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December 2002Annual Report

ElectroTech Investments Limited(Incorporated in Singapore)

Australian Stock ExchangeARBN 094 099 046

ElectroTech Investments Limited(Incorporated in Singapore)

Australian Stock ExchangeARBN 094 099 046

December 2002Annual Report

Group Operating Structure

Company Particulars

Chairman’s Statement

Financial History

Review of Operations

Directors' Report

Corporate Governance Statement

Income Statements

Balance Sheets

Statements of Changes in Equity

Consolidated Cash Flows Statement

Notes to the Financial Statements

Statement by Directors

Report of The Auditors

Shareholder Information

Company Announcement

Notice of Annual General Meeting

Proxy Form

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8

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Insert

Contents

2

Group Operating Structure

Mechatronics Division

Frencken Group B.V.

Hurksestraat 16

5652 AJ Eindhoven

The Netherlands

Tel: +31 (0)40 2507 507

Fax: +31 (0)40 2507 518

eMail: [email protected]

www.frencken.nl

Frencken Group Subsidiaries:-

• Frencken Mechatronics B.V. Eindhoven, The Netherlands

• Machinefabriek Gebrs. Frencken B.V. Eindhoven, The Netherlands

• Optiwa B.V.

Reuver, The Netherlands

• Frencken Malaysia Sdn. Bhd. 74%Penang, Malaysia

Frencken Group Associate:-

• Frencken Brno s.r.o. 49%Brno, Czech Republic

Electronics Manufacturing Services Division

Precico Group Sdn. Bhd.

Plot 410, Lorong Perusahaan 8B

Prai Industrial Estate, 13600 Prai

Penang, Malaysia

Tel: +60 (04) 388 3177

Fax: +60 (04) 399 7877

Email: [email protected]

Japan: [email protected]

Precico Group Subsidiaries:-

• Precico Sdn. Bhd. Penang, Malaysia

• Precico Electronics Sdn. Bhd.Penang, Malaysia

• Precico M & D Sdn. Bhd.

Penang, Malaysia

• Merit Process Sdn. Bhd. Penang, Malaysia

Other Operating Companies:-

• ElectroTech EU LimitedCambridge, United Kingdom

• Precico Singapore Pte. Ltd.Singapore

ElectroTech Investments Limitedwww.electrotechgroup.com

3

Company Particulars

Directors Dato’ Larry Low Hock Peng Executive ChairmanGooi Soon HockRichard Alan ListerSebastiaan Johannes van SprangRichard Oh Hock MengProfessor Low Teck Seng

Executive Committee Gooi Soon Hock PresidentRichard Alan Lister Vice PresidentSebastiaan Johannes van Sprang Vice PresidentDavid Chin Yean Choon Vice President

Secretaries Choong Mee FongFoo Soon See

Auditors Ernst & Young10, Collyer Quay, #21-10 Ocean Building, Singapore 049315

Registered Office 8, Cross Street, #11- 00 PWC Building, Singapore 048424Tel: +65 6236 3333 Fax: +65 6236 4399

Principal Administrative Office c/o Precico Group Sdn. Bhd.Plot 410, Lorong Perusahaan 8B, Prai Industrial Estate, 13600 Prai, MalaysiaTel: +60 (04) 388 3177 Fax: +60 (04) 399 7877

Australian Share Registry Advanced Share Registry Services6th Floor, 200 Adelaide Terrace, Perth WA 6000, AustraliaTel: +61 8 9221 7288 Fax: +61 8 9221 7869

Australian Liaison Office c/o Kirke Securities Limited6, Ord Street, West Perth, WA 6005, AustraliaTel: +61 8 9321 3883 Fax: +61 8 9320 5108

Stock Exchange Listing Shares are listed on the Australian Stock Exchange under code “ELC”.

4

Chairman’s Statement

… financial year endchanged from

February to December

… Mechatronics Divisionis judiciously

investing in technology

Dear Shareholders

We have changed the Company’s financial year end from February

to December with effect from December 2002 onwards so as to

achieve co-terminous year ends for all Group companies within

ElectroTech Investments Limited. This financial year therefore covers

a ten-month period ended 31 December 2002.

The financial year ended 31 December 2002 has been a challenging

period for the Group. In this period, the Group was affected by the

downturn of the global electronic industry and the slow down in the

US economy resulting in slow off-take of customers’ inventories and

the deferment of capital investments. Orders were reduced and

launches of new products delayed. Under such weak business

conditions, the Group was able to achieve an operating revenue of

$101.4 million and profit before taxation of $3.8 million for the reporting

period. This compares with revenue of $101.7 million and profit before

taxation of $5.6 million for the year ended 28 February 2002.

As in the previous year, our Mechatronics Division contributed

substantially to the Group’s profit. In spite of the difficult business

environment, the Group was able to sustain revenue at $72.1 million,

which was a slight drop of 1.5% on the previous year’s revenue of

$73.2 million. Profit before taxation could not be sustained as well as

revenue. This is reduced by 22.9% to $8.4 million from $10.9 million.

Margin erosion was a major contributory factor.

The performance of the Electronics Manufacturing Services (“EMS”)

Division improved modestly. Revenue grew by 2.5 % to $29.3 million

from $28.6 million. Loss before taxation was pared down to

$2.4 million from $3.5 million, an improvement of 31.4%. Rigorous

effort made in aligning cost to the lower capacity utilisation, which

arose in the previous financial year, made this improvement possible.

With wide-spread over-capacity in Europe arising from the economic

slowdown, I am pleased to advise that the Mechatronics Division is

judiciously investing in technology so that Frencken Group secures

a competitive advantage and distinctly remains ahead of other

contract manufacturers within its class. Within this context, the

Mechatronics Division invested in EB (electronic beam) welding

equipment and is in the process of enhancing and marketing this

technological skill. EB welding will provide the ability for precise gas-

tight joints between metals needed for instance in the aviation industry

and in certain high end machining fabrications. Another extremely

promising development is our investment in sub-micron machining

technologies providing the capability to machine and measure

unusual materials with a very high level of accuracy.

… this report coversa ten-month

period ended31 December 2002

5

... Chairman’s Statement

The Company foresees that the plastic injection moulding business

of the EMS Division will be a significant contributor to the division’s

turnover in 2003. The Division will position itself to focus on the latest

trend for mobile phone keypads, which involves UV (ultra violet)

coated plastic capping on silicone rubber. This technological

approach facilitates higher durability on the keypad surfaces with a

higher level of feel satisfaction. In the light of such a requirement,

the EMS Division has invested in automated UV spraying lines acquired

from Japan, making it presently the only company with such a facility

in North Malaysia.

As reported in my previous year’s statement, the Company completed

the acquisition of a Singapore company for strategic expansion of

the mould design and manufacturing segment of our EMS Division.

The downturn of the manufacturing sector within the Singapore

economy impacted the capacity utilisation of the Singapore facilities

more severely than we originally envisaged. Preliminary plans are

being made to explore the possibility of moving the mould design

and tooling segment of the business to China. This may help to retain

our links with Singapore based and related customers that have

relocated to China.

A testimony of our dedication to customer satisfaction and continuing

upgrading is the Mechatronics and EMS Divisions’ emphasis on meeting

the new requirement of ISO 9000:2000 and ISO 9001:2000. While some

subsidiaries have already achieved this, those that have not are

aggressively pursuing this objective. Two major subsidiaries of the

EMS Division are also embarking on the ISO/TS 16949 certification

programme so as to guarantee a unique brand of quality and service

that comes with doing business with us. The ISO/TS 16949 certification

will also qualify the EMS Division as contract manufacturers for the

automotive industry.

I turn now to stock exchange listings, which has been the subject of

much internal discussion and of extensive consultations with

appropriate advisers, such as stockbrokers and merchant banks.

Your board has come to the conclusion that it is in the interest of the

Company and of its shareholders to seek a removal of the Company

from the Australian Stock Exchange Limited. According to Australian

Stock Exchange listing rules, this requires shareholders’ approval

through an Ordinary Resolution. Approval to apply for a removal will

be sought at the forthcoming Annual General Meeting. Due to

negative sentiment in stock markets worldwide and due to very poor

liquidity, the market price of the Company’s listed shares has fallen

to unreasonably low levels. This restricts the Company’s ability to

negotiate loan funds or seek joint venture partners on beneficial

financial terms related to market capitalisation or to the issue of new

shares. Continued listing therefore will provide no benefits to the

Company or its shareholders in the prevailing circumstances or in the

near future. The Board nevertheless recognises that shareholders will

be concerned that after removal, their shares cannot be traded.

… seek a removal ofthe Company from

the AustralianStock Exchange

… emphasis onmeeting new ISO

requirements

… focus on latesttrend of mobilephone keypads

The Board reiterates its intention to seek a listing on the Singapore

Stock Exchange at some opportune time in the future. The reasons

for seeking a future listing on the Singapore Stock Exchange are that

the Company is incorporated in Singapore and almost 80% of its

shareholders live in the region. Moreover, substantial revenues and

half of the Company’s assets are from this region. Once shares are

re-listed on the Singapore Stock Exchange, Australian shareholders

would not be disadvantaged. The Singapore Stock Exchange is now

linked to the Australian Stock Exchange and Australian shareholders

can trade their Singapore listed shares through their Australian

stockbrokers.

The Company will continue to report to International Accounting

Standards and to maintain the same levels of disclosure that applied

before the removal. I seek your support for the resolution and

commend you to vote in its favour.

Our people have been dedicated and committed to total customer

satisfaction and the relentless pursuit of operational excellence

through cohesion and teamwork. On behalf of the Board of Directors,

I wish to express my heartfelt gratitude and appreciation to the

management and staff for their hard work, contributions, perseverance

and sacrifices.

I would like to take this opportunity to thank our customers,

shareholders, suppliers, bankers and business associates for their

continued confidence and support. We will continue to leverage

on technological advancements and optimise our resources to meet

the needs of an increasingly challenging business environment. In

so doing, we will strive to make 2003 a better year.

Dato’ Larry Low Hock Peng

Executive Chairman

... Chairman’s Statement

6

… seeking a futurelisting on the Singapore

Stock Exchange

… will continue toleverage on

technologicaladvancements

2/1999 2/2000 2/2001 2/2002 12/2002

7

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

0

$’000

Group Operating Revenue

50,678

119,033122,410

101,724

8,000

6,000

4,000

2,000

0

-2,000

-4,000

-6,000

-8,000

-10,000

$’000

Group Net Profit/(Loss)

(9,018)

3,360

6,962

2,364

100,000

80,000

60,000

40,000

20,000

0

$’000

Group Net Assets

41,26846,460

54,001 58,147

Financial History

101,439

2/1999 2/2000 2/2001 2/2002 12/2002

377

2/1999 2/2000 2/2001 2/2002 12/2002

63,449

REVIEW OF OPERATIONS

The Group’s principal operating companies are organised in twocomplementary business divisions, as listed on Page 2 of the AnnualReport.

• Frencken Group in the Netherlands leads ElectroTech’sMechatronics division. This division mainly serves high precisionindustrial machinery and capital equipment clients.

• Precico Group in Malaysia leads ElectroTech’s ElectronicsManufacturing Services (“EMS”) division. This division mainlyserves consumer electronics and office automation clients.

MECHATRONICS DIVISION

The Mechatronics division could not be shielded from the prolongedlingering economic slowdown that was triggered by the September11th incident. Its performance in 2002 was therefore not as robust.Subdued sales were reported from slower deliveries to the vulnerablesemiconductor sector that experienced a worldwide slow-down.Coupled with this, the European economy was adversely affectedby a wave of uncertainties from growing tension in the Middle Eastthat caused companies and consumers alike to be wary of spending.This environment contributed to over-capacity in Europe and triggeredstiff competition. With no avenue for passing higher cost to customers,margins were affected. The division worked hard at containing costand improving efficiency to offset these negative impacts. Revenuedropped marginally by approximately 1.5% to $72.1 million from $73.2million as compared to the previous year. Operating profit’s fell by22.9% to $8.4 million from $10.9 million in the previous year.

8

Review of Operations

… semiconductorsector experienced

worldwide slow-down

… containing costand improving

efficiency

72,105

55,15863,687

Revenue Growth

2/2000 2/20022/2001

100,000

80,000

60,000

40,000

20,000

0

$’000

73,160

12/2002

MECHATRONICS DIVISION (cont’d)

Frencken Group is actively positioning itself for the future to takeadvantage of renewed growth as soon as it presents itself. Withinthis context, it is worth noting that Machinefabriek Gebrs. FrenckenB.V. has invested in EB (electronic beam) welding equipment. Thisis a highly specialised electron beam welding technology whichenables extremely accurate joints to be made between metals undervacuum environment and which brings about a strong, gas-tightjoint. The use of EB welding is expanding in many fields such as inaviation and aerospace, cryogenic and vacuum technologies, aswell as for machinery construction. Another extremely promisingdevelopment is the launching of sub-micron machining technologyat Optiwa B.V.. This technology enhances Optiwa’s core competencyby adding the capability of making highly accurate measurementsof roundness, concentricity and parallelism in the sub-micron range.

To complement this, machine testing equipment associated with

sub-micron technology was added. In line with this expansion not

only has the factory been upgraded but also the overall logistical

set-up has been optimised. The office and façade have been

modernised to give Optiwa B.V. a completely new look, which

exuding its new technological capabilities. These two technology

investments will provide a distinct competitive advantage and move

the Mechatronics division to a class of its own compared to other

contract manufacturers.

In December 2002, the 10000th L-arm module, which the Frencken

Group has been instrumental in developing for Philips Medical Systems‘

cardiovascular X-ray machine, was delivered. This machine has

been acclaimed by the medical world and has received several

awards. In appreciation and recognition of Frencken Group’s

contributions, Philips Medical Systems is selecting the division for a

Quality Award in its overall performance category.

ASML has demonstrated recognition to the Mechatronics division by

concluding a long term agreement. The Frencken Group was able

to achieve this as it has consistently met the required standards of

performance in the areas of technological competence, quality and

delivery reliability.

9

... Review of Operations

… launching of sub-micron machining

technology

… concluding along term agreement

with ASML

…quality awardin overall

performancecategory

10


MECHATRONICS DIVISION (cont’d)

The possible consequences of conflict in Iraq are causing widespread

business uncertainty. Many businesses are deciding to defer capital-

intensive investments. This has affected the performance of Frencken’s

customers making it necessary to off-load some of their risk to the

division. Margins erosion, reduced lead time, increased flexibility and

shorter visibility of orders are challenges confronting the Mechatronics

division. Increased turnover from existing products is not expected.

With this outlook, Frencken Group is focusing on finding new markets

in Germany and England. New opportunities arise from the many

product and technology companies that are now re-evaluating their

in-house manufacturing viability. The challenge is to find OEMs that

are willing to outsource suitable production and assembly projects.

Another potential challenge is the strengthening of the Euro against

the American Dollar. Pressure on prices has increased as this is making

Frencken’s customers less competitive in the United States market.

There is therefore a need to work with customers on cost saving

measures that can help to mitigate this negative trend.

The Mechatronics division is working to enhance the synergistic value

and hence the profitability of its Malaysian subsidiary. The level and

complexity of module assembly being transferred will be increased

during 2003. Accordingly, the subsidiary is upgrading its organisational

structure and facilities. This includes investment in CNC milling and

brushing machines that will match higher demand.

Arising from successful implementation of the ERP system in 2002, the

quality and timeliness of management information has been

reinforced. This assists the organisation’s ability to respond to changing

customer demand and improves the capability to manage changing

circumstances. In the last report it was mentioned that all Frencken

Group companies were in the process of securing certification to the

latest ISO 9000:2000 version. By the end of 2003, the group will be

fully accredited with the ISO 9000:2000 certification. In addition,

Frencken Group has also implemented certain initiatives to enhance

management capabilities throughout their business units. These

challenge and improve on the already high level of competency

within the division.

…successfulimplementation

of ERP system

… working to enhance

synergistic valueof its Malaysian

subsidiary

29,334

63,87558,723

Revenue Growth

2/2000 2/20022/2001

100,000

80,000

60,000

40,000

20,000

0

$’000

28,564

12/2002

11


… need to keepresources for several

major projects

… is cautiouslyoptimistic for

the future

ELECTRONICS MANUFACTURING SERVICES DIVISION (“EMS”)

The performance of the EMS division improved modestly. Revenue

increased by 2.5% to $29.3 million from $28.6 million in the previous

year. The loss before taxation improved by 31.4% to $2.4 million from

a loss before taxation of $3.5 million in the previous year. These

improvements were primarily attributable to cost saving initiatives

and to filling where possible short-term unutilised capacity. Further

cost rationalisation was limited by the need to keep resources available

for several major projects which were deferred longer than originally

envisaged. Two start-up products manufactured for new customers

met with limited success in the market place. For one of these

products, this was due in part to initial product design stability issues.

The other product has yet to achieve wide-spread market

acceptance. If not for the limited success of these two products,

the division’s performance would have been further enhanced.

The EMS division is cautiously optimistic for the future. The keypads

project, deferred from 2002, finally commenced commercial

production in mid February 2003. In the past, keypads can be made

solely from silicone rubber or solely from plastic, both of which have

their drawbacks. Plastic in itself does not inherently exude a pleasant

contact feeling and its elasticity is limited. Rubber presents design

limitations, which can include problems with printing durability. On

their own, neither provides the sophistication and cosmetic appeal

required by mobile phones. The mobile phone market is therefore

moving towards combining the best attributes of both materials. In

technical terms, keypads will be manufactured from UV (ultra violet)

coated plastic capping on a silicone rubber base. This enhances

the cosmetic appeal and allows designs with durable fancy engraving,

contouring, and a higher level of feel satisfaction. The EMS division

provides partnership support for the production of such keypads to

silicone rubber based keypad customers. With these attributes, the

division is optimistic that this project can potentially contribute

significantly to its profitability.

12

…full benefits ofcapacity utilisation

expected during 2004


…to attaincertification toISO/TS 16949

ELECTRONICS MANUFACTURING SERVICES DIVISION (“EMS”) (cont’d)

Apart from the keypad project, the launching of a high capacity

feeder (for printers) project in the third quarter of 2003 is anticipated.

In the office automation segment, the EMS division is in an advanced

stage of development with a European customer of a range of

products that is envisaged to commence commercial production

by the third quarter of 2003. Capacity utilisation will be significantly

improved with the realisation of these projects. The full benefits are

expected during 2004.

Apart from Malaysia, the marketing and business development of

the division is reinforced from overseas offices in United Kingdom,

Japan and Singapore. The United Kingdom office has made significant

gains to its retail customer base for its range of aerial and amplifier

products under the “Telecam” brand.

With the progressive shift of low-end, high volume products to China,

two of the principal strategies for the EMS division are to focus on the

electro-mechanical segment of the medium to high-end consumer

market and on the automotive industry. In line with this strategy, the

division is currently enhancing its capabilities on quality management

by a programme of comprehensive training. This is reinforced with

progressive production process revision needs. The objective is to

attain certification to ISO/TS 16949, which is a pre-requisite for

qualification as an automotive contract manufacturer. A strategic

alliance has also been secured with “SNECI” of France who has

extensive experience in the automotive sector.

The Executive Committee

Directors’ Report

13

The directors have pleasure in submitting their report and the audited financial statements of the Company andof the Group for the financial year ended 31 December 2002.

CHANGE OF FINANCIAL YEAR ENDThe Company has changed its financial year end from 28 February to 31 December. The financial statements areprepared for the financial year from 1 March 2002 to 31 December 2002.

DIRECTORATEThe directors of the Company in office at the date of this report are :-

Dato' Larry Low Hock PengGooi Soon HockRichard Alan ListerRichard Oh Hock MengProfessor Low Teck SengSebastiaan Johannes van Sprang (Appointed on 7 February 2003)

PRINCIPAL ACTIVITIESThe principal activity of the Company is that of an investment holding company. The principal activities of thesubsidiary companies are set out in Note 10 to the financial statements. There have been no significant changesin the nature of these activities during the financial year.

RESULTS FOR THE FINANCIAL YEAR

MATERIAL MOVEMENTS IN RESERVES AND PROVISIONSDetailed movements of reserves are shown in the Statements of Changes in Equity.

There were no material transfers to or from provisions except for those made in the normal course of operationsas disclosed in the financial statements.

ACQUISITIONS AND DISPOSALS OF SUBSIDIARY COMPANIESThe following subsidiary companies have commenced liquidation and applied for strike-off during the financialyear :-

Profit after taxation before minority interestsMinority interests

Profit for the year attributable to the shareholders of the Company

Group$’000

Company$’000

4,769-

4,769

564(187)

377

During the financial year, the Company acquired the entire equity interest in Permatech B.V. from a subsidiarycompany, ElectroTech (Bermuda) Limited, for a consideration of $38,147,000, based on the net tangible assets ofPermatech B.V. Group and its subsidiary companies at the date of acquisition.

There were no acquisitions or disposals of subsidiary companies during the financial year.

Status

In liquidationCommenced its application for strike-off pursuant to Section 344 of theCompanies Act, Cap. 50.

Subsidiary company

Picopak Holdings (M) Sdn. Bhd.Task Precision Industries Pte. Ltd.

... Directors’ Report

14

ISSUE OF SHARES AND DEBENTURESDuring the financial year, new shares were issued by the following subsidiary companies :-

Subsidiary company

Precico Group Sdn. Bhd. ("PGSB")

Precico Electronics Sdn. Bhd. ("PESB")

Merit Process Sdn. Bhd. ("MPSB")

Issuance of shares/Purpose

9,999,996 ordinary shares of RM1.00 each were issued at par, via thecapitalisation of an amount due to ElectroTech (Bermuda) Limited("EBL"), to increase the working capital.

The authorised share capital of PESB was increased from RM2,000,000to RM25,000,000.

13,000,000 ordinary shares of RM1.00 each were issued at par, via thecapitalisation of an amount due to PGSB, to increase the workingcapital.

The authorised share capital of MPSB was increased from RM1,000,000to RM10,000,000.

6,000,000 ordinary shares of RM1.00 each were issued at par, via thecapitalisation of an amount due to PGSB, to increase the workingcapital.

Other than as disclosed above, the Company and its subsidiary companies did not issue any shares or debenturesduring the financial year.

EMPLOYEE SHARE OPTION PLANThe Company has an Employee Share Option Plan (the "Plan") in respect of 22,000,000 unissued ordinary shares of$0.20 each in the Company.

Out of the 22,000,000 options approved, 9,000,000 options were issued to employees including three (3) Directors.

Statutory information regarding the options are as follows :-

(i) The exercise price is $0.25 for one ordinary share of $0.20 each;

(ii) The options are exercisable at anytime between 31 July 2002 and 30 July 2004 (the "Expiry Date");

(iii) The options may be exercised in multiples of at least 10,000 units or a multiple thereof, on the payment of theexercise price; and

(iv) The persons to whom the options have been issued have no right to participate by virtue of the options in anynew or bonus issue of shares of the Company which may be offered to the members of the Company fromtime to time prior to the Expiry Date unless such options have been exercised prior to the date of the issue.

During the financial year, there was no allotment or issuance of shares under the Plan.


15

DIRECTORS' INTERESTS IN SHARES OR DEBENTURESThe following Directors who held office at the end of the financial year had, according to the register of Directors'shareholdings required to be kept under Section 164 of the Companies Act, Chapter 50, interests in shares of theCompany as stated below :-

Name of Director

Ordinary shares of $0.20 each

Dato' Larry Low Hock PengGooi Soon HockRichard Alan ListerRichard Oh Hock MengProfessor Low Teck Seng

Options to subscribe for ordinary shares of $0.20 each at $0.25 per share

Dato' Larry Low Hock PengGooi Soon HockRichard Alan Lister

- 3,393,653

120,000350,000450,000

1,000,000 2,200,000 2,000,000

-3,720,903

120,000350,000450,000

1,000,000 2,200,000 2,000,000

22,825,79493,194,521

---

---

26,512,79493,194,521

500,000--

---

By virtue of Section 7 of the Companies Act, Chapter 50, Gooi Soon Hock is deemed to have an interest in theordinary shares of all the subsidiary companies at the beginning and end of the financial year.

No other Director who held office at the end of the financial year had an interest in shares or debentures of theCompany and its subsidiary companies.

Neither at the end of, nor at any time during the financial year did there subsist any arrangement, to which theCompany is a party, whereby Directors of the Company might acquire benefits by means of the acquisition ofshares in, or debentures of, the Company or any other body corporate.

BAD AND DOUBTFUL DEBTSBefore the income statement and balance sheet of the Company were made out, the Directors took reasonablesteps to ascertain that action had been taken in relation to the writing off of bad debts and the making of provisionfor doubtful debts, and have satisfied themselves that all known bad debts had been written off and that adequateprovision had been made for doubtful debts.

At the date of this report, the Directors are not aware of any circumstances which would render the amount writtenoff or provided for bad and doubtful debts in the Group inadequate to any substantial extent.

DIVIDENDSNo dividend has been paid, declared or recommended since the end of the previous financial year.

Deemed interest

At beginningof the year

Atend of

the year

Held in the name of Director

Atbeginning

of the year

Atend of

the year


16

CURRENT ASSETSBefore the income statement and balance sheet of the Company were made out, the Directors took reasonablesteps to ascertain that any current assets which were unlikely to realise their book value in the ordinary course ofbusiness have been written down to their estimated realisable values or that adequate provisions have been madefor the diminution in value of such current assets.

At the date of this report, the Directors are not aware of any circumstances which would render the values attributedto current assets in the consolidated financial statements misleading.

ABILITY TO MEET OBLIGATIONSNo contingent liability or other liability of the Company or any company in the Group has become enforceableor is likely to become enforceable within the period of twelve months after the end of the financial year which, inthe opinion of the Directors, will or may substantially affect the ability of the Company and of the Group to meettheir obligations as and when they fall due.

OTHER CIRCUMSTANCES AFFECTING THE FINANCIAL STATEMENTSAt the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this reportor the consolidated financial statements which would render any amount stated in the financial statements of theCompany and the consolidated financial statements misleading.

CHARGES ON ASSETS AND CONTINGENT LIABILITIES AFTER THE END OF THE FINANCIAL YEARSince the end of the financial year :-(i) no charge on the assets of the Company or any company in the Group has arisen which secures the liabilities

of any other person.

(ii) no contingent liability of the Company or any company in the Group has arisen.

MATERIAL AND UNUSUAL TRANSACTIONSIn the opinion of the Directors, the results of the operations of the Company and of the Group during the financialyear have not been affected by any item, transaction or event of a material and unusual nature.

In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in theinterval between the end of the financial year and the date of this report which would affect substantially the resultsof the operations of the Company and of the Group for the financial year in which this report is made.

DIRECTORS' BENEFITSSince the end of the previous financial year, no Director of the Company has received or has become entitled toreceive a benefit, required to be disclosed by Section 201(8) of the Companies Act, Chapter 50, by reason of acontract made by the Company or a related corporation with the Director, or with a firm of which the Director isa member, or with a company in which the Director has a substantial financial interest, except for the related partytransaction as disclosed in Note 25 to the financial statements.

DIRECTORS' REMUNERATIONFor the financial year ended 31 December 2002, the total remuneration of the Directors was approximately $868,800(1.3.2001 to 28.2.2002 - $1,023,000). The policy for determining the nature and amount of remuneration and itsrelationship with the Group's performance is included in the Corporate Governance Statement under the sectionentitled "Remuneration Committee".

INFORMATION ON DIRECTORS AND EXECUTIVES

Dato' Larry Low Hock PengDato' Larry Low, 51, is the Executive Chairman of the Company’s Board of Directors, and chairs its RemunerationCommittee. He holds a degree in Economics (BSc (Econs) (Hons)) from the London School of Economics andPolitical Science, University of London and a Masters in Business Administration (MBA) degree from the Universityof California, Los Angeles.

He also holds several board positions in companies in Malaysia and other countries. He is currently a generalcommittee member of the Penang Chinese Chamber of Commerce.

Gooi Soon HockGooi Soon Hock, 49, is a founder and Executive Director of the Company, and is President of its Executive Committee.He has extensive experience in managing manufacturing companies and in developing them into successfulinternational businesses.

He is also the present Managing Director of Precico Group Sdn. Bhd. and a founder member and Director of eachof its subsidiary companies in Malaysia. In addition to his duties as President of the Company, he is also involvedin the day-to-day management of the Electronics Manufacturing Services (“EMS”) operations.

Richard Alan ListerRichard Lister, 52, is an Executive Director of the Company and a Vice President of its Executive Committee. He isa Chartered Engineer (C.Eng., MIEE) with an honours degree in engineering (MA) from Cambridge University, UnitedKingdom.

He is also the Chairman and Supervisory Director of Frencken Group B.V., and the founder and Chairman ofElectroTech EU Limited in Cambridge, United Kingdom, where he is presently based. He has extensive previousexperience in the management of international electronics and manufacturing companies.

Richard Oh Hock MengRichard Oh, 54, is a founding Non-Executive Director of the Company, a member of the Remuneration Committeeand the local Australian Liaison Officer. He is an Australian national and represents the Company’s interests inAustralia by providing management, secretarial and advisory services on statutory and Stock Exchange matters.He is a Chartered Accountant (CA) and Certified Public Accountant (CPA) for more than twenty five (25) yearsand appropriately qualified and experienced in stocking broking and corporate finance having been instrumentatialin starting from scratch and managing two stockbroking firms for the past twelve (12) years as a principal shareholder.

He is currently a consultant to Kirke Securities Limited, a member corporation of the Australian Stock ExchangeLimited. He has previously held positions as chairman, director and/or company secretary in various listed and non-listed public companies. He is also a member of the Australian Institute of Company Directors (MAICD) and afoundation member of the Western Australian Chinese Chamber of Commerce.

Professor Low Teck SengProfessor Low, 47, is a Non-Executive Director of the Company and a member of the Remuneration Committee.Professor Low has served on the Board of the Institute of Electrical and Electronics Engineers (“IEEE”) and theorganising and technical committees of numerous international IEEE conferences in industrial electronics, mechatronicsand magnetics. Professor Low graduated with the B. Sc. (First Class) and Ph. D. degrees from the University of theSouthampton.

He is a professor in the Department of Electrical and Computer Engineering and the former Dean of Engineeringat the National University of Singapore. He was the Director of the Data Storage Institute (“DSI”), a national researchinstitute focused on data storage and optical storage systems, which he started in 1992 as the Magnetics TechnologyCentre until August 1998. He is currently the Principal and CEO of the Republic Polytechnic, Singapore and Chairmanof the DSI.


17


18

INFORMATION ON DIRECTORS AND EXECUTIVES (cont’d)

Sebastiaan Johannes van SprangSebastiaan Johannes van Sprang, 59, is a Vice President on the Company’s Executive Committee and ManagingDirector of Frencken Group and its subsidiaries. He joined Frencken Group in 1996 as Director of its Mechatronicsbusiness and was appointed Managing Director of Frencken Group in 1998.

He was previously the Director of Philips Machinefactory and has thirty (30) years experience in various management,engineering and manufacturing positions within the Mechatronics suppliers business.

David Chin Yean ChoonDavid Chin, 52, is a Vice President on the Company’s Executive Committee and the Financial Controller of theElectroTech Group of companies. He joined the Company in 2002.

He was previously the Group Financial Controller of Asian Agri Group, a large Indonesian plantation group. He hasextensive exposure in financial management, having held several key positions in various other companies bothin Indonesian and Malaysia. He is a Fellow of the Institute of Chartered Accountants in England & Wales and aregistered accountant of the Malaysian Institute of Accountants.

DIRECTORS' MEETINGSThe number of Directors' meetings held during the financial year ended 31 December 2002 and the number ofmeetings attended by each Director were :-

Board of Directors' meetings

NumberattendedNumber held

Dato' Larry Low Hock PengGooi Soon HockRichard Alan ListerRichard Oh Hock MengProfessor Low Teck Seng

33333

33333

The functions of the board and its committees are described in the Corporate Governance Statement which givesdetails of membership of each committee and attendance on committees by each Director.

INDEMNIFICATION AND INSURANCE OF OFFICERSDuring the financial year, the Company has not entered into any agreements to indemnify any Directors of theCompany and its subsidiary companies against liabilities to persons (other than the Company or a related bodycorporate) which arise out of the performance of their duties as Director or executive officer other than indemnitiesgiven to Directors and officers of the Company or its subsidiary companies for personal guarantees given by theDirectors or officers to financial institutions to secure financial facilities for the Group. However, the Company didnot provide Directors and officers with liability insurance.


19

ENVIRONMENTAL REGULATIONThe Board does not consider that the Company or its subsidiary companies are subject to unusual or onerousenvironmental regulation in any of the countries in which it operates. The management at each subsidiary companyis responsible for full compliance with health, safety and environmental legislation and for meeting all regulationsapplicable in their respective locations and industries. During the financial year reported and up to the date ofthis report, there were no known breaches of any environmental regulation and no material issues arising.

AUDITORSThe auditors, Ernst & Young, Certified Public Accountants, have expressed their willingness to accept re-appointment.

On behalf of the Board,

Dato' Larry Low Hock PengDirector

Gooi Soon HockDirector

24 March 2003

20

Corporate Governance Statement

The Board of DirectorsThe Board of Directors consists of an Executive Chairman, three Executive Directors and two Non-Executive Directors.Sebastiaan Johannes van Sprang was admitted to the Board of Directors on 7 February 2003. Details of the Directorsare set out in the Directors’ Report on pages 17-18 under the heading “Information on Directors and Executives”.

The Board meets regularly under Executive Chairman, Dato’ Larry Low, to direct the Group’s holding interests andstrategy. The Directors are committed to apply best practice in corporate governance in a manner which is bestsuited to the operational structure of the Group, and which is most appropriate to fulfilling their statutory responsibilitiesand maintaining accountability. The Board keeps the adequacy of its corporate governance procedures underreview, and where necessary establishes committees. To allow detailed consideration of complex issues, thesecommittees may consist of certain members of the Board, or of Executive Directors supported by suitably qualifiedmembers of the Group’s senior management.

The Board has established an Executive Committee and a Remuneration Committee in 1999. The composition,responsibilities and principal activities of these committees are stated below.

Changes in Corporate Governance arising since the year ended 28 February 2002, was the change of the accountingyear end from a February year end to a December year end. This will result in a co-terminous year end for all Groupcompanies within ElectroTech Investments Limited.

Executive CommitteeThe Executive Committee is responsible to the Board for the management of the Group’s operational activities andsubsidiary interests. The Executive Committee reports to the Board on a regular basis, and the Directors as a wholecontinue to hold statutory responsibility for the duties delegated to the Executive Committee and discharged bythe committee on behalf of the Board.

The Executive Committee has the following members :-

Mr. Gooi Soon Hock PresidentMr. Richard Alan Lister Vice PresidentMr. Sebastiaan Johannes van Sprang Vice PresidentMr. David Chin Yean Choon Vice President (Appointed on 1 January 2003)

Mr. Gooi, Mr. Lister and Mr. van Sprang are Executive Directors of the Company. Mr. Gooi oversees the EMS Divisionand Mr. van Sprang oversees the Mechatronics Division. Mr. David Chin is the Financial Controller of ElectroTechGroup of Companies. Further information on Directors and Executives is given in the Directors’ Report onpages 17-18.

A Review of Operations is presented on pages 8-12 of this Annual Report by The Executive Committee. A separatereview of the work of the Executive Committee and a table of attendance at meetings are not appropriate.Executives meet very regularly with one another, either formally, informally, electronically or with others on subsidiaryboards and in management meetings. For corporate governance purposes, it is considered that the ExecutiveCommittee manages the Group on a constant day-to-day basis and in response to events as they arise. Feedbackand interchange with the Board takes place on each occasion that the Board of Directors also meets.

Remuneration CommitteeThe Remuneration Committee consists of the Executive Chairman, Dato’ Larry Low and the two Non-ExecutiveDirectors, Mr. Richard Oh and Professor Low Teck Seng.

... Corporate Governance Statement

21

The committee reviews the remuneration of Executive Directors, and, based on the recommendation of ExecutiveDirectors, also approves the remuneration of other senior managers on the Executive Committee. The entire Boarddetermines the remuneration of Non-Executive Directors. The committee also advises the Board on remunerationpolicies and practices generally, and makes specific recommendations on terms of employment, performancerelated packages and other benefits and incentive schemes.

The Remuneration Committee meets concurrently with main board meetings on those occasions when there isbusiness to transact, or when the Board has referred specific items to the committee.

The remuneration of Directors is summarised on page 16 of the Directors’ Report under the heading “Directors’Remuneration”. The broad policy for determining the nature and amount of emoluments is to consider professionalsalary levels in each country of residence; the competitive demand locally for the individual’s skills and experience;the performance of each individual in respect to his contributions to, and against targets set within, the Group andeach subsidiary for which he has a responsibility; and the profitability, remuneration culture and strategic contributionsof each of these entities. In each of these respects, external expert advice and relevant comparative informationis obtained as appropriate.

During the year ended 28 February 2001, the Remuneration Committee has finalised the terms of a broadly basedEmployee Share Option Plan for key Group employees. This was agreed with the Board, approved by the AustralianStock Exchange and has been approved by the shareholders at the Annual General Meeting of the Company on30 July 2001. The Remuneration Committee approves awards made under the plan.

At the Annual General Meeting on 30 July 2001, the total number of 22,000,000 ordinary shares of $0.20 each inthe Company representing the Employees Share Option Plan has been approved by the shareholders where thetotal amount of 5,200,000 ordinary shares were granted to the Directors. This is set out on pages 14-15 under theheading “Employees Share Option Plan” in the Directors Report.

For the year ended 28 February 2002, the Remuneration Committee has issued a total number of 3,800,000 to EligiblePersons under the plan. There are no issues made for the ten (10) months period ended 31 December 2002.

Nominations, Appointments and RetirementsThe size of the Board and its Executive Committee has been considered appropriate and adequate for theoperational structure of the Company. Major shareholding interests are suitably represented on the Board.Operational management is suitably represented on the Executive Committee, and the Board considers that thecurrent Executive Committee can be further extended as the delegated workload and the required range ofprofessional skills demand.

Appointments to the Board and retirements are handled in accordance with the Company’s constitution. Theseprovide for Directors to be initially appointed by the Board, subject to election by shareholders at the next AnnualGeneral Meeting, and re-election at two-yearly intervals. The entire Board makes appointments to and dischargesfrom the Executive Committee on the recommendation of the Executive Directors.

The entire Board has therefore acted as a nominations committee, and a separate nominations committee hasnot been necessary. The Directors are receptive to new appointments that can strengthen the Board in accordancewith the Group’s further development.

22

... Corporate Governance Statement

Independent Advice, Audit and Business RiskThere was no formal audit committee nominated from members of the Board in the financial year reported as theBoard as a whole acts as an audit committee and reviews the audit report, approves the annual financial statements,and monitors the financial performance of the Company. During the financial year reported, the Executive Directorsadvised the Board on these matters and made available any internal audit reports. All external audit reports fromthe Group and their corresponding management letters are also made available to Non-Executive Directors onrequest.

The Directors collectively take external professional advice as necessary, and as policy, Non-Executive Directorshave independent access to the Company’s professional advisors on any reasonable request through the Chairman.Fresh perspectives are obtained through the rotation of advisors as appropriate, and fees are assessed periodicallyfor ongoing shareholder value.

Annual appointment or reappointment of an auditor is by shareholder resolution at the Annual General Meetingon the recommendation of the Board.

Each subsidiary of the Group is self-sufficient in financial reporting and compliance to the statutory requirementsof its country of registration. The subsidiary Boards of Directors are supported by one or more members of the Boardor Executive Committee, and are responsible for regular review of business risk, scope of audit, terms of engagement,and the effectiveness and efficiency of internal controls within their specific companies. The internal audit departmentwithin the Group gives additional support to the Executive Committee. Significant risks and events, supported byfinancial reports, are highlighted through the monthly management structure to the Executive Committee, whoin turn advises the Board. All financial information, including audit reports and other external advice, are transparentlyavailable to the Executive Committee, and are available to the Board on request. The Board remains ultimatelyresponsible for direction and review of the Group as a whole.

Ethical StandardsThe Directors are determined to maintain high ethical standards through development of the Company’s governancerequirements as necessary, and each has an awareness of the duties imposed on them as a Director of a publiccompany. As policy throughout the Group, unethical conduct by any employee will not be tolerated. In allcircumstances, all directors, executives and employees are charged with the highest standards of personal integrityand objectivity, over and above strict compliance with the legislative regimes applicable in the countries in whichthey operate.

5,351

-

5,351

-

-

4,860

-

-

-

-

-

4,769

-

4,769

-

4,769

101,724

18,215

1,649

7,166

61

-

-

150

5,577

2,464

2,364

1.00

(83,509)

(2,597)

(8,679)

(1,422)

(1,754)

(46)

(3,113)

(100)

101,439

16,937

1,554

4,769

149

1,081

-

3,778

564

377

0.16

(84,502)

(2,121)

(9,306)

(2,295)

(1,548)

(643)

(30)

(3,214)

(187)

(204)

(204)

(875)

(1,079)

(1,079)

(1,079)

(229)

(262)

(91)

23The accounting policies and explanatory notes on pages 28 to 50 form an integral part of the financial statements

Income Statementsfor the financial year ended 31 December 2002(In Singapore dollars)

Revenue

Cost of sales and services

Gross profit

Other income

Selling and distribution expenses

Administrative and general expenses

Other operating costs

Profit/(loss) from operating activities

Finance costs

Interest income

Exceptional items- Loss on liquidation of subsidiary company- Compensation payable to a former employee written-back- Provision for impairment in value of investment in a subsidiary company

Share of (loss)/profit of an associated company

Profit/(loss) before taxation

Taxation

Profit/(loss) after taxation before minority interests

Minority interests

Profit/(loss) for the year attributable to the shareholders of the Company

Earnings per share (cents)- Basic and diluted

-

-

-

-

-

-

-

-

-

-

-

-

-

-

3

4

5

6

7

8

Group

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

Company

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000Note

24

Balance Sheetsas at 31 December 2002

(In Singapore dollars)

Group Company

Note

31.12.2002$’000

28.2.2002$’000

31.12.2002$’000

28.2.2002$’000

The accounting policies and explanatory notes on pages 28 to 50 form an integral part of the financial statements

45,600-

86316,999

26,63724,004

1,603-

3091,068

53,621

15,9148,9621,098

243-

11,3223,786

660

41,985

11,636

1,0239,1761,450

63,449

48,14314,761

62,904

545

63,449

NON-CURRENT ASSETSProperty, plant and equipmentInvestment in subsidiary companiesInvestment in an associated companyGoodwill arising on consolidation

CURRENT ASSETSInventoriesTrade receivablesOther receivablesAmounts due from subsidiary companiesDeposit with banksCash and bank balances

CURRENT LIABILITIESTrade payablesOther payablesHire purchase/finance lease liabilitiesAmount due to an associated companyAmounts due to subsidiary companiesShort-term borrowingsTerm loansProvision for taxation

NET CURRENT ASSETS/(LIABILITIES)

NON-CURRENT LIABILITIESHire purchase/finance lease liabilitiesTerm loansDeferred taxation

NET ASSETS

EQUITYShare capitalReserves

SHAREHOLDERS' EQUITY

MINORITY INTERESTS

ASSETS LESS LIABILITIES

9101112

13141516

171819162021

182122

23

45,761-

68617,964

20,86519,714

1,959-

4391,640

44,617

10,80610,300

1,03580

-10,259

5,3642,230

40,074

4,543

8098,5591,439

58,147

48,1439,733

57,876

271

58,147

-85,048

--

--

1771,668

--

1,845

-364

--

34,750---

35,114

---

-

51,779

48,1433,636

51,779

-

51,779

-46,901

--

--

104283

--

387

-253

--

25---

278

109

---

-

47,010

48,143

47,010

-

47,010

(33,269)

(11,649) (10,807)

(1,133)

Statements Of Changes In Equityfor the financial year ended 31 December 2002(In Singapore dollars)

25The accounting policies and explanatory notes on pages 28 to 50 form an integral part of the financial statements

46,901

1,242

-

-

48,143

-

-

48,143

# The actual amount is $2

Group

At 1 March 2001

Issuance of shares during the financial year

Profit for the financial year

Foreign currency translation adjustments arising on consolidation

At 28 February 2002


Foreign currency translation adjustments arising on consolidation

At 31 December 2002

Company

At 1 March 2001

Issuance of shares during the financial year

Loss for the financial year

At 28 February 2002


At 31 December 2002

(AccumulatedLoss) /

RevenueReserve

$ '000

SharePremium

$ '000

OrdinaryShares$ '000

ForeignCurrency

TranslationReserve

$ '000 $ '000

TotalShareholders'

Equity

137

-

-

764

901

-

4,651

5,552

6,550

-

-

-

6,550

-

-

6,550

-

2,364

-

2,282

377

-

2,659

53,506

1,242

2,364

764

57,876

377

4,651

62,904

(82)

-

48,143

-

48,143

-

48,143

(54)

(1,079)

(1,133)

-

4,769

3,636

48,143

47,010

4,769

51,779

(54)

(1,079)

#

TotalShareholders’

Equity'$ '000

OrdinaryShares$ '000

(AccumulatedLoss)/

RevenueReserve

$ '000

26

Consolidated Cash Flows Statementfor the financial year ended 31 December 2002

(In Singapore dollars)

OPERATING CASH FLOWSReceipts from customersPayments to suppliers and employees

Cash generated from operation

Interest receivedInterest paidTax paid

Net cash from operating activities

CASH FLOWS FROM INVESTING ACTIVITIESPayment of real property gains taxProceeds from disposal of property, plant and equipmentNet cash of subsidiary companies acquired (Note A)Payments for acquisition of additional shares from minority interestNet cash disposed arising from the liquidation/striking-off of subsidiary companies (Note B)Payment for purchase of property, plant and equipment

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from borrowingsShare issue expensesLoan repayment receivedLoans/advances to third partiesPayment of hire purchase/finance lease liabilitiesRepayment of borrowings

Net cash used in financing activities

NET DECREASE IN CASH AND CASH EQUIVALENTSEffect of exchange rate changes on cash and cash equivalents

NET DECREASE IN CASH AND CASH EQUIVALENTSCASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEARDeposit with banksCash and bank balancesBank overdrafts (Note 20)


Group

(90,095)

(1,548)(3,715)

(1)(4,477)

(4,109)

(726)(4,363)

(2,343)

(2,960)(251)

(3,211)(2,641)

(5,852)

(7,229)

(5,852)

98,696

8,601

154

3,492

-369

--

2,601-

145-

3091,068

1.3.2002to

31.12.2002$’000

118,045

18,937

59

13,570

1906

2,704

556

390

4391,640

(99,108)

(1,754)(3,672)

(27)

(252)

(154)(4,627)

(4,864)

(25)

(4,929)(1,055)(8,827)

(11,576)

(2,870)(161)

(3,031)

(2,641)

(4,720)

(2,641)

1.3.2001to

28.2.2002$’000

27

...Consolidated Cash Flows Statementfor the financial year ended 31 December 2002(In Singapore dollars)


Note AThe attributable net liabilities of subsidiary companies acquired during the previous financial year were as follows :-

-

Property, plant and equipmentInventoriesTrade receivablesOther receivablesCash and cash equivalentsTrade payablesOther payablesHire purchase liabilitiesBank borrowingsLong term liabilitiesDeferred taxationGoodwill arising on acquisition

Less : Consideration satisfied by issuance of shares

Cash and cash equivalents of subsidiary companies acquired

Net cash inflow on acquisition of subsidiary companies

28.2.2002$’000

2,954601

1,96763

6

3,528

1,1241,124

-6

6

(1,022)(5,598)

(247)(635)(491)

(2)

Property, plant and equipmentInventoriesTrade receivablesOther receivablesCash and cash equivalentsTrade payablesOther payablesForeign currency translation

Loss on liquidation/striking-off of subsidiary companies

Cash and cash equivalents of subsidiary companies disposed of

Net cash outflow from disposal of subsidiary companies

Note BThe attributable net assets of subsidiary companies liquidated/striking-off during the financial year are as follows :-

31.12.2002$’000

28.2.2002$’000

4135925

154

46

-

(1)(122)

(86)

(46)

(154)

(154)

----1-

643

643

-

(1)

(643)

(1)

(1)

1 CORPORATE INFORMATIONThe financial statements of ElectroTech Investments Limited for the financial year ended 31 December 2002were authorised for issue in accordance with a resolution of the Directors on 24 March 2003.

ElectroTech Investments Limited is a limited liability Company incorporated in Singapore. The registered officeof ElectroTech Investments Limited is at 8 Cross Street, #11- 00 PWC Building, Singapore 048424.

The principal activity of the Company is that of an investment holding company. The principal activities ofthe subsidiary companies are set out in Note 10. There have been no significant changes in the nature of theseactivities during the financial year.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(a) Basis of preparation

The financial statements, which are expressed in Singapore Dollars, have been prepared under thehistorical cost convention and in accordance with Singapore Statements of Accounting Standard ("SAS")and the applicable provisions of the Companies Act.

The accounting policies have been consistently applied by the Company and, except for the revisionin accounting policy discussed more fully below, are consistent with those used in the previous financialyear.

(b) Revision of accounting policyOn 1 March 2002, the Company adopted SAS 12 (2001), Income Taxes.

In accordance with SAS 12 (2001) a deferred tax is recognised on all temporary differences except thatdeferred tax assets are recognised to the extent that it is probable that taxable profit will be availableagainst which the deductible temporary differences can be utilised. Previously, a deferred tax liabilitywas recognised for timing differences only to the extent that a tax liability was expected to materialisein the foreseeable future and a deferred tax asset was recognised for timing differences only to the extentthat there is reasonable expectation of their realisation.

There was no significant effect arising from the adoption of SAS 12 (2001).

(c) Principles of consolidation(i) The consolidated financial statements comprise the financial statements of the Company and all

its subsidiary companies.

In the previous financial years, the consolidated financial statements were drawn up to 28 Februaryeach year, except for Permatech B.V. and Precico Singapore Pte. Ltd. and the subsidiary companiesheld directly and indirectly by Permatech B.V. and Precico Singapore Pte. Ltd., which were drawnup to 31 December. In the current financial year, the financial year end of the Company and allthe other subsidiary companies have been changed to 31 December.

(ii) The financial statements of the subsidiary companies are prepared using consistent accountingpolicies.

(iii) For acquisition of subsidiary companies which are accounted for under the purchase method, fairvalues are assigned to the identifiable assets and liabilities of the subsidiary companies at the dateof acquisition as determined by the Directors.

(iv) The results of subsidiary companies acquired are included in the financial statements of the Groupfrom the date on which effective control is transferred to the Group and the results of subsidiarycompanies are excluded from the financial statements of the Group from the effective date ofdisposal.28

Notes To TheFinancial Statements

29

... Notes To TheFinancial Statements

Leasehold landBuildingsRenovationPlant and machineryMoulds and toolingsMotor vehiclesPiping and electrical installationsOffice equipment, furniture and fittings

44 to 94 years2%

14.29%10% - 33.33%

50%10% - 30%

10%10% - 33.33%

(c) Principles of consolidation (cont’d)

(v) All significant inter-company balances and transactions and resulting unrealised profits or losses areeliminated on consolidation.

(vi) The equity and net profit attributable to minority shareholders' interests are shown separately in thebalance sheet and income statement of the Group, respectively.

(d) Property, plant and equipment and depreciationProperty, plant and equipment are stated at cost less accumulated depreciation and any impairmentin value. Cost comprises its purchase price and any directly attributable costs of bringing the asset toworking condition for its intended use. Expenditure incurred after the property, plant and equipmenthave been put into operation, such as repairs and maintenance and overhaul costs, is normally chargedto the income statement in the period in which the costs are incurred. In situations where it can be clearlydemonstrated that the expenditure has resulted in an increase in the future economic benefits expectedto be obtained from the use of an item of property, plant and equipment beyond its originally assessedstandard of performance, the expenditure is capitalised as an additional cost of property, plant andequipment.

When assets are sold or retired, their cost and accumulated depreciation are removed from the financialstatements and any gain or loss resulting from their disposal is included in the income statement.

Freehold land is not depreciated. All other assets are depreciated over their useful lives on straight-linebasis commencing from the time the assets are held ready for use at the following principal annual ratesof depreciation :-

Fully depreciated assets are retained in the financial statements until they are no longer in use and nofurther charge for depreciation is made in respect of these assets.

The useful life and depreciation method are reviewed periodically to ensure that the method and periodof depreciation are consistent with the expected pattern of economic benefits from items of property,plant and equipment.

An assessment of the carrying value of property, plant and equipment is made when there are indicationsthat the assets have been impaired or the impairment losses recognised in prior years no longer exist.

(e) Investments in subsidiary companiesA subsidiary company is a company in which the Group, directly or indirectly, holds more than 50% ofthe issued share capital, or controls more than half of the voting power, or controls the composition ofthe Board of Directors.

Investments in subsidiary companies are stated at cost less any impairment loss in the Company'sbalance sheet. An assessment of investments in subsidiary companies is performed when there isindication that the asset has been impaired or the impairment losses recognised in the prior years nolonger exist.

(f) Investment in associated companyAn associated company is an entity, not being a subsidiary company, in which the Group has a long-term interest of not less than 20% nor more than 50% of the equity and in whose financial and operatingpolicy decisions the Group exercises significant influence.

The Group's investment in associated company is accounted for under the equity method. Investmentin associated company is carried in the balance sheet of the Group at cost plus post-acquisition changesin the Group’s share of net assets of associates, less any impairment loss.

When the Group’s share of losses exceeds the carrying amount of the investment, the investment isreported at nil value and recognition of losses is discontinued except to the extent of the Group’scommitment.

Intercompany balances and transactions, including intercompany profits and unrealised profits and lossesare eliminated. Unrealised gains arising from transactions with the associated company are eliminatedto the extent of the Group’s interest in the associated company, against the share of post-acquisitionreserves of the associated company. Unrealised losses are eliminated similarly but only to the extent thatthere is no evidence of impairment of the asset transferred.

The Group's share of the results of the associated company is included in the income statement of theGroup. Investment in associated company is stated at cost less any impairment loss in the Company'sbalance sheet. An assessment of investment in associated company is performed when there is indicationthat the asset has been impaired or the impairment losses recognised in the prior years no longer exist.

(g) Goodwill arising on consolidationGoodwill arising on consolidation represents the excess of the consideration paid for shares in a subsidiarycompany over the fair value of identifiable net assets of the subsidiary company. Goodwill arising onconsolidation is amortised using the straight line method over its estimated useful life :-

- Goodwill arising from strategic acquisitions of the Group is amortised over a maximum period oftwenty (20) years.

- Goodwill in high technology based companies is amortised over a period of five (5) years.

The estimated useful life is revised for impairment when events or changes in circumstances indicate thatthe carrying amount may not be recoverable. Goodwill is stated at cost less accumulated amortisationand any impairment.

(h) InventoriesInventories are valued at the lower of cost and net realisable value. Costs of raw materials are determinedon a first-in first-out basis. Costs of finished goods and work in progress include cost of direct materialsand labour and an appropriate portion of fixed and variable overhead expenses based on normaloperating capacity. Net realisable value is the estimate of the selling price in the ordinary course ofbusiness, less the estimated cost of completion and the cost necessary to make the sale.

(i) Trade and other receivablesTrade receivables, which generally have been granted on between 30 and 90 days credit terms, arerecognised and carried at original invoice amount less provision for any uncollectible amounts.Receivables from subsidiary companies and other receivables are recognised and carried at cost.Provision for doubtful debts is made when collection of the full amount is no longer probable. Bad debtsare written off as incurred.

30


31


(j) Trade and other payablesLiabilities for trade and other amounts payable, which are normally settled on 30-90 day terms, are carriedat cost which is the fair value of the consideration to be paid in the future for goods and services received,whether or not billed to the Group.

Payables to subsidiary and associated companies are carried at cost.

(k) ProvisionsProvisions are recognised when the Group has a present obligation (legal or constructive) as a result ofa past event, it is probable that an outflow of resources embodying economic benefits will be requiredto settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisionsare reviewed at each balance sheet date and adjusted to reflect the current best estimate. Where theGroup expects a provision to be reimbursed, for example under an insurance contract, the reimbursementis recognised as a separate asset but only when the reimbursement is virtually certain.

(l) LeasesFinance leaseFinance leases, which effectively transfer to the Group substantially all the risks and benefits incidentalto ownership of the leased item, are capitalised at the present value of the minimum lease payments atthe inception of the lease term. Lease payments are apportioned between the finance charges andreduction of the lease liability so as to achieve a constant rate of interest on the remaining balance ofthe liability. Finance charges are charged directly to the income statement.

Capitalised leased assets are depreciated in accordance with the policy set out in Note 2(d) above.

Hire purchaseProperty, plant and equipment acquired under hire purchase are capitalised in the financial statementsand are depreciated in accordance with the policy set out in Note 2(d) above. The correspondingoutstanding obligations due under the hire purchase after deducting finance expenses are included asliabilities in the financial statements. Finance expenses are charged to the income statement over theperiod of the respective arrangements using the straight line method.

Operating leaseLeases where the lessor effectively retains substantially all the risks and benefits of ownership of the leasedterm, are classified as operating leases. Operating lease payments are recognised as an expense in theincome statement on a straight-line basis over the lease term.

(m) TaxationDeferred taxation is provided, using the liability method, on all temporary differences at the balancesheet date between the tax bases of assets and liabilities and their carrying amounts for financial reportingpurposes. Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxableincome in the years in which those temporary differences are expected to be recovered or settled basedon tax rates enacted or substantively enacted at the balance sheet date.

Deferred tax liabilities are recognised for all taxable temporary differences associated with investmentsin subsidiary and associated companies, except where the timing of the reversal of the temporarydifference can be controlled and it is probable that the temporary difference will not reverse in theforeseeable future.

At each balance sheet date, the Group re-assesses unrecognised deferred tax assets and the carryingamount of deferred tax assets. The Group recognises a previously unrecognised deferred tax asset tothe extent that it has become probable that future taxable profit will allow the deferred tax asset to berecovered. The Group conversely reduces the carrying amount of a deferred tax asset to the extent thatit is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all ofthe deferred tax asset to be utilised.

32


(m) Taxation (cont’d)

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused taxassets and unused tax losses, to the extent that it is probable that taxable profit will be available againstwhich the deductible temporary differences, carry-forward of unused tax assets and unused tax lossescan be utilised.

Current tax and deferred tax are charged or credited directly to equity if the tax relates to items that arecredited or charged, in the same or a different period, directly to equity.

(n) Employees' benefitsDefined contribution plansAs required by law, certain subsidiary companies make contributions to their state pension schemes.These defined contributions are recognised as compensation expense in the same period as theemployment that gives rise to the contribution.

Employee leave entitlementEmployee entitlements to annual leave are recognised when they accrue to employees. A provisionis made for the estimated liability for annual leave as a result of services rendered by employees up tothe balance sheet date.

(o) Foreign currenciesTransactions in currencies other than Singapore Dollars have been brought to account using theexchange rates in effect at the date of the transaction. Monetary items in currencies other than SingaporeDollars at balance sheet date are translated at the exchange rates existing at that date.

Exchange differences are brought to account in the income statement of the financial year in whichthey arise.

(p) Translation of foreign currency financial statementsIncome statements of foreign subsidiary companies and associated companies are translated intoSingapore Dollars at average exchange rates for the year and the balance sheets are translated at theexchange rates ruling at the balance sheet date. All resultant exchange differences are taken directlyto the foreign currency translation reserve.

On disposal of a foreign entity, accumulated exchange differences are recognised in the incomestatement as a component of the gain or loss on disposal.

(q) Cash and cash equivalentsCash and cash equivalents comprise cash on hand and at bank, demand deposits and short-term, highlyliquid investments readily convertible to known amounts of cash and subject to an insignificant risk ofchange in value.

Cash on hand and in banks and short-term deposits are carried at cost.

For the purposes of the cash flows statement, cash and cash equivalents are shown net of outstandingbank overdrafts.

(r) Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Groupand the revenue can be reliably measured.

Revenue from sale of goods or services rendered are recognised upon delivery of products and customeracceptance, if any, or performance of services, net of sales tax and discounts, and after eliminating saleswithin the Group.

Dividend income is recognised when dividends are declared.

33


(s) Government grantsGrants from government are recognised at their fair value on a receipt basis. Expense related grants arerecognised as income in the period in which the respective expenses are incurred.

(t) BorrowingsBorrowings are recognised at cost, being the fair value of the consideration received, and borrowingcosts are recognised as expenses in the period in which they are incurred.

(u) Impairment of assetsAssets other than financial assets are reviewed for impairment whenever events or changes in circumstancesindicate that the carrying amount of an asset may not be recoverable. Whenever the carrying amountof an asset exceeds its recoverable amount, an impairment loss is recognised in the income statements.

Reversal of impairment losses recognised in prior years is recorded when there is an indication that theimpairment losses recognised for the asset no longer exist or have decreased. The reversal is recordedin income. However, the increased carrying amount of an asset due to a reversal of an impairment lossis recognised to the extent it does not exceed the carrying amount that would have been determined(net of amortisation or depreciation) had no impairment loss been recognised for that asset in prior years.

4 OTHER INCOME

Group

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

Company

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

101,147577

-

101,724

Sale of goodsRevenue from servicesDividend income from a subsidiary company

101,439--

101,439

--

5,351

5,351

---

-

3 REVENUE

Company

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

-186373

-736

162938

-163108

1,649

14262560

78-

611524

489-

51

1,554

-----------

-

Bad trade debts recoveredGain on disposal of property, plant and equipmentGovernment grants receivedPayables and accruals written backProvision for price reduction written backRental incomeRework chargesScrap salesTooling and moulding services incomeTrade deposits from a customer forfeitedOthers

-----------

-

Group

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

34


5 PROFIT/(LOSS) FROM OPERATING ACTIVITIES

The profit/(loss) from operating activities is stated after charging/(crediting) :-

Amortisation of goodwill arising on consolidationAuditors' remuneration- current year- under provision in prior yearBad trade debts written offClosure cost of a factoryCompensation paid to a former directorDepreciation of property, plant and equipmentDirectors' fees- directors of the CompanyDirectors' remuneration- directors of the Company- directors of subsidiary companiesInventories written-offLoss on disposal of property, plant and equipmentLoss/(gain) on conversion of foreign currency transactionsProvision for impairment in value of property, plant and equipmentProvision for doubtful trade receivablesProvision for inventories obsolescencesRental expenses

Company

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

Group

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

965

2205837

--

5,888

8

8691,589

11125

723

-124242360

1,011

25654

-347

386,188

7

1,0231,636

-56

401,0561,129

458

(17)

-

4246

----

8

----

262

----

-

112----

-

----

----

(14)

Interest expenses- Amount due to subsidiaries- Long-term loans- Hire purchase/finance leases- Short-term borrowings

6 FINANCE COSTS

Company

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

Group

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

-794177577

1,548

-1,178

164412

1,754

91---

91

----

-

35


7 TAXATIONMajor components of income tax expense for the year ended 31 December were :-

Company

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

Group

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

Current :-SingaporeForeign

Deferred :-SingaporeForeign

Under/(over) provision in respect of previous years :Current (foreign)Deferred (foreign)

-3,206

-37

3,243

4

3,214

(33)

(722)

(73)

-3,908

-

3,186

-

3,113

----

---

-

--

--

-

--

-

A reconciliation between the tax expense and the product of the accounting profit multiplied by the applicabletax rate for the year ended 31 December 2002 was as follows :-

Company

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

Group

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

119

-

-

-

Adjustments :-

Permanent differences/expenses not deductible for tax purposes

Tax exemption and relief

Deferred tax assets not recognised

Overprovision in respect of previous years

Tax expense

963

-

271

3,214

-

1,186

3,113

(29) (73)

(403)

(1,168)

264

-

-

-

-

Profit/(loss) before tax and minority interests

At Singapore income tax rate of 22% (28.2.2002 : 24.5%)

Higher tax rates of other countries

3,778

831

1,178

5,577

1,366

1,037

4,769

1,049

-

(1,079)

(264)

-

36


7 TAXATION (cont’d)

The estimated amount of unabsorbed tax losses, unutilised capital allowances and reinvestment allowances,pending agreement with the relevant tax authorities in the countries in which the Group operates, for whichthe related tax effects have not been accounted for are as follows :-

Unabsorbed tax lossesUnutilised capital allowancesUnutilised reinvestment allowances

9,0106,3063,689

8,5733,7973,117

Group

31.12.2002$’000

28.2.2002$’000

Weighted average number of ordinary shares in issue applicable to basic earnings per share

Effect of dilutive share options :-

Employees share option

Adjusted weighted average number of ordinary shares applicable to diluted earnings per share

Earnings per share (basic)

Numberof shares

Numberof shares

Cents Cents

240,713,258

233,209,382

236,761,197

236,695,900

(7,503,876) (65,297)

0.16 1.00

The diluted earnings per share is not presented as the assumed conversion of potential ordinary shares is anti-dilutive.

8 EARNINGS PER SHAREBasic earnings per share is calculated by dividing the net profit for the year attributable to ordinary shareholdersby the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by dividing the net profit attributable to ordinary shareholders by theweighted average number of ordinary shares outstanding during the year (adjusted for the effects of dilutiveshare options).

The following reflects the income and share data used in the basic and diluted earnings per sharecomputations :-

Profit attributable to ordinary shareholders for basic and diluted earnings per share

Group

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

377 2,364

37


9 PROPERTY, PLANT AND EQUIPMENT

Plant andmachinery,moulds and

toolings, motorvehicles and

piping andelectrical

installation$ '000

Freehold andleasehold land,

buildings andrenovation

$ '000Total

$ '000

Officeequipment,

furniture andfittings$ '000Group

CostAt beginning of financial yearForeign currency translation adjustmentsAdditionsDisposals

At end of financial year

Accumulated depreciation and impairmentAt beginning of financial year- Depreciation- Impairment

Foreign currency translation adjustmentsCharge for the financial yearDisposals- Depreciation- Impairment

28,2561,048

875-

30,179

4,586-

4,586

357368

--

46,194338

3,479

48,114

28,41235

28,447

4203,747

10,528559769

11,803

6.1795

6,184

4221,773

(53) (1,950)(1,897)

84,9781,9455,123

90,096

39,17740

39,217

1,1995,888

(1,751)

(8)(44)(5)

(1,795)(13)

Plant and equipment with a net book value of approximately $2,749,000 (28.2.2002 - $2,051,000) were acquiredunder hire purchase arrangements and finance leases.

Leasehold land and buildings with a total net book value of approximately $10,897,000 (28.2.2002 - $10,558,000)and plant and machinery with a total net book value of approximately $1,398,000 (28.2.2002 - $1,764,000) arecharged as securities for banking facilities.

At end of financial year- Depreciation- Impairment

Charge for 1.3.2001 to 28.2.2002

Net book valueAt beginning of financial year


5,311-

5,311

627

23,670

24,868

30,82827

30,855

4,246

17,747

17,259

8,330-

8,330

1,315

4,344

3,473

44,46927

44,496

6,188

45,761

45,600

38


10 INVESTMENT IN SUBSIDIARY COMPANIES

Held by the subsidiary companies :-

Frencken Group B.V. *

Frencken Mechatronics B.V. *

Frencken Technical Projects Assembly B.V. *

Machinefabriek Gebrs. Frencken B.V. *

Optiwa B.V. *

100%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Investment holding

Manufacturing, assemblyand engineering of precisionmechanical modules andequipment

Provision of services toGroup companies

Manufacturing and assemblyof precision mechanical parts,sheet metal and prototyping

Manufacturing and/orassembly of precisionmechanical parts and modules

Netherlands

Netherlands

Netherlands

Netherlands

Netherlands

Name ofsubsidiarycompany Principal activities

Effectiveequity interest held

by the Group31.12.2002 28.2.2002

Country ofincorporation/place ofbusiness

Unquoted shares - at costLess: Impairment loss

The subsidiary companies are as follows :-

Company

31.12.2002$’000

28.2.2002$’000

85,923

85,048

47,776

46,901

(875)(875)

Held by the Company :-

Electrotech(Bermuda) Limited * 100%46,901


Investment holding100%

Cost ofinvestment

31.12.2002$’000

28.2.2002$’000

46,901


by the Group

31.12.2002%

28.2.2002%

Bermuda


Precico Singapore Pte. Ltd.

Permatech B.V. *

100%

100%

875

38,147

85,923

Design andmanufacture of plasticinjection moulds,components and parts

Investment holding

100%

100%

875

-

47,776

Singapore

Netherlands # #

39


10 INVESTMENT IN SUBSIDIARY COMPANIES (cont’d)



by the Group

31.12.2002 28.2.2002


Held by the subsidiary companies :-

Frencken Investments B.V. *

Frencken Investments s.r.o. *

Frencken Malaysia Sdn. Bhd. *

Precico D&E Sdn. Bhd. *

Precico Group Sdn. Bhd. *

Precico Sdn. Bhd. *

Precico Electronics Sdn. Bhd. *

Precico M&D Sdn. Bhd. *

Picopak Holdings (M) Sdn. Bhd.

Merit Process Sdn. Bhd. *

ElectroTech EU Limited *

Task Precision Industries Pte. Ltd.

100%

100%

73.86%

100%

100%

100%

100%

100%

-

100%

100%

-

100%

100%

73.86%

100%

100%

100%

100%

100%

100%

100%

100%

100%

Property holding company

Property holding company

Manufacturing and/orassembly of mechanicalparts and modules

Dormant

Management andinvestment holding

Manufacture of plasticinjection moulded partsand/or assemblies

Manufacturing, final test andassembly of electronic relatedproducts

Design and manufacture ofplastic injection moulds

In liquidation

Manufacture of plastic injectionmoulded parts and/or assemblies

Management company andthe marketing of Groupproducts and services

Commenced applicationfor strike-off

Netherlands

Czech Republic

Malaysia

Malaysia

Malaysia

Malaysia

Malaysia

Malaysia

Malaysia

Malaysia

UnitedKingdom

Singapore

Frencken Eindhoven B.V. *

Gereedschap-makerij Fremach B.V. *

100%

100%

100%

100%

Provision of services toGroup companies

Dormant

Netherlands

Netherlands

* Audited by member firms of Ernst & Young Global

# During the financial year, the Company acquired the entire equity interest in Permatech B.V. from asubsidiary company, ElectroTech (Bermuda) Limited, for a consideration of $38,147,000, based on the nettangible assets of Permatech B.V. and its subsidiary companies at the date of acquisition.

40


11 INVESTMENT IN AN ASSOCIATED COMPANY

Group

31.12.2002$’000

28.2.2002$’000

Unquoted shares - at costGroup's share of post acquisition reserves

295568

863

295391

686

12 GOODWILL ARISING ON CONSOLIDATION

Frencken Brno s.r.o. CzechRepublic

40% 40% Manufacturing of precisionmetal parts

The associated company is as follows :-

Name ofassociatedcompany Principal activities


by the Group

31.12.2002 28.2.2002


Group

31.12.2002$’000

28.2.2002$’000

Cost :-

At beginning of financial yearGoodwill arising from acquisition of subsidiary companiesGoodwill arising from acquisition of additional shares in a subsidiary company from minority interestsReversal of goodwill arising from liquidation of a subsidiary company


Accumulated amortisation :-

At beginning of financial yearProvision for the financial yearReversal of goodwill arising from liquidation of a subsidiary company


Net book value :-


30,069-

-

22,375

7,694

16,999

26,8063,528

61

30,069

326

17,964

(7,694)

(12,105)(965)

(5,376)

(326)

(11,420)(1,011)

(12,105)

41


Raw materials- at costat net realisable valueFinished goods- at costat net realisable valueWork-in-progress (at cost)Goods in transit (at cost)Consumables (at net realisable value)

Inventories are stated after deducting provision for obsolescences :-

At beginning of financial yearForeign currency translation adjustmentAcquisition of subsidiary companiesProvision for the financial yearWritten-off against provision


Trade receivablesProvision for doubtful receivables

Analysis of provision for doubtful receivables :-

At beginning of financial yearAcquisition of subsidiary companiesForeign currency translation adjustmentsProvision for the financial yearBad debts written off against provisionProvision written back


13 INVENTORIES

10,50658

2,88776

7,154138

46

20,865

1,118

201,129

-

2,247

12,053238

5,807276

8,035228

-

26,637

2,24710

-242

523

Group

31.12.2002$’000

28.2.2002$’000

(1,976)

(20)

Inventories stated at cost of approximately $25,570,000 (28.2.2002 - $17,470,000) are charged as securitiesfor banking facilities.

14 TRADE RECEIVABLES

Group

31.12.2002$’000

28.2.2002$’000

24,854

24,004

1,631-

100304

850

21,345

19,714

63853

91,107

1,631

(850)

(1,005)(180)

(1,631)

(125)(51)

42


16 AMOUNTS DUE FROM/(TO) SUBSIDIARY COMPANIESThe amounts due from/(to) subsidiary companies are non-trade in nature, unsecured, interest free and haveno fixed terms of repayment, except for an amount of $191,000 (28.2.2002 - $Nil) due to a subsidiary companywhich bears interest at 6% (28.2.2002 - Nil%) per annum.

17 OTHER PAYABLES

The staff loans and advances are secured, bear interest at 3% (1.3.2001 to 28.2.2002 - 3%) per annum and arerepayable by monthly instalments.

Sundry payablesAmount owing to the former holding company of a subsidiary companyAmount owing to a company in which a director has an interestOther operating accrualsAccrued staff related costsCompensation payable to a former employeeAdvance payments from customers

The amount owing to the former holding company of a subsidiary company is unsecured, has no fixed termsof repayment and bears interest at Nil% (28.2.2002 - 5.18%) per annum.

The amount owing to a company in which a Director has an interest is unsecured, interest free and has nofixed terms of repayment.

Company

31.12.2002$’000

28.2.2002$’000

Group

31.12.2002$’000

28.2.2002$’000

2,976

1,356

1941,4612,789

-186

8,962

2,690

1,636

194496

2,524984

1,776

10,300

143

-

19427

---

364

45

-

19414

---

253

15 OTHER RECEIVABLES

Sundry receivablesDepositsPrepayments

Advances for mouldsStaff loans and advances

Company

31.12.2002$’000

28.2.2002$’000

Group

31.12.2002$’000

28.2.2002$’000

796152238287130

1,603

80490

240731

94

1,959

177----

177

104----

104

43


19 AMOUNT DUE TO AN ASSOCIATED COMPANY

18 HIRE PURCHASE/FINANCE LEASE LIABILITIESThe future minimum lease payments under hire purchase/finance leases together with the present value ofthe net minimum hire purchase/lease payments are as follows :-

Group

Minimumpayments28.2.2002

$ '000

Present valueof payments

31.12.2002$ '000

Minimumpayments31.12.2002

$ '000

Present valueof payments

28.2.2002$ '000

Within 1 yearAfter 1 year but not more than 5 years

Total minimum lease paymentsLess - Amount representing finance charges

Present value of minimum lease payments

1,2361,188

2,424

2,121

(303)

1,0981,023

2,121-

2,121

1,379833

2,212

1,844

(368)

1,035809

1,844-

1,844

The average discount rate implicit in the hire purchase/finance lease is 8% (28.2.2002 - 9%) per annum.The hire purchase liabilities are secured by a corporate guarantee from the Company of approximately$1,141,000 (28.2.2002 - $Nil).

Group

31.12.2002$’000

28.2.2002$’000

243-

243

737

80

The loan and non-trade amount due to an associated company are interest free and have no fixed terms ofrepayment.

Loan, unsecuredNon-trade amount, unsecured

20 SHORT-TERM BORROWINGS

The short-term borrowings are secured by a first legal charge over the leasehold land and buildings of certainsubsidiary companies, corporate guarantees from the Company of approximately $11,798,000 (28.2.2002 -$18,689,000) and ElectroTech (Bermuda) Limited of approximately $14,880,000 (28.2.2002 - $15,754,000)and personal guarantees from certain Directors of the Company.

Bank overdraftsBankers' acceptanceRevolving creditShort-term trade loansTrust receipts

7.07%3.17%7.58%8.35%2.83%

7.80%3.21%7.65%7.65%

-

Group

31.12.2002$’000

28.2.2002$’000

Weighted average rate

31.12.2002%

28.2.2002%

7,2291,786

4561,851

-

11,322

4,7203,747

797993

2

10,259

44


21 TERM LOANS

22 DEFERRED TAXATION

At beginning of financial yearForeign currency translation adjustmentAcquisition of subsidiary companiesTransferred from/(to) current taxation


Group

31.12.2002$’000

28.2.2002$’000

Ringgit Malaysia denominated term loansEuro denominated term loans

The term loans are repayable as follows :-

Due within 1 year - current portion

Due after 1 year - non-current portion Between 1 and 2 years Between 2 and 5 years Later than 5 years

Total

7,6675,295

12,962

3,786

2,6683,4963,012

9,176

12,962

9,3824,541

13,923

5,364

5,426966

2,167

8,559

13,923

The Ringgit Malaysia denominated loans are repayable by monthly instalments, and is secured by a first legalcharge over the leasehold land and buildings of the subsidiary companies with a net book value ofapproximately $10,897,000 (28.2.2002 - $10,558,000), first legal charges on certain plant and machinery ofthe subsidiary companies with a net book value of approximately $1,398,000 (28.2.2002 - $1,764,000),existing debenture for approximately $14,533,000 (28.2.2002 - $5,708,000) and additional debenture forapproximately $1,871,000 (28.2.2002 - $1,932,000) by way of fixed and floating charges over the entirepresent and future assets of the subsidiary companies and corporate guarantees from ElectroTech (Bermuda)Limited of approximately $14,880,000 (28.2.2002 - $15,754,000) and ElectroTech Investments Limited ofapproximately $10,384,000 (28.2.2002- $18,689,000) and personal guarantees from a Director of the Company.

The Euro denominated loans are repayable by quarterly instalments, and are secured by a pledge on all assetsof the Frencken Group B.V. totalling approximately $63,954,000 (28.2.2002 - $52,593,000) as at the financialyear end.

The term loans bear interest at floating rates ranging from 4.05% to 9.40% (1.3.2001 to 28.2.2002 - 4.05% to9.75%) per annum.

Group

31.12.2002$’000

28.2.2002$’000

1,4397-4

1,450

2,07287

2

1,439

(722)


45

23 SHARE CAPITAL

# The issued and fully paid share capital includes 234,505,800 ordinary shares of $0.20 each issued to theshareholders of ElectroTech (Bermuda) Limited pursuant to a scheme of arrangement carried out in theprevious financial year, as described below.

Group


Authorised :-

At beginning and end of financial year

Issued and fully paid :-

At beginning of financial year Issued during the financial year


22 DEFERRED TAXATION (cont’d)

Deferred taxes at 31 December related to the following :

Excess of net book value over tax written down value of property, plant and equipmentOther temporary differences

28.2.200231.12.2002Number

of shares $ '000

240,713,258 48,143 234,505,810# 46,901- - 6,207,448

240,713,258 48,143 240,713,258 48,143

64,000320,000,000 64,000 320,000,000

Numberof shares $ '000

1,242

Group

31.12.2002$’000

28.2.2002$’000

1,713

1,450

1,586

1,439

(263) (147)

* The actual amount is $2

Company


Authorised :-

At beginning and end of financial year

Issued and fully paid :-

At beginning of financial year Issued during the financial year


64,000320,000,000 64,000 320,000,000

48,143240,713,258

-

10 - *48,143

- 240,713,248

240,713,258 48,143 240,713,258 48,143

46


The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. Allordinary shares carry one vote per share without restrictions.

There are outstanding options to subscribe to the Company's shares granted under the Employee Share OptionPlan as disclosed in Note 24.

Under a Scheme of Arrangement to restructure ElectroTech (Bermuda) Limited (formerly ElectroTechInvestments Limited), an investment holding company incorporated in Bermuda and listed on the AustralianStock Exchange, and its subsidiary companies, the following events took place during the previous financialyear :-

23 SHARE CAPITAL (cont’d)

- the Company was admitted as a foreign company to the official list of the Australian Stock Exchange;

- the Company became the holding and ultimate holding company of ElectroTech (Bermuda) Limited andits subsidiary companies;

- the Company issued one new ordinary share in the Company to the shareholders of ElectroTech (Bermuda)Limited for each share acquired in ElectroTech (Bermuda) Limited;

- all ordinary shares in ElectroTech (Bermuda) Limited existing at that date were cancelled and extinguished,and new shares in ElectroTech (Bermuda) Limited were internally created for exclusive ownership by theCompany; and

- the Company commenced the trading of its shares upon the de-listing of ElectroTech (Bermuda) Limited.

In the opinion of the Directors, the Scheme of Arrangement was an internal reorganisation whose mainobjective was to change the country of domicile from Bermuda to Singapore rather than an acquisition asthe shareholders of the Company were the same as the former shareholders of ElectroTech (Bermuda) Limitedand the rights of each shareholder, relative to the others, were unchanged and no minority interest in the netassets of the Group is altered. The shareholders of ElectroTech (Bermuda) Limited continued to have aninterest in the businesses of ElectroTech (Bermuda) Limited, both before and after the Scheme ofArrangement. Consequently, the Directors considered that it was only appropriate to record the transactionusing generally accepted accounting principles similar to those used in the pooling of interest method ofconsolidation.

The consolidated financial statements for the financial year ended 28 February 2002 were presented as if theScheme of Arrangement had been effected on 27 August 1999 (the date of incorporation of the Company).Consequently, the assets and liabilities of ElectroTech (Bermuda) Limited Group as at 28 February 2001presented, and the results, changes in equity and cash flows of ElectroTech (Bermuda) Limited Group for theyear ended 28 February 2001 presented were consolidated with those of the Company.


47

24 NUMBER OF EMPLOYEES AND EMPLOYEE BENEFITS

Wages and salariesSocial security costsDefined contribution benefits

Staff costs (including executive directors)

The Group had the following number of employees as at the year end :-

Full timePart time

MalaysiaNetherlands

SingaporeOther countries

Group

1.3.2002to

31.12.2002$’000

1.3.2001to

28.2.2002$’000

20,1581,4671,353

22,978

1,29610

1,306

1,079211

124

1,306

21,8021,7801,236

24,818

1,3349

1,343

1,118212

94

1,343

The Company had no (28.2.2002 : nil) employee as its operation is managed by a subsidiary company.

The Company has an Employee Share Option Plan ("the Plan") for the granting of non-transferrable optionsto employees including 3 directors. Options are granted for terms of two (2) years to purchase the Company'sordinary shares at $0.25 per one ordinary share.

Out of the 22,000,000 options approved, 9,000,000 options were issued to the employees. There was noallotment or issuance of shares under the Plan since the date of grant.

The Company signed a management agreement with Richard Oh & Co. Ltd., a company in which a Directorhas a substantial financial interest, to provide secretarial and advisory services on Australian Stock Exchangeand Corporate Law matters at a fee of AUD3,000 ($2,970) (1.3.2001 to 28.2.2002 - $2,840) per month forthe financial year. Total fee paid and payable for the financial year amounted to $25,495 (1.3.2001 to28.2.2002 - $34,080).

25 RELATED PARTY DISCLOSURES

48


26 SEGMENTAL INFORMATION(a) Primary reporting information - Business segments

The operating business of the Group are organised and managed separately according to the natureof products provided, with each segment representing a strategic business unit that offers differentproducts and services different markets.

Frencken Group in the Netherlands leads the Group’s Mechatronics division. This division mainly serveshigh precision industrial machinery and capital equipment clients.

Precico Group in Malaysia leads the Group’s Electronics Manufacturing Services (“EMS”) division. Thisdivision mainly serves consumer electronics and office automation clients.

The following tables present revenue and profit information regarding industry segments for the financialyear ended 31 December 2002 and 28 February 2002 and certain asset and liability information regardingindustry segments at 31 December 2002 and 28 February 2002 :-

External revenueInter-segment sales

Segment results

Interest incomeFinance costsLoss on liquidation of subsidiary companyCompensation payable to a former employee written backShare of (loss)/profit of an associated company

Profit before taxationTaxation

Profit after taxation before minority interestsMinority interests

Profit for the year attributable to the shareholders of the Company

Total

28.2.02$ '000

31.12.02$ '000

Eliminations

28.2.02$ '000

31.12.02$ '000

E M S

28.2.02$ '000

31.12.02$ '000

Investment holding

28.2.02$ '000

31.12.02$ '000

Mechatronics

28.2.02$ '000

31.12.02$ '000

72,1051,070

73,175

8,410

73,160789

73,949

10,856

29,33451

29,385

(2,398)

28,5645

28,569

(3,485)

--

-

(1,243)

--

-

(205)

(1,121)

(1,121)

-

-

(794)

(794)

-

-

101,439-

101,439

4,769

149

1,081

3,778

564

377

101,724-

101,724

7,166

61

-150

5,577

2,464

2,364

(1,548)(643)

(30)

(3,214)

(187)

(1,754)(46)

(3,113)

(100)

Segment assetsInvestment in associated company

Segment liabilitiesUnallocated liabilites

Other segment information :-

Capital expenditureDepreciationAmortisation

65,008

13,700

3,0732,983

528

54,388

11,960

4,3672,575

591

49,083

10,700

2,0502,903

366

52,387

8,788

1,1983,607

335

2,129

476

-2

71

1,567

358

-6

85

-

-

---

-

-

---

116,220

863

117,083

24,87628,758

53,634

5,1235,888

965

108,342

686

109,028

21,10629,775

50,881

5,5656,1881,011


49

The Company generally accounts for intersegment sales and transfers as if the sales or transfers were tothird parties at current market prices.

Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivablesand operating cash and bank balances. Segment liabilities comprise operating liabilities. Capitalexpenditure comprises additions to property, plant and equipment.

26 SEGMENTAL INFORMATION(a) Primary reporting information - Business segments (cont’d)

The Group's business segments are managed on a worldwide basis and are grouped according to thefollowing geographical areas :-

Asia - The main activities are the manufacturing of precision moulded plastic parts and electronics assembly and investment holding.

Europe - The main activities are the manufacturing of precision metal parts, mechanical plant and equipment.

Other countries - The main activity is principally in investment holding.

The following table presents revenue and expenditure information regarding geographical segments forthe financial year ended 31 December 2002 and 28 February 2002 and certain asset information regardinggeographical segments as at 31 December 2002 and 28 February 2002 :-

(b) Secondary reporting format - Geographical segments

27 CAPITAL COMMITMENTS

Total

28.2.02$ '000

31.12.02$ '000

Eliminations

28.2.02$ '000

31.12.02$ '000

Europe

28.2.02$ '000

31.12.02$ '000

Other Countries

28.2.02$ '000

31.12.02$ '000

Asia

28.2.02$ '000

31.12.02$ '000

Operating revenue

Other geographical information :-

Total assetsCapital expenditure

27,614

50,346

2,463

28,003

54,417

1,364

73,825

66,736

2,660

73,721

54,610

4,201

-

1

-

-

1

-

-

-

-

-

-

-

101,439

117,083

5,123

101,724

109,028

5,565

Group

31.12.2002$’000

28.2.2002$’000

28 OPERATIONAL LEASE COMMITMENTS

Commitments in respect of purchase of property, plant and equipment approved by directors but not contracted for

Commitments in respect of contracts placed for the purchase of property, plant and equipment but not provided for

-

112

91

2

Group

31.12.2002$’000

28.2.2002$’000

Future minimum rentals under non-cancellable leases are as follows :-

Within 1 yearAfter 1 year but not more than 5 years

403293

696

445621

1,066

50


Financial risk management objectives and policiesThe main risks arising from the Group's financial instruments are credit risk, interest rate risk and foreigncurrency risk. The Board reviews and agrees policies for managing each of these risks and they are summarisedbelow :-

29 CONTINGENT LIABILITIES (UNSECURED)

30 FINANCIAL INSTRUMENTS

Credit riskFinancial assets which potentially subject the Group to concentrations of credit risk consist principally ofaccounts receivable, bank balances and deposits. The Group's cash equivalents and short-term depositsare placed with high creditworthy financial institutions. Accounts receivable are presented net ofprovision for doubtful receivables. Credit risk with respect to trade receivables is limited, as the Group doesnot have any significant exposure to any individual customer or counterparty.

Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. Creditrisk is minimised and monitored via strictly limiting the Company’s associations to business partners with highcreditworthiness. Trade receivables are monitored on an ongoing basis via Company management reportingprocedures.

Interest rate riskThe Group obtains financing through bank borrowings. The Group's policy is to obtain the most favourableinterest rates available without increasing its foreign currency exposure. The borrowings of the Group aremainly in floating interest rates and the short-term deposits are placed at prevailing interest rates.

Foreign currency riskThe Group transacts in various foreign currencies and, therefore, are exposed to movements in foreignexchange rates. The Group's exposure to foreign currencies are primarily managed by natural hedges ofmatching assets and liabilities denominated in foreign currencies. As at balance sheet date, the Group'scurrency exposures are insignificant.

Guarantee for banking and hire purchase facilities granted to subsidiary companies

Guarantee for banking facilities granted to an associated company

-

-

-

128

12,939

-

18,689

-

Company

31.12.2002$’000

28.2.2002$’000

Group

31.12.2002$’000

28.2.2002$’000

Significant risks and events, supported by financial reports are highlighted through the monthly managementstructure to the Executive Committee, who in turn advises the Board of Directors.

Fair valueHire purchase/finance lease liabilitiesThe carrying amounts of hire purchase and finance lease liabilities approximate their fair value as there areno significant differences between the historical interest rates at the point when the liabilities were undertakenand the current prevailing market interest rates.

Other financial assets and liabilitiesThe carrying amounts of accounts receivable, bank balances and deposits, accounts payable and bankoverdrafts approximate their fair value due to the short-term maturities of these assets and liabilities. The carryingamounts of long-term borrowings in floating rate interest approximate their fair value as at balance sheet date.

The Company has changed its financial year end from 28 February to 31 December. Accordingly, the financialstatements are prepared for the period from 1 March 2002 to 31 December 2002.

The comparatives have been extended to take into account the requirements of SAS 12 (2001) which becameeffective for the financial year ended 31 December 2002, as disclosed in Note 2(b).

31 COMPARATIVES

51

Statement By Directors

We, DATO' LARRY LOW HOCK PENG and GOOI SOON HOCK, being two of the Directors of ElectroTech InvestmentsLimited, do hereby state that, in the opinion of the Directors :-

(a) the accompanying income statements, balance sheets, statements of changes in equity of the Companyand of the Group and consolidated cash flows statement of the Group together with the notes theretoare drawn up so as to give a true and fair view of the state of affairs of the Company and of the Groupas at 31 December 2002, and of the results of the business, and changes in equity of the Company andof the Group, and cash flows of the Group, for the financial year then ended; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be ableto pay its debts as and when they fall due.

On behalf of the Board,

Dato’ Larry Low Hock PengDirector


24 March 2003

52

Report Of The Auditors To TheMembers Of ElectroTech Investments Limited

We have audited the financial statements of ElectroTech Investments Limited ("the Company") set out onpages 23 to 50. The financial statements comprise the balance sheets of the Company and of the Company andits subsidiary companies ("the Group") as at 31 December 2002, and the income statements and statements ofchanges in equity of the Company and of the Group and consolidated cash flows statement of the Group for thefinancial year then ended, and notes thereto. These financial statements are the responsibility of the Company'sDirectors. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that weplan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principles used and significantestimates made by the directors, as well as evaluating the overall financial statements presentation. We believethat our audit provides a reasonable basis for our opinion.

In our opinion,

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act("Act") and Singapore Statements of Accounting Standard and so as to give a true and fair view of :-

(i) the state of affairs of the Company and of the Group as at 31 December 2002, the results andchanges in equity of the Company and of the Group and cash flows of the Group for the financialyear then ended; and

(ii) the other matters required by Section 201 of the Act to be dealt with in the financial statements;

(b) the accounting and other records, and the registers required by the Act to be kept by the Companyand by the subsidiary company incorporated in Singapore of which we are the auditors have beenproperly kept in accordance with the provisions of the Act.

We have considered the financial statements and auditors' reports of all the subsidiary companies of which wehave not acted as auditors, being financial statements included in the consolidated financial statements. Thenames of the subsidiary companies are stated in Note 10 to the financial statements.

We are satisfied that the financial statements of the subsidiary companies that have been consolidated with thefinancial statements of the Company are in form and content appropriate and proper for the purposes of thepreparation of the consolidated financial statements and we have received satisfactory information and explanationsas required by us for these purposes.

The auditors' reports on the financial statements of the subsidiary companies were not subject to any qualificationand in respect of subsidiary company incorporated in Singapore did not include any comment made underSection 207(3) of the Act.

ERNST & YOUNGCertified Public Accountants

Singapore,24 March 2003

53

Shareholder Information

B. Twenty Largest ShareholdersThe names of the twenty largest shareholders are listed below :-

The shareholder information set out below was applicable as at 24 March 2003.

A. Distribution of SharesAnalysis of numbers of shareholders by size of holding :-

Ordinary shares

1 - 1,0001,001 - 5,0005,001 - 10,00010,001 - 100,000100,001 and over

Total number of holders

Holders

14585

12777

335

Units

100177,785697,610

4,361,338235,476,425

240,713,258

D. Voting RightsAll shares have the same rights and rank equally in all respects. Upon a poll every member present in person,by proxy or by representative will have one vote for every share registered in his or her name.

Number ofordinary shares

26,332,20626,154,87015,080,00014,616,00014,223,50014,168,00013,434,00012,527,445

Name

Micro Compact (M) Sdn. Bhd.Precico Holdings Sdn. Bhd.Sinn Hin Company Sdn. Bhd.National Nominees LimitedA A Anthony & Co. Sdn. Bhd.Gim Thye Realty Sdn. Bhd.Meng Tak Corporation Sdn. Bhd.Cayman Resources Sdn. Bhd.

C. Substantial ShareholdersThe Company's Register of Substantial Shareholders recorded the following information :-

The Register of Substantial Shareholders records all holders of more than 5% of the total issued ordinary shares,inclusive of any notified shareholdings held in nominee companies.

% Held of issuedordinary shares

10.9410.86

6.266.075.915.895.585.204.964.404.282.271.881.691.661.551.361.251.090.97

84.07

Number ofordinary shares

26,332,20626,154,87015,080,00014,616,00014,223,50014,168,00013,434,00012,527,44511,932,00010,588,79410,300,000

5,470,0004,520,0004,060,0003,987,7773,720,9033,281,2503,002,7232,623,2162,333,047

202,355,731

Name

Micro Compact (M) Sdn. Bhd.Precico Holdings Sdn. Bhd.Sinn Hin Company Sdn. Bhd.National Nominees LimitedA A Anthony & Co. Sdn. Bhd.Gim Thye Realty Sdn. Bhd.Meng Tak Corporation Sdn. Bhd.Cayman Resources Sdn. Bhd.Queenswood LimitedQueenspac CorporationPrimespot Sdn. Bhd.GBC Holdings Sdn. Bhd.OCBC Securities Pte. Ltd.K-Tee Holdings Sdn. Bhd.Wee Kim BengGooi Soon HockFlextech Holdings LimitedGooi Soon ChaiTung Keow KhengGooi Soon Kheng

54

Company AnnouncementTo The Australian Stock Exchange

The following are the list of announcements made to the Australian Stock Exchange during the financial year.

Date

5 March 2002

13 May 2002

31 May 2002

18 June 2002

26 June 2002

17 July 2002

2 September 2002

8 November 2002

13 November 2002

Announcements

Appendix 3Y - Change of Director’s Interest Notice

Preliminary Final Report for the financial year ended 28 February 2002

Appendix 3B – New issue of shares

Change of Balance Date (year end) from 28 February to 31 December

Annual Report for the year ended 28 February 2002, Top 20 shareholders and Notice ofAGM

Change of Directors’ Interests Notice

Change of Directors’ Interests Notice

Change of Address

Half Yearly Report for the 6 months period ended 31 August 2002

55

Notice OfAnnual General MeetingNOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of ElectroTech Investments Limited, ARBN 094 099 046 (“theCompany”) will be held at 8 Cross Street, #17- 00 PWC Building, Singapore 048424 on Friday, 30 May 2003 at2:00 p.m..

AGENDA

To consider and, if thought fit, to pass the resolutions numbered 1 to 10 below as ordinary resolutions :-

Ordinary Business :-

Financial Statements and Reports

1. To receive and consider the financial statements for the financial year ended 31 December 2002 and therelated directors’ report, directors’ statement and audit report.

Re-election of Directors

2. To elect Mr. Sebastiaan Johannes van Sprang as a Director. Mr. Sebastiaan Johannes van Sprang was appointeda Director on 7 February 2003 and in accordance with Article 3.3 of the Company’s Articles of Association,retires and being eligible, offers himself for re-election by shareholders at the Annual General Meeting.

3. To re-elect Mr. Richard Alan Lister as a Director. Mr. Richard Alan Lister retires by rotation in accordance withArticle 3.6 of the Company’s Articles of Association, and being eligible, offers himself for re-election byshareholders at the Annual General Meeting.

4. To re-elect Mr. Richard Oh Hock Meng as a Director. Mr. Richard Oh Hock Meng retires by rotation in accordancewith Article 3.6 of the Company’s Articles of Association, and being eligible, offers himself for re-election byshareholders at the Annual General Meeting.

Directors’ Fees

5. To approve the payment of Directors’ fees of $8,000.00 for the financial year ended 31 December 2002.

Re-appointment of Auditors

6. That Ernst and Young be re-appointed as Auditors of the Company and the Directors be authorised to fix theirremuneration.

Special Business :-

Authority to Allot Shares

7. That, pursuant to Section 161 of the Companies Act, Chapter 50, approval be and is hereby given to theDirectors to issue shares in the capital of the Company at any time, upon such terms and conditions and forsuch purposes and to such persons as the Directors may in their absolute discretion deem fit, provided alwaysthat the aggregate number of shares to be issued pursuant to this Resolution shall not exceed 15% of the issuedshare capital of the Company for the time being and that such authority shall continue to be in force until theconclusion of the Company’s next Annual General Meeting.

56

...Notice OfAnnual General Meeting

Authority to Grant Options and Issue Shares under the Company’s Employee Option Plan

8. That, pursuant to Section 161 of the Companies Act, Chapter 50, approval be and is hereby given to theDirectors to offer and grant options in accordance with the rules and terms of the Company’s Employee OptionPlan (the “Plan”) and to allot and issue from time to time such number of shares in the Company as may berequired to be allotted and issued pursuant to the exercise of options under the Plan, provided that theaggregate number of shares to be issued pursuant to the Plan does not exceed 15% of the issued share capitalof the Company at any time and from time to time.

Removal of the Company from the Official List of the Australian Stock Exchange Limited

9. That approval be and is hereby given to the Directors to undertake the removal of the Company from theofficial list of the Australian Stock Exchange Limited.

Any other Business :-

10. To transact any other business that may be transacted at the Annual General Meeting of the Company.

NOTES

Voting

The resolutions numbered 1 to 10 above must be passed by a majority in number of shares held by the holders ofordinary shares of the Company present and voting (either in person or by proxy).

However the company need not disregard a vote if :-• It is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions of the

proxy form; or• It is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with

a direction on a proxy form to vote as the proxy decides.

Proxies

A shareholder entitled to attend and vote at the meeting convened by this notice is entitled to appoint not morethan two proxies. Where two proxies are appointed each proxy must be appointed to represent a specifiedproportion of the shareholder's votes. The instrument appointing the proxy must be in writing under the hand ofthe appointor or the appointor's attorney. A proxy need not be a shareholder of the Company.

Each proxy form must be deposited at the Singapore registered office of the Company (8 Cross Street, #11- 00 PWCBuilding, Singapore 048424, facsimile number +65 02 6236 4399) not less than 48 hours before the time of the meeting,together with the power of attorney (if any) under which such proxy form is signed or a notarially certified copy ofsuch power of attorney. A proxy form is enclosed with this notice of meeting.

By Order of the Board


14 April 2003

Investments Limited

Registered Office: 8 Cross Street #11-00 PWC Building, Singapore 048424 Tel No.: 65 6236 3333 Fax No.: 65 6236 4399

ARBN 094 099 046

Directors Dato’ Larry Low Hock Peng Gooi Soon Hock Richard Alan Lister Richard Oh Hock Meng Professor Low Teck Seng Sebastiaan Johannes van Sprang 22 April 2003 To : The Shareholders of ElectroTech Investments Limited Dear Sir / Madam ADDENDUM RELATING TO THE CHANGE OF VENUE OF THE COMPANY’S ANNUAL GENERAL MEETING The purpose of this addendum is to inform the shareholders of the Company on the change of venue of the Company’s forthcoming Annual General Meeting to be held in Singapore on Friday, 30 May 2003. In consideration of the recent SARS outbreak in Singapore, the Board of Directors of the Company has decided to change the venue of the Annual General Meeting from Singapore to Penang, Malaysia as follows :- Venue : Board Room, Precico Sdn Bhd, Plot 410 Lorong Perusahaan 8B,

Prai Industrial Estate, 13600 Prai, Penang, Malaysia Day & Date : Friday, 30 May 2003 Time : 2.00 p.m. Yours faithfully For and on behalf of the Board Gooi Soon Hock Director

Investments Limited

Registered Office: 8 Cross Street #11-00 PWC Building, Singapore 048424 Tel No.: 65 6236 3333 Fax No.: 65 6236 4399

ARBN 094 099 046

14 April 2003 Dear Shareholder, RE: RESOLUTION 9 – REMOVAL OF THE COMPANY FROM THE OFFICIAL LIST OF THE

AUSTRALIAN STOCK EXCHANGE LIMITED After considerable deliberation and consultation with appropriate external consultants like accountants, bankers and brokers, your Board has come to the conclusion that it is no longer in the interest of the Company and its shareholders to remain on the Official List of the Australian Stock Exchange Limited (“ASX”) The reasons are as follows :-

a) Negative global stock market sentiment has contributed to very poor liquidity in the trading of shares in the Company and the decline of its share price to unreasonably low levels.

b) The resulting poor market capitalisation has put undue constraints on the Company’s

financial capabilities to negotiate more favourable commercial terms and/or to attract better quality investors or partners at more attractive instrinic values.

Continued listing therefore provides no benefits to the Company and its shareholders in the prevailing circumstances or the foreseeable future. Your Directors believe that by removing the Company from the official list at this juncture may provide a better chance at an opportune time in the future to list again on a more appropriate exchange without the stigma of unwarranted low share prices. This is assuming circumstances then justify such action. Pursuant to the Australian Stock Exchange listing rules the Company requires shareholders’ approval, which it is seeking at the forthcoming Annual General Meeting before application for removal from the official list can be made. In this regard your Board is unanimous in recommending that you vote for the motion. Your Directors also make the commitment to continued disclosure through its web site and/or appropriate electronic means after the proposed removal so that shareholders are still appropriately kept informed. Yours faithfully, ElectroTech Investments Limited Dato’ Larry Low Hock Peng Executive Chairman

PROXY FORM ElectroTech Investments Limited (ARBN 094 099 046) Please return this Proxy to the Company's Singapore registered office 8 Cross Street, #11-00 PWC Building Singapore 048424 Or by fax to +65 6236 4399 I/We ....................................................................................................................................... (block letters) of ...........................................................................................................................................… being shareholder(s) of ElectroTech Investments Limited HEREBY APPOINT ...............................................................................................................................................… of ...........................................................................................................................................… or failing him, ........................................................................................................................... of ...........................................................................................................................................… or failing him, the Chairman as my/our proxy vote for me/us on my/our behalf at the Annual General Meeting of the Company, to be held on Friday 30 May 2003 at Precico Sdn. Bhd.’s Boardroom, Plot 410, Lorong Perusahaan 8B, Prai Industrial Estate, 13600 Prai, Penang, Malaysia at 2:00 p.m., and at any adjournment thereof in respect of :- # The whole of my/our shares # ………….............. of my/our shares * Please delete whichever is not required. If no deletion is made and the number of shares is not inserted and only one proxy is appointed, it will be assumed that the proxy is for all the shares registered in the name of the shareholder. This form is to be used to vote on the resolutions [set out overleaf]. Signed this day of 2003 Signed by .................................................................... THE COMMON SEAL of was hereunto affixed by the authority of the Board of Directors in the presence of: Director .......................................... Director/Secretary ...................................................

Ordinary Resolutions

In favour*

Against*

1. To receive the Financial Statements and Reports for the financial year ended 31 December 2002.

2. To re-elect Mr Sebastiaan Johannes van Sprang as a Director.

3. To re-elect Mr Richard Alan Lister as a Director.

4. To re-elect Mr Richard Oh Hock Meng as a Director.

5. To approve the payment of Directors’ Fees.

6. To re-appoint Ernst and Young as Auditors of the Company and to authorise the Directors to fix their remuneration.

7. To authorise Directors to issue shares pursuant to Section 161 of the Companies Act, Cap. 50.

8. To authorise Directors to grant options and issue shares under the Company’s Employee Option Plan.

9. To authorise the Directors to remove the Company from the official list of the Australian Stock Exchange Limited.

*Tick whichever is desired NOTES 1. A shareholder entitled to attend and vote at the meeting is entitled to appoint not more than two

proxies. Where two proxies are appointed each proxy must be appointed to represent a specified proportion of the shareholder's votes.

2. The instrument appointing the proxy must be in writing under the hand of the appointor or the

appointor's attorney. A proxy need not be a shareholder of the Company. 3. Each proxy form must be deposited at the registered office of the Company (8 Cross Street,

#11-00 PWC Building, Singapore 048424, facsimile number +65 6236 4399) not less than 48 hours before the time of a meeting together with the power of attorney (if any) under which such proxy form is signed or a notarially certified copy of such power of attorney. A notice of meeting is enclosed with this proxy form.

4. Should you wish to direct your proxy how to vote, please tick accordingly as set out above,

otherwise your proxy will vote as your proxy thinks fit.

december 2002 annual reportfrenckengroup.listedcompany.com/misc/ar2002.pdf · foo soon see auditors...

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