positioned for growth - ellipsiz · was listed on sgx in july 2000. ... proprietary flip chip...

ANNUAL REPORT 2002

POSITIONED FOR GROWTH

03 Financial Highlights05 Key Events09 To Our Shareholders13 Corporate Governance15 Industry Outlook20 Management’s Discussion and Analysis

28 Directors’ Report34 Auditors’ Report36 Financial Results88 Shareholding Statistics89 Notice of Annual General Meeting91 Annual General Meeting - Proxy Form93 Corporate Information

C O N T E N T S

E L L I P S I ZA R 2 0 0 2

Pg. 1

To offer innovative andintegrated solutions whichwill enable our customersand partners to achievetheir goals optimally

OUR MISS ION

E L L I P S I ZA R 2 0 0 2Pg. 2

The Ellipsiz Group is a leading engineering and advanced packaging solutionsprovider to the semiconductor industry in Asia. The holding company, Ellipsiz Ltd.,was listed on SGX in July 2000. Among its engineering solutions are the sale andsupport of semiconductor equipment, materials, facilities services, turnkeyfailure analysis laboratories, and total chemicals management (TCM). It alsooffers advanced packaging services such as wafer bumping and System-in-Package manufacturing.

The Group has operations in Singapore, Malaysia, Taiwan, China and a salesoffice in the USA. More information on the Group is posted on its website atwww.ellipsiz.com.

Asia’s leading complex solutions provider for the

semiconductor industry :

• Engineering Solutions• Advanced Packaging Solutions• Outsourced Services

ENGINEERING SOLUTIONS MANUFACTURING SOLUTIONS

Equipment

Materials & Consumables

Facilities & other services

Nikon & Lithography

Advanced Packaging Solutions

E L L I P S I ZA R 2 0 0 2

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F INANCIAL HIGHLIGHTSOur fiscal year starts on 1 July and ends on 30 June.

FINANCIAL RATIOS

Debt/equity ratio

Debtors turnover(days)

Net profit/(loss)before tax

FY 2002 FY 2001 FY 2000

Interest coverage ratio

Working capital ratio

Quick ratio

(58.3%)

167

6%

(70)

2.83

2.64

(0.4%)

83

12%

2

2.56

2.44

13%

61

13%

55

1.62

1.58

EPS AND NTA BACKING (CENTS)

EPS beforeextraordinary gain

EPS afterextraordinary gain

NTA backing perordinary share

FY 2002 FY 2001 FY 2000

(11.79)

(11.79)

26.48

(1.84)

(1.84)

36.87

6.29

7.09

18.84

TURNOVER (S$M)

22

35

87

101.4

39.6

FY98 FY99 FY00 FY01 FY02

PROFIT BEFORE TAX (S$M)After share of results of Associated Companies

-0.37

-23.1

FY98 FY99 FY00 FY01 FY02

1.6

7.3

12

GROSS PROFITGross Profit by Business Segments

FY2002FY2001

-7.1

10.1

-3.7

23.9

Engineering SolutionsAdvanced Packaging

E L L I P S I ZA R 2 0 0 2Pg. 4

F I N A N C I A L H I G H L I G H T S ( C O N T ’ D )

TURNOVERComposition of sales by geographical region

Singapore 77%

OtherAsean Countries 16%

Other Region 7%

Singapore 46%

OtherAsean Countries 22%

Other Region 32%

FY2001

FY2002

AdvancedPackaging Group 6%

EngineeringSolutions Group 94%

AdvancedPackaging Group 2%

EngineeringSolutions Group 98%

TURNOVERComposition of sales by business segments

FY 2001

FY 2002

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SEPTEMBER 5, 2001Ellipsiz incorporates a 100% owned subsidiary,Ellipsiz Ventures Pte. Ltd.

SEPTEMBER 12, 2001FY 2001 full-year results are announced.

NOVEMBER 16, 2001Lim May Lan, Chief Financial Officer, is appointed as Director.

DECEMBER 5-7, 2001Ellipsiz exhibits in Semicon Japan.

FEBRUARY 28, 2002MicroFab signs MOU with Carsem for wafer bumping.

MARCH 20, 2002Ellipsiz (Shanghai) International Ltd. is incorporated.

MARCH 26-27, 2002Ellipsiz exhibits in Semicon China.

KEY EVENTS - FY 2002

MAY 7, 2002MicroFab forms turnkey partnership with UTAC.

MAY 7-9, 2002Ellipsiz exhibits in Semicon Singapore.

MAY 14, 2002Xavier Chong returns from sabbatical to assume Chairmanand CEO roles.

MAY 17, 2002Ellipsiz marks the 10th anniversary of the founding of itsfirst subsidiary, Excellent Scientific Instruments, in 1992.

JUNE 17, 2002Ong Puay Han, the General Manager of Ellipsiz subsidiary,Excellent Scientific Instruments Pte. Ltd., is appointed ActingPresident of Engineering Solutions.

The Ellipsiz booth drew the crowds at Semicon China.

Together with its international partners, Ellipsiz showcased its engineeringsolutions at Semicon Singapore.

E L L I P S I ZA R 2 0 0 2Pg. 6

XAVIER CHONG FOOK CHOYis our ChairmanChairmanChairmanChairmanChairman and CEOCEOCEOCEOCEO. Mr. Chong founded the Group in 1992, at age 30, with the start of hisfirst company, Excellent Scientific Instruments (ESI), to provide sales and engineering services inquality and reliability assurance for the semiconductor market in Singapore. Prior to hisbecoming an entrepreneur, he was the Service & Sales Manager of semiconductor equipmentsupplier, Leica Pte Ltd.

After ESI, he set up a family of other companies in quick succession to serve the waferprocessing, and materials and facility management requirements of wafer fabrication plants inS.E. Asia and Taiwan. In 1996, Mr. Chong ventured into manufacturing services, with investmentsin the wafer reclaim business, and in Advanced Packaging, including the incubation of itsproprietary flip chip interconnect processing technology. By 1999, the Group, then known asSingaTrust, had won a prestigious Enterprise 50 award, as one of Singapore’s top privately-heldlocal companies.

Mr. Chong listed the Group on the main board of the Singapore Exchange in July 2000, in thefinancial year when revenues first exceeded S$100m, and took on the role of Chairman. Hesubsequently took a sabbatical from active duty in September 2001, but returned at the requestof the Ellipsiz Board to assume the roles of Chairman and CEO, in May 2002. Mr. Chong served assub-committee member in the government-sponsored development and strategic planning ofSingapore 21 for the Electronics and Semiconductor Section.

RICK KENNETH HODGMANwas appointed as an Independent Director on 14 June 2000. Mr. Hodgman is currently theManaging Director for Asia Operations of Broadcom Singapore Pte Ltd. He was formerly theVice-President/General Manager of Wafer Fab Operations, Fab 2, 3 and Chartered Silicon PartnersPte Ltd at Chartered Semiconductor Manufacturing Ltd from 1996 to 1999. Prior to that,Mr. Hodgman was with Silicon Systems, Inc., for 14 years and left as Vice President, World-wideWafer Fab/Foundry Operations.

Mr Hodgman graduated from the University of Utah with a Bachelor of Science degree anda Master of Science degree in Electrical Engineering.

DR FOO SEE LIANGis the Co-Chairman of the Board. He was appointed as an Independent Director on 14 June 2000.Dr. Foo is currently an Associate Professor in the School of Accountancy and Business (SAB),Nanyang Technological University.

He was formerly the Vice-Dean (Accountancy) and Sub-Dean in SAB. He has served as HeadCounsellor of Hall of Residence IX, NTU, a Council Member of the University and was alsoAssistant to the President, NTU. He is an Academic Board Member of the Institute for ProductivityTraining (IPT) of the Productivity and Standards Board (PSB), Singapore, a Member of the NTUSports Advisory Council, and a Member of the Tanglin Civil Defence Executive Committee. He hasserved as Member of the Financial Reporting Standards Consultative Committee, theAccreditation Committee, and the Auditing Practices Committee of the ICPAS respectively.

BOARD OF DIRECTORS

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Pg. 7

JEFFREY STASZAKwas appointed as an Independent Director of the Group on 23 March 2001. Mr. Staszak iscurrently President and CEO of Volterra Semiconductor Corporation, a US multinational companywhich specializes in high- performance switching regulators for the computer, datacom, storage,portable and wireless markets.

Before joining Volterra, Mr. Staszak was the Senior Vice-President of the Storage Products Groupfor Texas Instruments, and for Silicon Systems Inc. The Storage Products Group was a US$450million division for Texas Instruments, serving disk drive manufacturers such as Seagate, WesternDigital and Maxtor. Prior to this posting in the United States, Mr. Staszak spent five-and- a- halfyears in Singapore as Vice-President, Asia Operations. He has held management positions in theareas of Wafer Fab, Assembly and Marketing, during his career with Texas Instruments, whichspanned from 1980 to 1999.

Mr. Staszak received his B.Sc. from the University of Wisconsin, his M.B.A. from PepperdineUniversity and was D.B.A. candidate at Brunel University in England.

MATTHEW CHAN CHUNG SHIHwas appointed as an Independent Director of the Group on 14 June 2000. He has extensivegeneral management experience in the high-tech electronics industry in the Asia Pacific region.Mr. Chan is currently the President of Asia Pacific and Corporate Vice-President in Cadence DesignSystems, Inc., San Jose, US. He manages the entire Cadence Asia Pacific business except Japan,with a focus on customer satisfaction, team efforts, communication, long-term businessstrategies, and partnerships with local industries. Prior to joining Cadence Design Systems, Inc.,Mr Chan was the President of Asia, Novellus Systems Inc., San Jose from 1994 to 1999. Between1981 and 1994, Mr Chan was with Tektronix, Inc., responsible for functional areas such as sales,marketing, operations and manufacturing. Mr Chan graduated from Chung Yuan University,Chung-Li, Taiwan with a Bachelor Degree of Industrial Engineering. He holds a Master ofComputer-Aided Manufacturing from Brigham Young University, Provo, Utah, and was a PhDcandidate of Sales and Marketing, University of South Australia, Adelaide, South Australia.

LIM MAY LANjoined the Ellipsiz Group at the beginning of 2000 as CFO. She was appointed as anExecutive Director on 16 November 2001. She was formerly the CFO of Zagro Limited, a companylisted in the SGX-ST. She was involved in the operation of the Zagro Group and its associatedcompanies mainly in finance, administration and general management.

Between 1991 and 1994, Ms. Lim was the Financial Controller of United Leasing and ServicesPte. Ltd., an associate company of Scott & English (Malaysia) Sdn. Bhd. Ms. Lim spent a significantpart of her career with two of the international public accounting firms, namely, Arthur Young andDeloitte & Touche.

Ms. Lim graduated from the National University of Singapore with a Bachelor of Accountancy.She holds a Diploma in company secretarial matters from the Institute of Chartered Secretariesand Administrators and a Postgraduate Diploma in Marketing from the Chartered Institute ofMarketing, UK. She also holds an MBA in Strategic Marketing from the University of Hull, UK.

Ms. Lim is a member of the ICPAS of Singapore, the Institute of Chartered Secretaries andAdministrators (UK) and the Chartered Institute of Marketing (UK).

TO OUR SHAREHOLDERS

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Pg. 9

The period under review, 1 July 2001 to 30 June 2002, saw the semiconductor

industry deeply-entrenched in the protracted economic trough. After global

semiconductor sales suffered its steepest ever plunge of more than 32% in late

2000 with the dot-com bust, it stayed trapped in a low, flat range for the next

18 months. It is against this depressed condition that our two main businesses –

Engineering Solutions and Advanced Packaging Solutions – operated under,

in FY2002.

Our turnover, of which 94% came from our core Engineering Solutions division,

fell 60.9% to $39.6m, and our losses before minority interests and tax ballooned

from $0.37m to $23.1m, inclusive of exceptional items of $10.8m.

First, let us explain the operating losses.

Our traditional cash engine, Engineering Solutions, remained profitable,

generating gross profits of $10.1m. This was significantly lower than the $23.9m

it generated in the previous financial year. Our entrenched markets – Singapore,

Malaysia and Taiwan - were depressed by the global slump, as customers severely

cut their capital expenditure and pushed out committed orders. A large number of

semiconductor plants in the region were partially - and in a few cases, fully - shut

RIDING OUT THE INDUSTRY TROUGH

“Our immediate goal is to get the Groupback on its feet and on the path ofgrowth and profitability again, byfocusing on business fundamentals andon leveraging our core strengths ofentrepreneurship and industry networks.”

XAVIER CHONG FOOK CHOY DR FOO SEE L IANG

E L L I P S I ZA R 2 0 0 2Pg. 10

down, affecting our recurring income stream from the sales

of spare parts, consumables and services. The gloomy

environment was also not conducive to the roll-out of our

proprietary solutions such as integrate-operate-transfer

laboratories and total chemicals management. While we

made an initial foray into the China market, starting up a

Shanghai office in March 2002, its contributions were not

significant enough to ameliorate our poor business from

more established markets.

The heavy drag on our bottom line came from operational

losses from our fledgling Advanced Packaging Division.

It moved to its new 50,000 sq ft , 7,000 wafers-per-

month factory premises in Woodlands in June 2001, making

FY2002 the first full year of operations on this scale. Despite

our efforts to keep capital expenditure in step with demand,

the high fixed costs, low demand, and long qualification

periods for new customers - typically ranging between six

and nine months - caused utilization to languish in the low

20% range for most of the year under review. We took large

strides ahead in our technical and production capability to

build and redistribute microscopic interconnects (“bumps”)

on wafers, us ing our highly competi t ive propr ietary

electroplating process technology, which is currently being

patented. Our technical capabi l i ty att racted leading

M E S S A G E T O O U R S H A R E H O L D E R S ( C O N T ’ D )

Our technical capability attracted leading electronics MNCs from the US, Europe andJapan to send their next-generation products to us for qualification - but thestormy and uncertain economic outlook kept them from mass production.

electronics MNCs from the US, Europe and Japan, who send

their next-generation products to us for qualification - but

the stormy and uncertain economic outlook kept them from

mass production. The resulting under-utilization of our

factory caused an operational loss of about $9.1m for

the year.

In addition, we recognized impairment losses on the fixed

assets and development expenditure of the Advanced

Packaging Group, amounting to $8.2m. Our investment

and associated companies also saw major setbacks.

These include a Silicon Valley start-up, Silicon Genesis, local

wafer reclaim operator Semiconductor Alliances, and our

supply chain arm, outsoz.com. As a result, we captured

impairment losses of $1.8m on our investment in Silicon

Genesis, made provision on the $0.5m loan granted to

Semiconductor Alliances, and wrote off assets and expenses

relating to outsoz.com, as it ceases operation, two years

after its starting up.

Hence, as we move into FY2003, our investments in

associated companies and a jointly controlled equity now

stand at $37k, down from $1.97m a year ago, and other

investments at $79k, down from $1.94m. We have also

reduced our borrowings by $5.6m. The debt-to-equity ratio

now stands at 6%, down from 12% a year ago.

Our cash position as at 30 June 2002 remains strong at

$44m. We intend to conserve and build this asset, and to

exercise the utmost care in its utilization. This is because we

believe that cash is crucial for both survival and growth in

a highly-cycl ical industry l ike ours. The volat i l i ty of

the semiconducto r cyc les have, in recent years ,

been exacerbated by advances in supply chain management

technology, and lessons learnt in the aftermath of

the dot.com bust, when massive excess inventory jeopardize

shor t-te rm indus t ry recovery. Fab less houses and

integrated device manufacturers (IDMs) now act almost

instantaneously to turn off the tap at the source, at the first

signs of any slackening in demand.

The aftermath of September 11, 2001 have also contributed to

the climate of uncertainty. Today, with mixed economic and

political signals broadcast globally almost on a daily basis,

the effect is an incessant series of shockwaves rippling right

E L L I P S I ZA R 2 0 0 2

Pg. 11

through the supply chain. Under such circumstance, cash is

critical - to cushion the shocks, as well as to enable us to

seize the business opportunities that may be thrown up.

GOING FORWARD

In May 2002, our Board of Directors requested that

Xavier Chong return f rom sabbat ical to take on the

CEO role, following the departure of Mr. Pao Ning Yu.

Our immediate goal is to get the Group back on its feet and

on the path of growth and profitability again, by focusing on

business fundamentals and on leveraging our core strengths

of entrepreneurship and industry networks.

The Engineering Solutions division has recently completed

its restructuring to scale into the region. It has, over its past

10 years of existence, established a presence in important

nodes of the semiconductor value chain, especially in

Southeast Asia. We are now better positioned to grow even

stronger, to deepen our hold on current markets in

Singapore and Malaysia, and to penetrate new markets in

the region, including China.

In the course of restructuring, we have also defined

dist inct bus iness uni ts with in the Div is ion. We wi l l

strengthen our capability to sell and support the highly-

specialized equipment and materials in those parts of

the complex chip-fabrication process that we participate in.

Even more importantly, we will focus on leveraging our

network of leading suppliers, and our intimate knowledge

of customers’ specific needs, to research and develop

proprietary solutions. These will be amended to helping

our cus tomers ach ieve the i r speed-to -market and

productivity goals.

As the business units in this Division develop, we believe

that some of them will develop into star performers, and can

eventually be spun off as independent companies.

For our Advanced Packaging business, we need to seek out

strategic partners to complement and leverage our wafer

bumping know-how. We fully realize that it is not financially

viable for a small independent player like ourselves to

stay on the path of continuously investing in equipment

and facil ities to keep pace with the frenetic changes

in our technology landscape, for example to 300mm wafers

from the exist ing 200mm size. However, in the past

year, our bumping techno logy has s ta r ted to ga in

recognition among high-end electronics manufacturers as an

enabler for packaging advanced chips with line-widths

below 0.18 microns, and for 300mm wafers. With this

Cash is crucial in a highly-cyclical industry like ours - to cushion the shocks, aswell as to enable us to seize the business opportunities that may be thrown up.

Approx 79%drop frompeak tocurrentlevels

Approx 92%drop frompeak tocurrentlevels

FE Bookings BE Bookings IC Unit %Y/Y

Source: Soundview Technology Group

3-Mth Average IC Bookings And BillingsVolume ($millions)

$3,000

$2,500

$2,000

$1,500

$1,000

$500

$0

10%

0%

-10%

-20%

-30%

-40%

20%

30%

40%

Jan -

91

May -

91

Sep -

91

Jan -

92

May -

92

Sep -

92

Jan -

93

May -

93

Sep -

93

Jan -

94

May -

94

Sep -

94

Jan -

95

May -

95

Sep -

95

Jan -

96

May -

96

Sep -

96

Jan -

97

May -

97

Sep -

97

Jan -

98

May -

98

Sep -

98

Jan -

99

May -

99

Sep -

99

Jan -

00

May -

00

Sep -

00

Jan -

01

May -

01

Sep -

01

Jan -

02

May -

02

E L L I P S I ZA R 2 0 0 2Pg. 12

M E S S A G E T O O U R S H A R E H O L D E R S ( C O N T ’ D )

DR FOO SEE LIANG

Co-Chairman

growing reputat ion and unwaver ing a ttent ion on

excellent execution, we believe that we can be a valuable

link in the regional semiconductor supply chain for leading-

edge semiconductor players.

In conc lus ion , we unders tand and fee l deep ly the

disappointment of our shareholders with our performance

in FY2002. Notwithstanding the severely chal lenging

industry climate in the year, we could have done better with

a faster change in strategic direction and a closer watch on

profitability. We want to reassure you that the whole

organization has learnt some very hard lessons in the past

year - lessons that we will not easily forget. All of us –

our directors, managers, engineers, and our production and

administrative staff - are committed to turning the business

around, and to developing and adding new businesses.

We look forward to your support as we position ourselves to

grow again in the year ahead.

Yours Truly

XAVIER CHONG

Chairman and Chief Executive Officer

E L L I P S I ZA R 2 0 0 2

Pg. 13

Ellipsiz Ltd (the “Company”) is committed to ensuring highstandards of corporate governance in order to protect theinterests of its shareholders through effective transparencyand disclosure.

The Company endeavours to adopt corporate governancepractices that are in conformity with the principles and bestpractices set out in the Best Practices Guide issued by theSingapore Exchange Securities Trading Limited.

For effective corporate governance, the Company has putin place the following self-regulatory and monitoringmechanisms:-

THE BOARD OF DIRECTORSThe Board as at 30 June 2002 comprised six directors, two ofwhom hold executive positions.

The members of the Board are:Executive DirectorsMr. Xavier Chong Fook Choy(Chairman and Chief Executive Officer)Ms. Lim May Lan(Chief Financial Officer. Newly appointed on16 November 2001.)

Independent Non-Executive DirectorsDr. Foo See Liang(Co-Chairman)Mr. Jeffrey StaszakMr. Matthew Chan Chung ShinMr. Rick Kenneth Hodgman

The Board approves the overall strategies and initiatives ofthe Group, regularly reviews its financial performance andensures the implementation of appropriate systems tomanage the principal risks of the Group’s businesses. TheBoard also evaluates the performance and compensation ofsenior management personnel.

Board meetings are generally held on a quarterly basis andduring the financial year, the directors met four times.

The functions of the Board are either carried out directly orthrough Board committees such as the Nominat ingCommittee, Audit Committee and Compensation Committee.

BOARD COMMITTEESNominating CommitteeThe Nominating Committee comprises two non-executivedirectors, namely, Mr. Rick Kenneth Hodgman (Chairman) andMr. Jeffrey Staszak.

The Committee plays a v i ta l ro le in assess ing theeffectiveness of the Board, its committees and their members.The Committee’s principal role is to ensure that only the mostcompetent individuals capable of contributing to the successof the Group are appointed.

The functions of the Committee include the nominations forthe appointment, re-appointment, election or re-election ofdirectors and members of the Compensation Committee andAudit Committee. It also reviews and approves nominationsfor senior management positions in the Group, including thatof the Chief Executive Officer and other senior executives.

Audit CommitteeThe Audit Committee comprises three non-executive directors,namely, Dr. Foo See Liang (Chairman), Mr. Rick KennethHodgman and Mr. Matthew Chan Chung Shin (appointed on28 August 2002).

The committee in ass is t ing the Board to fu l f i l i t sresponsibilities for the Group’s financial statements andexternal financial reporting, meets periodically with themanagement and external auditors to :-

(a) review the financial statements of the Company, theconsolidated financial statements of the Group and theAuditors’ Report before submission to the Boardfor approval;

(b) review the interim and annual announcements of theCompany and the Group before they are submitted to theBoard for approval;

(c) review and discuss with the external auditors theoverall scope of work of the audit, the results of theaudit and the evaluation of the internal control system,auditors’ management letter and the responses frommanagement; and

CORPORATE GOVERNANCE

E L L I P S I ZA R 2 0 0 2Pg. 14

C O R P O R A T E G O V E R N A N C E ( C O N T ’ D )

(d) review interested person transactions between the Groupand interested persons, if any.

The Committee is also tasked with advising the Board on theappointment or re-appointment of external auditors of theCompany at each Annual General Meeting.

The Audit Committee has full access to and co-operation fromthe Group’s management. It has also been given the resourcesrequired to discharge its function properly and has fulldiscretion to invite any director or executive officer to attendits meetings. The auditors have unrestricted access to theAudit Committee.

The Audit Committee has recommended to the Board thenomination of KPMG for re-appointment as external auditorsof Ellipsiz Ltd at its forthcoming Annual General Meeting.

Compensation CommitteeThe Compensation Committee comprises two independentdirectors, namely Mr. Rick Kenneth Hodgman (Chairman)and Mr. Jeffrey Staszak. It is responsible for reviewing andrecommending to the Board the compensation packages ofthe directors, Chief Executive Officer, and other seniorexecutives of the Group.

The Committee is empowered to review policies governingcompensation and promotion of executive officers of theGroup to ensure that these are consistent with the Group’sstrategy and performance.

The Committee is also delegated to administer the EllipsizShare Option Plan and the Ellipsiz Restricted Stock Plan.

SECURITIES TRADINGFollowing the introduction of the Best Practices Guide by theSingapore Exchange Securities Trading Limited, the Companyhas issued guidelines on share dealings to key employees ofthe Group, setting out the implications of insider trading andrecommendations of the Best Practices Guide.

The Directors of the Company have also adopted theBest Pract ices Guide with regards to deal ing in theCompany’s shares.

E L L I P S I ZA R 2 0 0 2

Pg. 15

The semiconductor industry is once again facing great uncertainty on the outcome for therest of the year, after several consecutive months of growth in both chip and equipmentsales in the first half of 2002. The short-lived recovery after a two-year recession isthreatened by cloudy global economic forecasts and falling consumer sentiment in theUS, which is the key market for the world electronics industry. The outlook is furtherdarkened by the threat of war in Iraq, with implications for the world economy.

INDUSTRY OUTLOOK

Darkening Out look For The US Economy

Uti

lisa

tion

(%

)

Source: The Conference Board

Index of 10 indicators designed to “load” orpredict overall economic activity: 1996 = 100

US Economy Lead ing Ind i ca to rsUS Consumer Confidence Index

Source: The Conference Board

85

90

95

100

105

110

115

120

97.1

94.5

93.3

JUN JUL AUG SEP OCT NOV DEC JANFEB MAR APRMAY JUN JUL AUG SEP2001 2002

85

90

95

100

105

110

115

120

111.8

JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG

2001 2002

The general lack of confidence in a recovery within the year has resulted in lacklusterdemand in key end-markets, such as personal computers, wireless phones andtelecommunications equipment. Coupled with the current overcapacity, investments incapital equipment are being held back. The result is reflected in indices such as the

E L L I P S I ZA R 2 0 0 2Pg. 16

I N D U S T R Y O U T L O O K ( C O N T ’ D )

SEMI* book-to-bill ratio, which dropped for a fourth consecutive month to 0.84 in Septemberfrom 1.02 in August and 1.22 in July.

IMPACT ON OUR MARKETSSimilarly, semiconductor manufacturers in Asia are facing the dilemma of whether to investin upgrading capacity and new technologies to position for the upturn (which analysts havepushed out to mid-2003), or to wait for a more robust signal of end-market demand.Even leading foundries TSMC and UMC have recently announced scaled-back capex plans inthe uncertain climate. There is a renewed hesitancy to place volume orders for equipment,materials, services and solutions, which could impact our Engineering Solutions arm. For ourAdvanced Packaging business, the lack of urgency to complete the qualification process, or toturn on the mass production of bumped wafers, would be negative factors.

However, the underlying trends driving the industry are still very much intact, and webelieve these will kick in when the outlook for the US economy clears at year’s end. Theseinclude the ever-growing demand for intelligence in electronic products, next-generationchip technology, outsourcing of semiconductor fabrication, and the ongoing concentration ofthe world’s chip manufacturing capacity in Asia, with China’s burgeoning semiconductorindustry becoming increasingly significant.

Semi Book-To-Bill

Bookings (3-mth average)

Billings (3-mth average)

Book-to-bill

600

800

1000

1200

0

0.5

1.0

1.5

2.0

2.5

3.0

APR 2002 MAY 2002 JUN 2002 JUL 2002 AUG 2002(FINAL)

SEP 2002(PRELIM)

US $(M) Book-to-bill ratio

* SEMI is the Semiconductor Equipment and Materials International industry Association. A book-to-bill of1.16 means that $116 worth of new orders were received for every $100 of product billed for the month.

E L L I P S I ZA R 2 0 0 2

Pg. 17

THE TRENDS1. Technology Transitions

With Moore’s Law* still going strong, many IC manufacturers and fabless houses aretargeting an accelerated two-year technology cycle versus the previous three to fouryears. Technology transitions which are already gaining momentum include 300mmwafers, copper interconnects, new insulating materials and the continued shrinking ofline widths to 0.13 microns and below.

2. Outsourcing Throughout Supply ChainAs both technology and demand cycles get compressed, outsourcing of either theentire chip manufacturing function to foundries, or parts of the value chain to othersolution providers, becomes much more compelling, from the speed-to-market andcost-effectiveness standpoints.

Ellipsiz is already serving the region’s largest wafer foundries - TSMC, UMC andChartered - and newer players in both Southeast and North Asia, and their growthwill provide opportunities for our Engineering and other services. The leading foundrieshave been experiencing booked-out demand for their 0.18 and 0.13 micron capacity,despite the slack for older process technologies. We expect the momentum toupgrade to finer architecture, new process technology and materials - and the need tooutsource non-core engineering functions - to continue even amidst generalmarket uncertainty.

The migration towards sub-micron line-widths at the front-end has a knock-on effectfurther down the supply chain, as flip chip and wafer scale packaging becomemainstream requirements. Outsourcing to enablers in areas like wafer bumping,to achieve the density of interconnects and die-yields for high-end electronic devices,is a natural outcome of this technology push.

• Flip Chip• Wafer Scale Packaging• 3D• System-in-a-package

Ne w Te c h n o l o g i e s Co m i n g On St r e a m

• Copper Interconnects• Silicon-On-Insulator

(SOI)• Low-k• Silicon Germanium

(SiGe)• Strained Silicon

• 300mm equipment• Processing chemistries• Alliances• Advanced Process

Control• Integrated Metrology

• System-on-Chip (SOC)• Magnetoresistive RAM• Double-gate Transistors• Carbon Nanotube

Transistors• Biological and Molecular

Self-Assembly

Source: FSI International, Inc.

NEW MATER IALS NEW MANUFACTURING ANDFABRICATION INITIATIVES

NEW PACKAGES

NEW ARCHITECTURESAND C IRCU I TS

* Moore’s law states that the number of transistors on a chip doubles every 18 months.

E L L I P S I ZA R 2 0 0 2Pg. 18

I N D U S T R Y O U T L O O K ( C O N T ’ D )

Semiconductor Equipment Shipment by Region (%)

Shipment in Millions

Source: SEMI-SEAJ (www.semi.org)

1000 200 300 400 500 600 700 800

13.7%

10.0%

31.1%

25.6%

24.9%

28.9%

6.3%

5.4%

13.7%

25.0%

10.4%

15.2%

June 2001 - $2.27 Billion


Europe

NorthAmerica

Japan

SouthKorea

Taiwan

ROW

Semiconductor Shipment by Region (%)

Shipment in Millions

Source: SEMI-SEAJ (www.semi.org)

10000 2000 3000 4000 5000

21.6%

20.0%

26.5%

22.7%

23.7%

20.8%

28.2%

36.4%



Europe

TheAmericas

Japan

Asia

3. Concentration Of Semiconductor Manufacturing In Asia

The Asia Pacific, excluding Japan, constitutes a major and growing market for bothchips and semiconductor equipment. In June 2002, this region constitutes 46% ofbillings for equipment, and 57% of billings for semiconductors.

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SUMMARYWhile the immediate outlook remains murky, we bel ieve that the industrytrends outlined above offer good opportunities for our engineering services andsolutions, and proprietary wafer bumping knowhow, in the near future. Ellipsiz willcontinue to work to restructure and build capability to scale regionally, to positionourselves for the recovery.

E L L I P S I ZA R 2 0 0 2Pg. 20

The following discussion is based on and should be read in conjunction with, the auditedconsolidated financial statements of Ellipsiz Ltd, including the notes thereto. This discussioncontains forward-looking statements that involve a number of risks and uncertainties thatcould cause our actual results to differ materially from those anticipated in these forward-looking statements.

Our consolidated financial statements are reported in Singapore Dollars and have beenprepared in accordance with the provisions of the Companies Act, Chapter 50, and SingaporeStatements of Accounting Standard.

RESULTS OF OPERATIONIn the financial year ended 30 June (“FY”) 2002, the Group’s focus was placed on theoperations of two of its business segments, namely, Engineering Solutions (“ES”) Group andAdvanced Packaging Solutions (“APS”) Group.

C O N S O L I D AT E D P R O F I T A N D L O S S A C CO U N T

Financial year ended 30 June 2002 30 June 2001

S$’000 S$’000

Revenues 39,634 101,427

Cost of Revenues (36,718) (81,631)

Gross Profit 2,916 19,796

Other Income 3,315 4,654

Distribution Costs (2,824) (4,244)

Administrative Costs (11,888) (13,671)

Other Operating Expenses (12,756) (6,090)

(Loss)/Profit from Operations (21,237) 445

Finance Costs (305) (219)

Share of results of

- associated companies 82 (506)

- a jointly controlled entity (1,643) (89)

Loss from ordinary activities before taxation (23,103) (369)

Taxation (211) (2,590)

Loss from ordinary activities after taxation but (23,314) (2,959)

before minority interest

Minority Interests (29) (662)

Net Loss attributable to shareholders (23,343) (3,621)

Basic Loss per share (cents) (11.79) (1.84)

MANAGEMENT’S DISCUSSIONAND ANALYSIS

E L L I P S I ZA R 2 0 0 2

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TURNOVERThe Group’s turnover in FY 2002 was $39.6 million, a drop of $61.8 million or 60.9%compared to FY 2001. This was largely due to the global downturn in the semiconductorindustry and the lack of capital spending by customers. Nevertheless, ES Group remainsthe main business segment in FY 2002 accounting for 94% of the Group’s turnover.The APS Group increased its sales by 22% from $1.8 million in FY 2001 to $2.2 millionin FY 2002.

GROSS PROFITIn FY 2002, the Group’s gross profit fell 85.3% from $19.8 million to $2.9 million, largelydue to the lower gross profit achieved by ES Group and the negative gross profit sufferedby APS Group.

The gross profit of ES Group was adversely affected by the poor sales performance.However, despite the lower gross profit performance, ES Group managed to improve itsgross margin from 23% in FY 2001 to 26% in FY 2002 due to the change in its salescomposition. In FY 2001, approximately 54% of ES Group’s turnover was derived fromequipment sales that generated relatively low margins. In FY 2002, due to the significantpush out and cancellation of equipment orders, the contribution from lower marginequipment sales was reduced to 36% of ES Group’s turnover performance.

The negative gross profit in APS Group was largely due to the lack of sales volume thatled to the under-utilisation of the manufacturing capacities. In addition, APS Groupabsorbed a full-year production cost in FY 2002 compared to the eight-months costs inFY 2001.

OTHER INCOMEThe decrease in other income from $4.6 million in FY 2001 to $3.3 million in FY 2002 wasmainly due to the decrease in interest income and the non-recurrence of exchangegain income.

ADMINISTRATIVE AND DISTRIBUTION EXPENSESThe cost cutting measures taken in FY 2002 to reduce staff costs was the main reason forthe reduction of the distribution and administrative expenses by 33.5% and 13.0%respectively. Other factors contributing to the positive variances included lowertravelling, entertainment and telecommunication expenses in FY 2002.

The impact of the above favourable variances is partially offset by the higherdepreciation expenses following the completion of the first phase of the ERP system.

OTHER OPERATING EXPENSESThe ‘Other Operating Expenses’ comprised mainly the exceptional items. The exceptionalitems amounted to $5.6 million in FY 2001 and $10.8 million in FY 2002.

E L L I P S I ZA R 2 0 0 2Pg. 22

The exceptional items in FY 2001 comprised $3.5 million write-off of investment in SurfaceInterface Inc (“SII”); $1.3 million write-off of fixed assets and recognition of $0.2 millionrental commitment in respect of APS Group’s old manufacturing premises; and $0.6 millionprovision for impairment of investment value in Weboffice Pte Ltd.

In FY 2002, the exceptional items comprised mainly the recognition of $8.2 millionimpairment losses on fixed assets and development expenditure of APS Group; $1.8 millionimpairment losses on our investments in Silicon Genesis Corporation (“SGC”) and clubmemberships; the write-off of $0.8 million of fixed assets in our Supply Chain Solutions(“SCS”) Group in view of the plan to cease its operations; the provision for doubtful loan of$0.5 million on a loan due from an associated company, Semiconductor Alliance Pte Ltd(“SCA”); and the recognition of proceeds of $0.6 million as gain on disposal of investment inSII during the year since the investment value was written off in FY 2001.

SHARE OF RESULTS OF ASSOCIATED COMPANIES AND A JOINTLY CONTROLLED ENTITYThe share of losses of associated companies and a jointly controlled entity increased from$0.6 million in FY 2001 to $1.6 million in FY 2002. The increase was mainly due to Ellipsiz’sshare of $0.95 million relating to the recognition of impairment losses on the fixed assetsand development expenditure in the jointly controlled entity, MicroRoutes Pte Ltd.

TAXIncome tax for the year comprised current year tax of $116,000; current year deferred taxcharges of $267,000 and adjustments for overprovision of prior year tax and deferred tax of$157,000 and $15,000 respectively.

Current tax was computed by applying the local corporate tax rate on the profits of thecompanies after adjusting for non-deductible items. Deferred tax was provided using thebalance sheet liability method, providing for temporary differences between the carryingamounts of assets and liabilities for financial reporting purposes and the amounts used fortaxation purposes. The deferred tax asset is recognized only to the extent that it is probablethat future taxable profit will be available against which the deferred tax asset can beutilized. For FY 2002, the tax payable by the Singapore subsidiaries also took intoconsideration the implementation of Group Relief System announced by the Governmentduring the year.

NET LOSS ATTRIBUTABLE TO SHAREHOLDERSThe net loss attributable to shareholders increased from $3.6 million in FY 2001 to $23.3million in FY 2002, thus resulted in the increase in basic loss per share from 1.84 centsto 11.79 cents.

M A N A G E M E N T ’ S D I S C U S S I O N A N D A N A L Y S I S ( C O N T ’ D )

E L L I P S I ZA R 2 0 0 2

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NON-CURRENT ASSETSNON-CURRENT ASSETSNON-CURRENT ASSETSNON-CURRENT ASSETSNON-CURRENT ASSETSThe Group’s non-current assets stood at $17.9 million as at 30 June 2002, a decrease of34% as compared with FY 2001’s position of $27 million.

INTANGIBLE ASSETS AND PROPERTY, PLANT AND EQUIPMENTDuring the year, the Group acquired property, plant and equipment of $8.9 million andintangible assets of $1.2 million. The property, plant and equipment additions includedprimarily the equipment for the new plant of APS Group and the laboratory equipment for ESGroup’s activities in Kuching. The intangible assets addition relates to the development costsincurred to implement the second phase of the ERP system.

In FY 2002, the Group recognised $8.2 million impairment losses on APS Group’s property,plant and equipment and development expenditure; took a property, plant and equipmentwrite-off of $0.8 million in SCS Group; and provided depreciation and amortisation expensesof $6.1 million.

F I N A N C I A L CO N D I T I O N As at As at

Consolidated Balance Sheet 30 June 2002 30 June 2001

S$’000 S$’000

ASSETSASSETSASSETSASSETSASSETS

Property, plant and equipment 15,914 18,571

Investments in associated companies 37 1,972

and jointly controlled entity

Other Investments 79 1,942

Intangible Assets 1,773 4,546

Deferred tax asset 82 0

17,885 27,031

NET CURRENT ASSETS

Current Assets 61,721 91,325

Current Liabilities (21,802) (35,701)

39,919 55,624

NON-CURRENT LIABILITIES

Non-current Liabilities (1,845) (3,381)

55,959 79,274

Represented by:

SHARE CAPITAL AND RESERVES

Share Capital 49,500 49,500

Reserves 4,703 28,051

54,203 77,551

Minority Interest 1,756 1,723

55,959 79,274

E L L I P S I ZA R 2 0 0 2Pg. 24

INVESTMENT IN ASSOCIATED COMPANIES AND JOINTLY CONTROLLED ENTITYThe share of losses of $1.56 million in associated companies and jointly controlled entitycoupled with the provision of doubtful loan of $0.5 million due from SCA and partially offsetby the additional investment of $0.1 million in SCP Global Technologies Asia Pte Ltd (“SCP”)accounted for the overall decrease in the investment in associated companies and jointlycontrolled entity.

OTHER INVESTMENTSThe provision of impairment losses on the investment in SGC and club memberships resultedin the 96% decrease in other investments.

CURRENT ASSETSThe Group’s current assets decreased by 32% from $91.3 million in FY 2001 to $61.7 million inFY 2002. The reductions in trade receivables and cash and cash equivalent balances were themain causes for the lower current assets. In line with the lower sales activities, the tradereceivables declined by 53%. The reduction in cash and cash equivalents were mainlyattributed to the acquisition of fixed and intangible assets and the $5.9 million repayment ofloan and hire purchase borrowings.

CURRENT LIABILITIESThe lower trade creditors and accruals, which were in line with the reduced businessactivities, together with the repayment of borrowings during the year, led to the decrease of39% in current liabilities in FY 2002.


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The Group had a net cash outflow from operating activities of $2.1 million in FY 2002,as compared to net cash inflow of $4.7 million in FY 2001. The poor operating performance wasthe main reason for the net cash outflows from operating activities. The impact was howeverpartially offset by the reduction in net working capital. Cash generated from operations had beenadjusted to exclude the effect of non-cash items such as depreciation and amortisationexpenses, write-off of property, plant and equipment, gain from disposal of investment,impairment losses on assets and undistributed losses of associated companies and jointlycontrolled entity.

Net cash outflow from investing activities in FY 2002 was $9.1 million, a drop of $11.4 millionfrom $20.5 million in FY 2001. In FY 2002, majority of the funds were invested in acquiring fixedand intangible assets to meet the operational needs of the Group. The Group had also recordedsale proceeds of $0.6 million from disposal of other financial assets.

The repayment of bills drawn from bank, term loan and hire purchase liabilities, partially offsetby the $1.3 million of government grant received by the APS Group, led to the$4.2 million cash outflow from the financing activities.

The above movements resulted in reduction of the Group’s cash position by $15.4 million.However the cash and cash equivalent position of the Group as at 30 June 2002 remains strongat $44 million.

RISKS AND UNCERTAINTIESCYCLICAL INDUSTRYThe semiconductor industry is highly cyclical due to the sudden changes in supply anddemand of semiconductors. The semiconductor industry has experienced periodic downturnsthat have resulted in semiconductor manufacturers canceling or delaying their purchases ofsemiconductor material or equipment and which in turn may adversely affects the operatingresults of semiconductor material and equipment suppliers. The timing, length and severity ofsuch downturns are difficult to predict. In the event of any downturn in the semiconductorindustry, the Group’s operating results would be materially affected.

CO N S O L I DAT E D STAT E M E N T O F CA S H F LO W SFinancial year ended 30 June 2002 30 June 2001

S$ ‘000 S$ ‘000

Net cash generated (used in)/from operating activities (2,055) 4,740Net cash generated (used in)/from investing activities (9,084) (20,460)Net cash generated (used in)/from financing activities (4,249) 41,600Net (decrease)/increase in cash and cash equivalents (15,388) 25,880

Cash and cash equivalents at beginning of the year 59,403 33,601Effect of exchange rate changes on balances in foreign currencies - (78)Cash and cash equivalents at end of the year 44,01544,01544,01544,01544,015 59,40359,40359,40359,40359,403

LIQUIDITY AND CAPITAL RESOURCES

E L L I P S I ZA R 2 0 0 2Pg. 26


DEPENDENCE ON A FEW KEY PRINCIPALSIn FY 2002, the Group’s five largest suppliers accounted for approximately 46% of theGroup’s revenue.

All semiconductor materials, equipment and products sold and serviced by the Group arepursuant to agreements with the principals. These agreements can be terminated by theGroup or the principals subject to notification periods that range from 30 days to two years.The Group generally does not sell competing products in the same market, and therefore thenumber of principals the Group can represent at any one time is limited. The principals mayterminate their relationships with the Group and should the Group lose any key principal, theGroup may not be able to find a suitable replacement on a timely basis, or at all.

The loss of a key principal may cause the Group to lose customers and incur expensesassociated with the termination of the agreement with that principal. The Group may loseprincipals for various reasons. These include mergers and acquisitions involving the principalsand other semiconductor materials and equipment manufacturers that the Group does notrepresent; the expansion of a principal’s product offerings to compete with the products ofanother principal (as the Group generally does not offer competing product lines in the samemarket, the Group may be required to terminate the agreement with one of the competingprincipals); a principal’s dissatisfaction with the Group’s level or quality of service; and thefailure of a principal’s business.

If, for any reason, any of the key principals were to materially reduce their business orterminate their relationship with the Group, the loss of the key principal would have amaterial and adverse effect on the Group’s business.

DEPENDENCE ON A FEW KEY CUSTOMERSIn FY 2002, five of our largest customers accounted for approximately 45% of the Group’srevenue. However, further consolidation in the semiconductor industry may occur and thismay result in increased customer concentration and reliance on fewer key customers in thefuture. Unless the Group diversifies and expands its customer base, the Group’s business maybe hampered due to its reliance on too few key customers. A significant decrease in sales toa major customer or the deferral or cancellation of any significant order would have anadverse effect on the Group’s operating results.

SIGNIFICANT COMPETITION FROM GLOBAL COMPETITORSIn the area of semiconductor manufacturing services, the Group competes with numerouscompetitors, comprising vertically integrated companies that have in-house IC packagingand independent producers. Current and prospective customers constantly evaluatethe Group’s capabilities against the merits of in-house IC packaging capabilities. In recentyears, semiconductor companies have increasingly subcontracted parts of the IC productionprocess to independent IC packagers and testers to reduce costs and to shorten productioncycles. However, a slowdown in such a trend might have an adverse impact on the Group’soperating results.

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CO N T E N T S

28 Directors’ Report

33 Statement By Directors34 Auditor’s Report

36 Balance Sheets

38 Profit And Loss Accounts39 Statements Of Changes In Equity

41 Consolidated Statement Of Cash Flows

43 Notes To The Financial Statements

FINANCIAL STATEMENTS FOR THE YEARENDED 30 JUNE 2002

Ellipsiz Ltdand its subsidiaries Directors’ ReportAnnual Report for the year ended 30 June 2002

Page 28

Directors' Report

On behalf of all the directors of the Company, we submit this annual report to the members together with the auditedfinancial statements of the Group and of the Company for the financial year ended 30 June 2002.

Board of Directors

The directors in office at the date of this report are as follows:-

Chong Fook ChoyFoo See LiangRick Kenneth HodgmanMatthew Chan Chung ShinJeffrey StaszakLim May Lan (Appointed on 16 November 2001)

In accordance with Article 91 of the Company’s Articles of Association, Messrs Matthew Chan Chung Shin and JeffreyStaszak who shall retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves forre-election.

Principal Activities

The principal activities of the Company during the financial year have been those relating to investment holding and theprovision of management services. The principal activities of the subsidiaries are set out in Note 5 to the financialstatements. A subsidiary, Ellipsiz Ventures Pte Ltd, ceased operations during the financial year.

Acquisition and Disposal of Subsidiaries

During the financial year, the Company incorporated a wholly owned subsidiary, Ellipsiz (Shanghai) International Ltd, bycontributing cash of $361,000 towards its registered and paid-up capital.

There was no acquisition or disposal of any other subsidiaries during the financial year.

Financial Results

The results of the Group and of the Company for the financial year were as follows:-

The Group The Company$’000 $’000

Loss after taxation (23,314) (25,463)

Minority interests (29) - ───────────── ─────────────

Net loss attributable to shareholders (23,343) (25,463)

Accumulated profits/(losses) brought forward, aspreviously reported 2,129 (256)

Effect of adopting accounting standards:- SAS 10 (dividends proposed in 2001 and approved in 2002) - (2,643)- SAS 17 (employee benefits) (280) (68)

Accumulated profits/(losses) brought forward, restated 1,849 (2,967) ───────────── ─────────────

Accumulated losses carried forward (21,494) (28,430) ═════════════ ═════════════


Page 29

Transfers to or from Reserves or Provisions

During the financial year, a translation loss of $5,000 arising from the consolidation of foreign subsidiaries wastransferred to the Exchange Translation Reserve.

Material movements in provisions (including allowance, impairment, depreciation and amortisation) are as set out in theaccompanying financial statements.

Issues of Shares or Debentures

During the financial year, a subsidiary, MicroFab Technology (S) Pte Ltd, increased its authorised ordinary share capitalfrom $6,000,000 comprising 6,000,000 ordinary shares of $1 each to $30,000,000 by the creation of an additional24,000,000 ordinary shares of $1 each. The subsidiary also issued 20,000,000 ordinary shares of $1 each at par byway of conversion of debts owing to the Company.

During the financial year, a subsidiary, Factech Semiconductors Sdn. Bhd., issued 99,998 ordinary shares of RM1 eachfully paid at par for cash to provide additional working capital.

Except as disclosed above, neither the Company nor its subsidiaries issued any shares or debentures during thefinancial year.

Arrangements to Enable Directors to Acquire Shares and Debentures

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whoseobjects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of theacquisition of shares in or debentures of the Company or any other body corporate.

Directors' Interests in Shares and Debentures

According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50,particulars of interests of directors who held office at the end of the financial year and their spouses and infant childrenin shares in the Company and related corporations (other than wholly owned subsidiaries) are as follows:

Holdings in the name of the director,spouse or infant children

At 1/7/2001/date of At At

appointment 30/6/2002 21/7/2002

The Company Ordinary shares of $0.25 each fully paid

Chong Fook Choy 32,149,320 27,920,320 27,920,320Foo See Liang 30,000 30,000 30,000Rick Kenneth Hodgman 80,000 80,000 80,000Lim May Lan 480,000 480,000 480,000

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares ordebentures of the Company or of related corporations either at the beginning of the financial year, or date ofappointment, if later, or at the end of the financial year.

Dividends

Since the end of the last financial year, no dividend has been paid in respect of that previous financial year. No dividendhas been paid or is proposed to be paid in respect of the financial year under review.


Page 30

Bad and Doubtful Debts

Before the profit and loss account and the balance sheet of the Group and of the Company were made out, the directorstook reasonable steps to ascertain what action had been taken in relation to writing off bad debts and providing fordoubtful debts of the Group and of the Company. The directors have satisfied themselves that all known bad debtshave been written off and that adequate provision has been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances, which would render any amounts written offfor bad debts or provided for doubtful debts in the financial statements of the Group and of the Company inadequate toany substantial extent.

Current Assets

Before the profit and loss account and the balance sheet of the Group and of the Company were made out, the directorstook reasonable steps to ascertain that current assets of the Group and of the Company which were unlikely to realisetheir book values in the ordinary course of business have been written down to their estimated realisable values and thatadequate provision has been made for the diminution in value of such current assets.

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report, whichwould render the values attributable to current assets in the Group and in the Company misleading.

Charges and Contingent Liabilities

Since the end of the financial year: -

(i) no charge on the assets of the Group or of the Company has arisen which secures the liabilities of any otherperson; and

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

Ability to Meet Obligations

No contingent liability or other liability of the Group or of the Company has become enforceable or is likely to becomeenforceable 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 Group or of the Company to meet their obligations as and when they falldue.

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 thefinancial statements which would render any amount stated in the financial statements of the Group or of the Companymisleading.

Unusual Items

In the opinion of the directors, no item, transaction or event of a material and unusual nature has substantially affectedthe results of the operations of the Group or of the Company during the financial year.

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


Page 31

Directors', Chief Executive Officer's or Substantial Shareholders' Interests in Contracts

Since the end of the last financial year, no director, chief executive officer or substantial shareholder has received orbecome entitled to receive a benefit by reason of a contract made by the Company or a related corporation with thedirector, chief executive officer or substantial shareholder or with a firm of which he is a member or with a company inwhich he has a substantial financial interest.

Share Option

On 28 November 2001, the Company had approved the "Ellipsiz Share Option Plan" and the "Ellipsiz Restricted StockPlan".

The "Ellipsiz Share Option Plan" would enable selected employees and non-executive directors of the Group tosubscribe for shares in the Company.

The "Ellipsiz Restricted Stock Plan" would enable selected employees and non-executive directors of the Group, otherthan controlling shareholders or their associates, to receive awards in the form of fully paid shares, their equivalent cashvalue or combination thereof, free of charge.

The "Ellipsiz Share Option Plan" and "Ellipsiz Restricted Stock Plan" are administered by a committee which consists oftwo members, being Mr. Rick Kenneth Hodgman and Mr. Jeffrey Staszak.

During the financial year, there was:-

(a) no option or award granted by the Company or its subsidiaries to any person to take up unissued shares in theCompany or its subsidiaries; and

(b) no share issued by virtue of any exercise of option or receipt of awards to take up unissued shares of theCompany or its subsidiaries.

As at the end of the financial year, there were no unissued shares of the Company or its subsidiaries under option orawards.

Audit Committee

The members of the audit committee at the date of this report are as follows:-

Foo See Liang (Chairman)Rick Kenneth HodgmanMatthew Chan Chung Shin

The audit committee has held 4 meetings since the last directors’ report.

The Audit Committee performs the functions specified by Section 201B of the Companies Act, Chapter 50 (the "Act"),and the Singapore Exchange Listing Manual (the "Listing Manual") and the Best Practices Guide of the SingaporeExchange.

The principal responsibilities of the Audit Committee include the review of:-

(a) the effectiveness and reliability of financial reporting process;

(b) the effectiveness of the management of financial risks and the internal control system;

(c) the scope of work of the statutory auditors and the results arising therefrom, including their comments on theinternal accounting controls of the Group;

(d) the assistance given by the Group’s officers to the auditors;

(e) compliance with laws and regulations, particularly those of the Act and the Listing Manual; and

(f) the appropriateness of half year and full year announcements and reports.


Page 32

Audit Committee (cont’d)

In accordance with Chapter 9A of the Singapore Exchange Listing Manual, the Audit Committee has reviewed therequirements for approval and disclosure of interested person transactions, and reviewed the internal procedures set upby the Company to identify and report and where necessary, seek approval for interested person transactions.

The Audit Committee has full access to management and is given the resources required for it to discharge its functions.It has full authority and discretion to invite any director or executive officer to attend its meetings.

The Audit Committee has recommended to the Board of Directors that the auditors, KPMG, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.

Auditors

The auditors, KPMG, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

.................................................CHONG FOOK CHOYDirector

.................................................LIM MAY LANDirector

SINGAPORE

30 September 2002

Ellipsiz Ltdand its subsidiaries Statement by DirectorsAnnual Report for the year ended 30 June 2002

Page 33

We, CHONG FOOK CHOY and LIM MAY LAN, being directors of ELLIPSIZ LTD, do hereby state that in our opinion:-

(a) the financial statements set out on pages 36 to 87 are drawn up so as to give a true and fair view of the state ofaffairs of the Group and of the Company as at 30 June 2002 and of the results of the business and the changesin equity of the Group and of the Company and cash flows of the Group for the financial year ended on that date;and

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

The Board of Directors has authorised these financial statements for issue on the date of this statement.

On behalf of the Board of Directors

..............................................................CHONG FOOK CHOYDirector

..............................................................LIM MAY LANDirector

SINGAPORE

30 September 2002

Report of the Auditors to the Members ofEllipsiz Ltd

We have audited the consolidated financial statements of the Group and the financial statements of the Company for thefinancial year ended 30 June 2002 as set out on pages 36 to 87. These financial statements are the responsibility of theCompany'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 planand perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used and significant estimates made bythe directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

In our opinion:-

(a) the financial statements are properly drawn up in accordance with the provisions of the Companies Act, Chapter50 (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 Group and of the Company as at 30 June 2002 and of the results and changes inequity of the Group and of the Company and cash flows of the Group for the financial year ended on thatdate; 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 thosesubsidiaries incorporated in Singapore of which we are the auditors, have been properly kept in accordance withthe provisions of the Act.

We have considered the financial statements and auditors’ report of the subsidiaries which have been audited by ourassociated firms, being financial statements that have been included in the consolidated financial statements. We haveconsidered the financial statements and auditors’ report of the subsidiaries of which we have not acted as auditors,being financial statements that have been included in the consolidated financial statements. We have also consideredthe financial statements of the subsidiaries which are not required by the laws of their countries of incorporation to beaudited, being financial statements that have been included in the consolidated financial statements. The names ofthese subsidiaries are set out in Note 5 to the financial statements.

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

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

KPMGCertified Public Accountants

SINGAPORE

30 September 2002

Ellipsiz Ltdand its subsidiaries Balance SheetsAnnual Report as at 30 June 2002

Page 36

------- The Group ------ -----The Company -----2001 2001

Note 2002 restated 2002 restated$’000 $’000 $’000 $’000

Non-Current Assets

Property, plant andequipment 3 15,914 18,571 2,117 1,128

Intangible assets 4 1,773 4,546 1,773 1,149Investments in subsidiaries 5 - - 26,151 26,790Interests in associated

companies 6 37 329 50 1,617Interests in a jointly

controlled entity 7 - 1,643 - 1,732Other financial assets 8 79 1,942 75 1,878Deferred tax asset 17 82 - - -

───────────── ───────────── ───────────── ─────────────

17,885 27,031 30,166 34,294Current Assets

Inventories 9 4,251 4,215 - -Trade and other receivables 10 13,417 27,144 316 128Amounts owing by

related parties 12 38 563 14,696 25,909Cash and cash equivalents 13 44,015 59,403 17,774 26,540

61,721 91,325 32,786 52,577

Less:Current Liabilities

Trade and other payables 14 18,194 27,125 2,939 1,548Amounts owing to

related parties 12 10 132 35 137Interest-bearing loans and

borrowings 15 1,998 5,413 284 212Term loan (interest-free) 16 53 482 - -Provision for taxation 1,547 2,549 36 36

21,802 35,701 3,294 1,933

Net Current Assets 39,919 55,624 29,492 50,644 ───────────── ───────────── ───────────── ─────────────

57,804 82,655 59,658 84,938

Less:Non-Current Liabilities

Interest-bearing loans andborrowings 15 1,405 3,207 256 316

Deferred taxation 17 440 174 388 145

1,845 3,381 644 461 ───────────── ───────────── ───────────── ─────────────

55,959 79,274 59,014 84,477Minority Interests (1,756) (1,723) - - ───────────── ───────────── ───────────── ─────────────

NET ASSETS 54,203 77,551 59,014 84,477 ═════════════ ═════════════ ═════════════ ═════════════

Ellipsiz Ltdand its subsidiaries Balance SheetsAnnual Report as at 30 June 2002

The accompanying notes form an integral part of these financial statements.

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CAPITAL AND RESERVES

Share Capital 18 49,500 49,500 49,500 49,500

Reserves 19 4,703 28,051 9,514 34,977 ───────────── ───────────── ───────────── ─────────────

54,203 77,551 59,014 84,477 ═════════════ ═════════════ ═════════════ ═════════════

Ellipsiz Ltdand its subsidiaries Profit and Loss AccountAnnual Report for the year ended 30 June 2002


Page 38



Revenues 20 39,634 101,427 - -

Cost of revenues (36,718) (81,631) - - ───────────── ───────────── ───────────── ─────────────

Gross profit 2,916 19,796 - -

Other income 21(a) 3,315 4,654 9,365 6,216

Distribution costs (2,824) (4,244) - -

Administrative expenses (11,888) (13,671) (5,002) (5,242)

Other operating expenses (12,756) (6,090) (28,639) (4,058) ───────────── ───────────── ───────────── ─────────────

(Loss)/Profit from operations (21,237) 445 (24,276) (3,084)

Finance costs 21(f) (305) (219) (64) (12)

Share of results ofassociated companies 82 (506) - -

Share of results of ajointly controlled entity (1,643) (89) - -

───────────── ───────────── ───────────── ─────────────

Loss from ordinary activitiesbefore taxation 21 (23,103) (369) (24,340) (3,096)

Tax expense 22 (211) (2,590) (1,123) (359) ───────────── ───────────── ───────────── ─────────────

Loss from ordinary activitiesafter taxation butbefore minority interests (23,314) (2,959) (25,463) (3,455)

Minority Interests (29) (662) - - ───────────── ───────────── ───────────── ─────────────

Net Loss attributable toshareholders (23,343) (3,621) (25,463) (3,455)

═════════════ ═════════════ ═════════════ ═════════════

Basic Loss Per Share 23 (11.79 cents) (1.84 cents) ═════════════ ═════════════

Ellipsiz Ltdand its subsidiaries Statement of Changes in EquityAnnual Report for the year ended 30 June 2002


Page 39

Exchange AccumulatedShare Share Capital translation profits/

Note capital premium reserve reserve (losses) Total$'000 $'000 $'000 $'000 $'000 $'000

The Group

At 1 July 2000, aspreviouslyreported 39,000 2 (11,902) 62 5,470 32,632

Effects of adoptingaccountingstandards:

- SAS 17 24(b) - - - - - -─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At 1 July 2000, restated 39,000 2 (11,902) 62 5,470 32,632

Issue of 42,000,000ordinary sharesof $0.25 each atpremium of $0.95per share 10,500 39,900 - - - 50,400

Share issue expenseswritten off - (1,958) - - - (1,958)

Goodwill written off - - 182 - - 182

Translation differencearising on consolidationof foreign subsidiaries - - - (84) - (84)

Loss for the year - - - - (3,621) (3,621)─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At 30 June 2001, restated 49,500 37,944 (11,720) (22) 1,849 77,551═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════

At 1 July 2001, aspreviously reported 49,500 37,944 (11,720) (22) 2,129 77,831

Effects of adoptingaccountingstandards:

- SAS 17 24(b) - - - - (280) (280)─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At 1 July 2001, restated 49,500 37,944 (11,720) (22) 1,849 77,551

Translation differencearising on consolidationof foreign subsidiaries - - - (5) - (5)

Loss for the year - - - - (23,343) (23,343)─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At 30 June 2002 49,500 37,944 (11,720) (27) (21,494) 54,203═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Ellipsiz Ltdand its subsidiaries Statement of Changes in EquityAnnual Report for the year ended 30 June 2002


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Share Share AccumulatedNote capital premium profits/(losses) Total

$'000 $'000 $'000 $'000The Company

At 1 July 2000, aspreviously reported 39,000 2 1,038 40,040

Effects of adoptingaccounting standards:

- SAS 10 24(b) - - (550) (550)- SAS 17 24(b) - - - -

─────── ─────── ─────── ───────

At 1 July 2000, restated 39,000 2 488 39,490

Issue of 42,000,000ordinary sharesof $0.25 each ata premium of $0.95per share 10,500 39,900 - 50,400

Share issue expenses written off - (1,958) - (1,958)

Loss for the year - - (3,455) (3,455)─────── ─────── ─────── ───────

At 30 June 2001, restated 49,500 37,944 (2,967) 84,477═══════ ═══════ ═══════ ═══════

At 1 July 2001, aspreviously reported 49,500 37,944 (256) 87,188

Effects of adoptingaccounting standards:

- SAS 10 24(b) - - (2,643) (2,643)- SAS 17 24(b) - - (68) (68)

─────── ─────── ─────── ───────

At 1 July 2001, restated 49,500 37,944 (2,967) 84,477

Loss for the year - - (25,463) (25,463)─────── ─────── ─────── ───────

At 30 June 2002 49,500 37,944 (28,430) 59,014═══════ ═══════ ═══════ ═══════

Ellipsiz Ltdand its subsidiaries Consolidated Statement of Cash FlowsAnnual Report for the year ended 30 June 2002

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2002 2001restated

$’000 $’000Operating Activities

Loss from ordinary activities (23,103) (369)Adjustments for:-

Depreciation of property, plant and equipment 5,113 1,652Interest income (511) (1,831)Interest expense 305 219Property, plant and equipment written off 1,071 1,408Loss on disposal of property, plant and equipment 10 10Allowance made for doubtful loans to associated companies 494 -Gain on disposal of unquoted equity investments (615) -Loss on disposal of other financial assets 4 -Amortisation of intangible assets 941 535Impairment losses on:- property, plant and equipment 5,548 -- intangible assets 2,613 -- other financial assets 1,857 566Grant income (302) (398)Amortisation of grant income (404) (186)Other financial assets written off - 3,492Undistributed losses of associated companies

and a jointly controlled entity 1,561 595 ───────────── ─────────────

Operating (loss)/profit before working capital changes (5,418) 5,693

Changes in working capitalInventories (36) (2,921)Trade and other receivables 13,486 (111)Balances with affiliated companies - 138Balances with associated companies - (852)Trade and other payables (9,264) 3,727

───────────── ─────────────

Cash (used in)/generated from operations (1,232) 5,674Interest received 511 1,831Interest paid (305) (219)Income tax paid (1,029) (2,546)

───────────── ─────────────

Cash (outflow)/inflow from operating activities (2,055) 4,740

Investing Activities

Proceeds from disposal of other financial assets 617 -Purchase of property, plant and equipment (8,973) (10,160)Proceeds from disposal of property, plant and equipment 174 6Development expenditure incurred - (390)Purchase of other intangible assets (781) (1,161)Investment in associated companies (121) (823)Investment in a jointly controlled entity - (1,732)Acquisition of additional shareholding in a subsidiary - (59)Acquisitions of other financial assets - (5,583)Cash held by subsidiary no longer consolidated upon

reclassification to associated company - (558)

Cash outflow from investing activities (9,084) (20,460)

Ellipsiz Ltdand its subsidiaries Consolidated Statement of Cash FlowsAnnual Report for the year ended 30 June 2002


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2002 2001Note restated

$’000 $’000

Financing Activities

Balances with a jointly controlled entity 73 (88)Balances with associated companies 246 123Balances with affiliated companies (17) (76)Balances with shareholders 25 (8,265)Balances with directors 76 74Repayment of term loan (429) (26)Bills repaid (3,033) 3,033Repayment of bank loans (1,158) (1,125)Repayment of hire purchase and finance

lease creditors (1,312) (1,105)Grant received 1,280 613Proceeds from share issue, net of expenses - 48,442

Cash (outflow)/inflow from financing activities (4,249) 41,600 ───────────── ─────────────

Net (Decrease)/Increase In Cash And Cash Equivalents (15,388) 25,880

Cash And Cash Equivalents At Beginning of Year 59,403 33,601

Effect of Exchange Rate Changes on Balances inForeign Currencies - (78)

───────────── ─────────────

Cash And Cash Equivalents At End of Year 13 44,015 59,403 ═════════════ ═════════════

Notes to Consolidated Statement of Cash Flows

(i) Significant non-cash transactions:

During the financial year, the Group acquired $286,000 (2001: $4,474,000) of property, plant and equipmentunder hire purchase agreements.

(ii) Effects of acquisition/disposal of subsidiaries:

In the financial year ended 30 June 2001, the Group acquired a 100% equity interest in Factech SemiconductorSdn Bhd for a nominal consideration. The Group also paid a consideration of $59,000 for the acquisition of anadditional 10% equity interest in Crystaltech Scientific Inc.

2001$’000

Property, plant and equipment (154)Trade receivables (97)Other receivables, deposits and prepayments (132)Cash at banks and in hand (558)Trade payables 983Other payables and accruals 54Minority interests (48)

─────────────

48Investment retained by the Company (48)

─────────────

-Cash disposed of 558

─────────────

Net cash outflow on acquisition of subsidiaries 558 ═════════════

Ellipsiz Ltdand its subsidiaries Notes to the Financial StatementsAnnual Report 30 June 2002

Page 43

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the directors on 30 September 2002.

1. Domicile and Activities

Ellipsiz Ltd is incorporated in Singapore with its registered office at 29 Woodlands Industrial Park E1, Lobby 1,#04-01/06 Northtech Building, Singapore 757716.

The principal activities of the Company are those relating to investment holding and the provision of managementservices. The principal activities of the subsidiaries are set out in Note 5 to the financial statements.

The consolidated financial statements of the Company for the year ended 30 June 2002 relate to the Companyand its subsidiaries (together referred to as the "Group") and the Group's interests in associated companies anda jointly controlled entity.

2. Summary of Significant Accounting Policies

(a) Statement of Compliance

These financial statements have been prepared in accordance with Singapore Statements of AccountingStandard ("SAS") (including Interpretations of Statements of Accounting Standard) issued by the Institute ofCertified Public Accountants of Singapore and the applicable requirements of the Singapore Companies Act,Chapter 50.

(b) Basis of Preparation

The financial statements, which are expressed in Singapore dollars, are prepared on the historical cost basis.

During the financial year, the Group and the Company have changed their accounting policies as a result ofadopting ten new or revised accounting standards which have become effective for the financial statements for2002. The benchmark treatment given in SAS 8 (revised 2000) – Net Profit or Loss for the Period, FundamentalErrors and Changes in Accounting Policies of applying the changes retrospectively by adjusting the openingbalance of the accumulated profits/(losses) of the prior and current year has been adopted, unless suchtreatment is prohibited or modified by the specific transitional provisions set out in the respective standards beingadopted. Details of the effects of adopting the standards are given in Note 24.

(c) Basis of Consolidation

(i) Subsidiaries

Subsidiaries are those companies controlled by the Company. Control exists when the Company has thepower, directly or indirectly, to govern the financial and operating policies of a company so as to obtainbenefits from its activities.

The consolidated financial statements incorporate the financial statements of the Company and all itssubsidiaries made up to the end of the financial year. The financial statements of subsidiaries areincluded in the consolidated financial statements from the date that control commences until the date thatcontrol ceases. All significant intra-Group balances and transactions are eliminated on consolidation.


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2. Summary of Significant Accounting Policies (cont’d)

(c) Basis of Consolidation (cont’d)

(ii) Associates and Jointly Controlled Entities

Associated companies are companies, not being subsidiaries, in whose financial and operating decisionsthe Group exercises significant influence through board representation.

Jointly controlled entities are entities which operate under a contractual arrangement between the Groupor Company and other parties, where the contractual arrangement establishes that the Group orCompany and one or more of the other parties share joint control over the economic activities of theentities.

The Group’s share of the results of associated companies and jointly controlled entities is included in theconsolidated profit and loss account on an equity accounted basis, from the date that significant influenceor joint control commences until the date that significant influence or joint control ceases. The Group’sshare of the post-acquisition retained profits and capital reserves of associated companies and jointlycontrolled entities is included in the carrying values of the investments in the consolidated balance sheet.

Goodwill (net of accumulated amortisation), representing the excess of the cost of investment over theGroup’s share of net tangible assets acquired, is included in the Group’s investment in associatedcompanies and jointly controlled entities.

When the Group's share of losses exceeds the carrying amount of the associated companies or jointlycontrolled entities, the carrying amount is reduced to nil and recognition of further losses is discontinuedexcept to the extent that the Group has incurred obligations in respect of the associated companies orjointly controlled entities.

(d) Property, Plant and Equipment

(i) Owned Assets

Items of property, plant and equipment are stated at cost less accumulated depreciation and impairmentlosses. The cost of self-constructed assets includes the cost of materials, direct labour and anappropriate proportion of production overheads.

Borrowing costs that are directly attributable to the acquisition or construction of property, plant andequipment is capitalised as part of the asset.

(ii) Leased Asset

Plant and equipment acquired under hire purchase arrangements and finance leases are stated atamounts equal to the lower of their fair values and the present values of the minimum payments at theinception of the hire purchase arrangements and finance leases, less accumulated depreciation.Repayments of hire purchase and finance lease obligations are apportioned between the finance chargesand reduction of the hire purchase and finance lease obligations so as to achieve a constant rate ofinterest on the remaining balance of the outstanding obligations. Finance charges are recognised asexpenses in the profit and loss account.


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(d) Property, Plant and Equipment (cont’d)

(iii) Depreciation

Depreciation of property, plant and equipment is calculated on the straight-line basis so as to write off thecosts of the property, plant and equipment over their estimated useful lives as follows:-

Leasehold improvements - shorter of 10 years and remaining lease periodFurniture and fittings - 5 to 10 yearsOffice equipment - 5 to 10 yearsComputers - 3 yearsMotor vehicles - 5 yearsPlant and machinery - 3 to 5 yearsMechanical and electrical facilities - 10 years

No depreciation is provided for assets under construction.

(iv) Subsequent Expenditure

Subsequent expenditure relating to property, plant and equipment that has already been recognised isadded to the carrying amount of the asset when it is probable that future economic benefits, in excess ofthe originally assessed standard of performance of the existing asset, will flow to the enterprise. All othersubsequent expenditure is recognised as an expense in the period in which it is incurred.

(v) Disposal

Gains or losses arising from the retirement or disposal of property, plant and equipment are determinedas the difference between the estimated net disposal proceeds and the carrying amount of the asset andare recognised in the profit and loss account on the date of retirement or disposal.

(e) Investments in Subsidiaries

Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses.

(f) Interests in Associated Companies and Jointly Controlled Entities

Investments in associated companies and jointly controlled entities are stated in the Company’s balance sheet atcost less impairment losses.

(g) Intangible Assets

(i) Goodwill

Goodwill arising on an acquisition represents the excess of the cost of acquisition over the fair value of theGroup’s share of the net identifiable assets acquired. Goodwill is stated at cost less accumulatedamortisation and impairment losses. In respect of associated companies and jointly controlled entities,the carrying amount of goodwill is included in the carrying amount of the investments.


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(g) Intangible Assets (cont’d)

(ii) Negative Goodwill

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

To the extent that negative goodwill relates to an expectation of future losses and expenses that areidentified 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. Anyremaining negative goodwill, but not exceeding the fair values of the non-monetary assets acquired, isrecognised in the profit and loss account over the weighted average useful life of those assets that aredepreciable or amortisable. Negative goodwill in excess of the fair values of the non-monetary assets isrecognised immediately in the profit and loss account.

In respect of associated companies and jointly controlled entities, the carrying amount of negativegoodwill is included in the carrying amount of the investments in the associated companies or jointlycontrolled entities.

(iii) Research and Development

Development expenditure attributable to a project whose technical feasibility and commercial viability arereasonably assured is capitalised. Capitalised development expenditure is stated at cost lessaccumulated amortisation and impairment losses. Amortisation is calculated on a straight line basis overa 5-year period from the date of commencement of commercial production.

(iv) Computer Software

Computer software which does not form an integral part of related hardware is stated at cost lessaccumulated amortisation and impairment losses.

(v) Subsequent Expenditure

Subsequent expenditure on capitalised intangible assets is capitalised only when it increases the futureeconomic benefits embodied in the specific asset to which it relates. All other expenditure is expensedwhen incurred.

(vi) Amortisation

Amortisation is charged to the profit and loss account on a straight-line basis over the estimated usefullives of intangible assets. Goodwill is amortised from the date of initial recognition; other intangible assetsare amortised from the date they are available for use.

The estimated useful lives are as follows:-

Development expenditure - 5 yearsComputer software - 5 years

(h) Affiliated Companies

An affiliated company is defined as one, other than a related corporation, which has common direct or indirectshareholders or common directors with the Company.

Balances with affiliated companies are stated at their cost less allowance for doubtful receivables.


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(i) Financial Assets

Quoted and unquoted equity securities held as long-term investments are stated at cost less impairment losses.

Dividends from investments are included in the profit and loss account when such dividends are received.

Profits and losses on disposal of financial assets are determined as the difference between the net disposalproceeds and the carrying amount of the financial assets and are accounted for in the profit and loss account asthey arise.

(j) Inventories

Inventories are stated at the lower of cost and estimated net realisable value.

Cost is determined principally on a first-in-first-out basis and comprises all costs of purchase, costs of conversionand other costs incurred in bringing the inventories to their present location and condition. In the case ofmanufactured inventories and work-in-progress, cost includes an appropriate proportion of attributableoverheads.

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

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period inwhich the related revenue is recognised. The amount of any allowance for write-down of inventories to netrealisable value and all losses of inventories are recognised as an expense in the period the write-down or lossoccurs. The amount of any reversal of any allowance for write-down of inventories, arising from an increase innet realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in theperiod in which the reversal occurs.

(k) Trade and Other Receivables

Trade and other receivables are stated at cost less allowance for doubtful receivables.

(l) Government Grants

Grants received in respect of the acquisition of plant and equipment are presented in the balance sheet asdeferred income and are accreted on a straight-line basis over the estimated useful lives of the relevant assets.Income related grants are recognised in the year to which they relate.

(m) Cash and Cash Equivalents

Cash and cash equivalents comprise cash in hand, bank deposits and highly liquid investments which are readilyconvertible to cash and which are subject to an insignificant risk of changes in value. For the purposes of thestatement of cash flows, cash and cash equivalents are stated net of bank overdrafts which are repayable ondemand and which form an integral part of the Group’s cash management.

(n) Related Parties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group hasthe ability, directly or indirectly, to control the party or exercise significant influence over the party in makingfinancial and operating decisions, or vice versa, or where the Group and the party are subject to common controlor common significant influence. Related parties may be individuals or other entities.

Balances with related parties are stated at their cost less allowance for doubtful receivables.


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(o) Impairment

The carrying amounts of the Group's assets, other than inventories, are reviewed at each balance sheet date todetermine whether there is any indication of impairment. If any such indication exists, the asset's recoverableamount is estimated. For intangible assets that are not yet available for use, the recoverable amount isestimated at each balance sheet date.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceedsits recoverable amount. Impairment losses are recognised in the profit and loss account.

(i) Calculation of Recoverable Amount

The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing valuein use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risks specific to the asset.For an asset that does not generate cash inflows largely independent of those from other assets, therecoverable amount is determined for the cash-generating unit to which the asset belongs.

(ii) Reversal of Impairment Loss

An impairment loss is reversed if there has been a change in the estimates used to determine therecoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amountdoes not exceed the carrying amount that would have been determined, net of depreciation oramortisation, if no impairment loss had been recognised. Reversals of impairment are recognised in theprofit and loss account.

An impairment loss in respect of goodwill is not reversed unless the loss was caused by a specific externalevent of an exceptional nature that is not expected to recur, and the increase in recoverable amountrelates clearly to the reversal of the effect of that specific event.

(p) Trade and Other Payables

Trade and other payables are stated at cost.

(q) Employee Benefits – Defined Contribution Plans

Contributions to defined contribution pension plans are recognised as an expense in the profit and loss accountas incurred.

(r) Provisions

A provision is recognised in the balance sheet when the Group has a legal or constructive obligation as a resultof a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Ifthe effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax ratethat reflects current market assessments of the time value of money and, where appropriate, the risks specific tothe liability.

A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from acontract are lower than the unavoidable cost of meeting its obligations under the contract.

(s) Loans and Borrowings

Loans and borrowings, including obligations under hire purchase agreements and finance leases, are recognisedat cost.


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(t) Income Recognition

(i) Sale of Goods and Services

Revenue from the sales of equipment is recognised upon completion of installation. Recognition ofrevenue pertaining to the provision of warranty and maintenance services is deferred and recognised overthe period in which the services are rendered. Revenue from sales of other goods is recognised uponcompletion of delivery.

Commission income is recognised on an accrual basis.

(ii) Interest Income

Interest income from bank deposits is accrued on a time-apportioned basis.

(iii) Dividend Income

Dividend income is recognised in the profit and loss account when the shareholder’s right to receivepayment is established.

(u) Operating Leases

Rental expenses payable under operating leases are accounted for in the profit and loss account on a straight-line basis over the periods of the respective leases.

(v) Finance Costs

Interest expense and similar charges are expensed in the profit and loss account in the period in which they areincurred, except to the extent that they are capitalised as being directly attributable to the acquisition,construction or production of an asset which necessarily takes a substantial period of time to prepare for itsintended use or sale.

The interest component of finance lease payments is recognised in the profit and loss account using the effectiveinterest rate method.

(w) Income Tax

Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in theprofit and loss account except that it relates to items recognised directly to equity, in which case it is recognisedin equity.

Current tax is the expected tax payable on the taxable income for the year, using the tax rates enacted orsubstantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between thecarrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxationpurposes. The following temporary differences are not provided for: goodwill not deductible for tax purposes, theinitial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating toinvestments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amountof deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount ofassets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be availableagainst which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longerprobable that the related tax benefit will be realised.

Additional income taxes that arise from the distribution of dividends are recognised at the same time as theliability to pay the related dividend.


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(x) Dividends

Dividends on ordinary shares are recognised as a liability in the period in which they are declared.

(y) Foreign Currency Translation

(i) Translation of foreign currencies

Monetary assets and liabilities in foreign currencies are translated into the reporting currencies at rates ofexchange closely approximate to those ruling at the balance sheet date. Transactions in foreigncurrencies are translated at rates ruling on transaction dates. Translation differences are included in theprofit and loss account.

(ii) Financial statements of overseas subsidiaries

The assets and liabilities as well as profit and loss items of overseas subsidiaries are translated intoSingapore dollars at the rates of exchange ruling at the balance sheet date. The exchange differences aredealt with as a movement in Exchange Translation Reserve.

(z) Segment Reporting

A segment is a distinguishable component of the Group that is engaged either in providing products or services(business segment), or in providing products or services within a particular economic environment (geographicalsegment), which is subject to risks and rewards that are different from those of other segments.

Segment information is presented in respect of the Group's business and geographical segments. The primaryformat, business segments, is based on the Group’s management and internal reporting structure.

Inter-segment pricing is determined on an arm’s length basis.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can beallocated on a reasonable basis. Unallocated items mainly comprise corporate assets, liabilities and expenses.

Segment capital expenditure is the total cost incurred during the period to acquire segment assets that areexpected to be used for more than one period.

(i) Business Segments

The Group comprises the following main business segments:-

Engineering Solutions : Trading of scientific instruments, electronic equipment,consumable products used in the semiconductorindustry and provision of technical services andsupport.

Advanced Packaging Solutions : Manufacturing of bump interconnects for advancedpackaging of integrated circuits and related services.

Supply Chain Solutions : Provision of e-commerce services to the wafer andsemiconductor industry.


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(z) Segment Reporting (cont’d)

(ii) Geographical Segments

The business segments are managed on a worldwide basis, but the Group operates in three principalgeographical areas, namely Singapore, other Asean countries and other regions.

In presenting information on the basis of geographical segments, segment revenue is based on thegeographical location of customers. Segment assets are based on the geographical location of theassets.


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3. Property, Plant and Equipment

Furniture Plant Mechanical AssetsLeasehold and Office Motor and and electrical under

The Group improvements fittings equipment Computers vehicles machinery facilities construction Total2002 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Cost

At beginning of the year,as previously reported 567 454 352 1,114 44 6,884 11 13,634 23,060

Reclassifications tointangible assets - - - (22) - - - (1,139) (1,161)

─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At beginning of the year,restated 567 454 352 1,092 44 6,884 11 12,495 21,899

Additions 851 265 2,492 448 - 783 524 3,896 9,259

Disposals and write-offs (486) (247) (101) (520) - (284) - (482) (2,120)

Reclassification - 34 - 1,033 - 10,130 4,529 (15,726) -─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At end of the year 932 506 2,743 2,053 44 17,513 5,064 183 29,038═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════


Page 53

3. Property, Plant and Equipment (cont’d)

Furniture Plant Mechanical AssetsLeasehold and Office Motor and and electrical under

The Group improvements fittings equipment Computers vehicles machinery facilities construction Total2002 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000

Depreciation andimpairment losses

At beginning of the year,as previously reported 287 152 115 454 31 2,295 6 - 3,340

Reclassifications tointangible assets - - - (12) - - - - (12)

─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At beginning of the year,restated 287 152 115 442 31 2,295 6 - 3,328

Depreciation charge forthe year 231 105 776 567 8 3,284 142 - 5,113

Impairment losses - 54 5 16 - 3,720 1,753 - 5,548Disposals and write-offs (407) (127) (65) (176) - (90) - - (865)

─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At end of the year 111 184 831 849 39 9,209 1,901 - 13,124═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Depreciation chargefor 2001, restated 207 98 75 234 8 1,292 160 - 2,074

═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Carrying amount

As at 30 June 2002 821 322 1,912 1,204 5 8,304 3,163 183 15,914═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════

As at 30 June 2001,restated 280 302 237 650 13 4,589 5 12,495 18,571

═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════


Page 54


Leasehold Furniture Assetsimprove- and Office under

The Company ments fittings equipment Computers construction Total2002 $’000 $’000 $’000 $’000 $’000 $’000Cost

At beginning of the year,as previously reported - 226 70 402 1,784 2,482

Reclassification tointangible assets - - - (22) (1,139) (1,161)

─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At beginning of the year,restated - 226 70 380 645 1,321

Additions 758 38 123 404 141 1,464Disposals - (181) (16) (56) - (253)Reclassification - - - 645 (645) -

─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At end of the year 758 83 177 1,373 141 2,532═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Depreciation

At beginning of the year,as previously reported - 86 21 98 - 205

Reclassification tointangible assets - - - (12) - (12)

─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At beginning of the year,restated - 86 21 86 - 193

Depreciation charge forthe year 31 31 19 290 - 371

Disposals - (94) (10) (45) - (149)─────────── ─────────── ─────────── ─────────── ─────────── ───────────

At end of the year 31 23 30 331 - 415═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Depreciation chargefor 2001, restated - 53 13 42 - 108

═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Carrying amountAs at 30 June 2002 727 60 147 1,042 141 2,117

═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════

As at 30 June 2001, restated - 140 49 294 645 1,128═══════════ ═══════════ ═══════════ ═══════════ ═══════════ ═══════════

The carrying amount of property, plant and equipment includes amounts totalling $2,662,000 (2001: $4,244,000)for the Group and $637,000 (2001: $510,000) for the Company in respect of assets acquired under hire purchaseagreements and finance leases (Note 15).

Certain plant and machinery of the Group with a net book value of $Nil (2001: $71,000) is charged as security fora term loan (Note 16).


Page 55


Due to the continued weakness in the semiconductor industry, a subsidiary, MicroFab Technology (S) Pte Ltd,initiated an impairment review in June 2002. The property, plant and equipment and development expenditure ofthe subsidiary, as a whole, were identified to be a single cash-generating unit. The estimate of recoverableamount was based on net selling price, determined by an independent valuer. The amount of impairment losseswas allocated on a pro-rata basis to the assets of the cash-generating unit based on the carrying amount of eachasset in the unit. In allocating the impairment losses, the carrying amounts of the assets were not reduced belowtheir net selling price. As a result of the review, the subsidiary recorded asset impairment losses totalling$5,548,000 in relation to plant, property and equipment.

No borrowing costs were capitalised in respect of the assets under construction (2001: $Nil).

4. Intangible Assets

---------- Computer Software ----------- DevelopmentAvailable Under Sub expenditure Total

The Group for use development Total2002 $’000 $’000 $’000 $’000 $’000Cost

At beginning of theyear, as previouslyreported - - - 3,920 3,920

Reclassifications fromproperty, plantand equipment 22 1,139 1,161 - 1,161

─────────── ─────────── ─────────── ─────────── ───────────

At beginning of theyear, restated 22 1,139 1,161 3,920 5,081

Additions 195 586 781 - 781Reclassifications 565 (565) - - -Disposals (1) - (1) - (1)

─────────── ─────────── ─────────── ─────────── ───────────

At end of the year 781 1,160 1,941 3,920 5,861═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Amortisation andimpairment losses

At beginning of theyear, as previouslyreported - - - 523 523

Reclassifications fromproperty, plantand equipment 12 - 12 - 12

─────────── ─────────── ─────────── ─────────── ───────────

At beginning of theyear, restated 12 - 12 523 535

Amortisation chargefor the year 157 - 157 784 941

Impairment losses - - - 2,613 2,613Disposals (1) - (1) - (1)

─────────── ─────────── ─────────── ─────────── ───────────

At end of the year 168 - 168 3,920 4,088═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Amortisation charge for2001, restated 12 - 12 523 535

═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Carrying amount

As at 30 June 2002 613 1,160 1,773 - 1,773═══════════ ═══════════ ═══════════ ═══════════ ═══════════

As at 30 June 2001,restated 10 1,139 1,149 3,397 4,546

═══════════ ═══════════ ═══════════ ═══════════ ═══════════


Page 56

4. Intangible Assets (cont’d)

---------- Computer Software -----------Available Under

The Company for use development Total2002 $’000 $’000 $’000Cost

At beginning of the year, as previously reported - - -Reclassifications from property, plant and

equipment 22 1,139 1,161─────────── ─────────── ───────────

At beginning of the year, restated 22 1,139 1,161Additions 195 586 781Reclassifications 565 (565) -Disposals (1) - (1)

─────────── ─────────── ───────────

At end of the year 781 1,160 1,941═══════════ ═══════════ ═══════════

Amortisation

At beginning of the year, as previously reported - - -Reclassifications from property, plant and

equipment 12 - 12─────────── ─────────── ───────────

At beginning of the year, restated 12 - 12Amortisation charge for the year 157 - 157Disposals (1) - (1)

─────────── ─────────── ───────────

At end of the year 168 - 168═══════════ ═══════════ ═══════════

Amortisation charge for 2001, restated 12 - 12═══════════ ═══════════ ═══════════

Carrying amount

As at 30 June 2002 613 1,160 1,773═══════════ ═══════════ ═══════════

As at 30 June 2001, restated 10 1,139 1,149═══════════ ═══════════ ═══════════

The Group – Development Expenditure

No further development expenditure was capitalised since the subsidiary commenced commercial production inthe prior financial year. The additions to development expenditure for the financial year ended 30 June 2001included staff costs of $330,000.

During the financial year ended 30 June 2002, the subsidiary recorded asset impairment losses totalling$2,613,000 to development expenditure as a result of the impairment review described in Note 3.

The Group and the Company – Computer Software

The carrying amount of computer software acquired under hire purchase agreements and finance leasesamounted to $29,000 (2001: $126,000) for the Group and the Company.


Page 57

5. Investments in Subsidiaries – The Company----- The Company ----

Note 2002 2001$’000 $’000

Unquoted equity shares, at cost 47,151 26,790Less:

Impairment losses

Balance at beginning of the year - -Allowance made during the year 21(d) 21,000 -

Balance at end of the year 21,000 - ───────────── ─────────────

26,151 26,790 ═════════════ ═════════════

Details of the subsidiaries are as follows:-

Country ofIncorporation/ Effective

Place of Percentage Cost ofName of Subsidiary Principal Activities Business of Equity Investment

2002 2001 2002 2001% % $’000 $’000

Antech Instruments Sales representation Singapore 100 100 1,000 1,000Pte Ltd and its services and distributionsubsidiary:- of failure analysis

equipment and opticalequipment

* Ellipsiz Malaysia Sales representation Malaysia 100 100 - -Sdn. Bhd. (formerly services and distributionknown as Prisma of equipment used in theScientific semiconductor industryInstrumentsServices Sdn. Bhd.)

Tezt Pulse Pte Ltd Trading of laboratory Singapore 100 100 1,000 1,000equipment and apparatusand provision ofconsultancy services

† Crystaltech Scientific Dealers of scientific Taiwan 69 69 230 230Inc. and its instruments, electronicsubsidiary:- equipment, commission

agents and provision oftechnical services andsupport

# Crystaltech Scientific Trading of scientific British 69 69 - -Corp. and electronic Virgin

equipment Islands────────── ──────────

Balance carried forward 2,230 2,230


Page 58

5. Investments in Subsidiaries – The Company (cont’d)



2002 2001 2002 2001% % $’000 $’000

Balance brought forward 2,230 2,230

# Ellipsiz MicroFab Inc. Inactive United 100 100 144 144(formerly known as States ofExcellent Scientific AmericaInstruments (USA),Inc.)

Ellipsiz Singapore Pte Ltd Trading of scientific Singapore 100 100 1,000 1,000(formerly known as instruments, electronicExcellent Scientific equipment and provisionInstruments Pte Ltd) of technical services and

support and commissionagents

Solidvision Pte Ltd and Trading of consumable Singapore 100 100 1,000 1,000its subsidiary:- products used in the

semiconductor industry

† Factech Provision of total Malaysia 100 100 - -Semiconductors chemical managementSdn. Bhd. services

MicroFab Technology Manufacturer of bump Singapore 100 100 41,416 21,416(S) Pte Ltd interconnects for

advanced packaging ofintegrated circuits andrelated services

Factech Pte Ltd Provision of facilitating Singapore 100 100 - -work for installationof machinery

ESI Instruments Pte Ltd Servicing and main- Singapore 100 100 - -tenance of machineryand parts

────────── ──────────

Balance carried forward 45,790 25,790


Page 59

5. Investments in Subsidiaries – The Company (cont’d)



2002 2001 2002 2001% % $’000 $’000

Balance brought forward 45,790 25,790

# outsoz.com Inc. Provision of e-commerce United 100 100 - -services to the wafer and Statessemiconductor industry of America

outsoz.com Pte Ltd Provision of e-commerce Singapore 100 100 1,000 1,000services to the wafer andsemiconductor industry

# Ellipsiz USA Inc. Trading of laboratory United 100 100 - -(formerly known as equipment and apparatus StatesTezt Inc.) and provision of of America

consultancy services

Ellipsiz Ventures Pte Investment holding Singapore 100 100 - -Ltd company

# Ellipsiz (Shanghai) Inactive China 100 - 361 -International Ltd

────────── ──────────

47,151 26,790══════════ ══════════

The Singapore – incorporated subsidiaries are audited by KPMG Singapore.

* This subsidiary is audited by another firm of auditors, Chew & Co.

# These subsidiaries are not required by the law of their country of incorporation to be audited for the current year.

† These subsidiaries are audited by affiliated firms of the Company’s auditors, KPMG Singapore.

An application was made on 14 March 2000 to the Malaysian Foreign Investment Committee ("FIC") for AntechInstruments Pte Ltd to hold a direct 100% equity interest in Ellipsiz Malaysia Sdn. Bhd. (formerly known as PrismaScientific Instruments Services Sdn. Bhd.) ("Ellipsiz Malaysia"). The application and subsequent appeal to theFIC were rejected. The FIC requires that the Group’s interest in Ellipsiz Malaysia be reduced to a 30% interest.The Company is now in the process of complying with the requirements set by the FIC.


Page 60

6. Interests in Associated Companies

------- The Group ------ -----The Company -----Note 2002 2001 2002 2001

$’000 $’000 $’000 $’000

Unquoted equityshares, at cost 1,289 1,168 1,289 1,168Less:

Impairment losses

Balance at beginningof the year - - 45 45

Allowance madeduring the year 21(d) - - 1,194 -

Balance at end of theyear - - 1,239 45

───────────── ───────────── ───────────── ─────────────

1,289 1,168 50 1,123Share of post-acquisition

reserves (1,252) (1,333) - - ───────────── ───────────── ───────────── ─────────────

37 (165) 50 1,123Loans to associated

companies 988 988 988 988Less:

Allowance for doubtful debt

Balance at beginningof the year 494 494 494 494

Allowance madeduring the year 21(d) 494 - 494 -

Balance at end of theyear 988 494 988 494

───────────── ───────────── ───────────── ─────────────

- 494 - 494 ───────────── ───────────── ───────────── ─────────────

37 329 50 1,617 ═════════════ ═════════════ ═════════════ ═════════════

Loans to associated companies are unsecured and interest-free, and are not expected to be repaid within thenext year.


Page 61

6. Interests in Associated Companies (cont’d)

Details of the associated companies are as follows:-Country of

Incorporation/Place of Equity

Name of Company Principal Activities Business Interest2002 2001

% %

* Semiconductor Alliance Pte Ltd Investment holding Singapore 45 45("SCA") company

# Fluidix Technology Pte Ltd Supply and installation Singapore 50 50("Fluidix") of chemical equipment

@ SCP Global Technologies Trading of surface Singapore 49.9 49.9Asia Pte Ltd ("SCP") preparation equipment

used in the semiconductorindustry

# This associated company is audited by KPMG Singapore.

* This associated company is audited by another firm of auditors, Chia, Wong and Partners.

@ This associated company is audited by another firm of auditors, Deloitte & Touche.

During the current financial year, the Company satisfied a commitment to increase its investment in SCP bycontributing cash towards its capital totalling $121,000. The Company recognised asset impairment lossestotalling $1,194,000 (2001: $Nil) in respect of its investments in associated companies.

In accordance with SAS 27 - Accounting for Investments in Associates, the Group discontinued applying theequity method of accounting for its investment in SCP and SCA when its share of losses of the associatedcompanies accounted for by the equity method exceeded the carrying amounts of the investments. Theunrecognised share of losses of SCP and SCA amounted to approximately $97,000 (2001: $403,000) and$84,000 (2001: $Nil), respectively, for the year ended 30 June 2002. The shareholders of Fluidix plan to put theCompany under liquidation subsequent to the year ended 30 June 2002.

7. Interests in a Jointly Controlled Entity


$’000 $’000 $’000 $’000

Unquoted equity shares,at cost 1,732 1,732 1,732 1,732Less:

Impairment losses

Balance at beginningof the year - - - -


Balance at end of theyear - - 1,732 -

───────────── ───────────── ───────────── ─────────────

1,732 1,732 - 1,732Share of post-acquisition

reserves (1,732) (89) - - ───────────── ───────────── ───────────── ─────────────

- 1,643 - 1,732 ═════════════ ═════════════ ═════════════ ═════════════


Page 62

7. Interests in a Jointly Controlled Entity (cont’d)

Details of the jointly controlled entity are as follows:-Country of

Incorporation/Place of Equity

Name of Joint Venture Principal Activities Business Interest2002 2001

% %

MicroRoutes Pte Ltd Provision of high technology Singapore 50 50("MicroRoutes") silicon wafer treatment and

processing for commercialapplications

During the financial year, the Company recorded asset impairment losses totalling $1,732,000 (2001: $Nil) inrespect of its interests in MicroRoutes following the shareholders’ plan to put the company under liquidation.

8. Other Financial Assets------- The Group ------ -----The Company -----

Note 2002 2001 2002 2001$’000 $’000 $’000 $’000

Unquoted equityinvestment, at cost 2,313 2,313 2,313 2,313

Club memberships 189 195 131 131 ───────────── ───────────── ───────────── ─────────────

2,502 2,508 2,444 2,444Less:

Impairment losses

Balance at beginning ofthe year 566 - 566 -

Allowance madeduring the year 21(d) 1,857 566 1,803 566

Balance at end of the year 2,423 566 2,369 566 ───────────── ───────────── ───────────── ─────────────

79 1,942 75 1,878 ═════════════ ═════════════ ═════════════ ═════════════

During the financial year, the Company recorded asset impairment losses of $1,747,000 (2001: $566,000) inrespect of unquoted equity investments. Also during the financial year, the Company and a subsidiary recordedasset impairment losses of $56,000 (2001: $Nil) and $54,000 (2001: $Nil) relating to club memberships,respectively.

9. Inventories--------- The Group --------

Note 2002 2001$’000 $’000

Raw materials 261 165Work-in-progress 3,121 66Finished goods 917 3,984Stocks-in-transit 222 -

───────────── ─────────────

4,521 4,215Less:

Allowance for inventory obsolescence

Balance at beginning of the year - -Allowance made during the year 21(d) 270 -

Balance at end of the year 270 - ───────────── ─────────────

4,251 4,215 ═════════════ ═════════════


Page 63

10. Trade and Other Receivables


$’000 $’000 $’000 $’000

Trade receivables 11 11,461 24,821 - -Refundable deposits 436 292 179 57Prepayments 988 722 80 10Grant receivable 390 631 - -Other receivables 142 678 57 61

───────────── ───────────── ───────────── ─────────────

13,417 27,144 316 128 ═════════════ ═════════════ ═════════════ ═════════════

11. Trade Receivables

--------- The Group --------Note 2002 2001

$’000 $’000

Trade receivables 12,261 25,367Less:

Allowance for doubtful debts

Balance at beginning of the year 546 218Translation difference - (5)Allowance made during the year 21(d) 489 333Allowance used during the year (235) -

Balance at end of the year 800 546 ───────────── ─────────────

11,461 24,821 ═════════════ ═════════════

12. Balances with Related Parties


$’000 $’000 $’000 $’000

Amounts owing by:-Subsidiaries:

- non-trade - - 16,334 21,087- dividend receivable - - - 4,692

- - 16,334 25,779Less:

Allowance for doubtful debts

Balance at beginning ofthe year - - - -


Balance at end of theyear - - 1,638 -

───────────── ───────────── ───────────── ─────────────

Balance carried forward - - 14,696 25,779


Page 64

12. Balances with Related Parties (cont’d)

------- The Group ------ -----The Company -----2002 2001 2002 2001$’000 $’000 $’000 $’000

Balance brought forward - - 14,696 25,779

Associated companies:- non-trade - 378 - 37Jointly controlled entity- non-trade 15 88 - 88Affiliated company 17 - - -Directors of the Company - 5 - 5Directors of subsidiaries- non-trade - 61 - -Shareholders- non-trade 6 31 - -

───────────── ───────────── ───────────── ─────────────

38 563 14,696 25,909 ═════════════ ═════════════ ═════════════ ═════════════

Amounts owing to:-

Subsidiaries:- non-trade - - (25) (137)Associated companies:- non-trade - (132) - -Directors of the Company:- non-trade (10) - (10) -

───────────── ───────────── ───────────── ─────────────

(10) (132) (35) (137) ═════════════ ═════════════ ═════════════ ═════════════

The non-trade balances are unsecured and interest-free, and have no fixed terms of repayments.

13. Cash and Cash Equivalents


Cash at bank and inhand 24,676 21,498 7,489 6,200

Fixed deposits 19,339 37,905 10,285 20,340 ───────────── ───────────── ───────────── ─────────────

44,015 59,403 17,774 26,540 ═════════════ ═════════════ ═════════════ ═════════════

Included in fixed deposits are amounts of $Nil (2001: $1,018,000) and $53,000 (2001: $4,805,000) placed withbanks as security for bank facilities granted to the Company and to certain subsidiaries of the Group, respectively.


Page 65

14. Trade and Other Payables


Trade payables 7,945 13,582 - -Other accrued expenses 4,940 8,293 1,850 1,042Other creditors 1,865 3,454 839 274Advance billings to customers 1,251 - - -Deferred income:-

Grants 1,228 895 - -Others 345 457 - -

Liability for defined contributionplans 142 164 142 164

Liability for short-term accumulatingcompensated absences 478 280 108 68

───────────── ───────────── ───────────── ─────────────

18,194 27,125 2,939 1,548 ═════════════ ═════════════ ═════════════ ═════════════

Details of deferred income relating to grants are as follows:-

---------- The Group ---------Note 2002 2001

$’000 $’000

Grant received and receivable 2,152 1,415Less:

Amortisation

Balance at beginning of the year 520 255Amortisation charge for the year:- to development expenditure - 79- to profit and loss account 21(a) 404 186

Balance at end of the year 924 520 ───────────── ─────────────

1,228 895 ═════════════ ═════════════

A subsidiary, MicroFab Technology (S) Pte Ltd, has obtained a grant under the Research and DevelopmentAssistance Scheme ("RDAS") administered by Economic Development Board ("EDB") for the development ofwafer bumping technologies for advanced packaging of integrated circuits. The scheme provides for funds to bedisbursed to the subsidiary by EDB over the duration of the project based on qualifying expenditure incurred.

Deferred income represents the funds received and receivable from EDB for acquisition of plant and equipment.


Page 66

15. Interest-Bearing Loans and Borrowings

This note provides information about the contractual terms of the Company’s and the Group’s interest-bearingloans and borrowings. For more information about the Group’s exposure to interest rate and currency risk, referto Note 28.

(a) Interest-bearing loans and borrowings consist of the following:


Non-current liabilities

Secured bank loan 362 1,080 - -Obligations under hire

purchase agreementand finance leases 1,043 2,127 256 316

─────── ─────── ─────── ───────

1,405 3,207 256 316═══════ ═══════ ═══════ ═══════

Current liabilities

Bills payable (unsecured) - 3,033 - -Short-term loan (secured) - 491 - -Current portion of:- secured bank loan 690 639 - -- obligations under hire

purchase agreementsand finance leases 1,308 1,250 284 212

─────── ─────── ─────── ───────

1,998 5,413 284 212═══════ ═══════ ═══════ ═══════

(b) Terms and debt repayment schedule

--------------2002-------------- --------------2001---------------After After1 year 1 year

Within but within Within but withinTotal 1 year 5 years Total 1 year 5 years$'000 $'000 $'000 $'000 $'000 $'000

The Group

Secured bank loan 1,052 690 362 1,719 639 1,080Obligations under hire

purchase agreementsand finance leases 2,351 1,308 1,043 3,377 1,250 2,127

Short-term loan (secured) - - - 491 491 -Bills payable (unsecured) - - - 3,033 3,033 -

─────── ─────── ─────── ─────── ─────── ───────

3,403 1,998 1,405 8,620 5,413 3,207 ═══════ ═══════ ═══════ ═══════ ═══════ ═══════

The Company

Obligations under hirepurchase agreementsand finance leases 540 284 256 528 212 316

═══════ ═══════ ═══════ ═══════ ═══════ ═══════

Secured Bank Loan

Bank loan of a subsidiary is repayable in 48 months commencing March 2000. Interest is charged on theloan at 1.75% (2001: 1.75%) per annum over the bank’s prevailing prime rate. The bank loan is securedby way of:-

(i) fixed and floating charges over the assets of the subsidiary, excluding plant and machinery chargedto a third party as disclosed in Note 3, and

(ii) corporate guarantee provided by the Company.


Page 67

15. Interest-Bearing Loans and Borrowings (cont’d)

(c) Obligations under hire purchase agreement and finance leases

-----------------2002----------------- ------------------2001------------------

Payment Interest Principal Payment Interest Principal$’000 $’000 $’000 $’000 $’000 $’000

The Group

Within 1 year 1,455 147 1,308 1,394 144 1,250After 1 year but

within 5 years 1,138 95 1,043 2,370 243 2,127─────── ─────── ─────── ─────── ─────── ───────

2,593 242 2,351 3,764 387 3,377═══════ ═══════ ═══════ ═══════ ═══════ ═══════

The Company

Within 1 year 319 35 284 241 29 212After 1 year but

within 5 years 265 9 256 361 45 316─────── ─────── ─────── ─────── ─────── ───────

584 44 540 602 74 528═══════ ═══════ ═══════ ═══════ ═══════ ═══════

16. Term Loan (Interest-free) – The Group

The loan represents the cost of infrastructure support services received under the Assured Supply and DemandAgreement entered into by a subsidiary in February 1999. Under the agreement, the subsidiary has committedto provide an annual discount of 15% on wafer bumping services to the contract party and, upon termination ofthe agreement in February 2002, the subsidiary granted a non-exclusive, worldwide, non-transferable andirrevocable license to the contract party for its continued usage of the wafer bumping technology.

At 30 June 2002, the loan was interest-free and secured on plant and machinery with a net book value of $Nil(2001: $71,000) (Note 3).

17. Deferred Tax Assets and Liabilities

(a) Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:-

Assets Liabilities Net2002 2001 2002 2001 2002 2001

The Group $’000 $’000 $’000 $’000 $’000 $’000

Property, plant andequipment (6) (10) 409 178 403 168

Inventories (55) - - - (55) -Trade and other

receivables (24) - 7 26 (17) 26Trade and other payables (33) (38) 5 18 (28) (20)Tax value of loss carry-

forwards recognised (16) - - - (16) -Other items (10) - 81 - 71 -

───────── ───────── ───────── ───────── ───────── ─────────

Net tax (assets)/liabilities (144) (48) 502 222 358 174═════════ ═════════ ═════════ ═════════ ═════════ ═════════


Page 68

17. Deferred Tax Assets and Liabilities (cont’d)

(a) Recognised deferred tax assets and liabilities (cont’d)

Assets Liabilities Net2002 2001 2002 2001 2002 2001

The Company $’000 $’000 $’000 $’000 $’000 $’000

Property, plant andequipment - - 412 162 412 162

Other payables andaccruals (24) (17) - - (24) (17)

───────── ───────── ───────── ───────── ───────── ─────────

Net tax (assets)/liabilities (24) (17) 412 162 388 145═════════ ═════════ ═════════ ═════════ ═════════ ═════════

(b) Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:-

-------The Group------2002 2001$'000 $'000

Deductible temporary differences 14,299 4,047Tax losses 10,205 2,168

─────── ───────

24,504 6,215═══════ ═══════

The tax losses and deductible temporary differences are primarily attributable to subsidiaries operating inSingapore and, the tax losses and deductible temporary differences do not expire under current yearlegislation. The unutilised tax losses and unabsorbed wear and tear allowances are available for set-offagainst future profits subject to the provisions of Section 37 and 23 of the Income Tax Act. Deferred taxassets have not been recognised in respect of these items because it is not probable that future taxableprofit will be available against which the Group can utilise the benefits therefrom.

18. Share Capital – The Company

-------------2002------------- --------------2001-------------No. of shares No. of shares

’000 $’000 ’000 $’000

Authorised:

Ordinary shares of $0.25 each 4,000,000 1,000,000 4,000,000 1,000,000 ═════════════ ═════════════ ═════════════ ═════════════

Issued and fully paid:

At beginning of the year 198,000 49,500 156,000 39,000Issue of $0.25 shares for

$1.20 each for cash - - 42,000 10,500 ───────────── ───────────── ───────────── ─────────────

At end of the year 198,000 49,500 198,000 49,500 ═════════════ ═════════════ ═════════════ ═════════════


Page 69

19. Reserves


Share premium 37,944 37,944 37,944 37,944Capital reserve (11,720) (11,720) - -Exchange translation reserve (27) (22) - -Accumulated (losses)/profits (21,494) 1,849 (28,430) (2,967)

───────────── ───────────── ───────────── ─────────────

4,703 28,051 9,514 34,977 ═════════════ ═════════════ ═════════════ ═════════════

The application of the share premium account is governed by Sections 69 – 69F of the Companies Act, Chapter50.

The capital reserve comprises goodwill arising on acquisition of subsidiaries and associated companies written offagainst shareholders’ equity.

The exchange translation reserve comprises all foreign exchange differences arising from the translation of thefinancial statements of foreign subsidiaries.

Accumulated (losses)/profits of the Group include share of post-acquisition accumulated deficit in respect ofassociated companies and jointly controlled entities of $2,984,000 (2001: $1,422,000).

In accordance with SAS 1 - Presentation of Financial Statements, movements in reserves for the Group and theCompany are set out in the Consolidated Statement of Changes in Equity and the Statement of Changes inEquity, respectively.

20. Revenues

Revenues represent the net invoiced value of goods sold and services rendered in the normal course of trade.The Group’s turnover excludes intercompany transactions.

The amount of each significant category of revenues recognised during the financial year is as follows:

-------The Group------2002 2001

$'000 $'000

Sale of goods 25,506 73,215Service income 10,664 19,842Commission income 3,464 8,370

───────────── ─────────────

39,634 101,427 ═════════════ ═════════════


Page 70

21. Loss from Ordinary Activities Before Taxation

Loss from ordinary activities before taxation includes the following:-


$’000 $’000 $’000 $’000

(a) Other income

Dividend incomefrom subsidiaries 21(b) - - 3,500 738

Exchange gain, net - 1,248 - 51Amortisation of

deferred income 14 404 186 - -Interest income- bank 511 1,818 119 825- others - 13 - -Management fees - - 5,009 4,602Sundry income 1,303 991 122 -Grant income 302 398 - -Gain on disposal of

unquoted equityinvestments previouslywritten off 615 - 615 -

Distribution terminationcompensation 180 - - -

───────────── ───────────── ───────────── ─────────────

3,315 4,654 9,365 6,216═════════════ ═════════════ ═════════════ ═════════════

-------The Company ------2002 2001$'000 $'000

(b) Dividend income

As previously reported:- dividend income proposed by subsidiaries

recognised in 2001 - 3,500Effect of adopting SAS 10:- reversal of proposed dividend income recognised

in respect of year 2001 - (3,500)- dividend income received in the year 3,500 738

───────────── ─────────────

3,500 738═════════════ ═════════════


Page 71

21. Loss from Ordinary Activities Before Taxation (cont’d)


$’000 $’000 $’000 $’000

(c) Staff costs

Wages and salaries 11,051 13,426 1,840 2,041Contributions to

defined contributionplans 1,406 1,596 302 334

Increase in liabilityfor short-termaccumulatingcompensatedabsences 14 198 280 40 68

Others 1,797 1,860 781 1,255───────────── ───────────── ───────────── ─────────────

14,452 17,162 2,963 3,698═════════════ ═════════════ ═════════════ ═════════════

------- The Group ------ -----The Company -----2002 2001 2002 2001

Number of employeesat 30 June 255 263 22 28

═════════════ ═════════════ ═════════════ ═════════════


$’000 $’000 $’000 $’000

(d) Other Expenses

Auditors' remuneration:- auditors of the

company 166 153 26 38- other auditors 3 7 - -Non-audit fees

paid to auditorsof the Company * 54 34 8 5

Depreciation ofproperty, plantand equipment 3 5,113 1,652 371 108

Allowance made for:- doubtful loans to

associatedcompanies 6 494 - 494 -


Page 72



$’000 $’000 $’000 $’000

(d) Other Expenses (cont’d)

Allowance made for:- inventory

obsolescence 9 270 - - -- doubtful trade

receivables 11 489 333 - -- doubtful amounts

owing bysubsidiaries 12 - - 1,638 -

Loss on disposal:- property, plant

and equipment 10 10 3 -- other financial assets 4 - - -Impairment losses

incurred on:- property, plant

and equipment 3 5,548 - - -- development

expenditure 4 2,613 - - -Amortisation of

intangible assets 4 941 535 157 12Property, plant and

equipmentwritten off # 1,071 1,408 97 -

Inventories written off 55 - - -Research and

development costs 325 268 - -Professional fees paid

to a firm in whicha director is a member - 227 - 204

Impairment lossesincurred on:- investments in

subsidiaries 5 - - 21,000 -- interests in associated

companies 6 - - 1,194 -- interests in a jointly

controlled entity 7 - - 1,732 -- other financial assets 8 1,857 566 1,803 566

Other financial assetswritten-off+ - 3,492 - 3,492

Foreign exchange loss,net 752 - 9 -

Operating leasesexpenses# 1,698 1,281 229 151

═════════════ ═════════════ ═════════════ ═════════════


Page 73


(d) Other Expenses (cont’d)

* For the year ended 30 June 2001, there were additional non-audit fees of $227,000 paid to the auditors of theGroup and Company that were charged against share premium. For the year ended 30 June 2002, no suchexpenses were incurred.

+ For the year ended 30 June 2001, other financial assets written off represents the full write-off of theCompany’s equity investment in Surface Interface Inc..

# During the financial year ended 30 June 2001, property, plant and equipment written off included an amountof $1,299,000 being the full write-off of the old cleanroom facilities of a subsidiary, MicroFab Technology (S)Pte Ltd, on relocation of the subsidiary’s operations to new larger premises. A charge in respect of theremaining rent obligations for the old premises amounting to $257,000 was included within operating leaseexpenses.

(e) Directors’ Remuneration

Directors’ remuneration and fees are recognised as follows:


Staff costs

Directors’ fees:- directors of the Company 169 156 169 156

Directors’ remuneration:- directors of the Company 1,020 997 1,020 997- other directors 554 1,123 - -

───────────── ───────────── ───────────── ─────────────

1,743 2,276 1,189 1,153═════════════ ═════════════ ═════════════ ═════════════

Remuneration, including salaries, fees, bonuses and the value of benefits in kind, earned during the yearfrom the Group by the directors of the Company are summarised below:-

2002 2001Number Number

$500,000 and above 1 1$250,000 to $499,999 - 1Below $250,000 7 5

───────────── ─────────────

8 7 ═════════════ ═════════════


Page 74



(f) Finance Costs

Interest expense:- hire purchase and

finance lease 177 41 64 12- banks 128 178 - -

───────────── ───────────── ───────────── ─────────────

305 219 64 12 ═════════════ ═════════════ ═════════════ ═════════════

22. Taxation


(a) Recognised in the profitand loss account

Current tax expense:- current year 116 2,522 880 225- under/(over)

provision in respectof prior years (157) 20 - 20

───────────── ───────────── ───────────── ─────────────

(41) 2,542 880 245 ═════════════ ═════════════ ═════════════ ═════════════

Deferred tax expense:- origination and

reversal oftemporarydifference 267 48 243 114

- overprovision inrespect of prioryears (15) - - -

───────────── ───────────── ───────────── ─────────────

252 48 243 114 ═════════════ ═════════════ ═════════════ ═════════════

Total income taxexpense in profitand loss account 211 2,590 1,123 359

═════════════ ═════════════ ═════════════ ═════════════


Page 75

22. Taxation (cont’d)


(b) Reconciliation ofeffective tax rate

Loss before tax (23,103) (369) (24,340) (3,096) ═════════════ ═════════════ ═════════════ ═════════════

Income tax at applicabletax rate of 22%(2001: 24.5%) (5,082) (90) (5,355) (759)

Effect of differenttax rates in foreignjurisdictions 10 50 - -

Non-deductibleexpenses 1,522 1,169 5,620 910

Deferred tax assets notrecognised 3,933 1,441 - -

Tax on dividend incomededucted at source - - 858 188

Under/(Over)provision in respectof prior years (172) 20 - 20

───────────── ───────────── ───────────── ─────────────

211 2,590 1,123 359 ═════════════ ═════════════ ═════════════ ═════════════

23. Loss Per Share – The Group

The calculation of basic earnings per share is based on the Group’s loss after taxation and minority interests of$23,343,000 (2001: adjusted loss $3,621,000) divided by the weighted average of 198,000,000 (2001:197,309,589) ordinary shares in issue during the financial year.

No diluted earnings per share is presented at 30 June 2002 or 30 June 2001, as there are no unissued ordinaryshares under options or awards.

Tax benefit is received under the Loss-Transfer System of Group Relief (“Group Relief System”) which enablecurrent year unutilized tax losses and capital allowances of one company to be set-off against taxable profit ofanother company in the same group. The Group Relief System is effective from financial year ended 30 June2002.

24. Changes in Accounting Policies

(a) Adoption of new/revised accounting standards and their effects

During the financial year, the Group and the Company has adopted the following new/revised standards inthe manner elaborated below:-

SAS 10 (revised 2000) - Events after the Balance Sheet Date

The adoption of SAS 10 has resulted in the Company reversing income for proposed final dividendsreceivable from the subsidiaries at 30 June 2000 and 2001 of $738,000 and $3,500,000, respectively. Thenew accounting policy is to recognise proposed final dividends only after they have been formallyapproved by shareholders (refer to Note 21). The new accounting policy has been applied retrospectivelyby adjusting the opening balances of the Company’s accumulated profits at 1 July 2000 and 2001;comparatives have been restated.


Page 76

24. Changes in Accounting Policies (cont’d)

(a) Adoption of new/revised accounting standards and their effects (cont’d)

SAS 17 - Employee Benefits

The adoption of SAS 17 – Employee Benefits has resulted in the Group and the Company makingprovisions for the obligations in respect of short-term employee benefits in the form of accumulatingcompensated balances. These obligations are provided when the employees render services thatincrease their entitlement to future compensated absences (refer to Note 14). The new accounting policyhas been applied retrospectively by adjusting the opening balances of accumulated profits at 1 July 2000and 2001; comparatives have been restated.

SAS 22 - Business Combinations

In prior years, goodwill and negative goodwill arising from acquisitions was written off to capital reserve.For goodwill arising on acquisitions subsequent to 1 July 2001, the accounting policy set out in Note 2(g) isadopted. There were no acquisitions during the financial year.

SAS 34 – Intangible Assets

The adoption of SAS 34 – Intangible Assets has resulted in the Group and the Company reclassifying fromproperty, plant and equipment those assets which meet the definition of intangible assets. The changehas been applied retrospectively, and comparatives have been restated.

Other Standards

The adoption of SAS 12 (revised 2001) – Income Taxes, SAS 31 – Provisions, Contingent Liabilities andContingent Assets, SAS 32 – Financial Instruments: Disclosure and Presentation, SAS 35 – DiscontinuingOperations, SAS 36 – Impairment of Assets and SAS 38 – Financial Reporting in HyperinflationaryEconomies have not given rise to any adjustments to the opening balances of accumulated profits/(losses)of the prior and current periods or to changes in comparatives.

(b) Effects of changes in accounting policies

The changes in accounting policies to the extent that they are applied retrospectively, have the followingimpact (net of tax):-


Effect of changes onaccumulated profits/(losses):

Accumulated profits/(losses)brought forward, aspreviously reported 2,129 5,470 (256) 1,038

Effects of adopting:- SAS 10 (proposed dividends) - - (2,643) (550)- SAS 17 (employee benefits) (280) - (68) -

───────────── ───────────── ───────────── ─────────────

Accumulated profits/(losses)brought forward, restated 1,849 5,470 (2,967) 488

═════════════ ═════════════ ═════════════ ═════════════


Page 77

24. Changes in Accounting Policies (cont’d)

(b) Effects of changes in accounting policies (cont’d)


Effect of changes on net lossfor the year:

Net loss before changesin accounting policies (23,145) (3,341) (28,066) (1,294)

Effects of adopting:- SAS 10 (proposed dividends) - - 2,643 (2,093)- SAS 17 (employee benefits) (198) (280) (40) (68)

───────────── ───────────── ───────────── ─────────────

Net loss for the year (23,343) (3,621) (25,463) (3,455)═════════════ ═════════════ ═════════════ ═════════════

25. Equity Compensation Benefits

The "Ellipsiz Share Option Plan" and the "Ellipsiz Restricted Stock Plan" were approved and adopted at anExtraordinary General Meeting held on 28 November 2001. The "Ellipsiz Share Option Plan" would enableselected employees and non-executive directors of the Group to subscribe for shares in the Company. The"Ellipsiz Restricted Stock Plan" would enable selected employees and non-executive directors of the Group, otherthan controlling shareholders or their associates, to receive awards in the form of fully paid shares, theirequivalent cash value or combination thereof, free of charge.

The "Ellipsiz Share Option Plan" and "Ellipsiz Restricted Stock Plan" are administered by a committee whichconsists of two members, being Mr. Rick Kenneth Hodgman and Mr. Jeffrey Staszak.

Other statutory information regarding the "Ellipsiz Share Option Plan" and "Ellipsiz Restricted Stock Plan" are setout below:-

(a) The price of the options or awards is determined to be equal to the volume-weighted average price of theCompany’s shares on the Singapore Exchange Securities Trading Limited (SGX-ST) over 7 consecutivetrading days immediately preceding the date of grant of such options or awards.

(b) The options granted under the "Ellipsiz Share Option Plan" vest in accordance with a vesting schedulewhich shall be determined by the committee on the option’s grant date.

(c) The options granted under the "Ellipsiz Share Option Plan" expire after five years from the grant dateunless they are cancelled or have lapsed.

During the financial year, there was:-

(a) no option or award granted by the Company to any person to take up unissued shares in the Company;and

(b) no share issued by virtue of any exercise of option or receipt of awards to take up unissued shares of theCompany.

As at the end of the financial year, there were no unissued shares of the Company under option or awards.


Page 78

26. Significant Related Party Transactions

Significant transactions with related parties, other than those disclosed elsewhere in the financial statements, areas follows:-


Sales to:- a jointly controlled entity 324 - - -

Purchases from:- associated companies - 128 - -

Commission income receivablefrom:

- affiliated companies 59 - - -

Management fees receivable from:- subsidiaries - - 5,009 4,602- a jointly controlled entity 68 - - -

Dividend income received from:- subsidiaries - - 3,500 738

Rental income receivable from:- affiliated companies 71 164 - -- a jointly controlled entity 11 - - -

Rental and utilities recharged to:- subsidiaries - - 97 -

═════════════ ═════════════ ═════════════ ═════════════

The Group, in normal course of business, transacts with affiliated and associated companies on arms-lengthterms.

27. Commitments

(a) Lease Commitments

As at 30 June 2002, commitments of the Group and the Company for minimum lease payments undernon-cancellable operating leases with terms of more than one year are as follows:-


Within 1 year 1,397 1,328 658 102Within 2 to 5 years 1,766 1,264 1,334 -

───────────── ───────────── ───────────── ─────────────

3,163 2,592 1,992 102 ═════════════ ═════════════ ═════════════ ═════════════

(b) Capital Commitments

Capital expenditure approved but not provided for in the financial statements as at 30 June 2002 is asfollows:-


Supply and installationof facilities,infrastructureand equipment 289 4,265 - 765

Capital injection toassociated company - 121 - 121

═════════════ ═════════════ ═════════════ ═════════════


Page 79

28. Financial Instruments

(a) Financial risk management objectives and policies

The principal objective of the Group’s treasury policy is the management and control of risks relating toearnings and net assets.

The Group does not have any derivative financial instruments. The existing primary financial instrumentsof the Group such as receivables, payables and inter-company balances meet the definition of financialassets or liabilities.

The main risk arising from the Group’s financial instruments are credit risk, interest rate risk and currencyrisk, which are summarised as follows:-

(b) Credit risk

The carrying amounts of trade and other receivables represent the Group’s exposure to credit risk.

The management had evaluated the credit standing of customers with significant outstanding with theGroup as at 30 June 2002. As the majority of them are multinational corporations, the management hasreasonable grounds to believe that the Group does not have significant credit risk as at 30 June 2002.Credit risks arising from sales are evaluated on an on-going basis. The debts are also monitoredcontinually and hence the Group does not expect to incur material credit losses.

The cash and cash equivalents of the Group are placed with reputable banks.

(c) Interest rate risk

The Group obtains additional financing through bank borrowings and leasing arrangements. The Group’spolicy is to obtain the most favourable interest rates available.

The Group’s exposure to interest rate risk relates primarily to its debt obligations which arise mainly fromobligations under hire purchase agreements and finance leases.

In respect of interest-earning financial assets and interest-bearing financial liabilities, the following tableindicates their effective interest rates at the balance sheet date and the periods in which they reprice.

EffectiveInterest Within 1 to 5

The Group Rate Total 1 year years2002 % $’000 $’000 $’000

Financial Assets

Fixed deposits 0.69 19,339 19,339 -

Financial Liabilities

Secured bank loan 6.75 (1,052) (1,052) -Obligations under hire

purchase agreements and finance leases 5.55 (2,351) (1,308) (1,043) _

(3,403) (2,360) (1,043) ───────────── ───────────── ─────────────

Total 15,936 16,979 (1,043) ═════════════ ═════════════ ═════════════


Page 80

28. Financial Instruments (cont’d)

(c) Interest rate risk (cont’d)


Rate Total 1 year years2001 % $’000 $’000 $’000

Financial Assets

Fixed deposits 2.53 37,905 37,905 -


Bills payable 4.75 (3,033) (3,033) -Short-term loan 4.91 (491) (491) -Secured bank loan 7.25 (1,719) (1,719) -Obligations under hire

purchase agreements andfinance leases 5.20 (3,377) (1,250) (2,127)

_

(8,620) (6,493) (2,127) ───────────── ───────────── ─────────────

Total 29,285 31,412 (2,127) ═════════════ ═════════════ ═════════════


The Company Rate Total 1 year years2002 % $’000 $’000 $’000

Financial Assets

Fixed deposits 0.44 10,285 10,285 -


Obligations under hirepurchase agreements andfinance leases 11.90 (540) (284) (256)

───────────── ───────────── ─────────────

Total 9,745 10,001 (256) ═════════════ ═════════════ ═════════════


Rate Total 1 year years2001 % $’000 $’000 $’000

Financial Assets

Fixed deposits 1.91 20,340 20,340 -


Obligations under hirepurchase agreements andfinance leases 13.50 (528) (212) (316)

───────────── ───────────── ─────────────

Total 19,812 20,128 (316) ═════════════ ═════════════ ═════════════


Page 81

28. Financial Instruments (cont’d)

(d) Currency risk

The Group has exposure to foreign currency movement on its trade receivables, trade payables and cashand cash equivalents. It also incurs foreign currency risk on sales and purchases that are denominated ina currency other than Singapore dollars. The currencies giving rise to this risk are primarily US dollars andJapanese yen. Currently, the Group does not hedge its foreign currency exposure using derivative financialinstruments. However the management monitors the exposure closely and will consider hedging significantforeign currency exposure should the need arise. It is the policy of the Group not to trade in derivativeforeign currency contracts.

(e) Fair value

The carrying amounts of the financial assets and liabilities approximate fair values.

29. Contingent Liabilities – The Company

The Company has provided corporate guarantees amounting to $15,429,000 (2001: $38,900,000) to banks andfinancial institutions in respect of facilities extended to the Company and its subsidiaries. At 30 June 2002,drawdowns under these facilities amounted to $1,278,000 (2001: $5,200,000).

30. Segment Reporting

(a) Business Segments

Advanced SupplyEngineering Packaging Chain Elimin-

Solutions Solutions Solutions ations Consolidated$'000 $'000 $'000 $'000 $'000

Revenue and Expenses2002

Total revenue from externalcustomers 37,375 2,185 74 - 39,634

Inter-segment revenue 1,431 - - (1,431) -─────────── ─────────── ─────────── ─────────── ───────────

38,806 2,185 74 (1,431) 39,634═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Segment results 94 (17,120) (1,748) (56) (18,830)═══════════ ═══════════ ═══════════ ═══════════

Unallocated corporate expenses (2,918)Share of results of

associated companies 82 - - - 82Share of results of a jointly

controlled entity - (1,643) - - (1,643)───────────

Loss from ordinary activitiesbefore interest income/(expense)and taxation (23,309)

Interest income 511Interest expense (305)Taxation (211)Minority interest (29)

───────────

Net loss for the year (23,343)═══════════


Page 82

30. Segment Reporting (cont’d)

(a) Business Segments (cont’d)

Advanced SupplyEngineering Packaging Chain Elimin-

Solutions Solutions Solutions ations Consolidated$'000 $'000 $'000 $'000 $'000

2001Total revenue from external

customers 99,677 1,750 - - 101,427Inter-segment revenue 4,412 - - (4,412) -

─────────── ─────────── ─────────── ─────────── ───────────

104,089 1,750 - (4,412) 101,427═══════════ ═══════════ ═══════════ ═══════════ ═══════════

Segment results, restated 10,893 (5,999) (499) (254) 4,141═══════════ ═══════════ ═══════════ ═══════════

Unallocated corporateexpenses, restated (5,527)

Share of results of associatedcompanies (506) - - - (506)

Share of results of a jointlycontrolled entity - (89) - - (89)

───────────

Loss from ordinary activitiesbefore taxation, interestincome/(expense), restated (1,981)

Interest income 1,831Interest expense (219)Taxation (2,590)Minority interest (662)

───────────

Net loss for the year, restated (3,621)═══════════

The impairment losses of $8,161,000 incurred on property, plant and equipment and developmentexpenditure, as described in Notes 3 and 4, were included in the segment results for Advanced PackagingSolutions segment for the year ended 30 June 2002.

The segment results for the Advanced Packaging Solutions segment for the year ended 30 June 2001included the write-off of $1,299,000 in respect of cleanroom facilities and the provision for remaining rentobligation of $257,000 as disclosed in Note 21.

The write-off of $3,492,000 in respect of the Company’s equity investment in Surface Interface Inc. for theyear ended 30 June 2001 was included in the segment result for the Engineering Solutions segment.

The impairment losses of $1,747,000 and $566,000 incurred on the Company’s unquoted equityinvestments for the years ended 30 June 2002 and 2001 were included in the segment results for theEngineering Solutions segment and the unallocated corporate expenses, respectively.


Page 83


(a) Business Segments (cont’d)Advanced Supply

Engineering Packaging Chain Elimin-Solutions Solutions Solutions ations Consolidated

$'000 $'000 $'000 $'000 $'000

Assets and Liabilities

2002

Segment assets 46,337 14,319 207 (887) 59,976Unallocated corporate assets 19,511Investment in associated companies 37 - - - 37Deferred tax asset 82

───────────

Total assets 79,606═══════════

Segment liabilities 11,767 4,038 240 (887) 15,158Unallocated corporate liabilities 3,046Interest-bearing loans and borrowings 3,403Term loan (interest-free) 53Income tax liabilities 1,987

───────────

Total liabilities 23,647═══════════

2001

Segment assets 65,100 22,889 1,630 (418) 89,201Unallocated corporate assets 27,183Investment in associated companies 329 - - - 329Investment in a jointly controlled entity - 1,643 - - 1,643

───────────

Total assets 118,356═══════════

Segment liabilities 22,574 3,642 155 (418) 25,953Unallocated corporate liabilities 1,304Interest-bearing loans and borrowings 8,620Term loan (interest-free) 482Income tax liabilities 2,723

───────────

Total liabilities 39,082═══════════


Page 84



Advanced SupplyEngineering Packaging Chain

Solutions Solutions Solutions Consolidated$'000 $'000 $'000 $'000

Capital Expenditure

2002

Capital expenditure 3,506 5,378 36 8,920Corporate 1,120

───────────

10,040═══════════

2001

Capital expenditure 2,240 12,860 740 15,840Corporate 345

───────────

16,185═══════════

Significant Non-cash Items

2002

Depreciation of property,plant and equipment:

- allocated to businesssegments 1,371 3,497 91 4,959

- unallocated corporateexpenses 154

5,113Impairment losses incurred on:- property, plant and

equipment - 5,548 - 5,548- development expenditure - 2,613 - 2,613

Property, plant andequipment written off:

- allocated to businesssegments 162 - 812 974


1,071


Page 85





Property, plant andequipment acquired underhire purchase agreementsand finance leases:

- allocated to businesssegments 211 36 7 254


286Amortisation of intangible

assets:

- allocated to businesssegments 111 803 4 918


941Impairment losses incurred

on other financial assets:

- allocated to businesssegments 1,801 - - 1,801


1,857Allowance made for doubtful

loans to associatedcompanies 494 - - 494

Grant income - 302 - 302Amortisation of deferred

income - 404 - 404══════ ══════ ══════ ══════


Page 86





Significant Non-cash Items

2001

Depreciation of property,plant and equipment:

- allocated to businesssegments 499 1,033 12 1,544


1,652Property, plant and

equipment written off 3 1,405 - 1,408

Amortisation ofintangible assets:

- allocated to businesssegments 9 525 - 534


535Property, plant and

equipment acquiredunder hire purchaseagreements andfinance leases:

- allocated to businesssegments 468 3,918 16 4,402

- unallocated corporateacquisitions 72

4,474

Impairment losses incurredon other financial assets - - - 566

Other financial assetswritten off 3,492 - - 3,492

Grant income - 398 - 398Amortisation of deferred

income - 186 - 186══════ ══════ ══════ ══════


Page 87


(b) Geographical SegmentsOtherAsean Other Elimin-

Singapore Countries Regions ations Consolidated$'000 $'000 $'000 $'000 $'000

2002

Total revenue fromexternal customers 30,193 6,500 2,941 39,634

═══════ ═══════ ═══════ ═══════

Segment assets 40,879 6,407 12,925 (235) 59,976Unallocated corporate assets 19,511 - - - 19,511Investment in associated

companies 37 - - - 37Deferred tax asset - - 82 - 82

──────────── ──────────── ──────────── ──────────── ────────────

60,427 6,407 13,007 (235) 79,606═══════ ═══════ ═══════ ═══════ ═══════

Capital expenditure 7,566 2,361 113 10,040═══════ ═══════ ═══════ ═══════

2001

Total revenue fromexternal customers 46,752 22,388 32,287 101,427

═══════ ═══════ ═══════ ═══════

Segment assets 57,012 6,257 26,135 (203) 89,201Unallocated corporate assets 27,183 - - - 27,183Investment in associated

companies 329 - - - 329Investment in a jointly

controlled entity 1,643 - - - 1,643──────────── ──────────── ──────────── ──────────── ────────────

86,167 6,257 26,135 (203) 118,356═══════ ═══════ ═══════ ═══════ ═══════

Capital expenditure 15,491 331 363 16,185═══════ ═══════ ═══════ ═══════

31. Comparative Figures

Comparatives in the financial statements have been changed from the previous year due to the adoption of therequirements of the new and revised accounting standards stated in Note 24.

E L L I P S I ZA R 2 0 0 2Pg. 88

SHAREHOLDING STATISTICSAS AT 14 OCTOBER 2002(AS SHOWN IN THE COMPANY’S REGISTER OF SUBSTANTIAL SHAREHOLDERS)

ANALYSIS OF SHAREHOLDINGS BY RANGE AS AT 14 OCTOBER 2002

Range of shareholdings No. of shareholders % of shareholders No. of shares % of issuedshare capital

1 to 999 8 0.20 4,012 0.001,000 to 10,000 3,013 74.67 11,782,248 5.9510,001 to 1,000,000 996 24.68 44,593,132 22.521,000,001 and Above 18 0.45 141,620,608 71.53

TOTAL 4,035 100.00 198,000,000 100.00

TOP 20 SHAREHOLDERS AS AT 14 OCTOBER 2002

No. Name of shareholders No. of shares % of issuedshare capital

1 DBS NOMINEES PTE LTD 33,760,060 17.052 CHONG FOOK CHOY 27,950,320 14.123 PAO NING YU 21,940,416 11.084 HAY SOOK ANN 16,206,412 8.195 NG BENG SOON 8,939,216 4.516 DBS VICKERS SECURITIES (S) PTE LTD 5,242,000 2.657 HSBC (SINGAPORE) NOMINEES PTE LTD 4,765,000 2.418 PLE INVESTMENTS PTE LTD 4,457,168 2.259 UNITED OVERSEAS BANK NOMINEES PTE LTD 3,829,000 1.9310 ONG PUAY HAN 2,462,484 1.2411 THE ASIA LIFE ASSURANCE SOCIETY LTD

- SINGAPORE LIFE FUND 2,008,000 1.0112 OCBC SECURITIES PRIVATE LTD 1,868,000 0.9413 LEE BOON LENG 1,722,148 0.8714 WATERWORTH PTE LTD 1,500,000 0.7615 CHOO SOO KWANG 1,405,744 0.7116 OVERSEA CHINESE BANK NOMINEES PTE LTD 1,303,000 0.6617 NG KHENG HUEY SALLY 1,222,640 0.6218 UOB KAY HIAN PTE LTD 1,039,000 0.5219 KIM ENG ONG ASIA SECURITIES PTE LTD 958,000 0.4820 PHILLIP SECURITIES PTE LTD 881,000 0.45

TOTAL 143,459,608 72.45

SUBSTANTIAL SHAREHOLDERS AS AT 14 OCTOBER 2002(AS SHOWN IN THE COMPANY’S REGISTER OF SUBSTANTIAL SHAREHOLDERS)

Name of shareholders No. of shares % of issuedshare capital

DBS NOMINEES PTE LTD (*) 33,760,060 17.05CHONG FOOK CHOY 27,950,320 14.12PAO NING YU 21,940,416 11.08HAY SOOK ANN 16,206,412 8.19

* Out of the 33,760,060 shares, 19,221,420 shares and 4,178,640 shares were held on behalf of 3i Group plc and 3i Asia Pacific Technology LP respectively.The total direct and indirect interest of 3i Group plc amounted to 11.8%.

E L L I P S I ZA R 2 0 0 2

Pg. 89

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the 7th Annual General Meeting of Ellipsiz Ltd will be held at 29 WoodlandsIndustrial Park E1, Lobby 1, #04-01/06, NorthTech, Singapore 757716, on Tuesday, 19 November 2002,at 4.00p.m. to transact the following businesses:-

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Accounts for the financial year ended 30th June 2002, together withthe Directors’ Report and Auditors’ Report thereon.

2. To re-elect the following Directors retiring by rotation pursuant to Article 91 of the Company’s Articlesof Association and who, being eligible offer themselves for re-election:-

Mr. Matthew Chan Chung Shin (independent member of Audit Committee)Mr. Jeffrey Staszak (independent member of Audit Committee)

3. To re-appoint KPMG as the Company’s Auditors and to authorise the Directors to fix their remuneration.

4. To transact any other ordinary business that may be transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolution as an Ordinary Resolution, with or withoutany modifications:-

5. Authority to allot and issue new shares

“That the Directors be and are hereby authorised pursuant to the provisions of Section 161 of theCompanies Act, Cap. 50, and subject to the Company’s Articles of Association and the rules andregulations of the Singapore Exchange Securities Trading Limited, to allot and issue such of theunissued shares of the Company on such terms and conditions and with such rights or restrictions asthey may deem fit PROVIDED ALWAYS THAT the aggregate number of shares to be issued pursuant tothis Resolution does not exceed fifty per cent (50%) of the Company’s issued share capital for the timebeing, of which the aggregate number of shares issued other than on a pro-rata basis to existingshareholders does not exceed twenty per cent (20%) of the Company’s issued share capital for thetime being and that such authority shall continue in force until the conclusion of the next AnnualGeneral Meeting of the Company or the date by which such Annual General Meeting is required by lawto be held, whichever is the earlier.”

Dated: 30 October 2002

By Order of the Board

Anne Choo and Chan Yuen LengJoint Company SecretariesSingapore

ELLIPSIZ LTD(Incorporated in the Republic of Singapore)

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

E L L I P S I ZA R 2 0 0 2Pg. 90

Note:

A member of the Company entitled to attend and vote at this meeting is entitled to appoint not more than two proxies to attendand vote in his stead. A proxy need not be a member of the Company. Where a member appoints two proxies, he shall specifyon each instrument of proxy the number of shares in respect of which the appointment is made, failing which the appointmentshall be deemed to be in the alternative. A member of the Company which is a corporation is entitled to appoint its authorisedrepresentative or proxy to vote on its behalf. If the member is a corporation, the instrument appointing the proxy must be underseal or the hand of an officer or attorney duly authorised. The instrument appointing a proxy must be deposited at the registeredoffice of the Company at 29 Woodlands Industrial Park E1, Lobby 1, #04-01/06, NorthTech, Singapore 757716 not less than48 hours before the time appointed for the Meeting.

Explanatory Notes:

1. The Ordinary Resolution proposed in item 5 above, if passed, will empower the Directors from the date of the above meetinguntil the next Annual General Meeting to issue and allot shares up to and not exceeding in total 50 per cent of the issuedshare capital of the Company for the time being for such purposes as they consider would be in the interest of the Company,provided that the aggregate number of shares issued other than on a pro-rata basis to existing shareholders does not exceed20 per cent of the issued capital of the Company for the time being. This authority will, unless previously revoked or variedat a general meeting, expire at the next Annual General Meeting of the Company or such time when the next Annual GeneralMeeting is required to be held under the Companies Act, Cap. 50.

N O T I C E O F A N N U A L G E N E R A L M E E T I N G ( C O N T ’ D )

E L L I P S I ZA R 2 0 0 2

Pg. 91

I/We, NRIC No.

of

being *a member/members of ELLIPSIZ LTD (the “Company”), hereby appoint:-

Name Address NRIC/Passport Proportion ofNumber Shareholding (%)

and/or (delete as appropriate)

or failing the person, or either or both of the persons, referred to above, the Chairman of the Meeting, as my/our proxy/proxiesto attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the 7th Annual General Meeting of theCompany to be held at 29 Woodlands Industrial Park E1, Lobby 1, #04-01/06, NorthTech, Singapore 757716, on Tuesday,19 November 2002, at 4.00p.m. and at any adjournment thereof.

(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions asset out in the Notice of 7th Annual General Meeting. In the absence of specific directions, your proxy/proxies will vote or abstainfrom voting as he/they may think fit as he/they will on any other matters arising at the 7th Annual General Meeting.)

ELLIPSIZ LTD(Incorporated in the Republic of Singapore)

7TH ANNUAL GENERAL MEETING - PROXY FORM

IMPORTANTIMPORTANTIMPORTANTIMPORTANTIMPORTANT

1. For investors who have used their CPF monies to buy shares inthe capital of Ellipsiz Ltd, this Proxy Form is forwarded to them atthe request of their CPF Approved Nominees and is sent solelyFOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF Investors and shall beineffective for all intents and purposes if used or purported to beused by them.

IMPORTANT: PLEASE READ NOTES OVERLEAF

1. Adoption of the Audited Accounts for the financial year ended 30th June 2002,together with the Directors’ Report and Auditors’ Report thereon.

2. Re-election of Mr Matthew Chan Chung Shin as Director under Article 91.3. Re-election of Mr Jeffrey Staszak as Director under Article 91.4. Re-appointment of KPMG as Auditors and to authorise the Directors to fix

their renumeration.5. Any other ordinary business that may be transacted at an Annual

General Meeting.SPECIAL BUSINESS

6. Authority to allot and issue new shares.

Dated this day of November 2002.

Signature(s) of Member(s) or Common Seal* delete as appropriate

NO. RESOLUTION FOR AGAINSTORDINARY BUSINESS

Total No. ofOrdinary Sharesheld:

E L L I P S I ZA R 2 0 0 2Pg. 92

P R O X Y F O R M ( C O N T ’ D )

Notes:-

1. If you have Ordinary Shares entered against your name in the Depository Register (as defined in Section 130A of theCompanies Act, Chapter 50 of Singapore), you should insert that number of Ordinary Shares. If you have Ordinary Sharesregistered in your name in the Register of Members, you should insert that number of Ordinary Shares. If you have OrdinaryShares entered against your name in the Depository Register and Ordinary Shares registered in your name in the Register ofMembers, you should insert the aggregate number of Ordinary Shares entered against your name in the Depository Registerand registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy orproxies shall be deemed to relate to all the Ordinary Shares in the capital of the Company held by you.

2. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint one or two proxiesto attend and vote in his stead. A proxy need not be a member.

3. Where a member appoints two proxies, the appointments shall be invalid unless he specifies the proportion of hisshareholding (expressed as a percentage of the whole) to be represented by each proxy. If no such proportion is specified, thefirst named proxy shall be treated as representing 100 per cent of the shareholding and any second named proxy as analternative to the first named.

4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 29 WoodlandsIndustrial Park E1, Lobby 1, #04-01/06, NorthTech, Singapore 757716 not later than 48 hours before the time fixed for holdingthe Annual General Meeting.

5. This instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised inwriting. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under itsseal or under the hand of any officer or attorney duly authorised.

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

7. The Company shall be entitled to reject this instrument appointing a proxy or proxies if it is incomplete, improperly completedor illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specifiedin the instrument appointing a proxy or proxies.

8. In the case of members whose Ordinary Shares are entered against their names in the Depository Register, the Company mayreject any instrument appointing a proxy or proxies lodged if such members are not shown to have Ordinary Shares enteredagainst their names in the Depository Register as at 48 hours before the time fixed for holding the Annual General Meeting ascertified by the CDP to the Company.

Ellipsiz Ltd. – Corporate Office29 Woodlands Industrial Park E1 #04-01/06NorthTech Lobby 1Singapore 757716Tel: (65) 6311 8500Fax: (65) 6269 2628

Ellipsiz Singapore Pte. Ltd.29 Woodlands Industrial Park E1 #04-01/06NorthTech Lobby 1Singapore 757716Tel: (65) 6311 8500Fax: (65) 6269 0838

Ellipsiz Malaysia Sdn. Bhd.(Penang – Malaysia head office)25, 1st Floor, Lorong Helang 2Sungai Dua, 11700 GelugorPenang, MalaysiaTel: (60) 4 659 2035Fax: (60) 4 659 0175

Ellipsiz Malaysia Sdn. Bhd.(Kuala Lumpur – Malaysia branch office)15B & 15C, Jalan Kenari 8, Puchong Jaya47100 Puchong, Selangor Darul EhsanMalaysiaTel: (60) 3 8075 2035Fax: (60) 3 8075 3104

Ellipsiz (Shanghai) International Ltd.550 Yan An East RoadOcean Towers Unit 712 – 715Shanghai 200001, P.R. ChinaTel: (86) 21 6360 4012Fax: (86) 21 6360 4035

Ellipsiz MicroFab, Inc.50 Airport ParkwaySan Jose, CA 95110-1011Tel: (1) 408 437 7751Fax: (1) 408 437 4950

CrystalTech Scientific Inc.4F-6, No.26 Tai Yuen StreetChu Pei City, Hsin-Chu HsienTaiwan 302, R.O.C.Tel: (886) 3 552 5622Fax: (886) 3 552 6621

Factech Semiconductors Sdn. Bhd.Lot 9706, 1st FloorSection 64 KTLDJalan Pending93450 KuchingSarawak, MalaysiaTel: (60) 82 484 922Fax: (60) 82 484 966

MicroFab Technology (S) Pte. Ltd.2 Woodlands Sector 1 #01-20Woodlands SpectrumSingapore 738068Tel: (65) 6262 5260Fax: (65) 6268 8297

Ellipsiz Representatives:

Hiizu Takezaki#706 18-6, 3 chomeFuruedai Suita CityOsaka 565-0874JapanTel: (81) 6 4863 7511

HiSOL, Inc.1-17-6 Ueno, Taito-kuTokyo 110-0005JapanTel: (81) 3 3836 2800Fax: (81) 3 3836 2266Contact: Mr. Masami Akiyama

CORPORATE INFORMATION

HeadquartersEllipsiz Ltd.29 Woodlands Industrial Park E1 #04-01/06NorthTech Lobby 1Singapore 757716Tel: (65) 6311 8500Fax: (65) 6269 2628

Stock listingEllipsiz ordinary shares are traded on the Singapore ExchangeSecurities Trading Limited or SGX-ST since 6 July 2000 underthe symbol “Ellipsiz”

Independent AuditorKPMG16 Raffles Quay#22-00 Hong Leong BuildingSingapore 048581Tel: (65) 6220 7411Partner-in-charge: Mr. David Leaver

Registrar and Share Transfer OfficeM&C Services Pte. Ltd.138 Robinson Road#17-00 The Corporate OfficeSingapore 068906Tel: (65) 6227 6660

Joint Company SecretariesChan Yuen Leng, LL.B. (Hons)Anne Choo, LL.B. (Hons)

Principal BankersMalayan Banking Bhd.2 Battery RoadMaybank TowerSingapore 049514

Oversea-Chinese Banking Corporation Ltd.65 Chulia Street#06-00 OCBC CentreSingapore 049513

www.ellipsiz.com

ELLIPSIZ LTD29 WoodlandsIndustrial ParkE1 #04-01/06NorthTech Lobby 1Singapore 757716Tel: (65) 6311 8500Fax: (65) 6269 2628email: information@ellipsiz .comwww.ellipsiz.com

positioned for growth - ellipsiz · was listed on sgx in july 2000. ... proprietary flip chip...

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