UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 20-F

(Mark One)

[   ] Registration Statement Pursuant To Section 12(b) or (g) of the Securities
      Exchange Act of 1934

                                       OR

[ X ] Annual Report Pursuant To Section 13 or 15 (d) of the Securities
      Exchange Act of 1934 For the fiscal year ended December 31, 2003.

                                       OR

[  ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934

For the transition period from ................. to.............................
Commission file number 000-30678

                               GLOBAL SOURCES LTD.
             (Exact Name of Registrant as Specified in its Charter)

                               Global Sources Ltd.
                 (Translation of Registrant's Name into English)

                                     Bermuda
                 (Jurisdiction of incorporation or organization)

                                  Canon's Court
                               22 Victoria Street
                             Hamilton, HM 12 Bermuda
                    (Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

         TITLE OF EACH CLASS          NAME OF EACH EXCHANGE ON WHICH REGISTERED

Common Shares, $0.01 Par Value        NASDAQ National Market

Securities registered or to be registered pursuant to Section 12(g) of the Act:
NONE

Securities for which there is a reporting obligation pursuant to Section 15(d)
of the Act: NONE

Indicate the number of outstanding shares of each of the issuer's classes of
capital or common stock as of the close of the period covered by the annual
report:

28,952,194 common shares, $0.01 par value, outstanding as of April 1, 2004.

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                       Yes        x                     No

Indicate by check mark which financial statement item the registrant has elected
to follow.

                       Item 17                          Item 18       x


<PAGE>


                                TABLE OF CONTENTS

                               GENERAL INFORMATION

                                                                            PAGE


                                     PART I

ITEM 1.        IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS.........3
ITEM 2.        OFFER STATISTICS AND EXPECTED TIMETABLE.......................3
ITEM 3.        KEY INFORMATION...............................................3
ITEM 4.        INFORMATION ON THE COMPANY...................................14
ITEM 5.        OPERATING AND FINANCIAL REVIEW AND PROSPECTS.................26
ITEM 6.        DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES...................37
ITEM 7.        MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS............44
ITEM 8.        FINANCIAL INFORMATION........................................46
ITEM 9.        THE OFFER AND LISTING........................................77
ITEM 10.       ADDITIONAL INFORMATION.......................................77
ITEM 11.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...87
ITEM 12.       DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES.......87

                                     PART II

ITEM 13.       DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES..............88
ITEM 14.       MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
                 AND USE OF PROCEEDS........................................88
ITEM 15.       CONTROLS AND PROCEDURES......................................88
ITEM 16A.      AUDIT COMMITTEE FINANCIAL EXPERT.............................88
ITEM 16B.      CODE OF ETHICS...............................................88
IETM 16C.      PRINCIPAL ACCOUNTANT FEES AND SERVICES.......................89
ITEM 16D.      EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES...89
ITEM 16E.      PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
                 PURCHASERS.................................................89

                                    PART III

ITEM 17.       FINANCIAL STATEMENTS.........................................89
ITEM 18.       FINANCIAL STATEMENTS.........................................89
ITEM 19.       EXHIBITS.....................................................90




                                       2
<PAGE>


                           FORWARD-LOOKING STATEMENTS

Except for any historical information contained herein, the matters discussed in
this Annual Report on Form 20-F contain certain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 with
respect to our financial condition, results of operations and business. These
statements relate to analyses and other information which are based on forecasts
of future results and estimates of amounts not yet determinable. These
statements also relate to our future prospects, developments and business
strategies. These forward-looking statements are identified by their use of
terms and phrases such as "anticipate," "believe," "could," "estimate,"
"expect," "intend," "may," "plan," "predict," "will" and similar terms and
phrases, including references to assumptions. These forward-looking statements
involve risks and uncertainties, including current trend information,
projections for deliveries, backlog and other trend projections, that may cause
our actual future activities and results of operations to be materially
different from those suggested or described in this Annual Report on Form 20-F.

These risks include:

     o    customer satisfaction and quality issues;

     o    competition;

     o    our ability to achieve and execute internal business plans;

     o    worldwide political instability and economic downturns and inflation,
          including any weakness in the economic and political conditions of
          countries in the Asia-Pacific region, including China; and

     o    other factors described herein under "Risk Factors."

If one or more of these risks or uncertainties materialize, or if underlying
assumptions prove incorrect, our actual results may vary materially from those
expected, estimated or projected. Given these uncertainties, users of the
information included in this Annual Report on Form 20-F, including investors and
prospective investors, are cautioned not to place undue reliance on such
forward-looking statements. We do not intend to update the forward-looking
statements included in this Annual Report on Form 20-F.

In this Annual Report on Form 20-F, except as specified otherwise or unless the
context requires otherwise, "we," "our," "us," the "Company," and "Global
Sources" refer to Global Sources Ltd. and its subsidiaries. All references to
"fiscal" in connection with a year shall mean the year ended December 31.

All financial information contained herein is expressed in United States
dollars, unless otherwise stated.

                                     PART I

     ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
             - (NOT APPLICABLE)

     ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
             - (NOT APPLICABLE)

     ITEM 3. KEY INFORMATION

SELECTED FINANCIAL DATA

The following historical financial information should be read in conjunction
with the section entitled "Operating and Financial Review and Prospects" and our
audited consolidated financial statements and related notes, which are included
elsewhere in this document. The consolidated statements of income data for each
of the three



                                       3
<PAGE>

years ended December 31, 2001, 2002 and 2003 and selected consolidated balance
sheet data as of December 31, 2002 and 2003 are derived from, and qualified by
reference to, our audited consolidated financial statements included elsewhere
in this document. The consolidated statements of income data for each of the
years ended December 31, 1999 and 2000 and selected consolidated balance sheet
data as of December 31, 1999, 2000 and 2001 are derived from our audited
financial statements not included in this document.



<PAGE>


<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                                     ------------------------------------------------------------
                                                         1999         2000        2001        2002        2003
                                                     ----------  -----------  -----------  ----------  ----------
                                                                 (In Thousands, Except Per Share Data)
INCOME STATEMENT DATA:
Revenues:
<S>                                                    <C>          <C>          <C>         <C>         <C>
   Online services..............................       $25,463      $55,121      $55,468     $51,268     $51,367
   Other media services.........................        61,778       44,113       36,391      33,132      36,318
   Exhibitions..................................         1,906        2,635        2,619       2,455       3,327
   Miscellaneous................................         1,125        1,184          807         631         657
                                                     ----------  -----------  -----------  ----------  ----------
Total revenues..................................        90,272      103,053       95,285      87,486      91,669
Operating expenses:
   Sales........................................        29,481       33,847       31,236      28,659      30,113
   Event production.............................           562          795          811         933         930
   Community....................................        13,120       13,710       12,735      12,481      12,331
   General and administrative...................        31,521       35,618       32,748      28,885      28,682
   Online services development..................         3,461        6,665        8,393       5,378       4,960
   Non-cash compensation expense(1).............            --       65,689        2,501       2,564       1,419
   Other(2).....................................           371        2,371        3,476       3,740       4,453
                                                     ----------  -----------  -----------  ----------  ----------
Total operating expenses........................        78,516      158,695       91,900      82,640      82,888
                                                     ----------  -----------  -----------  ----------  ----------
Income (loss) from operations...................       $11,756     $(55,642)      $3,385      $4,846      $8,781
   Interest expense.............................          (337)        (649)        (172)         --          --
   Interest income..............................           558        1,135          357         439         122
   Loss on sale of available-for-sale securities            --           --           --          --         (40)
   Foreign exchange gains (losses), net.........           427           50         (470)         50          --
   Write-down of investments....................            --      (11,750)      (1,150)         --          --
                                                     ----------  -----------  -----------  ----------  ----------
Income (loss) before income taxes...............        12,404      (66,856)       1,950       5,335       8,863
Income tax provision............................        (1,435)      (1,277)      (1,143)       (720)       (668)
                                                     ----------  -----------  -----------  ----------  ----------
Income (loss) before minority interest..........       $10,969     $(68,133)        $807      $4,615      $8,195
                                                     ----------  -----------  -----------  ----------  ----------
Equity in income (loss) of affiliate............            --          (51)          51          --          --
Minority interest...............................            --          (37)         (83)       (308)       (861)
                                                     ----------  -----------  -----------  ----------  ----------
Net income (loss)...............................       $10,969     $(68,221)        $775      $4,307      $7,334
                                                     ==========  ===========  ===========  ==========  ==========
Basic and diluted net income (loss) per share...         $0.40      $(2.39)        $0.03       $0.15       $0.25
                                                     ==========  ===========  ===========  ==========  ==========
Cash dividends declared per share...............          0.54           --           --          --          --

Shares used in basic net income per share
calculations(3).................................         27,557      28,544       28,936      28,940      28,946

Shares used in diluted net income per share
calculations(3).................................        27,557       28,544       28,936      28,940      28,973
                                                     ==========  ===========  ===========  ==========  ==========

                                                                              DECEMBER 31,
                                                     ------------------------------------------------------------
                                                         1999         2000        2001         2002        2003
                                                     ----------  -----------  -----------  ----------  ----------
                                                                       (In U.S. Dollars Thousands)
BALANCE SHEET DATA:
   Cash and cash equivalents......................      $15,433     $12,727      $20,236     $11,009      $26,227
   Available-for-sales securities.................           --          --           --      26,199       35,140
   Total assets...................................       46,645      55,706       53,602      62,650       82,541
   Net assets.....................................        5,710       8,161       11,601      18,522       27,980
   Long-term debt, less current portion...........        3,540      16,084       15,963      15,856       16,068
   Total shareholders' equity.....................        5,710       8,161       11,601      18,522       27,980

</TABLE>

                                       4
<PAGE>

___________________

(1)  Reflects the non-cash compensation expenses associated with the grants
     under the employee equity compensation plans and for year 2000, also
     includes the non-cash compensation expenses associated with the transfer of
     shares from Hung Lay Si Co. Ltd., our former parent company, to our
     chairman and chief executive officer. Non-cash compensation expense was
     allocated according to the category under which a staff employee and team
     member functioned as follows: approximately $323 (2002: $623; 2001: $381;
     2000: $291) represents sales expenses, $96 (2002: $238; 2001: $87; 2000:
     $168) represents community expenses, $691 (2002: $1,179; 2001: $1,546;
     2000: $65,044) represents general and administrative expenses and $309
     (2002: $524; 2001: $487; 2000: $186) represents online services development
     expenses.

(2)  Includes amortization of intangibles/software development cost and for the
     year ended December 31, 2000 also includes non-cash listing expenses of
     approximately $1.4 million.

(3)  On February 16, 2004, we announced a one for ten bonus share issue on our
     outstanding common shares. All common shares and per-share amounts have
     been retroactively adjusted to reflect the eleven for ten share split for
     all periods presented. For a further discussion on the share split, please
     see Note 26 of our consolidated financial statements appearing elsewhere in
     this annual report. Fractional shares were rounded up resulting in an
     additional 1,350 common shares upon distribution of the bonus shares on
     April 1, 2004.

RISK FACTORS

In addition to other information in this annual report, the following risk
factors should be carefully considered in evaluating us and our business because
such factors may have a significant impact on our business, operating results
and financial condition. As a result of the risk factors set forth below and
elsewhere in this annual report, and the risks discussed in our other Securities
and Exchange Commission filings, actual results could differ materially from
those projected in any forward-looking statements.

General economic uncertainty may reduce spending for business-to-business
marketing and advertising.

The revenue growth and profitability of our business depends significantly on
the overall demand for business-to-business media and especially online
marketplace services, trade publications and trade shows. We believe that the
markets for these services are subject to the potentially negative impact of a
number of factors, including reductions in marketing expenditures by suppliers
and the overall weakening of global economies. These factors may give rise to a
number of market trends that adversely affect our business and revenues.

The Chinese market is key to our current and future revenue growth, and
political instability in this market could reduce our revenue and seriously harm
our business.

Our customers in China provided more than 36% of our total revenues in fiscal
2002 and approximately 43% of our total revenues in fiscal 2003, and we believe
our operations in China will continue to grow for the next several years. Our
dependence on the China market and its revenues is significant, and adverse
political changes in China may harm our business and cause our revenues to
decline.

The Chinese government has instituted a policy of economic reform which has
included encouraging foreign trade and investment, and greater economic
decentralization. However, the Chinese government may discontinue or change
these policies, or these policies may not be successful. Moreover, despite
progress in developing its legal system, China does not have a comprehensive and
highly developed system of laws, particularly as it relates to foreign
investment activities and foreign trade. Enforcement of existing and future
laws, regulations and contracts is uncertain, and implementation and
interpretation of these laws and regulations may be inconsistent. As the Chinese
legal system develops, new laws and regulations, changes to existing laws and
regulations and the interpretation or enforcement of laws and regulations may
adversely affect business operations in China. While Hong Kong SAR (Special
Administrative Region) has had a long history of promoting foreign investment,
its incorporation into China means that the uncertainty related to China and its
policies may now also affect Hong Kong SAR.



                                       5
<PAGE>

The international markets, and in particular the Asia-Pacific region, in which
we do business are subject to political and economic instability, which may
interfere with our ability to do business, increase our costs and decrease our
revenues.

The international markets in which we operate are subject to risks, including:

     o    fluctuations in regional economic conditions;

     o    political instability;

     o    the threat of terrorist attacks;

     o    conflicting and changing legal and regulatory requirements;

     o    restrictions placed on our operations due to our foreign status;

     o    significant changes in tax rates and reporting requirements;

     o    the loss of revenues, property and equipment from expropriation,
          nationalization, war, insurrection, terrorism and other political
          risks;

     o    adverse governmental actions, such as restrictions on transfers of
          funds and trade protection measures, including tariffs and export
          quotas; and

     o    fluctuations in currency exchange rates.

In 2003, we derived more than 90% of our revenues from customers in the
Asia-Pacific region. We expect that a majority of our future revenues will
continue to be generated from customers in this region. At the time of the Asian
economic crisis of 1997 and 1998, our revenues and operating results were
adversely affected. During the Asian economic crisis, both our sales and
revenues declined. If there is future political or economic instability in the
Asia-Pacific region, our business may be harmed and our revenues may decrease.

Because we operate internationally, foreign exchange rate fluctuations may have
a material impact on our results of operations. To the extent significant
currency fluctuations occur in Asian currencies, our revenues and profits would
be affected. At the time of the Asian economic crisis of 1997 and 1998, certain
of our contracts were dominated and priced in foreign currencies. The conversion
of these contract proceeds into U.S. dollars resulted in losses and is
indicative of the foreign exchange risk assumed by us. Currently, we do not
hedge our exposure to foreign currency fluctuations.

Our limited operating history in the trade show business as well as other
factors could adversely affect our ability to operate in this business
successfully.

Our trade show business to date has been limited. To increase our scale in the
trade show business, we will need to hire additional personnel and expend
additional capital. The trade show business also requires us to make substantial
non-refundable deposits to secure venue dates far in advance of our conducting
the trade show. We may not have sufficient access to capital to expand our trade
show business and we can give no assurances that our operation of this business
will be incremental to our growth.

In addition, while we expect that a significant portion of our future revenues
will be derived from our trade show business, several factors could negatively
affect our financial performance in this business, including:

     o    the spread of SARS, Avian influenza and other similar epidemics;



                                       6
<PAGE>

     o    political instability and the threat of terrorist attacks;

     o    decrease in demand for booth space;

     o    limited availability of venues and appropriate venue dates;

     o    competing trade shows; and

     o    our inability to effectively expand our staff and infrastructure.

If our current and potential customers are not willing to adopt and renew our
services, we may not attract and retain a critical mass of customers.

Our services will be attractive to suppliers only if buyers use our services to
identify suppliers and purchase their products. The content, products and
suppliers currently available on our websites and other media or made available
by suppliers may not be sufficient to attract and retain buyers. If buyers and
suppliers do not accept our online services and other media, or if we are unable
to attract and retain a critical mass of buyers and suppliers for our online
services and other media, our business will suffer and our revenues may
decrease.

None of the buyers or suppliers that currently pay to use our services are under
any long-term contractual obligation to continue using our services. A
significant percentage of our customers do not renew their contracts and we
experience high customer turnover from year to year. If we cannot replace
non-renewing customers with new customers, our business could be adversely
affected.

We may not be successful in identifying and consummating acquisitions, joint
ventures and alliances to expand our business.

We are regularly evaluating potential strategic acquisitions, joint ventures and
alliances and we believe that such transactions are an integral part of our
business strategy. However, we may not be able to negotiate terms successfully,
finance the acquisition or arrangement, or integrate any new businesses,
products or technologies into our existing business and operations. Even if we
are successful in integrating any new businesses, products or technologies into
our existing business, we may not achieve expected results, or we may not
realize other expected benefits. If we are unable to make acquisitions and enter
into joint ventures and alliance arrangements successfully, our growth potential
may be harmed.

If we are unable to compete effectively, we will lose current customers and fail
to attract new customers.

Our industry is intensely competitive, evolving and subject to rapid change.
Barriers to entry are minimal, and competitors are able to launch new websites
and other media at a low cost. Competition is likely to result in price
reductions, reduced margins and loss of market share, any one of which may harm
our business. We compete for our share of customers' marketing and advertising
budgets with other online marketplaces, trade publications and trade shows.
Competitors vary in size, geographic scope, industries served and breadth of the
products and services offered. We may encounter competition from companies which
offer more comprehensive content, services, functionality and/or lower prices.

Many of our current and potential competitors may have greater financial,
technical, marketing and/or other resources and experience and greater name
recognition than we have. In addition, many of our competitors may have
established relationships with one another and with our current and potential
suppliers and buyers and may have extensive knowledge of our industry. Current
and potential competitors have established or may establish cooperative
relationships with third parties to increase the ability of their products to
address customer needs. Accordingly, our competitors may develop and rapidly
acquire significant market share.



                                       7
<PAGE>

Our quarterly operating results may have seasonal fluctuations, and we may fail
to meet analyst, investor and shareholder expectations, causing our share price
to decline.

We have experienced seasonal quarter-to-quarter fluctuations. Our buyer activity
is often relatively slower during the summer and year-end vacation and holiday
periods. Additionally, our online and trade publication advertising revenue is
seasonal and tends to be highest in the fourth quarter of each calendar year as
a result of increased advertising and media buying in that quarter. Virtually
all of our trade shows are expected to be held in April and October of each
year. As a result, second and fourth quarter revenues are likely to be
substantially higher than the first and third quarter revenues. However, certain
expenses associated with these revenues are likely to be incurred in preceding
quarters, which may cause results to be lower in those quarters. If revenues in
a quarter fails to meet or exceed the expectations of public market analysts,
investors and shareholders, the price of our shares may decline.

Current weakness of the telecommunications and Internet infrastructure in the
Asia-Pacific region could harm our business.

We are likely to continue to derive the majority of our Internet-based online
marketplace revenues from the Asia-Pacific region. The quality of some of the
telecommunications and Internet infrastructure and telephone line availability
in China and in some Asia-Pacific countries is poor. This may contribute to
lower than expected adoption of many of our services and may cause usage growth
and revenues to fall below expectations. In addition, access fees are high in
many Asia-Pacific countries, which also contributes to low usage and may
adversely affect our growth and revenues potential.

Customer concerns regarding security may deter use of our online products and
services.

Widely publicized security breaches involving the Internet or in online services
generally, or our failure to prevent security breaches, may cause our current
and potential customers not to use our products and services and adversely
affect our revenues. We may be required to incur additional costs to protect
against security breaches or to alleviate problems caused by these breaches. Our
potential for growth depends on our customers' confidence in the security of our
products and services.

The failure of outside parties to meet our service level and information
accuracy expectations may make our services less attractive to customers and
harm our business. We rely on outside parties for some information, licenses,
product delivery and technology products and services. We rely on technology
relationships with software developers and providers, systems integrators and
other technology firms to support, enhance and develop our products and
services. Although we have contracts with technology providers to enhance,
expand, manage and maintain our computer and communications equipment and
software, these service providers may not provide acceptable services. Services
provided by third parties include managing our Global Sources Online network Web
server, maintaining our communications lines and managing our network data
centers and software development. These relationships may not continue or we may
not be able to develop additional third-party relationships on acceptable
commercial terms, which could cause customer dissatisfaction and/or a delay in
the launch of new software or services.

We license some components of our technology from third parties. These licenses
may not be available to us on commercially reasonable terms in the future. The
loss of these licenses could delay release or enhancement of our services until
equivalent technology could be licensed, developed or otherwise obtained. Any
such delay could have a material adverse effect on our business. These factors
may deter customers from using our services, damage our business reputation,
cause us to lose current customers, and harm our ability to attract new
customers.

We have no control over the accuracy, timeliness or effectiveness of the
information, products and services of these outside parties. As a result of
outside party actions, we may fail to provide accurate, complete and current


                                       8
<PAGE>

information about customers and their products in a timely manner and to deliver
information to buyers in a satisfactory manner.

We rely on independent sales representative firms and the loss of any
significant firm or members of a firm would harm our business and revenues.

We rely on the services of independent sales representative firms for the sales
and marketing of our products and services. We have service agreements with
various sales representative firms that employ sales representatives. Four sales
representative firms in China are responsible for supplier accounts which in the
aggregate accounted for approximately 43% of our total revenues for the year
ended December 31, 2003. Generally, either we or the sales representative firm
may terminate the service agreement between us upon short notice. It is possible
that we may not retain some of our sales representative firms, or they may not
retain some of their sales personnel or be able to replace them with equally
qualified personnel. Furthermore, if a sales representative firm terminates its
agreement with us, some of our customers with a direct relationship with that
sales representative firm or its personnel may terminate their relationship with
us. Although these firms and their employees are independent from us, there can
be no assurance that our reputation and our business will not be harmed by their
acts or omissions.

The loss of one or more of our executive officers or key employees, either to a
competitor or otherwise, could harm our business.

Our executive officers and key employees are critical to our business. Our
executive officers and key personnel may not remain with us and their loss may
negatively impact our operations, and may reduce our revenues and cash flows. In
particular, the services of our chief executive officer, chief financial
officer, chief operating officer and chief information officer are important to
our operations. If competitors hire our key personnel, it could allow them to
compete more effectively by diverting customers from us and facilitating more
rapid development of their competitive offerings. We do not maintain key man
insurance on any of our executive officers.

Our inability to maintain effective Internet domain names could create confusion
and direct traffic away from our online services.

If we are not able to prevent third parties from acquiring Internet domain names
that are similar to the various Internet domain names that we own, third parties
could create confusion that diverts traffic to other websites away from our
online services, thereby adversely affecting our business. The acquisition and
maintenance of Internet domain names generally are regulated by governmental
agencies. The regulation of Internet domain names in the United States and in
foreign countries is subject to change. As a result, we may not be able to
acquire or maintain relevant Internet domain names. Furthermore, the
relationship between regulations governing such addresses and laws protecting
proprietary rights is unclear.

If we release new services, catalog tools or software that contain defects, we
may need to suspend further sales and services until we fix the defects, and our
reputation could be harmed.

Our services depend on software that is complex and that may contain unknown and
undetected defects, errors or performance problems. We may not discover defects,
errors or performance problems that affect our new or current services or
enhancements until after they are deployed. These defects, errors or performance
problems could force us to suspend sales and services or cause service
interruptions which could damage our reputation or increase our service costs,
cause us to lose revenues, delay market acceptance or divert our development
resources, any of which could severely harm our business.

Risk of failure of our computer and communications hardware systems increases
without redundant facilities.

Our business depends on the efficient and uninterrupted operation of our
computer and communications hardware systems. Any system interruptions that
cause Global Sources Online or any of our online sites to be unavailable may
drive away buyers and reduce the attractiveness of these sites to advertisers
and could adversely



                                       9
<PAGE>

affect our business, financial condition and operating results. We maintain most
of our computer systems in one web-hosting and internal support facility in
Singapore. We do not have redundant facilities or disaster recovery systems for
our computer systems. Interruptions could result from natural disasters as well
as catastrophic hardware failures, software problems, extended power loss,
telecommunications failure and similar events.

We may be subject to legal liability for publishing or distributing content over
the Internet or in our trade publications or trade shows.

We may be subject to legal claims relating to the content on Global Sources
Online or our other websites, or the downloading and distribution of such
content, as well as legal claims arising out of the products or companies
featured in our trade publications and tradeshows. Claims could involve matters
such as libel and defamation, patent, trademark, copyright and design
infringement, fraud and invasion of privacy. Media companies have been sued in
the past, sometimes successfully, based on the content published or made
available by them. Like many companies in our industry, we have received notices
of claims based on content made available on our website. In addition, some of
the content provided on Global Sources Online is manually entered from data
compiled by other parties, including governmental and commercial sources, and
this data may have errors, or we may introduce errors when entering such data.
If our content is improperly used or if we supply incorrect information, third
parties may take legal action against us. In addition, we may violate usage
restrictions placed on text or data that is supplied to us by third parties. Our
insurance may not cover claims of this type, or may not provide sufficient
coverage, which could harm our reputation and operating results.

Evolving regulation of the Internet and commercial e-mail may affect us
adversely.

As Internet commerce continues to evolve, increasing regulation by federal,
state or foreign agencies becomes more likely. Strict legal prohibitions on the
transmission of unsolicited commercial email, coupled with aggressive
enforcement, could reduce our ability to promote our services and our ability to
facilitate communications between suppliers and buyers and, as a result,
adversely affect our business.

In addition, taxation of products and services provided over the Internet or
other charges imposed by government agencies or by private organizations for
accessing the Internet may also be imposed. Any regulation imposing greater fees
for Internet use or restricting information exchange over the Internet could
result in a decline in the use of the Internet and the viability of
Internet-based services, which could harm our business and operating results.

The laws governing Internet transactions and market access over the Internet are
evolving and remain largely unsettled. The adoption or modification of laws or
regulations relating to the Internet may harm our business by increasing our
costs and administrative burdens. It may take years to determine whether and how
existing laws apply to the Internet.

Our intellectual property protection is limited, and others may infringe upon
it, which may reduce our ability to compete and may divert our resources.

Our success depends upon proprietary technology, content and other intellectual
property rights. We have relied on a combination of copyright, trade secret and
trademark laws and nondisclosure and other contractual restrictions to protect
ourselves. Our efforts to protect our intellectual property rights may not be
adequate. Our competitors may independently develop similar technology or
duplicate our software and services. If others are able to develop or use
technology and/or content we have developed, our competitive position may be
negatively affected.

We have in the past co-developed, and may in the future co-develop, some of our
intellectual property with independent third parties. In these instances, we
take all action that we believe is necessary and advisable to protect and to
gain ownership of all co-developed intellectual property. However, if such third
parties were to introduce similar or competing online products and services that
achieve market acceptance, the success of our online services and our business,
financial condition, prospects and operating results may be harmed.



                                       10
<PAGE>

We cannot determine whether future patent, service mark or trademark
applications, if any, will be granted. No certainty exists as to whether our
current intellectual property or any future intellectual property that we may
develop will be challenged, invalidated or circumvented or will provide us with
any competitive advantages.

Litigation may be necessary to enforce our intellectual property rights, protect
trade secrets, determine the validity and scope of the proprietary rights of
others, or defend against claims of infringement or invalidity. Intellectual
property laws provide limited protection. Moreover, the laws of some foreign
countries do not offer the same level of protection for intellectual property as
the laws of the United States. In addition, we may be unable to detect
unauthorized use of our intellectual property. Litigation may result in
substantial costs and diversion of resources, regardless of its outcome, which
may limit our ability to develop new services and compete for customers.

If third parties claim that we infringe upon their intellectual property rights,
our ability to use technologies and products may be limited, and we may incur
substantial costs to resolve these claims.

Litigation regarding intellectual property rights is common in the Internet and
software industries. Defending against these claims could be expensive and
divert our attention from operating our business. We expect third-party
infringement claims involving Internet technologies and software products and
services to increase. If we become liable to third parties for infringing their
intellectual property rights, we could be required to pay substantial damage
awards and be forced to develop non-infringing technology, obtain a license or
cease using the products and services that contain the infringing technology or
content. We may be unable to develop non-infringing technology or content or to
obtain a license on commercially reasonable terms, or at all.

In the past, we have received notices alleging intellectual property
infringements. Although, to date, there has been no successful litigation
directed against us with respect to the infringement and/or improper use of the
intellectual property rights of third parties, there can be no assurances that
there will not be any successful litigation in the future.

We may also be named as a defendant in litigation alleging infringement of
intellectual property rights by our customers. We may be required to defend
ourselves and our customers against infringement claims. In the event of a claim
of infringement, we and our customers may be required to pay significant damages
or obtain one or more licenses from third parties, and we may be unable to
obtain necessary licenses at a reasonable cost or at all. Inability to obtain
licenses may prevent us from offering products and services, which may limit our
revenues.

Our lengthy sales and implementation cycle could cause delays in revenues
growth.

The period between our initial contact with a potential customer and the
purchase by it of our products and services is often long and unpredictable and
may have delays associated with the lengthy budgeting and approval processes of
our customers. This lengthy sales and implementation cycle may affect our
ability to estimate our revenues in future quarters.

Our growth could strain our resources, and if we are unable to implement
appropriate controls and procedures to manage our growth, we may not be able to
successfully implement our business plan.

We plan to increase substantially the number of independent sales
representatives in China in order to pursue our business objectives. Our success
will depend in part upon the ability of our senior management to implement and
manage this growth effectively. To do this, additional new representatives must
be recruited and trained. If our new representatives perform poorly, or if their
training and management is unsuccessful, or if our relationships with our
existing representatives fail, our business may be harmed. To manage the
expected growth of our operations, we will need to continue to improve our
operational, financial and management controls and our reporting systems and
procedures. If we fail to manage our growth successfully, we will be unable to
execute our business plan.



                                       11
<PAGE>

Merle A. Hinrichs, our Chairman and Chief Executive Officer, is also our
controlling shareholder and he may take actions that conflict with your
interest.

Merle A. Hinrichs beneficially owns 67.2% of our common shares. Accordingly, Mr.
Hinrichs controls the power to elect our directors, to appoint new management
and to oppose actions requiring shareholder approval, such as adopting
amendments to our articles of incorporation and approving mergers or sales of
all or substantially all of our assets. Such concentration of ownership may have
the effect of delaying or preventing a change of control even if a change of
control is in the best interest of all shareholders. In addition, Mr. Hinrichs
may still effectively control our company even if his share holdings are
significantly reduced. There may be instances in which the interest of our
controlling shareholder may conflict with the interest of a holder of our
securities.

There is a limited public market for our shares and the trading volume for our
shares is low which may limit your ability to sell your shares or purchase more
shares.

Our common shares have been traded in the public market for a limited time and
this market may not be sustained. As a result of the April 2000 share exchange,
1,189,949 of our common shares were listed on the Nasdaq National Market. As of
April 1, 2004 we had approximately 1,009 shareholders, and approximately
7,080,216 shares that were tradable on the Nasdaq National Market.

However, because of the small number of shareholders and the small number of
publicly tradable shares, we cannot be sure that an active trading market will
develop or be sustained or that you will be able to sell or buy common shares
when you want to. As a result, it may be difficult to make purchases or sales of
our common shares in the market at any particular time or in any significant
quantity. If our shareholders sell our common shares in the public market, the
market price of our common shares may fall. In addition, such sales may create
the perception by the public of difficulties or problems with our products and
services or management. As a result, these sales may make it more difficult for
us to sell equity or equity related securities in the future at a time or price
that is appropriate.

Future sales of our common shares could depress the price of the common shares.

Future sales of common shares by us or our existing shareholders could adversely
affect the prevailing market price of the common shares. As of April 1, 2004, we
had 28,952,194 common shares outstanding. At least 19,920,400 common shares
outstanding are beneficially owned by people who may be deemed "affiliates," as
defined by Rule 405 of the Act, and are "restricted securities" which can be
resold in the public market only if registered with the Securities and Exchange
Commission or pursuant to an exemption from registration.

We cannot predict what effect, if any, that future sales of such restricted
shares or the availability of shares for future sale, will have on the market
price of the common shares from time to time. Sales of substantial amounts of
common shares in the public market, or the perception that such sales could
occur, could adversely affect prevailing market prices for the common shares and
could impair our ability to raise additional capital through an offering of our
equity securities.

Because we are governed by Bermuda law rather than the laws of the United States
and our assets are outside the U.S., our shareholders may have more difficulty
protecting their rights because of differences in the laws of the jurisdictions.

We are organized under the laws of Bermuda. In addition, certain of our
directors and officers reside outside the United States and a substantial
portion of our assets are located outside the United States. As a result, it may
be difficult for investors to effect service of process within the United States
upon such persons or to realize against them judgments of courts of the United
States predicated upon civil liabilities under the United States federal
securities laws. We have been advised by our legal counsel in Bermuda, Appleby
Spurling Hunter, that there is doubt as to the enforcement in Bermuda, in
original actions or in actions for enforcement of judgments of United States
courts, of liabilities predicated upon U.S. federal securities laws, although
Bermuda



                                       12
<PAGE>

courts will enforce foreign judgments for liquidated amounts in civil matters
subject to certain conditions and exceptions.

It may be difficult for a third party to acquire us, and this may depress our
share price.

Our bye-laws contain provisions that may have the effect of delaying, deferring
or preventing a change in control or the displacement of our management. These
provisions may discourage proxy contests and make it more difficult for the
shareholders to elect directors and take other corporate actions. These
provisions may also limit the price that investors might be willing to pay in
the future for our common shares. These provisions include:

     o    providing for a staggered board of directors, so that it would take
          three successive annual general meetings to replace all directors;

     o    requiring the approval of 100% of shareholders for shareholder action
          by written consent;

     o    establishing advance notice requirements for submitting nominations
          for election to the board of directors and for proposing matters that
          may be acted upon by shareholders at a general meeting; and

     o    restricting business combinations with interested shareholders that
          have not been approved by at least two-thirds of the holders of our
          voting shares (other than the interested shareholder) or by a majority
          of the continuing directors or if certain prescribed conditions are
          met assuming that we will receive fair market value in exchange for
          such business combination. In this context, a "business combination"
          includes mergers, asset sales and other material transactions
          resulting in a benefit to the interested shareholder or the adoption
          of a plan for our liquidation or dissolution; a "continuing director"
          is a member of our board of directors that is not an affiliate or
          associate of an interested shareholder and was a member of our board
          prior to such person becoming an interested shareholder; and an
          "interested shareholder" is any person (other than us or any of our
          subsidiaries, any employee benefit or other similar plan or any of our
          shareholders who owned shares prior to the listing of our shares on
          the Nasdaq National Market) that owns or has announced its intention
          to own, or with respect to any of our affiliates or associates, within
          the prior two years did own, at least 15% of our voting shares.

Issues related to Arthur Andersen may impede our ability to access the capital
markets.

SEC rules and regulations require us to present historical audited financial
statements in various SEC filings, including registration statements, along with
our accountants' consent to our inclusion of its audit report in those filings.
Prior to August 8, 2002, Arthur Andersen served as our independent auditors.
Effective August 8, 2002, Arthur Andersen resigned as our independent public
accountants and we subsequently retained Ernst & Young as our independent
auditors for the fiscal years ended December 31, 2002 and December 31, 2003. On
August 31, 2002, Arthur Andersen ceased practicing before the SEC and, as a
result, we are unable to obtain their written consent to incorporate by
reference or include Arthur Andersen's reports on our financial statements. If
the SEC ceased accepting financial statements previously audited by Arthur
Andersen without Arthur Andersen's written consent, we would be unable to access
the public capital markets unless Ernst & Young, our current independent
accountant, or another independent accountant, is able to re-audit the financial
statements originally audited by Arthur Andersen. In addition, investors in the
securities offered hereby and in any future offerings we make for which we use
Arthur Andersen audit reports will not be entitled to recovery against Arthur
Andersen under the Securities Act for any material misstatements or omissions in
those financial statements. Furthermore, Arthur Andersen will be unable to
participate in the "due diligence" process that would customarily be performed
by potential investors in our securities, which process includes having Arthur
Andersen perform procedures to assure the continued accuracy of its report on
our audited financial statements and to confirm its review of unaudited interim
periods presented for comparative purposes. As a result, we may not be able to
bring to the market successfully an offering of our securities. Consequently,
our financing costs may increase or we may miss attractive market opportunities.



                                       13
<PAGE>

ITEM 4.  INFORMATION ON THE COMPANY

HISTORY AND DEVELOPMENT OF THE COMPANY

We are a leading facilitator of global merchandise trade. Our business began in
1971 in Hong Kong when we launched Asian Sources, a trade magazine to serve
global buyers importing products in volume from Asia. Today, we are one of
Asia's leading providers of trade information in print, online, on CD-ROM and
face-to-face, meeting the marketing and sourcing needs of our supplier and buyer
communities.

While our core business facilitates exports from Asia to the world, we also
facilitate trade from the world to Asia. In 1985, we launched Electronics News
for China for this purpose. Today we have several publications, their associated
websites plus leading events and conferences that provide information to high-
tech design engineers and manufacturers in China and throughout Asia.

Realizing the importance of the Internet, we became one of the first providers
of business-to-business online services by launching Asian Sources Online in
1995. In 1999, we changed the name of Asian Sources Online to Global Sources
Online.

We originally were incorporated under the laws of Hong Kong in 1970. In April
2000, we completed a share exchange with a publicly traded company based in
Bermuda, and our shareholders became the majority shareholders of the Bermuda
corporation. As a result of the share exchange, we became incorporated under the
laws of Bermuda and changed our name to Global Sources Ltd.

Our capital expenditures during the year ended December 31, 2003 amounted to
$2.3 million and were incurred mainly for computers, software, software
development, leasehold improvements and a motor vehicle. Capital expenditures
during the three month period ended March 31, 2004 amounted to $0.3 million and
were incurred mainly for computers, software and office furniture. Our capital
expenditures were financed using cash generated from our operations. The net
book value of capital assets disposed during the year ended December 31, 2003
and the three months ended March 31, 2004 amounted to $0.04 million and none,
respectively.

Our primary operating offices are located in Shenzhen, China; Hong Kong SAR;
Singapore and Makati, Philippines. Our registered office is located at Canon's
Court, 22 Victoria Street, Hamilton, HM 12, Bermuda, and our telephone number at
that address is (441) 295-2244. Our website address is www.globalsources.com.
Information contained on our website or available through our website is not
incorporated by reference into this annual report and should not be considered a
part of this annual report.

BUSINESS OVERVIEW

We are a leading business-to-business (B2B) media company that provides
information and integrated marketing services, with a particular focus on the
Chinese market. Our mission is to facilitate global trade between buyers and
suppliers by providing the right information, at the right time, in the right
format. Although our range of media has grown, for more than 33 years we have
been in the same basic business of helping buyers worldwide find products and
suppliers in Asia.

Buyers rely on our media to stay current with available purchasing
opportunities. Suppliers use our media to find new buyers and markets for their
products. With our broad range of online, trade magazine and trade show
offerings, we provide comprehensive export marketing media and services.

We have a significant presence across a number of industry sectors including
electronics, fashion accessories, hardware and gifts. We are particularly strong
in facilitating China's two-way trade of electronics, China's largest import and
export sector. Our revenue from China has grown 59% since 2000.

We serve an independently certified community of more than 400,000 active
members in more than 200 countries and territories. This buyer community has
almost doubled in size from 209,000 at the end of 2000. During



                                       14
<PAGE>

2003, buyers sent more than 3.8 million requests for information (RFIs) to the
130,000 suppliers listed on Global Sources Online, up from 2.4 million for the
year 2000.

We are diversified in terms of products and services offered, industries served
and our customer base. We have powerful and valuable assets including: the
Global Sources brand; leading products and market positions; a long history and
extensive presence in China; and substantial online leadership and expertise. We
believe that all of these provide a strong platform for success and that we are
well positioned to grow along with China's exports and imports in the industry
segments within which we operate.

The following table sets forth our revenue by category for the last three fiscal
years:

<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31,
                                                            --------------------------------------------
                                                                2001             2002            2003
                                                            -----------    --------------    -----------

REVENUE:
<S>                                                         <C>               <C>             <C>
    Online services..................................       $   55,468        $   51,268      $   51,367
    Other media services.............................           36,391            33,132          36,318
    Exhibitions - trade shows and seminars...........            2,619             2,455           3,327
    Miscellaneous....................................              807               631             657
                                                            -----------    --------------    -----------
                                                            $   95,285        $   87,486      $   91,669
                                                            ===========    ==============    ===========
</TABLE>

The following table represents our revenue by geographical area for the last
three fiscal years:

<TABLE>
<CAPTION>
                                                                       YEAR ENDED DECEMBER 31,
                                                            --------------------------------------------
                                                                2001             2002            2003
                                                            -----------    --------------    -----------
REVENUE:
<S>                                                         <C>               <C>             <C>
    Asia.............................................       $   88,427        $   81,456      $   84,856
    United States....................................            5,255             4,986           5,970
    Europe...........................................              908               525             437
    Others...........................................              695               519             406
                                                            -----------    --------------    -----------
    Consolidated.....................................       $   95,285        $   87,486      $   91,669
                                                            ===========    ==============    ===========
</TABLE>

We currently generate the majority of our revenue from suppliers in Asia, with
China being our largest market at 46% of total revenue during fourth Quarter of
2003. Our revenue is derived from three primary sources:

     o    ONLINE SERVICES - Our primary service is creating and hosting
          marketing websites that present suppliers' product and company
          information in a consistent and easily searchable manner on Global
          Sources Online. We also derive revenue from banner advertising fees.

     o    OTHER MEDIA SERVICES - We publish trade magazines, which consist
          primarily of advertisements from suppliers and our independent
          editorial reports and product surveys. We publish our core trade
          magazines monthly, and a host of specialized magazines seasonally. We
          also derive revenue from buyers that subscribe to our trade
          publications. We also offer CD-ROM versions of the content on Global
          Sources Online.

     o    EXHIBITIONS - TRADE SHOWS and Seminars - We launched a new line of
          trade shows called the China Sourcing Fairs. They offer international
          buyers direct access to manufacturers in China and other Asian
          countries. The first fair was held during the fourth quarter of 2003.
          Future fairs will be held mainly in the second quarter and fourth
          quarter of each financial year.



                                       15
<PAGE>

INDUSTRY BACKGROUND

Global Trade and the Role of China

Over the past few decades, as communications and logistics technologies have
improved and as more free trade agreements have been signed, international trade
has grown at a pace far exceeding the growth of overall global production. For
example, from 1990 to 2002, world exports increased at an average annual rate of
6.0% while world GDP grew at an average annual rate of 2.2%. Asia, and China in
particular, have been significant contributors to the growth of global trade.

According to the World Trade Organization (WTO), China is the world's fourth
largest economy, after the European Union, the United States and Japan. China is
rapidly expanding as both an exporter and an importer of goods and services.
According to the US-China Business Council (UCBC), from 1999 to 2003 China's
exports have grown from $195 billion to $438 billion, a compound annual growth
rate (CAGR) of 22%, and its imports have grown from $166 billion to $413
billion, a CAGR of 26%.

China has become a major manufacturer and exporter of a wide range of products,
due to its significant labor cost advantages, large population, improving
quality controls and increasing amounts of foreign investment. Being admitted to
the WTO in 2001 was a very important turning point for China. Membership led to
a dramatic shift in global trade, with more orders flowing to China and away
from traditional supply markets.

As an indicator of China's export strength, exports to the United States grew by
a CAGR of 15% between 1999 and 2003, from $81.8 billion to $152.4 billion. This
is in sharp contrast to other traditional trading powers, such as Taiwan and
Hong Kong SAR, which have each experienced an 8% decrease in their exports to
the United States over the same period.

The graph below illustrates the recent growth of China's exports to the United
States across a range of selected product categories.

<TABLE>
<CAPTION>
                 CHINA EXPORTS TO THE US IN SELECTED PRODUCT CATEGORIES (U.S. DOLLARS IN MILLIONS)

INDUSTRY SEGMENT                                        2001            2002            2003           CAGR*
<S>                                                    <C>            <C>             <C>               <C>
Household goods................................        $19,296        $24,473         $28,864           22%
Computers and accessories, peripherals
and parts......................................         10,406         14,774          21,988           45%
Sporting goods, footwear, and toys.............         15,411         18,166          20,007           14%
Television receivers, VCRs & other video
equipment......................................          2,416          4,276           5,749           54%
Telecommunications equipment...................          2,069          2,812           3,747           35%
Electric apparatus and parts...................          2,846          3,115           3,484           11%
Automotive parts and accessories...............          1,350          1,697           2,144           26%

</TABLE>
____________________

Source:  Foreign Trade Division, U.S. Census Bureau
* Compound annual growth rate

The largest segment of China's overall global trade, for both imports and
exports, is electrical machinery and equipment. According to the UCBC, this
segment includes consumer electronics, semiconductors, computers and
communications equipment. The UCBC estimates that China:

     o    Exported $89 billion worth of electrical machinery and equipment in
          2003. This is up 36% from 2002 and represents 20% of China's total
          exports.



                                       16
<PAGE>

     o    Imported $104 billion worth of electrical machinery and equipment in
          2003. This is up 42% from 2002 and represents 18% of China's total
          imports.

With a population that is more than 15 times as large as Hong Kong SAR, Taiwan
and Korea combined, and with comparably more manufacturing facilities, the
potential scale of China as an exporter is very substantial. China's exporters
include state-owned enterprises, joint ventures and a rapidly growing number of
entrepreneurial companies. Many of these companies are relatively inexperienced
with exporting.

With thousands of manufacturers spread across vast regions, and given the large
distances between them and their customers, it is difficult for buyers and
suppliers to identify and communicate with each other. Accordingly, buyers'
search and evaluation costs, and suppliers' advertising and marketing expenses
can be substantial.

The Role of Media in Global Trade

In global trade, media play a key role in helping suppliers and buyers find,
connect and transact with each other. To facilitate this, media companies
provide three major offerings--online marketplaces, trade publications and trade
shows. Many media companies, however, offer just one or two of these types of
media.

For media companies doing business in Asia, the fragmentation existing in many
markets presents significant challenges. They need to find, qualify and visit
tens of thousands of suppliers and then assist them to promote their products to
the global marketplace. Building a sales force to contact these suppliers is a
significant undertaking and typically requires substantial financial and
manpower commitments and resources. In particular, there is a huge challenge to
effectively and efficiently hire, train and manage a network of sales
representatives across such an immense area, where multiple jurisdictions have
varying legal requirements, languages, currencies and customs.

Buyers rely on media to stay current with all available purchasing
opportunities. They use the media to identify and pursue new suppliers with
which they can compare both pricing and product quality with their existing
suppliers. They also seek to purchase new product lines appropriate to their
distribution channels. Buyers choose media based on the quality and quantity of
information relevant to their interests, and on the range and flexibility of the
formats and delivery methods.

Most suppliers frequently introduce new products and actively seek new buyers
and markets through the use of media. Their objective is to make sure their
products are seen by as many potential buyers as possible, and sold to buyers
that will provide them the best price and the right order size. Suppliers select
media based on the number and quality of buyers reached, and on the reputation
of the medium and its cost. Also, particularly in China, creative services for
ad design and English language copywriting play a significant role in media
selection. Suppliers measure the return on their promotional investments by the
quantity and quality of sales leads, or RFIs, that they receive, and where
possible, by the actual orders generated.

Operators of online marketplaces generate most of their business from selling
marketing services to suppliers, such as hosting and publishing a suppliers'
website or catalog, and from advertising. Online marketplaces have the
advantages of content depth and timeliness and provide a venue where suppliers
can make detailed product and company information accessible to buyers. In the
past several years, the use of the Internet for sourcing and purchasing
activities has increased significantly. In the United States for example,
Forrester Research and the Institute for Supply Chain Management stated that 69%
of companies surveyed recently indicated that they were using the Internet as
part of the request for proposal (RFP) process.

Trade magazine publishers garner the vast majority of their revenue from the
sale of advertising. Magazines offer buyers the convenience of portability while
offering suppliers a proven medium that delivers a targeted audience. Magazine
advertising formats are effective since they enable suppliers to do high-impact,
display advertising that can strongly position their company and their products.
Advertising in trade magazines contributes greatly to making buyers aware that a
company is a potential supplier, and if the buyer is in an active



                                       17
<PAGE>

sourcing mode, these advertisements often stimulate the buyer to make an inquiry
or to visit the supplier's website.

Trade show organizers generate most of their business from selling booth space
to suppliers. Trade shows play a unique role in the sales process since they
allow sellers to make face-to-face presentations to buyers and to negotiate and
take orders at the booth. In international trade, this is something that cannot
be accomplished by online or print media.

Many suppliers want to reach their customers and prospects in multiple ways:
online, in print and in person at trade shows. Suppliers need this full range of
media to make sure they reach their entire target market, because of the
benefits of different exposures to buyers, and because each of the media plays a
different role in the sales cycle.

OUR OFFERINGS

Our primary business relates to connecting buyers worldwide with suppliers in
Asia and other emerging markets. However, we also enable trade in the other
direction with a range of media that facilitate selling to Asia and China.

We provide a broad set of business-to-business (B2B) media products and services
to stimulate and streamline the marketing and sourcing processes of global
trade. In particular, we believe that we are the largest company offering such
an integrated solution to suppliers and buyers engaged in international trade
with China.

Buyers request information and purchase goods from suppliers who market
themselves through our online services, trade magazines, CD-ROMs and trade
shows. We provide information to help buyers evaluate numerous sourcing options
so they can place orders with suppliers that offer them the best terms. We help
suppliers market their products and their capabilities to our community of
buyers worldwide. By receiving inquiries from a wide selection of buyers,
suppliers have more opportunities to achieve the best possible terms, and to
learn about the demand and specific requirements in different markets.

With the combination of our print, online and trade show offerings, supported by
our creative and production services, we offer suppliers a virtual one-stop shop
for most of their export marketing communications needs.

Media for Buyers Worldwide

Online Services

Through Global Sources Online, our online marketplace, buyers are able to
identify and make inquiries to suppliers. Our primary source of revenue is from
suppliers who pay for marketing websites. Each marketing website is comprised of
a home page, a company profile and a virtual showroom containing product profile
pages on the supplier's products. Each product profile page contains detailed
product information, specifications and full color images. Many suppliers choose
to supplement their marketing websites with additional online marketing
services. For example, suppliers can sponsor a particular product or other
search category and when a buyer searches that category, the supplier's banner
advertisement is displayed promoting its products or services, with a link to
that supplier's marketing website.

Buyers may search Global Sources Online by product, keyword, supplier or
country. Buyers can reach a large potential supply base by searching among,
and/or making inquiries to the 130,000 suppliers who are categorized according
to the products they can supply. In listing suppliers for a specific product, we
give prominence to those who maintain marketing websites with us.

A key feature of Global Sources Online for buyers is the standard format for
suppliers' information, making it unnecessary for buyers to leave our website to
visit numerous individual supplier websites, each with a different data
structure and design. Another important feature is our "Product Alert." Buyers
register their profiles and



                                       18
<PAGE>

are then notified by e-mail whenever there is new advertising or editorial
content in the product categories they specified.

Trade Publications

We publish seven monthly publications, plus other quarterly and seasonal
publications, that are circulated to buyers worldwide. Our trade publications
contain paid advertisements from suppliers, as well as our independent editorial
features, which include market reports and product surveys. In addition to our
paid subscription base, we distribute samples of our trade magazines and CD-ROMs
free of charge to prospective buyers worldwide at a variety of trade shows and
events. Our CD-ROMs provide buyers with an offline, electronic means of
accessing content found within the industry sectors on Global Sources Online. We
do not charge suppliers separately for including their information on CD-ROMs.

Trade Shows

We have six China Sourcing Fairs scheduled for 2004 in Shanghai. The shows bring
buyers from around the world to meet face-to-face with Chinese suppliers. The
first China Sourcing Fair was held in Shanghai in October 2003. It featured
nearly 600 booths and was attended by 15,000 buyers from more than 100 countries
and territories.

Our online Trade Show Center provides extensive event, exhibitor and product
information and enables buyers to search for products, send inquiries or make
appointments with suppliers at the listed events. We also publish show guides
with CD-ROMs for China Sourcing Fairs.

Advertising Creative Services

We offer our customers advertising and marketing creative services, which assist
them in communicating their unique selling propositions and in executing
integrated marketing campaigns across our online services, trade magazines and
trade shows. Account managers and copywriters in our customer service centers
assist suppliers with various creative services--including digital photography
of products, translation, copywriting, ad layout and quality control. Basic
media and creative services are included in our media charges.

Private Catalogs

My Catalog is an online service for buyers to make their sourcing and purchasing
activities more efficient. My Catalog has all the functionality of Global
Sources Online plus additional content, functionality and support. My Catalog
enables buyers to maintain personalized product and supplier information for
current and/or potential suppliers. As of March 2004, a variety of companies
were using this service including large buying organizations such as AEON, Best
Buy and Kingfisher.

Our Private Supplier Catalogs enable suppliers to enter, manage, update and
distribute their product and company data for a variety of online marketing and
cataloging applications. We provide tools within the catalog to assist suppliers
with creating, updating and posting content.

Our online catalog offerings are maintained in a private, password-protected
environment where the catalog user has the sole right of access and data entry.
We currently derive little revenue from these services.

Media for Asian Engineers and Executives

In addition to our primary media, which connect export suppliers in Asia with
buyers worldwide, we are a leading provider of information to electronics
engineers and executives within Asia. For this segment of our business, we have
six websites, seven magazines and host several conferences and events each year.



                                       19
<PAGE>

STRATEGY

Our objective is to be the preferred provider of essential information and
integrated marketing solutions in the markets we serve, with a particular
emphasis on the large and rapidly growing China market. Our primary strategy to
achieve this objective is to serve our industry sectors with each of online,
trade publication and trade show media. This full range of media enables
suppliers to reach their target market in multiple ways. This strategy can also
enable us to achieve a competitive advantage versus other media companies who do
not provide this full range of media.

Our focus for growth is to invest in the organic development of our core
businesses and competencies, where we believe significant opportunities exist,
and to seek acquisitions and alliances. More specifically, there are five
principal components of our growth strategy:

     o    Continue to Expand in China. We are significantly expanding our sales
          representation, marketing and infrastructure in China to enable us to
          grow our revenue along with the anticipated growth of China trade in
          the industry sectors we serve. Our revenue from China has grown
          approximately 59% since 2000 and we expect revenue from China to
          continue to grow.

     o    Expand Trade Show Business. Our primary initiative is to launch more
          trade shows. Building on the success of our first China Sourcing Fair,
          which was held in October 2003, we currently have six China Sourcing
          Fairs scheduled in 2004. We are looking to expand the number of
          exhibitors, industry sectors served, frequency, and locations where
          our trade shows are held.

     o    Add New Customers for Existing Services. To date, we have sold our
          solutions to a relatively small number of the 130,000 suppliers
          currently listed on Global Sources Online. We believe we can
          significantly increase the number of suppliers who will purchase our
          online marketplace, trade publication and trade show services for
          three primary reasons: the overall strength and differentiation of our
          services; the largest community of independently certified buyers we
          are involved in global B2B trade; and the increasing number of buyers
          making inquiries through Global Sources Online. We also intend to
          further penetrate the high-tech sector in Asia, which we serve in
          several languages, and where we see significant potential to continue
          to increase our revenue.

     o    Cross-Sell Services to Existing Customers. We believe that we can
          increase our revenues by cross-selling our existing products and
          services to suppliers who are already customers. We see significant
          potential to convince more of our online marketplace and trade
          publication customers to also exhibit in our trade shows; and to
          convince more of our trade show exhibitors to also become customers of
          our online marketplaces and trade publications.

     o    Seek Acquisitions, Joint Ventures and Alliances. We intend to
          selectively pursue acquisitions, joint ventures and alliances to help
          us accelerate achievement of our strategic goals and maintain and
          achieve market-leading positions. Specific objectives currently
          include: gaining greater penetration into existing or adjacent
          additional industry sectors, expanding into new industry sectors, and
          gaining access to a larger number of potential users.

At the core of our strategy is one basic goal: to steadily increase the usage of
our media. As we do this, we expect to increase the size and loyalty of the
communities we serve. Our belief is that as our community of active buyers
increases, our products and services become increasingly attractive to
suppliers. As the number of buyers and sellers using our products and services
grows, our offerings become incrementally more attractive to additional buyers
and sellers, which we believe will drive revenue growth through further adoption
of our online, publication and trade show products and services.



                                       20
<PAGE>

PRODUCTS & SERVICES

Media for Buyers Worldwide

Online Services

Global Sources Online, our primary online service, is comprised of the following
industry sector marketplaces:

Computer Products                            Hardwares
Electronic Components                        Security Products
Electronics                                  Telecom Products
Fashion Accessories & Supplies               Timepieces
Gifts & Home Products

Trade Publications

We publish the following industry-specific trade magazines monthly:

Asian Sources Computer Products              Asian Sources Gifts & Home Products
Asian Sources Electronic Components          Asian Sources Hardwares
Asian Sources Electronics                    Asian Sources Telecom Products
Asian Sources Fashion Accessories & Supplies

We also publish the following specialized magazines and CD-ROMs seasonally
and/or for special trade events:

Global Sources Electronic Components         Global Sources Security Products
Global Sources Lighting Products             Global Sources Timepieces


Trade Shows

<TABLE>
<CAPTION>
   TRADE SHOW                                     DESCRIPTION
   ----------                                     -----------

<S>                                               <C>
   China Sourcing Fair:  DIY & Home Improvement   o     Primary product categories include:  DIY & home
                                                        center; furniture & furnishings; garden & outdoor
                                                        products; and lighting & electrical.
                                                  o     Spring and fall 2004 events in Shanghai.

   China Sourcing Fair:  Gifts & Home Products    o     Primary product categories include:  gifts,
                                                        premiums & toys; sporting goods; Christmas & holiday
                                                        products; stationery; health & beauty products; and
                                                        kitchen & household appliances.
                                                  o     Spring and fall 2004 events in Shanghai.

   China Sourcing Fair:  Electronics &            o     Primary product categories include:  personal &
   Components                                           mobile electronics; computers & networking products;
                                                        electronic components;
                                                        security & safety
                                                        products; telecom
                                                        products & accessories;
                                                        and home & office
                                                        electronics.
                                                  o     Spring and fall 2004 events in Shanghai.




                                       21
<PAGE>

Media for Asian Engineers and Executives

Magazines

   MAGAZINE                                       DESCRIPTION
   --------                                       -----------

   Electronic Engineering Times - Asia            o     Editions published bi-weekly in simplified and
                                                        traditional Chinese, Korean and English; covers the
                                                        latest technology and design techniques for
                                                        electronics engineers.

   Electronic Buyers' News - China                o     Published monthly in simplified Chinese; delivers
                                                        technology and business intelligence required by
                                                        procurement, production and corporate management who
                                                        oversee electronics manufacturing in China, select
                                                        technology solutions and approve vendor selection.

   Chief Executive China                          o     Published monthly in simplified Chinese; serves
                                                        mainland China senior management with case studies
                                                        and information on management techniques
                                                        and strategies.

Websites

   WEBSITE                                        DESCRIPTION
   -------                                        -----------

   Electronic Engineering Times - Asia Online     o     Provides industry news, new product information and
                                                        feature stories covering electronic technology and its
                                                        application; websites in traditional and simplified
                                                        Chinese, English and Korean.

   Electronic Buyers' News - China Online         o     Provides global and local industry news, technology
                                                        trends and product updates in simplified Chinese.

   Chief Executive China Online                   o     A resource focusing on excellent management
                                                        practices for China's business leaders in
                                                        simplified Chinese.
Trade Shows and Exhibitions:

   TRADE SHOW                                     DESCRIPTION
   ----------                                     -----------

   The 9th Annual International IC - China        o     Mainland China's premiere showcase of integrated
   Conference & Exhibition                              circuits (IC) application technologies and high-end
                                                        components.
                                                  o     March 2004 events in mainland China.

   The 4th Annual Embedded Systems Conferences    o     Embedded systems design, skills training and Asia &
                                                        China technologies in mainland China and Taiwan.
                                                  o     March 2004 events in mainland China and July
                                                        2004 in Taiwan.

   The 3rd EDA & Test - China Conference &        o     Asia-Pacific's largest, longest-running showcase of
   Exhibition & 12th EDA & Test - Taiwan                electronic


                                       22
<PAGE>
   TRADE SHOW                                     DESCRIPTION
   ----------                                     -----------

   Conference & Exhibition                              design automation and test technologies.
                                                  o     March 2004 in mainland China and July 2004 in
                                                        Taiwan.

   Franchising China 2004 Conference &            o     China's foremost showcase of international
   Exhibition                                           franchising concepts.
                                                  o     November 2004 events in mainland China.

</TABLE>

CUSTOMERS

We provide services to a broad range of international buyers and suppliers in
various industry sectors.

Suppliers

During 2003, more than 6,600 suppliers paid us for marketing or advertising
services. More than 5,900 of these suppliers were located in greater China,
including approximately 3,100 located in mainland China, 1,900 in Taiwan and 950
in Hong Kong SAR. Customers during 2003 included: Analog Devices, Hitachi,
Honeywell, Matsushita, Motorola Semiconductor, NEC, Philips, Seiko, TDK, Texas
Instruments and Toshiba. However, most customers do not have brands or company
names that are well-known by those not involved in our industry sectors. None of
our supplier customers represented more than 2% of our revenue during 2003.

Buyers

For our primary group of media, which connect export suppliers in Asia with
buyers worldwide, we serve an independently certified community of more than
400,000 active members in more than 200 countries and territories. This figure
is based on procedures to ensure that only buyers who have received a magazine
or a CD-ROM, or who have made an inquiry through the Global Sources website
(www.globalsources.com) within the 12 month period ended December 31, 2003 are
extracted from the databases. This community is up from approximately 209,000 at
the end of 2000, representing a compound annual growth rate of 24%.

We have developed our services primarily for retailers, distributors and
manufacturers who import in volume for resale. We serve a specialized group of
senior executives with large import buying power. We believe a significant
portion of these executives are owners, partners, presidents, vice presidents,
general managers or directors of their respective companies.

We derive a relatively small proportion of our total revenue from these buyers
for subscriptions to our magazines, reports, and to My Catalog.

SALES AND MARKETING

Our sales organization consists of approximately 870 independent representatives
in approximately 60 cities worldwide, with 45 of these locations in Greater
China. We have a staff of nine full-time employees that oversee and monitor the
independent sales representative organizations that employ these
representatives. These organizations operate pursuant to service agreements with
us that generally are terminable by either party on short notice. These
representatives focus on developing and maintaining relationships with suppliers
that are current customers and they seek to increase the number of new suppliers
using our services. Substantially all of our contracts with suppliers are
entered into directly between the supplier and us. Online services and print
advertising revenue is seasonal and tends to be highest in the fourth quarter of
each calendar year. Revenue for trade shows is highly seasonal as it is
recognized in the month in which each show is held. Our sales representatives
collectively make an average of 40,000 supplier visits per month. The largest
representative sales offices are located in Beijing, Guangzhou, Shanghai,
Shenzhen, Hong Kong SAR and Taipei. Our four largest sales representatives in
China accounted for approximately 43% of our total revenue in 2003.



                                       23
<PAGE>

Our marketing strategy leverages our database of approximately 130,000 suppliers
currently listed on Global Sources Online. Sophisticated analyses of buyer and
supplier profile data enable us to target our sales and marketing programs to
new geographic areas and to specific product categories within industry sectors.

Our sales representative organization is generally structured to offer an
integrated marketing solution of our media to customers. With this approach, the
focus is on the customers' needs as opposed to separate sales representatives
selling individual media. Our community development group is responsible for
marketing our services to the global buyer community through online
advertisements and promotions, trade shows and direct mail campaigns.

CONTENT DEVELOPMENT

Our content development group, comprised of 289 team members, is responsible for
compiling, editing, integrating and processing the content that appears in our
online services, print media and CD-ROMs. Within content development, the
advertisement operations and editorial groups compile materials from suppliers
and freelance writers, respectively, and transform these materials into the
advertising and editorial content. Research teams analyze customer content usage
to direct content development and they work with sales representatives and
marketing staff to develop appropriate content for new industry sectors. Our
site team is responsible for evaluating and integrating content into our online
services, as well as maintaining the overall integrity of such services. In
addition, members of the content development group manage the pre-press
production work and print production processes associated with the creation of
our trade magazines. They also maintain the back-end supplier database, which is
the foundation for our online supplier and product information.

STRATEGIC RELATIONSHIPS

We own 60.1% of a joint venture with CMP Media Inc., through UBM Asia B.V., a
subsidiary of United News & Media plc. We entered into the joint venture in
September 2000, to provide new technology content, media and online services for
the Asian electronics market, focusing on new opportunities in the greater China
market. During 2001, we increased the frequency of the joint ventures'
publications.

In November 2001, we formed a strategic alliance with the WorldWide Retail
Exchange (WWRE), to offer a supplier sourcing program for WWRE members and Asian
suppliers.

We have formed license-based partnerships with third parties to operate regional
online marketing services such as South African Sources, and Turkish Sources.
These enable suppliers within the relevant geographic regions to promote their
products and services to buyers located primarily outside of such regions.

TECHNOLOGY AND SYSTEMS

We use a combination of commercial software and internally developed systems to
operate our websites and services. We have invested more than $35.3 million from
1995 to December 31, 2003 in online services development. As of December 31,
2003, we had 138 team members engaged in technology development, maintenance,
software customization and data center operations.

Our online marketplace services are run on the Oracle DBMS release 8. The
catalog application that supports Global Sources Online's core functions uses a
Java Application Platform.

Our servers are hosted by Singapore Telecommunications ("SingTel"). We have a
dedicated 10Mbps link to SingTel's IX backbone, while SingTel maintains a 777
Mbps link to the United States and direct links to most countries in Asia. We
use Storage Tech Enterprise tape back-up systems as well as servers located at
our Singapore facility for back-up. For the year ended December 31, 2003 our
external network had approximately 99.99% uptime availability.



                                       24
<PAGE>

Our platform applications use standard industry database protocols. We can,
therefore, integrate our systems with products from other vendors written in
traditional program languages or more innovative systems. Our Internet offerings
are based on industry standard Web technologies. We may deploy our Web offerings
on any modern Internet browser platform, which means that our Web clients do not
need to download the software onto their personal computers.

All of our systems use secure socket layer, known as SSL, to encrypt sensitive
communications between browsers and Web servers. SSL enables secure
communication by encoding information transmitted over the Internet. We use
Extensible Markup Language, referred to in the industry as XML, as an open
communication protocol for information delivery.

COMPETITION

For our online marketplaces, trade magazines and trade show services, the market
is highly fragmented and potential competition and competitors vary by the range
of services provided, geographic focus and the industry sector served. Some
competitors only offer trade shows and other competitors only offer online
services. However, across the range of our services, geographic focus and
industry sectors served, we do not believe that there is a dominant direct
competitor.

We may compete to some extent with a variety of organizations that have
announced their intention to launch, or have already launched, products and
services that compete to a certain degree with ours. These businesses include
business media companies, trade show organizers, consortium exchanges,
government trade promotion bodies, domestic retail marketplaces, international
trade marketplaces, global standards organizations, transaction software and
services providers, electronic sourcing application and/or service providers,
and distributor, sell-side marketplaces. We may be at a competitive disadvantage
to companies that have greater financial resources, that have more advanced
technology, that have greater experience or that offer lower cost solutions than
ours. In addition, some buyers and suppliers may have developed in-house
solutions for the online sourcing and marketing of goods and may be unwilling to
use ours.

INTELLECTUAL PROPERTY

Our primary product and supplier content, in addition to our in-house produced
editorial content, is held under common law copyright. We actively protect this
intellectual property by several means, including the use of digital watermark
technology on the images on our website, which enables us to identify
unauthorized use on other websites.

We have also developed several proprietary technology applications. In the
future, we may apply for patents for these technology applications, where
appropriate. However, we may not be successful in obtaining the patents for
which we applied. Even if we are issued a patent, it is possible that others may
be able to challenge such a patent or that no competitive advantage will be
gained from such patent.

Our intellectual property is very important to our business. We rely on a
combination of contractual provisions, employee and third-party nondisclosure
agreements, and copyright, trademark, service mark, trade secret and patent laws
to establish and protect the proprietary rights of our software and services.

We have registered trademarks for "Asian Sources" and/or "Global Sources" in
Australia, the European Community, Germany, Hong Kong SAR, Indonesia, Israel,
Malaysia, Mexico, Japan, the Philippines, the People's Republic of China,
Singapore, South Africa, South Korea, Switzerland, Taiwan, Thailand, Turkey and
the USA, and we have trademarks pending registration in various countries,
including Australia, the European Community, Hong Kong SAR, India, Indonesia,
Japan, Malaysia, Mexico, the People's Republic of China, the Philippines, South
Africa, Thailand, Turkey and the USA.

We have in the past, and may in the future, co-develop some of our intellectual
property with independent third parties. In these instances, we take all action
that we believe is necessary or advisable to protect and to gain



                                       25
<PAGE>

ownership of all co-developed intellectual property. However, if such third
parties were to introduce similar or competing online services that achieve
market acceptance, the success of our online services and our business,
financial condition, prospects and operating results may be harmed.

GOVERNMENT REGULATION

Our services are subject to government regulation.

Internet Regulation

There are an increasing number of laws and regulations pertaining to the
Internet. In addition, a number of legislative and regulatory proposals are
under consideration by federal, state and local and foreign governments and
agencies. Laws or regulations may be adopted with respect to the Internet
relating to the liability for information retrieved from or transmitted over the
Internet, online content regulation, user privacy, taxation and the quality of
products and services. Moreover, it may take years to determine whether and how
existing laws, such as those governing issues relating to intellectual property
ownership and infringement, privacy, libel, copyright, trademark, trade secret,
design rights, taxation, and the regulation of, or any unanticipated application
or interpretation of existing laws, may decrease the use of the Internet, which
could in turn decrease the demand for our services, increase our cost of doing
business or otherwise have a material adverse effect on our business, financial
condition, prospects and operating results.

Regulation of Communications Facilities

To some extent, the rapid growth of the Internet in the United States has been
due to the relative lack of government intervention in the marketplace for
Internet access. For example, several telecommunications carriers are seeking to
have telecommunications over the Internet regulated in the same manner as are
certain other telecommunications services. Additionally, local telephone
carriers have petitioned the Federal Communications Commission to regulate
Internet service providers in a manner similar to long distance telephone
carriers and to impose access fees on such providers. Some Internet service
providers are seeking to have broadband Internet access over cable systems
regulated in much the same manner as telephone services, which could slow the
deployment of broadband Internet access services. Because of these proceedings
or others, new laws or regulations could be enacted, which could burden the
companies that provide the infrastructure on which the Internet is based,
thereby slowing the rapid expansion of the medium and its availability to new
users.

PROPERTIES

We do not own any of our offices. Generally, we lease our office space under
cancelable and non-cancelable arrangements with terms of two to five years. We
also service our customers through independent sales representative offices
located in Australia, Hong Kong SAR, India, Israel, Japan, Malaysia, the
Netherlands, the Philippines, Singapore, Taiwan, Thailand, the United Kingdom,
the United States and over 40 locations in mainland China. We lease in the
aggregate approximately 117,915 square feet of executive and administrative
offices in China, Hong Kong SAR, the Philippines, Singapore and Taiwan. Our
aggregate base rental and building management fee payments for the year ended
December 31, 2003 were approximately $1.5 million.

LEGAL PROCEEDINGS

We are a party to litigation from time to time in the ordinary course of our
business. We do not expect the outcome of any pending litigation to have a
material adverse effect on our business.

     ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our financial condition and results of operations
should be read in conjunction with the "Selected Financial Data" and the
accompanying financial statements and the notes to those statements appearing
elsewhere in this annual report. The following discussion contains
forward-looking statements that



                                       26
<PAGE>

reflect our plans, estimates and beliefs. Our actual results could differ
materially from those discussed in these forward-looking statements. Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed below and elsewhere in this annual report, particularly
under the caption "Risk Factors."



OVERVIEW

We are a leading business-to-business (B2B) media company that provides
information and integrated marketing services, with a particular focus on the
China market. Our mission is to facilitate global trade between buyers and
suppliers by providing the right information, at the right time, in the right
format. Although our range of media has grown, for more than 33 years we have
been in the same basic business of helping buyers worldwide find products and
suppliers in Asia.

We were originally incorporated under the laws of Hong Kong in 1970. In 1971, we
launched Asian Sources, a trade magazine to serve global buyers importing
products in volume from Asia. In 1985, we launched Electronics News for China
for this purpose. Realizing the importance of the Internet, we became one of the
first providers of business-to-business online services by launching Asian
Sources Online in 1995. In 1999, we changed the name of Asian Sources Online to
Global Sources Online. Today we have several publications, their associated
websites plus leading events and conferences that provide information to high
tech design engineers and manufacturers in China and throughout Asia.

In April 2000, we completed a share exchange with a publicly traded company
based in Bermuda, and our shareholders became the majority shareholders of the
Bermuda corporation. As a result of the share exchange, we became incorporated
under the laws of Bermuda and changed our name to Global Sources Ltd. Today we
are one of Asia's leading providers of trade information in print, online, on CD
Rom and face to face, meeting the marketing and sourcing needs of our supplier
and buyer communities.

REVENUE

We derive revenue from three principal sources.

Online services -- Our primary service is creating and hosting marketing
websites that present suppliers' products and company information in a
consistent and easily searchable manner on Global Sources Online. We also derive
revenue from banner advertising fees. We ratably recognize the fees we receive
to display a supplier's advertisement or company data over the contractual term,
which is generally six to twelve months.

Other media services -- We publish trade magazines, which consist primarily of
product advertisements from suppliers and our independent editorial reports and
product surveys. We publish our core trade magazines monthly, and a host of
specialized magazines seasonally. Suppliers pay for advertising in our trade
magazines to promote their products and companies. We also derive revenue from
buyers that subscribe to our trade publications. We also offer CD-ROM versions
of the content on Global Sources Online. We recognize revenue ratably over the
period during which the advertisement is displayed, generally not exceeding one
year.

Exhibitions - trade shows and seminars -- We launched a new line of trade shows,
called the China Sourcing Fairs. They offer international buyers direct access
to China and other Asian manufacturers. The first fair was held during the
fourth quarter of 2003. Future fairs will be held mainly in the second quarter
and fourth quarter of each financial year. We recognize exhibitor services
revenue at the conclusion of the related events.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are described in Note 2 to the consolidated
financial statements included in Item 8 of this document. The following is a
discussion of our critical accounting policies:



                                       27
<PAGE>

Revenue Recognition

We derive our revenue primarily from receipt of advertising fees in our
published trade magazines and websites, sale of trade magazines, receipt of fees
from licensing our trade and service marks, receipt of service fees from the
provision of software maintenance services, and from organizing exhibitions and
business seminars.

Revenue from advertising in trade magazines and websites is recognized ratably
over the period in which the advertisement is displayed. Advertising contracts
do not exceed one year. When advertising fees from published trade magazines and
websites are contracted under a single arrangement, we allocate the total
advertising fees to the multiple deliverables based on their relative fair
values. The fair value of the revenue from published trade magazines and
websites is based on our average historical selling prices. Revenue from sales
of trade magazines is recognized upon delivery of the magazine. Magazine
subscriptions received in advance are deferred and recognized as revenue upon
delivery of the magazine. Revenue from the provision of maintenance service is
deferred and recognized ratably over the maintenance service period. Revenue
from organizing exhibitions or trade shows and business seminars is recognized
at the conclusion of the event and the related direct event production costs and
direct event promotion costs are deferred and recognized as expenses upon
conclusion of the event.

We receive license fees and royalties from licensing our trade and service
marks. Revenue from license fees is recognized ratably over the term of the
license, currently four to five years. Royalties from license arrangements are
earned ratably in the period in which the advertisement is displayed by the
licensee.

The correct measurement of timing and the duration of the contracts with our
customers are essential to the recognition of our revenue. Any delays in
recognizing the revenue could cause our operating results to vary significantly
from period to period. In addition our revenue recognition determines the timing
of certain expenses such as commissions, circulation expenses, direct event
production costs and direct event promotion expenses. We believe that we have
adequate controls and processes in place to ensure the accuracy of the revenue
recording.

Capitalization of Development Costs of Software for Internal Use

We adopted Statement of Position 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." Costs incurred in the
preliminary project stage with respect to the development of software for
internal use are expensed as incurred; costs incurred during the application
development stage are capitalized and are amortized over the estimated useful
life of three years upon the commissioning of service of the software. Training
and maintenance costs are expensed as incurred.

To account for the development costs related to the products to be sold, leased
or otherwise marketed, we adopted SFAS No. 86, "Accounting for the Costs of
Computer Software to Be Sold, Leased, or Otherwise Marketed." Development costs
incurred subsequent to the establishment of the technological feasibility of the
product are capitalized. The capitalization will end when the product is
available for general release to customers.

Our policies on capitalized software development costs determine the timing and
our recognition of certain development costs. In addition, these policies
determine whether the costs are capitalized or recorded as expenses.

Estimation of Allowance for Doubtful Debts

The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities in
our financial statements.

We estimate the collectibility of our accounts receivable based on our analysis
of the accounts receivable, historical bad debts, customer credit-worthiness and
current economic trends. We continuously monitor collec-



                                       28
<PAGE>

tions from our customers and maintain adequate allowance for doubtful accounts.
While credit losses have historically been within our expectations and the
allowances we established, if the bad debts significantly exceed our provisions,
our operating results and liquidity would be adversely affected.

Impairment of Long-Lived Assets

Property and equipment are amortized over their estimated useful lives. Useful
lives are based on our estimates of the period that the assets will generate
revenue and can be productively employed.

We periodically review the carrying values of our long-lived assets based on the
anticipated gross cash flows and will provide for impairment whenever events or
changes in circumstances indicate that the carrying amount of the assets may not
be fully recoverable. The impairment loss is measured based on the difference
between the carrying amount of the asset and its fair value.

While we believe our estimation of the useful lives and future cash flows are
reasonable, different assumptions regarding such useful lives and cash flows
could materially affect our valuations.

RESULTS OF OPERATIONS

The following table sets forth our results of operations as a percentage of
total revenue:

<TABLE>
<CAPTION>
                                                                   YEAR ENDED DECEMBER 31,
                                                           -----------------------------------------
                                                               2001           2002          2003
                                                           ----------     ------------   -----------
INCOME STATEMENT DATA:
REVENUE:
<S>                                                             <C>             <C>           <C>
  Online services....................................           58%             59%           56%
  Other media services...............................           38              38            39
  Exhibitions........................................            3               2             4
  Miscellaneous......................................            1               1             1
         Total revenue...............................          100             100           100
OPERATING EXPENSES:
  Sales..............................................           33              33            33
  Event production...................................            1               1             1
  Community..........................................           13              14            13
  General and administrative.........................           34              33            31
  Online services development........................            9               6             5
  Non-cash compensation..............................            3               3             2
  Other..............................................            3               4             5
         Total operating expenses....................           96              94            90
  Income (loss) from operations......................            4%              6%           10%
  Net income (loss)..................................            1%              5%            8%
                                                          ============    ===========    ============
</TABLE>

The following table represents our revenue by geographical areas as a percentage
of total revenue:

<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31,
                                                          --------------------------------------------
                                                               2001           2002           2003
                                                          -------------   ------------   -------------
<S>                                                              <C>            <C>           <C>
Asia.................................................            93%            93%           93%
United States........................................             5              6             6
Europe...............................................             1              1             1
Others...............................................             1              0             0
                                                          -------------   ------------   -------------
         Total revenue...............................           100%           100%          100%
                                                          =============   ============   =============
</TABLE>



                                       29
<PAGE>

FISCAL YEAR 2003 COMPARED TO FISCAL YEAR 2002

REVENUE

During the year ended December 31, 2003, our total revenue grew to $91.7 million
from $87.5 million during the year ended December 31, 2002, a growth of 5%. Our
online services revenue grew marginally by $0.1 million to $51.4 million during
the year ended December 31, 2003, as compared with $51.3 million during the year
ended December 31, 2002. Revenue from our other media services grew by $3.2
million or 10% to $36.3 million during the year ended December 31, 2003 as
compared with $33.1 million during the year ended December 31, 2002. Our
exhibitions or trade shows revenue grew from $2.5 million during the year ended
December 31, 2002 to $3.3 million during the year ended December 31, 2003, a
growth of 32%, due to launching our China Sourcing Fairs event held in the
fourth quarter of 2003. This offers international buyers direct access to
suppliers in China and other Asian countries. Future fairs will be held mainly
in the second quarter and fourth quarter of each financial year.

We made substantial progress in developing our customer base in China, which has
offset much of the decline we experienced in other markets such as Hong Kong SAR
and Taiwan. Revenue from China grew by 40% during the three months ended
December 31, 2003 compared to the three months ended December 31, 2002 making
China the Company's largest market.

OPERATING EXPENSES

Sales

We utilize independent sales representatives employed by independent sales
representative organizations in various territories to promote our products and
services. Under these arrangements, the sales representatives are entitled to
commissions as well as marketing fees. Commissions expense is recorded when the
associated revenue is recognized or when the associated accounts receivable are
paid, whichever is earlier, and is included in sales expenses.

The sales representative organizations handle collections from customers on our
behalf. We include these collections as well as cash advances made to the sales
representatives in receivables from sales representatives. As of June 30, 2002,
the board of directors of two of these sales representative companies included a
director we nominated to monitor the receivables collected from our customers by
these related party sales representatives, and to monitor any changes to the
authorized signatories of the depository bank accounts. The nominated directors
were our employees. We and the nominated directors did not have any interest in
the share capital of the sales representative companies. However as of December
31, 2003 and December 31, 2002, we did not have any nominated directors on the
board of directors of any of our sales representative organizations.

Sales costs consist of the commissions and marketing fees paid and incentives
provided to our independent sales representatives as well as sales support fees
for processing sales contracts. These representatives sell online services,
advertisements in our trade magazines and exhibitor services and earn a
commission as a percentage of revenue generated. Sales costs increased from
$28.7 million during the year ended December 31, 2002 to $30.1 million during
the year ended December 31, 2003, an increase of 5% due to increase in revenue
of 5%.

Event Production

With the launch of China Sourcing Fairs in fourth quarter of 2003, we are
presenting the costs associated with production of the exhibition or trade show
and seminar events as a separate category in our Income Statement. Accordingly,
certain of our costs for first nine months of 2003 and prior periods have been
reclassified from sales costs to event production costs to conform to current
presentation.



                                       30
<PAGE>

Event production costs consist of the cost incurred for hosting the exhibition
or trade show and seminar events. The event production costs include venue
rental charges, booth construction costs, travel costs incurred for the event
hosting and other event organizing costs. The event production costs are
deferred and recognized as expense at the conclusion of the related events.

Event production costs remained at $0.9 million during the year ended December
31, 2003 and the year ended December 31, 2002, due to a decline in event
production costs of our technical seminars and exhibitions during year 2003,
which was offset by the additional production costs of our first China Sourcing
Fair, held in the fourth quarter of 2003. Event production costs are expected to
increase in 2004 from our sponsoring of six China Sourcing Fairs.

Community

During the third quarter of 2003, we enhanced the scope of our circulation
function and renamed it as Community Development. Certain items of costs for the
first half of 2003 and prior periods have been reclassified from general and
administrative costs to community costs to conform to our current year
presentation.

Community costs consist of the costs incurred for servicing our buyer community
and for marketing our products and services to the global buyer community.
Community costs also include costs relating to our trade magazine publishing
business, specifically printing, paper, bulk circulation, subscription
promotions, customer services costs and the marketing promotions costs incurred
for promoting the China Sourcing Fairs events to the buyer community. The
promotions costs incurred for promoting the China Sourcing Fairs to the buyer
community are deferred and recognized as expense at the conclusion of the
related events.

Community costs declined from $12.5 million during the year ended December 31,
2002 to $12.3 million during the year ended December 31, 2003, a decline of 2%
due mainly to a decline in payroll costs, rental costs of premises, utilities
and fees paid to third parties offset partially by an increase in buyer
marketing promotions costs.

General and Administrative

General and administrative costs consist mainly of corporate staff compensation,
information technology support services, content management services, marketing
costs, office rental, depreciation, communication and travel costs.

General and administrative costs declined marginally from $28.9 million during
the year ended December 31, 2002 to $28.7 million during the year ended December
31, 2003, due mainly to a decline in information technology support services
costs.

Online Services Development

Online services development costs consist mainly of payroll, office rental and
depreciation costs relating to the enhancements of Global Sources Online.

Online services development costs to fund the expansion of our online services
declined from $5.4 million during the year ended December 31, 2002 to $5.0
million during the year ended December 31, 2003, a decline of 7%. This decline
resulted mainly from a decline in depreciation costs.

Non-Cash Compensation Expenses

We have issued share awards under several equity compensation plans (ECP) to
both employees and team members. The total non-cash compensation expense,
resulting from the ECP, recorded by us during the year ended December 31, 2003
was $1.4 million compared to $2.6 million recorded during the year ended
Decem-



                                       31
<PAGE>

ber 31, 2002. This decline was a result of earlier share awards that were fully
vested in April 2003. The corresponding amounts for the non-cash compensation
expenses are credited to shareholders' equity.

Other Non-Cash Expenses

Other non-cash expenses consist mainly of amortization of software development
costs.

Other non-cash expenses during the year ended December 31, 2003 were $4.5
million, compared to $3.7 million for the year ended December 31, 2002.

Income from Operations

The total income from operations during the year ended December 31, 2003 was
$8.8 million compared to $4.8 million during the year ended December 31, 2002.
The improvement was mainly due to growth in revenue, declines in community
costs, general and administrative costs, online services development costs and
non-cash compensation expenses, offset partially by an increase in sales costs
and amortization of software development costs. Income from operations for
online services declined from $6.3 million during the year ended December 31,
2002 to $6.0 million during the year ended December 31, 2003, a decline of 5%.
The decline resulted mainly from an increase in amortization of software
development costs offset partially by a decline in online services development
costs.

Income Taxes

We and certain of our subsidiaries operate in the Cayman Islands and other
jurisdictions where there are no taxes imposed on companies. Certain of our
subsidiaries operate in Hong Kong SAR and Singapore and are subject to income
taxes in their respective jurisdictions. Also, we are subject to withholding
taxes for revenue earned in certain other countries.

We reported a tax provision of $0.7 million during the year ended December 31,
2003 and the year ended December 31, 2002.

Net Income

Net income was $7.3 million during the year ended December 31, 2003, compared to
a net income of $4.3 million during the year ended December 31, 2002. The
improvement was mainly due to growth in revenue, declines in community costs,
general and administrative costs, online services development costs, non-cash
compensation expenses and income taxes, offset partially by increases in sales
costs, amortization of software development costs, the share of profits
attributable to a minority shareholder during the year ended December 31, 2003
due to profitable performance of a subsidiary and decline in interest income.

FISCAL YEAR 2002 COMPARED TO FISCAL YEAR 2001

REVENUE

During the year ended December 31, 2002, our online services revenue declined by
$4.2 million or 8% to $51.3 million as compared with $55.5 million during the
year ended December 31, 2001. Revenue from our other media services declined by
$3.3 million or 9% to $33.1 million during the year ended December 31, 2002 as
compared with $36.4 million during the year ended December 31, 2001. Our
exhibitions or trade shows revenue declined by $0.1 million or 4% from $2.6
million to $2.5 million. Total revenue for the year ended December 31, 2002 was
$87.5 million compared with $95.3 million for the year ended December 31, 2001,
a decline of $7.8 million or 8%.

Revenue has been affected by the poor global economy, and especially the severe
recession in some of our traditional markets, Hong Kong SAR and Taiwan, which
together accounted for 60% of our revenue for fiscal year



                                       32
<PAGE>

2000. However, we have made substantial progress in developing our customer base
in China which has offset much of the decline in other markets. Revenue from
China grew by 10% during fiscal year 2002, making China the Company's largest
market and China accounted for 38% of total revenue in fourth quarter of fiscal
year 2002.

OPERATING EXPENSES

Sales

Sales costs consist of the commissions and marketing fees paid and incentives
provided to our independent sales representative organizations and sales support
costs. Sales costs declined from $31.2 million during the year ended December
31, 2001 to $28.7 million during the year ended December 31, 2002, a decline of
8% due mainly to a decline in revenue of 8%.

Event Production

Event production costs consist of costs incurred for hosting the exhibition or
trade show and seminar events. The event production costs include venue rental
charges, booth construction costs, travel costs incurred for the event hosting
and other event organizing costs.

Event production costs increased from $0.8 million during the year ended
December 31, 2001 to $0.9 million during the year ended December 31, 2002, an
increase of 13% due to increase in event organizing costs.

Community

Community costs consist of the costs incurred for servicing our buyer community
and for marketing our solutions to the global buyer community. The community
costs also include costs relating to our trade magazine publishing business,
specifically printing, paper, bulk circulation, subscription promotions and
customer services costs.

Community costs declined slightly from $12.7 million during the year ended
December 31, 2001 to $12.5 million during the year ended December 31, 2002, a
decline of 2% due to a decline in printing costs and paper consumption.

General and Administrative

General and administrative costs consist mainly of corporate staff compensation,
information and technology support services, content management services,
marketing costs, office rental, depreciation, communication and travel costs.

General and administrative costs declined from $32.7 million during the year
ended December 31, 2001 to $28.9 million during the year ended December 31,
2002, a decline of 12% due to our cost reduction measures that resulted in a
decline in marketing expenses, information technology support costs,
telecommunications costs and payroll costs, and a decline in content management
services costs in the first half of 2002.

Online Services Development

Online services development costs consist mainly of payroll, office rental and
depreciation costs relating to the enhancements of Global Sources Online.

Online services development costs to fund the expansion of our online services
declined from $8.4 million during the year ended December 31, 2001 to $5.4
million during the year ended December 31, 2002, a decline of 36%. This decline
resulted from reductions in fees paid to consultants and capitalization of costs
related to the internal development of new software and software tools.



                                       33
<PAGE>

Non-Cash Compensation Expenses

We have issued share awards under several equity compensation plans ("ECP") to
both employees and team members. The total non-cash compensation expense,
resulting from the ECP, recorded by us during the years ended December 31, 2002
and 2001 was $2.6 million and $2.5 million, respectively. The corresponding
amounts for the non-cash compensation expenses are credited to shareholders'
equity.

Other Non-Cash Expenses

Other non-cash expenses consist of amortization of software development costs
and amortization of intangibles.

Other non-cash expenses during the year ended December 31, 2002 were $3.7
million, consisting mainly of amortization of software development costs,
compared to $3.5 million for the year ended December 31, 2001, consisting of
$3.1 million for amortization of software development costs and $0.4 million for
amortization of intangibles.

Income from Operations

Income from operations for online services grew to $6.3 million during the year
ended December 31, 2002 from $6.0 million during the year ended December 31,
2001, an increase of 5%. The improvement resulted mainly from declines in sales
costs, general administrative costs and online development costs compared to
2001, offset partially by the decline in online services revenue. The total
income from operations during the year ended December 31, 2002 was $4.8 million
compared to $3.4 million during the year 2001. The improvement was mainly due to
declines in sales costs, general administrative costs and online development
costs compared to 2001, offset partially by the decline in total revenue.

Income Taxes

We and certain of our subsidiaries operate in the Cayman Islands and other
jurisdictions where there are no taxes imposed on companies. Certain of our
subsidiaries operate in Hong Kong SAR and Singapore and are subject to income
taxes in their respective jurisdictions. Also, we are subject to withholding
taxes for revenue earned in certain other countries.

We reported a tax provision of $0.7 million during the year ended December 31,
2002 and $1.1 million during the year ended December 31, 2001.

Net Income

Net income was $4.3 million during the year ended December 31, 2002, compared to
a net income of $0.8 million during the year ended December 31, 2001. The
improvement primarily was due to declines in sales costs, general and
administrative costs, online development costs and exchange loss compared to the
year ended December 31, 2001, and the $1.2 million write-down of investments
recorded in year 2001 and offset partially by a decline in revenue.

LIQUIDITY AND CAPITAL RESOURCES

We have reclassified the available-for-sale securities from cash and cash
equivalents and disclosed them separately in our balance sheet.

We financed our activities for year ended December 31, 2003 using cash generated
from our operations.

Net cash generated from operating activities was $25.3 million during the year
ended December 31, 2003 compared to $20.7 million cash generated from operating
activities during the year ended December 31, 2002. The



                                       34
<PAGE>

primary source of cash from operating activities was collections from our
customers received through our independent sales representative organizations.

Net cash used for investing activities was $10.1 million during the year ended
December 31, 2003, which was used principally for capital expenditures for
computers, softwares, software development, leasehold improvements and a motor
vehicle, and purchase of available-for-sale securities. Net cash used for
investing activities during the year ended December 31, 2002 was $29.9 million,
which was used principally for capital expenditure for computers, softwares,
software development, leasehold improvements and purchase of available-for-sale
securities.

Net cash generated from financing activities was $0.03 million during the year
ended December 31, 2003, which represents the amount received from directors for
the shares subscribed by them in the Directors Purchase Plan. Net cash generated
from financing activities was $0.05 million during the year ended December 31,
2002, which represents amount received from directors for the shares subscribed
by them in the Directors Purchase Plan.

We have an existing credit facility with Bank of Bermuda (Isle of Man) Limited,
which may be drawn upon in tranches of a minimum of $1.0 million. The lender may
request that we secure our borrowings under the credit facility. The credit
facility bears interest, payable quarterly in arrears, at the London Inter-Bank
Market Rate plus 0.5%. The credit facility can be used for investments, working
capital and general corporate purposes. Our previous principal shareholder, Hung
Lay Si Co. Ltd., has guaranteed all of the obligations under the credit
facility. On March 7, 2003, the credit facility was renewed for $10.0 million,
for one year subject to the same terms and conditions as applicable to the
original facility. We did not draw on that credit facility during the year ended
December 31, 2003, and we have no bank debt as at December 31, 2003. We did not
renew the credit facility for 2004.

We also hold a Documentary Credit facility with the Hongkong and Shanghai
Banking Corporation Limited, for providing documentary credits to our suppliers.
This facility has a maximum limit of approximately $0.6 million. As at December
31, 2003, the unutilized amount under this facility was approximately $0.3
million. Hongkong and Shanghai Banking Corporation Limited has also provided
guarantees on our behalf to our suppliers. As at December 31, 2003, such
guarantees amounted to $0.009 million.

We continuously monitor collections from our customers and maintain adequate
allowance for doubtful accounts. While credit losses have historically been
within our expectations and the allowances established, if the bad debts
significantly exceed our provisions, additional allowances may be required.

Advance payments received from customers were $27.5 million as of December 31,
2003, compared to $18.3 million as at December 31, 2002, improving our
liquidity. We anticipate that cash on hand, and cash generated from operations
will be adequate to satisfy our working capital, capital expenditure
requirements and cash commitments based on the current levels of our operations.

THE FOLLOWING TABLE SUMMARIZES OUR CONTRACTUAL OBLIGATIONS AS AT DECEMBER 31,
2003:

<TABLE>
<CAPTION>
                                                         PAYMENTS DUE BY PERIOD (IN U.S. DOLLARS THOUSANDS)
                                                         --------------------------------------------------
                                                                  LESS THAN       1-3            3-5    MORE THAN
                                                      TOTAL        1 YEAR        YEARS         YEARS     5 YEARS
                                                     --------     ---------    ---------     ---------  ---------
CONTRACTUAL OBLIGATIONS
<S>                                                  <C>           <C>           <C>               <C>        <C>
Operating leases..............................       $    499      $   468       $    31           --         --
Liabilities for incentive and bonus plans.....          1,025          343           375          307         --
Amount owed to Hung Lay Si Co., Ltd.(1).......         11,953           --         2,476        2,434      7,043
Purchase obligations..........................            395          395            --           --         --
                                                     --------      -------       -------      -------    -------
Total.........................................       $ 13,872      $ 1,206       $ 2,882      $ 2,741    $ 7,043
                                                     ========      =======       =======      =======    =======

</TABLE>

                                       35
<PAGE>

(1)  Interest on the principal amount owed to Hung Lay Si Co. Ltd will accrue
     beginning January 1, 2005 at the U.S. Federal Funds rate. The rate assumed
     for purpose of the contractual obligation on the amount owed to Hung Lay Si
     Co. Ltd is based on the U.S. Federal Funds rate as at December 31, 2003.

Subsequent to the balance sheet date, we entered into a number of licence
agreements for our exhibition events amounting to $29.9 million in payments over
five (5) years. The agreements are cancelable under Force Majeure conditions,
and with the consent of the other party but may be subject to a payment penalty.

On February 16, 2004, we announced a one for ten bonus share issue on our
outstanding common shares. Shareholders of record on March 1, 2004 will receive
one additional common share for every ten common shares held, of face value of
$0.01 each. The bonus share issue was distributed on April 1, 2004. All common
shares and per-share amounts in the consolidated financial statements and
related notes appearing elsewhere in this annual report have been retroactively
adjusted to reflect the eleven for ten share split for all periods presented.

RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." This statement addresses financial accounting and reporting for
obligations associated with the retirement of tangible long-lived assets and the
associated asset retirement costs. The purpose of this statement is to develop
consistent accounting for asset retirement obligations and related costs in the
financial statements and provides more information about future cash outflows,
leverage and liquidity regarding retirement obligations and the gross investment
in long-lived assets. We adopted SFAS No. 143 effective January 1, 2003 and
believe that the adoption of this standard did not have a material impact on the
Company's financial statements of position, results of operations, or cash
flows.

In December 2002, FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation - Transition and Disclosure," which requires additional disclosures
in interim and annual financial statements about the method of accounting for
stock-based employee compensation and the effect of the method used on reported
results. The disclosure provisions of SFAS No. 148 are effective for fiscal
years ending after December 15, 2002.

In January 2003, FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities." FIN 46 requires a beneficiary to consolidate a variable interest
entity ("VIE") if it is the primary beneficiary of that entity. The primary
beneficiary is defined as having a variable interest in a VIE that will absorb a
majority of the entity's expected losses if they occur, receives a majority of
the entity's expected residual returns if they occur, or both. In December 2003,
FASB completed deliberations of proposed modifications to FIN 46 ("Revised
Interpretations") resulting in multiple effective dates based on the nature as
well as the creation date of the VIE. VIEs created after January 31, 2003, but
prior to January 1, 2004, may be accounted for either based on the original
interpretation or the Revised Interpretations. However, the Revised
Interpretations must be applied no later than the Company's first quarter of
fiscal 2004. VIEs created after December 31, 2003 must be accounted for under
the Revised Interpretations. Special Purpose Entities ("SPEs") created prior to
February 1, 2003, may be accounted for under the original or revised
interpretation's provisions no later than the first period ending after December
15, 2003. Non-SPEs created prior to February 1, 2003, should be accounted for
under the revised interpretation's provisions no later than the Company's first
quarter of fiscal 2004. We believe that the adoption of FIN 46 will not have a
material impact on the Company's financial statements of position, results of
operations, or cash flows.

In November 2002, the EITF reached consensus on EITF Issue No. 00-21,
"Accounting for Revenue Arrangements with Multiple Deliverables," which
addresses how to account for arrangements that may involve the delivery or
performance of multiple products, services, and/or rights to use assets. The
final consensus of EITF 00-21 is applicable to agreements entered into in fiscal
periods beginning after June 15, 2003. We believe that the adoption of EITF
00-21 does not have a material impact on the Company's financial statements of
position, results of operations or cash flows.



                                       36
<PAGE>

QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

We operate internationally and foreign exchange rate fluctuations may have a
material impact on our results of operations. Historically, currency
fluctuations have been minimal on a year to year basis in the currencies of the
countries where we have operations. As a result, foreign exchange gains or
losses in revenue and accounts receivable have been offset by corresponding
foreign exchange losses or gains arising from expenses. However, during the
Asian economic crisis of 1997 to 1998, both advertising sales and the value of
Asian currencies declined, which caused a significant decline in our revenue
that was not fully offset by lower expense levels in Asian operations.

This decline in revenue occurred due to contracts being denominated and priced
in foreign currencies prior to devaluations in Asian currencies. The conversion
of these contract proceeds to U.S. dollars resulted in losses and reflects the
foreign exchange risk assumed by us between contract signing and the conversion
of cash into U.S. dollars. We believe this risk is mitigated because
historically a majority (ranging between 55% to 60%) of our revenue is
denominated in U.S. dollars or is received in the Hong Kong currency which is
currently pegged to the U.S. dollar. Correspondingly, a majority (approximately
85%) of our expenses are denominated in Asian currencies. To the extent
significant currency fluctuations occur in the New Taiwan dollar, the Chinese
Renminbi or other Asian currencies, or if the Hong Kong dollar is no longer
pegged to the U.S. dollar, our revenue and expenses may fluctuate in tandem thus
reducing the net impact on our profits.

In the years ended December 31, 2002 and 2003, we have not engaged in foreign
currency hedging activities.

During the years ended December 31, 2002 and 2003, we derived more than 90% of
our revenue from customers in the Asia-Pacific region. We expect that a majority
of our future revenue will continue to be generated from customers in this
region. Future political or economic instability in the Asia-Pacific region
could negatively impact our business.

ITEM 6.  DIRECTORS AND SENIOR MANAGEMENT

     The following table sets forth information regarding the persons who are
our executive officers and directors.

        NAME                             AGE      POSITION
        ----                             ---      --------
        Merle A. Hinrichs.........        62      Director, Chairman
                                                    and Chief Executive Officer
        Eddie Heng Teng Hua.......        53      Director and Chief
                                                    Financial Officer
        J. Craig Pepples..........        43      Chief Operating Officer
        Bill Georgiou.............        59      Chief Information Officer
        Sarah Benecke.............        47      Director
        Roderick Chalmers.........        56      Director
        Dr. H. Lynn Hazlett.......        67      Director
        David F. Jones............        39      Director
        Jeffrey J. Steiner........        67      Director

Mr. Hinrichs has been a director since April 2000 and is currently our Chairman
and Chief Executive Officer. Mr. Hinrichs is our co-founder and was the
principal executive officer of our predecessor company, Trade Media Holdings
Limited, a Cayman Islands corporation which is now wholly owned by us ("Trade
Media"), from 1971 through 1993 and resumed that position in September 1999.
From 1994 to August 1999, Mr. Hinrichs was chairman of the ASM Group, which
included Trade Media. Mr. Hinrichs is a director of Trade Media and has also
been the Chairman of the Board of Trade Media. Mr. Hinrichs graduated from the
University of Nebraska and Thunderbird, the American Graduate School of
International Management ("Thunderbird"). Mr. Hinrichs is a co-founder and
former chairman of the Society of Hong Kong Publishers. He is a member of the
board of trustees of Thunderbird and is a board member of the Economic Strategy
Institute. His term as director expires in 2006.



                                       37
<PAGE>

Mr. Heng has been the Chief Financial Officer (previously entitled vice
president of finance) since 1994 and has been a director since April 2000. He
joined us in August 1993 as deputy to the vice president of finance. He received
an MBA from Shiller International University in London in 1993, is a Singapore
Certified Public Accountant, a member of the Institute of Certified Public
Accountants, Singapore, and a Fellow Member of The Association of Chartered
Certified Accountants in the United Kingdom. Prior to joining us, he was the
regional financial controller of Hitachi Data Systems, a joint venture between
Hitachi and General Motors. His term as director expires in 2004.

Mr. Pepples has been our Chief Operating Officer since June 1999 and is
responsible for our worldwide operations, including interactive media, corporate
marketing, community development, information services, human resources and
finance. Mr. Pepples joined Trade Media in October 1986 in an editorial
capacity, managed Trade Media's sales in China from 1989 to 1992, and served as
country manager for China from 1992 to June 1999. Mr. Pepples graduated with a
B.A. in Linguistics from Yale University.

Mr. Georgiou was appointed our Chief Information Officer (previously Chief
Technology Officer) in January 2001. Mr. Georgiou has had over 20 years'
experience in information technology, most recently as a consultant with 3Com
Technologies during 2000 and as IT Director with Park N'Shop (HK) Ltd., a
subsidiary company of A.S. Watson, from 1999 to 2000. He received his B.Ec.
(Honours degree) and M.B.A. from the University of Adelaide.

Ms. Benecke has been a director since April 2000, and, since 1993, has been a
director of Trade Media Holdings Ltd. Ms. Benecke was our principal executive
officer from January 1994 through August 1999. She joined us in May 1980 and
served in numerous positions, including publisher from 1988 to December 1992 and
chief operating officer in 1993. Since September 1999, Ms. Benecke has been a
consultant to Publishers Representatives, Ltd. (Hong Kong), a subsidiary of our
company. She is also a director of Hintak Ltd. (Hong Kong). She graduated with a
B.A. from the University of New South Wales, Australia. Her term as director
expires in 2004.

Mr. Chalmers has been a director since October 2000. He was chairman,
Asia-Pacific, of PricewaterhouseCoopers LLP ("PwC") and a member of PwC's Global
Management Board from 1998 until his retirement in July 2000. He was a 30-year
veteran with PwC's merger partner Coopers & Lybrand with specialist experience
in the securities industry. He has at various times been a non-executive
director of the Hong Kong SAR Securities and Futures Commission, a member of the
Takeovers and Mergers Panel, and chairman of the Working Group on Financial
Disclosure. He is a director of Gasan Group Limited (Malta) and Gasan Mamo
Insurance Co. Limited (Malta). His term as director expires in 2006.

Dr. H. Lynn Hazlett has been a director since October 2000. He was a former
chief executive officer and president of QRS Corporation, a leading US-based
provider of supply chain management solutions to the retail industry, until his
retirement in 2000. He previously managed Supply Chain Associates, an
international consulting firm until 1997. Prior to that he was corporate vice
president at VF Corporation, the US apparel company, from 1989 to 1994.
Currently he is the owner and managing partner of RxD Citrus Ltd., a grower of
citrus fruit. He is also managing partner of AMI Bayshore Developer LLC and GFB
LLC, both coastal land development companies. Dr. Hazlett has a doctorate in
Economics and Automated Systems from George Washington University. His term as
director expires in 2005.

Mr. Jones has been a director since April 2000. Mr. Jones was an executive at
MacQuarie Direct Investment, a venture capital firm in Sydney, Australia from
1994 to August 1999. He founded and ran UBS Capital in Australia from July 1999
to September 2002. Since September 2002, Mr. Jones has been a director of Castle
Harlan Australian Mezzanine Partners Pty. Limited, an Australian buyout firm. He
is currently a director of the following companies: Otowa Pty Ltd.; Sheridan
Australia Pty Ltd.; Austar United Ltd.; New Price Retail; and Penrice Soda
Products Pty Ltd. Mr. Jones has an MBA from Harvard Business School and is a
mechanical engineering graduate from the University of Melbourne. His term as
director expires in 2005.



                                       38
<PAGE>

Mr. Steiner has been a director since November 1999. Mr. Steiner also has been a
director of The Fairchild Corporation ("Fairchild") since 1985. He has been the
chairman of the board and chief executive officer of Fairchild from December
1985 to the present. Mr. Steiner was president of Fairchild from July 1991 to
September 1998. His term as director expires in 2006.

In 2003, Mr. Jeffrey Steiner was convicted in France on a charge of unjustified
use (in 1990) of the corporate funds of Elf Acquitaine, which is a criminal
offense in France. Mr. Steiner was given a suspended sentence of one year and
ordered to pay a fine of (Euro)500,000 by the French court.

COMPENSATION

For the year ended December 31, 2003, we and our subsidiaries provided our nine
directors and executive officers as a group aggregate remuneration, pension
contributions, allowances and other benefits of approximately $2,370,591
including the non-cash compensation of $301,013 associated with the share award
and ECP plans. Of that amount, $195,000 was paid under a performance based,
long-term discretionary bonus plan which we implemented in 1989 for members of
our senior management. Under the plan, members of senior management may, at our
discretion, receive a long-term discretionary bonus payment. The awards, which
are payable in either five or ten years time, are paid to a member of senior
management if his or her performance is satisfactory to us. There are five
current members of senior management and four former members of senior
management who may receive payments on maturity.

In 2003, we and our subsidiaries incurred $30,079 in costs to provide pension,
retirement or similar benefits to our respective officers and directors pursuant
to our retirement plan and pension plan.

EMPLOYMENT AGREEMENTS

We have employment agreements with Merle A. Hinrichs under which he serves as
our chairman and chief executive officer and as president of Global Sources USA,
Inc., one of our subsidiaries. The agreements contain covenants restricting Mr.
Hinrichs' ability to compete with us during his term of employment and
preventing him from disclosing any confidential information during the term of
his employment agreement and for a period of three years after the termination
of his employment agreement. In addition, we retain the rights to all trademarks
and copyrights acquired and any inventions or discoveries made or discovered by
Mr. Hinrichs in the course of his employment. Upon a change of control, if Mr.
Hinrichs is placed in a position of lesser stature than that of a senior
executive officer, a significant change in the nature or scope of his duties is
effected, Mr. Hinrichs ceases to be a member of the board or there is a breach
of those sections of his employment agreements relating to compensation,
reimbursement, title and duties or termination, each of us and such subsidiary
shall pay Mr. Hinrichs a lump sum cash payment equal to five times the sum of
his base salary prior to the change of control and the bonus paid to him in the
year preceding the change of control. The agreements may be terminated by either
party by giving six months notice.

We have employment agreements with each of our executive officers. Each
employment agreement contains a non-competition provision, preventing the
employee from undertaking or becoming involved in any business activity or
venture during the term of employment without notice to us and our approval. The
employee must keep all of our proprietary and private information confidential
during the term of employment and for a period of three years after the
termination of the agreement. We can assign the employee to work for another
company if the employee's duties remain similar. In addition, we retain the
rights to all trademarks and copyrights acquired and any inventions or
discoveries made or discovered by the employee during the employee's term of
employment. Each employment agreement contains a six months' notice provision
for termination, and does not have a set term of employment. Bonus provisions
are determined on an individual basis.

BOARD PRACTICES

Our board of directors consists of seven members divided into three classes, the
terms of which expire at the general meeting of shareholders to be held in each
year indicated above. Each director holds office until his or



                                       39
<PAGE>

her term expires and his or her successor has been elected and qualified. At
each general meeting of shareholders, directors nominated to a class with a term
that expires in that year will be elected for a three-year term. Executive
officers serve at the discretion of the board of directors. Officers are elected
at the annual meeting of the directors held immediately after the annual general
meeting of shareholders. Our executive officers have, on average, 16 years of
service with us. Directors receive a cash fee of $10,000 per year, plus an
additional $2,500 for each board meeting attended.

COMMITTEES OF THE BOARD OF DIRECTORS

We have established an audit committee and an executive committee of our board
of directors. The audit committee recommends the appointment of auditors,
oversees accounting and audit functions and other key financial matters of our
company. David Jones, Roderick Chalmers and Lynn Hazlett are the members of the
audit committee and the board of directors determined that Mr. Chalmers is an
audit committee financial expert as defined under appropriate SEC guidelines.
The executive committee acts for the entire board of directors between board
meetings. Merle Hinrichs and Eddie Heng are the members of the executive
committee.

CODE OF ETHICS

We have adopted a Code of Ethics ("Code of Ethics") that applies to our chief
executive officer, chief financial officer, chief accounting officer or
controller and persons performing similar functions. Any amendments or waivers
to our Code of Ethics that apply to the chief executive officer or senior
financial officers will be promptly disclosed on our website as required by law
or by the Securities and Exchange Commission or by the Nasdaq National Market.

EMPLOYEES

As of December 31, 2003, we had 464 employees worldwide, the majority of whom
work in management, technical or administrative positions. We consider our
employee relationships to be satisfactory. Our employees are not represented by
labor unions and we are not aware of any attempts to organize our employees.

The following summarizes the approximate number of employees and independent
contractors by function:

<TABLE>
<CAPTION>
                                                                                     INDEPENDENT
FUNCTION                                                              EMPLOYEES      CONTRACTORS         TOTAL
--------                                                              ---------      -----------         -----

<S>                                                                      <C>             <C>              <C>
Content Development...........................................           103             186              289
Corporate Human Resources & Administration....................            34              38               72
Corporate Marketing...........................................             8              37               45
Community Development.........................................            91              25              116
Sales.........................................................             9             870              879
Publishing....................................................            17              49               66
Electronic Commerce Services..................................             6              16               22
Information System Department.................................           109              29              138
Corporate Accounts............................................            62              57              119
Office of the CEO, COO........................................             9               0                9
Legal and Group Secretarial...................................             4               6               10
Conference & Exhibition Services..............................            12               4               16
                                                                     ---------      -----------         -----
      TOTAL...................................................           464           1,317            1,781
                                                                     =========      ===========         =====

</TABLE>

SHARE OWNERSHIP

Information on the ownership of our Common Shares is given on pages 44-46 under
Item 7, Major Shareholders and Related Party Transactions.



                                       40
<PAGE>

EQUITY COMPENSATION PLANS

We established The Global Sources Employee Equity Compensation Trust (the
"Trust") on December 30, 1999. The Trust is administered by Harrington Trust
Limited, as trustee. The purpose of the Trust is to administer monies and other
assets contributed to the trustee for the establishment of equity compensation
and other benefit plans, including the equity compensation plans described
below. The number of shares that may be sold pursuant to these plans is limited
to the number of our shares held by the Trust. Following our takeover of Trade
Media on April 14, 2000, the Trade Media shares were exchanged for our common
shares. These Trade Media shares currently represent our common shares. As of
December 31, 2003 after adjustment to reflect the share split discussed in Note
26 to our consolidated financial statements included elsewhere in this document,
the Trust holds 2,165,844 of our common shares. The Trust has informed us that
it does not intend to acquire any additional shares. In exercising its powers,
including the voting of securities held in the Trust, the trustee may be
directed by a plan committee, selected by the board of directors of one of our
wholly owned subsidiaries.

Global Sources Equity Compensation Plans Numbers I, II and III

In March 2000, we adopted the Global Sources Equity Compensation Plans (ECP)
Numbers I, II and III. Employees, directors, consultants, advisors and
independent contractors of ours, our subsidiaries or affiliates are eligible to
receive option grants under ECP I. Employees, directors and consultants of ours,
our subsidiaries or affiliates are eligible to receive grants under ECP II and
III. Options granted under ECP I and II will be exercisable, and coupons granted
under ECP III will be redeemable, for our shares held by the Trust.

ECPs I, II and III are administered by the trustee subject to the directions of
the plan committee of one of our wholly-owned subsidiaries. The plan committee
determines who will receive, and the terms of, the options under ECP I and II.
The exercise price of these options may be below the fair market value of our
shares. Under ECP I, payment for shares being purchased upon exercise of an
option may be made in the manner determined by us at the time of grant. Under
ECP II optionees may pay for common shares purchased upon exercise of options by
check to the Trust. Under ECP II, the number of common shares that optionees may
purchase is based on the number of years they have been employed by, or have
been working with us, our subsidiaries or affiliates.

Under ECP III, outstanding coupons are redeemable for a defined amount of
compensation payable in our common shares, which will be transferred from the
Trust to the coupon holders. The number of shares will be determined by dividing
the amount of compensation awarded by an amount determined by the plan
committee. Under each of ECPs I and III, the maximum number of shares that may
be issued to any individual in any calendar year may not exceed 25% of the total
shares available under such plan.

On each of the first three annual anniversaries of the listing of our common
shares on a securities exchange, the trustee will release one-third of the
common shares purchased by an optionee, under ECP II, and one-third of the
shares granted to each coupon holder, under ECP III, if such optionee or holder,
as the case may be, is still employed with us on these dates. Under ECP II, the
consideration paid for any common shares purchased by an optionee fired for
cause or who becomes an employee of one of our competitors, but not yet released
by the trustee, will be returned to the optionee by the Trust and the right to
receive these shares will be forfeited and revert back to the trustee. Under ECP
III, common shares allotted by, but not yet released by the trustee, to an
employee who is subsequently fired for cause or who becomes an employee of one
of our competitors, are forfeited and revert back to the trustee for future use.
Options are not transferable under ECPs I and II and coupons are not
transferable under ECP III.

Under ECPs I and II, all options held by an optionee terminate on the date of
that optionee's termination for cause or resignation. Death, disability or
retirement does not affect an optionee's right to exercise an option.

All outstanding options are adjusted to preserve the optionee's benefits under
ECPs I and II and all outstanding common shares are adjusted to preserve the
interests of the holders of these common shares under ECP III if



                                       41
<PAGE>

there is a change in the number of our outstanding common shares or an exchange
for securities of a successor entity as a result of our: (i) reorganization;
(ii) recapitalization; (iii) stock dividend; or (iv) stock split.

If a person or group of persons acting together becomes the beneficial owner of
at least 50% of our issued and outstanding common shares, by tender offer or
otherwise, all unexercised options under ECPs I and II become immediately
exercisable and all optionees will be entitled to sell to the trustee all
unexercised options at a price equal to the greater of fair market value or the
tender offer price.

If ECPs I, II and III terminate, all optionees will be entitled to sell to the
trustee all unexercised options at a price equal to the difference between the
fair market value of the common shares and the aggregate exercise price of the
options under ECPs I and II and securities and any cash held by the trustee
shall be distributed in equal shares to people who received coupons under ECP
III, upon our: (i) dissolution or liquidation; (ii) reorganization, merger or
consolidation; or (iii) sale of our business. If none of these events occurs,
ECPs I, II and III terminate in February 2010.

The non-cash compensation expense associated with the awards under ECP II and
ECP III of approximately $2,904,000 and $2,357,000, respectively, were
recognized ratably over the three year vesting term from the respective award
dates.

Global Sources Equity Compensation Plans Numbers IV and V

Eligible employees, directors, consultants, advisors and independent contractors
under ECP IV are awarded a defined amount of compensation payable in Global
Sources Ltd. common shares the number of which are determined by the plan
committee periodically.

Entitlement of the employees, directors, consultants, advisors and independent
contractors to these common shares is subject to employment and vesting terms.

Eligible employees, directors, consultants, advisors and independent contractors
under ECP V were awarded a one-time grant of shares the number of which were
determined by the plan committee.

Entitlement of the employees, directors, consultants, advisors and independent
contractors to these common shares is subject to employment and vesting terms.

The Equity Compensation Plan committee approved the awards of common shares
under ECP IV and ECP V on January 23, 2001. The Equity Compensation Plan
Committee approved additional awards of common shares under ECP IV on April 1,
2001 and July 1, 2001 and under ECP V in January 2002.

The non-cash compensation expenses associated with the above awards under ECP IV
and ECP V of approximately $3,095,000 and $1,823,000, respectively, are
recognized over the five year vesting term from the respective award dates.

Global Sources Equity Compensation Plan VI

Eligible employees, directors, consultants, advisors and independent contractors
under ECP VI are awarded a one-time grant of our common shares the number of
which are determined by the plan committee.

Entitlement of the employees, directors, consultants, advisors and independent
contractors to these common shares is subject to non-compete and vesting terms.

The Equity Compensation Plan committee approved the ECP VI on March 13, 2001 and
made awards of common shares under the plan on various dates during the year
2001 and 2002.



                                       42
<PAGE>

The non-cash compensation expenses associated with the awards in accordance with
ECP VI totaling approximately $589,000 are recognized over the five year vesting
term from the respective award dates.

Global Sources Equity Compensation Plan VII

Eligible employees, directors, consultants, advisors and independent contractors
under ECP VII are awarded a grant of a defined number of our common shares, the
number of which are determined by the plan committee periodically.

Entitlement of the employees, directors, consultants, advisors and independent
contractors to these common shares is subject to employment and vesting terms.

The Equity Compensation Plan committee approved the awards of common shares
under ECP VII in January 2002 and made further awards on March 31, 2003 and on
June 19, 2003. The non-cash compensation expenses associated with the above
awards under ECP VII of approximately $1,967,000 are recognised over the six
year vesting term from the respective award dates.

DIRECTORS PURCHASE PLAN

A 2000 Non-Employee Directors Share Option Plan was approved on October 26, 2000
by our shareholders. Each eligible director on the date of the first board
meeting of each calendar year, commencing in 2001, receives the grant of an
option to purchase 22,000 common shares on that date. The options granted are
subject to such terms and conditions as determined by the board of directors at
the time of the grant.

The option price per share, payable before the end of each February, is
determined by the board of directors for each such grant of options. The
non-employee directors may decline all or part of the award, which is
non-transferable.

The board of directors granted the first awards under the above plan in 2001.
The option price was fifteen percent less than the average closing price of the
shares for the last five trading days of the previous calendar year. Full
payment must be made upon exercising the option. The award vests over four years
with one quarter of the shares vesting each year. Upon resignation of an
eligible director, all unvested shares are forfeited and the option price
received for the forfeited unvested shares is refunded. Only one director
accepted the offer for the 22,000 shares granted under the option on February
10, 2001. On February 28, 2002, 2003 and 2004, we issued to the director 5,500,
5,500 and 5,500 of our common shares, respectively, that vested on those dates,
adjusted to reflect the share split discussed in Note 26 to the consolidated
financial statements. As of December 31, 2003, $164,300 from the proceeds of
this plan was included in additional paid in capital.

As per the terms of the plan, the board of directors granted options to all
eligible directors in February 2002. These awards will vest after four years.
Optionees must pay 15% of the option price, which is the average closing price
of the shares for the last five trading days of year 2001, at the time of
exercising the option. The balance of 85% must be paid on or before the vesting
date. The resignation of a director following his or her exercise of the grant
of options and payment of the option price shall not cause a forfeiture of the
unvested shares. All the eligible non-employee directors accepted the offer
before February 28, 2002. We received $49,896 towards the 15% of the option
price which was included in additional paid in capital.

The board of directors granted options to all eligible directors again in
February 2003. These awards will vest after four years. Optionees must pay 10%
of the option price, which is the average closing price of the shares for the
last five trading days of year 2002, at the time of exercising the option. The
remaining 90% must be paid on or before the vesting date. The resignation of a
director following his or her exercise of the grant of options and payment of
the option price shall not cause a forfeiture of the unvested shares. Three
eligible directors accepted the offer before February 28, 2003. The $29,700
received towards the 10% of the option price was included in the additional paid
in capital.



                                       43
<PAGE>

On May 8, 2003, shareholders approved the amendments to the 2000 Non-Employee
Directors Share Option Plan to allow both employee and non-employee directors to
participate in the plan. The plan was renamed as Directors Purchase Plan by the
board of directors on August 14, 2003.

Directors purchasing the shares under the plan pay 10% of the purchase price
which is the average closing price of the shares for the last five trading days
of year 2003, on or before February 28, 2004. The balance of 90% is paid by
February 28, 2008 and the shares will be issued thereafter. The resignation of a
director following his or her purchase of the shares and payment of the 10%
initial installment shall not cause a forfeiture of the purchased shares. Six
directors opted to purchase 22,000 shares each and a director opted to purchase
part of the 22,000 shares. The amount of $92,069 received towards the 10% of the
purchase price will be included in the additional paid in capital.

         ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

MAJOR SHAREHOLDERS

The following table sets forth information about those persons who hold more
than 5% of our common shares and the share ownership of our directors and
officers as a group. The information is based upon our knowledge of the share
ownership of such persons on April 1, 2004.

Prior to November 27, 2003, the Quan Gung 1986 Trust (through Hung Lay Si Co.
Ltd., its wholly owned subsidiary) beneficially owned approximately 61% of our
common shares. Hung Lay Si Co. Ltd. is a company organized under the laws of the
Cayman Islands. The Quan Gung 1986 Trust was formed under the laws of the Island
of Jersey. Counsel to the trustee has informed us that, by virtue of the terms
of the Trust and the laws of the Island of Jersey, the trustee cannot make
disclosure of the names of the beneficiaries and settlor of the Trust in breach
of the obligations placed on it and in accordance with its duties of
confidentiality.

On November 27, 2003, Merle A. Hinrichs acquired 15,033,846 of our common
shares, after adjustment to reflect the share split resulting from our bonus
share distribution of one share for every ten shares held as of March 1, 2004,
representing 51.9% of the outstanding common shares, from Hung Lay Si Co. Ltd.
As a result, Mr. Hinrichs owns approximately 67.2% of our outstanding common
shares. As consideration for the purchase of the common shares, Mr. Hinrichs
agreed to pay Hung Lay Si Co. Ltd. the purchase price of $109,337,056 payable on
November 27, 2013. Mr. Hinrichs has granted to Hung Lay Si Co. Ltd. a security
interest in all 15,033,846 common shares he purchased pending payment of the
consideration. A copy of the purchase agreement and security agreement was filed
by Mr. Hinrichs with the SEC on Schedule 13D on December 8, 2003, and jointly by
the Trust and Hung Lay Si Co. Ltd. on Schedule 13D/A on the same day, and
reference is made to those filings for the complete terms of the transaction.
The agreements provide that in the event of cash dividends declared and paid by
us, Mr. Hinrichs will pay to Hung Lay Si Co. Ltd. 50% of the dividends for any
of the common shares purchased by Mr. Hinrichs that remain subject to Hung Lay
Si Co. Ltd.'s security interest in the shares. If Mr. Hinrichs wishes to
transfer or sell any shares subject to those agreements to someone other than
Hung Lay Si Co. Ltd., Hung Lay Si Co. Ltd. has a right of first refusal to offer
to purchase those shares. If Hung Lay Si Co. Ltd. waives its right to purchase
the shares, upon consummation of a sale to the other person, at least 80% of the
proceeds of the sale will be applied to the payment of the purchase price. Hung
Lay Si Co. Ltd. may also be deemed, under Securities and Exchange Commission
rules, to be a beneficial owner of the shares in which it has a right of first
refusal and a security interest.

                                             COMMON SHARES BENEFICIALLY OWNED
                                             ----------------------------------
NAME OF BENEFICIAL OWNER                        SHARES             PERCENTAGE
-----------------------------------          --------------      --------------
Merle A. Hinrichs..................              19,456,864              67.2%
Hung Lay Si Co. Ltd................               2,605,082               9.0%
Harrington Trust Limited...........               2,394,620               8.3%
Jeffrey J. Steiner (1).............                 366,812               1.3%
Eddie Heng Teng Hua................                       *               *
J. Craig Pepples...................                       *               *


                                       44
<PAGE>

Bill Georgiou......................                       *               *
Sarah Benecke......................                       *               *
David F. Jones.....................                       *               *
Roderick Chalmers..................                       *               *
Dr. H. Lynn Hazlett................                       *               *
All officers and directors
  as a group (9 persons)...........              19,920,400              68.8%
________________________

* Indicates beneficial ownership of less than 1%.

(1)  Mr. Jeffrey J. Steiner may be deemed to beneficially own the same common
     shares owned directly or beneficially by The Steiner Group LLC. Mr. Steiner
     disclaims beneficial ownership of shares owned by The Steiner Group LLC,
     the Jeffrey Steiner Family Trust and shares owned by him as custodian for
     his children. The Steiner Group LLC is a Delaware limited liability
     company.

At April 1, 2004, we believe that 3,143,732 of our shares or 10.86%, were
beneficially owned by U.S. holders and there were 827 shareholders of record in
the U.S.

Mr. Merle A. Hinrichs, our Chairman and Chief Executive Officer, beneficially
owns approximately 67.2% of our common shares and is deemed our controlling
shareholder.

Our major shareholders do not have different voting rights. We do not know of
any arrangement which may at a subsequent date result in a change in control of
our company.

RELATED PARTY TRANSACTIONS

On December 31, 2003, we had $11,404,000 in obligations due to our former
controlling shareholder.

These obligations arose from:

     o    the transfer of intangibles, including copyrights for magazines, from
          Hung Lay Si Co. Ltd. to us in 1983; and

     o    allocations of operating expenses from Hung Lay Si Co. Ltd. and its
          affiliates to us prior to year 2000, when we became a public company
          pursuant to a share exchange.

Effective January 1, 2000, we executed an unsecured promissory note in the
principal amount of $11,404,000 to establish the repayment terms of these
obligations owed to Hung Lay Si Co. Ltd. On January 1, 2005, we will begin
repayment of this promissory note by making quarterly payments of principal and
interest over the following ten years. Interest will accrue beginning on January
1, 2005 at the U.S. Federal Funds rate on the following business day and will be
adjusted quarterly. For each subsequent interest period, the interest rate will
be the U.S. Federal Funds rate on the first business day of the applicable
calendar quarter. If we fail to make a timely payment, the interest rate on that
payment will be adjusted quarterly to equal 2% over the U.S. Federal Funds rate
on the first business day of each calendar quarter that payment and the accrued
but unpaid interest are outstanding until that payment is made. The interest
that accrues on the unpaid amount will be payable quarterly unless Hung Lay Si
Co. Ltd. demands immediate payment. If we fail to make a payment, Hung Lay Si
Co. Ltd. may also accelerate the promissory note and demand full payment.

We have extended loans to some of our employees for the sole purpose of
financing the purchase or lease of a residence. The loans for the purchase of a
residence are secured by that residence, bear interest at a rate of LIBOR plus 2
to 3%, generally have a term of ten years and become due and payable immediately
upon the termination of the employee's employment. The loans for the lease of a
residence are unsecured, interest free and are repayable in equal monthly
installments over the period of the lease, which is typically less than or equal
to 12 months. The maximum loan amounts are limited to the lower of the aggregate
of two years' gross compensation of the borrower or $500,000. The loans were
made upon terms and subject to conditions that are



                                       45
<PAGE>

more favorable to the borrowers than those that would customarily be applied by
commercial lending institutions in the borrower's country of employment. Since
the beginning of 2000, the largest aggregate amount of indebtedness of Mr.
Pepples to us, outstanding at any time during such period, was approximately
$32,233. Mr. Pepples has repaid his loan in full in November 2002. Mr. Pepples'
loan was interest free and unsecured. Except for the aforementioned loan, there
were no other loans due from our directors and executive officers as at December
31, 2002 and 2003. We do not expect to extend loans to our directors or
executive officers to the extent such loans would be prohibited by the
Sarbanes-Oxley Act of 2002.

We lease approximately 90,157 square feet of our office facilities from
companies controlled by a wholly-owned subsidiary of Hung Lay Si Co. Ltd. under
cancelable and non-cancelable operating leases and incur building maintenance
services fees to our former affiliated companies. We incurred rental and
building services expenses of $756,428 during the year ended December 31, 2003.
We also receive legal, secretarial and treasury management consultancy services
from wholly-owned subsidiaries of Hung Lay Si Co. Ltd. The expenses incurred for
these services during the year ended December 31, 2003 was $258,677.

On March 17, 2000 we entered into a revolving credit facility with Bank of
Bermuda (Isle of Man) Limited. The credit facility has a term of one year and
provides for borrowings of up to $25.0 million, with minimum borrowings of $1.0
million. The credit facility beared interest, payable quarterly in arrears, at
LIBOR plus 0.5%. When we entered into the credit facility, we paid the bank an
arrangement fee of approximately $16,000. Hung Lay Si Co. Ltd. guaranteed all of
our obligations under the credit facility. Hung Lay Si Co. Ltd. did not receive
a fee for issuing this guarantee. We repaid the loan in full by December 31,
2001. On March 20, 2002, we renewed the credit facility for $10.0 million for
one year subject to the same terms and conditions as applicable to the original
facility. We did not draw on the credit facility during our fiscal year 2002. On
March 7, 2003, we renewed the credit facility for $10.0 million for a further
one year period subject to the same terms and conditions as applicable to the
original facility. We did not draw on the credit facility during our fiscal year
2003. We did not renew the credit facility for 2004.

We also have a documentary credit facility with the Hongkong and Shanghai
Banking Corporation Limited, for providing documentary credits to our suppliers.
As at December 31, 2002, this facility had a maximum limit of $0.8 million. One
of our former fellow subsidiaries has guaranteed our obligation under this
facility. This facility has been renewed during the year 2003 for a maximum
limit of $0.577 million and at the time of renewal, the guarantee given by our
former fellow subsidiary was released. The largest amount outstanding under this
facility during the fiscal year 2003, prior to the renewal date, was $0.475
million.

For further information on these transactions, see the notes to our audited
consolidated financial statements included elsewhere in this annual report.

We believe these transactions are commercially reasonable in the jurisdictions
where we operate and for our employees where they reside or work.

     ITEM 8. FINANCIAL INFORMATION

CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES

                   Index to Consolidated Financial Statements
                                December 31, 2003

                                                                     PAGE

Reports of Independent Public Accountants........................   47-49
Consolidated Balance Sheets......................................    49
Consolidated Statements of Income................................    50
Consolidated Statements of Cash Flows............................    51
Consolidated Statement of Shareholders' Equity...................    52
Notes to Consolidated Financial Statements.......................   53-76



                                       46
<PAGE>


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of
Global Sources Ltd.

We have audited the accompanying consolidated balance sheets of Global Sources
Ltd. (a company incorporated under the laws of Bermuda) and its subsidiaries as
of December 31, 2003 and 2002, and the related consolidated statements of
income, shareholders' equity and cash flows for each of the two years in the
period ended December 31, 2003. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits. The financial
statements of the Company as of December 31, 2001 were audited by other auditors
who have ceased operations and whose report dated February 28, 2002 expressed an
unqualified opinion.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Global
Sources Ltd. and its subsidiaries as of December 31, 2003 and 2002, and the
consolidated results of their operations and cash flows for each of the two
years in the period ended December 31, 2003, in conformity with accounting
principles generally accepted in the United States of America.

/s/  ERNST & YOUNG

Singapore
March 10, 2004




                                       47
<PAGE>



THE FOLLOWING REPORT IS A COPY OF THE INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
PREVIOUSLY ISSUED BY ARTHUR ANDERSEN. THE REPORT HAS NOT BEEN REISSUED BY ARTHUR
ANDERSEN.

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of
Global Sources Ltd.

We have audited the accompanying consolidated balance sheets of Global Sources
Ltd. (a company incorporated under the laws of Bermuda) and its subsidiaries as
of December 31, 2001 and 2000, and the related consolidated statements of
income, shareholders' equity and cash flows for each of the three years in the
period ended December 31, 2001. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Global
Sources Ltd. and its subsidiaries as of December 31, 2001 and 2000, and the
results of their operations and cash flows for each of the three years in the
period ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America.

/s/  ARTHUR ANDERSEN

Singapore
February 28, 2002




                                       48
<PAGE>



<TABLE>
<CAPTION>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

                                                                                    AT DECEMBER 31    AT DECEMBER 31
                                                                                    --------------    --------------
                                                                                        2002              2003
                                                                                    --------------    --------------
                                     ASSETS
CURRENT ASSETS:
<S>                                                                                  <C>              <C>
   Cash and cash equivalents................................................         $   11,009       $   26,227
   Available-for-sale securities............................................             26,199           35,140
   Accounts receivable, net.................................................              4,169            4,507
   Receivables from sales representatives...................................              2,932            3,883
   Inventory of paper.......................................................                545              703
   Prepaid expenses and other current assets................................              1,147            1,883
                                                                                    --------------    --------------
                  TOTAL CURRENT ASSETS .....................................             46,001           72,343
                                                                                    --------------    --------------

Property and equipment, net.................................................             14,110            7,870
Long term investments.......................................................                100              100
Bonds held to maturity, at amortized cost...................................              1,358              992
Other assets................................................................              1,081            1,236
                                                                                    --------------    --------------
                  TOTAL ASSETS .............................................         $   62,650       $   82,541
                                                                                    ==============    ==============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts payable.........................................................         $    4,284       $    4,432
   Deferred income and customer prepayments.................................             18,259           27,454
   Accrued liabilities......................................................              5,361            5,803
   Income taxes payable.....................................................                368              804
                                                                                    --------------    --------------
                  TOTAL CURRENT LIABILITIES ................................             28,272           38,493
                                                                                    --------------    --------------

Liabilities for incentive and bonus plans...................................              1,025              682
Amount due to parent company................................................             11,404               --
Amount due to a shareholder.................................................                 --           11,404
Minority interest...........................................................              2,823            3,684
Deferred tax liability......................................................                604              298
                                                                                    --------------    --------------
                  TOTAL LIABILITIES ........................................             44,128           54,561
                                                                                    --------------    --------------
SHAREHOLDERS' EQUITY:
   Common shares, US$0.01 par value; 50,000,000 shares authorized;
       28,945,344 (2002:  28,939,844) shares issued and outstanding.........                289              289
   Additional paid in capital...............................................             80,460           81,925
   Retained deficit.........................................................            (57,680)         (50,346)
   Less:  Unearned compensation.............................................             (4,547)          (4,563)
   Accumulated other comprehensive income...................................                 --              675
                                                                                    --------------    --------------
                  TOTAL SHAREHOLDERS' EQUITY ...............................             18,522           27,980
                                                                                    --------------    --------------
       TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY...........................          $  62,650        $  82,541
                                                                                    ==============    ==============
</TABLE>

   The accompanying notes are an integral part of these financial statements.




                                       49
<PAGE>



<TABLE>
<CAPTION>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

                                                                             YEAR ENDED DECEMBER 31,
                                                                   ----------------------------------------------
                                                                      2001             2002             2003
                                                                   ------------    --------------   -------------
REVENUES:
<S>                                                                <C>              <C>              <C>
   Online services........................................         $    55,468      $    51,268      $    51,367
   Other media services...................................              36,391           33,132           36,318
   Exhibitions............................................               2,619            2,455            3,327
   Miscellaneous..........................................                 807              631              657
                                                                   ------------    --------------   -------------
                                                                        95,285           87,486           91,669
                                                                   ------------    --------------   -------------
OPERATING EXPENSES:
   Sales..................................................              31,236           28,659           30,113
   Event production.......................................                 811              933              930
   Community..............................................              12,735           12,481           12,331
   General and administrative.............................              32,748           28,885           28,682
   Online services development............................               8,393            5,378            4,960
   Non-cash compensation expense (Note a).................               2,501            2,564            1,419
   Amortization of intangibles/Software development cost..               3,476            3,740            4,453
                                                                   ------------    --------------   -------------
TOTAL OPERATING EXPENSES..................................              91,900           82,640           82,888
                                                                   ------------    --------------   -------------
INCOME FROM OPERATIONS....................................               3,385            4,846            8,781
                                                                   ------------    --------------   -------------
   Interest expense.......................................                (172)              --               --
   Interest income........................................                 357              439              122
   Loss on sale of available-for-sale securities..........                  --               --              (40)
   Foreign exchange gains (losses), net...................                (470)              50               --
   Write-down of investments..............................              (1,150)              --               --
                                                                   ------------    --------------   -------------
INCOME BEFORE INCOME TAXES................................               1,950            5,335            8,863
INCOME TAX PROVISION......................................              (1,143)            (720)            (668)
                                                                   ------------    --------------   -------------
NET INCOME BEFORE MINORITY INTEREST.......................         $       807      $     4,615      $     8,195
                                                                   ------------    --------------   -------------
Equity in income of affiliate.............................                  51               --               --
Minority interest.........................................                 (83)            (308)            (861)
                                                                   ------------    --------------   -------------
NET INCOME................................................         $       775      $     4,307      $     7,334
                                                                   ============    ==============   =============
BASIC NET INCOME PER SHARE................................         $      0.03      $      0.15      $      0.25
                                                                   ============    ==============   =============
SHARES USED IN BASIC NET INCOME PER SHARE CALCULATIONS  (NOTE
   2(U))..................................................           28,934,344       28,938,970       28,944,470
                                                                   ============    ==============   =============
DILUTED NET INCOME PER SHARE..............................         $      0.03      $      0.15      $      0.25
                                                                   ============    ==============   =============
SHARES USED IN DILUTED NET INCOME
   PER SHARE CALCULATIONS (NOTE 2(U)).....................          28,934,344       28,940,309       28,979,339
                                                                   ============    ==============   =============

</TABLE>

Note: a. Reflects the non-cash compensation expenses associated with the
     employee equity compensation plans. Approximately $323 (2002: $623, 2001:
     $381) represents sales expenses, $96 (2002: $238, 2001: $87) represents
     community, $691 (2002: $1,179, 2001: $1,546) represents general and
     administrative and $309 (2002: $524, 2001: $487) represents online services
     development expenses.

   The accompanying notes are an integral part of these financial statements.




                                       50
<PAGE>



<TABLE>
<CAPTION>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                           (IN U.S. DOLLARS THOUSANDS)

                                                                                  YEAR ENDED DECEMBER 31,
                                                                           ----------------------------------------
                                                                             2001           2002          2003
                                                                           -----------    ----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                        <C>            <C>           <C>
  Net income.......................................................        $     775      $   4,307     $   7,334
Adjustments to reconcile net income to net cash provided by
operating activities:
  Depreciation and amortization....................................            8,934         8,989      $   8,509
  Loss/(Profit) on sale of property and equipment..................               34            (1)            (7)
  Accretion of U.S. Treasury strips zero % coupon..................             (122)          (99)           (74)
  Loss on sale of available-for-sale securities....................               --            --             40
  Bad debt expense.................................................              765           670            202
  Non-cash compensation expense....................................            2,501         2,564          1,419
  Income attributable to minority shareholder......................               83           308            861
  Write-down of investments........................................            1,150            --             --
  Equity in income of affiliate....................................              (51)           --             --
  Property and equipment written off...............................              108           153             12
                                                                           -----------    ----------    -----------
                                                                              14,177        16,891         18,296
CHANGES IN ASSETS AND LIABILITIES:
  Accounts receivables.............................................            1,328           871           (540)
  Receivables from sales representatives...........................             (153)       (2,223)          (951)
  Receivables from related party sales representatives.............              538         2,900             --
  Inventory of paper...............................................              357           311           (158)
  Prepaid expenses and other current assets........................              646           (25)          (742)
  Long term assets.................................................              147           118           (155)
  Accounts payable.................................................           (1,911)          659            148
  Accrued liabilities and liabilities for incentive and bonus plans           (1,061)         (175)            99
  Deferred income and customer prepayments.........................            1,234         1,137          9,195
  Tax liability....................................................              162           198            131
                                                                           -----------    ----------    -----------
       NET CASH PROVIDED BY OPERATING ACTIVITIES...................           15,464        20,662         25,323
                                                                           -----------    ----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment...............................           (4,874)       (4,193)        (2,307)
  Proceeds from sales of property and equipment....................              315             3             32
  Proceeds from matured bonds......................................              440           450            440
  Purchase of available-for-sale securities........................               --       (26,199)       (19,300)
  Proceeds from sale of available-for-sale securities..............               --            --         11,000
                                                                           -----------    ----------    -----------
       NET CASH USED FOR INVESTING ACTIVITIES......................           (4,119)      (29,939)       (10,135)
                                                                           -----------    ----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Repayment of short-term borrowings...............................           (4,000)           --             --
  Amount received towards directors purchase plan..................              164            50             30
                                                                           -----------    ----------    -----------
       NET CASH (USED FOR)/GENERATED FROM FINANCING ACTIVITIES.....           (3,836)           50             30
                                                                           -----------    ----------    -----------

Net increase/(decrease) in cash and cash equivalents...............            7,509        (9,227)        15,218
Cash and cash equivalents, beginning of the year...................           12,727        20,236         11,009
                                                                           -----------    ----------    -----------
CASH AND CASH EQUIVALENTS, END OF THE YEAR.........................        $  20,236      $ 11,009      $  26,227
                                                                           ===========    ==========    ===========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
  Income tax paid..................................................        $     981      $    522      $     537
  Interest paid....................................................              172            --             --
                                                                           ===========    ==========    ===========

</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                       51
<PAGE>



<TABLE>
<CAPTION>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

              (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES)

                                          COMMON SHARES
                                          -------------

                                                                                                             ACCUMU-        TOTAL
                                                                 ADDITIONAL                     UNEARNED   LATED OTHER     SHARE-
                                     NUMBER OF                     PAID IN        RETAINED      COMPENSA-  COMPREHEN-      HOLDERS'
                                      SHARES        AMOUNTS        CAPITAL        DEFICIT         TION     SIVE INCOME     EQUITY
                                    -----------    ---------    ------------    ------------   ----------  ------------    ---------
<S>                                 <C>             <C>           <C>             <C>            <C>                       <C>
BALANCE AT DECEMBER 31, 2000.....   28,934,344      $   289       $  75,700       $ (62,762)     $(5,066)           --     $  8,161
Net income.......................           --           --              --             775           --            --     $    775
Non-cash compensation expense....           --           --           4,306              --           --            --     $  4,306
Unearned compensation............           --           --              --              --       (1,805)           --     $ (1,805)
Amount received towards directors
          purchase plan..........           --           --             164              --           --            --     $    164
                                    -----------    ---------    ------------    ------------   ----------  ------------    ---------
BALANCE AT DECEMBER 31, 2001.....   28,934,344      $   289       $  80,170       $ (61,987)     $(6,871)           --     $ 11,601
Net income.......................           --           --              --           4,307           --            --     $  4,307
Non-cash compensation expense....           --           --             240              --           --            --     $    240
Unearned compensation............           --           --              --              --        2,324            --     $  2,324
Amount received towards directors
          purchase plan..........           --           --              50              --           --            --     $     50
Issuance of shares under directors
          purchase plan..........        5,500           --              --              --           --            --           --
                                    -----------    ---------    ------------    ------------   ----------  ------------    ---------
BALANCE AT DECEMBER 31, 2002.....   28,939,844      $   289       $  80,460       $ (57,680)     $(4,547)           --     $ 18,522
Net income.......................           --           --              --           7,334           --            --     $  7,334
Non-cash compensation expense....           --           --           1,435              --           --            --     $  1,435
Unearned compensation............           --           --              --              --          (16)           --     $    (16)
Amount received towards directors
          purchase plan..........           --           --              30              --           --            --     $     30
Issuance of shares under directors
         purchase plan...........        5,500           --              --              --           --            --          --
Loss realized on sale of
   available-for-sale securities,
   net of income tax of $NIL ....           --           --              --              --           --            40     $     40
Unrealized gain on
   available-for-sale securities,
   net of income tax of $NIL.....           --           --              --              --           --           635     $    635
                                    -----------    ---------    ------------    ------------   ----------  ------------    ---------
BALANCE AT DECEMBER 31, 2003.....   28,945,344      $   289       $  81,925       $ (50,346)     $(4,563)     $    675     $ 27,980
                                    ===========    =========    ============    ============   ==========  ============    =========
</TABLE>

   The accompanying notes are an integral part of these financial statements.



                                       52
<PAGE>



                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)




1.       THE COMPANY

         Global Sources Ltd. (the "Company") was incorporated in November 1999
         under the laws of Bermuda. Prior to December 2, 2003, the Company was
         majority owned by Hung Lay Si Co Ltd. (the "Former Parent Company").
         The Former Parent Company is a company organized under the laws of
         Cayman Islands. It is wholly owned by the Quan Gung 1986 Trust, a trust
         formed under the laws of the Island of Jersey. Hill Street Trustees
         Ltd. is the trustee of the trust (the "Trustee") and the Trustee has
         sole and exclusive voting investment and depositive power over the
         shares of capital stock of the Former Parent Company owned by the
         trust. On November 27, 2003, the chairman and chief executive officer
         of the Company acquired 15,033,846 common shares of the Company
         representing 51.9 percent of the outstanding common shares of the
         Company, from the Former Parent Company. On December 2, 2003, the
         shares transfer was completed and as a result the chairman and chief
         executive officer is the beneficial owner of 19,455,543 or 67.2 percent
         of the Company's outstanding common shares and he has the sole power to
         vote the shares beneficially owned by him. As a consideration of the
         purchase of the common shares, the chairman and chief executive officer
         has agreed to pay the Former Parent Company $109,337, payable on
         November 27, 2013, with a right to prepay such amount at anytime.
         Pending payment of the said amount, the Former Parent Company will have
         a security interest in common shares of the Company held by the
         chairman and chief executive officer of the Company.

         The Company's principal business is to provide services that allow
         global buyers to identify suppliers and products, and enable suppliers
         to market their products to a large number of buyers. The Company's
         primary online service is creating and hosting marketing websites that
         present suppliers' product and company information in a consistent,
         easily searchable manner on Global Sources Online. The Company also
         offers electronic cataloguing services for buyers and suppliers. My
         Catalogs enable buyers to maintain customized information on suppliers.
         Private Supplier Catalogs are password-protected online environments
         where suppliers can develop and maintain their own product and company
         data. Complementing these services are various trade magazines and
         CD-ROMs. The Company launched China Sourcing Fairs exhibitions in 2003.
         These offer international buyers direct access to China and other Asian
         manufacturers. The Company's businesses are conducted primarily through
         Trade Media Limited, its wholly owned subsidiary, which was
         incorporated in October 1984 under the laws of Cayman Islands. Through
         certain other wholly owned subsidiaries, the Company also organizes
         China Sourcing Fairs exhibitions, conferences and exhibitions on
         technology related issues and licenses Asian Sources / Global Sources
         Online and catalog services.

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A)      BASIS OF CONSOLIDATION AND PRESENTATION

               (i) The accompanying consolidated financial statements are
          prepared in accordance with accounting principles generally accepted
          in the United States of America and comprise the financial statements
          of the Company, its majority owned subsidiaries and those owned
          through nominee shareholders. All significant intercompany
          transactions and balances have been eliminated on consolidation.

               (ii) The results of subsidiaries acquired or disposed of during
          the year are included in the consolidated statement of income from the
          effective dates of acquisition or up to the effective dates of
          disposal.



                                       53
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

               (iii) The functional currency of the Company and certain
          subsidiaries is the United States dollar. The functional currencies of
          other subsidiaries are their respective local currencies. United
          States dollars are used as the reporting currency as the Company's
          operations are global.

(B)      USE OF ESTIMATES

         The preparation of financial statements in conformity with accounting
         principles generally accepted in the United States of America ("U.S.
         GAAP") requires management to make estimates and assumptions that
         affect the amounts reported in the consolidated financial statements
         and accompanying notes. Actual results could differ from those
         estimates.

(C)      CASH EQUIVALENTS

         The Company considers all highly liquid investments purchased with an
         original maturity of three months or less to be cash equivalents.

(D)      AVAILABLE-FOR-SALE SECURITIES

         Short-term investments in marketable securities are classified as
         available-for-sale securities. Investments classified as
         available-for-sale securities are carried at market value with any
         unrealized holding gains and losses, net of related tax effect if any,
         presented under shareholders' equity as accumulated other comprehensive
         income.

         Realized gains and losses and declines in values judged to be
         other-than-temporary on available-for-sale securities are included in
         the statement of income. The cost of securities sold is based on the
         average cost method.

(E)      INVENTORY OF PAPER

         Inventory of paper is stated at the lower of cost or market value. Cost
         is determined on the first-in, first-out basis.

(F)      PROPERTY AND EQUIPMENT

               (i) Property and equipment are stated at cost less accumulated
          depreciation. Cost represents the purchase price of the asset and
          other costs incurred to bring the asset into its existing use.

               (ii) Depreciation on property and equipment is calculated to
          amortize their cost on a straight-line basis over their estimated
          useful lives as follows:

              Fixtures, fittings and office equipment............     5 years
              Leasehold improvements.............................     5 years
              Motor vehicles.....................................     5 years
              Computer equipment and software....................     3 years



                                       54
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

               (iii) Effective January 1, 1999, the Company adopted Statement of
          Position 98-1, "Accounting for the Costs of Computer Software
          Developed or Obtained for Internal Use," to account for the costs
          incurred to develop computer software for internal use. Costs incurred
          in the preliminary project stage with respect to the development of
          software for internal use are expensed as incurred; costs incurred
          during the application development stage are capitalized and are
          amortized over the estimated useful life of three years upon the
          commissioning of service of the software. Training and maintenance
          costs are expensed as incurred.

         To account for the development costs related to the products to be
         sold, leased or otherwise marketed, the Company adopted SFAS No. 86,
         "Accounting for the Costs of Computer Software to Be Sold, Leased, or
         Otherwise Marketed." Development costs incurred subsequent to the
         establishment of the technological feasibility of the product are
         capitalized. The capitalization ends when the product is available for
         general release to customers.

         The Company expensed $1,117, $64 and $38 during the years ended
         December 31, 2001, 2002 and 2003, respectively, for the costs incurred
         prior to the establishment of the technological feasibility with
         respect to the development of products to be sold, leased or otherwise
         marketed.

(G)      INTANGIBLE ASSETS

         Prior to the adoption of SFAS No. 142 effective on January 1, 2002,
         copyrights were amortized on a straight-line basis over a period of ten
         years and goodwill, was amortized on a straight-line basis over twenty
         years.

         In June 2001, FASB issued SFAS No. 141, "Business Combinations," and
         SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141
         requires all business combinations initiated after June 30, 2001 to be
         accounted for using the purchase method and broadened the criteria for
         recording intangible assets separated from goodwill. Under SFAS No.
         142, goodwill and intangible assets with indefinite lives are no longer
         amortized but are reviewed annually (or more frequently if impairment
         indicators arise) for impairment. Separable intangible assets that are
         not deemed to have indefinite lives will continue to be amortized over
         their useful lives (but with no maximum life). The amortization
         provisions of SFAS No. 142 apply immediately to goodwill and intangible
         assets acquired after June 30, 2001. With respect to goodwill and
         intangible assets acquired prior to July 1, 2001, we adopted SFAS No.
         142 effective January 1, 2002. As goodwill was fully amortized and no
         acquisitions occurred during 2001, the Company believes that the
         adoption of these standards did not have a material impact on the
         Company's financial statements of position, results of operations, or
         cash flows.

         Intangible Assets, net:

                                                        AT DECEMBER 31,
                                                  -----------------------------
                                                     2002            2003
                                                  ------------   --------------
         Goodwill..............................   $       654     $      654
         Copyrights............................         3,706          3,706
                                                  ------------   --------------
                                                        4,360          4,360
         Less:  Accumulated amortization.......        (4,360)        (4,360)
                                                  ------------   --------------
                                                  $        --     $       --
                                                  ------------   --------------



                                       55
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


(H)      LONG TERM INVESTMENTS

         Long term investments for business and strategic purposes in
         privately-held companies where such investments are less than 20% of
         the equity capital of the investees, with no significant influence over
         the investees, are stated at cost.

         Long term investments in companies where such investments are in the
         range of 20% to 50% of the equity capital of the investees and over
         whom the Company exercises significant influence, are accounted under
         the equity method.

         Interests in subsidiaries with more than 50% ownership are consolidated
         and the ownership interests of minority investors are recorded as
         minority interest.

         Long term investments in U.S. Treasury strips zero % coupon, held to
         maturity are stated at amortized cost.

(I)      IMPAIRMENT OF LONG-LIVED ASSETS

         The Company reviews the carrying value of its long-lived assets based
         upon a gross cash flow basis and will reserve for impairment whenever
         events or changes in circumstances indicate the carrying amount of the
         assets may not be fully recoverable. The impairment loss is measured
         based on the difference between the carrying amount of the asset and
         its fair value. There was no impairment of the Company's property and
         equipment as of December 31, 2003.

(J)      REVENUE RECOGNITION

         The Company derives its revenues from advertising fees in its published
         trade magazines and websites, sales of trade magazines, fees from
         licensing its trade and service marks, service fees from the provision
         of software maintenance service, and organizing exhibitions and
         business seminars.

         Revenues from advertising in trade magazines and websites are
         recognized ratably over the period in which the advertisement is
         displayed. Advertising contracts do not exceed one year. When
         advertising fees from published trade magazines and websites are
         contracted under a single arrangement, the Company allocates the total
         advertising fees to the multiple deliverables based on their relative
         fair values. The fair value of the revenues from published trade
         magazines and websites is based on the Company's average historical
         selling prices. Revenue from sales of trade magazines is recognized
         upon delivery of the magazine. Magazine subscriptions received in
         advance are deferred and recognized as revenue upon delivery of the
         magazine. Revenue from the provision of maintenance service is deferred
         and recognized ratably over the maintenance service period. Revenue
         from organizing exhibitions and business seminars is recognized at the
         conclusion of the event and the related direct event production costs
         and direct event promotion costs are deferred and recognized as
         expenses upon conclusion of the event.



                                       56
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


         The Company receives license fees and royalties from licensing its
         trade and service marks. Revenue from license fees is recognized
         ratably over the term of the license, currently four to five years.
         Royalties from license arrangements are earned ratably over the period
         in which the advertisement is displayed by the licensee.

         The interest income from investments in U.S. Treasury strips zero %
         coupon is recognized as it accrues, taking into account the effective
         yield on the asset.

(K)      TRANSACTIONS WITH SALES REPRESENTATIVES AND RELATED PARTY SALES
         REPRESENTATIVES

         The Company utilizes sales representatives and in the past utilized
         related party sales representatives in various territories to promote
         the Company's products and services. Under these arrangements, these
         sales representatives are entitled to commissions as well as marketing
         fees. Commissions expense is recorded when owed to these sales
         representatives and is included in sales expenses.

         These sales representatives, which are mainly corporate entities,
         handle collections from clients on behalf of the Company. Included in
         receivables from these sales representatives are amounts collected on
         behalf of the Company as well as cash advances made to these sales
         representatives.

         As of December 31, 2001, the boards of directors of eight of these
         sales representative companies each included a director nominated by
         the Company to monitor the receivables collected from the Company's
         clients by these related party sales representatives, and to monitor
         any changes to the authorized signatories of the depository bank
         accounts. The nominated directors were employees of the Company. The
         Company and the nominated directors did not have any interest in the
         share capital of these related party sales representatives companies.
         However as of December 31, 2002 and 2003, the Company does not have any
         nominated directors on the board of directors of any of the Company's
         sales representative companies. Approximately $20,172, $9,986 and $NIL
         of the commissions and marketing fees expense was associated with these
         related party sales representative companies for 2001, 2002 and 2003,
         respectively.

(L)      ADVERTISING EXPENSES

         Advertising expenses are expensed as incurred. The Company incurred
         advertising expenses of $277, $161 and $244 during the years ended
         December 31, 2001, 2002 and 2003, respectively.

(M)      OPERATING LEASES

         The Company leases certain office facilities under cancelable and
         non-cancelable operating leases that expire in two to five years.
         Rentals under operating leases are expensed on a straight-line basis
         over the life of the leases.

(N)      LIABILITIES FOR BONUS PLAN

         Before the commencement of the Equity Compensation Plans as described
         in Note 22, the Company rewarded its senior management staff based on
         their performance through long term discretionary bonus awards. These
         awards were payable in cash generally at the end of five or ten years
         from the date



                                       57
<PAGE>


                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

         of the award, even in the event of termination of
         employment unless certain non-compete provisions had been violated.
         These awards were expensed in the period to which the performance bonus
         relates.

(O)      RETIREMENT BENEFITS

         The Company operates a number of defined contribution retirement
         benefit plans. Contributions are based on a percentage of each eligible
         employee's salary and are expensed as the related salaries are
         incurred.

(P)      INCOME TAXES

         The Company accounts for deferred income taxes using the liability
         method, under which the expected future tax consequences of temporary
         differences between the financial reporting and tax basis of its assets
         and liabilities are recognized as deferred tax assets and liabilities.
         A valuation allowance is established for any deferred tax asset when it
         is more likely than not that the deferred tax asset will not be
         recovered.

(Q)      MINORITY INTEREST

         In 2000, the Company entered into an agreement with CMP Media Inc.,
         through United Professional Media B.V. (previously known as United
         Business Media B.V.), a subsidiary of United News and Media plc. (CMP)
         to set-up a corporation (eMedia Asia Ltd.) to provide new technology
         content, media and e-commerce services to the electronics technology
         market in Asia. The Company holds a 60.1% controlling equity interest
         in eMedia Asia Ltd. and consolidates the results of operations. As part
         of obtaining its 39.9% interest, CMP has committed to pay $6,000 and
         interest thereon to the Company upon the payment of specified future
         dividends of eMedia Asia Ltd. Pursuant to an internal restructuring
         within the CMP group, United Professional Media B.V.'s 39.9% interest
         in eMedia Asia Ltd. and associated obligations were novated and
         assigned to UBM Asia B.V. (another subsidiary within the CMP group) in
         October 2003. Due to the contingent nature of the payment, the Company
         did not record in its balance sheet the promissory note receivable of
         $6,000 due from CMP and no interest income was accrued as at December
         31, 2003, 2002 and 2001. The minority interest liability of $3,684 and
         $2,823 at December 31, 2003 and 2002, respectively, reflects CMP's
         proportionate interest of the net book value of eMedia Asia Ltd.

(R)      FOREIGN CURRENCIES

         Transactions in currencies other than the functional currency are
         measured and recorded in the functional currency using the exchange
         rate in effect on the date of the transaction. As of the balance sheet
         date, monetary assets and liabilities that are denominated in
         currencies other than the functional currency are remeasured using the
         exchange rate at the balance sheet date. All gains and losses arising
         from foreign currency transactions and remeasurement of foreign
         currency denominated accounts are included in the determination of net
         income in the year in which they occur.

         The financial statements of the subsidiaries reporting in their
         respective local currencies are translated into U.S. dollars for
         consolidation as follows: assets and liabilities at the exchange rate
         as of the balance sheet date, shareholders' equity at the historical
         rates of exchange, and income and expense



                                       58
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)



         amounts at the average monthly exchange rates. The cumulative
         translation differences were not material as of December 31, 2002 and
         2003.

(S)      SEGMENT REPORTING

         SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
         Information" requires that companies report separately, in the
         financial statements, certain financial and descriptive information
         about operating segment profit or loss, certain specific revenue and
         expense items, and segment assets. Additionally, companies are required
         to report information about the revenues derived from their products
         and services groups, about geographic areas in which the Company earns
         revenues and holds assets, and about major customers.

         The Company identifies its operating segments based on business
         activities, management responsibility and geographic location. The
         Company has three reportable segments: online services, other media
         services and exhibitions.

(T)      COMPREHENSIVE INCOME

         SFAS No. 130, "Reporting Comprehensive Income," establishes standards
         for reporting comprehensive income and its components in financial
         statements. Comprehensive income is defined as the change in equity of
         a company during a period from transactions and other events and
         circumstances excluding transactions resulting from investment by
         owners and distribution to owners.

         Accumulated other comprehensive income consists of the following:
<TABLE>
<CAPTION>

                                                                           YEAR ENDED DECEMBER 31,
                                                               -------------------------------------------------
                                                                   2001             2002             2003
                                                               -------------    -------------     --------------

<S>                                                            <C>              <C>               <C>
         Unrealized gain on available-for-sale securities,
            net of income tax of $NIL......................    $        --      $       --        $         635
         Loss realized on sale of available-for-sale
            securities, net of income tax of $NIL..........    $        --      $       --        $          40
                                                               -------------    -------------     --------------
         Accumulated other comprehensive income............    $        --      $       --        $         675
                                                               =============    =============     ==============

</TABLE>

(U)      BASIC AND DILUTED NET INCOME PER SHARE

         Basic net income per share is computed by dividing net income by the
         weighted average number of shares of common shares outstanding during
         the period. Diluted net income per share is calculated using the
         weighted average number of outstanding common shares, plus other
         dilutive potential common shares.

         The following table reconciles the number of shares utilized in the net
         income per share calculations:


                                       59
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                                              ------------------------------------------------
                                                                   2001             2002             2003
                                                              --------------   -------------    --------------
<S>                                                           <C>              <C>              <C>
         Net income.......................................    $         775    $       4,307    $       7,334
                                                              ==============   =============    ==============
         Basic net income per share.......................    $        0.03    $        0.15    $        0.25
                                                              ==============   =============    ==============
         Diluted net income per share.....................    $        0.03    $        0.15    $        0.25
                                                              ==============   =============    ==============
         Weighted average common shares outstanding,
           used in basic net income per share calculation.       28,934,344       28,938,970       28,944,470

         Effect of dilutive shares........................               --            1,339           34,869
                                                              --------------   -------------    --------------
         Weighted average common shares outstanding,
            used in diluted net income per share
            calculation...................................       28,934,344       28,940,309       28,979,339
                                                              ==============   =============    ==============

         Antidilutive share options.......................           21,500           16,000              --

</TABLE>

         Antidilutive share options had exercise prices greater than the average
         market price during the year, and due to the net loss in first quarter
         of 2001.

(V)      STOCK BASED COMPENSATION

         The Company has adopted the disclosure only provisions of SFAS No. 123,
         "Accounting for Stock-Based Compensation." The Company accounts for
         stock-based compensation using the intrinsic value method prescribed in
         APB No. 25, "Accounting for Stock Issued to Employees" and related
         interpretations. Accordingly, compensation cost of stock options is
         measured as the excess, if any, of the fair value of the Company's
         stock at the date of the grant over the option exercise price and is
         charged to operations over the vesting period.

         The Company accounts for equity instruments issued to non-employees in
         accordance with the provisions of SFAS No. 123 and EITF Issue No.
         96-18, "Accounting for Equity Instruments that are Issued to Other Than
         Employees for Acquiring, or in Conjunction with Selling Goods and
         Services." All transactions in which services are received for the
         issuance of equity instruments are accounted for based on the fair
         value of the consideration received or the fair value of the equity
         instrument issued, whichever is more reliably measurable. The
         measurement date of the fair value of the equity instrument issued is
         the earlier of the date on which the counterparty's performance is
         complete or the date on which it is probable that performance will
         occur.

         A majority of the Company's employee stock compensation plans are share
         grants without any exercise price or exercise period. Therefore the
         fair value of the share grants at the date of grant approximates the
         intrinsic value. As a result, the impact of fair value based accounting
         under SFAS No. 123 is not significantly different from the intrinsic
         value method under APB No. 25.

(W)      ALLOWANCE FOR DOUBTFUL DEBTS

         The Company estimates the collectibility of the accounts receivable
         based on the analysis of accounts receivable, historical bad debts,
         customer credit-worthiness and current economic trends and maintains
         adequate allowance for doubtful debts.



                                       60
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

(X)      RECENT ACCOUNTING PRONOUNCEMENTS

         In June 2001, FASB issued SFAS No. 143, "Accounting for Asset
         Retirement Obligations." This statement addresses financial accounting
         and reporting for obligations associated with the retirement of
         tangible long-lived assets and the associated asset retirement costs.
         The purpose of this statement is to develop consistent accounting for
         asset retirement obligations and related costs in the financial
         statements and provides more information about future cash outflows,
         leverage and liquidity regarding retirement obligations and the gross
         investment in long-lived assets. We adopted SFAS No. 143 effective
         January 1, 2003 and believe that the adoption of this standard did not
         have a material impact on the Company's financial statements of
         position, results of operations, or cash flows.

         In December 2002, FASB issued SFAS No. 148, "Accounting for Stock-Based
         Compensation - Transition and Disclosure," which requires additional
         disclosures in interim and annual financial statements about the method
         of accounting for stock-based employee compensation and the effect of
         the method used on reported results. The disclosure provisions of SFAS
         No. 148 are effective for fiscal years ending after December 15, 2002.

         In January 2003, FASB issued FIN No. 46, "Consolidation of Variable
         Interest Entities." FIN 46 requires a beneficiary to consolidate a
         variable interest entity ("VIE") if it is the primary beneficiary of
         that entity. The primary beneficiary is defined as having a variable
         interest in a VIE that will absorb a majority of the entity's expected
         losses if they occur, receives a majority of the entity's expected
         residual returns if they occur, or both. In December 2003, FASB
         completed deliberations of proposed modifications to FIN 46 ("Revised
         Interpretations") resulting in multiple effective dates based on the
         nature as well as the creation date of the VIE. VIEs created after
         January 31, 2003, but prior to January 1, 2004, may be accounted for
         either based on the original interpretation or the Revised
         Interpretations. However, the Revised Interpretations must be applied
         no later than the Company's first quarter of fiscal 2004. VIEs created
         after December 31, 2003 must be accounted for under the Revised
         Interpretations. Special Purpose Entities ("SPEs") created prior to
         February 1, 2003, may be accounted for under the original or revised
         interpretation's provisions no later than the first period ending after
         December 15, 2003. Non-SPEs created prior to February 1, 2003, should
         be accounted for under the revised interpretation's provisions no later
         than the Company's first quarter of fiscal 2004. We believe that the
         adoption of FIN 46 will not have a material impact on the Company's
         financial statements of position, results of operations, or cash flows.

         In November 2002, the EITF reached consensus on EITF Issue No. 00-21,
         "Accounting for Revenue Arrangements with Multiple Deliverables", which
         addresses how to account for arrangements that may involve the delivery
         or performance of multiple products, services, and/or rights to use
         assets. The final consensus of EITF 00-21 is applicable to agreements
         entered into in fiscal periods beginning after June 15, 2003. We
         believe that the adoption of EITF 00-21 does not have a material impact
         on the Company's financial statements of position, results of
         operations or cash flows.

3.       AVAILABLE-FOR-SALE SECURITIES:



                                       61
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

                                                     AT DECEMBER 31,
                                              ------------------------------
                                                  2002             2003
                                              -------------   --------------

         Cost............................     $    26,199      $    34,465
         Unrealized holding gain.........               -              675
                                              -------------   --------------
         Fair value......................     $    26,199      $    35,140
                                              =============   ==============

4.       CURRENT ASSETS:

                                                   AT DECEMBER 31,
                                            ---------------------------
                                                 2002            2003
                                            --------------   ------------
         ACCOUNTS RECEIVABLE:
         Gross trade receivables.........   $      6,135     $     6,604
         Less:  Allowance for doubtful
                  debts..................         (1,966)         (2,097)
                                            --------------   ------------
                                            $      4,169     $     4,507
                                            ==============   ============


         MOVEMENTS IN ALLOWANCE FOR DOUBTFUL DEBTS:
<TABLE>
<CAPTION>
                                                                           YEAR ENDED DECEMBER 31,
                                                               -----------------------------------------------
                                                                   2001             2002             2003
                                                               -------------   --------------   --------------
<S>                                                            <C>              <C>              <C>
         BALANCE AT BEGINNING OF YEAR.....................     $     2,400      $     2,132      $     1,966
         Charged to bad debt expenses.....................             765              670              202
         Write-off of bad debts...........................          (1,033)            (836)             (71)
                                                               -------------   --------------   --------------
         BALANCE AT END OF YEAR...........................     $     2,132      $     1,966      $     2,097
                                                               =============   ==============   ==============
</TABLE>


<TABLE>
<CAPTION>
                                                                               AT DECEMBER 31,
                                                               -----------------------------------------------
                                                                                    2002             2003
                                                                               --------------   --------------
<S>                                                                             <C>                 <C>
         PREPAID EXPENSES AND OTHER CURRENT ASSETS:
         Unsecured employee loans and other debtors...                          $       108         $     73
         Prepaid expenses.............................                                  284              324
         Deferred expenses............................                                    -              535
         Other current assets.........................                                  755              951
                                                                               --------------   --------------
                                                                                $     1,147        $   1,883
                                                                               ==============   ==============
</TABLE>



                                       62
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


5.       PROPERTY AND EQUIPMENT, NET:

                                                              AT DECEMBER 31,
                                                         -----------------------
                                                           2002         2003
                                                         -----------  ----------
         Capital work-in-progress.....................   $      192   $       -
         Leasehold improvements.......................        6,806       6,936
         Motor vehicles...............................           98         191
         Computers, fixtures, fittings and office
           equipment..................................       22,463      22,866
         Software development costs...................       14,723      15,664
                                                         -----------  ----------
         Property and equipment, at cost..............       44,282      45,657
         Less:  Accumulated depreciation..............      (30,172)    (37,787)
                                                         -----------  ----------
                                                         $   14,110   $   7,870
                                                         -----------  ----------

         Depreciation expense for the years ended December 31, 2001, 2002 and
         2003 was $5,458, $5,249 and $4,056, respectively and the amortization
         of Software development cost for the years ended December 31, 2001,
         2002 and 2003 was $3,106, $3,737 and $4,453 respectively.

6.       LONG-TERM INVESTMENTS AND BONDS HELD TO MATURITY:

               (i) As at December 31, 2003, the Company holds equity instruments
          carried at $100 in a privately held unaffiliated electronic commerce
          company for business and strategic purposes. The investment is
          accounted for under the cost method since the ownership is less than
          20% and the Company does not have the ability to exercise significant
          influence over the investee. The investment is shown under long term
          investments in the consolidated balance sheets.

         The Company's policy is to regularly review the carrying values of the
         non-quoted investments and to identify and provide for impairment when
         circumstances indicate impairment other than a temporary decline in the
         carrying values of such assets.

         During the year 2001, the Company recorded a $1,150 impairment loss for
         other than a temporary decline in the carrying value of the investment
         based on economic events and other factors. The net carrying value of
         the long term investment as at December 31, 2002 and 2003 was $100. The
         Company will continue to evaluate this investment for impairment.

               (ii) U.S. Treasury strips zero % coupon

                                                               AT DECEMBER 31,
                                                        ------------------------
                                                           2002          2003
                                                        -----------  -----------
         The amortized cost classified by date of
         contractual maturity is as follows:
         Due within one year........................... $     426     $     364
         Due after one year through five years.........       854           628
         Due after five years through ten years........        78             -
                                                        -----------  -----------
                                                        $   1,358     $     992
                                                        -----------  -----------



                                       63
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


                                                               AT DECEMBER 31,
                                                        ------------------------
                                                           2002          2003
                                                        -----------  -----------
         The fair value based on the market price,
           classified by date of contractual maturity
           is as follows:
         Due within one year............................$     437    $       380
         Due after one year through five years..........      964            691
         Due after five years through ten years.........       86              -
                                                        -----------  -----------
                                                        $   1,487    $     1,071
                                                        -----------  -----------


                                                               AT DECEMBER 31,
                                                        ------------------------
                                                           2002          2003
                                                        -----------  -----------
         Gross unrealized holding gains................ $     129    $      79
                                                        -----------  -----------

7.       OTHER ASSETS:

                                                               AT DECEMBER 31,
                                                        ------------------------
                                                           2002          2003
                                                        -----------  -----------
         Employee housing loans........................ $     270     $      231
         Club memberships..............................       514            514
         Rental, utility and other deposits............       297            491
                                                        -----------  -----------
                                                        $   1,081     $    1,236
                                                        -----------  -----------

8.       CURRENT LIABILITIES:

                                                               AT DECEMBER 31,
                                                        ------------------------
                                                           2002          2003
                                                        -----------  -----------
         DEFERRED INCOME AND CUSTOMER PREPAYMENTS:
         Advertising..................................  $  15,582    $    19,475
         Exhibitions, subscription and others.........      2,677          7,979
                                                        -----------  -----------
                                                        $  18,259    $    27,454
                                                        -----------  -----------


                                                               AT DECEMBER 31,
                                                        ------------------------
                                                           2002          2003
                                                        -----------  -----------
         ACCRUED LIABILITIES:
         Salaries, wages and commissions................ $   1,261    $   1,239
         Retirement benefit plans.......................       491          548
         Current portion of liabilities for incentive
           and bonus plans .............................     1,174        1,106
         Others.........................................     2,435        2,910
                                                        -----------  -----------
                                                         $   5,361    $   5,803
                                                        -----------  -----------




                                       64
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


9.       LIABILITIES FOR INCENTIVE AND BONUS PLANS

                                                               AT DECEMBER 31,
                                                        ------------------------
                                                           2002          2003
                                                        -----------  -----------
         Liability for long term discretionary bonus
           program......................................  $   1,025   $     682
                                                        -----------  -----------


10.      RELATED PARTY TRANSACTIONS

         The Company has extended loans to some of its employees to finance
         their purchase or lease of residences. The loans for the purchase of a
         residence are secured by the subject residence, bear interest at a rate
         of LIBOR plus 2 to 3%, generally have a term of ten years and become
         due and payable immediately under certain circumstances, including
         their termination of employment with the Company. The loans for the
         lease of a residence are unsecured, interest free and are repayable in
         equal monthly installments over the period of the lease, typically less
         than or equal to twelve months. Loans due from employees for purchase
         of residences were $270 and $231 as of December 31, 2002 and 2003
         respectively. Loans due from employees for lease of residences were $81
         and $61 as of December 31, 2002 and 2003, respectively. There were no
         other loans due from the Company's directors and executive officers as
         at December 31, 2002 and 2003. Other temporary advances to staff, which
         are generally repayable within twelve months, were $26 and $14 as of
         December 31, 2002 and 2003, respectively.

         The Company leases certain office facilities from subsidiaries of the
         Former Parent Company under cancelable and non-cancelable operating
         leases that include both rental and building maintenance services.
         During the years ended December 31, 2001, 2002 and 2003, the Company
         incurred rental and building management services expenses of $1,044,
         $1,048 and $756 respectively, with respect to these office facilities.

         The Company also receives legal, secretarial and treasury management
         consultancy services from subsidiaries of the Former Parent Company.
         During the year ended December 31, 2001, 2002 and 2003, the Company
         incurred such legal, secretarial and treasury management consultancy
         services expenses of $464, $275 and $259, respectively.

         The Company had $11,404 and $11,404 due to the Former Parent Company as
         of December 31, 2002 and 2003, respectively. Due to the disposal of the
         shares by the Former Parent Company to the Company's chairman and chief
         executive officer discussed in Note 1, this liability as at December
         31, 2003 was reclassified and disclosed as "Amount due to a
         shareholder" in the Company's consolidated balance sheet as at December
         31, 2003. The amount due to the Former Parent Company is unsecured.

         Effective January 1, 2000, the Company executed an unsecured promissory
         note in the principal amount of $11,404 to establish the repayment
         terms of amounts owed to the Former Parent Company. On January 1, 2005,
         the Company will begin repayment of this promissory note. The Company
         will make quarterly payments of principal and interest over the
         following ten years. Interest will accrue beginning January 1, 2005 at
         the applicable U.S. Federal Funds rate.



                                       65
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


         In addition to the transactions with related party sales
         representatives discussed in Note 2(K), the Company provided technical
         services to these sales representatives for a fee. During the year
         ended December 31, 2001, 2002 and 2003, the Company derived such
         service fees of $259, $156 and $NIL respectively. During the years
         ended December 31, 2001, 2002 and 2003, the Company has incurred costs
         of $76, $47 and $NIL respectively with respect to the incentive awards
         discussed in Note 11, relating to the related party sales
         representatives.

11.      LIABILITIES FOR INCENTIVE AND BONUS PLANS

         Before the commencement of the Equity Compensation Plans the Company
         rewarded its senior management staff based on their current performance
         through long term discretionary bonus awards. These awards are payable
         approximately at the end of five or ten years from the date of the
         award, even in the event of termination of employment unless certain
         non-compete provisions have been violated. The Company did not incur
         any expenses related to these awards during the years ended December
         31, 2001, 2002 and 2003. The required funds were set aside for payment
         of the discretionary bonuses by purchasing U.S. Treasury strips zero %
         coupons maturing in either five or ten years. These investments are
         held until maturity and the proceeds are used for payment of the
         discretionary bonuses.

         Certain sales representatives of the Company are eligible for incentive
         awards under plans administered by the Company. Costs incurred related
         to incentive awards under plans administered by the Company for the
         years ended December 31, 2001, 2002 and 2003 were $78, $128 and $116
         respectively. Amounts under liabilities for incentive plans include
         amounts owed under plans previously administered by the Company.

12.      RETIREMENT BENEFIT PLANS

         The Company operates a number of defined contribution retirement
         benefit plans. Employees working in a jurisdiction where there is no
         statutory provision for retirement benefits are covered by the
         Company's plans.

         The two principal defined contribution plans are plans where employees
         are not required to make contributions. One of these two plans is
         separately administered by an independent trustee and the plan assets
         are held independent of the Company. The other one is not independently
         administered and is currently unfunded. The Company's liabilities under
         this unfunded plan as of December 31, 2002 and 2003 were $447 and $520,
         respectively.

         The Company incurred costs of $1,085, $1,101 and $1,102 with respect to
         the retirement plans in the years ended December 31, 2001, 2002 and
         2003, respectively.

13.      INCOME TAXES

         The Company and certain of its subsidiaries operate in the Cayman
         Islands and other jurisdictions where there are no taxes imposed on
         companies. Certain of the Company's subsidiaries operate in Hong Kong
         SAR and Singapore and are subject to income taxes in their respective
         jurisdictions. Also, the Company is subject to withholding taxes for
         revenues earned in certain other countries.



                                       66
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


         Income before income taxes consists of:

<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31,
                                                        -------------------------------------------------------
                                                              2001                 2002                2003
                                                        -----------------    ---------------     --------------
<S>                                                     <C>                  <C>                 <C>
         Cayman Islands............................     $           401      $      3,587        $     5,420
         Foreign...................................               1,549             1,748              3,443
                                                        -----------------    ---------------     --------------
                                                        $         1,950      $      5,335        $     8,863
                                                        -----------------    ---------------     --------------

         The provision for income taxes consists of:

                                                                         YEAR ENDED DECEMBER 31,
                                                        -------------------------------------------------------
                                                              2001                 2002                2003
                                                        -----------------    ---------------     --------------
         Current tax expenses:
           Cayman Islands..........................     $            --      $        --         $        --
           Foreign.................................                 987              726                 974
         Deferred tax expense:
           Cayman Islands..........................                  --               --                  --
           Foreign.................................                 156               (6)               (306)
                                                        -----------------    ---------------     --------------
         Total provision...........................     $         1,143      $       720         $       668
                                                        -----------------    ---------------     --------------

         The provision for income taxes for the years ended December 31, 2001,
         2002 and 2003 differed from the amount computed by applying the
         statutory income tax rate of 0% as follows:

                                                                         YEAR ENDED DECEMBER 31,
                                                        -------------------------------------------------------
                                                              2001                 2002                2003
                                                        -----------------    ---------------     --------------
         Income taxes at statutory rate............     $            --      $         --        $        --
         Foreign income and revenues taxed at higher
         rates.....................................               1,143               720                668
                                                        -----------------    ---------------     --------------
         Total.....................................     $         1,143      $        720        $       668
                                                        -----------------    ---------------     --------------
         Effective tax rate........................               58.62%           13.50%              7.54%
                                                        -----------------    ---------------     --------------

         Deferred tax assets consist of the following:

</TABLE>

<TABLE>
<CAPTION>
                                                                                       AT DECEMBER 31,
                                                                             -----------------------------------
                                                                                   2002                2003
                                                                             --------------     ----------------
<S>                                                                          <C>                 <C>
         Net operating loss carry forwards............................       $      7,460        $     7,462
         Less:  valuation allowance...................................             (7,460)            (7,462)
                                                                             --------------     ----------------
         Deferred tax assets..........................................       $         --        $        --
                                                                             --------------     ----------------

</TABLE>

         The Company recorded a full valuation allowance for the deferred tax
         assets due to the uncertainty as to their ultimate realization. The net
         change in valuation allowance for the years ended December 31,



                                       67
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


          2001, 2002 and 2003 was a (decrease)/increase of approximately ($91),
          $26 and $2, respectively, resulting primarily from net operating
          losses incurred by some of the subsidiaries during the respective
          years.

         As of December 31, 2003 and 2002, a United States subsidiary has net
         operating loss carry forwards of approximately $17.3 million. These
         losses which expire in year 2020 can be utilized to reduce future
         taxable income of the subsidiary subject to compliance with the
         taxation legislation and regulations in the relevant jurisdiction.

         The Company recognized a deferred tax liability of $604 and $298 as at
         December 31, 2002 and 2003, respectively, which primarily arose from
         the temporary differences between the financial reporting and the tax
         bases of property and equipment in one of the subsidiaries of the
         Company.

14.      SHARE CAPITAL

         On April 14, 2000, in conjunction with the Share Exchange Agreement
         dated December 6, 1999, Fairchild (Bermuda), Ltd. issued 27,556,518
         common shares to the shareholders of Trade Media Holdings Ltd.,
         predecessor to Global Sources Ltd., in exchange for all of its 10,000
         ordinary shares outstanding at that date. All share and per share
         amounts in these consolidated financial statements have been restated
         for the year ended December 31, 1999 in a manner similar to a 2,756 to
         1 stock split. In addition, Fairchild (Bermuda), Ltd. issued 68,891
         common shares and 1,308,935 common shares to The Fairchild Corporation
         and the shareholders of The Fairchild Corporation, respectively. After
         the share exchange Fairchild (Bermuda), Ltd was renamed Global Sources
         Ltd. On February 28, 2002 and 2003, the Company issued 5,500 and 5,500
         common shares, respectively, under the Directors Purchase Plan. The
         authorized share capital of the Company as at December 31, 2002 and
         2003 is 50,000,000 common shares of $0.01 par value. As at December 31,
         2002 and at December 31, 2003, the Company has 28,939,844 and
         28,945,344 common shares issued and outstanding, respectively.

15.      FAIR VALUE OF FINANCIAL INSTRUMENTS

         The carrying amounts of the Company's cash equivalents, accounts
         receivable, accounts payable and accrued liabilities approximate fair
         value due to their short maturities. The fair value of
         available-for-sale securities is disclosed in Note 3. The fair value of
         related party payables cannot be determined due to the related party
         nature. The information with respect to long term payables to the
         Former Parent Company is disclosed in Note 10. The carrying amount and
         market value of long term investments are discussed in Note 6.

16.      CONCENTRATION OF CREDIT RISK AND OTHER RISKS

         Financial instruments, which potentially subject the Company to
         concentration of credit risk, consist primarily of investment in
         checking and money market accounts, available-for-sale securities,
         investment in U.S. Treasury strips zero % coupon, accounts receivable
         and receivables from sales representatives. The Company maintains
         checking, money market accounts and available-for-sale securities with
         high quality institutions. The Company has a large number of customers,
         operates in different geographic areas and generally does not require
         collateral on accounts receivable or receivables from sales
         representatives. In addition, the Company is continuously monitoring
         the credit transactions and



                                       68
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

         maintains reserves for credit losses where necessary. No customer
         accounted for more than 10% of the Company's revenues for each of the
         years ended December 31, 2001, 2002 and 2003. No customer accounted
         for more than 10% of the accounts receivable as of December 31, 2002
         and 2003.

         In 2003, the Company derived approximately 93% of its revenue from
         customers in Asia. The Company expects that a majority of its future
         revenue will continue to be generated from customers in this region.
         Future political or economic instability in Asia could negatively
         impact the business.

17.      OPERATING LEASES

         The Company leases office facilities under cancelable and
         non-cancelable operating leases that expire in two to five years.
         During the years ended December 31, 2001, 2002 and 2003, the Company's
         operating lease rental and building management services expenses were
         $1,897, $1,872 and $1,484, respectively. The estimated future minimum
         lease rental payments under non-cancelable operating leases as of
         December 31, 2003 are as follows:

                  YEAR ENDING DECEMBER 31,                 OPERATING LEASES
                  ------------------------                 ----------------
         2004...................................                    468
         2005 ..................................                     31
         2006 onwards...........................                     --
                                                           ----------------
                                                             $      499
                                                           ----------------

18.      SEGMENT AND GEOGRAPHIC INFORMATION

         With the launch of China Sourcing Fairs in the fourth quarter of 2003,
         the Company realigned its products and services into three groups. Thus
         the Company has three reportable segments: online services, other media
         services and exhibitions. Certain prior year items have been
         reclassified to conform to the 2003 presentation. Revenues by
         geographic location are based on the location of the customer.

(A)      SEGMENT INFORMATION

<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31,
                                                          ------------------------------------------------------
                                                               2001               2002                2003
                                                          ---------------    ---------------    ----------------
         Revenues:
<S>                                                       <C>                <C>                <C>
         Online services.............................     $       55,468     $       51,268     $       51,367
         Other media services........................             36,391             33,132             36,318
         Exhibitions.................................              2,619              2,455              3,327
         Miscellaneous...............................                807                631                657
                                                          ---------------    ---------------    ----------------
         Consolidated................................     $       95,285     $       87,486     $       91,669
                                                          ---------------    ---------------    ----------------




                                       69
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

                                                                         YEAR ENDED DECEMBER 31,
                                                          ------------------------------------------------------
                                                               2001               2002                2003
                                                          ---------------    ---------------    ----------------
         Income/(Loss) from Operations:
         Online services.............................     $        5,958     $        6,311     $        6,018
         Other media services........................               (850)            (1,452)             3,372
         Exhibitions.................................               (220)              (315)            (1,215)
         Miscellaneous...............................             (1,503)               302                606
                                                          ---------------    ---------------    ----------------
         Consolidated................................     $        3,385     $        4,846     $        8,781
                                                          ---------------    ---------------    ----------------

</TABLE>

<TABLE>
<CAPTION>
                                                                                      AT DECEMBER 31,
                                                                            ------------------------------------
                                                                                 2002                2003
                                                                            ----------------   -----------------
<S>                                                                         <C>                <C>
         Identifiable Assets:
         Online services...................                                 $       39,497     $       47,907
         Other media services..............                                         20,876             31,215
         Exhibitions.......................                                          1,545              2,855
         Miscellaneous.....................                                            732                564
                                                                            -----------------  -----------------
         Consolidated......................                                 $       62,650     $       82,541
                                                                            -----------------  -----------------
</TABLE>

(B)      FOREIGN OPERATIONS

<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31,
                                                          ------------------------------------------------------
                                                               2001               2002                2003
                                                          ---------------   ---------------     ----------------
         Revenues:
<S>                                                       <C>                <C>                <C>
         Asia.......................................      $      88,427      $     81,456       $      84,856
         United States..............................              5,255             4,986               5,970
         Europe.....................................                908               525                 437
         Others.....................................                695               519                 406
                                                          ---------------   ---------------     ----------------
         Consolidated...............................      $      95,285      $     87,486       $      91,669
                                                          ---------------   ---------------     ----------------

</TABLE>

                                                       AT DECEMBER 31,
                                              ----------------------------------
                                                  2002                2003
                                              --------------    ----------------
         Long-Lived Assets:
         Asia................................$     15,285       $       9,206
         United States.......................           6                   -
                                             ---------------    ----------------
         Consolidated........................$     15,291       $       9,206
                                             ---------------    ----------------

19.      CONTINGENCIES

         From time to time the Company is involved in litigation in the normal
         course of business. While the results of such litigation and claims
         cannot be predicted with certainty, the Company believes that the
         probability is remote that the outcome of the outstanding litigation
         and claims as of the current date will have a material adverse effect
         on the Company's consolidated financial position and results of
         operations.



                                       70
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


20.      CAPITAL COMMITMENTS

         The commitments as at December 31, 2003 for the purchase and
         commissioning of software amounted to $160. There were no material
         capital commitments as at December 31, 2002.

21.      RESTRICTED SHARE AWARD PLAN

         On February 4, 2000, the Company established a restricted share award
         plan for the benefit of its chairman and chief executive officer in
         recognition of services to the Company. In conjunction with the
         restricted share award plan, the Former Parent Company assigned
         4,409,044 common shares of the Company, representing a 16% equity
         interest in the Company to the Company. The Company then awarded these
         shares to its chairman and chief executive officer. The chairman and
         chief executive officer's entitlement to 551,131 of these shares is
         subject to an employment agreement with one of the Company's United
         States subsidiaries and entitlement to such shares vested immediately.
         The chairman and chief executive officer's entitlement to the remaining
         3,857,913 shares is subject to employment, non-compete and vesting
         terms under an employment agreement with one of the Company's United
         States subsidiaries. The 3,857,913 shares were to vest ratably over 10
         years, 10% each year on each anniversary date from the grant date.
         However, effective August 30, 2000, the Company's Board of Directors
         approved the accelerated vesting of all the restricted shares granted
         to the chairman and chief executive officer resulting in immediate
         vesting of all the shares. The Company recorded total $64,000 non-cash
         compensation expense associated with these awards in the year ended
         December 31, 2000. At the modification date and subsequently the
         Company, based on historical evidence and the Company's forecast of
         future employee separations, estimated that the chairman and chief
         executive officer will not terminate employment and appointment as
         director prior to the date that vesting in the shares would have
         occurred absent the modification. Therefore, the Company has estimated
         that additional compensation expense to be recognized as a result of
         the modification is nil. Should actual results differ from this
         estimate, adjustment in future reporting periods will be required.

22.      EQUITY COMPENSATION PLANS

         On December 30, 1999, the Company established the Global Sources
         Employee Equity Compensation Trust (the "Trust") for the purpose of
         administering monies and other assets to be contributed by the Company
         to the Trust for the establishment of equity compensation and other
         benefit plans. The Trust is administered by Harrington Trust Limited
         (the "Bermuda Trustee"). The Bermuda Trustee in the exercise of its
         power under the Declaration of Trust may be directed by the plan
         committee, including the voting of securities held in the Trust. The
         Board of Directors of the Company will select the members of the plan
         committee.

         On February 4, 2000, in conjunction with the establishment of the Trust
         and the Share Exchange, the Former Parent Company assigned 2,755,652
         common shares of the Company, representing a 10% equity interest in the
         Company, for the establishment of share option plans and/or share award
         plans, known as ECP I, ECP II and ECP III. Subsequently, share option
         plans and/or share award plans, known as ECP IV, ECP V, ECP VI and ECP
         VII were established.

         Eligible employees, directors and consultants under ECP I are entitled
         to purchase common shares of Global Sources Ltd. at a price determined
         by the plan committee at the time of the grant. The exercise



                                       71
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


         price of these options may be below the fair market value of the
         Company's common shares. The plan committee determines who will
         receive, and the terms of, the options.

         Optionees may pay for common shares purchased upon exercise of options
         in the manner determined by the plan committee at the time of grant.

         Eligible employees, directors and consultants under ECP II were
         entitled to purchase common shares of Global Sources Ltd. at an
         exercise price determined by the plan committee at the time of the
         grant. There are two types of options under this plan. The exercise
         price of both of these options were below the fair market value of the
         Company's common shares at that time. The plan committee determines who
         will receive, and the terms of, the options. Employees could decide
         whether to take up the options for a period of 95 days ending June 29,
         2000. All the options granted were exercised. Optionees were able to
         pay for common shares purchased upon exercise of options by check to
         the Trust. Payment has been made to the Trust. Entitlement of the
         employees, directors and consultants to these common shares is subject
         to employment and vesting terms.

         Eligible employees, directors and consultants under ECP III were
         awarded a defined amount of compensation payable in Global Sources Ltd.
         common shares, the number of which were determined by dividing the
         amount of compensation awarded by an amount determined by the plan
         committee prior to the Share Exchange.

         Entitlement of the employees to these common shares is subject to
         employment and vesting terms.

         The non-cash compensation expense associated with awards in accordance
         with APB No. 25 and SFAS No. 123, under ECP II and ECP III of
         approximately $2,904 and $2,357, respectively, were recognized ratably
         over the three year vesting term from the respective award dates.

         Eligible employees, directors and consultants under ECP IV are awarded
         a defined amount of compensation payable in Global Sources Ltd. common
         shares, the number of which are determined by the plan committee
         periodically.

         Entitlement of the employees, directors and consultants to these common
         shares is subject to employment and vesting terms.

         Eligible employees, directors and consultants under ECP V were awarded
         a one-time grant of shares, the number of which were determined by the
         plan committee.

         Entitlement of the employees to these common shares is subject to
         employment and vesting terms.

         The Equity Compensation Plan committee approved the awards of common
         shares under ECP IV and ECP V on January 23, 2001. The Equity
         Compensation Plan committee approved additional awards of common shares
         under ECP IV on April 1, 2001 and July 1, 2001 and under ECP V on
         January 1, 2002.

         The non-cash compensation expenses associated with the above awards in
         accordance with APB No. 25 and SFAS No. 123, under ECP IV and ECP V of
         approximately $3,095 and $1,823, respectively, are recognized over the
         five year vesting term from the respective award dates.

         Eligible employees, directors and consultants under ECP VI are awarded
         a one-time grant of Global Sources Ltd. common shares, the number of
         which are determined by the plan committee.

         Entitlement of the employees, directors and consultants to these common
         shares is subject to non-compete and vesting terms.

         The Equity Compensation Plan committee approved ECP VI on March 13,
         2001 and made awards of common shares under plan on various dates
         during the year 2001 and 2002.

         The non-cash compensation expenses associated with the awards in
         accordance with APB No. 25 and SFAS No. 123, under ECP VI totaling to
         approximately $589, are recognized over the five year vesting term from
         the respective award dates.



                                       72
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


         Eligible employees, directors and consultants under ECP VII are awarded
         a grant of defined number of Global Sources Ltd. common shares, the
         number of which are determined by the plan committee periodically.

         The Equity Compensation Plan committee approved the awards of common
         shares under ECP VII on January 1, 2002 and made further awards on
         March 31, 2003 and on June 19, 2003. The non-cash compensation expenses
         associated with the above awards in accordance with APB No. 25 and SFAS
         No. 123, under ECP VII of approximately $1,967 are recognized over the
         six years vesting term from the respective award dates.

         Entitlement of the employees, directors and consultants to these common
         shares is subject to employment and vesting terms.

         The Company expensed $2,501, $2,564 and $1,419 in non-cash compensation
         costs associated with the awards under the above ECP plans in the years
         ended December 31, 2001, 2002 and 2003, respectively.




                                       73
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)




<TABLE>
<CAPTION>
                                      ECP II             ECP III       ECP IV       ECPV      ECP VI     ECP VII
                               PURCHASE      GIFT         GRANT        GRANT        GRANT     GRANT      GRANT
                                 PLAN        PLAN         PLAN         PLAN         PLAN      PLAN       PLAN
                              ----------   ----------   ----------   ----------  ----------  --------  ----------
Plan Inception                  MARCH,       MARCH,       MARCH,      JANUARY,    JANUARY,    MARCH,    JANUARY,
                                 2000         2000         2000         2001        2001       2001       2002
                              -----------------------------------------------------------------------------------
Number of Shares:
<S>                             <C>         <C>         <C>                <C>         <C>        <C>        <C>
At December 31, 2000...         88,976      221,193     113,135            --          --         --         --
Original restricted
  shares granted in                 --           --          --       574,590     333,300     86,130         --
  year 2001............
Shares forfeited to
  beneficial trustee...             --      (26,915)    (21,823)      (96,621)   (100,650)        --         --
                              ----------   ----------   ----------   ----------  ---------   ---------  ---------
Balance at December 31, 2001    88,976      194,278      91,312       477,969     232,650     86,130         --
Original restricted
  shares granted in
  year 2002............             --           --          --            --      33,000     11,000    147,892
Shares forfeited to
  beneficial trustee...             --      (10,873)     (2,507)      (42,591)    (31,240)        --    (10,112)
                              ----------   ----------   ----------   ----------  ---------   ---------  ---------
Balance at December 31, 2002    88,976      183,405      88,805       435,378     234,410     97,130    137,780
Original restricted
  shares granted in
  year 2003............             --           --          --            --          --         --    316,059
Shares forfeited to
  beneficial trustee...             --       (1,439)         --       (13,526)     (3,960)        --    (12,432)
                              ----------   ----------   ----------   ----------  ---------   ---------  ---------

Balance at December
  31, 2003.............           88,976    181,966      88,805       421,852     230,450     97,130    441,407
                              ----------   ----------   ----------   ----------  ---------   ---------  ---------
Grant Price Per Share..          $ 21.82      $ NIL       $ NIL         $ NIL       $ NIL      $ NIL      $ NIL
                              ----------   ----------   ----------   ----------  ---------   ---------  ---------
Weighted average fair
  value of the shares
  granted..............          $  2.27      $ 24.09     $ 24.09       $  7.88     $ 7.95     $ 5.00     $ 3.90
                              ----------   ----------   ----------   ----------  ---------   ---------  ---------

</TABLE>

Weighted average fair value of the shares granted is estimated to be the average
market value of the shares at the time of the grant.

23.      DIRECTORS PURCHASE PLAN

         A 2000 Non-Employee Directors Share Option Plan was approved on October
         26, 2000 by the shareholders of the Company. Each eligible Director on
         the date of the first board meeting of each calendar year, commencing
         in 2001, would receive the grant of an option to purchase 22,000 common
         shares on that date. The Options granted are subject to such terms and
         conditions as determined by the Board of Directors at the grant.

         The option price, per share, payable before the end of each February,
         is determined by the Board of Directors for each such grant of options.
         The non-employee Directors may decline all or part of the award, which
         is non-transferable.



                                       74
<PAGE>
                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)


         The Board granted the first awards under the above plan in 2001. The
         option price was fifteen percent less than the average closing price of
         the shares for the last five trading days of the previous calendar
         year. The award vests over four years with one quarter of the shares
         vesting each year. Full payment must be made upon exercising the
         option. Upon resignation of an eligible Director, all unvested shares
         are forfeited and the option price received for the forfeited unvested
         shares is refunded. Only one Director accepted the offer on February
         10, 2001 for the 22,000 shares granted under option. The $164 received
         as proceeds of this plan was included in additional paid-in capital. On
         February 28, 2002 and 2003, the Company issued to the Director the
         5,500 and 5,500 common shares, respectively, that vested on those
         dates, adjusted to reflect the shares split discussed in Note 26.

         As per the terms of the plan, the Board granted options to all eligible
         Directors again in February 2002. These awards will vest after four
         years. Optionees must pay 15% of the option price, which is the average
         closing price of the shares for the last five trading days of year
         2001, at the time of exercising the option. The balance of 85% must be
         paid on or before the vesting date. The resignation of a Director
         following his or her exercise of the Grant of Options and payment of
         the Option Price shall not cause a forfeiture of the unvested shares.
         All the eligible non-employee Directors accepted the offer before
         February 28, 2002. The $50 received towards the 15% of the option price
         was included in additional paid in capital.

         The Board granted options to all eligible directors again in February
         2003. These awards will vest after four years. Optionees must pay 10%
         of the option price, which is the average closing price of the shares
         for the last five trading days of year 2002, at the time of exercising
         the option. The balance of 90% must be paid on or before the vesting
         date. The resignation of a Director following his or her exercise of
         the grant of options and payment of the option price shall not cause a
         forfeiture of the unvested shares. Three eligible directors accepted
         the offer before February 28, 2003. The $30 received towards the 10% of
         the option price was included in the additional paid in capital.

         On May 8, 2003, shareholders approved the amendments to the 2000
         Non-Employee Directors Share Option Plan to allow both employee and
         non-employee Directors to participate in the plan. The plan was renamed
         as Directors Purchase Plan by the Board of Directors on August 14,
         2003.

         Directors purchasing the shares under the plan pay 10% of the purchase
         price which is the average closing price of the shares for the last
         five trading days of year 2003, on or before February 28, 2004. The
         balance of 90% is paid by February 28, 2008 and the shares will be
         issued thereafter. The resignation of a Director following his or her
         purchase of the shares and payment of the 10% initial installment shall
         not cause a forfeiture of the purchased shares. Six directors opted to
         purchase 22,000 shares each and one director opted to purchase part of
         the 22,000 shares. The amount of $92 received towards the 10% of the
         purchase price will be included in the additional paid in capital.

24.      CREDIT FACILITIES

         On March 17, 2000, the Company entered into a credit facility with the
         Bank of Bermuda (Isle of Man) Limited. The credit facility has a term
         of one year and provides for borrowings of up to $25,000, with minimum
         borrowings of $1,000. The lender may request security from time to time
         to secure borrowings under the credit facility. The credit facility
         bears interest, payable quarterly in arrears, at the Lon-



                                       75
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (IN U.S. DOLLARS THOUSANDS, EXCEPT NUMBER OF SHARES AND PER SHARE DATA)

         don Inter-Bank Market Rate plus 0.5%. The former parent company has
         guaranteed all of the Company's obligations under the credit facility.

         On March 20, 2002, the credit facility was renewed for $10,000 for one
         more year subject to the same terms and conditions as applicable to the
         original facility.

         This credit facility was renewed for $10,000 for a further one year
         period on March 7, 2003, subject to the same terms and conditions as
         applicable to the original facility.

         As of December 31, 2002 and 2003, the outstanding principal amount
         under this credit facility was $NIL.

         The Company also holds a Documentary Credit facility with the Hongkong
         and Shanghai Banking Corporation Limited, for providing documentary
         credits to the Company's suppliers. This facility has a maximum limit
         of $577. As at December 31, 2003, the unutilized amount under this
         facility was approximately $265. Hongkong and Shanghai Banking
         Corporation Limited has also provided guarantees on behalf of the
         Company to the Company's suppliers. As at December 31, 2003, such
         guarantees amounted to $9.

25.      RECLASSIFICATION

         Certain prior-year amounts have been reclassified to conform to the
         current-year presentation.

26.      POST BALANCE SHEET EVENTS

         Subsequent to the balance sheet date, the Company has entered into a
         number of licence agreements for its exhibition events amounting to
         $29,868 in payments over five (5) years. The agreements are cancelable
         under Force Majeure conditions, and with the consent of the other party
         but may be subject to a payment penalty.

         On February 16, 2004, the Company announced a one for ten bonus share
         issue on the Company's outstanding common shares. Shareholders of
         record on March 1, 2004 will receive one additional common share for
         every ten common shares held, of face value of $0.01 each. The bonus
         share issue will be distributed on or about April 1, 2004. All common
         shares and per-share amounts in the consolidated financial statements
         and related notes have been retroactively adjusted to reflect the
         eleven for ten share split for all periods presented. In addition, the
         Company has reclassified $26 and $26 from additional paid in capital to
         common share capital as of December 31, 2003 and 2002, respectively.




                                       76
<PAGE>





     ITEM 9. THE OFFER AND LISTING

PRICE HISTORY OF STOCK

The following table sets forth the high and low per share closing prices for our
common shares for the periods indicated, as adjusted for the eleven for ten
share split resulting from the bonus share issue.

             PERIOD                       HIGH                LOW
             ------                       ----                ---

Year 2000                                $90.80             $7.95
Year 2001                                 10.23              2.73
Year 2002                                  5.06              2.59
Year 2003                                 10.09              3.69

First Quarter 2002                         5.06              3.32
Second Quarter 2002                        4.64              3.68
Third Quarter 2002                         3.82              2.59
Fourth Quarter 2002                        4.72              3.05

First Quarter 2003                         4.82              3.77
Second Quarter 2003                        5.50              3.69
Third Quarter 2003                        10.09              4.37
Fourth Quarter 2003                        9.09              6.36

October 2003                               9.09              6.82
November 2003                              8.77              6.82
December 2003                              7.72              6.36

January 2004                              16.82              6.74
February 2004                             16.36             11.82
March 2004                                16.04             10.88

MARKETS

Our shares are listed and traded under the symbol "GSOL" on the Nasdaq National
Market.

     ITEM 10. ADDITIONAL INFORMATION

MEMORANDUM AND ARTICLES OF ASSOCIATION

DESCRIPTION OF SHAREHOLDER RIGHTS ATTACHING TO OUR COMMON SHARES

The following discussion of our common shares, and the laws governing the rights
of our shareholders, is based upon the advice of Appleby Spurling Hunter, our
Bermuda counsel.

Our authorized share capital consists of 50,000,000 common shares, par value
$0.01 per share. Effective April 1, 2004, we issued to all of our shareholders a
bonus share distribution of one share for every ten shares held as of March 1,
2004. As of April 1, 2004, we had 28,952,194 common shares issued and
outstanding.

     o    Holders of common shares have no preemptive, redemption, conversion or
          sinking fund rights.

     o    Holders of common shares are entitled to one vote per share on all
          matters submitted to a vote of holders of common shares and do not
          have any cumulative voting rights.



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     o    In the event of our liquidation, dissolution or winding-up, the
          holders of common shares are entitled to share ratably in our assets,
          if any, remaining after the payment of all our debts and liabilities.

     o    Our outstanding common shares are fully paid and non-assessable.
          Non-assessable as that term is understood under Bermuda Law means in
          relation to fully-paid shares of a company and subject to any contrary
          provision in any agreement in writing between such company and the
          holder of shares, that no shareholder shall be obliged to contribute
          further amounts to the capital of the company, either in order to
          complete payment for their shares, to satisfy claims of creditors of
          the company, or otherwise; and no shareholder shall be bound by an
          alteration of the memorandum of association or bye-laws of the company
          after the date on which he became a shareholder, if and so far as the
          alteration requires him to take, or subscribe for additional shares,
          or in any way increases his liability to contribute to the share
          capital of, or otherwise to pay money to, the company.

     o    Additional authorized but unissued common shares may be issued by the
          board of directors without the approval of the shareholders.

The holders of common shares will receive dividends, if any, as may be declared
by the board of directors out of funds legally available for purposes. We may
not declare or pay a dividend, or make a distribution out of contributed
surplus, if there are reasonable grounds for believing that:

     o    we are, or after the payment would be, unable to pay our liabilities
          as they become due; or

     o    the realizable value of our assets after such payment or distribution
          would be less than the aggregate amount of our liabilities and our
          issued share capital and share premium accounts.

The following is a summary of provisions of Bermuda law and our organizational
documents, including the bye-laws. We refer you to our memorandum of association
and bye-laws, copies of which have been filed with the SEC. You are urged to
read these documents for a complete understanding of the terms of the memorandum
of association and bye-laws.

SHARE CAPITAL

Our authorized capital consists of one class of common shares. Under our
bye-laws, our board of directors has the power to issue any authorized and
unissued shares on such terms and conditions as it may determine. Any shares or
class of shares may be issued with such preferred, deferred, qualified or other
special rights or such restrictions, whether in regard to dividend, voting,
return of capital or otherwise, as we may from time to time by resolution of the
shareholders prescribe.

VOTING RIGHTS

Generally, under Bermuda law and our bye-laws, questions brought before a
general meeting are decided by a simple majority vote of shareholders present or
represented by proxy. Each shareholder is entitled to one vote for each share
held. Matters will be decided by way of votes cast on a show of hands, unless a
poll is demanded.

If a poll is demanded, each shareholder who is entitled to vote and who is
present in person or by proxy has one vote for each common share entitled to
vote on such question. A poll may only be demanded under the bye-laws by:

     o    the chairman of the meeting;

     o    at least three shareholders present in person or by proxy;



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     o    any shareholder or shareholders present in person or by proxy and
          holding between them not less than one-tenth of the total voting
          rights of all shareholders having the right to vote at such meeting;
          or

     o    a shareholder or shareholders present in person or represented by
          proxy holding shares conferring the right to vote at such meeting,
          being common shares on which an aggregate sum has been paid up equal
          to not less than one-tenth of the total sum paid up on all such common
          shares conferring such right.

No shareholder shall, unless the board of directors otherwise determines, be
entitled to vote at any general meeting unless all calls or other sums presently
payable by that shareholder in respect of all shares held by such shareholder
have been paid.

DIVIDEND RIGHTS

Under Bermuda law, a company may declare and pay dividends unless there are
reasonable grounds for believing that the company is, or would, after the
payment, be unable to pay its liabilities as they become due or that the
realizable value of the company's assets would thereby be less than the
aggregate of its liabilities and issued share capital and share premium
accounts.

Under our bye-laws, each share is entitled to a dividend if, as and when
dividends are declared by the board of directors. The board of directors may
determine that any dividend may be paid in cash or will be satisfied in paying
up in full in our common shares to be issued to the shareholders credited as
fully paid or partly paid. The board of directors may also pay any fixed cash
dividend which is payable on any of our common shares half-yearly or on other
dates, whenever our position, in the opinion of the board of directors,
justifies such payment.

Dividends, if any, on our common shares will be paid at the discretion of our
board of directors and will depend on our future operations and earnings,
capital requirements, surplus and general financial conditions, as our board of
directors may deem relevant.

We have not paid any cash dividends on our common shares since October 1999.
Previously, we paid dividends as a private company as a means to distribute
earnings to shareholders. Beginning in October 1999, we have focused on the
implementation of our growth plans, and we have retained earnings in furtherance
of such plans. Currently, we do not intend to pay dividends for the foreseeable
future in order to focus on our growth plans. We are not permitted to pay a
dividend under Bermuda law until such time as we have positive retained
earnings. In any event, we do not intend to pay dividends for the foreseeable
future in order to focus on our growth plans.

PURCHASE BY A COMPANY OF ITS OWN COMMON SHARES

We may purchase our own common shares out of the capital paid up on the common
shares in question or out of funds that would otherwise be available for
dividend or distribution or out of the proceeds of a fresh issue of common
shares made for the purposes of the purchase. We may not purchase our shares if,
as a result, our issued share capital would be reduced below the minimum capital
specified in our memorandum of association.

However, to the extent that any premium is payable on the purchase, the premium
must be provided out of the funds of the company that would otherwise be
available for dividend or distribution or out of a company's share premium
account. Any common share purchased by a company are treated as cancelled and
the amount of the company's issued capital is diminished by the nominal value of
the shares accordingly but shall not be taken as reducing the amount of the
company's authorized share capital.

PREEMPTIVE RIGHTS

Our bye-laws do not provide the holders of our common shares with preemptive
rights in relation to any issues of common shares held by us or any transfer of
our shares.



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VARIATION OF RIGHTS

We may issue more than one class of shares and more than one series of shares in
each class. If we have more than one class of shares, the rights attached to any
class of shares may be altered or abrogated either:

     o    with the consent in writing of the holders of not less than
          seventy-five percent of the issued common shares of that class; or

     o    with the sanction of a resolution passed at a separate general meeting
          of the holders of such common shares, voting in proxy or present, at
          which a quorum is present.

The bye-laws provide that a quorum for such a meeting shall be two persons
present in person or by proxy representing a majority of the shares of the
relevant class. The bye-laws specify that the creation or issue of shares
ranking on parity with existing shares will not, subject to any statement to the
contrary in the terms of issue of those shares or rights attached to those
shares, vary the special rights attached to existing shares.

TRANSFER OF COMMON SHARES

Subject to the "Transfer Restrictions" section below, a shareholder may transfer
title to all or any of his shares by completing an instrument of transfer in the
usual common form or in such other form as the board of directors may approve.

TRANSFER RESTRICTIONS

The board of directors may in its absolute discretion and without assigning any
reason refuse to register the transfer of any share that is not fully paid.

The board of directors may refuse to register an instrument of transfer of a
share unless it:

     o    is duly stamped, if required by law, and lodged with us;

     o    is accompanied by the relevant share certificate and such other
          evidence of the transferor's right to make the transfer as the board
          of directors shall reasonably require;

     o    has obtained, where applicable, permission of the Bermuda Monetary
          Authority; and

     o    is in respect of one class of shares.

A "blanket" authorization has been obtained from the Bermuda Monetary Authority
for all transfers of our common shares between persons who are not resident in
Bermuda for exchange control purposes, provided our common shares remain listed
on an "appointed stock exchange" (which includes listing on the Nasdaq National
Market).

TRANSMISSION OF SHARES

In the event of the death of a shareholder, the survivor or survivors, where the
deceased shareholder was a joint holder, or the legal personal representative of
such shareholder, including executors and administrators, shall be the only
persons recognized by us as having any title to the shareholder shares.

DISCLOSURE OF INTERESTS

Our bye-laws provide that a director who has at least a five percent interest,
directly or indirectly, in an entity that is interested in a contract or
proposed contract or arrangement with us, shall declare the nature of such
interest at the



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first opportunity at a meeting of the board of directors, or by writing to the
board of directors. If the director has complied with the relevant sections of
the Companies Act and the bye-laws with regard to the disclosure of his
interest, the director may vote at a meeting of the board of directors or a
committee thereof on a contract, transaction or arrangement in which that
director is interested and he will be taken into account in ascertaining whether
a quorum is present.

Under Bermuda law, directors individually do not have exerciseable borrowing
rights, unless the bye-laws provide otherwise. Our bye-laws do not provide for
borrowing rights or credit limits for individual directors. The board of
directors may approve borrowings at their meetings, and between meetings the
executive committee of the board may approve borrowings.

RIGHTS IN LIQUIDATION

Under Bermuda law, in the event of liquidation, dissolution or winding-up of a
company, after satisfaction in full of all claims of creditors and subject to
the preferential rights accorded to any series of preferred stock, the proceeds
of such liquidation, dissolution or winding-up are distributed among the holders
of shares in accordance with a company's bye-laws.

Under our bye-laws, if we are wound up, the liquidator may, with the sanction of
a resolution from us and any sanction required by the Companies Act, divide
amongst the shareholders in specie or kind the whole or part of our assets,
whether they shall consist of property of the same kind or not and may for such
purposes set such values as he deems fair upon any property to be divided as set
out above and may determine how such division shall be carried out as between
the shareholders.

MEETINGS OF SHAREHOLDERS

Under Bermuda law, a company is required to convene at least one general meeting
per calendar year. The directors of a company, notwithstanding anything in its
bye-laws, shall, on the requisition of the shareholders holding at the date of
the deposit of the requisition not less than one-tenth of the paid-up capital of
the company carrying the right of vote, duly convene a special general meeting.

The bye-laws provide that the board of directors may convene a special general
meeting whenever in their judgment such a meeting is necessary. Unless the
bye-laws of a company specify otherwise, Bermuda law requires that shareholders
be given at least five days' notice of a meeting of the company. Our bye-laws
extend this period to provide that at least 21 days' written notice of a general
meeting must be given to those shareholders entitled to receive such notice. The
accidental omission to give notice to or non-receipt of a notice of a meeting by
any person does not invalidate the proceedings of a meeting.

Under Bermuda law the number of shareholders constituting a quorum at any
general meeting of shareholders may not be less than two individuals. Our
bye-laws add to this quorum requirement to provide that no business can be
transacted at a general meeting unless a quorum of at least two shareholders
representing a majority of the issued shares of the company are present in
person or by proxy and entitled to vote. A shareholder present at a general
meeting or a meeting of a class of shareholders in person or by proxy shall be
deemed to have received appropriate notice of the meeting.

Under our bye-laws, notice to any shareholders may be delivered either
personally, by electronic means or by sending it through the post, by airmail
where applicable, in a pre-paid letter addressed to the shareholder at his
address as appearing in the share register or by delivering it to, or leaving it
at such registered address or, in the case of delivery by electronic means, by
delivering it to the shareholder at such address as may be provided to the
company by the shareholder for such purpose. A notice of a general meeting is
deemed to be duly given to the shareholder if it is sent to him by cable, telex,
telecopier or electronic means.



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ACCESS TO BOOKS AND RECORDS AND DISSEMINATION OF INFORMATION

Under Bermuda law, members of the general public have the right to inspect the
public documents of a company available at the office of the Bermuda Registrar
of Companies. These documents include the memorandum of association and any
alteration to the memorandum of association.

Our shareholders and directors have the additional right to inspect our minute
books and our audited financial statements, which must be presented at an annual
general meeting.

Our bye-laws provide that our register of shareholders is required to be open
for inspection during normal business hours by shareholders without charge and
to members of the general public on the payment of a fee. A company is required
to maintain its share register in Bermuda but may, subject to the provisions of
the Companies Act, establish a branch register outside of Bermuda. We have
established a branch register with our transfer agent, Mellon Investor Services,
LLC, at 85 Challenger Road, Ridgefield Park, NJ 07660, USA.

Under Bermuda law, a company is required to keep at its registered office a
register of its directors and officers that is open for inspection for not less
than two hours in each day by members of the public without charge. Our bye-laws
extend this obligation to provide that the register of directors and officers be
available for inspection by the public during normal business hours. Bermuda law
does not, however, provide a general right for shareholders to inspect or obtain
copies of any other corporate records.

ELECTION OR REMOVAL OF DIRECTORS

The bye-laws provide that the number of directors will be such number not less
than two, as our shareholders by resolution may from time to time determine. A
director will serve until his successor is appointed or his prior removal in the
manner provided by the Companies Act or the bye-laws. Our bye-laws provide that
at each annual general meeting one-third of the directors will retire from
office on a rotational basis based on length of time served. A director is not
required to hold shares in a company to qualify to join the board, and once
appointed may sit on the board regardless of age, unless the bye-laws provide
otherwise. Our bye-laws do not require qualifying shares to join the board and
do not set age limits for directors who serve on the board. All directors must
provide written acceptance of their appointment within thirty days of their
appointment.

The board has the power at any time and from time to time to appoint any
individual to be a director so as to fill a casual vacancy. The board may
approve the appointment of alternate directors.

We may, in a special general meeting called for this purpose, remove a director,
provided notice of such meeting is served upon the director concerned not less
than fourteen days before the meeting and he shall be entitled to be heard at
that meeting.

The office of a director will be vacated in the event of any of the following:

     o    if he resigns his office by notice in writing to be delivered to our
          registered office or tendered at a meeting of the board of directors;

     o    if he becomes of unsound mind or a patient for any purpose of any
          statute or applicable law relating to mental health;

     o    if he becomes bankrupt under the law of any country or compounds with
          his creditors;

     o    if he is prohibited by law from being a director; or



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     o    if he ceases to be a director by virtue of the Companies Act or is
          removed from office pursuant to the bye-laws.

AMENDMENT OF MEMORANDUM OF ASSOCIATION AND BYE-LAWS

Bermuda law provides that the memorandum of association of a company may be
amended by resolution of the board subject to approval by a resolution passed at
a general meeting of which due notice has been given. An amendment to a
memorandum of association does not require the consent of the Minister of
Finance save for specific circumstances, for example, the adopting of any
objects which constitute restricted business activities under the Companies Act.

Under Bermuda law, the holders of:

     o    an aggregate of not less than twenty percent in par value of a
          company's issued share capital or any class thereof, or

     o    not less in the aggregate than twenty percent of the company's
          debentures entitled to object to alterations to its memorandum of
          association,

have the right to apply to the Supreme Court of Bermuda for an annulment of any
amendment of the memorandum of association. Where such an application is made,
the amendment becomes effective only to the extent that it is confirmed by the
Bermuda Supreme Court. An application for an annulment of an amendment of the
memorandum of association must be made within twenty-one days after the date on
which the resolution altering the memorandum of association is passed and may be
made on behalf of the persons entitled to make the application by one or more of
their number as they may appoint in writing for the purpose. No such application
may be made by persons voting in favor of the amendment or any persons who have
given to the company a statement in writing duly signed that he, having had
notice, consents to the alteration.

Our bye-laws provide that they may be amended in the manner provided for in the
Companies Act. The Companies Act provides that the directors may amend the
bye-laws, provided that any such amendment shall be operative only to the extent
approved by the shareholders.

TRANSACTIONS WITH INTERESTED SHAREHOLDERS

Our bye-laws prohibit us from engaging in a business combination with any
interested shareholder unless the business combination is approved by two-thirds
of the holders of our voting shares (other than shares held by that interested
shareholder), or by a simple majority if the business combination is approved by
a majority of continuing directors or if certain prescribed conditions are met
assuring that we will receive fair market value in exchange for such business
combination. In this context, a "business combination" includes mergers, asset
sales and other material transactions resulting in a benefit to the interested
shareholder or the adoption of a plan for our liquidation or dissolution; a
"continuing director" is a member of our board of directors that is not an
affiliate or associate of an interested shareholder and was a member of our
board prior to such person becoming an interested shareholder; and an
"interested shareholder" is any person (other than us or any of our
subsidiaries, any employee benefit or other similar plan or any of our
shareholders that received our shares in connection with our share exchange in
2000 prior to the listing of our shares on the Nasdaq National Market) that owns
or has announced its intention to own, or with respect to any of our affiliates
or associates, within the prior two years did own, at least 15% of our voting
shares.

APPRAISAL RIGHTS AND SHAREHOLDER SUITS

Amalgamation

The Companies Act provides that, subject to the terms of a company's bye-laws,
the amalgamation of a Bermuda company with another company requires the
amalgamation agreement to be approved by the board of directors and



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at a meeting of the shareholders by seventy-five percent of the members present
and entitled to vote at that meeting in respect of which the quorum shall be two
persons holding or representing at least one-third of the issued shares of the
company or class, as the case may be.

Our bye-laws alter the majority vote required and provide that any resolution
submitted for the consideration of shareholders at any general meeting to
approve a proposed amalgamation with another company requires the approval of
two-thirds of the votes of disinterested shareholders cast at such meeting.

Under Bermuda law, in the event of an amalgamation of a Bermuda company, a
shareholder who did not vote in favor of the amalgamation and who is not
satisfied that fair value has been offered for such shareholder's shares, may
apply to a Bermuda court within one month of notice of the meeting of
shareholders to appraise the fair value of those shares.

Class Actions and Derivative Actions

Class actions and derivative actions are generally not available to shareholders
under Bermuda law. Under Bermuda law, a shareholder may commence an action in
the name of a company to remedy a wrong done to the company where the act
complained of is alleged to be beyond the corporate power of the company, or is
illegal or would result in the violation of the company's memorandum of
association or bye-laws. Furthermore, consideration would be given by a Bermuda
court to acts that are alleged to constitute a fraud against the minority
shareholders or, for instance, where an act requires the approval of a greater
percentage of the company's shareholders than those who actually approved it.

When the affairs of a company are being conducted in a manner which is
oppressive or prejudicial to the interests of some part of the shareholders, one
or more shareholders may apply to a Bermuda court, which may make such order as
it sees fit, including an order regulating the conduct of the company's affairs
in the future or ordering the purchase of the shares of any shareholders, by
other shareholders or by the company.

CAPITALIZATION OF PROFITS AND RESERVES

Under our bye-laws, the board of directors may resolve to capitalize all or any
part of any amount for the time being standing to the credit of any reserve or
fund which is available for distribution or to the credit of our share premium
account; and accordingly make that amount available for distribution among the
shareholders who would be entitled to it if distributed by way of a dividend in
the same proportions and on the footing that the same may be paid not in cash
but be applied either in or towards:

     o    paying up amounts unpaid on any of our shares held by the
          shareholders; or

     o    payment up in full of our unissued shares, debentures, or other
          obligations to be allotted and credited as fully paid amongst such
          shareholders.

As a proviso to the foregoing, the share premium account may be applied only in
paying up unissued shares to be issued to shareholders credited as fully paid,
and provided, further, that any sum standing to the credit of a share premium
account may only be applied in crediting as fully paid shares of the same class
as that from which the relevant share premium was derived.

REGISTRAR OR TRANSFER AGENT

Our transfer agent and registrar is Mellon Investor Services, LLC. In addition
to a register held by Mellon Investor Services, a register of holders of the
shares is maintained by Appleby Spurling Hunter in Bermuda located at Canon's
Court, 22 Victoria Street, Hamilton HM 12 Bermuda.



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UNTRACED SHAREHOLDERS

We are entitled to sell the common shares of a person entitled to such common
shares provided such person goes untraced for a period of 12 years. We shall be
held to account to the rightful holder of such common shares for an amount equal
to the proceeds of sale. Any dividend or distribution out of contributed surplus
unclaimed for a period of six years from the date of declaration of that
dividend or distribution shall be forfeited and shall revert to us and the
payment by the board of directors of any unclaimed dividend, distribution,
interest or other sum payable on or in respect of the common share into a
separate account shall not constitute us a trustee in respect thereof.

PERSONAL LIABILITY OF DIRECTORS AND INDEMNITY

The Companies Act requires every officer, including directors, of a company in
exercising powers and discharging duties, to act honestly in good faith with a
view to the best interests of the company, and to exercise the care, diligence
and skill that a reasonably prudent person would exercise in comparable
circumstances. The Companies Act further provides that any provision whether in
the bye-laws of a company or in any contract between the company and any officer
or any person employed by the company as auditor exempting such officer or
person from, or indemnifying him against, any liability which by virtue of any
rule of law would otherwise attach to him, in respect of any fraud or dishonesty
of which he may be guilty in relation to the company, shall be void.

Every director, officer, resident representative and committee member shall be
indemnified out of our funds against all liabilities, loss, damage or expense,
including liabilities under contract, tort and statute or any applicable foreign
law or regulation and all reasonable legal and other costs and expenses properly
payable, incurred or suffered by him as director, officer, resident
representative or committee member; provided that the indemnity contained in the
bye-laws will not extend to any matter which would render it void under the
Companies Act as discussed above.

MATERIAL CONTRACTS

We do not believe any of our contracts to be material to the operation of our
company, taken as a whole.

EXCHANGE CONTROLS

BERMUDA LAW

We have been designated as a non-resident under the Exchange Control Act of 1972
by the Bermuda Monetary Authority. This designation will allow us to engage in
transactions in currencies other than the Bermuda dollar.

The Registrar of Companies (Bermuda) has neither approved nor disapproved of the
securities to which this document relates, nor passed on the accuracy or
adequacy of this document and accepts no responsibility for the financial
soundness of any proposals or the correctness of any statements made or opinions
expressed with regard to such securities. Approvals or permissions received from
the Bermuda Monetary Authority do not constitute a guarantee by the Bermuda
Monetary Authority as to our performance or our creditworthiness. Accordingly,
in giving such approvals or permissions, the Bermuda Monetary Authority will not
be liable for our performance or default or for the correctness of any opinions
or statements expressed in this document.

The transfer of common shares between persons regarded as resident outside
Bermuda for exchange control purposes and the issue of common shares to such
persons may be effected without specific consent under the Control Act and
regulations thereunder. Issues and transfers of common shares to any person
regarded as resident in Bermuda for exchange control purposes require specific
prior approval from the Bermuda Monetary Authority under the Control Act.

There are no limitations on the rights of persons regarded as non-resident of
Bermuda for foreign exchange control purposes owning our shares. Because we have
been designated as a non-resident for Bermuda exchange control purposes, there
are no restrictions on our ability to transfer funds, other than funds
denominated in Bermuda dollars,



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in and out of Bermuda or to pay dividends to non-Bermuda residents who are
holders of our shares, other than in respect of local Bermuda currency.

Under Bermuda law, share certificates are only issued in the names of
corporations, partnerships or individuals. In the case of an applicant acting in
a special capacity, for example an executor or a trustee, certificates may, at
the request of the applicant, record the capacity in which the applicant is
acting.

Notwithstanding the recording of any such special capacity, we are not bound to
investigate or incur any responsibility in respect of the proper administration
of any such estate or trust.

We will take no notice of any trust applicable to any of our common shares
whether or not we had notice of such trust.

As an "exempted company," we are exempt from Bermuda laws which restrict the
percentage of share capital that may be held by non-Bermudians. However, as an
exempted company we may not participate in designated business transactions,
including:

     o    the acquisition or holding of land in Bermuda (except that required
          for our business and held by way of lease or tenancy agreement for a
          term not exceeding 50 years or, with the consent of the Minister
          granted in his discretion, land held by way of lease or tenancy for a
          term of not more than 21 years in order to provide accommodation or
          recreational facilities for our officers and employees);

     o    the taking of mortgages on land in Bermuda to secure an amount in
          excess of $50,000 without the consent of the Minister of Finance of
          Bermuda;

     o    the acquisition of bonds or debentures secured on land in Bermuda,
          unless they are issued by the Bermuda Government or a public
          authority; or

     o    the carrying on of business of any kind in Bermuda, except in
          furtherance of our business carried on outside Bermuda or under a
          license granted by the Minister of Finance of Bermuda.

TAXATION

BERMUDA TAXATION

We have received from the Minister of Finance a written undertaking under the
Exempted Undertakings Tax Protection Act, 1996 (as amended) of Bermuda, to the
effect that in the event of there being enacted in Bermuda any legislation
imposing tax computed on profits or income, or computed on any capital asset,
gain or appreciation, or any tax in the nature of estate duty or inheritance
tax, then the imposition of any such tax shall not be applicable to us or to any
of our operations or to our shares, debentures or other obligations until March
28, 2016. These assurances are subject to the proviso that they are not
construed so as to prevent the application of any tax or duty to such persons as
are ordinarily resident in Bermuda or to prevent the imposition of property
taxes on any company owning real property or leasehold interests in Bermuda.

Currently there is no Bermuda withholding tax on dividends that may be payable
by us in respect to the holders of our common shares. No income, withholding or
other taxes or stamp duty or other duties are imposed upon the issue, transfer
or sale of the shares or on any payment thereunder. There is no income tax
treaty between Bermuda and the United States.



                                       86
<PAGE>

DOCUMENTS ON DISPLAY

WHERE YOU MAY FIND MORE INFORMATION

We are required to comply with the reporting requirements of the Securities
Exchange Act of 1934, as amended, applicable to a foreign private issuer. We
will file annually a Form 20-F no later than six months after the close of our
fiscal year, which is December 31. As a foreign private issuer, we are exempt
from the rules under the Exchange Act prescribing the furnishing and content of
proxy statements, and our officers, directors and principal shareholders are
exempt from the reporting and short-swing profit recovery provisions contained
in Section 16 of the Exchange Act. We will furnish our shareholders with annual
reports, which will include a review of operations and annual audited
consolidated financial statements prepared in conformity with U.S. GAAP. We
intend, although we are not obligated to do so, to furnish our shareholders with
quarterly reports by mail with the assistance of a corporate services provider,
which will include unaudited interim financial information prepared in
conformity with U.S. GAAP for each of the three quarters of each fiscal year
following the end of each such quarter. We may discontinue providing quarterly
reports at any time without prior notice to our shareholders.

Our reports and other information, when so filed, may be inspected and copied at
the public reference facilities maintained by the Securities and Exchange
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549. Copies of such material may be obtained from the Public Reference
Section of the Securities and Exchange Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates.

These reports and other information may also be inspected at the offices of the
Nasdaq National Market, 1735 K Street, N.W., Washington, D.C. 20006.

     ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We operate internationally and foreign exchange rate fluctuations may have a
material impact on our results of operations. Historically, currency
fluctuations have been minimal on a year-to-year basis in the currencies of the
countries where we have operations. As a result, foreign exchange gains or
losses in revenues and accounts receivable have been offset by corresponding
foreign exchange losses or gains arising from expenses. However, during the
Asian economic crisis of 1997 to 1998, both advertising sales and the value of
Asian currencies declined, which caused a significant decline in revenues that
was not fully offset by lower expense levels in Asian operations.

This decline in revenues occurred due to contracts being denominated and priced
in foreign currencies prior to devaluations in Asian currencies. The conversion
of these contract proceeds in U.S. dollars resulted in losses and reflects the
foreign exchange risk assumed by us between contract signing and the conversion
of cash into U.S. dollars. We believe this risk is mitigated because
historically a majority (ranging between 55% and 65%) of our revenues are
denominated in U.S. dollars or are received in the Hong Kong currency, which is
currently pegged to the U.S. dollar. To the extent significant currency
fluctuations occur in the New Taiwan dollar, and Chinese Renminbi or other Asian
currencies, or if the Hong Kong dollar is no longer pegged to the U.S. dollar,
our profits would be affected.

As of December 31, 2003, we have not engaged in foreign currency hedging
activities.

     ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES - (NOT
             APPLICABLE)

                                     PART II

All financial information contained in this document is expressed in United
States dollars, unless otherwise stated.



                                       87
<PAGE>

     ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES - (NOT APPLICABLE)

     ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE
             OF PROCEEDS - (NOT APPLICABLE)

     ITEM 15. CONTROLS AND PROCEDURES

We maintain a set of disclosure controls and procedures designed to ensure that
information required to be disclosed by the Company in report that it files or
submits under the U.S. Securities Exchange Act of 1934, as amended, is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms. Within the 90-day period
prior to the filing of this report, an evaluation was carried out under the
supervision and with the participation of the Company's management, including
the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), of the
effectiveness of our disclosure controls and procedures. Based on that
evaluation, the CEO and CFO have concluded that our disclosure controls and
procedures are effective.

Subsequent to the date of their evaluation, there have been no significant
changes in our internal controls or in other factors that could significantly
affect these controls.

     ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Our audit committee financial expert is Roderick Chalmers, an independent
director.

     ITEM 16B. CODE OF ETHICS

We have adopted a Code of Ethics that applies to our chief executive officer,
chief financial officer, chief accounting officer or controller and other
persons performing similar functions. We have filed this Code of Ethics as an
exhibit to this annual report.

During 2003, the Company did not grant any waiver, including any implicit
waiver, from any provision of the Code of Ethics to the chief executive officer,
chief financial officer, chief accounting officer or controller or other person
performing similar functions.




                                       88
<PAGE>



         ITEM 16C.       PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the aggregate audit fees, audit-related fees, tax
fees of our principal accountants and all other fees billed for products and
services provided by our principal accountants for each of the fiscal years 2002
and 2003:

                                                       YEAR ENDED
                                                      DECEMBER 31,
                                               -------------------------------
                                                 2003              2002
                                               -----------      --------------
Audit fees..................................   $  203,790       $  141,309
Audit-related fees..........................           --               --
                                               -----------      --------------
     Total..................................   $  203,790       $  141,309
Tax fees....................................        3,000               --
All other fees..............................       94,036           27,917
                                               -----------      --------------
     Total fees.............................   $  300,826       $  169,226
                                               ===========      ==============

Audit fees include fees associated with the review of the Company's annual
financial statements, review of the Company's quarterly financial statements
filed with the SEC and services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for those fiscal
years.

Tax fees included tax compliance, tax advice and tax planning.

All other fees consisted mainly of cyber process certification for the Company's
management's assertions on the computation of the number of Community
membership, security consultancy services for the review of network
infrastructure, mail server review and security advisory services.

AUDIT COMMITTEE'S PRE-APPROVAL POLICIES AND PROCEDURES

Our Audit Committee nominates and engages our independent auditors to audit our
financial statements. Our Audit Committee also requires management to obtain the
Audit Committee's approval on a case-by-case basis before engaging our
independent auditors to provide any audit or permitted non-audit services to us
or our subsidiaries.

     ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES - (NOT
               APPLICABLE)

     ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
               PURCHASERS - (NOT APPLICABLE)

                                    PART III

All financial information contained in this document is expressed in United
States dollars, unless otherwise stated.

     ITEM 17. FINANCIAL STATEMENTS - (NOT APPLICABLE)

     ITEM 18. FINANCIAL STATEMENTS

As provided in Item 8, the Company has presented financial statements in
accordance with U.S. accounting standards in lieu of Item 18.



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<PAGE>

     ITEM 19. EXHIBITS

                                  EXHIBIT INDEX

EXHIBIT NO.     DESCRIPTION
-----------     -----------

1.1  Memorandum of Association of the Company. *

1.2  Bye-laws of the Company. *

1.3  Amendments to the Bye-Laws of Global Sources Ltd., as approved at the May
     6, 2002 Annual General Meeting of Shareholders. ++

2.1  Specimen Certificate. *

4.2  Form of executive officer employment agreement. *

4.3  Employment Agreement dated November 1, 1999, by and between Trade Media
     Holdings Limited and Merle Hinrichs. *

4.4  Amendment to Employment Agreement dated January 19, 2000, between Trade
     Media Holdings Limited and Merle Hinrichs. *

4.5  Employment Agreement dated as of January 29, 2000, by and between LER
     Corporation and Merle Hinrichs. *

4.6  Form of Restricted Stock Award and Agreement, dated as of January 29, 2000,
     by and between LER Corporation and Merle Hinrichs. *

4.7  Amendment No.1 to Restricted Stock Award and Agreement dated as of February
     29, 2000, by and between LER Corporation and Merle Hinrichs. *

4.8  Form of The Global Sources Employee Equity Compensation Plan No. I. *

4.9  Form of The Global Sources Employee Equity Compensation Plan No. II. *

4.10 Form of The Global Sources Employee Equity Compensation Plan No. III. *

4.11 Loan Agreement, dated March 7, 2000 of Trade Media Holdings Ltd. to Hung
     Lay Si Co. Ltd. *

4.12 Facility Agreement, dated March 17, 2000, between Bank of Bermuda (Isle of
     Man) Limited and Trade Media Holdings Ltd. *

4.13 Guarantee and Indemnity, dated March 17, 2000, between Hung Lay Si Co. Ltd.
     and Bank of Bermuda (Isle of Man) Limited. *

4.15 Extension of the Facility terms and conditions letter dated March 9, 2001,
     between Bank of Bermuda (Isle of Man) Limited and Trade Media Holdings Ltd.
     **

4.16 Acceptance of the terms and conditions relating to extension of the
     facility dated March 13, 2001, by Trade Media Holdings Ltd. **

4.17 Extension of the guarantee and indemnity, dated March 13, 2001, between
     Hung Lay Si Co. Ltd. and Bank of Bermuda (Isle of Man) Limited. **

4.18 Form of The Global Sources Employee Equity Compensation Plan No. IV. **

4.19 Form of The Global Sources Employee Equity Compensation Plan No. V. **

4.20 Form of The Global Sources Employee Equity Compensation Plan No. VI. ***

4.21 Extension of the Facility terms and conditions letter dated March 20, 2002,
     between Bank of Bermuda (Isle of Man) Limited and Trade Media Holdings
     Ltd., and Acceptance of the terms and conditions relating to extension of
     the facility by Trade Media Holdings Ltd. +

4.22 Extension of the guarantee and indemnity, dated March 20, 2002, between
     Hung Lay Si Co. Ltd. and Bank of Bermuda (Isle of Man) Limited. +

4.23 Form of The Global Sources Employee Equity Compensation Plan No. VII. *****

4.24 Extension of the Facility terms and conditions letter dated March 7, 2003,
     between Bank of Bermuda (Isle of Man) Limited and Trade Media Holdings
     Ltd., and Acceptance of the terms and conditions relating to extension of
     the facility by Trade Media Holdings Ltd. #

4.25 Extension of the guarantee and indemnity, dated March 7, 2003, between Hung
     Lay Si Co. Ltd. and Bank of Bermuda (Isle of Man) Limited. #

4.26 Global Sources' Code of Ethics (approved and adopted by the Board of
     directors on March 7, 2003).

4.27 Form of The Global Sources Employee Equity Compensation Plan No. V
     (Amended). *****

8.1  Subsidiaries of Global Sources Ltd.



                                       90
<PAGE>
EXHIBIT NO.     DESCRIPTION
-----------     -----------

12.1 Certification of the Chief Executive Officer pursuant to Section 302 of the
     Sarbanes-Oxley Act of 2002.

12.2 Certification of the Chief Financial Officer pursuant to Section 302 of the
     Sarbanes-Oxley Act of 2002.

13.1 Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section
     1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of
     2002.

13.2 Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section
     1350, as adopted pursuant to Section 906 of the Sarbanes - Oxley Act of
     2002.

14.1 Consent of Independent Accountants for incorporation of their report filed
     with Form 6-K into the Company's previously filed Registration Statements
     File No. 333-59098 and 333-62132. ****

14.2 Changes in Registrant's Certifying Accountant. +++

14.3 Letter to the SEC from the Company pursuant to SEC Release No. 33-8070,
     dated April 9, 2002. ****

14.4 Consent of Independent Accountants for incorporation of their report filed
     under Form 20-F into the Company's previously filed Registration Statements
     File No. 333-104426 and 333-59098.

14.5 Press release dated February 16, 2004 to announce the bonus share issue by
     Global Sources Ltd. ##

___________________

*    Incorporated by reference to Form 20-F Annual Report of Global Sources Ltd.
     filed with the Securities and Exchange Commission on June 30, 2000.

**   Incorporated by reference to Form 20-F Annual Report of Global Sources Ltd.
     filed with the Securities and Exchange Commission on April 5, 2001.

***  Incorporated by reference to Form S-8 Registration Statement filed with the
     Securities and Exchange Commission on June 1, 2001.

**** Incorporated by reference to Form 6-K filed with the Securities and
     Exchange Commission on April 25, 2002.

***** Incorporated by reference to Form S-8 Registration Statement filed with
     the Securities and Exchange Commission on April 10, 2003.

+    Incorporated by reference to Form 20-F Annual Report of Global Sources Ltd.
     filed with the Securities and Exchange Commission on April 30, 2002.

++   Incorporated by reference to Form 6-K filed with the Securities and
     Exchange Commission on May 6, 2002.

+++  Incorporated by reference to Form 6-K filed with the Securities and
     Exchange Commission on August 13, 2002.

#    Incorporated by reference to Form 20-F Annual Report of Global Sources Ltd.
     Filed with the Securities and Exchange Commission on May 05, 2003.

##   Incorporated by reference to Form 6-K filed with the Securities and
     Exchange Commission on February 18, 2004.




                                       91
<PAGE>



                                    SIGNATURE

The registrant hereby certifies that it meets all of the requirements for filing
on Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on its behalf.


                                     GLOBAL SOURCES LTD.


                                     By:  /s/ EDDIE HENG
                                          ---------------------------------
                                          Eddie Heng, Director and
                                          Chief Financial Officer


Date:  May 4, 2004




                                       92
<PAGE>



                                                                    EXHIBIT 4.26


                                Table of Contents

Code of Ethics

27.      1. Personal Conduct

2.       Protecting the Company's Assets 2.1 Confidential and Proprietary
         Information 2.2 Insider Information and Securities Trading 2.3 Use of
         Company's Resources

3.       Employees
         3.1      Fair Employment Practices
         3.2      Safety and Health Guidelines
         3.3      Anti-harassment Guidelines

4.       Subcontractors, Representative Companies, Service Companies and
         Licensee Companies 4.1 Ethical Business Relationships

5.       Shareholders and Investors 5.1 Accuracy of Company Records

6.       Community and Society 6.1 Environmental Concerns
         6.2      Communicating with External Audiences

7.       Governments
         7.1      Compliance with Applicable Laws, Rules and Regulations

8.       Reporting Violations of the Code

9.       Questions




                                       93
<PAGE>



                                 Code of Ethics

Global Sources is committed to maintaining the highest standard of ethical
conduct. Ethics is about doing the right things, as an individual and as an
employee of Global Sources (Employee).

Global Sources' (the Company's) core values are introduced and reinforced to
Employees through induction briefings, training and employee communications.
Every Employee is expected to conduct himself or herself in line with the Code
of Ethics outlined below.

1.   PERSONAL CONDUCT

         1.1      The individual and collective conduct of Global Sources
                  Employees, in respect of the performance of their duties,
                  should promote the Company's business interests and
                  activities.

         1.2      Employee honesty and integrity is essential to ethical
                  business conduct, including the handling of actual or apparent
                  conflicts of interest between an Employee's personal and
                  professional relationships.

         1.3      It is essential for every Employee to avoid making untrue
                  representations or statements to anyone inside or outside the
                  Company.

         1.4      Employees are not permitted to engage in any freelance or
                  other employment of a part time or full time nature, whether
                  within, or outside working hours, without prior written
                  consent from the Company.

         1.5      Employees may not make or offer to make payments to government
                  officials or candidates for public office, either directly or
                  indirectly, in order to obtain or retain an advantage in the
                  business or other activities of the Company.

         1.6      Employees should avoid holding or owning a substantial
                  interest in a company, which is a competitor, customer or a
                  supplier, or acts as a consultant to or is employed by a
                  customer or supplier, unless the Employee has disclosed such
                  interest to the Company and has obtained the relevant
                  approval.

2.   PROTECTING THE COMPANY'S ASSETS

         2.1      Confidential and Proprietary Information

                 2.1.1    Every Employee is responsible for protecting the
                          Company's confidential and proprietary information.
                          The obligation to preserve such information continues
                          even after employment ends.

                 2.1.2    Protecting the confidentiality of sensitive
                          information is a requirement for employment and is
                          reflected in the Company's standard employment
                          agreement. While much of the information about our
                          customers is publicly available once it is published
                          in print media, on the Internet or on other electronic
                          media, Employees should be aware that they may have
                          access to information that should only be discussed or
                          revealed internally on a need-to-know basis.

         2.2      Insider Information and Securities Trading

                 2.2.1    Employees at every level may see information that, if
                          it became public, could affect the price of the
                          Company's shares or the shares of another publicly
                          listed company. Exam-



                                       94
<PAGE>

                          ples of such information would
                          include new products or services, facility closings,
                          expansions, or mergers and acquisitions. Revealing
                          this information to anyone - even family members -
                          before it is made public could subject the Employee
                          and the Company to substantial civil and criminal
                          penalties.

         2.3      Use of Company's Resources

                 2.3.1    Every Employee is expected to use good judgment in the
                          use of Company resources. Company assets and
                          facilities should be used only for functions related
                          to the business of Global Sources. Any personal use of
                          company resources must be authorized and must not
                          result in significant additional costs, or disruption
                          of business processes, or other disadvantages to the
                          Company.

3.   EMPLOYEES

         3.1      Fair Employment Practices

                 3.1.1    Management is committed to carrying out policies
                          promoting equal employment opportunities for all
                          Employees.

         3.2      Safety and Health Guidelines

                 3.2.1    The Company is committed to providing a safe and
                          healthy working environment for its Employees and its
                          visitors.

                 3.2.2    Each Employee is expected to report to work free from
                          the influence of any substance that could prevent him
                          or her from engaging in work activities safely and
                          effectively.

                 3.2.3    Each Employee is expected to know the safety
                          procedures and regulations for his or her workplace.

         3.3      Anti-harassment Guidelines

                 3.3.1    Offensive behavior, discrimination and sexual
                          harassment are not acceptable in the workplace, or at
                          other employment related events or activities. An
                          Employee who witnesses unacceptable activities or
                          behavior is expected to report their occurrence to the
                          appropriate authority in the Company.

4.   SUBCONTRACTORS, REPRESENTATIVE COMPANIES, SERVICE COMPANIES AND LICENSEE
     COMPANIES

         4.1      Ethical Business Relationship

                  The Company is committed to deal only with subcontractors,
                  representative companies, service companies and licensee
                  companies who themselves adhere to acceptable legal
                  requirements, appropriate business practices and ethical
                  performance in their business relationships.

5.   SHAREHOLDERS AND INVESTORS

         5.1      Accuracy of Company Records

                  The Company is committed to maintaining its books, invoices,
                  records, accounts, financial statements, funds and assets in
                  proper condition and to reflect fairly and accurately and in
                  reasonable



                                       95
<PAGE>

                  detail, the underlying transactions and disposition of the
                  Company's business. Misrepresenting facts or falsifying
                  records for any reason is not acceptable.

6.   COMMUNITY AND SOCIETY

         6.1      Environmental Concerns

                 6.1.1    The Company is committed to operating its facilities
                          wherever they are located in compliance with
                          applicable environmental, health and safety
                          regulations.

         6.2      Communicating with External Audiences

                 6.2.1    Requests for Company information from the media should
                          be directed to Corporate Communications to ensure
                          professional and consistent representation. Only those
                          individuals designated by the Company may represent
                          the Company in dealings with the public.

                 6.2.2    Requests for information from financial analysts
                          and/or shareholders should be directed to Investor
                          Relations for an appropriate response.

                 6.2.3    Every Employee is expected to cooperate with
                          reasonable requests for information from government
                          agencies and regulators, and to consult with the Legal
                          Department before responding to any non-routine
                          requests. All information provided for such requests
                          should be responsive and accurate.

7.   GOVERNMENTS

         7.1      Compliance with Applicable Laws, Rules and Regulations

                 7.1.1    The Company conducts business globally where laws,
                          customs, and social requirements may vary. In our
                          business dealings, the Company is committed to abide
                          by the laws, customs and norms of the host nations and
                          communities in which we operate.

8.   REPORTING VIOLATIONS OF THE CODE

         If any Employee feels that he or she has been unfairly treated or
         harassed by co-workers, supervisors in a work situation, or by fellow
         employees, or observes or has concerns about violations of this Code,
         or unethical or illegal activities, the Employee is encouraged to take
         appropriate and consistent action to report the concerns to his or her
         Supervisor or the Human Resources Department.

9.   QUESTIONS

         Any Employee who has any questions or requires any guidance regarding
         the Code is encouraged to contact his or her Supervisor. If an Employee
         is uncomfortable discussing the issue with his or her Supervisor, he or
         she may approach the Human Resources Department.




                                       96
<PAGE>




                                                                     EXHIBIT 8.1


<TABLE>
<CAPTION>
                       SUBSIDIARIES OF GLOBAL SOURCES LTD.

<S>                                                           <C>
NAME                                                          JURISDICTION OF ORGANIZATION
----                                                          ----------------------------
Global Sources Technologies Ltd.                              Bermuda
Trade Media Holdings Limited                                  Cayman Islands
ASM Business Services Limited                                 Cayman Islands
A.S. Mediaconsult Limited                                     Republic of Cyprus
China Media Advertising, Inc.                                 Liberia
E-Commerce International Ltd.                                 Bermuda
Earldom Limited                                               British Virgin Islands
eMedia Asia Ltd.                                              Barbados
Earldom Computer Software (Shenzhen) Co., Ltd.                People's Republic of China
Equitable Accounting Services Limited                         Hong Kong SAR
Event Marketing Services Limited                              Hong Kong SAR
Export Media Ltd.                                             British Virgin Islands
Fertile Valley Pte Ltd                                        Singapore
Floro Company Limited                                         Hong Kong SAR
Fortune Valley Ltd                                            Mauritius
Global Capital Group Holdings Limited                         British Virgin Islands
Global Sources Auctions Ltd.                                  Cayman Islands
Global Sources Auctions Limited                               Hong Kong SAR
Global Sources Research Foundation Limited                    British Virgin Islands
Hillcrest Services Limited                                    British Virgin Islands
Japan Publishing Limited                                      Japan
Lazenby Services Limited                                      British Virgin Islands
Global Sources USA, Inc.                                      USA - Delaware
Media Data Systems Pte Ltd                                    Singapore


                                       97
<PAGE>
NAME                                                          JURISDICTION OF ORGANIZATION
----                                                          ----------------------------

Media Productions Ltd.                                        Cayman Islands
Pine Grove B.V.                                               Netherlands
Publishers Representatives Limited                            Hong Kong SAR
Steady Access Resources Limited                               British Virgin Islands
Steady Information Consultant (Shenzhen) Co., Ltd             People's Republic of China
Targeted Marketing Promotions Corp.                           Liberia
Trade Management Software Limited                             Cayman Islands
Trade Management Software (HK) Limited                        Hong Kong SAR
Trade Magazine Productions Limited                            Hong Kong SAR
Trade Media Limited                                           Cayman Islands
Trade Point Hong Kong Limited                                 Hong Kong SAR
World Executive's Digest Limited                              Cayman Islands

</TABLE>



                                       98
<PAGE>



                                                                    EXHIBIT 12.1

I, Merle A. Hinrichs, certify that:

1.   I have reviewed this annual report on Form 20-F of Global Sources Ltd.

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the company as of, and for, the periods presented in this report;

4.   The company's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
     financial reporting (as defined in Exchange Act Rules 13a-15(f) and
     15d-15(f)) for the company and have:

     (a)  Designed such disclosure controls and procedures, or caused such
          disclosure controls or procedures to be designed under our
          supervision, to ensure that material information relating to the
          company, including its consolidated subsidiaries, is made known to us
          by others within those entities, particularly during the period in
          which this report is being prepared;

     (b)  Designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     (c)  Evaluated the effectiveness of the company's disclosure controls and
          procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the
          period covered by this report based on such an evaluation; and

     (d)  Disclosed in this report any change in the company's internal control
          over financial reporting that occurred during the period covered by
          the annual report that has materially affected, or is reasonably
          likely to materially affect, the company's internal control over
          financial reporting; and

5.   The company's other certifying officer and I have disclosed, based on our
     most recent evaluation of internal control over financial reporting, to the
     company's auditors and the audit committee of the company's board of
     directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to adversely affect the company's ability to record, process,
     summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other
     employees who have a significant role in the company's internal control
     over financial reporting.


Date:  May 4, 2004

                           /s/ Merle A. Hinrichs
                           -------------------------------------------
                           Merle A. Hinrichs, Director, Chairman and
                           Chief Executive Officer





                                       99
<PAGE>



                                                                    EXHIBIT 12.2


I, Eddie Heng, certify that:

1.   I have reviewed this annual report on Form 20-F of Global Sources Ltd.

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this annual report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the company as of, and for, the periods presented in this report;

4.   The company's other certifying officer and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over
     financial reporting (as defined in Exchange Act Rules 13a-15(f) and
     15d-15(f)) for the company and have:

     (a)  Designed such disclosure controls and procedures, or caused such
          disclosure controls or procedures to be designed under our
          supervision, to ensure that material information relating to the
          company, including its consolidated subsidiaries, is made known to us
          by others within those entities, particularly during the period in
          which this report is being prepared;

     (b)  Designed such internal control over financial reporting, or caused
          such internal control over financial reporting to be designed under
          our supervision, to provide reasonable assurance regarding the
          reliability of financial reporting and the preparation of financial
          statements for external purposes in accordance with generally accepted
          accounting principles;

     (c)  Evaluated the effectiveness of the company's disclosure controls and
          procedures and presented in this report our conclusions about the
          effectiveness of the disclosure controls and procedures, as of the
          period covered by this report based on such an evaluation; and

     (d)  Disclosed in this report any change in the company's internal control
          over financial reporting that occurred during the period covered by
          the annual report that has materially affected, or is reasonably
          likely to materially affect, the company's internal control over
          financial reporting; and

5.   The company's other certifying officer and I have disclosed, based on our
     most recent evaluation of internal control over financial reporting, to the
     company's auditors and the audit committee of the company's board of
     directors (or persons performing the equivalent functions):

     (a)  All significant deficiencies and material weaknesses in the design or
          operation of internal control over financial reporting which are
          reasonably likely to adversely affect the company's ability to record,
          process, summarize and report financial information; and

     (b)  Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the company's internal
          control over financial reporting.

Date: May 4, 2004

                              /s/ Eddie Heng
                              -----------------------------
                              Eddie Heng, Director and
                              Chief Financial Officer





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<PAGE>



                                                                    EXHIBIT 13.1

                                  Certification
           Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

     Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63,
Title 18 U.S.C. ss. 1350(a) and (b)), the undersigned hereby certifies in his
capacity as an officer of Global Sources Ltd. (the "Company") that the Annual
Report of the Company on Form 20-F for the year ended December 31, 2003 fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, and that the information contained in such
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company at the end of and for the periods covered
by such Report.

Dated:  May 4, 2004

                              /s/ Merle A. Hinrichs
                              ----------------------------------------------
                              Merle A. Hinrichs
                              Director, Chairman and Chief Executive Officer


     The foregoing certification is being furnished solely pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. ss. 1350(a)
and (b)), is not a part of the Form 20-F to which it refers and is, to the
extent permitted by law, provided by the above signatory to the extent of his
knowledge.

     A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS
BEEN PROVIDED TO GLOBAL SOURCES LTD. AND WILL BE RETAINED BY GLOBAL SOURCES. AND
FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.





                                      101
<PAGE>




                                                                    EXHIBIT 13.2


                                  Certification
           Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
                  Section 906 of the Sarbanes-Oxley Act of 2002

     Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chapter 63,
Title 18 U.S.C. ss. 1350(a) and (b)), the undersigned hereby certifies in his
capacity as an officer of Global Sources Ltd. (the "Company") that the Annual
Report of the Company on Form 20-F for the year ended December 31, 2003 fully
complies with the requirements of Section 13(a) or 15(d) of the Securities
Exchange Act of 1934, as amended, and that the information contained in such
Report fairly presents, in all material respects, the financial condition and
results of operations of the Company at the end of and for the periods covered
by such Report.


Dated:  May 4, 2004

                               /s/ Eddie Heng
                               ---------------------------------------------
                               Eddie Heng
                               Director and Chief Financial Officer


     The foregoing certification is being furnished solely pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. ss. 1350(a)
and (b)), is not a part of the Form 20-F to which it refers and is, to the
extent permitted by law, provided by the above signatory to the extent of his
knowledge.

     A SIGNED ORIGINAL OF THIS WRITTEN STATEMENT REQUIRED BY SECTION 906 HAS
BEEN PROVIDED TO GLOBAL SOURCES LTD. AND WILL BE RETAINED BY GLOBAL SOURCES. AND
FURNISHED TO THE SECURITIES AND EXCHANGE COMMISSION OR ITS STAFF UPON REQUEST.





                                      102
<PAGE>



                                                                    EXHIBIT 14.4


CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement (Form
S-8) No. 333-104426 and 333-59098) pertaining to Global Sources Equity
Compensation Plans Numbers I, II, III, IV, V, VI and VII of Global Sources Ltd.
of our report dated March 10, 2004, with respect to the consolidated financial
statements of Global Sources Ltd. and its subsidiaries included in Annual Report
(Form 20-F) for the year ended December 31, 2003.




/s/  ERNST & YOUNG
Singapore

May 4, 2004



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