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	•	To re-elect the following Directors: Michael E. Marks, Richard L. Sharp, Michael M. McNamara, H. Raymond Bingham, Ajay B. Shah and Rockwell A. Schnabel (Proposals 1 and 2);
	•	To approve the re-appointment of Deloitte & Touche LLP as our independent auditors for the 2007 fiscal year (Proposal 3);
	•	To approve the authorization for the Directors of the Company to allot and issue ordinary shares (Proposal 4);
	•	To approve the cash compensation payable to our non-employee Directors (Proposal 5);
	•	To approve the Company’s Amended and Restated Articles of Association (Proposal 6);
	•	To approve the renewal of the Share Purchase Mandate relating to acquisitions by the Company of its own issued ordinary shares (Proposal 7); and
	•	To approve amendments to our 2001 Equity Incentive Plan relating to: (a) the elimination of the sub-limit on outstanding stock bonus awards; (b) modification of the automatic option grants to non-employee directors; and (c) a 5,000,000-share increase in the share reserve (Proposals 8, 9 and 10).

	(a) Mr. Michael E. Marks; and
	(b) Mr. Richard L. Sharp.

	(a) Mr. Michael M. McNamara,
	(b) Mr. H. Raymond Bingham,
	(c) Mr. Ajay B. Shah; and

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	(d) Mr. Rockwell A. Schnabel.

	“RESOLVED THAT, pursuant to the provisions of Section 161 of the Singapore Companies Act, Cap. 50, and notwithstanding the provisions of Article 46 of our Articles of Association but subject otherwise to the provisions of that Act and our Articles of Association, authority be and is hereby given to our Directors to:

	(a) (i) allot and issue ordinary shares in our capital; and/or
	(ii) make or grant offers, agreements or options that might or would require ordinary shares in our capital to be allotted and issued, whether after the expiration of this authority or otherwise (including but not limited to the creation and issue of warrants, debentures or other instruments convertible into ordinary shares in our capital),

	at any time to and/or with such persons and upon such terms and conditions and for such purposes as our Directors may in their absolute discretion deem fit, and with such rights or restrictions as our Directors may think fit to impose and as are set forth in our Articles of Association; and

	(b) (notwithstanding the authority conferred by this resolution may have ceased to be in force) allot and issue ordinary shares in our capital in pursuance of any offer, agreement or option made or granted by our Directors while this resolution was in force,

	and that such authority shall continue in force until the conclusion of our next Annual General Meeting or the expiration of the period within which our next Annual General Meeting is required by law to be held, whichever is the earlier.”

	“RESOLVED THAT, approval be and is hereby given for us to provide:

	(a) Annual cash compensation of $40,000 to each of our non-employee Directors for services rendered as a director;
	(b) Additional annual cash compensation of $10,000 to the Chairman of the Audit Committee (if appointed) of the Board of Directors for services rendered as Chairman of the Audit Committee and for his or her participation on the Audit Committee; and
	(c) Additional annual cash compensation of $5,000 to each of our non-employee Directors for their participation on each standing committee of the Board of Directors on which such Director serves.”

	“RESOLVED THAT:

	Approval be and is hereby given for the amendment and restatement of the Articles of Association of the Company, as described in this proxy statement.”

	“RESOLVED THAT:

	(a) for the purposes of Sections 76C and 76E of the Singapore Companies Act, Cap. 50 (the “Companies Act”), the exercise by our Directors of all our powers to purchase or otherwise acquire issued ordinary shares in the capital of the Company, not exceeding in aggregate the number of

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issued ordinary shares representing 10% of the total number of issued ordinary shares in the capital of the Company as at the date of the passing of this resolution (excluding any ordinary shares which are held as treasury shares as at that date), at such price or prices as may be determined by our Directors from time to time up to the maximum purchase price described in paragraph (c) below, whether by way of:

	(i) market purchases on the NASDAQ Global Market or any other stock exchange on which our ordinary shares may for the time being be listed and quoted; and/or
	(ii) off-market purchases (if effected other than on the NASDAQ Global Market or, as the case may be, any other stock exchange on which our ordinary shares may for the time being be listed and quoted) in accordance with any equal access scheme(s) as may be determined or formulated by our Directors as they consider fit, which scheme(s) shall satisfy all the conditions prescribed by the Companies Act,

	and otherwise in accordance with all other laws and regulations and rules of the NASDAQ Global Market or, as the case may be, any other stock exchange on which our ordinary shares may for the time being be listed and quoted as may for the time being be applicable, be and is hereby authorized and approved generally and unconditionally;

	(b) unless varied or revoked by our shareholders in a general meeting, the authority conferred on our Directors pursuant to the mandate contained in paragraph (a) above may be exercised by our Directors at any time and from time to time during the period commencing from the date of the passing of this resolution and expiring on the earlier of:

	(i) the date on which our next Annual General Meeting is held; or
	(ii) the date by which our next Annual General Meeting is required by law to be held;

	(c) the maximum purchase price (excluding brokerage, commission, applicable goods and services tax and other related expenses) which may be paid for an ordinary share purchased or acquired by us pursuant to the mandate contained in paragraph (a) above, shall not exceed:

	(i) in the case of a market purchase of an ordinary share, the highest independent bid or the last independent transaction price, whichever is higher, of our ordinary shares quoted or reported on the NASDAQ Global Market at the time the purchase is effected; and
	(ii) in the case of an off-market purchase pursuant to an equal access scheme, 150% of the Prior Day Close Price;

and for the above purposes, the term Prior Day Close Price means the closing price of our ordinary shares as quoted on the NASDAQ Global Market or, as the case may be, any other stock exchange on which our ordinary shares may for the time being be listed and quoted, on the day immediately preceding the date of the market purchase by us or, as the case may be, the date of the making of the offer pursuant to the off-market purchase. The date of the making of the offer refers to the date on which we announce our intention to make an offer for the purchase or acquisition of our ordinary shares from holders of our ordinary shares, stating therein the purchase price (which shall not be more than the maximum purchase price calculated on the foregoing basis) for each ordinary share and the relevant terms of the equal access scheme for effecting the off-market purchase; and

	(d) our Directors and/or any of them be and are hereby authorized to complete and do all such acts and things (including executing such documents as may be required) as they and/or he may consider expedient or necessary to give effect to the transactions contemplated and/or authorized by this resolution.”

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	“RESOLVED THAT:

	Approval be and is hereby given for the amendment to our 2001 Equity Incentive Plan, which we refer to as the 2001 Plan, to eliminate the 2 million share sub-limit on the number of ordinary shares subject to stock bonus awards that may be outstanding at any point during the term of the 2001 Plan.”

	“RESOLVED THAT:

	Approval be and is hereby given to amend the 2001 Plan to provide that the automatic option grant to non-employee directors of 12,500 options following each Annual General Meeting will not be pro-rated based on the service of the director during the prior 12 months.”

	“RESOLVED THAT:

Approval be and is hereby given to amend the 2001 Plan to increase the maximum number of ordinary shares authorized for issuance under the 2001 Plan from 27,000,000 ordinary shares to 32,000,000 ordinary shares and that an additional 5,000,000 ordinary shares be reserved for issuance under the 2001 Plan, and that such ordinary shares, when issued and paid for in accordance with the terms of the 2001 Plan, shall be validly issue, fully-paid and non-assessable ordinary shares in our capital.”

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Bernard Liew Jin Yang	Yap Lune Teng

Joint Secretary	Joint Secretary

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Notice of Annual General Meeting of Shareholders					1
Proxy Statement					7
	Voting Rights and Solicitation of Proxies				7
	Proposals No. 1 and 2 — Re-Election of Directors				8
	Corporate Governance				10
	Proposal No. 3 — Re-Appointment of Independent Auditors for Fiscal Year 2007 and Authorization of the Board to Fix Their Remuneration				14
		Principal Accountant Fees and Services			14
		Audit Committee Pre-Approval Policy			14
	Proposal No. 4 — Ordinary Resolution to Authorize Ordinary Share Issuances				15
	Proposal No. 5 — Ordinary Resolution to Approve Non-Employee Director Compensation				16
	Proposal No. 6 — Special Resolution to Amend and Restate our Articles of Association				17
	Proposal No. 7 — Ordinary Resolution to Approve the Proposed Renewal of the Share Purchase Mandate				20
	Proposal Nos. 8, 9 and 10 — Ordinary Resolutions to Amend our 2001 Equity Incentive Plan				24
	Executive Officers				29
	Executive Compensation				30
	Compensation Committee Report on Executive Compensation				36
	Audit Committee Report				40
	Stock Price Performance Graph				41
	Security Ownership of Certain Beneficial Owners and Management				42
	Certain Relationships and Related Transactions				44
	Section 16(a) Beneficial Ownership Reporting Compliance				45
	Shareholder Proposals for the 2007 Annual General Meeting				46
	Incorporation of Certain Documents by Reference				46
	Singapore Statutory Financial Statements				46
	Other Matters				47
Singapore Statutory Financial Statements					S-1
	Annex A – Charter of the Audit Committee of the Board of Directors				A-1
	Annex B – Amended and Restated Articles of Association				B-1
	Annex C – 2001 Equity Incentive Plan				C-1

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	•	The affirmative vote by show of hands of at least a majority of the shareholders present and voting at the 2006 Annual General Meeting, or, if a poll is demanded by the chair or by holders of at least 10% of our outstanding shares in accordance with our Articles of Association, a simple majority of the shares voting at the 2006 Annual General Meeting, is required to re-elect the Directors nominated pursuant to Proposals No. 1 and 2, to re-appoint Deloitte & Touche LLP as our independent auditors and to approve the ordinary resolutions contained in Proposal Nos. 4, 5, and 7.

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	•	The affirmative vote by show of hands of at least three-fourths of the shareholders present and voting at the 2006 Annual General Meeting, or, if a poll is demanded in the manner previously described, at least three-fourths of the shares voting at the 2006 Annual General Meeting, is required to approve our Amended and Restated Articles of Association as set forth in Proposal 6.
	•	The affirmative vote of the holders of a majority of all issued and outstanding shares voting in person or by proxy at the Annual General Meeting is required to approve Proposals 8, 9 and 10.

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Nominating and

Corporate

Audit

Compensation

Governance

Finance

Name

Committee

Committee

Committee

Committee

H. Raymond Bingham

X

X

James A. Davidson

X

Michael E. Marks

X

Michael M. McNamara

Rockwell A. Schnabel

Ajay B. Shah

X

X

Richard L. Sharp

X

Lip-Bu Tan

X

X

	Audit Committee

	•	monitor and evaluate periodic reviews of the adequacy of the accounting and financial reporting processes and systems of internal control that are conducted by our financial and senior management, and our independent auditors;
	•	be directly responsible for the appointment, compensation and oversight of the work of our independent auditors (including resolution of any disagreements between our management and the auditors regarding financial reporting); and
	•	facilitate communication among our independent auditors, our financial and senior management and our Board.

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	Compensation Committee

	Nominating and Corporate Governance Committee

	Finance Committee

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	•	annual cash compensation of $40,000, payable quarterly in arrears to each non-employee Director, for services rendered as a director; and
	•	additional annual cash compensation of $10,000, payable quarterly in arrears to the Chairman of the Audit Committee (if appointed) of the Board of Directors for services rendered as Chairman of the Audit Committee and for his or her participation on the Audit Committee; and
	•	additional annual cash compensation of $5,000, payable quarterly in arrears to each non-employee Director for his or her participation on each committee of the Board of Directors on which he or she serves.

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		Fiscal Year				Fiscal Year
		2006				2005
		(In millions)
Audit Fees		$	7.0			$	7.6
Audit-Related Fees			2.2				—
Tax Fees			*				2.6
All Other Fees			—				—
Total:		$	*			$	10.2

*	Note: As of the date of the filing of the Preliminary Proxy Statement, the tax fees had not yet been determined. As a result, this information has been omitted from the Preliminary Proxy Statement but will be included in the Definitive Proxy Statement.

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	•	in connection with strategic transactions and acquisitions;
	•	pursuant to public and private offerings of our ordinary shares as well as instruments convertible into our ordinary shares; and
	•	in connection with our equity compensation plans and arrangements.

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	•	578,621,330 ordinary shares were issued and outstanding;
	•	55,524,248 ordinary shares were reserved for issuance upon the exercise of outstanding options and other awards under our equity compensation plans;
	•	22,537,149 ordinary shares were available for grant under our equity compensation plans; and
	•	18,725,798 shares were reserved for issuance upon conversion of our outstanding convertible notes.

	•	annual cash compensation of $40,000, payable quarterly in arrears, to each of our non-employee Directors for services rendered as a director;
	•	additional annual cash compensation of $10,000, payable quarterly in arrears to the Chairman of the Audit Committee (if appointed) of the Board of Directors for services rendered as Chairman of the Audit Committee and for his or her participation on the Audit Committee and

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	•	additional annual cash compensation of $5,000 payable quarterly in arrears to each non-employee Director for his or her participation on each standing committee of the Board of Directors on which he or she serves.

	•	eliminating the concepts of par value and authorized share capital, pursuant to which the ordinary shares of the Company no longer have any par or nominal value;
	•	eliminating the corresponding concepts of share premium and the issuance of shares at a discount;
	•	enabling a company to repurchase shares out of its capital, as well as from distributable profits; and
	•	allowing ordinary shares that are the subject of a share repurchase by a company to be held as treasury shares instead of being cancelled, as previously required.

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	Changes Relating to the Singapore Companies (Amendment) Act 2005

	•	modification of Article 2 (Interpretation) to clarify that the term “Members” and references to “holders” of shares or a class of shares shall generally not include the Company in its holding of treasury shares;
	•	modification of or deletion of existing provisions to reflect the elimination of the concepts of authorized share capital, share premium, par or nominal value and shares issued at a discount, in Articles 5, 7, 29, 32, 34, 44, 48 through 52, 59, 64(iv), 115, 123, and 133;
	•	addition of a new provision in Article 5 and modification of existing provisions in Articles 6(b), 64(iv), 70 and 73 to provide for the holding of treasury shares or to specify that the Company may not deal with its treasury shares in any matter that is not authorized by or prescribed pursuant to the Singapore Companies Act;
	•	modification of Article 11 (Power to Pay Commission and Brokerage) to address a repeal of the Singapore Companies Act provision relating to the powers to pay certain commissions by providing that the Company may pay commissions or brokerage on any issuance of shares at such rate or amount and in such manner as the Directors may deem fit (Article 11 currently allows for the payment of such commissions, but includes certain limitations on amounts and other requirements intended to conform to the repealed provision of the Singapore Companies Act);
	•	modification of Article 49 (Power to Reduce Capital) to explain the effect of share buy backs on the share capital of the Company when made out of the share capital of the Company;
	•	modification of Articles 133 (Power to Capitalize Profits) and 134 (Implementation of Resolution to Capitalize Profits) to delete the references to the share premium account and the capital redemption reserve fund because, under the Singapore Companies (Amendment) Act 2005, any amounts standing to the credit of the Company’s share premium account and the capital redemption reserve became part of its share capital; and
	•	modification of Articles 133 and 134 to permit the Company, by an Ordinary Resolution of the Shareholders and recommendation of the Board, to issue bonus shares to all of our shareholders on a pro-rata basis without receiving any consideration for such shares. The elimination of the concept of par value pursuant to the Singapore Companies (Amendment) Act 2005 made the issuance of such bonus shares permissible and is in addition to the Company’s current ability to issue bonus shares by capitalizing our reserve accounts or any sum standing to our profit and loss account to our shareholders and applying such sum in paying up in full the bonus shares to be issued.

	Other Substantive Changes

	•	modification of Article 2 (Interpretation) to clarify that any reference in the Articles of Association to any “enactment” is a reference to that enactment as amended or re-enacted from time to time;
	•	modification of Article 19 (New Certificates may be Issued) to delete the references to stamp duty payable on share certificates since, under current law, no stamp duty is payable on share certificates;
	•	modification of Article 22 to provide that the Directors may refuse to register any instrument of transfer of shares unless such instrument is accompanied by a certificate of payment of stamp duty (if any) since registering such an instrument may be an offence under Section 66 of the Singapore Stamp Duties Act, Cap. 312;
	•	deletion of Article 46 (Issue of New Shares to Members), which provides a form of pre-emptive rights to our shareholders, in order to provide our Board with greater flexibility in capital-raising activities;

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	•	modification of Article 49 (Power to Reduce Capital) to clarify that the Company may reduce its share capital by a Special Resolution of our shareholders, which is a restatement of the Company’s power to reduce its share capital under the Singapore Companies Act;
	•	modification of Article 58(ii) (Routine Business) to delete the reference to the term “adopting” so as to clarify that the provision is limited to providing shareholders the opportunity at the Annual General Meeting to read and ask questions in connection with the presentation of the balance sheet, the reports of the Directors and Auditors, and other accounts and documents required to be annexed to the balance sheet;
	•	modification of Article 63 (Adjournment) to clarify that an Annual General Meeting may be adjourned without specifying a particular day for reconvening;
	•	modification of Article 64(ii) (Method of Voting) to clarify that each of the three members required to demand a poll must be entitled to vote at the meeting at which the resolution is put to the vote;
	•	modification of Article 79 (Form of Proxies) to clarify that, as a procedural matter, an appointed proxy shall be deemed to have the right to move any resolution and to speak at the Annual General Meeting but shall not be deemed to have any rights greater than, or in addition to, the rights of the member(s) who appointed such proxy;
	•	deletion of Article 83 (Directors), which identifies the first directors of the Company, and which is no longer required under the Singapore Companies Act;
	•	modification of Articles 90 through 93 and 95 to replace the term “Managing Director” with a broadened reference to the Chief Executive Officer (or any person holding an equivalent position) in order to clarify what is meant by the term “Managing Director”, which the Articles permit the Board to appoint from time to time;
	•	modification of Articles 91 and 95 to provide that the Board may decide whether or not to exempt the position currently referred to as the “Managing Director” from retirement by rotation (Articles 91 and 95 currently provide that such position is automatically exempt from retirement by rotation);
	•	modification of Article 95 to provide that the number of directors subject to retirement by rotation at each Annual General Meeting, if the number of directors taken into account is not a multiple of three, shall be rounded down to the number closest to, but not more than, one-third of the total number of directors that are taken into account (Article 95 currently provides that, if such number of directors is not a multiple of three, the number of directors subject to retirement by rotation shall be rounded up so that not less than one-third of the directors taken into account must retire;
	•	modification of Article 100 (Notice of Intention to Appoint Director) to change the date prior to which shareholders must notify the Company of their intent to nominate a person to be a Director from 10 days before the Annual General Meeting to 45 days prior to the date on which the previous years’ proxy statement was first mailed and to specify what information is required in such notice;

	•	modification of Articles 103 (Meetings of Directors) and 108 (Resolutions in Writing) to expand the permitted use of electronic communications for meetings of the Board and written resolutions of the Board, respectively, and to clarify the requirements of such electronic communications;

	•	modification of Article 112 (General Powers of Directors to Manage Company’s Business) to conform with Section 157A of the Singapore Companies Act, which provides that the powers of management of the Company reside with the Directors of the Company, except for those powers which the Singapore Companies Act or the Company’s Memorandum of Association or Articles of Association specify are to be exercised by the Company in General Meeting;
	•	modification of Article 115 (Directors’ Borrowing Powers) to clarify that in borrowing or raising money the Directors shall comply with any applicable provisions of the Singapore Companies Act and every other applicable statute, and the Articles of Association; and

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	•	modification of Articles 145 (Service of Notice) and 149 (When Service Effected) to permit the Company to use electronic communications to give, send or serve on members, auditors and officers any notice to be given by the Company.

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	•	the date on which our next Annual General Meeting is held or required by law to be held; or
	•	the date on which the authority conferred by the Share Purchase Mandate is revoked or varied.

	•	market purchases on the NASDAQ Global Market or any other stock exchange on which our ordinary shares may for the time being be listed and quoted, through one or more duly licensed dealers appointed by us for that purpose; and/or
	•	off-market purchases (if effected other than on the NASDAQ Global Market or, as the case may be, any other stock exchange on which our ordinary shares may for the time being be listed and quoted), in accordance with an equal access scheme as prescribed by the Companies Act.

	•	offers for the purchase or acquisition of ordinary shares must be made to every person who holds ordinary shares to purchase or acquire the same percentage of their ordinary shares;
	•	all of those persons must be given a reasonable opportunity to accept the offers made; and
	•	the terms of all of the offers must be the same (except differences in consideration that result from offers relating to ordinary shares with different accrued dividend entitlements and differences in the offers solely to ensure that each person is left with a whole number of ordinary shares).

	•	in the case of a market purchase, the highest independent bid or the last independent transaction price, whichever is higher, of our ordinary shares quoted or reported on the NASDAQ Global Market at the time the purchase is effected; and
	•	in the case of an off-market purchase pursuant to an equal access scheme, 150% of the “Prior Day Close Price” of our ordinary shares.

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	•	sell the treasury shares for cash;
	•	transfer the treasury shares for the purposes of or pursuant to an employees’ share scheme;
	•	transfer the treasury shares as consideration for the acquisition of shares in or assets of another company or assets of a person;
	•	cancel the treasury shares; or
	•	sell, transfer or otherwise use the treasury shares for such other purposes as may be prescribed by the Minister for Finance of Singapore.

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	(a) elimination of the two million share limit on the number of ordinary shares subject to stock bonus awards that may be outstanding at any time during the term of the 2001 Plan so that stock bonus awards will be subject only to the existing limitation that we may not issue more than an aggregate of 10 million shares under stock bonuses;
	(b) modification of the automatic option grant to non-employee directors of 12,500 options following each Annual General Meeting to non-employee directors so that the option grant will not be pro-rated based on the service of the director during the prior 12 months; and
	(c) increase of the share reserve by 5,000,000 ordinary shares to an aggregate of 32,000,000 ordinary shares.

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	Discretionary Stock Option/ Stock Bonus Program

	Automatic Option Grant Program

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	•	amend the 2001 Plan to materially increase the maximum number of ordinary shares issuable under the 2001 Plan, the number of ordinary shares for which options may be granted to newly-elected or continuing non- employee directors, or the maximum number of ordinary shares for which any one individual participating in the 2001 Plan may be granted options;
	•	materially modify the eligibility requirements for participation in the 2001 Plan; or
	•	materially increase the benefits accruing to participants in the 2001 Plan.

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	Incentive Stock Options. No taxable income is recognized by the optionee at the time of the option grant, and no taxable income is generally recognized at the time the option is exercised unless the optionee is subject to the alternative minimum tax. The optionee will, however, recognize taxable income in the year in which the purchased shares are sold or otherwise disposed of. For United States federal tax purposes, dispositions are divided into either qualifying or disqualifying. A qualifying disposition occurs if the sale or other disposition is made after the optionee has held the shares for more than two years after the option grant date and more than one year after the exercise date. Upon a qualifying disposition, any gain or loss, measured by the difference between the option exercise price and amount realized on the sale of shares, will be treated as capital gain or loss. If either of these two holding periods is not satisfied, then a disqualifying disposition results. Upon a disqualifying disposition, any gain up to the difference between the option exercise price and the fair market value of the shares on the date of exercise, or, if less, the amount realized on the sale of shares, will be treated as ordinary income. Any additional gain will be capital gain.
	If the optionee makes a disqualifying disposition of the purchased shares, then we may be entitled to a deduction from our income taxed by the United States for the taxable year in which such disposition occurs, equal to the excess of the fair market value of such shares on the option exercise date over the exercise price paid for the shares. In no other instance will we be allowed a deduction with respect to the optionee’s disposition of the purchased shares.
	Non-Statutory Options. No taxable income is recognized by an optionee upon the grant of a non-statutory option. The optionee will, in general, recognize ordinary income, in the year in which the option is exercised, equal to the excess of the fair market value of the purchased shares on the exercise date over the exercise price paid for the shares, and we will be entitled to a deduction with respect to, and be required to satisfy the tax withholding requirements applicable to, such income.
	Stock Bonuses. Upon issuance of shares pursuant to a stock bonus, the employee will have ordinary income in the amount of the fair market value of the issued stock on the date of issuance. Any further gain or loss upon disposition of the stock will be short- or long-term capital gain or loss, depending on the employee’s holding period as measured from the date of issuance. We will generally have a withholding obligation, and be entitled to a deduction, in the amount the employee recognizes as ordinary income.
	Section 162(m). Any United States income tax deductions that would otherwise be available to us are subject to a number of restrictions under the Internal Revenue Code, including Section 162(m), which can limit the deduction for compensation paid to our Chief Executive Officer and our other four most highly compensated executive officers.

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	•	our Chief Executive Officer;
	•	each of our four other most highly compensated executive officers;
	•	all current executive officers as a group; and
	•	all employees, including all current officers who are not executive officers, as a group.

Name		Age				Position
Michael M. McNamara			49				Chief Executive Officer
Thomas J. Smach			46				Chief Financial Officer
Nicholas Brathwaite			47				Chief Technology Officer
Peter Tan			57			President and Managing Director, Flextronics Asia
Werner Widmann			54				President, Multek

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															Long Term
															Compensation
															Awards
			Annual Compensation
															Securities
			Fiscal												Underlying				All Other
Name and Principal Position			Year				Salary				Bonus				Options				Compensation
Michael E. Marks(1)				2006			$	738,750			$	7,423,214	(2)			—			$	1,565,859	(3)
	Chief Executive Officer			2005				985,000				2,795,350				2,375,000				1,567,595	(4)
				2004				785,442				605,000				—				17,599	(5)
Michael M. McNamara(6)				2006			$	850,000			$	1,100,000	(7)			3,000,000			$	4,510,108	(8)
	Chief Executive Officer			2005				800,000				1,143,860				600,000				6,780	(9)
				2004				700,110				393,750				—				17,183	(10)
Thomas J. Smach(14)				2006			$	530,000			$	667,500	(11)			500,000			$	2,709,407	(12)
	Chief Financial Officer			2005				441,250				642,750				500,000				12,075	(13)
Nicholas E. Brathwaite(14)				2006			$	530,000			$	967,500	(15)			—			$	2,409,832	(16)
	Chief Technology Officer
Werner Widmann(14)				2006			$	358,545			$	298,394	(17)			—			$	551,291	(18)
	President, Multek
Peter Tan(14)				2006			$	350,000			$	163,013	(18)			250,000			$	3,225,524	(20)
	President and Managing Director, Flextronics Asia			2005				350,000				251,628				350,000				24,640	(21)

	(1)	Mr. Marks retired from his position as Chief Executive Officer and was appointed to serve as Chairman of our Board of Directors beginning January 1, 2006.
	(2)	Bonus payments to Mr. Marks for fiscal year 2006 consist of quarterly performance-based bonuses totaling $1,477,500 and an acceleration of the balance outstanding under Mr. Marks’s Contingent Share Award Agreement as of November 30, 2006, which totaled $5,945,714 and was deferred pursuant to such agreement.

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	(3)	Consists of 401(k) plan contributions of $4,076, life insurance premium payments of $600, disability insurance premium payments of $3,282, health insurance premium payments of $3,228 and imputed income for group term life insurance of $387. Also includes lump sum payment of $1,554,286 made on July 3, 2006 pursuant to the terms of Mr. Mark’s agreement with us dated November 30, 2005.
	(4)	Consists of contributions to Mr. Marks’s Special Deferred Compensation Plan of $1,554,286, 401(k) plan contributions of $8,374, life insurance premium payments of $660, disability insurance premium payments of $3,939 and imputed income for group term life insurance of $336.
	(5)	Consists of 401(k) plan contributions of $7,100, life insurance premium payments of $867, disability insurance premium payments of $5,985, imputed income for group term life insurance of $276 and a vehicle allowance of $3,371.
	(6)	Mr. McNamara was appointed to the position of Chief Executive Officer on January 1, 2006.
	(7)	Bonus payment to Mr. McNamara for fiscal year 2006 consists of quarterly performance-based bonuses totaling $600,000. Also includes $500,000, the portion of Mr. McNamara’s deferred long-term incentive bonus which vested on April 1, 2006 under the terms of the Flextronics International USA, Inc. Senior Executive Deferred Compensation Plan.
	(8)	Consists of 401(k) plan contributions of $8,450, life insurance premium payments of $1,284, disability insurance premium payments of $194 and imputed income for group term life insurance of $180. Also includes $4,500,000, the unvested amount of Mr. McNamara’s deferred long-term incentive bonus awarded on July 7, 2005 and deferred under the terms of the Flextronics International USA, Inc. Senior Executive Deferred Compensation Plan.
	(9)	Consists of 401(k) plan contributions of $6,600 and imputed income for group term life insurance of $180.

(10)	Consists of 401(k) plan contributions of $6,000, life insurance premium payments of $1,431, disability insurance premium payments of $2,047, imputed income for group term life insurance of $180, a vehicle allowance of $70 and personal use of the company jet of $7,455.
(11)	Bonus payment to Mr. Smach for fiscal year 2006 consists of quarterly performance-based bonuses totaling $367,500. Also includes $300,000, the portion of Mr. Smach’s deferred long-term incentive bonus which vested on April 1, 2006 under the terms of the Flextronics International USA, Inc. Senior Executive Deferred Compensation Plan.
(12)	Consists of 401(k) plan contributions of $8,313, life insurance premium payments of $720, disability insurance premium payments of $194 and imputed income for group term life insurance of $180. Also includes $2,700,000, the unvested amount of Mr. Smach’s deferred long-term incentive bonus awarded on July 7, 2005 and deferred under the terms of the Flextronics International USA, Inc. Senior Executive Deferred Compensation Plan.
(13)	Consists of 401(k) plan contributions of $6,188, life insurance premium payments of $852, imputed income for group term life insurance of $135 and a vehicle allowance of $4,900.
(14)	Mr. Brathwaite and Mr. Widmann were appointed as Executive Officers on February 7, 2006. Mr. Smach was appointed Chief Financial Officer during fiscal year 2005. Mr. Tan was appointed as an Executive Officer during fiscal year 2005.
(15)	Bonus payment to Mr. Brathwaite for fiscal year 2006 consists of quarterly performance-based bonuses totaling $367,500. Also includes $600,000, the portion of Mr. Brathwaite’s deferred long-term incentive bonus which vested on April 1, 2006 under the terms of the Flextronics International USA, Inc. Senior Executive Deferred Compensation Plan.
(16)	Consists of 401(k) plan contributions of $8,738, life insurance premium payments of $720, disability insurance premium payments of $194 and imputed income for group term life insurance of $180. Also includes $2,400,000, the unvested amount of Mr. Brathwaite’s deferred long-term incentive bonus awarded on July 7, 2005 and deferred under the terms of the Flextronics International USA, Inc. Senior Executive Deferred Compensation Plan.
(17)	Bonus payment to Mr. Widmann for fiscal year 2006 consists of quarterly performance-based bonuses totaling $298.394.

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(18)	Consists of German pension payments of $13,873, health insurance premium payments of $3,917 and a vehicle allowance of $20,290. Also includes long-term incentive bonus of $400,000 and €93,750 paid on July 7, 2005 and deferred pursuant to Mr. Widmann’s Deferred Compensation Plan. For purposes of this table, the €93,750 payment was converted to US dollars based on the exchange rate on the payment date.
(19)	Bonus payment to Mr. Tan for fiscal year 2006 consists of quarterly performance-based bonuses totaling $163,013.
(20)	Consists of life insurance premium payments of $617, health insurance premium payments of $457 and a vehicle allowance of $24,450. Also includes a long-term incentive bonus of $3,200,000, paid in July 2005 and deferred pursuant to Mr. Tan’s Deferred Compensation Plan.
(21)	Consists of health insurance premium payments of $330, disability insurance premium payments of $150 and a vehicle allowance of $24,160.

		Individual Grants
						Percent of
						Total
		Number of				Options
		Securities				Granted to
		Underlying				Employees				Exercise								Grant Date
		Options				in Fiscal				Price per				Expiration				Present
Name		Granted				Year 2006				Share				Date				Value($)
Michael E. Marks			—				—				—				—				—
Michael M. McNamara			3,000,000	(1)			25.98	%		$	12.37				05/13/2015			$	11,772,300
Thomas J. Smach			500,000	(1)			4.33	%		$	12.37				05/13/2015			$	1,962,050
Nicholas E. Brathwaite			—				—				—				—				—
Werner Widmann			—				—				—				—				—
Peter Tan			250,000	(1)			2.16	%		$	12.37				05/13/2015			$	981,025

(1)	The vesting of these options was accelerated to February 7, 2006.

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										Number of Securities								Value of Unexercised
										Underlying Unexercised								In-the-Money Options at
		Shares								Options at March 31, 2006								March 31, 2006
		Acquired				Value
Name		on Exercise				Realized				Vested				Unvested				Vested				Unvested
Michael E. Marks			1,000,000			$	5,513,300				3,975,000				3,000,000			$	2,450,000			$	7,350,000
Michael M. McNamara			—				—				5,279,167				1,320,833				2,866,000				2,940,000
Thomas J. Smach			—				—				2,067,917				327,083				1,580,250				61,250
Nicholas E. Brathwaite			250,625				1,360,126				1,996,465				29,167				172,010				71,459
Werner Widmann			5,000				34,130				206,959				96,041				7,508				6,832
Peter Tan			—				—				746,375				121,875				242,460				37,415

	Agreement with Michael E. Marks

	•	Acceleration of the balance outstanding under Mr. Marks’s Contingent Share Award Agreement as of November 30, 2006, which totaled $5,945,714 and which was deferred pursuant to such agreement;
	•	Cash payment of $1,554,286, payable on July 3, 2006;
	•	Eligibility to receive all cash compensation paid to non-employee directors from January 2, 2006 until the 2006 Annual General Meeting, at which time Mr. Marks will be eligible to receive all cash and equity compensation paid to non-employee directors;
	•	Provision by the Company of medical and dental benefits for the remainder of Mr. Marks’s life for Mr. Marks and his spouse (reduced to the extent Mr. Marks receives comparable benefits from another employer);
	•	Personal use of our corporate jets beginning on the termination date, subject to availability, and subject to Mr. Marks’s reimbursement of our variable cost as determined by Flextronics USA in its sole discretion; and
	•	Certain provisions relating to options to purchase our ordinary shares held by Mr. Marks, including immediate vesting of all options with an exercise price of $11.53 per share; cancellation of an option to

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		purchase 1,000,000 shares and extension of the post-termination exercise period for all outstanding options with an exercise price greater than $10.56 per share.

	Supplemental Executive Retirement Plan for Michael E. Marks

	Deferred Compensation Arrangements

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	Change in Control Arrangements Under Option Agreements

		(A)				(B)				(C)
										Number of Ordinary Shares
										Remaining Available for
		Number of Ordinary								Future Issuance Under
		Shares to be Issued				Weighted-Average				Equity Compensation Plans
		Upon Exercise of				Exercise Price of				(Excluding Ordinary Shares
Plan Category		Outstanding Options				Outstanding Options				Reflected in Column (A))
Equity compensation plans approved by shareholders			31,813,161			$	13.24				20,755,277	(1)
Equity compensation plans not approved by shareholders(2)(3)(4 )			17,883,064			$	11.72				4,455,700	(5)
Total			49,696,225			$	12.69				25,210,977

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(1)	Consists of 20,755,277 ordinary shares available for grant under the 2001 Equity Incentive Plan. There are no additional ordinary shares available for grant under the 1993 Equity Incentive Plan.
(2)	The 2004 Award Plan for New Employees, which we refer to as the 2004 Plan, was established in October 2004. The purpose of the 2004 Plan is to provide incentives to attract, retain and motivate eligible persons whose potential contributions are important to our success by offering such persons an opportunity to participate in our future performance through stock awards. Grants under the 2004 Plan may be granted only to persons who: (a) were not previously an employee or director of Flextronics or subsidiary of Flextronics or (b) have either (i) completed a period of bona fide non-employment by Flextronics, and any subsidiary of Flextronics, of at least 1 year, or (ii) are returning to service as an employee of Flextronics, or any subsidiary of Flextronics, after a period of bona fide non-employment of less than 1 year due to Flextronics’s acquisition of such person’s employer; and then only as an incentive to such persons entering into employment with Flextronics or any subsidiary of Flextronics. We may only grant nonqualified stock options or stock bonuses under the 2004 Plan. The 2004 Plan is administered by the Compensation Committee, which is comprised of two independent directors. The 2004 Plan provides for grants of up to 7,500,000 shares. The exercise price of options granted under the 2004 Plan is determined by the Compensation Committee and may not be less than the fair market value of the underlying stock on the date of grant. Options granted under the 2004 Plan generally vest over four years and generally expire 10 years from the date of grant.
(3)	Our 2002 Interim Incentive Plan, which we refer to as the 2002 Plan, was adopted by our Board in May 2002. The adoption of the 2002 Plan was necessitated by our internal growth, our multiple acquisitions and the requirement to provide equity compensation for employees consistent with competitors and peer companies. The Board reserved an aggregate of 20,000,000 ordinary shares for issuance under the 2002 Plan. The 2002 Plan provides for the grant to qualified persons of non-statutory stock options to purchase our ordinary shares and stock bonus awards. Shares subject to options granted pursuant to the 2002 Plan that expire or terminate for any reason without being exercised or stock bonus awards that do not vest will again become available for grant and issuance pursuant to awards under the 2002 Plan. Options granted under the 2002 Plan have an exercise price of not less than 85% of the fair market value of the underlying ordinary shares on the date of grant. Options issued under the 2002 Plan generally vest over a four-year period and expire 10 years from the date of grant. The other general terms of the 2002 Plan are similar to the 2001 Equity Incentive Plan.
(4)	Companies acquired by us have adopted option plans, which we refer to as the Assumed Plans. Options to purchase a total of 5,346,331 ordinary shares under the Assumed Plans remained outstanding. These options have a weighted-average exercise price of $6.01 per share. These options have been converted into options to purchase our ordinary shares on the terms specified in the applicable acquisition agreement, but are otherwise administered in accordance with terms of the Assumed Plans. Options under the Assumed Plans generally vest over four years and expire 10 years from the date of grant. No further awards may be made under the Assumed Plans. Options outstanding under the Assumed Plans are not included in the above table.
(5)	Of these, 1,875,714 ordinary shares remained available for grant under the 2002 Plan and 2,579,986 ordinary shares remained available for grant under the 2004 Plan. On May 12, 2005, our Board of Directors approved an increase of 2.5 million ordinary shares available for grant under the 2004 Plan.

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*	$100 invested on 3/31/01 in stock or index, including reinvestment of dividends. Fiscal year ending March 31.

			2001					2002					2003					2004					2005					2006
Flextronics International Ltd.			$	100.00				$	121.67				$	58.13				$	113.93				$	80.27				$	69.00
S&P 500 Index				100.00					100.24					75.42					101.91					108.73					121.48
Peer Group				100.00					75.33					30.98					55.38					40.32					46.69

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	•	each shareholder known to us to be the beneficial owner of more than 5% of our outstanding ordinary shares;
	•	each Named Executive Officer;
	•	each director; and
	•	all executive officers and directors as a group.

			Shares Beneficially
			Owned
			Number of
Name and Address of Beneficial Owner			Shares				Percent
5% Shareholders:
Entities associated with AXA Financial, Inc.(1)				92,988,801				16.07	%
	1290 Avenue of the Americas New York, NY 10104
Entities associated with FMR Corp.(2)				59,208,030				10.23
	82 Devonshire Street Boston, MA 02109
Entities associated with Capital Group International, Inc.(3)				42,843,810				7.41
	11100 Santa Monica Boulevard Los Angeles, CA 90025
Capital Research and Management Company(4)				38,915,000				6.73
	333 South Hope Street Los Angeles, CA 90071
Wellington Management Company, LLP(5)				31,961,259				5.52
	75 State Street Boston, MA 02109

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		Shares Beneficially
		Owned
		Number of
Name and Address of Beneficial Owner		Shares				Percent
Named Executive Officers and Directors:
Michael E. Marks(6)			8,193,959				1.40
Michael M. McNamara(7)			5,283,380				*
Richard L. Sharp(8)			3,219,694				*
Thomas J. Smach(9)			1,629,673				*
Nicholas E. Brathwaite(10)			1,041,332				*
Peter Tan(11)			687,375				*
Werner Widmann(12)			173,625				*
James A. Davidson(13)			144,559				*
Lip-Bu Tan(14)			97,762				*
Ajay B. Shah			—				*
H. Raymond Bingham			—				*
Rockwell A. Schnabel			—				*
All executive officers and directors as a group (12 persons)(15)			20,471,359				3.46	%

	*	Less than 1%.

	(1)	Based on information supplied by AXA Financial, Inc. in an amended Schedule 13G filed with the SEC on February 14, 2006. Alliance Capital Management L.P. is deemed to have sole voting power for 68,488,644 of these shares, shared voting power for 7,988,010 of these shares, sole dispositive power for 92,944,633 of these shares and shared dispositive power for 38,468 of these shares. AXA Equitable Life Insurance Company has sole dispositive power for 5,700 of these shares. A majority of these shares are held by unaffiliated third-party client accounts managed by Alliance Capital Management L.P., as investment adviser. Each of Alliance Capital Management L.P. and AXA Equitable Life Insurance Company is a subsidiary of AXA Financial, Inc.
	(2)	Based on information supplied by FMR Corp. in an amended Schedule 13G filed with the SEC on February 14, 2006. FMR Corp., as a result of acting as an investment adviser, is deemed to beneficially own all of these shares. FMR Corp. is deemed to have sole voting power for 1,909,190 of these shares and sole dispositive power for 59,208,030 of these shares.
	(3)	Based on information supplied by Capital Group International, Inc. in a Schedule 13G filed with the SEC on February 9, 2006. Capital Group International, Inc. as a result of being the parent holding company of a group of investment management companies, is deemed to have sole voting power for 35,621,610 of these shares and sole dispositive power for 42,843,810 of these shares. Capital Guardian Trust Company, a wholly owned subsidiary of Capital Group International, Inc. is deemed to have sole voting power for 22,914,910 of these shares and sole dispositive power for 28,269,210 of these shares.
	(4)	Based on information supplied by Capital Research and Management Company in an amended Schedule 13G filed with the SEC on February 6, 2006. Capital Research and Management Company, as a result of acting as an investment adviser, is deemed to beneficially own all of these shares. Capital Research and Management Company is deemed to have sole voting power for 22,850,000 of these shares and sole dispositive power for 38,915,000 of these shares.
	(5)	Based on information supplied by Wellington Management Company, LLP in a Schedule 13G filed with the SEC on February 14, 2006. Wellington Management Company, LLP, as a result of acting as an investment adviser, is deemed to have shared voting power for 18,869,737 of these shares and shared dispositive power for 31,961,259 of these shares.
	(6)	Includes 2,561,626 shares held by Epping Investment Holdings, LLC of which Mr. Marks and his spouse are managing members, 633,333 shares held by the Marks Family Trust, 24,000 shares held by a

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		trust for Mr. Marks’s minor children and 4,975,000 shares subject to options exercisable within 60 days of May 31, 2006.
	(7)	Includes 5,045,833 shares subject to options exercisable within 60 days of May 31, 2006.
	(8)	Includes 480,000 shares beneficially owned by Bethany Limited of which Mr. Sharp is a manager, and in which Mr. Sharp owns a 1% interest. Mr. Sharp disclaims beneficial ownership in the shares owned by Bethany Limited except to the extent of his pecuniary interest arising from his partnership interest in Bethany Limited. Also includes 457,000 shares held directly by RLS 2000 Charitable Remainder Unitrust of which Mr. Sharp is a co-trustee, and 155,000 shares held directly by RLS 1998 Charitable Remainder Unitrust, of which Mr. Sharp is a co-trustee. Also includes 172,146 shares subject to options exercisable within 60 days of May 31, 2006.
	(9)	Includes 1,509,583 shares subject to options exercisable within 60 days of May 31, 2006.

(10)	Includes 1,025,632 shares subject to options exercisable within 60 days of May 31, 2006.
(11)	Includes 671,375 shares subject to options exercisable within 60 days of May 31, 2006.
(12)	Includes 173,625 shares subject to options exercisable within 60 days of May 31, 2006.
(13)	Includes 45,740 shares held by the Davidson Living Trust of which Mr. Davidson is a trustee, 7,898 shares held by Silver Lake Technology Management, L.L.C. of which Mr. Davidson is Managing Director, 5,000 shares held directly by Mr. Davidson, 94 shares held by the John Alexander Davidson 2000 Irrevocable Trust of which Mr. Davidson is a trustee and 85,827 shares subject to options exercisable within 60 days of May 31, 2006. Mr. Davidson received these options in connection with his service as a member of our Board. Under Mr. Davidson’s arrangements with respect to director compensation, these 85,827 shares issuable upon exercise of options are expected to be assigned by Mr. Davidson to Silver Lake Technology Management, L.L.C. Does not include 18,571,427 shares previously issuable upon the conversion of $195.0 million in aggregate principal amount of our Convertible Junior Subordinated Notes due 2008 held by funds affiliated with Silver Lake Partners, of which Mr. Davidson is a co-founder and managing director. In July 2006, the Notes were amended to among other things, (i) extend the maturity date of the Notes to July 31, 2009 and (ii) provide for net share settlement of the Notes upon maturity. The Notes may no longer be converted or redeemed prior to maturity, other than in connection with certain change of control transactions, and upon maturity will be net share settled by the payment of cash equal to the face amount of the Notes and the issuance of shares with a value equal to any conversion value in excess of the face amount of the Notes. Mr. Davidson disclaims beneficial ownership of the Notes and any underlying shares, except to the extent of his pecuniary interest therein.
(14)	Includes 12,898 shares held by the Lip-Bu Tan and Ysa Loo, TTEES of which Mr. Tan is a co-trustee and 84,864 shares subject to options exercisable within 60 days of May 31, 2006.
(15)	Includes 13,743,885 shares subject to options exercisable within 60 days of May 31, 2006.

	•	in which the amount involved exceeded or will exceed $60,000; and
	•	in which any director, nominee, executive officer, holder of more than 5% of our ordinary shares or any member of their immediate family had or will have a direct or indirect material interest.

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		Amount of				Interest
Date		Loan				Rate
July 2000		$	311,421				6.40	%
August 2000			204,155				6.22
November 2000			1,001,831				6.09
August 2001			151,697				5.72
November 2001			117,611				5.05
December 2001			33,739				5.05

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	•	Item 8, “Financial Statements and Supplementary Data”;
	•	Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; and
	•	Item 7A, “Quantitative and Qualitative Disclosures About Market Risk.”

	•	our consolidated financial statements (which are identical to those included in the Annual Report on Form 10-K, described above);
	•	supplementary financial statements (which reflect solely our standalone financial results, with our subsidiaries accounted for under the equity method rather than consolidated, and which we refer to in this section as the Parent financial statements);

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	•	a Directors’ Report; and
	•	the Auditors’ Report of Deloitte & Touche, our Singapore statutory auditors for the fiscal year ended March 31, 2006.

Bernard Liew Jin Yang	Yap Lune Teng

Joint Secretary	Joint Secretary

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		Page
Report of the Directors		S-2
Statement of Directors		S-6
Auditors’ Report to the Members of Flextronics International Ltd.		S-7
Consolidated Financial Statements of Flextronics International Ltd. and its Subsidiaries		S-8
Supplementary Financial Statements of Flextronics International Ltd. (Parent Company)		S-49

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	H. Raymond Bingham
	James A. Davidson
	Michael E. Marks
	Michael M McNamara
	Rockwell A. Schnabel
	Ajay B. Shah
	Richard L. Sharp
	Lip-Bu Tan

		Interest Held
		As of March 31,
		2005 or Date of
		Appointment as
		Director During				As of
Ordinary Shares, no Par Value, in Flextronics International Ltd.		the Year				March 31, 2006
H. Raymond Bingham *			—				—
James A. Davidson			50,834				50,834
Michael E. Marks			3,570,059				3,218,959
Michael M. McNamara *			597,547				237,547
Rockwell A. Schnabel **			—				—
Ajay B. Shah *			—				—
Richard L. Sharp			3,037,952				3,047,548
Lip-Bu Tan			5,000				12,898

*	Messrs. Bingham, McNamara and Shah joined the Board of Directors on October 14, 2005.

**	Mr. Schnabel joined the Board of Directors on February 7, 2006.

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		As of March 31,
		2005 or Date of
		Appointment as
		Director During				As of
		the Year				March 31, 2006				Exercise Price				Exercisable Period
H. Raymond Bingham *			—				25,000			$	11.8200				10.14.05 to 10.14.10
James A. Davidson			25,000				25,000			$	9.3500				03.20.03 to 03.20.08
			6,610				6,610			$	14.2200				09.30.03 to 09.30.08
			20,000				20,000			$	17.5000				01.22.04 to 01.22.09
			20,000				20,000			$	10.0800				08.12.04 to 08.12.09
			12,500				12,500			$	13.5300				09.23.04 to 09.23.09
			—				25,000			$	12.6200				05.17.05 to 05.17.10
			—				12,500			$	12.6600				09.20.05 to 09.20.10
Michael E. Marks			1,000,000				—			$	23.1875				12.20.00 to 12.20.10
			200,000				200,000			$	13.9800				09.21.01 to 09.21.11
			400,000				400,000			$	15.9000				10.01.01 to 10.01.11
			5,000,000				4,000,000			$	7.9000				07.01.02 to 07.01.12
			1,000,000				1,000,000			$	17.6900				04.21.04 to 04.21.14
			1,375,000				1,375,000			$	11.5300				08.23.04 to 08.23.14
Michael M. McNamara *			150,000				150,000			$	13.9800				09.21.01 to 09.21.11
			250,000				250,000			$	15.9000				10.01.01 to 10.01.11
			2,000,000				2,000,000			$	7.9000				07.01.02 to 07.01.12
			600,000				600,000			$	8.8400				09.03.02 to 09.03.12
			400,000				400,000			$	16.0700				04.30.04 to 04.30.14
			200,000				200,000			$	11.5300				08.23.04 to 08.23.14
			3,000,000				3,000,000			$	12.3700				05.13.05 to 05.13.15
Rockwell A. Schnabel **			—				25,000			$	10.1700				02.07.06 to 02.07.11
Ajay B. Shah *			—				25,000			$	11.8200				10.14.05 to 10.14.10
Richard L. Sharp			6,000				—			$	42.0313				09.21.00 to 09.21.05
			6,000				6,000			$	14.1000				09.20.01 to 09.20.06
			10,000				10,000			$	7.9000				07.01.02 to 07.01.07
			12,500				12,500			$	9.5100				08.29.02 to 08.29.07
			12,500				12,500			$	14.2200				09.30.03 to 09.30.08
			20,000				20,000			$	17.5000				01.22.04 to 01.22.09
			20,000				20,000			$	10.0800				08.12.04 to 08.12.09
			12,500				12,500			$	13.5300				09.23.04 to 09.23.09
			—				100,000			$	12.6200				05.17.05 to 05.17.10
			—				12,500			$	10.4200				01.03.06 to 01.03.11
Lip-Bu Tan			25,000				25,000			$	9.0000				04.03.03 to 04.03.08
			6,165				6,165			$	14.2200				09.30.03 to 09.30.08
			20,000				20,000			$	17.5000				01.22.04 to 01.22.09
			20,000				20,000			$	10.0800				08.12.04 to 08.12.09
			12,500				12,500			$	13.5300				09.23.04 to 09.23.09
			—				25,000			$	12.6200				05.17.05 to 05.17.10
			—				12,500			$	12.6600				09.20.05 to 09.20.10

*	Messrs. Bingham, McNamara and Shah joined the Board of Directors on October 14, 2005.

**	Mr. Schnabel joined the Board of Directors on February 7, 2006.

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	2004 Award Plan (the “2004 Plan”)

	2002 Interim Incentive Plan (the “2002 Plan”)

	2001 Equity Incentive Plan (the “2001 Plan”)

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	Employee Share Purchase Plan (the “ESPP”)

/s/ MICHAEL E. MARKS		/s/ MICHAEL M. MCNAMARA
Director		Director

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/s/ MICHAEL E. MARKS		/s/ MICHAEL M. MCNAMARA
Director		Director

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	a) the statutory financial statements are properly drawn up in accordance with the provisions of the Singapore Companies Act, Cap. 50 (“Act”) and accounting principles generally accepted in the United States of America (the use of which is approved by the Accounting and Corporate Regulatory Authority of Singapore) so as to give a true and fair view of the state of affairs of the Company and of the Parent as at March 31, 2006, and of the results, changes in equity and cash flows of the Company for the financial year then ended; and
	b) the accounting and other records required by the Act to be kept by the Parent and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

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				March 31,
				2006				2005
				(In thousands except
				share amounts)
ASSETS
Current assets:
	Cash and cash equivalents			$	942,859			$	869,258
	Accounts receivable, net of allowance for doubtful accounts of $17,749 and $26,641 as of March 31, 2006 and 2005, respectively				1,496,520				1,787,006
	Inventories				1,738,310				1,513,715
	Deferred income taxes				9,643				11,614
	Current assets of discontinued operations				89,509				79,053
	Other current assets				620,095				526,519
		Total current assets			4,896,936				4,787,165
Property and equipment, net					1,586,486				1,669,876
Deferred income taxes					646,431				687,146
Goodwill					2,676,727				2,965,867
Other intangible assets, net					115,064				81,644
Long-term assets of discontinued operations					574,384				494,019
Other assets					462,379				324,049
		Total assets		$	10,958,407			$	11,009,766
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
	Bank borrowings, current portion of long-term debt and capital lease obligations			$	106,099			$	26,140
	Accounts payable				2,758,019				2,505,719
	Accrued payroll				184,483				269,532
	Current liabilities of discontinued operations				57,213				66,669
	Other current liabilities				852,490				1,012,134
		Total current liabilities			3,958,304				3,880,194
Long-term debt and capital lease obligations, net of current portion					1,488,975				1,709,011
Long-term liabilities of discontinued operations					30,578				53,189
Other liabilities					125,903				143,324
Commitments and contingencies (Note 7)
Shareholders’ equity
	Ordinary shares, no par value; 578,141,566 and 568,329,662 shares issued and outstanding as of March 31, 2006 and 2005, respectively				5,572,574				5,489,764
	Accumulated deficit				(241,438	)			(382,600	)
	Accumulated other comprehensive income				27,565				123,683
	Deferred compensation				(4,054	)			(6,799	)
		Total shareholders’ equity			5,354,647				5,224,048
		Total liabilities and shareholders’ equity		$	10,958,407			$	11,009,766

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			Fiscal Year Ended March 31,
			2006				2005				2004
			(In thousands, except per share amounts)
Net sales			$	15,287,976			$	15,730,717			$	14,479,262
Cost of sales				14,354,461				14,720,532				13,676,855
Restructuring charges				185,631				78,381				474,068
	Gross profit			747,884				931,804				328,339
Selling, general and administrative expenses				463,946				525,607				469,229
Intangible amortization				37,160				33,541				34,543
Restructuring charges				30,110				16,978				54,785
Other income, net				(17,200	)			(13,491	)			—
Interest and other expense, net				92,951				89,996				77,241
Gain on divestiture of operations				(23,819	)			—				—
Loss on early extinguishment of debt				—				16,328				103,909
	Income (loss) from continuing operations before income taxes			164,736				262,845				(411,368	)
Provision for (benefit from) income taxes				54,218				(68,652	)			(64,958	)
	Income (loss) from continuing operations		$	110,518			$	331,497			$	(346,410	)
Discontinued operations
Income (loss) from discontinued operations, net of tax				30,644				8,374				(5,968	)
	Net income (loss)		$	141,162			$	339,871			$	(352,378	)
Earnings (loss) per share:
Income (loss) from continuing operations:
	Basic		$	0.19			$	0.60			$	(0.66	)
	Diluted		$	0.18			$	0.57			$	(0.66	)
Income (loss) from discontinued operations:
	Basic		$	0.05			$	0.02			$	(0.01	)
	Diluted		$	0.05			$	0.01			$	(0.01	)
Net income(loss):
	Basic		$	0.25			$	0.61			$	(0.67	)
	Diluted		$	0.24			$	0.58			$	(0.67	)
Weighted average shares used in computing per share amounts:
	Basic			573,520				552,920				525,318
	Diluted			600,604				585,499				525,318

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			Fiscal Year Ended March 31,
			2006				2005				2004
			(In thousands)
Net income (loss)			$	141,162			$	339,871			$	(352,378	)
Other comprehensive income (loss):
	Foreign currency translation adjustment, net of taxes			(100,472	)			56,255				105,963
	Unrealized holding gain (loss) on investments and derivative instruments, net of taxes			4,354				(10,677	)			5,561
Comprehensive income (loss)			$	45,044			$	385,449			$	(240,854	)

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														Accumulated
		Ordinary Shares												Other
														Comprehensive								Total
		Shares								Accumulated				Income				Deferred				Shareholders’
		Outstanding				Amount				Deficit				(Loss)				Compensation				Equity
		(In thousands)
BALANCE AT MARCH 31, 2003			520,228			$	4,951,679			$	(370,093	)		$	(33,419	)		$	(6,147	)		$	4,542,020
Issuance of ordinary shares for acquisitions			517				3,162				—				—				—				3,162
Exercise of stock options			8,235				54,825				—				—				—				54,825
Ordinary shares issued under Employee Stock Purchase Plan			718				6,288				—				—				—				6,288
Issuance of restricted ordinary shares			246				—				—				—				—				—
Net loss			—				—				(352,378	)			—				—				(352,378	)
Deferred stock compensation, net of cancellations			—				2,171				—				—				(2,171	)			—
Amortization of deferred stock compensation			—				—				—				—				1,772				1,772
Unrealized gain on investments and derivative instruments, net of taxes			—				—				—				5,561				—				5,561
Foreign currency translation, net of taxes			—				—				—				105,963				—				105,963
BALANCE AT MARCH 31, 2004			529,944				5,018,125				(722,471	)			78,105				(6,546	)			4,367,213
Issuance of ordinary shares for acquisitions			10,004				127,226				—				—				—				127,226
Exercise of stock options			3,182				29,784				—				—				—				29,784
Modification of stock option grants (Note 11)			—				5,575				—				—				—				5,575
Ordinary shares issued under Employee Stock Purchase Plan			561				6,817				—				—				—				6,817
Sales of ordinary shares in public offering, net of offering costs of $4,636			24,331				299,500				—				—				—				299,500
Issuance of restricted ordinary shares			308				329				—				—				—				329
Net income			—				—				339,871				—				—				339,871
Deferred stock compensation, net of cancellations			—				2,408				—				—				(2,408	)			—
Amortization of deferred stock compensation			—				—				—				—				2,155				2,155
Unrealized loss on investments and derivative instruments, net of taxes			—				—				—				(10,677	)			—				(10,677	)
Foreign currency translation, net of taxes			—				—				—				56,255				—				56,255
BALANCE AT MARCH 31, 2005			568,330				5,489,764				(382,600	)			123,683				(6,799	)			5,224,048
Issuance of ordinary shares for acquisitions			2,526				27,907				—				—				—				27,907
Exercise of stock options			5,562				41,052				—				—				—				41,052
Shares issued for debt conversion			476				5,000				—				—				—				5,000
Ordinary shares issued under Employee Stock Purchase Plan			914				8,934				—				—				—				8,934
Issuance of restricted ordinary shares			293				—				—				—				—				—
Shares issued for board of directors compensation			41				499				—				—				—				499
Net income			—				—				141,162				—				—				141,162
Deferred stock compensation, net of cancellations			—				(582	)			—				—				582				—
Amortization of deferred stock compensation			—				—				—				—				2,163				2,163
Unrealized loss on investments and derivative instruments, net of taxes			—				—				—				4,354				—				4,354
Foreign currency translation, net of taxes			—				—				—				(100,472	)			—				(100,472	)
BALANCE AT MARCH 31, 2006			578,142			$	5,572,574			$	(241,438	)		$	27,565			$	(4,054	)		$	5,354,647

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					Fiscal Year Ended March 31,
					2006				2005				2004
					(In thousands)
Cash flows from operating activities:
Net income (loss)					$	141,162			$	339,871			$	(352,378	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Depreciation, amortization and impairment charges					390,828				373,670				662,798
	Gain on sale of equipment					(8,473	)			(1,752	)			(2,206	)
	Provision for doubtful accounts					606				4,848				1,256
	Equity in earnings (losses) of associated companies and other charges, net					(16,831	)			2,785				(181	)
	Stock compensation					2,662				2,155				1,772
	Deferred income taxes					47,953				(84,070	)			(97,171	)
	Gain on divestitures of operations					(67,569	)			—				—
	Changes in operating assets and liabilities, net of acquisitions:
		Accounts receivable				172,638				110,907				(381,948	)
		Inventories				(220,988	)			(105,126	)			(40,302	)
		Other assets				(171,460	)			61,341				(139,691	)
		Accounts payable and other current liabilities				278,828				19,636				535,749
			Net cash provided by operating activities			549,356				724,265				187,698
Cash flows from investing activities:
	Purchases of property and equipment, net of disposition					(251,174	)			(289,680	)			(181,461	)
	Acquisition of businesses, net of cash acquired					(649,160	)			(469,003	)			(119,983	)
	Proceeds from divestitures of operations, net of cash disposed					518,505				—				—
	Other investments and notes receivable					(47,090	)			20,406				(102,323	)
			Net cash used in investing activities			(428,919	)			(738,277	)			(403,767	)
Cash flows from financing activities:
	Proceeds from bank borrowings and long-term debt					3,420,583				1,793,969				1,446,592
	Repayments of bank borrowings and long-term debt					(3,503,420	)			(1,789,862	)			(1,008,692	)
	Repayment of capital lease obligations and other					(11,457	)			(10,672	)			(12,613	)
	Payment for early extinguishment of debt					—				(13,201	)			(91,647	)
	Proceeds from exercise of stock options and Employee Stock Purchase Plan					49,986				36,601				61,113
	Net proceeds from issuance of ordinary shares in public offering					—				299,500				—
			Net cash provided by (used in) financing activities			(44,308	)			316,335				394,753
Effect of exchange rates on cash						(2,528	)			(48,341	)			12,572
	Net increase in cash and cash equivalents					73,601				253,982				191,256
	Cash and cash equivalents, beginning of year					869,258				615,276				424,020
	Cash and cash equivalents, end of year				$	942,859			$	869,258			$	615,276

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1.	ORGANIZATION OF THE COMPANY

2.	SUMMARY OF ACCOUNTING POLICIES

	Basis of Presentation and Principles of Consolidation

S-13

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	Use of Estimates

	Translation of Foreign Currencies

	Revenue Recognition

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	Allowance for Doubtful Accounts

	Cash and Cash Equivalents

		March 31,
		2006				2005
		(In thousands)
Cash and bank balances		$	870,140			$	832,290
Money market funds			64,787				15,911
Certificates of deposit			7,932				21,057
		$	942,859			$	869,258

	Long-term Investments

	Concentration of Credit Risk

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	Inventories

		March 31,
		2006				2005
		(In thousands)
Raw materials		$	884,940			$	711,720
Work-in-progress			335,061				304,189
Finished goods			518,309				497,806
		$	1,738,310			$	1,513,715

	Property and Equipment

				March 31,
				2006				2005
				(In thousands)
Machinery and equipment				$	1,426,987			$	1,432,673
Buildings					752,951				764,390
Leasehold improvements					116,955				92,880
Furniture, fixtures, computer equipment and software					303,075				364,810
Land and other					220,859				237,951
					2,820,827				2,892,704
	Accumulated depreciation and amortization				(1,234,341	)			(1,222,828	)
		Property and equipment, net		$	1,586,486			$	1,669,876

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	Deferred Income Taxes

	Goodwill and Other Intangibles

			March 31,
			2006				2005
			(In thousands)
Balance, beginning of the year			$	2,965,867			$	2,630,708
	Additions			224,628				235,928
	Goodwill related to divested operations(1)			(410,296	)			—
	Reclassification to other intangible assets(2)			(30,622	)			(6,506	)
	Foreign currency translation adjustments			(72,850	)			105,737
Balance, end of the year			$	2,676,727			$	2,965,867

(1)	Refer to Note 13, “Business and Asset Acquisitions and Divestitures.”
(2)	Reclassification resulting from final allocation of the Company’s intangible assets acquired through certain business combinations completed in a period subsequent to the respective period of acquisition, based on third-party valuations.

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				March 31, 2006												March 31, 2005
				Gross								Net				Gross								Net
				Carrying				Accumulated				Carrying				Carrying				Accumulated				Carrying
				Amount				Amortization				Amount				Amount				Amortization				Amount
				(In thousands)												(In thousands)
Intangible assets:
	Customer related intangibles			$	150,471			$	(36,086	)		$	114,385			$	121,436			$	(54,508	)		$	66,928
	Other acquired intangibles				26,521				(25,842	)			679				36,696				(21,980	)			14,716
		Total		$	176,992			$	(61,928	)		$	115,064			$	158,132			$	(76,488	)		$	81,644

Fiscal Years Ending March 31,			Amount
			(In thousands)
2007			$	26,243
2008				23,859
2009				19,646
2010				17,985
2011				13,825
Thereafter				13,506
	Total amortization expenses		$	115,064

	Derivative Instruments and Hedging Activities

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	Restructuring Charges

	Accounting for Stock-Based Compensation

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			Fiscal Year Ended March 31,
			2006				2005				2004
			(In thousands)
Net income (loss), as reported			$	141,162			$	339,871			$	(352,378	)
Add: Stock-based compensation expense included in reported net income (loss), net of tax				2,662				2,155				1,772
Less: Fair value compensation costs, net of taxes				(67,195	)			(175,981	)			(54,623	)
Pro forma net income (loss)			$	76,629			$	166,045			$	(405,229	)
Basic earnings (loss) per share:
	As reported		$	0.25			$	0.61			$	(0.67	)
	Pro forma		$	0.13			$	0.30			$	(0.77	)
Diluted earnings (loss) per share:
	As reported		$	0.24			$	0.58			$	(0.67	)
	Pro forma		$	0.13			$	0.29			$	(0.77	)

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		Fiscal Year Ended March 31,
		2006				2005				2004
Volatility			39	%			79	%			85	%
Risk-free interest rate			3.8	%			3.0	%			2.3	%
Dividend yield			0.0	%			0.0	%			0.0	%
Expected option lives			4.0 years				3.8 years				3.8 years

		Fiscal Year Ended March 31,
		2006				2005				2004
Volatility			40	%			41	%			44	%
Risk-free interest rate			2.1	%			1.7	%			1.4	%
Dividend yield			0.0	%			0.0	%			0.0	%
Expected option lives			0.5 years				0.5 years				0.5 years

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	Earnings (Loss) Per Share

				Fiscal Year Ended March 31,
				2006				2005				2004
				(In thousands, except
				per share amounts)
Basic earnings (loss) per share:
	Net income (loss) from continuing operations			$	110,518			$	331,497			$	(346,410	)
	Shares used in computation:
		Weighted-average ordinary shares outstanding			573,520				552,920				525,318
		Basic earnings (loss) from continuing operations per share		$	0.19			$	0.60			$	(0.66	)
Diluted earnings (loss) from continuing operations per share:
	Net income (loss) from continuing operations			$	110,518			$	331,497			$	(346,410	)
	Shares used in computation:
		Weighted-average ordinary shares outstanding			573,520				552,920				525,318
		Weighted-average ordinary share equivalents from stock options and awards(1)			8,358				12,956				—
		Weighted-average ordinary share equivalents from convertible notes(2)			18,726				19,623				—
		Weighted-average ordinary shares and ordinary share equivalents outstanding			600,604				585,499				525,318
		Diluted earnings (loss) from continuing operations per share		$	0.18			$	0.57			$	(0.66	)

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(1)	Due to the Company’s reported net loss from continuing operations, the ordinary share equivalents from stock options and restricted stock to purchase 13,668,419 shares outstanding were excluded from the computation of diluted earnings (loss) per share during fiscal year 2004 because the inclusion would be anti-dilutive for the period.

	Also, the ordinary share equivalents from stock options to purchase 33,062,904, 24,186,135 and 14,750,432 shares during fiscal years 2006, 2005 and 2004, respectively, were excluded from the computation of diluted earnings (loss) per share primarily because the exercise price of these options was greater than the average market price of the Company’s ordinary shares during the respective periods.

(2)

During fiscal years 2006 and 2005, 18,725,798 and 19,047,619 ordinary share equivalents related to the zero coupon convertible junior subordinated notes were included as ordinary share equivalents, respectively. During fiscal year 2004, 19,047,619 ordinary share equivalent related to the zero coupon convertible junior subordinated notes were anti-dilutive and therefore, were not included as ordinary share equivalents.

In addition, as the Company has the positive intent and ability to settle the principal amount of its 1% convertible subordinated notes due August 2010 in cash, 32,206,119 ordinary share equivalents related to the principal portion of the notes are excluded from the computation of diluted earnings per share. The Company intends to settle any conversion spread (excess of the conversion value over face value) in stock. During fiscal year 2006, the conversion obligation was less than the principal portion of the convertible notes and accordingly, no additional shares were included as ordinary share equivalents. During fiscal year 2005, 575,587 ordinary share equivalents from the conversion spread have been included. During fiscal year 2004, 851,274 ordinary share equivalents from the conversion spread were anti-dilutive and were excluded.

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3.	SUPPLEMENTAL CASH FLOW DISCLOSURES

			Fiscal Year Ended March 31,
			2006				2005				2004
			(In thousands)
Net cash paid for:
	Interest		$	65,052			$	76,060			$	89,244
	Income taxes		$	25,197			$	24,246			$	36,356
Non-cash investing and financing activities:
	Equipment acquired under capital lease obligations		$	1,577			$	6,091			$	18,713
	Issuance of ordinary shares for acquisition of businesses		$	27,907			$	127,226			$	3,162
	Issuance of ordinary shares upon conversion of debt		$	5,000			$	—			$	—

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4.	BANK BORROWINGS AND LONG-TERM DEBT

		March 31,
		2006				2005
		(In thousands)
Short term bank borrowings		$	105,732			$	10,301
0.00% convertible junior subordinated notes			195,000				200,000
1.00% convertible subordinated notes			500,000				500,000
6.50% senior subordinated notes			399,650				399,650
6.25% senior subordinated notes			384,879				490,270
Other			7,659				117,146
			1,592,920				1,717,367
Current portion			(105,732	)			(17,445	)
Non-current portion		$	1,487,188			$	1,699,922

Fiscal Years Ending March 31,			Amount
			(In thousands)
2007			$	105,732
2008				195,000
2009				—
2010				—
2011				507,659
Thereafter				784,529
	Total		$	1,592,920

	Revolving Credit Facilities and Other Credit Lines

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	6.25% Senior Subordinated Notes

	1.0% Convertible Subordinated Notes

	6.5% Senior Subordinated Notes

S-26

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	Zero Coupon Convertible Junior Subordinated Notes

	Other Redemptions

5.	FINANCIAL INSTRUMENTS

S-27

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6.	TRADE RECEIVABLES SECURITIZATION

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7.	COMMITMENTS AND CONTINGENCIES

			Capital				Operating
Fiscal Years Ending March 31,			Lease				Lease
			(In thousands)
2007			$	483			$	39,410
2008				348				30,932
2009				348				25,959
2010				307				19,079
2011				277				17,545
Thereafter				855				190,969
	Total minimum lease payments			2,618			$	323,894
Amount representing interest				(464	)
Present value of total minimum lease payments				2,154
	Current portion			(367	)
	Capital lease obligation, net of current portion		$	1,787

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8.	INCOME TAXES

			Fiscal Year Ended March 31,
			2006				2005				2004
			(In thousands)
Domestic			$	99,605			$	42,374			$	19,251
Foreign				65,131				220,471				(430,619	)
	Total		$	164,736			$	262,845			$	(411,368	)

				Fiscal Year Ended March 31,
				2006				2005				2004
				(In thousands)
Current:
	Domestic			$	503			$	2,088			$	3,388
	Foreign				31,165				21,795				94,065
					31,668				23,883				97,453
Deferred:
	Domestic				(409	)			870				(599	)
	Foreign				22,959				(93,405	)			(161,812	)
					22,550				(92,535	)			(162,411	)
		Provision for (benefit from) income taxes		$	54,218			$	(68,652	)		$	(64,958	)

			Fiscal Year Ended March 31,
			2006				2005				2004
			(In thousands)
Income tax based on domestic statutory rates			$	32,947			$	52,569			$	(82,274	)
Effect of tax rate differential				(86,251	)			(320,059	)			(112,893	)
Goodwill and other intangibles amortization				6,819				3,354				3,455
Change in valuation allowance				120,182				202,316				142,556
Other				(19,479	)			(6,832	)			(15,802	)
	Provision for (benefit from) income taxes		$	54,218			$	(68,652	)		$	(64,958	)

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				March 31,
				2006				2005
				(In thousands)
Deferred tax liabilities:
	Fixed assets			$	9,031			$	(37,703	)
	Intangible assets				(10,782	)			(24,349	)
	Others				(6,762	)			(3,874	)
		Total deferred tax liabilities			(8,513	)			(65,926	)
Deferred tax assets:
	Deferred compensation				4,796				4,710
	Provision for inventory obsolescence				14,327				14,466
	Provision for doubtful accounts				1,338				1,274
	Net operating loss and other carryforwards				1,600,614				1,564,410
	Others				70,311				68,271
					1,691,386				1,653,131
Valuation allowances					(1,026,799	)			(888,445	)
		Total deferred tax asset			664,587				764,686
Net deferred tax asset				$	656,074			$	698,760
The net deferred tax asset is classified as follows:
	Current			$	9,643			$	11,614
	Long-term				646,431				687,146
		Total		$	656,074			$	698,760

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9.	SHAREHOLDERS’ EQUITY

	Equity Offering

	Share Repurchase Plan

	Stock Option and Incentive Plans

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			March 31, 2006								March 31, 2005								March 31, 2004
			Options				Price				Options				Price				Options				Price
Outstanding, beginning of fiscal year				57,578,401			$	12.67				50,303,999			$	12.86				55,682,533			$	11.35
	Granted			11,549,454				11.80				18,461,056				13.94				8,841,856				15.60
	Exercised			(5,562,348	)			7.38				(3,182,087	)			9.34				(8,235,283	)			6.66
	Forfeited			(8,522,951	)			18.83				(8,004,567	)			17.99				(5,985,107	)			11.39
Outstanding, end of fiscal year				55,042,556			$	12.04				57,578,401			$	12.67				50,303,999			$	12.86
Options exercisable, end of fiscal year				42,475,818								40,484,074								27,638,781
Weighted average fair value per option granted			$	3.80							$	7.99							$	9.47

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		Options Outstanding												Options Exercisable
						Weighted				Weighted								Weighted
						Average				Average								Average
		Number of				Contractual				Contractual				Number of				Exercise
Range of Exercise Prices		Shares				Life				Price				Shares				Price
$ 0.42 - $ 6.23			5,967,661				3.40			$	4.72				5,743,550			$	4.67
$ 7.13 - $ 7.90			7,808,424				6.16				7.87				3,439,392				7.84
$ 8.01 - $11.10			8,698,067				7.94				10.35				2,350,828				8.96
$11.32 - $12.37			7,648,453				8.71				12.03				6,082,591				12.09
$12.40 - $13.18			5,946,576				8.39				12.82				5,920,717				12.82
$13.27 - $15.90			7,572,482				6.56				14.59				7,538,003				14.59
$15.95 - $17.37			5,767,284				7.44				16.94				5,767,128				16.94
$17.38 - $23.19			5,548,827				6.22				18.87				5,548,827				18.87
$23.61 - $29.94			83,782				4.58				25.35				83,782				25.35
$30.00 - $30.00			1,000				4.90				30.00				1,000				30.00
$ 0.42 - $30.00			55,042,556				6.93			$	12.04				42,475,818			$	12.69

10.	RESTRUCTURING CHARGES

	Fiscal Year 2006

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		First				Second				Third				Fourth
		Quarter				Quarter				Quarter				Quarter				Total
		(In thousands)
Americas:
Severance		$	2,442			$	6,546			$	1,719			$	4,626			$	15,333
Long-lived asset impairment			3,847				7,244				1,951				945				13,987
Other exit costs			6,421				836				10,957				439				18,653
Total restructuring charges			12,710				14,626				14,627				6,010				47,973
Asia:
Severance			—				—				1,312				—				1,312
Long-lived asset impairment			—				—				1,912				—				1,912
Other exit costs			—				—				—				—				—
Total restructuring charges			—				—				3,224				—				3,224
Europe:
Severance			11,483				16,669				47,689				20,604				96,445
Long-lived asset impairment			456				7,125				2,497				4,327				14,405
Other exit costs			8,040				11,926				520				33,208				53,694
Total restructuring charges			19,979				35,720				50,706				58,139				164,544
Total
Severance			13,925				23,215				50,720				25,230				113,090
Long-lived asset impairment			4,303				14,369				6,360				5,272				30,304
Other exit costs			14,461				12,762				11,477				33,647				72,347
Total restructuring charges		$	32,689			$	50,346			$	68,557			$	64,149			$	215,741

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							Long-Lived
							Asset				Other Exit
			Severance				Impairment				Costs				Total
			(In thousands)
Balance as of March 31, 2005			$	13,551			$	—			$	24,337			$	37,888
Activities during the year:
Provision for charges incurred during the year				113,090				30,304				72,347				215,741
	Cash payments for charges incurred in fiscal year 2006			(74,507	)			—				(27,183	)			(101,690	)
	Cash payments for charges incurred in fiscal year 2005			(8,130	)			—				(1,119	)			(9,249	)
	Cash payments for charges incurred in fiscal year 2004			(2,481	)			—				(7,023	)			(9,504	)
	Cash payments for charges incurred in fiscal year 2003 and prior			(145	)			—				(3,380	)			(3,525	)
	Non-cash charges incurred during the year			—				(30,304	)			(35,335	)			(65,639	)
Balance as of March 31, 2006				41,378				—				22,644				64,022
Less: Current portion (classified as other current liabilities)				(36,567	)			—				(10,605	)			(47,172	)
Accrued facility closure costs, net of current portion (classified as other long-term liabilities)			$	4,811			$	—			$	12,039			$	16,850

	Fiscal Year 2005

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		First				Second				Third				Fourth
		Quarter				Quarter				Quarter				Quarter				Total				Nature
		(In thousands)
Americas:
Severance		$	1,793			$	—			$	—			$	—			$	1,793
Long-lived asset impairment			365				125				—				5,300				5,790
Other exit costs			1,598				321				170				—				2,089
Total restructuring charges			3,756				446				170				5,300				9,672
Asia:
Severance			—				872				—				—				872
Long-lived asset impairment			—				267				—				—				267
Other exit costs			—				1,220				—				—				1,220
Total restructuring charges			—				2,359				—				—				2,359
Europe:
Severance			17,447				15,613				29,092				1,515				63,667
Long-lived asset impairment			100				5,743				—				795				6,638
Other exit costs			2,285				9,341				1,397				—				13,023
Total restructuring charges			19,832				30,697				30,489				2,310				83,328
Total
Severance			19,240				16,485				29,092				1,515				66,332				Cash
Long-lived asset impairment			465				6,135				—				6,095				12,695				Non-cash
Other exit costs			3,883				10,882				1,567				—				16,332				Cash & non-cash
Total restructuring charges		$	23,588			$	33,502			$	30,659			$	7,610			$	95,359

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							Long-Lived
							Asset				Other
			Severance				Impairment				Exit Costs				Total
			(In thousands)
Activities during fiscal year 2005:
	Provision		$	66,332			$	12,695			$	16,332			$	95,359
	Cash payments			(57,758	)			—				(6,977	)			(64,735	)
	Non-cash charges			—				(12,695	)			(6,624	)			(19,319	)
Balance as of March 31, 2005			$	8,574			$	—			$	2,731			$	11,305

	Fiscal Year 2004

		First				Second				Third				Fourth
		Quarter				Quarter				Quarter				Quarter				Total				Nature
		(In thousands)
Americas:
Severance		$	3,691			$	14,072			$	5,023			$	3,623			$	26,409
Long-lived asset impairment			64,844				18,024				2,273				8,247				93,388
Other exit costs			17,736				18,492				18,978				25,772				80,978
Total restructuring charges(1)			86,271				50,588				26,274				37,642				200,775
Asia:
Severance			—				—				—				—				—
Long-lived asset impairment			111,340				—				—				—				111,340
Other exit costs			—				—				—				—				—
Total restructuring charges			111,340				—				—				—				111,340
Europe:
Severance			8,200				6,003				28,081				35,040				77,324
Long-lived asset impairment			114,388				1,497				8,008				2,539				126,432
Other exit costs			6,909				2,164				8,656				6,748				24,477
Total restructuring charges			129,497				9,664				44,745				44,327				228,233
Total:
Severance			11,891				20,075				33,104				38,663				103,733				Cash
Long-lived asset impairment			290,572				19,521				10,281				10,786				331,160				Non-cash
Other exit costs			24,645				20,656				27,634				32,520				105,455				Cash & non-cash
Total restructuring charges		$	327,108			$	60,252			$	71,019			$	81,969			$	540,348

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(1)

Included in the first quarter charges are $7.2 million related to discontinued operations, of which $1.7 million related to cost of sales. The charges included severance of $0.4 million, long-lived asset impairment of $2.7 million and other exit costs of $4.1 million. Included in the second quarter charges are $4.3 million related to discontinued operations, of which $1.5 million related to cost of sales. The charges included severance of $2.3 million, long-lived asset impairment of $0.6 million and other exit costs of $1.4 million.

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	Fiscal Year 2003 and Prior

11.	OTHER INCOME, NET

12.	RELATED PARTY TRANSACTIONS

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13.	BUSINESS AND ASSET ACQUISITIONS AND DIVESTITURES

	Business and Asset Acquisitions

	Nortel

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	Hughes Software Systems Limited (now known as Flextronics Software Systems Limited (“FSS”))

		Fiscal Year Ended March 31,
		2006				2005				2004
		(In thousands, except per share amounts)
Net sales		$	15,531,976			$	16,922,100			$	14,479,262
Income (loss) from continuing operations			110,218				333,897				(346,410	)
Income from discontinued operations, net of tax			33,125				22,336				11,013
Net income (loss)			143,343				356,233				(335,397	)
Basic earnings per share from continuing operations		$	0.19			$	0.60			$	(0.66	)
Diluted earnings per share from continuing operations		$	0.18			$	0.57			$	(0.66	)
Basic earnings per share from discontinued operations		$	0.06			$	0.04			$	0.02
Diluted earnings per share from discontinued operations		$	0.06			$	0.04			$	0.02
Basic earnings (loss) per share		$	0.25			$	0.64			$	(0.64	)
Diluted earnings (loss) per share		$	0.24			$	0.61			$	(0.64	)

	Other Acquisitions

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	Divestitures

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14.	SEGMENT REPORTING

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				Fiscal Year Ended March 31,
				2006				2005				2004
				(In thousands)
Net Sales:
	Asia			$	8,580,642			$	7,674,809			$	6,542,484
	Americas				3,296,469				2,519,443				1,966,093
	Europe				3,410,865				5,536,465				5,970,685
		Total		$	15,287,976			$	15,730,717			$	14,479,262
Long-Lived Assets:
	Asia			$	924,492			$	806,178			$	703,276
	Americas				436,191				457,662				440,669
	Europe				340,867				487,680				542,711
		Total		$	1,701,550			$	1,751,520			$	1,686,656

15.	CONSOLIDATION OF VARIABLE INTEREST ENTITIES

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16.	DISCONTINUED OPERATIONS

			Fiscal Year Ended March 31,
			2006				2005				2004
			(In thousands)
Net sales			$	278,018			$	177,506			$	51,154
Cost of sales				172,747				107,328				27,721
Restructuring charges				—				—				3,237
	Gross profit			105,271				70,178				20,196
Selling, general and administrative expenses				61,178				42,926				18,058
Intangible amortization				16,640				8,979				2,172
Restructuring charges				—				—				8,258
Interest and other expense, net				5,023				4,209				459
Gain on divestiture of operations				(43,750	)			—				—
	Income (loss) before income taxes			66,180				14,064				(8,751	)
Provision for (benefit from) income taxes				35,536				5,690				(2,783	)
	Net income (loss) on discontinued operations		$	30,644			$	8,374			$	(5,968	)

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			March 31,
			2006				2005
			(In thousands)
Accounts receivable, net			$	63,129			$	55,004
Other current assets				26,380				24,049
	Total current assets of discontinued operations		$	89,509			$	79,053
Goodwill			$	472,051			$	393,611
Other intangible assets, net				56,748				61,067
Other assets				45,585				39,341
	Total non-current assets of discontinued operations		$	574,384			$	494,019
Accounts payable			$	13,744			$	17,550
Accrued payroll				19,216				15,972
Other current liabilities				24,253				33,147
	Total current liabilities of discontinued operations		$	57,213			$	66,669
	Total non-current liabilities of discontinued operations		$	30,578			$	53,189

17.	QUARTERLY FINANCIAL DATA (UNAUDITED)

				Fiscal Year Ended March 31, 2006																Fiscal Year Ended March 31, 2005
				First				Second				Third				Fourth				First				Second				Third				Fourth
				(In thousands, except per share amounts)
Net sales(1)				$	3,823,056			$	3,808,075			$	4,125,956			$	3,530,889			$	3,862,515			$	4,110,257			$	4,218,083			$	3,539,862
Gross profit(1)					222,341				195,166				173,517				156,860				218,348				236,272				251,464				225,720
Net income (loss) from continuing operations					56,778				(20,782	)			37,619				36,903				72,580				90,752				91,498				76,667
Income (loss) from discontinued operations, net of tax					1,929				18,335				4,335				6,045				1,742				1,870				7,185				(2,423	)
Net income (loss)					58,707				(2,447	)			41,954				42,948				74,322				92,622				98,683				74,244
Earnings (loss) per share:
	Net income from continuing operations:
		Basic		$	0.10			$	(0.04	)		$	0.07			$	0.06			$	0.14			$	0.16			$	0.16			$	0.14
		Diluted		$	0.09			$	(0.04	)		$	0.06			$	0.06			$	0.13			$	0.16			$	0.15			$	0.13
	Income from discontinued operations:
		Basic		$	0.00			$	0.03			$	0.01			$	0.01			$	0.00			$	0.00			$	0.01			$	0.00
		Diluted		$	0.00			$	0.03			$	0.01			$	0.01			$	0.00			$	0.00			$	0.01			$	0.00
	Net income:
		Basic		$	0.10			$	0.00			$	0.07			$	0.07			$	0.14			$	0.17			$	0.18			$	0.13
		Diluted		$	0.10			$	0.00			$	0.07			$	0.07			$	0.13			$	0.16			$	0.17			$	0.12

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(1)

As discussed further in Note 16, beginning in the quarter ended March 31, 2006, the Company is now reporting the results of operations for its Semiconductor and its Software Development and Solutions Business (a previously identified operating segment, see Note 14) as discontinued operations in accordance with SFAS 144. The following table reconciles the Company’s net sales and gross profit as previously reported to the amounts from continuing operations. The reconciliation of income from continuing operations to net income as previously reported, including per share data, is illustrated in the table above.

		Fiscal Year Ended March 31, 2006																Fiscal Year Ended March 31, 2005
		First				Second				Third				Fourth				First				Second				Third				Fourth
		(In thousands)
Net sales as previously reported		$	3,897,531			$	3,884,231			$	4,186,891			$	3,530,889			$	3,880,448			$	4,138,249			$	4,276,614			$	3,612,912
Less net sales attributable to discontinued operations			74,475				76,156				60,935				—				17,933				27,992				58,531				73,050
Net sales from continuing operations		$	3,823,056			$	3,808,075			$	4,125,956			$	3,530,889			$	3,862,515			$	4,110,257			$	4,218,083			$	3,539,862
Gross profit as previously reported		$	251,642			$	223,743			$	196,317			$	156,860			$	225,941			$	245,160			$	275,706			$	255,175
Less gross profit attributable to discontinued operations			29,301				28,577				22,800				—				7,593				8,888				24,242				29,455
Gross profit from continuing operations		$	222,341			$	195,166			$	173,517			$	156,860			$	218,348			$	236,272			$	251,464			$	225,720

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				March 31,
				2006				2005
				(In thousands, except share
				amounts)
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents			$	78,469			$	221,088
	Due from subsidiaries				2,651,880				2,044,976
	Other current assets				1,410				1,047
		Total current assets			2,731,759				2,267,111
Other intangibles, net					—				3,083
Other investments					95,964				55,958
Investment in subsidiaries					6,980,810				6,828,834
Due from subsidiaries					1,949,969				1,923,796
Other assets					28,197				133,522
		Total assets		$	11,786,699			$	11,212,304
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
	Bank borrowings			$	100,000			$	—
	Due to subsidiaries				4,384,352				3,762,125
	Other current liabilities				46,356				35,368
		Total current liabilities			4,530,708				3,797,493
Long-term debt, net of current portion					1,487,188				1,605,012
Due to subsidiaries					414,156				585,751
Commitments and contingencies (Note 6)
SHAREHOLDERS’ EQUITY:
Ordinary shares, no par value; 578,141,566 and 568,329,662 shares issued and outstanding as of March 31, 2006 and 2005, respectively					5,572,574				5,489,764
Accumulated deficit					(241,438	)			(382,600	)
Accumulated other comprehensive income					27,565				123,683
Deferred compensation					(4,054	)			(6,799	)
		Total shareholders’ equity			5,354,647				5,224,048
		Total liabilities and shareholders’ equity		$	11,786,699			$	11,212,304

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1.	ORGANIZATION OF THE COMPANY

2.	SUMMARY OF ACCOUNTING POLICIES

	Basis of Presentation

	Use of Estimates

	Translation of Foreign Currencies

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	Cash and Cash Equivalents

	Long-term Investments

	Due from/ Due to Subsidiaries

	Investment in Subsidiaries

	Concentration of Credit Risk

	Intangible Assets, net

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	Derivative Instruments and Hedging Activities

	Accounting for Stock-Based Compensation

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	Recent Accounting Pronouncements

	Accounting Changes and Error Corrections

	Accounting for Servicing of Financial Assets

	Accounting for Conditional Asset Retirement Obligations

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3.	BANK BORROWINGS AND LONG-TERM DEBT

		March 31,
		2006				2005
		(In thousands)
0.00% convertible junior subordinated notes		$	195,000			$	200,000
9.875% senior subordinated notes			7,659				7,659
9.75% Euro senior subordinated notes			—				7,433
1.00% convertible subordinated notes			500,000				500,000
6.50% senior subordinated notes			399,650				399,650
6.25% senior subordinated notes			384,879				490,270
Bank borrowings			100,000				—
		$	1,587,188			$	1,605,012

Fiscal Year Ending March 31,		(In thousands)
2007		$	100,000
2008			195,000
2009			—
2010			—
2011			507,659
Thereafter			784,529
		$	1,587,188

	Revolving Credit Facilities

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	6.25% Senior Subordinated Notes

	1.00% Convertible Subordinated Notes

	6.50% Senior Subordinated Notes

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	Zero Coupon Convertible Junior Subordinated Notes

4.	FINANCIAL INSTRUMENTS

5.	TRADE RECEIVABLES SECURIZATION

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6.	COMMITMENTS AND CONTINGENCIES

	Legal Proceedings

	Guarantees

7.	INCOME TAXES

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8.	SHAREHOLDERS’ EQUITY

	Equity Offering

	Share Repurchase Plan

	Stock Option and Incentive Plans

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			March 31, 2006								March 31, 2005
			Options				Price				Options				Price
Outstanding, beginning of fiscal year				57,578,401			$	12.67				50,303,999			$	12.86
	Granted			11,549,454				11.80				18,461,056				13.94
	Exercised			(5,562,348	)			7.38				(3,182,087	)			9.34
	Forfeited			(8,522,951	)			18.83				(8,004,567	)			17.99
Outstanding, end of fiscal year				55,042,556			$	12.04				57,578,401			$	12.67
Options exercisable, end of fiscal year				42,475,818								40,484,074
Weighted-average fair value per option granted			$	3.80							$	7.99

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		Options Outstanding												Options Exercisable
						Weighted				Weighted								Weighted
						Average				Average								Average
		Number of				Contractual				Exercise				Number of				Exercise
Range of Exercise Prices		Shares				Life				Price				Shares				Price
$ 0.42 - $ 6.23			5,967,661				3.40			$	4.72				5,743,550			$	4.67
$ 7.13 - $ 7.90			7,808,424				6.16				7.87				3,439,392				7.84
$ 8.01 - $11.10			8,698,067				7.94				10.35				2,350,828				8.96
$11.32 - $12.37			7,648,453				8.71				12.03				6,082,591				12.09
$12.40 - $13.18			5,946,576				8.39				12.82				5,920,717				12.82
$13.27 - $15.90			7,572,482				6.56				14.59				7,538,003				14.59
$15.95 - $17.37			5,767,284				7.44				16.94				5,767,128				16.94
$17.38 - $23.19			5,548,827				6.22				18.87				5,548,827				18.87
$23.61 - $29.94			83,782				4.58				25.35				83,782				25.35
$30.00 - $30.00			1,000				4.90				30.00				1,000				30.00
$ 0.42 - $30.00			55,042,556				6.93			$	12.04				42,475,818			$	12.69

9.	SUBSEQUENT EVENTS

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I.	Purpose

	•	monitor and evaluate periodic reviews of the adequacy of the accounting and financial reporting processes and systems of internal control that are conducted by the Company’s financial and senior management, and the Company’s independent auditors;
	•	be directly responsible for the appointment, compensation and oversight of the work of the Company’s independent auditors (including resolution of any disagreements between management and the auditors regarding financial reporting); and
	•	facilitate communication among the Company’s independent auditors, the Company’s financial and senior management and the Board.

II.	Membership and Procedures

III.	Meetings

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IV.	Responsibilities and Duties

Meeting When Performed

First

Second

Third

Fourth

As

Responsibilities and Duties

Quarter

Quarter

Quarter

Quarter

Needed

1.

Review and assess the adequacy of this Audit Committee Responsibilities Checklist and charter annually and recommend to the Board of Directors any modifications in the Committee’s duties and responsbilities.

X

2.

Verify the Committee consists of a minimum of three members who are financially literate, including at least one member who is a financial expert.

X

X

X

X

3.

Review and confirm the independence of each Committee member based on NASD and other applicable rules.

X

X

X

X

4.

Review the independence of the independent public accountants, including a review of tax and consulting services and related fees and a review of audit and related fees.

X

X

X

X

5.

Recommend to the Board of Directors the independent public accountants to be nominated for the current fiscal year.

X

6.

Communicate with the auditors about the Company’s expectations regarding its relationship with the auditors, including:(i) the independent auditors’ ultimate accountability to the Committee; and (ii) the authority and responsibility of the Committee to select, evaluate and, where appropriate, replace the independent auditors.

X

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Meeting When Performed

First

Second

Third

Fourth

As

Responsibilities and Duties

Quarter

Quarter

Quarter

Quarter

Needed

7.

Review with the the independent public accountants, Finance management and the Director of Internal Audit, and approve, the audit scope and plan, and the use of independent public accountants other than the appointed auditors of Flextronics. Inquire of the chief financial officer, the independent auditors, and Director of Internal Audit, the extent to which their planned audit scope can be relied on to detect material weaknesses in internal controls or the occurrences of fraudulent financial reporting.

X

8.

Review with Finance management and the independent public accountants at the completion of the annual audit:

X

a. The Company’s annual financial statements and related footnotes.

b. The results of the independent public accountants’ audit of the financial statements and its report thereon.

c. Any significant changes required in the independent public accountant’s audit plan.

d. Any difficulties or disputes with management encountered during the course of the audit, including any restrictions on the scope of activities or access to required information.

e. The cooperation received by the independent auditors during their audit examination, including the access to all requested records, data, and information and elicit the comments of management regarding the responsiveness of the independent auditors to the Company’s needs.

f. The matters described in the paragraphs following this checklist.

g. Other matters related to the conduct of the audit which are to be communicated to the Committee under generally accepted auditing standards.

9.

Consider and review with Finance management, the Director of Internal Audit and the independent auditors:

X

X

X

X

a. Significant findings during the year, including the status of previous internal audit recommendations and management’s responses.

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Meeting When Performed

First

Second

Third

Fourth

As

Responsibilities and Duties

Quarter

Quarter

Quarter

Quarter

Needed

b. Any difficulties encountered in the course of the internal audit process, including any restrictions on the scope of their work or access to required information.

c. Any change required in the planned scope of the Internal Audit plan.

d. The Internal Audit Department charter, budget and staffing (to be done annually in the third quarter.

10.

Review and provide a report for the annual proxy that includes the Committee’s review and discussion of matters with management and the independent public accountants.

X

11.

Consider and review with the independent public accountants, Finance management and the internal auditor:

X

X

a. The adequacy of the Companys internal controls including computerized information system controls and security.

b. Any related significant findings and recommendations of the independent public accountants and internal audit together with managements responses thereto.

12.

Discuss any comments or recommendations of the independent auditors outlined in their annual management letter. Approve a schedule for implementing any recommended changes and monitor compliance with the schedule.

X

13.

Receive and review the report (beginning when mandated by law) from the independent auditors addressing:(a) all critical accounting policies used;(b) alternative treatments of financial information within generally accepted accounting principles that have been discussed with management;(c) ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent auditors; and(d) material written communications with the independent auditors and management (such as any management letter or schedule of unadjusted differences).

X

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Meeting When Performed

First

Second

Third

Fourth

As

Responsibilities and Duties

Quarter

Quarter

Quarter

Quarter

Needed

14.

In connection with the Committee’s review of the quarterly financial statements:

X

X

X

X

a. Discuss with the independent auditors and management the results of the independent auditors’ SAS 71 review of the quarterly financial statements, including the independent auditors’ judgments about the quality and appropriateness of the Company’s accounting principles, the reasonableness of significant judgments, the clarity of the disclosures in the Company’s financial statements and any difficulties encountered during the course of the audit.

b. Discuss with management and the independent auditors any significant issues, events and transactions, any significant changes (or proposed changes) regarding accounting principles, practices, judgments or estimates, any significant reporting issues discussed between management and the independent auditors, including any significant disagreements, and any significant adjustments proposed by the auditors.

c. Discuss any significant issues reviewed by in-house and outside counsel concerning litigation, contingencies, claims, or assessments.

15.

Review each earnings release with management prior to public release.

X

X

X

X

16.

Review unusual reporting issues prior to the issuance of quarterly earnings releases.

X

17.

Review the Company’s annual and quarterly reports prior to filing with the SEC.

X

X

X

X

18.

Receive from the Chief Financial Officer and Chief Executive Officer (based on their evaluation within the preceding 90 days), and discuss with management and the independent auditors, any information regarding:

X

X

X

X

a. All significant deficiencies in the design or operation of internal controls which could adversely affect the issuer’s ability to record, process, summarize and report financial data, and any material weaknesses in internal controls; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the issuer’s internal controls.

19.

Review with Finance management any significant changes to GAAP policies or standards.

X

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Meeting When Performed

First

Second

Third

Fourth

As

Responsibilities and Duties

Quarter

Quarter

Quarter

Quarter

Needed

20.

Inquire of Finance management, the Internal Auditor, and the independent public accountants about significant risks or exposures and assess the steps management has taken to minimize such risk to the Company.

X

21.

Meet with the independent public accountants and the Director of Internal Audit in separate executive sessions to discuss any matters that the Committee or these groups believe should be discussed privately with the Audit Committee.

X

X

X

X

22.

Monitor any standards adopted as a code of conduct for the Company and as a code of ethics for its finance management.

X

23.

Review legal and regulatory matters that may have a material impact on the financial statements, related Company compliance policies, and programs and reports received from regulators.

X

X

X

X

X

24.

Review the process management has established to ensure the integrity of interim reporting, including the system of disclosure controls implemented by management.

X

	(a) Obtain and review, on an annual basis, a letter from the independent auditors describing all relationships between the independent auditors and the Company required to be disclosed by Independence Standards Board Standard No. 1, review the nature, fees, and scope of such relationships and terminate any relationships that the Committee believes could compromise the independence of the auditors;
	(b) Review the extent of non-audit services provided by the independent auditors in relation to the objectivity needed in the audit and consider whether fees billed for permitted non-audit services are compatible with maintaining the independence of the auditors.
	(c) In pre-approving auditing services and permitted non-audit services, the Committee may delegate the authority to grant preapproval of auditing and non-audit services to one or more designated members of the Committee; provided, that the decisions of any member to whom authority is delegated to preapprove an activity must be presented to the full Committee at each of its scheduled meetings.

	(a) Have authority to resolve disagreements between management and the independent auditors regarding financial reporting.
	(b) Have authority to hire and fire the Director of Internal Audit.
	(c) Review with the chief financial officer the activities, organizational structure, and qualifications of the internal finance staff.

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	(d) Discuss with the independent auditors the quality of the Company’s financial and accounting personnel and any relevant recommendations that the independent auditors may have, including those in their “Report to Management.”

	(a) Review and approve the Company’s code of conduct policy. This policy should include standards for ethics and should be developed and distributed on a Company-wide basis. Review on at least an annual basis the Company’s compliance with this policy.
	(b) Review and approve all transactions between the Company and any related party, as defined by applicable law and the rules of Nasdaq.
	(c) Review the policies and procedures in effect for the review of officer expenses, purchases, and use of corporate assets.
	(d) Review the findings of any relevant examinations by the Securities and Exchange Commission, or any other agency as deemed necessary such as the Internal Revenue Service, Occupational Safety and Health Administration, the Environmental Protection Agency or others.
	(e) Review any legal matters that could have a significant impact on the Company’s financial statements.

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WORDS		MEANINGS
“The Act”		The Companies Act, Cap. 50 or any statutory modification, amendment or re-enactment thereof for the time being in force or any and every other act for the time being in force concerning companies and affecting the Company and any reference to any provision of the Act is to that provision as so modified, amended or re-enacted or contained in any such subsequent Companies Act.
“These Articles”		These Articles of Association or other regulations of the Company for the time being in force.
“The Company”		The above-named Company by whatever name from time to time called.
“Directors”		The Directors for the time being of the Company or such number of them as have authority to act for the Company.
“Director”		Includes any person acting as a Director of the Company and includes any person duly appointed and acting for the time being as an Alternate Director.
“Dividend”		Includes bonus.
“Dollar(s)” and the sign ‘$”		The lawful currency of Singapore.
“Member”		A registered holder of any shares of the Company; provided, however, that a “Member” shall not include the Company in the

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		holding of its shares as treasury shares, unless otherwise required by the Act.
“Month”		Calendar month.
“Office”		The Registered Office of the Company for the time being.
“Paid Up”		Includes credited as paid up.
“Register”		The Register of Members.
“Seal”		The Common Seal of the Company or in appropriate cases the Official Seal or duplicate Common Seal.
“Secretary”		The Secretary or Secretaries appointed under these Articles and shall include any person entitled to perform the duties of Secretary temporarily.
“Singapore”		The Republic of Singapore.
“Writing” and “Written”		Includes printing, lithography, typewriting and any other mode of representing or reproducing words in a visible form.
“Year”		Calendar Year.

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	(i) By an Ordinary Resolution passed on 27th August, 1999, the authorised share capital of the Company was increased from S$1,000,000/— divided into 100,000,000 ordinary shares of S$0.01 each to S$2,500,000/- by the creation of 150,000,000 ordinary shares if S$0.01 each.
	(ii) By an Ordinary Resolution passed on 21st September, 2000, the authorised share capital of the Company was increased from S$2,500,000/— divided into 250,000,000 ordinary shares of S$0.01 each to S$15,000,000/- by the creation of 1,250,000,000 ordinary shares of S$0.01 each.

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	(i) such fee not exceeding $2/- or such other sum as the Directors may from time to time require under the provisions of these Articles, is paid to the Company in respect thereof;
	(ii) the instrument of transfer is deposited at the Office or at such other place (if any) as the Directors may appoint accompanied by a certificate of payment of stamp duty (if any), the certificates of the shares to which itthe transfer relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer and, if the instrument of transfer is executed by some other person on his behalf, the authority of the person so to do the same; and
	(iii) such instrument of transfer has been duly stamped with the amount of stampproper duty, (if any,) with which sucheach instrument of transfer is chargeable under any lawslaw for the time being in force relating to stamps is paid.

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	(i) consolidate and divide all or any of its share capital into shares of larger amount than its existing shares;
	(ii) cancel any shares which, at the date of the passing of the Resolution, have not been taken or agreed to be taken by any person or which have been forfeited and diminish the amount of its share capital by the amount of the shares so cancelled;

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	(iii) subdivide its shares or any of them into shares of a smaller amount than is fixed by the Memorandum of Association ( subject nevertheless, subject to the provisions of the Act); provided always, however, that in such sub-division the proportion between the amount paid and the amount (if any) unpaid on each reduced share shall be the same as it was in the case of the share from which the reduced share is derived; and
	(iviii) subject to the provisions of these Articles and the Act, convert any class of shares into any other class of shares.

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	(i) in the case of an Annual General Meeting by all the Members entitled to attend and vote thereat; and
	(ii) in the case of an Extraordinary General Meeting by that number or majority in number of the Members having a right to attend and vote thereat as is required by the Act.

	(i) Declaring dividends;
	(ii) Reading, and considering and adopting the balance sheet, the reports of the Directors and Auditors, and other accounts and documents required to be annexed to the balance sheet;
	(iii) Appointing or re-appointing Directors to fill vacancies arising at the meeting on retirement whether by rotation or otherwise; and
	(iv) Re-appointing the retiring Auditors (unless they were last appointed otherwise than by the Company in General Meeting) and fixing the remuneration of Auditors or determining the manner in which such remuneration is to be fixed.

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	(i) by the Chairman (being a person entitled to vote thereat); or;
	(ii) by not less than three membersMembers who are entitled to vote at the meeting and who are present in person or by proxy and entitled to vote; or by attorney or in the case of a corporation by a representative;
	(iii) by any Member or Members present in person or by proxy or by attorney or in the case of a corporation by a representative and representing not less than one-tenth of the total voting rights of all the Members having the right to vote at the Meeting; or
	(iv) by aany Member or Members present in person or by proxy or by attorney or in the case of a corporation by a representative, holding shares in the Company conferring a right to vote at the Meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that rightnumber of paid-up shares of the Company (excluding treasury shares).

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	(i) in the case of an individual shall be signed by the appointor or by his attorney; and
	(ii) in the case of a corporation shall be either under the common seal or signed by its attorney or by an officer on behalf of the corporation.

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	“I/We,

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	(i) Michael E. Marks;
	(ii) Tsui Sung Lam;
	(iii) Andrew Russell;
	(iv) Bernard J. Lacroute;
	(v) Richard L. Sharp;
	(vi) Michael J. Moritz; and
	(vii) Robert Dykes[This Article intentionally left blank].

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	(i) if he becomes prohibited from being a Director by reason of any order made under the Act;
	(ii) if he ceases to be a Director by virtue of any of the provisions of the Act or these Articles;
	(iii) subject to Section 145 of the Act, if he resigns by writing under his hand left at the Office;
	(iv) if he has a receiving order made against him or suspends payments or compounds with his creditors generally;
	(v) if he be found lunatic or becomes of unsound mind; or
	(vi) if he be absent from meetings of the Directors for a continuous period of six months without leave from the Directors and the Directors resolve that his office be vacated.

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	(i) of all appointments of officers made by the Directors;
	(ii) of the names of the Directors present at each meeting of Directors and of any committee of Directors; and
	(iii) of all Resolutions and proceedings at all Meetings of the Company and of any class of Members, of the Directors and of committees of Directors.

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	(i) by delivering the notice personally to him; or
	(ii) by sending it by prepaid mail to him at his registered address in Singapore or where such address is outside Singapore by prepaid air- mailairmail; or
	(iii) by sending a cable or telex, or telefax containing the text of the notice to him at his registered addressfax number in Singapore or where such addressfax number is outside Singapore to such addressfax number or to any other address as might have been previously notified by the Member concerned to the Company; or
	(iv) by sending an electronic communication containing the text of the notice in the manner provided in the Act.

	(i) when it is delivered personally to the Member, at the time when it is so delivered;
	(ii) when it is sent by prepaid mail to an address in Singapore or by prepaid airmail to an address outside Singapore, on the day following that on which the notice was put into the post; or
	(iii) when the notice is sent by cable or telex, or telefax or electronic communication on the day it is so sent or transmitted.

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	(i) every Member;
	(ii) every person entitled to a share in consequence of the death or bankruptcy or otherwise of a Member who but for the same would be entitled to receive notice of the Meeting; and
	(iii) the Auditor for the time being of the Company.

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	(a) construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan;
	(b) prescribe, amend and rescind rules and regulations relating to this Plan or any Award;
	(c) select persons to receive Awards;
	(d) determine the form and terms of Awards;
	(e) determine the number of Shares or other consideration subject to Awards;
	(f) determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under this Plan or any other incentive or compensation plan of the Company or any Parent or Subsidiary of the Company;
	(g) grant waivers of Plan or Award conditions;
	(h) determine the vesting, exercisability and payment of Awards;
	(i) correct any defect, supply any omission or reconcile any inconsistency in this Plan, any Award or any Award Agreement;
	(j) determine whether an Award has been earned; and
	(k) make all other determinations necessary or advisable for the administration of this Plan.

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	(a) If the Participant is Terminated for any reason except death or Disability, then the Participant may exercise such Participant’s Options only to the extent that such Options would have been exercisable upon the Termination Date no later than three (3) months after the Termination Date (or such shorter or longer time period not exceeding five (5) years as may be determined by the Committee, provided, that any Option which is exercised beyond three (3) months after the Termination Date shall be deemed to be an NQSO), but in any event no later than the expiration date of the Options.
	(b) If the Participant is Terminated because of the Participant’s death or Disability (or the Participant dies within three (3) months after a Termination other than for Cause or because of the Participant’s Disability), then the Participant’s Options may be exercised only to the extent that such Options would have been exercisable by the Participant on the Termination Date and must be exercised by the Participant (or the Participant’s legal representative or authorized assignee) no later than twelve (12) months after the Termination Date (or such shorter or longer time period not exceeding five (5) years as may be determined by the Committee, provided, that any Option which is exercised beyond twelve (12) months after the Termination Date when the Termination is for Participant’s Disability, shall be deemed to be an NQSO), but in any event no later than the expiration date of the Options.
	(c) If the Participant is terminated for Cause, then the Participant’s Options shall expire on such Participant’s Termination Date, or at such later time and on such conditions as are determined by the Committee (but in any event, no later than the expiration date of the Options).

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	(a) by cancellation of indebtedness of the Company to the Participant;
	(b) by waiver of compensation due or accrued to the Participant for services rendered;
	(c) with respect only to purchases upon exercise of an Option, and provided that a public market for the Company’s Shares exists:

	(i) through a “same day sale” commitment from the Participant and a broker-dealer that is a member of the National Association of Securities Dealers (an “NASD Dealer”) whereby the Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or
	(ii) through a “margin” commitment from the Participant and a NASD Dealer whereby the Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company;

	(d) conversion of a convertible note issued by the Company, the terms of which provide that it is convertible into Shares issuable pursuant to the Plan (with the principal amount and any accrued interest being converted and credited dollar for dollar to the payment of the Exercise Price); or
	(e) by any combination of the foregoing.

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	(a) Initial Grant. Each Initial Grant will vest and be exercisable as to 25% of the Shares on the first one year anniversary of the Start Date for such Initial Grant, and thereafter as to 1/48 of the Shares at the end of each full succeeding month, so long as the Outside Director continuously remains a director or a consultant of the Company.
	(b) Succeeding Grant. Each Succeeding Grant will vest and be exercisable as to 25% of the Shares on the first one year anniversary of the Start Date for such Succeeding Grant, and thereafter as to 1/48 of the Shares at the end of each full succeeding month, so long as the Outside Director continuously remains a director or a consultant of the Company. No Options granted to an Outside Director will be exercisable after the expiration of five (5) years from the date the Option is granted to such Outside Director. If the Outside Director is Terminated, the Outside Director may exercise such Outside Director’s Options only to the extent that such Options would have been exercisable upon the Termination Date for such period as set forth in Section 5.6. Notwithstanding any provision to the contrary, in the event of a Corporate Transaction described in Section 15.1, the vesting of all Options granted to Outside Directors pursuant to this Section 7 will accelerate and such Options will become exercisable in full prior to the consummation of such event at such times and on such conditions as the Committee determines, and must be exercised, if at all, within three (3) months of the consummation of said event. Any Options not exercised within such three-month period shall expire. Notwithstanding any provision to the contrary, in the event of a Hostile Take-Over, the Outside Director shall have a thirty-day period in which to surrender to the Company each option held by him or her under this Plan for a period of at least six (6) months. The Outside Director shall in return be entitled to a cash distribution from the Company in an amount equal to the excess of (i) the Take-Over Price of the Shares at the time subject to the surrendered Option (whether or not the Option is otherwise at the time exercisable for those Shares) over (ii) the aggregate Exercise Price payable for such Shares. Such cash distribution shall be paid within five (5) days following the surrender of the Option to the Company. Neither the approval of the Committee nor the consent of the Board shall be required in connection with such option surrender and cash distribution. The Shares subject to each Option surrendered in connection with the Hostile Take-Over shall NOT be available for subsequent issuance under the Plan.

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	(a) if such Shares are then quoted on the Nasdaq National Market, the closing price of such Shares on the Nasdaq National Market on the date of determination as reported in The Wall Street Journal;
	(b) if such Shares are publicly traded and are then listed on a national securities exchange, the closing price of such Shares on the date of determination on the principal national securities exchange on which the Shares are listed or admitted to trading as reported in The Wall Street Journal;
	(c) if such Shares are publicly traded but are not quoted on the Nasdaq National Market nor listed or admitted to trading on a national securities exchange, the average of the closing bid and asked prices on the date of determination as reported in The Wall Street Journal; or
	(d) if none of the foregoing is applicable, by the Committee in good faith.

	(a) child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the Participant, including any such person with such relationship to the Participant by adoption;
	(b) any person (other than a tenant or employee) sharing the Participant’s household;
	(c) a trust in which the persons in (a) and (b) have more than fifty percent of the beneficial interest;
	(d) a foundation in which the persons in (a) and (b) or the Participant control the management of assets; or
	(e) any other entity in which the persons in (a) and (b) or the Participant own more than fifty percent of the voting interest.

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	(a) the direct or indirect acquisition by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the Company’s shareholders which the Board does not recommend such shareholders to accept, and
	(b) the acceptance of more than fifty percent (50%) of the securities so acquired in such tender or exchange offer from holders other than Insiders.

	(a) Net revenue and/or net revenue growth;
	(b) Earnings before income taxes and amortization and/or earnings before income taxes and amortization growth;
	(c) Operating income and/or operating income growth;
	(d) Net income and/or net income growth;
	(e) Earnings per share and/or earnings per share growth;
	(f) Total stockholder return and/or total stockholder return growth;
	(g) Return on equity;
	(h) Operating cash flow return on income;
	(i) Adjusted operating cash flow return on income;
	(j) Economic value added; and
	(k) Individual confidential business objectives.

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