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									                                                                                     A S I A N M I C RO H O L D I N G S L I M I T E D • ANNUAL REPORT 2003
                                                                                                                                                                                  ASIAN MICRO HOLDINGS LIMITED




                                                                                                                                                                                              Heading in the
                                                                                                                                                                                              Right Direction




      Asian Micro Holdings Limited
          3, Tech Park Crescent,
              Tuas Tech park,
            Singapore 638129
             Tel: 65-6862 7777
            Fax: 65-6862 6277
Web-Site: http://www.asianmicro.com.sg




                                         press Media Pte Ltd • tel: (65) 6880 2838
                                         Designed & Produced by




                                                                                                                                                             annual report 2003
C O N T E N T S
      Corporate Information                     1
      Chairman’s Statement                      2
      Board of Directors                        3
      Financial Highlights                      5
      Corporate Governance                      7

      Financial Statements
          Report of the Directors               10
          Statement by Directors                16
         Auditors’ Report                       17
         Balance Sheets                         18
          Profit and Loss Accounts              19
          Statements of Changes in Equity       20
         Consolidated Statement of Cash Flows   21
         Notes to the Financial Statements      23

      Supplementary Information                 50
      Statistics of Shareholdings               52
      Notice of Annual General Meeting          53
      Proxy Form
Corporate Information


                   Directors

                   Pang Kim Hin – Non-Executive Chairman
                   Lim Kee Liew @ Victor Lim – CEO and Group Managing Director
                   Leong Lai Heng – Executive Director
                   Lim Kee Hing – Executive Director
                   Dr. Wang Kai Yuen – Independent Director
                   Teo Kio Choon @ Chang Chiaw Choon – Non-Executive Director




Company Secretary                                                Bankers

Wang Li-Er Sherylene Theresa                                     Malayan Banking Berhad
Ng Lai Ying                                                      United Overseas Bank Limited
                                                                 The Bank of East Asia, Limited


Registered Office
                                                                 Share Registrar
3 Tech Park Crescent
Tuas Tech Park                                                   B.A.C.S. Private Limited
Singapore 638129                                                 63 Cantonment Road
                                                                 Singapore 089758


Solicitors
                                                                 Auditors
Foo & Quek
16 Raffles Quay #14-01                                           Ernst & Young
Hong Leong Building                                              10 Collyer Quay
Singapore 048581                                                 #21-01 Ocean Building
                                                                 Singapore 049315
ShookLin & Bok, Advocates & Solicitors                           Partner-in-charge : Philip Ling
1 Robinson Road #18-00, AIA Towers                               (since financial year ended 30 June 2002)
Singapore 048542


Tan Peng Chin LLC
9 Battery Road #18-08
Straits Trading Building
Singapore 049910




                                                                                                             1

                                   Asian Micro Holdings Limited | Annual Report 2003
    Chairman’s Statement


    Group Performance

    The demand for electronic components has been weak and competitive in financial year 2003. The war in Iraq and
    the outbreak of SARS also affected the Group’s overall performance.

    The Group’s turnover decreased by 29% from S$72.0 million in financial year 2002 to S$50.8 million in financial
    year 2003. The outbreak of US-Iraq war affected our major customer, the U.S. based Read-Rite (Thailand) Co., Ltd.
    which was eventually taken over by U.S. based Western Digital Corporation in August 2003.

    However, the Group’s gross profit increased by S$2.699 million from S$2.435 million to S$5.134 million. This was
    mainly due to the Group’s continuous efforts towards enhancing efficiency and lowering production costs. In addition,
    the Group also focused on promoting its profitable precision tray washing and recycling activities.

    As previously announced on 1st August 2003, the Flexible Circuit Board Assembly (“FCBA”) business activities have
    been scaled down and the Group is in the process of exiting the FCBA business. Various write-offs and provision
    have been made against obsolescent stock, all plant and machinery relating to FCBA as well as all other non-
    income generating plant and machinery. In view of these provisions, the Group’s net loss attributable to shareholders
    of the Company has increased by S$4.319 million from S$4.066 million to S$8.385 million.



    Outlook and Going forward

    The regional economic condition remains unpredictable due to the continued threat of global terrorism as well as
    the potential recurrence of SARS.

    The Group, subsequent to year-end, is exiting from its non-profitable business of Flexible Circuit Board Assembly
    (“FCBA”). The Group will be focusing on its core business activity of clean room precision Tray Washing and Recycling
    (“Tray Washing and Recycling”). The Tray Washing and Recycling business are currently carried out by the Group’s
    subsidiaries in Singapore, Bangkok (Thailand) and Wuxi (China).

    The Group will continue to review its corporate structure, business activities and financial position comprehensively.
    Continuous effort will be focused to further reduce operating and administrative expenses to enhance
    competitiveness.



    Acknowledgements

    On behalf of the Board, I would like to extend our appreciation to Mr Victor Lim, who stepped down as Chairman
    of the Board on 15th August 2003, allowing me to assume the position on the same day. Mr Victor Lim remains as
    Chief Executive Officer and Group Managing Director of the Group. This separation of posts is in accordance with
    the recommendations of the Code of Corporate Governance.

    I would like to thank all Board Members for their trust and support as well as their valuable counsel and commitment.
    I look forward to working closely with all members as we steer the Group back to profitability.

    I would like to thank the Management and all staff for their dedication and hard work throughout these difficult
    times.

    Last but not least, I would like to thank all our customers, suppliers and shareholders for their continued support.




    Pang Kim Hin
    Chairman
    29 September 2003

2

                                           Asian Micro Holdings Limited | Annual Report 2003
Board of Directors




                                                                                                From left to right:
                                                              Mr Pang Kim Hin, Mr Victor Lim & Ms Leong Lai Heng




Mr Pang Kim Hin

is an independent, Non-Executive Chairman of the Group. He is a businessman holding directorships involved in
retailing, warehousing, human resources and investments, both locally and overseas. He holds a Bachelor of
Engineering (Mechanical) degree from McGill University, Canada. Mr Pang was awarded Friend of Labour by the
National Trades Union Congress in 1980 and the Rochdale Medal by the Singapore National Co-operative Federation
Ltd in 1993.


Currently, Mr Pang is the Chairman of the Group’s Nominating and Remuneration Committee and member of the
Company’s Audit Committee.



Mr Victor Lim

is the Chief Executive Officer and Group Managing Director of the Company. Mr Lim is the key founder of the
Group and currently provides the overall strategic direction and policy decisions of the Group. Prior to setting up
the Group, Mr Lim was the Engineering Support Manager in Micropolis Singapore Ltd from 1983 to 1989. Mr Lim
holds a Diploma in Production Engineering from the Singapore Polytechnic and has more than 20 years experience
in the electronics and hard disk drive industry.


He is currently a member of the Company’s Remuneration Committee.



Ms Leong Lai Heng

is an Executive Director of the Company. She oversees the Group’s administrative matters and is responsible for
staff matters such as recruitment and payroll, corporate affairs such as public relations, as well as general office
administration.


Ms Leong is also a member of the Company’s Remuneration Committee.
                                                                                                                       3

                                       Asian Micro Holdings Limited | Annual Report 2003
    Board of Directors




                                                                                               From left to right:
                                     Dr Wang Kai Yuen, Mr Teo Kio Choon @ Chang Chiaw Choon & Mr Lim Kee Hing




    Dr Wang Kai Yuen

    was appointed as an independent Director of the Company in August 1999. He is currently a director of Xerox
    Singapore Software Centre. He is a Member of Parliament for Bukit Timah Constituency, and holds several other
    directorships including directorships in ComfortDelGro Corporation Limited, Superbowl Holdings Limited, Xpress
    Holdings Limited, Cosco Investment (Singapore) Ltd and Koon Holdings Limited. Dr Wang holds a PhD in Electrical
    Engineering from Stanford University, USA.


    Dr Wang is also the Chairman of the Company’s Audit Committee and member of the Nominating and Remuneration
    Committee.



    Mr Teo Kio Choon @ Chang Chiaw Choon

    is a Non-Executive Director of the Company. He is a partner of KC Teo Consultants, a management consultancy firm
    since 1992. Mr Chang holds a Bachelor of Science (Honours) degree from the Nanyang University.


    Mr- Teo is currently the member of the Group’s Audit, Nominating and Remuneration Committee.



    Mr Lim Kee Hing

    was appointed as an Executive Director of the Company in August 1999. He is currently responsible for the business
    planning and administration of the Company’s subsidiary in Wuxi, China. Mr Lim was the General Manager of our
    subsidiaries in Malaysia and Philippines from 1995 to 2000 and responsible for the sales and marketing activities of
    the Group’s trading division.




4

                                           Asian Micro Holdings Limited | Annual Report 2003
Financial Highlights



      Turnover by
     Geographical
Region (S$million)




      Turnover by
Business Activities
       (S$million)




         Turnover
       (S$million)




     Net Profit (loss)
      Attributable to
        Shareholders
          (S$million)




                                                                             5

                         Asian Micro Holdings Limited | Annual Report 2003
    Financial Highlights



                                                                                            YEAR ENDED 30 JUNE

                                                                  1999             2000          2001       2002       2003
    FINANCIAL YEAR                                               S$’000           S$’000        S$’000     S$’000     S$’000


     Results of Operation


    Turnover                                                     54,753          36,178        113,343     71,952     50,796
    Profit / (Loss) before taxation and                           5,056          (6,623)        (5,057)    (4,701)    (8,606)
    minority interests

    Taxation                                                      (665)            (107)        (1,619)        635        265
    Profit / (Loss) after taxation but                            4,391          (6,730)        (6,676)    (4,066)    (8,341)
    before minority interests

    Minority interests                                               29               38              -          -       (44)
    Net profit / (loss) attributable to                           4,420          (6,692)        (6,676)    (4,066)    (8,385)
    shareholders of the company


     Financial Position


    Fixed assets                                                 21,998           19,280         13,237     13,734      6,857
    Goodwill on consolidation                                         -                -             55        810        544
    Investment property                                           2,800            2,800          2,800      2,700      2,700
    Deferrred tax assets                                              -                -              -         25          -
    Associated company                                                -              274            324          -          -
    Other investments                                                75               84             66         22          -
    Convertible loan                                                  -              402            425          -          -
    Current assets                                               22,325           26,000         27,903     17,137     13,855
    Current liabilities                                        (32,170)         (23,568)       (26,704)   (21,971)   (17,999)
    Net current assets (liabilities)                            (9,845)            2,432          1,199    (4,834)    (4,144)
    Non current liabilities                                     (7,105)          (6,290)        (5,720)    (4,608)    (3,983)

    Representing :-
    Share capital                                                 7,923           18,982        12,386      7,850      1,501
    Minority interests                                                -                -             -          -        473

    EPS before taxation                                              3.5            (4.1)         (2.6)      (2.4)      (4.3)
    EPS after taxation & MI                                          3.0            (4.1)         (3.4)      (2.1)      (4.1)
    NTA per share                                                    5.5              9.8           6.3        3.6        0.6




6

                                          Asian Micro Holdings Limited | Annual Report 2003
Report on Corporate Governance


The Company is committed to raising the standard of corporate governance in order to protect the interests of its
shareholders. The Board of Directors fully supports the Best Practices Guide on corporate governance recommended
by the Singapore Exchange Securities Trading Limited (the “SGX-ST”) and has put in place various mechanisms to
ensure that effective corporate governance is practiced.

Board of Directors

The Board comprises six members with varied experience and expertise, three of whom are non-executive directors,
and two of whom are independent.

The Directors of Asian Micro Holdings Limited have adopted the principles of corporate governance under the Best
Practices Guide with respect to the separation of duties between Chairman and Chief Executive Officer.

The Board has on 15 August 2003 appointed Mr. Pang Kim Hin as Chairman of the Board. Mr. Pang is an independent
non-executive director. The day-to-day operational activities of the Group continue to be headed by the Group
Managing Director and Chief Executive Officer, Mr. Victor Lim.

Apart from its statutory responsibilities, the Board reviews and approves the Group’s strategic plans, key operational
initiatives and major investment and funding decisions. It also identifies principal risks of the Group’s business and
implements appropriate systems to manage those risks, reviews the Group’s financial performance and evaluates the
performance and compensation of senior management personnel. These functions are carried out either directly or
through Board Committees.

In the course of the year under review, the Board met on two occasions. The number of meetings attended by each
member of the Board during the financial year is as follows : -

Name of Director                                  Board meeting attended
Lim Kee Liew @ Victor Lim                                          2
Leong Lai Heng                                                     2
Lim Kee Hing                                                       1
Dr. Wang Kai Yuen                                                  2
Pang Kim Hin                                                       2
Teo Kio Choon @ Chang Chiaw Choon                                  2

Based on a review of the effectiveness of the Group’s material internal control procedures by the Audit Committee,
and the internal control policies in force, the Board is of the view that such internal controls are adequate.

Audit Committee

The Directors of Asian Micro Holdings Limited have adopted the principles of corporate governance under the Best
Practices Guide with respect to Audit Committees as formulated by SGX-ST

The Audit Committee comprises:-
Dr. Wang Kai Yuen (Independent Non-Executive Director) - Chairman
Pang Kim Hin (Independent Non-Executive Director)
Teo Kio Choon @ Chang Chiaw Choon (Non-Executive Director)

The Committee held two meetings for the financial year ended 30 June 2003 which recorded full attendance of all
members of the Audit Committee.




                                                                                                                         7

                                       Asian Micro Holdings Limited | Annual Report 2003
    Report on Corporate Governance


    Functions performed by the Audit Committee include :

    a)   review the audit plan of the external auditors and results of their examination and evaluation of the Group’s
         systems of internal accounting controls;
    b)   review the Group’s financial and operating results;
    c)   review the announcement of the half-year and full-year results of the Company and the Group to the Singapore
         Exchange Securities Trading Limited;
    d)   review the financial statements of the Company and the consolidated financial statements of the Group before
         their submission to the Board of Directors and the external auditors’ report on those financial statements;
    e)   review the scope and effectiveness of internal control procedures and policies
    f)   review the co-operation given by the management to the external auditors; and
    g)   the appointment of the external auditors of the Company.

    The Audit Committee has full access to and co-operation from the management. The external auditors have unrestricted
    access to the Audit Committee.

    After due consideration of the independence and objectivity of the external auditors, the Audit Committee has
    recommended to the Board of Directors the re- appointment of Ernst & Young as external auditors of the Company
    at the forthcoming Annual General Meeting.

    Nominating Committee (“NC”)

    The Nominating Committee was formed on 22 March 2002 and comprises :

    Pang Kim Hin (Independent Non-Executive Director) - Chairman
    Dr. Wang Kai Yuen (Independent Non-Executive Director)
    Teo Kio Choon @ Chang Chiaw Choon (Non-Executive Director)

    The functions of the NC are, inter alia, to indentify candidates, review and make recommendations to the Board on
    all board appointments and re-appointments. The NC is also responsible for ensuring that the independent directors
    meet the criteria set out in the Code of Corporate Governance.
    The NC has held one meeting during the year, at which a Board appraisal exercise was undertaken. The NC also
    reviewed the composition of the Board and Board Committees, and confirmed the status of the independent directors.

    Remuneration Committee (“RC”)

    The Remuneration Committee was formed on 22 March 2002 and comprises :

    Pang Kim Hin (Independent Non-Executive Director) - Chairman
    Dr. Wang Kai Yuen (Independent Non-Executive Director)
    Teo Kio Choon @ Chang Chiaw Choon (Non-Executive Director)
    Lim Kee Liew @ Victor Lim (Executive Director)
    Leong Lai Heng (Executive Director)

    The role of the RC is to review and recommend to the Board, in consultation with the Chairman of the Board, a
    framework of remuneration for the Board and key executives of the Group, and to determine specific remuneration
    packages for each executive director.

    In its review, the RC’s objective is to establish and maintain an appropriate and competitive level of remuneration to
    attract, retain and motivate directors and key executives, to run the Company successfully. The RC would also ensure
    that the remuneration policies and systems of the Group support the Group’s objectives and strategies.




8

                                           Asian Micro Holdings Limited | Annual Report 2003
Report on Corporate Governance


The RC has held one meeting since its inception, but the members communicated regularly and passed resolutions by
written means. The service agreements of the three executive directors were rectified, and Directors’ fees paid for
the current financial year were reviewed. The remuneration packages of senior executives and division heads were
also reviewed.

Details of remuneration paid or payable for the financial year ended 30 June 2003 are as follows :

Remuneration band                             Directors (2003)                              Directors (2002)
S$500,000 and above                           Lim Kee Liew @ Victor Lim                     Lim Kee Liew @ Victor Lim
S$250,000 to S$499,999                        Leong Lai Heng                                Leong Lai Heng
Below S$250,000                               Lim Kee Hing                                  Lim Kee Hing
                                              Dr. Wang Kai Yuen                             Dr. Wang Kai Yuen
                                              Pang Kim Hin                                  Pang Kim Hin
                                              Teo Kio Choon @                               Teo Kio Choon @
                                              Chang Chiaw Choon                             Chang Chiaw Choon

Each of the top five executives (who are not directors) of the Group receives less than S$250,000 in total remuneration
for financial year ended 30 June 2003.

Communication with Shareholders

In line with continuous disclosure obligations of the Company, the Board’s policy is that shareholders are informed of
all major developments that impact the Group.

Communication is made through :

– annual reports that are prepared and issued to all shareholders ;
– half-yearly financial statement containing a summary of the financial information and affairs of the Group for the
  period ;
– notices of and explanatory notes for annual general meetings (AGM) and extraordinary general meeting ; and
– disclosures to the Singapore Exchange Securities Trading Limited.

Shareholders are encouraged to attend the AGM to ensure a high level of accountability and to stay informed of the
Group’s strategy and objectives. The AGM is the principal forum for dialogue with shareholders. The external auditors,
and the chairmen of the Board, Audit Committee, NC and RC, will be on hand to address any queries shareholders
may have.

Code on Securities Transactions

The Company has devised and adopted its own internal Code of Best Practices on Securities Transactions, which was
modeled after the Best Practices Guide issued by the SGX-ST with some modifications, to provide guidance to its
directors and management level employees on their dealings in its securities.




                                                                                                                          9

                                        Asian Micro Holdings Limited | Annual Report 2003
     Report of the Directors


     The directors are pleased to present their report to the members together with the audited financial statements of
     the Company and of the Group for the financial year ended 30 June 2003.

     Directors

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

     Pang Kim Hin
     Lim Kee Liew @ Victor Lim
     Leong Lai Heng
     Lim Kee Hing
     Dr. Wang Kai Yuen
     Teo Kio Choon @ Chang Chiaw Choon

     Principal activities

     The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are
     described in Note 5 to the financial statements. As at 30 June 2003, the Group is in the process of discontinuing its
     activities of manufacturing and sale of flexible circuit board, actuator coil assembly and provision of hook-up assembly
     services (“FCBA”). Subsequent to the financial year end, the Group has ceased its FCBA activities.

     There have been no other significant changes in the principal activities of the Company and its subsidiaries during
     the financial year.

     Results for the financial year
                                                                                                        Group          Company
                                                                                                          $               $

     Loss attributable to shareholders                                                                 8,385,074       13,648,965

     Material movements in reserves or provisions

     There were no other material transfers to or from reserves or provisions during the financial year except as disclosed
     in the financial statements.


     Acquisition and disposal of subsidiaries

     During the financial year, the following equity interests were acquired by the Company:

                                           Interest                Interest after                                   Net tangible
     Name of subsidiary                    acquired                 acquisition                   Consideration    asset acquired
                                                                                                        $                 $
     Hypertech Technology
      Pte Ltd (“Hypertech”)                  51%                          51%                        510,000          401,666

     Except as disclosed above, there were no other acquisitions or disposals of subsidiaries during the financial year.

     Issue of shares and debentures

     During the financial year, the Company issued the following shares:

     (i)   21,273,140 ordinary shares of $0.05 each at $0.057 by way of capitalisation of $1,212,569 due to certain directors
           and affiliated companies;

     (ii) 1,326,000 ordinary shares of $0.05 each at $0.062 by way of capitalisation of $82,212 due to third parties;




10

                                              Asian Micro Holdings Limited | Annual Report 2003
Report of the Directors


Issue of shares and debentures (cont’d)

(iii) 539,000 ordinary shares of $0.05 each, for cash, at the respective exercise price per share upon the exercise of
      options granted by the Company under the Asian Micro Employees’ Share Option Scheme as follows:

      Number of ordinary shares issued                         Exercise price per ordinary shares
                 497,000                                                           $0.05
                  42,000                                                           $0.06

(iv) 3,333,000 ordinary shares of $0.05 each at $0.12 per share as part of the consideration for the purchase of 40%
     equity interest in Hypertech Technology Pte Ltd (“Hypertech”); and

(v)   1,375,000 ordinary shares of $0.05 each at $0.08 per share as consideration for the acquisition of additional 11%
      of equity interest in Hypertech.

Shares issued in subsidiaries during the financial year are as follows:

(i)   In previous year, a subsidiary, Asian Micro Technology (Wuxi) Co., Ltd. was incorporated with a registered capital
      of US$2,500,000. The Group, through Asian Micro (S) Pte Ltd (“AMS”) has contributed US$900,845 ($1,496,327)
      to the registered capital of this subsidiary by way of cash and fixed assets as at 30 June 2002. During the year,
      the Group further contributed US$154,801 ($271,831) in cash and US$86,005 ($138,104) in the form of fixed
      assets to its registered capital. Total capital contributed and outstanding contribution as at 30 June 2003 are
      US$1,141,651 ($1,906,262) and US$1,358,349 ($2,385,000) respectively.

      Of the contributed capital as at 30 June 2003, US$504,401 ($887,746) has yet to be certified by an independent
      certified public accountant in the People’s Republic of China.

(ii) A-P Technology (Shunde) Co., Ltd. was incorporated in May 2002 with a registered capital of US$450,000. As at
     30 June 2003, the Group, through A-P Plastics Precision Pte Ltd (“APP”) has contributed to its 51% share in the
     subsidiary’s registered capital amounting to US$229,500 ($404,633) by injecting US$83,700 ($147,008) in cash
     and US$145,800 ($257,625) in fixed assets. The contributed capital has yet to be certified by an independent
     certified public accountant in the People’s Republic of China.

(iii) During the year, Hypertech was incorporated with authorised share capital of $100,000, comprising 100,000
      ordinary shares of $1 each. 2 ordinary shares were issued and fully paid upon incorporation as subscriber shares.
      The authorised share capital of Hypertech was subsequently increased to $2,000,000, comprising 2,000,000 ordinary
      shares of $1 each by the creation of 1,900,000 ordinary shares of $1 each. The issued share capital was subsequently
      increased to $830,000 by the issuance of 829,998 ordinary shares of $1 each at par for consideration other than
      cash.

      Except as disclosed above, no other shares or debentures of the Company or its subsidiaries were issued during
      the financial year.


Arrangements to enable directors to acquire shares and debentures

Except for capitalisation of amount due to certain directors of the Company and affiliated companies as described
above and the Asian Micro Employees’ Share Option Scheme as described below, neither at the end of nor at any
time during the financial year was the Company a party to any arrangement whose object is to enable the directors
of the Company to acquire benefits by means of the acquisition of shares or debentures of the Company or any other
body corporate.




                                                                                                                             11

                                         Asian Micro Holdings Limited | Annual Report 2003
     Report of the Directors


     Directors’ interests in shares and debentures

     The following directors, who held office at the end of the financial year, had, according to the register of directors’
     shareholdings required to be kept under section 164 of the Companies Act, Cap. 50, an interest in shares of the
     Company and related corporations, as stated below:
                                                    Direct interest                                        Deemed interest
                                           At             At                  At                    At          At           At
                                         1 July        30 June              21 July               1 July      30 June      21 July
                                         2002            2003                2003                 2002         2003         2003
     The Company
     (Ordinary shares of $0.05 each)
     Lim Kee Liew @ Victor Lim         66,686,913      73,202,439         73,164,439         65,885,912        71,205,526   68,905,526
     Leong Lai Heng                    65,885,912      68,148,982         68,148,982         66,686,913        76,258,983   73,920,983
     Lim Kee Hing                       9,010,000       7,010,000          7,010,000                  -                 -            -
     Dr. Wang Kai Yuen                    400,000         400,000            400,000                  -                 -            -
     Pang Kim Hin                         400,000         400,000            400,000                  -                 -            -
     Teo Kio Choon @
       Chang Chiaw Choon                 400,000           400,000            400,000                      -            -            -

                                                  Direct interest
                                           At           At          At
                                         1 July      30 June      21 July             Exercise                 Exercise period
                                         2002           2003            2003            price
                                                                                           $
     The Company
     (Options to subscribe for
     ordinary shares of $0.05 each)
     Lim Kee Hing                      1,200,000     1,200,000       1,200,000           0.05         5 October 2002 – 5 October 2004
     Dr. Wang Kai Yuen                   880,000       880,000         880,000           0.05         5 October 2002 – 5 October 2004
     Pang Kim Hin                        880,000       880,000         880,000           0.05         5 October 2002 – 5 October 2004
     Teo Kio Choon @
       Chang Chiaw Choon               1,200,000     1,200,000       1,200,000           0.05         5 October 2002 – 5 October 2004

     Messrs Lim Kee Liew @ Victor Lim and Leong Lai Heng are deemed to have an interest in shares of the Company’s
     subsidiaries in proportion to its interest in the subsidiaries by virtue of their interests in more than 20% of the issued
     share capital of the Company.

     Except as disclosed above, no other directors had an interest in any shares and debentures of the Company or related
     corporations either at the beginning or end of the financial year or 21 July 2003.


     Dividends

     No dividends have been paid, declared or recommended since the end of the Company’s previous financial year.


     Bad and doubtful debts

     Before the profit and loss account and balance sheet of the Company were prepared, the directors took reasonable
     steps to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
     provision for doubtful debts, and have satisfied themselves that all known bad debts have been written off and that
     adequate provision had been made for doubtful debts.

     At the date of this report, the directors are not aware of any circumstances which would render the amount of bad
     debts written off or the amount of provision for doubtful debts in the Group inadequate to any substantial extent.




12

                                              Asian Micro Holdings Limited | Annual Report 2003
Report of the Directors


Current assets

Before the profit and loss account and balance sheet of the Company were prepared, the directors took reasonable
steps to ascertain that any current assets which were unlikely to realise their book values in the ordinary course of
business have been written down to their estimated realisable values or adequate provision had been made for the
diminution in the value of such current assets.

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


Charges on assets and contingent liabilities

Since the end of the financial year, and up to the date of this report, no charge on the assets of the Company or any
corporation in the group has arisen which secures the liabilities of any other person and no contingent liability has
arisen.

Ability to meet obligations

No contingent or other liability has become enforceable or is likely to become enforceable within the period of
twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially
affect the ability of the Company or of the Group to meet their obligations as and when they fall due.

Other circumstances affecting the financial statements

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or
in the consolidated financial statements which would render any amount stated in the financial statements of the
Company and consolidated financial statements misleading.


Unusual items

In the opinion of the directors, the results of the operations of the Company and of the Group during the financial
year have not been substantially affected by any item, transaction or event of a material and unusual nature, except
for those as disclosed in Note 24 to the financial statements.

Unusual Items after the financial year

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


Directors’ contractual benefits

Since the end of the previous financial year, no director of the Company has received or become entitled to receive
a benefit (other than as disclosed as directors’ remuneration and fees in the accompanying financial statements and
emoluments received from related corporations) by reason of a contract made by the Company or a related corporation
with the director, or with a firm of which the director is a member, or with a company in which the director has a
substantial financial interest, except for significant transactions with related parties as disclosed in Note 33 to the
accompanying financial statements.




                                                                                                                          13

                                        Asian Micro Holdings Limited | Annual Report 2003
     Report of the Directors


     Share options

     The Asian Micro Employees’ Share Option Scheme (“the Scheme”) is administered by the following directors:

     Lim Kee Liew @ Victor Lim
     Leong Lai Heng
     Teo Kio Choon @ Chang Chiaw Choon

     Details of options to subscribe for new ordinary shares of $0.05 each in the share capital of the Company pursuant to
     the Scheme are as follows:

                                                                       Option    Option                              Balance
                                 Option                    Balance    cancelled exercised                               at       Number
                                exercise        Exercise 1 July 2002/  during    during                              30 June       of
     Date granted                period          price date of grant the year   the year                              2003       holders

     5 October 2001        5 October 2002 -        $0.05         9,364,000          (986,000)         (497,000)      7,881,000        14
                           5 October 2004
     28 November 2001      28 November 2002 -      $0.06         4,886,000        (2,370,000)             (42,000)   2,474,000        23
                           28 November 2004
     23 January 2002       23 January 2003 -       $0.09           180,000                    –                 –     180,000          1
                           23 January 2005
     21 March 2002         21 March 2003 -         $0.21           599,000          (437,000)                   –     162,000          3
                           21 March 2005
     3 May 2002            3 May 2003 -            $0.18           616,000          (378,000)                   –     238,000          4
                           3 May 2005
     4 June 2002           4 June 2003 -           $0.165          403,000            (69,000)                  –     334,000          9
                           4 June 2005
     13 July 2002          13 July 2003 -          $0.14            18,000                    –                 –      18,000          1
                           31 December 2003
     29 August 2002        29 August 2003 -        $0.14           198,000                    –                 –     198,000          2
                           29 August 2005
     6 February 2003       6 February 2004 -       $0.06           743,000                    –                 –     743,000          3
                           6 February 2006

     Details of options to subscribe for new ordinary shares of $0.05 each in the share capital of the Company granted to
     directors of the Company pursuant to the Scheme are as follows:
                                                                                                           Balance
                                                                                                     at 1 July 2002 and
     Director of the Company                 Exercise period                   Exercise price           30 June 2003
     Teo Kio Choon @
       Chang Chiaw Choon              5 October 2002 – 5 October 2004                             $0.05                   1,200,000
     Lim Kee Hing                     5 October 2002 – 5 October 2004                             $0.05                   1,200,000
     Pang Kim Hin                     5 October 2002 – 5 October 2004                             $0.05                    880,000
     Dr. Wang Kai Yuen                5 October 2002 – 5 October 2004                             $0.05                    880,000

     No options granted to directors have been exercised during the financial year.

     Except for the above, no options have been granted to other directors, controlling shareholders of the Company or
     their associates and no employees of the Company have received 5% or more of the total options available under the
     Scheme.

     The options do not entitle the holder to participate, by virtue of the options, in any share issue of any other corporation.
     No option has been exercised from the financial year end to the date of this report. No unissued shares, other than
     those referred to above, are under option as at the date of this report.




14

                                              Asian Micro Holdings Limited | Annual Report 2003
Report of the Directors


Audit committee

The Audit Committee comprises three directors, one of whom is also the Chairman of the Audit Committee. The
members of the Audit Committee are:

Dr. Wang Kai Yuen (Chairman, Independent Non-Executive)
Pang Kim Hin (Independent Non-Executive)
Teo Kio Choon @ Chang Chiaw Choon (Non-Executive)

The Audit Committee performs the functions set out in section 201B(5) of the Companies Act, Cap. 50 and the SGX-
ST Listing Manual. In performing those functions, the Audit Committee reviewed the overall scope of external audits
and the assistance given by the Company’s officers to the auditors. The Audit Committee met with the external
auditors to discuss the results of their audits and their evaluation of the systems of internal accounting controls. The
Audit Committee reviewed the independence and objectivity of the external auditors and the nature and extent of
non-audit services performed by the external auditors. The Audit Committee also reviewed the financial statements
of the Company and the consolidated financial statements of the Group for the year ended 30 June 2003, as well as
the external auditors’ report thereon.

In addition, the Audit Committee has reviewed interested person transactions for the financial year ended 30 June
2003 to satisfy itself that the transactions are on normal commercial terms.

The Audit Committee has full access to and co-operation by the Company’s management and has full discretion to
invite any director or executive officer to attend its meetings. The auditors have unrestricted access to the Audit
Committee.

The Audit Committee has recommended to the Board of Directors that the auditors, Ernst & Young, be nominated
for re-appointment as auditors at the forthcoming annual general meeting of the Company.


Auditors

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



On behalf of the Board,




Lim Kee Liew @ Victor Lim
Director




Leong Lai Heng
Director



Singapore
25 September 2003




                                                                                                                           15

                                        Asian Micro Holdings Limited | Annual Report 2003
     Statement by Directors Pursuant to Section 201(15)


     We, Lim Kee Liew @ Victor Lim and Leong Lai Heng, being two of the directors of Asian Micro Holdings Limited, do
     hereby state that, in the opinion of the directors,

     (i)   the accompanying balance sheets, profit and loss accounts, statements of changes in equity and consolidated
           statement of cash flows together with notes thereto, set out on pages 18 to 49, are drawn up so as to give a true
           and fair view of the state of affairs of the Company and of the Group as at 30 June 2003 and of the results and
           changes in equity of the Company and of the Group and cash flows of the Group for the year then ended, and

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

     The board of directors authorised these financial statements for issue on 25 September 2003.




     On behalf of the Board,




     Lim Kee Liew @ Victor Lim
     Director




     Leong Lai Heng
     Director



     Singapore
     25 September 2003




16

                                             Asian Micro Holdings Limited | Annual Report 2003
Auditors’ Report
to the Members of Asian Micro Holdings Limited



We have audited the financial statements of Asian Micro Holdings Limited set out on pages 18 to 49. The financial
statements comprise the balance sheets of the Company and of the Group as at 30 June 2003, the profit and loss
accounts and the statements of changes in equity of the Company and of the Group and consolidated statement of
cash flows of the Group for the year then ended, and notes thereto. These financial statements are the responsibility
of the Company’s directors. Our responsibility is to express an opinion on these financial statements based on our
audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan
and perform the audit to obtain reasonable assurance about 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 the directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides
a reasonable basis for our opinion.

In our opinion,

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

(i)   the state of affairs of the Company and of the Group as at 30 June 2003 and of the results and changes in equity
      of the Company and of the Group and cash flows of the Group for the year ended on that date; and

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

(b) the accounting and other records, and the registers required by the Act to be kept by the Company and by those
    subsidiaries incorporated in Singapore have been properly kept in accordance with the provisions of the Act.

We have considered the financial statements and auditors’ reports of the subsidiaries of which we have not acted as
auditors, being financial statements included in the consolidated financial statements. The names of these subsidiaries
are stated in Note 5 to the financial statements.

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial
statements of the Company are in form and content appropriate and proper for the purposes of the preparation of
the consolidated financial statements and we have received satisfactory information and explanations as required by
us for those purposes.

The auditors’ reports on the financial statements of the subsidiaries were not subject to any qualification, and in
respect of the subsidiaries incorporated in Singapore, did not include any comment made under section 207(3) of the
Act.




ERNST & YOUNG
Certified Public Accountants


Singapore
25 September 2003




                                                                                                                           17

                                        Asian Micro Holdings Limited | Annual Report 2003
     Balance Sheets
     as at 30 June 2003
     (Amounts in Singapore dollars)


                                                              Note                      Group                         Company
                                                                                2003                2002          2003       2002
                                                                                  $                   $             $          $
     ASSETS LESS LIABILITIES
     Non-current assets
     Fixed assets                                                3            6,857,377       13,734,201            1,227        2,454
     Goodwill on consolidation                                   4              544,448          810,240                –            –
     Investments in subsidiaries                                 5                    –                –        7,947,142    9,821,963
     Investment property                                         6            2,700,000        2,700,000                –            –
     Deferred tax assets                                        25                    –           24,573                –            –
     Other long-term investments                                 7                    –           22,285                –            –

     Current assets
     Stocks                                                      8             909,743         5,092,138                –            –
     Trade debtors                                               9           7,287,945         6,942,587                –            –
     Other debtors, deposits and prepayments                    10             878,404           721,001           31,802       38,527
     Loan to subsidiaries                                       11                   –                 –          419,021      443,021
     Due from subsidiaries (non-trade)                          12                   –                 –        2,513,852    9,802,816
     Due from affiliated companies (non-trade)                  13                 180               180                –            –
     Fixed deposits                                             28           4,088,912         4,050,935        3,742,174    3,681,916
     Cash and bank balances                                     28             690,079           330,272           37,537        7,582
                                                                            13,855,263        17,137,113        6,744,386   13,973,862

     Current liabilities
     Trade creditors                                                         5,248,430         5,583,977                –            –
     Bills payable to banks (secured)                           14             225,401           343,039                –            –
     Other creditors and accruals                               15           3,472,941         5,391,750          564,877      358,474
     Due to subsidiaries (non-trade)                            13                   –                 –        3,216,327            –
     Due to directors (non-trade)                               13             266,222           105,840                –            –
     Due to affiliated companies (trade)                                             –           129,780                –            –
     Due to affiliated companies (non-trade)                    13             276,394           382,535                –            –
     Due to a minority shareholder                              16             851,275           851,776                –            –
     Provision for taxation                                                    852,585         1,361,235          100,821      100,821
     Finance lease obligations, current portion                 17             435,744           409,194                –            –
     Term loans (secured), current portion                      14             565,474           584,428                –            –
     Short-term bank loans (secured)                            14           3,878,000         4,589,400          878,000    1,589,400
     Bank overdrafts (secured)                                  14           1,926,625         2,237,784                –            –
                                                                            17,999,091        21,970,738        4,760,025    2,048,695

     Net current (liabilities) assets                                        (4,143,828)          (4,833,625)   1,984,361   11,925,167

     Non-current liabilities
     Finance lease obligations, non-current portion             17              353,985             402,820             –            –
     Deferred tax liabilities                                   25              162,247              75,998           585          585
     Term loans (secured), non-current portion                  14            3,467,243           4,129,179             –            –
     Net assets                                                               1,974,522           7,849,677     9,932,145   21,748,999

     CAPITAL AND RESERVES
     Share capital                                              18          11,115,009    9,722,702 11,115,009               9,722,702
     Share premium                                                          16,405,557 15,965,753 16,405,557                15,965,753
     Translation reserve                                                      (195,000)    (399,062)           –                     –
     Accumulated losses                                                    (25,824,790) (17,439,716) (17,588,421)           (3,939,456)
                                                                             1,500,776    7,849,677    9,932,145            21,748,999
     Minority interests                                                        473,746            –            –                     –
     Total equity                                                            1,974,522    7,849,677    9,932,145            21,748,999




        The accounting policies and explanatory notes on pages 23 through 49 form an integral part of the financial statements.

18

                                              Asian Micro Holdings Limited | Annual Report 2003
Profit and Loss Accounts
for the year ended 30 June 2003
(Amounts in Singapore dollars)


                             Note                                         Group                                                      Company
                                          Continuing                  Discontinuing
                                          operations                   operations                        Total
                                       2003        2002             2003        2002             2003           2002           2003          2002
                                                                                                              (Note 36)                    (Note 36)
                                         $              $             $             $             $               $              $             $

Revenues                       19    26,959,925 17,509,219 23,835,931 54,442,436 50,795,856 71,951,655                         636,000     1,100,000
Cost of sales                       (20,674,306) (13,761,809) (24,988,529) (55,755,627) (45,662,835) (69,517,436)                    –             –
Gross profit                          6,285,619    3,747,410 (1,152,598) (1,313,191) 5,133,021         2,434,219               636,000     1,100,000
Distribution and selling
 expenses                              (528,400)      (970,087)     (248,551)     (248,790)     (776,951)     (1,218,877)            –             –
Administrative expenses              (4,392,231)    (2,800,494)   (1,171,668)   (3,306,185)   (5,563,899)     (6,106,679)     (677,765)     (898,346)
Other operating
 (expenses) income                   (1,901,432)        21,228      (125,985)    1,010,942    (2,027,417)      1,032,170          6,739     (117,113)
(Loss)/profit from operations 21       (536,444)        (1,943)   (2,698,802)   (3,857,224)   (3,235,246)     (3,859,167)       (35,026)      84,541
Financial expenses             22      (540,457)      (738,513)      (79,050)     (370,403)     (619,507)     (1,108,916)       (12,226)     (65,442)
Financial income               22        59,304         97,039             –        41,040        59,304         138,079         96,601      127,864
Exceptional items              24             –              –    (4,810,161)      128,548    (4,810,161)        128,548    (13,698,314)    (716,167)
Loss before taxation                 (1,017,597)      (643,417)   (7,588,013)   (4,058,039)   (8,605,610)     (4,701,456)   (13,648,965)    (569,204)
Taxation                       25       208,750        643,040        56,235        (8,088)      264,985         634,952              –      (14,383)
Loss after taxation                    (808,847)          (377)   (7,531,778)   (4,066,127)   (8,340,625)     (4,066,504)   (13,648,965)    (583,587)
Minority interests                      (44,449)             –             –             –       (44,449)              –              –            –
Loss attributable to shareholders      (853,296)          (377)   (7,531,778)   (4,066,127)   (8,385,074)     (4,066,504)   (13,648,965)    (583,587)

Loss per share (cents)        26                                                                      (4.1)         (2.1)

Diluted loss per share (cents) 26                                                                     (4.1)         (2.1)




    The accounting policies and explanatory notes on pages 23 through 49 form an integral part of the financial statements.

                                                                                                                                                        19

                                             Asian Micro Holdings Limited | Annual Report 2003
     Statements of Changes in Equity
     for the year ended 30 June 2003
     (Amounts in Singapore dollars)


                                                                                         Group                         Company
                                                                                 2003               2002           2003       2002
                                                                                   $                  $              $          $
     Share capital
     Balance at beginning of year                                             9,722,702            9,722,702     9,722,702    9,722,702
     Shares issued during the year                                            1,392,307                    –     1,392,307            –
     Balance at end of year                                                  11,115,009            9,722,702    11,115,009    9,722,702

     Share premium*
     Balance at beginning of year                                            15,965,753        15,965,753       15,965,753   15,965,753
     Premium arising from shares issued during the year                         439,804                 –          439,804            –
     Balance at end of year                                                  16,405,557        15,965,753       16,405,557   15,965,753

     Translation reserve
     Balance at beginning of year                                               (399,062)             71,404            –             –
     Currency translation differences                                            204,062            (470,466)           –             –
     Balance at end of year                                                     (195,000)           (399,062)           –             –

     Accumulated losses
     Balance at beginning of year                                           (17,439,716) (13,373,212) (3,939,456)            (3,355,869)
     Loss for the year                                                       (8,385,074) (4,066,504) (13,648,965)              (583,587)
     Balance at end of year                                                 (25,824,790) (17,439,716) (17,588,421)           (3,939,456)

     Total equity                                                              1,500,776           7,849,677     9,932,145   21,748,999

     *    The share premium account may be applied only for the purposes specified in the Companies Act. The balance
          is not available for distribution of dividends except in the form of shares.




         The accounting policies and explanatory notes on pages 23 through 49 form an integral part of the financial statements.

20

                                               Asian Micro Holdings Limited | Annual Report 2003
Consolidated Statement of Cash Flows
for the year ended 30 June 2003
(Amounts in Singapore dollars)


                                                                                           2003          2002
                                                                                             $             $
Cash flows from operating activities
Loss before taxation                                                                     (8,605,610)   (4,701,456)
Adjustments:
  Provision for stock obsolescence                                                       1,392,219       115,591
  Provision for doubtful debts
  – trade                                                                                   83,183       740,981
  – non-trade                                                                                    –         9,084
  Impairment in value of quoted investments                                                      –        29,417
  Fixed assets impairment                                                                   34,315             –
  Amortisation of negative goodwill on consolidation                                             –      (141,536)
  Amortisation of goodwill on consolidation                                                374,126       216,327
  Loss on sale of quoted investments                                                         5,520        14,174
  Gain on disposal of subsidiaries                                                        (201,853)            –
  Deficit on revaluation of investment property                                                  –       100,000
  Depreciation of fixed assets                                                           2,364,316     2,566,010
  Fixed assets written off                                                               4,909,576        87,866
  Gain on sale of fixed assets                                                              (2,244)     (160,013)
  Gain on dilution of interest in a subsidiary                                                   –      (144,616)
  Bad debts written off (trade)                                                            508,836         9,437
  Stocks written off                                                                             –        24,020
  Reversal of impairment in value of quoted investments                                          –       (11,125)
  Written back of provision for doubtful trade debts                                        (8,741)      (26,005)
  Written back of provision for stock obsolescence                                          (9,497)            –
  Deposits forfeited                                                                       135,950             –
  Interest expense                                                                         597,787     1,014,625
  Interest income                                                                          (59,304)     (138,079)
  Translation difference                                                                   223,873      (520,401)



Operating profit before working capital changes                                          1,742,452       (915,699)
 Stocks                                                                                  2,790,938      4,137,934
 Trade debtors                                                                            (637,080)     4,557,292
 Other debtors, deposits and prepayments                                                  (311,359)       569,871
 Due from an associated company (non-trade)                                                      –       (211,868)
 Due from affiliated companies (trade)                                                           –        239,688
 Due from affiliated companies (non-trade)                                                       –        126,429
 Trade creditors                                                                          (435,855)    (2,750,521)
 Bills payable to banks                                                                   (117,637)    (4,204,652)
 Other creditors and accruals                                                             (723,197)      (383,933)
 Due to directors (non-trade)                                                              126,646       (759,153)
 Due to affiliated companies (trade)                                                      (129,780)        42,637
 Due to affiliated companies (non-trade)                                                   552,639        206,649
 Due to a minority shareholder                                                                (501)       851,776

Cash generated from operations                                                           2,857,266      1,506,450
Interest paid                                                                             (597,787)    (1,014,625)
Interest income received                                                                    59,304        138,079
Income taxes paid                                                                         (132,843)       (96,765)
Net cash from operating activities                                                       2,185,940        533,139




                                                                                                                     21

                                     Asian Micro Holdings Limited | Annual Report 2003
     Consolidated Statement of Cash Flows
     for the year ended 30 June 2003
     (Amounts in Singapore dollars)


                                                                                                  Note     2003           2002
                                                                                                             $              $
     Cash flows from investing activities
     Acquisition of subsidiaries, net of cash acquired                                             5       142,632        144,719
     Disposal of subsidiaries, net of cash                                                         5       (22,113)             –
     Proceed from sale of fixed assets                                                                   1,151,126        499,207
     Proceed from sale of quoted investment                                                                 16,765         20,486
     Purchase of fixed assets                                                                      3      (921,310)    (1,636,700)
     Purchase of quoted investment                                                                               –         (9,217)
     Minority interest contribution to incorporate new subsidiary                                           44,692              –
     Net cash from/(used in) investing activities                                                          411,792       (981,505)

     Cash flows from financing activities
     Proceeds from exercise of share options                                                                 27,370             –
     Repayment of term loans                                                                             (1,013,891)     (459,391)
     Repayment of short term loans                                                                         (378,400)      (49,500)
     Proceeds from short term loans                                                                               –     3,000,000
     Repayment of finance lease                                                                            (523,868)   (1,675,458)
     Fixed deposits subjected to restriction                                                                (58,042)      (82,236)
     Net cash (used in)/from financing activities                                                        (1,946,831)      733,415

     Net increase in cash and cash equivalents                                                              650,901       285,049
     Cash and cash equivalents at beginning of year                                                      (1,867,735)   (2,152,784)
     Cash and cash equivalents at end of year                                                      28    (1,216,834)   (1,867,735)




        The accounting policies and explanatory notes on pages 23 through 49 form an integral part of the financial statements.

22

                                              Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


1.   Corporation information

     The financial statements of Asian Micro Holdings Limited for the year ended 30 June 2003 were authorised for
     issue in accordance with a resolution of the directors on 25 September 2003. Asian Micro Holdings Limited is a
     limited liability company which is incorporated in Singapore.

     The registered office and principal place of business of Asian Micro Holdings Limited is located at 3 Tech Park
     Crescent, Tuas Tech Park, Singapore 638129.

     The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries
     are described in Note 5 to the financial statements. As at 30 June 2003, the Group is in the process of discontinuing
     its activities of manufacturing and sale of flexible circuit board, actuator coil assembly and provision of hook-up
     assembly services (“FCBA”). Subsequent to the financial year end, the Group has ceased its FCBA activities.
     Accordingly, the results of FCBA activities have been disclosed under “Discontinuing operations” in the profit
     and loss account.

     There have been no other significant changes in the principal activities of the Company and its subsidiaries
     during the financial year.

     The Group and Company employed 449 and 3 (2002: 514 and 3) employees as of 30 June 2003, respectively.

     The Group and Company incurred net loss of $8,385,074 and $13,648,965 respectively for the financial year
     ended 30 June 2003, and as of that date, the Group’s current liabilities exceeded its current assets by $4,143,828.
     A major shareholder has given an undertaking to continue to provide sufficient financial support to the Group
     for at least 12 months from the date of the report of the directors, to enable the Group to operate as a going
     concern. Accordingly, the financial statements have been prepared on a going concern basis.


2.   Significant accounting policies

     (a) Basis of preparation

          The financial statements of the Company and of the Group which are expressed in Singapore dollars, have
          been prepared under the historical cost convention, modified by the revaluation of investment property, in
          accordance with Singapore Statements of Accounting Standard (“SAS”) and applicable provisions of the
          Singapore Companies Act. The financial statements have been prepared on the going concern basis
          notwithstanding the excess of current liabilities over current assets as at 30 June 2003 due to reasons as
          described in Note 1.

          The accounting policies have been consistently applied by the Company and the Group and are consistent
          with those used in the previous year.

     (b) Principles of consolidation

          The consolidated financial statements include the financial statements of the Company and its subsidiaries.

          The results of subsidiaries acquired or sold during the year are consolidated for the periods from or to the
          date of acquisition or disposal. All intercompany balances, transactions and any unrealised profit or loss on
          intercompany transactions are eliminated on consolidation.

          Acquisitions of subsidiaries are accounted for using the purchase method of accounting.

          The consolidated financial statements are prepared using uniform accounting policies for like transactions
          and other events in similar circumstances.

          Assets, liabilities and results of the foreign subsidiaries are translated into Singapore dollars on the basis
          outlined in paragraph (g) below.




                                                                                                                             23

                                         Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     2.   Significant accounting policies (cont’d)

          (c)   Subsidiaries

                A subsidiary is defined as a company, in which the Group has a long-term interest of more than 50% of the
                equity or in whose financial and operating policy decisions the Group controls.

                Investments in subsidiaries are stated in the financial statements of the Company at cost.

                An assessment of investments in subsidiaries is performed when there is indication that the asset has been
                impaired or the impairment losses recognised in the prior years no longer exist.

          (d) Associated company

                An associated company is defined as a company, not being a subsidiary, in which the Group has a long-term
                interest of not less than 20% of the equity and in whose financial and operating policy decisions the Group
                exercises significant influence.

          (e) Affiliated companies

                An affiliated company is defined as a company, not being a subsidiary or an associated company, in which
                the Company’s directors or shareholders have an equity interest or can exercise control or significant influence.

          (f)   Foreign currencies

                The accounting records of the companies in the Group are maintained in their respective measurement
                currencies.

                Foreign currency transactions are converted into Singapore dollars at rates closely approximating those
                ruling at the transaction dates. Foreign currency monetary assets and liabilities outstanding at the balance
                sheet date are converted into Singapore dollars at the rates of exchange approximating those ruling at
                that date. All resultant exchange difference are recognised in the profit and loss account.

          (g) Translation of foreign currency denominated financial statements

                In the preparation of the consolidated financial statements, the financial statements of foreign subsidiaries
                have been translated from their respective measurement currencies to Singapore dollars as follows:

                (i) share capital and reserves at historical exchange rates;
                (ii) all assets and liabilities at the exchange rates approximating those prevailing at the balance sheet
                      date; and
                (iii) profit and loss account at the average exchange rate for the year.

                Exchange differences arising from the above translation are taken to translation reserve.

          (h) Fixed assets

                Fixed assets are stated at cost less accumulated depreciation and any impairment in value. The cost of an
                asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition
                for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure
                for maintenance and repairs are charged to the profit and loss account. When assets are sold or retired,
                their cost and accumulated depreciation are removed from the financial statements and any gain or loss
                resulting from their disposal is included in the profit and loss account.

          (i)   Depreciation

                Depreciation is calculated on a straight-line method to write off the cost of fixed assets over their estimated
                useful lives. The estimated useful lives of fixed assets are as follows:



24

                                               Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


2.   Significant accounting policies (cont’d)

     (i)   Depreciation (cont’d)
                                                                                              Years
           Leasehold land and buildings                                             over the lease term
           Freehold buildings                                                                50
           Furniture and fittings                                                          5 – 10
           Air conditioners                                                                2 – 10
           Machinery, equipment and motor vehicles                                         3 – 10
           Office equipment and computers                                                  1 – 10
           Communications equipment                                                           2
           Renovation and electrical installation                                          3 – 10

           No depreciation is provided for freehold land and capital work-in-progress.

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

     (j)   Impairment of assets

           Fixed assets, goodwill and long-term investments are reviewed for impairment whenever events or changes
           in circumstances indicate that the carrying amount of the asset may not be recoverable. Whenever the
           carrying amount of an asset exceeds its recoverable amount, an impairment loss is recognised in the profit
           and loss account or treated as a revaluation decrease for assets carried at revalued amount to the extent
           that the impairment loss does not exceed the amount held in the revaluation surplus for the same asset.
           The recoverable amount is the higher of an asset’s net selling price and value in use. The net selling price is
           the amount obtainable from the sale of an asset in an arm’s length transaction. Value in use is the present
           value of estimated future cash flows expected to arise from the continuing use of an asset and from its
           disposal at the end of its useful life. Recoverable amounts are estimated for individual assets or, if it is not
           possible, for the cash-generating unit.

           Reversal of an impairment loss recognised in prior years is recorded when there is an indication that the
           impairment loss recognised for an asset no longer exists or has decreased. The reversal is recorded in the
           profit and loss account or as a revaluation increase.

           However, the increased carrying amount of an asset due to a reversal of an impairment loss is recognised to
           the extent it does not exceed the carrying amount that would have been determined (net of amortisation
           or depreciation) had no impairment loss been recognised for that asset in prior years.

     (k) Goodwill and negative goodwill

           (i)   Goodwill

                 Goodwill represents the excess of the cost of the acquisition over the fair value of identifiable net
                 assets of a subsidiary at the date of acquisition. Goodwill is amortised on a straight-line basis over a
                 period of 3 years. Goodwill is stated at cost less accumulated amortisation and any impairment losses.

           (ii) Negative goodwill

                 Negative goodwill arising on acquisition represents the excess of the fair value of the identifiable net
                 assets acquired over the cost of acquisition.

                 To the extent that negative goodwill relates to an expectation of future losses and expenses that are
                 identified in the plan of acquisition and can be measured reliably, but which have not yet been
                 recognised, it is recognised in the profit and loss account when the future losses and expenses are
                 recognised. Any remaining negative goodwill, not exceeding the fair values of the non-monetary
                 assets acquired, is recognised in the profit and loss account over 3 years, the weighted average useful
                 life of those assets that are depreciable or amortisable. Negative goodwill in excess of fair values of
                 the non-monetary assets acquired is recognised immediately in the profit and loss account.

                 Negative goodwill is presented in the same balance sheet classification as goodwill.
                                                                                                                              25

                                          Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     2.   Significant accounting policies (cont’d)

          (l)   Quoted investments

                Quoted investments are stated at the lower of cost and market value determined on an aggregate portfolio
                basis. Dividend income is recognised when it is declared payable by the investee companies.

          (m) Investment property

                Investment property is held for the primary purpose of producing rental income. It is not held for resale in
                the ordinary course of business. The investment property is stated at annual valuation.

                An independent professional valuation is made at least once every three years. The net surplus or deficit
                on revaluation is taken to revaluation reserve except when the total of the reserve is not sufficient to cover
                a deficit, in which case the amount by which the deficit exceeds the amount in the revaluation reserve is
                charged to the profit and loss account.

                Surplus on revaluation is released to the profit and loss account upon the sale of the investment property.

          (n) Stocks

                Stocks are valued at the lower of cost (determined on a first-in, first-out basis) and net realisable value.
                Cost includes materials, all direct expenditure and an attributable portion of overheads.

                Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
                completion and the estimated costs necessary to make the sale.

                Provision is made for deteriorated, damaged and slow-moving stocks.

          (o) Trade and other debtors

                Trade and other debtors are recognised and carried at original invoiced amount less an allowance for any
                uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no
                longer probable. Bad debts are written off as incurred.

                Receivables from related parties are recognised and carried at cost less an allowance for any uncollectible
                amounts.

          (p) Cash and cash equivalents

                Cash and cash equivalents are defined as cash on hand, demand deposits and short-term, highly liquid
                investments readily convertible to known amounts of cash and subject to insignificant risk of changes in
                values.

                Cash and cash equivalents are carried at cost.

          (q) Trade and other creditors

                Liabilities for trade and other amounts payable are carried at cost which is the fair value of the consideration
                to be paid in the future for goods and services received, whether or not billed to the Group.

                Payables to related parties are carried at cost.




26

                                               Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


2.   Significant accounting policies (cont’d)

     (r)   Leases

           (i)   Finance lease

                 Finance leases, which effectively transfer to the Group substantially all the risks and benefits incidental
                 to ownership of the lease item, are capitalised at the present value of the minimum lease payments at
                 the inception of the lease term and disclosed as fixed assets. Lease payments are apportioned between
                 the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on
                 the remaining balance of the liability. Finance charges are charged directly against income.

                 Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or
                 the lease term.

           (ii) Operating lease

                 Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the
                 leased assets are classified as operating leases. Operating lease payments are recognised as an expense
                 in the profit and loss account on a straight-line basis over the lease term.

     (s)   Loans and borrowings

           Loans and other borrowings are recognised at cost.

     (t)   Revenue recognition

           (i) Revenue from sale of goods

                 Revenue from sale of goods is recognised net of discounts upon delivery of goods and acceptance by
                 customers.

           (ii) Interest income

                 Interest income is recognised on an accrual basis.

           (iii) Dividend income

                 Dividend income is recognised gross on the date it is declared payable by the investee company.

                 Group turnover excludes intercompany transactions.

     (u) Employee benefits

           Defined contribution plan

           As required by law, the Group’s companies in Singapore and Malaysia make provident fund contributions
           to the state pension schemes. These contributions are recognised as compensation expense in the same
           period as the employment that gives rise to the contribution.

           Employee leave entitlement

           Employee entitlements to annual leave are recognised when they accrue to employees. An accrual is made
           for estimated liability for annual leave as a result of service rendered by employees up to the balance sheet
           date.

           Employee share incentive plan

           The Company has an employee share incentive plan for the granting of non-transferable options. No
           compensation cost is recognised upon granting or the exercise of the options. When the options are
           exercised, the proceeds received net of any transaction costs are credited to share capital and share premium
           accordingly.

                                                                                                                               27

                                           Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     2.   Significant accounting policies (cont’d)

          (v)   Preliminary expenses

                Preliminary expenses are recognised as expenses in the period in which they are incurred.

          (w) Borrowing costs

                Borrowing costs are recognised as expenses in the period in which they are incurred.

          (x)   Income taxes

                Income tax expense is determined on the basis of tax effect accounting, using the liability method, and is
                applied to all temporary differences at the balance sheet date between the carrying amounts of assets and
                liabilities and the amounts used for tax purposes. Deferred tax liabilities are recognised for all taxable
                temporary differences.

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

                Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
                assets and unused tax losses, to the extent that it is probable that taxable profit against which the deductible
                temporary differences, carry-forward of unused tax assets and unused tax losses can be utilised will be
                available. For deductible temporary differences associated with investments in subsidiaries, deferred tax
                assets are only recognised to the extent that it is probable that the temporary differences will reverse in the
                foreseeable future and taxable profit against which the temporary difference can be utilised will be available.

                The carrying amount of a deferred tax asset is reviewed at each balance sheet date and reduced to the
                extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of
                part or all of the deferred tax asset to be utilised.

                Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period
                when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted
                or substantively enacted at the balance sheet date.

          (y)   Segments

                For management purposes, the Group is organised on a world-wide basis into three major divisions according
                to the nature of products and services provided, with each segment representing a strategic business unit
                that offers different products and serves different markets.

                Segment revenue, expenses and results include transfers between segments. Such transfers are accounted
                for on an arm’s length basis.




28

                                               Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


3.    Fixed assets
                                                                            Machinery, Office              Renovations
                            Leasehold Freehold        Furniture             equipment equipment    Com-        and       Capital
                             land and land and           and        Air     and motor    and    munications electrical work-in-
(a) Group                   buildings buildings        fittings conditioners vehicles computers equipments installation progress                 Total
                                 $        $                $         $          $         $          $          $          $                       $
Cost
 At 1.7.2002                4,638,450    1,027,736      279,533     324,191     14,118,624    540,016     1,576,616    1,894,490     764,758   25,164,414
 Arising from acquisition
  of subsidiaries                   –            –            –        6,696      650,706      11,760             –        4,959           –     674,121
 Reversal upon disposal
  of subsidiaries                   –            –         (290)           –             –          –             –            –           –        (290)
 Additions                          –            –        8,300        2,942     1,120,849     36,955             –       77,295           –   1,246,341
 Disposals                          –     (405,558)     (10,975)           –    (1,318,701)   (14,146)      (44,863)        (700)   (530,918) (2,325,861)
 Written off                        –            –       (5,033)    (157,146)   (7,313,403)   (30,104)     (461,432)    (575,002)   (225,881) (8,768,001)
 Returned to vendor                 –            –            –            –      (362,806)         –             –            –           –    (362,806)
 Translation difference       (12,109)      (7,762)        (557)          (3)      (90,000)    (2,032)      (29,685)      (3,385)     (7,959)   (153,492)
 At 30.6.2003               4,626,341      614,416      270,978      176,680     6,805,269    542,449     1,040,636    1,397,657           – 15,474,426

 Accumulated depreciation
 At 1.7.2002            1,081,945           77,975      198,209     231,564      7,487,928    333,475       833,738    1,185,379           –   11,430,213
 Charge for the year      183,317           14,872       24,881       4,430      1,654,878     64,039       258,139      159,760           –    2,364,316
 Impairment loss                –           34,315            –           –              –          –             –            –           –       34,315
 Disposals                      –          (29,957)      (4,865)          –     (1,098,652)   (12,125)      (31,205)        (175)          –   (1,176,979)
 Written off                    –                –         (684)    (78,573)    (3,443,273)   (19,884)            –     (316,011)          –   (3,858,425)
 Translation difference    (9,135)            (349)        (480)          2       (144,019)      (907)      (20,036)      (1,467)          –     (176,391)
 At 30.6.2003           1,256,127           96,856      217,061     157,423      4,456,862    364,598     1,040,636    1,027,486           –    8,617,049
 Charge for 2002          196,798           15,893       41,614      34,995      1,801,232     87,965       230,610      156,903           –    2,566,010

 Net book value
 At 30.6.2003               3,370,214     517,560        53,917      19,257      2,348,407    177,851            –      370,171            –    6,857,377
 At 30.6.2002               3,556,505     949,761        81,324      92,627      6,630,696    206,541      742,878      709,111      764,758   13,734,201

      Machinery and equipment and motor vehicles of the Group with net book values of approximately $341,000
      and $381,000 (2002: $552,000 and $334,000) respectively, were acquired under finance leases. Freehold land
      and buildings of the Group of approximately $518,000 (2002: $950,000) and leasehold land and buildings of the
      Group of approximately $3,300,000 (2002: $3,400,000) were pledged to banks for certain loan facilities granted
      to the Group as disclosed in Note 14 below.

      During the year, the Group acquired fixed assets amounting to $1,246,341 (2002: $2,793,887) of which $921,310
      (2002: $1,636,700) and $325,031 (2002: $1,157,187) were acquired by way of cash and finance leases respectively.

(b) Company                                                                                                                         Furniture and
                                                                                                                                       fittings
                                                                                                                                           $

      Cost
      As at 1.7.2002 and 30.6.2003                                                                                                       6,136
      Accumulated depreciation
      As at 1.7.2002                                                                                                                     3,682
      Charge for the year                                                                                                                1,227
      As at 30.6.2003                                                                                                                    4,909
      Depreciation charge for 2002                                                                                                       1,227
      Net book value
      As at 30.6.2003                                                                                                                    1,227
      As at 30.6.2002                                                                                                                    2,454

                                                                                                                                                             29

                                                      Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     4.   Goodwill on consolidation
                                                                                                          Group
                                                                                                   2003           2002
                                                                                                     $              $
          Goodwill on consolidation
          Balance at beginning of year                                                           1,061,304        82,063
          Goodwill arising from acquisition of subsidiaries                                        108,334       979,241
                                                                                                 1,169,638     1,061,304
          Less : Accumulated amortisation                                                         (625,190)     (251,064)
          Balance at end of year                                                                   544,448       810,240

          Movements in accumulated amortisation of goodwill on consolidation during the year are as follows :

          Balance at beginning of year                                                             251,064         27,354
          Arising from dilution of interest during the year                                              –          7,383
          Amortisation for the year                                                                374,126        216,327
          Balance at end of year                                                                   625,190        251,064

          Negative goodwill on consolidation
          Balance at beginning of year                                                            (424,608)     (424,608)
          Less : Accumulated amortisation                                                          424,608       424,608
          Balance at end of year                                                                         –             –

          Movement in accumulated amortisation of negative goodwill on consolidation during the year is as follows :

          Balance at beginning of year                                                             424,608        283,072
          Amortisation for the year                                                                      –        141,536
          Balance at end of year                                                                   424,608        424,608
          Goodwill on consolidation – net                                                          544,448        810,240


     5.   Investments in subsidiaries

          (i)   Cost of investments
                                                                                                       Company
                                                                                                   2003      2002
                                                                                                     $         $
                Unquoted equity investments, at cost                                             10,913,928    10,454,902
                Less : Impairment loss                                                           (2,966,786)    (632,939)
                Balance at end of year                                                            7,947,142     9,821,963

          (ii) Movements in impairment loss in value of investments in subsidiaries during the year are as
               follows :
                                                                                           Company
                                                                                       2003       2002
                                                                                         $           $
                Balance at beginning of year                                                       632,939              –
                Impairment loss during the year                                                  2,384,821        632,939
                Reversal of impairment loss upon disposal of subsidiaries                          (50,974)             –
                Balance at end of year                                                           2,966,786        632,939




30

                                             Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


5.   Investments in subsidiaries (cont’d)

     (iii) Acquisition of a subsidiary

         The Company acquired a 51% equity interest in Hypertech Technology Pte Ltd during the financial year. In
         previous financial year, the Company acquired an additional 15.4% and 55.5% equity interest in A-P Precision
         Plastic Pte Ltd (“APP”) and A-P Engineering Pte Ltd (“APE”) respectively.

         The attributable assets acquired and liabilities assumed during the year resulting from the acquisition of
         subsidiaries are as follows:
                                                                                                 2003          2002
                                                                                                   $             $
         Fixed assets                                                                           674,121        658,678
         Current assets                                                                         521,570      1,594,884
         Current liabilities                                                                   (417,316)    (2,875,800)
         Goodwill arising on acquisition                                                        108,334        979,241
         Minority interests                                                                    (376,709)             –
         Total purchase price                                                                   510,000        357,003
         Consideration satisfied by:
         - issuance of shares                                                                  (509,960)             –
         - capitalisation of convertible loan                                                         –       (300,000)
         Less: net cash at bank from subsidiaries acquisition                                  (142,672)      (201,722)

         Cash flow from acquisition, net of cash acquired                                      (142,632)      (144,719)


     (iv) Disposal of subsidiaries

         The Company disposed of the following subsidiaries during the year :

         Name of subsidiary                                                                         Effective equity
                                                                                                   interest disposed
         ACI Technology (Thai) Co., Ltd.                                                                   49%
         Semtronic Technology Sdn. Bhd.                                                                    100%

         The assets disposed and the liabilities discharged as a result of the disposal of the above subsidiaries are as
         follows:

                                                                                                           2003
                                                                                                             $

         Fixed assets                                                                                        290
         Current assets                                                                                  101,382
         Current liabilities                                                                            (303,525)
                                                                                                        (201,853)
         Less : Gain on disposal                                                                         201,853
                                                                                                               –
         Sales proceeds                                                                                        –
         Cash disposed                                                                                   (22,113)
         Net cash out flow from disposal of subsidiaries                                                 (22,113)




                                                                                                                           31

                                       Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     5.   Investments in subsidiaries (cont’d)

          (v) Details of the subsidiaries at the end of the financial year are as follows:

                                                                         Country of
                                                                       incorporation          Effective equity           Cost of
                                                                        and place of          interest held by       investment by
          Name of company                 Principal activities            business               the Group            the Company
                                                                                              2003        2002     2003          2002
                                                                                               %           %         $             $
          Held by the Company
          Asian Micro (S) Pte             Manufacture and sale of        Singapore            100         100    3,865,290     3,865,290
           Ltd (“AMS”) (1)                precision trays and
                                          provision of tray
                                          recycling services

          Asian Micro Sdn. Bhd.           FCBA                            Malaysia            100         100    2,765,013     2,765,013
           (“AMM”) (2)
           (Note d)

          Asian Micro Manufacturing       FCBA                           Philippines          100         100     1,163,926    1,163,926
           Phils., Inc. (“AMPI”) (1)
           (Note d)

          World Circuit Technology (S)    Currently inactive             Singapore            100         100            1              1
           Pte Ltd (“WCT”) (3)

          Semtronic Technology            Trading in clean room          Malaysia                –        100             –      50,973
           Sdn. Bhd. (“Semtronic”) (2)    supplies for the electronics
           (Note a)                       and hard disk drive industries

          Impact Polythene Pte Ltd        Manufacture of clean           Singapore            100         100      600,000      600,000
           (“Impact”) (1)                 room grade polyethylene
                                          packaging materials

          ACI Industries Pte Ltd          Trading in clean               Singapore            100         100      168,387      168,387
           (“ACI”) (1)                    room supplies

          ACI Technology (Thai)           Currently inactive              Thailand               –         49             –             1
           Co., Ltd. (“ACIT”) (4)
           (Notes a & b)

          ACI Industries, Inc.            Currently inactive             Philippines            40         40            1              1
           (“ACIP”) (1)
            (Note b)

          Asian Micro (Thailand)          FCBA and provision of           Thailand            100         100     1,402,246    1,402,246
           Co., Ltd. (“AMT”) (4)           tray recycling services
           (Note d)

          A-P Precision Plastic Pte Ltd   Production of precision        Singapore            59.7        59.7     139,063      139,063
           (“APP”) (1)                    engineering plastic
                                          components

          A-P Engineering Pte Ltd         Design and fabrication of       Singapore          54.91       54.91     300,001      300,001
           (“APE”) (1)                    moulds, high precision
                                          tungsten carbide or hardened
                                          tool steel die sets and systems

          Hypertech Technology Pte Ltd Design and fabrication of     Singapore                  51           –     510,000              –
           (“Hypertech”) (3)           precision die for automotive,
                                       electronics and
                                       telecommunication industries
                                                                                                                 10,913,928   10,454,902

32

                                                     Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


5.   Investments in subsidiaries (cont’d)

     (v) Details of the subsidiaries at the end of the financial year are as follows:

                                                                  Country of
                                                                incorporation          Effective equity            Cost of
                                                                 and place of          interest held by        investment by
     Name of company                Principal activities         business                 the Group             the Company
                                                                                       2003        2002      2003          2002
                                                                                        %           %          $             $
     Held by subsidiaries
     Asian Micro Technology         Manufacture of flex        People’s Republic       100         100             –              –
      (Wuxi) Co., Ltd (“AMW”) (5)   cable assemblies for           of China
      (Note c)                      telecommunication and
                                    electronics industries and
                                    provision of tray
                                    recycling services

     A-P Technology (Shunde)        Production of precision    People’s Republic        51         51              –              –
      Co., Ltd (6)                  engineering plastic            of China
                                    components

     (1)   Audited by Ernst & Young Singapore or member firms of Ernst & Young Global
     (2)   Audited by KPMG Malaysia
     (3)   Audited by Goh Yau Kee & Co.
     (4)   Audited by KPMG Thailand
     (5)   Audited by Wuxi Zhong Xin Certified Public Accountants Co., Ltd.
     (6)   Audited by Shunde Xiang He Certified Public Accountants Co., Ltd.

     (a) During the financial year, the Company disposed its investment in Semtronic and ACIT. A gain on disposal
         of $201,853 was recognised in the consolidated profit and loss account, as described in Note 24.
     (b) As the Company has control over their financial and operating policies via a majority representation on the
         Board of Directors, these entities are deemed to be subsidiaries of the Company.
     (c)   In previous year, the subsidiary, AMW was incorporated with a registered capital of US$2,500,000. The
           Group, through AMS has contributed US$900,845 ($1,496,327) to the registered capital by way of cash and
           fixed assets as at 30 June 2002. During the year, the Group further contributed US$154,801 ($271,831) in
           cash and US$86,005 ($138,104) in the form of fixed assets. Total capital contributed and outstanding
           contribution as at 30 June 2003 is US$1,141,651 ($1,906,262) and US$1,358,349 ($2,385,000) respectively.
           Subsequent to the financial year end, the Group further contributed to the subsidiary’s registered capital
           by injecting US$193,500 ($339,786) in cash and US$133,000 ($233,548) in fixed assets.
     (d) As at 30 June 2003, the subsidiaries, other than AMT ceased their FCBA activities and became inactive. AMT
         has also ceased its FCBA activities subsequent to the financial year end.

6.   Investment property
                                                                                                                   Group
                                                                                                            2003           2002
                                                                                                              $              $
     Investment property at beginning of year                                                             2,700,000    2,800,000
     Deficit on revaluation                                                                                       –     (100,000)
     Balance at end of year, stated at valuation                                                          2,700,000    2,700,000

     The investment property is stated at directors’ valuation in the current financial year. It was previously revalued
     by an independent professional firm of valuers, Chesterton International Property Consultants Pte Ltd in August
     2002 on an open market basis. This investment property has been pledged to certain banks for certain credit
     facilities granted to the Group as disclosed in Note 14 below.

                                                                                                                                      33

                                              Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     7.   Other long-term investments
                                                                                                          Group
                                                                                                   2003           2002
                                                                                                     $              $
          Quoted investments, at cost                                                              80,767         106,210
          Additions                                                                                     –           9,217
          Disposals                                                                               (80,767)        (34,660)
          Less: provision for lower of cost and market value of quoted investments                      –         (58,482)
          Market value of quoted equity shares                                                          –          22,285

          Movements in provision for lower of cost and market value of quoted investments during the year are as follows:

          Balance at beginning of year                                                             58,482          40,190
          Provision for the year                                                                        –          29,417
          Written back during the year                                                                  –         (11,125)
          Written off against provision                                                           (58,482)              –
                                                                                                        –          58,482


     8.   Stocks
                                                                                                          Group
                                                                                                   2003           2002
                                                                                                     $              $
          Finished goods, at cost                                                                 526,610     2,742,832
          Work-in-progress, at cost                                                                85,731       136,526
          Raw materials, at cost                                                                  297,402     2,038,046
          Goods-in-transit, at cost                                                                     –       174,734
                                                                                                  909,743     5,092,138
          Stocks are stated after deducting provision for stock obsolescence                    2,048,828       765,641

          Movements in provision for stock obsolescence during the year are as follows :

          Balance at beginning of year                                                            765,641     1,190,807
          Provision for the year                                                                1,392,219       115,591
          Written back during the year                                                             (9,497)            –
          Written off against provision                                                           (99,017)     (538,304)
          Translation difference                                                                     (518)       (2,453)
                                                                                                2,048,828       765,641

          Raw materials and finished goods amounting to $105,415 and $1,943,413 (2002: $163,078 and $602,563)
          respectively, were carried at their net realisable value of $Nil.

     9.   Trade debtors
                                                                                                          Group
                                                                                                   2003           2002
                                                                                                     $              $
          Trade debtors                                                                         7,828,767     8,174,571
          Less : provision for doubtful debts                                                    (540,822)   (1,231,984)
                                                                                                7,287,945     6,942,587

          Movements in provision for doubtful debts during the year are as follows :

          Balance at beginning of year                                                          1,231,984       529,729
          Provision for the year                                                                   83,183       740,981
          Written off against provision                                                          (755,606)            –
          Written back of provision                                                                (8,741)      (26,005)
          Translation difference                                                                   (9,998)      (12,721)
                                                                                                  540,822     1,231,984

34

                                            Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


10. Other debtors, deposits and prepayments
                                                                                    Group                      Company
                                                                            2003              2002         2003       2002
                                                                              $                 $            $          $
    Other debtors                                                           587,439           277,355       26,802        38,527
    Less : Provision for doubtful debts                                     (69,473)          (87,796)           –             –
                                                                            517,966           189,559       26,802        38,527
    Deposits                                                                342,021           496,435            –             –
    Prepayments                                                              18,417            35,007        5,000             –
                                                                            878,404           721,001       31,802        38,527

    Movements in provision for doubtful debts during the year are as follows :

    Balance at beginning of year                                              87,796           79,021            –              –
    Provision for the year                                                         –            9,084            –              –
    Bad debts written off against provision                                  (18,085)               –            –              –
    Translation difference                                                      (238)            (309)           –              –
                                                                              69,473           87,796            –              –

11. Loans to subsidiaries

    The loans bear interest at 9% (2002: 7%) per annum. The loans are unsecured and are repayable on demand,
    however, the Company has undertaken not to call for payment of these loan at least for twelve months from 19
    September 2003, unless the subsidiaries are financially able to do so.

12. Due from subsidiaries (non-trade)
                                                                                                                Company
                                                                                                            2003      2002
                                                                                                              $         $
    Due from subsidiaries (non-trade)                                                                    11,286,665    9,886,044
    Less : provision for doubtful debts                                                                  (8,772,813)     (83,228)
                                                                                                          2,513,852    9,802,816

    Movements in provision for doubtful debts during the year are as follows :

    Balance at beginning of year                                                                             83,228     3,400,437
    Provision for the year                                                                                7,389,585        83,228
    Transferred from subsidiary resulting from assumption of debts                                        1,300,000             –
    Written off against provision                                                                                 –    (3,400,437)
                                                                                                          8,772,813        83,228

13. Due to subsidiaries (non-trade)
    Due from (to) affiliated companies (non-trade)
    Due to directors (non-trade)

    These amounts are unsecured, interest-free and are repayable on demand.

14. Bills payable to banks/ Short-term bank loans/ Term loans/ Bank overdrafts (secured)

    Bills payable to banks

    Interest on bills payable to banks is charged at 0.5% to 2.5% (2002: 1% to 2.5%) per annum above the banks’
    prime rates. The banks’ prime rates during the year ranged from 4% to 5.5% (2002 : 4.75% to 6.75%) per
    annum.

                                                                                                                                     35

                                          Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     14. Bills payable to banks/ Short-term bank loans/ Term loans/ Bank overdrafts (secured) (cont’d)

         Short-term bank loans

         This represents a revolving credit facility taken up by the Company and a subsidiary, bearing interest at 1.5%
         and 1.25% (2002: 1.5% and Nil%) respectively per annum above the bank’s prime rate. The bank’s prime rate
         during the year ranged from 5.25% to 5.5% (2002: 5.5% to 6%) per annum.

         Term loans
                                                                                                            Group
                                                                                                     2003           2002
                                                                                                       $              $
         Secured term loans:
         Due within 12 months                                                                        565,474      584,428
         Due after 12 months                                                                       3,467,243    4,129,179
                                                                                                   4,032,717    4,713,607

         The Group’s term loans as at 30 June 2003 comprise:

         (a) a bank loan taken up by a subsidiary of approximately $2,372,000 (2002: $2,591,000) repayable in 180
             monthly instalments commencing July 1997. The loan bears interest at 1% above the bank’s prime rate.
             The bank’s prime rates during the year ranged from 4% to 4.75% (2002 : 4.75% to 6.75%) per annum;

         (b) a bank loan taken up by a subsidiary of approximately $133,000 (2002: $273,000) which bears interest of
             between 1.75% and 2.5% (2002: 1.5% and 2.5%) above the bank’s base lending rates. The bank’s base
             lending rate during the year was 6.4% (2002: ranged from 6.4% to 6.7%) per annum; and

         (c)   a bank loan taken up by a subsidiary of approximately $1,528,000 (2002: $1,850,000) which bears interest
               of between 1% per annum above the prevailing bank’s prime rate. The bank’s prime rates during the year
               ranged from 4% to 4.75% (2002 : 4.75% to 6.75%) per annum.

         The bills payable to banks, short-term bank loans, term loans and bank overdrafts are secured by:

         (i)   a legal mortgage over a subsidiary’s investment property valued at $2.7 million (2002: $2.7 million);

         (ii) a legal mortgage over a subsidiary’s leasehold land and building with a net book value of approximately
              $3.3 million (2002: $3.4 million);

         (iii) fixed legal charges over the Group’s freehold land and building with a net book value of approximately
               $518,000 (2002: $950,000) as at 30 June 2003;

         (iv) a legal mortgage over two properties of affiliated companies, American Converters Industries Pte Ltd and
              Ultraline Technology (S) Pte Ltd;

         (v)   charges over certain fixed assets of an affiliated company, Wide Victory Sdn Bhd;

         (vi) corporate guarantee of $17,137,000 (2002: $17,167,000) from the Company;

         (vii) fixed deposits of $4 million (2002: $4 million); and

         (viii) a negative pledge in the form of an undertaking by a subsidiary that it will not mortgage, pledge or create
                any charge (fixed or floating) over its assets.




36

                                             Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


15. Other creditors and accruals
                                                                                Group                         Company
                                                                        2003               2002           2003       2002
                                                                          $                  $              $          $
    Other creditors                                                   2,010,568           3,598,650      121,205        51,119
    Accrued operating expenses                                        1,384,742           1,727,924      443,672       307,355
    Deferred income                                                      77,631              65,176            –             –
                                                                      3,472,941           5,391,750      564,877       358,474


16. Due to a minority shareholder

    This amount is unsecured, interest-free and is repayable on demand. Included in this balance is an amount of
    $697,000 which is currently under legal dispute as described in Note 32.


17. Finance lease obligations
                                                       Total minimum                       Finance             Present value
                                                       lease payments                      charges             of payments
    2003                                                      $                               $                      $
    1 year to 5 years                                        405,400                        (51,415)                353,985
    Not later than 1 year                                    486,073                        (50,329)                435,744
                                                             891,473                       (101,744)                789,729

    2002
    1 year to 5 years                                        460,851                        (58,031)                402,820
    Not later than 1 year                                    460,610                        (51,416)                409,194
                                                             921,461                       (109,447)                812,014

    Lease terms are for 3 to 5 years and do not contain restriction on the Group’s activities concerning dividends,
    additional debt or further leasing.


18. Share capital
                                                                        Number of shares               Group and Company
                                                                        2003       2002                  2003       2002
                                                                                                           $          $
    Authorised:
    Ordinary shares of $0.05 each                                  400,000,000 400,000,000             20,000,000    20,000,000

    Issued and fully paid:
    Balance at 1 July
    - Ordinary shares of $0.05 each                                194,454,047 194,454,047              9,722,702     9,722,702
    Increase during the year
    - Issue of ordinary shares of $0.05 each                        27,846,140                    –     1,392,307             –
    Balance at 30 June
    - Ordinary shares of $0.05 each                                222,300,187 194,454,047             11,115,009     9,722,702




                                                                                                                                  37

                                      Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     18. Share capital (cont’d)

         During the financial year, the Company issued the following shares:

         (i)   21,273,140 ordinary shares of $0.05 each at $0.057 by way of capitalisation of $1,212,569 due to certain
               directors and affiliated companies;

         (ii) 1,326,000 ordinary shares of $0.05 each at $0.062 by way of capitalisation of $82,212 due to third parties;

         (iii) 539,000 ordinary shares of $0.05 each, for cash, at the respective exercise price per share upon the exercise
               of options granted by the Company under the Asian Micro Employees’ Share Option Scheme as follows:-

               Number of ordinary shares issued                            Exercise price per ordinary shares
                            497,000                                                               $0.05
                             42,000                                                               $0.06

         (iv) 3,333,000 ordinary shares of $0.05 each at $0.12 per share as part of the consideration for the purchase of
              40% equity interest in Hypertech; and

         (v)   1,375,000 ordinary shares of $0.05 each at $0.08 per share as consideration for the acquisition of additional
               11% of equity interest in Hypertech.


     19. Revenue
                                                                                       Group                     Company
                                                                               2003               2002       2003       2002
                                                                                 $                  $          $          $
         Management fees                                                            –                 –      600,000   1,100,000
         Sales of trading goods                                             1,716,785         2,660,655            –           –
         Sales of manufactured goods                                        8,125,235         4,776,334            –           –
         Tray recycling services                                           17,117,905        10,072,230            –           –
         FCBA*                                                             23,835,931        54,442,436            –           –
         Others                                                                     –                 –       36,000           –
                                                                           50,795,856        71,951,655      636,000   1,100,000
         * FCBA refers to manufacturing and sale of flexible circuit board, actuator coil assembly and provision of hook-
           up assembly services. The Group ceased its FCBA activities subsequent to the financial year end.


     20. Personnel expenses
                                                                                       Group                     Company
                                                                               2003               2002       2003       2002
                                                                                 $                  $          $          $
         Wages, salaries and bonuses                                         6,669,038           6,752,248   314,000    561,326
         Provident fund contributions                                          379,970             331,039    42,240     30,238
         Other personnel expenses                                              310,142             176,506         –          –
                                                                             7,359,150           7,259,793   356,240    591,564
         Retrenchment benefits (Note 24)                                       103,610              16,068         –          –
                                                                             7,462,760           7,275,861   356,240    591,564




38

                                             Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


21. (Loss)/profit from operations

    (Loss)/profit from operations is stated after charging (crediting) the following:
                                                                                 Group                      Company
                                                                         2003               2002        2003       2002
                                                                           $                  $           $          $
    Auditors’ remuneration
    - to auditors of the Company                                           90,000           118,000      22,000     30,500
    - to other auditors                                                    28,837            34,985           –          –
    Non-audit fees
    - to auditors of the Company                                          71,800                   –      4,500          –
    - to other auditors                                                    1,371              23,000          –     23,000
    Amortisation of goodwill on consolidation                            374,126             216,327          –          –
    Amortisation of negative goodwill on consolidation                         –            (141,536)         –          –
    Bad debts written off
    - trade                                                              508,836               9,437          –          –
    Deposits forfeited                                                   135,950                   –          –          –
    Depreciation of fixed assets                                       2,364,316           2,566,010      1,227      1,227
    Deficit on revaluation of investment property                              –             100,000          –          –
    Fixed assets written off                                               1,172              87,866          –          –
    Fixed assets impairment                                               34,315                   –          –          –
    Gain on sale of fixed assets                                          (2,244)           (160,013)         –          –
    Directors’ fees to directors of the Company                           84,000             134,000     84,000    134,000
    Directors’ remuneration
    - to directors of the Company                                      1,144,029             930,604    356,240    591,564
    - to directors of subsidiaries                                       187,476              13,920          –          –
    Foreign exchange loss/(gain) – net                                    59,039            (568,729)    (6,738)   117,113
    Impairment in value of quoted investments                                  –              29,417          –          –
    Loss on sale of quoted investments                                     5,520              14,174          –          –
    Operating lease expenses                                           1,307,033           1,219,375          –          –
    Personnel expenses * (Note 20)                                     7,359,150           7,259,793    356,240    591,564
    Provision for doubtful debts
    - trade                                                               83,183            740,981           –           –
    - non-trade                                                                –              9,084           –           –
    Provision for stock obsolescence                                   1,392,219            115,591           –           –
    Reversal of impairment in value of quoted investments                      –            (11,125)          –           –
    Stocks written off                                                         –             24,020           –           –
    Written back of provision for doubtful trade debts                    (8,741)           (26,005)          –           –
    Written back of provision for stock obsolescence                      (9,497)                 –           –           –

    * This includes directors’ remuneration as disclosed above.




                                                                                                                              39

                                       Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     22. Financial (expenses) income
                                                                                     Group                         Company
                                                                             2003                2002          2003       2002
                                                                               $                   $             $          $
         Financial expenses
         Interest expense on:
         - bank overdrafts                                                  (137,756)            (317,488)           –            –
         - finance leases                                                    (50,616)             (69,671)           –            –
         - short term bank loans                                            (127,366)             (70,072)           –      (64,943)
         - term loans                                                       (246,840)            (315,565)           –            –
         - bills payable to banks                                            (12,748)             (25,349)           –            –
         - others                                                            (22,461)            (216,480)     (12,226)        (499)
                                                                            (597,787)          (1,014,625)     (12,226)     (65,442)
         Bank charges                                                        (21,720)             (94,291)           –            –
                                                                            (619,507)          (1,108,916)     (12,226)     (65,442)
         Financial income
         Interest income from
         - fixed deposits and bank balances                                    51,938            111,893        51,225      87,877
         - loans to subsidiaries                                                    –                  –        38,185      39,987
         - others                                                               7,366             26,186         7,191           –
                                                                               59,304            138,079        96,601     127,864

     23. Directors’ remuneration

         The number of directors of the Company whose emoluments fall within the following bands:

                                                                                                                2003       2002
         $500,000 and above                                                                                       1          1
         $250,000 to $499,999                                                                                     1          1
         Below $250,000                                                                                           4          4
                                                                                                                  6          6

     24. Exceptional items

                                                           Note                    Group                           Company
                                                                             2003        2002                  2003       2002
                                                                               $           $                     $          $
         Fixed assets written off                            (a)           4,908,404          –                      –         –
         Retrenchment benefits                               (b)             103,610     16,068                      –         –
         Gain on disposal/dilution of interest
          of subsidiaries                                                   (201,853)          (144,616)               –          –
         Impairment loss in value of investments
          in subsidiaries                                                             –                 –     2,384,821    632,939
         Provision for doubtful non-trade
          debts due from subsidiaries                                                 –                 –     7,389,585     83,228
         Non-trade debts due from a subsidiary
          written off                                                              –                  –       3,923,908          –
                                                                           4,810,161           (128,548)     13,698,314    716,167

         (a) Fixed assets written off

              As disclosed in Note 1, as at 30 June 2003, the Group is in the process of discontinuing its activities on
              manufacturing and sale of flexible circuit board, actuator coil assembly and provision of hook-up assembly
              services. Accordingly, the fixed assets relate to those operation were written off as at 30 June 2003.




40

                                           Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


24. Exceptional items (cont’d)

    (b) Retrenchment benefits

         This relates to cost incurred in reducing the headcounts of the Group as a result of the Group’s decision to
         exit from its manufacturing and sale of flexible circuit board, actuator coil assembly and provision of hook-
         up assembly services.


25. Taxation

    Major components of income tax expense for the year ended 30 June were:

                                                                                  Group                     Company
                                                                          2003              2002        2003       2002
                                                                            $                 $           $          $
    Current tax
    - current year                                                         39,350            160,514        –      58,158
    - (over) under provision in respect of prior years                   (415,157)          (115,261)       –      28,740
    - write back of potential claw-back of income tax                           –           (462,721)       –           –
    Deferred tax
    - current year                                                       (238,517)           117,275        –         180
    - under (over) provision in respect of prior years                    349,339           (334,759)       –     (72,695)
                                                                         (264,985)          (634,952)       –      14,383

    The Group

    As at 30 June 2003, the Group has unutilised tax losses of approximately $8,512,000 (2002: $7,643,000), which
    are available for offset against future taxable profits, subject to agreement with the Income Tax Authorities and
    compliance with the relevant provisions of the Income Tax Act.

    The potential deferred tax asset arising from these unutilised tax losses has not been recognised in the financial
    statements as it is not probable that sufficient taxable profits will be available against which a deferred tax asset
    arising from the deductible temporary differences can be utilised.

    A loss-transfer system of group relief (group relief system) for companies was introduced in Singapore with
    effect from year of assessment 2003. Under the group relief system, a company belonging to a group may
    transfer its current year unabsorbed capital allowances, current year unabsorbed trade losses and current year
    unabsorbed donations (loss items) to another company belonging to the same group, to be deducted against
    the assessable income of the latter company.

    The Company intends to transfer unabsorbed capital allowances of approximately $23,000 and trade losses of
    $980,000 from a subsidiary to the Company and certain other subsidiaries under the group relief system, subject
    to compliance with relevant rules and procedures and agreement of the Inland Revenue Authority of Singapore.
    The tax expense, unabsorbed capital allowance and unutilised tax losses as at 30 June 2003 as disclosed above
    have included the effect of the intended transfers.




                                                                                                                             41

                                        Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     25. Taxation (cont’d)

         A reconciliation of the tax expense and the product of accounting profit multiplied by the applicable tax rate is
         as follows :
                                                                           Group                      Company
                                                                     2003          2002           2003           2002
                                                                        $             $             $              $
         Accounting losses                                                  (8,605,610)          (4,701,456) (13,648,965)     (569,204)
         Tax at the applicable tax rate of 22%                       (1,893,234)                 (1,034,320)    (3,002,772)   (125,225)
         Tax effect on expense that are not deductible in
          determining taxable profits                                   798,450                    344,328      3,012,440         195,157
         Tax rebates                                                    (40,169)                   (40,776)        (5,519)        (11,550)
         Write back of potential claw-back of income tax                      –                   (462,721)             –               –
         (Over) under provision of tax in respect of prior year         (65,818)                  (450,020)             –         (43,955)
         Utilisation of deferred tax assets previously not recognised (49,737)                     (21,950)             –               –
         Group tax relief                                                     –                          –         (4,417)              –
         Unrecognised deferred tax assets                             1,389,696                  1,480,642              –               –
         Effects of different tax rates in other countries             (396,961)                  (449,846)             –               –
         Others                                                          (7,212)                      (289)           268             (44)
         Tax (credit) expense                                          (264,985)                  (634,952)             –          14,383

         Deferred taxation at 30 June relate to the following:
                                                                                       Group                          Company
                                                                               2003                2002           2003       2002
                                                                                 $                   $              $          $
         Deferred tax assets
         - excess of tax written down value of
            fixed assets over net book value                                          –             24,573                –              –
         - general provision                                                      4,130                  –                –              –
                                                                                  4,130             24,573                –              –

         Deferred tax liabilities
         - excess of net book value over
            tax written down value of fixed assets                            (166,377)            (75,998)          (585)           (585)
         Deferred tax assets, net                                                    –              24,573              –               –
         Deferred tax liabilities, net                                        (162,247)            (75,998)          (585)           (585)

     26. Loss per share
                                                                                                                          Group
                                                                                                                   2003           2002
                                                                                                                     $              $
         Loss attributable to shareholders                                                                       8,385,074    4,066,504

         Weighted average number of ordinary shares on
          issue applicable to basic and diluted loss per share                                                 202,118,596 194,454,047

         Basic loss per share is calculated by dividing the loss attributable to shareholders by the weighted average
         number of ordinary shares outstanding during the year.

         Diluted loss per share is the same as basic loss per share as the potential ordinary shares are anti-dilutive in
         nature and are ignored in calculating diluted loss per share.




42

                                             Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


27. Employee benefits

    The Company has an employee share option scheme, Asian Micro Employees’ Share Option Scheme (“the Scheme”)
    for the granting of non-transferable options to purchase ordinary shares at not less than 80% of the market
    value of the shares at the date of grant. The options may be exercisable within 2 years beginning on the first
    anniversary of the date of grant. Options granted are cancelled when the option holder ceases to be under full
    employment of the Company or any corporation in the Group subject to certain exceptions at the discretion of
    the Company.

    The Company uses the intrinsic value accounting method for share options granted under which there is no
    charge to the profit and loss account for employee share options granted.

    Dilutive effect of outstanding options is reflected as additional share dilution in the computation of earnings
    per share unless the potential additional shares is anti-dilutive in nature.

    Information with respect to the number of options granted under the Scheme is as follows:

                                                              Balance at
                                                             1 July 2002/                                    Balance      Number
                       Exercisable             Exercise        date of                          Options         at          of
    Date granted       period                   price           grant          Cancelled       exercised    30.6.2003     holders
    5 October 2001     5 October 2002 -          $0.05        9,364,000         (986,000)      (497,000)     7,881,000       14
                       5 October 2004
    28 November 2001   28 November 2002 -        $0.06        4,886,000        (2,370,000)      (42,000)     2,474,000       23
                       28 November 2004
    23 January 2002    23 January 2003 -         $0.09          180,000                  –            –       180,000         1
                       23 January 2005
    13 March 2002      13 March 2003 -           $0.21          599,000         (437,000)             –       162,000         3
                       13 March 2005
    3 May 2002         3 May 2003 -              $0.18          616,000         (378,000)             –       238,000         4
                       3 May 2005
    4 June 2002        4 June 2003 -             $0.165         403,000           (69,000)            –       334,000         9
                       4 June 2005
    13 July 2002       13 July 2003 -            $0.14           18,000                  –            –        18,000         1
                       31 December 2003
    29 August 2002     29 August 2003 -          $0.14          198,000                  –            –       198,000         2
                       29 August 2005
    6 February 2003    6 February 2004 -         $0.06          743,000                  –            –       743,000         3
                       6 February 2006

28. Cash and cash equivalents

    Cash and cash equivalents as at 30 June were as follows :
                                                                                                                    Group
                                                                                                             2003           2002
                                                                                                               $              $
    Cash and bank balances                                                                                    690,079       330,272
    Fixed deposits                                                                                          4,088,912     4,050,935
    Bank overdrafts                                                                                        (1,926,625)   (2,237,784)
                                                                                                            2,852,366     2,143,423
    Less: Fixed deposits subjected to restrictions *                                                       (4,069,200)   (4,011,158)
                                                                                                           (1,216,834)   (1,867,735)

    * This relates to fixed deposits pledged in connection with credit facilities granted by a bank (Note 14).

                                                                                                                                       43

                                           Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     29. Discontinuing operation

         During the year, the Group decided not to continue with one of its core activities, the manufacturing and sale of
         flexible circuit board, actuator coil assembly and provision of hook-up assembly services (“FCBA”). The carrying
         amounts of the total assets and liabilities of the FCBA division as at 30 June are as follows:
                                                                                                           2003           2002
                                                                                                             $              $
         Non-current assets                                                                                      -       4,795,891
         Current assets                                                                                    799,061       4,924,286
         Current liabilities                                                                              (524,651)     (3,599,247)
                                                                                                           274,410       6,120,930

         The net cash flows attributable to the FCBA division is as follows:
                                                                                                           2003           2002
                                                                                                             $              $
         Operating                                                                                         (970,167)    1,962,126
         Investing                                                                                         (262,490)    1,216,372
         Net cash (outflows)/inflows                                                                     (1,232,657)    3,178,498


     30. Segment information

         (a) Business segments

         The three main operating divisions of the Group are namely:

         -      Contract manufacturing and tray recycling
         -      Manufacturing
         -      Trading

         Segment accounting policies are the same as the policies described in Note 2.

                                     Contract
                                   Manufacturing
                                     and tray
         2003                        recycling   Manufacturing               Trading            Others   Eliminations      Group
                                       $’000        $’000                     $’000             $’000        $’000         $’000
         Turnover
         - external sales              40,954               8,125              1,717                –           –          50,796
         - inter-segment sales              5                 896                 33                –        (934)              –
                                       40,959               9,021              1,750                –        (934)         50,796
         Operating loss                  (719)                (79)            (1,587)            (806)        (44)         (3,235)
         Financial expenses – net                                                                                            (561)
         Exceptional items                                                                                                 (4,810)
         Tax                                                                                                                  265
         Net loss after tax                                                                                                (8,341)
         Minority interest                                                                                                    (44)
         Net loss for the year                                                                                             (8,385)
         Assets                        11,209               7,932              3,982               33       (4,522)        18,634
         Financial assets                 715                 257                 27            3,780            –          4,779
         Unallocated assets                                                                                                   544
         Total assets                                                                                                      23,957
         Liabilities                   16,727               7,652              5,163            1,267      (20,693)        10,116
         Financial liabilities          5,966                 638              3,370              878            –         10,852
         Unallocated liabilities                                                                                            1,015
         Total liabilities                                                                                                 21,983
         Capital expenditure              106               1,138                   2               –            –          1,246
         Depreciation and amortisation                                                                                      2,738
         Other non-cash expenses        5,489                 211              1,147                –            –          6,847
44

                                            Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


30. Segment information (cont’d)

                                 Contract
                               Manufacturing
                                 and tray
    2002                         recycling   Manufacturing               Trading             Others    Eliminations       Group
                                   $’000        $’000                     $’000              $’000         $’000          $’000
    Turnover
    - external sales                64,480              4,811              2,661                  –           –           71,952
    - inter-segment sales                1                276                175                  –        (452)               –
                                    64,481              5,087              2,836                  –        (452)          71,952
    Operating loss                  (2,878)              (456)               208               (733)          –           (3,859)
    Financial expenses – net                                                                                                (971)
    Exceptional items                                                                                                        128
    Tax                                                                                                                      635
    Net loss for the year                                                                                                 (4,067)
    Assets                        24,564                6,495            14,911              10,287     (27,066)          29,191
    Financial assets                 505                  120                90               3,688           –            4,403
    Unallocated assets                                                                                                       835
    Total assets                                                                                                          34,429
    Liabilities                   22,379                8,487            13,628                 358     (32,406)          12,446
    Financial liabilities          6,905                  474             3,727               1,590           –           12,696
    Unallocated liabilities                                                                                                1,437
    Total liabilities                                                                                                     26,579
    Capital expenditure            1,514                1,277                   3                 –           –            2,794
    Depreciation and amortisation                                                                                          2,641
    Other non-cash expenses          944                  120                141                  –           –            1,205

    (b) Geographical segments

    Turnover is based on the location of customers regardless of where the goods are produced. Assets and additions
    to property, plant and equipment are based on the location of those assets.

                                            Turnover                                Assets              Capital expenditure
                                       2003        2002                   2003               2002        2003        2002
                                       $’000       $’000                  $’000              $’000       $’000       $’000

    Singapore                         21,159           12,137            19,249             21,743         114              387
    Malaysia                           1,004              910               793              2,657           –              789
    Philippines                          164              202               278              1,063           –                –
    Thailand                          25,484           56,711             2,578              7,442         223              585
    Others                             2,985            1,992             1,059              1,524         909            1,033
                                      50,796           71,952            23,957             34,429       1,246            2,794


31. Commitments and contingencies

    (a) Operating lease commitments

           The Group has various operating lease agreements for the rental of equipment, offices and other facilities.
           Lease terms do not contain restrictions on the Group’s activities concerning dividends, additional debt or
           further leasing.

           Future minimum rentals under non-cancellable leases are as follows as at 30 June:
                                                                                                                  Group
                                                                                                         2003             2002
                                                                                                           $                $
           Within one year                                                                               515,000        934,000
           After one year but not more than five years                                                   394,000        647,000
           More than five years                                                                        1,098,000      1,185,000
                                                                                                       2,007,000      2,766,000
                                                                                                                                    45

                                        Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     31. Commitments and contingencies (cont’d)

         (b) Capital expenditure commitments
                                                                                                                Group
                                                                                                         2003           2002
                                                                                                           $              $
               Capital expenditure not provided for in the financial statements
               - commitments in respect of contracts placed for the purchase of machineries                    –    1,105,000
               - commitments in respect of additional investment in subsidiary                         2,385,000    3,229,000
                                                                                                       2,385,000    4,334,000

         (c) Bank guarantee

               A subsidiary, Asian Micro (Thailand) Co., Ltd, was contingently liable for letters of guarantee of approximately
               $70,000 (2002: $72,000) issued by a bank in favour of a government agency in Thailand.

         (d) Corporate guarantees

               The Company has issued corporate guarantees of $17,137,000 (2002: $17,167,000) in favour of several
               banks in relation to banking facilities granted to certain subsidiaries

         (e) Continuing financial support

               As at 30 June 2003, the Company had given an undertaking to certain subsidiaries to provide financial
               support to enable them to operate as going concerns and to meet their obligations for at least 12 months
               from the respective date of their directors’ report.

     32. Pending legal cases

         (i)   In the previous year, a minority shareholder of two subsidiaries, APP and APE, has served a letter of demand
               to the subsidiaries for repayment of his alleged loans of $186,000 and $511,000 given to APP and APE
               respectively. To date, the minority shareholder had not taken any further action on his letter of demand.
               The subsidiaries have engaged independent auditors to verify the validity of his claims. Based on the
               findings of the independent auditors, the directors believe that a major portion of the claims is not supported.
               As such, the subsidiaries have defended themselves against the claims. These claims have been recorded as
               amount due to a minority shareholder in the consolidated financial statements.

         (ii) Meanwhile, the Company, APP and APE are also currently pursuing a few legal suits against the minority
              shareholder, who has also filed an oppression suit against the Company.

               All the above legal suits are still on going as at the date of the directors’ report.

         (iii) In the previous year, APP and APE filed a legal suit against an ex-employee, Tan Puay Boon and some of her
               related parties, to demand repayment of monies that she misappropriated during the course of her
               employment.

               On 23 September 2003, the Court has ruled in favour of APE. APE has since served mareva injunction
               against the assets of the defendants and commenced garnishee proceedings and writ of seizure proceedings
               in respect of their accounts and other assets. The amount that may be recovered will only be recognised as
               and when realised.




46

                                              Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


33. Related party disclosures

    During the year, the group entered into transactions with related parties who are not members of the Group.
    Those transactions for the years ended 30 June are presented in the following table:
                                                                                                 Group
                                                                                           2003         2002
                                                                                             $            $
    Expense
    Rental expense paid to affiliated companies                                            554,720     649,983

    Others
    Capitalisation of amount due to directors                                                     553,789               –
    Capitalisation of amount due to affiliated companies                                          658,780               –

34. Financial instruments

    Financial risk management objectives and policies

    The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, liquidity
    risk and credit risk. The management reviews and agrees policies for managing each of these risks and they are
    summarised below.

    Interest rate risk

    The Group obtains additional financing through bank borrowings and leasing arrangements. The Group’s policy
    is to obtain the most favourable interest rates available without increasing the foreign currency exposure.

    Surplus funds are placed with reputable banks.

    Information relating to the Group’s interest rate exposure is also disclosed in Notes 11 and 14.

    Foreign currency risk

    The Group incurs foreign exchange risk on sales and purchases that are denominated in a currency other than
    measurement currencies of the respective company in the Group. The currency that gives rise to this risk is
    primarily United States dollar.

    The Group manages its foreign exchange exposure risk by matching, as far as possible, receipt and payment in
    each individual currency. Foreign currency is converted into measurement currency as and when the management
    deemed necessary. The net unhedged exposure are reviewed and monitored closely on an ongoing basis and
    management might hedge the position where appropriate.

    It is the Group’s policy not to trade in derivative contracts.

    Liquidity risk

    In the management of liquidity risk, the Group monitors and maintains a level of cash and bank balances deemed
    adequate by the management to finance the Group’s operations and mitigate the effects of fluctuation in cash
    flows.

    Short-term funding is obtained from bank overdraft facilities and short-term trade financing.

    Credit risk

    Credit risk is limited to the risk arising from the inability of a debtor to make payments when due. It is the
    Group’s policy to provide credit terms to creditworthy customers. These debts are continually monitored and
    therefore, the Group does not expect to incur material credit losses.

    The carrying amount of cash and cash equivalents, trade debtors and other debtors represent the Group’s
    maximum exposure to credit risk in relation to financial assets.

    Other than balances due from 2 major customers which accounts for approximately 46% of the total trade debtors
    balance of the Group as at 30 June 2003, the Group has no other significant concentrations of credit risk.

                                                                                                                             47

                                        Asian Micro Holdings Limited | Annual Report 2003
     Notes to the Financial Statements
     30 June 2003
     (Amounts in Singapore dollars unless otherwise stated)


     34. Financial instruments (cont’d)

         Fair values

         Fair value is the amount for which an asset could be exchanged or a liability settled, in between knowledgeable
         willing parties in an arm’s length transaction.

         The following methods and assumptions are used to estimate the fair value of each class of financial instrument.

         Cash and cash equivalents, short-term receivables and payables

         The carrying amounts approximate fair values due to the relatively short-term maturity of these financial
         instruments.

         Short-term borrowings and other current payables

         The carrying amounts approximate fair values due to the relatively short period to maturity of these instruments.

         Long-term borrowing

         The fair value of term loans with variable interest rates approximates their carrying amounts.

         Finance lease obligations

         The fair value of finance lease obligations are estimated based on the expected cash flows discounted to present
         value with reference to the current market interest rates applicable to finance lease obligation with the same
         maturity profile.

         Where it is practicable to estimate with sufficient reliability, the carrying amounts and estimated fair value of
         finance lease obligations is as follow :
                                                                        2003                               2002
                                                         Carrying               Estimated       Carrying          Estimated
                                                         amount                 fair value      amount            fair value
                                                            $                        $             $                   $
         Lease obligations                                789,729                 756,408       812,014            866,054


     35. Subsequent events

         Subsequent to the financial year end:

         (i)   The Company issued 18,519,000 ordinary shares of $0.05 each to third parties at $0.054 per share for a total
               cash consideration of $1,000,000 via a private placement arrangement.

         (ii) The Company issued 7,425,000 and 3,485,000 ordinary shares of $0.05 each at $0.062 and $0.057 per share
              respectively by way of capitalisation of $659,040 due to third parties.

         (iii) The Group ceased its FCBA activities. The Group is in the process of disposing various fixed assets relating
               to the FCBA activities. Impairment loss on those assets has been recognised in profit and loss account as at
               30 June 2003.

         (iv) The Group further contributed to the registered capital of a subsidiary, Asian Micro Technology (Wuxi) Co.,
              Ltd., by injecting US$193,500 ($339,786) in cash and US$133,000 ($233,548) in fixed assets.



48

                                            Asian Micro Holdings Limited | Annual Report 2003
Notes to the Financial Statements
30 June 2003
(Amounts in Singapore dollars unless otherwise stated)


36. Comparative figures

    The following comparative figures have been reclassified to conform with current year’s presentation and to
    better reflect the nature of expenses:

    (i)   Provision for doubtful debts amounting to $34,561 for the Group were included in administrative expenses
          in prior year. Such amount has been included in other operating expenses in the current year’s financial
          statements.

    (ii) Gain on disposal of subsidiaries amounting to $144,616 for the Group were included in other operating
         income in prior year. Such amount has been included in exceptional item in the current year’s financial
         statements.

    (iii) Retrenchment benefits amounting to $16,068 for the Group were included in administrative expenses in
          prior year. Such amount has been included in exceptional items in the current year’s finacial year statements.

    (iv) Provision for doubtful non-trade debts due from subsidiaries amounting to $83,228 and impairment loss in
         value of investments in subsidiaries amounting to $632,939 included in administrative expenses of the
         Company in prior year has been included in exceptional items in the current year’s financial statements.

                                                             Group                                   Company
                                                      2002           2002                      2002          2002
                                                       As        As previously                  As       As previously
                                                  reclassified     reported                reclassified    reported
                                                        $              $                         $             $
          Administrative expenses                  (6,106,679)            (6,157,308)       (898,346)     (1,614,513)
          Other operating income/(expenses)         1,032,170              1,211,347        (117,113)       (117,113)
          Exceptional items                           128,548                      –        (716,167)              –




                                                                                                                           49

                                       Asian Micro Holdings Limited | Annual Report 2003
     Supplementary Information
     (Amounts in Singapore dollars)




     Interested person transactions carried out during the financial year pursuant to the Shareholders’ mandate obtained
     in accordance with SGX-ST Listing Manual are as follows:

     Interested Parties Transactions

     Location                             Lessee                      Lessor                   Amount    Remark
                                                                                                 $
     No 2 Lintang Beringin 6              Semtronic                   Wide Victory              320      Rental of Office
     Diamond Valley Industrial Park       Technology                  Sdn. Bhd.                          (Ceased on
     Jln Permatang Damar Laut             Sdn. Bhd.                                                      31 July 2002)
     11960 Pulau Pinang, Malaysia

     No 3 Tech Park Crescent              ACI Industries              American                 210,600   Rental of Factory
     Singapore 638129                     Pte Ltd                     Converters                         Building / Office
                                                                      Industries
                                                                      Pte Ltd

     No 3 Tech Park Crescent              Asian Micro                 American                 70,200    Rental of Factory
     Singapore 638129                     (S) Pte Ltd                 Converters                         Building / Office
                                                                      Industries
                                                                      Pte Ltd

     No 1 Tech Park Crescent              Asian Micro                 Ultraline                136,800   Rental of Factory
     Singapore 638131                     (S) Pte Ltd                 Technology                         Building / Office
                                                                      (S) Pte Ltd

     No 1 Tech Park Crescent              Impact Polythene            Ultraline                136,800   Rental of Factory
     Singapore 638131                     Pte Ltd                     Technology                         Building / Office
                                                                      (S) Pte Ltd
                                                                                               554,720




50

                                           Asian Micro Holdings Limited | Annual Report 2003
Supplementary Information
(Amounts in Singapore dollars unless otherwise stated)




                                                    Area (Land)          Area (Build-Up)                     NBV @
Property                     Description              Sq. ft.                Sq. ft.         Tenure         30/6/2003

Investment Property

20 Tech Park Crescent,       2 storey Semi-             18,502                  18,546     Leasehold for   $2,700,000
Tuas Tech Park,              detached Factory                                              60 years from
Singapore 638112                                                                             18/8/1993

Fixed Asset Properties

21 Tuas South Street 1,      Light Industrial           53,949                  30,085     Leasehold for   $3,263,932
Singapore 638032             Factory                                                       60 years from
                                                                                             1/8/1997

6514 Lorong Ayam Didik,     Light Industrial            25,000                  12,800       Freehold      RM1,120,000
Kawasan Perindustrian       Factory
Ringan, Taman Ria Jaya,
08000 Sungai Petani, Kedah,
West Malaysia




                                                                                                                         51

                                      Asian Micro Holdings Limited | Annual Report 2003
     Statistics of Shareholdings
     as at 2 October 2003



     AUTHORISED SHARE CAPITAL               :           S$20,000,000
     ISSUED AND FULLY PAID-UP CAPITAL       :           S$12,595,809.35
     CLASS OF SHARES                        :           Ordinary shares of S$0.05 each



     SIZE OF                              NO. OF
     SHAREHOLDINGS                     SHAREHOLDERS                         %                 NO. OF SHARES          %
     1        –         999                         5                      0.12                      1,327           0.00
     1,000    –      10,000                     3,469                     80.43                 13,476,000           5.35
     10,001 –     1,000,000                       822                     19.06                 47,117,439          18.70
     1,000,001 & ABOVE                             17                      0.39                191,321,421          75.95
     TOTAL                                      4,313                    100.00                251,916,187         100.00



     TOP TWENTY SHAREHOLDERS                                                                  NO. OF SHARES          %
     LEONG LAI HENG                                                                             67,388,982          26.75
     LIM KEE LIEW                                                                               48,668,439          19.32
     OVERSEAS UNION BANK NOMINEES PTE LTD                                                       15,263,000           6.06
     MAYBAN NOMINEES (S) PTE LTD                                                                11,570,000           4.59
     BRITE-TECH MANAGEMENT CONSULTANTS PTE LTD                                                   7,468,000           2.96
     LIM KEE HING                                                                                7,010,000           2.78
     UNITED OVERSEAS BANK NOMINEES PTE LTD                                                       4,908,000           1.95
     LOW SENG WAH                                                                                4,171,000           1.66
     LIM SWEE LONG                                                                               4,058,000           1.61
     GOH KIAW CHOH                                                                               3,812,000           1.51
     M-POL INDUSTRIAL PLASTICS SDN BHD                                                           3,348,000           1.33
     LIM MEE GOH                                                                                 3,000,000           1.19
     OCBC SECURITIES PRIVATE LTD                                                                 2,875,000           1.14
     DBS NOMINEES PTE LTD                                                                        2,694,000           1.07
     KIM ENG SECURITIES PTE LTD                                                                  2,151,000           0.85
     DBS VICKERS SECURITIES (S) PTE LTD                                                          1,760,000           0.70
     LIM KIAT SENG                                                                               1,176,000           0.47
     FOO SHIANG LUI                                                                                960,000           0.38
     PEREIRA GERARD WILSON                                                                         800,000           0.32
     PHUA KENG KOUNG                                                                               800,000           0.32
     TOTAL                                                                                     193,881,421          76.96

     Based on the information available to the Company, approximately 40.04 % of the Company ‘s equity securities are
     held in the hands of the public. This is in compliance with Rule 723 of the Listing Manual of the SGX-ST which
     requires at least 10% of a listed issuer’s equity securities to be held by the public.


     SUBSTANTIAL SHAREHOLDERS                                       NO. OF SHARES                DEEMED INTEREST
     LEONG LAI HENG                                           (a)       68,148,982                   73,920,983
     LIM KEE LIEW                                             (b)       73,164,439                   68,905,526



     Note :
     (a) For Ms. Leong Lai Heng, 760,000 shares registered under United Overseas Bank Nominees Pte Ltd.

     (b) For Lim Kee Liew, 15,000,000 shares registered under Overseas Union Bank Nominees Pte Ltd, 9,000,000 shares
         registered under Mayban Nominee Pte Ltd and 496,000 shares registered under DBS Nominees Pte Ltd.



52

                                          Asian Micro Holdings Limited | Annual Report 2003
Notice of Annual General Meeting


NOTICE IS HEREBY GIVEN that the Annual General Meeting of Asian Micro Holdings Limited (“the Company”) will be
held at No. 21 Tuas South Street 1 Singapore 638032 on Wednesday, 29 October 2003 at 9.30 am for the
following purposes:



AS ORDINARY BUSINESS

1.   To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 30
     June 2003 together with the Auditors’ Report thereon.                                     (Resolution 1)

2.   To re-elect the following Directors retiring pursuant to Article 89 of the Company’s Articles of Association:-

     Mr Lim Kee Hing                                                                                  (Resolution 2)
     Dr Wang Kai Yuen                                                                                 (Resolution 3)

     Dr Wang Kai Yuen will, upon re-election as Director of the Company, remain as a Chairman of the Audit Committee
     and member of the Nominating and Remuneration Committees. He will be considered independent for the
     purposes of Rule 704(8) of Listing Manual of the Singapore Exchange Securities Trading Limited.

3.   To approve the payment of Directors’ fees of S$84,000 for the year ended 30 June 2003 (previous year: S$134,000).
                                                                                                      (Resolution 4)

4.   To re-appoint Messrs Ernst & Young as the Company’s Auditors and to authorise the Directors to fix their
     remuneration.                                                                           (Resolution 5)

5.   To transact any other business which may properly be transacted at an Annual General Meeting.



AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any
modifications:

6.   Authority to allot and issue shares up to 50 per centum (50%) of issued capital

     That pursuant to Section 161 of the Companies Act, Chapter 50 and the provisions of Rule 806 of the Listing
     Manual of the Singapore Exchange Securities Trading Limited, the Directors be empowered to allot and issue
     shares and convertible securities in the capital of the Company at any time and upon such terms and conditions
     and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate
     number of shares (including shares to be issued in accordance with the terms of convertible securities issued,
     made or granted pursuant to this Resolution) to be allotted and issued pursuant to this Resolution shall not
     exceed fifty per centum (50%) of the issued share capital of the Company at the time of the passing of this
     resolution, of which the aggregate number of shares and convertible securities to be issued other than on a pro
     rata basis to all shareholders of the Company shall not exceed twenty per centum (20%) of the issued capital of
     the Company and that such authority shall, unless revoked or varied by the Company in general meeting, continue
     in force (i) until the conclusion of the Company’s next Annual General Meeting or the date by which the next
     Annual General Meeting of the Company is required by law or the Articles of Association of the Company to be
     held, whichever is earlier or (ii) in the case of shares to be issued in accordance with the terms of convertible
     securities issued, made or granted pursuant to this Resolution, until the issuance of such shares in accordance
     with the terms of such convertible securities. [see explanatory note (i)]                        (Resolution 6)




                                                                                                                         53

                                        Asian Micro Holdings Limited | Annual Report 2003
     Notice of Annual General Meeting


     7.    Authority to allot and issue shares under the Asian Micro Employees’ Share Option Scheme

           THAT pursuant to Section 161 of the Companies Act, Cap. 50, the Directors be authorised and empowered to
           allot and issue shares in the capital of the Company to all the holders of options granted by the Company,
           whether granted during the subsistence of this authority or otherwise, under the Asian Micro Employees’ Share
           Option Scheme (“the Scheme”) upon the exercise of such options and in accordance with the terms and conditions
           of the Scheme, provided always that the aggregate number of additional ordinary shares to be allotted and
           issued pursuant to the Scheme shall not exceed fifteen percentum (15%) of the issued share capital of the
           Company from time to time. [see Explanatory Note (ii)]                                        (Resolution 7)

     By Order of the Board



     Sherylene Wang
     Company Secretary
     Singapore, 15 October 2003



     Explanatory Notes:

     (i)   The Ordinary Resolution 6 proposed in item 6 above, if passed, will empower the Directors from the date of the
           above Meeting until the date of the next Annual General Meeting, to allot and issue shares and convertible
           securities in the Company. The number of shares and convertible securities that the Directors may allot and
           issue under this Resolution would not exceed fifty per centum (50%) of the issued capital of the Company at the
           time of passing this resolution. For issue of shares and convertible securities other than on a pro rata basis to all
           shareholders, the aggregate number of shares and convertible securities to be issued shall not exceed twenty
           per centum (20%) of the issued capital of the Company. The percentage of issued capital is based on the
           Company’s issued capital at the time this mandate is passed, after adjusting for (a) new shares arising from the
           conversion of convertible securities or employee share options in issue at the time the proposed Ordinary
           Resolution is passed and (b) any subsequent consolidation or subdivision of shares.

     (ii) The Ordinary Resolution 7 proposed in item 7 above, if passed, will empower the Directors of the Company,
          from the date of the above Meeting until the next Annual General Meeting, to allot and issue shares in the
          Company of up to a number not exceeding in total fifteen per centum (15%) of the issued share capital of the
          Company from time to time pursuant to the exercise of the options under the Scheme.



     1.    A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a
           proxy to attend and vote instead of him/her/it. A proxy need not be a Member of the Company.

     2.    If the appointor is a corporation, the instrument appointing a proxy must be executed under seal or the hand of
           its duly authorised officer or attorney.

     3.    The instrument appointing a proxy must be deposited at the Registered Office of the Company at 3 Tech Park
           Crescent, Tuas Tech Park Singapore 638129 not less than 48 hours before the time for holding the Meeting.




54

                                               Asian Micro Holdings Limited | Annual Report 2003
          IMPORTANT:
     1.   For investors who have used their CPF monies to buy Asian Micro shares, this Notice is forwarded to them at the request of their CPF Approved
          Nominees and is sent solely FOR INFORMATION ONLY.
     2.   This Proxy Form is not valid for use by CPF Investors and shall be ineffective for all intents and purposes if used or purported to be used by them.




                                   ASIAN MICRO HOLDINGS LIMITED
                                     (Incorporated In The Republic Of Singapore with limited liability)


                                                                  Proxy Form
                                            (Please see notes overleaf before completing this Form)




    I/We, _________________________________________________________________________________________________ (Name)
    of __________________________________________________________________________________________________ (Address)
    being a member/members of Asian Micro Holdings Limited (the “Company”), hereby appoint ________________________
    ______________________________________________ (Name) of _____________________________________________ (Address)
    __________________________________________________________________________________________ or, failing him/her,
    ______________________________________________ (Name) of _____________________________________________ (Address)
    _______________________________________________________________________________________________________________________

    or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Sixth
    Annual General Meeting (the “Meeting”) of the Company to be held on 29 October 2003 at 9.30 am and at any
    adjournment thereof. The proxy is to vote on the business before the meeting as indicated below. If no specific
    direction as to voting is given, the proxy will vote or abstain from voting at his/her discretion, as he/she will on any
    other matter arising at the Meeting:


     No.      Resolutions relating to:                                                                                            For           Against
     1        Directors’ Report and Audited Accounts for the year ended 30 June 2003
     2        Re-election of Mr Lim Kee Hing as a Director
     3        Re-election of Dr Wang Kai Yuen as a Director
     4        Approval of Directors’ fees amounting to S$84,000
     5        Re-appointment of Messrs Ernst & Young as Auditors
     6        Authority to allot and issue new shares
     7        Authority to allot and issue shares under the Asian Micro Employees’ Share
              Option Scheme

    (Please indicate with a cross [X] in the space provided whether you wish your vote to be cast for or against the
    Resolutions as set out in the Notice of the Meeting.)




    Dated this ________ day of _________________________ 2003
                                                                                                Total number of Shares in: No. of Shares
                                                                                                (a) CDP Register
                                                                                                (b) Register of Members
    ______________________________________________________
    Signature of Shareholder(s)
    or, Common Seal of Corporate Shareholder



    *Delete where inapplicable
✃




                                                                                                                                                                 55

                                                        Asian Micro Holdings Limited | Annual Report 2003
Notes :

1.   Please insert the total number of Shares held by you. If you have Shares entered against your name in the
     Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should
     insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should
     insert that number of Shares. If you have Shares entered against your name in the Depository Register and
     Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares
     entered against your name in the Depository Register and registered in your name in the Register of Members.
     If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares
     held by you.

2.   A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one
     or two proxies to attend and vote instead of him/her. A proxy need not be a member of the Company.

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

4.   The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 3
     Tech Park Crescent, Tuas Tech Park, Singapore 638129 not less than 48 hours before the time appointed for the
     Annual General Meeting.

5.   The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly
     authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must
     be executed either under its seal or under the hand of an officer or attorney duly authorised.

6.   A corporation which is a member may authorise by resolution of its directors or other governing body such
     person as it thinks fit to act as its representative at the Meeting, in accordance with Section 179 of the Companies
     Act, Chapter 50 of Singapore.



General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly
completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of
the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in
5the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member,
being the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours
before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the
Company.

								
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