-00 The Corporate Office, Singapore 068906. Alternatively, anyOverseas Shareholder may write to the Share Registrar at the aforementioned address to requestfor the Circular and any related documents to be sent to an address in Singapore by ordinary postat his own risk (the last date for despatch in respect of such request shall be a date falling threeMarket Days prior to the final Closing Date).

9.3 Copies of Offer Document

Based on the Offer Document, Overseas Shareholders may obtain copies of the Offer Document,the relevant acceptance forms and any related documents, during normal business hours up to theClosing Date at M & C Services Pte Ltd, 138 Robinson Road, #17-00 The Corporate Office,Singapore 068906 or The Central Depository (Pte) Limited, 4 Shenton Way #02-01 SGX Centre 2Singapore 068807. Alternatively, an Overseas Shareholder may write to the Offeror c/o M & CServices Pte Ltd, 138 Robinson Road, #17-00 The Corporate Office, Singapore 068906 to requestfor the Offer Document, the relevant acceptance forms and any related documents to be sent to anaddress in Singapore by ordinary post at his own risk, up to three Market Days prior to the ClosingDate.


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9.4 Notice

The Offeror and ANZ reserve the right to notify any matter, including the fact that the Offer hasbeen made, to any or all Overseas Shareholders by announcement to the SGX-ST or paidadvertisement in a daily newspaper published and circulated in Singapore, in which case, suchnotice shall be deemed to have been sufficiently given notwithstanding any failure by anyShareholder to receive or see such announcement or advertisement.

Further details in relation to Overseas Shareholders are contained in the Offer Document.

10. ACTION TO BE TAKEN BY SHAREHOLDERS

Shareholders who wish to accept the Offer must do so no later than 5.30 p.m. on 17 October2008 or on such later date(s) as may be announced from time to time by or on behalf of theOfferor and should follow the procedures as set out in Appendix 2 to the Offer Document.

Shareholders who do not wish to accept the Offer need not take any further action in respect of theOffer Document and the FAA and/or FAT which have been sent to them.

11. CONSENTS

11.1 The IFA has given and has not withdrawn its written consent to the issue of this Circular with theinclusion herein of its name, the IFA Letter and its letter dated 24 September 2008 in relation to theStatement of Prospects, and the references to its name and such letters, in the form and context inwhich they appear in this Circular.

11.2 The auditor of the Company, KPMG, has given and has not withdrawn its written consent to theissue of this Circular with the inclusion herein of its name and its letter dated 22 September 2008in relation to the Statement of Prospects, and the references to its name and letter, in the form andcontext in which they appear in this Circular.

11.3 The valuer appointed by the Company, CB Richard Ellis (Pte) Ltd, has given and not withdrawn itswritten consent to the issue of this Circular with the inclusion herein of its name and its letter dated4 September 2008 in relation to the valuation summary report for 7 Bedok South Road Singapore469272, and the references to its name and such letters, in the form and context in which theyappear in this Circular.

12. DIRECTORS’ RESPONSIBILITY STATEMENT

Save for the opinions expressed by the IFA as set out in this Circular, in its letter appended asAppendix 1 to this Circular and in its letter appended as Appendix 7 to this Circular, and theopinions expressed by the auditors of the Company in their letter appended as Appendix 6 to thisCircular, the Directors (including those who have delegated detailed supervision of this Circular)collectively and individually accept full responsibility for the accuracy of the information given in thisCircular and confirm that, after having made all reasonable enquiries and to the best of theirknowledge and belief, the facts stated and opinions expressed in this Circular are fair and accuratein all material respects and there are no material facts the omission of which would make anystatement in this Circular misleading in any material respect.

In respect of the IFA Letter, the sole responsibility of the Directors has been to ensure that thefacts stated with respect to the Company are fair and accurate.

Where information has been extracted from published or otherwise publicly available sources orobtained from the Offeror, including the Offer Document, the sole responsibility of the Directors forsuch information has been to ensure that it has been correctly and accurately extracted from thesesources, or as the case may be, accurately or reproduced in this Circular.


13. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents may be inspected at the registered office of the Companyduring normal office hours from the date of this Circular for the period during which the Offerremains open for acceptance:

(a) the Memorandum and Articles of Association of the Company;

(b) the annual reports of the Company for FY2005, FY2006 and FY2007;

(c) the announcement relating to the unaudited financial statements and dividendannouncement of the Group for the 6 months ended 30 June 2008;

(d) the IFA letter;

(e) the letter from KPMG in relation to the Statement of Prospects;

(f) the letter from CIMB-GK in relation to the Statement of Prospects; and

(g) the letters of consent referred to in Section 11 of this Circular.

Yours faithfullyFor and on behalf ofthe Board of Directors ofSINGAPORE COMPUTER SYSTEMS LIMITED

Peter Seah Lim HuatChairman

16

APPENDIX 1: LETTER FROM CIMB-GK TO THE INDEPENDENT DIRECTORSOF SINGAPORE COMPUTER SYSTEMS LIMITED IN RESPECT OF THE OFFER

17

CIMB-GK SECURITIES PTE. LTD.(Incorporated in the Republic of Singapore)(Company Registration No.: 198701621D)

50 Raffles Place #19-00Singapore Land Tower

Singapore 048623

24 September 2008

To: The Independent DirectorsSingapore Computer Systems Limited7 Bedok South RoadSingapore 469272

Dear Sirs,

MANDATORY CONDITIONAL CASH OFFER BY ANZ SINGAPORE LIMITED FOR AND ON BEHALFOF COMPUTER SYSTEMS HOLDINGS PTE. LTD. TO ACQUIRE ALL THE ISSUED ORDINARYSHARES IN THE CAPITAL OF SINGAPORE COMPUTER SYSTEMS LIMITED

1. INTRODUCTION

On 25 August 2008 (the “Offer Announcement Date”), ANZ Singapore Limited (“ANZ”) announced, for and on behalf of Computer Systems Holdings Pte. Ltd. (the “Offeror”), thatthe Offeror has on 25 August 2008 acquired 93,144,501 ordinary shares (the “Shares”) in thecapital of Singapore Computer Systems Limited (“SCS” or the “Company”), representingapproximately 60 per cent. of all the Shares from Green Dot Capital Pte Ltd (“Green Dot”) for acash consideration of S$1.50 per Share (the “Acquisition”), pursuant to a share purchaseagreement dated 25 August 2008 between the Offeror, Green Dot and NCS Pte. Ltd. (“NCS”) (the“Share Purchase Agreement”).

As a consequence of the Acquisition and in accordance with Rule 14 of the Singapore Code onTake-overs and Mergers (the “Code”), the Offeror has on the same day make a mandatoryconditional cash offer (the “Offer”) for all the Shares, other than those already owned, controlled oragreed to be acquired by the Offeror, in accordance with Section 139 of the Securities and FuturesAct, Chapter 289 of Singapore and the Code.

CIMB-GK Securities Pte. Ltd. has been appointed as the independent financial adviser to thedirectors of the Company who are deemed to be independent (“Independent Directors”) for thepurpose of rendering a recommendation to the shareholders of the Company (“Shareholders”) inconnection with the Offer.

This letter sets out, inter alia, our evaluation of the financial terms of the Offer and our advicethereon. It forms part of the circular dated 24 September 2008 and issued by the Company,providing, inter alia, details of the Offer and the recommendation of the Independent Directors inrespect of the Offer (the “Circular”). Unless otherwise defined or the context otherwise requires, allterms defined in the Circular shall have the same meanings herein.


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2. TERMS OF REFERENCE

We have been appointed to advise the Independent Directors on the financial terms of the Offerand whether Shareholders should accept or reject the Offer, pursuant to Rules 7.1 and 24.1(b) ofthe Code. We have confined our evaluation to the financial terms of the Offer and our terms ofreference do not require us to evaluate or comment on the commercial risks and/or commercialmerits of the Offer or the future prospects of the Company and its subsidiaries (the “Group”) or anyof its associated or joint venture companies and we have not made such evaluation or comment.However, we may draw upon the views of the Directors and/or the management of the Company ormake such comments in respect thereof (to the extent deemed necessary or appropriate by us) inarriving at our opinion as set out in this letter. We have not been requested, and we do not expressany opinion on the relative merits of the Offer as compared to any other alternative transaction. Wehave not been requested or authorised to solicit, and we have not solicited, any indications ofinterest from any third party with respect to the Shares.

We have held discussions with the Directors and the management of the Company and haveexamined publicly available information collated by us as well as information, both written andverbal, provided to us by the Directors, the management of the Company and the Company’s otherprofessional advisers. We have not independently verified such information, whether written orverbal, and accordingly we cannot and do not warrant or make any representation (whetherexpress or implied) regarding, or accept any responsibility for, the accuracy, completeness oradequacy of such information. However, we have made such enquiries and exercised our judgmentas we deem necessary on such information and have found no reason to doubt the reliability of theinformation.

We have relied upon the assurances of the Directors (including those who may have delegatedsupervision of the Circular) that they have taken all reasonable care to ensure that the facts statedand opinions expressed by them or the Company in the Circular are true, complete and accurate inall material respects. The Directors have confirmed to us, that to the best of their knowledge andbelief, all material information relating to the Group, its associated or joint venture companies andthe Offer have been disclosed to us, that such information is true, complete and accurate in allmaterial respects and that there are no other material facts and circumstances the omission ofwhich would make any statement in the Circular inaccurate, incomplete or misleading in anymaterial respect. The Directors have jointly and severally accepted such responsibility accordingly.

We have not made any independent evaluation or appraisal of the assets and liabilities (includingwithout limitation, real property) of the Group or any of its associated or joint venture companiesand we have not been furnished with any such evaluation or appraisal, except for the letter andvaluation certificate from the valuer appointed by the Company in connection with the Offer(“Valuer”) set out in Appendix 8 to the Circular in which we have placed sole reliance on for suchasset appraisal. With respect to such letters and valuation certificates, we are not experts in theevaluation or appraisal of the assets concerned and we have not made any independentverification of the contents of these letters and valuation certificates.

Our opinion is based upon market, economic, industry, monetary and other conditions prevailing on17 September 2008 (the “Latest Practicable Date”), as well as the information made available tous as at the Latest Practicable Date. Such conditions may change significantly over a short periodof time. Accordingly, we do not express any opinion or view on the future prospects, financialperformance and/or financial position of the Group, its associated or joint venture companies.Shareholders should take note of any announcement and/or documents relevant to theirconsideration of the Offer which may be released or published by or on behalf of the Company orOfferor after the Latest Practicable Date.


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In rendering our advice, we have not had regard to the specific investment objectives, financialsituation, tax position, risk profile or particular needs and constraints of any individual Shareholder.As each Shareholder would have different investment objectives and profiles, any Shareholder whomay require specific advice in the context of his specific investment objectives or portfolio shouldconsult his stockbroker, bank manager, solicitor, accountant, tax adviser or other professionaladviser immediately.

The Company has been separately advised in the preparation of the Circular (other than thisletter). We were not involved in and have not provided any advice in the preparation, review andverification of the Circular (other than this letter). Accordingly, we take no responsibility for, andexpress no views (express or implied) on, the contents of the Circular (other than this letter).

3. THE OFFER

Shareholders should by now have received a copy of the Offer Document dated 10 September2008 issued by ANZ, for and on behalf of the Offeror, in accordance with Rule 15 of the Code.

We note that the Offer is made subject to the terms and conditions set out in paragraphs 2.1 to 2.5of the Offer Document, the FAA and the FAT.

3.1. Offer Price

Based on the information set out in Section 2 of the letter from ANZ to the Shareholders containedin the Offer Document:-

(a) The Offer will be made for all the Shares other than those already owned, controlled oragreed to be acquired by the Offeror.

(b) The Offeror will make the Offer for the Offer Shares on the following basis:-

For each Offer Share: S$1.50 in cash (the “Offer Price”)

The Offeror does not intend to revise the Offer Price.

(c) The Offer is extended to, on the same terms and conditions, to all new Sharesunconditionally issued or to be issued (i) pursuant to the valid exercise of any options tosubscribe for new shares (“Options”) granted under SCS’ Executives’ Share Option Schemeand SCS’ Share Option Plan (the “Plans”) and (ii) pursuant to the valid release of anyawards under SCS’ Performance Share Plan and SCS’ Restricted Stock Plan, each prior tothe close of the Offer. For the purposes of this Offer, the expression “Offer Shares” shallinclude such new Shares.

(d) The Offer Shares will be acquired (i) fully-paid, (ii) free from all charges, liens, equities,encumbrances, rights of pre-emption and any other third party rights or interests of anynature whatsoever, and (iii) together with all rights, benefits and entitlements attachedthereto as at the Offer Announcement Date and thereafter attaching thereto, including allvoting rights, the right to receive and retain all dividends, rights and other distributions whichmay be announced, declared, paid or made by the Company on or after the OfferAnnouncement Date. If any dividend, other distribution or return of capital is declared, paidor made on or after the Offer Announcement Date, the Offeror reserves the right to reducethe Offer Price by the amount of such dividend, distribution or return of capital.


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3.2 Condition of the Offer

The Offer will be subject to the condition that it is established that the Competition Commission ofSingapore (the “CCS”) will not (i) refer the proposed acquisition of the Company by the Offeror, orany matter arising from or relating to that proposed acquisition, to a more detailed assessmentpursuant to the CCS Guidelines on Merger Procedures (the “Phase 2 Review”) or (ii) issue adirection that will prohibit the Offeror from acquiring voting rights in the Company.


3.3 Merger Control Event

3.3.1 Merger Control Event

The Offer shall lapse in the event (each, a “Merger Control Event”) that the CCS (i) refersthe proposed acquisition of the Company by the Offeror, or any matter arising from orrelating to that proposed acquisition, to a Phase 2 Review or (ii) issues a direction thatprohibits the Offeror from acquiring voting rights in the Company, before the First ClosingDate.

3.3.2 Lapse

If the Offer lapses as a result of a Merger Control Event, the effects are that the Offer willcease to be capable of further acceptance and both the Shareholders and the Offeror willcease to be bound by prior acceptances of the Offer. If, following the lapse of the Offer as aresult of a Merger Control Event, the CCS issues a decision that the proposed acquisition ofthe Company by the Offeror will not infringe Section 54 of the Competition Act, Chapter 50Bof Singapore (the “Favourable Decision”), the Offer will be reinstated on the same termsand at the Offer Price as soon as practicable following the date of issue of the FavourableDecision.

3.4 Options

3.4.1 Plans

As at the Latest Practicable Date, there are outstanding Options. Under the rules of thePlans, the Options are not transferable by the holders thereof (“Optionholders”). In view ofthis restriction, ANZ, of behalf of the Offeror, will not make an offer to acquire the Options(although, for the avoidance of doubt, the Offer will be extended to all new Shares issued orto be issued pursuant to the valid exercise of the Options on or prior to the close of theOffer). Instead, ANZ, on behalf of the Offeror, make a proposal (the “Options Proposal”) toOptionholders on the following terms:-

(i) subject to the Offer becoming or being declared unconditional; and

(ii) the relevant Options continuing to be exercisable into new Shares,

the Offeror will pay to such Optionholders a cash amount (determined as provided below)(the “Option Price”) in consideration of such Optionholders agreeing:-

(i) not to exercise any of such Options into new Shares; and

(ii) not to exercise any of their rights as Optionholders,

in each case from the date of their acceptance of the Options Proposal to the respectivedates of expiry of such Options. Further, if the Offer becomes or is declared unconditional,Optionholders who have accepted the Options Proposal will also be required to surrender allof their Options for cancellation. If the Offer lapses or is withdrawn or if the relevant Optionscease to be exercisable into new Shares, the Options Proposal will lapse accordingly.


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3.4.2 Option Price

The Option Price is computed on a “see-through” basis. In other words, the Option Price inrelation to any Option is the amount by which the Offer Price is in excess of the exerciseprice of that Option. Where the exercise price of an Option is equal to or in excess of theOffer Price, the Option Price for each Option will be fixed at S$0.001.

3.4.3 Offer and Options Proposal Mutually Exclusive

For the avoidance of doubt, whilst the Options Proposal is conditional upon the Offerbecoming or being declared unconditional, the Offer will not be conditional uponacceptances received in relation to the Options Proposal. The Offer and the OptionsProposal are separate and are mutually exclusive. The Options Proposal does not form partof the Offer, and vice versa. Without prejudice to the foregoing, if Optionholders exercisetheir Options in order to accept the Offer in respect of the new Shares to be issued pursuantto such exercise, they may not accept the Options Proposal in respect of such Options.Conversely, if Optionholders wish to accept the Options Proposal in respect of their Options,they may not exercise those Options in order to accept the Offer in respect of the newShares to be issued pursuant to such exercise.

3.4.4 Options Proposal

Details of the Options Proposal have been separately dispatched to the Optionholders onthe date of despatch of the Offer Document.

3.5 Warranty

Shareholders should note Section 4 of the Offer Document which states that a Shareholder whotenders his Offer Shares in acceptance of the Offer will be deemed to warrant that he sells suchOffer Shares as or on behalf of the beneficial owner(s) thereof, (i) fully paid, (ii) free from all liens,equities, charges, encumbrances, rights of pre-emption and any other third party rights or interestsor any nature whatsoever and (iii) together with all rights, benefits and entitlements attachedthereto as at the Offer Announcement Date and thereafter attaching thereto, including all votingrights, the right to receive and retain all dividends, rights and other distributions announced,declared, paid or made by SCS on or after the Offer Announcement Date.

3.6 Duration of the Offer

First Closing Date. Based on the Offer Document, the Offer is open for acceptance byShareholders for at least 28 days from the Despatch Date, unless the Offer is withdrawn with theconsent of the SIC and every person released from any obligation incurred thereunder.Accordingly, the Offer will close at 5.30 p.m. on 17 October 2008, being the First Closing Dateor such later date(s) as may be announced from time to time by or on behalf of the Offeror.

Subsequent Closing Date. If the Offer is extended and:-

(a) is not unconditional as at the date of such extension, the announcement of the extensionmust state the next Closing Date; and

(b) is unconditional as at the date of such extension, the announcement of the extension neednot state the next Closing Date but may state that the Offer will remain open until furthernotice. In such a case, the Offeror must give Shareholders at least 14 days’ prior notice inwriting before it may close the Offer.

No Obligation to Extend the Offer. The Offeror is not obliged to extend the Offer if the conditionspecified in Section 2.4 of the Offer Document is not fulfilled by the Closing Date(s).


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3.7 Information on the Offeror and NCS

The information on the Offeror is set out in Section 7 of the letter from ANZ to the Shareholderscontained in the Offer Document, which is reproduced in italics below:-

“The Offeror. The Offeror was incorporated in Singapore on 19 August 2008 for the purpose of theproposed acquisition of SCS, as a wholly-owned subsidiary of NCS. As of the Latest PracticableDate, the directors of the Offeror are Lim Eng and Lim Chuang.

NCS. NCS, incorporated in Singapore on 23 April 1981, is a leading information technology andcommunications engineering service provider with operations across the Asia Pacific, spanningAustralia, China, Hong Kong, Korea, Malaysia, Sri Lanka, Philippines, and the Middle East region.NCS has in-depth domain knowledge and delivery capabilities which focus on defining, realisingand sustaining business value for its customers via the use of technology. With proven expertise inconsulting, development, systems integration, outsourcing, infrastructure management andsolutions, NCS is able to deliver end-to-end solutions to a wide spectrum of commercial andgovernment organisations.

As of the Latest Practicable Date, the directors of NCS are Allen Lew Yoong Keong and Lim Eng.NCS is, in turn, a wholly-owned subsidiary of Singapore Telecommunications Limited (“SingTel”),which is a leading communications group that provides services and solutions in fixed mobile anddata communications, internet, information technology, pay television and satellite.”

3.8 Rationale for the Offer

The full text of the rationale for the Offer is stated in Section 9 of the letter from ANZ to theShareholders contained in the Offer Document, which is reproduced in italics below:-

“9. RATIONALE FOR THE OFFER

The proposed acquisition of SCS will accelerate the overseas expansion plans of NCS byproviding the scale operations and enlarged regional footprint that are critical in servicingand competing for regional customers in a market that is increasingly characterised bycompetition from large multinational service providers. The combination of NCS’ and SCS’businesses will also better position the enlarged group to compete locally and regionally withlarge multinational service providers in the information and communications technologyservice sector and to meet any challenges posed by the current operating environment.

The Offeror is further making the Offer with a view to exercising its rights of compulsoryacquisition under Section 215(1) of the Companies Act, in the event that the Offerorbecomes entitled to do so, and delisting SCS from the SGX-ST thereafter.”

4. INFORMATION ON THE GROUP

The Company was incorporated in Singapore on 7 January 1980 and is listed on the Main Boardof the Singapore Exchange Securities Trading Limited (the “SGX-ST”). The Company is a leadinginformation and communications technology service provider in Asia. Its services range fromtraditional information technology (“IT”) infrastructure, business solutions, system integration andmanaged services to state-of-the art Application Aware Infrastructure, Infrastructure AwareApplications, converged communications, business rules management systems, business processoutsourcing and business continuity management services. The Group has operations in Asiaspanning Singapore, Brunei, China, Malaysia, the Philippines and Thailand.


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5. FINANCIAL EVALUATION OF THE TERMS OF THE OFFERS

Methodology

In assessing the financial terms of the Offer, we have considered the following:-

(i) Market quotation and trading activity of the Shares;

(ii) Valuation ratios of the Company implied by the Offer Price versus those of selectedcomparables listed companies;

(iii) Book net tangible assets (“NTA”) and Revalued NTA of the Group;

(iv) Premium paid in other take-overs of companies listed on the SGX-ST;

(v) Premium paid in recent merger and acquisition transactions in the information technologiesindustry;

(vi) Analysts’ estimates of price targets for the Shares;

(vii) Dividend track record of the Company; and

(viii) Other relevant considerations which have a significant bearing on our assessment.

General bases and assumptions

In the course of our analysis, we have relied on the following general bases:-

(a) The share capital of the Company as at the Latest Practicable Date is S$43,990,226.80comprising 158,684,887 Shares; and

(b) The market prices and trading statistics of all securities and equity indices as well as foreignexchange rates used in this letter have been extracted from Bloomberg unless otherwisestated.

Valuation ratios

We have applied the following valuation ratios in our analysis:-

Valuation ratio General description

P/E : “P/E” or “price-to-earnings” ratio illustrates the ratio of the marketprice of a company’s shares relative to its earnings per share. TheP/E ratio is affected by, inter alia, the capital structure of acompany, its tax position as well as its accounting policies relatingto depreciation and intangible assets.

EV/EBITDA : “EV” or “enterprise value” is the sum of a company’s marketcapitalisation, preferred equity, minority interests, short and longterm debt less its cash and cash equivalents. “EBITDA” stands forhistorical earnings before interest, tax, depreciation andamortisation expenses, inclusive of share of associates’ and jointventures’ income and excluding exceptional items. The EV/EBITDAratio illustrates the market value of a company’s business relativeto its historical pre-tax operating cashflow performance, withoutregard to the company’s capital structure.


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Valuation ratio General description

P/NTA : “P/NTA” or “price-to-NTA” ratio illustrates the ratio of the marketprice of a company’s shares relative to its historical book NTA pershare as recorded in its financial statements. The NTA figureprovides an estimate of the value of a company assuming the saleof all its tangible assets, the proceeds which are first used to settleits liabilities and obligations with the balance available fordistribution to its shareholders. Comparisons of companies usingtheir book NTAs are affected by differences in their respectiveaccounting policies, in particular their depreciation and assetvaluation policies. Where the value of a company’s key assets areadjusted to their current market values, the NTA figure derived isreferred to as its “Revalued NTA”.

5.1 Market Quotation and Trading Activity of the Shares

5.1.1 Share price performance

The trend of the daily last transacted prices of the Shares from 31 July 2006 (being twoyears prior to the Holding Announcement Date (as defined below)) to the Latest PracticableDate is set out below.

Source: Bloomberg

Notes:-

(1) On 13 November 2006, the Company released its unaudited results for the 9-month period ended 30September 2006 and reported net profit attributable to equity holders of the Company of approximately S$3.5million compared to a loss of approximately S$43.9 million for the corresponding period in FY2005.

(2) On 1 March 2007, the Company released its unaudited full year results ended 31 December 2006 (“FY2006”)and reported net profit attributable to equity holders of the Company of approximately S$7.3 million comparedto a loss of approximately S$43.6 million for FY2005.

(3) On 14 May 2007, the Company released its unaudited results for the 3-month period ended 31 March 2007and reported that net profit attributable to equity holders of the Company increased by approximately 66.5%to S$2.5 million as compared to S$1.5 million in the corresponding period in FY2006.

(4) On 6 August 2007, the Company released its unaudited half-year results ended 30 June 2007 and reportedthat net profit attributable to equity holders of the Company increased by approximately 77.0% to S$4.8million as compared to S$2.7 million in the corresponding period in FY2006.

Daily Last Transacted Prices of the Shares(From 31 July 2006 to the Latest Practicable Date)

0.5

0.55

0.6

0.65

0.7

0.75

0.8

0.85

0.9

0.95

1

1.05

1.1

1.15

1.2

1.25

1.3

1.35

1.4

1.45

1.5

1.55

Jul-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08

Share Price(S$)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

Volume(Millions)

Note 1Note 2

Note 3Note 4

Note 5

Note 6

Note 7

Note 9

Note 10

Note 11

Offer Announcement Date

Holding Announcement Date

Offer Price = S$1.50

Note 8


25

(5) On 7 November 2007, the Company released its unaudited results for the 9-month period ended 30September 2007 and reported that net profit attributable to equity holders of the Company increased byapproximately 97.5% to S$7.0 million as compared to S$3.5 million in the corresponding period in FY2006.

(6) On 28 February 2008, the Company released its unaudited full-year results ended 31 December 2007(“FY2007”) and reported that net profit attributable to equity holders of the Company increased byapproximately 140.1% to S$17.6 million as compared to S$7.3 million for FY2006. On the same day, theCompany announced that the Infocomm Development Authority of Singapore (IDA) has awarded the eight-year Standard Operating Environment (SOEasy) project worth approximately S$1.3 billion to EDS, leader ofthe oneMeridian consortium. SCS is the key local partner in this consortium.

(7) On 8 May 2008, the Company released its unaudited results for the 3-month period ended 31 March 2008and reported that net profit attributable to equity holders of the Company increased by approximately 53.3%to S$3.9 million as compared to S$2.5 million in the corresponding period in FY2007.

(8) On 24 June 2008, the Company and PT Astra Graphia Tbk (“ASGR”) entered into a conditional agreementwhere ASGR would purchase SCS’ 51% stake in PT Astragraphia Technologies (“SAT”). SAT is a jointventure company in Indonesia owned by SCS (51%) and ASGR (49%). The net consideration is S$12.87million. The divestment will result in an estimated net gain of approximately S$1.86 million for SCS.

(9) On 30 July 2008, the Company announced that it has been informed that Green Dot was evaluating optionswith respect to its stake in the Company (“Holding Announcement Date”).

(10) On 7 August 2008, the Company released its unaudited half-year results ended 30 June 2008 and reportedthat net profit attributable to equity holders of the Company increased by approximately 68.8% to S$8.2million as compared to S$4.8 million in the corresponding period in FY2007.

(11) On 25 August 2008, the Offer was announced.

For illustration, the trend of the daily last transacted prices of the Shares from 1 July 2008 (beingone month prior to the Holding Announcement Date) to the Latest Practicable Date is set outbelow.

Source: Bloomberg

Daily Last Transacted Prices of the Shares(From 1 July 2008 to the Latest Practicable Date)

0.8

0.85

0.9

0.95

1

1.05

1.1

1.15

1.2

1.25

1.3

1.35

1.4

1.45

1.5

1.55

1-Ju

l2-

Jul3-

Jul4-

Jul7-

Jul8-

Jul9-

Jul

10-Ju

l

11-Ju

l

14-Ju

l

15-Ju

l

16-Ju

l

17-Ju

l

18-Ju

l

21-Ju

l

22-Ju

l

23-Ju

l

24-Ju

l

25-Ju

l

28-Ju

l

29-Ju

l

30-Ju

l

31-Ju

l

1-Aug

4-Aug

5-Aug

6-Aug

7-Aug

8-Aug

11-A

ug

12-A

ug

13-A

ug

14-A

ug

15-A

ug

18-A

ug

19-A

ug

20-A

ug

21-A

ug

22-A

ug

25-A

ug

26-A

ug

27-A

ug

28-A

ug

29-A

ug

1-Sep

2-Sep

3-Sep

4-Sep

5-Sep

8-Sep

9-Sep

10-S

ep

11-S

ep

12-S

ep

15-S

ep

16-S

ep

17-S

ep

Share Price(S$)

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

Volume(Millions)



Offer Price = S$1.50


26

The volume weighted average price (“VWAP”) and trading volume of the Shares from 31 July 2006to the Latest Practicable Date are set out below.

Daily tradingPremium Average volume as aof Offer daily percentage

Price over Highest Lowest trading of freeVWAP VWAP price price volume (1) float(2)

(S$) (%) (S$) (S$) (’000) (%)

Periods prior to the Holding Announcement Date

Last 2 years 0.86 74.7 1.090 0.675 56 0.1Last 1 year 0.89 68.6 1.090 0.730 55 0.1Last 6 months 0.91 65.0 1.090 0.790 87 0.2Last 3 months 0.93 61.4 1.090 0.830 67 0.1Last 1 month 0.94 58.8 1.090 0.850 142 0.3

Last transacted price prior to the HoldingAnnouncement Date 1.08 38.9

Periods after the Holding Announcement Date but before the Offer Announcement Date

Between the HoldingAnnouncement Dateand the OfferAnnouncement Date 1.21 24.3 1.340 1.090 723 1.3

Last transaction priceprior to the OfferAnnouncement Date 1.34 11.9

Periods after the Offer Announcement Date

Between the OfferAnnouncement Dateand the LatestPracticable Date 1.47 1.8 1.490 1.460 605 1.1

Last transaction priceas at the LatestPracticable Date 1.48 1.4

Source: Bloomberg and CIMB-GK’s computations

Notes:-

(1) The average daily trading volume of the Shares is calculated based on the total volume of shares traded during theperiod divided by the number of Market Days during that period.

(2) Free float refers to those Shares in which the Directors and the substantial shareholders of the Company have nointerest as at the Latest Practicable Date, and amounts to approximately 56.0 million Shares or approximately 35.3per cent. of the issued share capital of the Company as at the Latest Practicable Date.


27

We note the following:-

(i) Over the last two years prior to the Holding Announcement Date, the market price of theShares has traded between a low of S$0.675 and a high of S$1.090, with an average dailytrading volume of approximately 56,000 Shares. As the market price of the Shares did nottrade at or above the Offer Price, the Offer Price is at a premium to the VWAP of the Sharesfor all the historical periods within this time span.

(ii) The Offer Price represents a premium of approximately 74.7%, 68.6%, 65.0%, 61.4% and58.8% over the corresponding VWAP of the Shares over the 2-year period, 1-year period, 6-month period, 3-month period and 1-month period prior to the Holding Announcement Date,respectively.

(iii) The Offer Price represents a premium of approximately 38.9% over the last transacted priceof the Shares prior to the Holding Announcement Date.

(iv) From the Holding Announcement Date to the Offer Announcement Date, the market price ofthe Shares has traded between a low of S$1.090 and a high of S$1.340, with an averagedaily trading volume of approximately 723,000 Shares.

(v) The Offer Price represents a premium of approximately 24.3% over the VWAP between theHolding Announcement Date and the Offer Announcement Date.

(vi) The Offer Price represents a premium of approximately 11.9% over the last transacted priceof the Shares prior to the Offer Announcement Date.

(vii) From the Offer Announcement Date and the Latest Practicable Date, the market price of theShares has traded between a low of S$1.460 and a high of S$1.490, with an average dailytrading volume of approximately 605,000 Shares.

(viii) The Offer Price represents a premium of approximately 1.8% over the VWAP of the Sharesover the corresponding period between the Offer Announcement Date and the LatestPracticable Date.

(ix) The Offer Price represents a premium of approximately 1.4% over the last transacted priceon the Latest Practicable Date.

The past trading performance of the Shares should not, in any way, be relied upon as a promise orindication of its future trading performance.


28

5.1.2 Relative Share price performance

To gauge the market price performance of the Shares relative to the general performance ofthe Singapore equity market, we have compared the normalised market price movement ofthe Shares against that of the Straits Times Index (“FSSTI”) for the period between 31 July2006 (being two years prior to the Holding Announcement Date) and the Latest PracticableDate, as illustrated below.

Source: Bloomberg

Based on the above chart, on a normalised basis, it appears that the market price of theShares has consistently underperformed the FSSTI up till the Holding Announcement Date.It appears that the market price movement of the Shares and the FSSTI has diverged sincethe Holding Announcement Date.

The movements in the closing prices of the Shares and the FSSTI between the HoldingAnnouncement Date, Market Day immediately prior to the Offer Announcement Date, andthe Latest Practicable Date are as follows:-

Percentage Percentagechange changebetween between

Last Last Last the Holding the Offertransacted transacted transacted Announcement Announcement

price prior to price prior to price on the Date and the Date and thethe Holding the Offer Latest Latest Latest

Announcement Announcement Practicable Practicable Practicable Date Date Date Date Date

(%) (%)

Company (S$) 1.08 1.34 1.48 37.0 10.5FSSTI 2,925.50 2,723.30 2,419.29 (17.3) (11.2)

Source: Bloomberg

We note that the market price of the Shares experienced a sharp increase after the HoldingAnnouncement Date and experienced a further immediate upward spike upon the release ofthe Offer Announcement.

0.8

0.9

1

1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

1.9

2

Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08

Normalised Chart(From 31 July 2006 to the Latest Practicable Date)

FSSTI

Company




29

Between the Holding Announcement Date and the Latest Practicable Date, the market priceof the Shares had increased by approximately 37.0% while the FSSTI had declined byapproximately 17.3% over the same period.

Between the Offer Announcement Date and the Latest Practicable Date, the market price ofthe Shares had increased by approximately 10.5% while the FSSTI had declined byapproximately 11.2%.

Based on the above observations, it appears highly likely that the market price of the Sharesis supported by the Offer. As such, there is no assurance that the trading volumes andmarket prices of the Share will be maintained at current levels prevailing as at the LatestPracticable Date after the close of the Offer.

5.2 Valuation Ratios of Comparable Companies

For the purpose of assessing the Offer Price, we have compared the valuation ratios of theCompany implied in the Offer Price with those of selected companies listed on the SGX-ST thatare in the business of providing information and communications technology services which are, inour opinion, broadly comparable to the Company (“Comparable Companies”).

5.2.1 Description of Comparable Companies

A brief description of the Comparable Companies, as extracted from Bloomberg or theirrespective annual reports and websites, is set out below.

Company Principal Business

Armarda Group Limited Armarda provides IT consulting, IT support and business(“Armarda”) transformation services for enterprises in the banking and financial

services industry predominantly in China.

Azeus Systems Holdings Azeus is an IT services provider, focusing on software developmentLimited (“Azeus”) and system implementation services. The Company also provides

maintenance and support services and operates business processoutsourcing.

CNA Group Ltd. (“CNA”) CNA through its subsidiaries, provides, designs and implementsintegrated control and automation systems and IT solutions. TheCompany implements its solutions at a range of buildings and facilitieslocated in Singapore, Malaysia, Thailand, the Philippines, Taiwan andthe People’s Republic of China.

CSE Global Limited CSE provides systems integration and IT solutions, computer network(“CSE”) systems and industrial automation. The Company also designs,

manufactures and installs management information systems. It alsodevelops, manufactures and sells electronic and micro processormonitoring equipment.

DMX Technologies DMX is a computer systems integrator that provides networking,Group Limited (“DMX”) security and software solutions and e-business transactions platform

services. The company also trades security software.

Source: Bloomberg and respective annual reports and websites of the Comparable Companies

We wish to highlight that the Comparable Companies are not exhaustive and they differ fromthe Group in terms of, inter alia, market capitalisation, size of operations, clientele base,composition of business activities, asset base, geographical spread, track record, operatingand financial leverage, risk profile, liquidity, accounting policies, future prospects and otherrelevant criteria. As such, any comparison made is necessarily limited and merely serves asan illustrative guide.


30

Marketcapitalisation P/E(1) EV/EBITDA(2) P/NTA(3)

(S$’ million) (times) (times) (times)

Armarda 15.5 8.2 n.m. (4) 0.5Azeus 16.5 12.4 2.3 0.8CNA 36.5 4.1 5.2 0.9CSE 454.7 11.7 8.4 6.4DMX 55.3 4.2 1.4 0.3

High 12.4 8.4 6.4Low 4.1 1.4 0.3Mean 8.1 4.4 1.8Median 8.2 3.8 0.8

SCS (5) 22.9 5.3 1.9(Implied in the Offer Price)

Source: Bloomberg, annual reports and latest publicly available information of the respective Comparable Company

Notes:-

(1) Based on the historical consolidated basic earnings per share of the respective companies as set out in theirlatest available full-year financial statements prior to the Latest Practicable Date.

(2) The EV of the respective companies are based on their market capitalisation and their net debt and minorityinterest figures as set out in their latest available financial statements prior to the Latest Practicable Date.EBITDA of the respective companies are extracted from their latest available full-year financial results prior tothe Latest Practicable Date.

(3) The NTA of the respective companies are extracted from the latest available financial statements prior to theLatest Practicable Date.

(4) Not meaningful as the EV of Armada was negative as at the Latest Practicable Date. In computing the meanand median EV/EBITDA ratios, we have excluded Armada as an outlier.

(5) In arriving at the net profit attributable to Shareholders for FY2007, we have excluded a negative goodwillcredited to the Company’s income statement upon the acquisition of additional interest in subsidiaries, theutilisation of deferred tax assets not previously recognised and the recognition of previously unrecogniseddeferred tax assets as we are of the view following discussion with management that such items amounted toone-off events and, as such, are not likely to recur.

We note that:-

(i) The historical P/E ratio of the Company implied in the Offer Price is above the rangeof the historical P/E ratios of the Comparable Companies.

(ii) The EV/EBITDA ratio of the Company implied in the Offer Price is within the rangeand higher than the mean and median EV/EBITDA ratios of the ComparableCompanies.

(iii) The P/NTA ratio of the Company implied in the Offer Price is within the range andhigher than the mean and median P/NTA ratios of the Comparable Companies.

5.3 Book NTA and Revalued NTA of the Group

We have considered both the book NTA and Revalued NTA of the Group in assessing the OfferPrice. Based on the Company’s unaudited consolidated financial statements for HY2008, theGroup also has significant cash at bank and deposit amounting to approximately S$61.4 million asat 30 June 2008. In assessing the Offer Price, we have therefore also considered both the bookNTA and Revalued NTA of the Group on an ex-cash basis.


31

5.3.1 Book NTA

Based on the Company’s unaudited consolidated financial statements for HY2008, theunaudited book NTA of the Group as at 30 June 2008 was approximately S$120.9 million orapproximately S$0.78 per Share. The Offer Price is at a premium of approximately 92.3 percent. over the audited book NTA per Share of the Group as at 30 June 2008.

On a an ex-cash basis, the unaudited book NTA of the Group as at 30 June 2008 wasapproximately S$59.5 million or approximately S$0.38 per Share. The ex-cash Offer Price ofapproximately S$1.10 is at a premium of approximately 187.3% over the unaudited bookNTA per Share as at 30 June 2008.

The NTA-based valuation provides an estimate of the value of a company assuming thehypothetical sale of all its tangible assets over a reasonable period of time and is particularlyrelevant for property companies or where the subject company intends to realise or convertthe use of its assets.

5.3.2 Revalued NTA and ex-cash Revalued NTA

To obtain an estimate of the Revalued NTA of the Group, we have relied upon theCompany’s unaudited consolidated financial statements as at 30 June 2008 as a base andmade the appropriate adjustments (based on information provided by the Company). Wehave also relied on the letter and/or valuation certificate from the Valuer, which can be foundin Appendix 8. Save as stated below, the other assets of the Group have not been revaluedfor the purpose of determining the Revalued NTA of the Group. The Directors haveconfirmed to us that to the best of their knowledge and belief, that there are no materialdifferences between the realisable value of these other assets and their respective bookvalues as at 30 June 2008 which would have a material impact on the Revalued NTA of theGroup. The Directors have confirmed to us that there have been no material acquisitions anddisposals of assets by the Group, its joint venture companies and its associated companiessince 30 June 2008 up to the Latest Practicable Date. Further, the Directors have alsoconfirmed to us that to the best of their knowledge and belief, other than that alreadyprovided for or disclosed in the Company’s unaudited consolidated financial statements forthe 6 months period ended 30 June 2008, there are no other contingent liabilities which arelikely to have a material impact on the NTA of the Group as at the Latest Practicable Date.

Net revaluationsurplus after potential

Effective Open tax liabilities andDescription Interest market value third-party interests (1)

(%) (S$’ million) (S$’ million)

Leasehold Property

7 Bedok South Road 100.0 30.0 6.9Singapore 469272

6.9

Note:-

(1) The potential tax effects arising from the hypothetical sale of the revalued property are computed by themanagement of the Company in consultation with its tax adviser. For the purpose of the computation, the fairmarket values (as determined by the Valuer) are taken to be the hypothetical sales proceeds arising from thedisposal of the revalued property.


32

We set out below the computation of the Group’s Revalued NTA as at 30 June 2008.

S$’ million S$’ million

Unaudited book NTA as at 30 June 2008 120.9

Gross revaluation surplus 7.0

Less: Potential tax liabilities 0.1

Net adjustments 6.9

Revalued NTA as at 30 June 2008 127.8

Revalued NTA per Share as at 30 June 2008 S$0.82

The Offer Price is at a premium of approximately 82.0 per cent. to the Revalued NTA perShare of approximately S$0.82 as at 30 June 2008.

On an ex-cash basis, the Revalued NTA of the Group as at 30 June 2008 would beapproximately S$66.4 million or approximately S$0.43 per Share. The ex-cash Offer Price ofapproximately S$1.10 is at a premium of approximately 157.5% to the ex-cash RevaluedNTA per Share as at 30 June 2008.

Shareholders should note that the above analysis assumes the hypothetical sale of theassets (including the revalued property) of the Group as at the Latest Practicable Date.

In addition, we wish to highlight that the Revalued NTA per Share shown above includes therevaluation surpluses on properties. Shareholder should be aware that the Group has notfully earned or realised the surplus on such properties as at the Latest Practicable Date.There is no assurance that any surpluses or returns eventually recorded by the Group on itsproperties will be the same as that appraised by the Valuer or indicated in the table above.

5.4 Premium Paid in Other Take-Overs of Companies Listed on the SGX-ST

We note that if the Offeror receives acceptances pursuant to the Offer in respect of not less than90 per cent. of the Offer Shares (other than those already held by the Offeror, its relatedcorporations or their respective nominees as at the date of the Offer), it is the current intention ofthe Offeror to exercise its rights of compulsory acquisition under Section 215(1) of the CompaniesAct to acquire the remaining Offer Shares at the Offer Price and proceed to de-list the Companyfrom the SGX-ST.

In assessing whether the Offer Price is reasonable given the abovementioned intentions, we havecompared the Offer Price premia with those of successful completed take-overs of companieslisted on the SGX-ST announced since August 2007 where the offeror succeeded in securingstatutory control and/or privatising of the target listed company (“Take-over Transactions”).

We wish to highlight that the list of target companies involved in the Take-over Transactions set outin the analysis below are not directly comparable with the Company in terms of size of operations,market capitalisation, business activities, asset base, geographical spread, track record,accounting policy, financial performance, operating and financial leverage, future prospects andother relevant criteria. The analysis below is based on data compiled from publicly availablesources and serves as a guide as to the premia paid in connection with take-overs of companieslisted on the SGX-ST. Each transaction must be judged on its own commercial and financial merits.The premium that an offeror pays in any particular take-over depends on various factors such asthe potential synergy that the Offeror can gain by acquiring the target, the presence of competing

bids for the target, prevailing market conditions and sentiments, attractiveness and profile of thetarget’s business and assets, size of consideration and existing and desired level of control in thetarget. Hence, the comparison of the Offer with the Take-over Transactions set out below is forillustration purpose only. Conclusions drawn from the comparisons made may not reflect anyperceived market valuation of the Company.

A summary of the relevant Take-over Transactions is set out below.

Premium / (Discount) of offer price to

Last transacted 1-month VWAP 3-month VWAPDate of price prior to prior to prior to

announcement announcement announcement announcement P/NTA(%) (%) (%) (times)

Non-Privatisations

Radiance ElectronicsLimited (1) 05-Oct-07 (30.0) (22.2) (17.6) 0.8

Gates Electronics Limited 24-Oct-07 3.5 0.4 0.8 2.3The Straits Trading CompanyLimited(2) 06-Jan-08 35.1 30.4 35.0 1.2

Asiapharm Group Ltd. (3) 05-Feb-08 16.9 31.1 32.1 2.3

High 35.1 31.1 35.0 2.3Low 3.5 0.4 0.8 1.2Mean 18.5 20.6 22.6 1.9Median 16.9 30.4 32.1 2.3

Privatisations

ECS Holdings Limited(4) 8-Aug-07 11.5 18.2 30.8 1.3Labroy Marine Limited(5) 29-Oct-07 3.4 9.2 19.8 11.2Frontline Technologies Corp 05-Dec-07 16.7 29.6 34.6 2.4Sincere Watch Limited (3) (6) 07-Dec-07 11.0 19.3 30.2 3.5The Ascott Group (3) 08-Jan-08 43.0 39.5 19.3 2.4Robinson and Company, Ltd (7) 20-Jan-08 65.1 64.4 60.4 2.7China Education Limited 01-Feb-08 25.0 11.2 2.3 4.2Sing Lun Holdings Limited (8) 30-Mar-08 50.8 62.7 73.6 2.1SNP Corporation Ltd 10-Jun-08 33.3 39.6 47.1 1.4


Non-Privatisations andPrivatisations


SCS 30-Jul-08 38.9 58.8 61.4 1.9

25-Aug-08 11.9 26.5 30.7 1.9

Source: SGX-ST announcements and circulars to shareholders in relation to the respective Take-over Transactions


33


34

Notes:-

(1) In computing the mean and median market premia of the Take-over Transactions, we have excluded RadianceElectronics Limited as an outlier.

(2) On 6 January 2008, a voluntary conditional cash offer was made for The Straits Trading Company Limited at S$5.70for each share and on 28 January 2008, following a competing bid, the offer price was revised to S$6.50 for eachshare. On 28 February 2008, the offer was further revised to S$6.70 for each share following a revised competingbid. The computations in the table above were based on the final offer price of S$6.70 for each share and over therelevant periods prior to the first offer announcement on 6 January 2008.

(3) The implied P/NTA ratios in respect of the takeovers of Asiapharm Group Ltd., Sincere Watch Limited and The AscottGroup in the table above represent price to net asset value ratios instead.

(4) On 28 May 2007, ECS Holdings Limited announced that a third party had approached certain substantialshareholders and had engaged in negotiations regarding a possible transaction which may lead to a general offer. On1 August 2007, ECS Holdings Limited further announced that it had received confirmation that discussions andnegotiations between certain substantial shareholders and the third party were still ongoing. On 8 August 2007, apre-conditional offer for ECS Holdings Limited was announced. The market premia in the table above were computedbased on prices prior to the first holding announcement on 28 May 2007.

At the close of the offer on 14 December 2007, as a result of acceptances of the offer, the public float in ECSHoldings Limited had fallen below 10% and consequently, its shares were suspended on 17 December 2007. Theofferor had then stated that it intended to preserve the listing status of ECS Holdings Limited and would take steps torestore the public float. The shares of ECS Holdings Limited resumed trading on 15 August 2008 as the public floathad been restored as a result of a private placement.

(5) In computing the mean and median P/NTA ratios of the Take-over Transactions, we have excluded Labroy MarineLimited as an outlier.

(6) On 7 December 2007, a pre-conditional voluntary conditional offer for Sincere Watch Limited was announced. Theoffer price for each share in Sincere Watch Limited was S$2.051 in cash and 0.228 new share in the capital of PeaceMark Holdings Limited (a company listed on Hong Kong Stock Exchange) at the issue price of HK$12.096 each,equivalent to a total notional value of S$2.564. The computations in the table above were based on such notionalvalue and over the relevant periods prior to the pre-conditional offer announcement on 7 December 2007.

At the close of the offer on 18 March 2008, as a result of acceptances of the offer, the public float in Sincere WatchLimited had fallen below 10% and consequently, its shares were suspended since 19 March 2008. The offeror hadthen stated that it intended to preserve the listing status of Sincere Watch Limited and would take steps to restore thepublic float. However, on 27 March 2008, the offeror announced that it had changed its intention and would seek theSIC’s consent for the compulsory acquisition of Sincere Watch Limited. On 28 April 2008, the offeror announced thatSIC had rejected its application. On 8 August 2008, Sincere Watch Limited was de-listed from the Main Board of theSGX-ST.

(7) On 20 January 2008, the offeror announced that it intended to make a voluntary conditional cash offer for the sharesin the capital of Robinson and Company, Limited at a price of S$6.25. Subsequently, the offeror increased the offerprice to S$7.00 on 17 March 2008, and to S$7.20 on 3 April 2008. The market premia in the table above, asextracted from the relevant circular, were computed based on the final offer price of S$7.20 and market prices prior tothe first offer announcement on 20 January 2008. In computing the premium of the offer price over the last transactedprice, the last transacted price on 18 January 2008 had been adjusted for interim dividend declared.

(8) On 24 March 2008, Sing Lun Holdings Limited announced that it had been informed that certain parties wereengaged in discussions to consider making a general offer for the Shares. On 30 March 2008, the voluntaryconditional cash offer was announced. The market premia in the table above were computed based on prices prior tothe holding announcement on 24 March 2008.

We note that:-

(i) The price premia to the last transacted price, 1-month and 3-month VWAP prior to theHolding Announcement Date implied in the Offer Price are higher than the correspondingmedian and mean premia in both the non-privatisation and privatisation Take-overTransactions.

(ii) The price premium to the last transacted price prior to the Offer Announcement Date impliedin the Offer Price is lower than the corresponding median and mean premia in both the non-privatisation and privatisation Take-over Transactions.


35

(iii) The price premia to the 1-month and 3-month VWAP prior to the Offer Announcement Dateimplied in the Offer Price are lower that the corresponding median but higher than thecorresponding mean premia in the non-privatisation Take-over Transactions.

(iv) The price premia to the 1-month and 3-month VWAP prior to the Offer Announcement Dateimplied in the Offer Price are lower than the corresponding mean and median premia in theprivatisation Take-over Transactions.

(v) The P/NTA ratio of the Group implied in the Offer Price is within the range, equal to themean but lower than the median P/NTA ratios of the non-privatisation Take-overTransactions.

(vi) The P/NTA ratio of the Group implied in the Offer Price is within the range but lower than themedian and mean P/NTA ratios of the privatisation Take-over Transactions.

5.5 Comparable acquisition offer analysis

In considering the Offer, we also make reference to the terms of recent merger and acquisitiontransactions in the information technologies industry since 2005 and up to the Latest PracticableDate (“Comparable Transactions”).

We wish to highlight that due to the differences in, inter alia, business activities, scale ofoperations, geographical spread of activities, track record and future prospects, the comparisonbetween the Offer against the Comparable Transactions serves only as an illustrative guide. Eachtransaction must be judged on its own commercial and financial merits. The premium in anyparticular acquisition depends on various factors such as the existing level of control in the targetcompany, prevailing market conditions, attractiveness and profile of the target company’sunderlying business and assets, size of consideration, general economic and business risks.Conclusions drawn from the comparisons made may not reflect any perceived market valuation ofSCS.

DateAnnounced Target Company Acquirer P/E EV/EBITDA P/NTA

(times) (times) (times)

13-Jun-05 CSA Holdings Ltd CSC Computer 23.2 6.4 2.0Sciences Intl

24-Jul-06 System Access Limited Sungard Asia n.m. 89.7 8.0Pacific Inc.

05-Dec-07 Frontline Technologies BT Group 22.4 10.1 2.4Corp Ltd

22-Jul-08 Datacraft Asia Limited Dimension Data 20.3 10.1 2.9Holdings Plc

High 23.2 89.7 8.0Low 20.3 6.4 2.0Mean 21.9 29.1 3.8Median 22.4 10.1 2.7

SCS 22.9 5.3 1.9(Implied in the Offer Price)


36

We note that:-

(i) The P/E ratio of the Group implied in the Offer Price is within the range and higher than themean and median P/E ratios of the Comparable Transactions.

(ii) The EV/EBITDA ratio of the Group implied in the Offer Price is below the range of theEV/EBITDA ratios of the Comparable Transactions.

(iii) The P/NTA ratio of the Group implied in the Offer Price is below the range of the P/NTAratios of the Comparable Transactions.

In addition, we also make reference to the market price premia of the Comparable Transactions.

Premium of offer price to

Last transacted 1-month VWAP 3-month VWAPDate Target price prior to prior to prior toAnnounced Company Acquirer announcement announcement announcement

(%) (%) (%)

13-Jun-05 CSA Holdings CSC Computer 49.6 56.5 65.3Ltd Sciences Intl

24-Jul-06 System Access Sungard Asia 22.1 51.3 85.3Limited Pacific Inc.

05-Dec-07 Frontline BT Group 28.9 33.9 38.1TechnologiesCorp Ltd

22-Jul-08 Datacraft Asia Dimension Data 34.3 30.6 33.0Limited Holdings Plc

High 49.6 56.5 85.3

Low 22.1 30.6 33.0

Mean 33.7 43.1 55.4

Median 31.6 42.6 51.7

SCS 30-Jul-08 38.9 58.8 61.4

25-Aug-08 11.9 26.5 30.7

We note that:-

(i) The price premia to the last transacted price, 1-month and 3-month VWAP prior to theHolding Announcement Date implied in the Offer are above the corresponding median andmean premia in the Comparable Transactions.

(ii) The price premia to the last transacted price, 1-month and 3-month VWAP prior to the OfferAnnouncement Date implied in the Offer are below the corresponding median and meanpremia in the Comparable Transactions.

5.6 Analysts’ estimates of price targets for the Shares

In our assessment of the Offer Price, we have considered analysts’ expectations of the future priceperformance of the Shares. For this purpose, we have reviewed publicly available investmentresearch reports issued on SCS to ascertain the price targets for the Shares estimated by theseanalysts. There were a total of 2 institutions which have issued investment research reports onSCS between 1 March 2008 and the Latest Practicable Date which set price targets for theShares. We set out below a summary of the price targets for the Shares set out in these reports.


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Target Date ofName of Institutions price last update

(S$)

SIAS Research Pte Ltd 1.27 14 August 2008

DBS Vickers Research (Singapore) Pte Ltd 0.95 03 March 2008

Average 1.11

Offer Price 1.50

We note that the Offer Price is at a premium of approximately 35.1% over the average of theanalysts’ target price of S$1.11.

We wish to highlight that the aforementioned price targets for the Shares represent the individualviews of the respective analysts based on then prevailing circumstances (including marketconditions and economic outlook) as at the date of publication. The analysts views and/or pricetargets may change materially over a short period of time as a result of, among other things,changes in general market conditions, SCS’ corporate developments and emergence of other newdevelopments or information relevant to SCS and/or its industry. The price targets for the Sharesquoted by these analysts may not necessarily represent an accurate prediction of the future marketprices of the Shares. Shareholders should note that the information above should not be reliedupon as a promise or indication of the actual future market prices of the Shares.

5.7 Dividend Track Record of the Company

For the purposes of assessing the Offer Price, we have considered the dividend yield of theShares implied in the Offer Price and compared them with the returns which a Shareholder maypotentially obtain by re-investing the proceeds from the Offer in other comparable investments.

Historical dividends paid by the Company

The Company had declared the following ordinary dividends in respect of the last five financialyears:

Gross Gross dividend dividend Implied gross Net dividend Net dividend Implied net

Period per Share payout (1) dividend yield (2) per Share payout (1) dividend yield (2)

(S$) (%) (%) (S$) (%) (%)

FY2003 0.03 n.m. (3) 2.0 0.0240 n.m. 1.6

FY2004 0.03 16.7 2.0 0.0240 21.5 1.6

FY2005 – – – – – –

FY2006 – – – – – –

FY2007 (4) 0.03 26.2 2.0 0.0246 21.5 1.6

Notes:-

(1) Based on the gross or net dividend per Share, as the case may be, divided by the consolidated basic earnings perShare as reported in the Company’s annual reports for the respective financial years. The earnings per Share usedfor the purpose of the computation above have not been adjusted for any changes in the Group’s accounting policiesover the years.

(2) Based on the gross or net dividend per Share, as the case may be, divided by the Offer Price.

(3) Not meaningful as the Group recorded a loss in respect of FY2003.

(4) The Company had also declared special net dividends of S$0.0082 (in addition to the interim net dividend ofS$0.0246) per Share in respect of FY2007.


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The Directors have confirmed to us that, even though the Company had declared dividends in thepast, the Company does not have a fixed rate of dividend payments. As such, the quantum ofdividends paid by the Company in any period would depend on various factors including but notlimited to the financial performance of the Group, its working capital and capital expenditure needsas well as other considerations.

As at 30 June 2008, the Company and the Group had accumulated profits of approximately S$65.7million and S$85.3 million, respectively.

Investment in selected alternative investments

Shareholders who accept the Offer may re-invest the proceeds from the Offer in selectedalternative equity investments including the shares of the Comparable Companies and/or a broadmarket index instrument such as the STI Exchange Traded Fund (“STI ETF”).

For illustration purpose, the dividend yields of these selected alternative instruments based on theirordinary dividends declared in their respective last financial year are as follows:

Financial year ended Net dividend yield (1)

(%)

Armarda 31-Dec-07 n.a.Azeus 31-Mar-08 7.0CNA 31-Dec-07 3.1CSE(2) 31-Dec-07 3.2DMX 31-Dec-07 n.a.

Average 4.5

STI ETF 30-Jun-08 3.8

SCS (Implied in the Offer Price) (3) 31-Dec-07 1.6

Notes:-

(1) Net dividend yield of each selected alternative investment is computed as the net dividend per share dividend by theclosing market prices on the last cum-dividend dates (or where there was no trading on such date, the last availableclosing market price prior thereto). The aforementioned net dividend yield computed may differ from the actualdividend yield which will vary depending on the actual cost of investment paid by the individual investor. Where bothinterim and final dividends were declared, the net dividend yield is determined using the average of the annualisednet dividend yields.

(2) CSE had also declared an interim net dividend of S$0.01 per share in respect of FY2008.

(3) The Company had also declared a special net dividend of S$0.0082 per Share in respect of FY2007. Including thisspecial net dividend, the dividend yield implied by the Offer would be approximately 2.2%.

The above analysis indicates that the net dividend yield of the Company implied in the Offer Priceis lower than the net dividend yields of the Comparable Companies and that of the STI ETF. Thissuggests that a Shareholder who accepts the Offer may potentially experience an increase ininvestment income if he re-invests the proceeds in the shares of the Comparable Companies andthe STI ETF. This is without regard to special dividends declared and is on the assumption that theCompany, the Comparable Companies and the STI ETF maintain their respective net dividend pershare at the same level as that in their last financial year.

We wish to highlight that the above dividend analysis serves only as an illustrative guide and is notan indication of the Company’s future dividend policy nor that of any of the ComparableCompanies or the STI ETF. Furthermore, an investment in the equity of the ComparableCompanies or the STI ETF also presents different risk-return profiles compared to an investment inthe Shares. Moreover, there is no assurance that the Company or any of the above selectedalternative investments will continue to pay dividends in the future and/or maintain the level ofdividend paid in past periods.


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6. OTHER CONSIDERATIONS

6.1 Outlook of the Group

We would like to draw the attention of Shareholders to paragraph 10 of the Company’s resultsannouncement for the 6-months period ended 30 June 2008 wherein the Company has made acommentary of the significant trends and competitive conditions of the industry in which the Groupoperates and any known factors or events that may affect the Group in the next reporting periodand the next 12 months, which is reproduced in italics below.

“10. A commentary at the date of the announcement of the significant trends andcompetitive conditions of the industry in which the group operates and any knownfactors or events that may affect the group in the next reporting period and the next12 months.

The Monetary Authority of Singapore (MAS) forecasts the economic growth of SCS’ homemarket Singapore easing in the next few quarters in view of slowing external demand, butmaintains the full-year growth outlook at 4-6%. The MAS has also revised its ConsumerPrice Index (CPI) inflation forecast for 2008 to 6-7%, compared to the earlier estimate of 5-6%, but expects CPI inflation to come down over the rest of the year.

Estimates of tender value for Singapore Government information teleology projects in 2008made by IDA in May 2008 remains at about S$1 billion. SCS plans to address some of thesenew opportunities.

As announced on 25 June 2008, the completion of the sale of PT SCS Astragraphia Tbk(SAT) is expected to be in September 2008 subject to fulfillment of conditions by SCS’ jointventure partner. This transaction will impact the Group’s revenue post-completion. Last year,SAT contributed S$60.3 million of revenue for the full year, of which S$19.8 million wasregistered in the fourth quarter.

Barring any unforeseen circumstances, the Group expects the second half to remainprofitable.”

6.2 Offer is Conditional

The Offer will be subject to the condition that it is established that the CCS will not (i) refer theproposed acquisition of the Company by the Offeror, or any matter arising from or relating to thatproposed acquisition, to a Phase 2 Review or (ii) issue a direction that will prohibit the Offeror fromacquiring voting rights in the Company.

The Offer shall lapse in the event (each, a “Merger Control Event”) that the CCS (i) refers theproposed acquisition of the Company by the Offeror, or any matter arising from or relating to thatproposed acquisition, to a Phase 2 Review or (ii) issues a direction that prohibits the Offeror fromacquiring voting rights in the Company, before the first closing date of the Offer as set out in theOffer Document.

If the Offer lapses as a result of a Merger Control Event, the effects are that the Offer will cease tobe capable of further acceptance and both the Shareholders and the Offeror will cease to bebound by prior acceptances of the Offer. If, following the lapse of the Offer as a result of a MergerControl Event, the CCS issues a decision that the proposed acquisition of the Company by theOfferor will not infringe the Section 54 of the Competition Act, Chapter 50B of Singapore, the Offerwill be reinstated on the same terms and at the Offer Price as soon as practicable following thedate of issue of the Favourable Decision.


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In addition, according to “CCS Guidelines on Merger Procedures”, we wish to highlight to theShareholders that in the event CCS issues a decision that the proposed acquisition of theCompany by the Offeror will infringe the Section 54 of the Competition Act, Chapter 50B ofSingapore (the “Unfavourable Decision”), CCS may issue directions to persons as it considersappropriate, to undertake such remedies to eliminate the adverse effects arising from the mergersituation. Section 69(2) of the Act provides examples of directions which may be issued by theCCS. These include directions: (i) prohibiting an anticipated merger from being carried into effect orrequiring a merger to be dissolved or modified in such manner as the CCS may direct; (ii) requiringthe merger parties to enter into such legally-enforceable agreements as may be specified by theCCS to prevent or lessen the anti-competitive effects which have arisen; (iii) requiring the mergerparties to dispose of such operations, assets or shares of such undertaking in such manner asmay be specified by the CCS; and (iv) providing a performance bond, guarantee or other form ofsecurity on such terms and conditions as the CCS may determine.


As at 25 August 2008, the Offeror is the single largest shareholder of SCS, owning or controllingapproximately 60.1 per cent. of all the Shares. As at the Latest Practicable Date, the Offeror ownsor controls approximately 58.7 per cent. of all the Shares.

6.3 Control of the Company

As at the Latest Practicable Date, the Offeror already controls more than 50% of the Shares in theCompany regardless of whether the minority Shareholders accept or reject the Offer. This entitlesthe Offeror to determine, inter alia, the operating and financial policies, management and strategyof the Group. The Offeror also has the right to pass all ordinary resolutions of the Company onmatters in which the Offeror and/or its concert parties do not have an interest, at general meetingsof Shareholders.

Nevertheless, according to the “SIC Practice Statement on the Merger Procedures of theCompetition Commission of Singapore (“CCS”)” and in connection with the Merger Control Event,we wish to highlight to the Shareholders that if the CCS issues an Unfavourable Decisionprohibiting the Offer, SIC will consider whether, if there is no order to such effect by the CCS, torequire the Offeror to reduce the percentage of Shares in which it and persons acting in concertwith it control, to below 30%. SIC would normally expect an offeror whose offer has lapsedpursuant to the Merger Control Event to proceed with all due diligence before the CCS. However, if,with the consent of the SIC and within a limited period, the offeror reduces the percentage ofshares carrying voting rights in which it and persons acting in concert with it control to below 30%,the SIC will regard the obligation to make the Offer as having lapsed.

6.4 Compulsory acquisition and delisting of Shares

The Offeror is making the Offer with a view to exercising its rights of compulsory acquisition underSection 215(1) of the Companies Act in the event that the Offeror becomes entitled to do so, anddelisting the Company from the SGX-ST thereafter.

Pursuant to Section 215(1) of the Companies Act, if the Offeror receives acceptances pursuant tothe Offer for not less than 90 per cent. of the Shares (other than those already held by the Offeror,its related corporations or their respective nominees as at the date of the Offer, including theShares purchased from Green Dot under the Share Purchase Agreement), the Offeror will exerciseits right under Section 215(1) of the Companies Act to compulsorily acquire, at the Offer Price, allthe Shares of Shareholders who have not accepted the Offer and proceed to delist the Companyfrom the SGX-ST.


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In addition, pursuant to Section 215(3) of the Companies Act, if the Offeror acquires such numberof Shares which, together with Shares held by it, its related corporations and their respectivenominees, comprise 90 percent. or more of the Shares, Shareholders who have not accepted theOffer have a right to require the Offeror to acquire their Shares at the Offer Price. Shareholderswho wish to exercise such a right are advised to seek their own independent legal advice.

Under Rule 1105 of the Listing Manual, in the event that the Offeror and parties acting in concertwith it, as a result of the Offer or otherwise, own or control more than 90 per cent. of the Shares(excluding treasury shares), the SGX-ST may suspend the listing of the Shares until such timewhen the SGX-ST is satisfied that at least 10 per cent. of the Shares (excluding treasury shares)are held by at least 500 shareholders who are members of the public.

In addition, under Rule 724 of the Listing Manual, if the percentage of the Shares (excludingtreasury shares) held in public hands falls below 10 per cent., the Company must, as soon aspracticable, announce that fact and the SGX-ST may suspend trading of all the Shares. UnderRule 1303(1) of the Listing Manual, where the Offeror succeeds in garnering acceptancesexceeding 90 per cent. of the Shares (excluding treasury shares), thus causing the percentage ofthe Company’s total number of Shares (excluding treasury shares) to fall below 10 per cent. theSGX-ST will suspend trading of the Shares at the close of the Offer.

Rule 725 of the Listing Manual states that the SGX-ST may allow the Company a period of threemonths, or such longer period as the SGX-ST may agree, to raise the percentage of Shares inpublic hands to at least 10 per cent., failing which the Company may be delisted.

We note from the Offer Document that it is the intention of the Offeror to make the Companyits wholly-owned subsidiary and the Offeror does not intend to preserve the listing status ofthe Company. Accordingly, the Offeror does not intend to take steps for any tradingsuspension of the Shares by the SGX-ST to be lifted in the event that, inter alia, less than 10per cent. of the Shares (excluding treasury shares) are held in public hands.

We would like to alert Shareholders to certain implications and consequences which may arise inthe event of a trading suspension and/or delisting of the Shares, as follows:-

(i) There will be no ready public market for their Shares and it would be more difficult forShareholders to sell their Shares;

(ii) As the Shares become less marketable due to the absence of a ready market, the sale oftheir Shares may be transacted at discounts to the valuation of comparable listedcompanies; and

(iii) In the event that the Shares are delisted, the Company will no longer be obliged to provide,and Shareholders will no longer enjoy the same level of protection, transparency andaccountability afforded and imposed on the Company by the Listing Manual (including therequirement to have independent directors). Nonetheless, as a company incorporated inSingapore, the Company will still have to comply with the requirements of the CompaniesAct.

6.5 Limitation on subsequent offer

We wish to highlight that in the event that the Offer becomes unconditional and the Offerortogether with its concert parties hold Shares carrying more than 50% of the voting rights of theCompany, Shareholders should note that under Rule 33.2 of the Code, neither the Offeror nor anyperson acting in concert with it may (except with the consent of the SIC), within 6 months of theclosing date of the successful offer, make a second offer to, or acquire any Shares from, anyShareholder on terms better than those made available under the successful offer.


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Shareholders should also note that if the Offer becomes unconditional, the Offeror and its concertparties will be free to increase their shareholding in the Company after the close of the Offerwithout incurring a take-over obligation under Rule 14 of the Code if their aggregate voting rightsremain at above 49% in the 6 months prior to any such subsequent acquisition of Shares.

6.6 Offeror’s intentions for SCS

The information on Offeror’s intentions for SCS is set out in Section 10 of the letter from ANZ tothe Shareholders contained in the Offer Document, which is reproduced in italics below.

“10. THE OFFEROR’S INTENTIONS FOR SCS

10.1 The Offeror’s intentions for SCS. Following the acquisition of SCS, the Offeror currentlyintends to synergise the business and operations of SCS with the business and operationsof NCS and to this end, the Offeror will undertake a comprehensive review of theorganisation, businesses and operations of SCS and its subsidiaries, and intends to workclosely with SCS to develop appropriate measures to maximise business value.

Following such a review and until such time when a decision is made, the Offeror presentlyhas no intention to (i) introduce any major changes to the business of SCS (save for theactions to be taken pursuant to the Change of Name Undertakings), (ii) redeploy the fixedassets of SCS or (iii) discontinue the employment of the employees of SCS and itssubsidiaries.

The directors of the Offeror retain the flexibility at any time to consider any options in relationto SCS and its subsidiaries which may present themselves and which they may regard to bein the interest of the Offeror.”

6.7 Unutilised capital allowances and tax losses

As at 31 December 2007, the Company and its subsidiaries in Singapore had in aggregateunabsorbed capital allowances and unutilised tax losses of approximately S$0.8 million and S$11.1million respectively while its overseas subsidiaries had in aggregate unabsorbed capital allowancesand unutilised tax losses of approximately S$0.1 million and S$8.2 million respectively. Suchunutilised capital allowances and tax losses are available for carry forward to set-off against futuretaxable income subject to the agreement of Inland Revenue Authority of Singapore or such otherrelevant tax authorities.

It is important to note that under Sections 23(4) and 37(12) of the Singapore Income Tax Act,unabsorbed capital allowances and tax losses incurred by a company are available for carryforward for set-off against future taxable income provided that the beneficial shareholders and theirshareholdings of the company remain substantially (i.e. more that 50%) the same on the last day(i.e. 31 December) of the year in which the capital allowances arose or the tax losses wereincurred, and on the first day (i.e. 1 January) of the year of assessment in which such unabsorbedcapital allowances or tax losses are to be set-off against taxable income, respectively. In addition,the utilisation of unabsorbed capital allowances is subject to a further condition that the businessfrom which the capital allowances arose is still carried on (i.e. there is no change in the principalactivity of the company).

In connection with the Offer, there may be a substantial change in the beneficial shareholders ofthe Company. If there is such a substantial change, the Company and its subsidiaries in Singaporewill not be able to carry forward the unabsorbed capital allowances and tax losses which are beingaffected by the substantial change of ownership thereof for set-off against their future taxableincome. However, the Company and its subsidiaries in Singapore may, pursuant to Sections 23(5)and 37(16) of the Singapore Income Tax Act, apply to the Minister of Finance for the waiver ofcontinuity of the substantial ownership test and if a waiver is granted, the unabsorbed capitalallowances and tax losses can only be set-off against the taxable profit for the same trade inrespect of which the capital allowances arose and/or tax losses were incurred.


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6.8 Impact of change in corporate names and contractual arrangements

We note that pursuant to 5.1 of the Share Purchase Agreement, each of the Offeror and NCS hasundertaken (on a joint and several basis) with Green Dot that, following the completion of theAcquisition under the Share Purchase Agreement, it shall,

(i) not later than 180 days after the Offer closes:

(a) (1) if at the close of the Offer, it holds 75 per cent. or more of the total voting rights inSCS, procure the removal of the term “Singapore” from the name of SCS and (2) if atthe close of the Offer, it holds less than 75 per cent. of the total voting rights in SCS,use its reasonable endeavours to procure that a general meeting is held by the OtherGroup Entities of the Company at which a resolution for the removal of the term“Singapore” from the name of SCS will be proposed, and vote in favor of suchresolution;

(b) where the names of the subsidiaries and associated companies of SCS contain theterm “Singapore Computer Systems Limited”, (1) procure the removal of the term“Singapore” form the respective names of the 75% Controlled Subsidiaries of SCSand (2) use its reasonable endeavours to procure that a general meeting is held byeach of the Other Group Entities of SCS at which a resolution for the removal of theterm “Singapore” from its name will be proposed, and vote in favour of suchresolution;

(c) procure the removal of the term “Green Dot” from the name of Green Dot InternetServices Pte Ltd; and

(d) procure that the Company uses its reasonable endeavours to procure that a generalmeeting is held by Trusted Hub Ltd at which a resolution for the removal of the term“Trusted” from the name of “Trusted Hub Ltd” will be proposed, and vote in favour ofsuch resolution;

(ii) procure that the subsidiaries of the Company incorporated after the Offer closes do notcontain the term “Trusted” or “Green Dot” in their respective names;

(iii) in relation to entities whose names contain the term “Trusted” or “Green Dot” and which areacquired after the Offer closes, not later than 180 days from the respective dates ofacquisition of such entities (1) for the 75% Controlled Subsidiaries of SCS, procure that theydo not use the term “Trusted” or “Green Dot” in their respective names and (2) for the OtherGroup Entities of SCS, use its reasonable endeavours to procure that a general meeting isheld by each of the Other Group Entities at which a resolution to remove the term “Trusted”or “Green Dot” (as the case may be) from its name will be proposed, and vote in favour ofsuch resolution;

(iv) in respect of (1) the 75% Controlled Subsidiaries of SingTel as at the close of the Offer orwhich are acquired after the Offer closes, not later than 180 days from the date the Offercloses or the respective dates of acquisition of such 75% Controlled Subsidiaries, as thecase may be, or (2) the subsidiaries of SingTel which are incorporated after the Offer closes,procure that such relevant subsidiaries not use the term “Singapore Computer SystemsLimited” in their respective names; and

(v) in respect of the Offer Group Entities of SingTel whose names contain the terms “SingaporeComputer Systems Limited” as at the close of the Offer or which are acquired after the Offercloses, not later that 180 days from the date the Offer closes or the respective dates ofacquisition of such Other Group Entities, as the case may be, use its reasonable endevoursto procure that a general meeting is held by each of such Other Group Entities at which aresolution for the removal of the term “Singapore Computer Systems Limited” from its namewill be proposed and vote in favour of such resolution,

Provided that if a subsidiary or associated company of SCS or SingTel adopts, or is acquired witha name on or after the close of the Offer which causes the Offeror and/or NCS to be in breach oftheir respective obligations as stated in sections (ii) to (v) above:-

(a) Green Dot shall give notice of such breach to the Offeror and NCS as soon as Green Dotbecomes aware of such breach and shall allow the Offeror and NCS a period of 30 daysfrom the date of receipt of such notice to remedy such breach; and

(b) the Offeror and NCS shall, as soon as either of them becomes aware of such breach (otherthan by reason of a notice from Green Dot), remedy the breach within 30 days thereafter.

Apart from the above, we wish to highlight that some of the Group’s existing agreements and/orcontractual arrangements may be subject to change-of-control provisions. The Directors haveconfirmed to us that as at the Latest Practicable Date, the Company has not received any writtennotification to terminate any of the Group’s existing agreements and/or contractual arrangementsarising from the Offer. Shareholders should note that there is however no assurance that theresultant change in the shareholding structure of the Company pursuant to the Offer will noteventually affect the Group’s existing agreements and/or contractual arrangements.

6.9 Alternative take-over offer

As at the Latest Practicable Date, there is no publicly available evidence of an alternative take-overoffer for the Shares or an enhancement or revision of the Offer.

In this regard, we wish to highlight that the Offeror has stated that it does not intend to revise theOffer Price.

7. SUMMARY OF ANALYSIS

In arriving at our advice on the Offer, we have relied on the following key considerations (whichshould be read in conjunction with, and in the context of, the full text of this letter):-

(a) Over the last two years prior to the Holding Announcement Date, the market price of theShares has traded at between a low of S$0.675 and a high of S$1.090, with an averagedaily trading volume of approximately 56,000 Shares. As the market price of the Shares didnot trade at or above the Offer Price, the Offer Price is at a premium of between 58.8% to74.7% to the VWAP of the Shares for the various historical periods within this time span.

(b) The average daily trading volume has generally been low over the last two years prior to theHolding Announcement Date. Daily trading volume has been lower than 0.3 per cent. of freefloat for most of the periods over the last two years.

(c) It is highly likely that the market price of the Shares has been supported by the Offer. As theShares have been trading at about the Offer Price since the Offer Announcement Date,there is no assurance that the market price and the trading volume of the Shares will bemaintained at the level prevailing as at the Latest Practicable Date after the closing of theOffer.

(d) The historical P/E ratio of the Company implied in the Offer Price is above the range of thehistorical P/E ratios of the Comparable Companies.

(e) The EV/EBITDA ratio of the Company implied in the Offer Price is within the range andhigher than the mean and median EV/EBITDA ratios of the Comparable Companies.

(f) The P/NTA ratio of the Company implied in the Offer Price is within the range and higherthan the mean and median P/NTA ratios of the Comparable Companies.


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(g) The Offer Price is at a premium of approximately 92.3 per cent. over the unaudited bookNTA per Share of the Group as at 30 June 2008.

(h) The Offer Price is at a premium of approximately 82.0 per cent. over the Revalued NTA perShare of the Group as at 30 June 2008.

(i) The market price premia to the last transacted price, 1-month and 3-month VWAP prior tothe Holding Announcement Date implied in the Offer Price are higher than thecorresponding median and mean premia in the privatisation Take-over Transactions.

(j) The market price premia to the last transacted price, 1-month and 3-month VWAP prior tothe Offer Announcement Date implied in the Offer Price are lower than the correspondingmedian and mean premia in the privatisation Take-over Transactions.

(k) The P/NTA ratio of the Group implied in the Offer Price is within the range but lower than themedian and mean P/NTA ratios of the privatisation Take-over Transactions.

(l) The P/E ratio of the Group implied in the Offer Price is within the range and higher than themean and median P/E ratios of the Comparable Transactions.

(m) The EV/EBITDA ratio of the Group implied in the Offer Price is below the range of theEV/EBITDA ratios of the Comparable Transactions.

(n) The P/NTA ratio of the Group implied in the Offer Price is below the range of the P/NTAratios of the Comparable Transactions.

(o) The market price premia to the last transacted price, 1-month and 3 month VWAP prior tothe Holding Announcement Date implied in the Offer are above the corresponding medianand mean premia in the Comparable Transactions.

(p) The market price premia to the last transacted price, 1-month and 3 month VWAP prior tothe Offer Announcement Date implied in the Offer are below the corresponding median andmean premia in the Comparable Transactions.

(q) The Offer Price is at a premium of approximately 35.1% over the average of the analysts’target price of S$1.11.

(r) As at the Latest Practicable Date, the Shares are trading just below the Offer Price.

(s) The other relevant factors as disclosed under “Other Considerations” in this letter, inparticular:-

(i) The Offer is conditional upon no Merger Control Event occurring.

(ii) The Offeror has control of more than 50% of the Shares in the Company regardless ofwhether minority Shareholders accept or reject the Offer.

Nevertheless, we wish to highlight to the Shareholders that according to the “SICPractice Statement on the Merger Procedures of the Competition Commission ofSingapore (“CCS”)” and in connection with the Merger Control Event, if the CCSissues an Unfavourable Decision prohibiting the Offer, SIC will consider whether, ifthere is no order to such effect by the CCS, to require the Offeror to reduce thepercentage of Shares in which it and persons acting in concert with it control, to below30%.

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(iii) Given the opportunity, the Offeror intends to privatise and delist the Company and hasstated its intention not to take steps for any trading suspension of the Shares to belifted.

(iv) As at the Latest Practicable Date, there is no public evidence of an alternative offer orenhanced offer for the Shares. The Offeror has also stated that it does not intend torevise the Offer Price.

In summary, after carefully considering all available information and based on our assessment ofthe financial terms of the Offer, we are of the opinion that the Offer is, on balance, a reasonablyattractive price.

8. CIMB-GK’S ADVICE ON THE OFFER

After carefully considering all available information and based on our assessment of the financialterms of the Offer, we advise the Independent Directors to make the following recommendations toShareholders in relation to the Offer:-

Unless Shareholders are confident and optimistic about the prospects of the Group under thecontrol of the Offeror, they should either ACCEPT the Offer or sell their Shares in the openmarket if they can obtain a price higher than the Offer Price (after deducting all relatedexpenses) by doing so. In addition, we wish to bring to Shareholders’ attention that the Offershall lapse and the Offeror will cease to be bound by prior acceptances of the Offer in the eventa Merger Control Event occurs. Shareholders are advised to read Sections 6.2 and 6.3 of ourletter carefully in relation to the Merger Control Event.

Shareholders who do not wish to accept the Offer should be aware that they will be subject tothe general risks associated with share investments, including but not limited to fluctuations inthe price and trading liquidity of the Shares. They should also note that the market price and/ortrading liquidity of the Shares may not be sustained at the current level after the Closing Dateand trading in the Shares may be suspended if the SGX-ST’s shareholding spread requirementsare not met.

In rendering the above advice, we have not had regard to the specific investment objectives,financial situation, tax position or particular needs and constraints of any individual Shareholder. Aseach Shareholder would have different investment objectives and profiles, we would advise thatany individual Shareholder who may require specific advice in relation to his investment objectivesor portfolio should consult his stockbroker, bank manager, solicitor, accountant, tax adviser or otherprofessional adviser immediately.

The Independent Directors should advise Shareholders that the opinion and advice of CIMB-GKshould not be relied upon by any Shareholder as the sole basis for deciding whether or not toaccept the Offer.

Yours faithfullyFor and on behalf ofCIMB-GK SECURITIES PTE. LTD.

MAH KAH LOON ERIC WONGHEAD DIRECTORCORPORATE FINANCE CORPORATE FINANCE

1. DIRECTORS

The names, addresses and designations of the Directors as at the Latest Practicable Date are setout below:

Name Address Designation

Peter Seah Lim Huat 45 Binjai Park Singapore 589845 Chairman

Boon Swan Foo 7 Palm Drive Singapore 456477 Deputy Chairman

Philip Eng Heng Nee 53C Jalan Lim Tai See Singapore 268383 Director

William Liu Wei Hai 22 Kingsmead Road Singapore 267973 Director

Tan Cheng Han 64 Jalan Haji Alias Singapore 268552 Director

Donald Albert Ramble 18 Trevose Crescent Singapore 298032 Director

Venkatachalam Krishnakumar 28A Swettenham Road Singapore 248126 Director

Tan Tong Hai 151 Duchess Avenue Singapore 269172 President & CEO

2. PRINCIPAL ACTIVITIES

The Company is incorporated in Singapore with its principal place of business and registered officeat 7 Bedok South Road Singapore 469272.

The principal activities of the Company and its subsidiaries are to provide computer systemsintegration services and computer facilities management services.

3. SHARE CAPITAL

3.1 As at the Latest Practicable Date, the Company has a total of 158,684,887 issued Shares and anissued and paid-up share capital of S$43,990,226.80.

3.2 4,124,886 Shares have been issued between the end of the last financial year ended 31December 2007 and the Latest Practicable Date pursuant to the exercise of Options and vesting ofawards under the SCS Performance Share Plan and SCS Restricted Stock Plan.

3.3 As of the Latest Practicable Date, there are the following Options to subscribe for Shares:

No. outstanding at Exercise priceDate of grant Latest Practicable Date (S$) Exercise period

12 July 2000 4,900 1.13 20/04/2001-18/04/2009

18 October 2000 148,000 2.20 19/10/2001-18/10/2010

14 March 2001 164,000 2.08 15/03/2002-14/03/2011

7 March 2002 178,000 1.55 08/03/2003-07/03/2012

21 February 2003 80,000 0.86 22/02/2004-21/02/2013

29 April 2004 16,000 0.84 30/04/2005-29/04/2009

29 April 2004 16,500 0.84 30/04/2005-29/04/2014

9 April 2005 16,000 0.84 10/04/2006-09/04/2010

9 April 2005 136,950 0.84 10/04/2006-09/04/2015

4 April 2006 200,000 0.70 05/04/2007-04/04/2016

TOTAL 960,350

Save for such Options, there are no outstanding instruments convertible into, or rights to subscribefor, or options in respect of securities which carry voting rights in the capital of the Company.

APPENDIX 2: GENERAL INFORMATION

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3.4 The Company is listed on the Official List of the Singapore SGX-ST.

3.5 There is only one class of Shares in the capital of the Company which are ordinary Shares withequal ranking rights to dividend, voting at general meetings and return of capital. Further details ofthe rights of Shareholders in respect of capital, voting and dividends are stated in the Articles ofthe Company, the relevant extracts of which are reproduced in italics, without amendment, below:

“4. Subject to the Statutes, no shares may be issued by the Directors without the priorapproval of the Company in General Meeting but subject thereto and to Article 8, and to anyspecial rights attached to any shares for the time being issued, the Directors may allot and issueshares or grant options over or otherwise dispose of the same to such persons on such terms andconditions and for such consideration and at such time and subject or not to the payment of anypart of the amount thereof in cash as the Directors may think fit, and any shares may be issuedwith such preferential, deferred, qualified or special rights, privileges or conditions as the Directorsmay think fit, and preference shares may be issued which are or at the option of the Company areliable to be redeemed, the terms and manner of redemption being determined by the Directors,provided always that:

(i) no shares shall be issued to transfer a controlling interest in the Companywithout the prior approval of the Members in a General Meeting;

(ii) (subject to any direction to the contrary that may be given by the Company inGeneral Meeting) any issue of shares for cash to Members holding shares of any classshall be offered to such Members in proportion as nearly as may be to the number ofshares of such class then held by them and the provisions of the second sentence ofArticle 8(A) with such adaptations as are necessary shall apply; and

(iii) any other issue of shares, the aggregate of which would exceed the limitsreferred to in Article 8(B), shall be subject to the approval of the Company in GeneralMeeting.

5. (A) Preference shares may be issued subject to such limitation thereof as may beprescribed by any Stock Exchange upon which shares in the Company may be listed, Preferenceshareholders shall have the same rights as ordinary shareholders as regards receiving of notices,reports and balance sheets and attending General Meetings of the Company, and preferenceshareholders shall also have the right to vote at any meeting convened for the purpose of reducingthe capital or winding-up or sanctioning a sale of the undertaking or where the proposal to besubmitted to the meeting directly affects their rights and privileges or when the dividend on thepreference shares is more than six months in arrear.

(B) The Company has power to issue further preference capital ranking equally with,or in priority to, preference shares already issued.

6. (A) Whenever the share capital of the Company is divided into different classes ofshares, the special rights attached to any class may, subject to the provisions of the Statutes, bevaried or abrogated either with the consent in writing of the holders of three-quarters of the issuedshares of the class or with the sanction of a Special Resolution passed at a separate GeneralMeeting of the holders of the shares of the class (but not otherwise) and may be so varied orabrogated either whilst the Company is a going concern or during or in contemplation of a winding-up. To every such separate General Meeting all the provisions of these presents relating to GeneralMeetings of the Company and to the proceedings thereat shall mutatis mutandis apply, except thatthe necessary quorum shall be two persons at least holding or representing by proxy at least one-third of the issued shares of the class and that any holder of shares of the class present in personor by proxy may demand a poll and that every such holder shall on a poll have one vote for everyshare of the class held by him, Provided always that where the necessary majority for such aSpecial Resolution is not obtained at such General Meeting, consent in writing if obtained from theholders of three-quarters of the issued shares of the class concerned within two months of such


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General Meeting shall be as valid and effectual as a Special Resolution carried at such GeneralMeeting. The foregoing provisions of this Article shall apply to the variation or abrogation of thespecial rights attached to some only of the shares of any class as if each group of shares of theclass differently treated formed a separate class the special rights whereof are to be varied.

(B) The special rights attached to any class of shares having preferential rights shallnot unless otherwise expressly provided by the terms of issue thereof be deemed to be varied bythe creation or issue of further shares ranking as regards participation in the profits or assets ofthe Company in some or all respects pari passu therewith but in no respect in priority thereto.

8. (A) Subject to any direction to the contrary that may be given by the Company inGeneral Meeting, all new shares shall before issue be offered to such persons as at the date of theoffer are entitled to receive notices from the Company of General Meetings in proportion, as nearlyas the circumstances admit, to the number of the existing shares to which they are entitled. Theoffer shall be made by notice specifying the number of shares offered, and limiting a time withinwhich the offer, if not accepted, will be deemed to be declined, and, after the expiration of thattime, or on the receipt of an intimation from the person to whom the offer is made that he declinesto accept the shares offered, the Directors may dispose of those shares in such manner as theythink most beneficial to the Company. The Directors may likewise so dispose of any new shareswhich (by reason of the ratio which the new shares bear to shares held by persons entitled to anoffer of new shares) cannot, in the opinion of the Directors, be conveniently offered under thisArticle 8(A).

(B) Notwithstanding Article 8(A), the Company may by Ordinary Resolution inGeneral Meeting give to the Director a general authority, either unconditionally or subject to suchconditions as may be specified in the Ordinary Resolution, to :

(a) (i) issue shares in the capital of the Company (“shares”) whether by way ofrights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”)that might or would require shares to be issued, including but not limited to thecreation and issue of (as well as adjustments to) warrants, debentures or otherinstruments convertible into shares; and

(b) notwithstanding the authority conferred by the Ordinary Resolution may haveceased to be in force) issue shares in pursuance of any instrument made orgranted by the Directors while the Ordinary Resolution was in force,

provided that :

(1) the aggregate number of shares to be issued pursuant to the OrdinaryResolution (including shares to be issued in pursuance of Instruments made orgranted pursuant to the Ordinary Resolution) shall be subject to such limits andmanner of calculation as may be prescribed by the Singapore ExchangeSecurities Trading Limited;

(2) in exercising the authority conferred by the Ordinary Resolution, the Companyshall comply with the provisions of the Listing Manual of the Singapore ExchangeSecurities Trading Limited for the time being in force (unless such compliance iswaived by the Singapore Exchange Securities Limited) and these presents; and

(3) (unless revoked or varied by the Company in General Meeting) the authorityconferred by the Ordinary Resolution shall not continue in force beyond theconclusion of the Annual General Meeting of the Company next following thepassing of the Ordinary Resolution, or the date by which such Annual GeneralMeeting of the Company is required by law to be held, or the expiration of suchother period as may be prescribed by the Statutes (whichever is earliest).


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(C) Except so far as otherwise provided by the conditions of issue or by thesepresents, all new shares shall be subject to the provisions of the Statutes and ofthese presents with reference to allotment, payment of calls, lien, transfer,transmission, forfeiture and otherwise.

9. The Company may by Ordinary Resolution:-

(i) consolidate and divide all or any of its shares;

(ii) sub-divide its shares, or any of them, (subject, nevertheless, to the provisions ofthe Statutes), and so that the resolution whereby any share is sub-divided maydetermine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may, as compared with the others, have anysuch preferred, deferred or other special rights, or be subject to any suchrestrictions, as the Company has power to attach to unissued or new shares; and

(iii) subject to the provisions of the Statutes, convert any class of shares into anyother class of shares.

12. Without prejudice to any special rights previously conferred on the holders of any sharesor class of shares for the time being issued, any share in the Company may be issued with suchpreferred, deferred or other special rights, or subject to such restrictions, whether as regardsdividend, return of capital, voting or otherwise, as the Company may from time to time by OrdinaryResolution determine (or, in the absence of any such determination, as the Directors maydetermine) and subject to the provisions of the Statutes the Company may issue preference shareswhich are, or at the option of the Company are liable, to be redeemed.

13. Subject to the provisions of these presents and of the Statutes relating to authority, pre-emption rights and otherwise and of any resolution of the Company in General Meeting passedpursuant thereto, all unissued shares shall be at the disposal of the Directors and they may allot(with or without conferring a right of renunciation), grant options over or otherwise dispose of themto such persons, at such times and on such terms as they think proper.

25. No Member shall be entitled to receive any dividend or vote at any meeting or upon a poll,until he shall have paid all calls for the time being due and payable on every share held by him,whether alone or jointly with any other person, together with interest and expenses (if any).

46. Save as otherwise provided by or in accordance with these presents, a person becomingentitled to a share pursuant to Article 44(A) or (B) or Article 45 (upon supplying to the Companysuch evidence as the Directors may reasonably require to show his title to the share) shall beentitled to the same dividends and other advantages as those to which he would be entitled if hewere the Member in respect of the share except that he shall not be entitled in respect thereof(except with the authority of the Directors) to exercise any right conferred by membership inrelation to meetings of the Company until he shall have been registered as a Member in theRegister of Members or his name shall have been entered in the Depository Register in respect ofthe share.

52. Any General Meeting at which it is proposed to pass a Special Resolution or (save asprovided by the Statutes) a resolution of which special notice has been given to the Company, shallbe called by 21 days’ notice in writing at the least and an Annual General Meeting and any otherExtraordinary General Meeting by 14 days’ notice in writing at the least. The period of notice shallin each case be exclusive of the day on which it is served or deemed to be served and of the dayon which the meeting is to be held and shall be given in the manner hereinafter mentioned to all


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Members other than such as are not under the provisions of these presents and the Act entitled toreceive such notices from the Company; Provided that a General Meeting notwithstanding that ithas been called by a shorter notice than that specified above shall be deemed to have been dulycalled if it is so agreed:-

(i) in the case of an Annual General Meeting by all the Members entitled to attendand vote thereat; and

(ii) in the case of an Extraordinary General Meeting by a majority in number of theMembers having a right to attend and vote thereat, being a majority togetherholding not less than 95 per cent. of the total voting rights of all the Membershaving a right to vote at that meeting;

Provided also that the accidental omission to give notice to or the non-receipt of notice byany person entitled thereto shall not invalidate the proceedings at any General Meeting. At least14 days’ notice of any General Meeting shall be given by advertisement in an English dailynewspaper in circulation in Singapore and in writing to the Singapore Exchange Securities TradingLimited.

62. At any General Meeting a resolution put to the vote of the meeting shall be decided on ashow of hands unless a poll is (before or on the declaration of the result of the show of hands)demanded by:

(i) the chairman of the meeting; or

(ii) not less than two Members present in person or by proxy and entitled to vote atthe meeting; or

(iii) a Member present in person or by proxy and representing not less than one-tenth of the total voting rights of all the Members having the right to vote at themeeting; or

(iv) a Member present in person or by proxy and holding not less than 10 per cent. ofthe total number of paid-up shares of the Company (excluding treasury shares);

Provided always that no poll shall be demanded on the choice of a chairman or on aquestion of adjournment.

63. A demand for a poll may be withdrawn only with the approval of the meeting. Unless apoll is required a declaration by the chairman of the meeting that a resolution has been carried, orcarried unanimously, or by a particular majority, or lost, and an entry to that effect in the minutebook, shall be conclusive evidence of that fact without proof of the number or proportion of thevotes recorded for or against such resolution. If a poll is required, it shall be taken in such manner(including the use of ballot or voting papers or tickets) as the chairman of the meeting may direct,and the result of the poll shall be deemed to be the resolution of the meeting at which the poll wasdemanded. The chairman of the meeting may (and if so directed by the meeting shall) appointscrutineers and may adjourn the meeting to some place and time fixed by him for the purpose ofdeclaring the result of the poll.

64. In the case of an equality of votes, whether on a show of hands or on a poll, the chairmanof the meeting at which the show of hands takes place or at which the poll is demanded shall beentitled to a casting vote.


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65. A poll demanded on any question shall be taken either immediately or at such subsequenttime (not being more than 30 days from the date of the meeting) and place as the chairman maydirect. No notice need be given of a poll not taken immediately. The demand for a poll shall notprevent the continuance of the meeting for the transaction of any business other than the questionon which the poll has been demanded.

66. Subject and without prejudice to any special privileges or restrictions as to voting for thetime being attached to any special class of shares for the time being forming part of the capital ofthe Company and to Article 5A, each Member entitled to vote may vote in person or by proxy. Ona show of hands every Member who is present in person or by proxy shall have one vote (providedthat in the case of a Member who is represented by two proxies, only one of the two proxies asdetermined by that Member or, failing such determination, by the Chairman of the meeting (or by aperson authorised by him) in his sole discretion shall be entitled to vote on a show of hands) andon a poll, every Member who is present in person or by proxy shall have one vote for every sharewhich he holds or represents. For the purpose of determining the number of votes which aMember, being a Depositor, or his proxy may cast at any General Meeting on a poll, the referenceto shares held or represented shall, in relation to shares of that Depositor, be the number of sharesentered against his name in the Depository Register as at 48 hours before the time of the relevantGeneral Meeting as certified by the Depository to the Company.

67. In the case of joint holders of a share the vote of the senior who tenders a vote, whetherin person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders andfor this purpose seniority shall be determined by the order in which the names stand in theRegister of Members or (as the case may be) the Depository Register in respect of the share.

68. Where in Singapore or elsewhere a receiver or other person (by whatever name called)has been appointed by any court claiming jurisdiction in that behalf to exercise powers with respectto the property or affairs of any Member on the ground (however formulated) of mental disorder,the Directors may in their absolute discretion, upon or subject to production of such evidence of theappointment as the Directors may require, permit such receiver or other person on behalf of suchMember to vote in person or by proxy at any General Meeting or to exercise any other rightconferred by membership in relation to meetings of the Company.

69. Every Member shall be entitled to be present and to vote at any General Meeting eitherpersonally or by proxy in respect of any shares upon which all calls due to the Company havebeen paid.

70. No objection shall be raised as to the admissibility of any vote except at the meeting oradjourned meeting at which the vote objected to is or may be given or tendered and every vote notdisallowed at such meeting shall be valid for all purposes. Any such objection shall be referred tothe chairman of the meeting whose decision shall be final and conclusive.

71. On a poll, votes may be given either personally or by proxy and a person entitled to morethan one vote need not use all his votes or cast all the votes he uses in the same way.

72. (A) A Member may appoint not more than two proxies to attend and vote at thesame General Meeting provided that if the Member is a Depositor, the Company shall be entitledand bound:-

(i) to reject any instrument of proxy lodged if the Depositor is not shown to have anyshares entered against his name in the Depository Register as at 48 hoursbefore the time of the relevant General Meeting as certified by the Depository tothe Company; and


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(ii) to accept as the maximum number of votes which in aggregate the proxy orproxies appointed by the Depositor is or are able to cast on a poll a numberwhich is the number of shares entered against the name of that Depositor in theDepository Register as at 48 hours before the time of the relevant GeneralMeeting as certified by the Depository to the Company, whether that number isgreater or smaller than the number specified in any instrument of proxy executedby or on behalf of that Depositor.

(B) The Company shall be entitled and bound, in determining rights to vote andother matters in respect of a completed instrument of proxy submitted to it, tohave regard to the instructions (if any) given by and the notes (if any) set out inthe instrument of proxy.

(C) In any case where a form of proxy appoints more than one proxy, the proportionof the shareholding concerned to be represented by each proxy shall bespecified in the form of proxy.

(D) A proxy need not be a Member of the Company.

73. (A) An instrument appointing a proxy shall be in writing in any usual or common formor in any other form which the Directors may approve and:-

(i) in the case of an individual shall be signed by the appointor or his attorney; and

(ii) in the case of a corporation shall be either given under its common seal orsigned on its behalf by an attorney or a duly authorised officer of the corporation.

(B) The signature on such instrument need not be witnessed. Where an instrumentappointing a proxy is signed on behalf of the appointor by an attorney, the letteror power of attorney or a duly certified copy thereof must (failing previousregistration with the Company) be lodged with the instrument of proxy pursuantto the next following Article, failing which the instrument may be treated asinvalid.

74. An instrument appointing a proxy must be left at such place or one of such places (if any)as may be specified for that purpose in or by way of note to or in any document accompanying thenotice convening the meeting (or, if no place is so specified, at the Office) not less than 48 hoursbefore the time appointed for the holding of the meeting or adjourned meeting or (in the case of apoll taken otherwise than at or on the same day as the meeting or adjourned meeting) for thetaking of the poll at which it is to be used, and in default shall not be treated as valid. Theinstrument shall, unless the contrary is stated thereon, be valid as well for any adjournment of themeeting as for the meeting to which it relates; Provided that an instrument of proxy relating to morethan one meeting (including any adjournment thereof) having once been so delivered for thepurposes of any meeting shall not require again to be delivered for the purposes of anysubsequent meeting to which it relates.

75. An instrument appointing a proxy shall be deemed to include the right to demand or joinin demanding a poll, to move any resolution or amendment thereto and to speak at the meeting.

76. A vote cast by proxy shall not be invalidated by the previous death or insanity of theprincipal or by the revocation of the appointment of the proxy or of the authority under which theappointment was made provided that no intimation in writing of such death, insanity or revocationshall have been received by the Company at the Office at least one hour before thecommencement of the meeting or adjourned meeting or (in the case of a poll taken otherwise thanat or on the same day as the meeting or adjourned meeting) the time appointed for the taking ofthe poll at which the vote is cast.


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123. The Company may by Ordinary Resolution declare dividends but no such dividend shallexceed the amount recommended by the Directors.

124. If and so far as in the opinion of the Directors the profits of the Company justify suchpayments, the Directors may declare and pay the fixed dividends on any class of shares carrying afixed dividend expressed to be payable on fixed dates on the half-yearly or other dates prescribedfor the payment thereof and may also from time to time declare and pay interim dividends onshares of any class of such amounts and on such dates and in respect of such periods as theythink fit.

125. Subject to any rights or restrictions attached to any shares or class of shares and exceptas otherwise permitted under the Act:

(i) all dividends in respect of shares must be paid in proportion to the number ofshares held by a Member but where shares are partly paid all dividends must beapportioned and paid proportionately to the amounts paid or credited as paid onthe partly paid shares; and

(ii) all dividends must be apportioned and paid proportionately to the amounts sopaid or credited as paid during any portion or portions of the period in respect ofwhich the dividend is paid.

For the purpose of this Article, an amount paid or credited as paid on a share in advanceof a call is to be ignored.

126. No dividend shall be paid otherwise than out of profits available for distribution under theprovisions of the Statutes.

127. No dividend or other moneys payable on or in respect of a share shall bear interest asagainst the Company.

128. (A) The Directors may retain any dividend or other moneys payable on or in respectof a share on which the Company has a lien and may apply the same in or towards satisfaction ofthe debts, liabilities or engagements in respect of which the lien exists.

(B) The Directors may retain the dividends payable upon shares in respect of whichany person is under the provisions as to the transmission of shares hereinbefore contained entitledto become a Member, or which any person is under those provisions entitled to transfer, until suchperson shall become a Member in respect of such shares or shall transfer the same.

129. The waiver in whole or in part of any dividend on any share by any document (whether ornot under seal) shall be effective only if such document is signed by the shareholder (or the personentitled to the share in consequence of the death or bankruptcy of the holder) and delivered to theCompany and if or to the extent that the same is accepted as such or acted upon by the Company.

129A The payment by the Company of any unclaimed dividends or other moneys payable on orin respect of a share into a separate account shall not constitute the Company a trustee in respectthereof. All dividends and other moneys payable on or in respect of a share that are unclaimedafter first becoming payable may be invested or otherwise made use of by, for the benefit of, theCompany and any dividend or any such moneys unclaimed after a period of six years from thedate that are first payable may be forfeited and if so shall revert to the Company but the Directorsmay at any time thereafter at their absolute discretion annul any such forfeiture and pay themoneys so forfeited to the person entitled thereto prior to the forfeiture. If the Depository returnsany such dividend or moneys to the Company, the relevant Depositor shall not have any right orclaim in respect of such dividend or moneys against the Company if a period of six years haselapsed from the date of the declaration of such dividend or the date on which such other moneysare first payable.


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130. The Company may upon the recommendation of the Directors by Ordinary Resolutiondirect payment of a dividend in whole or in part by the distribution of specific assets (and inparticular of paid-up shares or debentures of any other company) and the Directors shall giveeffect to such resolution. Where any difficulty arises in regard to such distribution, the Directorsmay settle the same as they think expedient and in particular may issue fractional certificates, mayfix the value for distribution of such specific assets or any part thereof, may determine that cashpayments shall be made to any Members upon the footing of the value so fixed in order to adjustthe rights of all parties and may vest any such specific assets in trustees as may seem expedientto the Directors.

131. Any dividend or other moneys payable in cash on or in respect of a share may be paid bycheque or warrant sent through the post to the registered address appearing in the Register ofMembers or (as the case may be) the Depository Register of a Member or person entitled thereto(or, if two or more persons are registered in the Register of Members or (as the case may be)entered in the Depository Register as joint holders of the share or are entitled thereto inconsequence of the death or bankruptcy of the holder, to any one of such persons) or to suchperson at such address as such Member or person or persons may by writing direct. Every suchcheque or warrant shall be made payable to the order of the person to whom it is sent or to suchperson as the holder or joint holders or person or persons entitled to the share in consequence ofthe death or bankruptcy of the holder may direct and payment of the cheque or warrant by thebanker upon whom it is drawn shall be a good discharge to the Company. Every such cheque orwarrant shall be sent at the risk of the person entitled to the money represented thereby.Notwithstanding the foregoing provisions of this Article and the provisions of Article 133, thepayment by the Company to the Depository of any dividend payable to a Depositor shall, to theextent of the payment made to the Depository, discharge the Company from any liability to theDepositor in respect of that payment.

132. If two or more persons are registered in the Register of Members or (as the case may be)the Depository Register as joint holders of any share, or are entitled jointly to a share inconsequence of the death or bankruptcy of the holder, any one of them may give effectual receiptsfor any dividend or other moneys payable or property distributable on or in respect of the share.

133. Any resolution declaring a dividend on shares of any class, whether a resolution of theCompany in General Meeting or a resolution of the Directors, may specify that the same shall bepayable to the persons registered as the holders of such shares in the Register of Members or (asthe case may be) the Depository Register at the close of business on a particular date andthereupon the dividend shall be payable to them in accordance with their respective holdings soregistered, but without prejudice to the rights inter se in respect of such dividend of transferors andtransferees of any such shares.

146. If the Company shall be wound up (whether the liquidation is voluntary, under supervision,or by the court) the Liquidator may, with the authority of a Special Resolution, divide among theMembers in specie or kind the whole or any part of the assets of the Company and whether or notthe assets shall consist of property of one kind or shall consist of properties of different kinds, andmay for such purpose set such value as he deems fair upon any one or more class or classes ofproperty and may determine how such division shall be carried out as between the Members ofdifferent classes of Members. The Liquidator may, with the like authority, vest any part of theassets in trustees upon such trusts for the benefit of Members as the Liquidator with the likeauthority shall think fit, and the liquidation of the Company may be closed and the Companydissolved, but so that no contributory shall be compelled to accept any shares or other property inrespect of which there is a liability.”


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4. DISCLOSURE OF INTERESTS

4.1 Neither the Company nor its subsidiaries has any direct or indirect interests in the shares orconvertible securities of the Offeror or NCS as at the Latest Practicable Date.

4.2 Neither the Company nor its subsidiaries has dealt for value in the shares or convertible securitiesof the Offeror or NCS during the period commencing six months prior to 25 August 2008, being theOffer Announcement Date, and ending on the Latest Practicable Date.

4.3 None of the Directors has any direct or indirect interests in the shares or convertible securities ofthe Offeror or NCS as at the Latest Practicable Date.

4.4 None of the Directors has dealt for value in the shares or convertible securities of the Offerorduring the period commencing six months prior to 25 August 2008, being the Offer AnnouncementDate, and ending on the Latest Practicable Date.

4.5 For the purposes of disclosure, the following Directors have interests in the shares or convertiblesecurities of SingTel as set out below :-

Direct Interest Deemed InterestName No. of Shares No. of Shares

Peter Seah Lim Huat 1,680 1,360

Boon Swan Foo 23,890 1,360

Philip Eng Heng Nee 16,690 –

William Liu Wei Hai 4,327 –

Tan Cheng Han 1,550 1,550

Tan Tong Hai 177 457

4.6 Save as disclosed below, none of the Directors has any direct or deemed interest in the Shares asat the Latest Practicable Date.

Direct InterestDirectors No. of Shares % Options

William Liu Wei Hai 3,000 0.002 16,000

Donald Albert Ramble – – 16,000

Tan Tong Hai 2,026,116 1.28 200,000

4.7 None of the Directors has dealt for value in the shares or convertible securities of the Companyduring the period commencing six months prior to 25 August 2008, being the Offer AnnouncementDate, and ending on the Latest Practicable Date.

4.8 As at the Latest Practicable Date, CIMB-GK owns 121 Shares that were acquired pursuant toproprietary dealings not carried out in connection with the Offer. Save as aforesaid, none of CIMB-GK, its related corporation or funds whose investments are managed by the IFA or its relatedcorporations on a discretionary basis, owns or controls any Shares as at the Latest PracticableDate.

4.9 Save for the proprietary dealings by CIMB-GK which were not carried out in connection with theOffer as disclosed below, none of CIMB-GK, its related corporations or funds whose investmentsare managed by CIMB-GK or its related corporations on a discretionary basis has dealt for value inthe Shares during the period commencing 6 months prior to 25 August 2008, being the OfferAnnouncement Date, and ending on the Latest Practicable Date.


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Date No. of Shares Average price per Sharepurchased / (sold) (S$)

15 May 2008 502 0.880

15 May 2008 (1,000) 0.895

21 May 2008 500 0.850

26 June 2008 500 0.816

26 June 2008 (1,000) 0.865

10 July 2008 700 0.820

15 July 2008 (1,000) 0.860

5. OTHER DISCLOSURES

5.1 Directors’ service contracts

There are no service contracts between any Director or proposed director with the Company orany of its subsidiaries which have more than 12 months to run and which cannot be terminated bythe Company within the next 12 months without paying any compensation and there are no suchservice contracts entered into or amended during the period commencing six months prior to 25August 2008, being the Offer Announcement Date, and ending on the Latest Practicable Date.

5.2 Arrangements affecting Directors

It is not proposed, in connection with the Offer, that any payment or other benefit be made or givento any Director or to any director of any other corporation which is, by virtue of Section 6 of theAct, deemed to be related to the Company, as compensation for loss of office or otherwise inconnection with the Offer.

There are no agreements or arrangements made between any Director and any other person inconnection with or conditional upon the outcome of the Offer.

There are no material contracts entered into by the Offeror in which any of the Directors has amaterial personal interest, whether direct or indirect.

5.3 Directors’ intentions

It is the current intention of all the Directors who hold Shares to accept the Offer in relation to theirrespective holdings of Shares and to accept the Options Proposal in relation to any Options thatthey might hold.

5.4 Material contracts

Neither the Company or any of its subsidiaries has entered into any material contract withinterested persons, as defined in the Note on Rule 23.12 of the Code, other than those enteredinto in the ordinary course of business during the period beginning three years before 25 August2008, being the Offer Announcement Date, and ending on the Latest Practicable Date.

5.5 Material litigation

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged inany material litigation or arbitration proceedings either as plaintiff or as defendant in respect of anyclaims or amounts which might materially affect the financial position of the Company and itssubsidiaries taken as a whole and the Directors have no knowledge and are not aware of anyproceedings pending or threatened against the Company or any of its subsidiaries or of any factslikely to give rise to any proceedings which might materially affect the financial position of theCompany and its subsidiaries taken as a whole.


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6. FINANCIAL INFORMATION

6.1 Financial information on the Group

A summary of the audited financial information of the Group, including revenue, net profit and lossbefore and after tax, minority interests, earnings per share and net dividends per share, forFY2005, FY2006 and FY2007 is set out below. The following summary financial information shouldbe read together with the audited financial statements for the relevant periods and related notesthereto:

FY2005 FY2006 FY2007(S$’000) (Audited) (Audited) (Audited)

Revenue 348,117 375,332 453,418

Net profit/(loss) before tax and minority interests (39,595) 11,341 15,611

Minority interests 1,098 1,063 1,134

Net profit/(loss) after tax and minority interests (43,576) 7,341 17,623

Earnings/(loss) per share (cents) (28.27) 4.76 11.43

Net dividends per share (cents) NA NA 3.28

The statement of the assets and liabilities of the Group as at 31 December 2007 is set out in theaudited consolidated financial statements of the Group for FY2007.

A summary of the unaudited financial information of the Group, including revenue, exceptionalitems, net profit and loss before and after tax, minority interests, earnings per share and netdividends per share, for HY2008 is set out below. The following summary financial informationshould be read together with the audited financial statements for the relevant periods and relatednotes thereto:

Six-month period ended30 June 2008

(S$’000) (Unaudited)

Revenue 197,686

Net profit before tax and minority interests 10,078

Minority interests 283

Net profit after tax and minority interests 8,164

Earnings per share (cents) 5.28

Net dividends per share (cents) NA

The statement of the assets and liabilities of the Group as at 30 June 2008 is set out in theunaudited consolidated financial statements of the Group for HY2008, which is set out in Appendix4 to this Circular.

6.2 Material changes in financial position

Save as disclosed in this Circular, the unaudited consolidated financial statements of the Group forHY2008 set out in Appendix 4 to this Circular, the audited consolidated financial statements of theGroup for FY2007 as well as any other information on the Group which is publicly available(including without limitation, the announcements released by the Company on the SGXNET), therehave been no known material changes to the financial position of the Company since 31 December 2007, being the date of the last published audited financial statements of theCompany.


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6.3 Recent developments

On 28 February 2008, the Company announced that the Infocomm Development Authority ofSingapore (IDA) has awarded the eight-year Standard Operating Environment (SOEasy) projectworth approximately S$1.3 billion to EDS, leader of the oneMeridian consortium. The Company isthe key local partner in this consortium.

On 25 June 2008, the Company announced that PT Astra Graphia Tbk (“ASGR”) and theCompany have entered into a conditional agreement where ASGR would purchase the Company’s51% stake in PT SCS Astragraphia Technologies (“SAT”). SAT is a joint venture company inIndonesia set up by the Company (51%) and ASGR (49%). ASGR, a subsidiary of PT AstraInternational Tbk, will purchase 39,270 shares, representing 51% of the issued share capital inSAT, from the Company on a willing-buyer-willing-seller basis. On 2 September 2008, the Companyfurther announced that the divestment has been completed.

On 27 August 2008, the Company announced that its wholly-owned subsidiary, SCS MNP Pte Ltd,is divesting its 20% stake in TX123(M) Sdn Bhd to Kompakar eSystems Sdn Bhd.

6.4 Significant accounting policies

The significant accounting policies of the Group which are disclosed in the notes to the AuditedConsolidated Financial Statements of the Group for FY2007 are reproduced in italics, withoutamendment, below:

“BASIS OF PREPARATION

The financial statements have been prepared in accordance with Singapore Financial ReportingStandards (FRS).

The financial statements have been prepared on the historical cost basis except for certainfinancial assets and financial liabilities which are measured at fair value and/or amortised cost.

The financial statements are presented in Singapore dollars which is the Company’s functionalcurrency. All financial information presented in Singapore dollars has been rounded to the nearestthousand, unless otherwise stated.

The preparation of financial statements in conformity with FRS requires management to makejudgements, estimates and assumptions that affect the application of accounting policies and thereported amounts of assets, liabilities, income and expenses. Actual results may differ from theseestimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accountingestimates are recognised in the period in which the estimate is revised and in any future periodsaffected.

In particular, information about significant areas of estimation uncertainty and critical judgements inapplying accounting policies that have the most significant effect on the amount recognised in thefinancial statements are described in the following notes:

� Note 10 – allowance for foreseeable losses on projects

� Note 11 – impairment assessment of trade receivables

� Note 19 – provision for warranty

� Note 23 – recognition of deferred tax assets

The accounting policies used by the Group have been applied consistently by the Group to allperiods presented in these financial statements.


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CONSOLIDATION

Business combinations

Business combinations are accounted for under the purchase method. The cost of an acquisition ismeasured at the fair value of the assets given, equity instruments issued and liabilities incurred orassumed at the date of exchange, plus costs directly attributable to the acquisition.

The excess of the Group’s interest in the net fair value of the identifiable assets, liabilities andcontingent liabilities over the cost of acquisition is credited to income statement in the period ofacquisition.

Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power togovern the financial and operating policies of an entity so as to obtain benefits from its activities.In assessing control, potential voting rights presently exercisable are taken into account. Thefinancial statements of subsidiaries are included in the consolidated financial statements from thedate that control commences until the date that control ceases. The accounting policies ofsubsidiaries have been changed where necessary to align them with the policies adopted by theGroup.

Associates

Associates are those entities in which the Group has significant influence, but not control, overtheir financial and operating policies. Significant influence is presumed to exist when the Groupholds between 20% and 50% of voting power of another entity. Associates are accounted for usingthe equity method. The consolidated financial statements include the Group’s share of the income,expenses and equity movements of associates after adjustments to align the accounting policieswith those of the Group, from the date that significant influence commences until the date thatsignificant influence ceases. When the Group’s share of losses exceeds its interest in anassociate, the carrying amount of that interest (including any long-term investments) is reduced tozero and the recognition of further losses is discontinued except to the extent that the Group hasan obligation or has made payments on behalf of the associate.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealisedgains arising from transactions with associates are eliminated against the investment to the extentof the Group’s interest in the associates. Unrealised losses are eliminated in the same way asunrealised gains, but only to the extent that there is no evidence of impairment.

Accounting for subsidiaries and associates by the Company

Investments in subsidiaries and associates are stated in the Company’s balance sheet at cost lessaccumulated impairment losses.

FOREIGN CURRENCIES

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Groupentities at the exchange rate at the date of the transaction. The functional currencies of the Group’sentities are Singapore dollar, Indonesian Rupiah, Chinese Renminbi, Brunei dollar, Thai Baht andMalaysian Ringgit. Monetary assets and liabilities denominated in foreign currencies at thereporting date are retranslated to the functional currency at the exchange rate at the reportingdate. Non-monetary assets and liabilities denominated in foreign currencies that are measured atfair value are retranslated to the functional currency at the exchange rate at the date on which thefair value was determined.

Foreign currency differences arising on retranslation are recognised in the income statement,except for differences arising on the retranslation of available-for-sale equity instruments.


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Foreign operations

The assets and liabilities of foreign operations are translated to Singapore dollars at exchangerates prevailing at the reporting date. The income and expenses of foreign operations aretranslated to Singapore dollars at exchange rates prevailing at the dates of the transactions.Goodwill and fair value adjustments arising on the acquisition of a foreign operation on or after 1January 2006 are treated as assets and liabilities of the foreign operation and translated at theclosing rate. For acquisitions prior to 1 January 2006, the exchange rates at the date of acquisitionwere used.

Foreign currency differences are recognised in the foreign currency translation reserve. When aforeign operation is disposed of, in part or in full, the relevant amount in the foreign exchangetranslation reserve is transferred to the income statement.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less accumulated depreciation and impairmentlosses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost ofself-constructed assets includes the cost of materials and direct labour, any other costs directlyattributable to bringing the asset to a working condition for its intended use, and the cost ofdismantling and removing the items and restoring the site on which they are located. Purchasedsoftware that is integral to the functionality of the related equipment is capitalised as part of thatequipment.

When parts of an item of property, plant and equipment have different useful lives, they areaccounted for as separate items (major components) of property, plant and equipment.

The cost of replacing part of an item of property, plant and equipment is recognised in the carryingamount of the item if it is probable that the future economic benefits embodied within the part willflow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing ofproperty, plant and equipment are recognised in the income statement as incurred.

Depreciation on property, plant and equipment is recognised in the income statement on a straight-line basis over their estimated useful lives (or lease term, if shorter) of each part of an item ofproperty, plant and equipment.

The estimated useful lives are as follows:

Leasehold land - 30 years

Leasehold building - 30 years

Leasehold improvements - 3 to 9 years

Computer equipment under lease - 2 to 4 years

Computer equipment - 2 to 5 years

Office equipment - 3 to 5 years

Furniture and fittings - 2 to 6 years

Motor vehicles - 2 to 5 years

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate,at each reporting date.


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INTANGIBLE ASSETS

Goodwill

Goodwill and negative goodwill arise on the acquisition of subsidiaries and associates.

Acquisitions prior to 1 January 2001

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the netfair value of the identifiable assets and liabilities of the acquiree.

Goodwill and negative goodwill on acquisitions were written off against accumulated profits in theyear of acquisition.

Goodwill and negative goodwill that have previously been taken to accumulated profits are nottaken to the income statement when (a) the business is disposed of or (b) the goodwill is impaired.

Acquisitions occurring between 1 January 2001 and 1 January 2005

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the netfair value of the identifiable assets and liabilities of the acquiree.

Goodwill arising on the acquisition of subsidiaries is presented in intangible assets. Goodwillarising on the acquisition of associates is presented together with investments in associates.

Goodwill was stated at cost from the date of initial recognition and amortised over its estimateduseful life of 3 to 10 years. On 1 January 2005, the Group discontinued amortisation of thisgoodwill. This remaining goodwill balance is subject to testing for impairment, as described in Note2.8.

Acquisitions on or after 1 January 2005

Goodwill represents the excess of the cost of the acquisition over the Group’s interest in the netfair value of the identifiable assets, liabilities and contingent liabilities of the acquiree.

Goodwill arising on the acquisition of subsidiaries is presented in intangible assets. Goodwillarising on the acquisition of associates is presented together with investments in associates.

Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested forimpairment as described in Note 2.8. Negative goodwill is recognised immediately in the incomestatement.

Acquisition of minority interest

Goodwill arising on the acquisition of a minority interest in a subsidiary represents the excess ofthe cost of the additional investment over the carrying amount of the net assets acquired at thedate of exchange.

Other Intangible Assets

Intangible assets that have an indefinite life or that are not yet available for use are stated at costless impairment losses. Such intangible assets are tested for impairment annually in accordancewith Note 2.8 below.

Development costs which relate to a definable product that is demonstrated to be technically andcommercially feasible, and for which the Group has sufficient resources to market, are recognisedas assets to the extent that such costs are probably recoverable from future economic benefits.


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All deferred development costs are reviewed annually to determine the amount, if any, that is nolonger recoverable from expected economic benefits. Any such amount is written off andrecognised as an expense in the income statement.

Other intangible assets, which comprise intellectual property rights, rights to distribute certaincomputer products, technology licenses and the loyalty and frequent flyer programme businesscontract, that are acquired by the Group and which have finite useful lives, are measured at costless accumulated amortisation and impairment losses.

Subsequent Expenditure

Subsequent expenditure on capitalised intangible assets is capitalised only when it increases thefuture economic benefits embodied in the specific asset to which it relates. All other expenditure isexpensed as incurred.

Amortisation

Other intangible assets are amortised in the income statement on a straight-line basis over theirestimated useful lives of 3 to 5 years from the date on which they are available for use.

FINANCIAL INSTRUMENTS

Non-derivative financial instruments

Non-derivative financial instruments comprise investments in equity securities, trade and otherreceivables, cash and cash equivalents, financial liabilities, and trade and other payables.

Non-derivative financial instruments are recognised initially at fair value plus, for instruments not atfair value through profit or loss, any directly attributable transaction costs. Subsequent to initialrecognition, non-derivative financial instruments are measured as described below.

A financial instrument is recognised if the Group becomes a party to the contractual provisions ofthe instrument. Financial assets are derecognised if the Group’s contractual rights to the cashflows from the financial assets expire or if the Group transfers the financial asset to another partywithout retaining control or transfers substantially all the risks and rewards of the asset. Regularway purchases and sales of financial assets are accounted for at trade date, ie, the date that theGroup commits itself to purchase or sell the asset. Financial liabilities are derecognised if theGroup’s obligations specified in the contract expire or are discharged or cancelled.

Cash and cash equivalents comprise cash balances and bank deposits. Bank overdrafts that arerepayable on demand and that form an integral part of the Group’s cash management are includedas a component of cash and cash equivalents for the purpose of the cash flow statement.

Available-for-sale financial assets

The Group’s investments in equity securities are classified as available-for-sale financial assets.Subsequent to initial recognition, they are measured at fair value and changes therein, other thanfor impairment losses are recognised directly in equity. When an investment is derecognised, thecumulative gain or loss in equity is transferred to the income statement.

Other

Other non-derivative financial instruments are measured at amortised cost using the effectiveinterest method, less any impairment losses.

Impairment of financial assets

A financial asset is assessed at each reporting date to determine whether there is any objectiveevidence that it is impaired. A financial asset is considered to be impaired if objective evidenceindicates that one or more events have had a negative effect on the estimated future cash flows ofthat asset.


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An impairment loss in respect of a financial asset measured at amortised cost is calculated as thedifference between its carrying amount and the present value of the estimated future cash flowsdiscounted at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is calculated by reference to its current fair value.

Individually significant financial assets are tested for impairment on an individual basis. Theremaining financial assets are assessed collectively in groups that share similar credit riskcharacteristics.

All impairment losses are recognised in the income statement. Any cumulative loss in respect ofan available-for-sale financial asset recognised previously in equity is transferred to the incomestatement upon disposal/derecognition of the asset.

Impairment losses in respect of financial assets measured at amortised cost are reversed if thesubsequent increase in fair value can be related objectively to an event occurring after theimpairment loss was recognised.

Impairment losses recognised in the income statement in respect of available-for-sale equitysecurities are not reversed through the income statement. Any subsequent increase in fair value ofsuch assets is recognised directly in equity.

Financial guarantees

Financial guarantees are financial instruments issued by the Group that requires the issuer tomake specified payments to reimburse the holder for the loss it incurs because a specified debtorfails to meet payment when due in accordance with the original or modified terms of a debtinstrument.

Financial guarantees are recognised initially at fair value and are classified as financial liabilities.Subsequent to initial measurement, the financial guarantees are stated at the higher of the initialfair value less cumulative amortisation and the amount that would be recognised if they wereaccounted for as contingent liabilities. When financial guarantees are terminated before theiroriginal expiry date, the carrying amount of the financial guarantees is transferred to the incomestatement.

Share capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of ordinary shares and share options arerecognised as a deduction from equity, net of any tax effects.

LEASES

When entities within the Group are lessees of a finance lease

Leased assets in which the Group assumes substantially all the risks and rewards of ownershipare classified as finance leases. Upon initial recognition, property, plant and equipment acquiredthrough finance leases are capitalised at the lower of its fair value and the present value of theminimum lease payments. Subsequent to initial recognition, the asset is accounted for inaccordance with the accounting policy applicable to that asset. Leased assets are depreciatedover the shorter of the lease term and their useful lives. Lease payments are apportioned betweenfinance expense and reduction of the lease liability. The finance expense is allocated to eachperiod during the lease term so as to produce a constant periodic rate of interest on the remainingbalance of the liability.


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When entities within the Group are lessees of an operating lease

Where the Group has the use of assets under operating leases, payments made under the leasesare recognised in the income statement on a straight-line basis over the term of the lease. Leaseincentives received are recognised in the income statement as an integral part of the total leasepayments made.

When entities within the Group are lessors of an operating lease

Assets leased out under operating leases are included in property, plant and equipment and arestated at cost less accumulated depreciation. Rental income is recognised on a straight-line basisover the lease term.

At inception, an arrangement that contains a lease is accounted for as such based on the termsand conditions even though the arrangement is not in the legal form of a lease.

IMPAIRMENT – NON-FINANCIAL ASSETS

The carrying amounts of the Group’s non-financial assets, other than inventories and deferred taxassets, are reviewed at each reporting date to determine whether there is any indication ofimpairment. If any such indication exists, the assets’ recoverable amounts are estimated. Forgoodwill, the recoverable amount is estimated at each reporting date, and as and when indicatorsof impairment are identified.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unitexceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset groupthat generates cash flows that are largely independent from other assets and groups. Impairmentlosses are recognised in the income statement. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to theunits and then to reduce the carrying amount of the other assets in the unit (group of units) on apro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use andits fair value less costs to sell. In assessing value in use, the estimated future cash flows arediscounted to their present value using a pre-tax discount rate that reflects current marketassessments of the time value of money and the risks specific to the asset or cash-generating unit.

An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairmentlosses recognised in prior periods are assessed at each reporting date for any indications that theloss has decreased or no longer exists. An impairment loss is reversed if there has been a changein the estimates used to determine the recoverable amount. An impairment loss is reversed only tothe extent that the asset’s carrying amount does not exceed the carrying amount that would havebeen determined, net of depreciation or amortisation, if no impairment loss had been recognised.

INVENTORIES

Inventories Held for Resale

Inventories are stated at the lower of cost and net realisable value. Cost is calculated using theweighted average cost formula and comprises all costs of purchase, costs of conversion and othercosts incurred in bringing the inventories to their present location and condition. Net realisablevalue is the estimated selling price in the ordinary course of business, less the selling expenses.

Projects-in-Progress

Projects-in-progress are valued at cost. Cost includes direct materials, labour and an appropriateproportion of project overhead expenditure. Allowance is made where necessary to account forforeseeable losses where total costs to complete the projects exceed the contract revenue.Progress billings on projects-in-progress are reflected in the financial statements upon invoicingand are shown as a deduction from the value of the projects-in-progress.


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Projects-in-progress are presented as part of inventories in the balance sheet. If paymentsreceived from customers exceed projects-in-progress, the net amount is presented as part ofcurrent liabilities in the balance sheet.

EMPLOYEE BENEFITS

Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognised as an expense inthe income statement as incurred.

Other long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits other than pension plans isthe amount of future benefit that employees have earned in return for their service in current andprior periods; that benefit is discounted to determine its present value, and the fair value of anyrelated assets is deducted. The discount rate is the yield at the reporting date on AA credit-ratedbonds that have maturity dates approximating the terms of the Group’s obligations. The calculationis performed using the projected unit credit method. Any actuarial gains or losses are recognisedin the income statement in the period in which they arise.

Short-term benefits

Short-term employee benefit obligations are measured on an undiscounted basis and areexpensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus orprofit-sharing plans if the Group has a present legal or constructive obligation to pay this amountas a result of past service provided by the employee and the obligation can be estimated reliably.

Defined benefit plans

The Group’s net obligations in respect of defined benefit pension plans is calculated separately foreach plan by estimating the amount of future benefit that employees have earned in return for theirservice in the current and prior periods; that benefit is discounted to determine the present value,and any unrecognised past service costs and the fair value of any plan assets is deducted. Thediscount rate is the yield at the balance sheet date on AA credit-rated government bonds that havematurity dates approximating the terms of the Group’s obligations.

The calculation is performed by a qualified actuary every year using the projected unit creditmethod. When the calculation results in a benefit to the Group, the recognised asset is limited tothe net total of any unrecognised past service cost and the present value of any future refundsfrom the plan or reductions in future contributions to the plan.

When the benefits of a plan are improved, the portion of the increased benefit relating to pastservice by employee is recognised as an expense in the income statement on a straight-line basisover the average period until the benefits become vested. To the extent that the benefits vestimmediately, the expense is recognised immediately in the income statement.

In calculating the Group’s obligation in respect of a plan, to the extent that any cumulativeunrecognised actuarial gain or loss exceeds 10 per cent of the greater of the present value of thedefined benefit obligation and the fair value of plan assets, that portion is recognised in the incomestatement over the expected average remaining working lives of the employees participating in theplan. Otherwise, the actuarial gain or loss is not recognised.


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Share-based payments

The share option programme allows the Group employees to acquire shares of the Company. Thefair value of options granted is recognised as an employee expense with a corresponding increasein equity. The fair value is measured at grant date and spread over the vesting period during whichthe employees become unconditionally entitled to the options. At each balance sheet date, theCompany revises its estimates of the number of options that are expected to become exercisable.It recognises the impact of the revision of original estimates in employee expense and in acorresponding adjustment to equity over the remaining vesting period.

The proceeds received net of any directly attributable transactions costs are credited to sharecapital when the options are exercised.

Performance share plan and restricted stock plan

The performance share plan and restricted stock plan are accounted as equity-settled share-basedpayments. Equity-settled share-based payments are measured at fair value at the date of grant.The share-based expense is amortised and recognised in the income statement on a straight-linebasis over the vesting period. At each balance sheet date, the Company revises its estimates ofthe number of shares that the participating employees are expected to receive based on vestingconditions. The difference is charged or credited to the income statement, with a correspondingadjustment to equity.

PROVISION

A provision is recognised if, as a result of a past event, the Group has a present legal orconstructive obligation that can be estimated reliably, and it is probable that an outflow of economicbenefits will be required to settle the obligation. Provisions are determined by discounting theexpected future cash flows at a pre-tax rate that reflects current market assessments of the timevalue of money and the risks specific to the liability.

Warranty

A provision for warranty is recognised when the underlying products or services are sold. Theprovision is based on historical warranty data and a weighting of all possible outcomes againsttheir associated probabilities.

REVENUE RECOGNITION

Service contracts

Provided it is probable that the economic benefits will flow to the Group, and that the revenue andcosts, if applicable, can be measured reliably, revenue from service contracts is recognised overthe period of contract.

Sale of computer hardware

Revenue from the sale of computer hardware is measured at the fair value of the considerationreceived or receivable, net of returns and allowances, trade discounts and volume rebates.Revenue is recognised when the significant risks and rewards of ownership have been transferredto the buyer, recovery of the consideration is probable, the associated costs and possible return ofgoods can be estimated reliably, and there is no continuing management involvement with thegoods, and the amount of revenue can be measured reliably.

Transfer of risks and rewards vary depending on the individual terms of the contract of sale.


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Project revenue

Revenue from projects is recognised when it is probable that the economic benefits of thecontracts will flow to the Company; the revenue and costs of the contracts can be measuredreliably; and the outcome of the contracts can be estimated reliably. Contract revenue andexpenses are recognised in the income statement in proportion to the stage of completion of thecontract. Contract revenue includes the initial amount agreed in the contract plus any variations incontract work, claims and incentive payment to the extent that it is probable that they will result inrevenue and can be measured reliably.

The state of completion is assessed by reference to surveys of work performed. When theoutcome of a contract cannot be estimated reliably, contract revenue is recognised only to theextent of contract costs incurred that are likely to be recoverable. An expected loss on a contract isrecognised immediately in the income statement.

Licence fee income

License fee income is recognised on installation and customer’s acceptance of the license, when itis an assignment of rights for a fixed fee or non-refundable guarantee under a non-cancellablecontract which permits the licensee to exploit those rights freely and the licensor has no remainingobligations to perform. If these conditions are not met, license fee income is recognised on astraight-line basis over the life of the licensing agreement. Where license fee to be received iscontingent on the occurrence of a future event, revenue is recognised only when it is probable thatthe fee will be received.

Other income

Dividend income is recognised in the income statement when the shareholder’s right to receivepayment is established.

Interest income from bank deposits is recognised as it accrues, using the effective interest method.

Rental income receivable under operating leases is recognised in the income statement on astraight-line basis over the term of the lease.

FINANCE EXPENSE

Finance expense comprises interest expense on borrowings and are recognised in the incomestatement. All borrowing costs are recognised in the income statement using the effective interestmethod.

INCOME TAX EXPENSE

Income tax expense comprises current and deferred tax. Income tax expense is recognised in theincome statement except to the extent that it relates to items recognised directly in equity, in whichcase it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enactedor substantively enacted at the reporting date, and any adjustment to tax payable in respect ofprevious years.

Deferred tax is recognised using the balance sheet method, providing for temporary differencesbetween the carrying amounts of assets and liabilities for financial reporting purposes and theamounts used for taxation purposes. Deferred tax is not recognised for the following temporarydifferences: the initial recognition of goodwill, the initial recognition of assets or liabilities in atransaction that is not a business combination and that affects neither accounting nor taxable profit,and differences relating to investments in subsidiaries to the extent that they probably will notreverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to beapplied to the temporary differences when they reverse, based on the laws that have been enacted


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or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if thereis a legally enforceable right to offset current tax liabilities and assets and they relate to incometaxes levied by the same tax authority on the same taxable entity or on different tax entities, butthey intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilitieswill be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will beavailable against which temporary differences can be utilised. Deferred tax assets are reviewed ateach reporting date and are reduced to the extent that it is no longer probable that the related taxbenefit will be realised.

KEY MANAGEMENT PERSONNEL

Key management personnel of the Group and the Company are those persons having the authorityand responsibility for planning, directing and controlling the activities of the entity. The directorsand senior management staff, comprising the Chief Executive Officer, Chief Financial Officer,Executive Vice President and Senior Vice President, of the Group and the Company areconsidered as key management personnel.”

6.5 Changes in accounting policies

Save as disclosed in the notes to the Audited Consolidated Financial Statements of the Group forFY2007:

(i) there were no significant accounting policies or any matter from the notes of the financialstatements of the Group which are of any major relevance for the interpretation of the lastpublished audited financial statements of the Group; and

(ii) there was no change in the accounting policies of the Company and its consolidatedsubsidiaries which will cause the financial information for FY2008 not to be comparable to amaterial extent with FY2007.

7. SHARE PRICES

7.1 Closing Prices and Trading Volume on a Monthly Basis

The following table sets out the closing prices and the trading volume of the Shares on the SGX-ST Main Board on a monthly basis from 1 February 2008 to 31 August 2008 for the sixcalendar months preceding 25 August 2008 (being the Offer Announcement Date):

Last transacted Volume ofHighest Lowest price as at the Shares

closing price closing price last Market Day traded inMonthly of the month of the month of the month the month Trades* (S$) (S$) (S$) (’000)

February 0.985 0.795 0.925 3,547

March 0.925 0.800 0.830 1,956

April 0.910 0.800 0.910 1,111

May 0.900 0.875 0.880 665

June 0.900 0.850 0.870 431

July 1.100 0.850 1.100 4,969

August 1.470 1.180 1.470 16,255

*Source: ShareInvestor


69

7.2 Closing Prices and Trading Volume on a Daily Basis

The table below sets out the closing prices and trading volume of the Shares on a Market Day onthe SGX-ST Main Board on a daily basis from 25 August 2008 (being the Offer AnnouncementDate) up to and including the Latest Practicable Date:

Last Volume ofHighest price Lowest price transacted price Shares traded

of the day of the day for the day in the dayDate* (S$) (S$) (S$) (’000)

25 August 2008 1 – – – –

26 August 2008 1.48 1.46 1.47 3,220

27 August 2008 1.47 1.47 1.47 844

28 August 2008 1.48 1.47 1.47 476

29 August 2008 1.48 1.47 1.47 552

1 September 2008 1.48 1.47 1.47 426

2 September 2008 1.48 1.47 1.48 1,531

3 September 2008 1.48 1.48 1.48 1,026

4 September 2008 1.49 1.48 1.48 426

5 September 2008 1.48 1.48 1.48 946

8 September 2008 1.48 1.48 1.48 96

9 September 2008 1.48 1.48 1.48 109

10 September 2008 1.49 1.48 1.48 182

11 September 2008 1.49 1.48 1.48 159

12 September 2008 1.48 1.48 1.48 175

15 September 2008 1.48 1.48 1.48 258

16 September 2008 1.48 1.48 1.48 332

17 September 2008 1.48 1.48 1.48 128

*Source: ShareInvestor

1 Trading of the shares of the Company was halted on 22 August 2008 and 25 August 2008.

7.3 Highest and Lowest Prices

The highest and lowest closing prices of the Shares on the SGX-ST during the period commencingsix calendar months prior to the Offer Announcement Date and ending on the Latest PracticableDate are as follows:

Highest Closing Price : S$1.480 since 2 September 2008

Lowest Closing Price : S$0.795 on 15 February 2008

8. GENERAL

All expenses and costs incurred by the Company in relation to the Offer will be borne by theCompany.


70

The following information on the Offeror and NCS has been extracted from the Offer Document and setout in italics below. Unless otherwise defined, all terms and expressions used in the extract below shallhave the same meaning as those defined in the Offer Document.

“7.1 The Offeror. The Offeror was incorporated in Singapore on 19 August 2008 for the purpose of theproposed acquisition of SCS, as a wholly-owned subsidiary of NCS. As of the Latest PracticableDate, the directors of the Offeror are Lim Eng and Lim Chuang.

7.2 NCS. NCS, incorporated in Singapore on 23 April 1981, is a leading information technology andcommunications engineering service provider with operations across the Asia Pacific, spanningAustralia, China, Hong Kong, Korea, Malaysia, Sri Lanka, Philippines, and the Middle East region.NCS has in-depth domain knowledge and delivery capabilities which focus on defining, realizingand sustaining business value for its customers via the use of technology. With proven expertise inconsulting, development, systems integration, outsourcing, infrastructure management andsolutions, NCS is able to deliver end-to-end solutions to a wide spectrum of commercial andgovernment organisations.

As of the Latest Practicable Date, the directors of NCS are Allen Lew Yoong Keong and Lim Eng.NCS is, in turn, a wholly-owned subsidiary of Singapore Telecommunications Limited (“SingTel”),which is a leading communications group that provides services and solutions in fixed mobile anddata communications, internet, information technology, pay television and satellite.”

Additional information on the Offeror and NCS, including details of their respective directors, is set out inAppendix 3 and Appendix 4 of the Offer Document.

APPENDIX 3: INFORMATION ON THE OFFEROR AND NCS

71

PART I INFORMATION REQUIRED FOR QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR ANNOUNCEMENTS

1(a)(i)

3 months 3 months Fav / 6 months 6 months Fav /ended ended (Unfav) ended ended (Unfav)

30/6/2008 30/6/2007 30/6/2008 30/6/2007

$'000 $'000 % $'000 $'000 %Revenue 96,529 103,466 -6.7% 197,686 199,124 -0.7%Cost of sales (78,474) (87,837) 10.7% (161,713) (168,897) 4.3%

Gross profit 18,055 15,629 15.5% 35,973 30,227 19.0%18.7% 15.1% 18.2% 15.2%

Distribution expenses (4,745) (4,200) -13.0% (9,428) (8,400) -12.2%

Administrative expenses (8,592) (8,684) 1.1% (18,264) (17,100) -6.8%

Other income 749 261 187.0% 2,025 1,543 31.2%

Results from operating activities 5,467 3,006 81.9% 10,306 6,270 64.4%

Finance expenses (97) (132) 26.5% (210) (332) 36.7%

Share of profit of associates (net of tax) (45) 89 -150.6% (18) 146 -112.3%

Profit before income tax 5,325 2,963 79.7% 10,078 6,084 65.6%

Income tax (936) (610) -53.4% (1,631) (1,067) -52.9%

Profit for the period 4,389 2,353 86.5% 8,447 5,017 68.4%

Attributable to:-Equity holders of the Company 4,275 2,299 86.0% 8,164 4,836 68.8%Minority interests 114 54 -111.1% 283 181 -56.4%Profit for the period 4,389 2,353 86.5% 8,447 5,017 68.4%

Profit for the period as a percentage of revenue 4.5% 2.3% 4.3% 2.5%

3.4% 2.1% 6.5% 4.4%

The following items have been included in arriving at profit for the period:Gain on foreign exchange 383 73 929 208Write off and allowance (made)/written back for: - inventory obsolescences 15 (624) (468) (1,327) - doubtful receivables (206) 56 124 (59)

(5,190) (5,397) (9,908) (10,574)

- - - 1,010

- long-term investments 244 - 580 -

(227) (13) (227) (13)

Profit attributable to shareholders as a percentage of issued capital and reserves

Impairment loss on investments in unquoted shares

An income statement (for the group) together with a comparative statement for the corresponding period of the immediately preceding financial year.

Amortisation, depreciation and write-off of intangible assetsNegative goodwill created to income statement upon acqusition of subsidiaryGain on disposal of investments in:

Group Group

APPENDIX 4: UNAUDITED CONSOLIDATED FINANCIALSTATEMENT OF THE GROUP FOR HY2008

72

1(b)(i)

Balance sheet

CompanyAs at

30/6/2008As at

31/12/2007 As at 30/6/2008 As at 31/12/2007

$'000 $'000 $'000 $'000Non-current assetsProperty, plant and equipment 45,725 47,565 33,933 33,734Intangible assets 150 300 - -Subsidiaries - - 29,042 30,252Associates 2,422 2,519 1,663 1,663Other investments 926 1,233 1,153 1,233Long-term receivables 583 645 - -Deferred tax assets 3,466 3,046 2,511 2,511

53,272 55,308 68,302 69,393Current assetsInventories and projects-in-progress 84,235 56,025 73,628 48,280Trade and other receivables 101,949 141,712 84,917 120,714Short-term loan receivables 7 7 7 1,007Cash and cash equivalents 61,359 38,517 40,593 17,715

247,550 236,261 199,145 187,716Total assets 300,822 291,569 267,447 257,109

Equity attributable to equity holders of the Company

Share capital 41,494 41,347 41,494 41,347Reserves 83,011 75,113 66,757 60,062Shareholders’ equity 124,505 116,460 108,251 101,409Minority interests 11,746 11,882 - -Total equity 136,251 128,342 108,251 101,409

Non-current liabilitiesFinancial liabilities 1,699 2,250 - -Other payables 525 550 - -

2,224 2,800 - -Current liabilitiesTrade and other payables 150,224 144,917 150,925 145,848Progress billings in excess of cost of projects-in-progress 3,996 6,153 3,435 5,486Current tax payable 2,395 381 1,965 93Provisions 2,871 4,273 2,871 4,273Financial liabilities 2,861 4,703 - -

162,347 160,427 159,196 155,700Total liabilities 164,571 163,227 159,196 155,700Total equity and liabilities 300,822 291,569 267,447 257,109

- - - -

1(b)(ii) Aggregate amount of the group's borrowings and debt securities

Amount repayable in one year or less, or on demand `

Secured Unsecured Secured Unsecured$'000 $'000 $'000 $'000

2,711 - 4,614 -

The amount repayable after one year

Secured Unsecured Secured Unsecured$'000 $'000 $'000 $'000

1,699 - 2,213 -

Details of any collaterals

Group

As at 30/6/2008 As at 31/12/2007

A balance sheet (for the issuer and group) together with a comparative statement as at the end of the immediately preceding financial year

As at 30/6/2008 As at 31/12/2007

The bank loans obtained by one of the group's subsidiary are secured by fiduciary transfer of receivable amounting to $6,340,000 (2007: $5,621,000).


73

1(c) Cash Flow Statement for the quarter ended 30 June

3 months 3 months 6 months 6 monthsended ended ended ended

30/6/2008 30/6/2007 30/6/2008 30/6/2007$'000 $'000 $'000 $'000

Operating activities:Profit before income tax 5,325 2,963 10,078 6,084Adjustments for:-Allowance made for impairment of other investments 227 13 227 13Amortisation, depreciation and write-off of non-current assets 5,190 5,397 9,908 10,574Finance expenses 97 132 210 332Gain on disposal of investments (244) - (580) -Negative goodwill credited to income statement upon acquisition of additional interest in subsidiaries - - - (1,010)(Gain)/Loss on disposal of property, plant and equipment 6 6 (17) 6Interest income (164) (289) (248) (508)Share of profit of associates 45 (89) 18 (146)Provisions made for warranty 205 73 1,044 341Cost of share-based payment 304 170 408 337

Operating profit before working capital changes 10,991 8,376 21,048 16,023

Changes in working capital:-Inventories and projects-in-progress (24,562) (10,092) (31,286) (25,725)Trade and other receivables 26,807 24,394 39,687 13,806Trade and other payables (5,374) (26,812) 3,141 7,019

Cash from operations 7,862 (4,134) 32,590 11,123Interest received 147 353 217 537Interest paid (100) (8) (215) (203)Repayment of staff loan 57 (109) 62 (57)Income tax refunded/(paid) (9) (1,653) 554 (1,995)Cash flows from operating activities 7,957 (5,551) 33,208 9,405

Investing activities:Proceeds from share options exercised - 55 - 55Fund injection into investment - (22) - (30)Dividends received from associates and other investments - 150 - 150

Acquisition of additional interests in subsidiary, previously an associate - - - 5,126 Proceeds from disposal of other investments 244 - 648 -Proceeds from disposal of property, plant and equipment 2 3 31 5Purchase of property, plant and equipment (7,445) (3,889) (8,464) (7,409)Cash flows (used in)/from investing activities (7,199) (3,703) (7,785) (2,103)

Financing activities:Repayment of finance lease (48) (43) (71) (62)Receipts of finance Lease 95 - 95Repayment of short-term bank loans (1,604) (359) (2,411) (1,969)Proceeds from long-term bank loans - - 2,062 -Repayment of long-term bank loans (33) - (2,068) -Cash flows used in financing activities (1,590) (402) (2,393) (2,031)

Net increase in cash and cash equivalents (832) (9,656) 23,030 5,271Cash and cash equivalents at beginning of period 62,109 52,853 38,323 37,964Effect of exchange rate changes on balances held in foreign currency (112) (52) (188) (90)Cash and cash equivalents at end of period 61,165 43,145 61,165 43,145

GroupGroup

Cash and cash equivalents exclude $194,000 (2007: $51,000) being fixed deposits and cash at bank of certain subsidiaries pledged as security for bank guaranteefacilities.


74

1(d)(i)

Statement of Changes in Equity for the quarter ended 30 June

Share capital

Currency translation

reserve

Equity compensation

reserve

Asset revaluation

reserve

Accumlated profits

Total attributable to equity holders

of the Company

Minority interests Total equity

$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000GroupAt 1 April 2007 40,969 (2,032) 312 111 67,023 106,383 11,545 117,928Fair value adjustments on available-for-sale investments - - - 21 - 21 - 21

Translation differences relating to financial statements of foreign subsidiaries and associates

- 141 - - - 141 217 358

Net gains/(losses) recognised directly in equity - 141 - 21 - 162 217 379

Profit for the period - - - - 2,299 2,299 54 2,353Total recognised income and expense for the period - 141 - 21 2,299 2,461 271 2,732

Cost of share-based payment - - 170 - - 170 - 170Issuance of shares 66 - (11) - - 55 - 55At 30 June 2007 41,035 (1,891) 471 132 69,322 109,069 11,816 120,885

At 1 April 2008 41,347 (3,024) 768 102 80,992 120,185 11,811 131,996Fair value adjustments on available-for-sale investments - - - 6 - 6 - 6

Translation differences relating to financial statements of foreign subsidiaries and associates

- (265) - - - (265) (179) (444)

Net gains/(losses) recognised directly in equity - (265) - 6 - (259) (179) (438)

Profit for the period - - - - 4,275 4,275 114 4,389Total recognised income and expense for the period - (265) - 6 4,275 4,016 (65) 3,951

Cost of share-based payment - - 297 - 7 304 - 304Issuance of shares 147 - (147) - - - - -At 30 June 2008 41,494 (3,289) 918 108 85,274 124,505 11,746 136,251

CompanyAt 1 April 2007 40,969 - 312 111 32,938 74,330 - 74,330Fair value adjustments on available-for-sale investments - - - 21 - 21 - 21

Net gains/(losses) recognised directly in equity - - - 21 - 21 - 21

Profit for the period - - - - 14,440 14,440 - 14,440Total recognised income and expense for the period - - - 21 14,440 14,461 - 14,461

Cost of share-based payment - - 170 - - 170 - 170Issuance of shares 66 - (11) - - 55 - 55At 30 June 2007 41,035 - 471 132 47,378 89,016 - 89,016

At 1 April 2008 41,347 - 768 102 61,747 103,964 - 103,964Fair value adjustments on available-for-sale investments - - - 6 - 6 - 6

Net gains/(losses) recognised directly in equity - - - 6 - 6 - 6

Profit for the period - - - - 3,977 3,977 - 3,977Total recognised income and expense for the period - - - 6 3,977 3,983 - 3,983

Cost of share-based payment - - 297 - 7 304 - 304Issuance of shares 147 - (147) - - - - -At 30 June 2008 41,494 - 918 108 65,731 108,251 - 108,251

A statement (for the issuer and the group) showing either (I) all changes in equity or (ii) changes in equity other than those arising from capitalisationissues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financialyear.


75

1(d)(ii)

2.

3.

4.

5.

6.

3 months 3 months 6 months 6 monthsended ended ended ended

30/6/2008 30/6/2007 30/6/2008 30/6/2007Earnings per ordinary share for the period based on profit for the period:(i) Based on the weighted average number of ordinary shares on issue (cts); and 2.76 1.49 5.28 3.14(ii) On a fully diluted basis - detailing any adjustments made to the earnings (cts) 2.71 1.48 5.18 3.11

7.

As at 30/6/2008

As at 31/12/2007

As at 30/6/2008 As at 31/12/2007

80.44 75.35 69.94 65.61

Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants,conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of theprevious period reported on.State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial periodreported on and as at the end of the corresponding period of the immediately preceding financial year.

During 1 April 2008 to 30 June 2008, the Company issued 223,500 shares pursuant to Company's Restricted Stock Plan. As at 30 June 2008, issued share capitalof the Company was S$41,494,485 (as at 31 March 2008: S$41,346,751).

As at 30 June 2008, there were:-

(a) 27,000 (as at 30 June 2007: 27,000) unissued ordinary shares under options granted and unexercised under the Company's Executives' Share Option Scheme;and

(b) 1,317,185 (as at 30 June 2007: 2,283,614) unissued ordinary shares under options granted and unexercised under the Company's Share Option Plan.

Whether the figures have been audited or reviewed, and in accordance with which auditing standard or practice

The figures have not been audited or reviewed.

Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis of a matter).

Not applicable.

Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on;and (b) immediately preceding financial year.

Whether the same accounting policies and methods of computation as in the issuer's most recently audited annual financial statements have beenapplied.

The Group has applied the same accounting policies and method of computation used in the financial statement for the current reporting period compared with theaudited financial statements for the year ended 31 December 2007.

If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed,as well as the reasons for, and the effect of, the change.

The amendments and interpretation to the Singapore Financial Reporting Standards (FRS) for the period effective from 1 January 2008 do not have a significantimpact.

Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year,after deducting any provision for preference dividends:-

Group Group

Group Company

Net asset value per ordinary share (cts)


76

8.

9.

10.

11. If a decision regarding dividend has been made:-

11(a) Whether an interim (final) ordinary dividend has been declared (recommended); and

11(b) (i) Amount per share (cents)

None.

(ii) Previous corresponding period (cents)

None.

11(c)

Not applicable.

11(d) The date the dividend is payable.

Not applicable.

11(e)

Not applicable.

12. If no dividend has been declared/recommended, a statement to that effect.

No dividend has been declared or recommended for the second quarter ended 30 June 2008.

A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's business. It must include a discussionof the following:-

The Group's balance sheet and cash position remain healthy. As at 30 June 2008, its cash and cash equivalents amounted to S$61.4 million. The Group's orderbook as at 30 June 2008 is S$720.1 million, of which several contracts are subject to change of control provisions.

Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results.

Whether the dividend is before tax, net of tax or tax exempt. If before tax or net of tax, state the tax rate and the country where the dividend is derived. (Ifthe dividend is not taxable in the hands of the shareholders, this must be stated.)

The date on which Registrable Transfers received by the company (up to 5.00pm) will be registered before entitlements to the dividend are determined.

The results are in line with the prospect statement made in the 1Q FY2008 results announcement.

None.

A commentary at the date of announcement of the significant trends and competitive conditions of the industry in which the group operates and anyknown factors or events that may affect the group in the next reporting period and the next 12 months.

The Monetary Authority of Singapore (MAS) forecasts the economic growth of SCS’ home market Singapore easing in the next few quarters in view of slowingexternal demand, but maintains the full-year growth outlook at 4-6%. The MAS has also revised its Consumer Price Index (CPI) inflation forecast for 2008 to 6-7%,compared to the earlier estimate of 5-6%, but expects CPI inflation to come down over the rest of the year.

Estimates of tender value for Singapore Government information technology projects in 2008 made by IDA in May 2008 remains at about S$1 billion. SCS plans toaddress some of these new opportunities.

As announced on 25 June 2008, the completion of the sale of PT SCS Astragraphia Tbk (SAT) is expected to be in September 2008 subject to fulfilment ofconditions by SCS’ joint venture partner. This transaction will impact the Group’s revenue post-completion. Last year, SAT contributed S$60.3 million of revenue forthe full year, of which S$19.8 million was registered in the fourth quarter.

Barring any unforeseen circumstances, the Group expects the second half to remain profitable.

(a) any significant factors that affected the turnover, costs and earning of the group for the current financial period reported on, including (whereapplicable) seasonal or cyclical factors; and

(b) any material factors that affected the cashflow, working capital, assets or liabilities of the group during the current financial period reported on.

In 2Q FY2008, the Group registered a revenue of S$96.6 million compared to S$103.5 million in 2Q FY2007. Gross margin increased to 18.7% from 15.1% in thesame period, mainly due to improved project management in the Business Solutions segment. Correspondingly, the quarter's net profit increased 86% to S$4.3million from S$2.3 million for the same period a year ago.

For 1H FY2008, the Group achieved a net profit of S$8.2 million on a revenue of S$197.7 million, compared to net profit of S$4.8 million and revenue of S$199.1million for the same period last year.

Singapore continued to be the main revenue and profit contributor of the Group.


77

13. Segment Analysis

Singapore Indonesia China Others Eliminations Total

$'000 $'000 $'000 $'000 $'000 $'000Revenue and Expenses(by location of assets)

For 3 months ended 30 June 2008Total revenue from external customers 81,158 13,227 226 1,918 - 96,529 Inter-segment revenue 826 114 486 - (1,426) - Total revenue 81,984 13,341 712 1,918 (1,426) 96,529

Segment results 4,132 205 (184) 53 - 4,206 Other income 1,261 Finance expenses (97)Share of profit of associates (45)Income tax expense (936)Profit for the period 4,389

For 3 months ended 30 June 2007Total revenue from external customers 87,557 13,386 1,152 1,371 - 103,466 Inter-segment revenue 1,138 - 238 - (1,376) - Total revenue 88,695 13,386 1,390 1,371 (1,376) 103,466

Segment results 3,252 36 (180) (478) - 2,630 Other income 376 Finance expenses (132)Share of profit of associates 89 Income tax expense (610)Profit for the period 2,353

IT Business ITSolutions Infrastructure Others Eliminations Total

$'000 $'000 $'000 $'000 $'000Revenue and Expenses(by business segments)

For 3 months ended 30 June 2008Total revenue from external customers 26,542 69,987 - - 96,529 Inter-segment revenue 1,041 385 - (1,426) - Total revenue 27,583 70,372 - (1,426) 96,529

Segment results 5,458 3,344 (4,596) - 4,206Other income 1,261Finance expenses (97)Share of profit of associates (45)Income tax expense (936)Profit for the period 4,389

IT Business ITSolutions Infrastructure Others Eliminations Total

$'000 $'000 $'000 $'000 $'000Revenue and Expenses(by business segments)

For 3 months ended 30 June 2007Total revenue from external customers 33,625 69,841 - - 103,466Inter-segment revenue 722 654 - (1,376) -Total revenue 34,347 70,495 - (1,376) 103,466

Segment results 3,136 3,937 (4,443) - 2,630Other income 376Finance expenses (132)Share of profit of associates 89Income tax expense (610)Profit for the period 2,353


78

14. Interested Person Transactions

Aggregate value of all interestedperson transactions conductedunder shareholders' mandate

pursuant to Rule 920 (excludingtransactions less than $100,000)

3 monthsended

30/6/2008$'000

Transactions for the Sales of Goods and ServicesSingapore Technologies Semiconductors Pte Ltd & its Associates 115SMRT Corporation Ltd & its Associates 920Singapore Technologies Telemedia Pte Ltd & its Associates 4,744Temasek Holdings (Pte) Ltd 253

Transactions for the Purchases of Goods and ServicesMediaCorp Pte Ltd & its Associates 224

Total 6,256

15. Negative Assurance

On behalf of the Board of Directors

Boon Swan Foo Philip Eng Heng NeeDeputy Chairman Chairman of the Audit Committee

BY ORDER OF THE BOARD

Mr Andrew CheongCompany Secretary7 August 2008

MEDIA, ANALYST AND INVESTOR CONTACT:Mr Mervin WangMobile: (65) 9798 6077Email: [email protected]

The Board of Directors hereby confirm that, to the best of their knowledge, nothing has come to their attention which may render the 2Q 2008 financial results to befalse or misleading.


79

The announcement released by the Company on 7 August 2008 on the unaudited results of the Group,which relates to the six months ended 30 June 2008, included the following Statement of Prospects ofthe Group:

“Barring any unforeseen circumstances, the Group expects the second half to remain profitable.”

The above Statement of Prospects, for which the Directors are solely responsible, has been made basedon financial forecasts prepared on the bases set out below and is consistent with the accounting policiesnormally adopted by the Group which are in accordance with Singapore Financial Reporting Standards:

(a) Forecast revenue is based on realization of orders already in the Group’s order book and probablenew orders that the Group is pursuing.

(b) The Group’s pricing structures will accurately anticipate the cost and complexity of the work to beperformed and result in profitability in our projects.

(c) Cost of externally procured materials including software, hardware, licences and third partyconsultation etc is forecast based on existing agreements negotiated on a term basis from regularsuppliers as well as historical cost trend in the first six months of 2008.

(d) Forecast manpower cost is based on the forecast headcount and manpower mix required to fulfillbusiness needs, current orders and new orders that flow into the forecast revenue.

(e) The Group will be able to attract, retain and motivate employees or efficiently utilize their skills sothat the Group is able to compete effectively and will be able to grow its business.

(f) Forecast for other operating expenses is based on historical cost trend in the first six months of2008 adjusted for any increased or decreased according to business requirements.

(g) The Group will be able to utilise capital allowances and tax losses brought forward from prioryears.

(h) There will be no significant decline in the value of property, plant and equipment, investments andother assets which require material impairment to the carrying values of property, plant andequipment, investments and other assets of the Group.

(i) There will be no significant allowance for foreseeable losses required in respect of projects-in-progress other than the amounts that have been identified and provided for in the managementaccounts as at 30 June 2008.

(j) There will be no significant delays in meeting project milestones and deliverables, which requireprovisions to be made by the Group in respect of significant liquidated damages and penalties.

(k) It is assumed that there will be no material change, whether acquisitions or disposals, which willresult in a material gain or loss to the Group except for sale of PT SCS Astragraphia Tbk (SAT) asannounced by the Group on 25 June 2008. In the results announcement by the Company on 7August 2008, it was mentioned that the divestment is expected to complete in September 2008,subject to fulfillment of conditions by SCS’ joint venture partner and that this transaction will impactthe Group’s revenue post-completion. The forecast has taken into account the financial impact ofthis divestment on the Group and that there will be no tax on the gain on divestment of SAT.[afternote: The Company has announced the completion of the divestment on 2 September 2008.]

APPENDIX 5: STATEMENT OF PROSPECTS

80

(l) The following exchange rates have been used:

CNY / SGD : 0.1962

IDR / SGD : 0.00017

MYR / SGD : 0.4430

THB / SGD : 0.0432

(m) There will be no material changes in the existing political, legal, fiscal, market or economicconditions in the countries in which the Group currently operates or which are otherwise material tothe Group’s business.

(n) There will be no material changes in legislation, regulation or rules in the countries in which theGroup currently operates or in which the Group has arrangements or agreements, which maymaterially adversely affect the Group’s business or operations.

(o) There will be no material changes in the bases or applicable rates of taxation, surcharges or othergovernment levies in the countries in which the Group operates.

(p) There will be no wars, military incidents, pandemic diseases or natural disasters that would have amaterial impact on the Group’s business and operating activities.

(q) There will be no material changes in the Group’s present management and accounting policies.

(r) There will be no material changes in the Group structure and principal activities of the Group.

(s) There will be no significant changes in existing agreements and arrangements in the Group.

(t) There will be no exceptional circumstances, which require provisions to be made by the Group inrespect of any contingent liability or arbitration, threatened or otherwise, abnormal bad debts oruncompleted contracts.

(u) There will be no significant disruptions to the Group’s activities arising from industrial disputes orany other causes.

APPENDIX 5: STATEMENT OF PROSPECTS

81

The Board of DirectorsSingapore Computer Systems Limited7 Bedok South RoadSingapore 469272

22 September 2008

Dear Sirs

Statement of Prospects of Singapore Computer Systems Limited (the “Company”) and itssubsidiaries (collectively, the “Group”) for the financial year ending 31 December 2008

We have provided this letter solely to the Directors (the “Directors”) of Singapore Computer SystemsLimited (the “Company” and “Offeree”) for inclusion in the circular (the “Circular”) to be issued inconnection with the mandatory conditional cash offer by ANZ Singapore Limited, for and on behalf ofComputer Systems Holdings Pte. Ltd. (the “Offeror”), to acquire the remaining ordinary shares in thecapital of the Company (the “Shares”) other than those already owned, controlled or agreed to beacquired by the Offeror.

On 7 August 2008, the Company announced its unaudited consolidated financial results for the half yearended 30 June 2008 which contained the following statement on the prospects of the Group for the yearending 31 December 2008 (“Statement of Prospects”):

“Barring any unforeseen circumstances, the Group expects the second half to remain profitable.”

We have reviewed the Statement of Prospects in accordance with Singapore Standards on AssuranceEngagements applicable to the examination of prospective financial information. The Directors are solelyresponsible for the Statement of Prospects including the bases and assumptions set out in Appendix 5 ofthe Circular on which it is based.

Based on our review of the evidence supporting the assumptions, nothing has come to our attentionwhich causes us to believe that these bases and assumptions do not provide a reasonable basis for theStatement of Prospects.

Further, in our opinion, the Statement of Prospects, so far as the accounting policies and calculations areconcerned, is properly prepared on the bases and assumptions, and in all material respects, is based onfinancial information which is consistent with the accounting policies normally adopted by the Group.

Given that events and circumstances frequently do not occur as expected, actual results may differ fromthe Statement of Prospects and the variation may be material.

Our work in connection with the Statement of Prospects has been undertaken solely for the purposes ofreporting to the Directors under the Singapore Code on Take-overs and Mergers for the purpose ofmeeting regulatory requirements for the Circular, and is not intended to be relied on for any otherpurposes.

Yours faithfully

KPMGPublic Accountants and Certified Public AccountantsSingapore

APPENDIX 6: REPORT OF AUDITORS ON THE STATEMENT OF PROSPECTS

82

KPMG Telephone +65 6213 338816 Raffles Quay #22-00 Fax +65 6225 0984Hong Leong Building Internet www.kpmg.com.sgSingapore 048581

APPENDIX 7: LETTER FROM CIMB-GK IN RELATIONTO THE STATEMENT OF PROSPECTS

83

24 September 2008

The Independent Directors Singapore Computer Systems Limited7 Bedok South Road Singapore 469272

Dear Sirs

MANDATORY CONDITIONAL CASH OFFER BY ANZ SINGAPORE LIMITED FOR AND ON BEHALFOF COMPUTER SYSTEMS HOLDINGS PTE. LTD.

This letter has been prepared for inclusion in the circular dated 24 September 2008 issued by SingaporeComputer Systems Limited (the “Company”) to its shareholders in relation to the mandatory conditionalcash offer by ANZ Singapore Limited, for and on behalf of Computer Systems Holdings Pte. Ltd. for theCompany (the “Circular”).

This Circular contains a statement of prospects (the “Statement of Prospects”) by the Company which isreproduced in Appendix 5 of the Circular.

The Statement of Prospects is solely the responsibility of the Company’s directors (the “Directors”).

We have considered and have held discussions with the management of the Company on (i) the Statement of Prospects and (ii) the bases and assumptions upon which the Statement of Prospects wasprepared as provided to us by the Company. We have also considered the letter from the Company’sauditors, KPMG dated 22 September 2008 addressed to the Directors as set out at Appendix 6 of theCircular relating to their examination of the Statement of Prospects.

Based on the above, we are of the opinion that the Statement of Prospects was stated by the Directorsafter due and careful enquiry.

For the purpose of rendering our opinion on this letter, we have relied upon and assumed the accuracyand completeness of all information provided to, or discussed with us. Save as provided in this letter, wedo not express any other opinion on the Statement of Prospects.

This letter is provided to the Directors solely for the purpose of complying with Rule 25 of the SingaporeCode on Take-overs and Mergers and not for any other purpose. We do not accept any responsibility toany person (other than the Directors) in respect of, arising out of, or in connection with this letter.

Yours faithfully For and on behalf of CIMB-GK SECURITIES PTE. LTD.

MAH KAH LOON ERIC WONGHEAD DIRECTORCORPORATE FINANCE CORPORATE FINANCE

APPENDIX 8: VALUATION SUMMARY REPORT

84

6 Battery Road #32-01 Singapore 049909

T (65) 6224 8181 F (65) 6225 1987

www.cbre.com.sg

Co. Reg. No.: 197701161R

CB Richard Ellis (Pte) Ltd

Independent Property Valuation Summary Report

4 September 2008

The Board of Directors

Singapore Computer Systems Limited

7 Bedok South Road

Singapore 469272

Dear Sirs

Valuation Of

7 Bedok South Road, Singapore 469272

We have been instructed by Singapore Computer Systems Limited to assess the current Open Market

Value of the abovementioned property in connection with the mandatory conditional cash offer by ANZ

Singapore Limited for and on behalf of Computer Systems Holdings Pte. Ltd. We confirm that we have

conducted a site inspection on 1 September 2008 and have obtained such further information as we

consider necessary for the purpose of providing you with our opinion of the current Open Market Value

of the property.

Page 2

We have prepared a comprehensive formal valuation report of the property and have adopted the

following definition of Open Market Value:

Open Market Value means the best price at which the sale of an interest in property might reasonably

be expected to have been completed unconditionally for cash consideration on the date of valuation,

assuming:

(a) a willing seller;

(b) that, prior to the date of valuation, there had been a reasonable period (having regard to the

nature of the property and the state of the market) for the proper marketing of the interest, for the

agreement of price and terms and for the completion of the sale;

(c) that the state of the market, level of value and other circumstances were, on any earlier assumed

date of exchange of contracts, the same as on the date of valuation,

(d) that no account is taken of any additional bid by a purchaser with a special interest and

(e) that both parties to the transaction had acted knowledgeably, prudently and without compulsion.

Our valuation has been made on the assumption that the owner sells the property on the open market in

its existing state without the benefit of a deferred terms contract, leaseback, joint venture, management

agreement or any similar arrangement that would affect the value of the property.

Where market value is assessed, it reflects the full contract value and no account is taken of any liability

to taxation on sale or of the cost involved in effecting a sale. The property is valued on the assumption

that it is free and clear of all mortgages, encumbrances and other outstanding premiums and charges.

Our valuation is prepared on the basis that the premises and any works thereto comply with all relevant

statutory regulations. It is assumed that the building on site has been issued with Certificate of Statutory

Completion by the Building Authority.

Where applicable, information as to title particulars, site area and tenure are obtained from searches

carried out at Singapore Land Authority. We have also relied on information provided to us by our client

pertaining to matters such as floor area, property tax annual value etc.

All information provided is treated as correct and CB Richard Ellis (Pte) Ltd accepts no responsibility for

subsequent changes in information and reserves the right to change our opinion of value if any other

information provided were to materially change.


85

Page 3

No structural survey has been made of the building and no guarantee is given in respect of rot, termite

or pest infestation or other hidden defects. None of the services in the building was tested.

In arriving at the open market value of the property, we have considered the Direct Comparison Method,

Replacement Cost Method and Residual Land Value Method.

CB Richard Ellis (Pte) Ltd has prepared this Valuation Summary letter and specifically disclaims liability

to any person in the event of any omission from or false or misleading statement included, other than in

respect of the information provided within the aforementioned Report and this Valuation Summary letter.

CB Richard Ellis (Pte) Ltd does not make any warranty or representation as to the accuracy of the

information other than as expressly made or given by CB Richard Ellis (Pte) Ltd in this Valuation

Summary letter.

CB Richard Ellis (Pte) Ltd has relied upon property data supplied by Singapore Computer Systems

Limited which we assume to be true and accurate. CB Richard Ellis (Pte) Ltd takes no responsibility for

inaccurate client supplied data and subsequent conclusions related to such data.

The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting

conditions and are our personal, unbiased professional analyses, opinions and conclusions. We have no

present or prospective interest in the subject property and are not a related corporation, nor have we a

relationship with Singapore Computer Systems Limited and its advisors. The valuer’s compensation is not

contingent upon the reporting of a predetermined value or direction in value that favours the cause of the

client, the amount of the value estimate, the attainment of a stipulated result, or the occurrence of a

subsequent event (such as a lending proposal or sale negotiation).

We hereby certify that the valuer undertaking the valuation is authorised to practice as valuer and has the

necessary expertise and experience in valuing similar types of properties.

Having considered the prevailing market conditions and other relevant factors, we estimate the current

Open Market Value of 7 BEDOK SOUTH ROAD, SINGAPORE 469272 to be S$30,000,000

(SINGAPORE DOLLARS: THIRTY MILLION ONLY). This valuation excludes all plant and machinery

items and equipments within the premises.

The key details of the property are shown in Appendix A.

Yours faithfully

CB RICHARD ELLIS (PTE) LTD

LI HIAW HO

DipUrbVal (Auck) ANZIV FSISV

Appraiser’s Licence No. : AD041-2445


86

APPENDIX A

Property Description Tenure/Registered Owner Current Open

Market Value

7 Bedok

South Road,

Singapore

469272

The property is a purpose-built

factory located along Bedok South

Road, about 250 metres from its

junction with its junction with Bedok

South Avenue 1. It is approximately

13 kilometres from the city centre at

Raffles Place.

The property comprises a purpose-

built single-storey with mezzanine

level building which incorporates a

data centre. The building was

originally completed circa 1973 with

subsequent addition/alteration

works in the mid 1990s.

Other improvements within the

compound of the development

include a guard house located at the

main entrance gate, tarmacadam

driveway with surface car parking

lots and a football field which could

be used for future expansion plans.

As advised, the building has an

approximate gross floor area of

19,582.39 square metres.

The site is zoned “Business 1” with

a plot ratio of 2.5 under the

Singapore Master Plan 2003 and

Draft Master Plan 2008.

The property is erected on Lot

4013P of Mukim 27 with a land

area of 32,378.0 square metres.

The property is leased by the

Housing and Development Board

(lessor) to Smith-Corona Private

limited (lessee) for a term of 60

years commencing on 1 May 1973.

The lease was subsequently

assigned to Singapore Computer

Systems Limited (formerly known

as ST Computer Systems &

Services Limited). The current

unexpired lease term is about 24.7

years.

Upfront land premium has been

paid-up for the site by the original

lessee.

Amongst the other terms and

conditions contained in the lease

agreement, the lessee is not to use

or permit or suffer the said land or

any building thereon to be used

otherwise than software

development and customization

and computer related services only

except with the consent in writing of

the lessor and subject to the

approval of the competent authority

appointed under Section 5 of the

Planning Act.

S$30,000,000/-(excluding all plant

and machinery items

and equipments

within the premises)


87

Documents

SINGAPORE COMPUTER SYSTEMS LIMITED