NAKAREG HOLDINGS BERHADPROSPECTUS THISEXPOSUREDRAFTPROSPECTUSHASNOTBEENREGISTEREDWITHTHESECURITIES COMMISSIONMALAYSIA("SC").THEINFORMATIONCONTAINEDINTHISEXPOSUREDRAFT PROSPECTUSMAYBESUBJECTTOFURTHERAMENDMENTSBEFOREBEINGREGISTERED WITHTHESc.UNDERNOCIRCUMSTANCESSHALLTHISEXPOSUREDRAFTPROSPECTUS CONSTITUTE AN OFFER FOR SUBSCRIPTION NKG (Company No.918382-T) (Incorporated in Malaysia under the Companies Act,1965) INITIALPUBLICOFFERINGOF52,000,000NEWORDINARYSHARESOFRMO.I0EACH("IPO SHARES")INCONJUNCTIONWITHOURLISTINGONTHEACEMARKETOFBURSAMALAYSIA SECURITIES BERHAD COMPRISING: 44,000,000 IPO SHARES BY WAY OF PRIVATE PLACEMENT TO THE SELECTED INVESTORS; 5,000,000IPOSHARESMADEAVAILABLEFOR APPLICATIONBYOUR ELIGIBLEDIRECTORS, EMPLOYEESANDBUSINESSASSOCIA TESIPERSONSWHOHAVECONTRIBUTEDTOTHE SUCCESS OF OUR GROUP; AND 3,000,000 IPO SHARES FOR APPLICATION BY THE PUBLIC AT AN ISSUE PRICE OF RM [.] PER IPO SHARE, PAY ABLE IN FULL UPON APPLICATION Adviser, Sponsor, Underwriter and Placement Agent PM Securities Sdn. Bhd. YOU ARE ADVISEDTO READ AND UNDERSTANDTHE CONTENTS OF THIS PROSPECTUS.IF IN DOUBT, PLEASE CONSULT A PROFESSIONAL ADVISER. FOR INFORMATION CONCERNING CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE "RISK FACTORS" IN SECTION 5 OF THIS PROSPECTUS. INVESTORS ARE ADVISED TO NOTE THAT COMPANIES LISTED ON THE ACEMARKET MAYBE OF HIGH INVESTMENT RISK. This Prospectus isdated [.] 2011 RESPONSIBILITY STATEMENTS OUR DIRECTORSANDPROMOTERS(ASDEFINEDHEREIN)HAVESEENANDAPPROVEDTHIS PROSPECTUS. THEYCOLLECTIVELY AND INDIVIDUALLY ACCEPT FULL RESPONSmILITY FOR THEACCURACYOFTHEINFORMATIONCONTAINEDINTHISPROSPECTUS.HAVINGMADE ALL REASONABLEENQUIRIES AND TO THEBEST OF THEIR KNOWLEDGEAND BELIEF, THEY CONFIRM THAT THERE IS NO FALSE OR MISLEADINGSTATEMENT OR OTHER FACTSWHICH, IF OMITTED, WOULDMAKE ANY STATEMENT IN THIS PROSPECTUS FALSE OR MISLEADING. PMSECURITIESSDNBHD(COMPANYNO.66299-A)("PMSECURITIES"),BEING THE ADVISER, SPONSOR,UNDERWRITER AND PLACEMENT AGENT,ACKNOWLEDGES THAT,BASEDONALL AVAILABLEINFORMATIONANDTOTHEBESTOFITSKNOWLEDGEANDBELIEF,THIS PROSPECTUSCONSTITUTESAFULLANDTRUEDISCLOSUREOFALLMATERIALFACTS CONCERNING OUR IPO (AS DEFINED HEREIN). STATEMENTS OF DISCLAIMER A COpy OF THIS PROSPECTUS [-HAS BEEN] REGISTERED WITH THE SECURITIES COMMISSION MALAYSIA("SC').THEREGISTRATIONOFTHISPROSPECTUSSHOULDNOTBETAKENTO INDICATETHATTHESCRECOMMENDSOURIPOORASSUMESRESPONSmILITYFORTHE CORRECTNESSOFANYSTATEMENTMADEOROPINIONORREPORTEXPRESSEDINTHIS PROSPECTUS. THESC HASNOT,INANYWAY,CONSIDERED THE MERITSOFTHESECURITIES BEING OFFERED FOR INVESTMENT. THESCISNOT LIABLEFOR ANYNON-DISCLOSUREONOUR PART.THE SCALSOTAKESNO RESPONSIBILITYFORTHECONTENTSOFTHISPROSPECTUS,MAKESNOREPRESENTATION ASTOITSACCURACYOR COMPLETENESSAND EXPRESSLY DISCLAIMSANY LIABILITYFOR ANYLOSSYOUMAYSUFFERARISINGFROMOR INRELIANCEUPONTHEWHOLEOR ANY PART OF THE CONTENTS OF THIS PROSPECTUS. YOU SHOULD RELY ON YOUR OWN EVALUATION TO ASSESS THE MERITS AND RISKS OF THEINVESTMENT.IF YOUAREINANYDOUBTASTOTHEACTIONTOBETAKEN,YOU SHOULDCONSULTYOURSTOCKBROKERS,BANKMANAGERS,SOLICITORS, ACCOUNTANTS OR OTHER PROFESSIONAL ADVISERS IMMEDIATELY. APPROVAL[- HASBEEN]OBTAINED FROMBURSA MALAYSIASECURITIES BERHAD ("BURSA SECURITIES")FORTHELISTINGOFANDQUOTATIONFORTHESECURITIESBEINGISSUED AND/OR OFFERED. OUR ADMISSION TO THE OFFICIAL LIST OF BURSA SECURITIES IS NOT TO BETAKENASANINDICATION OF THE MERITSOFTHE INVITATION,OUR COMPANY OR OUR SECURITIES. BURSASECURITIESSHALLNOTBELIABLEFORANYNONDISCLOSUREONOURPART AND TAKESNORESPONSmILITYFORTHECONTENTSOFTHISPROSPECTUS,MAKESNO REPRESENTATIONASTOITSACCURACYORCOMPLETENESSANDEXPRESSLYDISCLAIMS ANYLIABILITYWHATSOEVERFORANYLOSSYOUMAYSUFFERARISINGFROMORIN RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS PROSPECTUS. ACOPYOFTHISPROSPECTUS,TOGETHERWITHTHEAPPLICATIONFORMS(ASDEFINED HEREIN), [-HAS ALSO BEEN LODGED]WITH THE REGISTRAR OF COMPANIES,WHO TAKES NO RESPONSmILITY FOR ITS CONTENTS. OTHER STATEMENTS COMPANIESLISTEDONTHEACEMARKETMA YHAVEALIMITEDOPERATINGHISTORYOR MA Y NOT HAVEANY PROFIT TRACK RECORDPRIOR TOLISTING.SUCH COMPANIES MAYBE OFHIGHINVESTMENT RISK.ASWITH ALLINVESTMENTS,YOUSHOULDBE A WAREOFALL POTENTIAL RISKSIN INVESTING IN SUCH COMPANIES AND SHOULD MAKE THE DECISION TO INVESTAFTERGIVINGDUEANDCAREFULCONSIDERATIONBYREFERRINGTO,AMONG OTHERS,THEPROSPECTUS,LATESTFINANCIALSTATEMENTSANDCORPORATE ANNOUNCEMENTS.YOUARESTRONGLYRECOMMENDEDTOSEEKADVICEFROMA SECURITIES PROFESSIONAL/ADVISER. OUR IPOISAN EXEMPT TRANSACTION UNDER SECTION 213OF THE CAPITALMARKETS AND SERVICESACT 2007("CMSA")ANDISTHEREFORENOTSUBJECT TOTHE APPROVALOFTHE SC.YOUARE ADVISED TONOTE THAT RECOURSE FOR FALSE OR MISLEADINGSTATEMENTS ORACTSMADEINCONNECTIONWITHTHISPROSPECTUSISDIRECTLYAVAILABLE THROUGH SECTIONS 248, 249 AND 357 OF THE CMSA. SECURITIESLISTEDONBURSASECURITIESAREOFFEREDTOTHEPUBLICPREMISEDON FULL AND ACCURATE DISCLOSURE OF ALL MATERIAL INFORMATION CONCERNING THE IPO FOR WHICHANYOFTHEPERSONSSETOUTINSECTION236 OFTHECMSA,E.G.DIRECTORS AND ADVISERS, ARE RESPONSIBLE. THIS PROSPECTUS HAS NOT BEEN ANDWILL NOT BE MADE TO COMPLYWITH THE LAWS OF ANYJURISDICTIONOTHERTHANMALAYSIA,ANDHASNOTBEENANDWILLNOTBE LODGED,REGISTEREDORAPPROVEDPURSUANTTOORUNDERANYAPPLICABLE SECURITIES OR EQUIVALENTLEGISLATION OR WITH OR BY ANY REGULATORY AUTHORITY OROTHERRELEVANTBODYOFANYJURISDICTIONOTHERTHANMALAYSIA.THE DISTRIBUTIONOFTHISPROSPECTUSANDOURIPOARESUBJECTTOTHELAWSOF MALA YSIA. THE PROSPECTUS WILL NOT BE DISTRIBUTED OUTSIDE OF MALAYSIA EXCEPT IN SOFARASITISPARTOFTHEOFFERINGMEMORANDUMDISTRIBUTEDTOFOREIGN INSTITUTIONALINVESTORSOUTSIDEMALAYSIAINCONNECTIONWITHOURIPO.OUR COMPANY,PROMOTERS,ADVISER,UNDERWRITER ANDPLACEMENT AGENTNAMEDIN THIS PROSPECTUSHAVE NOTAUTHORISEDANDARENOTRESPONSIBLEFOR THE DISTRIBUTION OFTHISPROSPECTUSOUTSIDEMALAYSIAEXCEPTINSOFARASITISPARTOFTHE OFFERINGMEMORANDUMDISTRIBUTEDTOFOREIGNINSTITUTIONAL INVESTORSOUTSIDE MALAYSIAINCONNECTIONWITHOURIPO.NOACTIONHADBEENTAKENTOPERMITA PUBLICOFFERINGOFOURSHARESINANYJURISDICTIONOTHERTHANMALAYSIABASED ONTHISPROSPECTUS.ACCORDINGLY,THISPROSPECTUSMAYNOTBEUSEDFORTHE PURPOSEOFANDDOESNOTCONSTITUTEANOFFERFORSUBSCRIPTIONORPURCHASEOR INVITATIONTOSUBSCRIBEFORORPURCHASEOFOURSHARESUNDEROURIPOINANY JURISDICTIONORINANYCIRCUMSTANCESINWHICHANOFFERISNOTAUTHORISEDOR LA WFULORTOA1\yYPERSONTOWHOMITITSLAWFULTOMAKESUCHOFFEROR INVITATION.THEDISTRIBUTIONOFTHISPROSPECTUSANDTHESALEOFOURSHARES OFFEREDUNDEROURIPOINCERTAINJURISDICTIONSMAYBERESTRICTEDBYLAW. PERSONSWHOMAYBEINPOSSESSIONOFTHISPROSPECTUSAREREQUIREDTOINFORM THEMSELVES OF AND TO OBSERVE SUCH RESTRICTIONS. WEWILL NOT,PRIORTOACTINGONANYACCEPTANCEINRESPECTOFOUR IPO,MAKEOR BE BOUND TO MAKE ANY ENQUIRY ASTOWHETHER YOUHAVE A REGISTERED ADDRESSIN MALAYSIA ANDWILL NOT ACCEPT OR BE DEEMED TO ACCEPT ANYLIABILITY IN RELATION THERETOWHETHERORNOTANYENQUIRYORINVESTIGATIONISMADEINCONNECTION THEREWITH. IT SHALL BE YOUR SOLE RESPONSIBILITY IF YOU ARE OR MAYBE SUBJECT TO THE LAWSOF COUNTRIES OR JURISDICTIONS OTHER THAN MALAYSIA, TO CONSULT YOUR LEGAL AND/OR OTHERPROFESSIONALADVISERSASTOWHETHEROURIPOWOULDRESULTINTHE CONTRAVENTION OF ANY LAW OF SUCH COUNTRIES OR JURISDICTIONS. ii FURTHER,IT SHALLALSO BE YOURRESPONSIBILITY TO ENSURE THATYOUR APPLICATION FOR OUR IPO WOULDBEINCOMPLIANCEWITHTHETERMSOF OUR IPOASSTATEDINTHIS PROSPECTUS AND THEAPPLICATIONFORMS(ASDEFINED HEREIN) ANDWOULDNOT BE IN CONTRAVENTIONOF ANYLAWOFCOUNTRIESOR JURISDICTIONSOTHER THANMALAYSIA TOWHICHYOUMAYBESUBJECTEDTO.WEWILLFURTHERASSUMETHATYOUHAD ACCEPTEDOURIPOINMALAYSIAANDWILLATALLAPPLICABLETIMESBESUBJECTED ONLYTOTHELAWSOFMALAYSIAINCONNECTIONTHEREWITH.HOWEVER,WERESERVE THE RIGHT,INOUR ABSOLUTE DISCRETION TO TREAT ANY ACCEPTANCE ASINVALID IF WE BELIEVETHATSUCHACCEPTANCEMAYVIOLATEANYLAWORAPPLICABLELEGALOR REGULATORY REQUIREMENTS. NOACTIONHASBEENORWILLBETAKENTOENSURETHATTHISPROSPECTUSCOMPLIES WITHTHELAWSOFANYCOUNTRYORJURISDICTIONOTHERTHANTHELAWSOF MALAYSIA.ITSHALLBEYOURSOLERESPONSIBILITYTOCONSULTYOURLEGALANDIOR OTHER PROFESSIONALADVISERONTHELAWSTO WHICHOUR IPOOR YOUAREORMIGHT BE SUBJECTED TO.NEITHER US NOR OUR ADVISER NOR ANY OTHER ADVISERS IN RELATION TOOUR IPOSHALLACCEPTANYRESPONSIBILITYORLIABILITYINTHEEVENTTHATANY APPLICATIONMADEBYYOUSHALLBECOMEILLEGAL,UNENFORCEABLE,AVOIDABLEOR VOID INANY COUNTRY OR JURISDICTION. ELECTRONIC PROSPECTUS [-THE CONTENTSOFTHEELECTRONICPROSPECllJSANDTHECOPYOFTHISPROSPECTUS REGISTEREDWITHTHESCARETHESAME.THISPROSPECTUSCANALSOBEVIEWEDOR DOWNLOADED FROM BURSA SECURITIES' WEBSITE AT www.bursamalaysia.com.l [-YOUMAYALSOOBTAINACOPYOFTHE ELECTRONICPROSPECTUSFROMTHEWEBSITE OFRHBBANKBERHADATwww.rhb.com.my.MALAYANBANKINGBERHADAT www.maybank2u.com.my,CIMBBANK BERHAD AT www.cimbclicks.com.my, AFFINBANK BERHAD AT www.affinOnline.com,CIMBINVESTMENT BANK BERHADATwww.eipocimb.com AND PUBLIC BANK BERHAD AT www.pbebank.com.] YOUAREADVISEDTHATTHEINTERNETISNOTAFULLYSECUREDMEDIUM,ANDTHAT YOUR INTERNET SHARE APPLICATION (AS DEFINED HEREIN) MAYBE SUBJECT TO THE RISKS INDATA TRANSMISSION,COMPUTER SECURITYTHREATSSUCH ASVIRUSES, HACKERS AND CRACKERS,FAULTSWITHCOMPUTERSOFTWAREANDOTHEREVENTSBEYONDTHE CONTROLOFTHEINTERNETPARTICIPATINGFINANCIALINSTITUTIONS(ASDEFINED HEREIN).THESERISKSCANNOTBEBORNEBYTHEINTERNETPARTICIPATINGFINANCIAL INSTITUTIONS. IFYOUAREINDOUBTABOUTTHEVALIDITYORINTEGRITYOFANELECTRONIC PROSPECTUS,YOUSHOULDIMMEDIATELYREQUESTFROMUS,OURADVISERORTHE ISSUINGHOUSE,AP APERIPRINTEDCOpyOFTHISPROSPECTUS.INTHEEVENTOFANY DISCREPANCYARISINGBETWEENTHECONTENTSOFTHEELECTRONICPROSPECTUSAND THECONTENTSOFTHEPAPERIPRINTEDCOPYOFTHEPROSPECTUSFORANYREASON WHATSOEVER,THECONTENTSOFTHE PAPERIPRINTEDCOpy OF THISPROSPECTUS,WHICH AREIDENTICALTOTHECOpyOFTHEPROSPECTUS[-REGISTEREDWITHTHEsq, SHALL PREVAIL.[-THE ELECTRONICPROSPECTUS SUBMITTEDTOTHE SCANDBURSASECURITIES IS THE SAME AS THE REGISTERED PAPERIPRINTED COPY.] INRELATIONTOANYREFERENCEINTHISPROSPECTUSTOTHIRDPARTYINTERNETSITES (REFERRED TO AS "THIRD PARTY INTERNET SITES"),WHETHER BY WAYOF HYPERLINKS OR BYWAYOF DESCRIPTION OF THE THIRD PARTY INTERNET SITES, YOU ACKNOWLEDGE AND AGREE THAT: iii Company No. 918382-T (I)WEANDOURADVISERDONOTENDORSEANDARENOT AFFILIATEDINANYWAY WITHTHETHIRDPARTYINTERNETSITES.ACCORDINGLY,WEANDOURADVISER ARENOTRESPONSIBLEFORTHEAVAILABILITYOF,ORTHECONTENTSORANY DATA,INFORMATION,FILES OR OTHER MATERIALS PROVIDED ON THE TIITRD PARTY INTERNET SITES. YOU SHALL BEAR ALL RISKS ASSOCIA TED WITH THE ACCESS TO OR USE OF THE THIRD PARTY INTERNET SITES; (II)WEANDOURADVISERARE NOT RESPONSIBLEFOR THE QUALITYOFPRODUCTSOR SERVICESINTHETHIRDPARTYINTERNETSITES,PARTICULARLYINFULFILLING ANYOFTHETERMSOFYOURAGREEMENTSWITHTHETHIRDPARTYINTERNET SITES.WEANDOURADVISERAREALSONOTRESPONSIBLEFORANYLOSSOR DAMAGE OR COSTS THAT YOUMAY SUFFER OR INCUR INCONNECTION WITHOR AS ARESULTOFDEALINGWITHTHE THIRD PARTYINTERNETSITES OR THE USE OF OR RELIANCE ON ANYDATA,INFORMATION,FILESOR OTHER MATERIAL PROVIDED BY SUCH PARTIES; AND (III)ANYDATA,FILESOROTHERMATERIALDOWNLOADEDFROMTHETHIRDPARTY INTERNETSITESISDONEATYOUROWNDISCRETIONANDRISK.WEANDOUR ADVISER ARE NOT RESPONSIBLE, LIABLE OR UNDER OBLIGATION FOR ANY DAMAGE TOYOURCOMPUTERSYSTEMORLOSSOFDATARESULTINGFROMTHE DOWNLOADING OF ANY SUCH DATA,INFORMATION, FILES OR OTHER MATERIALS. WHEREANELECTRONICPROSPECTUSISHOSTEDONTHEWEB SITESOFTHEINTERNET PARTICIPATING FINANCIAL INSTITUTIONS,YOU ARE ADVISED THAT: (I)THEINTERNETPARTICIPATINGFINANCIALINSTITUTIONSAREONLYLIABLEIN RESPECT OF THE INTEGRITY OF THE CONTENTS OFAN ELECTRONlC PROSPECTUS, TO THEEXTENTOFTHECONTENTSOFTHEELECTRONlCPROSPECTUSSITUATEDON THEWEBSERVERSOFTHEINTERNETPARTICIPATINGFINANCIALINSTITUTIONS WHICHMAYBEVIEWEDVIAYOURWEBBROWSEROROTHERRELEVANT SOFTWARE. THE INTERNET PARTICIPATING FINANCIAL INSTITUTIONS SHALL NOT BE RESPONSIBLEINANYWAYFORTHEINTEGRITYOFTHECONTENTSOFAN ELECTRONICPROSPECTUSWHICHHASBEENDOWNLOADEDOROTHERWISE OBTAINEDFROMTHEWEBSERVERSOFTHEINTERNETPARTICIPATINGFINANCIAL INSTITUTIONSANDTHEREAFTERCOMMUNICATEDORDISSEMINATEDINANY MANNER TO YOU OR OTHER PARTIES; AND (II)WHILEALLREASONABLEMEASURESHAVEBEENTAKENTOENSURETHE ACCURACYANDRELIABILITYOFTHE INFORMATIONPROVIDEDINANELECTRONlC PROSPECTUS,THEACCURACYANDRELIABILITYOFANELECTRONICPROSPECTUS CANNOT BE GUARANTEED AS THE INTERNET IS NOT A FULLY SECURED MEDIUM. THEINTERNET PARTICIPATING FINANCIAL INSTITUTIONS SHALL NOT BE LIABLE (WHETHER INTORTOR CONTRACT OR OTHERWISE)FORANYLOSS,DAMAGEOR COSTS,YOUOR ANY OTHER PERSON MAY SUFFER OR INCUR DUE TO, AS A CONSEQUENCE OF OR INCONNECTION WITH ANYINACCURACIES, CHANGES, ALTERATIONS, DELETIONS OR OMISSIONS IN RESPECT OFTHEINFORMATIONPROVIDEDINANELECTRONlCPROSPECTUSWHICHMAYARISEIN CONNECTIONWITHORASARESULTOFANYFAULTWITHWEBBROWSERSOROTHER RELEVANTSOFTWARE,ANYFAULTONYOURORANYTHIRDPARTY'SPERSONAL COMPUTER,OPERATINGSYSTEMOROTHERSOFTWARE,VIRUSESOROTHERSECURITY THREATS,UNAUTHORISEDACCESSTOINFORMATIONORSYSTEMSINRELATIONTOTHE WEBSITEOFTHEINTERNETPARTICIPATINGFINANCIALINSTITUTIONS,AND/ORPROBLEMS OCCURRINGDURINGDATATRANSMISSION,WHICHMAYRESULTININACCURATEOR INCOMPLETECOPIESOFINFORMATIONBEINGDOWNLOADEDORDISPLAYEDONYOUR PERSONAL COMPUTER. lV TENTATIVE TIMETABLE The following events areintended to take place on the following tentative dates: EventTentative date Issuanceof Prospectus/openingof theapplicationsof our]PO(asdefmed herein) Closing of the application for our ]PO Shares Tentative date for balloting of applications forour ]PO Shares Tentative date for allotment of our ]PO Shares to successful applicants Tentative listing date [e] at 10.00 a.m. [e] at 5.00 p.m. [e] [e] [e] This timetable is tentative and is subject to change which may be necessary to facilitate implementation procedures. Our Directors and our Underwriter may mutually decide, at their absolute discretion, to extend the closing date and time for application ofour ]PO to any later date or dates. Ifthe closing date for the application of our ]PO Shares be extended, wewill advertise a notice of extension in a widely-circulatedEnglishandBahasaMalaysiadailynewspaperpriortotheoriginalclosingdateof applicationsof ourIPO.Followingthis,thedatesfortheballotingof applicationsfortheIPOSharesand allotment of the IPO Shares as well as Listing will be extended accordingly. All terms used are defined under the 'Defmitions' section commencing on page (viii). THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK v PRESENTATION OF FINANCIAL ANDOTHER INFORMATION Any discrepancies in the tables between the amounts listed and the totals in this Prospectus are due to rounding. Allreferencesto "our Company"or "NakaregHoldings"inthisProspectusareto NakaregHoldingsBerhad, whilereferencesto"our Group","we","us","our"and"ourselves"aretoourCompanyandoursubsidiary companies,savewherethecontextotherwiserequires.Unlessthecontextotherwiserequires,referencesto "Management" are to our Directors and key management personnel asdisclosed in this Prospectus and asat the dateof thisProspectus.Statementsastoourbeliefs,expectations,estimatesandopinionsarethoseof our Management. Certainabbreviations,acronymsandtechnicaltermsusedaredefmedinthe"Definitions"and"Technical Terms" sections ofthis Prospectus. Words importing the singular shall, where applicable, include the plural and vice versa,andwords importing the masculine gender shall,whereapplicable,includethe feminineandneuter genders and vice versa.References to persons shall include companies and corporations. Any reference to any enactmentinthisProspectus shall be areference to thatenactmentasforthe time being amended or re-enacted and includes any rules or regulations made under such act or enactment. Allreferences to dates and times are references to dates and times in Malaysia. ThisProspectusincludesstatisticaldataprovidedbyvariousthirdpartiesrelatingtotheindustryinwhichwe operate. This data is taken or derived frominformation published by industry sources and fromour internal data. In each suchcase, thesourceisstated inthis Prospectus,provided that where no source isstated,itcan be assumed that the information originates fromus.In particular, certain information in this Prospectus isextracted or derived fromtheIndependentMarketResearchReportpreparedby VitalFactorConsulting,theIndependentBusiness andMarket ResearchConsultants,forinclusionin thisProspectus.Webelieve that thestatisticaldatacitedin thisProspectusareusefulinhelpingyouunderstandthemajortrendsintheindustryinwhichweoperate. However,neither we nor our advisers have independently verified these data. Neither we nor our advisersmake anyrepresentationastothecorrectness,accuracyorcompletenessof suchdata.Accordingly,youshouldnot placeunduerelianceonthestatisticaldatacitedinthisProspectus.Similarly,third partyprojections,citedin this Prospectus are subject to significant uncertainties thatcould causeactualdata todiffer materially fromthe projected figures.Wegive no assurance that the projected figureswill be achieved. Hence, you should not place undue reliance on the third-party projections. The informationon our website,or any website directly or indirectly linked to such website does not form part ofthis Prospectus and you should not rely on it. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK vi FORWARD-LOOKING STATEMENTS This Prospectus contains forward-looking statements. Allstatements other than those of historical facts included inthisProspectus,including,withoutlimitation,thoseregardingourGroup'sfinancialposition,business strategies, plans and objectives of our Management for future operations, are forward-looking statements. Suchforward-lookingstatementsinvolveknownandunknownrisks,uncertainties,contingenciesandother factorswhichmaycauseouractualresults,ourperformanceorachievements,orindustryresults,tobe materially different from any future results, performance or achievements expressed or implied by such forwardlooking statements. Such forward-looking statements are based on numerous assumptions regarding our Group's present andfuturebusiness strategiesand theenvironmentinwhichour Group will operatein thefuture.Such forward-lookingstatements reflectour Management'scurrent viewwithrespect tofutureeventsand arenot a guarantee of future performance. Some of these forward-looking statements canbeidentified by the use of forward-lookingterminology such as thewords"may","will","would","could","believe","expecf',"anticipate","intend","estimate","aim", "plan", "forecast" or similar expressionsandincludeallstatementsthatarenot historicalfacts.Suchforwardlooking statements include, without limitation, statements relating to: (i)demand forour products and services; (ii)our business strategies; (iii)plans and objectives of our Management for future operations; (iv)our financial position;and (v)our future earnings, cash flows and liquidity. Our actual results may differ materially fromthe information contained in such forward-looking statements as a result of numerous factors beyond our control, including, without limitation: (i)the economic, political and investment environment in Malaysia and globally; and (ii)government policies, legislations or regulations. Additionalfactorsthatcouldcauseour actualresults,performance,achievementsor industryresultstodiffer materiallyinclude,butarenotlimitedto,thosediscussedinSection5(Riskfactors)andSection13.2 (Management's discussion and analysis of financialcondition and results of operations) of this Prospectus. Due totheseandotheruncertainties,wecannotassureyouthattheforward-lookingstatementsincludedinthis Prospectus will be realised. These forward-looking statements are based on information available to us as at thedate of this Prospectus. You will be deemed tohavereadandunderstoodthedescriptionsof theassumptionsand uncertainties underlying the forward looking statements that are contained herein. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK vii DEFINITIONS ThefollowingtennsinthisProspectusbearthesamemeaningsassetoutbelowunlessthetennisdefmed otherwise or the context requires otherwise: COMPANIES WITHIN OUR GROUP: Nakareg Holdings or Company Nakareg Holdings Group or Group Nakareg Nakareg International NKG Technology Shanghai Optimus Nakareg KlUlshan Changshu Nakareg Nakareg International Group GENERAL: ACE Market Acquisitions by Nakareg Holdings Acquisitions by Nakareg International Acquisition ofNakareg Acquisition ofNakareg International Nakareg Holdings Berhad (918382-n NakaregHoldingsanditssubsidiaries,namelyNakareg,NKGTechnology andNakaregInternational(includingitssubsidiaries,ShanghaiOptimus, Nakareg KlUlshan and Changsbu Nakareg, collectively) Nakareg Sdn Bhd (29008-D), our wholly-owned subsidiary NakaregInternationalCompanyLimited(1089954),ourwbolly-owned subsidiary NKG Technology Sdn Bhd (338518-X), our wholly-owned subsidiary ShanghaiOptimusElectronicsCompanyLimited(pRCCompany RegistrationNumber:QiDuHuZongZiNo_022578(Fengxian,a wholly-owned subsidiary ofNakareg International NakaregElectronics(KlUlshan)CompanyLimited(PRCCompany RegistrationNumber:320583400027252)(fonnerlyknownasHitec Electronics(KlUlshan)CompanyLimited),awholly-ownedsubsidiaryof Nakareg International ChangshuNakaregPrecisionComponentsCompanyLimited(pRC CompanyRegistrationNumber:320581400000234),awholly-owned subsidiary ofNakareg International NakaregInternationalanditssubsidiaries,namelyShanghaiOptimus, Nakareg Kunshan and Changshu Nakareg ACE Market ofBursa Securities The acquisitions ofNakareg, Nakareg International and NKGTechnology, collectively by Nakareg Holdings Theacquisitionsof ShanghaiOptimus,NakaregKlUlshanandChangshu Nakareg,collectivelybyNakaregInternationalpursuanttoaninternal restructuri."lg Theacquisitionof theentireissuedandpaid-upsharecapitalof Nakareg comprising 733,333NakaregSharesforatotalpurchaseconsiderationof RM4,981,000satisfiedwholly by theissuanceof 4,981,000new ordinary sharesof RMl.OO-eachinourCompany,whichwascompletedon26 September 2011 Theacquisitionof theentireissuedandpaid-upsharecapitalof Nakareg Internationalcomprising11,062,035NakaregInternationalSharesfora totalpurchaseconsiderationofRM8,564,000satisfiedwhollybythe issuanceof8,564,000newordinarysharesofRMl.OOeachinour Company, which was completed on 26 September 20 11 viii DEFINITIONS(Cont'd) Acquisition ofNKG Technology Acquisition of Shanghai Optimus Acquisition ofNakareg Kunshan Acquisition of Changshu Nakareg Act ADA Application Form(s) ATM Authorised Financial Institution( s) BNM Board Bursa Depository Bursa Securities CCM CDS CIF CMSA D&D Director(s) EBITDA Theacquisitionof theentireissuedandpaid-upsharecapitalof NKG Technologycomprising500,000NKGTechnologySharesforatotal purchaseconsiderationof RM354,998satisfiedwhollybytheissuance of 354,998 new ordinary sharesofRMLOO eachinour Company,which was completed on 26 September 2011 Theacquisitionof theentireregisteredcapitalof ShanghaiOptimusof USD420,000foratotalpurchaseconsiderationofHKD3,268,912 (equivalenttoUSD420,000orRMI,270,590)(translatedattheexchange rateofUSDI.00:HKD7.7831,HKDl.OO:RMBO.8415andRMBI.OO: RM0.4619asat31March2011)satisfiedwhollybytheissuanceof 3,268,912 new Nakareg International Shares Theacquisitionof theentireregisteredcapitalof NakaregKunshanof USD300,000foratotalpurchaseconsiderationofHKD2,334,937 (equivalent toUSD300,000 or RM907,564) (translated at the exchange rate ofUSDl.OO:HKD7.7831,HKDl.OO:RMBO.8415andRMBl.OO:RM0.4619 as at 31March 2011) reflected as an amount owing to Nakareg Theacquisitionof theentireregisteredcapitalof ChangshuNakaregof USD1,000,000foratotalpurchaseconsiderationofHKD7,783,123 (equivalent toUSD1,000,000orRM3,025,213)(translatedat theexchange rateofUSD1.00:HKD7.7831,HK.D1.00:RMBO.8415andRMBl.OO: RM0.4619asat31March2011)satisfiedwhollybytheissuanceof 7,783,123 new Nakareg International Shares Companies Act,1965including any statutory modification,amendment or re-enactment thereoffor the time being in force Authorised Depository Agent The printed application formes) for the application of the IPO Shares Automated teller machine Theauthorisedfinancialinstitution(s)participatingintheInternetShare Applicationswithrespect topayments for our IPOShares under thePublic Issue Bank Negara Malaysia Board ofDirectors of our Company Bursa Malaysia Depository Sdn Bhd (165570-W) Bursa Malaysia Securities Berhad (635998-W) Companies Commission of Malaysia Central Depository System Cost,insuranceandfreight,whereby theselling priceincludesthecost of thegoods,thefreightortransportcostsandalsothecostofmarine insurance CapitalMarketsandServicesAct2007,includinganystatutory modification,amendmentorre-enactmentthereofforthetimebeingin force Design and development Eitheranexecutivedirectorornon-executivedirectorof ourCompany within the meaning given in Section 4 ofthe Act Earnings before interest, taxation, depreciation and amortisation ix DEFINITIONS (Conl'd) Electronic Prospectus Electronic Share Application EPS FYE FPE GP Hong Kong Independent Market Research Report Internet Participating Financial Institution(s) Internet Share Application(s) IPC IPO IPO Price IPO Share(s) Issuing House or MIH Listing Listing Requirements Listing Scheme LPD Market Day( s) MIDA MITI NA Copyof thisProspectusthatisissued,circulatedordisseminatedviathe internetand/or anelectronicstoragemedium,including butnotlimited to CD-ROMs or floppy diskettes Application forthe52,000,000IPO Shares under thePublicIssuethrougha Participating Financial Institution's ATM Earnings per Share Financial year(s) ended/ending Financial period(s) ended Gross profit Hong Kong Special Administrative Region ofthe PRC The"IndependentAssessmentoftheManufactureofElectronic Transformer Industryin Malaysia and the PRC" prepared by VitalFactor Consulting Participatingorganisation(s)intheInternetShareApplicationaslistedin Section 17 ofthis Prospectus Theapplication(s)forthe52,000,000IPOSharesunderthePublicIssue throughanonlineshareapplicationserviceprovidedbytheInternet Participating Financial Institution(s) Internationalprocurementcentre,alocallyincorporatedcompanywhich carries on a business in Malaysia to undertake procurement and sale ofraw . materials,componentsandfinishedproductstoitsgroupofrelated companies and tounrelated companies in Malaysia and abroad Initial public offering ofour IPO Shares RM[.] for each IPO Share 52,000,000 new Shares to be issued pursuant to the Public Issue Malaysian Issuing House Sdn Bhd (258345-X) Admission of our Company to the OfficialList of Bursa Securities and the listingof andquotationforourentireenlargedissuedandpaid-upshare capitalof RMI9,100,000comprising191,000,000SharesontheACE Market ofBursa Securities ACEMarketListingRequirementsofBursaSecuritiesandany amendments thereto from time to time The Public Issue and Listing, collectively. 15September2011,beingthelatestpracticabledatepriortothe registration of this Prospectus Any day on which Bursa Securities is open for the trading of securities MalaysianInvestmentDevelopmentAuthority(formerlyknownas Malaysian Industrial Development Authority) Ministry ofInternational Trade and Industry Malaysia Net assets x DEFINITIONS(Cont'd) Nakareg Agreement Nakareg Holdings Share(s) or Share(s) Nakareg International Agreement Nakareg International Share(s) Nakareg Share(s) NKG Technology Agreement NKGTechnology Share(s) Official List Participating Financial Institution( s) PAT PBT PE multiple PM Securities or Adviser or Sponsor or Underwriter or Placement Agent Pink Form Shares Allocation PRC Promoters Public Public Issue Record ofDepositors \ RDC Reporting Accountants R&D SSAdated26September2011enteredintobetweentheCompanyand Leong YeokFang,Pang KongChek,LianYoonHing,KazutakaMisawa and Hong Chin Chye in relation to the Acquisition ofNakareg Ordinary shares ofRMO.IO each in Nakareg Holdings SSA dated 26 September 2011entered into between the Company and Hau Mun Meng in relation to the Acquisition ofNakareg International Ordinary shares ofHKD1.00 each in Nakareg International Ordinary shares ofRM1.00 each in Nakareg SSA dated 26 September 2011entered into between the Company and Hau MunMengandHongChinChyeinrelationtotheAcquisitionof NKG Technology Ordinary shares ofRM1.00 each in NKGTechnology Alistspecifyingallsecuritieswhichhavebeenadmittedforlistingon Bursa Securities and not removed Participatingfinancialinstitution(s)forElectronicShare Application,alist as set out in Section 17.5.2 ofthis Prospectus Profit after taxation Profit before taxation Price earnings mUltiple PM Securities Sdn Bhd (66299-A) 5,000,000IPOSharesto be made availableforapplicationby theeligible Directors,employeesandbusinessassociates/personswhohave contributed to the success ofour Group People's RepubJic of China Promoters of our Company namely, Hau Mun Meng, Hong Chin Chye and Leong Yeok Fang, collectively All persons or members of the public comprising citizens of Malaysia and companies,societies,co-operativesandinstitutionsincorporatedor organised under thelawsof Malaysia excluding our Directors,substantial shareholders and persons connected or associated with them (as defmed in the Listing Requirements) PublicissuebyourCompanyof theIPOSharesattheIPOPricetobe allocated in the manner set out in Section 4.3ofthis Prospectus Arecordof depositorsprovidedbyBursa Depositoryundertherulesof Bursa Depository Regionaldistributioncentre,acollectionandconsolidationcentrefor finishedgoods,componentsandspare parts produced by itsown groupof companiesforitsown brand to be distributedtodealers,importersor its subsidiariesorotherunrelatedcompanieswithinoroutsidethecountry and such activities includes bulk breaking, repackaging and labeling UHY Chartered Accountants. Research and development xi DEFINITIONS (Cont'd) SCSecurities Commission Malaysia Share SplitThesubdivisionof one(1)ordinaryshareof RMl.OOeachinNakareg Holdings to ten (10) Shares. SSA(s)Conditional share sale agreements Sq.ft.Square feet Underwriting AgreementUnderwriting agreementdated[.]enteredintobetweenourCompany and PM Securities USUnited States of America Vital Factor ConsultingVitalFactorConsultingSdnBhd(266797-T),theindependentbusiness and market research consultants WFOEWholly Foreign-Owned Enterprise CURRENCIES: HKDHong Kong Dollar RM and senRinggit Malaysia and sen respectively RMBChinese Renminbi USDUnited States Dollar THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK xii panyNo.918382-T TECHNICAL TERMS To facilitatebetter understandingof thebusinessof our Group,thefollowingglossary containsanexplanation anddescriptionof certaintermsusedinthisProspectusinconnectionwithourGroup.Thetermsandtheir meanings may not correspond to standard industry meanings or usage of these terms. Alternating current ("AC") ATE AV CNC Conductor CPU Current Direct current ("DC") EDM EMI Electronic transformer Insulator Inverter IT LAN LCD LED Linear power transformer Mains electricity Printed circuit board assembly ("PCBA") POS Power distribution transformer Rectifier In an AC, the flow of electricity periodically reverses direction. Automatic test equipment Audio visual Computer numeric control Aconductorisamaterialthatallowselectricitytoflowthroughitreadily. Examplesofmaterialsthatarecurrentlycommonlyusedasconductors include copper and aluminium Central processing unit Current refers to the rate of flow of electricity in an electric circuit.The unit for measuring current is the ampere In a DC, the flow of electricity isin one direction only Electrical discharge machining Electromagnetic interference Anelectronictransformerisatransformerthatisdesignedtobeusedin electrical or electronic devices. (See explanation for transformer) An insulatorisamaterialthatdoesnotallowelectricity toflowthroughit readily.Examplesofmaterialsthatarecurrentlycommonlyusedas insulators include rubber, most types of plastics and air An inverter is an electrical device that converts DC into AC Information technology Local area network Liquid crystal display,a thin,flatelectronic visualdisplay that uses the light modulatingpropertiesofliquidcrystals.Itisusedinawiderangeof applications including computer monitors and TV signage Lightemittingdiode,adisplayandlightingtechnologyusedinvarious electrical and electronic products,froma tiny on/off light to digital readouts, flashlights, traffic lights and perimeter lighting. Alinearpowertransformerisatransformerinwhichelectricitypasses through the device directly from the power source Mains electricity refers to the alternating current electric power supply that is commonly encountered by users in houses and buildings. In Malaysia, mains electricity is supplied to users at a voltage of230 or 240 volts APCBAisaprintedcircuit boardthat hasbeenpopulatedwithelectronic components to create an electronic circuit that performs specific functions Point of sale A power distribution transformer isa transformer that is designed to be used as part ofthe electrical grid,or electrical power distribution system A rectifier is an electrical device that converts AC into DC xiii !Company No. 918382-T~ TECHNICAL TERMS (Conl'd) Restriction of hazardous substances directive ("ROHS") SMT Step-down transformer Step-up transformer Switch mode power supply ("SMPS") Thin client Transformer UPS Voltage The"Directiveontherestrictionof theuseof certainhazardoussubstances inelectricalandelectronicequipment2002/95IEC",commonlyknownas theROHS,isanEuropeanUniondirectivethatrestrictstheuseof six hazardousmaterialsinthemanufactureof varioustypesof electronicand electrical equipment.The ROHSdirective took effect on1 July 2006, andis requiredtobeenforcedandbecomelawineachEuropeanUnionmember state Surface Mount Technology Astep-downtransformerisatransformerthatisdesignedsuchthatthe output voltage is lower than the input voltage Astep-up transformerisa transformer thatisdesignedsuchthat theoutput voltageis higher than the input voltage ASMPSisanelectronicpowersupplydevicethatisusedtoconvert electricityatonevoltageorcurrentintoelectricityatsomeothervoltageor current.In a SMPS, AC input is converted into DC by a rectifier. The DCis switched on and off at a high frequency by an electronic switching regulator, andthenpassedthroughatransformer toconvert thevoltageorcurrentto the desired level Athinclientreferstoacomputerthatdependsheavilyonsomeother computer(itsserver)tofulfilitscomputationalroles.Thinclientsusually occurascomponentsof abroadercomputerinfrastructure,whereseveral thin clients share their computations with the same server Atransformerisadevicedesignedtoconvert(step-uporstep-down) electricityinanACsystemfromonevoltageorcurrentintosomeother desired voltage or current Uninterrupted power supply Voltagereferstothecapacityof anelectricfieldtodowork.Theunitfor measuring voltage is the volt THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK XIV EXCHANGE RATES TheaverageandclosingexchangeratesasoutlinedinthetablebelowareextractedfromBNM.Theaverage exchangerateforeachfmancialperiodistheaverageof theclosingexchangeratesonthelastdateof each monthduringthatfinancialperiod.Theseexchangerateshavebeenpresentedsolelyforinformationonlyand should not be construed as a representation that those HKD, RMB or USD amounts could have been, or could be, or was converted into RM, at any particular rates, the rates stated below, or at all. HKD:RMRMB:RMUSD:RM AverageClosingAverae:eClosine:_Averal!eClosin1! FYE 31December 20080.42870.44700.48200.50763.33623.4640 FYE 31December 20090.45440.44180.51570.50193.5225.4265 FYE 31December 20100.41310.39640.47480.46743.21053.0855 Closin 7.7831 31March 2011 (Source:BNM) The highandlow exchange rates between HKD andRM,RMB and RMand USDandRMforeach of the past six (6) months prior and up to the LPD were as follows: HKD:RM LowHie:h RMB:RM LowHigh USD:RM LowHigh March 20110.38790.39270.46120.46643.02593.0640 April 20110.38120.38980.45550.46372.96153.0305 May 20110.38230.39350.45710.47142.97003.0605 June 20110.38530.39260.46260.47212.99753.0575 July 20110.37720.38870.45630.46802.93853.0152 August 20110.37720.38870.45680.47152.93953.0360 (Source:BNM) Asat theLPD, theclosing exchange ratebetween HKDand RM wasHKDIto RM0.3964,between RMBand RM was RMBI to RM0.4838 and between USD and RM was USDI to RM3.0905. TheaboveexchangerateshavebeencalculatedwithreferencetotheexchangeratesquotedfromBNMand should not be construed as representations that the HKD, RMB or USD amounts actually represent such amounts or could be or was converted into the RM at the rate indicated, or at any other rate, or at all. We believe we have extracted the relevant information in its proper form and context in this prospectus and have not verified the above exchange rates. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK xv Company No. 91838 TABLE OF CONTENTS Page 1.INTRODUCTION 2.CORPORATE DIRECTORY3 3.INFORMATION SUMMARY6 3.1Overview of our Group and business6 3.2Our competitive advantages and key strengths7 3.3Our future plans and strategies7 3.4Our prospects7 3.5Financial highlights8 3.6Summary of our IPO11 3.7Risk factors11 4.PARTICULARS OF OUR IPO13 4.1Opening and closing of applications13 4.2Tentative timetable13 4.3Details of our IPO13 4.4Listing15 4.5Share capital15 4.6Market capitalisation16 4.7Purposes of our IPO16 4.8Basis of arriving at the IPO Price16 4.9Dilution17 4.10Use ofproceeds18 4.11Financial impact from utilisation of proceeds21 4.12Brokerage, underwriting commission and placement fee21 4.13Salient terms of the Underwriting Agreement21 5.RISK FACTORS22 5.1Risks relating toour business and industry22 5.2Risks relating to our Listing andinvestment in our IPO Shares28 5.3Other risks30 6.INFORMATION ON OUR GROUP31 6.1History and business31 6.2Share capital37 6.3Information on our subsidiary companies37 6.4Property, plant and equipment43 6.5Material capital expenditure and divestitures46 6.6Regulatory requirement and environmental issue46 6.7Listing Scheme47 7.BUSINESS OVERVIEW50 7.1Business model50 7.2Principal activities and services provided55 7.3Our products, services and operations 56 7.4Process flow 70 7.5Quality management system 77 7.6R&D 82 7.7Operational facilities 83 7.8Production output, capacity and utilisation 84 7.9Types, sources and availability of raw materials! input85 7.10Technology used 87 xvi TABLE OF CONTENTS (Cont'd) Page 7.BUSINESS OVERVIEW (Cont'd) 7.11Distribution andmarketing strategy91 7.12Trademark92 7.13Principal markets93 7.14Major customers93 7.15Major suppliers95 7.16Seasonality96 7.17Interruptions to business97 7.18Future plans, strategies and prospects97 8.INDEPENDENT MARKET RESEARCH REPORT103 9.LEGAL OPINION137 9.1Legal opinion on the relevant laws and regulations of Hong Kong137 9.2Legal opinion on the relevant laws and regulations of the PRC139 10.INFORMATION ONOUR PROMOTERS, SUBSTANTIAL SHAREHOLDERS,149 DIRECTORS, KEY MANAGEMENT AND KEY TECHNICAL PERSONNEL 10.1Promoters andsubstantial shareholders149 10.2Board ofDirectors151 10.3Key management and key technical personnel156 10.4Declarations fromour Promoters, Directors, key management and key technical159 personnel 10.5Family relationships and associations159 10.6Service agreements159 10.7Other matters159 10.8Employees160 11.APPROVALS AND CONDITIONS164 11.1Approvals from the relevant authorities in Malaysia164 11.2Approvals from the relevant authorities in Hong Kong180 11.3Approvals from the relevant authorities in the PRC180 11.4Moratorium on sale of our Shares180 12.CONFLICT OF INTERESTS AND RELATED PARTY TRANSACTIONS182 12.1Interests in similar business182 12.2Related party transactions182 12.3Monitoring and oversight of conflict of interests and related party transactions182 12.4Transactions that are unusualin nature or condition182 12.5Outstanding loans made to or forthe benefit of related parties182 12.6Promotion of material assets acquired182 12.7Declaration by advisers183 13.FINANCIAL INFORMATION184 13.1Historical financialinformation184 13.2Management's discussion and analysis of financialcondition and results of operations189 13.3Capitalisation and indebtedness206 13.4Liquidity and capital resources206 13.5Trend analysis211 13.6Dividend policy213 13.7Reporting Accountants' Letter onProforma Consolidated Financial Information214 14.ACCOUNTANTS' REPORT238 15.DIRECTORS'REPORT385 XVll i Company No. 9l8382-T~ TABLE OF CONTENTS (Cont'd) Page 16.ADDITIONAL INFORMATION386 16.1Share capital386 16.2Articles of Association386 16.3Benefits to our Promoters, Directors and substantial shareholders390 16.4Material litigation390 16.5Material contracts390 16.6Material agreements391 16.7Repatriation of capital and remittance of profits391 16.8Public take-overs392 16.9Consents392 16.10Documents available for inspection393 16.11Responsibility statements393 17.PROCEDURES FOR APPLICATION ANDACCEPTANCE394 17.1Opening and closing dates for application394 17.2Methods of application394 17.3Procedures for application394 17.4Application using Application Form395 17.5Application using Electronic Share Application398 17.6Application using Internet Share Application403 17.7Application and acceptance410 17.8CDS account411 17.9Notice of allotment412 17.10Enquiries412 17.11List of ADAs413 THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK xviii yNo.9I8382-T 1.INTRODUCTION This Prospectus is dated [e) 2011. We[ehave registered]acopyof thisProspectus together with the Application Fonns withtheSC.We[ehave alsolodged]acopy of thisProspectus,together withtheApplicationFonns withtheRegistrarof Companies. Neither the SC nor the Registrar of Companies takes any responsibility for its contents. We[ehave obtained]theapprovalfromBursaSecuritieson[e],for,inter-alia,our admissiontotheOfficial List of theACEMarket of BursaSecuritiesandforthelisting of andquotationfor our entireenlargedissued andpaid-upsharecapital,includingtheIPOShares,whicharethesubjectof thisProspectus,ontheACE Marketof BursaSecurities.OurShareswillbeadmittedtotheOfficialListof theACEMarketof Bursa Securities and official quotation will commence upon receipt of confrrmation fromBursa Depository that all the IPO Shares havebeen credited into the respective CDS accounts of thesuccessfulapplicants and the notices of allotment have been issued and despatched to all successful applicants. Bursa Securities assumes no responsibility for the correctness of any statement madeor ofany opinion or report expressed inthis Prospectus.Our admission to theOfficial List of the ACE Market of Bursa Securities shall not be taken as anindication ofthe merits of our Company, our Shares and/or our Listing exercise. PursuanttoSection14(1)of theSecuritiesIndustry(CentralDepositories)Act,1991,BursaSecuritieshas prescribedourSharesasprescribedsecurities.Therefore,wewilldepositourSharesdirectlywithBursa Depository.Anydealingsinour Shares willbecarried outin accordancewith theSecurities Industry(Central Depositories)Act,1991and theRulesof Bursa Depository.Wewillnotissuesharecertificatestosuccessful applicants. Personssubmittingapplicationsbywayof ApplicationFonnor bywayof ElectronicShareApplicationor Internet Share Application (refer to Section17.4, Section 17.5and Section17.6 respectively of this Prospectus) MUST have a CDS account. If you do not presently have a CDS account, you should open a CDS account at an ADA prior to making an application for our IPO Shares. In thecaseof an application by way of Application Fonn,you should state your CDSaccount number in thespace provided in the Application Fonn; or In thecase of an application by way of Electronic Share Application, only an applicant who has a CDS accountnumbercanmakeanElectronicShareApplicationandyoushallfurnishyourCDSaccount number to the Participating Financial Institution by way of keyinginyour CDS account number if the instructions on theA TM screen at whichyousubmit your Electronic ShareApplication requireyou to do so;or In thecaseof anapplicationbyway of InternetShare Application,onlyanapplicantwho has aCDS accountopenedwiththeInternetParticipatingFinancialInstitutioncanmakeanInternetShare Application.Arisingtherewith,your CDSaccount numberwillautomaticallyappear intheelectronic IPO online application fonn. A corporation or institution cannot apply for our IPOShares by way of ElectronicShare Application or Internet Share Application. Pursuant to theListing Requirements, at least 25% of the total number of our Shares for which Listing is sought must be held by a minimum number of two hundred (200) public shareholders holding not less than one hundred (100)Shares each at thepoint of our Listing.We expect to meet this publicshareholding spread requirement at the point of Listing.If wedonotmeet thepublic shareholding requirement,wemay not be allowed to proceed with theListing.In suchanevent,allmoniespaid inrespect of all applicationswillbe returnedin fullwithout interest and if such monies are not returned infullwithin fourteen (14) days after we become liable to do so, the provision of subsection 243(2) ofthe CMSA shall apply accordingly. 1.INTRODUCTION (Cont'd) YoushouldrelyontheinformationcontainedinthisProspectusoranyapplicableProspectussupplement. Neither we nor our Adviser haveauthorisedanyonetoprovideyouwithinformationthatisdifferentandnot contained in this Prospectus. The delivery of this Prospectus or any issue or offer made in connection with this Prospectusshallnot,underanycircumstances,constitutearepresentationor createanyimplicationthatthere has been no change in our affairs since the date of this Prospectus. Nonetheless, should webecome awareof any material changeor development affecting amatter disclosedinthisProspectus fromthedate of registrationof this Prospectus withtheSC up to thedate of our Listing,weshall furtherissueasupplementalor replacement prospectus, as the case may be, in accordance with the provisions of Section 238 ofthe CMSA. The distribution of this Prospectus and thesale of our IPO Shares in other jurisdictions outside of Malaysia may berestrictedby law. If you have come into possession of this Prospectus, we requireyou toinform yourself of and to observe such restrictions.This Prospectus does not constitute andmay not beusedfor thepurposeof an offer or invitationwhichisnotauthorisedor unlawful,or toany persontowhomitisunlawfultomakesuch offer or invitation. YOUSHOULDRELYONYOUROWNEVALUATIONTO ASSESSTHEMERITSANDRISKSOF THE INVESTMENT.INCONSIDERINGTHE INVESTMENT, IF YOUAREINANYDOUBT ASTO THEACTIONTOBETAKEN,YOUSHOULDCONSULTYOURSTOCKBROKERS,BANK MANAGERS,SOLICITORS,ACCOUNTANTSOROTHERPROFESSIONALADVISERS IMMEDIATELY BEFORE APPLYING FOR OUR IPO SHARES. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 2 2.CORPORATE DIRECTORY BOARD OF DIRECTORS Name Teh Kok Lim (Independent Non-Executive Chairman) HauMunMeng (Group Managing Director) Hong Chin Chye (Executive Director) Kazutaka Misawa (Non-Independent Non-Executive Director) ChuKheh Wee (Independent Non-Executive Director) AUDIT COMMITTEE Name ChuKheh Wee TehKokLim Kazutaka Misawa NOMINATION COMMITTEE Name TehKokLim ChuKheh Wee Kazutaka Misawa Address No. 44, lalan USl III1D 47620 Subang laya Selangor Darnl Ehsan No.9, lalan Desa 6/5 Bandar Country Homes 48000 Rawang Selangor Darnl Ehsan No.5, lalan Bestari 36/2 Taman Bestari Indah 81800 Ulu Tiram, Johor No. B-19-3, Tingkat 19 USJ One A venue Persiaran Mewah, usn 47600 Subang Jaya Selangor Darnl Ehsan No.12 AC, Mewah Court Taman Bukit Mewah 43000 Kajang Selangor Darnl Ehsan Designation Chairman Member Member Designation Chairman Member Member ProfessionNationality CompanyMalaysian Director CompanyMalaysian Director CompanyMalaysian Director CompanyJapanese Director CompanyMalaysian Director Directorsbip Independent Non-Executive Director Independent Non-Executive Director Non-Independent Non-Executive Director Directorsbip Independent Non-Executive Director Independent Non-Executive Director Non-Independent Non-Executive Director 3 2.CORPORATE DIRECTORY (Cont'd) REMUNERATION COMMITTEE Name Kazutaka Misawa Hau Mun Meng TehKokLim REGISTERED OFFICE HEAD I MANAGEMENT OFFICE I PRINCIPAL PLACE OF BUSINESS COMPANY SECRETARIES AUDITORS AND REPORTING ACCOUNTANTS DUE DILIGENCE SOLICITORS ON NAKAREG HOLDINGS, NAKAREG AND NKG TECHNOLOGY, AND LEGAL ADVISERS FOR THE PUBLIC ISSUE DUE DILIGENCE SOLICITORS ON NAKAREG INTERNATIONAL AND THE LEGAL ADVISERS ON THE LAWS OF HONG KONG DesignationDirectorship ChainnanNon-Independent Non-Executive Director MemberExecutive Director MemberIndependent Non-Executive Director Level 8,Symphony House Pusat Dagangan Dana 1 Jalan PJUlA146 47301Petaling Jaya Se1angor Darul Ehsan Tel No.: 03-78418000 No.2, Jalan BJ 5 Taman Perindustrian Belmas Johan 48000 Rawang Selangor Darul Ehsan Tel No. : 03-60910133 Fax No.: 03-60910141 Website: www.nakareg.com E-mail address:enquiry@my.nakareg.com See Siew Cheng (MAICSA 7011225) Leong Shiak Wan (MAICSA 7012855) c/o Level 8,Symphony House Pusat Dagangan Dana 1 Jalan PJUlA146 47301Petaling Jaya Se1angor Darul Ehsan Tel No.: 03-78418000 UHY Chartered Accountants (AF1411) Suite1 L05, Level 11 The Gardens South Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Tel No. : 03-2279 3088 Christina Chia Law Chambers Advocates and Solicitors Suite 5001, 5th Floor President House (ParkRoyal) Jalan Sultan Ismail 50250 Kuala Lumpur Tel No.: 03-21417711 Stevenson, Wong &Co. 4fF &5fF, Central Tower No. 28, Queen's Road Central, Hong Kong Tel No.: +8522526 6311 4 2.CORPORATE DIRECTORY (Coot'd) DUE DILIGENCE SOLICITORS ON SHANGHAI OPTIMUS, NAKAREG KUNSHAN ANDCHANGSHU NAKAREG, AND THE LEGAL ADVISERS ON THE LAWS OF THE PRC Martin Hu &Partners 81F,Kerry Parkside Office 1155 Fang Dian Road, Pudong Shanghai, 201204 PRC Tel No.: +862150101666 PRINCIPAL BANKERPublic Bank Berhad (6463-H) Rawang Branch 45, lalan 1B, Taman lati 48000 Rawang,Selangor Tel No.: 03-60910378 Fax No.: 03-60917424 ISSUING HOUSEMalaysian Issuing House Sdn Bhd (258345-X) Level 6, Symphony House Pusat Dagangan Dana 1 lalan PJU IN46 47301Petaling laya Selangor Darnl Ehsan Tel No.: 03-78418000 SHARE REGISTRARTricor Investor Services Sdn Bhd (118401-V) Level17, The Gardens North Tower Mid Valley City Lingkaran Syed Putra 59200 Kuala Lumpur Tel No. : 03-2264 3883 INDEPENDENT BUSINESS AND MARKET RESEARCH CONSULTANTS Vital Factor Consulting Sdn Bhd (266797-T) 75C & nc, lalan SS22119 Damansara laya 47400 Petaling laya Selangor Darnl Ehsan Tel No. : 03-7728 0248 ADVISER, SPONSOR, UNDERWRITER AND PLACEMENT AGENT PM Securities Sdn Bhd Mezzanine Floor, Menara PMI No.2, lalan Changkat Ceylon 50200 Kuala Lumpur Tel No.: 03-27151330 LISTING SOUGHTACE Market of Bursa Securities THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 5 3.INFORMATION SUMMARY TIDS SECTIONISONLYA SUMMARYOF THESALIENT INFORMATION ABOUTOUR GROUP ANDOURIPO,ANDDOESNOTPURPORTTOBECOMPLETEANDSHOULDBEREADIN CONJUNCTIONWITH,ANDISQUALIFIEDINITSENTIRETYBYTHEDETAILED INFORMATIONAPPEARINGELSEWHEREIN THISPROSPECTUS.YOUSHOULDREADAND UNDERSTANDTHISSECTIONTOGETHERWITHTHEENTIREPROSPECTUSBEFORE DECIDING WHETHER OR NOT TO INVEST IN OUR COMPANY. 3.1Overview of our Group and business NakaregHoldingswasincorporatedinMalaysiaon15October 2010under theActasapubliclimited company under itspresent name. Nakareg Holdingsisaninvestment holdingcompany andour Groupis primarilyengagedinthemanufacturingof electronictransformersandrelatedproducts,namely electronic noise filters,SMPS systems and related components, such as transformer coils and inductors. Inaddition,wemanufacturepartsandcomponentsforelectricalandelectronicproducts,suchas precision parts and components,PCBA andwireharnessaswell as computer and electronic products, such asindustrial server and electronic weighing scales. Our Group structure as at the LPD is as follows: 100% Nakareg International lOO% Nakareg Kunshan The main activities ofour Group are summarised below: CompanyPrincipal activities Nakareg HoldingsInvestment holding NakaregManufacture of electronic transformers and related components Nakareg InternationalInvestment holding, trading and distribution NKG TechnologyManufacture of electronic transformers Subsidiaries ofNakareg International Shanghai OptimusManufactureofelectronictransformersandrelatedproducts,PCBAand electronic weighing scales Nakareg KunshanManufacture of electronic transformers and related components, PCBA, wire harness and industrial server Changshu Nakareg Manufacture of precisionpartsandcomponentsforelectricaland electronic products 6 3.INFORMAnON SUMMARY(Coot'd) As at the date of this Prospectus, wedo not have any associated company. PleaserefertoSections6and7of thisProspectusforfurtherinformationonourGroupandour business respectively. 3.2Our competitive advantages and key strengths Our competitive strengths and advantages are important in sustaining our business aswellasproviding us with the platform for futurebusiness growth which include the following: Our in-house design capabilities; The quality of our products; We are an approved supplier to some ofour customers; Our manufacturing facilities are located close to our customers; Our products have a diverse range ofapplications; and We have an established track record. PleaserefertoSection7.1.3of thisProspectusforfurtherinformationonourGroup'scompetitive advantages and key strengths. 3.3Our future plans and strategies Our future plans and strategies include the following: New manufacturing facilities: Relocating the Changshu Nakareg manufacturing facilities;and Establishing a new manufacturing facilityin Malaysia. Expanding our existing facilities: Precision parts and components manufacturing; and PCBA manufacturing. Developing our existing businesses: Growinganddevelopingourprecisionpartsandcomponents,industrialserverandPCBA and wire harness manufacturing businesses. Product branding: Branding ofour own products; and Trademark registration. PleaserefertoSection7.18.1of thisProspectusforfurtherdetailsonourGroup'sfutureplansand strategies. 3.4Our prospects Our Group's core business isfocusedon manufacturing of electronic transformers and related products as most of our Group's revenue for the FYE 31December 2010 was derived from the manufacturing of electronic transformersand related products fromour customers in Malaysia and the PRC. Please refer to Section 8 of this Prospectus for information on the Independent Market Research Report. 7 3.INFORMATION SUMMARY (Cont'd) Our Directors are ofthe view that the prospects of our Group are favourablein light of our competitive advantages and key strengths, our future plans to create growth and development of our precision parts andcomponents as wellastheindustrialserver manufacturing businesses. These factorswould enable us to sustain our business and provide business growth opportunities. Please refer to Section 7.18.2 of this Prospectus for further details on our Group's prospects. 3.5Financial highligbts 3.5.1Proforma consolidated statement of comprehensive income We have prepared our proforma consolidated statement of comprehensive incomefor each of the past three (3) FYE31December 2008toFYE31December 2010below,forillustrative purposesonly.Theproformaconsolidatedstatementof comprehensiveincomehavebeen prepared based on theaudited fmancialstatements of our Company for the FPE31December 20 I 0 and our subsidiaries for thepast three (3) FYE 31December 2008to FYE 31December 2010andontheassumptionthatthecurrentstructureof ourGrouphasbeeninexistence throughoutthepastthree(3)financialyearsunderreview.Ourproformaconsolidated statementof comprehensiveincomebelowhavealsobeenpreparedinaccordancewiththe applicable approved accounting standards in Malaysia. You shouldreadthesummaryof our financialdata regardingour businessforthe past three (3)financialyearsthatwehavepresented below together withour management'sdiscussion andanalysisof fmancialconditionandresultsof operations,theReportingAccountants' LetteronourProformaConsolidated FinancialInformationandtheAccountants'Reportas set out in Sections 13.2,13.7 and14 ofthis Prospectus, respectively. FYE 31December 200820092010 RMRMRM Revenue41,646,92238,451,07639,059,087 Cost ofsales(34,379,703)(27,373,875)(30,812,661) GP7,267,21911,077,2018,246,426 Other operating income401,513318,4171,195,345 Administrative expenses(3,082,744)(2,739,607)(4,009,297) Selling and distribution expenses(96,692)(164,090)(115,872) Other operating expenses(548,309)(303,939)(335,310) Finance costs(115,487)(86,774)(170,137) PBT3,825,5008,101,2084,81I,155 Taxation(l,562,675)(1,594,020)(829,345) Net profit for the financialyear2,262,8256,507,1883,981,810 Other comprehensive income Foreign exchange differences,1,176,698(288,626)(1,188,363) representing net profit not recognised in the proforma consolidated statement ofcomprehensive income Netprofitforthefinancialyear,3,439,5236,218,5622,793,447 representingtotalcomprehensive income for the financialyear 8 2010 0.918382-T 3.INFORMATION SUMMARY (Cont'd) FYE 31 December 20082009 EBlTDA Number ofShares in issue{l)139,000,000139,000,000139,000,000 GP margin (%)(2)17.4528.8121.11 PBT margin (%l3)9.1921.0712.32 PAT margin (%l4)5.4316.9210.19 Effective tax rate (%)40.8519.6817.24 Gross EPS (sen)(5)5.237.975.93 NetEPS (senf6)1.634.682.86 Diluted net EPS (sent)1.183.412.08 Notes: (1)Number ofexisting Sharesinissue after the Acquisitions by Nakareg International,Acquisitions by Nakareg Holdings and Share Split but before the Public Issue. (2)TheGP margin is computed by dividing the GP by the reverrue earned in the respective financial years. (3)The P BT margin is computed by dividing the PBT by the revenue earned in the respective financial years. (4)ThePATmargin is computed by dividing the PAT by the revenue earned in the respective financial years. (5)The gross EPS is computed by dividing the PBT by 139,000,000 Shares. (6)The net EPS is computed by dividing the PAT by 139,000,000 Shares. (7)Thediluted net EPS is computed by dividing PAT by the enlarged rrumberofShares after the Listing Scheme of191,000,000 Shares. Therewerenoexceptionalor extraordinaryitemsthroughoutthefmancialperiodandyears under review. 3.5.2Proforma consolidated statement of financial position WehavepreparedourproformaconsolidatedstatementoffmancialpOSItIOnbelowfor illustrativepurposesonly,basedon theauditedfmandalstatementsof our Companyforthe FPE31December2010andoursubsidiariesfortheFYE31December2010toshowthe effectsof ourPublicIssueandtheutilisationof theproceedsarisingfromtheIPOonthe assumption that these transactions had been effected as at 31December 2010. We advise you to read the proforma consolidated statement of financial position together with theaccompanyingnotesandassumptionsincludedin theReportingAccountants'Letter on our Proforma Consolidated Financial Information enclosed in Section 13.7 ofthis Prospectus. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 9 3.INFORMATION SUMMARY (Coord) Audited as at 31 December 2010 RM (I) After Acquisitions by Nakareg International, Acquisitionsby Nakareg Holdings and Share Split RM (II) After proforma (I) and Public Issue RM (III) After proforma (II) and utilisation of proceeds fromthe Public Issue RM Non- current assets Property, plant and equipment6,281,4066,281,406(e) Current assets Inventories Trade receivable and other receivables Tax recoverable Cash and bank balances 56,774 6,004,322 9,842,059 441,654 6,004,322 9,842,059 441,654 6,004,322 9,842,059 441,654 Total assets 2 56,77619,074,934 Equity Share capital213,900,00019,100,00019,100,000 Share premium204,018(e)(e) Merger reserve(7,455,694)(7,455,694)(7,455,694) Reserves6,569,0106,569,010 Total Equity(4,462)13,217,334(e](e] Non-current liabilities Hire-purchase payables66,41466,41466,414 Bank borrowings1,109,2951,109,2951,109,295 Deferred tax liability400400400 1,176,1091,176,1091,176,109 Current liabilities Trade payable and other payables61,2388,947,9398,947,9398,947,939 Hire purchase payabJes859,986859,986859,986 Bank borrowings965,378965,378965,378 Tax payable189,594189,594189,594 Total liabilities Total equity and liabilities 61,23810,962,89710,962,89710,962,897 (4,462)23,356,340(e](e] Net (Iiabilities)/assets Number of ordinary shares2139,000,000191,000,000191,000,000 Net (liability)/assets attributable(223,100)16.80(e] 'e]to equity holders per ordinary share (sen) 10 0.918382-TI 3.INFORMATION SUMMARY (Conl'd) 3.5,3Auditors' qualification Theauditedfmancialstatementsof ourCompanyfortheFPE31December2010andour subsidiaries for the FYE 31December 2008, FYE 31December 2009 andFYE3]December 2010arenotsubjecttoanyauditqualificationasdisclosedinSection13.1.1ofthis Prospectus. 3.6Summary of our IPO lPO size52,000,000 IPO Shares by our Company, which will be allocated as follows: 44,000,000 IPO Shares by wayof private placement to the selected investors at the IPO Price; 5,000,000IPOSharestoEligibleDirectors,employeesandbusiness associates! persons who have contributed to the success of our Group; and 3,000,000 lPO Shares for the application by the Public at the IPO Price. IPO PriceRM[.] per IPO Share. Use ofWe intend to utilise the grossproceeds fromthe Public Issue ofRM[e] millionin proceedsthe following manner: PercentageEstimated timeframe of grossfor utilisationupon proceedsListing RM'OOO(%) Expanding our manufacturing[e]37.4Within 24 months operations Relocating the Changshu[e]26.7Within 24 months Nakareg manufacturing facility and expansion ofour existing manufacturing capabilities in thePRC Product branding[e]3.8Within12 months Working capital[e]10.7Within12 months Estimated listing expenses[e]21.4Within 2 weeks Total gross proceeds[e] Please refer to Section 4 ofthis Prospectus for detailed information on our lPO. 3.7Risk factors An investment in our IPO Shares involves a certain degree of risk.Before investing in our IPO Shares, youshouldcarefullyconsider thefollowingriskfactors(whichmaynotbeexhaustive),alongwith other matters in this Prospectus.. Risks relating to our business and industry which we operate (i)Revenue contribution from our major customers; (ii)Purchases from our major suppliers; (iii)Foreign exchange risk fluctuations; (iv)Global fmancialcrisis; (v)Fluctuation in raw material prices; (vi)Competition fromother manufacturers in the same country; (vii)Bargaining power of our customers; (viii)Changes inpolitical, economy and regulatory conditions; II 3.INFORMATION SUMMARY (Cont'd) (ix)Dependency on Executive Directors and key management personnel; and (x)Production/operational risks. Risks relating to our Listing and investment inour ]PO Shares (i)Potential delay or failure of our Listing; (ii)Delay between admission and trading of our IPO Shares; (iii)No prior market for our Shares; (iv)Volatility in our Share price and trading volume; and (v)Our Promoters will retain control over our Group upon Listing. Other risks (i)Disclosure regarding forward-looking statements. Please refer to Section 5 of this Prospectus for further details on the above risk factors. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 12 4.PARTICULARS OF OUR IPO 4.1Opening and closing of applications . Applicationswillbeacceptedfrom10.00a.m.on [e]andwillbeclosedat 5.00p.m.on[e]or such later date or datesasour DirectorsandUnderwriter mayin theirabsolutediscretionmutuallydecide. Late applications will not be accepted. 4.2Tentative timetable The tentative timing ofevents leading up to our Listing is set out below: EventTentative date Issuance ofProspectus/ opening of the application for our IPO Shares Closing ofthe application for our IPO Shares Tentative date for balloting of applications for our IPO Shares Tentative date for allotment of our IPO Shares to successful applicants Tentative listing date [e] at10.00 a.m. [ e] at 5.00 p.m. [e] [e] [e] This timetable is tentativeandissubject tochange, whichmaybe necessary to facilitateimplementation procedures.TheapplicationforourIPOShareswillcloseonthetimeanddatestatedaboveor such later dateor datesasour DirectorsandUnderwriter mayin their absolutediscretionmutuallydecide. Should the closing date for the application of our IPO Shares be extended, the dates for the allotment of our IPOSharespursuant to our IPOandour Listingwill be extendedaccordingly.Wewillannounce anyextensionof timefortheapplicationof ourIPOSharesbywayof advertisementsinawidely circulated English and Bahasa Malaysia newspaper within Malaysia prior to the originalclosing date of applications for our IPO Shares. 4.3Details of our IPO Public Issue The PublicIssue of 52,000,000IPOShares,representing approximately 27.2% of the enlarged issued and paid-up share capital our Company, atthe IPO Price of RM[ e] payable in fullonapplication upon the terms and conditions as set out in the Prospectus and will be allocated in the following manner: 4.3.1Private placement 44,000,000IPOShares,representingapproximately23.0% of theenlargedissuedandpaid-up sharecapitalof our Company,willbemadeavailabletoselectedinvestorsbywayof private placement. The IPO Shares for allocation to the selected investors pursuant to the private placement will not beunderwrittenasirrevocablewrittenundertakingshavebeenobtainedfromtherespective selected investors to subscribe for our IPO Shares. 4.3.2EligibleDirectors,employeesandbusinessassociates/personswhohavecontributedto the success of our Group 5,000,000IPOShares,representingapproximately2.6% of theenlargedissuedandpaid-up share capital of our Company,will be made available for application by the eligible Directors, employees and business associates/persons who have contributed to thesuccess of our Group under the Pink Form Shares Allocation. 13 4.PARTICULARS OF OUR IPO (Cont'd) The Pink Fonn Shares Allocation will be allocated as follows: CategoryNo. of personsNo.of Shares Eligible Directors21,000,000 Eligible employees333,500,000 Eligible business associates - Suppliers5500,000 Total405,000,000 The allocation to the eligible Directors andemployees of our Groupis based on thefollowing criteria as approved by our Board: (a)At least eighteen (18) years of age; (b)Job position; and (c)Length of service. For theallocationto thebusinessassociates/personswhohavecontributedto thesuccessof our Group,our Board hastakenintoconsiderationtheirlengthof business relationshipwith our Group and their contribution to the success of our Group. Saveforour eligible Directors as set out below, none of our other Directors isentitled for the Pink Fonn Shares Allocation: Name ofDireetorsDesignationNo. of Shares TehKokLim ChuKheh Wee Independent Non-Executive Director Independent Non-Executive Director 500,000 500,000 TheabovePinkFonnSharesAllocationissubjecttoeligibleDirectors,employeesand businessassociates/personswho havecontributed to thesuccessof ourGroupsubscribing to their respective allocations. In theevent that anyof theIPOShares are not takenup by our eligible Directors,employees andbusinessassociates/personswhohave contributed tothesuccess of our Group,such IPO Shares will be made available for application by the Public by way of balloting or be allocated bywayof privateplacement.TheIPOSharesabovehavebeenfullyunderwrittenbyour Underwriter. 4.3.3Public 3,000,000IPOShares,representingapproximately1.6% of theenlargedissuedandpaid-up sharecapital of our Company to be allocated by wayof balloting,will be madeavailablefor application by the Public. Any IPO Shares reservedunder this tranchewhicharenot fullysubscribed forby thePublic willbemadeavailableforsubscriptionbyoureligibleDirectors,employeesandbusiness associates/personswhohavecontributedtothesuccessof ourGroupunderthePinkFonn Shares Allocation.Any remaining Public Issue Shares will subsequently be made available for SUbscriptionbyourselectedinvestorsundertheprivateplacementtrancheasdescribedin Section 4.3.1and if undersubscribed,such IPO Shares will be subscribed by our Underwriter based on the tenns ofthe Underwriting Agreement. 14 4.PARTICULARS OF OURIPO (Cont'd) In summary, IPO Shares will be allocated in the following manner: Public Issue No.of Shares% Private placement44,000,00084.6 EligibleDirectors,employeesandbusinessassociates/personswho 5,000,0009.6have contributed success of our Group Public (via balloting)3,000,0005.8 Total52,000,000100.0 ThePublicIssuewillincreaseourissuedandpaid-upsharecapitalfrom139,000,000Sharesto 191,000,000 Shares. Thebasisof allocationforourIPOShares takesintoaccount thedesirabilityof distributingtheIPO Shares to areasonablenumber of applicants withaview of broadening our shareholders base to meet thepublicspread requirements as per theListing Requirementsand to establishaliquid andadequate market for our Shares. The salient terms ofthe Underwriting Agreement are set out in Section 4.13 of this Prospectus. 4.4Listing In conjunctionwithour IPO,wehavesought theadmission to theOfficialList and thelisting of and quotationforour entireenlargedissuedandpaid-upsharecapitalcomprising191,000,000Shareson the ACE Market ofBursa Securities, of which the approval was obtained on [.]. 4.5Share capital No. of SharesRMTotal (RM) Authorised share capital250,000,0000.1025,000,000 Issued and fully paid-Up share capital as at the date of this 139,000,0000.1013,900,000Prospectus To be issued pursuant to the Public Issue52,000,0000.105,200,000 Enlarged issued and fully paid-up share capitalupon Listing191;000,0000.1019,100,000 The IPO Price of RM[.] is payable in full on application. Asatthedateof thisProspectus,wehaveonlyone(1)classof shares,namelyordinarysharesof RMO.l 0each,allof whichrankpari passuwitheachother.OurIPOShares,uponallotmentand issuance,willrankparipassuinallrespectswithourexistingissuedandpaid-upsharecapital includingvotingrightsandwillbeentitledtoalldividends,rightsanddistributionsthatmaybe declared subsequent to the date of allotment andissuance of our IPO Shares. Subject toany specialrights attaching to anyShareswhichwemayissuein thefuture,the holdersof theShares inour Company shall,inproportion totheamount paid-Upon theSharesheldby them,be entitledtosharetheprofitspaidoutbyusasdividendsandotherdistributions.Similarly,if our Company is liquidated, our shareholders shall be entitled to the surplus, in accordance with our Articles ofAssociation. 15 4.PARTICULARS OF OUR IPO (Cont'd) Each ofour shareholders shall be entitled to vote at any ofour general meeting in person or by proxy or byattorney or by dulyauthorised representative. On a show ofhands,every person present whois our shareholder or representativeor proxyor attorney of ourshareholdersshallhaveone(1)vote,andin thecaseof poll,everyof our shareholderspresentinpersonor by proxyor byattorneyor otherduly authorised representative shall have one (I) vote for each of theShares held. A proxy may but need not be a member of our Company and the provisions of Section149(1)(b) of the Act shall not apply to our Company. Thereisno limitationontherighttoownourShares,includingtherightof non-residentorforeign shareholderstoholdorexercisevotingrightsonourSharesimposedbylaworbyconstituent documents ofour Company. 4.6Market capitalisation Based ontheIPO Price of RM[.] per IPOShare and our enlarged issued andpaid-upshare capital of 191,000,000 Shares, our market capitalisation on the ACE Market ofBursa Securities willbe RM[.]. 4.7Purposes of our IPO The purposes of our IPO are as follows: (i)ToachievelistingstatusforourCompanytoenableustogainrecognition,enhanceour corporate reputation and assist usin expanding our customer base; (ii)To provide anopportunityfortheinvesting communityincluding the Public,toparticipatein our continuing growth by way of equity participation; (iii)Toenable ustohaveaccessto thecapitalmarketandraise fundsforour Group's futureand continuedexpansion,diversificationandgrowth.SeeSection4.10of thisProspectusfor furtherinformation onhow we plan to utilise the proceeds from the Public Issue of our Shares; and (iv)To enhance the liquidity of our Shares. 4.8Basis of arriving at the IPO Price Our Directors, together with PM Securities as the Adviser,Sponsor, Underwriter and Placement Agent, have determined and agreed to the IPO Price ofRM[.] per IPO Share, based on the following factors: (i)A net PE mUltipleof [.] times based onour Group's historical EPS of approximately RM[.], (computed based ontheconsolidatedPAT fortheFYEIFPE[.] and ourenlargedissued and paid-up share capital) after the Public Issue of 191,000,000 Shares. (ii)Our proforma consolidated NA per Shareas at[.] of approximatelyRM[.](computedafter the Public Issue and our enlarged issued and paid-up share capital); (iii)Our competitive advantages and key strengths, which include the following: our in-house design capabilities; the quality of our products; we are anapproved supplier to some of our customers; our manufacturing facilities are located close to our customers; our products have a diverse range of applications; and we have an established track record. 16 4.PARTICULARS OF OUR IPO (Cool'd) Forfurtherdetailsonour competitiveadvantagesandkeystrengths,pleaserefertoSection 7.1.3of this Prospectus; (iv)Our future plans and strategies include the following: New manufacturing facilities: (i)Relocating the Changshu Nakareg manufacturing facilities;and (ii)Establishing a new manufacturing facility in Malaysia. Expanding our existing facilities: (i)Precision parts and components manufacturing; and (ii)PCBA manufacturing. Developing our existing businesses: (i)Growing and developing our precision parts and components,industrial server and PCBA and wire harness manufacturing businesses. Product branding: (i)Branding of our own products; and (ii)Trademark registration. Forfurtherdetailsof ourfutureplansandstrategies,pleaserefertoSection7.18.1of this Prospectus. (v)The prospects of our Group as set out in Section 7.18.2 ofthis Prospectus and the Independent Market Research Report as set out in Section 8 of this Prospectus. OurDirectorsandPMSecuritiesareof theopinionthatthelPOPriceisfairandreasonableafter careful consideration ofthe abovementioned factors. However, you shouldalso take note that upon and subsequent to our Listing, the market price of our Shares issubject to the vagariesof market forcesand other uncertainties, whichmay affect the pricing of our Shares being traded. You are reminded to consider carefully the risk factors as set out in Section 5 of this Prospectus before deciding to invest in our Shares. 4.9Dilution Dilution forour new shareholders pursuant toour IPOistheamoWlt by which the IPO Price to be paid by our newshareholders of our IPO Shares exceeds the NA per Share after our IPO. The proforma NA perShareof ourGroupasat[.],beforeadjustingforthenetproceedsfromthePublicIssue,was approximately RM[.] based on number of Shares in issue before the Public Issue. Pursuant totheissuanceof 52,000,000 lPOShares at theIPOPriceandafterdeducting theestimated listing expenses, the proforma consolidated NA per Share of our Group asat [ .] based on our enlarged issued and paid-upsharecapitalof 191,000,000Shares will beapproximately RM[.] per Share.This representsanimmediateincreaseinNAperShareof RM[.]toourexistingShareholdersandan immediate dilution in NA per Share of RM[.] to our newshareholders. 17 ICompany No. 918382-TII 4.PARTICULARS OF OUR IPO (Cont'd) The following table illustrates such dilution on a per Share basis: RM IPO Price[e) Profonna NA per Share as at [ e ][e] NA per Share after our IPO[e) Increase in NA per Share to existing shareholders[e) Dilution in NA per Share to new shareholders[e) Dilution in NA per Share to new shareholders as a percentage to the IPO Price[e%] Thefollowingtablesummarisesthetotalnumberof Sharesreceivedbyour substantialshareholders (whoarealsoPromoters)fromtheAcquisitionsby NakaregHoldings andthe cost per Sharetothem and to the new shareholders who subscribe to our IPO Shares pursuant to our IPO: Substantial shareholdersNumber of Shares receivedTotal considerationCost per Share pursuant to the Acquisitions(RM)(RM) by Nakareg Holdingsfl) HauMunMeng87,415,0008,741,5000.10 Hong Chin Chye16,718,0001,671,8000.10 Leong Yeok Fang23,627,9002,362,7900.10 Number ofIPO SharesTotal considerationCost per Share (RM)(RM) New shareholders52,000,000[e][e) Note: (J)After the Share Spill. SavefortheSharesreceivedbyoursubstantialshareholdersfromtheAcquisitionsbyNakareg Holdings, thereis no materialacquisition of any existing Shares that involved cash in our Company by our Directors,Promotersandsubstantialshareholdersor personconnected tothem,orinwhich they have the right to acquire, during the past three (3) years prior to the date oftbis Prospectus. 4.10Use of proceeds TheexpectedtotalgrossproceedsfromthePublicIssueareRM[ e]million.Weintendtoutilisethe gross proceeds in the following manner: NotesRM'OOO%Estimated timeframe for utilisationupon Listing Expanding our manufacturing37.4Within 24 months operations in Malaysia Relocating the Changshu226.7Within 24 months Nakareg manufacturing facility and expansion ofour existing manufacturing capabilities in the PRC Product branding33.8Within12 months Working capital410.7Within12 months Estimated listing expenses521.4Within 2 weeks Total gross proceeds100.0 18 No. 918382-T 4.PARTICULARS OF OUR IPO (Conl'd) Notes: 1.Expanding our manufacturing operations in Malaysia Aspartof ourfutureplans,weintendtoexpandourmanufacturingoperationsinMalaysiaby purchasing a new factory building within the Klang Valley.A total ofapproximately RM[.) million from our /PO proceeds will be utilisedfor the establishment ofa new manufacturing facility with built up area ofapproximately/5,000 sq. ft.withintheKlangValleyover thenext twenty four(24)months.Thenew facility will host our corporate headquarters,manufacturing operations and D&D centre. Intheevent theaboveestimated amount is insufficient,wewill utiliseour internally generated fundsor bank borrowings to offset any shortfall. 2.RelocatingtheChangshuNakaregmanufacturingfacilityandexpansionofourexisting manufacturing capabilities in the PRe. A total ofapproximately RM[.) million fromour IPO proceeds will be set aside for the relocation ofthe manufacturingfacilityof ChangshuNakareg,expansionof theprecisionpartsandcomponents manufacturing capabilitiesaswell astheexpansionof thePCBAmanufacturing facilityover thenext twenty four (24) months. WeareplanningtorelocateourexistingChangshuNakaregmanufacturingfacilitytoalarger manufacturingfacilitylocatedinSuzhouProvince,PRe.Thenewfactoryhasabuiltupareaof approximately 20,000 sq. ft.and the estimated cost ofrelocation are as follows: Description ofexpenditureEstimated amount %RM'OOO Relocation costs2.0re] Factory renovation12.0 re] Office equipment4.0re] Furniture andfittings2.0re] Total20.0re] Weintendtoexpandourprecisionpartsandcomponentsmanufacturingcapabilitybypurchasing additionalCNCmachinesthatareof di.f.fo.rentmodelsfromourexistingmachinestoincreasethe product range ofour precision parts and components. Description ofexpenditweEstimated amount %RM'OOO CNC machines- eight (8) units60.0re) Weintend to expand ourPCBAmanufacturing facilityinNakareg Kunshanwiththeinvestmentinan additional machine.Uponcompletion,the production capacity isestimated to increase by 60,000 boards per annum. Description ofexpenditureEstimated amount %RM'OOO SMT machine-one (/) unit20.0re) 3.Product branding Weintend toutiliseapproximately RM[.) million fromour IPO proceedstoregister our trademarkin Malaysiaand to engagein promotional events toenhance the recognition ofour 'NKG' brand nameby participating in various trade fairs and exhibitions.Webelieve these will enhance our brand recognition and ultimately promote our products, particularly our industrial server. 4.Working capital Ourworkingcapitalwillincreaseintandemwithour futureplans.Therefore,theIPOproceedsof approximatelyRM[.)millionwillbeutilisedforourGroup'sday-to-dayoperationsthatinclude payments to creditors, salaries and operating expenses. 19 4.PARTICULARS OF OUR IPO (Cont'd) 5.Estimated listing expenses Our Company will bear theentirelistingexpenses and foesincidental toour Listing of approximately RM re] million asfollows: Estimated amount %RM'OOO Professional fees15.0 Authoritiesfees0.8 Issuing house's fees,underwriting commission and2.0 placement foes Advertisement, printing and contingencies3.6 If theactuallistingexpensesarehigherthanbudgeted,thedeficitwillbe fundedoutif theportion allocated forworkingcapital.Conversely,if theactual listingexpensesarelowerthanbudgeted,the excess will be used for working capital purposes. THE REST OF THIS PAGE IS INTENTIONALLY LEFT BLANK 20 4.PARTICULARS OF OUR IPO (Coord) 4.11Financial impact fromutilisation of proceeds Our utilisation of proceeds fromthe Public Issue is expected to have a fmancialimpact on our Group as follows: (i)Interest savings HadwenotundertakentheListing,wemayhaveincurredincrementalborrowingof approximatelyRM[ -]millionforourintendedcapitalexpenditure,productbrandingand general working capital requirements. In such event, the notional interest savings arising from the potentialadditional borrowing based on theassumedinterest rateof about 8% per annum amounttoapproximatelyRM[-]annually.Accordingly,theIPOproceedsareexpectedto enhance our future earnings. (ii)Enhancement of working capital WeintendtoutiliseRM[-]millionfromourIPOproceedsforourworkingcapital requirementsforday-to-dayoperations,whichincludepaymentstocreditorsandoperating expenses.Our cashandcashequivalentswillincrease to approximately RM[ -] millionafter ourListing,basedontheproformacashflowstatementforthe[-].Thiswillallowusto internallyfundourdailyoperationalactivitieswithout beingdependentonexternalfunding while strengthening the liquidity and cash flow position of our Group in the future. Pendingtheutilisationof theproceedsfromtheIPOfortheabove-mentionedpurposes,theIPO proceeds would be placed as depositswith banks or licensed financialinstitutions or short-term money market instruments. 4.12Brokerage, underwriting commissionand placement fee (i)Brokerage We will bear the brokerage fees relating to the IPO Shares, at the rate of[-1.0]% ofthe IPO Price inrespectof successfulapplications,whichbearthestampof PMSecurities,aparticipating organisationof BursaSecurities,amemberof theAssociationof StockbrokingCompaniesin Malaysia or the Issuing House. (ii)Underwriting commission WewillpaytheUnderwriteranunderwritingcommissionof [-2.0%]of theIPOPricein respectof the8,000,000IPOSharestobeissuedtothepublicandoureligibleDirectors, employees and business associates/persons who have contributed to the success ofour Group. (iii)Placement fee WewillpaythePlacementAgentaplacementcommissionof [-0.5]%and[-2.0]%of the valueof theSharestobeplacedoutundertheprivateplacementinrelationtoplacees identified by our Group and the Placement Agent, respectively. 4.13Salient terms of the Underwriting Agreement [-to be included] 21 5.1 5.RISK FACTORS WE ARE EXPOSED TO A NUMBER OF POSSmLE RISKS THAT MAY ARISE FROM ECONOMIC, BUSINESS,MARKETANDFINANCIALFACTORSANDDEVELOPMENTS,WHICH MAYHAVE ANADVERSEIMPACTONOURFUTUREPERFORMANCE.YOUSHOULDCAREFULLY CONSIDERTHERISKSANDINVESTMENTCONSIDERATIONSSETOUTBELOWALONG WITHTHEOTHERMATTERSINTHISPROSPECTUSBEFOREYOUMAKEYOUR INVESTMENT DECISION. THERISKSANDINVESTMENTCONSIDERATIONSSETOUTBELOWARENOTAN EXHAUSTIVELISTOFTHECHALLENGESTHATWECURRENTLYFACEORTHATMAY DEVELOPINTHEFUTURE.ADDITIONALRISKS,WHETHERKNOWNORUNKNOWN,MAY HAVE A MATERIAL ADVERSE EFFECT ON THE FINANCIAL PERFORMANCE OF OUR GROUP AND/OR OUR SHARE PRICE. Risks relating to our business and industry (i)Revenue contribution from our major customers Two(2)of ourmajorcustomers,namelyWuxiTDK-LambdaElectronicsCo.,Ltdand Yamaha Electronics(Suzhou)Ltd,accountedformorethantenpercent(10.0%)eachof our totalrevenueforeachof theFYE31December 2010,FYE31December 2009andFYE31 December2008.Thereisariskthatour financialresultsmay beaffectedif oneor bothof thesecompaniesstopbuyingourproductsorreducethelevelof theirpurchasesfromour Group in the future. However,theriskof amaterialdropinrevenuecontributionfromWuxiTDK-Lambda Electronics Co., Ltd as a customer is mitigated by the following factors: WuxiTDK-Lambda Electronics Co., Ltdhas been our customer for fifteen (15) years, indicatingalong-termbusinessrelationship.Thisprovidesabasisforacontinuing business relationship; Oursubsidiary,ShanghaiOptimus,isanapprovedsupplierof WuxiTDK-Lambda ElectronicsCo.,Ltdforthesupplyof electronictransformersandelectronicnoise filters.Asanapprovedsupplier,ShanghaiOptimusisnormallygiven firstpriority to bidforordersrelatingtothesupplyof electronictransformersandelectronicnoise filters; and Wehaveenteredintoaone(I)-yearrenewablecontractwithWuxiTDK-Lambda Electronics Co., Ltd,which provides a basis for a continuing business relationshipwith Wuxi TDK-Lambda Electronics Co., Ltd for the length ofthe contract. The riskofa material drop inrevenue contribution fromYamaha Electronics (Suzhou) Ltd as a customer is mitigated by the following factors: Yamaha Electronics (Suzhou) Ltd has been our customer for eight (8) years,indicating along-termbusinessrelationship.Thisprovidesabasisforacontinuingbusiness relationship; Oursubsidiary,NakaregKunshan,isanapprovedsupplierof YamahaElectronics (Suzhou)Ltdforthesupplyof electronictransformers.Asanapprovedsupplier, Nakareg Kunshan is normally given first priority to bid for orders relating to the supply ofelectronic transformers; and Wehaveenteredintoaone(I)-yearcontractthatisautomaticallyrenewedwith YamahaElectronics(Suzhou)Ltd,whichprovidesabasisforacontinuingbusiness relationship with Yamaha Electronics (Suzhou) Ltd for the length ofthe contract. 22 S.RISK FACTORS (Cont'd) Nevertheless, therecan benoassurancethat WuxiTDK-Lambda ElectronicsCo.,Ltd and/or Yamaha Electronics (Suzhou) Ltd will continue to be our customers, or maintain their level of purchases from our Group in the future. (ii)Purchases from our major suppliers Five(5)of oursuppliers,namelyZhangjiagangHuayangElectronicCo.,Ltd,ZhejiangJFE ShojiSteelProductsCo.,Ltd,TDK-LambdaCorporation,TongliDevelopmentLimitedand Hung's Enterprise(Xiamen) Co.,Ltd,accounted forten percent (10.0%) or moreeach of our totalpurchasesforatleastoneof ourpastthree(3)FYE31December2008toFYE31 December 2010. AlthoughZhangjiagangHuayangElectronicCo.,Ltd.accountedformorethantenpercent (10.0%)of our purchasesfortheFYE31December2010,wewillnotlikelybematerially affected if Zhangjiagang Huayang Electronic Co., Ltd. reduces or stopsits supply to us due to the following mitigating factors: Zhangjiagang Huayang Electronic Co.,Ltd.was not our major supplier in the FYE 31 December 2009orFYE31December2008,suggesting thatwedonothavealongterm dependency on Zhangjiagang Huayang Electronic Co., Ltd as a supplier; Wemanufacturetransformersandhavethecapabilitytomanufactureelectronic transformersof thetypepurchasedfromZhangjiagangHuayangElectronicCo.,Ltd. should there be a need to do so; ThetransformerspurchasedfromZhangjiagangHuayangElectronicCo.,Ltd.were manufacturedforourGrouponanOriginalEquipmentManufacturer(OEM)basis. Thepurchaseof transformersfromZhangjiagangHuayangElectronicCo.Ltd.,was mainlyduetothesurgeindemandfromacustomer duringaparticular periodinthe said financialyear.Wearegradually building upour capacity tomanufactureforour customers'futuremodelsas reflectedin our futureplans,strategiesandprospectsset out in Section 7.18; and Wedonot expect suchpurchasesto berecurring and asattheLPD,wehave reduced our purchasesof electronic transformersfromZhangjiagangHuayang ElectronicCo., Ltd. AlthoughZhejiangJFEShojiSteelProductsCo.,Ltdaccountedformorethantenpercent (10.0%)of ourpurchasesfortheFYE31December2009andFYE31December2008 respectively,wewill not likely be materially affected if Zhejiang JFE Shoji Steel Products Co., Ltd. reduces or stops its supply to us due to the following mitigating factors: Zhejiang JFEShojiSteel Products Co.,Ltd was not our major supplier inthe FYE 31 December 2010,suggesting that wedonot havealong-termdependencyonZhejiang JFE Shoji Steel Products Co., Ltd as a supplier; and Our primary purchase fromZhejiang JFEShojiSteel Products Co.,Ltd comprise parts for E-1transformer cores.For theFYE 31December 2010, we purchased parts for E-1 transformercoresfromfour(4)othersuppliersfromourlistof toptwenty(20) suppliers. This suggests that we have ready access to other suppliers ofE-I transformer cores should there be a need to purchase from an alternative supplier. OurGroupwillalsonotlikelybemateriallyaffectedif TDK-LambdaCorporation,Tongli Development LimitedandHung's Enterprise (Xiamen) Co., Ltd.reduce or stop their supplies to us as thesecompanies accountedformorethan ten (10.0%) each of our total purchases in only one (1) ofthe past three (3) FYE 31December 2008 to FYE 31December 2010. 23 5.RISK FACTORS (Conl'd) Nevertheless,therecan be no assurance that we our operations may not be adversely affected if one or more ofthese suppliers reduces or stop supply to us. (iii)Foreign exchange risk fluctuations Our revenueandpurchasesweremainlytransactedinUSD,RMandRMB.FortheFYE 31 December 2010, 36.4% of our revenueand 37.8% of our purchases weredenominatedinUSD, 35.0% of our revenue and 22.2% of our purchases weredenominatedinRM and 28.5% of our revenueand38.0%of ourpurchasesweredenominatedin RMB.Theremaining2.0%of our purchasesweredenominatedinHKD,JapaneseYenandSingaporeDollars.Assuch,our business issubjected tosomerisk arisingfromforeignexchangeratefluctuations,particularly with regards to the USD and RMB. ThemitigatingfactorsagainsttherisktoouroperationsinMalaysiaarisingfromforeign exchange rate fluctuations include the following: On 21July 2005,the Malaysian Government removed the pegging of the RM toUSD andreplacedit withamanaged floatsystem.Promoting stabilityof theexchangerate continues to be a primary objective ofBNM policy; (Source:Independent assessment of theelectronictransformerindustry inMalaysiaand the PRC prepared by Vital Factor Consulting) Alargeproportionof therevenueandpurchasesof our operationsinMalaysiawere denominatedinRM.WeutilisetherevenuethatisdenominatedinRMtopayfor purchases denominated in the same currency; and Our Malaysianoperationsmaintainforeigncurrencybank accountstohandleforeign currencytransactions.Someof ourforeigncurrencyearningsaremaintainedinthe respectiveforeigncurrency accounts,and these arelater used tomake paymentsin the respectiveforeigncurrencies.Thisapproachalsoreducesthecostof carryingout currency conversion. ThemitigatingfactorsagainsttherisktoouroperationsinthePRCarising