Contents :

We are in receipt of your above mentioned letter. We are pleased to furnish the information based on the position as on date-

a. Feasibility Studies

The present concentration of the new Venture is to offer the LES products to the Malaysian Market. MDSB have an existing client and contact base and are actively involved in marketing such technology based software and solutions to the targeted market in Malaysia. MDSB has conducted a preliminary study to establish understanding on the infrastructure available in Malaysia, the readiness of the target customers to adopt m-commerce to enhance business value, products being offered by other vendors, cost efficiency of products that the new venture will offer, competitive edge of the products being offered by the new venture and pricing issues.

The outcome of the feasibility studies is very encouraging.
a. There exists a growing demand for the products.
b. The products offered by the Venture have a leading edge over its competition in terms of price packaging, ease, and speed of installation and implementation, scalability, flexibility and adaptability to various operating systems and low maintenance requirement.
c. The products offered are suitable for the financial sector, telecommunication industry, utilities industry, service industry, and the hospitality industry.
d. The infrastructure in the country is suitable for such products.
e. There is a high level of awareness that wireless technologies will have a growing influence on the way business is done and also that it is inevitable.
f. Mobile communication is a preferred and more convenient mode of communication.
g. Mobile phones out number the Internet users by almost four times.
h. The cost of mobile phone communication is competitive in global terms.
i. The Malaysian Government has laid emphasis on the use of information technology in business.

The Board of directors is of the opinion that the products are suitable and the timing is favourable for CNLT to invest in the new venture.

b. Eventual Capital and Investment Outlay

At present, the paid-up capital of the new venture is planned to be RM 100,000. The new venture will be supported by the Research and Development (R&D) works carried out by LES at their several R&D centres in USA and India. As the Costs of development, continuous upgrading, adoption of new technologies will be borne by LES. CNLT does not anticipate any further investments outlay in the new venture during the year 2000.

The present paid-up is considered sufficient, as the new venture will act as an agent vendor for LES products. The infrastructure required is minimum. Barring unforeseen circumstances, the paid-up capital of RM 100,000 is considered sufficient.

c. Capital Commitments and Source of Financing

The initial outlay has been planned to be minimum. MDSB has agreed to extend its existing facilities to house the office of the new venture for a token cost until the operations start generating revenue.

As LES will be providing the technical back up during the gestation period, we do not anticipate the costs to be substantial. We are anticipating that the venture should breakeven by the year 2001 and should start generating incremental revenue by the end of year 2001.

The expenditure during the gestation period will met by the resources of the venture. We anticipate that the business will not require any additional funding during the year 2000.

d. Financial and Business Risks with respect to the venture

The Board of Directors is of the opinion that the financial risks of the venture are unlikely to be substantial.

e. Period with-in which the venture is expected to make profit

Barring unforeseen circumstances, we expect the venture to start generating profits during the year 2001.

Query Letter Contents :

We refer to your announcement dated 04-05-2000 in respect of the aforesaid
matter.
In this connection, kindly furnish the Exchange with the following additional
information for public release :
(1) Outcome of any feasibility studies undertaken with respect to the Venture
and the
name(s) of the consultants conducting the same, if any.
(2) Eventual capital and investments outlay by your Company in the Venture.
(3) The capital commitments and source of financing to undertake the Venture
until such
time when operations commence and revenue is generated.
(4) The financial and business risks with respect to the Venture.
(5) Period within which the Venture is expected to generate profit.
Please furnish the Exchange with your reply within two (2) market days from the
date hereof.

Yours faithfully
KUALA LUMPUR STOCK EXCHANGE

TAN YEW ENG
Senior Manager, Listing Operations
/JT