WESTECH'02 120403 5 - listed companyweh.listedcompany.com/misc/ar2002.pdf · WesTech Electronics is a distributor and manufacturers’ representative of a comprehensive range of electronics

WesTech Electronics Limited 27

WESTECH ELECTRONICS LIMITEDWESTECH ELECTRONICS LIMITED

A N N U A L R E P O R T 2 0 0 2A N N U A L R E P O R T 2 0 0 2

| K E E P I N G | I N | F O C U S || K E E P I N G | I N | F O C U S |

28


Dear fellow investor,

This is WesTech’s first annual report to you.

The theme “Keeping in Focus” captures the commitment

and determination of the management and staff of WesTech

to grow our business and deliver value to the stakeholders

of this Company, despite a difficult operating environment.

In 2002, we worked hard to build a strong foundation for

value growth and made significant progress on several

important fronts. I am confident that the actions we have

taken will help us weather this period of economic weakness

and allow us to take advantage of more prosperous times.

Thank you for entrusting us with your investment and confidence.

Jeffrey Tan Siak LianChairman & CEO

2

to our principals...to our principals...“Our commitment is to build an effective partnership that grows their business.”


to our customers...to our customers...“Our commitment is to understand their needs and exceedtheir expectations.”

4

to our employees...to our employees...“Our commitment is to value our employees by embracingcreativity and rewarding excellence.”


to our shareholders...to our shareholders...“Our commitment is to focus on growing our business tomaximize shareholder value.”

6

CORPORATE PROFILE 7 OUR VALUE PROPOSITION 8 OUR ASIA PACIFIC NETWORK 9 CHAIRMAN & CEO’S MESSAGE 10 FINANCIAL SNAPSHOT 14

PERFORMANCE BY ACTIVITIES AND MARKETS 15 YEAR IN REVIEW 16 ACHIEVEMENTS IN 2002 19 BOARD OF DIRECTORS 20 EXECUTIVE MANAGEMENT 22

MANAGEMENT ORGANISATION CHART 23 GROUP STRUCTURE CHART 24

CONTENTS


CORPORATE PROF I LE

WesTech Electronics is a distributor and manufacturers’ representative

of a comprehensive range of electronics components, systems and equipment

for a growing number of international brands.

We support our principals with value-added services such as product design,

sales and marketing, engineering support, maintenance and OEM sub-assembly.

We offer our customers an integrated network of enhanced electronics and

engineering solutions.

Our regional footprint continues to expand and now covers Singapore,

Malaysia, The Philippines, Thailand, India, the People’s Republic of China,

Hong Kong, Taiwan and Korea.

London Stock Exchange-listed ACAL plc., a value-added distributor providing

specialist design-in, sales and marketing services, became a strategic investor of

WesTech in 1995. The partnership has allowed WesTech to leverage on ACAL’s

resources, management expertise and channels to provide an international

dimension to our existing products and services.

8

OUR VALUE PROPOS IT ION

OUR CUSTOMERSOur customers look to us for innovativesolutions for their needs. Our diversifiedproduct portfolio, market expertise andservice-oriented approach have attractedmore than 350 active customers in theAsia Pacific. Our major customers include:

• Advanced Micro Devices• Alps Electric• Aztech Systems• Benchmark Electronics• Cal-Comp Electronics• Delta Electronics• Fuji Electric• Infineon Technologies• Inventec Electronics• Kaifa Technology• Komag USA• Maxtor Peripherals• Motorola Electronics• Pepperl + Fuchs• Printronix Schweiz-Gmph• SAE Magnetics• Samsung Electronics• Seagate Technology• Semitech Electronics• Sharp Roxy Electronics• Showa Denko• Teraoka Weigh-System• Toshiba• Venture Corporation• Western Digital• Wincor Nixdorf• Yokogawa Electric

WESTECHSupported by a network of 13 offices acrossthe Asia Pacific, WesTech operates as avalue-added distributor and manufacturers’representative of a wide range of electronicscomponents and systems and equipment.We also provide a comprehensive suite ofvalue-added services that complements ourcore competency in distribution, covering:

• Sales and marketing• Product design and

development• Engineering support• Logistics support• OEM sub-assembly• Maintenance support• Label printing• Electronic alarms &

security systems

OUR PRINCIPALSBacked by a proven track record in thedistribution business, WesTech is wellpositioned to be a strategic partner of leadingmanufacturers of electronics componentsand systems and equipment who are keento tap into Asia’s growth potential. Currently,our principals are from Asia, Europe andthe USA. Our major principals include:

• Agere Systems• Anla Technology• C&D Technologies• Candela Instruments• Catalyst Semiconductor• Emblaze Semiconductor• Guzik Technical Enterprises• JVC• Inchang Electronics• Intime Corp• Integral Solutions• Kemet Electronics• Linear Technology• Nemic-Lambda• Profec/Etal• Tai Tien Electronics• Therm-O-Disc• Thermo Noran• Tyco Electronics• Ultralife Batteries• Winbond Electronics• Zetex

8


OUR AS IA PAC I F IC NETWORK

Electronics Components DistributionWe distribute and represent a diversified range of active and passive electronicscomponents through our Asia Pacific network. Our customers span the various sectors ofthe electronics industry such as Internet access, telecommunications, multimedia as wellas industrial & consumer electronics. WesTech also offers product design and developmentservices to our key principals.

Systems and Equipment DistributionWe primarily serve the hard disk drive, semiconductor, commercial and industrial industries.To better support our principals and customers in various locations, we have established astrong service network to provide engineering support services ranging from installation,calibration, integration and testing of systems, application training to maintenance of systems.We also act as our key principals’ regional parts, repair and service centre.

Product Design and DevelopmentAs an extended arm of WesTech’s distribution business, our product development teamprovides comprehensive value-added engineering and development services as well asapplication-specific support for the products we market. We offer full turnkey solutionsto ensure product growth and continuity.

OEM Sub-assemblyOur current OEM sub-assembly business focuses on the design and manufacture of OEMsub units for the consumer electronics market. Our role relates to the design and manufactureof the sub units, as well as the supply of key components used in the units. The manufacturingprocess is out-sourced to third party contractors.

Electronics Alarm and Security Systems & Label PrintingWe supply, install and maintain access and control and security systems to the residential,commercial and industrial markets. As a value-added service to our customers, WesTechprints a variety of labels that are largely for general and commercial uses.

WesCal Hong Kong

WesCal Korea

WesTech China

WesCal TaiwanWesTech Thailand

WesTech Philippines

WesTech Singapore

WesCal Malaysia

WesTech India


10


CHA IRMAN & CEO ’S MESSAGE

The last twelve months have been challenging but eventful for WesTech. The year marked ourtransition from a privately held entity to a publicly listed company through a successful initialpublic offering. On 23 May 2002, WesTech Electronics Limited started trading on the SGXSesdaq - the culmination of 18-months of preparation, punctuated by the tragic events of11 September 2001 and a global economic slowdown that has yet to run its course.

The impact of the global recession was reflected in the Group’s 2002 financial performance.Turnover fell 21% to $97.9 million due to a decline in our electronics components distribution,systems and equipment distribution businesses as the electronics and semiconductor industriesstruggled to regain growth momentum. Against the harsh operating environment, we remained inthe black with a $1.3 million profit before tax.

However, the IPO provided us with the capital to press on with our expansion plans into theAsia Pacific and we managed to make strong progress on various fronts by staying focused onour objectives.

Regionalisation PushOur growth and experience in South Asia have placed us in an excellent position to act as ourprincipals’ link to the wider Asia Pacific market. Increasingly, as the manufacturing world shifts itsbase to Asia, we are seeing opportunities for us to collaborate with our principals to service theircustomers in this region.

In our prospectus, we pledged to invest part of the IPO net proceeds to expand our operations andrelated businesses in North Asia. By the end of 2002, our progress towards this goal was pleasing.

In November 2002, we took a majority 55% stake in WesCal Korea Limited, a joint venture firmformed with local partners in South Korea. Riding on the growth in the electronics, semiconductor,PC and disk drive industries in South Korea, we commenced operations focusing on the systemdesign integration business. We are looking at other revenue opportunities including developingthe electronics components business.

We have also taken steps to strengthen our presence in the PRC, including increasing our staffstrength in Shenzhen to service customers in the Shenzen-Dongguan-Guangzhou electronics belt.In addition, we are well advanced in our plan to establish an operation in Suzhou to service ourcustomers in the Shanghai-Wuxi-Suzhou electronics belt.

Improving Customer Service and EfficiencyWe believe efficient supply chain optimisation plays a key role in increasing our effectiveness as avalue-added distributor. As such, we have committed resources to developing our North Asianlogistics hub in Hong Kong. Hong Kong’s strategic positioning and free-trade status make it theideal gateway to the PRC and it will significantly complement our South Asian logistics hubin Singapore. Considerable investment and resources will be allocated to the North Asia logisticshub over the next two years.

11WesTech Electronics Limited

12


12

As part of our focus to improve our level of customer service and operational efficiency, a portion ofthe IPO funds was used to pay for the integration of a management information system in ourregional operations. The integrated system will provide real time information that empowers oursubsidiaries and partners to make better commercial decisions. It will also facilitate data exchangeand e-commerce projects between WesTech and our principals and customers. I am delighted toreport that the integration has been completed in the Singapore headquarters and will soon beextended to our other offices in the region.

Growth StrategyThe focus of our business strategy is to position the company for an economic upturn while securingthe business fundamentals that will deliver long-term value-based growth. We aim to promoteourselves as a strong and progressive value-added distributor in the Asia Pacific known for ourmarket expertise, resourcefulness, and service-oriented approach.

Our growth plans focus on:

• Strategic regional expansion into growth markets in South and North Asia, and Europe(the latter through our strategic partnership with ACAL);

• Positioning WesTech to benefit from the trend of large manufacturers relocating theirmanufacturing operations to Asia;

• Harnessing our core competencies to provide turnkey solutions, including building an integratedsupply chain management infrastructure; and

• Establishing strategic alliances and partnerships to meet our customers’ diverse and evolving needs.

Specific growth initiatives include:

• Growing our logistics hubs in Singapore and Hong Kong to service the South and North Asianmarkets respectively;

• Expanding our product portfolio with innovative products by actively seeking partnershipswith existing and new principals;

• Building our brand and market recognition by participating regularly in local and overseastrade fairs; and

• Providing turnkey solutions to OEM customers to support our local and overseas markets.



OutlookThe next 12 months will continue to be difficult for the electronics components distribution, systems andequipment distribution businesses. Visibility remains low and we expect the difficult market conditionsto continue in the current financial year.

Our response is to remain focused on actively expanding our operations in North Asia and India, whichwe believe to be the engines of growth in the near future.

DividendWe are committed to growing the business to maximise shareholder value. For the financial year endedDecember 31, 2002 the Board of Directors is pleased to recommend a first and final cash dividend of0.5 cent per ordinary share (less tax).

AcknowledgementsI am proud and privileged to be working with a group of dedicated and talented people who never losesight of the Company we have pledged to build.

The strength of WesTech’s management team lies in its collective experience and wisdom. Each of oursenior managers has years of relevant professional or sales and marketing experiences in the electronicssector. I would like to thank our management and staff for their outstanding contributions. Without them,the achievements in 2002 would not have been possible.

On a personal note, I would like to thank the members of the Board of Directors for their contributionsthroughout the year. As the Chairman and CEO of a newly listed company I greatly value the experienceand wisdom of each Director.

Finally, I would like to thank our new shareholders for their confidence in the Company and its prospects.

We look forward to your continued support.

Jeffrey Tan Siak Lian

Executive Chairman & CEO


14

F INANC IAL SNAPSHOT

98 99 00 01 02

58

43 44

52

57

AVE INVENTORY TURNOVER(Days)

RETURN ON EQUITY(%)

98 99 00 01 02

3.9

21.2

62.4

22.2

0.8

NET OPERATING CASH FLOW($’000)

98 99 00 01 02

1,994

(228)

1,009830

(669)

SHAREHOLDERS’ CAPITAL AND RESERVES($’000)

98 99 00 01 02

25,596

19,238

14,118

5,5524,197

98 99 00 01 02

0.911.31

0.02

9.33

EARNINGS PER SHARE(Singapore cents)

4.33

PROFIT BEFORE TAX AND MINORITY INTERESTS($’000)

98 99 00 01 02

1,326

5,263

12,008

1,775

335

98 99 00 01 02

1,0051,234

33

8,815

NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS,NET OF EXTRAORDINARY ITEMS($’000)

4087

REVENUES($’000)

98 99 00 01 02

97,875

123,660127,264

60,794

30,394

Note:1 Figures for FY’98 to FY’01 are based on proforma.2 Figures for FY’02 are based on actual.


PERFORMANCE BY ACTIVITIES AND MARKETS

Profit Before Interest and Income Tax :

2002 2001

■ Electronics Component Distribution 18% 52%■ Systems and Equipment Distribution 70% 47%■ Others 12% 1%

2002 2001

■ Singapore 26% 29%■ Malaysia 45% 32%■ PRC and Hong Kong 15% 25%■ Others 14% 14%

Turnover :

2002 2001

■ Electronics Component Distribution 76% 66%■ Systems and Equipment Distribution 22% 33%■ Others 2% 1%

2002 2001

■ Singapore 39% 35%■ Malaysia 32% 25%■ PRC and Hong Kong 15% 26%■ Others 14% 14%

By Activities

By Markets

By Activities

By Markets

16

TurnoverThe Group’s turnover decreased by 21 percent from S$123.7 million in 2001 to S$97.9 millionin 2002, largely due to the slump in the electronics and semi-conductor sectors worldwide.The economic slowdown was especially felt by WesTech Electronics Limited, which saw sales dropby S$25.8 million compared to 2001.

Turnover from our electronics components distribution business declined from S$81.1 millionin 2001 to S$74.5 million in 2002 – a decrease of 8 percent. Our systems and equipment distributionrevenue declined by 48 percent from S$40.7 million in 2001 to S$21.2 million in 2002. The lowerturnover from both these businesses reflects the tough trading conditions experienced in 2002.

Revenue from other sources increased by 22 percent from S$1.8 million in 2001 to $2.2 millionin 2002.

Sales by subsidiary companies such as WesTech Industries and WesTech Systems have increased byapproximately S$0.5 million and S$0.1 million respectively. In addition, WesCal Korea, a newlyincorporated subsidiary company contributed S$0.4 million in sales to the Group.

Costs of SalesCost of sales decreased from S$108.4 million in 2001 to S$86.2 in 2002 reflecting the lower turnoveracross the Group. Overall gross profit margin remained relatively constant at around 12 percent forFY2001 and FY2002.

Operating ExpensesTotal payroll costs increased slightly due to an increase in employee numbers from 93 to 117.Administrative expenses were decreased as a result of cost cutting and prudent managementdecisions. Other operating expenses increased as a result of a rise in maintenance fees for thenew Oracle computer system. As the majority of the Group’s sales are in US dollar, the Groupsuffered an increased foreign exchange loss as a result of depreciation in the US dollar againstthe Singapore dollar.

YEAR IN REV IEW

16


ProfitabilityIn the tough market conditions the Group remained profitable posting a S$1.3 million profit before taxin 2002, down from S$5.1 million in 2001. Profit after tax and minority decreased from S$4.0 million in2001 to S$1.0 million in 2002.

Performance by Business ActivitiesIn 2002, electronics components distribution generated S$74.5 million in turnover. Systems and equipmentdistribution generated S$21.2 million in turnover and S$2.2 million came from other sources.Electronics component distribution continued to provide the bulk of the company’s revenue,accounting for 76 percent of turnover in 2002 compared to 66 percent in 2001. Turnover from systemsand equipment distribution represented 22 percent of total revenue and 2 percent came from other sources.

In terms of profit before income tax, systems and equipment distribution generated $1.4 million,which represents 70 percent of the Group’s total. Electronics component distribution generated$0.3 million or 18 percent of the Group’s total profit before income tax. Other sources contributed$0.2 million or 12 percent of the Group’s profit before income tax.

Performance by MarketsSingapore generates 39 percent of the Group’s turnover, closely followed by Malaysia, which accountedfor 32 percent. The PRC and Hong Kong contributed 15 percent while other geographical marketscontributed 14 percent of the Group’s turnover.

In terms of profit before income tax, Malaysia continues to be the most profitable market for the companygenerating 45 percent of the Group’s profits. The next largest contributor was Singapore, which accountsfor 26 percent, followed by the PRC and Hong Kong with 15 percent and other geographical marketscontributed 14 percent.

Balance SheetThe share capital of the Group increased from S$9.4 million in 2001 to S$11.2 million in 2002.Share premium also increased from S$1.0 million in 2001 to $4.3 million in 2002. During the financialyear, WesTech Electronics Limited issued 18 million ordinary shares of $0.10 each at a premium of$0.25 per share. This has resulted an increase the share capital and share premium. The increase inshare premium is partially offset by listing expenses, which were written off against the share premiumduring the financial year.

YEAR IN REV IEW

17WesTech Electronics Limited

18

YEAR IN REV IEW

Cash and bank balances improved from S$1.0 million in 2001 to S$1.5 million in 2002. The Group hasreduced its bank overdrafts from S$5.0 million in 2001 to S$1.7 million in 2002.

Fixed assets increased from S$5.9 million in 2001 to S$6.5 million in 2002. The increase is primarilydue to the acquisition of computer equipment during the financial year. This was partially offset bydepreciation charge of S$0.8 million for the year.

The level of stocks was reduced by 14 percent from S$12.7 million in 2001 to S$11.0 million in 2002.Management has been making a conscientious effort to maintain low levels of stocks to avoid exposureto the market conditions and monitoring the stock movements closely in order to identify obsoletestock items. This has resulted in reduction in overall stocks of S$1.7 million.

Trade amounts due from the associated companies comprise $1.4 million from WesCal Taiwan and$712,000 from WesTech Thailand. In prior years WesTech Electronics Limited used to trade directlywith Taiwan customers and WesCal Taiwan only earned commission. However in FY2002 WesTechElectronics Limited billed these customers through WesCal Taiwan instead.

Other creditors increased as a result of a payment to IBM Global for the purchase of the Oracle systemof $715,00. In addition the Group has an increase in deposits from customers.

Earnings Per Share and Net Tangible AssetsThe earnings per share in 2002 were 0.91 cents, based on a weighted average number of sharesadjusted for the effect of all diluted potential ordinary shares of 110,587,000 ordinary shares.This compares to earnings per share of 4.29 cents in 2001 based on a weighted average numberof ordinary shares in issue at 31 December 2001 of 94,460,000 ordinary shares.

Net asset backing per ordinary share based on existing issued share capital as at the end of the periodrose from 20.83 cents in 2001 to 22.62 cents in 2002.

18


ACH IEVEMENTS IN 2002

★ Listed on the SGX Sesdaq

★ Established WesCal Korea with local partnersin South Korea

★ Secured annual service and maintenanceagreement with SAE Magnetics in China

★ Appointed as distributor for EmblazeSemiconductor in Singapore

★ Appointed as distributor for Densei-Lambdain the PRC, Hong Kong & Korea

★ Appointed as distributor for Intime Corpin ASEAN

★ Appointed as distributor for Ultralife Batteriesin ASEAN, India, the PRC and Hong Kong

★ Completed integration of managementinformation systems in Singapore headquarters

★ Discharged the mortgage over our Kaki BukitCrescent premises

20

Mr Jeffrey Tan Siak Lian Executive Chairman and Chief Executive OfficerAs the Chairman and Chief Executive Officer, Mr Tan is responsible for driving the Company’s regionalgrowth expansion plans as well as providing strategic business direction. Prior to setting up the Companyin 1986, Mr Tan worked for Fairchild Semiconductor Ltd, a US multinational corporation in the QualityAssurance department in 1980. In 1984 he joined Kyocera (Hong Kong) Ltd, a subsidiary of the Japanesemultinational corporation Kyocera Corporation, as a Sales Engineer. He holds a diploma in Electronics& Communication engineering from the Singapore Polytechnic in 1977 and a Diploma in Marketing& Sales Management from the National Productivity Board in 1987. He was also a finalist in the11th Rotary – ASME Entrepreneur of the year Award in 1999.

Mr Tay Boon Kiat Executive DirectorMr Tay was appointed to our Board in March 1997 and has been with the company since 1995.In addition to overseeing the Group’s operations, Mr Tay also heads our Technology Division, which isinvolved in design and development of new products and OEM sub-assembly. Mr Tay started his careerin 1987 as a technical manager in Process Analytical Services Pte Ltd, where he was responsible fordesigning process systems, project management and technical training for customers for 7 years.He holds a Diploma in Electrical and Electronics Engineering from the Ngee Ann Technical College.Mr Tay is a member of the Chartered Institute of Marketing (UK) since 1989.

Mr John Arthur Hugh Curry Non-Executive DirectorMr Curry was appointed to the Board in October 1995. He is the Chairman of ACAL plc, which hefounded in 1986. He was previously joint Chief Executive from 1979 to 1986 and subsequently anon-executive director of Unitech plc, an investment holding company involved in the manufactureand distribution of electronic components, systems and controls through its subsidiaries. He is also anon-executive director of Foreign and Colonial Smaller Companies plc and The Terence ChapmanGroup plc, companies listed on London Stock Exchange. He was awarded Commander of British Empirein 1997 and he holds a Masters of Arts from Oxford University. He also holds a MBA from HarvardUniversity and is a Fellow of the Institute of Chartered Accountants of England and Wales.

Dr Ong Chit Chung Independent DirectorAppointed to the Board in April 2002, Dr Ong is Chairman of our Audit Committee. Dr Ong has experiencein both the public and private sectors, having worked in several government ministries and helddirectorships in companies engaged in the property, construction, engineering, hospitality and foodindustries. Among his previous appointments, he was President of China Development CorporationLimited and Deputy Group Managing Director of QAF Limited. He is presently the Chairman ofTEE International Limited and NASPAC Marketing Pte Ltd. Dr Ong holds a PhD. in International Historyfrom the London School of Economics of the University of London, a Masters of Arts Degree in MilitaryHistory from the Duke University of the United States of America and a Bachelor of Arts (1st ClassHonours) Degree in History from the then University of Singapore. Dr Ong is also a Member of Parliamentfor the Jurong GRC.

Dr Ho Ngiap Kum Independent DirectorDr Ho was appointed to our Board in April 2002. He was the senior manager/financial controller ofSoi Yong Industrial Pte Ltd from 1977 to 1981, and has been admitted as a local CPA practitioner sinceJanuary 1985. Dr Ho is currently the sole CPA practitioner in his own practice N K Ho & Co, and he isalso the managing director of Coastal Land Singapore Pte Ltd, an investment holding company. Mr Hoholds a MBA (Finance and Investment) from the University of Hull, U.K. Dr Ho also holds a PhD inBusiness Management from the University of South Australia.

BOARD OF D IRECTORS

20


Jeffrey Tan Siak LianExecutive Chairman and

Chief Executive Officer

John ArthurHugh Curry

Non-Executive Director

Dr Ho Ngiap KumIndependent Director

Tay Boon KiatExecutive Director

Dr Ong Chit ChungIndependent Director

22

Tan Chin HockFinancial Controller

EXECUT IVE MANAGEMENT

Jap Bun Siong, PaulVice-President

Components Division

Wang Shu-YiVice-PresidentBusiness Development

Seet Peng YamVice-President

Finance and Administration

Wong Hot YongVice-PresidentSystems & Equipment Division


Seet Peng YamVice-President

Finance &Administration

WESTECHINVESTMENT

WESTECHSYSTEMS

WESTECHINDUSTRIES

MANAGEMENT ORGAN ISAT ION CHART

Tan Siak LianExecutive Chairman & Chief Executive Officer

Tay Boon KiatVice-President

Operations

23

* Associated companies

Jap Bun Siong, PaulVice-PresidentComponents

Division

MALAYSIA

KOREA

INDIA*

THAILAND*

PHILIPPINES(Representative Office)

Wong Hot YongVice-President

Systems and EquipmentDivision

Tan Chin HockFinancialController

Wang Shu-YiVice-President

Business Development

PRC &HONG KONG

TAIWAN*

WesTech Electronics Limited

24

GROUP STRUCTURE CHART

WesCal Korea55%

WesCal Malaysia85%

WesTech Thailand*49%

WesCal Hong Kong70%

WesCal Taiwan*30%

WesTech Industries75%

WesTech India*50%

WesTech Systems51%

WesTech Investments100%

WesTech Philippines(Representative Office)

WesTech Shenzhen(Representative Office)

WesTech Suzhou+

(Representative Office)

WesTech Electronics LimitedInchang India^

25%

* Associated companies

+ Registration in progress

^ Our effective interest in InchangIndia is 25 per cent as our Companyowns 50 per cent of Inchang Indiathrough our associated companyWesTech India.

24

WesTech Electronics Limited Financial Report 2002 1

F INANC IAL REPORT 2002

2

CORPORATE GOVERNANCE 1 REPORT OF THE DIRECTORS 7 STATEMENT BY THE DIRECTORS 12AUDITOR’S REPORT 13 PROFIT AND LOSS ACCOUNTS 14 BALANCE SHEETS 15

STATEMENTS OF CHANGES IN EQUITY 17 CONSOLIDATED CASH FLOW STATEMENT 19 NOTES TO THE FINANCIAL STATEMENTS 21 SHAREHOLDERS’ STATISTICS 42

NOTICE OF ANNUAL GENERAL MEETING 44 PROXY FORM 47

C O N T E N T S


WesTech is focused on its shareholders. That is why we are committed to maintaining the highest standardsof corporate governance. In line with the Code of Corporate Governance (the Code) issued by the SGX-ST,the Board has taken a range of measures to improve the monitoring, transparency and decision-makingprocess of the Group. This statement outlines the main corporate governance practices that were in placethroughout the financial year.

1. Board Matters1.1 Role of the Board of Directors

The Board’s primary role is to protect and enhance long-term shareholder value. It sets the overallstrategy for the Group and supervises executive management. To fulfil this role, the Board is responsiblefor the overall corporate governance of the Group including setting its strategic direction, establishinggoals for management and monitoring the achievement of these goals.

1.2 Board CompositionThe Board of Directors comprises five directors two of whom are independent directors.The Directors of the Company as at the date of this statement are:

(i) Mr Jeffrey Tan Siak Lian (Executive Chairman and CEO)(ii) Mr Tay Boon Kiat (Executive Director)(iii) Mr John Arthur Hugh Curry (Non-Executive Director)(iv) Dr Ong Chit Chung (Independent Director)(v) Dr Ho Ngiap Kum (Independent Director)

1.3 Independent DirectorsThe Board of Directors has two directors who are independent members. The criteria for independenceis determined based on the definition provided in the Code of Corporate Governance issued by theCode of Corporate Committee.

The Board considers an “independent” director as one who has no relationship with the Company,its related companies or its officers that could interfere, or be reasonably perceived to interfere,with the exercise of the directors’ independent judgement of the Group’s affairs.

1.4 Chairman and CEOIt is the view of the Board that it is in the best interests of the Group to adopt a single leadershipstructure i.e. where the CEO and the Chairman of the Board is the same person, so as to ensure thatthe decision-making process of the Group would not be unnecessarily hindered.

The Group’s Executive Chairman and CEO is Mr Jeffrey Tan Siak Lian, who is responsible for theday-to-day management of the Group as well as the exercise of control over the quality, quantity andtimeliness of information flow between the Board and the management. He has played an instrumentalrole in developing the business of the Group and has also provided the Group with strong leadershipand vision.

All major decisions made by the Executive Chairman and CEO are reviewed by the Audit Committee.His performance and appointment to the Board will be reviewed periodically by the NominatingCommittee and his remuneration package will be reviewed periodically by the Remuneration Committee.Both the Nominating Committee and the Remuneration Committee comprise by a majority ofindependent directors of the Company. As such the Board believes that there are adequate safeguardsagainst an uneven concentration of power and authority in a single individual.

C O R P O R AT E G O V E R N A N C E

2


1.5 Board ProcessesTo assist in the execution of its responsibilities, the Board has established an Audit Committee,Nominating Committee and Remuneration Committee. These committees function within clearly definedterms of references and operating procedures, which are reviewed on a regular basis. The effectivenessof each committee is also constantly reviewed by the Board.

The full Board meets on a regular basis and as when necessary to address any specificsignificant matters that may arise. Since our initial public offering in May 2002, the Board has mettwo times to review the Company’s performance and direction as well as issue interim and full yearresults announcements. All the directors have attended the meetings.

1.6 Matters Requiring Board ApprovalThe Board has identified a number of areas for which the Board has direct responsibility fordecision-making. Interested Persons Transactions and the Group’s internal control procedures arealso reviewed by the Board. Major investments and funding decisions are approved by the Board.

The Board also meets to consider the following corporate matters:

• Approval of interim and year end result announcements (and quarterly results for 2004);• Approval of the Annual Reports and Accounts;• Convening of Shareholder’s Meetings• Approval of Corporate Strategies; and• Material Acquisitions and disposal of assets

1.7 Access to InformationThe Board has separate and independent access to senior management of the Company at all times.Requests for information from the Board are dealt with promptly by management. The Board is informedof all material events and transactions as and when they occur.

The company secretary attends all board meetings and is responsible to ensure that establishedprocedures and all relevant statutes and regulations which are applicable to the Company arecomplied with. The company secretary works together with the management staff of the Company toensure the Company complies with all rules and regulations that are applicable to the Company.

2. Board Committees2.1 Nominating Committee

Pursuant to the recommendations of the Code of Corporate Governance and in compliance thereof,the following persons are the members of the Nominating Committee as at the date of this report:

• Dr Ho Ngiap Kum (Chairman, Independent Director)• Dr Ong Chit Chung (Independent Director)• Mr Jeffrey Tan Siak Lian (Executive Chairman and Chief Executive Officer)

The primary function of the Nominating Committee is to determine the criteria for identifying candidatesand reviewing nominations for the appointment of directors to the Board and also to decide how theBoard’s performance may be evaluated and propose objective performance criteria for the Board’sapproval. Its duties and functions is outlined as follows:

a. to make recommendations to the Board on all board appointments and re-nomination havingregard to the director’s contribution and performance (e.g. attendance, preparedness, participation,candour and any other salient factors);

b. to ensure that all directors would be required to submit themselves for re-nomination and re-electionat regular intervals and at least once in every three years;



c. to determine annually whether a director is independent, guided by the independent guidelinescontained in the Code;

d. to decide whether a director is able to and has adequately carried out his duties as a directorof the company in particular where the director concerned has multiple board representations;

e. to decide how the Board’s performance may be evaluated and propose objectiveperformance criteria.

2.2 Audit Committee (AC)The Audit Committee comprises three directors, the majority of whom, including the Chairman,are independent. At the date of this report, the Audit Committee comprises the following members:

• Dr Ong Chit Chung (Chairman, Independent Director)• Dr Ho Ngiap Kum (Independent Director)• Mr John Arthur Hugh Curry (Non-Executive Director)

The Audit Committee met two times in the course of FY 2002. All the members of the committee haveattended the meetings. The role and function of the Audit Committee is clearly spelt out in the AuditCommittee Terms of Reference. The Audit Committee reviewed the following, where relevant, with theexecutive directors and the external auditors:

a. review with the external auditors the audit plan, their evaluation of the system of internal accountingcontrols, their audit report, their management letter and the management’s response;

b. review the interim and annual financial statements (quarterly financial statements for 2004) andbalance sheets and income statements before submission to the Board for approval, focusing inparticular, on changes in accounting policies and practices, major risk areas, significant adjustmentsresulting from the audit, the going concern statement, compliance with accounting standards aswell as compliance with any stock exchange and statutory/regulatory requirements;

c. review the internal control and procedures and ensure co-ordination between the external auditorsand the management, review the assistance given by management to the auditors and discussproblems and concerns, if any, arising from the interim and final audits, and any matters which theauditors may wish to discuss (in the absence of management where necessary);

d. review and discuss with the external auditors any suspected fraud or irregularity, or suspectedinfringement of any relevant laws, rules or regulations, which has or is likely to have a materialimpact on the Group’s operating results or financial position, and the management’s response;

e. consider the appointment or re-appointment of the external auditors, the audit fee, and mattersrelating to the resignation or dismissal of the auditors;

f. review transactions falling within the scope of the Audit Committee’s Terms of Reference, InterestedPerson Transactions and the Singapore Exchange Securities Trading Limited’s Listing Manual(“Listing Manual), in particular matters pertaining to and Acquisitions and Realisations, etc.; and

g. undertake such other reviews and projects as may be requested by the Board and will reportto the Board its findings from time to time on matters arising and requiring the attention of theAudit Committee.

4


2.2.1 Internal Controls and Internal AuditInternal ControlsThe Board acknowledges that it is responsible for the overall internal control framework,but recognizes that no cost effective internal control system will preclude all errors and irregularities,as a system is designed to manage rather than to eliminate the risk of failure to achieve businessobjectives, and can only provide reasonable and not absolute assurance against material misstatementor loss. The Audit Committee reviews the effectiveness of the internal controls and will consider therisk areas and recommendations by the external auditors.

The Board aims to strengthen the risk assessment and internal control evaluation with the appointmentof internal auditors.

Internal AuditFrom cost-effectiveness perspective as well as the Board believes that the existing system of internalcontrols is adequate, the Group currently has no separate internal audit function. The Company’sfinance department reviews the Group’s internal controls risk management and compliance systemsand report findings and makes recommendations to the management and Audit Committee.

The Board is however mindful of the Company’s need to set up an internal audit function so as toachieve full compliance with the Code. It is evaluating the form in which the internal audit function ofthe Group should take, whether to outsource this function, or to set up a department within the Groupto undertake this role, taking into consideration the number of offices and factories the Group has, thenature and complexity of its operations, and the cost effectiveness of the various options available.The Board will be evaluating proposals by various external professional firms before making a decisionon this matter. Meanwhile, the Board is satisfied that the management of the Group is fully aware ofthe importance of internal controls and has put in place a system of controls that would help tosafeguard the Group’s assets and manage its risks.

2.2.2 The Audit Committee has reviewed the non-audit services provided by the external auditors whichcomprise tax services and is satisfied with the independence of the external auditors.

2.3 Remuneration Committee (RC)The Remuneration Committee has three members, a majority of whom are directors who areindependent of Management and free from any business or other relationships, which maymaterially interfere with the exercise of their independent judgement. The RemunerationCommittee is chaired by an independent non-executive director, and will have at least onemember who is knowledgeable in the field of executive compensation, failing which theRemuneration Committee will have access to expert advice inside and/or outside the company.As at the date of this Report, the Remuneration Committee members are:

• Dr Ho Ngiap Kum (Chairman and Independent Director)• Dr Ong Chit Chung (Independent Director)• Mr John Arthur Hugh Curry (Non-Executive Director)

The Remuneration Committee’s role is to review and approve recommendations on remunerationpolicies and packages for key executives. The review will cover all aspects of remuneration includingbut not limited to directors’ fees, salaries, allowances, bonus, options and benefits in kind.The Committee’s recommendations are made in consultation with the Chairman of the Board andsubmitted for endorsement by the entire Board.



2.3.1 Remuneration MattersA breakdown showing the level and mix of each individual director’s remuneration payable forFY 2002 is as follows:

No. of directors in remuneration bands2002 2001

$250,000 to below $500,000 1 1Below $250,000 4 1

Total 5 2

Remuneration for the directorsFringe Directors’

Name Salary Bonus Benefits Fees Total

% % % % %

Mr Jeffrey Tan Siak Lian 83 7 10 - 100

Mr Tay Boon Kiat 77 6 17 - 100

Mr John Arthur Hugh Curry - - - 100 100

Dr Ong Chit Chung - - - 100 100

Dr Ho Ngiap Kum - - - 100 100

Remuneration of the top 5 key executivesFringe

Name Salary Bonus Benefits Total

% % % %

Mr Seet Peng Yam 82 7 11 100

Mr Wong Hot Yong 79 7 14 100

Mr Jap Bun Siong, Paul 84 7 9 100

Ms Wang Shu-Yi 92 8 - 100

Mr Tan Chin Hock 80 7 13 100

6


3. Communication With ShareholdersThe Company does not practise selective disclosure. In line with continuous obligations of the Companypursuant to the Singapore Exchange’s Listing Rules, the Board’s policy is that all shareholders shouldbe equally informed of all major developments impacting the Group.

The Company will adopt quarterly results reporting in 2004.

All shareholders of the Company receive the annual report and notice of AGM. At AGMs,shareholders are given the opportunity to voice their views and ask directors or managementquestions regarding the Company. The Chairmen of the Audit, Remuneration and NominatingCommittees will be normally present at future annual general meetings to answer any questionsrelating to the work of these committees.

4. Dealing in SecuritiesThe Group has procedures in place prohibiting dealings in the Company’s shares by its officers whilein possession of price sensitive information and during the period commencing one month priorto the announcement of the Company’s interim and full year results (quarterly financial statementsfor 2004). Directors and executives are also expected to observe insider trading laws at all timeseven when dealing in securities within permitted trading period.


R E P O R T O F T H E D I R E C T O R S

The directors are pleased to present their report together with the audited financial statements of the Companyand of the Group for the financial year ended 31 December 2002.

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

Mr Jeffrey Tan Siak LianMr John Arthur Hugh CurryMr Tay Boon KiatDr Ong Chit Chung (Appointed on 25 April 2002)Dr Ho Ngiap Kum (Appointed on 25 April 2002)

Principal activitiesThe principal activities of the Company are to engage as distributor and manufacturers’ representative ofelectronics components and test equipment for the disk drive industry, acting as commission agents, provision ofservices such as design-in engineering, system integration, computerised real time inventory managementand product design and development. The Company is also involved in Original Equipment Manufacturer(“OEM”) arrangements with a key principal for OEM sub-assembly for audio, video and multimedia products.The principal activities of its subsidiaries are shown in Note 10 to the financial statements.

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

On 23 May 2002, the Company was admitted to the Official List of The Stock Exchange of SingaporeDealing and Automated Quotation System (“SGX-SESDAQ”).

Results for the financial yearGroup Company$’000 $’000

Profit after taxation and minority interests 1,005 1,220Accumulated profits brought forward 9,189 9,401

10,194 10,621Dividends on ordinary shares (285) (285)

Accumulated profits carried forward 9,909 10,336

Material movements in reserves and provisionsThere were no material transfers to or from reserves or provisions during the financial year except for normalamounts set aside as disclosed in the financial statements.

Details of movements in reserves are shown in the Statements of Changes in Equity.

DividendsDuring the financial year, the Company paid a final dividend of 0.4 cents per share, less tax at 24.5%,amounting to $285,000 in respect of the previous financial year, as proposed in the Report of the Directorsfor that year.

The directors recommend that a final dividend of 0.5 cents per share, less tax at 22%, amounting to $439,000be paid in respect of the financial year under review, subject to shareholders’ approval in the next AnnualGeneral Meeting.

8


Acquisition and disposal of subsidiary companiesDuring the financial year, the Company incorporated a 55% owned subsidiary company, WesCal Korea Limited,with an issued and paid up of KRW120,000,000 comprising 24,000 ordinary shares of KRW5,000 each.

There were no acquisitions or disposals of subsidiary companies during the financial year.

Issue of shares and debenturesIn November 2002, the Company incorporated a 55% owned subsidiary company, WesCal Korea Limited,with an authorised share capital of KRW450,000,000 comprising 90,000 ordinary shares of KRW5,000each. WesCal Korea Limited issued 24,000 ordinary shares of KRW5,000 each at par for cash for thepurpose of providing working capital.

Except as disclosed above, no other shares or debentures of the Company and its subsidiary companieswere issued during the financial year.

Arrangement to enable directors to acquire shares and debenturesNeither at the end of the financial year nor at any time during the year, was the Company a party to anyarrangement whose object is to enable the directors of the Company to acquire benefits by means of theacquisition of shares in, or debentures of, the Company or any other body corporate.

Directors’ interest in shares and debenturesThe following directors who held office at the end of the financial year had, according to the register ofdirectors’ shareholdings required to be kept under Section 164 of the Companies Act, Cap. 50, an interestin shares of the Company, as stated below :-

Ordinary shares of $0.10 eachAt 1 January At 31 December At 21 January

Name of director 2002 2002 2003

Held in the name of directorsMr Jeffrey Tan Siak Lian 41,743,600 41,743,600 41,743,600Mr Tay Boon Kiat 2,475,000 2,453,000 2,453,000

Deemed interestMr Jeffrey Tan Siak Lian (1) 132,000 132,000 132,000

(1) The deemed interest under Mr Jeffrey Tan Siak Lian is held through his spouse, Ms Boey Lai Foon, Christine.

Pursuant to Section 7 of the Companies Act, Cap. 50, Mr Jeffrey Tan Siak Lian by virtue of his interest inmore than 20% of the issued share capital of the Company, is deemed to have an interest in the shares of allthe Company’s subsidiary companies as disclosed in Note 10 to the financial statements.

Except as disclosed above, no other directors who held office at the end of the financial year or the beginningand end of the financial year and on 21 January 2003 had an interest in the shares or debentures of theCompany and its subsidiary companies.

Bad and doubtful debtsBefore the profit and loss account and balance sheet of the Company were made out, the directors tookreasonable steps to ascertain that proper action had been taken in relation to the writing off of bad debts andthe making of provision for doubtful debts, and have satisfied themselves that all known bad debts havebeen written off and that adequate provision has been made for doubtful debts.

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



Current assetsBefore the profit and loss account and balance sheet of the Company were made out, the directors tookreasonable steps to ascertain that any current assets which were unlikely to realise their book values in theordinary course of business have been written down to their estimated realisable values or adequate provisionhad been made for the diminution in value of such current assets.

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

Charges on assets and contingent liabilitiesSince the end of the financial year, and up to the date of this report, no charge on the assets of the Companyor any company in the Group has arisen which secures the liabilities of any other person and no contingentliability has arisen, except as disclosed in Note 28 to the financial statements.

Ability to meet obligationsNo contingent or other liability has become enforceable or is likely to become enforceable within the periodof twelve months after the end of the financial year which, in the opinion of the directors, will or may substantiallyaffect the ability of the Company and of the Group to meet their obligations as and when they fall due.

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

Unusual itemsIn the opinion of the directors, the results of the operations of the Company and of the Group duringthe financial year have not been substantially affected by any item, transaction or event of a material andunusual nature.

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

Directors’ contractual benefitsSince the end of the previous financial year, no director of the Company has received or become entitled toreceive a benefit by reason of a contract made by the Company or a related corporation with the director, orwith a firm of which the director is a member, or with a company in which the director has a substantialfinancial interest, except as disclosed in Notes 4, 5 and 27 to the financial statements.

Share optionsThe Company implemented a “Share Option Scheme” (the “Scheme”). The Scheme was approved by theshareholders of the Company at an Extraordinary General Meeting held on 10 September 2001 and hasbeen in place since the Company’s admission to the Official List of The Stock Exchange of Singapore Dealingand Automated Quotation System on 23 May 2002.

The Scheme is administered by a Committee comprising Dr Ho Ngiap Kum, Mr John Arthur Hugh Curry andMr Jeffrey Tan Siak Lian.

10

Share options (cont’d)Under the Scheme, the shareholders of the Company approved a Share Option Agreement(the “Agreement”) at the Extraordinary General Meeting held on 10 September 2001. Pursuant to theAgreement, options for an aggregate of 2,550,000 ordinary shares were granted to 32 selectedemployees of the Group on 8 May 2002. The options are granted at a subscription price of $0.29 per share(subject to such adjustments as provided in the terms and conditions of the Agreement) and exercisablefrom 13 May 2004 to 12 May 2007. The subscription price of $0.29 per share represents a discount of17.1% to the Company’s Initial Public Offering offer price.

In line with the current rules of the SGX-ST, the total number of shares to be issued under this Agreement willnot exceed 15% of the total issued share capital of the Company from time to time.

The breakdown of share options granted by categories is as follows :-No. of staff granted Aggregate number of

Category with options option shares granted

Vice-Presidents 3 487,500Financial Controller 1 162,500Managers 11 880,000Executives 17 1,020,000

32 2,550,000

The names of the staff who received 5% or more of the total number of options available under theAgreement are as follows :-Name Number of options

Mr Seet Peng Yam (Vice-President, Finance & Admin) 162,500Mr Wong Hot Yong (Vice-President, Systems & Equipment Division) 162,500Mr Tan Chin Hock (Financial Controller) 162,500

There were no shares issued pursuant to the exercise of options, under the Agreement, to take up unissuedshares of the Company during the financial year.

These employees are not directors, controlling shareholders or associates of controlling shareholders ofthe Company.

The options granted by the Company do not entitle the holders of the options, by virtue of such options, anyright to participate in any share issue of any other company.

Except as disclosed above, there were no unissued shares of the Company or its subsidiary companiesunder options as at the end of the financial year.

Audit CommitteeThe members of the Audit Committee at the date of the report are :-

Dr Ong Chit Chung Chairman, Independent DirectorDr Ho Ngiap Kum Independent DirectorMr John Arthur Hugh Curry Non-executive Director

The Audit Committee performs the functions specified by Section 201B(5) of the Companies Act, and theListing Manual and the Best Practices Guide of the Singapore Exchange.

The Audit Committee held two meetings since the Company was admitted to the Official List of The StockExchange of Singapore Dealing and Automated Quotation System (“SGX-SESDAQ”) on 23 May 2002.In performing its functions, the Audit Committee met with the Company’s external auditors to discuss the scopeof their work and the results of their audit and evaluation of the Company’s internal accounting controls.




Audit Committee (cont’d)The Audit Committee also reviewed the following :-

- Assistance provided by the Company’s officers to the external auditors;

- Financial statements of the Group and the Company prior to their submission to the directors of theCompany for adoption; and

- Interested party transactions (as defined in Chapter 9A of the Listing Manual of the Singapore Exchange).

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

The Audit Committee has recommended to the Board of directors that the auditor, Ernst & Young, be nominatedfor re-appointment as auditor at the forthcoming Annual General Meeting of the Company.

AuditorErnst & Young have expressed their willingness to accept re-appointment as auditor.

On behalf of the Board of directors,

Jeffrey Tan Siak LianDirector

Tay Boon KiatDirector

Singapore17 April 2003

12

S TAT E M E N T B Y T H E D I R E C T O R SPursuant to Section 201(15) of the Companies Act, Cap. 50

We, Jeffrey Tan Siak Lian and Tay Boon Kiat, being two of the directors of WesTech Electronics Limited, dohereby state that, in the opinion of the directors,

(a) the accompanying balance sheets, profit and loss accounts, statements of changes in equity and consolidatedcash flow statement together with the notes thereto, set out on pages 14 to 41, are drawn up so as to givea true and fair view of the state of affairs of the Company and of the Group as at 31 December 2002 and ofthe results of the business, changes in equity of the Company and of the Group and cash flows of theGroup for the financial year then ended; and

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

The Board of directors authorised these financial statements for issue on 17 April 2003.

On behalf of the Board of directors,

Jeffrey Tan Siak LianDirector

Tay Boon KiatDirector



A U D I T O R ’ S R E P O R Tto the Members of WesTech Electronics Limited

We have audited the financial statements of WesTech Electronics Limited set out on pages 14 to 41.The financial statements comprise the balance sheets of the Company and of the Group as at31 December 2002, the profit and loss accounts, statements of changes in equity of the Company andof the Group, and the consolidated cash flow statement of the Group for the financial year ended31 December 2002, and notes thereto. These financial statements are the responsibility of the Company’sdirectors. Our responsibility is to express an opinion on these financial statements based on our audit.

The financial statements for the financial year ended 31 December 2001 were audited by another auditorwhose report dated 14 February 2002 expressed an unqualified opinion on those statements.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements arefree of material misstatement. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principles usedand significant estimates made by the directors, as well as evaluating the overall presentation of thefinancial statements. We believe that our audit provides a reasonable basis for our opinion.

In our opinion,

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

(i) the state of affairs of the Company and of the Group as at 31 December 2002, and of the resultsand changes in equity of the Company and of the Group and cash flows of the Group for the financialyear ended on that date; and

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

(b) the accounting and other records, and the registers required by the Act to be kept by the Company andby those subsidiary companies incorporated in Singapore of which we are the auditors have been properlykept in accordance with the provisions of the Act.

We have considered the financial statements and auditor’s reports of all subsidiary companies of which wehave not acted as auditors, being financial statements that have been included in the consolidated financialstatements. The names of these subsidiary companies are stated in Note 10 to the financial statements.

We are satisfied that the financial statements of the subsidiary companies that have been consolidated withthe financial statements of the Company are in form and content appropriate and proper for the purposes ofthe preparation of the consolidated financial statements and we have received satisfactory information andexplanations as required by us for those purposes.

The auditors’ reports on the financial statements of the subsidiary companies were not subject to anyqualification and in respect of subsidiary companies incorporated in Singapore did not include any commentmade under Section 207(3) of the Act.

ERNST & YOUNGCertified Public Accountants


14

P R O F I T A N D L O S S A C C O U N T Sfor the financial year ended 31 December 2002

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

Note Group Company2002 2001 2002 2001

$’000 $’000 $’000 $’000

Turnover 3 97,875 123,660 95,531 122,096

Cost of sales (86,159) (108,437) (85,723) (108,337)

Gross profit 11,716 15,223 9,808 13,759

Other income 58 146 22 140

Operating expenses

Selling and distribution costs (2,183) (2,115) (1,820) (1,600)

Payroll costs 4 (4,959) (4,683) (3,889) (3,998)

Administration costs (1,690) (1,978) (1,496) (1,713)

Other operating expenses (978) (596) (727) (306)

Profit from operating activities 5 1,964 5,997 1,898 6,282

Finance costs 6 (556) (858) (431) (752)

1,408 5,139 1,467 5,530Share of results of associated companies (82) (9) - -

Profit before taxation and minority interests 1,326 5,130 1,467 5,530

Taxation 7 (290) (1,232) (247) (1,215)

Minority interests (31) 56 - -

Profit after taxation and minority interests 1,005 3,954 1,220 4,315

Earnings per share 8

- Basic 0.91 cents 4.29 cents

- Diluted 0.91 cents 4.29 cents


B A L A N C E S H E E T Sas at 31 December 2002



$’000 $’000 $’000 $’000

Non-current assets

Fixed assets 9 6,459 5,885 2,078 1,437Investment in subsidiary companies 10 - - 973 875Investment in associated companies 11 127 210 183 183Other investments 12 207 294 207 294Goodwill on consolidation 13 507 470 - -Deferred tax assets 14 69 - 63 -

Current assets

Cash and bank balances 1,479 1,000 1,025 685Trade debtors 15 18,638 18,976 17,775 18,666Other debtors, deposits and prepayments 16 460 1,010 360 1,004Amounts due from associated companies 17 2,448 690 2,425 685Amounts due from subsidiary companies 18 - - 5,273 1,352Stocks 19 11,014 12,736 10,378 12,672

34,039 34,412 37,236 35,064

Current liabilities

Trade creditors 9,242 8,416 8,816 8,344Other creditors and accruals 20 1,860 768 1,559 583Amounts due to associated companies (trade) 110 118 110 117Amounts due to subsidiary companies (trade) - - 142 346Loan from a subsidiary company - - - 55Amounts due to directors (non-trade) - 268 - -Hire purchase creditors 21 28 36 - 9Bills payable to banks, secured 22 2,247 3,409 2,247 3,409Bank overdrafts, secured 22 1,698 4,993 1,524 3,312Term loans, secured 23 - 218 - -Provision for taxation 547 1,782 490 1,745

15,732 20,008 14,888 17,920

Net current assets 18,307 14,404 22,348 17,144

16

B A L A N C E S H E E T Sas at 31 December 2002



$’000 $’000 $’000 $’000

Non-current liabilities

Hire purchase creditors 21 58 104 - 16Term loans, secured 23 22 1,382 - -Deferred tax liabilities 14 - 57 - 50

80 1,543 - 66

Net assets 25,596 19,720 25,852 19,867

Equity

Share capital 24 11,246 9,446 11,246 9,446Share premium 4,270 1,020 4,270 1,020Accumulated profits 9,909 9,189 10,336 9,401Translation reserve 17 18 - -

25,442 19,673 25,852 19,867Minority interest 154 47 - -

Total equity 25,596 19,720 25,852 19,867


S TAT E M E N T S O F C H A N G E S I N E Q U I T Yfor the financial year ended 31 December 2002



$’000 $’000 $’000 $’000

Issued and paid-up capital (1)

Balance at beginning 9,446 4,500 9,446 4,500

Bonus issue of shares via capitalisation of accumulated profits - 4,723 - 4,723

Issue of Nil (2001: 22,300 ordinary shares of $10 each) at a premium of Nil (2001: $17.51) per share - 223 - 223

Issuance of 18,000,000 (2001: Nil) ordinary shares of $0.10 each at a premium of $0.25 per share 1,800 - 1,800 -

Balance at end 24 11,246 9,446 11,246 9,446

Share premium

Balance at beginning 1,020 630 1,020 630

Issue of Nil (2001: 22,300 ordinary shares of $10 each) at a premium of Nil (2001: $17.51) per share - 390 - 390

Issuance of 18,000,000 (2001: Nil) ordinary shares of $0.10 each at a premium of $0.25 per share 4,500 - 4,500 -

Expenses incurred in relation to Initial Public Offering (1,250) - (1,250) -

Balance at end 4,270 1,020 4,270 1,020

(1) 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.

18


S TAT E M E N T S O F C H A N G E S I N E Q U I T Yfor the financial year ended 31 December 2002


$’000 $’000 $’000 $’000

Accumulated profits

Balance at beginning 9,189 9,958 9,401 9,809

Dividends on ordinary shares 25 (285) - (285) -

Net profit for the financial year 1,005 3,954 1,220 4,315

Bonus issue of shares via capitalisation of accumulated profits - (4,723) - (4,723)

Balance at end 9,909 9,189 10,336 9,401

Translation reserve

Balance at beginning 18 (1) - -

Currency translation difference (1) 19 - -

Balance at end 17 18 - -

Total equity 25,442 19,673 25,852 19,867


C O N S O L I D AT E D C A S H F L O W S TAT E M E N Tfor the financial year ended 31 December 2002


2002 2001$’000 $’000

Cash flows from operating activities

Profit before taxation 1,326 5,130

Adjustments for :- Depreciation of fixed assets 747 353 Amortisation of goodwill on consolidation 139 131 Provision for diminution in value of club memberships 38 - Loss on disposal of fixed assets 2 22 Loss on disposal of club memberships 34 - Interest income (22) (146) Interest expense 556 858 Share of results of associated companies 82 9 Exchange realignment 7 12

Operating profit before reinvestment in working capital 2,909 6,369

Decrease in stocks 1,936 5,201Decrease in trade debtors 644 7,177Decrease/(increase) in other debtors, deposits and prepayments 397 (209)Increase in amounts due from associated companies, net (1,766) (878)Increase/(decrease) in trade creditors 487 (5,501)Decrease in bills payable to banks (1,162) (8,412)Increase/(decrease) in other creditors and accruals 743 (572)Decrease in amount due to an affiliated company, net - (93)

Cash generated from operations 4,188 3,082

Interest paid (556) (858)Interest received 22 146Tax paid (1,652) (2,733)

Net cash generated from/(used in) operating activities 2,002 (363)

Cash flows from investing activities

Capital contribution by minority shareholders 76 -Purchase of fixed assets (1) (1,328) (867)Purchase of club memberships (27) -Acquisition of subsidiary companies - (1,488)Acquisition of business (2) 25 -Proceeds from disposal of fixed assets 77 -Proceeds from disposal of club memberships 42 -

Net cash used in investing activities (1,135) (2,355)

20

C O N S O L I D AT E D C A S H F L O W S TAT E M E N Tfor the financial year ended 31 December 2002


2002 2001$’000 $’000

Cash flows from financing activities

Payment of loan from an affiliated company - (55)Repayment of lease obligations (54) (26)Repayment of term loans (1,578) (82)Proceeds from issue of shares 5,050 -Dividends paid (285) -Due to directors, net (226) (227)

Net cash provided by/(used in) financing activities 2,907 (390)

Net increase/(decrease) in cash and cash equivalents 3,774 (3,108)

Cash and cash equivalents at beginning of financial year (3,993) (885)

Cash and cash equivalents at end of financial year (Note 26) (219) (3,993)

(1) During the financial year, the Group acquired fixed assets with an aggregate cost of $1,328,000(2001: $904,000) of which Nil (2001: $36,000) was financed by means of hire purchase. Cash paymentof $1,328,000 (2001: $867,000) was made to purchase fixed assets.

(2) During the financial year, the Company’s subsidiary company acquired a business comprising assetsand liabilities. The effect on the individual assets and liabilities is set out as follows :-

$’000

Fixed assets 78Cash and bank balances 25Trade debtors 306Other debtors, deposits and prepayments 23Stocks 214Trade creditors (339)Other creditors and accruals (307)Inter-company loans (175)

Net liabilities acquired (175)

Cashflow on acquisition represented by cash and bank balances acquired 25


N O T E S T O T H E F I N A N C I A L S TAT E M E N T S– 31 December 2002

1. Corporate informationThe financial statements of WesTech Electronics Limited (the “Company”) for the financial year ended31 December 2002 were authorised for issue in accordance with a resolution of the directors on17 April 2003.

The Company is a public limited company domiciled and incorporated in Singapore. The registeredoffice of the Company is located at 34 Kaki Bukit Crescent, Kaki Bukit Techpark 1, Singapore 416263.

The Company was admitted to the Official List of The Stock Exchange of Singapore Dealing andAutomated Quotation System (“SGX-SESDAQ”) on 23 May 2002.

The principal activities of the Company are to engage as distributor and manufacturers’ representativeof electronics components and test equipment for the disk drive industry, acting as commission agents,provision of services such as design-in engineering, system integration, computerised real time inventorymanagement and product design and development. The Company is also involved in Original EquipmentManufacturer (“OEM”) arrangements with a key principal for OEM sub-assembly for audio, video andmultimedia products. The principal activities of its subsidiaries are as shown in Note 10 to the financialstatements.

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

As of 31 December 2002, the Company and the Group have 77 and 117 (2001: 61 and 93) employees,respectively. The Group operates in Asia.

2. Significant accounting policies(a) Basis of preparation

The financial statements of the Company and of the Group, which are expressed in Singaporedollars, are prepared under the historical cost convention, except for leasehold building which iscarried at revalued amounts, and in accordance with Singapore Statements of Accounting Standard(“SAS”) and applicable requirements of the Singapore Companies Act, Chapter 50.

The preparation and classification of items in the financial statements have been changed orextended, where applicable, to comply with requirements of the revised SAS 12: Income Taxes,which the Group and the Company implemented with effect from 1 January 2002.

The adoption of SAS 12 does not give rise to any prior year adjustments.

(b) Basis of consolidationThe financial year of the Company and all its subsidiary companies in the Group ends on31 December.

The consolidated financial statements include the financial statements of the Company and itssubsidiary companies made up to the end of the financial year. All transactions among the Grouphave been eliminated. The results of subsidiary companies acquired or disposed of during thefinancial year are included in or excluded from the Group’s financial statements from their respectivedates of acquisition or disposal, as applicable.

Any excess/deficit of the cost of acquisition of a subsidiary company over the fair value of the netassets acquired is treated as goodwill/negative goodwill on consolidation.

Assets, liabilities and results of overseas subsidiary companies are translated into Singaporedollars on the basis outlined in Note 2(d) below.

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

22


2. Significant accounting policies (cont’d)(c) Revenue

Revenue is recoginsed to the extent that it is probable that the economic benefits will flow to theGroup and the Company, and the revenue can be reliably measured. The following specificrecognition criteria must also be met before revenue is recognised :-

Revenue from sale of goods is recognised upon the passing of title to the customer which generallycoincides with delivery and acceptance of the goods sold.

Revenue from the provision of services is recognised upon commissioning of electrical alarm systems.

Commission income is recognised when services are rendered.

Interest income is recognised on an accrual basis.

(d) Foreign currency translationsTransactions arising in foreign currencies during the financial year are translated at exchangerates closely approximating those ruling on the transaction dates. Foreign currency monetaryassets and liabilities are translated into Singapore dollars at exchange rates ruling at the balancesheet date. Non-monetary assets and liabilities are translated using exchange rates that existedwhen the values were determined. All exchange differences arising from translation are includedin the profit and loss account.

For inclusion in the consolidated financial statements, all assets and liabilities of foreign subsidiarycompanies are translated into Singapore dollars at exchange rates ruling at balance sheet date,except for share capital and reserves which are translated at historical rates of exchange. The resultsof foreign subsidiary companies are translated at average exchange rates for the financial year.Exchange differences due to such currency translation are taken to foreign currency translation reserve.

(e) Employee benefitsDefined contribution planAs required by law, the Group’s companies in Malaysia and Singapore make contributions to theirstate pension scheme, the Central Provident Fund (“CPF”) and Employee’s Provident Fund (“EPF”),respectively. CPF and EPF contributions are recognised as compensation expense in the sameperiod as the employment that gives rise to these contributions.

Employee leave entitlementThe Group does not have a policy for accruing for unutilised leave entitlement as these leaveentitlements cannot be carried forward and will be forfeited if not utilised.

(f) Income taxesDeferred income tax is provided, using the liability method, on all temporary differences at thebalance sheet date between the tax bases of assets and liabilities and their carrying amounts forfinancial reporting purposes.

Deferred tax assets and liabilities are measured using the tax rates expected to apply to taxableincome in the years in which those temporary differences are expected to be recovered or settledbased on tax rates enacted or substantively enacted at the balance sheet date.

Deferred tax liabilities are recognised for all taxable temporary differences, associated withinvestments in subsidiary and associated companies, except where the timing of the reversal ofthe temporary difference can be controlled and it is probable that the temporary difference will notreverse in the foreseeable future.



2. Significant accounting policies (cont’d)(f) Income taxes (cont’d)

At each balance sheet date, the Group re-assesses unrecognised deferred tax assets and thecarrying amount of deferred tax assets. The Group recognises a previously unrecognised deferredtax asset to the extent that it has become probable that future taxable profit will allow the deferredtax asset to be recovered. The Group conversely reduces the carrying amount of a deferred taxasset to the extent that it is no longer probable that sufficient taxable profit will be available toallow the benefit of part or all of the deferred tax asset to be utilised.

Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unusedtax assets and unused tax losses, to the extent that it is probable that taxable profit will beavailable against which the deductible temporary differences, carry-forward of unused tax assetsand unused tax losses can be utilised.

Current tax and deferred tax are charged or credited directly to equity if the tax relates to itemsthat are credited or charged, in the same or a different period, directly to equity.

(g) Subsidiary companiesA subsidiary company is a company in which the Group or the Company has significant controlover its management, including participation in the financial and operating policies.

Investment in subsidiary companies is stated in the Company’s financial statements at cost andprovision is made for impairment in values.

A list of the Company’s subsidiary companies is shown in Note 10 to the financial statements.

(h) Associated companiesAn associated company is defined as an entity, not being a subsidiary company, in which theGroup has a long-term interest of not less than 20% nor more than 50% of the equity and inwhose financial and operating policy decisions the Group exercises significant influence.

Investment in associated companies is accounted for in the consolidated financial statementsusing the equity method whereby the Group’s share of profits less losses of associated companiesis included in the consolidated profit and loss account. The Group’s share of the post-acquisitionreserves of associated companies is adjusted against the cost of investment in the consolidatedbalance sheet.The financial statements of foreign associated companies are translated intoSingapore dollars at rates of exchange ruling at the balance sheet date.

Investment in associated companies is stated in the Company’s balance sheet at cost andprovision is made for impairment in values.

(i) Intangible assetsGoodwillWhen a subsidiary or associated company is acquired, the excess of the purchase considerationover the fair values of the net identifiable assets at the date of acquisition represents goodwill onconsolidation. Goodwill is stated at cost less accumulated amortisation and impairment losses.Goodwill is amortised on a straight-line basis over 5 years through the consolidated profit andloss account.

24


2. Significant accounting policies (cont’d)(i) Intangible assets (cont’d)

Negative goodwillNegative goodwill represents the excess of the fair value of the net identifiable assets acquiredover the purchase consideration.

To the extent that negative goodwill relates to expectations of future losses and expenses that areidentified in the plan of acquisition and can be measured reliably, but do not represent identifiableliabilities at the date of acquisition, that portion of negative goodwill is recognised as income in theprofit and loss account when the future losses and expenses are recognised. Any remainingnegative goodwill, not exceeding the fair values of the acquired identifiable non-monetary assets,is recognised in the profit and loss account as income over the remaining weighted averageuseful life of those assets that are depreciable or amortisable.

(j) Fixed assets and depreciationFixed assets are stated at cost, net of accumulated depreciation and any impairment loss. The costof an asset comprises its purchase price and any directly attributable costs of bringing the asset toworking condition for its intended use. Expenditure for additions, improvements and renewals arecapitalised and expenditure for maintenance and repairs are charged to the profit and loss account.

When assets are sold or retired, their cost and accumulated depreciation are removed from thefinancial statements and any gain or loss resulting from their disposal is included in the profit andloss account.

Depreciation is calculated on the straight line method to write off the cost of fixed assets over theirestimated useful lives as follows :-

Leasehold buildings - Over the remaining term of the leaseLeasehold improvements - 10 yearsFurniture and fittings - 5 - 10 yearsOffice equipment - 5 - 10 yearsComputer equipment - 5 yearsMachinery and tools - 5 yearsMotor vehicles - 2 - 5 years

Leasehold building is revalued at least once every five years. Where fixed assets are revalued, anysurplus on revaluation is credited to the asset revaluation reserve. A decrease in the net carryingamount of the asset revaluation reserve arising on revaluation of fixed assets is charged to theprofit and loss account to the extent that it exceeds any surplus held in reserve relating to aprevious revaluation of the same class of assets.

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

The useful life and depreciation method are reviewed periodically to ensure that the method andperiod of depreciation are consistent with the expected pattern of economic benefits from itemsof fixed assets. An assessment of the carrying value of fixed assets is made when there areindications that the assets have been impaired or the impairment losses recognised in prior yearsno longer exist.

(k) Other investmentsThese relate to club memberships held on a long-term basis and are stated at cost and provisionis made for impairment in values.



2. Significant accounting policies (cont’d)(l) Trade and other debtors

Trade debtors, which generally have 30 to 90 day terms, are recognised and carried at originalinvoiced amount less an allowance for any uncollectible amounts. An estimate for doubtful debts ismade when collection of the full amount is no longer probable. Bad debts are written off as incurred.

Receivables from associated and subsidiary companies are recognised and carried at cost lessan allowance for any uncollectible amounts.

(m) StocksStocks comprise direct materials and finished goods for resale. Stocks are stated at the lower ofcost and net realisable value. Cost is determined on a first-in-first-out basis. Net realisable valueis the estimated selling price in the ordinary course of business less estimated costs necessary tomake the sale. Provision is made for deteriorated, damaged, obsolete and slow-moving items.

(n) Trade and other creditorsLiabilities for trade and other amounts payable, which are settled on 30 to 90 day terms, arecarried at cost, which is the fair value of the consideration to be paid in the future for goods andservices received, whether or not billed to the Group.

Payables to associated and subsidiary companies are carried at cost.

(o) ProvisionsProvisions are recognised when the Group has a present legal or constructive obligation as aresult of a past event, it is probable that an outflow of resources embodying economic benefitswill be required to settle the obligation and a reliable estimate of the amount of the obligation canbe made.

(p) Loans and borrowingsLoans and borrowings are recognised at cost net of transaction costs associated with the borrowingor loan.

(q) LeasesFinance leasesFinance leases, which effectively transfer to the Group substantially all the risks and benefitsincidental to ownership of the leased asset, are capitalised at the present value of the minimumlease payments at the inception of the lease term and disclosed as plant and machinery as wellas motor vehicles. Lease payments are apportioned between the finance charges and reductionof the lease liability so as to achieve a constant rate of interest on the remaining balance of theliability. Finance charges are charged directly against income.

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

Operating leasesLeases where the lessor effectively retains substantially all the risks and benefits of ownership ofthe lease term are classified as operating leases. Operating lease payments are recognised as anexpense in the profit and loss account on a straight line basis over the lease term.

26


2. Significant accounting policies (cont’d)(r) Impairment of assets

The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determinewhether there is any indication of impairment. If any such indication exists, the asset’s recoverableamount is estimated. All impairment losses are recognised in the profit and loss account wheneverthe carrying amount of an asset or its cash-generating unit exceeds its recoverable amount.

An impairment loss is only reversed to the extent that the asset’s carrying amount does notexceed the carrying amount that would have been determined, net of depreciation or amortisation,if no impairment loss had been recognised. All reversals of impairment are recognised in the profitand loss account.

(s) Cash and cash equivalentsCash consists of cash on hand and cash with banks, including bank overdrafts. Cash equivalentsare short-term, highly liquid investments that are readily convertible to known amounts of cashand that are subject to an insignificant risk of changes in value.

(t) Financial instrumentsFinancial assets and financial liabilities carried on the balance sheet include cash and cashequivalents, trade and other debtors and creditors, loans and borrowings. The accounting policieson recognition and measurement of these items are disclosed in the respective accounting policiesfound in this Note.

(u) SegmentsFor management purposes, the Group is organised on a world wide basis into two major operatingbusinesses. The divisions are the basis on which the Group reports its primary segment information.

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

Segment results, assets and liabilities include items directly attributable to a segment as well asthose that can be allocated on a reasonable basis. Segment capital expenditure is the total costincurred during the financial year to acquire segment assets that are expected to be used formore than one year.

3. TurnoverTurnover comprises :-

Group Company2002 2001 2002 2001

$’000 $’000 $’000 $’000

Distribution sales 93,541 119,778 93,399 119,777Commission income 986 2,319 986 2,319Service income 1,146 - 1,146 -Label printing 1,711 1,216 - -Supply, installation and

maintenance of electronicalarm and security systems 491 347 - -

97,875 123,660 95,531 122,096



4. Payroll costsGroup Company

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

Wages and salaries 4,245 3,982 3,308 3,408CPF and EPF contributions 546 546 430 446Other personnel expenses 168 155 151 144

4,959 4,683 3,889 3,998

Included in payroll costs is:-

Directors’ remuneration -- Directors of the Company 642 616 642 616- Directors of subsidiary companies 117 109 - -

5. Profit from operating activitiesProfit from operating activities is stated after charging/(crediting) the following :-

Group Company2002 2001 2002 2001

$’000 $’000 $’000 $’000

Interest income on fixed deposits (22) (146) (22) (140)Auditors’ remuneration -- Auditors of the Company 76 72 40 37- Other auditors of subsidiary companies 4 4 - -Amortisation of goodwill on consolidation 139 131 - -Depreciation of fixed assets (Note 9) 747 353 543 212Directors’ fees 76 - 51 -Foreign exchange loss, net 468 248 468 285Loss on disposal of fixed assets 2 22 1 22Loss on sale of club memberships 34 - 34 -Non-audit fees paid to auditors of the Company 17 - 8 -Operating lease expenses 475 899 385 835Provision for impairment in value

of club memberships (Note 12) 38 - 38 -Provision for doubtful trade debts (Note 15) 211 455 200 450Provision for stock obsolescence (Note 19) 1,024 400 1,014 400

6. Finance costsGroup Company

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

Interest expense on -- Hire purchase 11 15 4 7- Bills payable 147 426 147 418- Term loans 68 34 - -- Bank overdrafts 130 157 83 118Bank charges 200 226 197 209

556 858 431 752

28


7. TaxationTaxation provided in respect of profit for the financial year :-

Group Company2002 2001 2002 2001

$’000 $’000 $’000 $’000

Current taxation- Current year 346 1,540 290 1,508- Under/(over) provision in respect of prior years 70 (128) 70 (128)

Deferred taxation- Current year (126) 1 (113) -- Over-provision in respect of prior years - (16) - -

Tax rebate in respect of prior year’s tax - (165) - (165)

290 1,232 247 1,215

As at 31 December 2002, the Group has unutilised losses and unabsorbed capital allowances ofapproximately $546,000 and $9,000 (2001: $380,000 and Nil), respectively, available for offset againstfuture taxable profits, subject to the agreement of the tax authorities and compliance with certainprovisions of the tax legislation of the respective countries in which the subsidiary companies operate.

A reconciliation between the tax expense and the product of accounting profit multiplied by theapplicable tax rate for the financial years ended 31 December is as follows :-

Profit before taxation 1,326 5,130 1,467 5,530

Tax expense on profit before taxationat 22% (2001: 24.5%) 292 1,257 323 1,355

Tax effect on -

Permanent differences/expenses not deductiblefor tax purposes 179 140 148 94

Utilisation of unabsorbed tax losses and unutilisedcapital allowances (6) (36) - -

Under/(over) provision in respect of prior years 70 (128) 70 (128)

Tax rebate in respect of prior years - (165) - (165)

Tax rebate and exempt income (37) (94) (12) (83)

Deferred tax assets not recognised 37 52 - -

Difference in tax rates in other countries 50 39 - -

Others (295) 167 (282) 142

Tax expense 290 1,232 247 1,215


8. Earnings per share - GroupBasic earnings per shareBasic earnings per share is calculated by dividing the net profit after tax and minority interests attributableto ordinary shareholders by the weighted average number of ordinary shares outstanding during thefinancial year.

Group2002 2001’000 ’000

Net profit attributable to ordinary shareholders inissue applicable to basic and diluted earnings per share $ 1,005 $ 3,954

Weighted average number of ordinary shares inissue applicable to basic and diluted earnings per share 110,443 92,238

Diluted earnings per shareIn calculating diluted earnings per share, the weighted average number of shares is adjusted for theeffect of all dilutive potential ordinary shares of 110,587,000 (2001: 94,460,000).

9. Fixed assetsAt valuation At Cost

Leasehold Leasehold Furniture Office Computer Machinery MotorGroup building improvement & fittings equipment equipment & tools vehicles Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Cost

As at 1.1.2002 4,099 793 196 130 991 676 326 7,211Additions - 1 32 9 1,256 7 23 1,328Acquisition of

a business - - - 30 - 5 43 78Disposals - - - (1) - - (149) (150)Currency

realignment - (1) (2) (2) - - (3) (8)

As at 31.12.2002 4,099 793 226 166 2,247 688 240 8,459

Accumulateddepreciation

As at 1.1.2002 114 354 59 68 224 400 107 1,326Charge for the

financial year 79 79 21 19 425 81 43 747Disposals - - - (1) - - (70) (71)Currency

realignment - (2) - - - - - (2)

As at 31.12.2002 193 431 80 86 649 481 80 2,000

Charge for 2001 26 81 20 20 65 80 61 353

Net book value

As at 31.12.2002 3,906 362 146 80 1,598 207 160 6,459

As at 31.12.2001 3,985 439 137 62 767 276 219 5,885


30


9. Fixed assets (cont’d)

Leasehold Furniture Office Computer Machinery MotorCompany improvement & fittings equipment equipment & tools vehicles Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Cost

As at 1.1.2002 771 131 70 965 91 150 2,178Additions 1 7 1 1,248 6 - 1,263Disposals - - - - - (150) (150)

As at 31.12.2002 772 138 71 2,213 97 - 3,291

Accumulateddepreciation

As at 1.1.2002 352 41 49 216 20 63 741Charge for the

financial year 77 14 7 418 19 8 543Disposals - - - - - (71) (71)

As at 31.12.2002 429 55 56 634 39 - 1,213

Charge for 2001 79 13 12 60 18 30 212

Net book value

As at 31.12.2002 343 83 15 1,579 58 - 2,078

As at 31.12.2001 419 90 21 749 71 87 1,437

The Group’s leasehold building has been stated at directors’ valuation, which was based on a revaluationby a firm of professional valuers, Jones Lang Property Consultants Pte Ltd as at 30 June 2000.The valuation was based on open market value for existing use.

Had the leasehold building been stated at cost less accumulated depreciation, its net book value as at31 December 2002 would have been approximately $4,288,000 (2001: $4,372,000).

As at 31 December 2002, the Group and the Company had motor vehicles under hire purchasearrangements with a net book value of approximately $96,000 and Nil (2001: $132,000 and $33,000),respectively.

Group’s major propertyLocation Description Tenure Existing use

34 Kaki Bukit Crescent Warehouse and 60 years leasehold WarehouseKaki Bukit Techpark 1 office building commencing from and officeSingapore 416263 25 September 1993

Gross floor area: 1,498 square meters



10. Investment in subsidiary companiesCompany

2002 2001$’000 $’000

Unquoted shares, at cost 975 877

Provision for impairment in value (2) (2)

973 875

Details of subsidiary companies are as follows :-Name of Country ofsubsidiary Principal incorporation Percentage of Cost ofcompany activities and operations equity held investment

2002 2001 2002 2001% % $’000 $’000

WesCal Electronics Distributor and Malaysia 85 85 1 1Sdn. Bhd ** representative

of electronicscomponentsand systemsand equipment

WesTech IndustriesPte Ltd # Label printing Singapore 75 75 80 80

WesTech Systems Supply, installation Singapore 51 51 25 25Pte Ltd # and maintenance

of electronicsalarm and securitysystems

WesCal Electronics Distributor and Hong Kong 70 70 158 158(HK) Pte Limited @ representative of

electronicscomponents andsystems andequipment

WesTech Investment Property investment Singapore 100 100 613 613Pte Ltd # holding and

provision ofpropertymanagementservices

WesCal Korea Distributor and Korea 55 - 98 -Limited * representative of

electronicscomponents andsystems andequipment

975 877

* WesCal Korea Limited was incorporated in November 2002 and is not due for audit.** Audited by Ernst & Young, Malaysia.# Audited by Ernst & Young, Singapore.@ Audited by Ernst & Young, Hong Kong.

32


11. Investment in associated companiesGroup Company

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

Unquoted shares, at cost 183 183 183 183

Share of post-acquisition reserves (56) 15 - -

Reserve on consolidation - 12 - -

127 210 183 183

Details of associated companies are as follows :-Name of Country ofassociated Principal incorporation and Percentage of Cost ofcompany activities and operations equity held investment

2002 2001 2002 2001% % $’000 $’000

WesTech Electronics Distributor and India 50 50 35 35India Pvt Ltd # representative of

electronicscomponents andsystem andequipment

WesTech Electronics Distributor and Thailand 49 49 114 114& Systems Co., representativeLtd @ of electronics

components andsystems andequipment

WesCal Electronics Distributor and Taiwan, 30* 30* 34 34Pte Ltd ## representative Republic of

of electronics Chinacomponents andsystems andequipment

Held by an associated company

Inchang Electronics Manufacturing India 25** 25** - -India Pvt Ltd # and assembling

of CRT sockets

183 183

Audited by other Certified Public Accounting firms :-# Audited by R. Sriramprasad, India.@ Audited by Hubert (Thailand) Company Limited, Thailand.## Audited by Lona CPAS & Co., Taiwan.* This includes 1% held in trust for the Company by a director.** The effective interest in Inchang Electronics India Pvt Ltd is 25% as 50% is owned through an associated

company, Westech Electronics India Pvt Ltd.



12. Other investmentsCompany

2002 2001$’000 $’000

Club memberships, at cost 245 350Provision for impairment in value of club memberships (38) (56)

207 294

Market value of club memberships 207 294

Movements in provision for impairment in value of club memberships during the financial year areas follows :-

Balance at beginning 56 56Write off against provision (56) -Provision during the financial year (Note 5) 38 -

Balance at end 38 56

13. Goodwill on consolidationGroup

2002 2001$’000 $’000

Net goodwill on consolidation arising from the acquisitionof subsidiary and associated companies 843 667

Accumulated amortisation (336) (197)

507 470

Movements in accumulated amortisation during the financial year are as follows :-

Balance at beginning 197 66Amortisation for the financial year (Note 5) 139 131

Balance at end 336 197

14. Deferred tax assets/(liabilities)Group Company

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

Balance at beginning (57) (71) (50) (50)

Provision during the financial year (Note 7) 126 14 113 -

Balance at end 69 (57) 63 (50)

Deferred tax liabilitiesDifference in depreciation (140) (137) (146) (130)

34


14. Deferred tax assets/(liabilities) (cont’d)Group Company

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

Deferred tax assetsUnrealised exchange differences 59 - 59 -Sundry provisions 150 80 150 80

Gross deferred tax assets 209 80 209 80

Net deferred tax assets/(liabilities) 69 (57) 63 (50)

15. Trade debtorsGroup Company

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

Trade debtors are stated after deducting provisionfor doubtful trade debts of 1,074 863 1,055 855

Analysis of provision for doubtful trade debts:-

Balance at beginning 863 408 855 405Provision during the financial year (Note 5) 211 455 200 450

Balance at end 1,074 863 1,055 855

16. Other debtors, deposits and prepaymentsGroup Company

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

Other debtors 93 267 7 241Deposits 173 132 160 160Staff loans 127 170 127 170Prepayments 67 441 66 433

460 1,010 360 1,004

Staff loans are unsecured, interest-free and repayable on demand.

17. Amounts due from associated companiesGroup Company

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

Trade related 2,153 511 2,154 511Non-trade related 295 179 271 174

2,448 690 2,425 685

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



18. Amounts due from subsidiary companiesGroup Company

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

Trade related - - 473 -Non-trade related -

- Interest bearing at 5% (2001: Nil) per annum - - 4,300 849- Non-interest bearing - - 500 503

- - 5,273 1,352

The non-trade balances are unsecured and have no fixed terms of repayment.

19. StocksGroup Company

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

At cost :-Finished goods 9,986 12,389 9,381 12,346Raw materials 31 21 - -Goods-in-transit 192 326 192 326

At net realisable value :-Finished goods 805 - 805 -

11,014 12,736 10,378 12,672

Stocks are stated after deductingprovision for stock obsolescence of 1,837 978 1,827 978

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

Balance at beginning 978 578 978 578Provision during the financial year (Note 5) 1,024 400 1,014 400Written off against provision (165) - (165) -

Balance at end 1,837 978 1,827 978

20. Other creditors and accrualsGroup Company

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

Accrued charges 612 562 496 440Sundry creditors 1,248 206 1,063 143

1,860 768 1,559 583

Included in sundry creditors is an amount of $42,000 (2001: Nil) due to directors of the Company’ssubsidiary companies. This amount is unsecured, interest-free and has no fixed terms of repayment.

21. Hire purchase creditorsThe Group acquired its motor vehicles under hire purchase arrangements. These hire purchase arrangementsare classified as finance leases and expire over the next five years. The discount rates implicit in thelease range from 2.8% to 5.25% (2001: 2.8% to 5.25%) per annum.

36


21. Hire purchase creditors (cont’d)The future minimum lease payments under hire purchase agreements together with the present valueof the net minimum lease payments are as follows :-

GroupMinimum Present Minimum Present

lease value of lease value ofpayments payments payments payments

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

Within 1 year 33 28 45 36After 1 year but not more than 5 years 66 58 120 104

Total future minimum lease payments 99 86 165 140

Less: Amount representing finance charges (13) - (25) -

Present value of net minimum lease payments 86 86 140 140

CompanyMinimum Present Minimum Present

lease value of lease value ofpayments payments payments payments

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

Within 1 year - - 10 9After 1 year but not more than 5 years - - 19 16

Total future minimum lease payments - - 29 25

Less: Amount representing finance charges - - (4) -

Present value of net minimum lease payments - - 25 25

22. Bills payable to banks and bank overdrafts, securedBills payable to banks and bank overdrafts, bears interest rates ranging from 3% to 6% (2001: 3.5%to 6.5%) per annum and are secured by the following :-

(i) Joint and severe personal guarantees from certain directors of the Company and certain subsidiarycompanies and a shareholder of a subsidiary company; and

(ii) A first fixed and floating charge over all assets, both present and future, of the Company.

23. Term loans, securedGroup

2002 2001$’000 $’000

Bank term loan 1, secured - 1,544

Bank term loan 2, secured - 56

Bank term loan 3, secured 22 -

22 1,600



23. Term loans, secured (cont’d)Group

2002 2001$’000 $’000

Classified as follows:

- Current portion - 218

- Non-current portion 22 1,382

22 1,600

Term loans 1 and 2 have been fully repaid during the financial year.

Term loan 3 is repayable after 12 months and bears interest at 10% per annum. This loan is securedby a personal guarantee from a director of the Company’s subsidiary company.

24. Share capitalGroup and Company

2002 2001$’000 $’000

Authorised :-

200,000,000 ordinary shares of $0.10 each 20,000 20,000

Issued and fully paid :-

112,460,000 (2001: 94,460,000) ordinary shares of $0.10 each 11,246 9,446

25. Dividends on ordinary sharesGroup and Company

2002 2001$’000 $’000

First and final dividend in respect of the previous financial yearof 0.4 cents per ordinary share, less tax at 24.5% 285 -

After the balance sheet date, the directors proposed the following dividend. This dividend has notbeen provided for in the financial statements as at the financial year-end as they are subject to approvalat the forthcoming Annual General Meeting of the Company.

Proposed first and final dividend of 0.5 cents(2001: 0.4 cents) per ordinary share, less tax at 22%(2001: 24.5%) 439 285

26. Cash and cash equivalentsCash and cash equivalents consist of cash and bank balances, fixed deposits and bank overdrafts.Cash and cash equivalents included in the consolidated statement of cash flows comprise the followingbalance sheet amounts :-

Group2002 2001

$’000 $’000

Cash and bank balances 1,479 1,000

Bank overdrafts, secured (1,698) (4,993)

(219) (3,993)

38


27. Related party transactionsGroup

2002 2001$’000 $’000

The Group had significant transactions with related parties on terms agreed between the partiesas follows :-

IncomeSales to an associated company 2,454 795

ExpenseManagement fee to a corporate shareholder 30 75

Commission paid to associate companies 509 693

Purchases from an affiliated company 9 343

Purchases from an associate company 904 464

OthersIssue of shares to a director as consideration

for the acquisition of a subsidiary company - 608

Sale of club membership to a director of the Company 42 -

28. Contingent liability, unsecuredThe Company has undertaken to provide continuing financial support to three of its subsidiarycompanies to enable them to operate as going concerns and to meet their obligations for at least 12months from the date of this report. These subsidiary companies are WesCal Malaysia Sdn. Bhd.,WesTech Industries Pte Ltd and WesCal Korea Limited.

29. Operating lease commitmentsThe Group leases a warehouse under a non-cancellable lease agreement which expires in 2003.Rental expense was $114,000 and $157,000 for the financial years ended 31 December 2002and 2001, respectively.

Future minimum lease payments for the lease are as follows :-Group

2002 2001$’000 $’000

Within one year 121 176

After one year but not more than five years 58 179

179 355



30. Subsequent eventThe directors recommend that a final dividend of 0.5 cents per share, less tax at 22%, amounting to$439,000 to be paid in respect of the financial year under review (Note 25).

31. Segmental informationThe Group is organised on a worldwide basis into two main operating divisions, namely :-

- Electronics components distribution; and- Systems and equipment distribution

Other operations include service income, label printing and the supply, installation and maintenance ofelectronics alarm and security systems.

Electronics Systems andBusiness Components Equipmentsegments Distribution Distribution Others Total

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

Turnover 74,456 81,125 21,217 40,726 2,202 1,809 97,875 123,660

Segment results 352 3,067 1,361 2,744 251 186 1,964 5,997

Finance costs (556) (858)

Share of resultsof associatedcompanies (82) (9 )

Profit fromoperating activitiesbefore taxationminority interests 1,326 5,130

Taxation (290) (1,232 )

Minority interests (31) 56

Net profit forthe financialyear 1,005 3,954

Assets 32,832 32,754 4,910 4,677 817 679 38,559 38,110

Investment inassociatedcompanies 127 210

Unallocatedassets 2,722 2,952

Total Assets 41,408 41,272

Liabilities 9,826 14,006 2,369 4,315 1,194 354 13,389 18,675

Unallocatedliabilities 2,423 2,876

Total liabilities 15,812 21,551

Capitalexpenditure 889 662 381 165 58 77 1,328 904

Depreciationandamortisation 368 210 158 52 360 222 886 484

40


31. Segmental information (cont’d)Geographical segmentsTurnover is based on the location of customers regardless of where the goods are produced. Assetsand additions to property, plant and equipment are based on the location of those assets.

Turnover Total assets Capital expenditure2002 2001 2002 2001 2002 2001

$’000 $’000 $’000 $’000 $’000 $’000

Singapore 38,354 42,440 17,880 19,516 1,126 865

Malaysia 31,676 30,715 12,288 8,326 5 9

People’s Republicof China andHong Kong 14,341 31,733 3,405 7,938 19 30

Other countries 13,504 18,772 7,835 5,491 178 -

97,875 123,660 41,408 41,271 1,328 904

32. Financial risk management objectives and policiesThe main risks arising from the Group’s financial statements are interest rate risk, credit risk andforeign currency risk. The Board reviews and agrees policies for managing each of these risks andthey are summarised below:-

Interest rate riskThe Group’s exposure to market risk for changes in interest rates relates primarily to the Group’sshort-term debt obligations.

The Group obtains additional financing through bank borrowings and leasing agreements. The Group’spolicy is to obtain the most favourable interest rate available without increasing its foreign currency exposure.

Information relating to the Company’s interest rate risk exposure is disclosed in Notes 21, 22 and 23.

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

The Group has no significant concentration of credit risk with any single or group of customers.Surplus funds are placed with reputable financial institutions.

The carrying amount of cash and cash equivalents, trade debtors and other debtors as well as amountsdue from associated companies represent the Group’s maximum exposure to credit risk in relation toits financial assets. No other financial assets carry a significant exposure to credit risk.

Foreign currency riskThe Group has exposure to foreign exchange risk as a result of transactions denominated in foreigncurrencies, such as sales and purchases that are denominated in currencies other than Singaporedollars. The currencies giving rise to foreign currency risk are primarily United States dollars, Malaysianringgit and Hong Kong dollars.

The Group does not use any foreign currency forward exchange contracts for trading or speculative purposes.



33. Fair value of financial instrumentsThe following methods and assumptions are used to determine the fair value of each class of financialinstruments for which it is practicable to estimate that value.

Trade debtors and trade creditorsTrade amounts due from/(to) subsidiary and associated companiesThe carrying amounts of these debtors and creditors approximate fair values because these aresubject to normal trade credit terms.

Other debtors, creditors and accrualsThe carrying amounts of these balances approximate their fair values due to the relatively short-termmaturity of these financial instruments.

Non-trade amounts due from/(to) subsidiary companiesNo disclosure of fair value is made for non-trade amounts due from/(to) subsidiary companies as itis not practicable to determine their fair values with sufficient reliability since these balances arenon-interest bearing and have no fixed terms of repayment.

Hire purchase creditorsThe fair value of hire purchase creditors is stated in Note 21.

Bank overdrafts and term loansThe carrying amounts of bank overdrafts and term loans approximate their fair values as the interestrates charged on these balances are based on floating interest rates and terms that continue to beavailable to the Group. The information on interest rates is disclosed in Notes 22 and 23.

34. Comparative figuresCertain comparative figures have been reclassified to conform with the current year’s presentation.

The presentation and classification of items in the financial statements have been extended orreclassified, where applicable, to comply with requirements of the new or revised Singapore Statementsof Accounting Standards which came into effect in the financial year as disclosed in Note 2(a) to thefinancial statements.

Prior year’s comparative figures were audited by a firm of certified public accountants other thanErnst & Young.

42

S H A R E H O L D E R S ’ S TAT I S T I C S as at 11 April 2003

Authorised Share Capital : $20,000,000Issued and Fully Paid-up Capital : $11,246,000Class of Shares : Ordinary shares of $0.10 eachVoting Rights : One vote per share

Distribution of Shareholders by Size of ShareholdingsNo. of

Size of Shareholdings Shareholders % No. of Shares %

1 - 999 0 0.00 0 0.001,000 - 10,000 368 51.83 2,482,600 2.2110,001 - 1,000,000 336 47.32 19,880,800 17.681,000,001 and above 6 0.85 90,096,600 80.11

Total 710 100.00 112,460,000 100.00

List of Top Twenty ShareholdersPercentage

S/No. Name of Shareholders No. of Shares of Holdings

1 TAN SIAK LIAN 41,743,600 37.12

2 ACAL PLC 41,287,000 36.71

3 TAY BOON KIAT 2,453,000 2.18

4 WANG SHU YI 1,688,000 1.50

5 DBS VICKERS SECS (S) PTE LTD 1,479,000 1.31

6 UOB KAY HIAN PTE LTD 1,446,000 1.29

7 WONG HOT YONG 972,400 0.86

8 DYNAX HOLDINGS LIMITED 700,000 0.62

9 PHILLIP SECURITIES PTE LTD 681,000 0.61

10 UNITED OVERSEAS BANK NOMINEES PTE LTD 523,000 0.47

11 SEAH SIEW HENG 500,000 0.44

12 CITIBANK NOMINEES S’PORE PTE LTD 464,000 0.41

13 KIM ENG ONG ASIA SECS PTE LTD 427,000 0.38

14 HO SENG FATT 403,600 0.36

15 CHAN MING HOE 400,000 0.36

16 DBS NOMINEES PTE LTD 384,000 0.34

17 LIOW AH SAI 350,000 0.31

18 LIU YA-LING 315,000 0.28

19 SEET PENG YAM 314,200 0.28

20 OCBC SECURITIES PRIVATE LTD 313,000 0.28

Total 96,843,800 86.11


S H A R E H O L D E R S ’ S TAT I S T I C S as at 11 April 2003

Substantial Shareholders (as shown in the Register of Substantial Shareholders)

Direct DeemedName of Shareholders Interest Interest

1 TAN SIAK LIAN (1) 41,743,600 132,000

2 ACAL PLC 41,287,000 -

Notes:(1) Deemed to have an interest in 132,000 ordinary shares of $0.10 each held in the name of his spouse,

Ms Boey Lai Foon, Christine.

On the basis of the information available to the Company, approximately 22.36% of the issued ordinary sharesof the Company are held in the hands of the public. This is in compliance with Rule 723 of the Listing Manual ofthe SGX-ST which requires at least 10% of a listed issuer’s equity securities to be held by the public.

44

N O T I C E O F A N N U A L G E N E R A L M E E T I N G(WesTech Electronics Limited – Incorporated in The Republic of Singapore)

NOTICE IS HEREBY GIVEN THAT the Annual General Meeting of the Company will be held at Board Room,4th Floor, 34 Kaki Bukit Crescent, Kaki Bukit Techpark 1, Singapore 416263 on 16 May 2003 at 4.00 p.m. forthe purpose of transacting the following business:-

As Ordinary Business1. To receive and adopt the Audited Accounts for the year ended 31 December 2002 and the Reports of

the Directors and Auditors thereon. (Resolution 1)

2. To declare a Final Dividend of 0.5 cents per share, less tax of 22% for the year ended 31 December 2002.(Resolution 2)

3. To approve Directors’ fees of S$51,116 for the financial year ended 31 December 2002. (Resolution 3)

4. To re-elect Mr Tay Boon Kiat who is retiring in accordance with Article 91 of the Company’s Articles ofAssociation and who, being eligible, offers himself for re-election. (Resolution 4)

5. To re-elect the following Directors who are retiring in accordance with Article 97 of the Company’s Articlesof Association and who, being eligible, offers themselves for re-election:-

(a) Dr Ong Chit Chung (Resolution 5)(b) Dr Ho Ngiap Kum (Resolution 6)

Dr Ong Chit Chung, will upon re-election as Director of the Company, remain as chairman of the AuditCommittee and Dr Ho Ngiap Kum, will upon re-election as Director of the Company, remain as memberof the Audit Committee. Dr Ong and Dr Ho will be considered to be independent for the purpose of Rule704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

6. To re-appoint Messrs Ernst & Young as Auditors and to authorise the Directors to fix their remuneration.(Resolution 7)

As Special BusinessTo consider and, if thought fit, to pass the following as Ordinary Resolutions, with or without modifications:-

7. Authority to allot and issue shares (Resolution 8)

“That, pursuant to Section 161 of the Companies Act, Cap. 50 and the listing rules of the SingaporeExchange Securities Trading Limited, authority be and is hereby given to the Directors of the Company toissue shares and convertible securities in the Company at any time to such persons and upon suchterms and conditions and for such purposes as the Directors may in their absolute discretion deem fit,provided that the aggregate number of shares and convertible securities to be issued pursuant to thisresolution does not exceed 50% of the issued share capital of the Company, of which the aggregatenumber of shares and convertible securities to be issued other than on a pro-rata basis to shareholdersof the Company does not exceed 20% of the issued share capital of the Company, and for the purposeof this resolution, the issued share capital shall be the Company’s issued share capital at the time thisresolution is passed (after adjusting for any subsequent consolidation or subdivision of the Company’sshares), and unless revoked or varied by the Company in general meeting, such authority shall continuein force until the conclusion of the next annual general meeting of the Company or the date by which thenext annual general meeting of the Company is required by law to be held, whichever is the earlier.”

[see Explanatory Note (i)]



8. Authority to grant options and issue shares under the Share Option Scheme (Resolution 9)

“That pursuant to Section 161 of the Companies Act, Cap. 50, approval be and is hereby given to theDirectors of the Company to allot and issue from time to time such number of shares in the capital of theCompany pursuant to the exercise of options granted in accordance with the provisions of the ShareOption Scheme (the “Scheme”), and, pursuant to the Scheme, to offer and grant options from time totime in accordance with the provisions of the Scheme, provided always that the aggregate number of theScheme Shares shall not exceed fifteen (15) per cent of the issued share capital of the Company fromtime to time.”

[see Explanatory Note (ii)]

9. Authority to grant options under the Company’s Share Option Scheme at a discount to market price(Resolution 10)

“That approval be and is hereby given for offers and grants of options to be made pursuant to and duringthe subsistence of the Scheme to persons who are eligible and are selected to participate in the Scheme,to subscribe for shares of S$0.10 each in the capital of the Company (“Shares”) at such subscriptionprices (“Subscription Prices”) as may be determined and fixed in accordance with the provisions of theScheme, including any Subscription Prices which are set at discounts to the market prices for the Shares(as determined in accordance with the provisions of the Scheme) at the time of the grants of suchoptions, provided that:-

(a) the maximum discount shall not, in any case, exceed 20 per cent of the relevant market price fora Share; and

(b) the Subscription Price for a Share shall not be less than the par value of the Share.”

[see Explanatory Note (iii)]

10. To transact any other business that may be transacted at an Annual General Meeting.

Notice of Books Closure DateNOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will beclosed on 6 June 2003, for the purpose of determining Members’ entitlements to the dividend to be proposedat the Annual General Meeting of the Company to be held on 16 May 2003.

Duly completed registrable transfers in respect of the shares in the Company received up to the close ofbusiness at 5.00 p.m. on 5 June 2003 by the Company’s Share Registrar, Barbinder & Co Pte Ltd, 8 CrossStreet, #11-00 PWC Building, Singapore 048424 will be registered to determine Members’ entitlements tosuch dividend. Members whose Securities Accounts with The Central Depository (Pte) Ltd are credited withshares in the Company as at 5.00 p.m. on 5 June 2003 will be entitled to such proposed dividend.

The proposed final dividend, if approved at the Annual General Meeting, will be paid on 20 June 2003.

BY ORDER OF THE BOARD

Tan Chin HockFoo Soon SooCompany Secretaries


46


Explanatory Note on Business to be Transacted

(i) The Ordinary Resolution in item no. 7, if passed, will empower the Directors of the Company to issueshares and convertible securities in the Company provided that the aggregate number of shares andconvertible securities to be issued does not exceed 50% of the issued share capital of the Company,of which the aggregate number of shares and convertible securities to be issued other than on apro-rata basis to shareholders of the Company does not exceed 20% of the issued share capital of theCompany for such purposes as they consider would be in the interests of the Company. The issuedshare capital shall be the Company’s issued share capital at the time this resolution is passed afteradjusting for any subsequent consolidation or subdivision of the Company’s shares. This authority will,unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Companyor the date by which the next Annual General Meeting of the Company is required by law to be held,whichever is the earlier.

(ii) The Ordinary Resolution in item no. 8, if passed, will empower the Directors of the Company to issue newshares for the exercise of any Options already granted and accepted under the Scheme.

(iii) The Ordinary Resolution in item no. 9, if passed, will empower the Directors of the Company to grantOptions at a discount to the market price, subject to a maximum of up to 20%.

Notes:

1) A member of the Company entitled to attend and vote at the General Meeting is entitled to appoint oneor two proxies to attend and vote in his stead. A proxy need not be a member of the Company.

2) The instrument appointing a proxy or proxies must be deposited at the registered office of the Companyat 34 Kaki Bukit Crescent, Kaki Bukit Techpark 1, Singapore 416263 not less than 48 hours before thetime fixed for the meeting.


P R O X Y F O R M(WesTech Electronics Limited – Incorporated in The Republic of Singapore)

I/We (Name)

of (Address)

being a member/members of Westech Electronics Limited (the “Company”) hereby appoint:

Proportion ofName Address NRIC/Passport No. Shareholding (%)

and/or (delete as appropriate)

Proportion ofName Address NRIC/Passport No. Shareholding (%)

or failing him/her, the Chairperson of the Annual General Meeting (“AGM”) of the Company as my/our proxy/proxies to vote for me/us on my/our behalf and, if necessary, to demand a poll at the AGM of the Company,to be held at Board Room, 4th Floor, 34 Kaki Bukit Crescent, Kaki Bukit Techpark 1, Singapore 416263 on16 May 2003 at 4.00 p.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for oragainst the Resolutions to be proposed at the AGM as indicated hereunder. If no specific directions as tovoting are given, the proxy/proxies will vote or abstain from voting at his /their discretion, as he/they will onany other matter arising at the AGM. If no person is named in the above boxes, the Chairperson of the AGMshall be my/our proxy/proxies to vote, for or against the Resolutions to be proposed at the AGM as indicatedhereunder, for me/us and on my/our behalf at the AGM and at any adjournment thereof.

No. Ordinary Resolutions For* Against*

1. To receive and adopt Directors’ Report and Audited Accounts2. To approve the payment of a final dividend3. To approve Directors’ Fees

4. To re-elect Mr Tay Boon Kiat5. To re-elect Dr Ong Chit Chung6. To re-elect Dr Ho Ngiap Kum

7. To re-appoint Auditors and to authorise the Directors to fixtheir remuneration

8. To authorise Directors to issue shares pursuant to Section 161of the Companies Act, Cap. 50

9. To authorise Directors to issue and grant shares under theShare Option Scheme

10. To approve grant of options under the Company’s Share OptionScheme at a discount to market price

11. Any other business

* Please indicate your vote “For” or “Against” with an “x” within the box provided.

Dated this day of 2003.

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

Total Number of Shares held

IMPORTANT:PLEASE READ NOTES OVERLEAF

I M P O R TA N T1. For investors who have used their CPF monies to buy Westech Electronics Limited shares,

the Annual Report is forwarded to them at the request of their CPF Approved Nominees andis sent FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents andpurposes if used or purported to be used by them.

48

The Company SecretaryWESTECH ELECTRONICS LIMITED

34 Kaki Bukit CrescentKaki Bukit Techpark 1

Singapore 416263

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 stead. A proxy need not

be a member of the Company.

2. Where a member appoints more than one proxy, he should specify the proportion of his shareholding (expressed as a percentage of the whole)to be represented by each proxy and if no percentage is specified, the first named proxy shall be deemed to represent 100 per cent of theshareholding and the second named proxy shall be deemed to be 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 name in the Depository Register(as defined in Section 130A of the Companies Act, Cap. 50 of Singapore), he should insert that number of shares. If the member has sharesregistered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has shares enteredagainst his name in the Depository Register and registered in his/her name in the Register of Members, he should insert the aggregate numberof 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. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 34 Kaki Bukit Crescent, Kaki BukitTechpark 1, Singapore 416263 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 underthe 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 dulycertified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrumentmay 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, authorise by resolutionof its directors or other governing body such person as it thinks fit to act as its representative at the Meeting.

8. The Company shall be entitled to reject the instrument appointing a proxy or proxies, if it is incomplete, improperly completed, illegible orwhere the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the instrument appointinga proxy or proxies. In addition, in the case of shares entered in the Depository Register, the Company may reject any instrument appointinga proxy or proxies if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at48 hours before the time appointed for holding the Meeting, as certified by the Central Depository (Pte) Limited to the Company.

1st Fold-in Here

2nd Fold-in Here

3rd Fold-in Here for Sealing

AFFIXSTAMP

30

CORPORATE INFORMAT ION

BOARD OF DIRECTORS

Jeffrey Tan Siak LianChairman and Chief Executive Officer(appointed in 1986)

Tay Boon KiatExecutive Director(appointed in 1997)

John Arthur Hugh CurryNon-Executive Director(appointed in 1995)

Dr Ong Chit ChungIndependent Director(appointed in 2002)

Dr Ho Ngiap KumIndependent Director(appointed in 2002)

EXECUTIVE OFFICERS

Seet Peng YamVice-PresidentFinance and Administration

Wong Hot YongVice-PresidentSystems and Equipment Division

Jap Bun Siong, PaulVice-PresidentComponents Division

Wang Shu-YiVice-PresidentBusiness Development

Tan Chin HockFinancial Controller

REGISTERED OFFICE

34 Kaki Bukit CrescentKaki Bukit Techpark 1Singapore 416263Tel : +65 6743 6355Fax: +65 6749 2848Website: www. westechelectronics.comEmail: [email protected]

JOINT COMPANY SECRETARIES

Foo Soon Soo CPA, FCIS, LLB (Hons)Tan Chin Hock CPA

SHARE REGISTRAR

Barbinder & Co. Pte Ltd8 Cross Street#11-00 PWC BuildingSingapore 048424

PRINCIPAL BANKERS

United Overseas Bank80 Raffles PlaceUOB PlazaSingapore 048624

The Development Bank Of Singapore Ltd6 Shenton Way, DBS Building-Tower OneSingapore 068809

Oversea-Chinese BankingCorporation Limited65 Chulia StreetOCBC CentreSingapore 049513

INDEPENDENT AUDITORS

Ernst & YoungCertified Public Accountant10 Collyer Quay#21-01 Ocean BuildingSingapore 049315Partner-in-Charge: Max Loh Khum Whai(with effect from the financial year ended 31 December 2002)

SOLICITORS

Rodyk & Davidson80 Raffles Place#33-00 UOB Plaza 1Singapore 048624

LISTING & TRADING SYMBOLS

Listed on 23 May 2002 on the Singapore ExchangeBloomberg: WTE.SPReuters: WTEH.SI

30


design & production by Q-PLUS design

26

SINGAPOREWesTech Electronics Limited34, Kaki Bukit CresentKaki Bukit Techpark 1Singapore 416263Tel : (65) 6743 6355Fax : (65) 6746 1396, (65) 6743 1403eMail : [email protected]

PEOPLE'S REPUBLIC OF CHINAWesTech Electronics Pte Ltd(Representative Office)Room 1810-1814, Hai Tian Building,No.2032 Cai Tian South Road,Fu Tian District, ShenZhen, China 518026Tel : (86) (755) 8346 0608Fax : (86) (755) 8346 0680eMail : [email protected]

INDIAWesTech Electronics India Pvt LtdNo.3302, 12th 'A' MAIN HAL 2nd StageBangalore - 560008Tel : (91) (80) 526 1102, (91) (80) 527 3174Fax : (91) (80) 526 3148eMail : [email protected]

THAILANDWesTech Electronics & Systems Co., Ltd302/11 Soi Ladproa 1,Ladproa Road, Landyao Subdistrict,Chattujak District, Bangkok 10900ThailandTel : (662) 939 3482 - 6Fax : (662) 939 3481eMail : [email protected]

THE PHILIPPINESWesTech Electronics Pte Ltd(Representative Office)Cubicle 2, 5th FloorRichville Corporate TowerMadrigal Business ParkAyala Alabang, Muntinlupa CityeMail : [email protected]

KOREAWesCal Korea Ltd.961-11, Hogye-dong, Dongan-ku, Anyang,Kyunggi, Korea 431-080Tel : (82) (31) 381 1002Fax : (82) (31) 381 1158eMail : [email protected]

HONG KONGWesCal Electronics (HK) Pte LtdUnit A13, 10/F, Blk A,Hong Kong Industrial Centre,489-491 Castle Peak Road,Kowloon, Hong KongTel : (852) 2310 9787Fax : (852) 2745 6468eMail : [email protected]

MALAYSIAWesCal Electronics Sdn. Bhd.(KL Branch)Suite 847, Block A2,Leisure Commerce Square (Bali)9 , Jalan PJS 8/946150 Petaling Jaya,Selangor, MalaysiaTel : (603) 7877 8175Fax : (603) 7877 8176eMail : [email protected]

WesCal Electonics Sdn. Bhd.(Penang Branch)81C-2-16 Jalan Sungai Dua11700 Penang, MalaysiaTel : (604) 657 7711Fax : (604) 656 2198eMail : [email protected]

TAIWANWesCal Electronics Pte Ltd8F-4, No. 14, ShiWei St.SanChung CityTaipei Hsien, Taiwan R.O.C.Tel : (886) (2) 8287 8827Fax : (886) (2) 2280 8908eMail : [email protected]

Documents

WESTECH'02 120403 5 - listed companyweh.listedcompany.com/misc/ar2002.pdf · WesTech Electronics is a distributor and manufacturers’ representative of a comprehensive range of electronics