Elec & Eltek International Company Limited

1 elec & Eltek International Company Limited elec & Eltek elec & Eltek International Company Limited Annual Report 2004/2005. Annual Report elec & Eltek elec & Eltek International Company Limited 2004/2005. (Incorporated in the Republic of Singapore). Company Registration Number 199300005H. 2 Corporate Profile CONTENTS 3 Financial Highlights and Calendar 6 Production and Market Information 7 Five Years' Financial Summary 8 Corporate Information 9 Functional Structure of the Group 11 Chairman's Letter 14 Statement on Corporate Governance 25 Profiles of Board of Directors and Core Management 32 Report of the Directors 39 Statement by Directors 41 Statutory Auditors' Report 42 Consolidated Profit and Loss Account 43 Balance Sheets 44 Statements of Changes in Equity 46 Consolidated Statement of Cash Flow 47 Notes to the Financial Statements 84 SGX Listing Manual Requirements Corporate Profile elec & Eltek International Company Limited ( elec & Eltek ), with its regional investment office in Singapore, is principally engaged in the manufacture and distribution of high-density double-sided and multi-layer printed circuit boards ( PCBs ).

2 Founded 33 years ago in Hong Kong with no more than 40 staff, the elec & Eltek Group today has eighteen offices worldwide, fifteen plants across Asia one in Hong Kong, two in Thailand and twelve in mainland China and a skilled and experienced workforce of over 11,000 employees. The Group mass-produces HDI, microvia, backplanes, high-end servers and up to 36-layer PCB with production capacity of approximately 43 million square feet per annum. Our diverse customer base includes worldwide market leaders in different sectors, such as computer and computer peripheral, communication/networking, consumer electronics, and automotive. We provide one-stop-shopping for customers with wide array of PCBs requirements. On the upstream, through vertical integration, our prepreg and laminate material plants in China and Thailand enhance our competitive edge in quality, cost and delivery. The global PCB market has continued its exponential growth over the past decade. elec & Eltek , in this era of keen competition and rapid changes, has maintained its premier position in PCB industry.

3 We are equipped with high density interconnect and high layer PCB technologies to satisfy our customers' every expectation. elec & Eltek 's mission is to be a leading PCB manufacturer that supplies quality high-tech PCBs in mass volume at competitive prices with excellent services. 2 elec & Eltek International Company Limited Financial Highlights and Calendar 30 June 2005. 2005 2004. US$ million US$ million Profit and Loss Account Turnover 438 354. Profit before taxation 51 46. Profit after taxation and minority interests but before extraordinary item 43 41. Per Share Net earnings (US cents) Basic Net earnings (US cents) Diluted Net tangible assets (US$) Balance Sheet Shareholders' funds 259 238. Total assets 531 470. Financial Ratios Current assets: Current liabilities (ratio) Inventory turnover period (month) Gearing ratio Financial Calendar 2004-2005 2003-2004. Financial year results announced on 23 August 2005 23 August 2004. Annual Report and Accounts issued on 16 September 2005 10 September 2004.

4 Annual General Meeting held on 5 October 2005 5 October 2004. Registers of Shareholders closed on 12-13 October 2005 12-13 October 2004. Dividend paid/payable on Interim 3 March 2005 12 March 2004. Final 20 October 2005 20 October 2004. Annual Report 2005 3. Financial Highlights and Calendar Turnover by Geographical Locations (US$ Million). Financial year 2005 Financial year 2004. North & Others Others (1%) North & (1%). Central America Central America (8%) Hong Kong Hong Kong (7%). (15%). Europe (19%). (18%) Europe (22%). Singapore &. Malaysia (17%). Other Asian countries Singapore &. (5%) Malaysia Other Asian (19%) countries Mainland China (8%) Mainland China (30%) (30%). Asia Asia Turnover by Layer Count (US$ Million). Financial year 2005 Financial year 2004. 10-Layer & up 10-Layer & up (24%) (21%). Double-sided Double-sided (12%) (14%). 8-Layer (9%). 8-Layer (8%). 6-Layer 6-Layer (15%) 4-Layer (17%) 4-Layer (41%) (39%). % Turnover Contribution by Manufacturing Locations (US$ Million).

5 Financial year 2005 Financial year 2004. Thailand Thailand (14%) (14%). Hong Kong Hong Kong (6%) (8%). Mainland China Mainland China (80%) (78%). 4 elec & Eltek International Company Limited Turnover (US$ Million) Profit Trend (US$ Million). 500 80. 400 60 300 40. 200 20 100. 0 0. 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005. Financial Year Financial Year Profit after taxation & minority interests but before extraordinary item (excluding exceptional items). Profit after taxation but before minority interests &. extraordinary item (excluding exceptional items). Earnings & Dividend Payout Trend Compare Total Assets with (US$ Million) Shareholders' Funds (US$ Million). 60 600. 50 500. 40 400 30 300. 20 200 10 100. 0 0. 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005. Financial Year Financial Year Dividend payout Total assets Profit after taxation & minority interests Shareholders' funds Annual Report 2005 5. Production and Market Information Production Capacity as at 30 June 2005.

6 Current Total PCBs Production Capacity million sq. ft. per annum Thailand Mainland China Hong Kong million sq. ft. (23%) million sq. ft. (76%) million sq. ft. (1%). Pathumthani Rojana Kaiping Huangpu Nanjing Shenzhen 1 plant 1 plant 4 plants 5 plants 2 plants 1 plant 1 plant PCBs with PCB PCBs with PCBs with PCBs with PCB PCBs with Mass Raw Mass Mass Mass Raw Mass Laminate Materials Laminate Laminate Laminate Materials Laminate 2005 PCB Projected Value World Market (US$ Million). 2005 2006 2007 2008. Projected PCB World Market $ $ $ $ Projected Double-sided and Multi-layer PCB Market $ $ $ $ PCB Market CAAGR (2003-2008). Projected Double-sided and Multi-layer PCB Production $ $ $ $ PCB Production CAAGR (2003-2008). CIS & Eastern Europe $ Bn N America $ Bn $ Bn $ Bn $ Bn Europe $ Bn $ Bn Japan $ Bn $ Bn Asia $ Bn $ Bn $ Bn (Ex Japan). $ Bn $ Bn $ Bn Projected Asia (excluding Japan). Double-sided and Multi-layer PCB Production 2003 2005 2008. Country $ Bn $ Bn $ Bn China (Incl. HK) Korea Rest of World $ Bn Singapore $ Bn Taiwan $ Bn Rest of Asia Total Source: BPA Feb 2005.

7 CAAGR: Compounded Annual Average Growth Rate 6 elec & Eltek International Company Limited Five Years' Financial Summary 2005 2004 2003 2002 2001. US$'000 US$'000 US$'000 US$'000 US$'000. Consolidated Results Turnover 437,510 354,388 245,080 244,165 340,277. Profit before taxation 50,910 46,406 17,358 28,243 60,016. Taxation (5,193) (3,403) (1,360) (1,749) (3,775). Profit after taxation 45,717 43,003 15,998 26,494 56,241. Minority interests (3,103) (2,408) (1,788) (1,809) (2,837). Profit for the year 42,614 40,595 14,210 24,685 53,404. Financial Positions Property, plant and equipment 300,120 274,287 209,635 212,339 215,326. Intangible assets 11 71 174 252 350. Deferred tax assets 2,771 2,111 1,763 1,958 1,075. Current assets 227,775 194,002 140,778 114,883 125,309. Total assets 530,677 470,471 352,350 329,432 342,060. Non-current liabilities 51,698 50,941 18,109 19,877 9,720. Current liabilities 204,505 167,473 96,982 62,002 87,323. Total liabilities 256,203 218,414 115,091 81,879 97,043.

8 Net assets 274,474 252,057 237,259 247,553 245,017. Represented by: Shareholders' funds 259,029 238,294 221,577 232,498 227,363. Minority interests 15,445 13,763 15,682 15,055 17,654. 274,474 252,057 237,259 247,553 245,017. Annual Report 2005 7. Corporate Information BOARD OF DIRECTORS SECRETARIES. Claudia Heng Nguan Leng Executive Directors Marian Ho Wui Mee Chadwick Mok Cham Hung Vice-Chairman REGISTERED OFFICE. Sammy Leung Tin Po 80 Raffles Place #25-01. Chief Executive Officer UOB Plaza 1. Cheung Kwok Wa Singapore 048624. Li Muk Kam Tel : 6535 6844. Philip Chan Sai Kit Fax: 6534 1909. Claudia Heng Nguan Leng PRINCIPAL OFFICE. Non-executive Directors 8 Shenton Way #37-03. Cheung Kwok Wing Temasek Tower Chairman Singapore 068811. Chan Wing Kwan Tel : 6226 0488. Chang Wing Yiu Fax: 6220 2377. Website: Independent Non-executive Directors Philip Wong Yu Hong SHARE REGISTRARS. Ann Chiang Lai Wan Lim Associates (Pte) Ltd Larry Lai Chong Tuck 10 Collyer Quay #19-08. Ocean Building AUDIT COMMITTEE Singapore 049315.

9 Larry Lai Chong Tuck (Chairman). Philip Wong Yu Hong STATUTORY AUDITORS. Ann Chiang Lai Wan Ernst & Young Certified Public Accountants NOMINATING COMMITTEE Partner: Winston Ngan Philip Wong Yu Hong (Chairman) (since the financial year 30 June 2004). Ann Chiang Lai Wan Larry Lai Chong Tuck SOLICITORS. Khattar Wong & Partners REMUNERATION COMMITTEE Chang See Hiang & Partners Philip Wong Yu Hong (Chairman). Ann Chiang Lai Wan PRINCIPAL BANKERS. Larry Lai Chong Tuck The Hongkong and Shanghai Banking Corporation Limited EMPLOYEES' SHARE OPTION SCHEME DBS Bank Ltd COMMITTEE. Cheung Kwok Wing Chan Wing Kwan Chang Wing Yiu 8 elec & Eltek International Company Limited Functional Structure of the Group 30 June 2005. elec & Eltek International Company Limited Singapore Investment Holdings Manufacturing and Management/. Marketing/Sales Research and Development Corporate Services elec & Eltek elec & Eltek elec & Eltek Multilayer PCB Limited Company Limited International Limited Hong Kong (100%) Hong Kong (100%) Hong Kong (100%).

10 elec & Eltek elec & Eltek (Thailand) Limited International Limited Thailand (100%). Hong Kong (100%). Pacific Insulating Material (Thailand) Limited UK Liaison Office German Liaison Office Thailand (100%). Taiwan Liaison Office Kai Ping elec & Eltek Company Limited elec & Eltek The People's Republic (Thailand) Limited of China ( China ) ( ). Thailand (100%). Kaiping elec & Eltek Company Limited elec & Eltek Technology China ( ) Research & Marketing Pte. Ltd. Singapore (100%). Kaiping elec & Eltek Company Limited Malaysia Branch China ( ). Kaiping elec & Eltek Kai Ping elec & Eltek Company Limited Company Limited China ( ) China ( ). elec & Eltek (Guangzhou) Guangzhou Liaison Office Electronic Company Limited Shanghai Liaison Office China (98%). Nanjing elec & Eltek elec & Eltek (Guangzhou) Electronic Co., Ltd. Technology Company Limited China ( ). China (98%). elec & Eltek Printed Guangzhou elec & Eltek Circuit Board Corporation Microvia Technology Limited USA (100%). China (98%).