pci limited - pciltd.com · these include design, manufacturing engineering, material sourcing and...

PCI LIMITED Co. Reg No. 198804482N

386 Jalan Ahmad IbrahimSingapore 629156Tel: (65) 6265 8181Fax: (65) 6265 3333Email: [email protected]: www.pciltd.com.sg

PCI LIMITED Annual Report 2012

MISSION STATEMENT

PCI aims to be a leading global high technology electronics manufacturing services company.

PCI delivers high quality, high value and timely supply chain solutions at competitive cost.

PCI’s strategy is to extend its core competency through alliances with a network of technology partners and suppliers to create optimal solutions for customers.

CONTENTS1 Corporate Profile4 Chairman’s Statement6 Group Financial Highlights and Five-Year Group Financial Statistics7 Financial Calendar8 Board of Directors10 Key Executives12 Corporate Data13 Corporate Governance Report20 Financial Statements77 Statistics of Shareholdings79 Notice of Annual General Meeting Proxy Form

CORPORATE PROFILE

ELECTRONICS MANUFACTURING SERVICES SOLUTIONS

PCI Limited delivers manufacturing services to a global customer base. Our business is to create competitive advantage for our customers through helping them bring products to market in the quickest possible time, at the right price and performance point, and with the highest quality. Everyday PCI provides complete manufacturing supply chain services to leading global technology companies.

Whether we are helping to facilitate the launch of new products, or enhancing the competitiveness of existing projects, PCI offers services at all points in the manufacturing outsourcing cycle. These include design, manufacturing engineering, material sourcing and procurement, assembly, test and logistics. PCI’s aim is to add value at each step in the supply chain.

The manufacturing we are engaged in encompasses printed circuit board assembly, customer user interface design and manufacture, and full turnkey electronics manufacturing. Examples of projects are networking and wireless communications products, mobile digital appliances, liquid crystal modules for mobile communications products, control panels for computer peripherals and a broad range of medical, industrial and automotive products.

PCI’S COMPETENCIES

PCI’s primary strength is the dedication of our employees and their knowledge of all aspects of electronics manufacturing. Combined with a network of technology and supply chain partners we deliver a high quality service. With more than thirty years of experience in providing manufacturing solutions, we have a clear understanding of customer’s technology and supply chain needs. PCI has its headquarters in Singapore.

We also house our Design & Development Centre, Quality Engineering Laboratory and Manufacturing Engineering Centre in Singapore. PCI has manufacturing facilities in Singapore, Batam and Shanghai. We have the flexibility and capacity to meet the most demanding requirements from low volume to high volume projects, including high value and high product mix needs.

Our design team provides product manufacturability and test solutions for any stage from between initial design concepts, through to helping facilitate the final touches to a new product. Design engineers interact closely with customer counter-parts on all technical aspects of projects with a constant exchange of information and design suggestions.

Annual Report 2012 1

CORPORATE PROFILE (con’t)

Design activities are based in a fully equipped design center in Singapore. Our experience includes radio frequency, global positioning system, liquid crystal module, control panel, printed circuit board and mechanical design.

Manufacturing capabilities consist of a range of high volume, or medium volume surface mount technology (SMT) assembly lines, and 50 wire bonding machines, with up to date demonstrated competencies for 0201, chip scale package (CSP), chip on board, chip on flex and chip on glass component assembly. Automatic insert capabilities are available for axial components, radial components and jumpers. PCI has significant manual assembly (conveyor belt system) capacity to complete medium to high volume module level, or full box build assembly.

PCI provides rapid development of test protocol, and automated test stations for many functional test applications including telecommunications, networking and RF technologies. Our particular strength is in the design and assembly of jigs and fixtures for product test requirements.

SUPPLY CHAIN MANAGEMENT

PCI’s materials operations take care of our customer’s total material requirements, encompassing global procurement, purchasing, and material management. PCI’s purchasing leverage helps to secure complete bill of materials in time to meet our customers’ product launches and shipment deadlines.

Our procurement team works globally and frequently visits suppliers to evaluate quality, technology and deliverability capabilities. The

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CORPORATE PROFILE (con’t)

development of long-term relationships with suppliers allows us to provide customers the support they need to source and procure electronic components and mechanical parts at highly competitive prices. Materials management takes care of the planning and purchasing needs for on time delivery and at the same time controls carefully the customer’s material procurement commitment and logistics. When supply problems surface, we will pro-actively offer alternative solutions, including product redesign to replace end of life, costly, or scarce components.

QUALITY

Being a cost leader in manufacturing does not compromise our commitment to the highest quality. The Company received ISO 9002 certification for both Singapore and Batam in early 1993. The certification obtained from both the British Standards Institute and the Singapore PSB, attest to PCI’s uncomprising long-term commitment to meeting the exacting quality demands of our customers. Certification was enhanced in 1999 for our design and development services, with ISO 9001 certification by the Singapore PSB.

PCI is well abreast of the latest development in quality management. We have all our ISO certificates awarded to the latest ISO9001:2000 standard. Certification for Shanghai was received in early 2005. In addition, we have also achieved the ISO/TS 16949:2002 certification in March 2006 which replaces the QS9000 standard.

The Quality Assurance team serves as a vital link between customers and our manufacturing locations. It plays an extremely active role during project introduction and subsequent quality improvement.

PCI heavily utilises a comprehensively equipped Accelerated Life Test (ALT) laboratory based in our Singapore facility, to qualify new products and to provide prediction and diagnosis of failures.

A DEDICATED PARTNER

PCI is a secure and dependable long-term partner. Our experience in supplying manufacturing solutions to the most demanding global customers is an assurance that PCI can get the job done. Customers frequently compliment us on providing a responsive and individual service regardless of the size of the project and PCI has been conferred numerous awards by happy and satisfied customers.

It’s easy to work with PCI; customers have ready access to key individuals in Singapore, and support from local marketing personnel. Communications advances and our regular experience of working late into the night, help eliminate time zone differences. Once a program starts, a dedicated program manager will ensure a smooth transition from initiation through to manufacturing. We have a “can do” attitude and are pro-active in working towards the best solution for our customers.

PCI was listed on the Sesdaq of the Singapore Exchange Securities Trading Limited (the “SGX-ST”) in May 1992 and transferred to the Mainboard of the SGX-ST in May 1995.


PEH KWEE CHIMExecutive Chairman

CHAIRMAN’S STATEMENT

FINANCIAL REVIEW

In FY12, we achieved a revenue of USD 239.0 million as

compared to USD 250.7 million the previous year. The net

profit attributable to shareholders was USD 9.0 million

compared to USD 12.7 million the previous year.

The Group’s financial position continues to be healthy. As

at 30 June 2012, total assets and total liabilities were USD

137.19 million and USD 52.53 million respectively. There

were no borrowings. Earnings per share was 4.54 US cents

bringing the total net asset value per ordinary share as at

30 June 2012 to 42.53 US cents.

The Directors are proposing to pay a one-tier tax exempt

first and final dividend of 3.0 SG cents per ordinary share

for the year.

OPERATIONAL REVIEW

EMS Activities

In FY12, EMS revenue was USD 234.5 million. It was

slightly lower than that achieved in FY11 as several of our

key customers were cautious about orders in view of the

uncertainty in the global economy. Compared to FY11, EMS

delivered a lower operating profit of USD 6.9 million. This

was attributed to shipment of projects with higher material

content coupled with the downward selling price pressure

from major customers. Despite the challenging business

and operating environment, the Group did not spare any

effort in pursuing new business. We gained new customers,

reaffirming the Group’s strong operating capabilities and

technical competencies.

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Estate Management Activities

In the second half of FY12, we started a warehousing

and logistics business at our Singapore premises.

This business contributed positively to the Group’s

performance, bringing the Estate Management and

Rental revenue and operating profit higher by 6.9% and

17.3% respectively.

OUTLOOK

The global economic outlook continues to remain

uncertain due to the slowdown in China, the European

sovereign debt crisis and the sluggish US economy.

Hence, the Directors remain cautious about the short

-term outlook of the Group’s business. Nevertheless, the

Group will continue to invest in improving its operating

efficiencies and technical know-how to support its long

term strategic goals and objectives.

APPRECIATION

We would like to place on record our appreciation to

Mr Lim Kwee Siah and Mr Teo Teck Chuan, who retired

from the Board in December 2011. Mr Lim served as a

Non-Executive Director for 22 years, while Mr Teo served

as an Executive Director for 17 years. We have benefitted

from their invaluable contributions and insights.

We would also like to extend a warm welcome to

Mr Lo Pang Foo Steven, who joined our Board as Lead

Independent Director in December 2011. Mr Lo is a

Director of Straits Law Practice LLC. His legal expertise

and experience will complement and strengthen the

composition of the Board.

On behalf of the Board of Directors, I would like to express

our gratitude towards our customers, business partners

and shareholders for their continued support. I would

also like to express our appreciation for the dedication

and commitment of our Management and staff.

PEH KWEE CHIMExecutive Chairman

27 August 2012

CHAIRMAN’S STATEMENT (con’t)


GROUP FINANCIAL HIGHLIGHTS2012

US$’0002011

US$’000Increase / (Decrease)

%

Turnover 239,085 250,772 -4.66Profit before taxation 8,433 15,057 -43.99Profit after taxation 9,030 12,770 -29.29Paid up share capital 44,620 44,620 0.00

US Cents US Cents US CentsNet Asset Value Per Share (Cents) 42.53 40.61 4.73Basic Earnings Per Share (Cents) 4.54 6.42 -29.28

2012 US$’000

2011 US$’000

2010 US$’000

2009 US$’000

2008 US$’000

Income StatementTurnover 239,085 250,772 172,728 153,396 169,102Profit before taxation 8,433 15,057 9,647 7,337 6,927Profit after taxation 9,030 12,770 8,141 5,195 5,397Profit attributable to shareholders 9,036 12,776 8,139 5,170 5,454Proposed final dividends 4,694 4,855 2,120 1,368 2,189

Balance SheetCurrent assets 126,372 119,676 106,246 75,518 95,397Property, plant and equipment 4,222 4,541 5,854 7,803 7,158Investment property (prepaid lease payment) 6,277 7,045 6,647 6,788 7,723Investment - fair value through profit or loss - - - - 1,920Available-for-sale investments - - 1,109 2,058 943Other non - current assets 315 315 315 378 370

137,186 131,577 120,171 92,545 113,511

Shareholders’ equity 84,590 80,763 68,348 61,062 58,705Current liabilities 52,128 50,255 50,970 30,540 54,181Deferred taxation 406 491 779 871 578Non - controlling interests 62 68 74 72 47

137,186 131,577 120,171 92,545 113,511

Per Share DataBasic earnings per share (US cents) 4.54 6.42 4.09 2.60 2.75Fully diluted earnings per share (US cents) 4.54 6.42 4.09 2.60 2.74Dividend rate per share (less tax) (S$ cents) 3.00 3.00 1.50 1.00 1.50Net tangible assets per share (US cents) 42.53 40.61 34.37 30.76 29.57Issued and paid up capital (US$’000) 44,620 44,620 44,610 44,552 44,552

FIVE-YEAR GROUP FINANCIAL STATISTICS

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FINANCIAL CALENDAR

30 June 2012Financial Year End

11 November 2011Announcement of First Quarter Financial Results

10 February 2012Announcement of Half-Year Financial Results

11 May 2012Announcement of Third Quarter Financial Results

10 August 2012Announcement of Full-Year Financial Results

5 October 2012Dispatch of Annual Report to Shareholders

25 October 2012Annual General Meeting

20 November 2012Book Closure to Register Members for Dividend Payment

3 December 2012Proposed Payment of First and Final Dividend


BOARD OF DIRECTORS

Mr Peh Kwee ChimExecutive Chairman

Mr Peh Kwee Chim is the Executive Chairman of PCI Limited (“PCI”). He was appointed as Director and Chairman in November 1989. He was last re-elected on 23 October 2009 and will be due for re-election at the coming Annual General Meeting (“AGM”). Mr Peh has over 20 years of experience in the contract manufacturing industry and has been instrumental in building up the PCI Group. He oversees the strategic planning and business development of the Group. He is also a member of the Nominating Committee.

Mr Peh is also an Executive Director of Chuan Hup Holdings Limited (“Chuan Hup”) and sits on its Nominating Committee. He was one of the co-founders of Chuan Hup in 1970. Mr Peh is also a Director of CH Offshore Ltd [“CHO”].

Mr Peh graduated from the University of Western Australia in 1969 with a Bachelor of Engineering (Mechanical) degree.

Mr Loh Kee KongNon-Executive Director

Mr Loh Kee Kong is a Non-Executive Director. He was appointed as an Executive Director of PCI in August 1989 and re-designated as a Non-Executive Director on 28 December 2011. He was last re-elected on 21 October 2011. Mr Loh is a member of the Audit and Remuneration Committees.

Mr Loh is also a Director of Finbar Group Limited, which is listed on the Australian Securities Exchange.

Mr Loh graduated from the then University of Singapore in 1976 with a Bachelor of Accountancy degree and is a member of the Institute of Certified Public Accountants of Singapore.

Mr Peh Siong Woon TerenceExecutive Director

Mr Peh Siong Woon Terence is an Executive Director of PCI. He was appointed to this position on 28 December 2011 and will be due for re-election at the coming AGM.

Mr Peh is the Chief Executive Officer and an Executive Director of Chuan Hup. Mr Peh was the Deputy Financial Controller of Chuan Hup from July 2002 to October 2005. From July 2002 to September 2005, he was seconded to CHO as Chief Financial Officer. As Chief Financial Officer, he oversaw the financial affairs of CHO. From July 2000 to June 2002, Mr Peh was the Finance Manager at Chuan Hup and was responsible for its cash management, treasury functions, account payables and banking relations. Prior to his appointment with Chuan Hup, he was a Finance Manager at PCI and was responsible for its cash management and treasury functions.

Mr Peh is also the Chief Executive Officer and Executive Director of Chuan Hup and an Alternate Director to Mr Peh Kwee Chim on the Board of CHO.

Mr Peh holds a degree of Bachelor of Commerce in Marketing from Curtin University of Technology, Australia and a Masters of Commerce in Finance from the University of New South Wales, Australia.

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BOARD OF DIRECTORS (con’t)

Ms Tey Swee Nai, NancyNon-Executive, Independent Director

Ms Tey Swee Nai, Nancy is a Non-Executive, Independent Director. She was appointed to this position in February 2005. She was last re-elected on 25 October 2010 and will be due for re-election at the coming AGM. She is also the Chairman of the Audit Committee and a member of the Nominating and Remuneration Committees.

Ms Tey has extensive experience in accounting, auditing and tax. She worked as an Assistant Examiner in the Income Tax Department (now known as Inland Revenue Authority) from 1962 to 1967. In 1967, she joined Peat, Marwick, Mitchell & Co. (now known as KPMG) as a Tax Senior before being promoted to Tax Manager. Thereafter, she joined the United Overseas Bank Group and was appointed as First Vice President in 1990. In 2004, she retired to pursue her personal interests.

Ms Tey was admitted to membership of the Australian Society of Accountants in 1965.

Mr Lo Pang Foo StevenLead Independent Director

Mr Lo Pang Foo Steven is the Lead Independent Director of PCI. He was appointed to this position on 28 December 2011 and will be due for re-election at the coming AGM. He is the Chairman of the Remuneration and Nominating Committees and a member of the Audit Committee.

Mr Lo is a Director of Straits Law Practice LLC (“Straits Law”). Prior to joining Straits Law in 2011, he was a partner at another major law firm in Singapore. He has more than 15 years of experience in the legal sector. His practice focuses on corporate finance and mergers and acquisitions.

Mr Lo is also a Council Member and Legal Advisor to HCA Hospice Care, a registered charity in Singapore providing comfort and support to patients with life-limiting illnesses.

Mr Lo graduated from the National University of Singapore with an LLB (Hons) and was admitted to the Singapore Bar in 1996. He subsequently obtained his LLM from the University of Cambridge and has been admitted to the Rolls of Solicitors of England & Wales in 2000 as a non-practising member.


KEY EXECUTIVES

ELECTRONICS MANUFACTURING SERVICES

The core business of PCI is the provision of electronic manufacturing services. Mr Teo Eng Lin, Chief Executive Officer, and his team are responsible for the running of this business.

Mr Teo Eng LinChief Executive Officer

Mr Teo joined PCI in June 1995 as Sourcing and Marketing Support Manager. He was appointed Business Development Manager in September 2000 and Vice President, Business Development, responsible for the business development of the EMS Division in October 2001. Mr Teo was appointed as Assistant Chief Operating Officer in November 2002 and as Chief Operating Officer in October 2003. On 1 July 2010, he was promoted to Chief Executive Officer.

Mr Teo holds a Bachelor of Electrical Engineering degree from the National University of Singapore.

Mr Thomas Muljadi HandojoVice President, Business Development

Mr Handojo joined PCI in August 1994 as a Product Engineer and was appointed Program Manager in July 1997. He was appointed Business Development Manager in July 2000 and promoted to Vice President, Business Development in 2009, responsible for Business Development, Program Management, Engineering and Business Excellence initiatives.

Mr Handojo holds an MBA degree in Management of Technology from the Nanyang Technological University of Singapore and a Bachelor of Electronics Engineering degree from Trisakti University of Jakarta.

Mr Chan Jin Hou, DominicVice President, Order Fulfillment and Planning

Mr Chan joined PCI in April 2003 as Head of Purchasing. He was promoted to Material Operations Manager in February 2005 and appointed General Manager of Batam Operations in April 2006. Mr Chan was appointed Senior Manager, Order Fulfillment and Planning in 2007 and was promoted to Vice President, Order Fulfillment and Planning in 2009.

Prior to joining PCI, Mr Chan worked as a Business Manager of Sales for North Asia Region in a Singapore-based company. He was subsequently appointed as Deputy Director of a plastics injection molding business in Europe and Russia.

Mr Chan holds a Bachelor of Engineering degree from the Nanyang Technological University of Singapore.

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KEY EXECUTIVES (con’t)

CORPORATE OFFICE

Mr Lee Keng PohChief Financial Officer

Mr Lee joined PCI in March 1990 as Finance Manager. He was appointed Group Financial Controller and Company Secretary in 1993 and Senior Vice President, Corporate Finance in January 2002. Mr Lee assumed the current appointment of Chief Financial Officer in November 2004. He resigned as Company Secretary in October 2008 to assist the Chief Executive Officer in overseeing overseas operations.

Mr Lee holds a Bachelor of Accountancy degree from the then Singapore Nanyang University and is a member of the Institute of Certified Public Accountants of Singapore.

Mdm Teo Guat Yau, WendyCorporate Office, Manager

Mdm Teo joined PCI in March 1990 as Deputy Finance Manager. She was appointed Chief Financial Officer in January 2000. Mdm Teo was appointed Senior Vice President, Operations Control, in November 2004 and was subsequently appointed Chief Accountant in July 2008. Mdm Teo assumed the current appointment of Corporate Office, Manager in 2009.

Prior to joining PCI, Mdm Teo was the Accounting Manager of Chuan Hup Holdings Limited.

Mdm Teo holds a diploma in Business Studies from the Ngee Ann Polytechnic and is a member of The Institute of Internal Auditors Singapore.

Mr Tan Quee LimGeneral Manager, Batam Operations

Mr Tan joined PCI in January 1990 as Senior Process Engineer and was appointed Engineering Manager in June 1994. He was promoted to Manufacturing Engineering Manager in May 1999. Mr Tan was appointed as Operations Manager in July 2001. He assumed the current appointment of General Manager, Batam Operations in March 2008 and is responsible for managing the Batam operations.

Prior to joining PCI, Mr Tan worked in the quality department of a US-based multinational company.

Mr Tan holds a Diploma in Electronics and Communication Engineering from the Singapore Polytechnic.


CORPORATE DATA

BOARD OF DIRECTORS

Mr Peh Kwee Chim (Executive Chairman)

Mr Peh Siong Woon Terence (Executive Director)

Mr Loh Kee Kong (Non-Executive Director)

Ms Tey Swee Nai, Nancy (Non-Executive, Independent Director)

Mr Lo Pang Foo Steven (Lead Independent Director)

AUDIT COMMITTEE

Ms Tey Swee Nai, Nancy (Chairman)

Mr Loh Kee Kong

Mr Lo Pang Foo Steven

REMUNERATION COMMITTEE

Mr Lo Pang Foo Steven (Chairman)

Ms Tey Swee Nai, Nancy

Mr Loh Kee Kong

NOMINATING COMMITTEE

Mr Lo Pang Foo Steven (Chairman)

Mr Peh Kwee Chim

Ms Tey Swee Nai, Nancy

COMPANY SECRETARY

Ms Valerie Tan May Wei

REGISTERED OFFICE

386 Jalan Ahmad IbrahimSingapore 629156Telephone: (65) 6265 8181Facsimile: (65) 6265 3333Website: www.pciltd.com.sgEmail: [email protected]

SHARE REGISTRAR

Tricor Barbinder Share Registration Services(A division of Tricor Singapore Pte. Ltd.)80 Robinson Road#02-00Singapore 068898

AUDITORS

Ernst & Young LLPOne Raffles Quay North Tower Level 18Singapore 048583

Partner-in-Charge:

Mr Adrian KohAppointed with effect from the financial year ended 30 June 2012

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CORPORATE GOVERNANCE REPORT

INTRODUCTION

PCI Limited (“PCI”) is committed to achieving high standards of corporate governance to ensure greater transparency and maximise long-term shareholder value.

This report describes PCI’s main corporate governance practices for the financial year ended 30 June 2012 with reference to the Singapore Code of Corporate Governance 2005 (the “Code”).

BOARD MATTERS

The Board’s Conduct of its Affairs(Principle 1)

The Board oversees the business affairs of PCI and therefore every Director is expected to act in good faith and always in the interests of the Company. The principal functions of the Board include the approval of the Company’s strategic plans, the approval of major investments, divestments and fund-raising, overseeing processes for evaluating the adequacy of internal controls and risk management and being responsible for corporate governance practices. PCI has in place financial authorisation and approval limits for operating and capital expenditure, as well as acquisitions and disposal of investments. The Board and the Audit Committee also approve the PCI Group’s financial results.

The Board meets on a regular basis. Where necessary, additional Board meetings are held to deliberate on urgent substantive matters. An aggregate of 8 Board meetings were held for the financial year ended 30 June 2012. Details of the attendance of Board members at Board meetings and meetings of the various Board Committees for the financial year ended 30 June 2012 are set out on page 19 of this Annual Report.

All new Directors appointed to the Board are briefed on the business activities of the Group and its strategic directions, as well as their statutory and other duties and responsibilities as Directors. In addition, Directors are briefed either during Board meetings or at specially convened sessions on changes to regulations and accounting standards which have an important bearing on the Company’s or Directors’ disclosure obligations. Where appropriate, Directors are encouraged to attend courses, conferences and seminars in relevant fields.

The Board is supported by Board Committees established to assist the Board in discharging its responsibilities of overseeing the Group’s affairs and enhancing corporate governance.

Board Composition and Guidance(Principle 2)

The Board currently comprises 5 Directors, 2 of whom are Non-Executive, Independent Directors and 1 of whom is a Non-Executive Director. The Non-Executive, Independent Directors are Ms Tey Swee Nai, Nancy and Mr Lo Pang Foo Steven. The Non-Executive Director is Mr Loh Kee Kong.

The Directors bring with them a broad range of expertise and experience in areas such as accounting or finance, law, business or management experience, industry knowledge and customer-based experience or knowledge. The diversity of the Directors’ experience allows for the useful exchange of ideas and views. Profiles of the Directors are set out on pages 8 and 9 of this Annual Report.

Chairman and Chief Executive Officer(Principle 3)

Different individuals assume the Chairman and the Chief Executive Officer functions in PCI. There is a clear distinction between the roles and responsibilities of the Chairman and the Chief Executive Officer. The Chairman oversees the strategic planning and business development of the Group, and the Chief Executive Officer is responsible for the day-to-day management of PCI. The Chairman and the Chief Executive Officer are not related.

14 PCI Limited


In line with corporate governance best practices, Mr Lo Pang Foo Steven was appointed as the Lead Independent Director on 28 December 2011.

The Lead Independent Director is appointed by the Board to serve in a lead capacity to coordinate the activities of the Non-Executive Directors in circumstances where it would be inappropriate for the Chairman to serve in such capacity, and to assist the Chairman and the Board to assure effective corporate governance in managing the affairs of the Board and the Company. He will also be available to shareholders if they have concerns relating to matters which contact through the normal channels of the Chairman, Chief Executive Officer or Chief Financial Officer has failed to resolve, of for which such contact is inappropriate.

Board Membership(Principle 4)

The Nominating Committee comprises Mr Lo Pang Foo Steven (Committee Chairman), Mr Peh Kwee Chim and Ms Tey Swee Nai, Nancy, the majority of whom, including the Chairman, are Non-Executive, Independent Directors.

The Nominating Committee reviews and assesses candidates for directorships before making recommendations to the Board. In recommending new Directors to the Board, the Nominating Committee takes into consideration the skills and experience required and the current composition of the Board, and strives to ensure that the Board has an appropriate balance of independent directors as well as directors with the right profile of expertise, skills, attributes and ability.

In evaluating a director’s contribution and performance for the purpose of re-nomination, the Nominating Committee takes into consideration a variety of factors such as attendance, preparedness, participation and candour.

Recommendations for appointments of directors and the members of the various Board Committees are made by the Nominating Committee and considered by the Board as a whole. At each Annual General Meeting (“AGM”) of PCI, not less than one third of the directors for the time being (being those who have been longest in office since their last re-election) are required to retire from office by rotation. A retiring director is eligible for re-election by the shareholders of PCI at the AGM. All newly appointed Directors during the year will hold office only until the next AGM and will be eligible for re-election. Directors above 70 years of age are subject to annual re-appointment.

Board Performance(Principle 5)

The Board should ensure compliance with applicable laws and Board members should act in good faith, with due diligence and care in the best interests of PCI and its shareholders. In addition to these fiduciary duties, the Board is charged with two key responsibilities: setting strategic directions and ensuring that PCI is ably led. The measure of a board’s performance is also tested through its ability to lend support to management especially in times of crisis and to steer the company in the right direction.

PCI is of the opinion that the financial indicators set out in the Code as guides for the evaluation of directors are more of a measure of management’s performance and hence are less applicable to directors. In any case, such financial indicators provide a snapshot of a Company’s performance, and do not fully measure the sustainable long-term wealth and value creation of PCI.

The Board through the delegation of its authority to the Nominating Committee, has used its best efforts to ensure that directors appointed to the Board possess the background, experience, knowledge and skills critical to the Company’s business and that each director with his special contributions brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.

Access to Information(Principle 6)

Prior to each Board meeting, the Board is supplied with relevant information by the Management pertaining to matters to be brought before the Board for decision as well as ongoing reports relating to operational and financial performance of the Group. The Board also has separate and independent access to Senior Management and the Company Secretary at all times. The Board also has access to independent professional advice, where appropriate, at the expense of PCI.



REMUNERATION MATTERS(Principles 7, 8 and 9)

The Remuneration Committee comprises Mr Lo Pang Foo Steven (Committee Chairman), Ms Tey Swee Nai, Nancy and Mr Loh Kee Kong, all of whom are Non-Executive Directors and the majority of whom, including the Chairman, are Independent Directors. The role of the Remuneration Committee is to review and approve the remuneration, including director’s fees, salaries, allowances, bonuses, share options and benefits in kind to the Directors and the Senior Management of PCI.

The Remuneration Committee in establishing the framework of remuneration policies for its Directors and Senior Executives is largely guided by the financial performance of the Company. The primary objective is to align the interest of Management with that of the shareholders. In this respect, it believes that remuneration should be competitive and sufficient to attract, retain and motivate Executive Directors and Senior Executives to manage the Company well. Pay levels, benefits and incentives are structured to motivate them to achieve corporate objectives.

The remuneration package generally comprises two components. One component is fixed in the form of a base salary that includes the 13th month based AWS. The other component is variable consisting of performance and incentive bonuses. The variable portion is largely dependent on the financial performance of the Company. The Remuneration Committee strongly supports and endorses the flexible wage system because it gives the Company more flexibility to ride through economic downturns. The Remuneration Committee has adopted set profitability levels to be achieved before performance bonuses are payable.

The Executive Chairman, Mr Peh Kwee Chim, has voluntarily declined receiving share options. Non-Executive Directors are not eligible for grant of share options as the Remuneration Committee believes that their independence can be better preserved and the discharge of their duties will not be influenced or affected by movements in the Company’s share price.

All Non-Executive Directors are paid Directors’ fees which are subject to approval at AGMs.

The Directors’ remuneration in bands of USD250,000 is disclosed below. The remuneration of the top five key executives in the Group who are not also Directors of the Company is shown in bands of USD250,000. Their actual remuneration has not been disclosed for competitive reasons and to maintain confidentiality of staff remuneration matters.

REMUNERATION PAID OR ACCRUED TO PCI DIRECTORS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Directors of CompanyBase

Component (1)Variable

ComponentDirectors’

Fees TotalShare Options

Granted

USD500,000 to USD749,999Mr Peh Kwee Chim 54% 46% - 100% -

Below USD250,000Mr Teo Teck Chuan (2) 64% 36% - 100% -Mr Loh Kee Kong 54% - 46% 100% -Dr Tan Cheng Bock (3) - - 100% 100% -Mr Lim Kwee Siah (4) - - 100% 100% -Ms Tey Swee Nai, Nancy - - 100% 100% -Mr Peh Siong Woon Terence (5) - - - - -Mr Lo Pang Foo Steven (6) - - 100% 100% -

Notes:

(1) Base component includes the 13th month AWS, allowances, benefits in kind, such as the use of Company cars and employer CPF.(2) Mr Teo Teck Chuan retired from the Board on 28 December 2011.(3) Dr Tan Cheng Bock retired from the Board following the conclusion of the AGM held on 21 October 2011.(4) Mr Lim Kwee Siah retired from the Board on 28 December 2011.(5) Mr Peh Siong Woon Terence was appointed as director on 28 December 2011.(6) Mr Lo Pang Foo Steven was appointed as director on 28 December 2011.

16 PCI Limited


REMUNERATION PAID OR ACCRUED TO TOP FIVE KEY EXECUTIVES FOR THE FINANCIAL YEAR ENDED 30 JUNE 2012

Top Key Executivesof the Company

Base Component (1)

Variable Component Others Total

Share Options Granted

USD250,000 to USD499,999Mr Teo Eng Lin 54% 46% - 100% -Mr Thomas Muljadi Handojo 53% 47% - 100% -Mr Chan Jin Hou, Dominic 52% 48% - 100% -

Below USD250,000Mr Lee Keng Poh 75% 25% - 100% -Mr Tan Quee Lim 58% 42% - 100% -

Note:

(1) Base component includes the 13th month AWS, allowances, benefits in kind, such as the use of Company cars and employer CPF.

ACCOUNTABILITY AND AUDIT

Accountability(Principle 10)

The Board through its announcements of quarterly and full-year results, aims to provide shareholders with a balanced and understandable assessment of the Company’s performance and prospects.

PCI recognises the importance of providing the Board with a continual flow of relevant information on an accurate and timely basis in order that it may effectively discharge its duties. On a regular basis, Board members are provided with business and financial reports comparing actual performance with budget with highlights on key business indicators and major issues.

Audit Committee(Principle 11)

The Audit Committee comprises Ms Tey Swee Nai, Nancy (Committee Chairman), Mr Loh Kee Kong and Mr Lo Pang Foo Steven, all of whom are Non-Executive and the majority of whom, including the Chairman, are Independent. Ms Tey Swee Nai, Nancy and Mr Loh Kee Kong have accounting or related financial management expertise and experience. The Board considers Mr Lo Pang Foo Steven as having sufficient financial knowledge and experience to discharge his responsibility as a member of the Committee.

The Audit Committee meets at least four times a year. The Audit Committee’s duties include:

(a) reviewing the quarterly and annual financial statements and financial announcements required by SGX-ST for recommendation to the Board for approval;

(b) discussing with the external auditors the audit plan, and the report on the audit of the year-end financial statements; reviewing the external auditors’ management letter and Management’s response thereto; reviewing the external auditors’ objectivity and independence from Management and the Company; reviewing the fees and expenses paid to the external auditors, including fees paid for non-audit services during the year; considering the appointment of the external auditors and the audit fee; making recommendations to the Board on the selection of the Company’s external auditors;

(c) reviewing the effectiveness of the Group’s material controls, including financial compliance and risk management controls, to safeguard shareholders’ investments and the Group’s assets; and

(d) reviewing interested person transactions to ensure compliance with the SGX-ST Listing Manual.



The Audit Committee has explicit authority to investigate any matter within its terms of reference. It has full access to, and the co-operation of Management and full discretion to invite any director or executive officer to attend its meetings. The Audit Committee has adequate resources to enable it to discharge its responsibilities properly. The Audit Committee meets with the external auditors without the presence of non-audit Management, at least annually.

With the exception of Printed Circuits International Incorporated, Printed Circuits International (PCI) Phil., Inc., PT. Prima Circuitama Indonesia, PT. PCI Elektronik Internasional, Pacific Gain Holding Limited, Polymicro Precision Technology (Thailand) Co. Ltd, Technology Enabler Designers Phils Inc, PCI-Gaozhi (Shanghai) Electronic Co., Ltd and PCI Shanghai Electronics Co., Ltd, all the subsidiaries listed on pages 63 to 65 of this Annual Report are audited by Ernst & Young LLP, Singapore.

Printed Circuits International Incorporated, Printed Circuits International (PCI) Phil., Inc. and Pacific Gain Holding Limited are not required to be audited by law in their respective countries of incorporation, but Printed Circuits International Incorporated is audited by Ernst & Young LLP, Singapore for consolidation purposes. PT. Prima Circuitama Indonesia and PT. PCI Elektronik Internasional are audited by Drs. Bernardi & Co., Registered Public Accountants, Jakarta, Indonesia. Polymicro Precision Technology (Thailand) Co. Ltd is audited by V.A.T. Accounting. Technology Enabler Designers Phils. Inc. is audited by SGV & CO., a member firm of Ernst & Young Global in Philippines. PCI-Gaozhi (Shanghai) Electronic Co., Ltd and PCI Shanghai Electronics Co., Ltd are audited by Shanghai Linfang Certified Public Accountants, Co. Ltd, Shanghai, China.

The Board and the Audit Committee are satisfied that the appointment of the above auditors would not compromise the standard and effectiveness of the audit of the Group. Accordingly, the Board confirms that Rule 712 and Rule 716 of the SGX-ST Listing Manual have been complied with.

Whistleblowing Policy

The Company has implemented a whistleblowing policy, which serves to encourage and provide a channel to employees to report in good faith and in confidence, without fear of reprisals, concerns about possible wrongdoing or breach of applicable laws, regulations, policies or other matters. The objectives for such arrangement is to ensure independent investigation of such matters and for appropriate follow-up action.

Interested Person Transactions

The Company has procedures in place to comply with the SGX-ST Listing Manual requirements relating to interested person transactions (“IPTs”) of the Company. All IPTs are disclosed in the Company’s Annual Report.

The following are details of the IPTs entered into by PCI in financial year ended 30 June 2012:

Name of Interested Person

Aggregate value of all interested person transactions during the financial year ended 30 June 2012

(excluding transactions less than S$100,000/USD79,460)

SGD’000 / USD’000

Chuan Hup Holdings Limited (1) 158 / 125Enabling Technology Group of Companies (2) 1,408 / 1,120

Notes:

(1) Mr Peh Kwee Chim is the Executive Chairman and controlling shareholder of the Company. He holds 51.23% of the issued shares in Chuan Hup Holdings Limited.

(2) The Enabling Technology Group of Gompanies is controlled by Mr Peh Lawrence Teck-Woon, who is the son of Mr Peh Kwee Chim.

18 PCI Limited


Internal Controls and Internal Audit(Principles 12 and 13)

The Company does not have an internal audit function. The Board is ultimately responsible for ensuring that a sound system of internal controls to safeguard shareholders’ investments are in place. The Board, through the Audit Committee, the Executive Chairman, Chief Executive Officer, and the Chief Financial Officer, considers that the Group’s framework of internal controls and procedures is adequate to provide reasonable assurance of the integrity, confidentiality and availability of critical information, and the effectiveness and efficiency of operations, safeguarding of assets and compliance with applicable rules and regulations. It is also satisfied that problems are identified on a timely basis and there is in place a process for best practices and follow up actions to be taken promptly to minimise unnecessary lapses and for the identification and containment of business risks.

Additionally, the various divisions within the Company have developed a control self assessment programme where operating departments’ management review and report on the adequacy of their respective divisions’ control environment to the Audit Committee annually.

As part of the statutory audit, the external auditors also conduct regular reviews of the system of internal controls and significant internal control weaknesses are brought to the attention of the Audit Committee and to Management for remedial action.

Risk management is essential to the Company’s business. The Company has established risk management policies, guidelines and control procedures to identify financial, operational and compliance risks and monitor and manage these risks.

PCI has implemented a Group insurance program and has in place a Business Continuity Planning Program. The Group also has in place a system for financial monitoring and control.

Based on the internal controls established and maintained by the Group, work performed by the external auditors, and reviews performed by Management and various Board Committees, the Board, with the concurrence of the Audit Committee, is of the opinion that the Group’s internal controls were adequate as at 30 June 2012 to address financial, operational and compliance risks, which the Group considers relevant and material to its operations.

The Board notes that the system of internal controls provides reasonable, but not absolute, assurance that the Group will not be affected by any event that could be reasonably foreseen as it strives to achieve its business objectives. In this regard, the Board also notes that no system can provide absolute assurance against the occurrence of material errors, poor judgement in decision-making, human error, fraud or other irregularities.

COMMUNICATION WITH SHAREHOLDERS(Principle 14 and 15)

PCI believes in regular and timely communication with investors. The Company is open to meetings with investors and analysts.

PCI’s website serves as a comprehensive and easy-to-use source of information for shareholders. It contains the Company’s publicly disclosed financial information, annual reports and announcements.

PCI is in full support of the Code’s principle to encourage shareholder participation. PCI’s Articles of Association allow a member entitled to attend and vote to appoint a proxy to attend and vote on behalf of the member and also provide that a proxy need not be a member of PCI. Voting in absentia by mail, facsimile or email is not currently permitted to ensure proper authentication of the identity of shareholders and their voting intent.

Board members endeavour to attend general meetings to address questions by shareholders. Management as well as the external auditors are present at AGMs to assist the Board in addressing queries from shareholders.



SECURITIES DEALING

The Company has adopted the SGX-ST Best Practices Guide with respect to the dealings in securities for the guidance of directors and officers. PCI’s directors and officers are prohibited from dealing in PCI’s shares for the period of two weeks prior to the announcement of quarterly results and a period of one month prior to the announcement of year-end results. In addition, directors and officers are prohibited from dealing in PCI’s shares on short-term considerations or if they are in possession of unpublished price-sensitive information on the Group.

CONCLUSION

PCI recognises the importance of good corporate governance practices for maintaining and promoting investor confidence. PCI will continue to review and improve its corporate governance practices on an ongoing basis.

ATTENDANCE AT BOARD AND COMMITTEE MEETINGS

The attendance of each Director at Board meetings and Board committee meetings during the financial year ended 30 June 2012 is as follows:

Board MeetingsDirector No. of meetings held No. of meetings attended

Mr Peh Kwee Chim 8 8Dr Tan Cheng Bock (1) 3 2Mr Loh Kee Kong 8 8Mr Lim Kwee Siah (2) 4 4Mr Teo Teck Chuan (3) 4 3Ms Tey Swee Nai, Nancy 8 8Mr Peh Siong Woon Terence (4) 4 4Mr Lo Pang Foo Steven (5) 4 4

Board Committee MeetingsAudit

CommitteeRemuneration

CommitteeNominatingCommittee

Director

No. ofmeetings

held

No. ofmeetingsattended

No. ofmeetings

held


No. ofmeetings

held


Mr Peh Kwee Chim - - - - 1 1Dr Tan Cheng Bock (1) 2 1 1 1 - -Mr Lim Kwee Siah (2) 3 3 1 1 - -Ms Tey Swee Nai, Nancy 6 6 1 1 1 1Mr Lo Pang Foo Steven (5) 3 3 - - 1 1Mr Loh Kee Kong (6) 3 3 - - - -

Notes:

(1) Dr Tan Cheng Bock retired as Non-Executive Director, and a Chairman of the Remuneration and Nominating Committees and a member of the Audit Committee following the conclusion of the AGM held on 21 October 2011.

(2) Mr Lim Kwee Siah retired from the Board and as a member of the Audit and Remuneration Committees on 28 December 2011.(3) Mr Teo Teck Chuan retired from the Board on 28 December 2011.(4) Mr Peh Siong Woon Terence was appointed as Executive Director on 28 December 2011.(5) Mr Lo Pang Foo Steven was appointed as the Lead Independent Director, Chairman of the Remuneration and Nominating Committees and

a member of the Audit Committee on 28 December 2011.(6) Mr Loh Kee Kong was appointed as a member of the Audit and Remuneration Committees on 28 December 2011.

FINANCIAL STATEMENTS21 Report of the Directors 24 Statement of Directors 25 Independent Auditors’ Report 27 Balance Sheets 28 Income Statements 29 Statements of Comprehensive Income 30 Statements of Changes in Equity 32 Consolidated Cash Flow Statement33 Notes to Financial Statements77 Statistics of Shareholdings79 Notice of Annual General Meeting Proxy Form


REPORT OF THE DIRECTORS

The directors are pleased to present their report to the members together with the audited consolidated financial statements of PCI Limited (the “Company”) and its subsidiaries (collectively, the “Group”) and the balance sheet, income statement, statement of comprehensive income and statement of changes in equity of the Company for the financial year ended 30 June 2012.

1. Directors

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

Peh Kwee Chim Loh Kee Kong Tey Swee Nai, Nancy Peh Siong Woon Terence (Appointed on 28 December 2011) Lo Pang Foo Steven (Appointed on 28 December 2011)

2. Arrangements to enable directors to acquire shares and debentures

Except as disclosed in this report, neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable a director of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate.

3. Directors’ interests in shares and debentures

The 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 Singapore Companies Act, Cap. 50, an interest in shares and share options of the Company and related corporations (other than wholly-owned subsidiaries) as stated below :

Name of directors and company in which interest is held

Shareholdings registered in the name of directors

Shareholdings in which directors are deemed to

have an interestAt the

beginning offinancial year

At theend of

financial year

At thebeginning of

financial year

At theend of

financial year

PCI LimitedOrdinary sharesPeh Kwee Chim − − 149,547,506# 151,476,506#

Holding company- Chuan Hup Holdings LimitedOrdinary sharesPeh Kwee Chim 474,572,490 478,264,490 − −

# Peh Kwee Chim has a deemed interest by virtue of Section 7(4) of the Singapore Companies Act, Cap 50.

The directors’ interests as at 21 July 2012 were the same as those at the end of the financial year.

4. Directors’ contractual benefits

Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit (other than as disclosed in the financial statements or in this report), by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member, or with a company in which he has a substantial financial interest. Certain directors received remuneration from related corporations in their capacity as executives of those related corporations.

22 PCI Limited


5. Share options

a) The PCI Limited Employees’ Share Option Scheme (the “1992 Scheme”) which was approved on 30 October 1992, expired on 30 June 2003. This has since been replaced by a new Share Option Scheme, the PCI Limited Employees’ Share Option Scheme 2003 (the “2003 Scheme”) which was approved by the shareholders of the Company at an Extraordinary General Meeting (“EGM”) held on 12 November 2003. Options granted under the 1992 Scheme which have not been exercised at the time of expiration of the 1992 Scheme shall remain valid until such a time where the options have been exercised or have lapsed and will continue to be administered under the rules of the 1992 Scheme as approved on 30 October 1992 and amended on 10 November 2000. No option has been granted under the 2003 Scheme since its commencement;

b) During the financial year, no option to take up unissued shares in the Company under the 2003 Scheme was granted;

c) Share options granted, exercised and cancelled during the financial year and outstanding as at 30 June 2012 pursuant to the 1992 Scheme were as follows :

No. of share options

Date of grantBalance as at

1 July 2011 exercised cancelledBalance as at 30 June 2012

Subscription price Expiry date

30 September 2002 245,000 − (10,000) 235,000 S$0.27

29 September 2012

245,000 − (10,000) 235,000

d) Statutory information regarding the options granted in 1999, 2000, 2001 and 2002 under the 1992 Scheme have been set out in the directors’ reports for the financial years ended 30 June 2000, 2001, 2002 and 2003;

Subject to Rule 11(b) and Rule 20 of the Scheme, a Grantee may exercise the option at any time during the Option Period. The Option Period commences after the first anniversary of the date of grant and expires before the 10th anniversary of the date of grant;

Under Rule 11(b), a Grantee who has been employed by the Group for less than 12 months as at the offering date may only exercise the option after the 2nd anniversary;

Under Rule 20, the option shall become void on the death of a Grantee, termination of employment of Grantee, where a Grantee does an act where he would be deprived of the legal or beneficial ownership of his option, where he is subject to a petition of bankruptcy or where a Grantee commits any breach of any terms of his option;

e) Both the 1992 Scheme and the 2003 Scheme are administered by the Remuneration Committee (the “Committee”). At the date of this report, the Committee members are Mr Lo Pang Foo Steven, the Lead Independent Director, Mr Loh Kee Kong, a Non-Executive Director and Ms Tey Swee Nai, Nancy, a Non-Executive, Independent Director;

f) Non-executive directors, controlling shareholders or their associates are not eligible to participate in the 1992 Scheme and the 2003 Scheme;

g) No option has been granted to eligible participants which, in aggregate, represent 5% or more of the total number of new shares available under the 1992 Scheme and the 2003 Scheme;

h) No option was granted under the 2003 Scheme during the financial year at a discount;

i) During the financial year, no option to take up unissued shares of any subsidiaries were granted and there was no share of any subsidiaries issued by virtue of the exercise of an option to take up unissued shares; and

j) At the end of the financial year, there was no unissued share of any subsidiaries under option.



6. Audit committee

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50 and the Singapore Exchange Securities Trading Limited Listing Manual. The functions carried out are detailed in the Corporate Governance Report, which is included in the Company’s Annual Report for the financial year ended 30 June 2012.

The Audit Committee has full access to and has the co-operation of management and has been given the resources required for it to discharge its functions properly. It also has full discretion to invite any director and executive officer to attend its meetings. The external auditors have unrestricted access to the Audit Committee.

The Audit Committee, having reviewed all non-audit services provided by the external auditors to the Group, is satisfied that the nature and extent of such services would not affect the independence of the external auditors. The Audit Committee has also conducted a review of interested person transactions.

7. Auditors

Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors.

On behalf of the board of directors,

Peh Siong Woon TerenceDirector

Peh Kwee ChimDirector

Singapore27 August 2012

24 PCI Limited

STATEMENT OF DIRECTORS

We, Peh Siong Woon Terence and Peh Kwee Chim, being two of the directors of PCI Limited and its subsidiaries, do hereby state that, in the opinion of the directors :

(i) the accompanying balance sheets, income statements, statements of comprehensive income, statements of changes in equity and consolidated cash flow statement together with notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2012 and the results of the business, changes in equity of the Group and of the Company and the cash flows of the Group for the year ended on that date; and

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

On behalf of the board of directors,

Peh Siong Woon TerenceDirector

Peh Kwee ChimDirector

Singapore27 August 2012


INDEPENDENT AUDITORS’ REPORTto the Members of PCI Limited

Report on the Financial Statements

We have audited the accompanying financial statements of PCI Limited (the “Company”) and its subsidiaries (collectively, the “Group”) set out on pages 27 to 76, which comprise the balance sheets of the Group and the Company as at 30 June 2012, the consolidated income statement, statement of comprehensive income, statement of changes in equity and cash flow statement of the Group and the income statement, statement of comprehensive income and statement of changes in equity of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditors’ Responsibility

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 we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

26 PCI Limited

INDEPENDENT AUDITORS’ REPORTto the Members of PCI Limited

Opinion

In our opinion, the consolidated financial statements of the Group and the financial statements of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and the Company as at 30 June 2012 and of the results, changes in equity of the Group and of the Company and the cash flows of the Group for the year ended on that date.

Other Matter

The consolidated financial statements of the Group and the financial statements of the Company for the year ended 30 June 2011, were audited by another auditors who expressed an unmodified opinion on those statements on 24 August 2011.

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

Ernst & Young LLPPublic Accountants andCertified Public AccountantsSingapore27 August 2012


BALANCE SHEETSJune 30, 2012

The accompanying accounting policies and explanatory information form an integral part of the financial statements.

Group CompanyNote 2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Assets

Current assetsCash and bank balances 6 47,659 45,894 37,726 34,741Trade receivables 7 40,138 33,428 35,285 29,306Other receivables and prepayments 8 1,745 1,574 686 519Amounts due from subsidiaries 9 − − 1,823 3,297Amounts due from holding company 3 − − − Derivative financial instruments 11 32 5 32 5Inventories 12 36,795 38,775 29,394 32,489Total current assets 126,372 119,676 104,946 100,357

Non-current assetsProperty, plant and equipment 13 4,222 4,541 2,781 3,310Investment property (prepaid lease payment) 14 6,277 7,045 − − Investments in subsidiaries 15 − − 16,880 17,762Investments in an associate 16 − − − − Available-for-sale investments 10 − − − − Other assets 17 315 315 315 315Total non-current assets 10,814 11,901 19,976 21,387Total assets 137,186 131,577 124,922 121,744

Liabilities and equity

Current liabilitiesTrade payables, other payables and provision 18 50,053 46,265 34,864 31,487Amounts due to subsidiaries 9 − − 8,141 7,936Derivative financial instruments 11 − 20 − 20Income tax payable 2,075 3,970 1,457 3,365Total current liabilities 52,128 50,255 44,462 42,808

Non-current liabilityDeferred tax liabilities 19 406 491 406 491Total non-current liability 406 491 406 491

Capital, reserves and non-controlling interestsShare capital 20 44,620 44,620 44,620 44,620Foreign currency translation reserve 4,025 4,450 − − Retained earnings 35,945 31,693 35,434 33,825Equity attributable to equity holders of the Company 84,590 80,763 80,054 78,445Non-controlling interests 62 68 − − Total equity 84,652 80,831 80,054 78,445

Total liabilities and equity 137,186 131,577 124,922 121,744

28 PCI Limited

INCOME STATEMENTSYear ended June 30, 2012



US$’000 US$’000 US$’000 US$’000

Revenue 22 239,085 250,772 216,854 227,932Cost of sales : Raw material and consumables (187,086) (194,184) (178,651) (183,634) Manufacturing expenses (25,663) (25,881) (18,473) (20,033) Other operating expenses (3,317) (3,072) − − Direct depreciation/amortization (1,915) (2,390) (887) (992)

(217,981) (225,527) (198,011) (204,659)

Gross profit 21,104 25,245 18,843 23,273Other operating income 23 715 594 558 253Other expenses : Business development expenses (5,811) (5,881) (5,962) (5,958) General and administrative expenses (5,653) (5,220) (6,413) (5,811) Indirect depreciation (1,161) (1,204) (1,100) (1,204) Foreign exchange (loss)/gain (808) 612 (728) 1,385 Mark to market valuation gain 47 45 47 45 Gain on disposal of investments − 866 − 866

(13,386) (10,782) (14,156) (10,677)

Profit before income tax 25 8,433 15,057 5,245 12,849Income tax benefit/(expense) 24 597 (2,287) 1,148 (1,472)

Profit for the year 9,030 12,770 6,393 11,377

Attributable to :

Equity holders of the Company 9,036 12,776Non-controlling interests (6) (6)

9,030 12,770

Earnings per share :

- Basic 26 4.54 cents 6.42 cents

- Diluted 26 4.54 cents 6.42 cents


STATEMENTS OF COMPREHENSIVE INCOMEYear ended June 30, 2012



US$’000 US$’000 US$’000 US$’000

Profit for the year 9,030 12,770 6,393 11,377

Other comprehensive income

Reclassification to profit or loss from equity − (3) − (3)Exchange differences on translation of foreign operations (425) 1,901 − −

Other comprehensive (loss)/income for the year (425) 1,898 − (3)

Total comprehensive income for the year, net of tax 8,605 14,668 6,393 11,374

Total comprehensive income attributable to :

Equity holders of the Company 8,611 14,674Non-controlling interests (6) (6)

8,605 14,668

30 PCI Limited

STATEMENTS OF CHANGES IN EQUITYYear ended June 30, 2012


Sharecapital

Investment revaluation

reserve(Note 10)

Foreign currency

translation reserve

Retainedearnings

Attributable to equity holders of the

Company

Non-controlling interests Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Group

Balance at 1 July 2010 44,610 3 2,549 21,186 68,348 74 68,422Profit for the year − − − 12,776 12,776 (6) 12,770Other comprehensive incomeNet gain on fair value changes of available-for-sale financial assets − (3) − − (3) − (3)Foreign currency translation − − 1,901 − 1,901 − 1,901Other comprehensive income, net of tax − (3) 1,901 − 1,898 − 1,898Total comprehensive income for the year − (3) 1,901 12,776 14,674 (6) 14,668Contributions by and distributions to ownersDividend paid (Note 27) − − − (2,269) (2,269) − (2,269)Issue of share capital (Note 20) 10 − − − 10 − 10Total contributions by and distributions to owners for the year 10 − − (2,269) (2,259) − (2,259)Balance at 30 June 2011 44,620 − 4,450 31,693 80,763 68 80,831

Balance at 1 July 2011 44,620 − 4,450 31,693 80,763 68 80,831Profit for the year − − − 9,036 9,036 (6) 9,030Other comprehensive incomeForeign currency translation − − (425) − (425) − (425)Other comprehensive income, net of tax − − (425) − (425) − (425)Total comprehensive income for the year − − (425) 9,036 8,611 (6) 8,605Contributions by and distributions to ownersDividend paid (Note 27) − − − (4,784) (4,784) − (4,784)Total contributions by and distributions to owners for the year − − − (4,784) (4,784) − (4,784)Balance at 30 June 2012 44,620 − 4,025 35,945 84,590 62 84,652


STATEMENTS OF CHANGES IN EQUITYYear ended June 30, 2012


Share capital

Investment revaluation

reserve(Note 10)

Retainedearnings Total

US$’000 US$’000 US$’000 US$’000

Company

Balance at 1 July 2010 44,610 3 24,717 69,330Profit for the year − − 11,377 11,377Other comprehensive incomeNet gain on fair value changes of available-for-sale financial assets − (3) − (3)Other comprehensive income, net of tax − (3) − (3)Total comprehensive income for the year − (3) 11,377 11,374Contributions by and distributions to ownersDividend paid (Note 27) − − (2,269) (2,269)Issue of share capital (Note 20) 10 − − 10Total contributions by and distributions to owners for the year 10 − (2,269) (2,259)

Balance at 30 June 2011 and at 1 July 2011 44,620 − 33,825 78,445Profit for the year − − 6,393 6,393Total comprehensive income for the year − − 6,393 6,393Contributions by and distributions to ownersDividend paid (Note 27) − − (4,784) (4,784)Total contributions by and distributions to owners for the year − − (4,784) (4,784)Balance at 30 June 2012 44,620 − 35,434 80,054

32 PCI Limited

CONSOLIDATED CASH FLOW STATEMENTYear ended June 30, 2012


Group2012 2011

US$’000 US$’000

Cash flows from operating activitiesProfit before tax 8,433 15,057Adjustments for : Depreciation/amortisation of property, plant and equipment and investment property (prepaid lease payment) 3,076 3,594 Gain on disposal of investments - financial assets at fair value through profit or loss − (756) Gain on disposal of available-for-sale investments − (110) Dividend income − (85) Mark to market value for derivative financial instruments (47) 15 Interest income (530) (677) Foreign exchange gain (80) (537)Operating profit before working capital changes 10,852 16,501 Trade receivables (6,710) (3,626) Other receivables and prepayments (159) (72) Amounts due from holding company (3) − Inventories 1,980 (5,900) Trade and other payables 3,790 (1,194)Cash flows from operations 9,750 5,709Interest received 518 686Dividends received − 85Income tax paid (1,332) (2,271)Net cash flows generated from operating activities 8,936 4,209

Cash flows from investing activitiesProceeds on disposal of investment property (prepaid lease payment) 1 − Purchase of property, plant and equipment (2,204) (1,692)Proceeds from disposal of investments financial assets at - fair value through profit or loss − 23,556Proceeds on disposal of available-for-sale investments − 2,208Acquisition of investments - financial assets at fair value through profit or loss − (5,000)Net cash flows (used in)/generated from investing activities (2,203) 19,072Cash flows from financing activitiesDividends paid (4,784) (2,269)Proceeds on issue of shares − 10Net cash flows used in financing activities (4,784) (2,259)Net increase in cash and bank balances 1,949 21,022Cash and bank balances at beginning of year 45,894 23,266Effect of exchange rate change on balance of cash held in foreign currencies (184) 1,606

Cash and cash equivalents at end of year include the following :

Cash and bank balances (Note 6) 47,659 45,894Pledged deposits for derivative financial instruments with banks (Note 6) (2,476) (800)Total cash and cash equivalents 45,183 45,094


NOTES TO FINANCIAL STATEMENTSYear ended June 30, 2012

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. General information

PCI Limited (the “Company”) is a limited liability company incorporated and domiciled in Singapore, with its principal place of business and registered office at 386 Jalan Ahmad Ibrahim, Singapore 629156. The Company is listed on the Singapore Exchange Securities Trading Limited. The Company’s holding company is Chuan Hup Holdings Limited, incorporated in the Republic of Singapore.

The principal activities of the Company are investment holding and providing electronics manufacturing services. There has been no significant change in the nature of these activities from the previous financial year.

The principal activities of the subsidiaries are disclosed in Note 15 to the financial statements.

2. Summary of significant accounting policies

2.1 Basis of preparation

The consolidated financial statements of the Group, the balance sheet, the income statement, the statement of comprehensive income, and statement of changes in equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).

The financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in United States dollars (“USD” or “US$”) which is the functional currency of the Group and all values in the tables are rounded to the nearest thousand (US$’000) as indicated.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards and Interpretations of FRS (“INT FRS”) that are effective for annual periods beginning on or after 1 July 2011. The adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group and the Company.

2.3 Standards issued but not yet effective

The Group has not adopted the following standards and interpretations that have been issued but not yet effective :

DescriptionEffective for annual periods

beginning on or after

Amendments to FRS 12 Deferred Tax - Recovery of Underlying Assets 1 January 2012Amendments to FRS 1 Presentation of Items of Other Comprehensive Income 1 July 2012Revised FRS 19 Employee Benefits 1 January 2013Revised FRS 27 Separate Financial Statements 1 January 2013Revised FRS 28 Investments in Associates and Joint Ventures 1 January 2013FRS 110 Consolidated Financial Statements 1 January 2013FRS 111 Joint Arrangements 1 January 2013FRS 112 Disclosures of Interests in Other Entities 1 January 2013FRS 113 Fair Value Measurements 1 January 2013Amendments to FRS 107 Disclosures - Offsetting Financial Assets and Financial Liabilities 1 January 2013Amendments to FRS 32 - Offsetting Financial Assets and Financial Liabilities 1 January 2014INT FRS 120 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013

The directors expect that the adoption of the standards and interpretations above will have no material impact on the financial statements in the period of initial application.

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2. Summary of significant accounting policies (cont’d)

2.4 Basis of consolidation and business combinations

(a) Basis of consolidation

Basis of consolidation from 1 July 2009

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting period as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains or losses resulting from intra-group transactions and dividends are eliminated in full.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control and continue to be consolidated until the date that such control ceases.

Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance.

A change in the ownership interest of a subsidiary, without a loss of control is accounted for as an equity transaction. If the Group losses control over a subsidiary, it :

- Derecognises the assets (including goodwill) and liabilities of the subsidiary at their carrying amounts at the date when controls are lost;

- Derecognises the carrying amount of any non-controlling interest;

- Derecognises the cumulative translation differences recorded in equity;

- Recognises the fair value of the consideration received;

- Recognises the fair value of any investment retained;

- Recognises any surplus or deficit in profit or loss; or

- Re-classifies the Group’s share of components previously recognised in other comprehensive income to profit or loss or retained earnings, as appropriate.

Basis of consolidation prior to 1 July 2009

Certain of the above-mentioned requirements were applied on a prospective basis. The following differences, however, are carried forward in certain instances from the previous basis of consolidation :

- Acquisition of non-controlling interests, prior to 1 July 2009, were accounted for using the parent entity extension method, whereby, the difference between the consideration and the book value of the share of the net assets acquired were recognised in goodwill;

- Losses incurred by the Group were attributed to the non-controlling interest until the balance was reduced to nil. Any further losses were attributed to the Group, unless the non-controlling interest had a binding obligation to cover these. Losses prior to 1 July 2009 were not reallocated between non-controlling interest and the owners of the Company; or

- Upon loss of control, the Group accounted for the investment retained at its proportionate share of net asset value (“NAV”) at the date control was lost. The carrying value of such investments as at 1 July 2009 has not been restated.




2.4 Basis of consolidation and business combinations (cont’d)

(b) Business combinations

Business combinations from 1 July 2009

Business combinations are accounted for by applying the purchase method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair value at the acquisition date. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.

When the Group acquired a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with FRS 39 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it is not be remeasured until it is finally settled within equity.

In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. In instances where the latter amount exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on the acquisition date.

Business combinations prior to 1 July 2009

In comparison to the above mentioned requirements, the following differences applied :

Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net assets.

Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in equity. Any additional acquired share of interest did not affect previously recognised goodwill.

When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree were not reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract.

Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outflow was more likely than not and a reliable estimate was determinable. Subsequent adjustments to the contingent consideration were recognised as part of goodwill.

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2.5 Transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly to owners of the Company and is presented separately in the consolidated statement of comprehensive income and within equity in the consolidated balance sheet, separately from equity attributable to owners of the Company.

Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amount of the controlling and non-controlling interests is adjusted to reflect the changes in their relative interests in its subsidiary. Any differences between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

2.6 Foreign currency

The Group’s consolidated financial statements are presented in USD, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the consolidated financial statements of each entity are measured using that functional currency.

(a) Transactions and balances

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the reporting period are recognised in profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investments in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. On disposal of the foreign operation, the cumulative amount of exchange differences deferred in other comprehensive income relating to that foreign operation is recognised in profit or loss as a component of the gain or loss on disposal.

(b) Consolidated financial statements

For consolidation purpose, the assets and liabilities of foreign operations are translated into USD at the rate of exchange ruling at the end of the reporting period and their profit or loss are translated at the exchange rates prevailing at the date of the transactions. The exchange differences arising on the translation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences are re-attributed to non-controlling interest and are not recognised in profit or loss. For partial disposals of associates or jointly controlled entities that are foreign operations, the proportionate share of the accumulated exchange differences is reclassified to profit or loss.




2.7 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent to recognition, all items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses, if any. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows :

Leasehold improvements - 5 years to 50 yearsPlant and equipment - 3 years to 10 years

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying values may not be recoverable.

The residual value, estimated useful life and depreciation method are reviewed at each financial year end and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefit is expected from its use or disposal. Any gains or losses on derecognition of the asset is included in profit or loss in the financial year the asset is derecognised.

2.8 Investment property (prepaid lease payment)

The prepaid lease payment is initially measured at cost. Following initial recognition, prepaid lease payment is measured at cost less accumulated amortisation. The prepaid lease payment is amortised on a straight-line basis. Amortization is computed on a straight-line basis over the period as follows :

Prepaid lease payment - 28 years

2.9 Club membership

Club membership was acquired separately and is not amortised as its useful life is infinite. The club membership is tested for impairment annually, or more frequently if the events and circumstances indicate that the carrying value may be impaired. The useful life of club membership is reviewed annually to determine whether the useful life assessment continues to be supportable. If not, the change in useful life from infinite to finite is made on a prospective basis.

2.10 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour costs and those production overheads, where applicable, that have been incurred in bringing the inventories to that present location and condition. Cost is calculated using the moving weighted average method. Net realisable value represents the estimated selling price in the ordinary course of business, less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

In arriving at net realisable values, allowances are made when necessary for obsolete, slow-moving and defective stocks.

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2.11 Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to obtain benefits from its activities.

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment

losses.

2.12 Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate.

The Group’s investments in an associate are accounted for using the equity method. Under the equity method, the investments in an associate is carried in the balance sheets at cost plus post-acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associates is included in the carrying amount of the investments and is neither amortised nor tested individually for impairment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investments is included as income in the determination of the Group’s share of results of the associates in the financial period in which the investments is acquired.

The profit or loss reflects the share of the results of operations of the associates. Where there has been a change recognised in other comprehensive income by the associates, the Group recognises its share of such changes in other comprehensive income. Unrealised gains or losses resulting from transactions between the Group and the associates are eliminated to the extent of the interest in the associates.

The Group’s share of profit or loss of its associates is shown on the face of profit or loss after tax and non-controlling interests in the subsidiaries of associates.

When the Group’s share of losses in an associate equals or exceeds its interests in an associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investments in an associate. The Group determines at the end of each reporting period whether there is any objective evidence that the investments in an associate are impaired. If this is the case, the Group calculates the amount of impairment as the differences between the recoverable amount of an associate and its carrying value and recognises the amount in profit or loss.

The financial statements of the associates are prepared as of the same reporting period as the Group. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.

Upon loss of significant influence over the associates, the Group measures any retained investments at fair value. Any differences between the carrying amount of an associate upon loss of significant influence and the fair value of the aggregate of the retained investments and proceeds from disposal is recognised in profit or loss.




2.13 Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets. Where the carrying amount of an asset in cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written-down to its recoverable amount. In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent with the function of the impaired asset, except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

Assessment is made at the end of each reporting period as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

2.14 Financial assets

Initial recognition and measurement

Financial assets are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determines the classification of its financial assets at initial recognition.

When financial assets are recognised initially, they are measured at fair value, plus in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

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2.14 Financial assets (cont’d)

Subsequent measurement

The subsequent measurement of financial assets depends on their classification as follows :

(a) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by FRS 39. Derivatives, including separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

The Group may only designate an instrument at fair value through profit or loss upon initial recognition when the following criteria are met and the designation is determined on an instrument by instrument basis :

- The designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the assets or liabilities or recognising gains or losses on them on a different basis;

- The assets and liabilities are part of a group of financial assets, financial liabilities or both which are managed and their performance evaluated on a fair value basis, in accordance with a documented risk management or investment strategy; or

- The financial instrument contains one or more embedded derivatives which significantly modify the cash flows that otherwise would be required by the contract.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial assets are recognised in profit or loss. Net gains or net losses on financial assets at fair value through profit or loss include exchange differences, interest and dividend income.

Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not held-for-trading or designated at fair value through profit or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required.

(b) Loans and receivables

Non-derivative financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less impairment. Gains or losses are recognised in profit or loss when the loans and receivables are derecognised or impaired and through the amortisation process.




2.14 Financial assets (cont’d)

Subsequent measurement (cont’d)

(c) Available-for-sale financial assets

Available-for-sale financial assets include equity and debt securities. Equity investments classified as available-for-sale are those, which are neither classified as held for trading nor designated at fair value through profit or loss. Debt securities in this category are those which are intended to be held for an indefinite period of time and which may be sold in response to needs for liquidity or in response to changes in the market conditions.

After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any gains or losses from changes in fair value of the financial assets are recognised in other comprehensive income, except that impairment losses, foreign exchange gains or losses on monetary instruments and interest calculated using the effective interest method are recognised in profit or loss. The cumulative gains or losses previously recognised in other comprehensive income are reclassified from other comprehensive income to profit or loss as a reclassification adjustment when the financial assets are derecognised.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

De-recognition

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On de-recognition of a financial asset in its entirety, the differences between the carrying amount and the sum of the consideration received and any cumulative gains or losses that had been recognised in other comprehensive income are recognised in profit or loss.

All regular way purchases and sales of financial assets are recognised or de-recognised on the trade date i.e., the date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned.

2.15 Impairment of financial assets

The Group assesses at the end of each reporting period whether there are any objective evidence that a financial asset is impaired :

(a) Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred, the amounts of the loss is measured as the differences between the asset’s carrying amount and the present values of estimated future cash flows discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in profit or loss.

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2.15 Impairment of financial assets (cont’d)

(a) Financial assets carried at amortised cost (cont’d)

When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written-off against the carrying value of the financial assets.

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

If in a subsequent period, the amounts of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

(b) Financial assets carried at cost

If there is objective evidence (such as significant adverse changes in the business environment where the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at cost has been incurred, the amount of the loss is measured as the differences between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(c) Available-for-sale financial assets

In the case of equity investments classified as available-for-sale, objective evidence of impairment include: (i) significant financial difficulty of the issuer or obligor; (ii) information about significant changes with an adverse effect that have taken place in the technological, market, economic or legal environment in which the issuer operates and indicates that the cost of the investments in equity instruments may not be recovered; and (iii) a significant or prolonged decline in the fair value of the investments below its costs. ‘Significant’ is to be evaluated against the original cost of the investments and ‘prolonged’ against the period in which the fair value has been below its original cost.

If an available-for-sale financial asset is impaired, an amount comprising the differences between its acquisition cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss is transferred from other comprehensive income and recognised in profit or loss. Reversals of impairment losses in respect of equity instruments are not recognised in profit or loss; increases in their fair value after impairment are recognised directly in other comprehensive income.

2.16 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand and deposits with financial institutions which are subject to an insignificant risk of changes in value.




2.17 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated reliably.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provisions are reversed. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provisions due to the passage of time is recognised as a finance cost.

2.18 Financial liabilities

Initial recognition and measurement

Financial liabilities are recognised when, and only when, the Group becomes a party to the contractual provisions of the financial instruments. The Group determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value and in the case of other financial liabilities, plus directly attributable transaction costs.

Subsequent measurement

The measurement of financial liabilities depends on their classification as follows :

(a) Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value. Any gains or losses arising from changes in fair value of the financial liabilities are recognised in profit or loss.

The Group has not designated any financial liabilities upon initial recognition at fair value through profit or loss.

(b) Other financial liabilities

After initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains or losses are recognised in profit or loss when the liabilities are derecognised and through the amortisation process.

De-recognition

A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new liability and the differences in the respective carrying amount is recognised in profit or loss.

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2.19 Employee benefits

(a) Defined contribution plan

The Group participates in the national pension schemes as defined by the laws of the countries which it has operations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fund (“CPF”) scheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the financial period in which the related service is performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the end of the reporting period.

(c) Share-based payments

The Group issued equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.

2.20 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is made. Revenue is measured at the fair value of consideration received or receivable, excluding discounts, rebates and sales taxes or duties. The Group has assessed its revenue arrangements to determine if it is acting as principal or agent. The following specific revenue recognition criteria must also be met before revenue is recognised :

(a) Sale of goods

Revenue from sale of goods is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customers usually on delivery of goods. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(b) Rendering of services

Revenue from services is recognised when service is rendered.

(c) Dividend income

Dividend income from investments is recognised when the Group’s right to receive payment is established.

(d) Interest income

Interest income is recognised using the effective interest method.

(e) Rental income

Rental income arising from operating leases on leasehold property is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.




2.21 Taxes

(a) Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the end of the reporting period, in the countries where the Group operates and generates taxable income.

Current income taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions were appropriate.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the end of the reporting period between the tax bases of assets and liabilities and their carrying amount for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except :

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, an associate and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised except :

- where the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, an associate and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the financial year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

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2.21 Taxes (cont’d)

(b) Deferred tax (cont’d)

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(c) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except :

- Where the sales tax incurred in a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheets.

2.22 Share capital and share issue expenses

Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable to the issuance of ordinary shares are deducted against share capital.

2.23 Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset even if that right is not explicitly specified in an arrangement. For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in accordance with the transitional requirements of INT FRS 104.

(a) As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item are capitalised at the inception of the lease at the fair value of the leased asset, or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss. Contingent rents, if any, are charged as expenses in the financial periods in which they are incurred.

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.




2.23 Leases (cont’d)

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of ownership of the assets are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. The accounting policy for rental income is set out in Note 2.20. Contingent rents are recognised as revenue in the financial period in which they are earned.

2.24 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 30, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.25 Related parties

A related party is defined as follows :

(a) A person or a close member of that person’s family is related to the Group and Company if that person :

(i) Has control or joint control over the Company; (ii) Has significant influence over the Company; or (iii) is a member of the key management personnel of the Group or the Company or of a parent of the Company.

(b) An entity is related to the Group and the Company if any of the following conditions applies :

(i) The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others);

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member);

(iii) Both entities are joint ventures of the same third party; (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity; (v) The entity is a post-employment benefit plan for the benefit of employees of either the Company or an entity

related to the Company. If the Company is itself such a plan, the sponsoring employers are also related to the Company;

(vi) The entity is controlled or jointly controlled by a person identified in (a); or (vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management

personnel of the entity (or of a parent of the entity).

48 PCI Limited


3. Significant accounting estimates and judgements

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosures of contingent liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future periods.

3.1 Judgements made in applying accounting policies

Management is of the opinion that there are no critical judgements involved that have a significant effect on the amounts recognised in the financial statements (apart from those involving estimations, which are dealt with below).

3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below :

Useful lives of plant and equipment

The cost of plant and equipment for the manufacture of electronics is depreciated on a straight-line basis over the plant and equipment’s estimated economic useful lives. Management estimates the useful lives of these plant and equipment to be within 3 to 10 years. These are common life expectancies applied in the electronics industry. Changes in the expected level of usage and technological development could impact the economic useful lives of these assets, therefore, future depreciation charges could be revised. The carrying amount of the Group’s plant and equipment at the end of each reporting period is disclosed in Note 13 to the financial statements.

Impairment of investments in subsidiaries and associate

Determining whether investments in subsidiaries and associate are impaired requires an estimation of the fair values less cost to sell and value in use of those investments. The process requires the company to estimate the future cash flows expected from the cash-generating units and appropriate discount rate in order to calculate the present value of the future cash flows. Management has evaluated the recoverability of those investments based on such estimates and is satisfied that the allowance for impairment, where necessary, is adequate. The carrying amounts of these investments as at year end are disclosed in Notes 15 and 16 to the financial statements.

Allowance for inventories

The group and the company review its inventory levels in order to identify slow moving and obsolete merchandise. Where the group and company identify items of inventory that have a market price that is lower than its carrying amount, the group and the company estimate the amount of inventory loss as allowance on inventory. Market price is generally the merchandise selling price quoted from the market of similar terms. Management is satisfied that adequate allowance for slow moving and obsolete merchandise has been made in the financial statements. The carrying amounts of inventories as at year end are disclosed in Note 12 to the financial statements.

Allowance for doubtful debts

The policy for allowance for doubtful debts of the group and the company is based on the evaluation of collectability and aging analysis of accounts and on management’s estimates. A considerable amount of estimation is required in assessing the ultimate realisation of these receivables, including the creditworthiness and the past collection history of each customer. Management has evaluated the collectability of these receivables and is satisfied that the allowance for doubtful debts, where necessary, is adequate. The carrying amounts of these receivables as at year end are disclosed in Note 7 to the financial statements.



4. Financial instruments, financial risk and capital risk management

(a) Categories of financial instruments

The following table sets out the financial instruments at the end of the reporting period :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Financial assetsDerivative financial instruments 32 5 32 5Loans and receivables 88,784 80,365 75,341 67,763

Financial liabilitiesDerivative financial instruments − 20 − 20Financial liabilities measured at amortised cost 36,750 28,942 33,374 25,700

(b) Financial risk management policies and objectives

Risk management is integral to the whole business of the Group and the Company. The management continually monitors the Group’s and the Company’s risk management process to ensure that an appropriate balance between risk and control is achieved. Risk management policies and systems are reviewed regularly to reflect changes in the market conditions and the Group’s and the Company’s activities.

There has been no change to the Group’s and the Company’s exposure to these financial risks or the manner in which it manages and measures the risk. Market risk exposures are measured using sensitivity analysis indicated below :

(i) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group and the Company. The Group’s and the Company’s exposure to credit risk arises primarily from trade receivables and other receivables. The Group and the Company have adopted a policy of only dealing with recognised and creditworthy counterparties. Trade receivables consist of a large number of customers, spread across Asia Pacific, Europe and North America.

The Group and the Company perform ongoing credit evaluations of its customers’ financial conditions and generally does not require collateral. This evaluation includes assessing and valuation of customers’ credit reliability and periodic review of their financial status to determine credit limits to be granted.

The Group and the Company do not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics.

The carrying amount of financial assets recorded in the financial statements, grossed up for any allowances for losses, represents the Group’s and the Company’s maximum exposure to credit risk without taking account of the value of any collateral obtained.

Further details of credit risks on trade receivables and other receivables are disclosed in Note 7 and Note 8 to the financial statements.

Cash and fixed deposits are held with credit worthy financial institutions.

50 PCI Limited


4. Financial instruments, financial risk and capital risk management (cont’d)

(b) Financial risk management policies and objectives (cont’d)

(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates. Summary quantitative data of the Group’s and the Company’s interest bearing financial instruments can be found in Section b(iv) of this note.

The Group’s and the Company’s portfolio of interest linked structured deposits bear fixed interest rate, which is subject to performance of underlying funds and is considered minimal since these are capital protected.

No sensitivity analysis is prepared as the Group and the Company do not expect any material effect on the Group’s and the Company’s profit or loss arising from the effects of reasonably possible changes to interest rates on interest bearing financial instruments at the end of the reporting period.

(iii) Foreign currency risk

Foreign currency risk arises from commercial transactions, recognised assets and liabilities and net investments in foreign operations where the commercial transaction or recognised assets and liabilities are dominated in a currency other than the respective functional currencies of Group entities and the Company. The Group’s foreign exchange exposures give rise to market risk associated with exchange rate movements against the US$, the Group’s functional and reporting currency.

The Group and the Company use forward contracts to hedge their exposure to foreign currency risk in the local reporting currency to enhance the yield of the cash at bank balance. Further details of the forward contracts are found in Note 11 to the financial statements.

At the end of the reporting period, the material carrying amount of monetary assets and monetary liabilities, including intercompany balances denominated in currencies other than the respective group entities’ functional currencies are as follows :

Group CompanyLiabilities Assets Liabilities Assets

2012 2011 2012 2011 2012 2011 2012 2011US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Singapore dollars 1,756 1,902 10,169 6,266 1,716 1,681 9,896 6,112Indonesian rupiah − − 1,500 2,977 − − 1,500 2,977United States dollars 4,955 5,437 7,999 10,488 − − − − Chinese yuan − − 4,433 4,331 − − 4,433 4,331Euro 38 20 − − 38 20 − −

The Company has a number of investments in foreign subsidiaries, whose net assets are exposed to currency translation risk. The Group does not currently designate its foreign currency denominated debt as a hedging instrument for the purpose of hedging the translation of its foreign operations.





(iii) Foreign currency risk (cont’d)

The following table details the sensitivity to a 5% increase/(decrease) in the relevant functional currencies against the foreign currency of each group entity. 5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items (excluding derivative financial instruments) and adjusts their translation at the period end for a 5% change in foreign currency rates. The sensitivity analysis includes loans to foreign operations within the Group where the denomination of the loan is in a currency other than the currency of the lender or the borrower.

If the relevant functional currency of each group entity weakens by 5% against the foreign currencies, profit before tax for the financial year will increase/(decrease) by :

Singapore dollars impact

Indonesian rupiah impact

United States dollars impact

Chinese yuanimpact


GroupProfit before income tax for the year 401 208 71 142 145 241 211 206

CompanyProfit before income tax for the year 390 211 71 142 − − 211 206

If the relevant functional currency of each group entity strengthens by 5% against the foreign currencies, profit before tax for the financial year will increase/(decrease) by :

Singapore dollars impact

Indonesian rupiah impact

United States dollars impact

Chinese yuanimpact


GroupProfit before income tax for the year (401) (208) (71) (142) (145) (241) (211) (206)

CompanyProfit before income tax for the year (390) (211) (71) (142) − − (211) (206)

52 PCI Limited




(iv) Liquidity risk

Liquidity risk refers to the risk in which the Group and the Company are unable to meet its short-term obligations and this arises from the possibility that customers may not be able to settle their obligations within the normal terms of trade. Liquidity risk is managed by matching the payment and receipt cycle. Management is of the opinion that liquidity risk is minimal as the Group and the Company have sufficient funds generated through operations to meet funding requirements and adequate lines of credit are also maintained to ensure the necessary liquidity.

Liquidity risk analysis

Non-derivative financial liabilities

All financial liabilities and financial guarantee contract liabilities of the Group and the Company are repayable on demand or due within one year.

Non-derivative financial assets

The following table details the expected maturity for non-derivative financial assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Group’s and the Company’s liquidity risk management as the Group’s and the Company’s liquidity risk is managed on a net asset and liability basis. The tables below have been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except where the Group and the Company anticipates that the cash flow will occur in a different period. The adjustment column represents the possible future cash flows attributable to the instrument included in the maturity analysis which is not included in the carrying amount of the financial asset on the balance sheets :

Weighted average effective

interest rate

On demand or within

1 year

Within 2 to 5 years Adjustment Total

% US$’000 US$’000 US$’000 US$’000

Group

2012Non-interest bearing (Note 7 and Note 8) − 41,125 − − 41,125Variable interest rate instruments (Note 6) − 24,801 − − 24,801Fixed deposits (Note 6) 1.84 22,858 − − 22,858

88,784 − − 88,784

2011Non-interest bearing (Note 7 and Note 8) − 34,471 − − 34,471Variable interest rate instruments (Note 6) 0.01 22,110 − − 22,110Fixed deposits (Note 6) 1.92 23,784 − − 23,784

80,365 − − 80,365





(iv) Liquidity risk (cont’d)

Liquidity risk analysis (cont’d)

Non-derivative financial assets (cont’d)

Weighted average effective

interest rate

On demand or within

1 year

Within 2 to 5 years Adjustment Total

% US$’000 US$’000 US$’000 US$’000

Company

2012Non-interest bearing (Note 7, Note 8 and Note 9) − 37,615 − − 37,615Variable interest rate instruments (Note 6) − 20,142 − − 20,142Fixed deposits (Note 6) 0.50 17,584 − − 17,584

75,341 − − 75,341

2011Non-interest bearing (Note 7, Note 8 and Note 9) − 33,022 − − 33,022Variable interest rate instruments (Note 6) − 16,592 − − 16,592Fixed deposits (Note 6) 0.28 18,149 − − 18,149

67,763 − − 67,763

Derivative financial instruments

On demand or within 1 year

US$’000

Group and Company

2012Gross settled :Foreign exchange forward contracts 32

2011Gross settled :Foreign exchange forward contracts (15)

Financial guarantees

The contractual expiry by maturity of the Group and Company’s contingent liabilities amounted to US$Nil (2011: US$4,000) is within one year.

54 PCI Limited




(v) Fair value of financial assets and financial liabilities

The carrying amount of cash and bank balances, trade and other receivables and payables approximate their respective fair value due to the relatively short-term maturity of these financial instruments. The fair value of available-for-sale investments and derivative financial instruments as at financial year end were disclosed in Notes 10 and 11 to the financial statements, respectively.

The Group classifies fair value measurements using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels :

Level 1 - Quoted prices unadjusted in active markets for identical assets or liabilities; Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the assets or

liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and Level 3 - Inputs for the assets or liabilities that are not based on observable market data (i.e.,

unobservable inputs).

There have been no transfers between Level 1 and Level 2 fair value measurements during the financial year ended 30 June 2012 and 30 June 2011.

Financial instruments measured at fair value

Level 1 Level 2 Level 3 TotalUS$’000 US$’000 US$’000 US$’000

Group and Company

2012Financial assetDerivative financial asset − 32 − 32

Financial liabilityDerivative financial liability − − − −

2011Financial assetDerivative financial asset − 5 − 5

Financial liabilityDerivative financial liability − 20 − 20

(c) Capital risk management policies and objectives

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders.

The capital structure of the Group consists of equity attributable to equity holders of the Company, comprising share capital, reserves and retained earnings.

The Group’s risk management committee reviews the capital structure on an on-going basis and its overall strategy remains unchanged from 2011.



5. Holding company, related company and related party transactions

Related companies in these financial statements refer to members of the holding company’s group of companies.

Some of the Company’s transactions and arrangements are between members of the Group and the effect of these on the basis determined between the parties is reflected in these financial statements. The intercompany balances are unsecured, interest-free, repayable on demand and are to be settled in cash unless otherwise stated.

Significant transactions with subsidiaries :Company

2012 2011US$’000 US$’000

Rental expense 461 336Marketing expense * 431 273Processing fee expense 12,677 13,325Estate management fee 115 111IT service fee 431 416Purchase of finished goods 39,147 30,645Engineering services * 300 220

* Included in business development expenses.

Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions.

Significant related parties transactions :Group Company

2012 2011 2012 2011US$’000 US$’000 US$’000 US$’000

Rental income (1) (125) (128) − − Legal and professional fees (1) 75 78 75 78Project start-up income (2) (27) (631) (27) (631)Project start-up expense (2) 1,093 804 1,093 804

(1) Arising from Chuan Hup Holdings Limited. (2) Company controlled by a close member of a director.

The operating lease commitment of the Company with its subsidiary, Quijul Pte Ltd is disclosed in Note 29.

The remuneration of directors and other members of key management during the financial year was as follows :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Short-term benefits 1,975 2,879 1,927 2,809Cost of defined contribution plan 58 56 58 56Total 2,033 2,935 1,985 2,865

The remuneration of directors and key management is determined by the remuneration committee having regard to the performance of individuals and market trends and is subject to the approval.

At the end of reporting period, no share options have been granted to the Company’s directors.

56 PCI Limited


6. Cash and bank balances

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Cash at bank 24,801 22,110 20,142 16,592Fixed deposits 20,382 22,984 15,108 17,349Fixed deposits pledged for foreign exchange forward contracts 2,476 800 2,476 800

47,659 45,894 37,726 34,741

Cash and bank balances comprise cash held by the Group and the Company and short-term fixed deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.

Fixed deposits held during the financial year bear interest at rate ranging from 0.01% to 7.5% (2011: 0.1% to 7.3%) per annum.

Fixed deposits amounting to US$2,476,000 (2011: US$800,000) are pledged to certain financial institutions for the purpose of entering foreign exchange forward contracts as disclosed in Note 11 to the financial statements.

The Group and the Company’s cash and bank balances that are not denominated in the functional currencies of the respective entities are as follows :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Singapore dollars 9,315 5,692 9,236 5,684Chinese yuan 4,432 4,331 4,432 4,331United States dollars 914 2,155 − −

7. Trade receivables

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Trade receivables 40,138 33,428 35,285 29,306

Trade receivables are non-interest bearing and the average credit period on sale of goods is 56 days (2011: 50 days). They are recognised at their original invoice amounts which represents their fair value at initial recognition.

Management has evaluated the creditworthiness and past collection history of receivables and is satisfied that no further provision for receivables that are past due date is necessary.

Before accepting any new customers, the Group will assess the potential customers’ credit quality. Credit limits are monitored periodically by management.

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the end of the reporting period. The concentration of credit risk is limited due to the customers based being large and unrelated. Accordingly, management believes that there is no further credit provision required.



7. Trade receivables (cont’d)

The table below is an analysis of trade receivables as at 30 June :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Not past due and not impaired 30,455 27,530 26,782 23,933Past due but not impaired 9,683 5,898 8,503 5,373

40,138 33,428 35,285 29,306

Aging of receivables that are past due but not impaired : < 3 months 9,408 5,898 8,285 5,373 > 3 months 275 − 219 −

9,683 5,898 8,504 5,373

Trade receivables that are neither past due nor impaired are with creditworthy debtors with good payment records with the Group and the Company.

No provision is made to the above receivables that are past due but not impaired as there has not been a significant change in credit quality and the amounts are still considered recoverable.

The Group and the Company’s trade receivables that are not denominated in the functional currencies of the respective entities are as follows :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

United States dollars 2,725 2,021 − −

8. Other receivables and prepayments

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Recoverable 545 456 494 419Prepayments 761 531 179 100Deposits 286 456 5 − Others 153 131 8 − Total 1,745 1,574 686 519

The Group and the Company’s other receivables and prepayments that are not denominated in the functional currencies of the respective entities are as follows :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Singapore dollars 854 574 660 428Chinese yuan 1 − 1 −

58 PCI Limited


9. Amounts due from/(to) subsidiaries

Company2012 2011

US$’000 US$’000

Amounts due from subsidiaries 1,823 3,297Amounts due to subsidiaries (8,141) (7,936)Net (6,318) (4,639)

The above balances are trade in nature, interest-free repayable on demand and are to be settled in cash.

Amounts due from/(to) subsidiaries that are not denominated in the functional currency of the Company are as follows :

Company2012 2011

US$’000 US$’000

Indonesian rupiah 1,500 2,977Singapore dollars (1,072) (1,256)

10. Available-for-sale investments

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Non-current :Unquoted investmentsAt cost : Unquoted corporate floating rate notes − 155 − 155 Impairment loss − (155) − (155) Net − − − −

Movement in the investment revaluation reserve :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

At beginning of year − 3 − 3Reclassification to profit or loss from equity − (3) − (3)At end of year − − − −

The impairment allowance was previously made due to losses incurred by the investees in the past which cumulatively were not anticipated to be recovered from future cash flows based on information available at the end of the reporting period.



11. Derivative financial instruments

2012 2011Assets Liabilities Assets Liabilities

US$’000 US$’000 US$’000 US$’000

Group and CompanyForeign exchange forward contracts (analysed as current) 32 − 5 20

The foreign exchange forward contracts (“Forward Contracts”) include an embedded derivative which may significantly modify the cash flows that would otherwise be required by the contract. The Forward Contracts may be terminated earlier than the maturity dates upon the occurrence of the knock-out event as stipulated in the contract. The Forward Contracts may not serve as an effective hedging tool on existing currency position as the potential gain is capped while the potential loss is unlimited.

The Forward Contracts’ maturity dates range from 13 February 2013 to 20 May 2013.

At the end of the reporting period, the total notional amounts of outstanding foreign exchange forward contracts to which the Group and the Company is committed are as follows :

Group and Company2012 2011

US$’000 US$’000

Buy S$ and sell US$ 7,056 9,976

The fair value is measured using inputs of the prevailing market forward exchange rates, discount and zero rate curves and foreign exchange rate volatilities. The fair value net loss of the Group and the Company’s foreign exchange forward contracts is estimated to be approximately US$32,000 (2011: US$15,000), which has been charged to profit or loss for the financial year ended 30 June 2012.

12. Inventories

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Raw materials 23,402 25,652 18,283 20,734Work-in-progress 1,979 2,120 1,004 1,316Finished goods 11,414 11,003 10,107 10,439

36,795 38,775 29,394 32,489

Inventories recognised as an expense in cost of sales amounted to US$187,086,000 and US$178,651,000 (2011: US$194,184,000 and US$183,634,000) for the Group and the Company, respectively.

It includes the cost of raw materials, consumables and overheads, and the write-down of inventory amounting to US$552,000 and US$369,000 (2011: US$851,000 and US$634,000) for the Group and the Company, respectively.

60 PCI Limited


13. Property, plant and equipment

Leasehold improvements

Plant and equipment Total

US$’000 US$’000 US$’000

Group

CostAt 30 June 2010 1,979 26,039 28,018Translation adjustment 95 220 315Additions − 1,692 1,692Disposals (240) (1,012) (1,252)At 30 June 2011 1,834 26,939 28,773Translation adjustment (88) (1) (89)Additions 18 2,186 2,204Disposals − (1,184) (1,184)At 30 June 2012 1,764 27,940 29,704

Accumulated depreciationAt 30 June 2010 1,762 20,402 22,164Translation adjustment 83 183 266Depreciation 192 2,862 3,054Disposals (240) (1,012) (1,252)At 30 June 2011 1,797 22,435 24,232Translation adjustment (83) (19) (102)Depreciation 15 2,521 2,536Disposals − (1,184) (1,184)At 30 June 2012 1,729 23,753 25,482

Net carrying amountAt 30 June 2011 37 4,504 4,541At 30 June 2012 35 4,187 4,222



13. Property, plant and equipment (cont’d)

Plant and equipment

US$’000

Company

CostAt 30 June 2010 21,735Additions 790Disposals (577)At 30 June 2011 21,948Additions 1,458Disposals (1,178)At 30 June 2012 22,228

Accumulated depreciationAt 30 June 2010 17,019Depreciation 2,196Disposals (577)At 30 June 2011 18,638Depreciation 1,987Disposals (1,178)At 30 June 2012 19,447

Net carrying amountAt 30 June 2011 3,310At 30 June 2012 2,781

14. Investment property (prepaid lease payment)

GroupUS$’000

CostAt 30 June 2010 10,289Translation adjustment 1,493At 30 June 2011 11,782Translation adjustment (390)Disposals (58)At 30 June 2012 11,334

Accumulated amortizationAt 30 June 2010 3,642Amortization 540Translation adjustment 555At 30 June 2011 4,737Amortization 540Translation adjustment (162)Disposals (58)At 30 June 2012 5,057

Net carrying amountAt 30 June 2011 7,045At 30 June 2012 6,277

62 PCI Limited


14. Investment property (prepaid lease payment) (cont’d)

Details of the leasehold property of the Group :

Description Lease term Location Area

Leasehold land and building 60 years from 1 July 1966 322/386/388/390Jalan Ahmad IbrahimSingapore 629151/629156/629157/629155

76,500 square metres

The fair value of the Group’s leasehold property at 30 June 2012 is US$17,705,000 (equivalent to S$22,500,000) (2011: US$18,313,000 (equivalent to S$22,500,000)). Fair value has been determined on the basis of valuation carried out at the financial year end date by an independent valuer having an appropriate recognised professional qualification and recent experience in the location and category of the property being valued. The valuation was arrived at by reference to market evidence of transaction prices for similar properties.

The property rental income from the Group’s leasehold property all of which are leased out under operating lease, amounted to US$3,026,000 (2011: US$3,457,000). Direct operating expenses (including repairs and maintenance) arising from the rental-generating leasehold property amounted to US$2,708,000 (2011: US$2,945,000).

15. Investments in subsidiaries

Company2012 2011

US$’000 US$’000

Unquoted equity shares, at cost 16,051 16,051Quasi capital 4,851 5,733Less: Impairment loss in value (4,022) (4,022)Net 16,880 17,762

Quasi capital pertains to the loans to a subsidiary, which is an extension of the Company’s net investments in a subsidiary. The balance is stated at cost less accumulated impairment. The amount is repayable at the option of the subsidiary.



15. Investments in subsidiaries (cont’d)

The subsidiaries of the Company as at 30 June are set out below :

Name of subsidiaries

Principal activities

Country of incorporation

Cost of investments

Proportion of effective ownership

2012 2011 2012 2011US$’000 US$’000 % %

Subsidiaries of PCI Limited

Printed Circuits International Incorporated (1) (7)

Investment holding and provision of support on electronics manufacturing services

United States of America

6,467 6,467 100.0 100.0

Printed Circuits International (PCI) Phil., Inc. (1)

Dormant Philippines 702 702 60.0 60.0

PT. Prima Circuitama Indonesia (2)

Provision of electronics manufacturing services for the Group

Indonesia 213 213 92.5 92.5

PT. PCI Elektronik Internasional (2)

Provision of electronics manufacturing services for the Group

Indonesia 500 500 100.0 100.0

Pacific Gain Holding Limited (1)

Investment holding British Virgin Islands * * 100.0 100.0

PCI China Private Limited (7)

Investment holding Singapore 5,100 5,100 100.0 100.0

Quijul Pte Ltd (7) Rental of property Singapore 4,851 5,733 100.0 100.0

* Cost of investments at US$1.00.

64 PCI Limited






Cost of investments


2012 2011 2012 2011US$’000 US$’000 % %

Subsidiaries of Printed Circuits International Incorporated

Printed Circuits International Private Limited (7)

Rendering of estate management services to a related company

Singapore − − 100.0 100.0

PCI Displays Pte. Ltd. (7)

Provision of electronics manufacturing and information technology services

Singapore − − 100.0 100.0

Subsidiaries of Pacific Gain Holding Limited

Polymicro Corporation (Singapore) Pte Ltd (3) (7)

Investment holding Singapore 3,069 3,069 100.0 100.0

Polymicro Precision Technology (Thailand) Co. Ltd (4)

Dormant Thailand − − 100.0 100.0

Technology Enabler Designers Phils. Inc. (5)

Provision of research and development services

Philippines − − 100.0 100.0

Subsidiaries of PCI China Private Limited

PCI-Gaozhi (Shanghai) Electronic Co., Ltd. (6)

Provision of electronics manufacturing services to the Group

China − − 90.0 90.0







Cost of investments


2012 2011 2012 2011US$’000 US$’000 % %

Subsidiaries of PCI China Private Limited (cont’d)

PCI Shanghai Electronics Co., Ltd. (6)

Provision of electronics manufacturing services to the Group and third party customer

China − − 100.0 100.0

Subsidiary of Quijul Pte Ltd

Quijul Logisitics Pte. Ltd. (7)

Value added logistics providers and general warehousing

Singapore − − 100.0 −

Total 20,902 21,784

(1) Not required to be audited by law in its country of incorporation

(2) Audited by another firm of auditors (Drs. Bernardi & Co. Registered Public Accountants, Jakarta, Indonesia)

(3) The investment represents 8% equity interest and 5,000,000 redeemable convertible preference shares held by the Company. The remaining 92% equity interest is held by Pacific Gain Holding Limited, a subsidiary of the Company

(4) Audited by another firm of auditors (V.A.T. Accounting)

(5) Audited by member firm of Ernst & Young Global in Philippines (SGV & CO)

(6) Audited by another firm of auditors (Shanghai Linfang Certified Public Accountants, Co. Ltd, Shanghai, China)

(7) Audited by Ernst & Young LLP, Singapore

66 PCI Limited


16. Investments in an associate

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Unquoted equity shares, at cost − 551 − 551Impairment loss − (551) − (551)Net − − − −

The associate of the Group and Company is set out below :

NamePrincipal activity


Cost of investments

% of equity interest held by the Group

and Company2012 2011 2012 2011

US$’000 US$’000 % %

First Pacific Realty Partners Corporation (1)

Rental of property Philippines − 551 − 18.9

(1) Audited by another firm of auditors, Cesar G. Avila, Jr.

Summarised financial information in respect of the Group’s and Company’s associate are set out below :

Group and Company

2011US$’000

Total assets 232Total liabilities (39)Net assets 193

Group’s and Company’s share of associate’s net assets 36

Revenue 35Profit for the year 11Group’s and Company’s share of associate’s profit for the year 2

During 2012, upon the loss of significant influence, the Group accounted for the investments in an associate as available-for-sale investment (Note 10).

17. Other assets

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Club membership, at cost 315 315 315 315

The fair value of club membership as at 30 June 2012 is US$395,027 (2011: US$432,164).



18. Trade payables, other payables and provision

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Trade payables 36,750 28,942 25,233 17,764Provision 2,264 2,702 909 1,220Accruals 11,039 14,621 8,722 12,503Total 50,053 46,265 34,864 31,487

The average credit period on purchases of goods is 57 days (2011: 50 days). No interest is charged by suppliers on the trade payables.

Trade payables, other payables and provision are substantially denominated in the functional currencies of the respective entities as at year end except as follows :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Singapore dollars 3,502 5,466 3,231 4,982United States dollars 5,188 5,637 − −

The following table shows the movement of provision for the financial year ended 30 June 2012 :

Group CompanyExcess

purchase orderStaff

retrenchment TotalExcess

purchase orderUS$’000 US$’000 US$’000 US$’000

1 July 2011 1,626 1,076 2,702 1,220Arose during the year − 120 120 − Reversed during the year (558) − (558) (311)At 30 June 2012 1,068 1,196 2,264 909

19. Deferred tax liabilities


US$’000 US$’000

At beginning of year 491 779Credit to profit or loss for the year (Note 24) (85) (288)At end of year 406 491

This balance comprises the tax effect of the excess of capital allowances over book depreciation.

68 PCI Limited


20. Share capital


No. of shares US$’000 No. of shares US$’000

Issued and fully paid ordinary shares :At beginning of year 198,884,000 44,620 198,834,000 44,610Issue of share capital − − 50,000 10At end of year 198,884,000 44,620 198,884,000 44,620

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions. The ordinary shares have no par value.

Equity settled share option scheme

(a) The PCI Limited Employees’ Share Option Scheme (the “1992 Scheme”) which was approved on 30 October 1992, expired on 30 June 2003. This has since been replaced by a new Share Option Scheme, the PCI Limited Employees’ Share Option Scheme 2003 (the “2003 Scheme”) which was approved by the shareholders of the Company at an Extraordinary General Meeting (“EGM”) held on 12 November 2003. Options granted under the 1992 Scheme which have not been exercised at the time of expiration of the 1992 Scheme shall remain valid until such a time where the options have been exercised or have lapsed and will continue to be administered under the rules of the 1992 Scheme as approved on 30 October 1992 and amended on 10 November 2000. No option has been granted under the 2003 Scheme since its commencement;

(b) Statutory information regarding the options granted in 1999, 2000, 2001 and 2002 under the 1992 Scheme have been set out in the directors’ reports for the financial years ended 30 June 2000, 2001, 2002 and 2003;

Subject to Rule 11(b) and Rule 20 of the Scheme, a Grantee may exercise the option at any time during the Option Period. The Option Period commences after the first anniversary of the date of grant and expires before the 10th anniversary of the date of grant;

Under Rule 11(b), a Grantee who has been employed by the Group for less than 12 months as at the offering date may only exercise the option after the 2nd anniversary;

Under Rule 20, the option shall become void on the death of a Grantee, termination of employment of Grantee, where a Grantee does an act where he would be deprived of the legal or beneficial ownership of his option, where he is subject to a petition of bankruptcy or where a Grantee commits any breach of any terms of his option;

(c) Both the 1992 Scheme and the 2003 Scheme are administered by the Remuneration Committee (the “Committee”). At the date of this report, the Committee members are Mr Lo Pang Foo Steven, the Lead Independent Director, Mr Loh Kee Kong, a Non-Executive Director, and Ms Tey Swee Nai, Nancy, a Non-Executive, Independent Director;

(d) Non-executive directors, controlling shareholders or their associates are not eligible to participate in the 1992 Scheme and the 2003 Scheme;

(e) No option has been granted to eligible participants which, in aggregate, represent 5% or more of the total number of new shares available under the 1992 Scheme and the 2003 Scheme;

(f) No option was granted under the 2003 Scheme during the financial year under review at a discount;

(g) During the financial year, no option to take up unissued shares of any subsidiaries were granted and there was no share of any subsidiaries issued by virtue of the exercise of an option to take up unissued shares; and

(h) At the end of the financial year, there was no unissued share of any subsidiaries under option.



20. Share capital (cont’d)

Details of the share options outstanding during the financial year are as follows :


Number of share

options

Weighted average exercise

price

Number of share

options

Weighted average exercise

priceS$ S$

Outstanding at beginning of year 245,000 0.27 2,579,000 0.70Exercised during the year − − (50,000) 0.27Cancelled during the year (10,000) 0.27 (2,284,000) 0.75Outstanding at end of year 235,000 245,000

Exercisable at end of year 235,000 0.27 245,000 0.27

The options outstanding at the end of the financial year have a weighted average remaining contractual life of 0.25 years (2011: 1.25 years).

21. Foreign currency translation reserve

The foreign currency translation reserve represents exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency.

22. Revenue

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Sale of goods 234,047 245,822 216,750 227,564Interest income from fixed deposits 530 524 74 99Interest income from structured deposits − 153 − 153Dividend income − 85 − 85Rental income 3,026 3,457 − − Others 1,482 731 30 31Total 239,085 250,772 216,854 227,932

23. Other operating income

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Sundry income 646 516 521 193Scrap sales 69 78 37 60Total 715 594 558 253

70 PCI Limited


24. Income tax (benefit)/expense

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Current income tax 1,234 2,849 665 2,022Over-provision in prior years (1,746) (274) (1,728) (262)Deferred tax liabilities-origination and reversal of temporary difference (Note 19) (85) (288) (85) (288)Total (597) 2,287 (1,148) 1,472

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable corporate tax rate is as follows :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Profit before tax 8,433 15,057 5,245 12,849

Tax at domestic rates applicable to profits in the countries where the Group operates 1,479 2,819 892 2,184Non-taxable items (309) (323) (373) (446)Over-provision in respect of prior years (1,746) (274) (1,728) (262)Effect of revenue that is exempt from taxation (59) (52) (20) (32)Effect of utilisation of tax losses not previously recognised (44) − − − Tax effect of tax losses not recognised − 87 − − Others 82 30 81 28Total (597) 2,287 (1,148) 1,472

The Group has tax loss carrying forwards available for offsetting against future taxable income as follows :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Amounts at beginning of year 1,756 1,103 − − Amounts issued in current year 79 665 − − Amounts utilised in current year (183) − − − Adjustments to prior year 37 (12) − − Amounts at end of year 1,689 1,756 − −

Deferred tax benefit on above unrecorded 368 359 − −

The realisation of the future income tax benefit expense from tax loss carry forwards is available for an unlimited future period subject to the conditions imposed by law including the retention of majority shareholders as defined. No deferred tax asset has been recognised due to the unpredictability of future profit streams.



25. Profit before income tax

Profit before taxation for the financial year has been arrived at after charging the following items :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Directors’ fees 80 88 80 88Directors’ remuneration (excluding directors’ fees) 730 1,228 730 1,228Salaries and bonuses (excluding directors’ remuneration) 23,854 23,288 8,152 8,208Cost of defined contribution plan 1,688 1,493 635 536Allowance for slow-moving inventories 552 851 369 634Total audit and non-audit fees including: 139 185 82 91Audit fees : - Auditors of the Company 112 103 82 83 - Other auditors 27 29 − − Non-audit fees : - Auditors of the Company − 53 − 8 - Other auditors − − − −

26. Basic and fully diluted earnings per share

The calculation of the basic and fully diluted earnings per share attributable of the Group is based on the following :

Group (Basic) Group (Diluted)2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Profit for the year attributable to equity holders of the Company 9,036 12,776 9,036 12,776

Number of shares Number of shares2012 2011 2012 2011’000 ’000 ’000 ’000

Number of weighted average ordinary shares used to compute earnings per share 198,884 198,851 198,957 198,951

Earnings per share (US Cents) 4.54 6.42 4.54 6.42

Number of shares2012 2011’000 ’000

Weighted average number of ordinary shares for the purposes of basic earnings per share 198,884 198,851Effect of dilutive potential ordinary shares : Share options 73 100Weighted average number of ordinary shares for the purposes of diluted earnings per share 198,957 198,951

72 PCI Limited


27. Dividends

During the financial year ended 30 June 2012, the Company declared and paid a first and final dividend of US$0.0241 (equivalent to S$0.0300) per ordinary share totalling US$4,784,000 (equivalent to S$5,967,000) in respect of the financial year ended 30 June 2011.

Subsequent to 30 June 2012, the directors of the Company proposed that a first and final dividend of US$0.0236 (equivalent to S$0.0300) per ordinary share totalling US$4,694,000 (equivalent to S$5,967,000) be paid in respect of the financial year just ended. This dividend is subject to approval by shareholders at the Annual General Meeting (“AGM”) and has not been included as liability in the financial statements.

28. Contingent liabilities


US$’000 US$’000

Guarantees (unsecured) − 4

As at 30 June 2012 and 2011, the maximum amount that the Group and the Company could be forced to settle under the financial guarantee contract, if the full guaranteed amount is claimed by the counterparty to the guarantee is US$Nil (2011: US$4,000).

29. Operating lease commitments

The Group and the Company as lessee

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Minimum lease payments under operating leases recognised as an expense in the year 2,121 1,998 486 360

At the end of the reporting period, the commitments in respect of non-cancellable operating leases for the rental of factory spaces, office premises, residential premises and land were as follows :

Group Company2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

Not later than one year 1,913 2,081 475 380Later than one year but not later than five years 4,490 5,064 − 21Later than five years 8,232 9,573 − − Total 14,635 16,718 475 401

The operating lease commitment of the Company mainly relates to the lease agreements with Quijul Pte Ltd, which is a wholly-owned subsidiary of the Company.



29. Operating lease commitments (cont’d) The Group as lessor

Group2012 2011

US$’000 US$’000

Rental income for the year included in profit or loss 3,026 3,457

At the end of the reporting period, the Group has contracted with tenants for the following future minimum lease receipts :

Not later than one year 1,412 1,445

30. Segment information

The Group determines and presents business based on the information that internally is provided to the Chief Executive Officer (“CEO”), who is the Group’s chief operating decision maker. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components and for which discrete financial information is available. An operating segment’s operating results are reviewed regularly by the CEO to make decisions about resources to be allocated to the segment and assess its performance. Segment results that are reported to the CEO include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. A geographical segment is engaged in providing products or services within a particular economic environment that are subject to risks and return that are different from those of segments operating in other economic environments.

Operating segment

For management purpose, the Group is organised on a world-wide basis into three operating segments - electronic manufacturing services, investment income and interest earned, estate management and rental income.

Principal activities in each segment are as follows :

Electronics manufacturing services - Electronics manufacturing services encompassing printed circuit board assembly, customer user interface design and manufacturing and fully turnkey electronics manufacturing

Investment income and interest earned - Interest income and other income earned from bonds, including gains or losses on disposal of investments

Estate management and rental income - Rental of premises

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in Note 2.24.

74 PCI Limited


30. Segment information (cont’d)

Operating segment (cont’d)

Segment revenues and expenses are the operating revenue and expense reported in the Group’s income statement that are directly attributable to a segment and the relevant portion of such revenue and expense that can be allocated on a reasonable basis to a segment.

Segment assets and liabilities: Segment assets include all operating assets used by a segment and consist principally of operating receivables, inventories and property, plant and equipment, net of allowances and provisions. Capital additions include the total cost incurred to acquire property, plant and equipment directly attributable to the segment. Segment liabilities include all operating liabilities and consist principally of accounts payable and accruals.

Inter-segment transfers: Segment revenues and expenses include transfers between operating segments and between geographical segments. Inter-segment pricing is determined at fair market value. These transfers are eliminated on consolidation.

Electronics manufacturing

services

Investment income and

interest earned

Estate management

and rental income Elimination Consolidated

US$’000 US$’000 US$’000 US$’000 US$’000

2012

Revenue : External 234,504 74 4,507 − 239,085 Inter-segment − − 738 (738) − Total 234,504 74 5,245 (738) 239,085

Results : Segment results 6,919 125 1,389 − 8,433 Profit before income tax 6,919 125 1,389 − 8,433 Income tax benefit/(expense) 868 − (271) − 597 Profit after income tax 7,787 125 1,118 − 9,030

Other information : Capital additions 2,204 − − − 2,204 Depreciation and amortisation 2,536 − 540 − 3,076 Interest income 456 74 − − 530

Assets : Segment assets 128,328 347 8,511 − 137,186

Liabilities : Segment liabilities 48,623 − 1,430 − 50,053 Unallocated corporate liabilities 2,481 Total 52,534




Operating segment (cont’d)

Electronics manufacturing

services

Investment income and

interest earned

Estate management

and rental income Elimination Consolidated

US$’000 US$’000 US$’000 US$’000 US$’000

2011

Revenue : External 246,217 337 4,218 − 250,772 Inter-segment − − 579 (579) − Total 246,217 337 4,797 (579) 250,772

Results : Segment results 12,625 1,248 1,184 − 15,057 Profit before income tax 12,625 1,248 1,184 − 15,057 Income tax expense (2,025) − (262) − (2,287) Profit after income tax 10,600 1,248 922 − 12,770

Other information : Capital additions 1,692 − − − 1,692 Depreciation and amortisation 3,053 − 541 − 3,594 Interest income 425 252 − − 677 Dividend income − 85 − − 85

Assets : Segment assets 123,132 320 8,125 − 131,577

Liabilities : Segment liabilities 45,197 − 1,068 − 46,265 Unallocated corporate liabilities 4,481 Total 50,746

76 PCI Limited



Geographical segments

The Group operates mainly in seven geographical areas namely United States of America, People’s Republic of China, British Virgin Islands, Singapore, ASEAN (excluding Singapore), Britain and Australia.

The revenue by geographical segments is based on location of the customers. Segment assets (non-current assets excluding available-for-sale investments) are based on the geographical location of the assets :

Revenue Non-current assets2012 2011 2012 2011

US$’000 US$’000 US$’000 US$’000

United States of America 81,573 83,558 − − People’s Republic of China 73,809 75,275 1,526 1,270British Virgin Islands 11,818 31,744 − − Singapore 26,450 19,786 9,192 10,451ASEAN (excluding Singapore) 11,422 12,013 96 180Britain 1,733 2,465 − − Australia 356 360 − − Others 31,924 25,571 − −

239,085 250,772 10,814 11,901

Information about major customers - Electronic manufacturing services

Included in electronics manufacturing services segment revenue of US$234,504,000 (2011: US$246,217,000) are revenues of approximately US$26,404,000, US$24,636,000 and US$23,754,000 (2011: US$22,606,000, US$33,335,000 and US$30,925,000), respectively which arose from sales of goods to the Group’s 3 (2011: 3) major customers.

At the end of the reporting period, approximately 30% (2011:33%) of the Group’s trade receivables were due from these major customers.

31. Authorisation of the financial statements

The consolidated financial statements of the Group and balance sheet, income statement, statement of comprehensive income and statement of changes in equity of the Company for the financial year ended 30 June 2012 were approved and authorised for issue by the board of directors on 27 August 2012.


STATISTICS OF SHAREHOLDINGSas at 13 September 2012

SHARE CAPITAL

Total Number of Issued Shares : 198,884,000Issued and Fully Paid-up Capital : S$74,973,270Class of Shares : Ordinary sharesVoting Rights : One vote per shareTreasury Shares : Nil

BREAKDOWN OF SHAREHOLDINGS BY RANGE

Size of ShareholdingsNo. of

Shareholders % No. of Shares %1 – 999 5 0.17 112 0.001,000 - 10,000 2,326 78.55 10,556,782 5.3110,001 - 1,000,000 626 21.14 26,253,000 13.201,000,001 and above 4 0.14 162,074,106 81.49TOTAL 2,961 100.00 198,884,000 100.00

TWENTY-TWO LARGEST SHAREHOLDERS

No. Shareholder’s Name No. of Shares %

1 DBS NOMINEES PTE LTD 155,996,606 78.442 MAYBANK KIM ENG SECURITIES PTE LTD 2,676,000 1.353 UNITED OVERSEAS BANK NOMINEES PTE LTD 2,384,500 1.204 OCBC NOMINEES SINGAPORE PTE LTD 1,017,000 0.515 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 783,000 0.396 TEO GUAT YAU 776,000 0.397 TEO GEOK KIOW 600,000 0.308 TAY BOON HUAT 430,000 0.229 OCBC SECURITIES PRIVATE LTD 380,000 0.1910 CITIBANK NOMINEES SINGAPORE PTE LTD 375,000 0.1911 CHIA CHEE KONG 350,000 0.1812 CHONG AH KAU @ CHONG LOONG TECK 350,000 0.1813 ONG ENG LOKE 280,000 0.1414 HL BANK NOMINEES (SINGAPORE) PTE LTD 276,000 0.1415 ANG JWEE HERNG 269,000 0.1416 TAN SIEW HWA 265,000 0.1317 NG FOONG TENG 254,000 0.1318 LEE KENG POH 250,000 0.1319 QUAH BIOW CHYE 201,000 0.1020 CHOO CHONG NGEN 200,000 0.1021 LAM HUP SUM 200,000 0.1022 TEO ENG LIN 200,000 0.10

Total: 168,513,106 84.75

78 PCI Limited

STATISTICS OF SHAREHOLDINGSas at 13 September 2012

Direct Interest Deemed Interest

Substantial Shareholder No. of Shares % of Holdings No. of Shares % of Holdings

Chuan Hup Holdings Limited 152,701,506(a) 76.78 - -

Mr Peh Kwee Chim - - 152,701,506(b) 76.78

Notes:

(a) Held in the name of its nominee, DBS Nominees Pte Ltd.

(b) Mr Peh Kwee Chim has a deemed interest in 152,701,506 shares, by virtue of Section 7(4) of the Singapore Companies Act, Cap. 50.

(c) Based on information available to the Company as at 13 September 2012, approximately 23.12% of the issued ordinary shares of the Company is held by the public and therefore, Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited is complied with.


NOTICE OF ANNUAL GENERAL MEETING

PCI LIMITED(Incorporated in the Republic of Singapore)

(Co. Reg. No. 198804482N)

NOTICE IS HEREBY GIVEN that the TWENTY-THIRD ANNUAL GENERAL MEETING of the Company will be held at The Board Room, 390 Jalan Ahmad Ibrahim, Singapore 629155 on 25 October 2012 at 10.30 a.m. to transact the following business:

Ordinary Business:

1. To receive and adopt the Audited Financial Statements for the financial year ended 30 June 2012 together with the reports of the Directors and Auditors thereon.

(Resolution 1)

2. To declare a one-tier tax exempt first and final dividend of 3 SG cents per share for the financial year ended 30 June 2012.

(Resolution 2)

3. To re-elect Mr Peh Siong Woon Terence who retires in accordance with Article 120 of the Company’s Articles of Association and who, being eligible, offers himself for re-election.

(Resolution 3)

4. To re-elect Mr Lo Pang Foo Steven who retires in accordance with Article 120 of the Company’s Articles of Association and who, being eligible, offers himself for re-election.[See Explanatory Note 1]

(Resolution 4)

5 To re-elect Mr Peh Kwee Chim who retires by rotation in accordance with Article 110 of the Company’s Articles of Association and who, being eligible, offers himself for re-election.[See Explanatory Note 2]

(Resolution 5)

6 To re-elect Ms Tey Swee Nai, Nancy who retires by rotation in accordance with Article 110 of the Company’s Articles of Association and who, being eligible, offers herself for re-election.[See Explanatory Note 3]

(Resolution 6)

7 To approve the payment of fees of SGD101,115.00 for Non-Executive Directors for the financial year ended 30 June 2012 (FY2011: SGD108,000).

(Resolution 7)

8. To re-appoint Messrs Ernst & Young LLP as Auditors of the Company and to authorise the Directors to fix their remuneration.

(Resolution 8)

Special Business:

9. To consider, and if thought fit, to pass the following resolution as an Ordinary Resolution:

“That authority be and is hereby given to the Directors of the Company to: (Resolution 9)

(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and

80 PCI Limited


(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

provided that:

(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50 per cent of the total number of issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 20 per cent of total number of issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities Trading Limited (the “SGX-ST”)) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the percentage of issued shares shall be based on total number of issued shares in the capital of the Company at the time this Resolution is passed, after adjusting for:

(i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and

(ii) any subsequent bonus issue or consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and

(4) (unless revoked or varied by the Company in General Meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.

10. To consider, and if thought fit, to pass the following resolution as an Ordinary Resolution:

“That the Directors be authorised and empowered to offer and grant options in accordance with the provisions of the PCI Limited Employees’ Share Option Scheme 2003 (the “2003 Scheme”) and to issue from time to time such number of ordinary shares in the capital of the Company as may be required to be issued pursuant to the exercise of options granted by the Company under the 2003 Scheme, provided always that the aggregate number of shares to be allotted and issued pursuant to the 2003 Scheme shall not exceed fifteen per cent (15%) of the issued shares in the capital of the Company from time to time and that such authority, shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.”

(Resolution 10)



NOTICE IS HEREBY GIVEN that, subject to the approval of shareholders to the first and final dividend (“Final Dividend”) being obtained at the Twenty-Third Annual General Meeting to be held on 25 October 2012, the Transfer Books and the Register of Members of the Company will be closed on 20 November 2012 for the preparation of dividend warrants.

Duly completed registrable transfers received by the Company’s Registrar, Tricor Barbinder Share Registration Services (a division of Tricor Singapore Pte. Ltd.) of 80 Robinson Road, #02-00, Singapore 068898, up to 5.00 p.m. on 19 November 2012, will be registered to determine shareholders’ entitlements to the Final Dividend. Subject to aforesaid, shareholders whose Securities Accounts with The Central Depository (Pte) Limited are credited with ordinary shares in the capital of the Company as at 5.00 p.m. on 19 November 2012, will be entitled to the Final Dividend.

The Final Dividend, if so approved by shareholders, will be paid on 3 December 2012.

Dated this 5th day of October 2012

BY ORDER OF THE BOARD

Valerie Tan May WeiCompany Secretary

Explanatory Notes:

(1) Mr Lo Pang Foo Steven, if re-elected, will continue as the Chairman of the Remuneration and Nominating Committees and a member of the Audit Committee. Mr Lo is considered an independent director.

(2) Mr Peh Kwee Chim, if re-elected, will continue as a member of the Nominating Committee. Mr Peh is considered a non-independent director.

(3) Ms Tey Swee Nai, Nancy, if re-elected, will continue as the Chairman of the Audit Committee and a member of the Remuneration and Nominating Committees. Ms Tey is considered an independent director.

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PCI LIMITED(Incorporated in the Republic of Singapore)(Co. Reg. No. 198804482N)

Proxy Form

IMPORTANT

1. For investors who have used their CPF monies to buy the Company’s shares, the Annual Report 2012 is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR THEIR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

I/We (Name)

(NRIC/Passport Number)

of (Address)

being a member/members of PCI Limited (the” Company”) hereby appoint

NAME ADDRESSNRIC/ PASSPORT

NUMBERPROPORTION OF

SHAREHOLDINGS (%)

and/or (delete as appropriate)

or failing him/her, the Chairman of the Twenty-Third Annual General Meeting of the Company (“Annual General Meeting”) as my/our proxy/proxies to attend and to vote for me/us and on my/our behalf at the Annual General Meeting to be held at The Board Room, 390 Jalan Ahmad Ibrahim, Singapore 629155 on 25 October 2012 at 10.30 a.m. and at any adjournment thereof.

(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting).

NO. ORDINARY RESOLUTIONS FOR AGAINSTOrdinary Business

1 Adoption of Financial Statements and Reports2 Declaration of First and Final Dividend3 Re-election of Mr Peh Siong Woon Terence in accordance with Article 1204 Re-election of Mr Lo Pang Foo Steven in accordance with Article 1205 Re-election of Mr Peh Kwee Chim in accordance with Article 1106 Re-election of Ms Tey Swee Nai, Nancy in accordance with Article 1107 Approval of Directors’ Fees for the financial year ended 30 June 20128 Re-appointment of Messrs Ernst & Young LLP as Auditors

Special Business9 Approval of proposed Share Issue Mandate10 Authority to Grant Options and to Issue Shares Pursuant to the PCI Limited

Employees’ Share Option Scheme 2003

Dated this day of 2012

Total Number of Shares Held:

Signature(s) of Member(s) or Common Seal

IMPORTANT: PLEASE READ NOTES ON THE REVERSE SIDE

Notes:

1. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint one or two proxies to attend and vote instead of him. A proxy need not be a member of the Company. The appointment of a proxy or proxies by this instrument shall not preclude a member from attending and voting in person at the Annual General Meeting. If a member attends the Annual General Meeting in person, the appointment of a proxy or proxies shall be deemed to be revoked, and the Company reserves the right to refuse to admit such proxy or proxies to the Annual General Meeting.

2. Where a member appoints two proxies, the appointment shall be invalid unless he specifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy.

3. This instrument of proxy or proxies must be signed by the appointor or his duly authorised attorney, or, if the appointer is a corporation, it must be executed either under its common seal or signed by its attorney.

4. A corporation which is a member may also appoint by resolution of its directors or other governing body an authorised representative or representatives in accordance with its Articles of Association and Section 179 of the Singapore Companies Act, Cap. 50, to attend and vote on its behalf.

5. This instrument appointing a proxy or proxies (together with the power of attorney if any, under which it is signed or a certified copy thereof) must be deposited at the registered office of the Company at 388 Jalan Ahmad Ibrahim, Singapore 629157, not less than 48 hours before the time appointed for holding the Annual General Meeting.

6. A member should insert the total number of shares held in this instrument of proxy. If the member has shares entered against his name in the Depository Register (as defined in Section 130A of the Singapore Companies Act, Cap 50), he should insert that number of shares. If the member has shares registered in his name in the Register of Members, he should insert that number of shares. If the member has shares entered against his name in the Depository Register as well as shares registered in his name in the Register of Members, he should insert the aggregate number of shares. If no number is inserted, this instrument of proxy will be deemed to relate to all the shares held by the member.

7. The Company shall be entitled to reject this instrument of proxy or proxies if it is incomplete, or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in this instrument of proxy. In addition, in the case of a member whose shares are entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register at 48 hours before the time appointed for holding the Annual General Meeting as certified by The Central Depository (Pte) Limited to the Company.

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