Document:

EXHIBIT 10.1

                               GLOBAL SOURCES LTD.
                                 41 Cedar Avenue
                                P.O. Box HM 1179
                             Hamilton HM EX, Bermuda

                                 --------------
                NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
                             To Be Held May 6, 2002
                                 --------------

To Our Shareholders:

      NOTICE IS HEREBY given that a general meeting of the shareholders of
Global Sources Ltd. (the "Company") will be held on May 6, 2002 at the Grand
Hyatt Shanghai, 88 Century Boulevard, Pudong, Shanghai 200120, China at 10:30
a.m., local time, for the following purposes:

      1.    To re-elect two members of the Board of Directors (the "Board") who
            are retiring by rotation and, being eligible, offering themselves
            for re-election;

      2.    To fix the number of directors that comprise the whole Board at nine
            (9) persons, declare any vacancies on the Board to be casual
            vacancies and authorize the Board to fill these vacancies on the
            Board as and when it deems fit;

      3.    To approve amendments to the Bye-Laws of the Company, which empower
            the Company to use electronic means to communicate with its
            shareholders and deliver corporate information.

      4.    To re-appoint Arthur Andersen as the Company's independent auditors
            until the next annual general meeting.

      The foregoing matters are described more fully in the accompanying Proxy
Statement. While this Notice and Proxy Statement and the enclosed form of proxy
are being sent only to shareholders of record and beneficial owners of whom the
Company is aware as of March 25, 2002, all shareholders of the Company of record
on the date of the meeting are entitled to attend the Annual General Meeting.
The Company's audited financial statements for the year ended December 31, 2001
are included with the mailing of this Notice and Proxy Statement.

      We hope you will be represented at the Annual General Meeting by signing,
dating and returning the enclosed proxy card in the accompanying envelope as
promptly as possible, whether or not you expect to be present in person. Your
vote is important - as is the vote of every shareholder - and the Board
appreciates the cooperation of shareholders in directing proxies to vote at the
meeting.

      Your proxy may be revoked at any time by following the procedures set
forth in the accompanying Proxy Statement, and the giving of your proxy will not
affect your right to vote in person if you attend the Annual General Meeting.

                                            By Order of the Board of Directors

                                            TANG YANG PING
                                            Secretary

DATED: April 12, 2002
       Hamilton, Bermuda
<PAGE>

                               GLOBAL SOURCES LTD.
                                 41 Cedar Avenue
                                P.O. Box HM 1179
                             Hamilton HM EX, Bermuda

                                 PROXY STATEMENT
                 For the Annual General Meeting of Shareholders
                                   May 6, 2002

      This proxy statement is being furnished in connection with the
solicitation of proxies by the Board of Directors (the "Board") of GLOBAL
SOURCES LTD., a Bermuda corporation (the "Company"), for use at the annual
general meeting of shareholders of the Company to be held at the Grand Hyatt
Shanghai, 88 Century Boulevard, Pudong, Shanghai 220120, China, on May 6, 2002
at 10:30 a.m., local time, and at any adjournments or postponements thereof (the
"Annual General Meeting"). Unless the context otherwise requires, references to
the Company includes Global Sources Ltd. and its subsidiaries. The proxy is
revocable by (i) filing a written revocation with the Secretary of the Company
prior to the voting of such proxy, (ii) giving a later dated proxy, or (iii)
attending the Annual General Meeting and voting in person. Shares represented by
all properly executed proxies received prior to the Annual General Meeting will
be voted at the meeting in the manner specified by the holders thereof. Proxies
that do not contain voting instructions will be voted (i) FOR re-electing the
two Directors retiring by rotation; (ii) FOR fixing the number of directors that
comprise the whole Board at nine (9), declaring any vacancies on the Board to be
casual vacancies and authorizing the Board to fill these vacancies on the Board
as and when it deems fit; (iii) FOR approving the proposed amendments to the
Bye-Laws; and (iv) FOR re-appointing Arthur Andersen as the Company's
independent auditors until the next annual general meeting. In accordance with
Section 84 of the Companies Act 1981 of Bermuda, the audited financial
statements of the Company for the period from January 1, 2001 to December 31,
2001, enclosed herewith, will be presented at the Annual General Meeting. These
statements have been approved by the Board of the Company. There is no
requirement under Bermuda law that such statements be approved by shareholders,
and no such approval will be sought at the Annual General Meeting.

      The Board has established March 25, 2002 as the date used to determine
those record holders and beneficial owners of Common Stock to whom notice of the
Annual General Meeting will be sent (the "Record Date"). On the Record Date,
there were 26,308,949 common shares, US$.01 par value per share (the "Common
Shares"), outstanding. The holders of the Common Shares are entitled to one vote
for each Common Share held. The presence, in person or by proxy, at the Annual
General Meeting of at least two (2) shareholders entitled to vote representing
more than 50% of the outstanding Common Shares as of the Record Date is
necessary to constitute a quorum at the Annual General Meeting. All matters
presented at the Annual General Meeting require approval by a simple majority of
votes cast at the meeting. For proposals to be approved, a majority of votes
cast must be favorable. Only votes for or against a proposal count. Votes which
are withheld from voting on a proposal will be excluded entirely and will have
no effect in determining the quorum or the majority of votes cast. Abstentions
and broker non-votes count for quorum purposes only and not for voting purposes.
Broker non-votes occur when a broker returns a proxy but does not have the
authority to vote on a particular proposal. Brokers that do not receive
instructions are entitled to vote on the election of directors and the
re-appointment of the auditors.

      This Notice, Proxy Statement and enclosed form of proxy are first being
mailed on or about April 12, 2002.
<PAGE>

                          SECURITY OWNERSHIP OF CERTAIN
                        BENEFICIAL OWNERS AND MANAGEMENT

      The following table sets forth information concerning beneficial ownership
of Common Shares of the Company outstanding at March 25, 2002 (i) by each person
known by the Company to be the beneficial owner of more than five percent of its
outstanding Common Shares, (ii) by each director (and director nominee) and
executive officer of the Company and (iii) by all directors and executive
officers of the Company as a group. Unless otherwise indicated, the address of
all directors and officers is: 1 Sims Lane, #08-01, Singapore 387355.

<TABLE>
<CAPTION>
                                                                                                  Percentage
                                                                      Shares Beneficially             Of
Name and Address of Beneficial Owner(1)                                      Owned                 Class(2)
---------------------------------------                               -------------------         ----------
<S>                                                                       <C>                       <C>
Hung Lay Si Co. Ltd..............................................         16,035,388(3)             61.0%
   P.O. Box 219GT,
   British American Centre
   Georgetown, Cayman Islands

Merle A. Hinrichs................................................           4,008,221                15.2%
   23/F, Vita Tower
   29 Wong Chuk Hang Road
   Hong Kong

Harrington Trust Ltd.............................................          2,492,224(4)              9.5%
   4th Floor Windsor Place
   22 Queen Street
   P.O. Box HM 1179
   Hamilton HM EX
   Bermuda

Jeffrey J. Steiner...............................................             313,131(5)              1.2%

Eddie Heng Teng Hua                                                                 *

J. Craig Pepples                                                                    *

Bill Georgiou                                                                       *

Sarah Benecke                                                                       *

David F. Jones                                                                      *

Roderick Chalmers                                                                   *

Dr. Lynn Hazlett                                                                    *

All Directors, Director Nominees and Executive Officers as a Group
   (9 persons)...................................................           4,368,516(6)             16.6%
</TABLE>

-----------------
*Less than 1%

1.    Each shareholder has sole voting power and sole dispositive power with
      respect to all shares beneficially owned by him unless otherwise
      indicated.

                                       2
<PAGE>

2.    Based upon 26,308,949 Common Shares outstanding at March 25, 2002.

3.    Hung Lay Si Co. Ltd. is a company organized under the laws of the Cayman
      Islands. It is wholly owned by the Quan Gung 1986 Trust, a trust formed
      under the laws of the Island of Jersey. The trustee of the trust is Hill
      Street Trustees Limited, an Island of Jersey limited liability company
      whose shares are wholly owned by the partners of the Mourant Group, which
      is a firm based in the Island of Jersey that provides trust administration
      services. The partners of the Mourant Group are: Richard Jeune, Peter
      Mourant, Conrad Coutanche, Ian James, Alan Binnington, James Crill, Tim
      Herbert, Jacqueline Richomme, Elizabeth Breen, Cyman Davies, Nicola
      Davies, Alastair Syvret, Edward Devenport, Jonathan Speck, Beverley Lacey,
      Moz Scott, Julia Chapman, Jonathan Walker and Dominic Jones. Hill Street
      Trustees Limited is the sole beneficial owner of the Hung Lay Si Co. Ltd.
      shares under applicable Securities and Exchange Commission regulations.

      The Quan Gung 1986 Trust (through Hung Lay Si Co. Ltd., its wholly owned
      subsidiary) beneficially owns approximately 61.0% of the Common Shares.
      The Quan Gung 1986 Trust was formed under the laws of the Island of
      Jersey. The Company has received an opinion from Mourant du Feu & Jeune,
      counsel to Hill Street Trustees Limited, the trustee of the trust, that
      the trustee has the sole and exclusive voting, investment and dispositive
      power over the shares of Hung Lay Si Co. Ltd. owned by the trust; and,
      therefore, none of the beneficiaries of the trust has any control over
      such shares. This opinion also states that the trustee's powers under the
      trust are irrevocable and neither the settlor, the beneficiaries nor any
      other person has under the terms of the trust the ability to amend or
      revoke such powers or to remove the trustee (except in very limited
      circumstances such as the trustee being a lunatic or of unsound mind, or
      becoming bankrupt). Hill Street Trustees Limited is an Island of Jersey
      limited liability company whose shares are owned by partners of the
      Mourant Group, which is a firm based in the Island of Jersey that provides
      trust administration services. This counsel has also informed us that, as
      is typical of trusts formed under the laws of the Island of Jersey, the
      trustee cannot make disclosure of the names of the beneficiaries or
      settlor of the trust in breach of the obligations placed on it under the
      terms of the trust and the laws of the Island of Jersey and its duties of
      confidentiality. Accordingly, the Company does not know and may never know
      the identity of the beneficiaries or settlors of the Quan Gung 1986 Trust.

4.    Harrington Trust Ltd. ("Harrington") is a trust organized under the laws
      of Bermuda. It is wholly-owned by the partners of one of Bermuda's largest
      law firms, Appleby, Spurling & Kempe. Harrington is the trustee of the
      Global Sources Employee Equity Compensation Trust (the "Trust").
      Harrington administers the monies and other assets of the Trust. By virtue
      of its position as trustee of the Trust, Harrington has the power to vote
      and dispose of the Company's shares owned by the Trust.

5.    Mr. Jeffrey J. Steiner is the sole manager of The Steiner Group LLC, and
      as such 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.
      Jeffrey J. Steiner is its sole manager. The members are Jeffrey J. Steiner
      (with a 20% membership interest) and the Jeffrey Steiner Family Trust
      (with an 80% membership interest). The Jeffrey Steiner Family Trust is a
      trust created for the benefit of the issue of Jeffrey J. Steiner.

6.    Includes 313,131 Common Shares owned directly or beneficially by The
      Steiner Group LLC. Mr. Jeffrey J. Steiner, a director of the Company, is
      the sole manager of The Steiner Group LLC, and as such may be deemed to
      beneficially own the 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. Jeffrey J. Steiner is its sole
      manager. The members are Jeffrey J. Steiner (with a 20% membership
      interest) and the Jeffrey Steiner Family Trust (with an 80% membership
      interest). The Jeffrey Steiner Family Trust is a trust created for the
      benefit of the issue of Jeffrey J. Steiner.

                                       3
<PAGE>

                                 PROPOSAL NO. 1

                   ELECTION OF DIRECTORS ELIGIBLE BY ROTATION

      Pursuant to the Company's Bye-Laws, one-third of the Directors shall
retire from office each year by rotation, with those who have been longest in
office retiring first. Those persons who became or were last appointed Directors
on the same day as those retiring shall be determined by lot or by agreement.
Both Mr. Jones and Dr. Hazlett are retiring at this year's Annual General
Meeting, and both have been nominated to be re-elected to the Board. Management
has no reason to believe that either of the nominees will be unable or unwilling
to serve as a Director, if elected. Should either nominee not be a candidate at
the time of the Annual General Meeting (a situation which is not now
anticipated), proxies may be voted in favor of the remaining nominee and may be
also voted for a substitute nominee selected by the Board.

      Unless authority is specifically withheld, proxies will be voted for the
election of the nominees named below, to serve for a three-year term and until
their successors have been duly elected and have qualified. Directors shall be
elected by a majority of the votes cast, in person or by proxy, at the Meeting.
The remaining Directors will continue to serve until they are retired by
rotation at the 2003 Annual General Meeting of Shareholders of the Company and
the 2004 Annual General Meeting of Shareholders of the Company.

      The names of the nominees and certain biographical information concerning
them are set forth below:

                                                          First Year Became
Name                                                         a Director
----                                                         ----------

David F. Jones..........................................        2000
Dr. H. Lynn Hazlett.....................................        2000

      Mr. Jones has been a Director of the Company since April 2000. Mr. Jones
was an executive at MacQuarie Direct Investment, a venture capital firm in
Sydney, Australia from 1997 to August 1999, where he was responsible for
investment and strategic analysis of potential and existing portfolio companies.
He joined UBS Capital in July 1999 and currently serves as the Executive
Director, Australia/New Zealand and is currently a director of Miller's Retail
Ltd., which is a customer of Trade Media Holdings Ltd., a Cayman Islands
corporation wholly-owned by the Company ("Trade Media"). Mr. Jones also serves
as a director of the following entities: ipac Securities Ltd. and Vandors Pty
Ltd., both financial services companies; Nextgen Holdings Ltd. and Nextgen
Networks, both telecommunications companies; TM Securities Ltd. and Tynan
Mackenzie, both financial planning companies; and Otowa Pty Ltd., an investment
holding company. Mr. Jones has an MBA from Harvard Business School and is a
mechanical engineering graduate from the University of Melbourne. Mr. Jones is
also a director of Trade Media.

      Dr. H. Lynn Hazlett has been a Director of the Company since October 2000.
He is currently the owner and manager of R&D Citrus Ltd., a managing partner of
AMI Bayshore Developer LLC, and a Managing Partner of CFB LLC. He was a former
chief executive officer and president of QRS Corporation, a leading U.S.-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, a U.S. apparel company, from 1989 to 1994. Dr.
Hazlett has a doctorate in Economics and Automated Systems from George
Washington University.

                                       4
<PAGE>

      The names and certain information of the Directors whose terms expire at
the 2003 and 2004 Annual General Meeting of Shareholders of the Company are set
forth below:

                                           First year became        Year term
Name                                           a director            Expires
----                                           ----------            -------
Merle A. Hinrichs.........................        2000                2003
Jeffrey J. Steiner........................        1999                2003
Roderick Chalmers.........................        2000                2003
Eddie Heng Teng Hua.......................        2000                2004
Sarah Benecke.............................        2000                2004

      Mr. Hinrichs has been a Director of the Company since April 2000 and is
currently its Chairman and Chief Executive Officer. A co-founder of the
business, he was the principal executive officer of 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 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. Mr. Hinrichs also is a director of Trade Media.

      Mr. Steiner has been a Director of the Company 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 since December 1985. Mr. Steiner was president of Fairchild from
November 1996 to November 1998. He is a director of Communications Intelligence
Corp.

      Mr. Chalmers has been a Director of the Company since October 2000. He was
chairman, Asia-Pacific, of PricewaterhouseCoopers ("PwC") and a member of PwC's
Global Management Board from 1998 until his retirement in July 2000. He worked
for PwC or one of its predecessors, Coopers & Lybrand, for 30 years,
specializing in the securities industry. He has at various times been a
non-executive director of the Hong Kong Securities and Futures Commission, a
member of the Takeovers and Mergers Panel, and chairman of the Working Group on
Financial Disclosure.

      Mr. Heng has been the Chief Financial Officer (previously entitled vice
president of finance) since 1994 and has been a director of the Company since
April 2000. Mr. Heng is also currently the Chief Financial Officer and Vice
President of Finance of Media Data Systems Pte. Ltd. He joined the Company 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 CPA, 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
("Hitachi"), a joint venture between Hitachi and General Motors.

      Ms. Benecke has been a Director of the Company since April 2000, and,
since 1993, has been a director of Trade Media. 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. She graduated with a B.A. from the
University of New South Wales, Australia.

                                       5
<PAGE>

Committees of the Board

The Board has established an audit committee and an executive committee. The
audit committee is responsible for recommending the appointment of auditors,
overseeing accounting and audit functions and other key financial matters of the
Company. David Jones, Roderick Chalmers and Lynn Hazlett currently serve as
members of the audit committee. The executive committee acts for the entire
Board between Board meetings. Merle Hinrichs and Eddie Heng serve as members of
the executive committee.

Recommendation of the Board of Directors

      THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE
NOMINEES.

                                       6
<PAGE>

                                   MANAGEMENT

Executive Officers of the Company

      The names, positions and certain biographical information of the executive
officers of the Company who are not Directors are set forth below.

Name                                                        Position
----                                                        --------
J. Craig Pepples................................     Chief Operating Officer
Bill Georgiou...................................     Chief Information Officer

      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 1993 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 an information technologies director with A.S.
Watson from 1999 to 2000. He received his B.Ec. (Honours degree) and M.B.A. from
the University of Adelaide.

Compensation of Directors and Executive Officers

      For the year ended December 31, 2001, the Company and its subsidiaries
provided its seven directors and two executive officers as a group aggregate
remuneration, pension contributions, allowances and other benefits of
approximately $2,541,592, including cash compensation amounting to $2,018,611
and non-cash compensation of $522,981 associated with the share award and equity
compensation plans. Of that amount, $195,000 was paid under a performance based,
long-term discretionary bonus plan which the Company implemented in 1989 for
members of its senior management. Under the plan, members of senior management
may, at the discretion of the Company, 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 the Company. There are seven current members of senior management and three
former members of senior management who may receive payments on maturity.

      In 2001, the Company and its subsidiaries incurred $29,677 in costs to
provide pension, retirement or similar benefits to their respective officers and
directors pursuant to the Company's retirement plan and pension plan.

Employment Agreements

      We have employment agreements with Merle A. Hinrichs under which he serves
as the chairman and chief executive officer of the Company and one of its
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, the Company retains 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 the
Company and the 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.

                                       7
<PAGE>

      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 month's notice provision
for termination, and does not have a set term of employment. Bonus provisions
are determined on an individual basis.

                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      On December 31, 2001, the Company had $11,400,000 in net intercompany
obligations due to its controlling shareholder.

      These obligations arose from:

      o     the transfer of intangibles, including copyrights for magazines,
            from Hung Lay Si Co. Ltd. to the Company after its re-incorporation
            in the Cayman Islands in 1983; and

      o     allocations of operating expenses from Hung Lay Si Co. Ltd. and its
            affiliates to the Company, as described in the sixth paragraph of
            Note 10 to the Company's audited financial statements, a copy of
            which is enclosed with this Proxy Statement.

      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
intercompany 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 certain members of the Company's senior
management who are living abroad, 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 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 1998, the largest
aggregate amount of indebtedness of Mr. Pepples and Ms. Benecke to us,
outstanding at any time during such period, was approximately $40,733 and
$350,011, respectively. As of December 31, 2001, the indebtedness of Mr. Pepples
to us was approximately $14,486. Ms. Benecke repaid her loan in full in July
1999. Ms. Benecke's loan was secured and bore interest at a rate of LIBOR plus
2%. Mr. Pepples' loan was interest free and unsecured.

      We utilize sales representatives, predominantly corporate entities (each,
a "Representative," and collectively, the "Representatives") to handle
collections from clients on our behalf. The Representatives are entitled to
commissions as well as marketing fees for their services (which commissions and
fees totaled $20,171,614 in the aggregate for the year ended December 31, 2001).
The Company has nominated one employee of the Company to sit on the boards of
directors of each of eight (8) of the corporate Representatives (each such

                                       8
<PAGE>

director, an "Employee Director"). Neither the Company nor the Employee
Directors have any interest in the eight Representatives on whose boards the
Employee Directors sit.

      During the year ended December 31, 2001, the Company also provided
technical services to the Representatives as well as to one of the subsidiaries
of Hung Lay Si Co. Ltd. The fee paid by the Representatives and by the
subsidiary of Hung Lay Si Co. Ltd. for these services to the Company amounted to
$258,784 in the aggregate for the year ended December 31, 2001.

      We lease approximately 97,940 square feet of our office facilities from
affiliated companies under cancelable and non-cancelable operating leases and
incur building maintenance services fees to those affiliated companies. We
incurred rental and building services expenses of $1,044,284 during the year
ended December 31, 2001. We also receive legal and secretarial services from our
affiliated companies. The expenses incurred for these services during the year
ended December 31, 2001 totaled $464,182.

      On March 13, 2001, we renewed the revolving credit facility with Bank of
Bermuda (Isle of Man) Limited that we entered into on March 13, 2000. The credit
facility had a term of one year and provides for borrowings of up to
$25,000,000, with minimum borrowings of $1,000,000; we renewed the facility for
an additional twelve month period under the same terms and conditions. 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 London Inter-Bank Market Rate plus 0.5%. The credit facility may
be used for investments, working capital and general corporate purposes. If any
payment is not made when due, the interest rate will increase by 2% on the
aggregate amount outstanding and will be payable in arrears and, if not paid
when due, will be compounded. The loan may not be prepaid prior to the end of
any quarter, but if the bank notifies us of its intention to charge a
maintenance fee to cover its costs for the facility, we may prepay without
penalty the amount outstanding within seven days of the bank's notice. When we
entered into the credit facility, we paid the bank an arrangement fee of
approximately $16,000. Hung Lay Si Co. Ltd. has guaranteed all of our
obligations under the credit facility. There was no outstanding principal amount
under this facility at December 31, 2001. On March 13, 2002, we renewed this
facility on the terms and conditions described above, with a reduction in the
credit line to $10,000,000.

      For further information on these transactions, see the notes to our
audited financial statements enclosed herewith.

      Our management believes these transactions are commercially reasonable in
the jurisdictions where it operates and for employees where they reside or work.

                                       9
<PAGE>

                                 PROPOSAL NO. 2

                  FIXING BOARD SIZE AND TREATMENT OF VACANCIES

      Pursuant to Bye-Law 89 of the Company's Bye-Laws, the Company shall
determine the minimum and maximum number of Directors at the Annual General
Meeting of Shareholders.

Change of Size of the Board

      The Company's Bye-Laws currently provide for a minimum of two (2)
Directors on the Board of Directors. In October 2000, the Company's shareholders
established the maximum size of the Board at nine (9) members. In November 2001,
the shareholders voted to maintain the number of Directors constituting the
Board at nine (9) directors. This proposal would continue to maintain the number
of Directors constituting the entire Board of the Company at nine (9) directors.

      The Company believes that having nine (9) Directors is necessary for the
Company to comply with the Nasdaq Stock Market requirements that a listed
company maintain a certain number of independent directors on its Board and
certain of its committees, while retaining as directors officers and members of
the Company's management who are familiar with the Company. Since the Annual
General Meeting in October 2000, where the shareholders agreed to permit the
Board to fill casual vacancies, the shareholders have continued to give the
Board the authority to appoint additional directors without a vote of
shareholders.

Authorization of Directors to Fill Casual Vacancies

      At the Annual General Meeting in October 2000, the shareholders approved a
proposal to allow casual vacancies on the Board to be filled by the Board. This
proposal was again approved in November 2001. This proposal would allow the
remaining vacant directorships to be casual vacancies and would authorize the
Board to fill those vacancies as and when it deems fit.

Recommendation of the Board of Directors

      THE BOARD OF DIRECTORS RECOMMENDS A VOTE TO FIX THE NUMBER OF DIRECTORS AT
NINE (9) DIRECTORS, TO DECLARE THAT ANY REMAINING VACANCIES BE CASUAL VACANCIES
AND TO AUTHORIZE THE BOARD TO FILL ANY SUCH CASUAL VACANCIES.

                                       10
<PAGE>

                                 PROPOSAL NO. 3

                              AMENDMENT OF BYE-LAWS

      In an effort to modernize and increase the efficiency of the
communications between the Company and its shareholders, the Board has approved
certain amendments to the Company's Bye-Laws to permit certain communications by
electronic means. These amendments provide an additional alternative for
communicating with the Company. The text of the proposed amendments is attached
as Annex A to this Proxy Statement and marked to show changes from the existing
Bye-Laws.

      Bye-law 154 states that the Board may amend any provision of the Bye-Laws,
subject to approval by resolution at a general meeting of the shareholders.
Accordingly, the Board is submitting the proposed amendments for consideration
by shareholders at the Annual General Meeting.

General Effect of Proposed Amendments

      Amendment 1 to the Bye-Laws adds interpretive provisions to the
"Interpretation" section allowing for use of electronic means in any case where
the Bye-Laws require any documents to be in writing, delivered or signed.

      Amendment 2 to the Bye-Laws amends Bye-Law 77 to provide that the
instrument appointing a proxy may be signed by electronic means.

      Amendments 3 and 4 to the Bye-Laws amend Bye-Laws 78 and 79, respectively,
to provide that a shareholder may deliver an appointment of a standing proxy by
use of electronic means.

      Amendment 5 to Bye-Law 141 provides that any notice or other document may
be served on or delivered to a shareholder by electronic means, and provides the
procedure for doing so.

      Amendment 6 to Bye-Law 142 provides that any notice of a general meeting
of the Company will be deemed to be duly given to a shareholder if it is given
by electronic means.

Board Recommendation

      THE BOARD RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED AMENDMENTS TO THE
BYE-LAWS.

                                       11
<PAGE>

                                 PROPOSAL NO. 4

                       APPOINTMENT OF INDEPENDENT AUDITORS

      Unless otherwise instructed, the proxies given pursuant to this
solicitation will be voted FOR the appointment of Arthur Andersen as the
independent auditors of the Company to hold office until the close of the next
annual general meeting at a remuneration to be negotiated by management and
approved by the Board. A representative of that firm, which served as the
Company's independent auditors during the year preceding the Annual General
Meeting, is expected to be present at the Annual General Meeting and, if he so
desires, will have the opportunity to make a statement, and in any event will be
available to respond to appropriate questions. Arthur Andersen has advised the
Company that it does not have any direct or indirect financial interest in the
Company, nor has such firm had any such interest in connection with the Company
during the past fiscal year other than in its capacity as the Company's
independent auditors.

Audit Fees

      Audit fees billed to the Company by Arthur Andersen for the fiscal year
ended December 31, 2001 for (i) review of the Company's annual financial
statements included herewith (ii) review of the Company's quarterly financial
statements filed with the SEC and (iii) review of financial statements for other
purposes totaled approximately $244,144.

Financial Information Systems Design and Implementation Fees

      The Company did not engage Arthur Andersen to provide advice to the
Company regarding financial information systems design and implementation during
the fiscal year ended December 31, 2001.

All Other Fees

      Fees billed to the Company by Arthur Andersen during the fiscal year ended
December 31, 2001 for non-audit services totaled approximately $58,878. The
Company estimates that Arthur Andersen will not bill any amounts for tax related
services relating to the Company's tax returns for 2001. The Audit Committee has
considered whether the provision by Arthur Andersen of the services covered by
such fees, other than the audit fees, is compatible with maintaining the
independence of Arthur Andersen and has determined that it is compatible.

Recommendation

      THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPOINTMENT OF ARTHUR
ANDERSEN AS THE COMPANY'S INDEPENDENT AUDITORS UNTIL THE NEXT ANNUAL GENERAL
MEETING.

                                       12
<PAGE>

                             SOLICITATION STATEMENT

      The Company shall bear all expenses in connection with the solicitation of
proxies. In addition to the use of the mails, solicitations may be made by the
Company's regular employees, by telephone, telegraph or personal contact,
without additional compensation. The Company shall, upon their request,
reimburse brokerage houses and persons holding Common Shares in the names of
their nominees for their reasonable expenses in sending solicited material to
their principals.

                                  OTHER MATTERS

      There is no business other than that described above to be presented for
action by the shareholders at the Meeting.

                              SHAREHOLDER PROPOSALS

      In order to be considered for inclusion in the proxy materials to be
distributed in connection with the next annual meeting of shareholders of the
Company, shareholder proposals for such meeting must be submitted to the Company
no later than December 13, 2002. Shareholder proposals may only be submitted by
shareholders or nominee holders that hold of record at least 1% of the Company's
Common Shares entitled to vote on such matter.

                          AUDITED FINANCIAL STATEMENTS

      The Company has sent, or is concurrently sending, all of its shareholders
of record as of the Record Date a copy of its audited financial statements for
the fiscal year ended December 31, 2001.

                            By Order of the Company,

                            TANG YANG PING, Secretary

Dated: Hamilton, Bermuda
       April 12, 2002

                                       13
<PAGE>

                                     ANNEX A

             PROPOSED AMENDMENTS TO BYE-LAWS OF GLOBAL SOURCES LTD.

Below are the provisions of the Bye-Laws that would be amended if Proposal No. 3
of the Proxy Statement is approved by the shareholders. New text has been
underlined, deleted text has been indicated by striking through such text.

(1)   INTERPRETATION

      To insert the following additional clauses:

      "9.   IN THESE BYE-LAWS UNLESS OTHERWISE REQUIRED BY LAW OR OTHERWISE
            SPECIFICALLY PROVIDED FOR IN THESE BYE-LAWS, WHERE INFORMATION,
            NOTICES OR DOCUMENTS OF ANY NATURE WHATSOEVER, ARE REQUIRED TO BE IN
            WRITING OR DESCRIBED AS BEING WRITTEN, THAT REQUIREMENT OR
            DESCRIPTION IS MET BY SUCH MATERIAL BEING PROVIDED BY ELECTRONIC
            MEANS.

      10.   IN THESE BYE-LAWS UNLESS OTHERWISE REQUIRED BY LAW OR OTHERWISE
            SPECIFICALLY PROVIDED FOR IN THESE BYE-LAWS, WHERE INFORMATION,
            NOTICES OR DOCUMENTS OF ANY NATURE WHATSOEVER ARE REQUIRED TO BE
            DELIVERED, DISPATCHED, GIVEN, SENT OR SERVED UPON A PERSON, THAT
            REQUIREMENT IS MET BY DOING SO BY ELECTRONIC MEANS PROVIDED THAT THE
            ORIGINATOR OF SUCH MATERIAL STATES THAT THE RECEIPT OF SUCH MATERIAL
            IS TO BE ACKNOWLEDGED AND THE ADDRESSEE HAS ACKNOWLEDGED SUCH
            RECEIPT.

      11.   IN THESE BYE-LAWS UNLESS OTHERWISE REQUIRED BY LAW OR OTHERWISE
            SPECIFICALLY PROVIDED FOR IN THESE BYE-LAWS, WHERE THE SIGNATURE OF
            A PERSON IS REQUIRED THAT REQUIREMENT IS MET BY A SIGNATURE
            DELIVERED BY ELECTRONIC MEANS PROVIDED THAT (A) A METHOD IS USED TO
            IDENTIFY THAT PERSON AND TO INDICATE THAT THE PERSON INTENDED TO
            SIGN OR OTHERWISE ADOPT THE MATERIAL TO WHICH THE SIGNATURE RELATES;
            AND (B) THAT METHOD IS, ON THE DISCRETION OF THE BOARD, RELIABLE."

(2)   BYE-LAW 77

      "The instrument appointing a proxy shall be in writing under the hand
      (INCLUDING A SIGNATURE PROVIDED BY ELECTRONIC MEANS) of the appointor or
      of his attorney authorized by him in writing or, if the appointor is a
      corporation, either under its seal or under the hand of an officer,
      attorney or other person authorized to sign the same."

(3)   BYE-LAW 78

      "Any Shareholder may appoint a standing proxy or (if a corporation)
      representative by depositing at the Registered Office, or at such place or
      places, AND IN SUCH MANNER, INCLUDING BY ELECTRONIC MEANS, as the Board
      may [otherwise specify] DETERMINE for the purpose, a proxy or (if a
      corporation) an authorization and such proxy or authorization shall be
      valid for all general meetings and adjournments thereof or, resolutions in
      writing, as the case may be, until notice of revocation is received at the
      Registered Office, or at such place or places as the Board may otherwise
      specify for the purpose. Where a standing proxy or authorization exists,
      its operation shall be deemed to have been suspended at any general
      meeting or adjournment thereof at which the Shareholder is present or in
      respect to which the Shareholder has specially appointed a proxy or
      representative. The Board may from time to time require such evidence as
      it shall deem necessary as to the due execution and continuing validity of
      any such standing proxy or authorization and the operation of any such
      standing proxy or authorization shall be deemed to be suspended until such
      time as the Board determines that it has received the requested evidence
      or other evidence satisfactory to it. A person so authorized as a
      representative of a corporation shall be entitled to

                                       A-1
<PAGE>

      exercise the same power on behalf of the grantor of the authority as the
      grantor could exercise if it were an individual Shareholder of the Company
      and the grantor shall for the purposes of these Bye-Laws be deemed to be
      present in person at any such meeting if a person so authorized is present
      at it."

(4)   BYE-LAW 79

      "Subject to Bye-Law 78, the instrument appointing a proxy together with
      such other evidence as to its due execution as the Board may from time to
      time require, shall be delivered at the Registered Office (or at such
      place or places as may be specified in the notice convening the meeting or
      in any notice of any adjournment or, in either case or the case of a
      written resolution, in any document sent therewith) IN SUCH MANNER,
      INCLUDING BY ELECTRONIC MEANS, AS THE BOARD MAY DETERMINE, not less than
      48 hours or such other period as the Board may determine, prior to the
      holding of the relevant meeting or adjourned meeting at which the person
      named in the instrument proposes to vote or, in the case of a poll taken
      subsequently to the date of a meeting or adjourned meeting, before the
      time appointed for the taking of the poll, or, in the case of a written
      resolution, prior to the effective date of the written resolution and in
      default the instrument of proxy shall not be treated as valid."

(5)   BYE-LAW 141

      "Any notice or other document (including a share certificate) may be
      served on or delivered to any Shareholder by the Company either
      personally, BY ELECTRONIC MEANS or by sending it through the post (by
      airmail where applicable) in a pre-paid letter addressed to such
      Shareholder at his address as appearing in the 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 SUCH SHAREHOLDER AT SUCH ADDRESS
      AS MAY BE PROVIDED TO THE COMPANY BY THE SHAREHOLDER FOR SUCH PURPOSE. In
      the case of joint holders of a share, service or delivery of any notice or
      other document on or to one of the joint holders shall for all purposes be
      deemed as sufficient service on or delivery to all the joint holders. Any
      notice or other document if sent by post shall be deemed to have been
      served or delivered seven days after it was put in the post (AND IF
      DELIVERED BY ELECTRONIC MEANS, 24 HOURS AFTER ITS DISPATCH), and in
      proving such service or delivery, it shall be sufficient to prove that the
      notice or document was properly addressed, AND SENT, AND, IF SENT BY POST,
      stamped and put in the post."

(6)   BYE-LAW 142

      "Any notice of a general meeting of the Company shall be deemed to be duly
      given to a Shareholder, or other person entitled to it, if it is sent to
      him by cable, telex, telecopier, ELECTRONIC MEANS or other mode of
      representing or reproducing words in a legible and non-transitory form at
      his address as appearing in the Register or any other address given by him
      to the Company for this purpose. Any such notice shall be deemed to have
      been served twenty-four hours after its dispatch."

                                       A-2
<PAGE>
--------------------------------------------------------------------------------
                                                             Please mark
                                                             your votes as  |X|
                                                             indicated in
                                                             this example

THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEMS 1,
2, 3, AND 4.

(I) To convene the Annual General Meeting ("AGM") of the Company on Monday, May
6, 2002 at 10:30 a.m. at Grand Hyatt Shanghai, 88 Century Boulevard, Pudong,
Shanghai 200120, China, for the following purposes:

1.    To re-elect 01 Mr. David F. Jones and 02 Dr. H. Lynn Hazlett, to serve as
      Directors until their respective terms of office expire.

     FOR ALL                                WITHHELD
    NOMINEES  |_|                           FROM ALL  |_|
                                            NOMINEES

--------------------------------------------------------------------------------
To withhold authority to vote for any nominee(s), print name(s) above.

2.    To fix the number of Directors constituting the entire Board of the
      Company at nine (9) persons, declare any vacancies on the Board to when it
      deems fit.

                    FOR           AGAINST          ABSTAIN
                    |_|             |_|              |_|

3.    To approve the proposed amendments to the Bye-Laws.

                    FOR           AGAINST          ABSTAIN
                    |_|             |_|              |_|

4.    To re-appoint Arthur Andersen as the Company's independent auditors until
      the next Annual General Meeting.

                    FOR           AGAINST          ABSTAIN
                    |_|             |_|              |_|

                             MARK HERE FOR ADDRESS
                             CHANGE AND NOTE BELOW:  |_|

Dated                                                                     , 2002
     ---------------------------------------------------------------------

--------------------------------------------------------------------------------
                                    Signature

--------------------------------------------------------------------------------
                                    Signature

NOTE: Your signature should appear the same as your name appears hereon. In
signing as attorney, executor, administrator, trustee or guardian, please
indicate the capacity in which signing. When signing as joint tenants, all
parties in the joint tenancy must sign. When a proxy is given by a corporation,
it should be signed by an authorized officer and the corporate seal affixed. No
postage is required if mailed in the United States.

--------------------------------------------------------------------------------
                            ^ FOLD AND DETACH HERE ^

--------------------------------------------------------------------------------
<PAGE>

--------------------------------------------------------------------------------

                              GLOBAL SOURCES LTD.

                Proxy for Annual General Meeting of Shareholders
                                  May 6, 2002

          THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

      KNOW ALL MEN BY THESE PRESENTS, that the undersigned shareholder of Global
Sources Ltd., a Bermuda corporation, does hereby constitute and appoint Tang
Yang Ping and Sarah Benecke, and each of them, with full power to act alone and
to designate substitutes, the true and lawful attorneys and proxies of the
undersigned for and in the name, place and stead of the undersigned, to vote all
Common Shares of Global Sources Ltd. which the undersigned would be entitled to
vote if personally present at the 2002 Annual General Meeting of Shareholders of
Global Sources Ltd. to be held at Grand Hyatt Shanghai, 88 Century Boulevard,
Pudong, Shanghai 200120, China, on Monday, May 6, 2002 at 10:30 a.m., local
time, or at any adjournment or adjournments thereof.

      The undersigned hereby revokes any proxy or proxies heretofore given and
acknowledges receipt of a copy of the Notice of Annual General Meeting and Proxy
Statement, both dated April 12, 2002, and a copy of the Company's audited
financial statements for the fiscal year ended December 31, 2001.

--------------------------------------------------------------------------------
                            ^ FOLD AND DETACH HERE ^

--------------------------------------------------------------------------------EXHIBIT 10.2

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES

                   Index to Consolidated Financial Statements
                                December 31, 2001

                                                                           Page

Report of Independent Public Accountants ..............................      1

Consolidated Balance Sheets............................................      2

Consolidated Statements of Income......................................      3

Consolidated Statements of Cash Flows..................................      4

Consolidated Statement of Shareholders' Equity.........................      5

Notes to Consolidated Financial Statements.............................   6 - 28
<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, 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

                                     Page 1
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

<TABLE>
<CAPTION>
                                                                            At              At
                                                                       December 31     December 31
                                                                       -----------     -----------
                                                                           2000            2001
                                                                       -----------     -----------
<S>                                                                       <C>           <C>
                                     ASSETS

Current Assets:

   Cash and cash equivalents ........................................     $ 12,727      $ 20,236
   Accounts receivable, net .........................................        7,803         5,710
   Receivables from sales representatives ...........................          556           709
   Receivables from related party sales representatives .............        3,438         2,900
   Inventory of paper ...............................................        1,213           856
   Prepaid expenses and other current assets ........................        1,768         1,122
                                                                          --------      --------
         Total Current Assets .......................................       27,505        31,533
                                                                          --------      --------

Property and equipment, net .........................................       23,205        19,058
Intangible assets, net ..............................................          373             3
Long term investments ...............................................        1,250           100
Bonds held to maturity, at amortized cost ...........................        2,027         1,709
Other assets ........................................................        1,346         1,199
                                                                          --------      --------
         Total Assets ...............................................     $ 55,706      $ 53,602
                                                                          ========      ========
                      LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

   Accounts payable .................................................     $  5,536      $  3,625
   Deferred income and customer prepayments .........................       15,888        17,122
   Accrued liabilities ..............................................        5,879         5,127
   Short-term loan ..................................................        4,000            --
   Income taxes payable .............................................          158           164
                                                                          --------      --------
         Total Current Liabilities ..................................       31,461        26,038
                                                                          --------      --------
   Liabilities for incentive and bonus
    plans ...........................................................        1,794         1,434
   Amount due to parent company .....................................       11,404        11,404
   Minority interest ................................................        2,432         2,515
   Deferred tax liability ...........................................          454           610
                                                                          --------      --------
         Total Liabilities ..........................................       47,545        42,001
                                                                          --------      --------

Shareholder's equity:

    Ordinary shares, US$0.01 par value; 50,000,000 shares authorized;
         26,303,949 (2000: 26,303,949) shares issued and outstanding           263           263
   Additional paid in capital .......................................       75,726        80,196
   Retained earnings/(deficit) ......................................      (62,762)      (61,987)
   Less : Unearned compensation .....................................       (5,066)       (6,871)
                                                                          --------      --------
         Total shareholders' equity .................................        8,161        11,601
                                                                          --------      --------
         Total liabilities and shareholders' equity .................     $ 55,706      $ 53,602
                                                                          ========      ========
</TABLE>

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

                                     Page 2
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

<TABLE>
<CAPTION>
                                                                                       Year Ended December 31,
                                                                        ----------------------------------------------------
                                                                            1999                2000                2001
                                                                        ------------        ------------        ------------
<S>                                                                     <C>                 <C>                 <C>
Revenues:
  Online marketplace services ...................................       $     25,463        $     55,121        $     55,468
  Transaction software and services .............................                584                 733                 305
  Complementary media services ..................................             60,846              42,602              34,964
  Other .........................................................              3,379               4,597               4,548
                                                                        ------------        ------------        ------------
                                                                              90,272             103,053              95,285
Operating Expenses:
    Sales .......................................................             29,481              34,436              32,047
    Circulation .................................................             13,069              13,337              11,757
    General and administrative ..................................             32,134              36,197              33,726
    Online services development .................................              3,461               6,665               8,393
    Non-cash compensation expense (Note a) ......................                 --              65,689               2,501
    Non-cash listing expenses ...................................                 --               1,353                  --
    Amortization of intangibles/Software development cost .......                371               1,018               3,476
                                                                        ------------        ------------        ------------
Total Operating Expenses ........................................             78,516             158,695              91,900
                                                                        ------------        ------------        ------------
Income/(Loss) from Operations ...................................             11,756             (55,642)              3,385
                                                                        ------------        ------------        ------------
    Interest expense ............................................               (337)               (649)               (172)
    Interest income .............................................                558               1,135                 357
    Foreign exchange gains (losses),  net .......................                427                  50                (470)
    Write-down of investments ...................................                 --             (11,750)             (1,150)
                                                                        ------------        ------------        ------------
Income/(Loss) before Income Taxes ...............................             12,404             (66,856)              1,950
Income Tax Provision ............................................             (1,435)             (1,277)             (1,143)
                                                                        ------------        ------------        ------------
Income/(Loss) before minority interest ..........................       $     10,969        $    (68,133)       $        807
                                                                        ------------        ------------        ------------
Equity in (loss)/income of affiliate ............................                 --                 (51)                 51
Minority interest ...............................................                 --                 (37)                (83)
                                                                        ------------        ------------        ------------
Net Income/(Loss) ...............................................       $     10,969        $    (68,221)       $        775
                                                                        ============        ============        ============

Basic and diluted net income/(loss) per share ...................       $       0.44        $      (2.63)       $       0.03
                                                                        ============        ============        ============
Shares used in basic and diluted net income /(loss) per share
  calculations (Note 14) ........................................         25,051,380          25,948,028          26,303,949
                                                                        ============        ============        ============
</TABLE>

Note  :  a. Reflects the non-cash compensation expenses associated with the
            transfer of shares from the parent company to the chairman and chief
            executive officer of the Company and the employee equity
            compensation plans. Approximately $381 (2000: $291) represents sales
            expenses, $87 (2000: $168) represents circulation, $1,546 (2000:
            $65,044) represents general and administrative and $487 (2000: $186)
            represents online services development expenses.

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

                                     Page 3
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                           (In U.S. Dollars Thousands)

<TABLE>
<CAPTION>
                                                                                     Year Ended December 31,
                                                                            ----------------------------------------
                                                                              1999            2000            2001
                                                                            --------        --------        --------
<S>                                                                         <C>             <C>             <C>
Cash flows from operating activities:
    Net income/(Loss) ...............................................       $ 10,969        $(68,221)       $    775
Adjustments to reconcile net income to net cash provided by
 (used for) operating activities:
    Depreciation and amortization ...................................          2,441           4,069           8,934
    Loss/(Profit) on sale of property and equipment .................             19             (23)             34
    Accretion of U.S. Treasury strips zero % coupon .................           (170)           (139)           (122)
    Bad debt expense ................................................          1,123           1,188             765
    Expenses allocated by Parent Company ............................            640              --              --
    Non-cash compensation expense ...................................             --          65,689           2,501
    Non-cash listing expenses .......................................             --           1,353              --
    Income attributable to minority shareholder .....................             --              37              83
    Write-down of investments .......................................             --          11,750           1,150
    Equity in loss/(income) of affiliate ............................             --              51             (51)
    Property and equipment written off ..............................             --              12             108
                                                                            --------        --------        --------
                                                                              15,022          15,766          14,177
    Changes in assets and liabilities:
    Accounts receivables ............................................           (407)         (1,865)          1,328
    Receivables from sales representatives ..........................            (11)          1,527            (153)
    Receivables from related party sales representatives ............          2,090             651             538
    Inventory of paper ..............................................            200            (630)            357
    Prepaid expenses and other current assets .......................          1,611           1,459             646
    Loan to chief executive officer .................................             --          (5,350)             --
    Repayment of loan from chief executive officer ..................             --           5,350              --
    Long term assets ................................................            308            (123)            147
    Accounts payable ................................................         (1,157)          2,067          (1,911)
    Accrued liabilities and liabilities for incentive and bonus plans             77          (2,987)         (1,061)
    Deferred income and customer prepayments ........................          3,447             750           1,234
    Amount due to Parent Company ....................................         (6,268)             --              --
    Tax liability ...................................................            227             298             162
                                                                            --------        --------        --------
         Net cash provided by operating activities ..................         15,139          16,913          15,464
                                                                            --------        --------        --------

Cash flows from investing activities:
    Purchase of bonds ...............................................            (93)             --              --
    Purchase of long term investments ...............................             --         (13,000)             --
    Purchase of property and equipment ..............................         (8,318)        (17,128)         (4,874)
    Proceeds from sales of property and equipment ...................             39              25             315
    Proceeds from matured bonds .....................................            460             460             440
   Capital contributed by minority shareholder in a joint venture ...             --           6,000              --
                                                                            --------        --------        --------
         Net cash used for investing activities .....................         (7,912)        (23,643)         (4,119)
                                                                            --------        --------        --------

Cash flows from financing activities:
    Short-term borrowings ...........................................             --          13,260              --
    Repayment of short-term borrowings ..............................             --          (9,260)         (4,000)
    Dividends paid ..................................................        (14,945)             --              --
    Advances from shareholders ......................................          7,438              --              --
    Amount received towards directors stock option plan .............             --              --             164
    Additional capital contributed ..................................             --              24              --
                                                                            --------        --------        --------
         Net cash (used for) generated from financing activities ....         (7,507)          4,024          (3,836)
                                                                            --------        --------        --------
Net (decrease)/increase in cash and cash equivalents ................           (280)         (2,706)          7,509
Cash and cash equivalents, beginning of the year ....................         15,713          15,433          12,727
                                                                            --------        --------        --------
Cash and cash equivalents, end of the year ..........................       $ 15,433        $ 12,727        $ 20,236
                                                                            ========        ========        ========

Supplemental cash flow disclosures:
    Income tax paid .................................................       $  1,208        $    979        $    981
    Interest paid ...................................................            337             639             172
                                                                            ========        ========        ========
</TABLE>

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

                                     Page 4
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
              (In U.S. Dollars Thousands, Except Number of Shares)

<TABLE>
<CAPTION>
                                            Ordinary Shares
                                          --------------------
                                                                  Additional                                  Total
                                          Number of                 paid in     Retained      Unearned     Shareholders'
                                            Shares     Amounts      Capital     Earnings    Compensation      Equity
                                            ------     -------      -------     --------    ------------      ------
<S>                                       <C>          <C>          <C>         <C>            <C>           <C>
Balance at December 31, 1998 ..........   25,051,380   $    251           --    $  9,435            --       $  9,686
Net income ............................           --         --           --      10,969            --       $ 10,969
Dividends .............................           --         --           --     (14,945)           --       $(14,945)
                                          ----------   --------     --------    --------       -------       --------

Balance at December 31, 1999 ..........   25,051,380   $    251           --    $  5,459            --       $  5,710
Net income ............................           --         --           --     (68,221)           --       $(68,221)
Issuance of shares upon share exchange     1,252,569   $     12     $     12          --            --       $     24
Non-cash compensation expenses ........           --         --       70,755          --            --       $ 70,755
Unearned compensation .................           --         --           --          --        (5,066)      $ (5,066)
Non-cash listing expenses .............           --         --        1,353          --            --       $  1,353
Interest in Joint Venture .............           --         --     $  3,606          --            --       $  3,606
                                          ----------   --------     --------    --------       -------       --------

Balance at December 31, 2000 ..........   26,303,949   $    263     $ 75,726    $(62,762)      $(5,066)      $  8,161
Net income ............................           --         --           --         775            --       $    775
Non-cash compensation expenses ........           --         --        4,306          --            --       $  4,306
Unearned compensation .................           --         --           --          --        (1,805)      $ (1,805)
Amount received towards directors -
  stock option plan ...................           --         --          164          --            --       $    164

                                          ----------   --------     --------    --------       -------       --------
Balance at December 31, 2001 ..........   26,303,949   $    263     $ 80,196    $(61,987)      $(6,871)      $ 11,601
                                         ===========   ========     ========    ========       =======       ========
</TABLE>

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

                                     Page 5
<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. The Company is majority owned by Hung Lay Si Co
      Ltd. (the "Parent Company"). The Parent Company is a company organized
      under the laws of the 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 dispositive power
      over the shares of capital stock of the Parent Company owned by the Trust.

      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. Private Buyer 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's businesses are
      conducted primarily through Trade Media Ltd., 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 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 accounts 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.

      (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.

                                     Page 6
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

(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)   Inventory of Paper

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

(e)   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

      (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". 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 will be
            expensed as incurred.

(f)   Intangible Assets

      Copyrights are carried at cost less accumulated amortization. Copyrights
      are amortized on a straight line basis over a period of ten years.

      Goodwill, which represents the excess of the cost of purchased businesses
      over the fair value of their net assets at dates of acquisition, is
      amortized on a straight-line basis over twenty years.

                                     Page 7
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

(g)   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.

      Interest 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.

(h)   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 or
      intangibles as of December 31, 2001.

(i)   Revenue Recognition

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

      Revenues from advertising in trade magazines and Web sites are recognized
      ratably in the period in which the advertisement is displayed. Advertising
      contracts do not exceed one year. 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 business seminars is recognized at the conclusion of the
      seminar.

      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 in the period in which the
      advertisement is displayed by the licensee.

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

                                     Page 8
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

(j)   Transactions with Sales Representatives and Related Party Sales
      Representatives

      The Company utilizes sales representatives and 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 representative 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.

      The Company nominated a director to the Board of Directors of eight of
      these sales representative companies. The nominated directors are
      employees of the Company. The Company and the nominated directors do not
      have any interest in the share capital of these related party sales
      representative companies. Approximately $16,056, $20,315, and $20,172 of
      commissions and marketing fees expense was associated with these related
      party sales representative companies for 1999, 2000, and 2001,
      respectively.

(k)   Advertising Expenses

      Advertising expenses are expensed as incurred.

(l)   Operating Leases

      The Company leases certain office facilities under 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.

(m)   Liabilities for Bonus Plan

      Before the commencement of the Equity Compensation Plans as described in
      note 23, 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 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.

(n)   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.

                                     Page 9
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

(o)   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.

(p)   Minority Interest

      In 2000 the Company entered into an agreement with CMP Media Inc., through
      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
      the 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. 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, 2001. The minority interest liability of $2,515 at December
      31, 2001 reflects CMP's proportionate interest of the net book value in
      the eMedia Asia Ltd.

(q)   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 expenses amounts at the average monthly exchange rate for the
      year. The cumulative translation differences were not material as of
      December 31, 2000 and 2001.

(r)   Segment Reporting

      Statement of Financial Accounting Standard ("SFAS") No. 131, "Disclosures
      about Segments of an Enterprise and Related Information" ("SFAS 131")
      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.

                                    Page 10
<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 identifies its operating segments based on business
      activities, management responsibility and geographic location. The Company
      has three reportable segments: online marketplace services, transaction
      software and services, and complementary media services.

(s)   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. For each of the years ended December 31, 1999,
      2000 and 2001, the Company had no material comprehensive income items.

(t)   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 ordinary shares outstanding during
      the period, as restated as discussed in note 14. Diluted net income per
      share is calculated using the weighted average number of outstanding
      ordinary shares, as restated as discussed in note 14, plus other dilutive
      potential ordinary shares. For all periods presented, the Company did not
      have any dilutive securities; therefore, both the basic and diluted net
      income per share computations resulted in the same amounts.

(u)   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
      Accounting Principles Board Opinion No. 25 (APB 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 Emerging Issues Task
      Force (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.

                                    Page 11
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

(v)   Recent Accounting Pronouncements

      As of December 31, 2001, the Company adopted the Emerging Issues Task
      Force Issue No. 00-14, "Accounting for Certain Sales Incentives" (EITF
      00-14). EITF 00-14 stipulates that the reduction in the selling price of
      the product or service resulting from any cash sales incentive should be
      classified as a reduction of revenue. The adoption of this EITF resulted
      in the Company reclassifying certain sales incentives from a sales expense
      to a reduction of revenue for all periods presented. This reclassification
      represented less than 3% of revenues for each period presented and did not
      impact net income.

      In June 1998, the Financial Accounting Standards Board (FASB) issued
      Statements of Accounting Standards (SFAS) No. 133, "Accounting for
      Derivative Instruments and Hedging Activities" as amended by SFAS No. 137
      and SFAS No. 138. This statement, as amended, was effective January 1,
      2001, and established accounting and reporting standards for derivative
      instruments, including certain derivative instruments imbedded in other
      contracts, and for hedging activities. The adoption of SFAS No. 133, as
      amended, did not impact the Company's financial position or results of
      operations.

      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. 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, the Company is required to adopt SFAS No. 142 effective
      January 1, 2002. As goodwill was fully amortized and no acquisitions
      occurred during 2001, management believes that the adoption of these
      standards will not have a material impact on the Company's financial
      statement of position, results of operations, or cash flows.

      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 provide more
      information about future cash outflows, leverage and liquidity regarding
      retirement obligations and the gross investment in long-lived assets. The
      Company will be required to implement SFAS No. 143 on January 1, 2003 and
      believes that the adoption of this standard will not have a material
      impact on the Company's financial statement of position, results of
      operations, or cash flows.

      In August 2001, FASB issued SFAS No. 144, "Accounting for the Impairment
      or Disposal of Long-Lived Assets." This statement addresses financial
      accounting and reporting for the impairment or disposal of long-lived
      assets, superseding SFAS No. 121, "Accounting for the Impairment of
      Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." The
      statement also supersedes the accounting and reporting provisions of APB
      Opinion No. 30,

                                    Page 12
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

      Reporting the Results of Operations -- Reporting the Effects of Disposal
      of a Segment of a Business, and Extraordinary, Unusual and Infrequently
      Occurring Events and Transactions , for segments of a business to be
      disposed. The Company is required to adopt this statement on January 1,
      2002 and believes that the adoption of this standard will not have a
      material impact on the Company's financial statement of position, results
      of operations, or cash flows.

3.    Current Assets:

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                                   ----------------------
                                                                     2000           2001
                                                                   --------       -------
<S>                                                                <C>            <C>
      Accounts receivable:
      Gross trade receivables ...............................      $ 10,203       $ 7,842
      Less:  Allowance for doubtful debts ...................        (2,400)       (2,132)
                                                                   --------       -------
                                                                   $  7,803       $ 5,710
                                                                   ========       =======
</TABLE>

      Movements in Allowance for Doubtful Accounts:

<TABLE>
<CAPTION>
                                                                    Year Ended December 31,
                                                             ------------------------------------
                                                               1999           2000          2001
                                                             --------       --------       ------
<S>                                                     <C>            <C>            <C>
     Balance at beginning of year .....................      $  2,376       $  1,854       $2,400
     Charged to bad debt expenses .....................         1,123          1,188          765
     Write-off of bad debts ...........................        (1,645)          (642)      (1,033)
                                                             --------       --------       ------
     Balance at end of year ...........................      $  1,854       $  2,400       $2,132
                                                             ========       ========       ======
</TABLE>

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                                   ----------------------
                                                                     2000           2001
                                                                   --------       -------
<S>                                                                <C>            <C>
      Prepaid expenses and other current assets:
      Unsecured employee loans and other debtors ............      $    318       $   117
      Prepaid expenses ......................................           313           399
      Other current assets ..................................         1,137           606
                                                                   --------       -------
                                                                   $  1,768       $ 1,122
                                                                   ========       =======
</TABLE>

                                    Page 13
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

4.    Property and Equipment, net:

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                                   ----------------------
                                                                     2000           2001
                                                                   --------       -------
<S>                                                                <C>            <C>
      Capital work-in progress ..............................      $     89       $    33
      Leasehold improvements ................................         6,398         6,635
      Motor vehicles ........................................            73            72
      Computers, fixtures, fittings and office equipment ....        20,114        21,781
      Software development costs ............................         9,316        11,821
                                                                   --------       -------
      Property and equipment, at cost .......................        35,990        40,342
      Less: Accumulated depreciation ........................       (12,785)      (21,284)
                                                                   --------       -------
                                                                   $ 23,205       $19,058
                                                                   ========       =======
</TABLE>

      Depreciation expense for the years ended December 31, 1999, 2000 and 2001
      were $2,070, $3,051 and $5,458, respectively and the amortization of
      Software development cost for the years ended December 31, 1999, 2000 and
      2001 were $ NIL, $647 and $3,106, respectively.

5.    Intangible Assets, net:

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                                   ----------------------
                                                                     2000           2001
                                                                   --------       -------
<S>                                                                <C>            <C>
      Goodwill ..............................................      $    654       $   654
      Copyrights ............................................         3,706         3,706
                                                                   --------       -------
                                                                      4,360         4,360
      Less:  Accumulated amortization .......................        (3,987)       (4,357)
                                                                   --------       -------
                                                                   $    373       $     3
                                                                   ========       =======
</TABLE>

6.    Long-term Investments and Bonds held to maturity:

      (i)   As at December 31, 2001, 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 ability to exercise significant
            influence over the investee. The investment is shown under long term
            investments in 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
            temporary decline in the carrying values of such assets.

            During the fourth quarter of year 2000, the Company recorded $11,750
            impairment loss for other than temporary decline in the carrying
            value of the investments based on the financial position of the
            investees and other information, which became available in the
            fourth

                                    Page 14
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

            quarter of year 2000 and developments in the technology and internet
            sectors in fourth quarter of year 2000. During the year 2001, the
            Company recorded a further $1,150 impairment loss for other than
            temporary decline in the carrying value of the investment based on
            current economic events and other factors. The net carrying value of
            the long term investment as at December 31, 2001 was $100. The
            Company will continue to evaluate this investment.

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

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                                   ----------------------
                                                                     2000           2001
                                                                   --------       -------
<S>                                                                <C>            <C>
      The amortized cost classified by date of contractual
      maturity is as follows:
      Due within one year ...................................      $    420       $   430
      Due after one year through five years .................         1,260         1,059
      Due after five years through ten years ................           347           220
                                                                   --------       -------
                                                                   $  2,027       $ 1,709
                                                                   ========       =======

      The fair value classified by date of contractual
      maturity is as follows:
      Due within one year ...................................      $    424       $   444
      Due after one year through five years .................         1,306         1,137
      Due after five years through ten years ................           362           230
                                                                   --------       -------
                                                                   $  2,092       $ 1,811
                                                                   ========       =======
</TABLE>

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                                   ----------------------
                                                                     2000           2001
                                                                   --------       -------
<S>                                                                <C>            <C>
      Gross unrealized holding gains ........................      $     65       $   102
                                                                   ========       =======
</TABLE>

7.    Other Assets:

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                                   ----------------------
                                                                     2000           2001
                                                                   --------       -------
<S>                                                                <C>            <C>
      Employee housing loans ................................      $    786       $   378
      Rental and utility deposits ...........................           560           821
                                                                   --------       -------
                                                                   $  1,346       $ 1,199
                                                                   ========       =======
</TABLE>

                                    Page 15
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

8.    Current Liabilities:

<TABLE>
<CAPTION>
                                                                               At December 31,
                                                                           ----------------------
                                                                             2000           2001
                                                                           --------       -------
<S>                                                                        <C>            <C>
      Deferred income and customer prepayments:
      Advertising ...........................................              $ 12,229       $13,963
      Subscription and others ...............................                 3,659         3,159
                                                                           --------       -------
                                                                           $ 15,888       $17,122
                                                                           ========       =======
</TABLE>

<TABLE>
<CAPTION>
                                                                               At December 31,
                                                                           ----------------------
                                                                             2000           2001
                                                                           --------       -------
<S>                                                                        <C>            <C>
      Accrued liabilities:
      Salaries, wages and commissions ...............................      $  1,251       $ 1,442
      Retirement benefit plans ......................................           493           435
      Current portion of liabilities for incentive and bonus plans...         2,848         1,168
      Others ........................................................         1,236         2,082
      Equity in loss of affiliate ...................................            51            --
                                                                           --------       -------
                                                                           $  5,879       $ 5,127
                                                                           ========       =======
</TABLE>

9.    Liabilities for Incentive and Bonus Plans:

<TABLE>
<CAPTION>
                                                                               At December 31,
                                                                           ----------------------
                                                                             2000           2001
                                                                           --------       -------
<S>                                                                           <C>            <C>
      Liability for long term discretionary bonus program ...........      $  1,794       $ 1,434
                                                                           ========       =======
</TABLE>

10.   Related Party Transactions

      The Company has extended loans to certain members of its senior management
      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 $786 and $378 as of December 31, 2000 and 2001
      respectively. Loans due from employees for lease of residences were $219
      and $114 as of December 31, 2000 and 2001, respectively.

      The Company leases certain office facilities from subsidiaries of the
      Parent Company under cancelable and non-cancelable operating leases that
      include both rental and building maintenance services. During the years
      ended December 31, 1999, 2000 and 2001, the

                                    Page 16
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

      Company incurred rental and building management services expenses of
      $1,406, $950 and $1,044, respectively, with respect to these office
      facilities.

      The Company also receives legal and secretarial services from subsidiaries
      of the Parent Company. During the year ended December 31, 1999, 2000 and
      2001, the Company incurred such legal and secretarial services expenses of
      $64, $455 and $464, respectively.

      The Company had $11,404 and $11,404 amounts due to the Parent Company as
      of December 31, 2000 and 2001, respectively. The amount due to the Parent
      Company is unsecured and has no fixed repayment terms prior to January 1,
      2000. Interest was charged in the range of 2 to 3%. During the year ended
      December 31, 1999, the Company incurred interest expense of $337, with
      respect to amounts due to the Parent Company. During the years 2000 and
      2001, the Company did not incur any such interest expenses with respect to
      amounts due to the Parent Company.

      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 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.

      During the year ended December 31, 1999, the Company incurred operating
      expenses of $640, allocated from the Parent Company. The Company believes
      that the methods used in the allocation of expenses were reasonable and
      that the consolidated statements of income include all costs directly and
      indirectly attributable to the Company. The amounts related to the Company
      have been determined by segregating amounts related to the operations of
      the Company from those related to the Parent Company. The determination of
      such amounts was made by reference to individual records for costs
      specifically relating to the Company or by allocation based on number of
      personnel, time spent by personnel, usage of facilities or similar
      references. During the years 2000 and 2001 there were no such allocated
      expenses from the Parent Company.

      Effective May 1, 2000, the Company engaged The Fairchild Corporation to
      provide financial, legal and certain other services to the Company for a
      fee of $42 per month. The Company terminated this arrangement effective
      December 31, 2000. The Company incurred $333 expenses for these services
      during the year ended December 31, 2000.

      In addition to the transactions with related party sales representatives
      discussed in note 2 (j), the Company provided technical services to these
      sales representatives and to a subsidiary of the Parent Company, for a
      fee. During the year ended December 31, 1999, 2000 and 2001, the Company
      received such services fee of $242, $167 and $259, respectively.

                                    Page 17
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

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. Amounts expensed related to these awards
      for the years ended December 31, 1999, 2000 and 2001, were $143, $NIL and
      $NIL, respectively. The required funds are set aside for payment of the
      discretionary bonuses by purchasing U.S. Treasury strips zero % coupon
      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. Amounts expensed related
      to incentive awards under plans administered by the Company for the years
      ended December 31, 1999, 2000 and 2001 were $45, $116 and $78,
      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, 2000 and 2001 were $381 and $376,
      respectively.

      The Company incurred costs of $823, $1,039 and $1,085 with respect to the
      retirement plans in the years ended December 31, 1999, 2000 and 2001,
      respectively.

                                    Page 18
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

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 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.

      Income / (loss) before income taxes consists of:

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                              ------------------------------------
                                                                1999           2000          2001
                                                              --------       --------       ------
<S>                                                           <C>            <C>            <C>
      Cayman Islands ...................................      $ 11,470       $ (3,593)      $  401
      Foreign ..........................................           934        (63,263)       1,549
                                                              --------       --------       ------
                                                              $ 12,404       $(66,856)      $1,950
                                                              ========       ========       ======
</TABLE>

      The provision for income taxes consists of:

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                              ------------------------------------
                                                                1999           2000          2001
                                                              --------       --------       ------
<S>                                                           <C>            <C>            <C>
      Current tax expense:
      Cayman Islands ...................................      $     --       $     --       $   --
      Foreign ..........................................         1,435          1,277        1,143
                                                              --------       --------       ------
      Total provision ..................................      $  1,435       $  1,277       $1,143
                                                              ========       ========       ======
</TABLE>

      The provision for income taxes for the years ended December 31, 1999, 2000
      and 2001 differed from the amount computed by applying the statutory
      income tax rate of 0% as follows:

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                              ------------------------------------
                                                                1999           2000          2001
                                                              --------       --------       ------
<S>                                                           <C>            <C>            <C>
      Income taxes at statutory rate ...................      $     --       $     --       $   --
      Foreign income and revenues taxed at higher rates          1,435          1,277        1,143
                                                              --------       --------       ------
      Total ............................................      $  1,435       $  1,277       $1,143
                                                              ========       ========       ======
      Effective tax rate ...............................         11.57%         (1.91)%      58.62%
                                                              ========       ========       ======
</TABLE>

      Deferred tax assets consist of the following:

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                                   ----------------------
                                                                     2000           2001
                                                                   --------       -------
<S>                                                                <C>            <C>
      Net operating loss carry forwards .....................      $  7,525       $ 7,434
      Less:  valuation allowance ............................        (7,525)       (7,434)
                                                                   --------       -------
      Deferred tax assets ...................................      $     --       $    --
                                                                   ========       =======
</TABLE>

                                    Page 19
<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 recorded a full valuation allowance for the deferred tax
      assets due to the uncertainty as to their ultimate realization.

      As of December 31, 2001, a United States subsidiary has net operating loss
      carry forwards of approximately $17.3 million. These losses can be
      utilised to reduce future taxable income of the subsidiary subject to
      compliance with the taxation legislation and regulations in the relevant
      jurisdiction.

14.   Share Capital

      On April 14, 2000, in conjunction with the Share Exchange Agreement
      discussed in Note 21, Fairchild (Bermuda) Ltd. issued 25,051,380 ordinary
      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 2,505 to 1 stock split. In
      addition, Fairchild (Bermuda) Ltd. issued 62,628 ordinary shares and
      1,189,941 ordinary 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. The
      authorized share capital of the Company as at December 31, 2000 and 2001
      is 50,000,000 ordinary shares of $0.01 par value. As at December 31, 2000
      and at December 31, 2001, the Company has 26,303,949 ordinary shares
      issued and outstanding.

15.   Fair Value of Financial Instruments

      The carrying amounts of the Company's cash equivalents, accounts
      receivable, related party receivables, accounts payable and accrued
      liabilities approximate fair value due to their short maturities. The fair
      value of related party payables cannot be determined due to the related
      party nature. The information with respect to long term related party
      payables 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, investment in U.S. Treasury strips zero %
      coupon, trade accounts receivable and receivables from sales
      representatives. The Company maintains checking and money market accounts
      with high quality institutions. The Company has a 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 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, 1999, 2000 and 2001. No
      customer accounted for more than 10% of the accounts receivable as of
      December 31, 2000 and 2001.

                                    Page 20
<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 2001, the Company derived approximately 93% of its revenue from
      customers in the Asia-Pacific region. 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 the Asia-Pacific
      region 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, 1999, 2000 and 2001, the Company's operating lease rental
      expenses were $1,898, $1,502 and $1,897, respectively. The estimated
      future minimum lease payments under non-cancelable operating leases as of
      December 31, 2001 are as follows:

                  Year Ending December 31,                      Operating Leases
                  ------------------------                      ----------------
                  2002 .........................................     $  471
                  2003 .........................................        471
                  2004 .........................................        414
                                                                     ------
                                                                     $1,356
                                                                     ======

18.   Segment and Geographic Information

      The Company has three reportable segments: online marketplace services,
      transaction software and services and complementary media services.
      Revenues by geographic location are based on the location of the customer.

(a)   Segment Information

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                              ------------------------------------
                                                                1999           2000          2001
                                                              --------       --------       ------
<S>                                                           <C>            <C>            <C>
      Revenues:
      Online marketplace services ......................      $ 25,463       $ 55,121       $55,468
      Transaction software and services ................           584            733           305
      Complementary media services .....................        60,846         42,602        34,964
      Other ............................................         3,379          4,597         4,548
                                                              --------       --------       -------
      Consolidated .....................................      $ 90,272       $103,053       $95,285
                                                              ========       ========       =======
</TABLE>

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                              ------------------------------------
                                                                1999           2000           2001
                                                              --------       --------       -------
<S>                                                           <C>            <C>            <C>
      Income/(loss) from Operations:
      Online marketplace services ......................      $  3,607       $(23,276)      $12,308
      Transaction software and services ................        (1,562)        (3,469)       (8,288)
      Complementary media services .....................         9,392        (27,106)       (1,360)
      Other ............................................           319         (1,791)          725
                                                              --------       --------       -------
      Consolidated .....................................      $ 11,756       $(55,642)      $ 3,385
                                                              ========       ========       =======
</TABLE>

                                    Page 21
<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>
                                                                       At December 31,
                                                                   ----------------------
                                                                     2000           2001
                                                                   --------       -------
<S>                                                                <C>            <C>
      Identifiable Assets:
      Online marketplace services ...........................      $ 24,376       $26,413
      Transaction software and services .....................        10,564         8,368
      Complementary media services ..........................        18,780        16,655
      Other .................................................         1,986         2,166
                                                                   --------       -------
      Consolidated ..........................................      $ 55,706       $53,602
                                                                   ========       =======
</TABLE>

(b)   Foreign Operations

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                              ------------------------------------
                                                                1999           2000          2001
                                                              --------       --------       ------
<S>                                                           <C>            <C>            <C>
      Revenues:
      Asia .............................................      $ 83,755       $ 95,388       $88,427
      United States ....................................         4,613          5,235         5,255
      Europe ...........................................         1,159          1,083           908
      Other ............................................           745          1,347           695
                                                              --------       --------       -------
      Consolidated .....................................      $ 90,272       $103,053       $95,285
                                                              ========       ========       =======
</TABLE>

<TABLE>
<CAPTION>
                                                                       At December 31,
                                                                   ----------------------
                                                                     2000           2001
                                                                   --------       -------
<S>                                                                <C>            <C>
      Long-Lived Assets:
      Asia ..................................................      $ 26,060       $20,247
      United States .........................................           114           113
                                                                   --------       -------
      Consolidated ..........................................      $ 26,174       $20,360
                                                                   ========       =======
</TABLE>

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 it 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.

                                    Page 22
<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, 2001 for the renovation work to be
      carried out on the leasehold office facilities amount to $91.

21.   Share Exchange Agreement

      On December 6, 1999, a Share Exchange Agreement was executed by The
      Fairchild Corporation, Fairchild (Bermuda), Ltd., Trade Media Holdings
      Ltd. and the shareholders of Trade Media Holdings Ltd. (the "Share
      Exchange"). Under the Share Exchange, Fairchild (Bermuda), Ltd. issued
      additional common shares in exchange for all of the issued and outstanding
      shares of the Company.

      After the Share Exchange, The Fairchild Corporation and shareholders of
      The Fairchild Corporation hold less than 5% and the shareholders of Trade
      Media Holdings Ltd. hold the remainder of the combined companies. After
      the Share Exchange, Fairchild (Bermuda), Ltd. was renamed Global Sources
      Ltd. Global Sources Ltd. recorded the Share Exchange as a
      recapitalization. This reflected a private operating company, Trade Media
      Holdings Ltd., as the acquirer combining into Fairchild (Bermuda), Ltd., a
      non-operating public shell corporation with nominal net assets. As of, and
      subsequent to, the Share Exchange, the historical consolidated financial
      statements of Trade Media Holdings Ltd. are being presented as the
      continuing accounting entity, similar to a reverse acquisition.
      Thereafter, all of the historical consolidated financial statements
      presented represent that of Trade Media Holdings Ltd.

      In the Share Exchange, the Company issued 25,051,380 ordinary shares to
      the shareholders of Trade Media Holdings Ltd. in exchange for all of its
      10,000 ordinary shares outstanding at that date. The shareholders' equity
      of Trade Media Holdings Ltd. has been restated to reflect the effect of
      the 2,505 to 1 exchange ratio. The authorized share capital of the Company
      following the Share Exchange is 50,000,000 ordinary shares. In addition,
      the Company issued 62,628 ordinary shares and 1,189,941 ordinary shares to
      The Fairchild Corporation and The Fairchild Corporation's shareholders,
      respectively.

      On April 3, 2000, the Form F-1 was declared effective, and on April 14,
      2000, the above Share Exchange Agreement was consummated. As of April 14,
      2000, the Company was publicly listed on NASDAQ.

      The transaction costs associated with the Share Exchange Agreement,
      amounting to $750, $609 and $NIL have been expensed during the year ended
      December 31, 1999, 2000 and 2001, respectively. This expense is included
      under general and administrative cost for the year ended December 31, 1999
      and 2000 in the Consolidated Statements of Income.

                                    Page 23
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

22.   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 Parent Company assigned 4,008,221 ordinary 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 501,028 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 3,507,193 of these shares is subjected to employment, non-compete and
      vesting terms under an employment agreement with one of the Company's
      United States subsidiaries. The 3,507,193 shares were to vest ratably over
      10 years, 10% each year. 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
      and $NIL non-cash compensation expense associated with these awards in the
      year ending December 31, 2000 and 2001, respectively.

23.   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 a subsidiary 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 Parent Company assigned 2,505,138 ordinary
      shares of the Company, representing a 10% equity interest in the Company,
      to 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 and ECP VI
      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 price of these
      options may be below the fair market value of the Company's ordinary
      shares. The plan committee determines who will receive, and the terms of,
      the options.

                                    Page 24
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

      Optionees may pay for ordinary shares purchased upon exercise of options
      by check or by the delivery of other securities of the Company. Payment
      shall made to the Trust.

      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 ordinary 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 ordinary shares
      purchased upon exercise of options by check or by the delivery of other
      securities of the Company. 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 and directors 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 25 and SFAS 123, under ECP II and ECP III of approximately $2,907
      and $2,521, respectively, are recognised ratably over the three year
      vesting term.

      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 was 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 and approved additional
      awards of common shares under ECP IV on April 1, 2001 and July 1, 2001.

      The non-cash compensation expenses associated with the above awards in
      accordance with APB 25 and SFAS 123, under ECP IV and ECP V of
      approximately $3,337 and $1,983, respectively, are recognized over the
      five year vesting term from the respective award date.

                                    Page 25
<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 Equity Compensation Plan committee approved further awards of common
      shares under ECP IV and ECP V in January 2002. The non-cash compensation
      expenses associated with the above awards in accordance with APB 25 and
      SFAS 123, under ECP IV and ECP V of approximately $537 and $120 will be
      recognized over the five year vesting term.

      Eligible employees, directors and consultants under ECP VI are awarded a
      one time grant of Global Sources Ltd. common shares the number of which is
      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 the ECP VI on March 13,
      2001 and made awards of common shares under the plan on various dates
      during the year 2001.

      The non-cash compensation expenses associated with the awards in
      accordance with APB 25 and SFAS 123, under ECP VI totaling to
      approximately $313, are recognized over the five year vesting term from
      the respective award date.

      The Company expensed $1,689 and $2,501 non-cash compensation costs
      associated with the awards under the above ECP plans in the years ended
      December 31, 2000 and 2001 respectively.

                                    Page 26
<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          ECP V        ECP VI
                                                         ------               -------        ------          -----        ------
                                                Purchase         Gift          Grant          Grant          Grant         Gift
                                                  Plan           Plan          Plan           Plan           Plan          Plan
                                                  ----           ----          ----           ----           ----          ----
<S>                                            <C>           <C>            <C>           <C>            <C>            <C>
Plan Inception .............................   March, 2000   March, 2000    March, 2000   January, 2001  January, 2001  March, 2001
                                               ===========   ===========    ===========   =============  =============  ===========

Number of Shares:

At December 31, 1999 .........................        --            --             --             --             --           --

  Original restricted shares granted in
    year 2000 ................................    80,887       212,526        104,184             --             --           --
  Shares forfeited to beneficial trustee .....        --       (11,442)        (1,334)            --             --           --
                                               -----------   -----------    -----------   -------------  -------------  -----------
Balance at December 31, 2000 .................    80,887       201,084        102,850             --             --           --

  Original restricted shares granted in
    year 2001 ................................        --            --             --        522,354        303,000       78,300
  Shares forfeited to beneficial trustee .....        --       (24,468)       (19,839)       (87,837)       (91,500)          --
                                               -----------   -----------    -----------   -------------  -------------  -----------
Balance at December 31, 2001 .................    80,887       176,616         83,011        434,517        211,500       78,300
                                               ===========   ===========    ===========   =============  =============  ===========
Grant Price Per Share ........................    $24.00      $    NIL       $    NIL       $    NIL       $    NIL      $   NIL
                                               ===========   ===========    ===========   =============  =============  ===========
Weighted average fair value of the
  shares granted .............................    $ 2.50      $  26.50       $  26.50       $   8.67       $   9.22      $  4.14
                                               ===========   ===========    ===========   =============  =============  ===========
</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.

                                    Page 27
<PAGE>

                      GLOBAL SOURCES LTD. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

     (In U.S. Dollars Thousands, Except Number of Shares and Per Share Data)

24.   Directors Stock Option Plan

      A Non-executive Director 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, receives
      the grant of an option to purchase 20,000 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
      fifteen percent less than the average closing price of the shares for the
      last five trading days of the previous calendar year. The non-executive
      Directors may decline all or part of the award, which is non-transferable.

      Board granted the first awards under the above plan in 2001. The award
      vests over four years with one quarter of the shares vesting each year.
      Full payment must be made while 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 on February 10, 2001 the offer for the 20,000
      shares granted under option. The $164 received as proceeds of this plan
      was included in additional paid-in capital.

      As per the terms of the plan, 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 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-executive
      Directors accepted the offer before February 28, 2002.

25.   Credit Facility

      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 London Inter-Bank Market
      Rate plus 0.5%. The Parent Company has guaranteed all of the Company's
      obligations under the credit facility.

      As of December 31, 2000 and 2001, $4,000 and $NIL, respectively of
      principal was outstanding under this credit facility.

      On March 13, 2002, the credit facility will be re-newed for $10,000 for
      one year subject to the same terms and conditions as applicable to the
      original facility.

                                    Page 28

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