TIR 2002 annual report

redefining light ABSOLUTE LUMINANCE THRESHOLD -- THE LUMINANCE T H R E S H O L D F O R A B R I G H T O B J E C T L I K E A D I S K O N A T O TA L LY DARK BACKGROUND. ABSORPTANCE -- THE RATIO OF THE FLUX ABSORBED BY A MEDIUM TO THE INCIDENT FLUX. ABSORPTION -- A GENERAL TERM FOR THE PROCESS BY WHICH I N C I D E N T F L U X I S C O N V E R T E D T O A N O T H E R F O R M O F E N E R G Y, U S U A L LY A N D U LT I M AT E LY T O H E AT. ACCENT LIGHTING -- DIRECTION LIGHTING TO EMPHASIZE A PA R T I C U L A R O B J E C T O R T O D R AW AT T E N T I O N T O A PA R T O F T H E F I E L D O F V I E W. ACCOMMODATION -- THE PROCESS BY WHICH THE EYE CHANGES FOCUS FROM ONE DISTANCE TO ANOTHER. A C T I N I C - - P H O T O C H E M I C A L LY A C T I V E . ACTION SPECTRUM -- THE QUANTITATIVE ACTINIC RESPONSE OF A CHEMICAL OR BIOLOGICAL SUBSTANCE OR LIVING ORGANISM AS A F U N C T I O N O F A N A P P R O P R I AT E S P E C T R A L PA R A M E T E R S U C H A S WAV E L E N G T H O R P H O T O N E N E R G Y. ADAPTATION -- THE PROCESS BY WHICH THE RETINA BECOMES ACCUSTOMED TO MORE OR LESS LIGHT THAN IT WAS EXPOSED TO DUR I N G A N I M M E D I AT E LY P R E C E D I N G P E R I O D . I T R E S U LT S I N A C H A N G E I N T H E S E N S I T I V I T Y T O L I G H T. A D A P T I V E C O L O R S H I F T - - T H E C H A N G E I N T H E P E R C E I V E D O B J E C T C O L O R C A U S E D S O L E LY B Y C H A N G E O F T H E S TAT E O F C H R O M AT I C ADAPTATION. A L P H A N U M E R I C D I S P L AY - - ( D I G I TA L D I S P L AY ) A N E L E C T R I C A L LY O P E R AT E D D I S P L AY O F C H A R A C T E R S . T U N G S T E N F I L A M E N T S , G A S D I CHARGES, LIGHT-EMITTING DIODES, LIQUID CRYSTALS, PROJECTED OR ILLUMINATED CHARACTERS AND OTHER PRINCIPLES OF OPERA T I O N M AY B E U S E D . A LT I T U D E - - ( I N D AY L I G H T I N G ) T H E A N G U L A R D I S TA N C E O F A H E AV E N LY B O D Y M E A S U R E D O N T H E G R E AT C I R C L E T H AT PA S S E S P E R P E N D I C U L A R T O T H E P L A N E O F T H E H O R I Z O N T H R O U G H T H E B O D Y A N D T H R O U G H T H E Z E N I T H . I T I S M E A S U R E D P O S I T I V E LY F R O M T H E HORIZON TO THE ZENITH, FROM O DEGREES TO 9O DEGREES AMBIENT LIGHTING -- LIGHTING THROUGHOUT AN AREA THAT PRODUCES GENERAL ILLUMINATION. ANCHOR LIGHT -- (AIRCRAFT) AN AIRCRAFT LIGHT DESIGNED FOR USE ON A SEAPLANE OR AMPHIBIAN TO INDICATE ITS POSITION WHE AT ANCHOR OR MOORED. ANGLE-OF-APPROACH LIGHTS -- AERONAUTICAL GROUND LIGHTS ARRANGED SO AS TO INDICATE A DESIRED ANGLE OF DESCENT DURIN A N A P P R O A C H T O A N A E R O D R O M E R U N W AY. ( A L S O C A L L E D O P T I C A L G L I D E PAT H L I G H T S . ) ANGLE OF COLLIMATION -- THE ANGLE SUBTENDED BY A LIGHT SOURCE AT A POINT ON AN IRRADIATED SURFACE. ANGSTROM -- A UNIT OF WAVELENGTH EQUAL TO (ONE TEN-BILLIONTH OF A METER). ANTICOLLISION LIGHT -- A FLASHING AIRCRAFT AERONAUTICAL LIGHT OR SYSTEM OF LIGHTS DESIGNED TO PROVIDE A RED SIGNAL THROUGH-OUT 360 DEGREES OF AZIMUTH FOR THE PURPOSE OF GIVING LONG-RANGE INDICATION OF AN AIRCRAFT’S LOCATION TO P I L O T S O F O T H E R A I R - C R A F T. A P E R T U R E C O L O R - - T H E P E R C E I V E D C O L O R O F T H E S K Y O R O F A PAT C H S E E N T H R O U G H A N A P E R T U R E A N D N O T I D E N T I F I A B L E A S B E L O N G I N G T O A S P E C I F I C O B J E C T. A P P R O A C H - L I G H T B E A C O N - - A N A E R O N A U T I C A L G R O U N D L I G H T P L A C E D O N T H E E X T E N D E D C E N T E R L I N E O F T H E R U N W AY AT A F I X E D D TA N C E F R O M T H E R U N W AY T H R E S H O L D T O P R O V I D E A N E A R LY I N D I C AT I O N O F P O S I T I O N D U R I N G A N A P P R O A C H T O A R U N W AY. A P P R O A C H L I G H T S - - A C O N F I G U R AT I O N O F A E R O N A U T I C A L G R O U N D L I G H T S L O C AT E D I N E X T E N S I O N O F A R U N W AY O R C H A N N E L B E F O THE THRESHOLD TO PROVIDE VISUAL APPROACH AND LANDING GUIDANCE TO PILOTS. SEE ANGLE-OF-APPROACH LIGHTS, APPROACHLIGHT BEACON AND J/ASIS. T I R S Y S T E M S LT D 2002 ANNUAL REPORT A R C D I S C H A R G E - - A N E L E C T R I C D I S C H A R G E C H A R A C T E R I Z E D B Y H I G H C AT H O D E C U R R E N T D E N S I T I E S A N D A L O W V O LTA G E D R O P AT T CATHODE. thgil gninifeder ECNANIMUL EHT -- DLOHSERHT ECNANIMUL ETULOSB YL L AT O T A N O K S I D A E K I L T C E J B O T H G I R B A R O F D L O H S E R H .DNUORGKCAB KRA A YB DEBROSBA XULF EHT FO OITAR EHT -- ECNATPROSB .XULF TNEDICNI EHT OT MUIDE HCIHW YB SSECORP EHT ROF MRET LARENEG A -- NOITPROSB ,Y G R E N E F O M R O F R E H T O N A O T D E T R E V N O C S I X U L F T N E D I C N .TA E H O T YL E TA M I TL U D N A YL L A U S A EZISAHPME OT GNITHGIL NOITCERID -- GNITHGIL TNECC E H T F O T R AP A O T N O I T N E T TA WA R D O T R O T C E J B O R A L U C I T R A .W E I V F O D L E I .REHTONA OT ECNATSID ENO MORF SUCOF SEGNAHC EYE EHT HCIHW YB SSECORP EHT -- NOITADOMMOCC . E V I T C A YL L A C I M E H C O T O H P - - C I N I T C A SA MSINAGRO GNIVIL RO ECNATSBUS LACIGOLOIB RO LACIMEHC A FO ESNOPSER CINITCA EVITATITNAUQ EHT -- MURTCEPS NOITC .Y G R E N E N O T O H P R O H T G N E L E VAW S A H C U S R E T E M A R AP L A R T C E P S E TA I R P O R P P A N A F O N O I T C N U RUD OT DESOPXE SAW TI NAHT THGIL SSEL RO EROM OT DEMOTSUCCA SEMOCEB ANITER EHT HCIHW YB SSECORP EHT -- NOITATPAD .T H G I L O T Y T I V I T I S N E S E H T N I E G N A H C A N I S TL U S E R T I . D O I R E P G N I D E C E R P YL E TA I D E M M I N A G N C I TA M O R H C F O E TAT S E H T F O E G N A H C Y B YL E L O S D E S U A C R O L O C T C E J B O D E V I E C R E P E H T N I E G N A H C E H T - - T F I H S R O L O C E V I T P A D .NOITATPAD D S A G , S T N E M A L I F N E T S G N U T . S R E T C A R A H C F O YA L P S I D D E TA R E P O YL L A C I R T C E L E N A ) YA L P S I D L AT I G I D ( - - YA L P S I D C I R E M U N A H P L REPO FO SELPICNIRP REHTO DNA SRETCARAHC DETANIMULLI RO DETCEJORP ,SLATSYRC DIUQIL ,SEDOID GNITTIME-THGIL ,SEGRAH . D E S U E B YA M N O I E P R E P S E S S AP TA H T E L C R I C TA E R G E H T N O D E R U S A E M Y D O B YL N E VA E H A F O E C N AT S I D R A L U G N A E H T ) G N I T H G I L YA D N I ( - - E D U T I TL E H T M O R F YL E V I T I S O P D E R U S A E M S I T I . H T I N E Z E H T H G U O R H T D N A Y D O B E H T H G U O R H T N O Z I R O H E H T F O E N A L P E H T O T R A L U C I SEERGED O9 OT SEERGED O MORF ,HTINEZ EHT OT NOZIRO .NOITANIMULLI LARENEG SECUDORP TAHT AERA NA TUOHGUORHT GNITHGIL -- GNITHGIL TNEIBM HW NOITISOP STI ETACIDNI OT NAIBIHPMA RO ENALPAES A NO ESU ROF DENGISED THGIL TFARCRIA NA )TFARCRIA( -- THGIL ROHCN .DEROOM RO ROHCNA T IRUD TNECSED FO ELGNA DERISED A ETACIDNI OT SA OS DEGNARRA STHGIL DNUORG LACITUANOREA -- STHGIL HCAORPPA-FO-ELGN ) . S T H G I L H TAP E D I L G L A C I T P O D E L L A C O S L A ( .YA W N U R E M O R D O R E A N A O T H C A O R P P A N .ECAFRUS DETAIDARRI NA NO TNIOP A TA ECRUOS THGIL A YB DEDNETBUS ELGNA EHT -- NOITAMILLOC FO ELGN .)RETEM A FO HTNOILLIB-NET ENO( OT LAUQE HTGNELEVAW FO TINU A -- MORTSGN LANGIS DER A EDIVORP OT DENGISED STHGIL FO METSYS RO THGIL LACITUANOREA TFARCRIA GNIHSALF A -- THGIL NOISILLOCITN OT NOITACOL S’TFARCRIA NA FO NOITACIDNI EGNAR-GNOL GNIVIG FO ESOPRUP EHT ROF HTUMIZA FO SEERGED 063 TUO-HGUORH .T F A R C - R I A R E H T O F O S T O L I S A E L B A I F I T N E D I T O N D N A E R U T R E P A N A H G U O R H T N E E S H C TAP A F O R O Y K S E H T F O R O L O C D E V I E C R E P E H T - - R O L O C E R U T R E P .T C E J B O C I F I C E P S A O T G N I G N O L E D D E X I F A TA YA W N U R E H T F O E N I L R E T N E C D E D N E T X E E H T N O D E C A L P T H G I L D N U O R G L A C I T U A N O R E A N A - - N O C A E B T H G I L - H C A O R P P .YA W N U R A O T H C A O R P P A N A G N I R U D N O I T I S O P F O N O I TA C I D N I YL R A E N A E D I V O R P O T D L O H S E R H T YA W N U R E H T M O R F E C N A O F E B L E N N A H C R O YA W N U R A F O N O I S N E T X E N I D E TA C O L S T H G I L D N U O R G L A C I T U A N O R E A F O N O I TA R U G I F N O C A - - S T H G I L H C A O R P P -HCAORPPA ,STHGIL HCAORPPA-FO-ELGNA EES .STOLIP OT ECNADIUG GNIDNAL DNA HCAORPPA LAUSIV EDIVORP OT DLOHSERHT EH D TL S M E T S Y S R I T .SISA/J DNA NOCAEB THGI TROPER LAUNNA 2002 TA P O R D E G ATL O V W O L A D N A S E I T I S N E D T N E R R U C E D O H TA C H G I H Y B D E Z I R E T C A R A H C E G R A H C S I D C I R T C E L E N A - - E G R A H C S I D C R .EDOHTA ARC LAMP -- A DISCHARGE LAMP IN WHICH THE LIGHT IS EMITTED BY AN ARC DISCHARGE OR BY ITS ELECTRODES. ARTIFICIAL PUPIL -- A DEVICE OR ARRANGEMENT FOR CONFINING T H E L I G H T PA S S I N G THROUGH THE PUPIL OF THE EYE TO AN AREA SMALLER THAN THE NATURAL PUPIL. AT M O S P H E R I C T R A N S M I S S I V I T Y - - T H E R AT I O O F T H E D I R E C T LY TRANSMITTED FLUX INCIDENT ON A SURFACE AFTER PASSING THROUGH UNIT THICKNESS OF THE ATMOSPHERE TO THE FLUX THAT WOULD BE INCIDENT ON THE SAME SURFACE IF THE FLUX HAD PASSED THROUGH A VACUUM. there’s a revolution going on. a quantum leap in an industry that has been using variations on a technology that dates back to the 19th century. low efficiency, high maintenance, expendable lighting systems are a thing of the past. AVERAGE LUMINANCE -- THE LUMINOUS INTENSITY AT A GIVEN ANGLE DIVIDED BY THE PROJECTED AREA OF THE LUMINAIRE AT THAT A N G L E . L U M I N A N C E I S A P R O P E R T Y O F A G E O M E T R I C R AY. L U M I N A N C E A S M E A S U R E D B Y C O N V E N T I O N A L M E T E R S I S AV E R A G E D W I T H RESPECT TO TWO INDEPENDENT VARIABLES, AREA AND SOLID ANGLE; BOTH MUST BE DEFINED FOR A COMPLETE DESCRIPTION OF A L U M I N A N C E M E A S U R E M E N T. AZIMUTH -- THE ANGULAR DISTANCE BETWEEN THE VERTICAL PLANE CONTAINING A GIVEN LINE OR CELESTIAL BODY AND THE PLANE THE MERIDIAN. B A C K L I G H T - - I L L U M I N AT I O N F R O M B E H I N D ( A N D U S U A L LY A B O V E ) A S U B J E C T T O P R O D U C E A H I G H L I G H T A L O N G I T S E D G E A N D C O N S Q U E N T S E PA R AT I O N B E T W E E N T H E S U B J E C T A N D I T S B A C K G R O U N D . S E E S I D E B A C K L I G H T. BACKING LIGHTING -- THE ILLUMINATION PROVIDED FOR SCENERY IN OFF-STAGE AREAS VISIBLE TO THE AUDIENCE. BACKUP LAMP -- A LIGHTING DEVICE MOUNTED ON THE REAR OF A VEHICLE FOR ILLUMINATING THE REGION NEAR THE REAR OF THE V E H I C L E W H I L E M O V I N G O R A B O U T T O M O V E I N R E V E R S E . I T N O R M A L LY C A N B E U S E D O N LY W H I L E B A C K I N G U P. BACTERICIDAL LAMP -- A UV LAMP THAT RADIATES A SIGNIFICANT PORTION OF ITS RADIATIVE POWER IN THE UV-C BAND (100-280 NM B A F F L E - - A S I N G L E O PA Q U E O R T R A N S L U C E N T E L E M E N T T O S H I E L D A S O U R C E F R O M D I R E C T V I E W AT C E R TA I N A N G L E S , T O A B S O R B O B L O C K U N WA N T E D L I G H T, O R T O R E F L E C T A N D R E D I R E C T L I G H T. B A L C O N Y L I G H T S - - L U M I N A I R E S M O U N T E D O N T H E F R O N T E D G E O F A N A U D I T O R I U M B A L C O N Y. B A L L A S T - - A D E V I C E U S E D W I T H A N E L E C T R I C - D I S C H A R G E L A M P T O O B TA I N T H E N E C E S S A R Y C I R C U I T C O N D I T I O N S ( V O LTA G E , C U R R E A N D WAV E F O R M ) F O R S TA R T I N G A N D O P E R AT I N G . S E E R E F E R E N C E B A L L A S T. BALLAST FACTOR -- THE FLUX OF A FLUORESCENT LAMP(S) OPERATED ON A BALLAST AS A FRACTION OF THE FLUX WHEN OPERATED ON THE STANDARD (REFERENCE) BALLASTING SPECIFIED FOR RATING LAMP LUMENS. BALLAST-LAMP -- PHOTOMETRIC FACTOR THE RATIO OF FLUORESCENT LUMINAIRE LUMEN OUTPUT WITH A GIVEN BALLAST AND LAMP T Y P E U N D E R P H O T O M E T R I C C O N D I T I O N S T O T H AT W I T H T H E L A M P T Y P E U S E D T O G E N E R AT E A P H O T O M E T R I C T E S T. BAR (OF LIGHTS) -- A GROUP OF THREE OR MORE AERONAUTICAL GROUND LIGHTS PLACED IN A LINE TRANSVERSE TO THE AXIS, OR E X T E N D E D A X I S , O F T H E R U N W AY. S E E B A R R E T T E . BARE (EXPOSED) -- LAMP A LIGHT SOURCE WITH NO SHIELDING. B A R N D O O R S - - A S E T O F A D J U S TA B L E F L A P S , U S U A L LY T W O O R F O U R ( T W O - W AY O R F O U R - W AY ) , T H AT M AY B E AT TA C H E D T O T H E F R O N O F A L U M I N A I R E ( U S U A L LY A F R E S N E L S P O T L I G H T ) I N O R D E R T O A LT E R T H E S H A P E A N D S P R E A D O F T H E L I G H T B E A M . B A R R E T T E - - ( I N AV I AT I O N ) A S H O R T B A R I N W H I C H T H E L I G H T S A R E C L O S E LY S PA C E D S O T H AT F R O M A D I S TA N C E T H E Y A P P E A R T O B A L I N E A R L I G H T. B A S E L I G H T U N I F O R M - - D I F F U S E , N E A R - S H A D O W L E S S I L L U M I N AT I O N S U F F I C I E N T LY I N T E N S E F O R A T E L E V I S I O N O R F I L M P I C T U R E O F ACCEPTABLE QUALITY AT A DESIRED LENS OPENING. THE ACCEPTABLE BASE LEVEL OF UNACCENTED BASE ILLUMINATION. BEACON A LIGHT -- (OR MARK) USED TO INDICATE A GEOGRAPHIC LOCATION. SEE AERODROME BEACON, AERONAUTICAL BEACON, AIRW AY B E A C O N , A P P R O A C H - L I G H T B E A C O N , H A Z A R D O R O B S T R U C T I O N B E A C O N , I D E N T I F I C AT I O N B E A C O N A N D L A N D M A R K B E A C O N . BEAM ANGLE -- THE ANGLE BETWEEN THE TWO DIRECTIONS FOR WHICH THE INTENSITY IS 50% OF THE MAXIMUM INTENSITY AS thgil gninifeder ni pael mutnauq a .no gniog noitulove r a s’e reht a no snoitairav gnisu neeb sah taht y rtsudni na .y rutnec ht91 eht ot kcab setad taht ygolonhcet e l b a d n e p x e , e c n a n e t n i a m h g i h ,y c n e i c i f f e w o l .tsap eht fo gniht a e ra smetsys gnithgil SI THGIL EHT HCIHW NI PMAL EGRAHCSID A -- PMAL CR .SEDORTCELE STI YB RO EGRAHCSID CRA NA YB DETTIM GNINIFNOC ROF TNEMEGNARRA RO ECIVED A -- LIPUP LAICIFITR G N I S S AP T H G I L E H NAHT RELLAMS AERA NA OT EYE EHT FO LIPUP EHT HGUORH .LIPUP LARUTAN EH YL T C E R I D E H T F O O I TA R E H T - - Y T I V I S S I M S N A R T C I R E H P S O M T GNISSAP RETFA ECAFRUS A NO TNEDICNI XULF DETTIMSNAR XULF EHT OT EREHPSOMTA EHT FO SSENKCIHT TINU HGUORH XULF EHT FI ECAFRUS EMAS EHT NO TNEDICNI EB DLUOW TAH .MUUCAV A HGUORHT DESSAP DA TAHT TA ERIANIMUL EHT FO AERA DETCEJORP EHT YB DEDIVID ELGNA NEVIG A TA YTISNETNI SUONIMUL EHT -- ECNANIMUL EGAREV H T I W D E G A R E VA S I S R E T E M L A N O I T N E V N O C Y B D E R U S A E M S A E C N A N I M U L .YA R C I R T E M O E G A F O Y T R E P O R P A S I E C N A N I M U L . E L G N A FO NOITPIRCSED ETELPMOC A ROF DENIFED EB TSUM HTOB ;ELGNA DILOS DNA AERA ,SELBAIRAV TNEDNEPEDNI OWT OT TCEPSE .T N E M E R U S A E M E C N A N I M U ENALP EHT DNA YDOB LAITSELEC RO ENIL NEVIG A GNINIATNOC ENALP LACITREV EHT NEEWTEB ECNATSID RALUGNA EHT -- HTUMIZ .NAIDIREM EH N O C D N A E G D E S T I G N O L A T H G I L H G I H A E C U D O R P O T T C E J B U S A ) E V O B A YL L A U S U D N A ( D N I H E B M O R F N O I TA N I M U L L I - - T H G I L K C A .T H G I L K C A B E D I S E E S . D N U O R G K C A B S T I D N A T C E J B U S E H T N E E W T E B N O I TA R AP E S T N E U .ECNEIDUA EHT OT ELBISIV SAERA EGATS-FFO NI YRENECS ROF DEDIVORP NOITANIMULLI EHT -- GNITHGIL GNIKCA EHT FO RAER EHT RAEN NOIGER EHT GNITANIMULLI ROF ELCIHEV A FO RAER EHT NO DETNUOM ECIVED GNITHGIL A -- PMAL PUKCA .P U G N I K C A B E L I H W YL N O D E S U E B N A C YL L A M R O N T I . E S R E V E R N I E V O M O T T U O B A R O G N I V O M E L I H W E L C I H E N 082-001( DNAB C-VU EHT NI REWOP EVITAIDAR STI FO NOITROP TNACIFINGIS A SETAIDAR TAHT PMAL VU A -- PMAL LADICIRETCA B R O S B A O T , S E L G N A N I AT R E C TA W E I V T C E R I D M O R F E C R U O S A D L E I H S O T T N E M E L E T N E C U L S N A R T R O E U Q AP O E L G N I S A - - E L F F A .T H G I L T C E R I D E R D N A T C E L F E R O T R O ,T H G I L D E T N AW N U K C O L .Y N O C L A B M U I R O T I D U A N A F O E G D E T N O R F E H T N O D E T N U O M S E R I A N I M U L - - S T H G I L Y N O C L A E R R U C , E G ATL O V ( S N O I T I D N O C T I U C R I C Y R A S S E C E N E H T N I AT B O O T P M A L E G R A H C S I D - C I R T C E L E N A H T I W D E S U E C I V E D A - - T S A L L A .T S A L L A B E C N E R E F E R E E S . G N I TA R E P O D N A G N I T R AT S R O F ) M R O F E VAW D N O DETAREPO NEHW XULF EHT FO NOITCARF A SA TSALLAB A NO DETAREPO )S(PMAL TNECSEROULF A FO XULF EHT -- ROTCAF TSALLA .SNEMUL PMAL GNITAR ROF DEIFICEPS GNITSALLAB )ECNEREFER( DRADNATS EH PMAL DNA TSALLAB NEVIG A HTIW TUPTUO NEMUL ERIANIMUL TNECSEROULF FO OITAR EHT ROTCAF CIRTEMOTOHP -- PMAL-TSALLA .T S E T C I R T E M O T O H P A E TA R E N E G O T D E S U E P Y T P M A L E H T H T I W TA H T O T S N O I T I D N O C C I R T E M O T O H P R E D N U E P Y RO ,SIXA EHT OT ESREVSNART ENIL A NI DECALP STHGIL DNUORG LACITUANOREA EROM RO EERHT FO PUORG A -- )STHGIL FO( RA . E T T E R R A B E E S .YA W N U R E H T F O , S I X A D E D N E T X .GNIDLEIHS ON HTIW ECRUOS THGIL A PMAL -- )DESOPXE( ERA O R F E H T O T D E H C AT TA E B YA M TA H T , ) YA W - R U O F R O YA W - O W T ( R U O F R O O W T YL L A U S U , S P A L F E L B AT S U J D A F O T E S A - - S R O O D N R A . M A E B T H G I L E H T F O D A E R P S D N A E P A H S E H T R E TL A O T R E D R O N I ) T H G I L T O P S L E N S E R F A YL L A U S U ( E R I A N I M U L A F B O T R A E P P A Y E H T E C N AT S I D A M O R F TA H T O S D E C AP S YL E S O L C E R A S T H G I L E H T H C I H W N I R A B T R O H S A ) N O I TA I VA N I ( - - E T T E R R A .T H G I L R A E N I L O E R U T C I P M L I F R O N O I S I V E L E T A R O F E S N E T N I YL T N E I C I F F U S N O I TA N I M U L L I S S E L W O D A H S - R A E N , E S U F F I D - - M R O F I N U T H G I L E S A .NOITANIMULLI ESAB DETNECCANU FO LEVEL ESAB ELBATPECCA EHT .GNINEPO SNEL DERISED A TA YTILAUQ ELBATPECC RIA ,NOCAEB LACITUANOREA ,NOCAEB EMORDOREA EES .NOITACOL CIHPARGOEG A ETACIDNI OT DESU )KRAM RO( -- THGIL A NOCAE . N O C A E B K R A M D N A L D N A N O C A E B N O I TA C I F I T N E D I , N O C A E B N O I T C U R T S B O R O D R A Z A H , N O C A E B T H G I L - H C A O R P P A , N O C A E B YA SA YTISNETNI MUMIXAM EHT FO %05 SI YTISNETNI EHT HCIHW ROF SNOITCERID OWT EHT NEEWTEB ELGNA EHT -- ELGNA MAE BIDIRECTIONAL REFLECTANCE -- THE RATIO OF THE REFLECTED FLUX COLLECTED OVER AN ELEM E N T O F S O L I D A N G L E S U R R O U N D I N G T H E G I V E N D I R E C T I O N T O T H E E S S E N T I A L LY C O L L I M AT E D INCIDENT FLUX. BIDIRECTIONAL REFLECTANCE DISTRIBUTION FUNCTION (BRDF) -- THE R AT I O O F T H E D I F F E R E N T I A L L U M I N A N C E O F A R AY R E F L E C T E D I N A G I V E N D I R E C T I O N T O T H E D I F FERENTIAL LUMINOUS FLUX DENSITY INCIDENT FROM A GIVEN DIRECTION OF INCIDENCE we’re TIR Systems. we’re redefining light. 2 | TIR Systems Ltd. | who TIR Systems Ltd. TIR Systems Ltd., a world leader in delivering specialty lighting systems, is building the foundations for tomorrow’s lighting. Through sound innovation and proven technical capability, TIR is developing, designing and marketing the core technologies that will allow Solid State Lighting (SSL) to move to the forefront of mainstream lighting. BIDIRECTIONAL TRANSMITTANCE -- THE RATIO OF THE INCIDENT FLUX COLLECTED OVER AN ELEM E N T O F S O L I D A N G L E S U R R O U N D I N G T H E G I V E N D I R E C T I O N T O T H E E S S E N T I A L LY C O L L I M AT E D INCIDENT FLUX. BIDIRECTIONAL TRANSMITTANCE DISTRIBUTION FUNCTION (BTDF) -- THE R AT I O O F T H E D I F F E R E N T I A L L U M I N A N C E O F A R AY T R A N S M I T T E D I N A G I V E N D I R E C T I O N T O T H E DIFFERENTIAL LUMINOUS FLUX DENSITY INCIDENT FROM A GIVEN DIRECTION OF INCIDENCE THAT CONTENTS C O R P O R AT E B R O C H U R E : W H O , W H AT, W H E R E , H O W, W H Y CEO’S REPORT TO SHAREHOLDERS M A N A G E M E N T D I S C U S S I O N A N D A N A LY S I S F I N A N C I A L S TAT E M E N T S N O T E S T O F I N A N C I A L S TAT E M E N T S THREE YEAR FINANCIAL SUMMARY DIRECTORS C O R P O R AT E I N F O R M AT I O N 03 50 54 61 64 70 IBC IBC TIR Systems Ltd. | who | 3 PRODUCES IT: SOLID STATE LIGHTING (SSL) -- THE DELIVERY OF LIGHT TO AN APPLICATION USING POWER, CONTROL, COMMUNICATIONS, AND OPTICS TO PROVIDE AN INTEGRATED SOLUTION THAT USES LIGHT EMITTING DIODES (LED’S) OR OTHER ELECTRONIC DEVICES AS LIGHT SOURCES. BIHEMISPHERICAL REFLECTANCE -THE RATIO OF THE REFLECTED FLUX COLLECTED OVER AN ENTIRE HEMISPHERE TO THE INCIDENT FLUX FROM THE ENTIRE HEMISPHERE. BIHEMISPHERICAL TRANSMITTANCE -- THE RATIO OF THE TRANSMITTED FLUX COLLECTED OVER AN ENTIRE HEMISPHERE TO THE INCIDENT FLUX FROM THE ENTIRE HEMISPHERE. B I N O C U L A R - - P O R T I O N O F T H E V I S U A L F I E L D T H AT P O R T I O N O F S PA C E W H E R E T H E F I E L D S O F T H E T W O E Y E S O V E R L A P. BIOLOGICAL RHYTHM -- A CHARACTER- who 4 | TIR Systems Ltd. | who I STIC PERIODIC CHANGE IN A LIVING ORGANISM OR LIFE-RELATED PROCESS. SOME BIOLOGIC A L R H Y T H M S A R E I N D U C E D O R S Y N C H R O N I Z E D B Y L I G H T. BLACKBODY -- A TEMPERAT U R E R A D I AT O R O F U N I F O R M T E M P E R AT U R E W H O S E R A D I A N T E X I TA N C E I N A L L PA R T S O F T H E SPECTRUM IS THE MAXIMUM OBTAINABLE FROM ANY TEMPERATURE RADIATOR AT THE SAME TEMPERATURE. SUCH A RADIATOR IS CALLED A BLACKBODY BECAUSE IT WILL ABSORB ALL THE LEONARD HORDYK PRESIDENT AND CEO “ O U R C O M M I T M E N T T O S O L I D S TAT E L I G H T I N G W I L L A L L O W T I R T O L E A D O U R C U S T O M E R S A N D PA R T N E R S T H R O U G H T H E B I G G E S T T R A N S I T I O N I N L I G H T I N G SINCE EDISON FIRST INTRODUCED THE WORLD TO THE ELECTRIC LIGHT BULB.” TIR Systems Ltd. | who | 5 R A D I A N T E N E R G Y T H AT FA L L S U P O N I T. A L L O T H E R T E M P E R A TURE RADIATORS ARE CALLED NONBLACKBODIES. THEY RADIATE LESS IN SOME OR ALL WAVELENGTH INTER VALS THAN A BLACKBODY OF THE SAME SIZE AND THE SAME TEMPERATURE. BLACKBODY (PLANCKIAN) LOCUS -- THE LOCUS OF POINTS ON JENNIFER KEMP A D M I N I S T R AT I V E A S S I S TA N T ISSA NAKHLEH CHIEF FINANCIAL OFFICER “ B Y D E V E L O P I N G N E W T E C H N O L O G I E S A N D I N T R O D U C I N G S O L I D S TAT E L I G H T I N G P R O D U C T S T O N E W M A R K E T S T I R W I L L D E L I V E R VA L U E T O ITS CUSTOMERS, ITS SHAREHOLDERS, AND ITS EMPLOYEES.” 6 | TIR Systems Ltd. | who A CHROMATICITY DIAGRAM REPRESENTING THE CHROMATICI T I E S O F B L A C K - B O D I E S H AV I N G VA R I O U S ( C O L O R ) T E M P E R ATURES. ‘BLACK LIGHT" -- THE POPULAR TERM FOR UV ENERGY NEAR THE VISIBLE REGION. "BLACK LIGHT" FLUX -- RADIANT FLUX WITHIN THE WAVELENGTH RANGE KEN PIAGGIO DIRECTOR OF SERVICE DELIVERY GROUP PETER KAN OPTO-MECHANICAL ENGINEER “O U R F O C U S O N T H E C U S T O M E R ’ S N E E D S A L L O W S T I R T O D E L I V E R E X A C T LY T H E R I G H T M I X O F S E R V I C E S T H AT W I L L M A K E A P R O G R A M SUCCESSFUL.” TIR Systems Ltd. | who | 7 3 2 0 - 4 0 0 N M . I T I S U S U A L LY M E A S U R E D I N M I L L I WAT T S . S E E F L U O R E N . "BLACK LIGHT" FLUX DENSITY -- THE "BLACK LIGHT" FLUX PER UNIT AREA OF THE SURFACE BEING IRRADIATED. IT IS EQUAL TO THE INCIDENT "BLACK LIGHT" FLUX DIVIDED BY THE AREA OF THE SURFACE WHEN THE F L U X I S U N I F O R M LY D I S T R I B U T E D . I T U S U A L LY I S M E A S U R E D I N M I L L I - KARIM KANANI MARKET MANAGER B O B D AV I E S V P M A N U F A C T U R I N G A N D O P E R AT I O N S “W E A R E B U I L D I N G T H E S Y S T E M S A N D K N O W L E D G E T O L E A D T I R I N T O THE FUTURE OF LIGHTING” 8 | TIR Systems Ltd. | who WATTS PER UNIT AREA OF FLUX. "BLACK LIGHT" LAMP -A N U LT R AV I O L E T L A M P T H AT E M I T S A S I G N I F I C A N T P O R T I O N O F ITS RADIATIVE POWER IN THE UV-A BAND (315-400 NM). BLENDING LIGHTING -- GENERAL ILLUMINATION USED TO PROVIDE SMOOTH TRANSITIONS BETWEEN THE LIGHTING AREAS ON BRENT YORK VP ENGINEERING AND TECHNOLOGY D U S TA N Y O U N G PRODUCTION SUPERVISOR “10 YEARS FROM NOW, I WANT PEOPLE TO REGARD TIR AND OUR TALENTED T E A M A S T H E P I O N E E R I N G F I R M T H AT E N A B L E D S O L I D S TAT E L I G H T I N G . ” TIR Systems Ltd. | who | 9 A STAGE. BLINDING GLARE -- GLARE WHICH IS SO INTENSE THAT FOR AN APPRECIABLE LENGTH OF TIME AFTER IT HAS BEEN REMOVED, NO OBJECT CAN BE SEEN. BLONDEL-REY LAW -- AN EXPRESSION FOR THE RATIO OF THE THRESH- OLDS OF A SQUAREFORM FLASHING LIGHT AND OF A STEADY LIGHT IN POINT VISION CONDITIONS AT G E O R G E M AT H E S O N MANAGER OF DESIGN GRANT HARLOW DIRECTOR OF MARKETING “TIR’S GOAL IS NOT LIMITED TO SELLING PRODUCTS. WE ARE HERE TO E D U C AT E T H E W O R L D A B O U T A W H O L E N E W W AY O F L I G H T I N G . ” 10 | TIR Systems Ltd. | who N I G H T, A S A THE FLASH: STRIPLIGHT AIMED DOWN OR TO LIGHT FUNCTION OF THE DURATION IN SECONDS OF BORDERLIGHT -- A LONG CONTINUOUS H U N G H O R I Z O N TA L LY A B O V E A S TA G E A N D TO PROVIDE GENERAL DIFFUSE ILLUMINATION T H E C Y C L O R A M A O R A D R O P ; U S U A L LY W I R E D HAMISH THOMSON PRODUCTION SUPERVISOR H E AT H E R P O G O R INSIDE SALES MANAGER TIR Systems Ltd. | who | 11 IN THREE OR FOUR COLOR CIRCUITS. BORDERLINE -- BETWEEN COMFORT AND DISCOMFORT (BCD) THE AVERAGE LUMINANCE OF A SOURCE IN A FIELD OF VIEW WHICH PRODUCES A SENSATION BETWEEN BERNARD DE SALABERRY P U R C H A S I N G A N D M AT E R I A L S S U P E R V I S O R DARREN LUCE DIRECTOR OF SALES AND BUSINESS DEVELOPMENT “ W E U N D E R S TA N D O U R C U S T O M E R S A N D W O R K W I T H T H E M T O D E L I V E R R E A L W O R L D L I G H T I N G S O L U T I O N S T H AT A R E M O R E T H A N J U S T N E W … THEY’RE BETTER.” 12 | TIR Systems Ltd. | who C O M F O R T A N D D I S C O M F O R T. BOUNDARY LIGHTS -- AERONAUTICAL GROUND LIGHTS DELIMITING THE BOUNDARY OF A LAND A E R O D R O M E W I T H O U T R U N W AY S . S E E R A N G E L I G H T S . BOWL -AN OPEN-TOP DIFFUSING GLASS OR PLASTIC ENCLOSURE USED TO SHIELD A LIGHT SOURCE FROM DIRECT VIEW AND TO REDIRECT OR T O M R AT C L I F F E AREA SALES MANAGER, MIDWEST AND SOUTH EAST USA ROBB MITCHELL SHIPPING & RECEIVING TIR Systems Ltd. | what | 13 S C AT T E R T H E L I G H T. EFFECTIVE LIGHTING -- LIGHTING THAT PROVIDES PEOPLE WITH THE ABILITY TO PERFORM VISUAL TASKS. BRACKET -- (MAST ARM) AN ATTACHMENT TO A LAMP POST OR POLE FROM WHICH A LUMINAIRE IS SUSPENDED. BRIGHTNESS -- (OF A PERCEIVED APERTURE COLOR) THE ATTRIBUTE BY WHICH AN AREA OF COLOR OF FINITE SIZE IS PERCEIVED TO EMIT, TRANSMIT OR REFLECT A GREATER OR LESSER AMOUNT OF LIGHT. NO ACCOUNT IS TAKEN OF WHETHER THE LIGHT COMES FROM A REFLECTING, TRANSMITTING OR SELF-LUMINOUS OBJECT. SEE ALSO SUBJECTIVE BRIGHTNESS, LUMINANCE, VEILING LUMINANCE AND BRIGHTNESS OF A PERCEIVED LIGHT SOURCE COLOR. BRIGHTNESS CONTRAST THRESHOLD -- THE JUST-DETECTABLE CONTRAST BETWEEN TWO what 14 | TIR Systems Ltd. | what products TIR Systems manufactures products designed to withstand reality. Our product development process ensures that the customer is the focus of our products, delivering on user requirements while incorporating a thorough understanding of a variety of environments. The same exper tise that has allowed Light Pipe products to operate successfully in noxious roadway tunnels and on the windy pinnacles of some of the world’s tallest buildings, is now being applied to today’s leading Solid State Lighting products. PATCHES OF BIPARTITE P GROUND. DANCE WITH BULB -- SEE COLOR SEPARATED BY A BRIGHTNESS CONTRAST BORDER, AS IN THE CASE OF A HOTOMETRIC FIELD OR OF A DISK-SHAPED OBJECT SURROUNDED BY ITS BACKBRIGHTNESS OF A PERCEIVED LIGHT SOURCE COLOR -- THE ATTRIBUTE IN ACCORWHICH THE SOURCE SEEMS TO EMIT MORE OR LESS LUMINOUS FLUX PER UNIT AREA. L A M P. CANDELA -- , CD THE SI UNIT OF LUMINOUS INTENSITY, EQUAL TO ONE TIR Systems Ltd. | what | 15 L U M E N P E R S T E R A D I A N . F O R M E R LY " C A N D L E . " S E E C H A P T E R 2 , M E A S U R E M E N T O F L I G H T AND OTHER RADIANT ENERGY. CANDLEPOWER -- LUMINOUS INTENSITY EXPRESSED IN CANDELAS. CANDLEPOWER DISTRIBUTION CURVE -- SEE INTENSITY DISTRIBUTION CURVE, CARBON-ARC LAMP -- AN ELECTRIC-DISCHARGE LAMP EMPLOYING AN ARC DISCHARGE BETWEEN CARBON ELECTRODES. ONE OR MORE OF THESE ELECTRODES D E S T I N Y C O L O R W A S H TM T H E M O S T S O P H I S T I C AT E D S O L I D S TAT E L I G H T I N G P R O D U C T AVA I L A B L E . C O M B I N E S O P T I C A L P E R F O R M A N C E , S T Y L I S H D E S I G N , AND THE BEST TECHNOLOGY TO PROVIDE DYNAMIC COLOR C H A N G E F O R D R A M AT I C A R C H I T E C T U R A L A N D C O M M E R C I A L WA L L WA S H I N G A P P L I C AT I O N S . 16 | TIR Systems Ltd. | what M AY H AV E C O R E S O F S P E C I A L C H E M I C A L S T H AT C O N T R I B U T E I M P O R TA N T LY T O T H E R A D I AT I O N . CAVITY RATIO -- A NUMB E R I N D I C AT I N G C AV I T Y P R O P O R T I O N S C A L C U L AT E D F R O M L E N G T H , W I D T H A N D H E I G H T. S E E C E I L I N G C AV I T Y R AT I O , F L O O R CAVITY RATIO AND ROOM CAVITY RATIO. CEILING -- AREA LIGHTING A GENERAL LIGHTING SYSTEM IN WHICH THE ENTIRE CEILING IS, IN EFFECT, ONE LARGE LUMINAIRE. NOTE: CEILING AREA LIGHTING INCLUDES LUMINOUS CEILINGS AND LOUVERED CEILINGS. CEILING CAVITY -- THE CAVITY FORMED BY THE CEILING, THE PLANE OF THE LUMI- DESTINY LIGHTPOLE THE FIRST SSL PRODUCT TO USE HIGH BRIGHTNESS LED’S, THIS POLE CAN BE USED A S A F R E E - S TA N D I N G A R C H I T E C T U R A L E L E M E N T OR AS AN ELEGANT MARKER FOR PLAZAS, C A M P U S E S , A N D O T H E R P U B L I C S PA C E S . TIR Systems Ltd. | what | 17 NAIRES AND THE WALL SURFACES BETWEEN THESE TWO PLANES. CEILING CAVITY RATIO (CCR) -- A NUMBER INDICATING CEILING CAVITY PROPORTIONS CALCULATED FROM LENGTH, WIDTH AND HEIGHT. CEILING PROJECTOR -- A DEVICE DESIGNED TO PRODUCE A WELL- DEFINED ILLUMINATED SPOT ON THE LOWER PORTION OF A CLOUD FOR THE PURPOSE OF PROVIDING A REFERENCE MARK FOR THE DETERMINAT I O N O F T H E H E I G H T O F T H AT PAR T O F T H E C L O U D . CEILING RATIO -- THE RATIO OF THE LUMINOUS L I G H T M A R K TM A CLEAN LINE OF COLORED LIGHT TO CAPTURE I N T E R E S T A N D C O N V E Y C O R P O R AT E I D E N T I T Y. S U B S TA N T I A L E N E R G Y S AV I N G S , E X T R E M E LY L O N G L I F E , A N D V I R T U A L LY N O M A I N T E N A N C E A R E T H E P R I M A R Y F E AT U R E S O F T H I S S S L S O L U T I O N . 18 | TIR Systems Ltd. | what F L U X R E A C H I N G T H E C E I L I N G D I R E C T LY T O T H E U P WA R D C O M P O N E N T F R O M T H E L U M I N A I R E . CENTRAL (FOVEAL) VISION -- THE SEEING OF OBJECTS IN THE CENTRAL OR FOVEAL PART OF THE VISUAL F I E L D , A P P R O X I M AT E LY 2 I N D I A M E T E R . I T P E R M I T S S E E I N G M U C H F I N E R D E TA I L T H A N D O E S P E R I P H ERAL VISION. CENTRAL VISUAL FIELD -- THAT REGION OF THE VISUAL FIELD CORRESPONDING TO THE FOVEAL PORTION OF THE RETINA. CHANNEL -- AN ENCLOSURE CONTAINING THE BALLAST, OVOID SERIES LIGHT PIPE U S E S E F F I C I E N T 1 0 0 0 W M E TA L H A L I D E L A M P S T O DELIVER UP TO 60' (18M) OF UNIFORM LIGHT FROM A S I N G L E L I G H T S O U R C E . P R O V I D E S U S E F U L TA S K L I G H T I N G F O R L A R G E S PA C E S W I T H H I G H C E I L I N G S O R D I F F I C U LT A C C E S S . TIR Systems Ltd. | what | 19 S TA R T E R , L A M P H O L D E R S A N D W I R I N G F O R A F L U O R E S C E N T L A M P, O R A S I M I L A R E N C L O S U R E O N W H I C H F I L A M E N T L A M P S ( U S U A L LY T U B U L A R ) A R E M O U N T E D . CHANNEL LIGHTS -- AERONAUTICAL GROUND LIGHTS ARRANGED ALONG THE SIDES OF A CHANNEL OF A WATER AERODROME. SEE TAXI- CHANNEL LIGHTS. CHARACTERISTIC CURVE -- A CURVE WHICH EXPRESSES THE RELATIONSHIP BETWEEN TWO VARIABLE PROPERTIES OF A LIGHT TUNNEL LIGHT PIPE BASED ON TIR’S CORE 6" (152MM) DIAMETER LIGHT PIPE SYSTEM, THIS PRODUCT DELIVERS HIGH QUALITY LINEAR LIGHT WITH THE ENERGY AND MAINTENANCE A D VA N TA G E S P O I N T S O U R C E L I G H T S H AV E H A D O V E R TRADITIONAL LINEAR FLUORESCENT SOURCES. 20 | TIR Systems Ltd. | what S O U R C E , S U C H A S C A N D L E P O W E R A N D V O LTA G E , F L U X A N D V O LTA G E , E T C . CHROMATIC ADAPTATION -- THE PROCESS BY WHICH THE CHROMATIC PROPERTIES OF THE VISUAL SYSTEM ARE MODIFIED BY THE OBSER VATION OF STIMULI OF VARIOUS CHROMATICITIES AND LUMINANCES. SEE STATE OF CHROMATIC ADAPTATION. CHROMATIC COLOR -- PERCEIVED COLOR POSSESSING A HUE. IN E V E R Y - D AY S P E E C H , T H E T E R M C O L O R I S O F T E N U S E D I N T H I S S E N S E I N C O N T R A D I S T I N C T I O N T O COMPONENTS L E D A R R AY S Y S T E M S A R E O N LY A S G O O D A S T H E C O M P O N E N T S I N T H E M . T I R E N S U R E S N O T O N LY T H E B E S T T E C H N O L O G Y I S U S E D , B U T T H AT T H E B I T S A N D P I E C E S A R E P U T T O G E T H E R T O M A K E A G R E AT E R W H O L E . TIR Systems Ltd. | where | 21 W H I T E , G R AY O R B L A C K . LIGHTING FOR EFFECT -- LIGHTING THAT IS FOR DECORATION OR TO PROVIDE A DESIRABLE APPEARANCE. CHROMATIC CONTRAST T H R E S H O L D ( C O L O R C O N T R A S T T H R E S H O L D ) - - A T H R E S H O L D O F C H R O M AT I C I T Y D I F F E R E N C E B E T W E E N T W O PAT C H E S O F C O L O R J U X TA P O S E D A N D S E PA R AT E D O N LY BY A COLOR CONTRAST BORDER, BELOW WHICH THEY CANNOT BE PERCEIVED AS DIFFERENT IN CHROMATICNESS OR SEPARATED BY A CONTRAST BORDER. A CONTRAST BORDER CAN INVOLVE DIFFERENCES BOTH IN LUMINANCE AND IN CHROMATICITY BETWEEN THE TWO SIDES. CHROMATICITY COORDINATES (OF A COLOR) - - X , Y, Z T H E R AT I O S O F T H E T H R E E T R I S T I M U L U S VA L U E S O F T H E C O L O R T O T H E I R S U M . CHROMATICITY DIAGRAM -- A PLANE DIAGRAM FORMED BY PLOTTING where 22 | TIR Systems Ltd. | where markets TIR Systems delivers lighting solutions to three markets, each having unique requirements but with a common need for quality products and exceptional customer suppor t. A R C H I T E C T U R A L Encompassing both “ef fective lighting” as with the illumination of a swimming pool, and “lighting for ef fect” the expression of creativity that lights up a bridge, building, or public space with dynamic color or striking illuminated elements. T R A N S P O R T A T I O N Unique solutions for tunnels, ser vice pits, and transit facilities that are valued for their combination of high quality lighting and operational benefits. C O R P O R A T E I D E N T I T Y Where light is used to reinforce a consistent brand image across multiple locations whether in petroleum, fast food, convenience stores or in retail, and also where low operating costs are critical to success. ONE OF THE THREE CHROMATICITY COORDINATES AGAINST ANOTHER. CHROMATICITY DIFFERENCE THRESHOLD THE SMALLEST DIFFERENCE IN CHROMATICITY BETWEEN TWO COLORS OF THE SAME L U M I N A N C E T H AT M A K E S T H E M P E R C E P T I B LY D I F F E R E N T. T H E D I F F E R E N C E M AY B E A D I F F E R E N C E IN HUE OR SATURATION, OR A COMBINATION OF THE TWO. CHROMATICITY -- OF A COLOR THE DOMINANT OR COMPLEMENTARY WAVELENGTH AND PURITY ASPECTS OF THE COLOR TAKEN TIR Systems Ltd. | where | 23 TOGETHER, OR THE ASPECTS SPECIFIED BY THE CHROMATICITY COORDINATES OF THE COLOR TAKEN TOGETHER. CHROMATICNESS -- THE ATTRIBUTE OF A VISUAL SENSATION ACCORDING TO WHICH THE (PERCEIVED) COLOR OF AN AREA APPEARS TO BE MORE OR LESS CHROMATIC. CIRCLING G U I D A N C E - - L I G H T S A E R O N A U T I C A L G R O U N D L I G H T S P R O - V I D E D T O S U P P LY A D D I T I O N A L G U I D A N C E DURING A CIRCLING APPROACH WHEN THE CIRCLING GUIDANCE FURNISHED BY THE APPROACH AND S T R AW B E R R Y M A N S I O N B R I D G E P H I L A D E L P H I A , PA T H E C I T Y WA N T E D T O I L L U M I N AT E T H E S T R U C T U R E I N A D Y N A M I C WAY. T I R ’ S L E D C O L O R C H A N G E L U M I N A I R E WA S PA R T I C U L A R LY A P P E A L I N G D U E T O I T S E N E R G Y E F F I C I E N T A N D L O W M A I N T E N A N C E F E AT U R E S . T I R S Y S T E M S A L S O P R O V I D E D A F U L L S O F T WA R E A N D T R A I N I N G PA C K A G E F O R T H E C O N T R O L S Y S T E M T H AT C I T Y E N G I N E E R S M AY A C C E S S V I A M O D E M F R O M T H E I R C I T Y C E N T E R O F F I C E S , A L L O W I N G T H E M T O C R E AT E THEIR OWN CUSTOM COLOR CHANGE PROGRAMS FOR PROFESSIONAL S P O R T S T E A M S , S P E C I A L E V E N T S O R S E A S O N A L H O L I D AY S . 24 | TIR Systems Ltd. | where R U N W AY L I G H T S I S I N A D E Q U AT E . CLEAR CLEARANCE LAMP -- A LIGHTING DEVICE MOUN OVERALL WIDTH AND HEIGHT OF THE VEHICLE. OF THE ROOFS OR OTHER PARTS AND WHOSE CLOUDY SKY -- A SKY HAVING MORE THAN 70% SKY -- A SKY THAT HAS LESS THAN 30% CLOUD COVER. TED ON A VEHICLE FOR THE PURPOSE OF INDICATING THE C L E R E S T O RY T H AT PA R T O F A B U I L D I N G R I S I N G C L E A R WALLS CONTAIN WINDOWS FOR LIGHTING THE INTERIOR. CLOUD COVER. COEFFICIENT OF ATTENUATION -- THE CALGARY WINTERCLUB POOL C A L G A R Y, A B T I R ’ S I L L U M I WAV E 1 0 0 0 S W I M M I N G P O O L L I G H T I N G A L L O W E D T H E D E S I G N E R S O F T H I S P O O L T O I N C O R P O R AT E M A N Y F E AT U R E S T H AT T R A D I T I O N A L I N D I R E C T L I G H T I N G S Y S T E M S W O U L D N O T A L L O W. A C O M P L E X C E I L I N G C AV I T Y A R E A I S C O M B I N E D W I T H A N EXTENSIVE USE OF GLASS, WHILE GOLD TILING COMPLEMENTS THE C H O S E N C O L O R S C H E M E . A L L O F T H E S E F E AT U R E S W E R E P O S S I B L E B E C A U S E O F T H E P R O D U C T ’ S U N I F O R M D I R E C T I L L U M I N AT I O N . T H R E E F I X T U R E S AT A L E N G T H O F 6 0 ’ ( 1 8 . 3 M ) E A C H W E R E A R R A N G E D I N A V I S U A L LY D I S T I N C T R A D I A L PA T T E R N T O A C C E N T U A T E T H E CIRCULAR POOL. TIR Systems Ltd. | where | 25 DECREMENT IN FLUX PER UNIT DISTANCE IN A GIVEN DIRECTION WITHIN A MEDIUM, DEFINED BY THE RELATION WHERE IS THE FLUX AT ANY DISTANCE X FROM A REFERENCE POINT HAVING FLUX WHERE THE C O E F F I C I E N T VA R I E S F R O M P O I N T T O P O I N T A L O N G T H E PAT H . COEFFICIENT OF BEAM UTILIZATION ( C B ) - - T H E R AT I O O F T H E L U M I N O U S F L U X ( L U M E N S ) R E A C H I N G A S P E C I F I E D A R E A D I R E C T LY F R O M A FLOODLIGHT OR PROJECTOR TO THE TOTAL BEAM LUMINOUS FLUX COEFFICIENT OF UTILIZATION S E P U LV E D A T U N N E L LOS ANGELES, CA T H I S H I G H T R A F F I C V O L U M E T U N N E L L O C AT E D N E A R L A X A I R P O R T F E A T U R E S T I R ’ S C O M P L E T E L I G H T I N G S O L U T I O N F O R R O A D W AY TUNNELS. 40’ (12.2M) LIGHT PIPE FIXTURES RUN THE ENTIRE LENGTH O F T H E T U N N E L , P R O V I D I N G H I G H Q U A L I T Y L I N E A R I L L U M I N AT I O N W H I L E TA K I N G A D VA N TA G E O F T H E L O N G L I F E A N D H I G H E R L I G H T O U T P U T O F L A M P S C O M M O N LY U S E D F O R S T R E E T L I G H T I N G . I N ADDITION, TIR’S DUAL BEAM PRODUCT IS USED IN THE TUNNEL E N T R A N C E A R E A S D U R I N G T H E D AY T O P R O V I D E H I G H L E V E L S O F U N I F O R M I L L U M I N AT I O N T H AT A L L O W T H E D R I V E R T O A D A P T F R O M BRIGHT SUNLIGHT TO THE LOWER LIGHT CONDITIONS IN THE TUNNEL. 26 | TIR Systems Ltd. | where (CU) -- THE RATIO OF THE LUMINOUS FLUX (LUMENS) FROM A LUMINAIRE CALCULATED AS RECEIVED ON THE WORKPLANE TO THE LUMINOUS FLUX EMITTED BY THE LUMINAIRE’S . LAMPS ALONE. C O F F E R - - A R E C E S S E D PA N E L O R DOME IN A CEILING. COLD-CATHODE LAMP -- AN ELECTRIC-DISCHARGE LAMP WHOSE MODE OF OPERATION IS THAT OF A GLOW DISCHARGE, AND HAVING ELECTRODES SO SPACED THAT MOST OF THE LIGHT COMES FROM THE POSITIVE COLUMN BETWEEN THEM. C O L O R - - T H E C H A R A C T E R I S T I C O F L I G H T B Y W H I C H A H U M A N O B S E R V E R M AY D I S T I N - BP CANOPIES USA T I R I S P R O V I D I N G I T S S O L I D S TAT E A C C E N T L I G H T I N G P R O D U C T, L I G H T M A R K ™ , I N P L A C E O F C O N V E N T I O N A L N E O N T O P R O V I D E A G R E E N D E L I N E AT I O N S T R I P O N B P ’ S R E TA I L C A N O P I E S A N D C O N V E N I E N C E S T O R E S . B P H A S U N D E R TA K E N A S U B S TA N T I A L R E - I M A G I N G P R O G R A M T O E N H A N C E I T S C O R P O R AT E I D E N T I T Y A N D H A S C H O S E N TIR’S PRODUCT AND PROJECT MANAGEMENT SERVICES T O E N S U R E T H AT T H E L A R G E E N E R G Y A N D M A I N T E N A N C E S AV I N G S P R O M I S E D B Y S S L T E C H N O L O G Y A R E R E A L I Z E D . TIR Systems Ltd. | where | 27 GUISH BETWEEN TWO STRUCTURE-FREE PATCHES OF LIGHT OF THE SAME SIZE AND SHAPE. SEE LIGHT SOURCE COLOR AND OBJECT COLOR. COLOR DIFFERENCE THRESHOLD -- THE DIFFERENCE IN CHROM AT I C I T Y O R L U M I N A N C E B E T W E E N T W O C O L O R S T H AT M A K E S T H E M J U S T P E R C E P T I B LY D I F F E R E N T. T H E D I F F E R E N C E M AY B E I N H U E , S AT U R AT I O N , B R I G H T N E S S ( L I G H T N E S S F O R S U R F A C E C O L O R S ) O R A C O M B I N AT I O N OF THE THREE. COLOR COMPARISON -- OR COLOR GRADING (CIE, OBJECT COLOR INSPECTION) THE CENTENNIAL TOWERS PONTIAC MARINA, SINGAPORE C Y L I N D R I C A L C O L U M N S W E R E I N C O R P O R AT E D I N T O T H E D E S I G N O F A B U I L D I N G T O W E R F A Ç A D E , I L L U M I N AT I N G T H E S T R I K I N G LY B E A U T I F U L G L A S S L O B B Y. T H I S AWA R D W I N N I N G B U I L D I N G A L S O USED TIR’S LIGHT PIPE PRODUCT FOR AN ADJACENT BUILDING W H E R E I T R E S T S O N F O U R I L L U M I N AT E D C Y L I N D E R S . A S T U N N I N G EXAMPLE OF HOW LIGHT PIPE CAN BE USED TO BACKLIGHT GLASS. T H E R E S U LT I S A S P E C TA C U L A R D I S P L AY O F L I G H T I N T H E M A R I N A A R E A O F T H E C I T Y, A H U B O F B U S I N E S S A N D S H O P P I N G . 28 | TIR Systems Ltd. | where JUDGMENT OF EQUALITY, OR OF THE AMOUNT AND CHARACTER OF DIFFERENCE, OF THE COLOR OF TWO OBJECTS VIEWED UNDER IDENTICAL ILLUMINATION. COLOR CONTRAST THRESHOLDS -- SEE CHROMATICITY DIFFERENCE THRESHOLD. COLOR CORRECTION -- (OF A PHOTOGRAPH OR PRINTED PICTURE) THE ADJUSTMENT OF A COLOR REPRODUCTION PROCESS TO IMPROVE THE PERCEIVED-COLOR CONFORMITY OF THE REPRODUCTION TO THE ORIGINAL. COLOR DISCRIMINATION -- THE PERCEPTION OF DIFFERENCES BETWEEN TWO OR MORE COLORS. COLOR MATCHING -- THE ACTION OF MAKING A COLOR BC TRANSIT SERVICE PITS S U R R E Y, B C TIR’S SERVICE PIT LIGHT PIPE PRODUCT PROVIDES “ S H A D O W L E S S ” , L O W G L A R E I L L U M I N AT I O N F O R THE WORK AREA UNDER BUSES, TRAINS, AND OTHER T R A N S I T V E H I C L E S . D E S I G N E D T O W I T H S TA N D T H E H A R S H E N V I R O N M E N T A N D I M PA C T F R O M T O O L S A N D E Q U I P M E N T, T H I S P R O D U C T I S A L S O R AT E D F O R U S E I N H A Z A R D O U S L O C AT I O N S . TIR Systems Ltd. | where | 29 APPEAR THE SAME AS A GIVEN COLOR. COLOR-MATCHING FUNCTIONS -- (SPECTRAL TRISTIMULUS VALUES) THE TRISTIMULUS VALUES PER UNIT WAVELENGTH INTER VAL AND UNIT SPECTRAL RADIANT FLUX. COLOR PREFERENCE INDEX -- (CPI) SEC FLATTERY INDEX. COLOR RENDERING -- A GENERAL EXPRESSION FOR THE EFFECT OF A LIGHT SOURCE ON THE COLOR APPEARANCE OF OBJECTS IN CONSCIOUS OR SUBCONSCIOUS COMPARISON WITH THEIR COLOR APPEARANCE UNDER A REFERENCE LIGHT SOURCE. COLOR RENDERING IMPROVEMENT -- (OF A LIGHT SOURCE)T ANAHEIM CONVENTION CENTER ANAHEIM, CA A N A R R AY O F T U B U L A R S E R I E S L I G H T P I P E F I X T U R E S A R E U S E D A S V E R T I C A L D E S I G N E L E M E N T S T O I L L U M I N AT E T H E U P P E R AT R I U M O F T H I S H I G H P R O F I L E C O N V E N T I O N CENTER. COMBINING HIGH NIGHTTIME VISIBILITY WITH A C C E S S I B I L I T Y F O R R E L A M P I N G , T H E L I G H T P I P E ™ WA S THE IDEAL SOLUTION TO ENSURE AESTHETIC VISIBILITY O F T H E M A I N LY G L A S S S T R U C T U R E . 30 | TIR Systems Ltd. | where THE ADJUSTMENT OF SPECTRAL COMPOSITION TO IMPROVE COLOR RENDERING. COLOR RENDERING INDEX -(OF A LIGHT SOURCE) A MEASURE OF THE DEGREE OF COLOR SHIFT OBJECTS UNDERGO WHEN ILLUMINATED BY T H E L I G H T S O U R C E A S C O M PA R E D W I T H T H O S E S A M E O B J E C T S W H E N I L L U M I N AT E D B Y A R E F E R E N C E S O U R C E O F C O M PA R A B L E C O L O R T E M P E R AT U R E . COLOR TEMPERATURE OF A LIGHT SOURCE -- THE ABSOLUTE TEMPERATURE OF A BLACKBODY RADIATOR HAVING A CHROMATICITY EQUAL TO THAT OF THE LIGHT SOURCE. SEE ALSO A R B Y ’ S R E S TA U R A N T S USA A N O T H E R E X A M P L E O F A C O R P O R AT E I D E N T I T Y C U S T O M E R TA K I N G A D VA N TA G E O F T H E S U B S TA N T I A L S AV I N G S G E N E R AT E D BY USING LED-BASED ACCENT LIGHTING IN PLACE OF NEON. PA R T O F T H I S C U S T O M E R ’ S I D E N T I F I A B L E I M A G E I S A R E D L I N E OF COLOR ON ITS SITES. TIR Systems Ltd. | where | 31 CORRELATED COLOR TEMPERATURE AND DISTRIBUTION TEMPERATURE. COLORFULNESS -- SEE CHROMATICNESS. COLORFULNESS OF A PERCEIVED COLOR -- THE ATTRIBUTE ACCORDING TO WHICH IT A P P E A R S T O E X H I B I T M O R E O R L E S S C H R O M AT I C C O L O R . F O R A S T I M U L U S O F A G I V E N C H R O M AT I C I T Y, C O L O R F U L N E S S N O R M A L LY I N C R E A S E S A S T H E A B S O L U T E L U M I N A N C E I S I N C R E A S E D . COLORIMETRIC PURITY -- (OF A LIGHT), P THE RATIO L WHERE L IS THE LUMINANCE OF THE SINGLE-FREQUENCY COMPO- BOSTON CITY HALL PLAZA BOSTON, MA A C L A S S I C U S E O F V E R T I C A L D E S I G N E L E M E N T S I N C O R P O R AT I N G D Y N A M I C C O L O R U S I N G S O L I D S TAT E L I G H T I N G ( S S L ) . L O C AT E D ALONG THE EDGE OF THE PLAZA IN FRONT OF CITY HALL IN BOSTON, T H I R T E E N L I G H T P I P E F I X T U R E S P R O V I D E A N E Y E - C AT C H I N G D I S P L AY O F V E R T I C A L L I G H T E F F E C T S . T H E I N S TA L L AT I O N H A S B E E N P R O G R A M M E D F O R R E G U L A R LY S C H E D U L E D S H O W S T H AT I N C L U D E SYNCHRONOUS TRANSITIONS FROM ONE COLOR TO ANOTHER ALONG W I T H A VA R I E T Y O F M U LT I - C O L O R E D L O O K S . 32 | TIR Systems Ltd. | where N E N T T H AT M U S T B E M I X E D W I T H A R E F E R E N C E S TA N D A R D T O M AT C H T H E C O L O R O F T H E L I G H T, A N D L I S T H E L U M I N A N C E O F T H E L I G H T. S E E E X C I TAT I O N P U R I T Y. COLORIMETRIC SHIFT -- THE CHANGE OF CHROMATICITY AND LUMINANCE FACTOR OF AN OBJECT COLOR D U E T O C H A N G E O F T H E L I G H T S O U R C E . S E E A D A P T I V E C O L O R S H I F T A N D R E S U LTA N T C O L O R S H I F T. COLORIMETRY -- THE MEAS U R E M E N T O F C O L O R . C O M PA C T - A R C L A M P S E E S H O R T - A R C L A M P. C O M PA C T S O U R C E I O D I D E ( C S L ) - - A N A R C S O U R C E U T I L I Z I N G A MERCURY VAPOR ARC WITH METAL HALIDE ADDITIVES TO PRODUCE ILLUMINATION IN THE 5000-6000-K RANGE. REQUIRES A BALLAST SONY BERLIN BERLIN, GERMANY THE PRIMARY ARCHITECTURAL THEME OF T H I S B U I L D I N G I S L I G H T T H AT I S L U M I N O U S A S O P P O S E D T O I L L U M I N AT I N G ; C H A N G I N G T H R O U G H O U T T H E D AY A N D N I G H T. T H E T R A N S PA R E N T G L A S S C E I L I N G S F E AT U R E D I N THE LOBBY AREAS USE LIGHT PIPE FIXTURES TO PROVIDE THE NECESSARY LEVEL OF LIGHT FOR COMFORT WHILE ALLOWING THE R E F L E C T I O N S A N D R E F R A C T I O N S T H AT A R E PA R T O F T H E O V E R A L L V I S I O N . TIR Systems Ltd. | how | 33 AND IGNITION SYSTEM FOR OPERATION. L I G H T E M I T T I N G D I O D E ( L E D ) - - E L E C T R O N I C D E V I C E T H AT E F F I C I E N T LY C O N V E R T S E L E C T R I C I T Y D I R E C T LY I N T O C O M PA R I S O N L A M P - - A L I G H T S O U R C E H AV I N G A C O N S TA N T, B U T N O T N E C E S S A R I LY K N O W N , L U M I N O U S I N T E N S I T Y W I T H W H I C H S TA N D A R D A N D T E S T L A M C O M PA R E D S U C C E S S I V E LY. C O M P L E M E N TA RY WAV E L E N G T H ( O F A L I G H T ) - - T H E WAV E L E N G T H O F R A D I A N T E N E R G Y O F A S I N G L E F R E Q U E N C Y T H AT, W H E BINED IN SUITABLE PROPORTION WITH THE LIGHT, MATCHES THE COLOR OF A REFERENCE STANDARD. SEE DOMINANT WAVELENGTH. COMPLETE DIFFU D I F F U S I O N I N W H I C H T H E D I F F U S I N G M E D I U M C O M P L E T E LY R E D I R E C T S T H E I N C I D E N T F L U X B Y S C AT T E R I N G S O T H AT N O I N C I D E N T F L U X C A N R E M A I N I N A N L I G H T. PS ARE N COMSION -IMAGE- how 34 | TIR Systems Ltd. | how SSL: solid state lighting At TIR Systems we talk about Solid State Lighting (SSL) and not just “LED’s”, simply because there is more to it. Just as a light bulb sitting on a table has no value until it is placed in a fixture with a socket, and a shade or cover, and provided with electricity, the fantastic potential of LED’s is not realized without the enabling technologies. TIR is researching and developing the technology pieces that, when put together, allow LED’s to become tomorrow’s Solid State Lighting. These pieces are the building blocks on which the world will redefine light. FORMING STATE. CONES -- RETINAL RECEPTORS THAT DOMINATE THE RETINAL RESPONSE WHEN THE LUMINANCE LEVEL IS HIGH AND PROVIDE THE BASIS FOR THE PERCEPTION OF COLOR. CONFIGURATION FACTOR -- THE RATIO OF THE ILLUMINANCE ON A SURFACE AT POINT 1 (DUE TO F L U X D I R E C T LY R E C E I V E D F R O M L A M B E R T I A N S U R FA C E 2 ) T O T H E E X I TA N C E O F S U R FA C E . I T I S U S E D I N F L U X T R A N S F E R T H E O R Y. A L S O , T H E R AT I O O F T H E D I F F E R E N T I A L F L U X D I R E C T LY R E C E I V E D TIR Systems Ltd. | how | 35 BY SURFACE 2 (AND DUE TO ELEMENT 1) TO THE TOTAL DIFFERENTIAL FLUX EMITTED BY DIFFERENTIAL LAMBERTIAN SURFACE ELEMENT 1 CONICAL-DIRECTIONAL REFLECTANCE -- THE RATIO OF THE REFLECTED FLUX COLLECTED OVER AN ELEMENT OF SOLID ANGLE SURROUNDING THE GIVEN DIRECTION TO THE INCIDENT FLUX LIMITED TO A CONICAL SOLID ANGLE. CONICAL-DIRECTIONAL TRANSMITTANCE -- THE RATIO OF THE TRANSMITTED FLUX COLLECTED OVER AN ELEMENT OF SOLID HOW RGB COLOR MIXING WORKS J U S T A S W I T H PA I N T, A L L C O L O R S O F L I G H T, I N C L U D I N G W H I T E L I G H T, C A N B E M A D E B Y M I X I N G T H R E E P R I M A R Y C O L O R S S TA R T I N G W I T H R E D . HIGH BRIGHTNESS RED L E D D E V E L O P E D 1 9 8 8 + 36 | TIR Systems Ltd. | how ANGLE SURROUNDING THE DIRECTION TO THE INCIDENT FLUX LIMITED TO A CONICAL SOLID ANGLE. CONICAL-HEMISPHERICAL REFLECTANCE -- THE RATIO OF THE REFLECTED FLUX COLLECTED OVER THE ENTIRE HEMISPHERE TO THE INCIDENT FLUX LIMITED TO A CONICAL SOLID ANGLE. NOTE THE DIRECTION AND EXTENT OF THE CONE MUST BE SPECIFIED. CONICAL-HEMISPHERICAL TRANSMITTANCE -- THE RATIO OF THE TRANSMITTED FLUX COLLECTED OVER THE ENTIRE HEMISPHERE TO THE INCIDENT FLUX LIMITED TO A CONICAL SOLID ANGLE. NOTE THE DIRECTION AND EXTENT OF G R E E N L E D ’ S , A L O N G W I T H R E D , H AV E B E E N AVA I L A B L E F O R D E C A D E S , B U T I T I S O N LY R E C E N T LY T H AT B L U E L E D W A S B O R N I N A L A B , A N D E V E N M O R E R E C E N T LY T H E Y E N T E R E D T H E W O R L D O F L I G H T. + + HIGH BRIGHTNESS GREEN L E D D E V E L O P E D 1 9 9 5 TIR Systems Ltd. | how | 37 THE CONE MUST BE SPECIFIED. CONSPICUITY -- THE CAPACITY OF A SIGNAL TO STAND OUT IN RELATION TO ITS BACKG R O U N D S O A S T O B E R E A D I LY D I S C O V E R E D B Y T H E E Y E . CONTRAST -- SEE LUMINANCE CONTRAST. CONTRAST RENDITION FACTOR (CAF) -- THE RATIO OF THE VISUAL TASK CONTRAST WITH A GIVEN LIGHTING ENVIRONMENT TO THE CONTRAST WITH SPHERE ILLUMINATION. ALSO KNOWN AS THE CONTRAST RENDERING FACTOR. CONTRAST SENSITIVITY -T H E A B I L I T Y T O D E T E C T T H E P R E S E N C E O F L U M I N A N C E D I F F E R E N C E S . Q U A N T I TAT I V E LY, I T I S E Q U A L T O T H E R E C I P R O C A L THE BLUE LED ALLOWED FOR MIXING ALL THREE OF T H E P R I M A R Y C O L O R S T O M A K E W H I T E L I G H T. + HIGH BRIGHTNESS BLUE L E D D E V E L O P E D 1 9 9 7 = 38 | TIR Systems Ltd. | how OF THE BRIGHTNESS CONTRAST THRESHOLD. CORNICE LIGHTING -- LIGHTING COMPRISING SOURCES SHIELDED BY A PANEL PARALLEL TO THE WALL AND ATTACHED TO THE CEILING, AND DISTRIBUTING LIGHT OVER THE WALL. CORRELATED COLO R T E M P E R AT U R E ( O F A L I G H T S O U R C E ) - - T H E A B S O L U T E T E M P E R AT U R E O F A B L A C K B O D Y W H O S E C H R O M AT I C I T Y M O S T N E A R LY RESEMBLES THAT OF THE LIGHT SOURCE. COSINE LAW -- THE LAW THAT THE ILLUMINANCE ON ANY SURFACE VARIES AS THE COSINE OF THE ANGLE OF INCIDENCE. THE ANGLE OF INCIDENCE 0 IS THE ANGLE BETWEEN THE NORMAL TO THE SURFACE IT ALSO OPENED UP THE POSSIBILITY OF MAKING A “ W H I T E ” L E D B Y A D D I N G C E R TA I N C O AT I N G S . o = WHITE TIR Systems Ltd. | how | 39 A N D T H E D I R E C T I O N O F T H E I N C I D E N T L I G H T. T H E I N V E R S E S Q U A R E L AW A N D T H E C O S I N E L AW C A N B E C O M B I N E D A S , S E E C O S I N E - C U B E D L AW A N D I N V E R S E S Q U A R E L AW. COSINE-CUBED LAW -- AN EXTENSION OF THE COSINE LAW IN WHICH THE DISTANCE D BETWEEN THE SOURCE AND SURFACE IS REPLACED BY WHERE H IS THE PERPENDICULAR DISTANCE OF THE SOURCE FROM THE PLANE IN WHICH THE POINT IS LOCATED. COUNTER-KEY LIGHT -- ILLUMIN AT I O N O N A S U B J E C T F R O M A D I R E C T I O N T H AT I S O P P O S I T E T O T H AT O F T H E K E Y L I G H T. COUNTRY BEAM -- SEE T O D AY D Y N A M I C S P L A S H E S O F C O L O R A N D T H E S M A L L S C A L E BEGINNINGS OF A WHITE LIGHT WORLD ARE POSSIBLE. T O M O R R O W A W O R L D O F T O TA L LY C O N T R O L L A B L E , H I G H LY E F F I C I E N T, M A I N T E N A N C E - F R E E I L L U M I N AT I O N AWA I T S . r ANY COLOR IN THE SPECTRUM 40 | TIR Systems Ltd. | how UPPER (DRIVING) BEAMS. COURSE LIGHT -- AN P L E M E N T I N G A N A I R W AY B E A C O N , F O R I N D I C AT I N G TO IDENTIFY BY A CODED SIGNAL THE LOCATION OF IS ASSOCIATED. COVE LIGHTING -- LIGHTING C LEDGE OR HORIZONTAL RECESS, AND DISTRIBUTING AERONAUTICAL GROUND LIGHT, SUPT H E D I R E C T I O N O F T H E A I R W AY A N D T H E A I R W AY B E A C O N W I T H W H I C H I T OMPRISING SOURCES SHIELDED BY A LIGHT OVER THE CEILING AND UPPER T H E F O U N D AT I O N S P O W E R C O N V E R S I O N : E F F I C I E N T C O N V E R S I O N F R O M “ WA L L P L U G ” E L E C T R I C I T Y T O S A F E L O W V O LTA G E D C D I G I TA L C O N T R O L : A N E L E C T R O N I C D E V I C E T H AT T E L L S T H E L E D ’ S W H AT T O D O . C O M M U N I C AT I O N : T H E A B I L I T Y T O U S E A C O M P U T E R , P D A , B U I L D I N G C O N T R O L O R O T H E R D E V I C E T O TA L K T O T H E L I G H T I N G THERMAL MANAGEMENT : YOUR COMPUTER HAS A FAN IN IT FOR A REASON. THE KEY TO MAXIMIZING LED PERFORMANCE LIES IN KEEPING THEM COOL OPTICS: PUTTING THE LIGHT WHERE IT IS NEEDED IS ESSENTIAL FOR AN EFFICIENT LIGHTING SYSTEM THE SOURCE L E D : A N E F F I C I E N T, I D E A L LY S I Z E D E L E C T R O N I C L I G H T S O U R C E T H AT C O N V E R T S E L E C T R I C I T Y D I R E C T LY I N T O L I G H T T I R S Y S T E M S I S R E S E A R C H I N G A N D D E V E L O P I N G T H E K E Y T E C H N O L O G I E S T H AT A R E T H E F O U N D AT I O N S O F T O M O R R O W ’ S L I G H T I N G . ELECTRICITY SOURCE POWER CONVERSION DIGITAL CONTROL LED ARRAY OPTICS SYSTEM INTEGRATION COMMUNICATION TIR Systems Ltd. | why | 41 WALL. D I S R U P T I V E T E C H N O L O G Y - - A N E W T E C H N O L O G Y T H AT H A S T H E P O T E N T I A L T O C H A N G E T H E F U N D A M E N TA L S T R U C T U R E S A N D P R O C E S S E S O F A N I N D U S T RY. CRITERIA -- RATING A TECHNIQUE THAT DETERMINED THE PROBABILITY THAT A SPECIFIC CRITERION WILL BE MET ANYWHERE IN A DEFINED AREA. THE NAME OF THE CRITERIA RATING INCLUDES THE NAME OF THE CRITERION BEING RATED. IT IS EXPRESSED IN SHORTHAND NOTATION BY LISTING THE RATING IN PERCENT FOLLOWED BY THE CRITERION ITSELF. C R I T I C A L F L I C K E R F R E Q U E N C Y - - S E E F L I C K E R F U S I O N F R E Q U E N C Y. CRITICAL FUSION FREQUENCY (CIF) -- SEE FLICKER FUSION FREQ U E N C Y. C R O S S L I G H T I N G - - I L L U M I N AT I O N F R O M T W O S O U R C E S O N O P P O S I T E S I D E S O F T H E S U B J E C T. O F T E N D I F F E R E N T C O L O R M E D I A A R E U S E D I N T H E L U M I - why 42 | TIR Systems Ltd. | why NAIRES FOR THE SAME AREA TO GIVE THE ILLUSION OF SHADOW WHILE PROVIDING SUFFICIENT ILLUM I N AT I O N F O R G O O D V I S I B I L I T Y. C U C O L O R I S - - A N O PA Q U E C U T O U T PA N E L M O U N T E D B E T W E E N A L I G H T S O U R C E ( S U N O R A R C ) A N D A TA R G E T S U R FA C E I N O R D E R T O P R O J E C T A S H A D O W PAT T E R N ( C L O U D S O R L E AV E S A R E T Y P I C A L ) U P O N S C E N E RY, C Y C L O R A M A O R A C T I N G A R E A . CUTOFF ANGLE -- (OF A LUMINAIRE) THE ANGLE, MEASURED UP FROM NADIR, BETWEEN THE VERTICAL AXIS To Build the Foundation of Tomorrow’s Lighting. TIR Systems Ltd. | why | 43 AND THE FIRST LINE OF SIGHT AT WHICH THE BARE SOURCE IS NOT VISIBLE. DARK ADAPTATION -- THE PROCESS BY WHICH THE RETINA BECOMES ADAPTED TO A LUMINANCE D AY L I G H T AVA I L A B I L I T Y - - T H E L U M I N O U S F L U X F R O M T H E S U N A N D T H E S K Y AT A S P E C I F I C L O C AT I O N , TIME, DATE AND SKY CONDITION. D AY L I G H T F A C T O R - - A M E A S U R E O F D AY L I G H T I L L U M I N A N C E AT A P O I N T O N A G I V E N P L A N E , E X P R E S S E D A S T H E R AT I O O F T H E I L L U M I N A N C E O N T H AT P L A N E AT T H AT P O I N T T O T H E S I M U LTA N E O U S E X T E R I O R I L L U M I N A N C E O N A H O R I Z O N T A L P L A N E F R O M T H E WHOLE OF AN UNOBSTRUCTED SKY OF ASSUMED OR KNOWN LUMINANCE DISTRIBUTION. DIRECT SUNLIGHT IS EXCLUDED FROM BOTH INTERIOR AND AN IDEAL LIGHT SOURCE S M A L L , E F F I C I E N T, A N D E V E R L A S T I N G . N O C O M B U S T I O N . N O VA C U U M T U B E S . N O POISONOUS GASES. LED’S ARE THE IDEAL LIGHT SOURCE. TIR SYSTEMS I S T H E I D E A L C O M PA N Y T O D E L I V E R L I G H T I N G S O L U T I O N S T H AT TA K E A D VA N TA G E O F L E D ’ S . Good lighting contributes to the productivity of businesses, the health and well-being of individuals, and the energy ef ficiency of buildings. V I S I O N 2 0 2 0 : T H E L I G H T I N G T E C H N O L O G Y R O A D M A P ( U S D E PA R T M E N T O F E N E R G Y ) 44 | TIR Systems Ltd. | why EXTERIOR VALUES OF ILLUMINANCE. D AY L I G H T L A M P - - A L A M P P R O D U C I N G A S P E C T R A L D I S T R I B U T I O N A P P R O X I M AT I N G T H AT O F A S P E C I F I E D D AY L I G H T. DENSITOMETER -- A PHOTOMETER FOR MEASURING THE OPTICAL DENSITY (COMMON LOGARITHM OF THE RECIPROCAL OF THE TRANSMITTANCE OR REFLECTANCE) OF MATERIALS. DIFFUSE -- REFLECTANCE THE RATIO OF THE FLUX LEAVING A SURFACE OR MEDIUM BY DIFFUSE REFLECTION TO THE INCIDENT FLUX. DIFFUSE REFLECTION -- THE PROCESS BY WHICH INCIDENT FLUX IS REDIRECTED OVER A RANGE OF ANGLES. DIFFUSE TRANSMISSION -- E N E R G Y S AV I N G S T O D AY, T I R ’ S S S L P R O D U C T S C A N D E L I V E R U P T O 9 0 % E L E C T R I C I T Y S AV I N G S C O M PA R E D T O C O N V E N T I O N A L L I G H T I N G I N C E R TA I N A P P L I C AT I O N S W H E R E C O L O R E D L I G H T I S R E Q U I R E D . T O M O R R O W, I T W I L L B E I N Y O U R HOME AND OFFICE. No other single lighting technology of fers so much potential t o c o n s e r v e p r e c i o u s e l e c t r i c i t y. These energy savings could reduce electricity bills by $98B cumulatively over the next 20 years. U S D E PA R T M E N T O F E N E R G Y TIR Systems Ltd. | why | 45 T H E P R O C E S S B Y W H I C H T H E I N C I D E N T F L U X PA S S I N G T H R O U G H A S U R FA C E O R M E D I U M I S S C AT T E R E D . D I F F U S E T R A N S M I T TA N C E - - T H E R AT I O O F T H E D I F F U S E LY T R A N S M I T T E D F L U X L E AV I N G A S U R F A C E O R M E D I UM TO THE INCIDENT FLUX. DIFFUSED LIGHTING -- LIGHTING, PROVIDED ON THE WORKPLANE OR ON A N O B J E C T, T H AT I S N O T P R E D O M I N A N T LY I N C I D E N T F R O M A N Y PA R T I C U L A R D I R E C T I O N . DIFFUSER -- A D E V I C E T O R E D I R E C T O R S C AT T E R T H E L I G H T F R O M A S O U R C E , P R I M A R I LY B Y T H E P R O C E S S O F D I F F U S E E N V I R O N M E N TA L B E N E F I T S 20% OF THE WORLD’S ELECTRICITY IS USED FOR LIGHTING. THE POWER P L A N T S T H AT P R O V I D E T H E E L E C T R I C I T Y G E N E R AT E E N O R M O U S QUANTITIES OF HARMFUL EMISSIONS. CONVENTIONAL LIGHT SOURCES C O N TA I N M E R C U RY A N D O T H E R P O T E N T I A L LY H A Z A R D O U S M AT E R I A L S T H AT E N T E R T H E E N V I R O N M E N T U P O N D I S P O S A L . S S L S Y S T E M S T H AT LAST FOR DECADES ARE MADE USING ELECTRONIC COMPONENTS. By the year 2020, electricity used for lighting may be cut 50%, sparing the atmosphere 28 million metric tons [ s i c ] o f c a r b o n e m i s s i o n a n n u a l l y. P H Y S I C S T O D AY – D E C E M B E R 2 0 0 1 46 | TIR Systems Ltd. | why TRANSMISSION. D I F F U S I N G PA N E L - - A T R A N S L U C E N T M AT E R I A L C O V E R I N G T H E L A M P S I N A L U M I N A I R E T O R E D U C E THE LUMINANCE BY DISTRIBUTING THE FLUX OVER AN EXTENDED AREA. DIFFUSING SURFACES -- AND MEDIA THOSE THAT REDISTRIBUTE AT LEAST SOME OF THE INCIDENT FLUX BY SCATTERING IN ALL DIRECTIONS. SEE COMPLETE DIFFUSION, INCOMPLETE DIFFUSION, PERFECT DIFFUSION, NARROW-ANGLE DIFFUSION AND WIDE-ANGLE DIFFUSION. D I G I TA L D I S P L AY - - S E E A L P H A N U M E R I C D I S P L AY. DIMMER -- A DEVICE USED TO CONTROL THE INTENSITY OF LIGHT IT’S HAPPENING NOW T H E W O R L D I S AWA K E N I N G T O T H E P O T E N T I A L O F A N E W DISRUPTIVE TECHNOLOGY IN LIGHTING. TIR SYSTEMS IS P O S I T I O N E D T O L E A D T H E WAY. W E A R E R E D E F I N I N G L I G H T. Congress finds that it is in the economic and energy security interests of the United States to encourage the development of white light emitting diodes… B I L L S . 1 1 6 6 – U N I T E D S TAT E S S E N AT E ( N E X T G E N E R AT I O N L I G H T I N G B I L L ) TIR Systems Ltd. | why | 47 E M I T T E D B Y A L U M I N A I R E B Y C O N T R O L L I N G T H E V O LTA G E O R C U R R E N T AVA I L A B L E T O I T. DIRECT COMPONENT -- THAT PORTION OF THE LIGHT FROM A LUMINAIRE WHICH ARRIVES AT THE WORKPLANE WITHOUT BEING REFLECTED BY ANY ROOM SURFACES. SEE INDIRECT C O M P O N E N T. D I R E C T G L A R E - - G L A R E R E S U LT I N G F R O M H I G H L U M I N A N C E S O R S U F F I C I E N T LY S H I E L D E D L I G H T S O U R C E S I N T H E F I E L D O F V I E W. I T I S U S U A L LY A S S O C I AT E D OUR VISION S O L I D S TAT E L I G H T I N G W I L L B E T H E D O M I N A N T W AY W E L I G H T T H E F U T U R E . B U T T H E J O U R N E Y S TA R T S T O D AY. A S L E D ’ S A N D T H E E N A B L I N G T E C H N O L O G I E S I M P R O V E , S S L W I L L M O V E F R O M D E C O R AT I V E C O L O R A P P L I C AT I O N S T H R O U G H T H E F I R S T E F F E C T I V E L I G H T I N G I N S TA L L AT I O N S A N D I N T O M A I N S T R E A M C O M M E R C I A L , R E S I D E N T I A L , A N D I N D U S T R I A L L I G H T I N G . T I R S Y S T E M S W I L L L E A D T H I S J O U R N E Y. G E N E R A L I L L U M I N AT I O N COMMERCIAL AND RESIDENTIAL LIGHTING MARKETS THAT WILL EMERGE AS INITIAL COSTS BECOME COMPETITIVE WITH CONVENTIONAL LIGHTING: APPROXIMATELY $28 BILLION (USD) WORLDWIDE TODAY POSSIBLE ENERGY SAVINGS UP TO 80% IN SOME APPLICATIONS LAMP LIFE MEASURED IN DECADES FULL INTEGRATION INTO BUILDING CONTROL SYSTEMS MINIMAL ENVIRONMENTAL IMPACT MARKET SIZE ($) S P E C I A LT Y I L L U M I N AT I O N THE FIRST “EFFECTIVE WHITE LIGHTING” SOLUTIONS ON A LARGE SCALE WHERE THE OPERATIONAL BENEFITS OF SSL OUTWEIGH HIGHER INITIAL COST : NO NEED TO CHANGE LAMPS IN A HIGH VALUE OR HAZARDOUS ENVIRONMENT ENERGY SAVINGS DUE TO EFFICIENT UTILIZATION OF LIGHT FULL CONFIGURABILITY FOR MULTI-PURPOSE LOCATIONS C O R P O R AT E I D E N T I T Y COST EFFECTIVE LIGHTING SOLUTIONS USING COLOR TO UNITE MULTIPLE LOCATIONS UNDER ONE IDENTITY: APPROXIMATELY $2.0 BILLION (USD) WORLDWIDE TODAY EFFICIENT COLOR GENERATION SIGNIFICANT ENERGY SAVINGS UP TO 90% IN SOME CASES EXTREMELY LOW MAINTENANCE COSTS A R C H I TA I N M E N T THE BLENDING OF ARCHITECTURAL AND ENTERTAINMENT LIGHTING: DYNAMIC SATURATED COLOR NEW VISUAL EFFECTS LONG LIFE AND LOW MAINTENANCE 2000 2010 48 | TIR Systems Ltd. | why WITH BRIGHT AREAS, SUCH AS LUMINAIRES, CEILINGS AND WINDOWS, WHICH ARE OUTSIDE THE VISUAL TASK OR R E G I O N B E I N G V I E W E D . A D I R E C T G L A R E S O U R C E M AY A L S O A F F E C T P E R F O R M A N C E B Y D I S T R A C T I N G AT T E N T I O N . D I R E C T - I N D I R E C T L I G H T I N G - - A VA R I A N T O F G E N E R A L D I F F U S E L I G H T I N G I N W H I C H T H E L U M I N A I R E S E M I T L I T T L E OR NO LIGHT AT ANGLES NEAR THE HORIZONTAL. DIRECT LIGHTING -- LIGHTING BY LUMINAIRES DISTRIBUTING 90-100% OF THE EMITTED LIGHT IN THE GENERAL DIRECTION OF THE SURFACE TO BE ILLUMINATED. THE TIR SYSTEMS IS PROVIDING LEADERSHIP LEADERSHIP MEANS: T E C H N O L O G Y T H AT W O R K S I N T H E R E A L W O R L D U N D E R S TA N D I N G A N D D E L I V E R I N G C U S T O M E R R E Q U I R E M E N T S PA R T N E R S H I P S T H AT A D VA N C E A W H O L E I N D U S T R Y P R O M O T I O N B Y E D U C AT I O N Edison was the 38th inventor of a filament based lamp. Edison was the 1st to deliver the entire lighting system… D R . R O L A N D H A I T Z ( R E T I R E D F R O M A G I L E N T ) F O U N D E R O F “ H A I T Z ’ S L AW ” T H E L E D E Q U I VA L E N T T O M O O R E ’ S L AW O F C O M P U T I N G TIR Systems Ltd. | Annual Report | 49 T E R M U S U A L LY R E F E R S T O L I G H T E M I T T E D I N A D O W N WA R D D I R E C T I O N . USEFUL LIFE -- THE AMOUNT OF TIME A LIGHTING SYSTEM PROVIDES ENOUGH LIGHT TO F U L F I L L T H E R E Q U I R E M E N T S O F T H E S P E C I F I C A P P L I C AT I O N F O R W H I C H I T I S D E S I G N E D . S S L D O E S N O T “ B U R N O U T ” O R “ D I E ” , I T S L O W LY C E A S E S T O P R O V I D E T H E AMOUNT OF LIGHT REQUIRED BY ITS APPLICATION. D I R E C T R AT I O - - T H E R AT I O O F T H E L U M I N O U S F L U X R E A C H I N G T H E W O R K P L A N E D I R E C T LY T O T H E D O W N WA R D COMPONENT FROM THE LUMINAIRE. DIRECTIONAL-CONICAL REFLECTANCE -- THE RATIO OF REFLECTED FLUX COLLECTED THROUGH A CONICAL SOLID ANGLE TO E S S E N T I A L LY C O L L I M AT E D I N C I D E N T F L U X . DIRECTIONAL-CONICAL TRANSMITTANCE -- THE RATIO OF TRANSMITTED FLUX COLLECTED THROUGH A CONICAL SOLID 2002 annual report 50 | TIR Systems Ltd. | Annual Report A N G L E T O E S S E N T I A L LY C O L L I M AT E D I N C I D E N T F L U X . DIRECTIONAL-HEMISPHERICAL REFLECTANCE -- THE RATIO OF REFLECTED FLUX COLLECTED OVER THE E N T I R E H E M I S P H E R E T O E S S E N T I A L LY C O L L I M AT E D I N C I D E N T F L U X . DIRECTIONAL-HEMISPHERICAL TRANSMITTANCE -- THE RATIO OF TRANSMITTED FLUX COLL E C T E D O V E R T H E E N T I R E H E M I S P H E R E T O E S S E N T I A L LY C O L L I M AT E D I N C I D E N T F L U X . DIRECTIONAL LIGHTING -- LIGHTING PROVIDED ON THE WORKPLANE OR O N A N O B J E C T P R E D O M I N A N T LY F R O M A P R E F E R R E D D I R E C T I O N . S E E A C C E N T L I G H T I N G , K E Y L I G H T A N D C R O S S L I G H T. DISABILITY GLARE -- THE EFFECT OF S T R AY L I G H T I N T H E E Y E W H E R E B Y V I S I B I L I T Y A N D V I S U A L P E R F O R M A N C E A R E R E D U C E D . A D I R E C T G L A R E S O U R C E T H AT P R O D U C E S D I S C O M F O R T M AY A L S O P R O - CEO’S REPORT TO SHAREHOLDERS 2002 WAS AN EXCITING AND PIVOTAL YEAR FOR OUR COMPANY. WE CONFIRMED THAT OUR COMPANY’S STRATEGY IN SOLID STATE LIGHTING TECHNOLOGY (SSL) AND OUR INVESTMENTS HAVE CONTRIBUTED TO GROWTH FOR THE COMPANY THIS YEAR AND IS POSITIONING US FOR SIGNIFICANT GROWTH IN COMING YEARS; WE SUCCESSFULLY LAUNCHED OUR NEW COLOR WASH PRODUCT VALIDATING OUR LEADERSHIP IN SSL; WE FORMED A STRATEGIC MARKETING PARTNERSHIP WITH LUMILEDS; WE LAUNCHED OUR CORPORATE IDENTITY BUSINESS AND SECURED OUR FIRST CUSTOMER, BP WITH A $9 MILLION ORDER; IN ADDITION, WE IMPLEMENTED A NEW ERP SYSTEM TO IMPROVE OPERATIONS; ALL WHILE ACHIEVING REVENUE GROWTH AND STRONG OPERATING RESULTS FOR THE YEAR. S TAY I N G T R U E TO OUR WORD TIR’s outstanding accomplishments in 2002 were directly attributed to the commitment and passion of our staff to firmly push for ward with the implementation of our strategy. “To Build the Foundation of Tomorrow’s Lighting” despite 2002 star ting slowly due to a soft USA economy. Our strategy is succeeding and we are leading the new SSL industr y by developing and marketing new SSL products and suppor t ser vices, while continuing to grow our core Light Pipe business. The key drivers behind SSL are the significant benefits this technology provides to the end user. This includes improved energy ef ficiency over traditional lighting resulting in energy savings of up to 90%, as well as longer operating life significantly reducing maintenance costs. As we look ahead to 2003 we are cer tain that by implementing our strategic vision we will change the lighting industr y. Our staff and management are dedicated to continue working hard to advance the Company, including forming the required strategic par tnerships to allow for fur ther growth and leadership in SSL. TIR Systems Ltd. | Annual Report | 51 RECORD BREAKING REVENUES We saw our revenues increase significantly this year to $7.8 million, the Company’s largest revenue year, and a 27% increase over the previous year. Growth was primarily from our core business, incorporating The Light Pipe™ technology into several product of ferings. Our traditional markets per formed exceptionally well due to our sales to swimming pool and tunnel customers, as well as a strong per formance by our distribution network of manufacturer representatives. Going for ward we have planned for a 35% compound annual growth rate in our core business over the next three years. TIR has already announced several significant orders for this coming year, allowing us the confidence to state that we expect revenues to at least double and a profit to be realized. Revenue growth and profitability is possible as a result of the investments made in prior years in SSL technology through developing strategic relationships within the industr y and our introduction of new products for the Architectural and Corporate Identity markets. NEW TECHNOLOGIES BRING PROMISE AND PRODUCT During this past year, our Company made its most significant investment in the development and integration of high ef ficiency power supplies, full range digital control, advanced optical films, thin coatings and next generation communication protocols to enable SSL. This was made possible through the repayable investment made by Technology Par tnership Canada (TPC) of $463,900 during this fiscal year. This brings our recovery to a total of $760,600 of the $6.6 million which we announced at the end of 2001. Total investment in Research and Development was 14% of our revenue before TPC recover y. Our major Research and Development achievement this past year was several new technology building blocks all packaged into one product: the Destiny ColorWash™. The advantage of the Destiny ColorWash™ is that this color-changing luminaire (fixture) is the first SSL product to deliver the level of light output and optical per formance of similar high quality traditional products in the Architainment market. Destiny ColorWash™ also delivers on the promise of SSL providing energy and maintenance savings. The product is a culmination of a number of achievements that advance TIR’s Technology Roadmap. It incorporates TIR’s own power supplies, control and drive electronics, software, firmware, and advanced optics, all of which are not available elsewhere. Comprised of almost all new technology, the Destiny ColorWash™ was designed to meet customer expectations for aesthetics and ease of use. As we continue our investment in Research and Development, we will leverage these building blocks to shor ten our new product development cycle. This will greatly assist TIR in the introduction of new products in the coming year. Additionally, we will continue to push the envelope of technology advancement in power supplies, control, drive electronics, software and advanced optics, all with the goal of delivering the most sophisticated integrated SSL products to our customers. 52 | TIR Systems Ltd. | Annual Report E X PA N D I N G THE HORIZON Early in the first quar ter of 2002, we launched the Corporate Identity marketing program. This market is made up of customers with many sites that use color and light to create a distinct brand and attract customers into their locations. They are large customers with the potential of generating volume repeat business; buying a single product or family of products for many sites. The market segments we are initially targeting will be in petroleum retail, fast food, and convenience stores where large chains with thousands of sites dominate. In March 2002 TIR established a strategic marketing par tnership with Lumileds, a joint venture between Philips and Agilent, and world leader in LED Research and Development. TIR gained access to a new SSL product “ChipStrip” which is aptly suited for the Corporate Identity Market. We took the ChipStrip product and applied our technology and exper tise to improve and re-engineer the product. As a result we were able to secure a $9 million order with BP to re-image 850 sites throughout Nor th America. The Corporate Identity market size is $5.4 Billion USD in the United States, with lighting representing between $1.0 and $1.6 billion USD of the total per annum. SSL technology can provide energy savings of up to 90% and a significant reduction in maintenance costs due to its long life as compared to traditional lighting technology, such as neon. To capitalize on this market oppor tunity TIR developed a manufacturing and deliver y team for Corporate Identity customers. We also put in place a business development team to fur ther secure additional business oppor tunities and to increase our distribution channels and par tnerships. We expect this market segment to represent significant growth for SSL for both the industr y and the Company in the coming years. OUR COMMITMENT TO SERVE The SSL industr y is at its infancy, yet surprisingly we are already seeing end user customers embracing this new technology and realizing its significant benefits. TIR is positioned to cater to early adopter customers’ interest. Our commitment to provide quality products and ser vice to our customer goes far beyond our technology and the new products we deliver to the market. SSL is a ver y new technology for an industr y that has historically used traditional light sources for over a centur y. To apply SSL technology ef fectively, it is more than delivering a product, it’s about delivering a complete system; an integrated solution. TIR Systems Ltd. | Annual Report | 53 TIR’s strategy is to introduce to the industr y new SSL products and to suppor t them through continuous education, marketing materials, systems solutions and optimum ser vices. By expanding our communication tools to suit this strategy, we are also streamlining and lowering our costs. For example, this year we have leveraged multi-use documents such as this Annual Repor t combining it with our Corporate Brochure. Our goal is to deliver reliable SSL solutions today and create a strong Company brand, which we believe will ensure success for SSL and TIR in the future as this technology matures. Recognizing our growth oppor tunities in ser ving our customers, TIR has identified the need to improve our Company’s infrastructure and systems. This year marked the implementation for our new ERP (Enterprise Resource Planning) system and additional operational systems, allowing us to grow quickly, maintain quality control and provide timely ser vice to our customers. Continued investments will be made over the next year to improve our operational systems and strengthen the Company’s foundation. ADDING DEPTH AND EXPERTISE The accomplishments of achieving record revenues and securing our first major SSL customer has demanded that our staf f double in size, growing from 42 to 90 people, adding to the depth and exper tise in the Company. In addition, we added a second facility of 17,000 square feet bringing our total space to 50,000 square feet to accommodate this growth. TIR’s accomplishments this past year include the broadening of our customer base, for this we are grateful. I would like to take this oppor tunity to thank the TIR team and their families for their commitment, passion, creativity and dedication in rising to the challenges of 2002 and helping us meet our milestones which mark another stage in the realization of our mission. By creating integrated solutions our team is contributing to the on-going development of SSL. For TIR’s shareholders and Board of Directors, our success in meeting our milestones this year is tangible evidence of TIR’s ability to foster the adoption of our technology. The development of TIR’s business has required patience and perseverance. I want to thank the Board for their strong guidance and suppor t, and thank our par tners and shareholders for their commitment to our strategy. We are confident that both the effor t and commitment will be realized with the acceleration in our business growth, leading to greater recognition of TIR’s value. LEONARD HORDYK CHIEF EXECUTIVE OFFICER 54 | TIR Systems Ltd. | Annual Report D U C E D I S A B I L I T Y G L A R E B Y I N T R O D U C I N G A M E A S U R A B L E A M O U N T O F S T R AY L I G H T I N T H E E Y E . DISABILITY GLARE FACTOR (DGF) -- A MEASURE OF THE VISIBILITY OF A TASK IN A GIVEN LIGHTING INSTALLATION IN COMPARISON WITH ITS VISIBILITY UNDER REFERENCE LIGHTING CONDITIONS, EXPRES SED IN TERMS OF THE RATIO OF LUMINANCE CONTRASTS HAVING AN EQUIVALENT EFFECT UPON TASK VISIBILITY. THE DEFINITION OF THE DGF TAKES ACCOUNT OF T HE EQUIVALENT VEILING LUMINANCE PRODUCED IN THE EYE BY THE PATTERN OF LUMINANCES IN THE TASK SURROUND. DISCOMFORT GLARE -- GLARE PRODUCING DISCOMF O R T. I T D O E S N O T N E C E S S A R I LY I N T E R F E R E W I T H V I S U A L P E R F O R M A N C E O R V I S I B I L I T Y. DISCOMFORT GLARE FACTOR -- THE NUMERICAL ASSESSMENT OF THE MANAGEMENT DISCUSSION A N D A N A LY S I S OVERVIEW 7,796 6,635 6,163 00 01 02 REVENUE IN THOUSANDS 96÷7.796=*12.314 TIR’s business is to provide lighting solutions to the Architectural, Transportation, and Corporate Identity markets. TIR segments its products within these markets into two categories: 1) its Light Pipe based business that uses traditional light sources, and 2) Solid State Lighting (SSL) that uses optoelectronic Light Emitting Diodes (LED’s) as the light source. A R C H I T E C T U R A L Building highlighting, remote access lighting, such as MRI rooms and ammunition depots, swimming pools, backlighting of ceilings and walls, columns and architectural elements. T R A N S P O R T A T I O N Tunnels, underpasses, transit platforms, service pits, and ceilings and escalators in terminal buildings. TIR’s SSL products currently ser ve two market segments. C O R P O R A T E I D E N T I T Y National chains for petroleum, fast food, convenience stores and big box retailers. A R C H I T E C T U R A L Landscape, building and façade highlighting and delineation. TIR has built a distribution network for all its products by appointing lighting manufacturer’s representatives and distributors throughout Nor th America, Europe and Asia for both its Light Pipe and SSL products. Corporate Identity customers are directly marketed to, as products need to be delivered to the end user or customer through the customer’s existing supply chain. Through the development of The Light Pipe™, TIR has developed key competencies in core technologies, which enable advanced lighting solutions. TIR launched a new strategy in late fiscal 2000 to take advantage of these key skills and technology and apply them to the new emerging SSL. SSL is the most significant advancement in the lighting industry since the invention of the electric light bulb 115 years ago. SSL uses High Brightness Light Emitting Diodes (HB LED’s), which are the most efficient source of artificial light to date and represents a major paradigm shift in the lighting industry, leading to major energy and maintenance savings and enabling applications not possible before now. TIR is developing and integrating high efficiency power supplies, full-range digital control, advanced optical films, thin coatings and next generation communications protocols to enable SSL. To assist the Company’s efforts, TIR received a funding commitment that may be applied from January 2001, totaling $6.6 million from the Government of Canada to suppor t the development of SSL Enabling Technology and completed financing of $2.5 million in September 2001. Traditional ARCHITECTURAL TIR’s architectural Light Pipe business is based on two core Light Pipe products: T U B U L A R S E R I E S circular shaped, this product is intended primarily for outdoor applications such as building highlighting, delineation, feature lighting and backlighting. O V O I D S E R I E S using a 1000W light source, this product is a larger more power ful Light Pipe line used primarily indoors for swimming pools, backlit ceilings and general lighting. TIR Systems Ltd. | Annual Report | 55 Revenues from these lighting solutions have historically accounted for a substantial por tion of the Company’s revenue. Typically, the Company receives a purchase order from the electrical or general contractor for the construction project utilizing Light Pipe. The Company usually completes the project within four months of receiving the purchase order. Larger orders are accounted for using the percentage of completion revenue recognition policy based on total costs incurred over the total estimated costs to complete the contract. The Company’s revenue is dependent, in large part, on a limited number of orders from a limited number of customers. As a result, any substantial delay in obtaining new orders from the customer base could have an adverse effect on the Company’s results of operations. As a result of these and other factors, the Company’s results of operations have fluctuated in the past and may continue to fluctuate from period-to-period. TRANSPORTATION Solid State Lighting CORPORATE IDENTITY In the Transpor tation market, the Company offers application specific solutions for tunnels, transit platforms, escalators and ser vice pits by providing market specific versions of its core Light Pipe products packaged with additional complementar y products as required. Revenues for these lighting solutions can account for a substantial por tion of the Company’s revenue due to the large nature of some tunnel projects. Typically, the Company receives a purchase order from the electrical or general contractor for the construction project utilizing Light Pipe. The Company usually completes the project within four to twelve months from receiving the purchase order. Larger orders are accounted for using the percentage of completion revenue recognition policy based on total costs incurred over the total estimated costs to complete the contract. The Company’s revenue is dependent, in large part, on very few orders from a handful of customers. As a result, any substantial delay in obtaining new orders from the customer base could have an adverse effect on the Company’s results of operations. As a result of these and other factors, the Company’s results of operations have fluctuated in the past and may continue to fluctuate from period-to-period. The Company has improved and rebranded its ChipStrip product as LightMark™ to ser ve the Corporate Identity market. This product currently provides solutions for building canopy delineation to a variety of retailers including: petroleum, fast food restaurants and convenience stores. This product is offered in five colors: blue, green, red, yellow and amber. The Company has established a dedicated product and market management team to target opportunities for this market. The LightMark™ product is an ideal neon replacement that utilizes solid state technology to offer substantial energy and maintenance savings. Customers for these products are interested in enhancing their corporate image while they reap the operational benefits noted above. The Company is investing into the development of fur ther products for this market. The Company expects to receive purchase orders from the end user for their annual requirements. The Company manufactures the product, inventories the product, and ships to the customer at their request. These orders are accounted for using the completed contract revenue recognition policy. Revenue and costs are only recognized when the customer takes possession of the goods. As this business is new in fiscal 2002 its revenue and profit contribution is minimal. The Company, based on receiving a substantial order late in fiscal 2002 expects that this business will contribute a significant portion of revenues for fiscal 2003. The Company’s revenue is dependent on ver y few orders from a handful of customers. As a result, any substantial delay in obtaining new orders from the customer base could have an adverse effect on the Company’s results of operations. LIGHTMARK™ IS AN IDEAL NEON REPLACEMENT OFFERING S U B S TA N T I A L ENERGY AND MAINTENANCE S AV I N G S . 56 | TIR Systems Ltd. | Annual Report ARCHITECTURAL TRADITIONAL – TRANSPORTATION 43.7 39.6 44.2 00 01 02 GROSS PROFIT PERCENT 96÷44.2=*2.172 The Architectural business targets landscape, building and façade highlighting and delineation applications. The Company’s products for this market include a version of Light Pipe product that uses a SSL source. In addition, the Company is introducing its Destiny Series of products to serve this market. Currently the Destiny Series has three products, the LightPole, LightBar and ColorWash™. Destiny ColorWash™ has been introduced by the Company and is expected to commence shipping in the second quar ter of fiscal 2003. Revenues from this business have not been significant in the past. However, it is seen as a high growth area for the Company and as such the majority of current and future product development targets these applications. To date the Company has developed a power supply, drivers and control software and hardware to manage the red, green and blue LED’s to produce any colour light. These building blocks can be leveraged into fur ther product releases. The Company expects to receive purchase orders from the electrical or general contractor for the construction project utilizing these products. Larger orders are accounted for using the percentage of completion revenue recognition policy based on total costs incurred over the total estimated costs to complete the contract. R E S U LT S O F O P E R AT I O N S The Company was able to attract significant orders from this product line in fiscal 2002. These orders were in excess of $4M of which $3M was recognized as revenue in fiscal 2002. The remaining $1M from these specific orders will be recognized in the first quarter of fiscal 2003. The Company has recently launched its 12" ovoid light pipe product into the transportation market for transit platforms and backlighting of transit stations. This additional revenue stream will allow the Company to achieve a reasonable order flow and revenue from this business. SSL – ARCHITECTURAL The Company introduced Destiny ColorWash™ product at Lightfair in San Francisco. This product, based on solid state lighting technology, was well received by Lighting Designers and Architects. The Company expects this product, to be shipping in the first half of fiscal 2003, will add to quote activity and order flow for this market. The Company intends to develop additional products that will add to the volumes in this market. The product family for this market is being called the Destiny Series. These products are expected to contribute to the overall revenue increase for the Company. SSL – CORPORATE IDENTITY Year Ended September 30, 2002 Compared to the Year Ended September 30, 2001 TRADITIONAL – ARCHITECTURAL The uncer tainty in the economy caused a few key orders to be delayed in the first half of the fiscal year. During the third quar ter of fiscal 2002, the Company experienced a larger order volume than the first half of fiscal 2002. This allowed this part of the business to contribute to the overall revenue growth for fiscal 2002. The Company continues to build its sales oppor tunities for its main markets in this business: building delineation, backlighting and swimming pools. The Company’s goal for this new market was to receive one beta site order from a large retail chain. This goal was more than achieved with the receipt of a $9M purchase order from BP, which was announced early in the fourth quarter. This order is to supply LightMark™ to 850 BP sites in the USA. This order is expected to contribute to the Company’s revenue for the first three quarters of fiscal 2003. The Company will increase its overheads accordingly to suppor t this substantial order. These overheads, additional office and manufacturing space, personnel and related expenses, have been added by the Company on a shor t term contract basis. TIR Systems Ltd. | Annual Report | 57 BP is currently in the second year of installing LightMark™ for its re-imaging program. BP expects that it will continue to install a delineation lighting product on the balance of sites that are to be re-imaged by 2004. The Company is actively pursuing the contract to supply the remaining sites. If the Company is successful in securing the continued BP business, the increased overheads will become more long term in nature. The Company is also actively marketing the LightMark™ product to additional Corporate Identity customers. The Company’s goal this coming year is to develop pilot programs with additional multi-site retailers that would provide fur ther volume orders. NET LOSS REVENUE The Company’s net loss was ($535,800) for the year ended September 30, 2002. This compares to a net loss of ($384,300) for the year September 30, 2001. This equates to a per share loss of ($0.04) to a per share loss of ($0.03) for the same time period. The increase in the loss was primarily due to the increased expenditures to $4.0M from $2.9M, an increase of 39%. This increase was primarily offset by an increased gross profit of $1.0M that was generated from the $1.6M in increased revenues in fiscal 2002 as compared to fiscal 2001. The Company expenditures in fiscal 2002 were slightly higher than budget due to the late fiscal year expenditures to increase staff and facilities that were needed to ramp up for the increased revenue expected in fiscal 2003 as a result of the large order received in late fiscal 2002 from BP for $9M wor th of LightMark™. As a result of the forecasted increase in revenues for fiscal 2003, the Company expects to show a profit in fiscal 2003. Revenue increased to $7.80 million from $6.16 million, an increase of 27% for the year ended September 30, 2002 as compared to the year ended September 30, 2001. This increase was attributable to a better order flow from initial signs of an economic recovery and the revenue generated from three significant transpor tation orders received in fiscal 2002. The Company expects that its revenues for fiscal 2003 will at least double. This confidence is a direct result of the $9M order from BP for our LightMark™ product and the increased back log and sales opportunities in the balance of the business. At September 30, 2002 the Company had recognized a small amount of revenue on the BP contract. It is expected that the remaining contract revenue will be recognized in fiscal 2003. DIRECT COSTS Direct costs were 55.8% of revenue for the year September 30, 2002 as compared to 60.4% for the year September 30, 2001. Direct costs include labour, materials, commissions, shipping, warranty and duty and brokerage related to a project. The Company achieved a lower direct cost for fiscal 2002 as compared to fiscal 2001 as a result of the higher revenue achieved and the ef ficiencies in supply from the sourcing of product for two large transpor tation jobs that were both produced in the fourth quarter of fiscal 2002. In addition, the higher than budgeted US exchange rate allow a better Canadian dollar revenue total on the large transportation orders. For fiscal 2003 the Company expects that the direct costs will vary as a result of the increase in diversity of our product mix forecasted for fiscal 2003. This product mix will include several new products, which during their introduction phase will affect direct costs until efficiencies are reached in manufacturing. ONE OF OUR GOALS THIS COMING YEAR IS TO DEVELOP PILOT PROGRAMS WITH ADDITIONAL M U LT I - S I T E R E TA I L E R S T H AT WOULD PROVIDE FURTHER VOLUME ORDERS FOR L I G H T M A R K T M. 58 | TIR Systems Ltd. | Annual Report 1,112.2 610.9 186.6 00 01 02 R&D BEFORE RECOVERY IN THOUSANDS 96÷1.1122=*86.315 Research and development expenses were $693,500 or 8.9% of revenue for the year September 30, 2002 and $343,500 or 5.6% of revenue for the year September 30, 2001. This represents an increase of $350,000 or 102% as compared to the same period in 2001. These figures are net of Technology Partnerships Canada recovery of $418,700 and $267,400 respectively. With these figures added back, the Company spent $1,112,200 or 14.3% of revenue in fiscal 2002 as compared to $610,900 or 9.9% in fiscal 2001. This increase in R & D expenditure is a direct result of increased product development efforts. The results of the development programs for fiscal 2002 were the improvements to the LightMark™ product that allowed the Company to secure the BP purchase order. The development of a 40 watt SSL power supply, optical techniques for SSL, LED drivers and an integrated control board allowed the Company to substantially complete its new ColorWash™ product in fiscal 2002. This product will be available for shipment in the first half of fiscal 2003. The power supply, LED drivers and control board are base building blocks that will allow the Company to accelerate its new product introductions in fiscal 2003. These accomplishments will be the primar y drivers of the expected revenue growth in fiscal 2003 with LightMark™ suppor ting our SSL Corporate Identity market and the Destiny Series supporting our SSL Architectural market. For fiscal 2003 the Company continues to commit the majority of its resources to the Architectural and Corporate Identity SSL markets. This will result in an increase in expenditures in research and development in fiscal 2003 by a range of 80% to 120%. SALES AND MARKETING Sales and marketing expenses were $2,150,000 or 27.6% of revenue for the year September 30, 2002 and $1,742,400 or 28.3% of revenue for the year September 30, 2001. The Company’s increase in expenditures for sales and marketing of $407,600 were primarily related to increased marketing costs to support the new products, LightMark™ and ColorWash™. This increase was attributable to increased staff and the initial marketing launch costs for the Destiny Series. RESEARCH AND DEVELOPMENT The Company anticipates that the dollar amounts of its sales and marketing expenses will continue to increase as a result of the Company’s commitment to the SSL Corporate Identity and Architectural markets. These increases will be spent on increased staff and marketing launches for the new SSL products. G E N E R A L A N D A D M I N I S T R AT I V E General and administrative expenses were $1,154,100 or 14.8% of revenue for the year September 30, 2002 and $797,600 or 12.9% of revenue for the year September 30, 2001. Total general and administrative expenses represent an increase of $356,500 for the year September 30, 2002 as compared to the same period in 2001. The increase is attributable to increased administrative staff and activity to support the Company’s current and expected growth. The Company expects that the dollar amounts will continue to increase as the Company expands its staf fing, information systems and other administrative requirements necessar y to suppor t the revenue growth. In addition, the Company expects that the increased research and development will result in a need for additional legal expenses for intellectual property protection filing and advice. OTHER INCOME (EXPENSE) Other income (expense) was $19,600 for the year September 30, 2002 as compared to $60,100 for the year September 30, 2001. Other income (expense) is comprised of interest income, interest expense and foreign exchange gain and loss. The majority of the gain for fiscal 2002, $13,200, was comprised of interest income as opposed to the majority of the gain in fiscal 2001, $57,400, being comprised of a foreign exchange gain. The Company is not expecting any profit contribution in this categor y for fiscal 2003 due to the anticipated increased interest expenses to finance the need for working capital required for the anticipated growth. TIR Systems Ltd. | Annual Report | 59 L I Q U I D I T Y A N D C A P I TA L R E S O U R C E S The Company finances its operations and capital expenditures with cash generated from operations, lines of credit and equity financings. At September 30, 2002, the Company had a net cash deficiency of $76,400 and working capital of $2.36 million as compared to cash equivalents of $2,406,800 and working capital of $3.28 million at September 30, 2001. Cash used in operating activities was $1,874,800 for the year ended September 30, 2002 compared to cash provided of $571,100 for the year ended September 30, 2001. The net outflow of cash from operating activities is primarily due to an increase of accounts receivable items of $1,650,500 and a $311,000 cash adjusted net loss. Other significant changes in non-cash working capital items is a cash use of $1,795,300 for an increase in inventor y balances and this was offset by an increase in accounts payable items of $1,863,400. These increases were a direct result of the inventory purchases for the BP purchase order. The Company anticipates that due to the large nature of the contracts that are being processed by the Company at September 30, 2002, the BP purchase order, the Minnesota and City of Los Angeles tunnel projects and the trend to larger orders, working capital components will continue to var y throughout fiscal 2003. The Company is discussing further lines of credit with its bank in case these arrangements will be needed. Cash provided from financing activities was $228,000 for the year ended September 30, 2002 as compared to $2,290,900 for the year ended September 30, 2001. During this fiscal year the funds were provided through the exercise of options and warrants, $89,300, and through net proceeds from the Company’s operating line, $138,700. Cash used in investing activities was $697,700 for the year ended September 30, 2002 as compared to $455,200 for the year ended September 30, 2001. These amounts were for the purchases of fixed assets. Purchases of fixed assets include computer hardware and software, plant equipment and testing equipment for use in research and development activities. These expenditures were needed to suppor t the increased staff levels that the Company experienced during fiscal 2002. In addition, the Company set up an additional 17,000 square foot facility to manufacture and suppor t the BP purchase order. This facility required the plant equipment, office equipment and furniture needed to establish the facility. The Company anticipates that capital expenditures in fiscal 2003 will be similar to that in fiscal 2002. The requirements for capital expenditures in fiscal 2003 may be greater if the Company could source one existing facility that can accommodate the entire business in one facility. Existing sources of liquidity at September 30, 2002 include $62,300 of cash and cash equivalents and $861,300 available on the current operating line of $1,000,000 from a chartered bank. In addition, this operating line has an ability to expand to $1,500,000 if certain conditions are met. The Company believes that future cash flows, in addition to funds on hand and its borrowing capacity under the line of credit are sufficient to fund its cash requirements. Commensurate with its past and expected future growth, the Company may increase, from time to time, its borrowing facility under its operating line of credit to support its operations. The Company has no material additional commitments other than operating leases. The Company intends to obtain additional debt financing to fund future growth and its investing activities, par ticularly the purchase of capital assets, which may or may not be available on attractive terms, or at all. At this time the Company is investigating an equity financing to fund an acceleration of its new strategy of development of intellectual proper ty and products for the emerging Solid State Lighting industry. This event may or may not happen depending on the availability of funds under acceptable terms and conditions. 3,998 2,884 2,482 00 01 02 OPERATING EXPENSES IN THOUSANDS 96÷3.998=*24.012 60 | TIR Systems Ltd. | Annual Report C A PA C I T Y O F A S I N G L E S O U R C E O F B R I G H T N E S S , S U C H A S A L U M I N A I R E , I N A G I V E N V I S U A L E N V I R O N M E N T F O R P R O D U C I N G D I S C O M F O R T ( T H I S T E R M I S O B S O L E T E A N D I S R E TA I N E D O N LY F O R R E F E R E N C E A N D L I T E R AT U R E S E A R C H E S ) . S E E G L A R E A N D D I S C O M F O R T G L A R E . DISCOMFORT GLARE RATING (DGR) -- A NUMERIC A L A S S E S S M E N T O F T H E C A PA C I T Y O F A N U M B E R O F S O U R C E S O F L U M I N A N C E , S U C H A S L U M I N A I R E S , I N A G I V E N V I S U A L E N V I R O N M E N T F O R P R O D U C I N G D I S C O M F O R T. I T I S T H E N E T E F F E C T O F T H E I N D I V I D U A L VA L U E S O F T H E I N D E X O F S E N S AT I O N F O R A L L L U M I N O U S A R E A S I N T H E F I E L D O F V I E W. S E E D I S C O M F O R T G L A R E FACTOR. D I S TA L S T I M U L I - - A N Y O F T H E P O I N T S , L I N E S A N D S U R F A C E S A N D T H R E E - D I M E N S I O N A L A R R AY S O F S C AT T E R I N G PA R T I C L E S W H I C H O N E C A N I D E N T I - MANAGEMENT’S RESPONSIBILITY AND AUDITORS’ REPORT MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS Management is responsible for the preparation of the financial statements and for the consistency therewith of all other financial and operating data presented in this Annual Repor t. In preparation of these financial statements, Management selects appropriate accounting policies and uses its judgement and best estimates to repor t events and transactions as they occur. Management has determined such amounts on a reasonable basis in order to ensure that the financial statements are presented fairly, in all material respects. Management maintains a system of internal controls to ensure, on a reasonable and cost ef fective basis, that the Company’s assets are safeguarded and to facilitate the preparation of relevant, reliable, and timely financial information. External auditors appointed by the shareholders have examined the financial statements. The Audit Committee, consisting entirely of non-management directors, has reviewed these statements with Management and the auditors and has repor ted to the Board of Directors. The Board has approved the financial statements. LEONARD HORDYK PRESIDENT AND CEO ISSA NAKHLEH CFO TO THE SHAREHOLDERS O F T I R S Y S T E M S LT D . We have audited the balance sheets of TIR Systems Ltd. as at September 30, 2002 and 2001 and the statements of loss and deficit and cash flows for the years then ended. These financial statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and per form an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In our opinion, these financial statements present fairly, in all material respects, the financial position of the company as at September 30, 2002 and 2001 and the results of its operations and its cash flows for the years then ended in accordance with Canadian generally accepted accounting principles. As required by the Company Act for British Columbia, we repor t that, in our opinion, these principles have been applied on a consistent basis. C H A R T E R E D A C C O U N TA N T S VA N C O U V E R , C A N A D A NOVEMBER 8, 2002. TIR Systems Ltd. | Annual Report | 61 F Y I N T H E P H Y S I C A L S PA C E I N F R O N T O F T H E E Y E A N D W H I C H F O R M O P T I C A L I M A G E S O N T H E R E T I N A . E A C H E L E M E N T O F A S U R FA C E O R V O L U M E TO W H I C H A N E Y E IS EXPOSED SUBTENDS A SOLID ANGLE AT THE ENTRANCE PUPIL. SUCH ELEMENTS OF SOLID ANGLE MAKE UP THE FIELD OF VIEW, AND EACH HAS A SPECIFIABLE L U M I N A N C E A N D C H R O M AT I C I T Y. P O I N T S A N D L I N E S A R E S P E C I F I C C A S E S W H I C H H AV E T O B E D E A LT W I T H I N T E R M S O F T O TA L I N T E N S I T Y A N D I N T E N S I T Y P E R U N I T LENGTH. DISTRIBUTION TEMPERATURE -- (OF A LIGHT SOURCE) THE ABSOLUTE TEMPERATURE OF A BLACKBODY WHOSE RELATIVE SPECTRAL DISTRIBUTION IS M O S T N E A R LY T H E S A M E I N T H E V I S I B L E R E G I O N O F T H E S P E C T R U M A S T H AT O F T H E L I G H T S O U R C E . DOMINANT WAVELENGTH -- (OF A LIGHT), AD THE WAVE- BALANCE SHEETS TIR SYSTEMS LTD. INCORPORATED UNDER THE LAWS OF BRITISH COLUMBIA AS AT SEPTEMBER 30 ($) A S S E T S [note 5] 2002 2001 CURRENT Cash and cash equivalents Accounts receivable Unbilled receivables Government grants receivable [note 8] Inventory [note 3] Prepaid expenses T O TA L C U R R E N T A S S E T S $ 62,300 1,509,200 1,798,000 383,100 2,433,500 108,600 6,294,700 1,138,500 29,500 7,462,700 $ 2,406,800 758,800 984,300 296,700 638,200 78,100 5,162,900 669,100 26,000 5,858,000 Capital assets [note 4] Patents T O TA L A S S E T S LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT Bank indebtedness [note 5] Accounts payable Accrued liabilities Customer deposits T O TA L C U R R E N T L I A B I L I T I E S 138,700 1,237,400 2,509,600 52,800 3,938,500 — 1,053,000 830,600 3,700 1,887,300 Commitments [note 10] SHAREHOLDERS’ EQUITY Share capital [note 6] Limited partnership equity [note 6[a]] Deficit T O TA L S H A R E H O L D E R S ’ E Q U I T Y T O TA L L I A B I L I T I E S A N D S H A R E H O L D E R S ’ E Q U I T Y 6,571,900 — (3,047,700) 3,524,200 7,462,700 5,082,600 1,400,000 (2,511,900) 3,970,700 5,858,000 See accompanying notes On behalf of the Board: DIRECTOR DIRECTOR 62 | TIR Systems Ltd. | Annual Report LENGTH OF RADIANT ENERGY OF A SINGLE FREQUENCY THAT, WHEN COMBINED IN SUITABLE PROPORTION WITH THE RADIANT ENERGY OF A REFERENCE STANDARD, MATCHES THE COLOR OF THE LIGHT. SEE COMPLEMENTARY WAVELENGTH. DOWNLIGHT -- A SMALL DIRECT LIGHTING UNIT WHICH DIRECTS THE LIGHT DOWNWARD AND CAN BE RECESSED, SURFACE MOUNTED OR SUSPENDED. DOWNWARD COMPONENT -- THAT PORTION OF THE LUMINOUS FLUX FROM A LUMINAIRE E M I T T E D AT A N G L E S B E L O W T H E H O R I Z O N TA L . S E E U P WA R D C O M P O N E N T. DRIVING BEAM -- SEE UPPER (DRIVING) BEAMS. DUAL HEADLIGHTING -- SYSTEM HEADLIGHTING BY MEANS OF TWO DOUBLE UNITS, ONE MOUNTED ON EACH SIDE OF THE FRONT END OF A VEHICLE. EACH UNIT CONSISTS OF TWO SEALED BEAM S TAT E M E N T S O F LOSS AND DEFICIT YEAR ENDED SEPTEMBER 30 ($) 2002 2001 R E V E N U E [note 7] Cost of sales Gross profit EXPENSES $ 7,796,200 4,354,000 3,442,200 2,150,000 1,154,100 1,112,200 (418,700) 3,997,600 (555,400) (1,800) 21,400 (535,800) (2,511,900) (3,047,700) (0.04) $ 6,162,500 3,723,400 2,439,100 1,742,400 797,600 610,900 (267,400) 2,883,500 (444,400) (2,000) 62,100 (384,300) (2,127,600) (2,511,900) (0.03) Sales and marketing General and administrative Research and development Less: government assistance [note 8] Loss from operations Interest expense Other income NET LOSS Deficit, beginning of year D E F I C I T, E N D O F Y E A R E A R N I N G S ( L O S S ) P E R S H A R E [note 6[d]] Basic and diluted See accompanying notes TIR Systems Ltd. | Annual Report | 63 L A M P S M O U N T E D I N A S I N G L E H O U S I N G . T H E U P P E R O R O U T E R L A M P S M AY H AV E T W O F I L A M E N T S S U P P LY I N G T H E L O W E R B E A M A N D PA R T O F T H E U P P E R B E A M , R E S P E C T I V E LY. T H E L O W E R O R I N N E R L A M P S H AV E O N E F I L A M E N T P R O V I D I N G T H E P R I M A R Y S O U R C E O F L I G H T F O R T H E U P P E R B E A M . DUSTPROOF LUMINAIRE - A LUMINAIRE SO CONSTRUCTED OR PROTECTED THAT DUST WILL NOT INTERFERE WITH ITS SUCCESSFUL OPERATION. DUST-TIGHT LUMINAIRE -- A LUMINAIRE SO CONSTRUCTED THAT DUST WILL NOT ENTER THE ENCLOSING CASE. EFFECTIVE CEILING CAVITY REFLECTANCE -- A NUMBER GIVING THE COMBINED R E F L E C TA N C E E F F E C T O F T H E WA L L A N D C E I L I N G R E F L E C TA N C E O F T H E C E I L I N G C AV I T Y. S E E C E I L I N G C AV I T Y R AT I O . EFFECTIVE FLOOR CAVITY REFLECTANCE - S TAT E M E N T S O F CASH FLOWS YEAR ENDED SEPTEMBER 30 ($) O P E R AT I N G A C T I V I T I E S 2002 2001 Net loss Adjustments for non-cash items: Depreciation and amortization Changes in non-cash working capital balances: Accounts receivable Unbilled receivables Government grants receivable Inventory Prepaid expenses Accounts payable Accrued liabilities Customer deposits C A S H P R O V I D E D B Y ( U S E D I N ) O P E R AT I N G A C T I V I T I E S FINANCING ACTIVITIES $ (535,800) 224,800 (750,400) (813,700) (86,400) (1,795,300) (30,500) 184,400 1,679,000 49,100 (1,874,800) 138,700 89,300 — 228,000 (690,100) (7,600) (697,700) (2,344,500) 2,406,800 62,300 1,800 $ (384,300) 144,700 15,300 541,800 (296,700) 88,500 14,200 522,800 148,900 (224,100) 571,100 (29,600) 920,500 1,400,000 2,290,900 (448,000) (7,200) (455,200) 2,406,800 — 2,406,800 2,000 Net advances (repayments) of bank indebtedness Issue of common shares Issue of limited partnership units CASH PROVIDED BY FINANCING ACTIVITIES INVESTING ACTIVITIES Acquisition of capital assets Acquisition of patents CASH USED IN INVESTING ACTIVITIES I N C R E A S E ( D E C R E A S E ) I N C A S H A N D C A S H E Q U I VA L E N T S Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year S U P P L E M E N TA L D I S C L O S U R E S O F C A S H F L O W I N F O R M AT I O N Cash paid during year for interest See accompanying notes 64 | TIR Systems Ltd. | Annual Report - P F C A N U M B E R G I V I N G T H E C O M B I N E D R E F L E C TA N C E E F F E C T O F T H E F L O O R C AV I T Y. S E E F L O O R C AV I T Y R AT I O . EFFECTIVE INTENSITY -- A QUANTITY CONVENT I O N A L LY D E F I N E D F O R A F L A S H I N G L I G H T B Y W H E R E T H E S O U R C E H A S C O N S TA N T M A G N I T U D E O V E R A T I M E D U R AT I O N . F O R A T I M E - VA RY I N G S O U R C E 1 ( T ) , T H E U N I T O F T H E C A N D E L A . T H E T I M E S T A N D T A R E C H O S E N T O M A X I M I Z E T H E C A L C U L AT E D E F F E C T I V E I N T E N S I T Y. I T I S T H E N F O U N D T H AT T H E A C TU A L I N T E N S I T Y I AT TIME T OR T IS EQUAL TO THE CALCULATED EQUIVALENT INTENSITY EFFICACY -- SEE LUMINOUS EFFICACY OF A SOURCE OF LIGHT AND SPECTRAL LUMINOUS EFFICACY OF RADIANT FLUX. EFFICIENCY -- SEE LUMINAIRE EFFICIENCY, LUMINOUS EFFICACY OF A SOURCE OF LIGHT AND SPECTRAL LUMINOUS EFFICIENCY NOTES TO FINANCIAL S TAT E M E N T S |01| N AT U R E O F B U S I N E S S A N D B A S I S O F P R E S E N TAT I O N TIR Systems Ltd. (the “Company”) develops, manufactures and markets traditional and solid state lighting products. The Company distributes its products into the architectural, corporate identity and transportation markets worldwide through an established network of representatives, distributors and direct sales. The Company is headquartered in Vancouver, British Columbia, and was incorporated under the laws of the Province of British Columbia on September 18, 1982. The 2001 financial statements included the accounts of TIR Systems Ltd. and TIR Systems Limited Partnership and were presented on a consolidated basis. In 2002, the financial statements are no longer presented on a consolidated basis because the TIR Systems Limited Par tnership was dissolved on June 11, 2002. The 2002 financial statements include the accounts of TIR Systems Ltd. for the year ended September 30, 2002 and the accounts of TIR Systems Limited Par tnership for the period ended June 11, 2002 [note 6[a]]. |02| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES These financial statements have been prepared in accordance with generally accepted accounting principles and reflect the following significant accounting policies. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of 90 days or less to be cash equivalents. Cash equivalents are carried at cost, plus accrued interest, which approximates market value. Inventory Inventory is valued at the lower of cost, determined on a first-in, first-out basis, and market. Market is considered to be replacement cost for raw materials and net realizable value for work in progress and finished goods. Capital Assets Capital assets are depreciated over their estimated useful lives on a declining balance basis at the following rates: Plant equipment EDP software and research and development equipment Furniture and fixtures Office and computer equipment 20% 30% 20 – 30% 20 – 30% Leasehold improvements are amor tized over the term of the related lease plus the first renewal option. TIR Systems Ltd. | Annual Report | 65 Research and Development Costs The company expenses all research and development expenditures, except development costs relating to specific products that have a clearly defined future market, which are deferred and amortized over the period in which the benefits are expected to accrue. Research and development expenditures are reduced by government assistance. Patents Patent costs are amortized over the lesser of the estimated useful life of the related technology and the life of the patent commencing with commercial production. If management determines that development of products to which patent costs relate is not reasonably certain, or that costs exceed recoverable value, such costs are charged to operations. I n c o m e Ta x e s The Company follows the liability method of accounting for income taxes. Under this method, future tax assets and liabilities are determined based on the difference between the accounting and tax bases of assets and liabilities using substantially enacted tax rates that will be in effect for the year in which the differences are expected to reverse. Government Assistance During the course of certain research and development programs, financial assistance is received from the government. The Company accounts for such assistance as either a recover y of costs incurred or a reduction of the cost of the related asset acquired. Financial Instruments The fair values of financial instruments approximate their carrying values, unless otherwise stated. Hedging Activity The Company uses for ward contracts to reduce its exposure to foreign currency exchange rate fluctuations. Gains and losses on these contracts, which constitute effective hedges, are deferred as a cost or revenue component of the related transaction. Foreign Currency Translation The Company follows the temporal method of accounting for the translation of foreign currency amounts into Canadian dollars. Under this method, all monetary assets and liabilities expressed in foreign currencies are translated at rates of exchange in effect at the end of the year. All other assets and liabilities are translated at the rates prevailing at the dates the assets were acquired or liabilities incurred. The resulting foreign currency translation gains and losses are included in the determination of net income, except for unrealized foreign currency gains and losses on long-term monetary assets and liabilities, which are amortized over the remaining lives of the related items on a straight-line basis. Revenues and expenses are translated at the exchange rate for the period. Revenue Recognition The Company derives its revenue from the sale of traditional and solid state lighting products. Revenue is comprised of sales of standard products and sales related to one time orders for project configured standard products. Standard product revenues are recognized upon shipment of the product. Project configured standard product revenues are recognized using a percentage of completion basis. A provision is made on a current basis to fully recognize any anticipated losses. Stock Based Compensation The Company grants stock options to directors and employees pursuant to a stock option plan described in note 6[b]. No compensation is recognized for this plan when stock options are granted or extended. Any consideration received on exercise of stock options is credited to share capital. If common shares are repurchased, the excess or deficiency of the consideration paid over the carrying amount of the common shares cancelled is charged or credited to contributed surplus or retained earnings. |03| INVENTORY ($) 2002 2001 Raw materials Work in progress Finished goods $ 2,084,100 11,200 338,200 2,433,500 $ 466,600 28,000 143,600 638,200 66 | TIR Systems Ltd. | Annual Report |04| C A P I TA L ASSETS ACCUMULATED DEPRECIATION AND AMORTIZATION ($) COST NET BOOK VALUE 2002 Plant equipment EDP software and research and development equipment Furniture and fixtures Office and computer equipment Leasehold improvements 2001 $ 488,500 575,100 407,100 632,200 163,000 2,265,900 $ 265,000 213,800 257,300 274,100 117,200 1,127,400 223,200 140,300 226,300 215,100 101,800 906,700 $ 223,500 361,300 149,800 358,100 45,800 1,138,500 141,100 221,100 107,900 148,500 50,500 669,100 Plant equipment EDP software and research and development equipment Furniture and fixtures Office and computer equipment Leasehold improvements 364,300 361,400 334,200 363,600 152,300 1,575,800 |05| BANK INDEBTEDNESS The Company entered into a new banking agreement during the year, providing them with a $1,000,000 operating loan, a $500,000 packing loan to assist in the financing of cost of goods sold, and a $435,000 foreign exchange loan to purchase foreign forward exchange contracts. The loans bear interest at prime plus 1% [prime rate at September 30, 2002 – 4.5%] and are collateralized by a general security agreement covering all assets of the Company and an assignment of inventory and insurance proceeds. As at September 30, 2002, $138,700 was outstanding under the operating loan. The loan agreement contains restrictive covenants with respect to maintenance of cer tain financial ratios. As at September 30, 2002, the Company was in compliance with the covenants. |06| SHARE C A P I TA L Authorized 100,000,000 common shares without par value 10,000,000 preferred shares without par value Issued and Outstanding Common Shares NUMBER OF SHARES AMOUNT ($) BALANCE, SEPTEMBER 30, 2000 11,558,205 2,200,000 13,758,205 2,800,000 122,942 100,000 16,781,147 $ 4,162,100 920,500 5,082,600 1,400,000 39,300 50,000 6,571,900 Issued for cash pursuant to private placement, net of share issue costs of $179,500 BALANCE, SEPTEMBER 30, 2001 Issued pursuant to acquisition of Limited Partnership units Issued pursuant to exercise of options Issued pursuant to exercise of broker warrants BALANCE, SEPTEMBER 30, 2002 a) TIR Systems Limited Partnership On July 6, 2001, TIR Systems Limited Partnership (the “partnership”) was formed under a Limited Partnership Agreement to carry on the sales and marketing of certain of the company’s licensed applications of its products. The par tnership sold 1,400 Limited Par tnership units at a price of $1,000 per unit, raising $1,400,000. Through a series of agreements the Company was contracted to provide management services, financial support and facilities necessary to conduct the business of the partnership and accordingly the accounts of the partnership were consolidated with those of the Company. TIR Systems Ltd. | Annual Report | 67 Provided the Company was not in default of its obligations under the agreements referred to above, the Company had the option to purchase all of the limited partnership interest in exchange for common shares of the company. The option was exercisable after March 1, 2002 and prior to December 31, 2003, in exchange for the issuance of 2,800,000 common shares of the Company. As a result of this option the par tnership equity was presented within shareholders’ equity of the Company. In 2002, the Company exercised its option to re-acquire the Limited Partnership units by issuing 2,800,000 common shares to the Limited Partners in return for the partnership units. As a result of this transaction all license rights granted to the partnership were returned to the Company and the par tnership was dissolved on June 11, 2002. b) Stock Option Plan On October 27, 1994 and subsequently amended on Februar y 7, 2000, the shareholders approved a stock option plan, to reward employees and directors who contribute to the continued success of the Company. In accordance with the plan, the Company may grant options to purchase up to a maximum of 1,709,641 common shares of the Company at any one point in time. On Februar y 12, 2001, the shareholders approved a new stock option plan. In accordance with the plan, the Company may grant options to purchase up to a maximum of 600,000 common shares of the Company at any one point in time. On Februar y 13, 2002 the Company amended the 2001 option plan, allowing the Company to grant options to purchase an additional 440,000 common shares. The options vest with the recipients over periods of up to five years from the date of the grant. At September 30, 2002 the Company had 405,738 stock options available for further issuance. Stock option transactions for the respective periods and the number of share options outstanding are summarized as follows: SHARES AVAILABLE FOR GRANT OPTIONS OUTSTANDING NUMBER WEIGHTED OF OPTIONED AVERAGE COMMON SHARES EXERCISE PRICE ($) BALANCE, SEPTEMBER 30, 2000 2001 Option Plan Options granted Options forfeited/expired BALANCE, SEPTEMBER 30, 2001 417,638 600,000 (680,000) 60,000 397,638 440,000 (453,900) — 22,000 405,738 1,292,003 — 680,000 (60,000) 1,912,003 — 453,900 (122,942) (22,000) 2,220,961 $ 0.49 — 0.42 0.43 0.47 — 0.53 0.32 0.49 0.49 Amendment of 2001 Option Plan Options granted Options exercised Options forfeited/expired BALANCE, SEPTEMBER 30, 2002 At September 30, 2002 the following stock options were outstanding and exercisable: NUMBER OF SHARES UNDER OPTION WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE (YEARS) NUMBER OF OPTIONS CURRENTLY EXERCISABLE EXERCISE PRICE ($) 0.15 0.17 0.38 0.40 0.45 0.50 0.51 0.65 0.74 0.80 0.89 0.49 198,831 248,234 200,000 55,000 410,000 10,000 397,900 30,000 597,000 19,000 54,996 2,220,961 2.1 1.3 2.3 1.2 3.1 1.4 4.4 4.8 0.3 4.9 3.2 2.6 198,831 248,234 175,000 55,000 305,833 8,333 157,975 2,500 597,000 1,582 54,996 1,805,284 68 | TIR Systems Ltd. | Annual Report c) Warrants During the year, all broker warrants issued by the Company in the prior year were exercised, resulting in the issuance of 100,000 common shares for cash proceeds of $50,000. d) Earnings (Loss) Per Share Basic earnings (loss) per share is calculated using the weighted average number of common shares outstanding during the year. The weighted average number of common shares outstanding as at September 30, 2002 was 15,101,525 [2001 – 11,821,767]. The diluted loss per share for the current year is not presented since the issue of shares upon exercise of the stock options and warrants would be anti-dilutive. |07| SEGMENTED I N F O R M AT I O N The Company operates in one primar y industr y segment, the development, manufacture and marketing of traditional and solid state lighting products. Revenue derived from these products is as follows: ($) 2002 2001 Traditional Solid State $ 7,511,900 284,300 7,796,200 $ 5,657,000 505,500 6,162,500 Export sales are primarily to customers in the United States and amounted to $6,927,300 [2001 – $5,596,600]. During the years ended September 30, 2002 and 2001, the Company did not have a significant concentration of credit risk or sales with a single or group of customers. All of the Company’s assets are located in Canada. |08| GOVERNMENT A S S I S TA N C E On November 5, 2001, the Company finalized an agreement with Technology Partnership Canada (“TPC”), whereby TPC will provide funding of 33% of eligible costs related to the research and development of “High Efficiency Intelligent Opto-electronic Lighting Devices” to a maximum funding of $6,636,271. Under the terms of the agreement, the funding is limited to $1,187,000 until the Company has raised additional equity in the amount of $4,000,000. The amount of the funding will not exceed the following amounts in the relevant fiscal years of the project as follows: ($) April 1, 2001 to March 31, 2002 April 1, 2002 to March 31, 2003 April 1, 2003 to March 31, 2004 $ 2,359,461 3,211,390 1,065,420 6,636,271 All claims are to be filed on a quarterly basis. For the year ended September 30, 2002, the Company has received or accrued $463,900 [2001 – $296,700] of which $418,700 [2001 – $267,400] has been credited against research and development costs. $12,700 [2001 – $29,300] has been credited against capital assets, and $32,500 [2001 – $nil] against sales, marketing, and general and administration expenses. In return for the funding, the Company is obligated to provide royalty payments on annual gross revenues beginning on October 1, 2002. The royalty rate is as follows: October 1, 2002 to September 30, 2004 October 1, 2005 to September 30, 2011 0.3% 0.9% If at September 30, 2011, the total cumulative royalty payments exceed $12,991,670, then the payment of royalties will end, other wise the royalty payments will continue until either this amount has been paid or until September 30, 2014, which ever occurs first. In addition to the above noted royalty payments, the Company has an obligation to pay 15% of the government funding received under this agreement to an outside consultant for assistance with the funding application and quar terly filings. TIR Systems Ltd. | Annual Report | 69 |09| INCOME TA X E S C o m p o n e n t s o f I n c o m e Ta x P r o v i s i o n Income and other taxes vary from the amount that would be computed by applying the combined federal and provincial income tax rate of approximately 43.3% [2001 – 45.6%] for the following reasons: ($) 2002 2001 Income tax expense (recovery) based on income (loss) before taxes Decrease in expense (recovery) resulting from: Manufacturing and processing deduction Non-controlling interest Unrecognized timing differences Expenses not deductible for tax purposes Utilization of previously unrecognized income tax losses and expenditures Other Income tax expense (recovery) $ (232,000) 37,000 727,000 94,000 29,000 (684,000) 29,000 — $ (174,000) 27,000 265,300 381,100 12,600 (528,000) 16,000 — The partnership incurred losses of $1,778,000 that have been allocated to the non-controlling interest. These costs have been classified in marketing, development, and general and administrative expenses. As at September 30, 2002, the Company has approximately $760,000 scientific research and experimental development expenditures, which can be carried forward indefinitely to reduce taxable income of future taxation years. The Company had approximately $560,000 of federal investment tax credits and $220,000 of provincial investment tax credits available to reduce taxes payable for future years. These credits expire over various dates to 2012. Significant components of the Company’s future tax assets as of September 30 are shown below. ($) 2002 2001 F U T U R E TA X A S S E T S : Research and development deductions and credits Non-capital tax losses carried forward Excess of tax basis of capital assets over book value Other assets Share issue costs Total future tax assets Valuation allowance Total future tax assets F U T U R E TA X L I A B I L I T I E S : $ 1,066,000 — 218,000 72,000 44,000 1,400,000 (715,000) 685,000 (685,000) (685,000) — $ 912,000 84,000 187,000 140,000 63,000 1,386,000 (1,172,000) 214,000 (214,000) (214,000) — Income not yet recognized for tax purposes Total future tax liabilities N E T F U T U R E TA X A S S E T S The potential income tax benefits relating to these future tax assets have not been recognized in the accounts as their realization does not meet the requirements of “more likely than not” under the liability method of tax allocation. |10| COMMITMENTS Leases The Company leases its premises and cer tain equipment under lease agreements expiring Februar y 28, 2004. The annual lease payments required to the end of the leases are as follows: ($) 2003 2004 $ 355,200 148,000 503,200 |11| C O M PA R AT I V E FIGURES Certain of the comparative figures have been reclassified to conform to the presentation adopted in the current year. 70 | TIR Systems Ltd. | Annual Report OF RADIANT FLUX. EGRESS -- SEE MEANS OF EGRESS. EGRESS LIGHTING -- EMERGENCY LIGHTING FOR EGRESS. ELECTRIC DISCHARGE -- SEE ARC DISCHARGE, GASEOUS DISCHARGE AND GLOW DISCHARGE. ELECTRIC-DISCHARGE LAMP -- A LAMP IN WHICH LIGHT (OR RADIANT ENERGY NEAR THE VISIBLE S P E C T R U M ) I S P R O D U C E D B Y T H E PA S S A G E O F A N E L E C T R I C C U R R E N T T H R O U G H A VA P O R O R G A S . S E E F L U O R E S C E N T L A M P, C O L D - C AT H O D E L A M P, H O T - C AT H O D E L A M P, C A R B O N - A R C L A M P, G L O W L A M P, F L U O R E S C E N T L A M P A N D H I G H - I N T E N S I T Y D I S C H A R G E ( H I D ) 0 L A M P. ELECTROLUMINESCENCE -- THE EMISSION OF LIGHT FROM A PHOSPHOR EXCITED BY AN ELECTROMAGNETIC FIELD. ELECTROMAGNETIC SPECTRUM -- A CONTINUUM OF ELECTRIC AND MAGNETIC RADI- THREE YEAR FINANCIAL SUMMARY 2002 REVENUE 2001 2000 Cost of Sales Gross profit General & administrative Sales and marketing Research and development, net Operating Expenses Income (loss) from operations Net income (loss) Income (loss) from operations per share – basic B A L A N C E S H E E T D ATA $ 7,796,200 4,354,000 3,442,200 1,154,100 2,150,000 693,500 3,997,600 (555,400) (535,800) (0.04) 2,356,200 3,524,200 7,462,700 16,781,147 19,002,108 $ 6,162,500 3,723,400 2,439,100 797,600 1,742,400 343,500 2,883,500 (444,400) (384,300) (0.03) 3,275,600 3,970,700 5,858,000 13,758,205 15,770,208 $ 6,634,500 3,732,200 2,902,300 646,400 1,647,700 186,600 2,481,700 420,600 414,300 0.04 1,649,900 2,034,500 3,503,800 11,558,205 12,850,208 Working Capital Total Equity Total assets No. of Shares outstanding No. of Shares outstanding – fully diluted REVENUE FISCAL 2002 GROSS PROFIT OPERATING EXPENSES NET INCOME (LOSS) INCOME (LOSS) FROM OPERATIONS PER SHARE – BASIC 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter FISCAL 2001 $ 3,521,600 1,626,600 1,846,800 801,200 $ 1,731,600 636,900 773,200 300,500 $ 1,524,000 828,900 865,300 779,400 $ 225,500 (207,700) (85,700) (467,900) $ 0.02 (0.02) (0.01) (0.03) 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter FISCAL 2000 2,123,000 1,239,500 1,005,600 1,794,400 793,300 456,300 382,500 807,000 527,400 868,300 818,000 669,800 262,500 (396,500) (395,700) 145,400 0.02 (0.03) (0.03) 0.01 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 2,210,700 1,933,300 1,226,200 1,264,300 1,021,800 817,700 572,200 490,600 686,400 644,100 645,500 505,700 337,800 159,800 (68,000) (15,300) 0.03 0.01 — — ATION ENCOMPASSING ALL WAVELENGTHS. SEE REGIONS OF THE ELECTROMAGNETIC SPECTRUM. ELEVATION -- THE ANGLE BETWEEN THE AXIS OF A SEARCHLIGHT DRUM AND THE HORIZONTAL. FOR ANGLES ABOVE THE HORIZONTAL, ELEVATION IS POSITIVE; FOR ANGLES BELOW, NEGATIVE. ELLIPSOIDAL REFLECTOR SPOTLIGHT -- A SPOTLIGHT IN WHICH A LAMP AND AN ELLIPSOIDAL REFLECTOR ARE MOUNTED IN A FIXED RELATIONSHIP DIRECTING A BEAM OF LIGHT INTO AN APERT U R E , W H E R E I T M AY B E S H A P E D B Y A PAT T E R N , I R I S , S H U T T E R S Y S T E M O R O T H E R I N S E R T I O N . T H E B E A M T H E N PA S S E S T H R O U G H A S I N G L E O R C O M P O U N D L E N S S Y S T E M T H AT F O C U S E S I T A S R E Q U I R E D , P R O D U C I N G A S H A R P LY D E F I N E D B E A M W I T H VA R I A B L E E D G E D E F I N I T I O N . EMERGENCY -- ANY CONDITION, EXTERNAL DIRECTORS A N D C O R P O R AT E I N F O R M AT I O N DIRECTORS JOHN MINGAY, CHAIRMAN STEPHEN ROONEY, DIRECTOR Mr. Mingay is the former President and CEO of TIR Systems since 1988 and a member of the Company’s audit committee. Shares owned: 1,164,051 Share options: 403,827 LEONARD HORDYK, PRESIDENT & CEO Mr. Rooney, formerly the International Vice President of Voith Paper Holding and a member of TIR’s audit committee. Shares owned: 40,073 Share options: 52,000 DAVID SCOTT, DIRECTOR Mr. Hordyk has been with TIR Systems since 1999, prior to joining the Company he held a number of senior management positions with Motorola Wireless Data Group. Shares owned: 234,118 Share options: 457,058 HARRY JAAKO, DIRECTOR Mr. Scott is a retired President of MDS Ventures Pacific Inc. (a venture capital company) and currently an active Director on several technology boards including Angiotech and Anormed. Shares owned: 120,000 Share options: 52,000 MORGAN STURDY, DIRECTOR Mr. Jaako is Chairman & Co-Chief Executive Officer of Discovery Capital Corporation (a venture capital company). He has over 20 years experience in advising early stage technology companies. Shares owned: 4,500,000* Share options: 12,000 LESLIE LANDES, DIRECTOR Mr. Sturdy is former President of NICE Systems CCD Ltd. a manufacturer and marketer of telecommunications equipment. Shares owned: 1,408,500 Share options: 52,000 Mr. Landes is President & COO for Stockgroup.com Media. Inc. and a member of the Company’s audit committee. Shares owned: 28,600 Share options: 52,000 *Shares controlled by Discovery Capital Corporation. Shares as of December 20, 2002 CORPORATE INFORMATION C O R P O R AT E H E A D O F F I C E TRANSFER AGENT 3350 Bridgeway St. Vancouver, BC Canada V5K 1H9 www.tirsys.com Telephone: 604-294-8477 Toll Free: 800-663-2036 Facsimile: 604-294-3733 SECURITIES COUNSEL CIBC-Mellon Trust Company Vancouver BC INVESTOR INQUIRIES J. Caren Holtby Telephone: 604-473-2318 Toll Free: 800-663-2036 ext 2318 Facsimile: 604-294-3733 Email: caren_holtby@tirsys.com STOCK EXCHANGE Farris, Vaughan, Wills & Murphy Vancouver BC GENERAL COUNSEL The TSX Venture Exchange Symbol: TIY ANNUAL MEETING Oyen Wiggs Green & Mutala Vancouver BC AUDITOR Ernst & Young LLP Vancouver BC BANKER HSBC Bank Canada Vancouver BC Tuesday February 18, 2003 4:00 pm (PST) TIR Systems Ltd. 3350 Bridgeway St Vancouver, BC Canada V5K 1H9 OR INTERNAL TO THE PREMISES, THAT WOULD COMPROMISE THE EFFECTIVENESS OF THE LIGHTING IN AN OCCUPIED AREA FOR SAFE MOVEMENT WITHIN AND OUT OF THAT AREA AND SAFE OPERATION OF EQUIPMENT WITHIN THE SPACE. DESIGN: SAMATAMASON, PHOTOGRAPHY : VICTOR JOHN PENNER AND VARIOUS, PRINTING: BLANCHETTE PRESS. E M E R G E N C Y E X I T - - A W AY O U T O F T H E P R E M I S E S T H AT I S I N T E N D E D T O B E U S E D O N LY D U R I N G A N E M E R G E N C Y. EMERGENCY LIGHTING -- LIGHTING DESIGNED TO TIR Systems Ltd. 3350 Bridgeway St. Vancouver, BC Canada V5K 1H9 1 800 663 2036 T 604 294 8477 F 604 294 3733 www.tirsys.com TIR IS A PUBLIC COMPANY LISTED ON THE TSX VENTURE EXCHANGE UNDER THE SYMBOL TIY