3.  NATURE OF BUSINESS

-   Capetronic International (Thailand) Public Co., Ltd, formerly known
    as “Teletech Thailand Limited”, was incorporated in Thailand on 1
    October 1985 with an initial registered capital of Baht 3.5 million.
    The Company and Teletech (Hongkong) Limited established a joint
    venture to produce color televisions and telephones at the factory
    in Thailand.

-   Teletech Thailand Limited changed its status from a Limited Company
    to Public Limited Company on 28 May 1993. Its major shareholder then
    was Teletech International Holdings Limited (“TIHL”)

-   In 1993, The Grande Holdings Limited (“The Grande Group”) acquired
    the shares of Teletech International Holdings Limited, the ultimate
    shareholder of the Company. The Grande Group has expertise in
    manufacturing and sales of computer monitors.

-   In 1993, Capetronic (Thailand) Limited (“CTL”) was incorporated as a
    wholly owned subsidiary of the Company to produce computer monitors.
    The total investment was Baht 40 million. Incentive privilege issued
    by the Board of Investment [ “BOI”] was granted to CTL for the
    production of computer monitors with 3 years corporate income tax
    exemption (1993-1996).

-   In 1993, the Company purchased a 50 percent interest in Capetronic
    Computer Products Holdings Limited (“CCPH”), the holding company for
    companies with activities in computer monitor manufacturing, design,
    sales and service from Capetronic Holdings Limited. This acquisition
    gave the Company an opportunity of access to Capetronic’s monitor
    manufacturing techniques, designing skill, its customer base and
    resulted in the transfer to the Company of Capetronic’s significant
    technology accumulated for more than 10 years of experience in the
    computer monitor industry. In 1997, the Company acquired a 50
    percent interest in Capetronic Computer Peripheral Holdings Limited
    to support the future growth of the Cape Group (Cape Group includes
    CITL, its subsidiary and associated companies)

-   The Company changed its name to “Capetronic International (Thailand)
    Public Company Limited” on 9 November 1994.

-   In 1995, the Company ceased production of television and telephone
    products. CTL transferred its production of computer monitor
    production to the Company and the Company started production of
    computer monitors. CTL also transferred its incentive privilege
    issued by the BOI to the Company.

-   The Company started production of PCD computer monitor in 1995.
    Incentive privilege issued by the BOI for the production of PCD
    computer monitors and electronic products was granted to the Company
    with corporate income tax exemption during the period from 1995
    to 1997. However, the Company ceased production of PCD monitors in
    1996 due to the decline in market demand for these products caused
    by changes in technology.

-   By the end of 1999, Capetronic (Kaohsiung) Corporation transferred
    computer monitor production including LCD monitors to the Company.

-   The Company stopped the production of non-profitable models of
    Shadow mask computer monitors in 2001.

-   The major customer informed the company of its decision to cease
    ordering production of small and medium sized Trinitron monitors in
    October 2001.

-   The company decided to develop LCD-Monitor and LCD-TV models to
    replace the CRT monitor in 2001.

-   In 2003, due to the insufficient demand, the Company wound down its
    operations. It made significant staff reductions and changed the
    status of all remaining staff to that of contract workers.

-   In 2003, the Company’s Board of Directors approved the disposal of
    certain machinery and inventories to third parties, but not more
    than 50 % of the total net book value of assets as at June 30,2003,
    for the best prices obtainable. If possible, for not less than net
    book value.

-   In 2003, the Stock Exchange of Thailand placed the Company into
    rehabilitation. In December 2003 the Company’s Board of Directors
    appointed MFC Asset Management Public Company Limited to assist in
    the rehabilitation plan.

-   At present, the Company registered share capital is Baht 20,156.39
    million, its issued and fully paid capital is Baht 14,009.37
    million. The major shareholder of the Company, The Grande Holdings
    Limited, holds in aggregate of 1,125 million shares or approximately
    80.32 percent of the total issued shares in the Company ( Based on
    information as at 31 December 2003).