ANNUAL REPORT 2012 - sunright.com · focus in executing our strategy. We have defined our target markets in working closely with our customers. Our experienced management team is

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02 Chairman’s Statement04 Business Review05 Board of Directors 08 Corporate Structure09 Corporate Information 10 Corporate Governance Statement21 Directors’ Report23 Statement by Directors 25 Independent Auditors’ Report C

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26 Consolidated Statement of Comphensive Income27 Balance Sheets 28 Statements of Changes in Equity30 Consolidated Statement of Cash Flows 31 Notes to the Financial Statements90 Shareholders’ Information92 Notice of Annual General MeetingProxy Form

A changing trend in lifestyles is creating a “mobile wave”, in our industry. Cool laptops, smartphones and stylish cars have one thing in common - they all use cutting edge semiconductor chips to achieve higher performance, provide more features and are smaller in size. These new opportunities bring growth for Sunright. Sunright ensures the reliability and functionality of many of these new chips, designed and manufactured by our global customers.

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Dear fellow shareholders

We entered FY 2012, crawling in at the same pace as we exited from the end of the last financial year. The recovery in the U.S. remains sluggish. The Euro-zone debt crisis continues to be a major global concern and the worldwide manufacturing indices of several key economies remain weak. Nevertheless, the semiconductor market has picked up, consistent with the industry forecast for calendar year 2012. We saw renewed strength in the second half of the FY 2012, even though year on year, revenue has declined. Sunright achieved a net profit of S$0.6 million in FY 2012, lower than the S$4.4 million in the previous year.

Despite weaker financial results, we made substantial progress in strengthening our product portfolio and expanding our customer base.

Diversified Product PortfolioEven as the Company navigated through a challenging time, we continued with our investments in technologies and growth initiatives.

We doubled our technical workforce to produce 2 designs each week for new devices introduced by our customers. This is a remarkable achievement. This flow of our design activities will continue, because of the growing demands in personal computers and network servers connected to mobile devices for smartphones and media tablets. Many of these designs would translate to equipment sales in 6 to 12 months, when market interest and acceptance grow for these applications.

The integration of an enhanced feature, “speed sort” and a separate new introduction of “tube” loading capability, increased the sales of our Fastrack, automatic loader & unloader. These additional developments expanded our product portfolio and we sold to a wide range of customers, including some new clients achieving a record sales for this new range of products.

We designed a new product, “g100”, a tray based handler for testing of Micro Electro Mechanical Systems or “MEMS” devices. This innovation provides a cost effective solution for wide ranging devices that are used in media tablets, phones, cars, printers and many other new consumer electronic products. The g100 prototype model has been completed and will be ready for market launch, in the second half of the new financial year.

Diversified Customer BaseSunright extended its market leadership by widening customer base. We achieved a significant milestone by serving 6 of the 7 top largest semiconductor manufacturers in the world. Our portfolio is increasingly international in scope, with presence in 9 countries. The international market remains a key area of growth for the Corporation.

Annual Report 201202 Sunright Limited

Across all our business groups, our customer base is meaningfully diversified. Our group of companies serve Fortune 500 customers and a wide base of mid-sized corporations as well as some 200 smaller companies, being actively serviced by our Distribution group.

Leading Service Through InnovationsWe operate in a niche market. The uniqueness of our business model in encompassing both service and equipment sales will further ensure sustainable profitability for the Group.

• FocusOnUniqueBusinessModel The customers for our services and the technologies for our systems, are complementary.

Our fortified position in service brings opportunities for our equipment to grow and lead in the equipment market.

• FocusonEquipmentMarket We have specific patented solutions that are market relevant. We also have a good

understanding of what our customers need and how their devices perform. Our recent success in marketing GENPOWER, and the expanding range of product portfolio for Fastrack, have further built our confidence.

We will continue to lead our services as the world’s largest “burn-in and test” service provider by creating innovative solutions using our proprietary technologies, for burn-in as well as test applications within our industry.

Moving Forward However, our group operations are facing pressure on rising labour and space costs. More resources will have to be added to support our expansion plans in our new equipment innovations. These increased costs will continue to be challenging to our operations. Although the global economic environment remains a concern, we continue to look forward with a clear focus in executing our strategy. We have defined our target markets in working closely with our customers. Our experienced management team is confident to lead, as they have executed in similarly difficult situations in the past.

DividendsThe Board is recommending a first and final tax-exempt (one tier) dividend of 0.2 cents per ordinary share for FY 2012, subject to shareholders’ approval, at the forthcoming Annual General Meeting.

AppreciationOur success over the years has led to higher expectations for Sunright - from our customers, our partners, and our shareholders. I would like to thank our employees for their unwavering support and the hard work in upholding Sunright in its premier position. We look forward with confidence and enthusiasm to growing Sunright’s profitably in 2013 and beyond.

SAMUEL LIM SYN SOOExecutive Chairman & Chief Executive Officer11 October 2012

through innovations

leading service


Equipment & Services 2012 was a challenging year for our equipment business and the industry. Demand was subdued; we focused on the enhancement of Fastrack, our automatic loader/unloader. We increased its performance and capabilities to process a wider range of devices including microcontrollers, microprocessors, sensors and digital signal processors. We designed a new product, g100 for test application, a tray based handler for testing of Micro Electro Mechanical Systems or “MEMS” devices. This new development was achieved by extending on our “pick & place” technology.

Our Service business remains robust, expanding in the automotive and communication sectors. We are committed to our mission of maintaining

the quality standard in the millions of devices we process through our continuous training and development programs for our staff.

DistributionOur annual sales were significantly reduced. Consequently, we have cut costs, reduced our inventories and focused on the growth in the distribution of cables and connectors for the Asian region. We continue to secure projects for structured cables in building infrastructure, supplied by a leading manufacturer, Siemon. We also continue to supply a wide variety of cables and wires to the electronics, military and the marine industries from Belden and Alpha, who are respective leaders in their fields. These sales are supplemented by renowned connector suppliers from Sullins and ITT Canon.

Our Service business remains robust, expanding in the automotive and communication sectors. We are committed to ourmissionofmaintainingthequalitystandardinthemillionsof devices we process through our continuous training and development programs of our staff.

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sSAMUEL LIM SYN SOONon-Independent Executive Director

Mr. Samuel Lim is the Executive Chairman and Chief Executive Officer of the Company and was appointed to the Board since its inception, on 9 March 1978. Mr. Lim is also the Executive Chairman and Chief Executive Officer of KESM Industries Berhad, a company listed on the Main Market of Bursa Malaysia Securities Berhad. Mr. Lim sits on the Boards of all the companies in the Sunright Group. By his vision and directions, he led the Company to become the world’s largest independent burn-in and testing services provider for the major manufacturers in the semiconductor industry.

Mr. Lim holds a Diploma in Industrial Engineering (Canada) and has more than 40 years of experience in the semiconductor and electronics industry. Prior to the establishing of Sunright Limited, Mr. Lim held senior positions including engineering, manufacturing and marketing in U.S. multinational companies. A local pioneer of the semiconductor industry, Mr. Lim received 4 U.S. patents in recognition of his inventions in various solutions involving “Burn-in and test”. He also sits on the Board of all the companies in KESM Industries Berhad.

Mr. Lim has a direct interest of 67,466,666 shares in the Company.

Mr. Lim was last re-elected as a Director of the Company on 19 November 2010.

KENNETH TAN TEOH KHOON Non-Independent Executive Director

Mr. Kenneth Tan was appointed to the Board on 12 January 1994. He is responsible for the strategic direction and new business initiatives of some of the Sunright Group companies, contract negotiations, investor relations and oversees the financial management of the Group.

Prior to joining the Company in 1987, he worked in an international accounting firm, a major property group in Singapore and subsequently in a diversified multinational group in the manufacturing and packaging industries.

Mr. Tan has a direct interest of 2,130,000 shares in the Company. He was last re-elected as a Director of the Company on 19 November 2010.

He is also an Executive Director of KESM Industries Berhad and also sits on the Boards of all the companies in the Group as well as several other private limited companies.

Mr Tan holds a Bachelor of Accountancy degree from the National University of Singapore and is a Fellow of the Institute of Certified Public Accountants of Singapore.


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LIM MEE ING Non-Independent Non-Executive Director

Ms. Lim Mee Ing was appointed to the Board on 20 February 1990. She is also a member of the Audit Committee of the Company.

She holds a Diploma from the Institute of Bankers, and has more than 18 years of working experience in the banking profession before her retirement in 1990.

Ms. Lim was employed by the Singapore Branch of Barclays Bank PLC from September 1973 to March 1990 in various senior positions. Prior to her exit, she was responsible for marketing and managing the operations of its global securities and custodian services. She was also a Director of Barclays Bank (S) Nominees Pte Ltd and a member of the Committee on Securities Industry of the Association of Banks in Singapore.

She does not have any shareholding in the Company and its subsidiaries, except she is deemed to have an interest in the shareholding of Mr. Samuel Lim in the Company by virtue of her spousal relationship. Ms. Lim was last re-elected as a director of the Company on 20 November 2009.

Ms. Lim is currently a Non-Executive Director of KESM Industries Berhad and also sits on the Board of a private limited company in China.

FRANCIS LEE CHOON HUI Independent Non-Executive Director

Mr. Francis Lee joined the Board on 18 January 1994, as an Independent Non-Executive Director. He is also the Chairman of the Audit Committee of the Company.

Mr Lee was admitted to the English Bar as a Barrister-At-Law, and to the Singapore Bar as an Advocate & Solicitor, in 1970. He was a senior corporate lawyer, whose principal areas of practice were in corporate law, civil litigation and general commercial practice.

In 1992, Mr Lee retired from full-time legal practice to found Corporate Ventures Group, a consultancy firm for mergers and acquisitions, of which he is the Chairman.

He does not have any shareholding in the Company and its subsidiaries. Mr. Lee was last re-elected as a Director of the Company on 18 November 2011.

He also serves as Vice Chairman and Independent Director of JEL Corporation (Holdings) Ltd.


TIMOTHY BROOKS SMITH Independent Non-Executive Director

Mr. Timothy Brooks Smith joined the Board on 18 January 1994. He is also a member of the Audit Committee of the Company.

Mr. Smith obtained a Bachelor of Science (Electrical & Electronics) in 1965 and then a Master of Science (Electrical Engineering) in 1969 from the Southern Methodist University in the United States of America.

He has over 40 years of experience in the semiconductor industry. He had spent over 21 years at Texas Instruments (“TI”) and was credited for the invention of TI’s Low Power Schottky Product Line and BiFET OP AMP. His last held position in TI was as a Senior Vice President of the Semiconductor Group, with worldwide profit and loss responsibility for its Memory, MOS Logic and DSP businesses. Reporting to Mr. Smith were TI plants in Singapore, Taiwan, the Philippines and Houston. He managed TI’s semiconductor wafer fabrication units in Dallas, Lubbock and Houston; was chairman of its wafer fabrication council; managed the annual capital expenditure budget for multiple wafer fabrication, assembly and test operations

and the annual research and development budget for process technology and product development for the businesses under his management. Mr. Smith was the Semiconductor Group representative to the corporate capital subcommittee of the Board of Directors and Chairman of the Wafer Fabrication Council, responsible for the capital roadmap for 27 wafer fabrication units, worldwide. He was also responsible for the included income statement, balance sheet and cash flow of TI’s worldwide Memory, MOS Logic and DSP businesses.

Mr. Smith does not have any shareholding in the Company and its subsidiaries. He was last re-elected as a Director of the Company on 18 November 2011.

Mr. Smith is currently the Chairman and Chief Executive Officer of Avazzia, Inc, a corporation he founded in 2004 to develop, manufacture and sell electronic medical devices.


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BURN-IN

- KES Systems & Service (1993) Pte Ltd- KES Systems & Service (1993) Pte Ltd Philippines Rep Office- KES Systems & Service (1993) Pte Ltd Malaysia Rep Office- KESM Industries Berhad- KESP Sdn. Bhd.- KEST Systems & Service Ltd- KESU Systems & Service, Inc.- KESU Systems & Service, Inc., Korea Branch- KES Systems, Inc.- KES Systems & Service Costa Rica Sociedad Anónima- KESM Industries (Tianjin) Co., Ltd- KES Systems & Service (Shanghai) Co., Ltd TESTING

- KESM Test (M) Sdn. Bhd.- KESM Industries (Tianjin) Co., Ltd DISTRIBUTION

- Kestronics (S) Pte Ltd- Kestronics Philippines, Inc.- Kestronics (M) Sdn. Bhd.- Kestronics (Thailand) Co., Ltd INVESTMENT HOLDING

- KES (USA) Inc. ELECTRONICS MANUFACTURING SERVICES

- KESP Sdn. Bhd.

SUNRIGHT LIMITED


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nAnnual Report 201209 Sunright Limited Annual Report 201209 Sunright Limited

BOARD OF DIRECTORS

Samuel Lim Syn SooExecutive Chairman & Chief Executive Officer

Kenneth Tan Teoh KhoonExecutive Director

Lim Mee IngNon-Executive, Non-Independent Director

Francis Lee Choon HuiNon-Executive, Independent Director

Timothy Brooks SmithNon-Executive, Independent Director

AUDIT COMMITTEE

Francis Lee Choon HuiLim Mee IngTimothy Brooks Smith

COMPANY SECRETARY

Adeline Lim Kim Swan

REGISTERED OFFICE

Block 1093 Lower Delta Road #02-01/08Tiong Bahru Industrial EstateSingapore 169204Tel : 6272 5842Fax: 6276 8426

SHARE REGISTRAR

Boardroom Corporate & Advisory Services Pte. Ltd.50 Raffles Place #32-01Singapore Land TowerSingapore 048623Tel : 6536 5355Fax: 6536 1360

AUDITORS

Ernst & Young LLPOne Raffles QuayNorth Tower Level 18Singapore 048583

AUDIT PARTNER

Philip Ng Weng KwaiPartner-in-charge (since 2008)

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I) BOARD OF DIRECTORS

A. Board’s Conduct of its Affairs

1. There is a strong and objective Board to lead and control the Company. The Board consists of individuals from the private sector, with the right core competencies and diversity of experience to enable them in their collective wisdom to contribute effectively. It is made up of a balanced mix of executive and non-executive, independent and non-independent directors. Each Director is expected to act in good faith and in the interests of the Company.

2. The key roles of our Board are to :-

• guidethecorporatestrategyanddirectionoftheGroup;

• establishaframeworkofprudentandeffectivecontrolswhichenablesrisktobeassessedandmanaged;

• ensureeffectivemanagementandleadershipofthehighestqualityandintegrity;and

• provideoversightintheproperconductoftheGroup’sbusiness.

3. The Board has delegated the day-to-day management and running of the Company to the Management headed by the Chief Executive Officer, Mr Samuel Lim Syn Soo, and the Executive Director, Mr Kenneth Tan Teoh Khoon. The Executive Directors supervise the managementoftheGroup’soperations.Togetherwithcorporatestaffmembers,theyregularlymeetwiththemanagementpersonneloftheGroup’soperationstorevieweachoperation’sprogressinstrategicdirections,projectsandoperationalperformance.

4. In addition, to assist the Board in the consideration of the various issues at hand and to facilitate decision-making, a Board committee had been formed, namely the Audit Committee (“AC”). The committee is governed and regulated by its own terms of reference which sets out the scope of its duties and responsibilities, rules and regulations, and procedures governing the manner in which the committee is to operate and how its decisions are to be taken.

The Board of Directors (“the Board”) recognises that the practice of good corporate governance is fundamental inthiseraofglobalisationwherethecorporateclimatecallsforenhancementofshareholders’value,alongsidesafeguarding the interest of shareholders of the Company.

WhenestablishingtheCompany’scorporategovernanceframework,theBoardevaluatestheprinciplesandguidelinesoftheCodeofCorporateGovernance2005(“theCode”)issuedbytheMinistryofFinanceon14July 2005. Having considered the costs and benefits of the recommended practices and their applicability to theGroup’sbusinesscircumstances,theBoardadoptspracticesthataremostsuitableandeffective,inorderto achieve high standard of corporate governance desired.

ThisStatementdescribestheCompany’scorporategovernancepracticesthatwereinplacethroughoutthefinancial year ended 31 July 2012 (“Year 2012”). Other than deviations which were explained in this Statement, the Company has generally adhered to the principles and guidelines set out in the Code.

Principle 1

Guideline 1.1

Guideline 1.3


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Guideline 1.4Guideline 1.2Guideline 2.1

Guideline 1.5

Guideline 1.4

Guideline 1.6

5. The Board meets regularly at least three (3) times a year, and holds additional meetings as warranted by particular circumstances. Board meetings are normally an open and transparentaffair.MattersrequiringanydecisionbytheBoardarediligentlydeliberatedbytheBoardtoensuretheinterestsoftheCompanyareprotected.Consequently,noindividualorsmallgroupofindividualsmaydominatetheBoard’sdecision-making.Ifnecessary, meetings may be conducted via telephone or videoconference, as permitted bytheCompany’sArticlesofAssociation.

6. The Board is fully aware of and acts on its specifically reserved matters for decision toensurethatthedirectionoftheGroupisfirmlyinitshands.MattersthatnormallyrequireBoard’sconsiderationandapproval includeannualbudget,annualfinancialstatements,reviewoftheGroup’sfinancialperformanceanditsinternalcontrolsystems;and authorisation of announcements to be made.

7. In between Board meetings, important matters are also discussed in person or on the telephone and are put to the Board for its decision by way of circulating resolutions in writing, together with supporting memorandum/papers (where relevant) to enable the directors to make informed decisions.

8. In Year 2012, the Board met on three (3) occasions. Amongst other Board matters, theBoardreviewedtheperformanceoftheGroupandendorsedthereleaseofthehalfyearlyandfullyear’sfinancialresults,approvedtheannualfinancialstatements,annualbudget,corporategovernancestatementandChairman’sstatement,authorisedannouncements to be issued, and deliberated on strategic plans and corporate governance practices.

9. Arecordofeach individualDirector’sattendanceatBoardmeetingsandBoardCommittee meetings in Year 2012 is set out below.

10. From time to time the Directors are kept informed by the Executive Directors, Management, Company Secretary and Auditors via circulated updates or briefings during AC and Board meetings about (i) issues relating to or which may affect the Group’sbusinessactivities,strategicdirectionsandgovernancepractices,(ii)industryenvironmentanddevelopmentsaffectingthebusinessesoftheGroup,(iii)changingcommercialrisksfacedbytheGroup,(iv)relevantnewlawsandregulations,and(v)changes to the accounting standards and regulations.

Name of Directors

Attendance at Board Meetings

No. ofMeeting Held

No. ofMeeting Attended

Samuel Lim Syn Soo 3 3

Kenneth Tan Teoh Khoon 3 3

Lim Mee Ing 3 2

Francis Lee Choon Hui 3 3

Timothy Brooks Smith 3 3

Name of Directors

Attendance at Audit Committee Meetings

No. ofMeeting Held

No. ofMeeting Attended

Francis Lee Choon Hui 2 2

Lim Mee Ing 2 1

Timothy Brooks Smith 2 2


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Guideline 1.7

Guideline 2.1

Guideline 2.5

Guideline 2.4

Guideline 2.3

Guideline 3.1

Guideline 3.2

Guideline 4.6

Principle 2

11. ThecurrentdirectorshavebeeninofficesincetheCompany’slistingontheSingaporeExchangeSecuritiesTradingLimited(“SGX-ST”)inOctober1994andhavebeenmadeaware of and are familiar with their duties and obligations. In this regard, the Company does not provide a formal letter to the directors outlining their duties and obligations.

B. Board Composition and Balance

1. The Board comprises five (5) members, three (3) of whom are Non-Executive. Two (2) of the Non-Executive Directors are Independent.

2. With more than one-third (1/3) Independent Directors on the Board, the Company has adheredtoGuideline2.1oftheCode.Therehasalwaysbeenactiveandunrestrictedparticipation by Independent Directors in the decision-making at Board meetings. Accordingly, there is a strong and independent element on the Board to enable the Board to exercise its judgment on corporate affairs objectively and independently, from the Management.

3. TheNon-ExecutiveDirectorsofferalternativeviewsof theGroup’sbusinessandcorporateactivities.Theycontribute to theBoard’sprocessbymonitoringandreviewingManagement’sperformanceagainstgoalsandobjectives.TheirviewsandopinionsprovidedifferentperspectivestotheGroup’sbusinesses.WhenchallengingManagement’sproposalsordecisions,theybringindependentjudgementtobearonbusiness activities and transactions.

4. The Board benefits from the wealth and depth of experience each Director possesses, collectively providing core competencies in accounting, business, finance, industry knowledge, law, management and strategic experience.

The profiles of each Director and other relevant information are set out under ”Board of Directors” section of this Report.

5. The Board considers its current Board size and composition to be appropriate and effective,aftertakingintoaccountthenatureandscopeoftheGroup’soperations.

C. Chairman and Chief Executive Officer

1. Mr Samuel Lim holds the positions of Chairman of the Board and Chief Executive Officer (“CEO”) of the Company.

2. Although the roles are combined, the Board is of the view that there are sufficient Independent Directors on the Board to ensure fair and objective deliberations at Board meetings and who are capable of exercising independent judgements. The Chairman/CEO always abstains from voting on matters, which he is directly or deemed, interested. Moreover the scale of the business does not warrant a meaningful split of these roles.

3. Further, inviewofMrSamuelLim’sperformanceandobjectivity indischarginghisresponsibilities, the Board fully supports the retention of his role as Executive Chairman and CEO.

4. As Chairman, he leads the Board, ensures that meetings are held when necessary to enable the Board to perform its duties responsibly and sets the Board agenda. However, Directorsarefreetorequestforadhocagendaitemstobe included,throughtheCompany Secretary. Further, the Chairman also ensures Directors receive accurate, timely and clear information, fosters effective communication with shareholders, encourages constructive relations between the Board and Management, and among Directors, and promotes high standards of corporate governance.



Principle 4.1

Guideline 4.5Principle 4

Guideline 4.4

Guideline 4.2

Guideline 4.2

Principle 5Guideline 5.1 to 5.4

Guideline 4.3

D. Board Membership/Board Performance

1. The Company did not establish a NC as recommended by the Code as the Board itself can fulfil the role of NC. The size of the Board does not warrant having a sub-committee for the stated purposes. The Board will review the need for a NC and establish one should the need arises.

2. All the Directors have been in the Board since 1994 and are closely identified with the Group’sbusinessandsuccessindividuallyandcollectively.TheDirectorshavebeenabletoeffectivelyandcapablyexecutetheirresponsibilities,thusenablingtheGrouptogrowovertheyears.AtsuchtimethattheBoardfindsitrequiresnewmemberstoimproveitsworkingandquality,theBoardwouldfindsuitablecandidatesandmakeappropriate recommendation. When a decision is made to appoint new Directors or increase the Board size, the Board will consider the adoption of a process for selection and appointment of new directors.

3. The independence of the Directors is monitored and ensured by the Board itself. The Board reviews the independence of the Board members with reference to the guidelines set out in the Code and, has determined that Messrs Francis Lee Choon Hui and Timothy Brooks Smith to be independent.

4. Although some Directors have other Board representations, the Board is satisfied that theseDirectorsareabletodischargeandhaveadequatelycarriedouttheirdutiesas Directors of the Company. The Board has experienced minimal competing time commitments among its members as Board meetings are planned and scheduled well in advance.

5. The Board recommends the nomination of retiring Directors retiring for re-election at theAnnualGeneralMeeting(“AGM”)oftheCompany.Beingasmall-sizedBoard,thecontribution and performance of each Director (measured in terms of attendance, preparedness, participation, leadership and decision-making) are apparent to the otherDirectors.Further,there-electionofDirectorsatAGMwillallowshareholderstodetermine the effectiveness of the Board and its members and vote accordingly.

6. Pursuant to the Articles of Association of the Company,

(i) one-thirdoftheDirectorsretirefromofficeateveryAGM;and

(ii) Directors appointed during the course of the year must submit themselves for re-electionatthenextAGMimmediatelyfollowingtheirappointment.

7. The financial indicators set out in the Code as guides for the evaluation of Directors are, intheCompany’sopinionmoreofameasureofManagement’sperformanceandhenceare less applicable to Directors. In any case, such financial indicators provide a snapshot ofaCompany’sperformanceanddonot fullymeasurethesustainable long-termwealth and value creation of the Company. For reasons as explained in the foregoing two paragraphs, no formal process for assessing the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board has been practised, as it is deemed to be unnecessary.

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E. Access to Information

1. The Board has full and unrestricted access to Management and the Company Secretary at all times.

2. Prior to each Board and AC meeting, every Director is given an agenda and a set of papers containing reports and information relevant to the agenda items to facilitate active participation and informed decision making. The papers are issued in sufficient time to enable the Directors to obtain further information and explanations, where necessary, so that they are properly briefed before the meetings.

3. At each meeting, apart from receiving financially oriented information from the Management, the Board is also kept updated on the activities, operations and other performancefactorsaffectingtheGroup’sbusinessandperformance.AllDirectorscanand do have the opportunity to call for additional clarification and information to assist them in their decision-making.

4. In Year 2012, the Directors attended the annual conference of the Company whereby theyareprovidedwithinformationabouttheGroup’sbusinesses,keyachievements,business directions, impact of changes/development in the economy, financial market, corporate governance, semiconductor industry, market outlook and introduction of new products and services. The Directors also have an opportunity to converse with the senior management staff to gather further information and broadly access its management resources and leadership.

5. All Directors have direct access to the company secretary. The company secretary is responsible for ensuring that Board procedures are observed. Together with senior management staff, she ensures that the Company follows and complies with applicable requirements,rulesandregulations.Thecompanysecretaryalsoensuresthereisgoodinformation flows within the Board and its committees and between senior management and Non-Executive Directors. She attends all meetings of the Board and its committees.

6. The appointment and the removal of the company secretary is a matter for the Board as a whole.

7. TheDirectorsarealsoabletoseekindependentprofessionaladviceattheCompany’sexpenseinthefurtheranceoftheirduties,ifrequired.

II) REMUNERATION MATTERS

A. Remuneration Policies, and Level and Mix of Remuneration

1. The Code recommends the setting up of a Remuneration Committee (“RC”) to undertake the responsibility of administering a formal and transparent process for fixing the remuneration of individual Directors. The Board did not establish a RC as the Board itself can fulfil the role of RC. Also, the size of the Board does not warrant having a sub-committee for the stated purposes. The Board will review the need for a RC and establish one should the need arises.

2. The Board determines and deliberates on the remuneration of Directors during the normal proceedings of the meeting of Directors. Further, a Director shall always abstain from suggesting, voting or recommending his or her individual remuneration.

Guideline 6.1Guideline 6.3

Principle 6Guideline 6.1

Guideline 6.3

Guideline 6.4

Guideline 6.5

Guideline 7.1

Guideline 7.2

Guideline 6.2

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3. TheremunerationpolicyoftheCompanyistopaycompetitivelyandadequately.Thistranslates to be remuneration that is attractive but yet non-excessive, that enables the Company to recruit capable Directors, Management and staff.

4. InitsreviewofandapprovaloftheDirectors’remuneration,theBoardmadereferenceto comparable companies in similar industry, market practices and the performance of theGroup.

5. ExecutiveDirectorsdonotreceivedirectors’fees.Insettingtheremunerationpackagesof the Executive Directors, the Company takes into account the performance of the GroupandthatoftheExecutiveDirectors.TheremunerationofExecutiveDirectorsconsistsoftheirsalaries,bonusesandprofitsharingawardsconditionalupontheGroupachieving certain profit before tax targets. Their service contracts do not have fixed appointment period as the Company may terminate by written notice to them. There are also no onerous removal clauses stipulated in their service contracts.

6. Non-Executive Directors have no service contracts with the Company. They are paid a basic fee and additional fees for serving on Board committee and taking on the responsibilitiesofcommitteechairmanship.Indeterminingthequantumofsuchfees,factors such as the efforts and time spent, and the responsibilities of Directors are taken into account. Such fees are subject to the approval of the shareholders as a lump sum paymentattheAGM.

B. Disclosure of Remuneration

1. Thebreakdown(inpercentageterms)ofeachindividualDirector’sremunerationearnedthrough fee, basic and variable remunerations for Year 2012 is as follows:

The remuneration paid to each of the top 5 key executives who are not Directors of

the Company fall below S$250,000 remuneration band. The Company refrains from disclosing the details of the remuneration as it believes that doing so is not in its best interests due to the sensitive and confidential nature of such information.

2. In Year 2012, no employee was an immediate family member of any Director or the CEO of the Company.

Principle 8



Guideline 9.3

Guideline 8.2

Fee SalaryOther

Benefits Total

Below S$250,000

Lim Mee Ing 100 - - 100

Francis Lee Choon Hui 100 - - 100

Timothy Brooks Smith 100 - - 100

S$500,000 to S$749,999

Samuel Lim Syn Soo - 85 15 100

Kenneth Tan Teoh Khoon - 85 15 100

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III) ACCOUNTABILITY AND AUDIT

A. Accountability

1. The Board aims to provide and present a balanced and meaningful assessment of the Company‘sandoftheGroup’sfinancialperformance,positionandprospectsinthehalfyear’sandfullyear’sresultsannouncements,annualfinancialstatements,theChairman’sstatementintheannualreport,andinotherpricesensitivepublicreports,andreportstotheregulators(ifrequired).TheBoardisassistedbytheACtooverseetheGroup’sfinancialreportingprocessesandthequalityofitsfinancialreporting.

2. Onanongoingbasis,theDirectorsareprovidedconcise,adequateandtimelyinformation,which include :-

(a)regularreceiptofmanagementaccountsoftheGroup’sperformance,positionandprospectsonamonthlybasis;and

(b)informationabouttheGroup’sbusinesses;performance;keyachievements;businessdirections; impactofchanges/development in theeconomy; financialmarket,corporategovernance,semiconductor industry;marketoutlook; introductionofnew products and services and new provisions or changes in statutory/regulatory requirementsaffectingtheoperationsoftheGroup,thatwerepresentedattheregular AC/Board meetings.

B. Audit Committee

1. The AC comprises three (3) Non-Executive Directors, two (2) of whom including the Chairman, are Independent Directors. A majority of the AC possesses accounting and related financial management expertise and experience. The members of the AC are Messrs Francis Lee Choon Hui, Lim Mee Ing and Timothy Brooks Smith.

2. The AC has a set of Terms of Reference defining its scope of authority and duties. In the performance of its duties, it has explicit authority to investigate any matter falling within its Terms of Reference, full access to and co-operation from Management and the internal auditors, full discretion to invite anyone to attend its meetings and reasonable resources at its disposal to enable it to discharge its function properly. The external auditors also have unrestricted access to the AC.

3. The AC performs the functions specified in the Singapore Companies Act, Cap. 50, and theListingManualofSGX-ST.Itsdutiesincludereviewingthescopeoftheauditandtheindependenceandobjectivityoftheexternalauditors;reviewingthesignificantfinancial reporting issues and judgements reported by the external auditors, ensuring theintegrityofthefinancialstatementsandresultsannouncementsoftheGroup,reviewingtheadequacyoftheGroup’sinternalcontrols,reviewingtheeffectivenessof theGroup’s internalaudit function, reviewingcorporategovernancepracticesand making recommendation on the appointment, re-appointment and removal of external auditors.

4. The Committee met two (2) times in Year 2012. All the other Board members, the Corporate Controller and the Company Secretary were present at the meetings.

5. TheCompanyhasaWhistleBlowerPolicybywhichemployeesoftheGroupmayreportand raise in good faith and in confidence, any concern about possible improprieties in matters of financial reporting or other matters. The policy serves to facilitate independent investigation of such matters and for appropriate follow-up action. C

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Guideline 11.1Guideline 11.2Guideline 11.8



Guideline 11.7

Guideline 10.2


6. During Year 2012, the AC :-

a) reviewedthere-nominationofexternalauditors;

b) reviewedwiththeexternalauditors,theirauditplan,andauditfindings;

c) reviewedtheauditedfinancialstatementsandtheexternalauditors’report;

d) reviewed, discussed and recommended the unaudited half-yearly and annual results oftheCompanyandoftheGrouptobepresentedtotheBoardforapproval;

e) reviewedanddiscussedwiththeinternalauditorstheirauditplanandreports;and

f) reviewedthelevelofassistancegivenbytheGroup’sManagementtotheauditors.

7. The AC has conducted a review of the non-audit services provided by the external auditors to satisfy itself that the provision of the said services will not prejudice the independence and objectivity of the external auditors before confirming their re-nomination.

C. Internal Audit

1. TheinternalauditfunctionoftheGroupisoutsourcedtoareputableaccounting/auditingfirm,whohasmetthestandardsstipulatedinGuideline13.2.

2. The internal auditors report directly and independently to the AC, with the Corporate Controller being the administrative coordinator.

3. The activities and organisational structure of the internal auditors are monitored and reviewed by the AC regularly to ensure that they have the necessary resources to adequatelyperformtheirfunction.

4. The internal auditors adopt a risk-based approach and prepare its audit strategy and planbasedontheriskprofilesofthebusinessunitsoftheGroup.Theauditplanispresented to the AC for approval. The resulting reports from the audits undertaken are reviewed. The full Board through the AC meets to review, discuss and direct actions onmatterspertainingtotheinternalauditors’reports.Theoperationalmanagementis responsible for ensuring that corrective actions on reported weaknesses are taken andcompletedwithintherequiredtimeframe.

D. Internal Controls and Risk Management

1. The Board recognises the importance of sound internal controls and risk management practices as part of good corporate governance. The Board is responsible for ensuring that Management maintains a sound system of internal controls to safeguard shareholders’investmentsandtheassetsoftheGroup.

2. The annual conduct of internal audits aids the AC in providing an independent assessmentontheadequacy,efficiencyandeffectivenessoftheGroup’s internalcontrol systems in anticipating potential risk exposures over key business systems and processesandincontrollingtheproperconductofbusinesswithintheGroup.

Guideline 11.8

Guideline 11.4 (a) and (b)



Guideline 11.4 (c) and (d)

Guideline 11.4 (a) and (e)

Guideline 11.6


Principle 12

Guideline 13.1

Guideline 13.3

Guideline 13.4

Guideline 12.1

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3. Apartfrominternalaudit,theGrouphasputinplaceanorganisationstructurewithformally defined lines of responsibility and delegation of authority. A process of hierarchical reporting has been established which provides for a documented and auditable trail of accountability.

4. The Executive Directors and senior management through their day-to-day involvement in the business operations and regular attendance at senior management level meetings,manageandmonitor theGroup’s financialperformance,keybusinessindicators, operational effectiveness and efficiency, discuss and resolve significant business issues and ensure compliance with applicable laws, regulations, rules, directives and guidelines. These senior management meetings serve as a two-way platform for the Board, through the Executive Directors, to communicate and address significantmattersinrelationtotheGroup’sbusinessandfinancialaffairsandprovideupdate on significant changes in the business and the external environment which result in significant risks.

5. TheGroup’sinternalcontrolproceduresalsoencompassaseriesofstandardoperatingpractice manuals and business process manuals, which serve as guidance for proper measures to be undertaken, and are subject to regular review, enhancement and improvement.

6. TheAChas,withtheassistanceofinternalandexternalauditors,reviewedtheGroup’smaterial controls, including financial, operational and compliance controls, and risk management systems. Based on the reports submitted by the internal and external auditors and the various controls put in place by Management, the Board is satisfied thatthereareadequateinternalcontrolsandriskmanagementprocessesforthenatureandthesizeoftheGroup’soperationsandbusinesses.

E. Communication with Shareholders

1. The Board recognises the importance of engaging in regular, effective and fair communications with its shareholders. In this regard, it strictly adheres to the disclosure requirementssetoutintheListingManualoftheSGX-ST.Ittakescaretoensurethatmaterial information is made publicly available on a timely and non-selective basis to all shareholders.

2. In disclosing information to shareholders, the Company aims to provide a balanced and meaningful description. Shareholders are kept informed of all major developments andperformanceof theGroupthroughtimelyhalfyearlyand fullyear’s resultsannouncementsandthevariousdisclosuresandannouncementsmadetotheSGX-STviatheSGXNET,pressreleases,annualreportsandcircularstoshareholders.

3. TheBoardalwaysencouragesshareholders’activeparticipationattheCompany’sAGM.

4. The Articles of Association of the Company provide for voting in person or through a proxyatAGM of theCompany.TheCompanyhasnot adopted theCode’srecommendation to allow shareholders to vote in absentia as it is felt that this would not serve the interest of shareholders.

5. Issuesormattersrequiringshareholders’approvalaretabledat theAGMof theCompany in the form of separate and distinct resolutions. This is to enable the shareholders to have full understanding and evaluation of issues or matters involved.

6. Members of the Board, including the Chairman of the AC, are normally present at general meetingstoaddressshareholders’questions.TheexternalauditorsarealsopresentatAGMtoassisttheDirectorsinaddressingshareholders’queriesabouttheauditedfinancial statements.

Guideline 12.2


Guideline 14.1

Guideline 15

Guideline 15.1

Guideline 15.2

Guideline 15.3

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DEALINGS IN SECURITIES OF THE COMPANY(Disclosure Pursuant to Rule 1207(18) of the Listing Manual)

TheCompanyhasadoptedaninternalcodeofconductondealingsintheCompany’ssecuritiesbyitsDirectorsand relevant officers of the Company and of its subsidiaries. This internal code is modelled along the Best PracticesGuideissuedbytheSGX-STwhichprohibitdealingintheCompany’ssecuritiesbyDirectorsandofficersduringtheperiodscommencingonemonthbeforetheannouncementoftheGroup’shalfyearlyandannual results and ending on the date of the announcement of such results, or when they are in possession ofunpublishedpricesensitiveinformationoftheGroup.

INTERESTED PERSON TRANSACTIONS(Disclosure Pursuant to Rule 920(1)(a) of the Listing Manual)

There was no interested person transaction conducted in Year 2012.

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s 21 Directors’Report23 Statement by Directors 25 IndependentAuditors’Report26 Consolidated Statement of Comprehensive Income27 Balance Sheets28 StatementsofChangesinEquity30 Consolidated Statement of Cash Flows31 Notes to the Financial Statements90 Shareholders’Information92 NoticeofAnnualGeneralMeetingProxy Form


The directors are pleased to present their report to the members together with the audited consolidated financial statements of Sunright Limited (the “Company”) and its subsidiary companies (collectively, the “Group”)andthebalancesheetandstatementofchangesinequityoftheCompanyforthefinancialyearended 31 July 2012.

Directors

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

Samuel Lim Syn SooKenneth Tan Teoh KhoonLim Mee IngFrancis Lee Choon HuiTimothy Brooks Smith

Arrangements to enable directors to acquire shares and debentures

Except as disclosed in this report, neither at the end of nor at any time during the financial year was the Company a party to any arrangement, whose objects are, or one of whose objects is, to enable the directors oftheCompanytoacquirebenefitsbymeansoftheacquisitionofsharesordebenturesoftheCompanyorany other body corporate.

Directors’ interests in shares and debentures

The following directors, who held office at the end of the financial year, had, according to the register of directors’shareholdingsrequiredtobekeptunderSection164oftheSingaporeCompaniesAct,Cap.50,aninterest in shares of the Company as stated below:

Name of director

Direct interest Deemed interest

At the beginning of

the yearAt the end of

the year

At the beginning of

the yearAt the end of

the year

Ordinary shares of the Company

Samuel Lim Syn Soo 67,466,666 67,466,666 – –

Lim Mee Ing – – 67,466,666 67,466,666

Kenneth Tan Teoh Khoon 2,130,000 2,130,000 – –

By virtue of their interest in Sunright Limited, Mr Samuel Lim Syn Soo and Ms Lim Mee Ing are deemed to have an interest in the shares of the subsidiary companies of Sunright Limited in proportion to its interest in the subsidiary companies as listed in Note 11 to the financial statements.

There was no change in any of the above-mentioned interests in the Company between the end of the financial year and 21 August 2012.

Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, share options, warrants or debentures of the Company, or of related corporations, either at the beginning of the financial year, or at the end of the financial year.

Dire

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tAnnual Report 201221 Sunright Limited

Directors’ contractual benefits

Except as disclosed in the financial statements, since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit by reason of a contract made by the Company, or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest.

Audit Committee

An Audit Committee was established on 3 October 1994 by the Board of Directors. The Audit Committee carried out the functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50. The functionsperformedaredetailedintheCorporateGovernanceStatement.

TheAuditCommittee,havingreviewedallnon-auditservicesprovidedbytheexternalauditorstotheGroup,is satisfied that the nature and extent of such services would not affect the independence of the external auditors.

The Committee recommends to the Board of Directors the re-appointment of Ernst & Young LLP as external auditors at the forthcoming annual general meeting of the Company.

Auditors

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

On behalf of the Board of Directors,

Samuel Lim Syn SooDirector

Kenneth Tan Teoh KhoonDirector

Singapore24 September 2012D

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Rep

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We, Samuel Lim Syn Soo and Kenneth Tan Teoh Khoon, being two of the directors of Sunright Limited, do hereby state that, in the opinion of the directors:

(i) the accompanying balance sheets, consolidated statement of comprehensive income, statements of changesinequity,andconsolidatedstatement of cash flows together with notes thereto are drawn up soastogiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyasat31 July 2012andtheresultsofthebusiness,changesinequityandcashflowsoftheGroupandthechangesinequityoftheCompanyfortheyearendedonthatdate,and

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

On behalf of the Board of Directors,

Samuel Lim Syn SooDirector

Kenneth Tan Teoh KhoonDirector

Singapore24 September 2012

Stat

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sAnnual Report 201223 Sunright Limited

To the Members of Sunright Limited

Report on the financial statements

We have audited the accompanying consolidated financial statements of Sunright Limited (the “Company”) anditssubsidiarycompanies(collectively,the“Group”)set out on pages 26 to 89, which comprise the balance sheetsoftheGroupandtheCompanyasat31July2012,thestatementsofchangesinequityoftheGroupand the Company, and the consolidated statement of comprehensive income and consolidated statement of cashflowsoftheGroupfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatory information.

Management’s responsibility for the financial statements

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

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted ourauditinaccordancewithSingaporeStandardsonAuditing.Thosestandardsrequirethatwecomplywithethical requirementsandplanandperformtheaudit toobtain reasonableassuranceaboutwhether thefinancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentof the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation offinancial statements that give a true and fair view in order to design audit procedures that are appropriate inthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

Inouropinion,theconsolidatedfinancialstatementsoftheGroupandthebalancesheetandstatementofchangesinequityoftheCompanyareproperlydrawnupinaccordancewiththeprovisionsoftheActandSingaporeFinancialReportingStandardssoastogiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyasat31July2012andoftheresults,changesinequityandcashflowsoftheGroupandthechangesinequityoftheCompanyfortheyearendedonthatdate.

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Report on other legal and regulatory requirements

Inouropinion,theaccountingandotherrecordsrequiredbytheActtobekeptbytheCompanyandbythosesubsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

Ernst & Young LLPPublic Accountants andCertified Public AccountantsSingapore24 September 2012

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(In Singapore dollars)

Note 2012$’000

2011$’000

Turnover 4 105,548 116,268

Revenue 4 55,277 61,396

Other items of income

Interest income 5 128 100

Dividend income 13 11

Fair value gain on held for trading investment securities 43 –

Miscellaneous income 6 2,590 2,737

Other items of expenses

Fair value loss on held for trading investment securities – (27)

Raw materials and consumables used (33,624) (36,103)

Changes in inventories of finished goods and work-in-progress (10) (1,497)

Employee benefits expense 27 (16,462) (16,917)

Depreciationofproperty,plantandequipment 10 (2,351) (1,678)

Operating lease rentals (1,523) (1,432)

Finance costs 7 (227) (244)

Other operating expenses (5,522) (6,258)

Share of results of associates 2,267 4,384

Profit before taxation 8 599 4,472

Income tax benefit 23 16 191

Profit for the year 615 4,663

Other comprehensive income:

Foreign currency translation reserve (742) (2,824)

Other comprehensive income for the year, net of tax (742) (2,824)

Total comprehensive income for the year (127) 1,839

Profit attributable to:

Owners of the Company 615 4,663

Total comprehensive income attributable to:

Owners of the Company (127) 1,839

Earnings per share (cents)

- Basic 9 0.5 3.8

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



Group Company

Note 2012$’000

2011$’000

2012$’000

2011$’000

ASSETSNon-current assetsProperty,plantandequipment 10 7,518 8,428 856 1,005Investment in subsidiaries 11 – – 14,393 14,393Investment in associates 12 53,911 52,471 5,885 5,885Deferred tax assets 23 781 714 – – Loans to subsidiaries 13 – – 93 89Loans to associates 14 549 561 549 561

Total non-current assets 62,759 62,174 21,776 21,933

Current assets Investment securities 15 358 315 358 315Inventories 16 6,939 8,183 – – Prepayments 508 215 72 52Trade and other receivables 17 15,271 11,957 5,587 12,213Fixed deposits 18 6,377 3,304 2,508 – Cash and bank balances 18 9,591 11,928 3,974 3,607

Total current assets 39,044 35,902 12,499 16,187

Total assets 101,803 98,076 34,275 38,120

EQUITY AND LIABILITIES EquityShare capital 19 35,727 35,727 35,727 35,727Retained earnings/(accumulated losses) 34,423 34,060 (16,296) (17,239)Other reserves 20 5,078 5,814 155 155

Total equity attributable to owners of the Company 75,228 75,601 19,586 18,643

Non-current liabilitiesLoans and borrowings 21 1,223 2,327 995 1,934Loans from subsidiaries 13 – – 6,291 9,514Long term payables 121 107 – – Provisions 25 39 39 – – Deferred income 22 1,028 1,468 – – Deferred tax liabilities 23 4,196 4,180 2,157 2,141

Total non-current liabilities 6,607 8,121 9,443 13,589

Current liabilitiesTrade and other payables 24 15,597 9,971 1,469 2,127Loans and borrowings 21 3,806 3,673 3,182 3,038Provisions 25 37 37 – – Provision for taxation 528 673 595 723

Total current liabilities 19,968 14,354 5,246 5,888

Total equity and liabilities 101,803 98,076 34,275 38,120

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Note

Total equity attributable to owners

of the Company

$’000

Share capital$’000

Retained earnings

$’000

Asset revaluation

reserve$’000

Foreign currency

translation reserve$’000

Capital reserve$’000

Group

As at 1 August 2010 74,008 35,727 29,643 1,696 (4,320) 11,262

Profit for the year 4,663 – 4,663 – – –

Other comprehensive income for the year, net of tax (2,824) – – – (2,824) –

Total comprehensive income for the year 1,839 – 4,663 – (2,824) –

Contributions by and distribution to owners

Dividends on ordinary shares 34 (246) – (246) – – –

Total contributions by and distribution to owners (246) – (246) – – –

As at 31 July 2011 and 1 August 2011 75,601 35,727 34,060 1,696 (7,144) 11,262

Profit for the year 615 – 615 – – –

Other comprehensive income for the year, net of tax (742) – – – (742) –

Total comprehensive income for the year (127) – 615 – (742) –

Contributions by and distribution to owners

Transfer to capital reserves – – (6) – – 6

Dividends on ordinary shares 34 (246) – (246) – – –

Total contributions by and distribution to owners (246) – (252) – – 6

As at 31 July 2012 75,228 35,727 34,423 1,696 (7,886) 11,268

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

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Note Total

equity$’000

Share capital$’000

Accumulated losses$’000

Capital reserve$’000

Company

As at 1 August 2010 15,325 35,727 (20,557) 155

Profit for the year 3,564 – 3,564 –

Total comprehensive income for the year 3,564 – 3,564 –

Dividends on ordinary shares 34 (246) – (246) –

As at 31 July 2011 18,643 35,727 (17,239) 155

As at 1 August 2011 18,643 35,727 (17,239) 155

Profit for the year 1,189 – 1,189 –

Total comprehensive income for the year 1,189 – 1,189 –

Dividends on ordinary shares 34 (246) – (246) –

As at 31 July 2012 19,586 35,727 (16,296) 155

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Note 2012$’000

2011$’000

Cash flows from operating activities:Profit before taxation 599 4,472

Adjustments:

Interest income 5 (128) (100)

Loss/(gain)ondisposalofproperty,plantandequipment 8 43 (189)

Property,plantandequipmentwrittenoff 8 – 42

Depreciationofproperty,plantandequipment 10 2,351 1,678

Write-down of inventories 16 332 492

Impairment loss/(reversal of impairment loss) on trade receivables 17 51 (120)

Trade receivables written off 17 – 27

Net (decrease)/increase in deferred income (440) 5

Dividend income (13) (11)

Net fair value (gain)/loss on held for trading investment securities (43) 27

Finance costs 7 227 244

Share of results of associates (2,267) (4,384)

Currency realignment (185) (435)

Operating cash flows before changes in working capital 527 1,748

(Increase)/decrease in debtors (4,214) 9,579

Decrease in inventories 1,437 3,912

Increase/(decrease) in creditors 5,620 (12,995)

Decrease in current account with associates 576 3,469

Cash flows from operations 3,946 5,713

Income taxes paid (180) (715)

Net cash flows from operating activities 3,766 4,998

Cash flows from investing activities:Interest received 128 100

Dividends received from associates 253 259

Dividends received from investment securities 13 11

Purchaseofproperty,plantandequipment 10 (1,628) (2,321)

Proceedsfromdisposalofproperty,plantandequipment 23 282

Proceeds from disposal of investment securities – 5

Net cash flows used in investing activities (1,211) (1,664)

Cash flows from financing activities:Interest paid (227) (244)

Proceeds from term loans 726 1,722

Repayment of term loans (1,880) (1,721)

Repayment of obligations under finance leases (457) (564)

Dividends paid 34 (246) (246)

Net cash flows used in financing activities (2,084) (1,053)

Netincreaseincashandcashequivalents 471 2,281

Cashandcashequivalentsatbeginningofyear 15,232 12,951

Cash and cash equivalents at end of year 18 15,703 15,232



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1. Corporate information

Sunright Limited (the “Company”) is a limited liability company incorporated and domiciled in Singapore andislistedontheSingaporeExchangeSecuritiesTradingLimited(SGX-ST).Theprincipalactivitiesofthe Company are that of investment holding and provision of management services.

The principal activities of the subsidiaries in the Group consist of the manufacturing of burn-inequipment, provision of burn-in services, research and development in burn-in and test-relatedactivities, and trading in and distribution of high-technology electronic products.

There have been no significant changes in the nature of these activities during the financial year.

The registered office and principal place of business of the Company is located at Block 1093 Lower Delta Road #02-01/08 Tiong Bahru Industrial Estate, Singapore 169204.

2. Summary of significant accounting policies

2.1 Basis of preparation

TheconsolidatedfinancialstatementsoftheGroupandthebalancesheetandstatementofchangesin equity of the Company have been prepared in accordance with Singapore Financial ReportingStandards (“FRS”).

The financial statements have been prepared on a historical cost basis except for derivative financial instruments and investment securities which are measured at fair value.

ThefinancialstatementsarepresentedinSingaporeDollars(SGDor$)andallvaluesareroundedtothenearestthousand($’000)exceptwhenotherwiseindicated.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial year except in the currentfinancialyear,theGrouphasadoptedallthenewandrevisedstandardsandInterpretationsofFRS (INT FRS) that are effective for annual periods beginning on or after 1 August 2011. The adoption of these standards and interpretations did not have any effect on the financial performance or position oftheGroupandtheCompany.

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

2.3 Standards issued but not yet effective

TheGrouphasnotadoptedthefollowingstandardsandinterpretationsthathavebeenissuedbutarenot yet effective:

Description

Effective for annual periods beginning on or

after

Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets 1 January 2012

Amendments to FRS 1 Presentation of Items of Other Comprehensive Income 1 July 2012

Revised FRS 19 Employee Benefits 1 January 2013

Revised FRS 27 Separate Financial Statements 1 January 2014

Revised FRS 28 Investments in Associates and Joint Ventures 1 January 2014

FRS 110 Consolidated Financial Statements 1 January 2014

FRS 111 Joint Arrangements 1 January 2014

FRS 112 Disclosure of Interests in Other Entities 1 January 2014

FRS 113 Fair Value Measurements 1 January 2013

FRS 107 Disclosures – Offsetting Financial Assets and Financial Liabilities 1 January 2013

FRS 32 Offsetting Financial Assets and Financial Liabilities 1 January 2014

INT FRS 120 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013

Except for the Amendments to FRS 1, FRS 110 and revised FRS 27, FRS 112 and FRS 113, the directors expect that the adoption of the other standards and interpretations above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes in accounting policy on adoption of the Amendments to FRS 1, FRS 110 and revised FRS 27, FRS 112 and FRS 113 are described below.

Amendments to FRS 1 Presentation of Items of Other Comprehensive Income

The Amendments to FRS 1 Presentation of Items of Other Comprehensive Income (OCI) is effective for financial periods beginning on or after 1 July 2012.

The Amendments to FRS 1 changes the grouping of items presented in OCI. Items that could be reclassified to profit or loss at a future point in time would be presented separately from items which will never be reclassified. As the Amendments only affect the presentations of items that are already recognisedinOCI,theGroupdoesnotexpectanyimpactonitsfinancialpositionorperformanceuponadoption of this standard.

FRS 110 Consolidated Financial Statements and Revised FRS 27 Separate Financial Statements

FRS 110 and the revised FRS 27 are effective for financial periods beginning on or after 1 January 2014.

FRS 110 establishes a single control model that applies to all entities (including special purpose entities). The changes introduced by FRS 110 will require management to exercise significant judgment todeterminewhichentitiesarecontrolled,and thereforearerequired tobeconsolidatedby theGroup,comparedwiththerequirementsthatwereinFRS27.Therefore,FRS110maychangewhichentitiesareconsolidatedwithinagroup.TheGroupisintheprocessofreviewingtheimplicationsofthesestandards.


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2.3 Standards issued but not yet effective (cont’d)

FRS 112 Disclosure of Interests in Other Entities

FRS 112 is effective for financial periods beginning on or after 1 January 2014.

FRS112isanewandcomprehensivestandardondisclosurerequirementsforallformsofinterestsinother entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. FRS 112 requires an entity to disclose information that helps users of its financialstatements to evaluate the nature and risks associated with its interests in other entities and the effectsofthoseinterestsonitsfinancialstatements.TheGroupiscurrentlydeterminingthe impactofthedisclosurerequirements.Asthisisadisclosurestandard,itwillhavenoimpacttothefinancialpositionandfinancialperformanceoftheGroupwhenimplementedin2014.

FRS 113 Fair Value Measurements

FRS 113 is effective for financial periods beginning on or after 1 January 2013.

FRS 113 provides a single source of guidance for all fair value measurements. FRS 113 does not change whenanentityisrequiredtousefairvalue,butratherprovidesguidanceonhowtomeasurefairvalueunderFRSwhenfairvalueisrequiredorpermittedbyFRS.TheGroupisintheprocessofreviewingtheimplications of this standard.

2.4 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the balance sheet date. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are all prepared for the same reporting date as the Company except for KES Systems & Service (Shanghai) Co., Ltd (“KESSH”) which has accounting yearending31Decemberasrequiredbythe lawsof itscountryof incorporation.Theconsolidatedfinancial statements incorporate KESSH audited financial statements as of 31 December and the unaudited management accounts from 1 January to 31 July. KESSH does not contribute materially to theGroup’sresults.Consistentaccountingpoliciesareappliedtoliketransactionsandeventsinsimilarcircumstances.AlistoftheGroupsubsidiariesisshowninNote11.

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

Acquisitionsofsubsidiariesareaccountedforbyapplyingthepurchasemethod. Identifiableassetsacquiredand liabilitiesandcontingent liabilitiesassumed inabusinesscombinationaremeasuredinitiallyattheirfairvaluesattheacquisitiondate.Adjustmentstothosefairvaluesrelatingtopreviouslyheldinterestsaretreatedasarevaluationandrecognisedinequity.Anyexcessofthecostofbusinesscombination over the Group’s share in the net fair value of the acquired subsidiary’s identifiableassets, liabilities and contingent liabilities is recorded as goodwill on the balance sheet. Any excess oftheGroup’sshareinthenetfairvalueoftheacquiredsubsidiary’sidentifiableassets,liabilitiesandcontingent liabilities over the cost of business combination is recognised as income in the statement ofcomprehensiveincomeonthedateofacquisition.

Subsidiariesareconsolidatedfromthedateofacquisition,beingthedateonwhichtheGroupobtainscontrol, and continue to be consolidated until the date that such control ceases.


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2.5 Foreign currency

TheGroup’sconsolidatedfinancialstatementsarepresentedinSingaporeDollars,whichisalsotheCompany’sfunctionalcurrency.EachentityintheGroupdeterminesitsownfunctionalcurrencyanditems included in the financial statements of each entity are measured using that functional currency.

(a) Transactions and balances

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

Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date are recognised in profit or loss except for exchange differences arisingonmonetaryitemsthatformpartoftheGroup’snetinvestmentinforeignoperations,which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve inequity.The foreigncurrency translation reserve is reclassifiedfromequitytoprofitorlossoftheGroupondisposaloftheforeignoperation.

(b) Consolidated financial statements

TheassetsandliabilitiesofforeignoperationsaretranslatedintoSGDattherateofexchangeruling at the balance sheet date and their profit or loss are translated at the weighted average exchange rates for the year. The exchange differences arising on the translation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.


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2.6 Property, plant and equipment

Allitemsofproperty,plantandequipmentareinitiallyrecordedatcost.Thecostofanitemofproperty,plantandequipmentisrecognisedasanassetif,andonlyif,itisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.

Whensignificantpartsofproperty,plantandequipmentarerequiredtobereplacedinintervals,theGrouprecognisessuchpartsasindividualassetswithspecificusefullivesanddepreciation,respectively.Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied.All other repair andmaintenance costs are recognised in profit or loss incurred.

Subsequenttoinitialrecognition,allitemsofproperty,plantandequipmentaremeasuredatcostlessaccumulated depreciation and any accumulated impairment losses.

Any revaluation surplus is recognised in other comprehensive income and accumulated in equityunder the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset carried in the asset revaluation reserve.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluation reserve in respect of an asset is transferred directly to retained earnings on retirement or disposal of the asset.

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

Buildings – 20 years

Renovation – 5 years

Plant,machineryandtestequipment – 3 - 8 years

Motor vehicles – 5 years

Officeequipment,furnitureandfittings – 3 - 10 years

Computer – 3 years

Work-in-progress assets are not depreciated as they are not yet available for use.

Thecarryingvaluesofproperty,plantandequipmentare reviewed for impairmentwheneventsorchanges in circumstances indicate that the carrying value may not be recoverable.

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

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss in the year the asset is derecognised.


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2.7 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may beimpaired.Ifanysuchindicationexists,orwhenannualimpairmentassessmentforanassetisrequired,theGroupmakesanestimateoftheasset’srecoverableamount.

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

TheGroupbasesitsimpairmentcalculationondetailedbudgetsandforecastcalculationswhicharepreparedseparatelyforeachoftheGroup’scash-generatingunitstowhichtheindividualassetsareallocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

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

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

2.8 Subsidiaries

AsubsidiaryisanentityoverwhichtheGrouphasthepowertogovernthefinancialandoperatingpolicies so as to obtain benefits from its activities.

IntheCompany’sseparatefinancialstatements,investmentsinsubsidiariesareaccountedforatcostless impairment losses.


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2.9 Associates

Anassociateisanentity,notbeingasubsidiaryorajointventure,inwhichtheGrouphassignificantinfluence.AnassociateisequityaccountedforfromthedatetheGroupobtainssignificantinfluenceuntilthedatetheGroupceasestohavesignificantinfluenceovertheassociate.

TheGroup’sinvestmentsinassociatesareaccountedforusingtheequitymethod.Undertheequitymethod,theinvestmentinassociateiscarriedinthebalancesheetatcostpluspost-acquisitionchangesintheGroup’sshareofnetassetsoftheassociate.Goodwillrelatingtoanassociateisincludedinthecarrying amount of the investment and is neither amortised nor tested individually for impairment. Any excessoftheGroup’sshareofthenetfairvalueoftheassociate’sidentifiableassets, liabilitiesandcontingent liabilities over the cost of the investment is included as income in the determination of the Group’sshareofresultsoftheassociateintheperiodinwhichtheinvestmentisacquired.

The profit or loss reflects the share of the results of operations of the associates. Where there has beenachangerecognisedinothercomprehensiveincomebytheassociates,theGrouprecognisesits share of such changes in other comprehensive income. Unrealised gains and losses resulting from transactionsbetweentheGroupandtheassociateareeliminatedtotheextentoftheinterestintheassociates.

The Group’s share of the profit or loss of its associates is shown on the face of statement ofcomprehensive income, net of tax.

WhentheGroup’sshareoflossesinanassociateequalsorexceedsitsinterestintheassociate,theGroup does not recognise further losses, unless it has incurred obligations or made payments onbehalf of the associate.

Afterapplicationoftheequitymethod,theGroupdetermineswhetheritisnecessarytorecogniseanadditionalimpairmentlossontheGroup’sinvestmentinitsassociates.TheGroupdeterminesateachbalance sheet date whether there is any objective evidence that the investment in the associate is impaired.Ifthisisthecase,theGroupcalculatestheamountofimpairmentasthedifferencebetweentherecoverable amount of the associate and its carrying value and recognises the amount in profit or loss.

The financial statements of the associates are prepared as of the same reporting date as the Company. Wherenecessary,adjustmentsaremadetoaligntheaccountingpolicieswiththoseoftheGroup.

2.10 Financial assets

Initial recognition and measurement

Financialassetsarerecognisedwhen,andonlywhen,theGroupbecomesapartytothecontractualprovisionsofthefinancialinstrument.TheGroupdeterminestheclassificationofitsfinancialassetsatinitial recognition.

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


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2.10 Financial assets (cont’d)

Subsequent measurement

Thesubsequentmeasurementoffinancialassetsdependsontheirclassificationasfollows:

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

Financial assets held for trading are classified as financial assets at fair value through profit or loss. Financial assets held for trading are investment securities, derivatives or financial assets acquiredprincipallyforthepurposeofsellingorrepurchasingitinthenearterm.Theaccountingpolicy for investment securities and derivative financial instruments are included in Note 2.12 and 2.23 respectively.

TheGrouphasnotdesignatedanyfinancialassetsuponinitialrecognitionatfairvaluethroughprofit or loss.

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

(b) Loans and receivables

Financialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedasloansandreceivables.Subsequenttoinitialrecognition,loansandreceivablesare measured at amortised cost using the effective interest method less impairment. Gainsand losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Derecognition

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

All regular way purchases and sales of financial assets are recognised or derecognised on the trade datei.e.thedatethattheGroupcommitstopurchaseorselltheasset.Regularwaypurchasesorsalesarepurchasesorsalesoffinancialassetsthatrequiredeliveryofassetswithintheperiodgenerallyestablished by regulation or convention in the marketplace concerned.


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2.11 Impairment of financial assets

TheGroupassessesateachbalancesheetdatewhetherthereisanyobjectiveevidencethatafinancialasset is impaired.

Financial assets carried at amortised cost

Forfinancialassetscarriedatamortisedcost, theGroupfirstassesseswhetherobjectiveevidenceof impairment exists individually for financial assets that are individually significant, or collectively for financialassetsthatarenotindividuallysignificant.IftheGroupdeterminesthatnoobjectiveevidenceof impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss on financial assets carried at amortised cost hasbeenincurred,theamountofthelossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedatthefinancialasset’soriginaleffective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in profit or loss.

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

To determine whether there is objective evidence that an impairment loss on financial assets has beenincurred,theGroupconsidersfactorssuchastheprobabilityofinsolvencyorsignificantfinancialdifficultiesofthedebtor,certaintyofcustomers’ordersanddefaultorsignificantdelayinpayments.

Ifinasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

2.12 Investment securities

Investment securities are classified as financial assets at fair value through profit or loss.

2.13 Cash and cash equivalents

Cashandcashequivalentscomprisefixeddeposits,cashatbankandinhand,andbankoverdrafts.

Cash and short term deposits carried in the balance sheet are classified and accounted for as loans and receivables.


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2.14 Trade and other receivables

Trade and other receivables, including amounts due from subsidiaries and associates are classified and accounted for as loans and receivables.

ImpairmentlossismadeforuncollectibleamountswhenthereisobjectiveevidencethattheGroupwill not be able to collect the debt. Bad debts are written off when identified. Further details on the accounting policy for impairment of financial assets are stated in Note 2.11 above.

2.15 Inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:

• Rawmaterials–purchasecostsonaweightedaveragebasis.

• Finishedgoodsandwork-in-progress–costsofdirectmaterialsandlabourandaproportionofmanufacturing overheads based on normal operating capacity.

Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value of inventories to the lower of cost and net realisable value.

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

2.16 Financial liabilities

Initial recognition and measurement

Financialliabilitiesarerecognisedwhen,andonlywhen,theGroupbecomesapartytothecontractualprovisionsofthefinancialinstrument.TheGroupdeterminestheclassificationofitsfinancialliabilitiesat initial recognition.

Financial liabilities are recognised initially at fair value plus in the case of financial liabilities not at fair value through profit or loss, directly attributable transaction costs.


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2.16 Financial liabilities (cont’d)

Subsequent measurement

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

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

Financial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilities designated upon initial recognition at fair value through profit or loss. Financialliabilitiesareclassifiedasheldfortradingiftheyareacquiredforthepurposeofsellingin the near term. This category includes derivative financial instruments entered into by the Groupthatarenotdesignatedashedginginstrumentsinhedgerelationships.

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

TheGrouphasnotdesignatedanyfinancialliabilitiesuponinitialrecognitionatfairvaluethroughprofit or loss.

(b) Other financial liabilities

Afterinitialrecognition,otherfinancialliabilitiesaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestratemethod.Gainsandlossesarerecognisedinprofitorlosswhenthe liabilities are derecognised, and through the amortisation process.

Derecognition

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

2.17 Loans and borrowings

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

Afterinitialrecognition,borrowingsaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterest method.

Gainsandlossesarerecognisedinprofitorlosswhentheliabilitiesarederecognisedaswellasthroughthe amortisation process.

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


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2.18 Provisions

ProvisionsarerecognisedwhentheGrouphasapresentobligation(legalorconstructive)whereasaresult of a past event, it is probable that an outflow of resources embodying economic benefits will be requiredtosettletheobligationandtheamountoftheobligationcanbeestimatedreliably.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If itisnolongerprobablethatanoutflowofeconomicresourceswillberequiredtosettletheobligation,theprovision is reversed. If the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

2.19 Employee benefits

(a) Defined contribution plans

TheGroupparticipatesinthenationalpensionschemesasdefinedbythelawsofthecountriesinwhichithasoperations.Inparticular,theSingaporecompaniesintheGroupmakecontributionsto the Central Provident Fund (“CPF”) scheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised as a liability when they accrue to employees. The estimated liability for leave is recognised for services rendered by employees up to balance sheet date.

2.20 Leases

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.

Finance lease - as lessee

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

Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and theleaseterm,ifthereisnoreasonablecertaintythattheGroupwillobtainownershipbytheendofthe lease term.


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2.20 Leases (cont’d)

Operating lease - as lessee

Leases where the lessor retains substantially all the risks and ownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

2.21 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Groupandtherevenuecanbereliablymeasured,regardlessofwhenthepaymentismade.Revenueis measured at the fair value consideration received or receivable, taking into account contractually definedtermsofpaymentandexcludingtaxesorduty.TheGroupassessesitsrevenuearrangementstodetermineifitisactingasprincipaloragent.TheGrouphasconcludedthatitisactingasaprincipalin all of its revenue arrangements. The following specific recognition criteria must also be met before revenue is recognised:

(a) Sale of goods

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

(b) Rendering of services

Revenue is recognised upon the performance of services to the customers, which generally coincides with their acceptance.

(c) Interest income

Interest income is recognised using the effective interest method.

(d) Dividends

DividendincomeisrecognisedwhentheGroup’srighttoreceivepaymentisestablished.

(e) Management fee income

Management fee income is recognised on an accrual basis upon which corporate services are rendered and earned.

(f) Rental income

Rental income is accounted for on a straight-line basis over the lease terms on ongoing leases.


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2.22 Income taxes

(a) Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by the balancesheetdate,inthecountrieswheretheGroupoperatesandgeneratestaxableincome.

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

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

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

• wherethedeferredtaxliabilityarisesfromtheinitialrecognitionofgoodwillorofanassetorliability in a transaction that is not a business combination and, at the time of the transaction, affectsneithertheaccountingprofitnortaxableprofitorloss;and

• inrespectoftaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiariesandassociates, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

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

• wherethedeferredtaxassetrelatingtothedeductibletemporarydifferencearisesfromtheinitial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;and

• inrespectofdeductibletemporarydifferencesassociatedwithinvestmentsinsubsidiariesand associates, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.


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2.22 Income taxes (cont’d)

(b) Deferred tax (cont’d)

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

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

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a businesscombinationisadjustedagainstgoodwillonacquisition.

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

Tax benefits acquired as part of a business combination, but not satisfying the criteria forseparaterecognitionatthatdate,wouldberecognisedsubsequentlyifnewinformationaboutfacts and circumstances changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill) if it is incurred during the measurement period or in profit or loss.

(c) Sales tax

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

• Wherethesalestaxincurredonapurchaseofassetsorservicesisnotrecoverablefromthetaxationauthority,inwhichcasethesalestaxisrecognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpenseitemasapplicable;and

• Receivablesandpayablesthatarestatedwiththeamountofsalestaxincluded.

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


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2.23 Derivative financial instruments

The Group uses derivative financial instruments such as forward currency contracts to hedge itsrisks associated with foreign currency fluctuations. Such derivative financial instruments are initially recognisedatfairvalueonthedateonwhichaderivativecontractisenteredintoandaresubsequentlyremeasured at fair value. Derivative financial instruments are carried as assets when the fair value is positive and as liabilities when the fair value is negative.

Any gains or losses arising from changes in fair value on derivative financial instruments that do not qualifyforhedgeaccountingaretakentothestatementofcomprehensiveincomefortheyear.

The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity profiles.

2.24 Segment reporting

Formanagementpurposes,theGroupisorganisedintooperatingsegmentsbasedontheirproductsand services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 33, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.25 Related parties

A related party is defined as follows:

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

(i) hascontrolorjointcontrolovertheCompany;(ii) hassignificantinfluenceovertheCompany;or(iii) isamemberofthekeymanagementpersonneloftheGrouporCompanyorofaparentof

the Company.


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2.25 Related parties (cont’d)

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

(i) The entity and the Company are members of the same group (which means that each parent,subsidiaryandfellowsubsidiaryisrelatedtotheothers);

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture ofamemberofagroupofwhichtheotherentityisamember);

(iii) Bothentitiesarejointventuresofthesamethirdparty;(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third

entity;(v) The entity is a post-employment benefit plan for the benefit of employees of either the

Company or an entity related to the Company. If the Company is itself such a plan, the sponsoringemployersarealsorelatedtotheCompany;

(vi) Theentityiscontrolledorjointlycontrolledbyapersonidentifiedin(a);and(vii) A person identified in (a) (i) has significant influence over the entity or is a member of the

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

3. Significant accounting estimates and judgements

The preparation of the Group’s consolidated financial statements requires management to makejudgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require amaterial adjustment to the carrying amount of the asset or liability affected in the future.

3.1 Judgements made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made the followingjudgements, apart from those involving estimations, which has the most significant effect on the amounts recognised in the consolidated financial statements:

Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Significant judgement isinvolved in determining the Group-wide provision for income taxes.There are certain transactionsand computations for which the ultimate tax determination is uncertain during the ordinary course ofbusiness.TheGrouprecognisesliabilitiesforexpectedtaxissuesbasedonestimatesofwhetheradditional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions intheperiodinwhichsuchdeterminationismade.ThecarryingamountoftheGroup’s incometaxpayables, deferred tax liabilities, deferred tax assets and unrecognised tax benefits at the balance sheet date were $528,000 (2011: $673,000), $4,196,000 (2011: $4,180,000), $781,000 (2011: $714,000) and$29,870,000(2011:$25,353,000)respectively.ThecarryingamountoftheCompany’sincometaxpayable and deferred tax liabilities of the balance sheet date were $595,000 (2011: $723,000) and $2,157,000 (2011: $2,141,000) respectively.


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3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Impairment of non-financial assets (property, plant and equipment, and investments in subsidiaries and associates)

The Group assesses whether there are any indicators of impairment for all non-financial assets ateach reporting date. Non-financial assets are tested for impairment when there are indicators that the carrying amounts may not be recoverable.

When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.

Maintenance warranties

A provision is recognised for expected warranty claims on products sold during the last one year, based on past experience of the level of repairs and returns. It is expected that most of these costs will be incurred after one year from the balance sheet date and will have been incurred within one year of the balance sheet date. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the one-year warranty period for all products sold.

Impairment of loans and receivables

TheGroupassessesattheendofeachreportingperiodwhetherthereisanyobjectiveevidencethatafinancialassetisimpaired.Todeterminewhetherthereisobjectiveevidenceofimpairment,theGroupconsiders factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. The carryingamountoftheGroup’sloansandreceivablesatthebalancesheetdateisdisclosedinNote30to the financial statements.

4. Turnover

Turnover,whichincludestheGroup’srevenueandtheGroup’sproportionateshareoftherevenueofthe associates, is analysed as follows:

Group

2012$’000

2011$’000

Sales by:

- Holding company and subsidiaries 55,277 61,396

- Associates 50,271 54,872

105,548 116,268


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5. Interest income

Group

2012$’000

2011$’000

Interest income from:

- Bank deposits 73 51

- Loans to an associate 48 49

- Others 7 –

128 100

6. Miscellaneous income

Note

Group

2012$’000

2011$’000

Management fee income 1,894 2,003

Amortisation of deferred income 22 491 484

Rental income 205 250

2,590 2,737

7. Finance costs

Group

2012$’000

2011$’000

Interest expense on:

- Loans and borrowing 166 189

- Finance charges payable under finance leases 61 55

227 224


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8. Profit before taxation

The following items have been included in arriving at profit before taxation:

Note

Group

2012$’000

2011$’000

Repairs and maintenance 596 580

Utilities 900 1,093

Write-down of inventories 16 332 492

Impairment loss/(reversal of impairment loss) on trade receivables 17 51 (120)

Trade receivables written off 17 – 27

Exchange (gain)/loss, net (32) 1,174

Loss/(gain) on disposal of property, plant and equipment 43 (189)

Property,plantandequipmentwrittenoff – 42

Travelling and entertainment 850 931

Upkeep of motor vehicles 381 354

Communication 319 347

Audit fees paid to:

- Auditors of the Company 305 305

- Other auditors 109 116

Non-audit fees paid to:

- Auditors of the Company 68 92

- Other auditors 91 130

Other professional fees 382 371

Directors’emoluments:

- Directors of the Company

•Fees 125 125

•Salariesandbonuses 1,283 1,390

•CPFandotherdefinedcontributions 17 15

- Directors of subsidiaries

•Fees 20 20


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9. Earnings per share

Basic earnings per share are calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the financial year.

Diluted earnings per share are calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares outstanding during the financial year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.

The following tables reflect the statement of comprehensive income and share data used in the computation of basic earnings per share for the years ended 31 July:

Group

2012$’000

2011$’000

Profit attributable to owners of the Company 615 4,663

’000 ’000

Weighted average number of ordinary shares for basic earnings per share computation 122,806 122,806

Cents Cents

Earnings per share

- Basic 0.5 3.8

There have been no other transactions involving ordinary shares or potential ordinary shares since the reporting date and before the completion of these financial statements.


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10. Property, plant and equipment

Buildings$’000

Renovation$’000

Plant, machinery and test equipment

$’000Motor vehicles

$’000

Office equipment,

furniture and fittings$’000

Computer$’000

Work-in-progress

$’000Total$’000

Group

Cost

At 1.8.2010 7,753 2,566 12,232 1,732 1,542 3,213 281 29,319

Currency realignment (277) (76) (814) (19) (32) (41) (14) (1,273)

Additions – 225 1,588 768 185 584 410 3,760

Transfer in/(out) – – 365 – – – (365) –

Disposals – (419) (46) (899) (126) (324) (37) (1,851)

At 31.7.2011 and 1.8.2011 7,476 2,296 13,325 1,582 1,569 3,432 275 29,955

Currency realignment (20) (2) (142) 1 – 3 10 (150)

Additions – 168 917 21 50 314 548 2,018

Transfer out* – – – – – – (525) (525)

Disposals – (359) (256) (91) (46) (126) – (878)

At 31.7.2012 7,456 2,103 13,844 1,513 1,573 3,623 308 30,420

Accumulated depreciation and impairment loss

At 1.8.2010 4,853 2,370 9,613 1,604 1,304 2,921 – 22,665

Currency realignment (146) (68) (803) (18) (25) (40) – (1,100)

Charge for the year 385 77 681 205 67 263 – 1,678

Disposals – (383) (5) (899) (110) (319) – (1,716)

At 31.7.2011 and 1.8.2011 5,092 1,996 9,486 892 1,236 2,825 – 21,527

Currency realignment (25) (5) (130) 2 (3) (3) – (164)

Charge for the year 386 95 1,278 182 59 351 – 2,351

Disposals – (354) (205) (91) (39) (123) – (812)

At 31.7.2012 5,453 1,732 10,429 985 1,253 3,050 – 22,902

Net book value

At 31.7.2012 2,003 371 3,415 528 320 573 308 7,518

At 31.7.2011 2,384 300 3,839 690 333 607 275 8,428

* Relates to machinery which has been transferred to inventories.



10. Property, plant and equipment

Buildings$’000

Renovation$’000

Plant, machinery and test equipment

$’000Motor vehicles

$’000

Office equipment,

furniture and fittings$’000

Computer$’000

Work-in-progress

$’000Total$’000

Group

Cost

At 1.8.2010 7,753 2,566 12,232 1,732 1,542 3,213 281 29,319

Currency realignment (277) (76) (814) (19) (32) (41) (14) (1,273)

Additions – 225 1,588 768 185 584 410 3,760

Transfer in/(out) – – 365 – – – (365) –

Disposals – (419) (46) (899) (126) (324) (37) (1,851)

At 31.7.2011 and 1.8.2011 7,476 2,296 13,325 1,582 1,569 3,432 275 29,955

Currency realignment (20) (2) (142) 1 – 3 10 (150)

Additions – 168 917 21 50 314 548 2,018

Transfer out* – – – – – – (525) (525)

Disposals – (359) (256) (91) (46) (126) – (878)

At 31.7.2012 7,456 2,103 13,844 1,513 1,573 3,623 308 30,420

Accumulated depreciation and impairment loss

At 1.8.2010 4,853 2,370 9,613 1,604 1,304 2,921 – 22,665

Currency realignment (146) (68) (803) (18) (25) (40) – (1,100)

Charge for the year 385 77 681 205 67 263 – 1,678

Disposals – (383) (5) (899) (110) (319) – (1,716)

At 31.7.2011 and 1.8.2011 5,092 1,996 9,486 892 1,236 2,825 – 21,527

Currency realignment (25) (5) (130) 2 (3) (3) – (164)

Charge for the year 386 95 1,278 182 59 351 – 2,351

Disposals – (354) (205) (91) (39) (123) – (812)

At 31.7.2012 5,453 1,732 10,429 985 1,253 3,050 – 22,902

Net book value

At 31.7.2012 2,003 371 3,415 528 320 573 308 7,518

At 31.7.2011 2,384 300 3,839 690 333 607 275 8,428


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

Renovation$’000

Motor vehicles$’000

Office equipment,

furniture and fittings

$’000Computer

$’000Total$’000

Company

Cost

At 1.8.2010 11 952 46 1,070 2,079

Additions 36 768 83 223 1,110

Disposals – (861) (4) (143) (1,008)

At 31.7.2011 and 1.8.2011 47 859 125 1,150 2,181

Additions – – 2 153 155

Disposals – (91) – – (91)

At 31.7.2012 47 768 127 1,303 2,245

Accumulated depreciation

At 1.8.2010 11 940 31 992 1,974

Charge for the year – 139 4 67 210

Disposals – (861) (4) (143) (1,008)

At 31.7.2011 and 1.8.2011 11 218 31 916 1,176

Charge for the year 7 154 11 132 304

Disposals – (91) – – (91)

At 31.7.2012 18 281 42 1,048 1,389

Net book value

At 31.7.2012 29 487 85 255 856

At 31.7.2011 36 641 94 234 1,005

Net book value of assets held under finance leases:

Note

Group Company

2012$’000

2011$’000

2012$’000

2011$’000

Motor vehicles 514 682 487 641

Computer 223 179 223 179

Plant, machinery and test equipment 496 352 – –

21 1,233 1,213 710 820

During the year, the Group and the Company acquired assets of $390,000 (2011: $1,439,000) and$152,000(2011:$960,000)respectivelybymeansoffinanceleases.Thecashoutflowonacquisitionofassetsamountedto$1,628,000(2011:$2,321,000)and$3,000(2011:$150,000)fortheGroupandtheCompany respectively.

Leased assets are pledged as security for the related finance lease liabilities, as disclosed in Note 21.


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11. Investment in subsidiaries

Company

2012$’000

2011$’000

Unquotedshares,atcost 23,311 23,311

Allowance for impairment (8,918) (8,918)

14,393 14,393

The subsidiaries at 31 July 2012 are:

Name of company(Country of incorporation)

Principal activities(Place of business)

Cost of investment

Percentage of equity held by

the Group

2012$’000

2011$’000

2012%

2011%

Held by the Company:

* KEST Systems & Service Ltd (Taiwan)

Provision of burn-in services (Taiwan)

1,970 1,970 100 100

δ KES (USA), Inc.(USA)

Investment holding(USA)

7,421 7,421 100 100

Kestronics (M) Sdn. Bhd.(Malaysia)

Distribution of high- technology electronic equipmentandmaterials (Malaysia)

1,500 1,500 100 100

Kestronics (S) Pte Ltd (Singapore)

Distribution of high- technology electronic equipmentandmaterials(Singapore)

4,880 4,880 100 100

KES Systems & Service (1993) Pte Ltd(Singapore)

Provision of burn-in services and manufacturing of burn-inequipment(Singapore)

5,700 5,700 100 100


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11. Investment in subsidiaries (cont’d)

Name of company (Country of incorporation)


Cost of investment


the Group

2012$’000

2011$’000

2012%

2011%

+ KestronicsPhilippines, Inc. (Philippines)

Distribution of high- technology electronic equipmentandmaterials (Philippines)

309 309 100 100

+ KES Systems & Service (Shanghai) Co., Ltd (China)

Provision of burn-in services and burn-in support services (China)

1,439 1,439 100 100

^ Kestronics (Thailand) Co., Ltd (Thailand)

Import and distribution of engines and electronicequipment(Thailand)

92 92 49# 49#

23,311 23,311

Held by subsidiaries:

δ KES Systems, Inc. (USA)

Research and development in burn-in and test related activities and distribution of electronicequipment(USA)

– – 100 100

δ KESU Systems & Service, Inc. (USA)

Provision of burn-in services (USA)

– – 100 100

+ KES Systems & Service Costa Rica, Sociedad Anonima (Costa Rica)

Provision of burn-in support services(Costa Rica)

– – 100 100

– –

Audited by Ernst & Young LLP, Singapore Audited by Ernst & Young, Malaysia Audited by Ernst & Young, Thailand AuditedbyPricewaterhouseCoopers,Taiwan.SGXListingRule716iscompliedwith. NotmaterialtotheGroupandnotrequiredtobedisclosedwithSGXListingRule717. Thisrepresentsthe legal interestsoftheGroupinKestronics (Thailand)Co.,Ltd. Kestronics

(Thailand) Co., Ltd is considered a subsidiary of Sunright Limited as the Company has effective control over the Board of Directors.

δ AuditedforthepurposeofGroupconsolidation


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12. Investment in associates

Group Company

2012$’000

2011$’000

2012$’000

2011$’000

Quoted shares, at cost 5,578 5,578 5,578 5,578

Unquotedshares,atcost 307 307 307 307

Goodwillonconsolidationwrittenoff (509) (509) – –

5,376 5,376 5,885 5,885

Shareofpost-acquisitionreserves:-

Share of profits, net of dividends 53,344 51,330 – –

Asset revaluation reserve 1,696 1,696 – –

Foreign currency translation reserve 495 (54) – –

Capital reserve 286 286 – –

Currency realignment (7,286) (6,163) – –

48,535 47,095 – –

53,911 52,471 5,885 5,885

Fair value of investment in associates for which there is publishedpricequotation 15,811 18,017 15,811 18,017

The associates at 31 July 2012 are:



Cost of investment


the Group

2012$’000

2011$’000

2012%

2011%

Held by the Company:

KESM Industries Berhad (Malaysia)

Provision of semiconductor burn-in services (Malaysia)

5,578 5,578 48 48

@ KESM Test (M) Sdn. Bhd. (Malaysia)

Provision of semiconductor testing services (Malaysia)

307 307 66 66


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12. Investment in associates (cont’d)



Cost of investment


the Group

2012$’000

2011$’000

2012%

2011%

Held by associates:

KESP Sdn. Bhd.(Malaysia)

Provision of semiconductor burn-in services and electronic manufacturing services(Malaysia)

– – 48 48

δ KESM Industries(Tianjin) Co., Ltd(China)

Provision of semiconductor burn-in and testing services(China)

– – 48 48

5,885 5,885

The summarised financial information of the associates, not adjusted for the proportion of ownership interestheldbytheGroupareasfollows:

2012$’000

2011$’000

Assets and liabilities

Total assets 147,409 151,962

Total liabilities (45,194) (51,215)

Results:

Revenue 96,363 103,538

Profit for the year 3,003 6,960

Audited by Ernst & Young, Malaysiaδ AuditedforthepurposeofGroupconsolidation@ Sunright Limited holds a direct interest of 35% (2011: 35%). The remaining interest is indirectly held

by an associate.


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13. Loans to/(from) subsidiaries

Company

2012$’000

2011$’000

Loans to subsidiaries 52,532 50,614

Less: Allowance for impairment (52,439) (50,525)

93 89

Loans from subsidiaries (6,291) (9,514)

Movement in allowance account is as follows:

Balance at beginning of year 50,525 48,535

Charged to profit or loss 1,905 2,022

Currency realignment 9 (32)

Balance at end of year 52,439 50,525

Loans to subsidiaries bear interest rates ranging from 2.0% to 9.5% (2011: 4.4% to 9.5%) per annum, are unsecured and not likely to be repaid in the foreseeable future.

The net carrying amounts of loans to subsidiaries are denominated in United States Dollar.

Loans from subsidiaries bear interest rates at 5.75% (2011: 4.5% to 6.6%) per annum, are unsecured and are repayable in cash after 5 years.

During the year, an impairment loss of $1,905,000 (2011: $2,022,000) was recognised in the profit or lossoftheCompanysubsequenttoadebtrecoveryassessmentperformedonloanstosubsidiariesas at 31 July 2012.

14. Loans to associates

Loans to associates are unsecured, bear interest rate of 8.5% (2011: 8.5%) per annum and are repayable in cash after 5 years.

The carrying amounts of loans to associates are denominated in Malaysian Ringgit.

15. Investment securities

Group and Company

2012$’000

2011$’000

Quotedequityinvestments 358 315


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16. Inventories

Group

2012$’000

2011$’000

Raw materials 1,214 2,299

Work-in-progress 2,027 1,789

Finished goods 3,698 4,095

Total inventories at lower of cost and net realisable value 6,939 8,183

Duringthefinancialyear,theGroupwrotedown$332,000(2011:$492,000)ofinventorieswhichwererecognised as other operating expenses in the profit or loss.

17. Trade and other receivables

Group Company

Note 2012$’000

2011$’000

2012$’000

2011$’000

Trade and other receivables:

- Trade receivables 14,493 10,707 – –

- Sundry deposits 360 361 – –

- Sundry receivables 583 440 11 27

- Derivative financial instruments 26(b) 4 18 – –

- Amounts due from subsidiaries, trade – – 4,876 7,454

- Amounts due from subsidiaries, non-trade – – 3,679 4,459

- Amounts due from associates, trade 475 1,021 255 838

- Amounts due from associates, non-trade 28 37 25 36

15,943 12,584 8,846 12,814

Allowance for impairment:

- Trade receivables (672) (627) – –

- Amounts due from subsidiaries, trade – – (2,030) (147)

- Amounts due from subsidiaries, non-trade – – (1,229) (454)

15,271 11,957 5,587 12,213


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17. Trade and other receivables (cont’d)

Trade receivables

Trade receivables, including amounts due from related companies, are non-interest bearing and aregenerallyon30to120days’terms.Theyarerecognisedattheiroriginalinvoiceamountswhichrepresent their fair values on initial recognition.

Group Company

2012$’000

2011$’000

2012$’000

2011$’000

Not past due and not impaired 11,388 6,023 255 1,010

Past due but not impaired 2,908 5,078 2,846 7,135

14,296 11,101 3,101 8,145

Individually assessed

Impaired receivable (gross) 672 627 2,030 147

Less: allowance for doubtful debts (672) (627) (2,030) (147)

– – – –

Trade receivables, net 14,296 11,101 3,101 8,145

Receivables that are past due but not impaired

Trade receivables, including amounts due from related companies, which are past due but not impaired are unsecured and the analysis of their aging at the balance sheet date is as follows:

Group Company

2012$’000

2011$’000

2012$’000

2011$’000

Less than 90 days 2,443 3,847 305 1,044

91 - 180 days 357 1,069 13 1,150

> 180 days 108 162 2,528 4,941

2,908 5,078 2,846 7,135


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17. Trade and other receivables (cont’d)

Receivables that are impaired

TheGroup’sandCompany’stradereceivables,includingamountsduefromrelatedcompanies,thatare impaired at the balance sheet date and the movement of the allowance account used to record the impairment are as follows:

Group Company

2012$’000

2011$’000

2012$’000

2011$’000

At beginning of the year 627 808 147 125

Bad debts written off against allowance (12) (25) – –

Charged/(credited) to profit or loss 51 (120) 1,883 22

Currency realignment 6 (36) – –

At end of the year 672 627 2,030 147

Bad debts written off directly to profit or loss – 27 – –

Trade receivables that are individually determined to be impaired at the balance sheet date relate to debtors that have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

During the year, an impairment loss of $51,000 (2011: reversal of $120,000) was recognised in profit or loss,subsequenttoadebtrecoveryassessmentperformedontradereceivablesasat31July2012.

Related party receivables

Amounts due from subsidiaries and associates are unsecured, non-interest bearing, repayable on demand and are to be repaid in cash.

Animpairmentlossof$1,883,000(2011:$22,000)wasrecognisedintheCompany’sprofitorlosssubsequentto a debt recovery assessment performed on amounts due from subsidiaries as at 31 July 2012.

The carrying amounts of total trade and other receivables are denominated in the following currencies:

Group Company

2012$’000

2011$’000

2012$’000

2011$’000

Singapore Dollar 840 2,014 4,801 11,443

United States Dollar 10,533 5,703 786 770

Malaysian Ringgit 2,381 2,366 – –

Taiwan Dollar 816 1,068 – –

Korean Won 204 259 – –

Others 497 547 – –

15,271 11,957 5,587 12,213


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18. Cash and cash equivalents

Note

Group Company

2012$’000

2011$’000

2012$’000

2011$’000

Cash and bank balances 9,591 11,928 3,974 3,607

Fixed deposits 6,377 3,304 2,508 –

Cash and short-term deposits 15,968 15,232 6,482 3,607

Bank overdrafts 21 (265) – – –

Cashandcashequivalents 15,703 15,232 6,482 3,607

Cash and short-term deposits are denominated in the following currencies:

Group Company

2012$’000

2011$’000

2012$’000

2011$’000

Singapore Dollar 6,815 7,209 6,336 3,565


Malaysian Ringgit 1,547 1,262 – –

Korean Won 182 1,642 – –

Taiwan Dollar 1,899 1,352 – –

Others 663 779 – –

15,968 15,232 6,482 3,607

Cash at banks earns interest at a weighted average interest rate of 0.12% (2011: 0.55%) per annum. Short-term deposits are made for varying periods of between one day and three months depending on the immediatecashrequirementsoftheGroup,andearninterestsattherespectiveshort-termdepositrates.The weighted average interest rate of short-term deposits is 1.35% (2011: 1.94%) per annum.

19. Share capital

Group and Company

2012 2011

No. of shares

No. of shares

’000 $’000 ’000 $’000

Issued and fully paid ordinary shares:

Balance at beginning and end of year 122,806 35,727 122,806 35,727

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


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20. Other reserves

(a) Asset revaluation reserve

The asset revaluation reserve represents increases in the fair value of buildings of the associates, net of tax, and decreases to the extent that such decrease relates to an increase on the same assetpreviouslyrecognisedinequity.

(b) Foreign currency translation reserve

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

(c) Capital reserve

Capital reserve includes a legal reserve set up by the subsidiary incorporated in Taiwan. The regulation inTaiwan requires thesubsidiary tosetasidea legal reserveof10%of itsannualnet income (less losses of prior years, if any) before it declares any part of such net profits as dividendsand/orbonusesuntiltheaccumulatedreserveequalsthetotalpaidupsharecapital.

21. Loans and borrowings

Effective interest rate(per annum)

%Maturities

Group Company

2012$’000

2011

$’0002012$’000

2011

$’000

Current:

Obligations under finance leases - secured 2.2 – 7.5 2012-2013 511 380 236 187

Bank loans 0.4 – 2.0 2012-2013 3,030 3,293 2,946 2,851

Bank overdrafts On demand 2012-2013 265 – – –

3,806 3,673 3,182 3,038

Non-current:

Obligations under finance leases - secured 2.2 – 7.5 2013-2015 523 721 359 477

Bank loans 0.4 – 2.0 2013-2014 700 1,606 636 1,457

1,223 2,327 995 1,934

Total 5,029 6,000 4,177 4,972


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21. Loans and borrowings (cont’d)

Included in loans and borrowings are secured liabilities of $2,302,000 (2011: $3,022,000) and $1,715,000 (2011:$2,353,000)fortheGroupandtheCompanyrespectively.

Obligations under finance leases - secured

Obligations under finance leases of $1,034,000 (2011: $1,101,000) and $595,000 (2011: $664,000) for theGroupandtheCompanyrespectivelyaresecuredbyachargeovertheleasedassets(Note10).

TheGroupandtheCompanyhavefinanceleasesforcertainassets(Note10).Theseleaseshavetermsof renewal but no purchase options and escalation clauses. There are no restrictions placed upon theGroupandtheCompanybyenteringintotheseleases.Renewalsareattheoptionofthespecificentities that hold the lease. The average discount rate implicit in the leases is 5.1% (2011: 5.0%) per annum.

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:

Minimum lease

payments

Present value of

payments

Minimum lease

payments

Present value of

payments

2012$’000

2012$’000

2011$’000

2011$’000

Group

Not later than one year 553 511 430 380

Later than one year but not later than five years 545 523 764 721

Total minimum lease payments 1,098 1,034 1,194 1,101

Less: Amounts representing finance charges (64) – (93) –

Present value of minimum lease payments 1,034 1,034 1,101 1,101

Company

Not later than one year 263 236 219 187

Later than one year but not later than five years 377 359 512 477

Total minimum lease payments 640 595 731 664

Less: Amounts representing finance charges (45) – (67) –

Present value of minimum lease payments 595 595 664 664


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21. Loans and borrowings (cont’d)

Bank loans

Bankloansof$1,268,000(2011:$1,921,000)and$1,120,000(2011:$1,689,000)fortheGroupandtheCompanyrespectivelyaresecuredonthefollowingassetsofthecompanieswithintheGroupwithnetbook values of:

Group

2012$’000

2011$’000

Buildings 1,165 1,307

Plant and machinery 1,528 1,450

2,693 2,757

Bank loans for the Company are secured by plant and machinery from its subsidiaries with net book value of $1,528,000 (2011: $1,450,000).

The carrying amounts of total loans and borrowings are denominated in the following currencies:

Group Company

2012$’000

2011$’000

2012$’000

2011$’000


United States Dollar 2,030 2,419 2,030 2,060

Others 152 234 – –

5,029 6,000 4,177 4,972

22. Deferred income

Deferred income represents unrealised profits on transactions made to associates, which have been eliminated to theextentof theGroup’sequity interests fromtheGroup’sprofit inaccordancewithFinancial Reporting Standard 28 Investments in Associates. This amount will be recognised in the profit orlossoftheGroupwhenrealised.

The movement of deferred income is as follows:

Group

Note 2012$’000

2011$’000

At beginning of the year 1,468 1,463

Additions during the year 51 489

Released to profit or loss 6 (491) (484)

At end of the year 1,028 1,468


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23. Income tax

(a) Major components of income tax benefit

The major components of income tax benefit for the years ended 31 July 2012 and 2011 are:

Group

2012$’000

2011$’000

Statement of comprehensive income

Current income tax

Current income taxation 172 217

Over provision in respect of previous years (129) (361)

43 (144)

Deferred tax

Movement in temporary differences 505 611

Benefits from previously unrecognised tax credits (510) (484)

Over provision in respect of previous years 18 (51)

Tax incentives (72) (357)

(59) (281)

Withholding tax expense recognised on unremitted offshore interest income – 234

Income tax benefit recognised in the statement of comprehensive income (16) (191)


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23. Income tax (cont’d)

(b) Relationship between tax benefit and accounting (loss)/profit

The reconciliation between tax benefit and the product of accounting (loss)/profit before taxation multiplied by the applicable corporate tax rate for the years ended 31 July 2012 and 2011 is as follows:

Group

2012$’000

2011$’000

Profit before taxation 599 4,472

Less: Share of results of associates (2,267) (4,384)

Adjusted (loss)/profit before tax (1,668) 88

Tax calculated at statutory tax rate of 17% (2011: 17%) (284) 15

Adjustments:

Non-deductible expenses 1,028 3,969

Income not subject to taxation (1,367) (2,548)

Effect of different tax rates on foreign income (144) (1,634)

Effect of partial tax exemption (25) –

Tax incentives (72) (357)

Benefits from previously unrecognised tax credits (510) (484)

Deferred tax assets not recognised 1,454 1,075

Over provision in respect of previous years (111) (412)

Withholding tax expense recognised on unremitted offshore interest income – 234

Others 15 (49)

Income tax benefit recognised in the statement of comprehensive income (16) (191)


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23. Income tax (cont’d)

(c) Deferred tax

Deferred tax as at 31 July relates to the following:

Groupbalance sheet

Groupstatement of

comprehensive income

Companybalance sheet

2012$’000

2011$’000

2012$’000

2011$’000

2012$’000

2011$’000

Deferred tax liabilities

Differences in depreciation for tax purposes 28 12 16 8 28 12

Unremitted offshore interest income 4,168 4,168 – – 2,129 2,129

4,196 4,180 16 8 2,157 2,141

Deferred tax assets

Differences in depreciation for tax purposes (216) 231 (447) 47 – –

Provisions (161) (178) 12 105 – –

Tax losses – (378) 378 (60) – –

Tax incentives (380) (357) (23) (357) – –

Other deductible temporary differences (24) (32) (5) (24) – –

(781) (714) (75) (289) – –

Deferred tax expense recognised in the statement of comprehensive income (59) (281)

Unrecognised tax benefits

Atbalancesheetdate,theGrouphastaxlosses,unutilisedcapitalallowancesandothertemporarydifferences of approximately $27,212,000 (2011: $23,604,000), $290,000 (2011: $173,000) and $2,368,000 (2011: $1,576,000) respectively that are available for offset against future taxable profits of the companies in which the losses arose, for which no deferred tax asset is recognised due to uncertainty of its recoverability. The use of these tax losses is subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the companies operate.


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24. Trade and other payables

Group Company

2012$’000

2011$’000

2012$’000

2011$’000

Trade and other payables:

- Trade payables 11,671 5,572 – –

- Trust receipts 87 – – –

- Accrued operating expenses 3,413 3,648 1,344 1,750

- Sundry payables 405 750 18 163

- Amounts due to subsidiaries, non-trade – – 101 214

- Amounts due to associates, trade 20 – 6 –

- Amounts due to associates, non-trade 1 1 – –

15,597 9,971 1,469 2,127

Trade payables and sundry payables

Theseamountsarenon-interestbearingandarenormallysettledon15to180days’terms.

Trust receipts

Interest on unsecured trust receipts ranged from 2.28% to 2.30% per annum. The trust receipts have maturity period of 3 months.

Related parties payables

Amounts due to subsidiaries and associates are non-interest bearing and repayable on demand.

All related parties payables are unsecured and are to be settled in cash.

The carrying amounts of total trade and other payables are denominated in the following currencies:

Group Company

2012$’000

2011$’000

2012$’000

2011$’000



Others 1,063 1,327 – –

15,597 9,971 1,469 2,127


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25. Provisions

Group

2012$’000

2011$’000

Provision for maintenance warranties 37 37

Others 39 39

76 76

Maintenance warranties

A provision is recognised for expected warranty claims on products sold during the last one year, based on past experience of the level of repairs and returns. It is expected that most of these costs will be incurred after one year from the balance sheet date and will have been incurred within one year of the balance sheet date. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the one-year warranty period for all products sold.

During the financial year, management concluded, based on the earlier mentioned statistics and warranty claims experience that the provision exceeded the amount necessary to cover warranty claims on products sold since 2011. Accordingly, $37,000 (2011: $163,000) of the warranty provision has been reversed.

Group

2012$’000

2011$’000

At 1 August 37 163

Provided during the year 37 42

Utilised – (5)

Unutilised amounts reversed (37) (163)

At 31 July 37 37


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26. Commitments

(a) Operating lease commitments – As lessee

These leases have an average tenure of between 1 and 5 years with no renewal option or escalationclausesincludedinthecontracts.TherearenorestrictionsplacedupontheGroupbyentering into these leases.

Future minimum lease payments payable under non-cancellable operating leases as at 31 July are as follows:

Group

2012$’000

2011$’000

Not later than one year 1,048 1,154

Later than one year but not later than five years 686 1,389

1,734 2,543

(b) Derivative financial instruments

Derivative financial instruments included in the balance sheets at 31 July are as follows:

Note

Group

2012 2011

Assets$’000

Liabilities$’000

Assets$’000

Liabilities$’000

Forward currency contracts 17 4 – 18 –

As at 31 July 2012, the Group held one (2011: two) forward currency contract, with totaloutstanding notional amounts of $627,000 (2011: $741,000). The outstanding forward contract matures in 3 months (2011: 1 day to 2 months).

TheGroupdoesnotapplyhedgeaccounting.

27. Employee benefits expense

Group

2012$’000

2011$’000

Employee benefits expense (including executive directors):

Salaries and bonuses 13,413 13,577

CPF and other defined contributions 882 811

Pension costs 168 157

Other benefits 1,999 2,372

16,462 16,917


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28. Related party disclosures

(a) Sale and purchase of goods and services

In addition to those related party information disclosed elsewhere in the financial statements, thefollowingsignificanttransactionsbetweentheGroupandrelatedpartiestookplaceduringthe year at terms agreed between the parties:

Sale of goods

$’000

Management fees received

$’000

Interest income$’000

Other Income$’000

Purchase of goods

$’000

2012GroupAssociates 1,885 1,895 48 33 178

2011GroupAssociates 4,687 1,993 49 – –

(b) Compensation of key management personnel

Group

2012$’000

2011$’000

Salaries and bonuses 1,283 1,390

CPF and other defined contributions 17 15

Total compensation paid to key management personnel 1,300 1,405

Comprise amounts paid to:

- Directors of the Company 1,300 1,405

The remuneration of key management personnel are determined by the Board of Directors having regard to the performance of individuals and market trends.

29. Contingent liabilities

Guarantee

The Company has provided corporate guarantees to the banks for loans amounting to $357,000 (2011: $425,000) taken by its subsidiaries.


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30. Fair value of financial instruments

A. Fair value of financial instruments that are carried at fair value

The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy:

Note

Quoted prices

in active markets(Level 1)

$’000

Significant other

observableinputs

(Level 2)$’000

Significant unobservable

inputs(Level 3)

$’000Total$’000

Financial assets:

Held for trading investments

- Investment securities (quoted) 15 358 – – 358

Forward currency contract 26(b) – 4 – 4

At 31 July 2012 358 4 – 362

Financial assets:

Held for trading investments

- Investment securities (quoted) 15 315 – – 315

Forward currency contract 26(b) – 18 – 18

At 31 July 2011 315 18 – 333

Fair value hierarchy

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

• Level1–Quotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;

• Level2–InputsotherthanquotedpricesincludedwithinLevel1thatareobservablefortheassetorliability,eitherdirectly(i.e.,asprices)orindirectly(i.e.,derivedfromprices);and

• Level 3 – Inputs for the asset or liability that are not based on observable market data(unobservable inputs).

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


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30. Fair value of financial instruments (cont’d)

Determination of fair value

Investment securities (Note 15): Fair value is determined directly by reference to their published market bid price at the balance sheet date.

Derivatives (Note 26(b)):Forwardcurrencycontractsarevaluedusingavaluationtechniquewith market observable inputs. The most frequently applied valuation techniques includeforward pricing model, using present value calculations. The model incorporates various inputs including foreign exchange spot and forward rates as well as forward rate curves.

B. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

Current trade and other receivables, current trade and other payables, cash and cash equivalents (Note 18), loans and borrowings at floating rate (Note 21) and non-current loans to/(from) subsidiaries (Note 13)

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the balance sheet date.

C. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

The fair value of financial assets and liabilities by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value are as follows:

Group and Company

Carrying amount

Fair value

Carrying amount

Fair value

Note 2012$’000

2012$’000

2011$’000

2011$’000

Financial assets:

Loans to associates (non-current) 14 549 * 561 *

* Fair value information has not been disclosed for the Company’s loans to associatesbecause fair values cannot be measured reliably. These loans are not expected to be repaid in the foreseeable future, and it is not possible to estimate the timing of future cash flows.


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SetoutbelowisacomparisonbycategoryofcarryingamountsoftheGroup’sandCompany’sfinancialinstruments that are carried in the financial statements:

Classification of financial instruments

Loans and receivables

$’000

Fair value through profit or

loss$’000

Non-financial assets$’000

Total$’000

Group31.7.2012Assets

Property,plantandequipment – – 7,518 7,518

Investment in associates – – 53,911 53,911

Deferred tax assets – – 781 781

Loans to associates 549 – – 549

Investment securities – 358 – 358

Inventories – – 6,939 6,939

Prepayments – – 508 508

Trade and other receivables 15,267 4 – 15,271

Fixed deposits 6,377 – – 6,377

Cash and bank balances 9,591 – – 9,591

31,784 362 69,657 101,803

Liabilitiesat amortised

cost$’000

Non-financial liabilities

$’000Total$’000

31.7.2012Liabilities

Loans and borrowings 5,029 – 5,029

Long term payables – 121 121

Deferred income – 1,028 1,028

Deferred tax liabilities – 4,196 4,196

Trade and other payables 15,597 – 15,597

Provisions – 76 76

Provision for taxation – 528 528

20,626 5,949 26,575


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$’000


loss$’000


Total$’000

Group31.7.2011Assets



Deferred tax assets – – 714 714



Inventories – – 8,183 8,183


Trade and other receivables 11,939 18 – 11,957



27,732 333 70,011 98,076


cost$’000


$’000Total$’000



Long term payables – 107 107

Deferred income – 1,468 1,468



Provisions – 76 76


15,971 6,504 22,475


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$’000


loss$’000


Total$’000

Company31.7.2012Assets

Property,plantandequipment – – 856 856

Investment in subsidiaries – – 14,393 14,393


Loans to subsidiaries 93 – – 93




Trade and other receivables 5,587 – – 5,587



12,711 358 21,206 34,275


cost$’000


$’000Total$’000



Loans from subsidiaries 6,291 – 6,291




11,937 2,752 14,689


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$’000


loss$’000


Total$’000

Company31.7.2011Assets


Investment in subsidiaries – – 14,393 14,393






Trade and other receivables 12,213 – – 12,213


16,470 315 21,335 38,120


cost$’000


$’000Total$’000



Loans from subsidiaries 9,514 – 9,514




16,613 2,864 19,477


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31. Financial risk management objectives and policies

The Group’s overall risk management programme seeks to minimise potential adverse effects onfinancialperformanceoftheGroupthattheserisksmaypose.

TheGroupandtheCompanyisexposedtofinancialrisksarisingfromitsoperationsandtheuseoffinancialinstruments.Thekeyfinancialrisksincludecreditrisk,liquidityrisk,interestraterisk,foreigncurrency risk and market price risk. The Board of directors reviews and agrees policies and procedures for the management of these risks. The Audit Committee provides independent oversight to the effectiveness of the risk management process. It is, and has been, throughout the current and previous financialyear,theGroup’spolicythatnoderivativesshallbeundertakenexceptfortheuseashedginginstrumentswhereappropriateandcost-efficient.TheGroupandtheCompanydonotapplyhedgeaccounting.

ThefollowingsectionsprovidedetailsregardingtheGroup’sandCompany’sexposuretotheabove-mentioned financial risks and the objectives, policies and processes for the management of these risks.

TherehasbeennochangetotheGroup’sexposuretothesefinancialrisksorthemannerinwhichitmanages and measures the risks.

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterpartydefaultonitsobligations.TheGroup’sandtheCompany’sexposuretocreditriskarises primarily from trade and other receivables, loans to subsidiaries and associates. For other financial assets (including investment securities, cash and cash equivalents and derivatives),theGroupandtheCompanyminimisecreditriskbydealingexclusivelywithhighcreditratingcounterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurredduetoincreasedcreditriskexposure.TheGrouptradeswithrecognisedandcreditworthythirdparties.ItistheGroup’spolicythatallcustomerswhowishtotradeoncredittermsaresubjectto credit verification procedures. In addition, accounts receivables are monitored on an ongoing basiswiththeresultthattheGroup’sexposuretobaddebtsisnotsignificant.

Exposure to credit risk

Atthebalancesheetdate,theGroup’sandtheCompany’smaximumexposuretocreditriskisrepresented by:

- the carrying amount of each class of financial assets recognised in the balance sheets, includingderivativeswithpositivefairvalues;

- a nominal amount of $357,000 (2011: $425,000) relating to corporate guarantees provided bytheCompanytothebanksonthesubsidiaries’bankloans.


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31. Financial risk management objectives and policies (cont’d)

(a) Credit risk (cont’d)

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the country and industrysector profile of its trade receivables, including amounts due from associates on an on-going basis.ThecreditriskconcentrationprofileoftheGroup’stradereceivablesatthebalancesheetdate is as follows:

2012 2011

$’000 % of total $’000 % of total

Group

By country:

Singapore 700 5 1,483 14

Malaysia 5,113 36 4,584 41

China 4,902 34 1,329 12

Other Asian countries 1,163 8 2,032 18

United States 1,611 11 1,006 9

Others 807 6 667 6

14,296 100 11,101 100

By industry sectors:Burn-in, testing and electronic

manufacturing services 11,554 81 6,622 60

Distribution 2,742 19 4,479 40

14,296 100 11,101 100

At the balance sheet date, approximately:

- 79%(2011:54%)oftheGroup’stradereceivableswereduefrom5majorcustomerswhoareinthesemiconductorindustry;and

- 3% (2011:9%)of theGroup’s tradeandother receivablesweredue fromrelatedpartieswhilealmostalloftheCompany’sreceivableswerebalanceswithrelatedparties.

Financial assets that are neither past due nor impaired

Trade and other receivables, as well as loans to subsidiaries and associates that are neither past duenorimpairedarecreditworthydebtorswithgoodpaymentrecordwiththeGroup.Cashandcashequivalents, investment securitiesandderivativesareplacedwithorentered intowithreputable financial institutions or companies with high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is disclosed in Note 17.


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(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in meetingfinancial obligations due to shortage of funds.The Group’s and the Company’s exposure toliquidityriskarisesprimarilyfrommismatchesofthematuritiesoffinancialassetsandliabilities.

The Group manages liquidity risk by maintaining sufficient cash to meet normal operatingcommitments.

TheGroupassessedtheconcentrationofriskwithrespecttorefinancingitsdebtandconcludedit to be low. Access to sources of funding is sufficiently available and debt maturing within 12 months can be rolled over with existing lenders.

Analysis of financial instruments by remaining contractual maturities

Thetablebelowsummarisesthematurityprofileof theGroup’sandtheCompany’sfinancialassets and liabilities at the end of the reporting period based on contractual undiscounted repayment obligations.

Total$’000

Within 1 year$’000

Within 1 to 5 years$’000

More than 5 years$’000

Group2012Financial assets

Investment securities 358 358 – –

Trade and other receivables 15,271 15,271 – –

Cash and short term deposits 15,968 15,968 – –


Total undiscounted financial assets 32,379 31,597 – 782

Financial liabilities

Trade and other payables (15,597) (15,597) – –

Loans and borrowings (5,306) (3,982) (1,324) –

Total undiscounted financial liabilities (20,903) (19,579) (1,324) –

Total net undiscounted financial assets/(liabilities) 11,476 12,018 (1,324) 782


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(b) Liquidity risk (cont’d)

Total$’000


Within 1 to 5 years

$’000


Group2011Financial assets









Total undiscounted financial liabilities (16,441) (13,892) (2,549) –

Total net undiscounted financial assets/(liabilities) 11,862 13,612 (2,549) 799

Total$’000


Within 1 to 5 years

$’000


Company2012Financial assets










Loans from subsidiaries (7,607) – – (7,607)

Total undiscounted financial liabilities (13,359) (4,725) (1,027) (7,607)

Total net undiscounted financial assets/(liabilities) (30) 7,702 (1,027) (6,705)


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(b) Liquidity risk (cont’d)

Total$’000


Within 1 to 5 years$’000


Company2011Financial assets










Loans from subsidiaries (10,960) – – (10,960)

Total undiscounted financial liabilities (18,264) (5,308) (1,996) (10,960)

Total net undiscounted financial assets/(liabilities) (1,215) 10,827 (1,996) (10,046)

(c) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and theCompany’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketinterestrates.TheGroup’sandtheCompany’sexposuretointerestraterisksarisesprimarilyfromtheirloansandborrowings.TheGroup’spolicyistoobtainthemostfavourableinterestratesavailablewithoutincreasing its foreign currency exposure.

Surplus funds are placed with reputable licensed banks.

Sensitivity analysis for interest rate risk

At the balance sheet date, if interest rates had been 100 (2011: 100) basis points higher/lower withallothervariablesheldconstant,theGroup’sandCompany’sprofitnetoftaxwouldhavebeen $36,000 (2011: $43,000) and $33,000 (2011: $37,000) lower/higher respectively, arising mainly as a result of higher/lower interest expense on floating rate loans and borrowings.


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(d) Foreign currency risk

TheforeignexchangeriskoftheGrouparisesfromsubsidiariesoperatinginforeigncountries,which generate revenue and incur costs denominated in foreign currencies. The foreign currency exposure is mainly United States dollars (USD).

The Group and the Company also hold cash and cash equivalents denominated in foreigncurrencies (Note 18) for working capital purposes.

TheGroupisalsoexposedtocurrencytranslationriskarisingfromitsnetinvestmentsinforeignoperations, namely Malaysia, United States, China, Taiwan, Philippines and Korea.

Sensitivity analysis for foreign currency risk

The following tabledemonstrates the increase/(decrease) in theGroup’sand theCompany’sprofitnetoftaxtoareasonablypossiblechangeintheUSDexchangerates(againstSGD),withall other variables held constant:

Group Company

2012$’000

2011$’000

2012$’000

2011$’000

USD - strengthened 1% (2011: 1%) +44 +15 -8 -10

USD - weakened 1% (2011: 1%) -44 -15 +8 +10

(e) Market price risk

Market price risk is the risk that the fair value or future cash flows of the Group’s and theCompany’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketprices(otherthaninterestorexchangerates).TheGroupandCompanyareexposedtoequitypriceriskarisingfromits investment inquotedequity instruments.TheseinstrumentsarequotedontheSGX-ST inSingapore,andareclassifiedasheld for trading.TheGroupdoesnothaveexposuretocommodity price risk.

TheGroup’sobjectiveistomanageinvestmentreturnsandequitypriceriskbymainlyinvestingin companies operating in Singapore which are publicly traded.

At thebalancesheetdate, if thesharepriceof thequotedequity instrumentshadbeen5%(2011:5%)higher/lowerwithallothervariablesheldconstant,theGroup’sprofitnetoftaxwouldhave been $15,000 (2011: $13,000) higher/lower, arising as a result of higher/lower fair value gain on held for trading investment securities.


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32. Capital management

TheprimaryobjectiveoftheGroup’scapitalmanagementistoensurethatitmaintainsastrongcreditrating and healthy capital ratios in order to support its business and maximise shareholder value.

TheGroupmanagesitscapitalstructureandmakesadjustmentstoit,inlightofchangesineconomicconditions.Tomaintainoradjust thecapitalstructure, theGroupmayadjust thedividendpaymentto shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 July 2012 and 31 July 2011.

TheGroupwillcontinuetobeguidedbyprudentfinancialpoliciesofwhichgearingisanimportantaspect.

Group

2012$’000

2011$’000

Total loans and borrowings (total debt) 5,029 6,000

Less: Cash and deposits (15,968) (15,232)

Net cash (10,939) (9,232)

TotalequityattributabletoownersoftheCompany 75,228 75,601

Capital and net cash 64,289 66,369

Atthereportingdate,theGroup’scashanddepositsexceeditsloansandborrowings.

33. Segment information

Formanagementpurposes,theGroupisorganisedintobusinessunitsbasedontheirproductsandservices, and has the following reportable business segments:

(a) Burn-in, testing and electronic manufacturing services segment is in the business of manufacturing burn-inequipment,assemblyofelectronicandelectricalcomponents,provisionofburn-inservices and research and development of burn-in and test related activities. This reportable segment has been formed by aggregating the burn-in and test related activities and assembly activities, which are regarded by management to exhibit similar economic characteristics.

(b) Distribution segment is in the business of trading in and distribution of high-technology electronic products.

(c) OtherssegmentinvolvesGroup-levelcorporateservices,treasuryfunctionsandinvestmentsin marketable securities, and consolidation adjustments which are not directly attributable to

particular business segment above.

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.


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33. Segment information (cont’d)

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which in certain respects, as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Group financing(including finance costs) and income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segments are at terms agreed between the related parties, in a manner similar to transactions with third parties.

Burn-in, testing and electronic

manu-facturing services

$’000Distribution

$’000Others$’000

Eliminations$’000

Consolidated$’000

2012Revenue:

External customers 42,395 12,882 – – 55,277

Inter-segment 2,095 426 – (2,521) –

Total revenue 44,490 13,308 – (2,521) 55,277

Results:

Segment profit/(loss) (1,375) (395) 365 (164) (1,569)

Interest income 128

Finance cost (227)

Share of results of associates 2,267 – – – 2,267

Profit before taxation 599

Income tax benefit 16

Profit for the year 615

Other information

Depreciation expenses 2,021 82 304 (56) 2,351

Additions to property, plantandequipment 1,817 46 155 – 2,018


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Burn-in, testing and electronic

manu-facturing services

$’000Distribution

$’000Others$’000

Eliminations$’000

Consolidated$’000

2011Revenue:

External customers 42,897 18,499 – – 61,396

Inter-segment 3,617 323 – (3,940) –

Total revenue 46,514 18,822 – (3,940) 61,396

Results:

Segment profit/(loss) 331 (42) 615 (672) 232

Interest income 100

Finance cost (244)

Share of results of associates 4,384 – – – 4,384

Profit before taxation 4,472

Income tax benefit 191

Profit for the year 4,663

Other information

Depreciation expenses 1,934 121 210 (587) 1,678

Additions to property, plantandequipment 2,744 51 1,110 (145) 3,760


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Geographical information

Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:

Revenue Non-current assets *

2012$’000

2011$’000

2012$’000

2011$’000

Singapore 2,933 6,451 58,689 57,692Malaysia 20,299 22,187 116 147Other Asian countries** 19,032 17,393 3,171 3,185United States 9,266 11,055 – 435Others 3,747 4,310 2 1

55,277 61,396 61,978 61,460

* Non-currentassetsconsistofproperty,plantandequipment,investmentinassociatesandloansto associates.

** Classified under “Other Asian countries” are Taiwan, Hong Kong, China, Korea, Philippines,

Thailand, Japan and Vietnam.

Information about major customers

The Group’s customer base includes 2 (2011: 2) customers from burn-in, testing and electronicmanufacturingservicesegment,withwhomtransactionshaveexceeded10%oftheGroup’srevenue.In the financial year 2012, revenue generated from these customers amounted to approximately $31 million (2011: $29 million).

34. Dividends

Group and Company

2012$’000

2011$’000

Declared and paid during the year:

Dividends on ordinary sharesFirst and final tax exempt (one-tier) dividend of 0.2 cents (2011: 0.2 cents) per share 246 246

Proposed but not recognised as a liability as at 31 July:

Dividendsonordinaryshares,subjecttoshareholders’approvalattheAGM:

- First and final tax exempt (one-tier) dividend of 0.2 cents (2011: 0.2 cents) per share 246 246

35. Authorisation of financial statements for issue

The financial statements of Sunright Limited and subsidiaries for the year ended 31 July 2012 were approved in accordance with a resolution of the directors on 24 September 2012.


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Class of shares : Ordinary share

Voting rights : 1 vote per ordinary share

ANALYSIS BY SIZE OF HOLDINGS

Size of ShareholdingsNumber of

shareholders %Number of

Shares %

1 – 999 10 0.25 2,580 0.00

1,000 – 10,000 3,496 88.71 11,574,166 9.42

10,001 – 1,000,000 427 10.84 24,236,188 19.74

1,000,001 and above 8 0.20 86,993,066 70.84

Total 3,941 100.00 122,806,000 100.00

SUBSTANTIAL SHAREHOLDER (as recorded in the Register of Substantial Shareholders)

Name of Shareholder Number of Shares %

Samuel Lim Syn Soo 67,466,666 54.94

TWENTY LARGEST SHAREHOLDERS

Name of Shareholders Number of Shares %

1. Samuel Lim Syn Soo 53,466,666 43.54

2. Raffles Nominees (Pte) Ltd 14,619,000 11.90

3. United Overseas Bank Nominees Pte Ltd 5,632,000 4.59

4. DBS Nominees Pte Ltd 4,353,000 3.54

5. Ang Ah Beng 3,429,000 2.79

6. OCBC Nominees Singapore Pte Ltd 2,263,400 1.84

7. Kenneth Tan Teoh Khoon 2,130,000 1.73

8. GohKokWee 1,100,000 0.90

9. Tan Citi Time Pte Ltd 851,000 0.69

10. Tay Lang Cheng 652,000 0.53

11. Wee Joo Eng Theresa Mrs Theresa Yeo 633,000 0.52

12. Lew Wing Kit 592,000 0.48

13. Rajbhushan Buddhiraju or Anshu Kumar 527,000 0.43

14. Merrill Lynch (Singapore) Pte Ltd 502,500 0.41

15. Tan Chin Wah 500,000 0.41

16. Yong Yuen Pun Michael 500,000 0.41

17. Maybank Kim Eng Sucurities Pte Ltd 490,000 0.40

18. Wirtz Jochen 457,000 0.37

19. Chan Siew Kit @ Chan Siew Kit Philip 455,000 0.37

20. Philip Securities Pte Ltd 437,000 0.36

Total 93,589,566 76.21


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DIRECTORS’ INTEREST AS AT 21 AUGUST 2012

Number of Shares Held

Name of Directors Direct Indirect

Samuel Lim Syn Soo 67,466,666 -

Kenneth Tan Teoh Khoon 2,130,000 -

Lim Mee Ing - 67,466,666 *

Francis Lee Choon Hui - -

Timothy Brooks Smith - -

* Deemed interest by virtue of her being the spouse of Mr. Samuel Lim Syn Soo.

FREE FLOAT

As at 1st October 2012, approximately 43.3% of the issued share capital of the Company were held in the hands of the public. Accordingly, the Company has complied with Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited.


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AS ORDINARY BUSINESS

1. ToreceiveandadopttheDirectors’ReportandAuditedFinancialStatementsforthefinancialyearended31July2012andtheAuditors’Reportthereon.

2. To declare a first and final tax-exempt (one-tier) dividend of 0.2 cents per ordinary share for the year ended 31 July 2012.

3. To re-elect the following Directors who retire by rotation pursuant to Article 87 of the Company’sArticlesofAssociation:-

(a) Ms Lim Mee Ing (Non-Independent Member of Audit Committee) (b) Mr Kenneth Tan Teoh Khoon

4. ToapprovethepaymentofDirectors’feesofS$125,000(2011:S$125,000).

5. To re-appoint Messrs Ernst & Young LLP as Auditors of the Company and to authorise

the Directors to fix their remuneration.

6. TotransactanyotherbusinesswhichmaybeproperlytransactedatanAnnualGeneralMeeting.

AS SPECIAL BUSINESS

7. To consider and, if thought fit, to pass, with or without amendments, the following Resolution as Ordinary Resolution: -

7.1 Ordinary Resolution No. 1

Authority to issue shares by Company pursuant to Section 161 of the Companies Act, Chapter 50 of Singapore

“THAT pursuant to Section 161 of the Companies Act, Chapter 50 of Singapore, authority be and is hereby given to the Directors of the Company to issue: -

(a) sharesintheCompany(whetherbywayofrights,bonusorotherwise); (b) convertiblesecurities; (c) additional convertible securities arising from adjustments made to the number of

convertible securities previously issued in the event of rights, bonus or capitalisation issues;or

(d) shares arising from the conversion of convertible securities,

NOTICEISHEREBYGIVENthatthe34thAnnualGeneralMeetingoftheCompanywillbeheldatRoom701,Level 7, No. 1 Marina Boulevard, NTUC Centre, Singapore 018989 on Tuesday, 20 November 2012 at 9:30 a.m. for the following purposes: -

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

Resolution 7


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NOTICE OF BOOKS CLOSURE

NOTICEISHEREBYGIVENthattheShareTransferBookandRegisterofMembersoftheCompanywillbeclosedon 29 November 2012 for the preparation of dividend warrants.

RegistrabletransfersreceivedbytheCompany’sRegistrars,BoardroomCorporate&AdvisoryServicesPte.Ltd.at 50 Raffles Place #32-01, Singapore Land Tower, Singapore 048623 up to 5:00 pm on 28 November 2012 will be registered before entitlements to the proposed first and final tax-exempt (one-tier) dividend are determined. Members whose securities accounts with The Central Depository (Pte) Limited are credited with shares at 5:00 pm on 28 November 2012 will be entitled to the proposed first and final tax-exempt (one-tier) dividend.

Payment of the first and final tax-exempt (one-tier) dividend, if approved by members at the 34th Annual GeneralMeeting,willbemadeon14December2012.

By Order of the BoardADELINE LIM KIM SWANCompany Secretary

29 October 2012

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

(i) the aggregate number of shares and convertible securities that may be issued, shall be not more than 50% of the issued shares in the capital of the Company, as at the datethegeneralmandateispassed;

(ii) the aggregate number of shares and convertible securities to be issued, other than

on a pro-rata basis to existing shareholders, shall be not more than 20% of the issued shares in the capital of the Company as at the date the general mandate is passed;

(iii) for the purpose of determining the aggregate number of shares that may be issued

under sub-paragraphs (i) and (ii) above, the percentage of issued shares shall be calculated based on the total number of issued shares in the capital of the Company as at the date the general mandate is passed, after adjusting for new shares arising from the conversion or exercise of any convertible securities or share options which are outstanding or subsisting, as at the date the general mandate is passed and any subsequentconsolidationorsubdivisionoftheCompany’sshares;and

(iv) unless earlier revoked or varied by the Company in general meeting, such authority

shallcontinueinforceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompanyorthedatebywhichthenextAnnualGeneralMeetingoftheCompanyisrequiredbylawtobeheld,whicheveristheearlier.”


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STATEMENT PURSUANT TO ARTICLE 57(3) OF THE ARTICLES OF ASSOCIATION OF THE COMPANY:

Resolution 7istoempowertheDirectorsfromthedateofAnnualGeneralMeetinguntilthedateofthenextAnnualGeneralMeetingtoallotandissuefurthersharesandconvertiblesecuritiesintheCompany.The number of shares and convertible securities that the Directors may allot and issue under this Resolution would not exceed fifty percent (50%) of the issued shares in the capital of the Company at the time of the passing of this resolution. For issue of shares and convertible securities other than on a pro-rata basis to all shareholders, the aggregate number of shares and convertible securities to be issued shall not exceed twenty percent (20%) of the issued shares in the capital of the Company.

The percentage of issued shares is based on the issued shares in the capital of the Company after adjusting for (a) new shares arising from the conversion or exercise of convertible securities or share options which areoutstandingorsubsistingatthetimethisproposedOrdinaryResolutionispassedand(b)anysubsequentconsolidation or subdivision of shares.

Notes:

AmemberoftheCompanyentitledtoattendandvoteattheAnnualGeneralMeetingisentitledtoappointnotmore than two proxies to attend and vote on his/her behalf. Such proxy need not be a member of the Company.

The instrument appointing a proxy must be deposited at the Registered Office of the Company at Block 1093 Lower Delta Road #02-01/08, Tiong Bahru Industrial Estate, Singapore 169204, not less than 48 hours before the time set for holding the meeting.


I / We ____________________________________________________________________________ (Full Name in Block Letters)

NRIC/Passport No.: ________________________________ of _____________________________________________________

_______________________________________________________________________________________________ (Address)

being a member/members of Sunright Limited, hereby appoint

Name Address

NRIC /Passport

No.

Proportion ofShareholdings

(%)

and / or (delete as appropriate)

Name Address

NRIC /Passport

No.

Proportion ofShareholdings

(%)

or failing him/her, the Chairman of the Meeting, as my/our proxy/proxies to attend and to vote for me/us on my/our behalf,andifnecessary,todemandapoll,atthe34thAnnualGeneralMeetingoftheCompanytobeheldatRoom701,Level 7, No. 1 Marina Boulevard, NTUC Centre, Singapore 018989 on Tuesday, 20 November 2012 at 9.30 a.m. and at any adjournment thereof.

I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the meeting as indicated hereunder. If no specific direction as to voting is given or in the event of any item arising not summarized below, my/our proxy/proxies may vote or abstain from voting at his/her discretion.

No. Resolutions

To be used on a show of hands

To be used in the event of a poll

For* Against*

No. of Votes For**

No. of Votes

Against**

ORDINARY BUSINESS: -

1. AdoptionofDirectors’Report,AuditedFinancialStatementsandAuditors’Report

2. Declaration of Dividend

3. Re-election of Ms Lim Mee Ing as Director

4. Re-election of Mr Kenneth Tan Teoh Khoon as Director

5. ApprovalofDirectors’fees

6. Re-appointment of Auditors

SPECIAL BUSINESS: -

7. Approval to issue shares pursuant to Section 161 of the Companies Act, Chapter 50 of Singapore

* Pleaseindicateyourvote“For”or“Against”withan“X”withintheboxprovided.

** Ifyouwishtoexerciseallyourvotes“For”or“Against”,pleaseindicatewithan“X”withintheboxprovided.Alternatively, please indicate the number of votes as appropriate.

Dated this ___________ day ___________ 2012

Total Number of Shares Held

IMPORTANT: PLEASE READ NOTES OVERLEAFProx

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* IMPORTANT

ForinvestorswhohaveusedtheirCPFmoniestobuySunrightLimited’sshares,theAnnualReportisforwardedtothemattherequestoftheirCPFApprovedNomineesand is sent solely FOR INFORMATION ONLY.

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

CPFinvestorswhowishtoattendtheAnnualGeneralMeetingasobserversmustsubmittheirrequeststhroughtheirrespectiveCPFApprovedNomineessothattheirCPFApproved Nominees may register, within the time frame specified, with the Company. Any voting instructions must also be submitted to their CPF Approved Nominees within thetimeframespecifiedtoenablethemtovoteontheirbehalf.(PleaserefertoNoteNo.11onthereversesideofthisformontherequireddetails.)

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Signature(s)/Common Seal of member(s)

Notes :

1. A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

2. Where a member appoints more than one proxy, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy. If no such proportion or number is specified, the first named proxy shall be deemed as representing 100% of the shareholding and the second proxy shall be deemed as an alternate to the first named.

3. A member should insert the total number of shares held. If the member has shares entered against his/her name in the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50 of Singapore), he/she should insert that number of shares. If the member has shares registered in his/her name in the Register of Members of the Company, he/she should insert that number of shares. If the member has shares entered against his/her name in the Depository Register and registered in his/her name in the Register of Members, he/she should insert the aggregate number of shares. If no number is inserted, the instrument appointing a proxy or proxies will be deemed to relate to all shares held by the member.

4. TheinstrumentappointingaproxyorproxiesmustbedepositedattheCompany’sregisteredofficeatBlock1093 Lower Delta Road #02-01/08, Tiong Bahru Industrial Estate, Singapore 169204 not less than 48 hours before the time set for the Meeting.

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

6. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.

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

8. In the case of joint holders of shares, any one of such persons may vote, but if more than one of such persons be present at the Meeting, the person whose name stands first on the Register of Members or (as the case may be) in the Depository Register shall alone be entitled to vote.

9. Any alteration made to this form of proxy should be initialled by the person who signs it.

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

11. CPFApprovedNomineesactingontherequestoftheCPFinvestorswhowishtoattendtheAnnualGeneralMeetingasobserversarerequestedtosubmitinwriting,alistwithdetailsoftheCPFinvestors’names,NRIC/Passport numbers, addresses and number of shares held. The list, signed by an authorized signatory oftheCPFApprovedNominee,shouldreachtheCompany’sregisteredofficeatBlock1093LowerDeltaRoad #02-01/08, Tiong Bahru Industrial Estate, Singapore 169204 not less than 48 hours before the time set for the Meeting.

SUNRIGHT LIMITED1093 Lower Delta Road #02-01/08Tiong Bahru Industrial Estate Singapore 169204Tel : (65) 6272 5842Fax : (65) 6276 8426

Documents

ANNUAL REPORT 2012 - sunright.com · focus in executing our strategy. We have defined our target markets in working closely with our customers. Our experienced management team is