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ASPIRINGTRANSFORMINGPROGRESSING

EXCELPOINT TECHNOLOGY LTDANNUAL REPORT 2007

EXCELPOINT is a value-added partner to Asia’s electronics manufacturers. Headquartered in Singapore, Excelpoint began as a distributor of electronic components in 1987. The company has since evolved and grown into a total solutions provider of quality components, engineering designs and supply chain services to OEM (original equipment manufacturers), ODM (original design manufacturers) and CM (contract manufacturers) in Asia.

Working closely with its principals, Excelpoint has a team of dedicated research and development professionals who will identify new trends and developments in the electronics industry to create and test drive new technical features that will complement their customers’ products.

The total solutions and reference designs created by Excelpoint for OEM customers are found in a wide range of applications – from medical equipment devices to the VoIP (Voice over Internet Protocol) devices, and from power protection and metering devices used in the industrial sector to video surveillance devices for homes, commercial buildings and national homeland security projects as well as the wireless communications domain.

Excelpoint also extends its expertise in supply chain management and wide value chain network to its customers, helping them to improve efficiency, manage costs and reduce their lead time to market.

Excelpoint is listed on the Mainboard of Singapore Stock Exchange since 2004. The company employs over 600 staff and has facilities and offices in 30 cities across Asia and the Pacific, including Singapore, Australia, Hong Kong, China, India, Korea, Malaysia, Philippines and Thailand.

For more information, please visit our website: www.excelpoint.com

CONTENTS01 GEOGRAPHICAL PRESENCE // 03 CHAIRMAN’S STATEMENT // 04 EXCELPOINT 20TH ANNIVERSARY06 BOARD OF DIRECTORS // 08 KEY MANAGEMENT // 09 CORPORATE STRUCTURE // 10 OPERATIONS REVIEW12 FINANCIAL HIGHLIGHTS // 13 FINANCIAL REVIEW // 16 CORPORATE INFORMATION

01EXCELPOINT TECHNOLOGY LTDANNUAL REPORT 2007

//GEOGRAPHICAL PRESENCE//CHAIRMAN’S STATEMENT//EXCELPOINT 20TH ANNIVERSARY//BOARD OF DIRECTORS//KEY MANAGEMENT//CORPORATE STRUCTURE//OPERATIONS REVIEW//FINANCIAL HIGHLIGHTS//FINANCIAL REVIEW//CORPORATE INFORMATION

CHINA

Beijing ChengduHarbinHongKongNanjingQingdaoShanghaiShenzhenXiamenXianZhuHai

KOREA

Seoul

MALAYSIA

KualaLumpurPenang

PHILIPPINES

Manila

THAILANDBangkok

SINGAPORE

Headquarters

AUSTRALIA

Sydney

INDIA

BangaloreHyderabadMumbaiNewDelhiPune

ALBERT PHUAY YONG HENCHAIRMAN AND GROUP CEO

Over our 20 years in business, we have built the groundworkthatwillallowus to leveragenewopportunities in theglobalmarketforgrowth.Theskyisourlimit.

TheGroupachievedaprofitaftertaxationof$1.2millionwithrevenueof$486.8million.TheshiningbeaconinourbusinesscontinuestobeourDesign-inserviceswhichdelivered9.5%riseinoperatingprofit.Similarly,theGroup’sDistributionbusinessposteda3.9%riseinoperatingprofit.

MyheartfeltthankstoourBoardofDirectorsfortheirguidanceandsupporttothesenior leadershipteam.Together,withouremployees, shareholders, customers and partners, Excelpointhad adapted well to the changing needs of the electronicsmarketplace and made inroads into wider sets of customersegmentstodelivervaluetoourshareholders.

Inappreciationforallofourshareholders,theBoardrecommendsadividendof0.25SingaporecentsperordinarysharesubjecttoyourapprovalattheforthcomingAnnualGeneralMeeting.

ALBERT PHUAY YONG HENCHAIRMAN AND GROUP CEO

... Excelpoint managed to maintain customer loyalty, grow our customer base and deepen our market penetration... we have built the groundwork that will allow us to leverage new opportunities in the global market for growth. The sky is our limit.

2007hasbeenahighlymemorableyearforExcelpoint.Itmarkedaturningpointinourjourneyoftransformation–fromthatofbeing the region’s electronic components distributor to thatofahighly regardedvalue-addedpartner toAsia’selectronicsmanufacturersandindustrialcorporations.

The Group focused on our three core pillars of our business– financial, knowledge and human capital. We have a strong,experienced team of leaders and engineering professionalsworking closely with our partners and customers to delivertotal solutions – from engineering designs to supply chainmanagementservicesusingourimpressivenetworkacrossAsia.

As such, despite the difficult market conditions marked byindustryconsolidation,aweakeningUSdollarandrisingcosts,Excelpoint managed to maintain customer loyalty, grow ourcustomerbaseanddeepenourmarketpenetration.

We re-aligned our business units towards key customersegmentsandgrewsales intovarioussegments ranging fromconsumer electronics, industrial projects, commercial andgovernment infrastructure projects, automotive and evennavigationalproducts.

The new partner signings made with major names LegendSiliconCorporation(“LegendSilicon”)andXilinx, Inc. (“Xilinx”)willgiveustheabilitytoofferourtotalsolutionstoagrowingcustomer segment – from nation-wide digital broadcastinfrastructure projects to power meters for industrial projectsacrossthemarketsweoperatein.

:: 02 03EXCELPOINT TECHNOLOGY LTDANNUAL REPORT 2007


CELEBRATING 20 YEARS OF ENTERPRISE EXCELLENCE!

It has been a remarkable journey ofdevelopments, challenges and growthbyExcelpointTechnologyLtd–20yearsofenterpriseexcellencethathasseentheGroup transform from being a winningand preferred distributor of electroniccomponentstoadynamictotalsolutionsproviderwithimpressiveR&Dcapabilitiesthat drive value creation in productdesignsforourbusinesspartners.

These achievements would not havebeenpossiblewithoutthesupportofourcustomersandvaluablepartners.


OUR KEY MILESTONES AND AWARDS SUMMARY

• VotedastheTop10PreferredRegionalDistributorsinChinabyElectronicsBuyers’NewsChinaforthelast4years.

• Ranked#9amongsttheTop10CompaniesbyMarket(India)and#47amongsttheSingaporeTop100Companies,inyear2007.

• AwardedrecognitionbySpansionLLC(“Spansion”)forbeingtheBestDistributorinAsiaforyear2007.

• Gained strategic distributorship agreements with worldleaders in semiconductor technology solutions such asAnalogDevicesB.V.(“ADI”),CambridgeSiliconRadioLimited(“CSR”), Fujitsu Mircoelectronics Asia Pte Ltd (“Fujitsu”),LegendSilicon,LeadisTechnology,Inc.(“Leadis”),MicrochipTechnologyIncorporated(“Microchip”),NXPSemiconductorsSingapore Pte Ltd (“NXP”), RF Micro Devices, Inc. (“RFMD”),Spansion,SamsungAsiaPteLtd (“Samsung”),SigmaTel, Inc(“SigmaTel”),TDKSingapore(Pte)Ltd(“TDK”)andXilinx,justtonameafew,acrosstheAsiaPacificregion.

• Outstanding and Special Awards presented to Group CEO ofETLbyADIandCSRrespectively, forHighestLevelofPassionandCommitmentindrivingthebusinessinAsia.

• AwardedrecognitionforbeinginnovativeonourDesign-IneffortforAmoiMobilePhonebyCSR.

• Awarded recognition by our principals – ADI, Samsungand TDK, for outstanding performance, sales records andbusinessgrowth.

• Awardedrecognitionbyourprincipals–ADIforexcellenteffortsinsalesandpromotionalactivitiesinAsiaPacificregion.

OUR COMMITTED AND LOYAL EMPLOYEES

Excelpoint had been building the careers of our employeesover the last 20 years. In return, these committed and loyalprofessionalshadcontributedimmenselytotheGroup,makingthejourneyoftransformationpossible.


ROSALIND TAY(VICE PRESIDENT OF FINANCE)18 YEARS WITH EXCELPOINT

It’s not easy to come to this stage from a mere two-man operation. Today, Excelpoint has over 600 staff worldwide. It’s due to hard work, perseverance and great leadership that we have come so far in the last 20 years. I’m grateful for our management team – they are loyal and committed in their respective fields. Staff like myself, we can see their commitment and we truly appreciate them. It’s a great place to work!

Over the years, Excelpoint had grown with more people and operations. As an IT professional, I’ve had to deal with the growing information needs of this company. This has really given me a lot of opportunities to explore, learn and deliver IT solutions to meet the company’s needs. I’m looking forward to more challenges to take up!

Unlike other companies where I’ve worked, Excelpoint gives me opportunities to prove myself and rewards me with the ability to see the business roadmap and offers me career development opportunities. I feel appreciated by the company for the work I’ve put in over the years. The senior leaders continue to encourage me and help me utilise my talents as the Group continues to grow and expand into new territories.

I have learnt much over the last ten years from our Chairman and Group CEO, Albert Phuay, and our Vice President of Operations, William Low. These leaders, despite their busy schedules, had given me invaluable guidance and insights into building and growing the Excelpoint business. I admire their entrepreneurial spirit, traditional values and their progressive outlook. They have made me excited about the role I play in bringing the Group to the next level.


ESTHER ANG(ASSISTANT MIS MANAGER)15 YEARS WITH EXCELPOINT

SAMUEL GE(VICE PRESIDENT OF FIELD APPLICATIONS)15 YEARS WITH EXCELPOINT

JOACHIM D’SOUZA(DEPUTY DIRECTOR OF SALES)10 YEARS WITH EXCELPOINT



SUNNY WONG FOOK CHOY

was appointed as an Independent Non-Executive Director on13November2003andwasre-electedon26April2005.HeistheChairmanoftheRemunerationCommitteeandamemberof the Audit Committee and Nominating Committee. He isa practising advocate and solicitor of the Supreme Court ofSingapore.Hestartedhislegalcareerin1982.HeiscurrentlytheManagingDirectorofWongTan&MollyLimLLC.Heholdsa Bachelor of Laws (Honours) from the National Universityof Singapore. He is a director in the following public listedcompanies in Singapore: Global Testing Corporation LimitedandAlbedoLimited.

PROFESSOR LOW TECK SENG

wasappointedasanIndependentNon-ExecutiveDirectoron19April2006.HeistheChairmanoftheNominatingCommitteeand a member of the Audit Committee and RemunerationCommittee. He holds a Bachelor of Science (First Class) andPh.D, in 1978 and 1982 from the Southampton University,United Kingdom. Prof. Low currently chairs Singapore’sA*STAR (Agency for Science,Technology and Research)TSRP(Thematic Strategic Research Programmes) and its programonNanoelectronics.HeisalsoaBoardMemberoftheHealthScience Authority, the National Community LeadershipInstitute and a Technical Panel member for the NationalEnvironmentalAgency.

KWAH THIAM HOCK

was appointed as an Independent Non-Executive Director on18April2007.HeistheChairmanoftheAuditCommitteeandalso a member of the Remuneration Committee. Mr. KwahholdsaBachelor inAccountancy fromtheNationalUniversityof Singapore. He is a Fellow CPA of Australian Society ofAccountantsandalsoaFellowMemberofboththeInstituteofCertifiedPublicAccountantsofSingaporeandACCA(UK).

ALBERT PHUAY YONG HEN

isthefounderofourGroupandisalsoourChairmanandGroupChief Executive Officer. He was appointed as an ExecutiveDirectoron18May2001andwaslastre-electedon28April2004.HeisalsoamemberoftheNominatingCommittee.Heoverseesthegeneralmanagementofourbusinessandisalsoresponsiblefor our Group’s strategic direction and planning and businessdevelopment. Prior to forming Excelpoint Systems (Pte) Ltd(“ESPL”),Mr.Phuayhadheldvariousmanagementpositionsinseveralcompaniesfrom1977-1986.Mr.PhuayholdsaTechnicalCertificate in Electronics from the Institute of TechnicalEducation in Singapore. He has also received a Long ServiceAwardcertificate in recognitionofhisvoluntarycontributionsto the Ministry of Community Development and Sports since1985,asaProbationOfficer.

ALAN KWAN WAI LOEN

wasappointedasanExecutiveDirectoron18May2001andwaslastre-electedon19April2006.HeistheManagingDirectoroftheLightsElectronicsPteLtd(“LES”)GroupandwasappointedasadirectorofLES in1993. He is responsible for thegeneralmanagement in the LES Group. Mr. Kwan holds a Diplomain Production Engineering from the Singapore Polytechnic,a Diploma in Marketing Management from the Ngee AnnPolytechnic and a Diploma from the Chartered Institute ofMarketingintheUnitedKingdom.

DAVID KOK FAT KEUNG

wasappointedasanExecutiveDirectoron5July2001andwaslastre-electedon26April2005.HeistheChiefOperatingOfficerof the Excelpoint Systems (H.K.) Limited (“ESHK”) Group andwas appointed as a director of ESHK in 1995. He is responsibleforthegeneralmanagementandbusinessdevelopmentoftheESHKGroup.Mr.KokholdsanOrdinaryCertificateinElectronicsEngineering from the Morrison Hill Technical Institute ofHongKong.


WILLIAM LOW MONG CHAI

is theVicePresidentofOperationsof theESPLGroup.Heoversees theoveralloperationsoftheESPLGroup. Mr.LowholdsaDiploma in Production Engineering and Industrial Systems from the Singapore Polytechnic and a Manufacturing ManagementConsultantCertificatefromSANNOInstituteofBusinessAdministrationinJapan.HeisalsoaCertifiedPractitionerofMethod-Time-Measurement-2fromMethod-Time-MeasurementAssociationLimitedintheUnitedKingdom.

HERBERT KWOK FEI LUNG

is the Senior Vice President of Business Unit of the ESHK Group. He oversees all the activities for PRC (including Hong Kong).Mr.KwokholdsaHigherDiplomainMarineElectronicsfromtheHongKongPolytechnic.

PHUAY YONG CHOON

is theVice President of Sales of the ESHK Group. He is responsible for and oversees the sales activities of the ESHK Group forPRC(includingHongKong).Mr.PhuayholdsaDiplomainElectronicsandCommunicationsfromtheSingaporePolytechnicandaPostgraduateDiplomainSalesandMarketingfromtheCharteredInstituteofMarketingintheUnitedKingdom.

GE YIXIN

is theVicePresidentofFieldApplicationsof theESHKGroup.Hisareasof responsibilities includeplanningof technicaldesignsand evaluation of projects for the design and development divisions of the ESHK Group. Mr. Ge holds a degree in AutomaticManufacturingSystemsfromtheShanghaiUniversityofTechnologyandwasconferredtheMastersofEngineeringdegreebythesameuniversity.

ANG TOK BENG

istheVicePresidentofSales(SouthernChina)ofESHKGroup.HeisresponsibleforthesalesandprofitabilityfortheSouthernChinaaswellasthestrategicaccountswithintheGroup.Mr.AngholdsaDiplomainElectronics&CommunicationfromtheSingaporePolytechnic,aDiplomainSales&MarketingfromtheSingaporeInstituteofMarketingandaDiplomainMarketingfromtheInstituteofMarketingintheUnitedKingdom.

IVAN LEE SEE THIAM

istheChiefFinancialOfficerofETL.HeoverseestheoverallfinancialactivitiesoftheGroup.Mr.LeeholdsaMastersofCommerce(AccountingandFinance)fromTheUniversityofSydney,AustraliaandaBachelorofBusinessAdministrationwithMeritfromtheNationalUniversityofSingapore.


ExcelpointSystemsSdn.Bhd.Malaysia•100%

ExcelpointSystems(Pte)Ltd(AustraliaBranch)

Australia

RepresentativeOfficesIndia-Bangalore,Hyderabad,

Mumbai,NewDelhi,PuneKorea-Seoul

ThePhilippines-ManilaThailand-Bangkok

EXCELPOINT SYSTEMS(PTE) LTD

SINGAPORE (100%)

LightsElectronics(H.K.)LimitedHongKong•100%

LightsElectronics(Shanghai)Co.,Ltd.PRC•100%

LightsElectronics(Shenzhen)Co.,Ltd.PRC•100%

SunLightsElectronics(M)Sdn.Bhd.Malaysia•100%

RepresentativeOfficesIndia-Bangalore,NewDelhi

PRC-Beijing,Xiamen

LIGHTS ELECTRONICS PTE LTDSINGAPORE (100%)

ExcelpointManufacturingPte.Ltd.Singapore•100%

ExcelpointManufacturing(ZhuHai)Co.,Ltd

PRC•100%

EXCELPOINT SOLUTIONSPTE. LTD.

SINGAPORE (100%)

EXCELPOINT TECHNOLOGY LTD

EXCELPOINT SYSTEMS (H.K.) LIMITED

HONG KONG (100%)


ExcelpointInternationalTrading(Shanghai)Co.,Ltd

PRC•100%

ExcelpointInternationalTrading(Shenzhen)Co.,Ltd

PRC•100%

GeneralEngineers(H.K.)LimitedHongKong•100%

RepresentativeOfficesPRC-Beijing,Chengdu,

Harbin,Nanjing,Qingdao,Xiamen,Xian

Excelpoint’s business units registered a healthy growth forFY2007. We generated $1.2 million in net profit after tax withrevenueof$486.8million.

Importantly, the Group’s Design-in business brought in anoperatingprofitof$3.3million,aslightincreasefrom$3.0millioninFY2006,whileDistributionactivitiesrecordasimilargrowthat$2.1millionascomparedtoFY2006.

BE CUSTOMER FOCUSED

In FY2007, the Group encountered a number of challenges,namely rising operating expenses in rentals, materials andtalent,weakeningoftheUSdollarwhichweusefortransactions,as well as consolidations in the electronics industry. Wesawmergersandacquisitionsatboththeprincipalandcustomerlevels.

In order to stay the course in such challenging environmentsandasapartofourtransformationaljourney,wetookanumberofstepsinFY2007:-

Driving greater synergies across functional units and marketsWidening solutions portfolio

Responding faster to market changes and needsSETTING THE FOUNDATION FOR GROWING CUSTOMER BASE

1. We became customer-focused, not product-focused.Wewantedtobeatotalsolutionsprovidertoourcustomers–fromcomponentlevelstohighvalue-addedservicesthatwilldrivegreaterefficienciesandsavingsforourcustomers.With that in mind, Excelpoint restructured our businessunitsacrossallmarkets.

ForourOEMandCMcustomers,forinstance,wecollaboratedwiththemtocreatetechnicalmodulesthatwillcomplementtheir own electronic products to a range of supply chainmanagement services. The solution modules which wehadcreatedforourcustomersmadetheirwayintoawiderapplications–frommedicalequipmentdevicestothehighlypopularVoIP(Voiceover InternetProtocol)devices,powerprotection and metering devices used in the industrialsectortovideosurveillancedevicesforhomes,commercialbuildingsandnationalhomelandsecurityprojects.



2. Weventuredintonewmarkets.WeidentifiedAsianmarketslike Bangladesh and Korea, which we believed to have thepotentialforgrowth,andsentoursalesteamsin.

3. We signed up new partners. Among the partners wesigned inFY2007wereXilinx, theworld’smarket leader inprogrammablelogicdevices;LegendSilicon,co-developerof China’s Digital Television Terrestrial BroadcastingSystem Standard and provider of the Standard compliantdemodulator products needed to create applications fordigital television; and with Leadis for semiconductorsintegraltomobilemediaplayersandassociatedaccessories.Thisnewsetofpartnerswillenableustoofferawiderrangeofsolutionstoourcustomersandtogrowourcustomersatalllevels.

4. Wegroomedourtoptalents.Talentedprofessionalswhomwebelievetohavethepotentialtoserveasnext-generationleaders were identified.We groomed these talented teammembers to ensure that they understand our businessand our transformation journey clearly. Their on-groundexperiencehadalsointurndeepenedourunderstandingofourcustomers’needs,wantsandchallenges.

Goingforward,wewillbeabletodrivegreatersynergiesacrossthe functional units and markets, deliver a wider range ofsolutions to our customers, respond faster to market changesand needs, and more importantly, set the foundation for agrowingcustomerbase.Essentially,wewillbeabletooperateefficientlywhilemaintainingcustomerloyalty.


* Forcomparativepurposes,theearningspershareandnetassetvaluepershareasat31December2003werecomputedbasedonthepre-invitationsharecapitalof347,971,200shares.

Asat31December2004,theearningspershareandnetassetsvaluepersharewerecomputedbasedontheweightedaveragesharecapitalof482,378,299sharesissuedduringthefinancialyearandyear-endsharecapitalof486,022,200shares,respectively.

Asat31December2005to2007,theearningspershareandnetassetsvaluepersharewerecomputedbasedonthesharecapitalof486,022,200shares.


RESULTS OF OPERATIONS (US$’000) 2003 2004 2005 2006 2007

Totalrevenue 373,430 576,693 453,290 454,212 486,785Profitbeforetaxation 7,605 8,986 1,969 3,508 2,104Profitaftertaxationattributabletoequityholders 6,123 7,031 767 2,516 1,210Earningspershare(cents)* 1.76 1.46 0.16 0.52 0.25Returnonequity(%) 41 17 2 6 3

BALANCE SHEETS (US$’000)

Shareholders’equity 14,913 42,194 42,824 44,553 44,169Fixedassets 6,019 6,567 4,280 4,895 5,736Intangibles 255 244 223 223 223Currentassets 141,890 147,483 120,351 124,673 144,278Currentliabilities 132,169 111,182 81,551 84,821 105,645Netcurrentassets 9,721 36,301 38,800 39,852 38,633Long-termliabilities 1,131 918 478 417 423Borrowings 42,691 29,127 15,202 12,497 31,655Netassetsvaluepershare(cents)* 4.29 8.75 8.81 9.17 9.09

FY2007 revenue increased partly due to Excelpoint’stransformation initiatives. The Group maintained customerloyaltywhileleveragingnewopportunitiesintheglobalmarkettogrowitscustomerbaseanddeepenmarketpenetration.

REVENUE (US$’MILLION)

727


REVENUE

373

03

454487

0706

453

577

04 05

From a segmental business standpoint, the Group’s Design-in activities accounted for 50.9% of total Group revenue.WhiletheDistributionactivitiesfollowedcloselywith48.3%,theSub-SystemManufacturingactivitiesamountedfor0.8%oftotalGrouprevenueforFY2007.

REVENUE BY BUSINESS ACTIVITIES (%)

REVENUE BY BUSINESS ACTIVITIES

Design-in50.9%

Distribution48.3%

Sub-System0.8%


50.9%

48.3%

0.8%

Despite the difficult market conditions in FY2007 withchallenges such as a weakening US dollar, rising costs andindustry consolidation, the Group remained profitable. Netprofitaftertaxstoodat$1.2millioninFY2007.

NET PROFIT AFTER TAX (US$’MILLION)

NET PROFIT AFTER TAX

727

03 070604 05

6.1

7.0

0.8

2.5

1.2

* Comprise: Thailand, Philippines and Others

China continues to be a major geographical segment forthe Group, accounting for 62.4% of its total revenue inFY2007.Singaporeaccountedforabout15.6%whilerevenuecontributions from India made up to 6.7%. The strongestgrowth in FY2007 was from Thailand, where revenue rosefrom$9.1millioninFY2006to$29.5millioninFY2007.

REVENUE BY GEOGRAPHICAL LOCATION (US$’MILLION)

727

REVENUE BY GEOGRAPHICAL LOCATION

China

420

259

India

6731

Others*

3819

Malaysia

75 61

Singapore

154

84

304

76

3335 39

070605



Total headcount for the year as at 31 December 2007 stoodat627employees.Thisrepresentedanincreaseof4.5%fromthe 600 in FY2006 as a result of overall business expansion.Higherattentiontoresearchanddevelopmentactivitiessawitsheadcountroseby18.

HUMAN CAPITAL

727

HUMAN CAPITAL

8733

5

121

03

376

127

374

147

453

165

462

R&D&FieldEngineers

Operations,Sales&Others

04 05 06 07

The Group’s efficiency of operations improved for the yearin tandem with its performance. It reduced average debtorsturnover time from 54 to 50 days, while average creditorsturnoverdaysalsofellmarginallyfrom56daysto55daysfortheyear.Onaverage,inventoryturnovertimehaslengthenedfrom34daysto45days.

OPERATIONAL EFFICIENCY (DAYS)

727

OPERATIONAL EFFICIENCY

57 54

38 34

59 56

5055

4546

52

35

DebtorsT/O CreditorsT/O InventoryT/O

07060504


BOARD OF DIRECTORS

EXECUTIVEMr.AlbertPhuayYongHen(Chairman and Group Chief Executive Officer)Mr.AlanKwanWaiLoenMr.DavidKokFatKeung

NON-EXECUTIVEMr.SunnyWongFookChoy(Independent)ProfessorLowTeckSeng(Independent)Mr.KwahThiamHock(Independent)(Appointed as Director on 18 April 2007)

AUDIT COMMITTEE

Mr.KwahThiamHock(Chairman)(Appointed on 18 April 2007)Mr.SunnyWongFookChoy(Member)ProfessorLowTeckSeng(Member)

NOMINATING COMMITTEE

ProfessorLowTeckSeng(Chairman)Mr.SunnyWongFookChoy(Member)Mr.AlbertPhuayYongHen(Member)

REMUNERATION COMMITTEE

Mr.SunnyWongFookChoy(Chairman)ProfessorLowTeckSeng(Member)Mr.KwahThiamHock(Member)(Appointed on 18 April 2007)


COMPANY SECRETARIES

Mr.TanCherLiangMs.WongYoenHar

REGISTERED OFFICE AND BUSINESS ADDRESS

15ChangiBusinessParkCentral15thand6thlevelSingapore486057Tel:67418966Fax:67418980Website:www.excelpoint.comCompanyRegistrationNo.200103280C

SHARE REGISTRAR

BoardroomCorporate&AdvisoryServicesPteLtd3ChurchStreet#08-01SamsungHubSingapore049483

AUDITORS

Ernst&YoungCertifiedPublicAccountantOneRafflesQuayNorthTower#18-00Singapore048583

AUDIT PARTNER-IN-CHARGE

Mr.YeeWoonYim(since financial year ended 31 December 2007)

FINANCIAL CONTENTS18 REPORT ON CORPORATE GOVERNANCE // 25 DIRECTORS’ REPORT // 28 STATEMENT BY DIRECTORS29 INDEPENDENT AUDITORS’ REPORT // 30 CONSOLIDATED INCOME STATEMENT // 31 BALANCE SHEETS32 STATEMENTS OF CHANGES IN EQUITY // 34 CONSOLIDATED CASH FLOW STATEMENT35 NOTES TO THE FINANCIAL STATEMENTS // 69 SHAREHOLDERS’ INFORMATION71 NOTICE OF SEVENTH ANNUAL GENERAL MEETING

//REPORT ON CORPORATE GOVERNANCE

EXCELPOINT TECHNOLOGY LTD (the “Company”) is committed to having and maintaining high standards of corporategovernance.TheCompanybelievesthatgoodcorporategovernanceinculcatesanethicalenvironmentandenhancestheinterestofallshareholders. Sinceourincorporationon18May2001andoursubsequentadmissiontotheOfficialListoftheSingaporeExchangeSecuritiesTradingLimited(the“SGX-ST”),wehavetakenstepstocomplywiththeCodeofCorporateGovernance(the“Code”).

The Group’s approach in 2007 remains unchanged. This Report describes the Company’s corporate governance processes andactivitieswithspecificreferencetotheCodeinitsannualreport.

BOARD MATTERS

1 PRINCIPLE 1 : THE BOARD’S CONDUCT OF ITS AFFAIRS

TheprincipalfunctionsoftheBoardare:-

1.1 Approving the broad policies, strategies and financial objectives of the Company and monitoring the performance ofmanagement;

1.2Overseeing the processes for evaluating the adequacy of internal controls, risk management, financial reporting andcompliance;

1.3Approvingthenominationsofdirectorsandappointmentofkeypersonnel;

1.4Approvingmajorfundingproposals,investmentanddivestmentproposals;and

1.5Assumingresponsibilityforcorporategovernance.

TheBoardmakesdecisionsinmattersspecificallyinvolvingconflictofinterestsituationsrelatingtoasubstantialshareholderoradirector,materialacquisitionsanddisposalofassets,corporateorfinancialrestructuringandshareissuances,dividendsandotherreturnstoshareholdersandothermatterswhichrequireBoardapprovalasspecifiedundertheCompany’sinterestedpersontransactionpolicy.

TheBoardconductsregularscheduledmeetings.Ad-hocmeetingsareconvenedwhencircumstancesrequire.TheCompany’sArticles of Association allows a board meeting to be conducted by way of telephone conference or by means of similarcommunication equipment whereby all persons participating in the meeting are able to hear each other. The Board issupportedbytheAuditCommittee,RemunerationCommitteeandNominatingCommittee.TheattendanceofthedirectorsatthesemeetingsisdisclosedinthisReport.

2 PRINCIPLE 2 : BOARD COMPOSITION AND BALANCE

The Board currently comprises three independent non-executive directors and three executive directors. The Board hasexamineditssizeandissatisfiedthatitisanappropriatesizeforeffectivedecisionmaking,takingintoaccountthenatureandscopeoftheCompany’soperations.The independentdirectorsconsistofrespectedindividuals fromdifferentbackgroundswhosecorecompetencies,qualifications,skillsandexperienceareextensiveandcomplementary.Theindependenceofeachnon-executivedirectorisreviewedbytheNominatingCommitteeannuallyinaccordancewiththeguidelinesoftheCode.TheBoardofDirectorsareasfollows:-

ExecutiveDirectors

AlbertPhuayYongHen (ChairmanandGroupChiefExecutiveOfficer) AlanKwanWaiLoen DavidKokFatKeung



2 PRINCIPLE 2 : BOARD COMPOSITION AND BALANCE (CONT’D)

IndependentDirectors

SunnyWongFookChoy LowTeckSeng KwahThiamHock

ProfilesoftheDirectorsarefoundonpage7ofthisAnnualReport.

3 PRINCIPLE 3 : ROLE OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER TheGroup’sChairmanandGroupCEO,Mr.AlbertPhuayYongHen,playsaninstrumentalroleindevelopingthebusinessof

the Group and provides the Group with strong leadership and vision. He is responsible for the day-to-day running of theGroupaswellastheexerciseofcontroloverthequality,quantityandtimelinessofinformationflowbetweentheBoardandManagement.AstheChairmanandGroupCEO,healsoschedulesBoardmeetings,overseesthepreparationoftheagendaforBoardmeetingsandensurestheGroup’scompliancewiththeCode.TheroleofChairmanisnotseparatefromthatoftheGroupCEOastheBoardconsidersthatthere isconsiderableaccountabilityandtransparencywithintheGroup. The independentdirectorscurrentlyformhalfthecompositionoftheBoardandexerciseobjectivejudgementoncorporatemattersimpartially,thusensuringabalanceofpowerandauthority.Assuch,itwouldnotbenecessaryfortheGrouptoeffectaseparationoftheroleofChairmanandGroupCEO.

4 PRINCIPLE 4 : BOARD MEMBERSHIP

NominatingCommittee(NC)

TheNominatingCommitteecomprisesthefollowingdirectors:-

LowTeckSeng (Chairman) SunnyWongFookChoy (Member) AlbertPhuayYongHen (Member)

TheNC’sprincipalfunctionsareto:-

4.1 Identify candidates and review all nominations for the appointment or re-appointment of members of the Board ofDirectorsandthemembersofthevariousBoardCommitteesforthepurposeofproposingsuchnominationstotheBoardforitsapproval;

4.2 Determinethecriteriaforidentifyingcandidatesandreviewingnominationsfortheappointmentsreferredtoinparagraph1;

4.3DecidethemannerinwhichtheBoard’sperformancemaybeevaluatedandproposeobjectiveperformancecriteriafortheBoard’sapproval;

4.4AssesstheeffectivenessoftheBoardasawhole,andthecontributionbyeachindividualdirectortotheeffectivenessoftheBoard;and

4.5 Todetermineonanannualbasistheindependenceofdirectors.

TheNChadheldameetinginOctober2006forthenominationofdirectorsfortheSixthAGM.

Atpresent,newdirectorsareappointedbywayofaboardresolution,upontheNC’sapprovaloftheirappointment.Thenewdirectors must submit themselves for re-election at the next AGM of the Company. In addition, the Company’s Articles ofAssociationrequiresallDirectorstoretirefromofficeatregularintervalsandatleastonceeverythreeyears.


4 PRINCIPLE 4 : BOARD MEMBERSHIP (CONT’D)

NominatingCommittee(NC)(cont’d)

AlthoughtheIndependentDirectorsandtheChairman&GroupCEOholddirectorshipsinothercompanieswhicharenotintheGroup,theBoardisoftheviewthatsuchmultipleboardrepresentationsdonothinderthemfromcarryingouttheirdutiesasdirectors.ThesedirectorswouldwidentheexperienceoftheBoardandgiveitabroaderperspective.

5 PRINCIPLE 5 : BOARD PERFORMANCE

TheNC,inconsideringthere-appointmentofanydirector,evaluatestheperformanceofthedirector.TheNCandtheChairmanoftheBoardimplementedaself-assessmentprocessthatrequiredeachdirectortoassesstheperformanceoftheBoardasawhole for FY2007. The self-assessment process took into consideration, inter alia, board structure, corporate strategy andplanning,riskmanagementandinternalcontrol,performancemeasurementandcompensation,successionplanning,financialreporting,conductofmeetingsandcommunicationwithshareholders.

The NC is of the opinion that the independence of the non-executive directors is maintained and that each director hascontributedtotheeffectivenessoftheBoardasawholeandhasrecommendedthere-electionofthefollowingDirectorstobeputforwardforre-electionattheforthcomingAnnualGeneralMeeting:-

Mr.KwahThiamHock (RetiringpursuanttoArticle108) Mr.SunnyWongFookChoy (RetiringpursuanttoArticle104) Mr.DavidKokFatKeung (RetiringpursuanttoArticle104)

TheattendanceofeachDirectoratmeetingsoftheBoardandAuditCommitteeduringthefinancialyearended31December2007isasfollows:-

AttendanceatBoardandCommitteeMeetings

NAME OF DIRECTORS BOARD AUDIT COMMITTEE (“AC”)

NOMINATING COMMITTEE (“NC”)

REMUNERATION COMMITTEE (“RC”)

NO. OF MEETINGS

ATTENDANCE NO. OF MEETINGS



ATTENDANCE

AlbertPhuayYongHen 4 4 - - - - - -

AlanKwanWaiLoen 4 4 - - - - - -

DavidKokFatKeung 4 4 - - - - - -

SunnyWongFookChoy 4 4 4 4 - - 1 1

LowTeckSeng 4 4 4 4 - - 1 1

KwahThiamHock(1) 4 3 3 3 - - - -

DavidChiaTianBin(2) 4 1 1 1 - - 1 1

(1)AppointedasDirector,ACChairmanandRCmemberon18April2007. (2)ResignedasDirector,ACChairmanandRCmemberon18April2007.

TheNChadheldameetinginOctober2006insteadofFebruary2007forthenominationofdirectorsfortheSixthAGM.

6 PRINCIPLE 6 : ACCESS TO INFORMATION

PriortoeachBoardmeeting,theBoardissuppliedwithrelevantinformationbythemanagementpertainingtomatterstobebroughtbeforetheBoardfordecisionaswellasongoingreportsrelatingtooperationalandfinancialperformanceoftheGroup.Inaddition,theBoardhasseparateandindependentaccesstoseniormanagementandtheCompanySecretariesatalltimes.



6 PRINCIPLE 6 : ACCESS TO INFORMATION (CONT’D)

Should directors, whether individually or as a group, need independent professional advice, the Company Secretaries will,upondirectionbytheBoard,appointaprofessionaladvisorselectedbythegrouporindividual,andapprovedbytheChairmantorenderadvice.ThecostofsuchprofessionaladvicewillbebornebytheCompany.

The Company Secretaries attend all Board meetings and Committee meetings and are responsible to ensure that boardproceduresarefollowed.

REMUNERATION MATTERS

7 PRINCIPLES 7, 8 AND 9 : REMUNERATION MATTERS

RemunerationCommittee(RC)

TheRemunerationCommitteecomprisesthefollowingthreedirectors,ofwhomallareindependentdirectors:-

SunnyWongFookChoy (Chairman) LowTeckSeng (Member) KwahThiamHock (Member)

TheRCmetonceinFY2007.Itsprincipalresponsibilitiesareto:-

7.1 RecommendtotheBoardbasepaylevels,benefitsandincentiveopportunities,andidentifycomponentsofpaywhichcanbestbeusedtofocusmanagementstaffonachievingcorporateobjectives,includingidentifyingequity-basedincentivessuchasstockoptions;

7.2 RecommendtotheBoardthestructureofthecompensationprogrammefordirectorsandseniormanagementtoensurethattheprogrammeiscompetitiveandsufficienttoattract,retainandmotivateseniormanagementoftherequiredqualitytoruntheCompanysuccessfully;and

7.3 Reviewcompensationpackagesofdirectors,seniormanagementandemployeeswhoarerelatedtotheExecutiveDirectorsandControllingShareholders(includingthecompensationpackageoftheCEO)annuallyanddetermineappropriateadjustmentsforapprovalbytheBoard.

TheCompanyhasadoptedtheExcelpointShareOptionSchemewhichwasapprovedbytheshareholdersatanExtraordinaryGeneralMeetingheldon13November2003.To-date,nooptionshadbeengranted.

OurexecutivedirectorsarepaidbasedontheirServiceAgreementswiththeCompanyasdisclosedintheCompany’sProspectusdated18December2003.TheAgreementswererenewedforafurtherperiodofthreeyearsfrom1January2008.Thenon-executiveandindependentdirectorsarepaidbasicfeeandadditionalfeesforservingonanyofthecommittees.

Keyexecutives’remunerationaresetinaccordancewitharemunerationframeworkcomprisingbasicsalary(includingvariablebonuses and benefits-in-kind). To preserve the confidentiality of the remuneration packages of these key executives, thebreakdown(inpercentageterms)ofeachexecutive’sremunerationisnotdisclosed.

7 PRINCIPLES 7, 8 AND 9 : REMUNERATION MATTERS (CONT’D)

RemunerationCommittee(RC)(cont’d)

TheremunerationinFY2007oftheDirectorsandkeyexecutivesaresetoutbelow:-

Directors’Remuneration

YEAR 2007NO. OF DIRECTORS

YEAR 2006NO. OF DIRECTORS

$500,000andabove 3 3

$250,000tobelow$500,000 - -

Below$250,000 3 3

Total 6 6

KeyExecutives’Remuneration

YEAR 2007NO. OF KEY EXECUTIVES

YEAR 2006NO. OF KEY EXECUTIVES

$250,000tobelow$500,000 2 2

Below$250,000 3 3

Total 5 5

Therearetwoemployeeswhoare immediatefamilymembersofourChairmanandGroupCEOandtheirremunerationarebetween$250,000tobelow$500,000forFY2007.

ACCOUNTABILITY AND AUDIT

8 PRINCIPLE 10 : ACCOUNTABILITY AND AUDIT

TheBoardseekstoprovideshareholderswithacomprehensiveviewoftheCompany’sfinancialperformance,positionandprospectsonaquarterlybasis.

9 PRINCIPLE 11: AUDIT COMMITTEE (AC)

TheACcomprisesthefollowingthreedirectors,allofwhomareindependentdirectors:-

KwahThiamHock (Chairman) LowTeckSeng (Member) SunnyWongFookChoy (Member)

AllthemembersoftheAChavehadmanyyearsofexperienceinseniormanagementpositionsindifferentsectors.TheBoardisoftheviewthatthemembersoftheAChavesufficientfinancialmanagementexpertiseandexperiencetodischargetheAC’sfunctions.

TheACmeetsquarterlytoperformthefollowingkeyfunctions:-

9.1 RecommendstotheBoardofDirectors,theexternalandinternalauditorstobenominated,approvesthecompensationoftheexternalauditors,andreviewsthescopeandresultsoftheaudit;

9.2 Reviews(withtheothercommittees,management,andtheexternalandinternalauditors)significantrisksorexposuresthatexistandassessesthestepsmanagementhastakentominimisesuchrisktotheCompany;




9 PRINCIPLE 11: AUDIT COMMITTEE (“AC”) (CONT’D)

9.3 ReviewswiththeChiefFinancialOfficerandexternalauditorsatthecompletionoftheannualexamination:-

• theexternalauditors’auditoftheannualfinancialstatementsandreports; • theadequacyoftheGroup’ssystemofaccountingcontrols; • thelevelofassistanceandcooperationgivenbymanagementtoexternalauditors; • anysignificantfindingsandrecommendationsoftheexternalauditorsandinternalauditorsandtherelatedmanagement’s

responsesthereto;and • anysignificantchangesrequiredintheexternalauditors’auditplan,anyseriousdifficultiesordisputeswithmanagement

encounteredduringthecourseoftheauditandtheirresolution,andothermattersrelatedtotheconductoftheaudit.

9.4 Reviewslegalandregulatorymattersthatmayhaveamaterialimpactonthefinancialstatements’relatedexchangecompliancepolicies,andprogrammesandreportsreceivedfromregulators;and

9.5 ReportsactionsandresolutionsoftheACtotheBoardofDirectorswithsuchrecommendationsastheACconsidersappropriate.TheAChastheexpressedpowertoconductorauthoriseinvestigationsintoanymatterswithinitstermsofreference.MinutesofACmeetingsareregularlysubmittedtotheBoardforitsinformationandreview.

TheAChasconductedanannualreviewofthevolumeofnon-auditservicestosatisfyitselfthatthenatureandextentofsuchserviceswillnotprejudicetheindependenceandobjectivityoftheauditorsbeforeconfirmingtheirre-nomination.

TheACalsoconductsreviewsofinterestedpersontransactionsandmeetswiththeexternalauditors,withoutthepresenceofmanagement,atleastonceayear.NomaterialcontractinvolvingtheinterestsofanydirectororcontrollingshareholderofthecompanyhasbeenenteredintobytheCompanyoranyofitssubsidiariessincetheendofthepreviousfinancialyear.

TheCompanyhasinplaceawhistle-blowingframework,whichprovidesanavenueforthestaffofthecompanytoraiseconcerns

aboutimproprietiesandtheindependentinvestigationsofsuchmattersbytheAC.ContactdetailsoftheAChavebeenmadeavailabletoallstaff.

10 PRINCIPLE 12 : INTERNAL CONTROLS

The Board believes in the importance of maintaining a sound system of internal controls to safeguard the interests of theshareholders and the Group’s assets. In the absence of any evidence to the contrary, the Board believes that the system ofinternal controls maintained by the Company’s management is adequate to meet the needs of the Group in its currentbusinessenvironment.

However,theBoardnotesthatnosystemofinternalcontrolcanprovideabsoluteassuranceagainsttheoccurrenceofmaterialerrors,poorjudgementindecisionmaking,humanerror,losses,fraudorotherirregularities.

Aspartoftheannualstatutoryauditonfinancialstatements,theexternalauditorsreporttotheACandtheappropriatelevelofmanagementanymaterialweaknessesinfinancialcontrolsovertheareaswhicharesignificanttotheaudit.

11 PRINCIPLE 13 : INTERNAL AUDITS

SinceFY2006,theCompany,upontherecommendationoftheAC,appointedMessrsBakerTillyTFWLCLasinternalauditorstoreviewkeybusinessprocessesoftheCompanyanditsmaterialsubsidiarieswiththeprimaryobjectiveofidentifyingsignificantcontrolissuesthattheACandmanagementshouldfocustheirattentionon.

Inthedischargeofitsfunctions,theinternalauditorsreportdirectlytotheChairmanoftheAConfunctionalmattersandtotheChiefFinancialOfficeronadministrativematters.TheACreviewsandapprovestheinternalauditplansandensuresthatresourcesareadequatetoperformthefunction.


COMMUNICATION WITH SHAREHOLDERS

12 PRINCIPLES 14 AND 15 : COMMUNICATION WITH SHAREHOLDERS AND GREATER SHAREHOLDER PARTICIPATION

TheCompanydoesnotpractiseselectivedisclosureofmaterialinformation.Materialandprice-sensitiveinformationisalwaysreleasedonSGXNETaftertradinghours.ResultsandannualreportsareannouncedorissuedwithinthemandatoryperiodsandareavailableontheCompanywebsite.Whenpressconferenceandbriefingswillbeheldonmajoreventsandfinancialresults,themanagementwillonlymeetthepressandanalystsaftertheannouncementisreleasedonSGXNET.

All shareholders of the Company receive the Annual Report and Notice of AGM. The Notice is also advertised in a nationalnewspaper. At AGMs, shareholders are given the opportunity to air their views and ask directors or management questionsregardingtheCompany.Separateresolutionsoneachdistinctissueareproposedatgeneralmeetingsforapproval.Theexternalauditorsandlegaladvisors(ifnecessary)arepresenttoassisttheDirectorsinaddressinganyqueriesbyshareholders.

TheArticlesofAssociationallowsamemberoftheCompanytoappointoneortwoproxiestoattendandvoteinplaceofthemember.

DEALINGS IN SECURITIES

The Company has issued an Internal Compliance Code on Securities Transactions to Directors and key employees (includingemployeeswithaccesstoprice-sensitiveinformationtotheCompany’sshares)oftheGroupsettingoutthecodeofconductontransactionsintheCompany’ssharesbythesepersons,theimplicationsofinsidertradingandtherecommendationsoftheBestPracticesGuideissuedbytheSGX-ST.TheCodeforbidsthetradingoftheCompany’ssharesduringtheperiodcommencingfromtheendofeachofthefinancialquartersandendingonthedateoftheannouncementoftherelevantresults.

OnBehalfoftheDirectors,

AlbertPhuayYongHenChairmanandGroupCEOSingapore


//DIRECTORS’ REPORT

ThedirectorsarepleasedtopresenttheirreporttothememberstogetherwiththeauditedconsolidatedfinancialstatementsofExcelpointTechnologyLtd(the“Company”)anditssubsidiaries(collectively,the“Group”)andthebalancesheetandstatementofchangesinequityoftheCompanyforthefinancialyearended31December2007.

1. DIRECTORS

ThedirectorsoftheCompanyinofficeatthedateofthisreportare:-

AlbertPhuayYongHen (ChairmanandGroupChiefExecutiveOfficer) AlanKwanWaiLoen DavidKokFatKeung SunnyWongFookChoy LowTeckSeng KwahThiamHock (Appointedon18April2007)

2. ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES

Exceptasdescribedinparagraph5below,neitherattheendofnoratanytimeduringthefinancialyearwastheCompanyapartytoanyarrangementwhoseobjectsare,oroneofwhoseobjectis,toenablethedirectorsoftheCompanytoacquirebenefitsbymeansoftheacquisitionofsharesordebenturesoftheCompanyoranyotherbodycorporate.

3. DIRECTORS’ INTEREST IN SHARES AND DEBENTURES

Thefollowingdirectorswhoheldofficeattheendofthefinancialyear,had,accordingtotheregisterofdirectors’shareholdingsrequiredtobekeptunderSection164of theSingaporeCompaniesAct,Cap.50,an interest insharesof theCompanyasstatedbelow:-

DIRECT INTEREST DEEMED INTEREST

NAME OF DIRECTOR AT BEGINNING OF FINANCIAL

YEAR

AT END OF FINANCIAL

YEAR

AT BEGINNING OF FINANCIAL

YEAR

AT END OF FINANCIAL

YEAR

OrdinarysharesoftheCompany

AlbertPhuayYongHen 237,457,520 237,244,520 12,990,840 12,990,840

AlanKwanWaiLoen 30,981,220 30,981,220 – –

DavidKokFatKeung 2,371,620 2,371,620 – –

SunnyWongFookChoy 100,000 100,000 – –

Therewasnochangeinanyoftheabove-mentionedinterestsbetweentheendofthefinancialyearand21January2008.

ByvirtueofSection7oftheSingaporeCompaniesAct,Cap.50,AlbertPhuayYongHenisdeemedtohaveinterestsinsharesofthesubsidiariesoftheCompany,allofwhicharewholly-owned.

Exceptasdisclosedinthisreport,nodirectorwhoheldofficeattheendofthefinancialyearhadinterestsinshares,shareoptions,warrantsordebenturesoftheCompany,orofrelatedcorporations,eitheratthebeginningofthefinancialyear,ordateofappointmentiflater,orattheendofthefinancialyear.

4. DIRECTORS’ CONTRACTUAL BENEFITS

Exceptasdisclosedinthefinancialstatements,sincetheendofthepreviousfinancialyear,nodirectoroftheCompanyhasreceivedorbecomeentitledtoreceiveabenefitbyreasonofacontractmadebytheCompanyorarelatedcorporationwiththedirector,orwithafirmofwhichthedirectorisamember,orwithaCompanyinwhichthedirectorhasasubstantialfinancialinterest.


5. OPTIONS

AtanExtraordinaryGeneralMeetingheldon13November2003,shareholdersapprovedtheExcelpointShareOptionScheme(the“Scheme”)forthegrantingofnon-transferableoptionsthataresettledbyphysicaldeliveryoftheordinarysharesoftheCompany.Asatthedateofthisreport,nooptionshavebeengrantedundertheScheme.

6. AUDIT COMMITTEE

TheAuditCommittee(“AC”)carriedoutitsfunctionsinaccordancewithSection201B(5)oftheSingaporeCompaniesAct,Cap.50,includingthefollowing:-

• ReviewstheauditplansoftheinternalandexternalauditorsoftheCompanyandreviewstheinternalauditors’evaluationoftheadequacyoftheCompany’ssystemofinternalaccountingcontrolsandtheassistancegivenbytheCompany’smanagementtotheexternalandinternalauditors;

• Reviews the quarterly and annual financial statements and the auditors’ report on the annual financial statements of theCompanybeforetheirsubmissiontotheboardofdirectors;

• ReviewstheeffectivenessoftheCompany’smaterialinternalcontrols,includingfinancial,operationalandcompliancecontrolsandriskmanagementviareviewscarriedoutbytheinternalauditors;

• Meetswiththeexternalauditors,othercommittees,andmanagementinseparateexecutivesessionstodiscussanymattersthatthesegroupsbelieveshouldbediscussedprivatelywiththeAC;

• Reviewslegalandregulatorymattersthatmayhaveamaterialimpactonthefinancialstatements,relatedcompliancepoliciesandprogrammesandanyreportsreceivedfromregulators;

• Reviewsthecosteffectivenessandtheindependenceandobjectivityoftheexternalauditors;

• Reviewsthenatureandextentofnon-auditservicesprovidedbytheexternalauditors;

• Recommends to the board of directors the external auditors to be nominated, approves the compensation of the externalauditors,andreviewsthescopeandresultsoftheaudit;

• ReportsactionsandminutesoftheACtotheboardofdirectorswithsuchrecommendationsastheACconsidersappropriate;and

• Reviews interested person transactions in accordance with the requirements of the Singapore Exchange SecuritiesTradingLimited(SGX-ST)’sListingManual.

TheAC,havingreviewedallnon-auditservicesprovidedbytheexternalauditorstotheGroup,issatisfiedthatthenatureandextentofsuchserviceswouldnotaffecttheindependenceoftheexternalauditors.TheAChasalsoconductedareviewofinterestedpersontransactions.

TheACconvenedfourmeetingsduringthefinancialyearwithfullattendancefromallmembers.TheAChasalsometwithinternalandexternalauditors,withoutthepresenceoftheCompany’smanagement,atleastonceayear.

FurtherdetailsregardingtheACaredisclosedintheReportonCorporateGovernanceintheAnnualReportoftheCompany.


7. AUDITORS

Ernst&Younghaveexpressedtheirwillingnesstoacceptre-appointmentasauditors.

Onbehalfoftheboardofdirectors,

AlbertPhuayYongHenDirector

AlanKwanWaiLoenDirector

Singapore11March2008


We,AlbertPhuayYongHenandAlanKwanWaiLoen,beingtwoofthedirectorsofExcelpointTechnologyLtd,doherebystatethat,intheopinionofthedirectors:-

(a) theaccompanyingbalancesheets,consolidatedincomestatement,statementsofchangesinequity,andconsolidatedcashflowstatementtogetherwiththenotestheretoaredrawnupsoastogiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyasat31December2007andtheresultsofthebusiness,changesinequityandcashflowsoftheGroupandthechangesinequityoftheCompanyforthefinancialyearendedonthatdate;and

(b) atthedateofthisstatement,therearereasonablegroundstobelievethattheCompanywillbeabletopayitsdebtsasandwhentheyfalldue.

Onbehalfoftheboardofdirectors,

AlbertPhuayYongHenDirector

AlanKwanWaiLoenDirector


//STATEMENT BY DIRECTORSPURSUANT TO SECTION 201(15)


//INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF EXCELPOINT TECHNOLOGY LTD

WehaveauditedtheaccompanyingfinancialstatementsofExcelpointTechnologyLtd(the“Company”)anditssubsidiaries(collectively,the“Group”)setoutonpages30to68,whichcomprisethebalancesheetsoftheGroupandtheCompanyasat31December2007,thestatementsofchangesinequityoftheGroupandtheCompany,theincomestatementandcashflowstatementoftheGroupforthefinancialyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatorynotes.

DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

TheCompany’sdirectorsareresponsibleforthepreparationandfairpresentationofthesefinancialstatementsinaccordancewiththeprovisionsoftheSingaporeCompaniesAct,Cap.50(the“Act”)andSingaporeFinancialReportingStandards.Thisresponsibilityincludes:designing,implementingandmaintaininginternalcontrolrelevanttothepreparationandfairpresentationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror;selectingandapplyingappropriateaccountingpolicies;andmakingaccountingestimatesthatarereasonableinthecircumstances.

AUDITORS’ RESPONSIBILITY

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithSingaporeStandardsonAuditing.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassurancewhetherthefinancialstatementsarefreefrommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependontheauditor’sjudgment,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheentity’spreparationandfairpresentationofthefinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebydirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

OPINION

Inouropinion,

(i) theconsolidatedfinancialstatementsoftheGroup,andthebalancesheetandstatementofchangesinequityoftheCompanyareproperlydrawnupinaccordancewiththeprovisionsoftheActandSingaporeFinancialReportingStandardssoastogiveatrueandfairviewofthestateofaffairsoftheGroupandoftheCompanyasat31December2007andtheresults,changesinequityandcashflowsoftheGroupandthechangesinequityoftheCompanyforthefinancialyearendedonthatdate;and

(ii) theaccountingandotherrecordsrequiredbytheActtobekeptbytheCompanyandbythosesubsidiariesincorporatedinSingaporeofwhichwearetheauditorshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.

ERNST&YOUNGCertifiedPublicAccountants


//CONSOLIDATED INCOME STATEMENTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

GROUP Note 2007 2006 US$’000 US$’000

Revenue 4 486,785 454,212Costofsales (451,873) (420,350)Grossprofit 34,912 33,862Otherincome 5 1,711 950Salesanddistributioncosts (18,958) (15,002)Generalandadministrativeexpenses (12,967) (12,158)Otherexpenses 7 (325) (2,892)Financecosts 6 (2,269) (1,252)Profitbeforetaxation 7 2,104 3,508Incometaxexpense 8 (894) (992)ProfitaftertaxationandattributabletoequityholdersoftheCompany 1,210 2,516

Basicearningspershare(cents) 9 0.25 0.52

Theaccompanyingaccountingpoliciesandexplanatorynotesformanintegralpartofthefinancialstatements.


//BALANCE SHEETSAS AT 31 DECEMBER 2007

GROUP COMPANY Note 2007 2006 2007 2006 US$’000 US$’000 US$’000 US$’000 Non-currentassets Property,plantandequipment 10 3,768 4,895 3 5Investmentproperty 11 1,968 – – –Intangibleassets 12 223 223 – –Investmentsinsubsidiaries 13 – – 13,049 13,700 5,959 5,118 13,052 13,705Currentassets Tradedebtors 14 69,935 65,018 5 2Otherdebtors 15 1,099 1,715 1 1Prepayments 92 67 – –Stocks 16 63,437 49,807 – –Amountsduefromsubsidiaries 17 – – 20,836 19,862Taxrecoverable 99 1,108 – –Cashandcashequivalents 26 9,616 6,958 87 356 144,278 124,673 20,929 20,221Currentliabilities Tradecreditorsandaccruals 18 (69,371) (67,517) (148) (117)Othercreditors 19 (4,398) (4,711) – –Interest-bearingloansandborrowings 20 (31,381) (12,151) – –Financeleaseobligations 21 (96) (129) – –Provisionfortaxation (399) (313) (60) (126) (105,645) (84,821) (208) (243)

Netcurrentassets 38,633 39,852 20,721 19,978 Non-currentliabilities Financeleaseobligations 21 (178) (217) – –Deferredtaxliabilities 22 (245) (200) – – (423) (417) – –Netassets 44,169 44,553 33,773 33,683 EquityattributabletoequityholdersoftheCompany Sharecapital 23 31,429 31,429 31,429 31,429Reserves 12,740 13,124 2,344 2,254 44,169 44,553 33,773 33,683


//STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY Foreign currency Statutory Equity, Share Share translation reserve RevenueGroup Note Total capital premium reserve fund reserves US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 At1January2007 44,553 31,429 – (938) 17 14,045Foreigncurrencytranslation 11 – – 11 – –Netincomerecogniseddirectlyinequity 11 – – 11 – –Profitfortheyear 1,210 – – – – 1,210Totalrecognisedincomefortheyear 1,221 – – 11 – 1,210Transfertostatutoryreservefund – – – – 8 (8)Dividendspaidonordinaryshares 35 (1,605) – – – – (1,605)At31December2007 44,169 31,429 – (927) 25 13,642 At1January2006 42,824 14,872 16,557 (910) 17 12,288Foreigncurrencytranslation (28) – – (28) – –Netexpenserecogniseddirectlyinequity (28) – – (28) – –Profitfortheyear 2,516 – – – – 2,516Totalrecognisedincomeandexpensefortheyear 2,488 – – (28) – 2,516Transferofsharepremiumtosharecapital – 16,557 (16,557) – – –Dividendspaidonordinaryshares 35 (759) – – – – (759)At31December2006 44,553 31,429 – (938) 17 14,045



//STATEMENTS OF CHANGES IN EQUITY

ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY Equity, Share Share RevenueCompany Note Total capital premium reserves US$’000 US$’000 US$’000 US$’000 At1January2007 33,683 31,429 – 2,254Profitfortheyear 1,695 – – 1,695Totalrecognisedincomefortheyear 1,695 – – 1,695Dividendspaidonordinaryshares 35 (1,605) – – (1,605)At31December2007 33,773 31,429 – 2,344 At1January2006 32,193 14,872 16,557 764Profitfortheyear 2,249 – – 2,249Totalrecognisedincomefortheyear 2,249 – – 2,249Transferfromsharepremiumtosharecapital – 16,557 (16,557) –Dividendspaidonordinaryshares 35 (759) – – (759)At31December2006 33,683 31,429 – 2,254


//CONSOLIDATED CASH FLOW STATEMENTFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

GROUP 2007 2006 US$’000 US$’000

Cashflowsfromoperatingactivities Profitbeforetaxation 2,104 3,508Adjustmentsfor:- Interestincome (347) (412)Interestexpense 2,269 1,252Reversalofimpairmentlossoninvestmentproperty (885) –Impairmentlossonplantandmachinery 354 –Depreciationofproperty,plantandequipment 1,111 894Depreciationofinvestmentproperty 24 –Net(gain)/lossondisposalofproperty,plantandequipment (220) 291 Operatingcashflowsbeforereinvestmentinworkingcapital 4,410 5,533Increaseinstocks (13,630) (21,557)(Increase)/decreaseindebtors (4,326) 3,454Increaseincreditors 1,541 5,873 Cashusedinoperations (12,005) (6,697)Interestreceived 347 412Interestpaid (2,269) (1,252)Incometaxrebate/(paid) 250 (2,056) Netcashusedinoperatingactivities (13,677) (9,593) Cashflowsfrominvestingactivities Purchaseofproperty,plantandequipment (1,898) (2,487)Proceedsondisposalsofproperty,plantandequipment 675 688 Netcashusedininvestingactivities (1,223) (1,799) Cashflowsfromfinancingactivities Proceedsfrom/(repaymentof)loansandborrowings 925 (40)Increase/(decrease)inbillspayable 18,305 (2,626)Repaymentoffinanceleaseobligations (72) (39)DividendspaidonordinarysharesbytheCompany (1,605) (759) Netcashflowsgeneratedfrom/(usedin)financingactivities 17,553 (3,464) Netincrease/(decrease)incashandcashequivalents 2,653 (14,856)Effectsofexchangeratechanges 5 (32)Cashandcashequivalentsatbeginningoffinancialyear 6,958 21,846 Cashandcashequivalentsatendoffinancialyear(Note26) 9,616 6,958



//NOTES TO FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2007

1. CORPORATE INFORMATION

ExcelpointTechnologyLtd(the“Company”)isalimitedliabilitycompanyincorporatedintheRepublicofSingaporeandislistedontheSingaporeExchangeSecuritiesTradingLimited(SGX-ST).

TheregisteredofficeandprincipalplaceofbusinessoftheCompanyislocatedat15ChangiBusinessParkCentral1,6thLevel,Singapore486057.

The principal activities of the Company are that of an investment holding company and the provision of support services toits subsidiaries. The principal activities of the subsidiaries include the trading of electronic equipment, sale and distributionof electronic components and dealers of all types of electronic and electrical components and accessories, and sub-systemmanufacturing.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basisofpreparation

TheconsolidatedfinancialstatementsoftheGroupandthebalancesheetandstatementofchangesinequityoftheCompanyhavebeenpreparedinaccordancewithSingaporeFinancialReportingStandards(FRS).

Thefinancialstatementshavebeenpreparedonahistoricalcostbasisexceptasdisclosedintheaccountingpoliciesbelow.

ThefinancialstatementsarepresentedinUnitedStatesDollars(USDorUS$)andallvaluesareroundedtothenearestthousand(US$’000)exceptwhenotherwiseindicated.

The accounting policies have been consistently applied by the Group and the Company during the financial year and areconsistentwiththoseusedinthepreviousfinancialyearexceptforthechangesinaccountingpoliciesdiscussedbelow.

2.2 Changesinaccountingpolicies

On1 January2007, theGroupadopted the followingFRSwhichareeffective forannualperiodsbeginningonorafter1January2007.

REFERENCE DESCRIPTION

AmendmenttoFRS1 RevisedPresentationofFinancialStatements(CapitalDisclosures)

FRS40 InvestmentProperty

FRS107 FinancialInstruments:Disclosures

AsaresultofadoptingFRS40,theGrouphasclassifieditspropertyasinvestmentpropertyarisingfromachangeinuseoftheproperty.TheGroupadoptedthecostmodelandhasstatedtheinvestmentpropertyatcostlessaccumulateddepreciationandimpairmentloss.

FRS107requiresdisclosuresthatenableusersofthefinancialstatementstoevaluatethesignificanceoftheCompany’sfinancialinstruments and the nature and extent of risks arising from those financial instruments. The new disclosures are includedthroughoutthefinancialstatements.WhiletherehasbeennoeffectonthefinancialpositionorresultsoftheGroup,comparativeinformationhasbeenincluded/revisedwhereappropriate.

AmendmenttoFRS1requirestheGrouptomakedisclosuresthatenableusersofthefinancialstatementstoevaluatetheGroup’sobjectives,policiesandprocessesformanagingcapital.ThesedisclosuresareshowninNote31tothefinancialstatements.

//NOTES TO FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

2.3 Futurechangesinaccountingpolicies

TheGrouphasnotappliedthefollowingFRSandINTFRSthathavebeenissuedbutnotyeteffective:-

REFERENCE DESCRIPTION EFFECTIVE FOR ANNUAL PERIODS BEGINNING ON OR AFTER

FRS23 AmendmenttoFRS23,BorrowingCosts 1January2009

FRS108 OperatingSegments 1January2009

INTFRS111 GroupandTreasuryShareTransactions 1March2007

INTFRS112 ServiceConcessionArrangements 1January2008 Thedirectorsexpectthattheadoptionoftheabovepronouncementswillhavenomaterialimpacttothefinancialstatementsin

theperiodofinitialapplication,exceptforFRS108,asindicatedbelow.

FRS108requiresentitiestodisclosesegmentinformationbasedontheinformationreviewedbytheentity’schiefoperatingdecisionmaker.Theimpactofthisstandardontheothersegmentdisclosuresistobedetermined.Asthisisadisclosurestandard,itwillhavenoimpactonthefinancialpositionorfinancialperformanceoftheGroupwhenimplemented2009.

2.4 Basisofconsolidation

TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompanyanditssubsidiariesasatthebalancesheetdate. ThefinancialstatementsofthesubsidiariesusedinthepreparationoftheconsolidatedfinancialstatementsarepreparedforthesamereportingdateastheCompany.Consistentaccountingpoliciesareappliedtoliketransactionsandeventsinsimilarcircumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions areeliminatedinfull.

Subsidiariesareconsolidatedfromthedateofacquisition,beingthedateonwhichtheGroupobtainscontrol,andcontinuetobeconsolidateduntilthedatethatsuchcontrolceases.

2.5 Functionalandforeigncurrency

(a) Functional currency

ThemanagementhasdeterminedthecurrencyoftheprimaryeconomicenvironmentinwhichtheCompanyoperates,i.e.thefunctionalcurrency,tobetheUnitedStatesDollars(USD),asitbestreflectstheeconomicsubstanceoftheunderlyingeventsandcircumstancesrelevanttotheentity.

(b) Foreign currency transactions

TransactionsinforeigncurrenciesaremeasuredintherespectivefunctionalcurrenciesoftheCompanyanditssubsidiariesandare recordedon initial recognition in the functionalcurrenciesatexchangeratesapproximatingthoserulingat thetransactiondates.Monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedattherateofexchangerulingatthebalancesheetdate.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyaretranslatedusingtheexchangeratesasatthedatesoftheinitialtransactions.Non-monetaryitemsmeasuredatfairvalueinaforeigncurrencyaretranslatedusingtheexchangeratesatthedatewhenthefairvaluewasdetermined.

Exchangedifferencesarisingonthesettlementofmonetary itemsoron translatingmonetary itemsat thebalancesheetdatearerecognised inthe incomestatementexceptforexchangedifferencesarisingonmonetary itemsthatform part of the Group’s net investment in foreign subsidiaries, which are recognised initially in equity as foreigncurrencytranslationreserveintheconsolidatedbalancesheetandrecognisedintheconsolidatedincomestatementondisposalofthesubsidiary.



2.5 Functionalandforeigncurrency(cont’d)

(b) Foreign currency transactions (cont’d)

TheassetsandliabilitiesofforeignoperationsaretranslatedintoUSDattherateofexchangerulingatthebalancesheetdateandtheirincomestatementsaretranslatedattheweightedaverageexchangeratesfortheyear.Theexchangedifferencesarisingonthetranslationaretakendirectlytoaseparatecomponentofequityasforeigncurrencytranslationreserve.Ondisposal of a foreign operation, the deferred cumulative amount recognised in equity relating to that particular foreignoperationisrecognisedintheincomestatement.

2.6 Property,plantandequipment

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

Subsequenttorecognition,allitemsofplantandequipmentaremeasuredatcostlessaccumulateddepreciationandaccumulatedimpairmentlosses.

Depreciationofanassetbeginswhenitisavailableforuseandiscomputedonthestraight-linebasisovertheexpectedusefullivesoftheassetsasfollows:-

Leaseholdbuilding - 46years(remainingleaseoftheland) Furnitureandfittings - 5-10years Officeequipment - 3-10years Motorvehicles - 5-10years Computers - 3-5years Renovations - 3-5years Plantandmachinery - 5-10years

Thecarryingvaluesofproperty,plantandequipmentarereviewedforimpairmentwheneventsorchangesincircumstancesindicatethatthecarryingvaluemaynotberecoverable.

The residual value, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount,methodandperiodofdepreciationareconsistentwithpreviousestimatesandtheexpectedpatternofconsumptionofthefutureeconomicbenefitsembodiedintheitemsofproperty,plantandequipment.

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Anygainorlossarisingonderecognitionoftheassetisincludedintheincomestatementintheyeartheassetisderecognised.

2.7Investmentproperty

Investmentpropertyisinitiallyrecordedatcost.Subsequenttorecognition,investmentpropertyismeasuredusingthecostmethodandisstatedatcostlessaccumulateddepreciationandimpairmentloss.

Investmentpropertyisderecognisedwheneithertheyhavebeendisposedoforwhentheinvestmentpropertyispermanentlywithdrawnfromuseandnofutureeconomicbenefitisexpectedfromitsdisposal. Anygainsorlossesontheretirementordisposalofaninvestmentpropertyarerecognisedintheincomestatementintheyearofretirementordisposal.

Transfersaremadetoorfrominvestmentpropertyonlywhenthereisachangeinuse.




2.8 Intangibleassets

Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a businesscombinationistheirfairvaluesasatthedateofacquisition.Followinginitialacquisition,intangibleassetsarecarriedatcostlessanyaccumulatedamortisationandanyaccumulatedimpairmentlosses.

Intangibleassetswithfiniteusefullivesareamortisedovertheestimatedusefullivesandassessedforimpairmentwheneverthereisanindicationthattheintangibleassetmaybeimpaired.Theamortisationperiodandtheamortisationmethodarereviewedatleastateachfinancialyear-end.

Intangibleassetswithindefiniteusefullivesornotyetavailableforusearetestedforimpairmentannuallyormorefrequentlyiftheeventsandcircumstancesindicatethatthecarryingvaluemaybeimpairedeitherindividuallyoratthecash-generatingunitlevel.Suchintangibleassetsarenotamortised.Theusefullifeofanintangibleassetwithanindefiniteusefullifeisreviewedannuallytodeterminewhethertheusefullifeassessmentcontinuestobesupportable.

(a) Club memberships

Clubmembershipsaremeasuredoninitialrecognitionatcost.Followinginitialrecognition,clubmembershipsarecarriedat cost less any accumulated impairment losses.The useful lives of club memberships are assessed to be indefinite asthesearelifetimemembershipsandhavenodatesofexpiryandaretestedforimpairmentannually.Theusefullifeofclubmembershipsisreviewedannuallytodeterminewhethertheusefullifeassessmentcontinuestobesupportable.Gainsorlossesondisposalofclubmembershipsaretakentotheincomestatement.

2.9 Impairmentofnon-financialassets

TheGroupassessesateachreportingdatewhetherthereisanindicationthatanassetmaybeimpaired.Ifanysuchindicationexists,orwhenannualimpairmenttestingforanassetisrequired,theGroupmakesanestimateoftheasset’srecoverableamount.

Anasset’srecoverableamountisthehigherofanasset’sorcash-generatingunit’sfairvaluelesscoststosellanditsvalueinuseandisdeterminedforanindividualasset,unlesstheassetdoesnotgeneratecashinflowsthatarelargelyindependentofthosefromotherassetsorgroupsofassets.Inassessingvalueinuse,theestimatedfuturecashflowsexpectedtobegeneratedbytheassetarediscountedtotheirpresentvalue.Wherethecarryingamountofanassetexceedsitsrecoverableamount,theassetiswrittendowntoitsrecoverableamount.

Impairmentlossesarerecognisedintheincomestatement.

Anassessmentismadeateachreportingdateastowhetherthereisanyindicationthatpreviouslyrecognisedimpairmentlossesmaynolongerexistormayhavedecreased.Apreviouslyrecognisedimpairmentlossisreversedonlyiftherehasbeenachangeintheestimatesusedtodeterminetheasset’srecoverableamountsincethelastimpairmentlosswasrecognised.Ifthatisthecase,thecarryingamountoftheassetisincreasedtoitsrecoverableamount.Thatincreasecannotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciation,hadnoimpairmentlossbeenrecognisedpreviously.Suchreversalisrecognisedintheincomestatement.

2.10Subsidiaries

Asubsidiary isanentityoverwhichtheGrouphasthepowertogovernthefinancialandoperatingpoliciessoastoobtainbenefitsfromitsactivities.

IntheCompany’sseparatefinancialstatements,investmentsinsubsidiariesareaccountedforatcostlessimpairmentlosses.




2.11Financialassets

Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the contractualprovisionsofthefinancialinstrument.

Whenfinancialassetsarerecognisedinitially,theyaremeasuredatfairvalue,plus,inthecaseoffinancialassetsnotatfairvaluethroughprofitorloss,directlyattributabletransactioncosts.

Afinancialassetisderecognisedwherethecontractualrighttoreceivecashflowsfromtheassethasexpired.Onderecognitionofafinancialassetinitsentirety,thedifferencebetweenthecarryingamountandthesumofconsiderationreceivedandanycumulativegainorlossthathasbeenrecogniseddirectlyinequityisrecognisedintheincomestatement.

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

Financialassetsatfairvaluethroughprofitorlossarefinancialassetsclassifiedasheldfortrading.Financialassetsclassifiedasheldfortradingarederivatives(includingseparateembeddedderivatives)orareacquiredprincipallyforthepurposeofsellingorrepurchasinginthenearterm.

TheGroupdoesnotdesignateanyfinancialassetsheldfortradingasfinancialassetsatfairvaluethroughprofitandlossaccount.

(b) Loans and receivables

Financialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedas loansandreceivables. Subsequentto initial recognition, loansandreceivablesaremeasuredatamortisedcostusingtheeffectiveinterestmethod.Gainsandlossesarerecognisedintheincomestatementwhentheloansandreceivablesarederecognisedorimpaired,andthroughtheamortisationprocess.

(c) Held-to-maturity investments

Financialassetswithfixedordeterminablepaymentsandfixedmaturityareclassifiedasheld-to-maturitywhentheGrouphasthepositiveintentionandabilitytoholdtheassetstomaturity.

TheGroupdoesnotdesignateanynon-derivativefinancialassetsasheld-to-maturityinvestments.

(d) Available-for-sale financial assets

Available-for-salefinancialassetsarefinancialassetsthatarenotclassifiedinanyoftheothercategories.

TheGroupdoesnotdesignateanynon-derivativefinancialassetsasavailable-for-sale. 2.12Impairmentoffinancialassets

TheGroupassessesateachbalancesheetdatewhetherthereisanyobjectiveevidencethatafinancialassetorgroupoffinancialassetsisimpaired.

(a) Assets carried at amortised cost Ifthereisobjectiveevidencethatanimpairmentlossonfinancialassetscarriedatamortisedcosthasbeenincurred,the

amountofthelossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedatthefinancialasset’soriginaleffectiveinterestrate.Thecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount.Theamountofthelossisrecognisedintheincomestatement.



2.12Impairmentoffinancialassets(cont’d)

(a) Assets carried at amortised cost (cont’d)

Whentheassetbecomesuncollectible,thecarryingamountofimpairedfinancialassetsisreduceddirectlyorifanamountwaschargedtotheallowanceaccount,theamountschargedtotheallowanceaccountarewrittenoffagainstthecarryingvalueofthefinancialasset.

Todeterminewhetherthereisobjectiveevidencethatanimpairmentlossonfinancialassetshasbeenincurred,theGroupconsiders factors such as the probability of insolvency or significant financial difficulties of the debtor and default orsignificantdelayinpayments.

Ifinasubsequentperiod,theamountoftheimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised,thepreviouslyrecognisedimpairmentlossisreversedtotheextentthatthecarryingamountoftheassetdoesnotexceeditsamortisedcostatthereversaldate. Theamountofreversal isrecognisedintheincomestatement.

2.13Cashandcashequivalents

Cashandcashequivalentscomprisecashonhand,bankbalancesandshort-termfixeddepositsinbanks.

2.14Stocks

Stocksarestatedatthelowerofcostandnetrealisablevalue.Costsincurredinbringingthestockstoitspresentlocationandconditionareaccountedforasfollows:-

• Tradingstocksandrawmaterials–purchasecostsonafirst-infirst-outbasis;and

• Finishedgoodsandwork-in-progress–costsofdirectmaterialsandlabourandaproportionofmanufacturingoverheadsbasedonnormaloperatingcapacitybutexcludingborrowingcosts.Thesecostsareassignedonafirst-infirst-outbasis.

2.15Provisions

ProvisionsarerecognisedwhentheGrouphasapresentobligationasaresultofapastevent.Itisprobablethatanoutflowofeconomicresourceswillberequiredtosettletheobligationandtheamountoftheobligationcanbeestimatedreliably.

Provisionsarereviewedateachbalancesheetdateandadjustedtoreflectthecurrentbestestimate.Ifitisnolongerprobablethatanoutflowofeconomicresourceswillberequiredtosettletheobligation,theprovisionisreversed. Iftheeffectofthetimevalueofmoneyismaterial,provisionsarediscountedusingacurrentpretaxratethatreflects,whereappropriate,therisksspecifictotheliability.Whendiscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasafinancecost.

2.16Financialliabilities

Financialliabilitiesarerecognisedonthebalancesheetwhen,andonlywhen,theGroupbecomesapartytothecontractualprovisionsofthefinancialinstrument.

Financial liabilitiesare recognised initiallyat fairvalue,plus, in thecaseoffinancial liabilitiesother thanderivatives,directlyattributabletransactioncosts.

Subsequent to initial recognition,allfinancial liabilitiesaremeasuredatamortisedcostusingtheeffective interestmethod,exceptforderivatives,whicharemeasuredatfairvalue.




2.16Financialliabilities(cont’d)

Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisextinguished.Forfinancialliabilitiesotherthanderivatives,gainsand lossesarerecognised inthe incomestatementwhenthe liabilitiesarederecognisedor impaired,andthroughtheamortisationprocess.Anygainsorlossesarisingfromthechangesinfairvalueofderivativesarerecognisedintheincomestatement.Netgainsorlossesonderivativesincludeexchangedifferences.

2.17Financialguarantee

Afinancialguaranteecontractisacontractthatrequirestheissuertomakespecifiedpaymentstoreimbursetheholderforalossitincursbecauseaspecifieddebtorfailstomakepaymentwhendue.

Financialguaranteesarerecognisedinitiallyatfairvalue.Subsequenttoinitialrecognition,financialguaranteesarerecognisedasincomeintheincomestatementovertheperiodoftheguarantee.Ifitisprobablethattheliabilitywillbehigherthantheamountinitiallyrecognisedlessamortisation,theliabilityisrecordedatthehigheramountwiththedifferencechargedtotheincomestatement.

2.18Employeebenefits

(a) Defined contribution plan

TheGroupparticipatesinthenationalpensionschemesasdefinedbythelawsofthecountriesinwhichithasoperations.Inparticular,theSingaporecompaniesintheGroupmakecontributionstotheCentralProvidentFund(“CPF”)schemeinSingapore,adefinedcontributionpensionscheme.Contributionstodefinedcontributionpensionschemesarerecognisedasanexpenseinthesameperiodinwhichtherelatedserviceisperformed.

(b) Employee leave entitlement

Employeeentitlementstoannualleavearerecognisedwhentheyaccruetoemployees.Aprovisionismadefortheestimatedliabilityforleaveasaresultofservicesrenderedbyemployeesuptothebalancesheetdate.

2.19Leases

(a) As lessee

Financeleases,whichtransfertotheGroupsubstantiallyalltherisksandrewardsincidentaltoownershipoftheleaseditem,arecapitalisedattheinceptionoftheleaseatthefairvalueoftheleasedassetor,iflower,atthepresentvalueoftheminimumleasepayments.Anyinitialdirectcostsarealsoaddedtotheamountcapitalised.Leasepaymentsareapportionedbetweenthefinancechargesandreductionoftheleaseliabilitysoastoachieveaconstantrateofinterestontheremainingbalanceoftheliability.Financechargesarechargedtotheincomestatement.Contingentrents,ifany,arechargedasexpensesintheperiodsinwhichtheyareincurred.

Capitalisedleasedassetsaredepreciatedovertheshorteroftheestimatedusefullifeoftheassetandtheleaseterm,ifthereisnoreasonablecertaintythattheGroupwillobtainownershipbytheendoftheleaseterm.

Operatingleasepaymentsarerecognisedasanexpenseintheincomestatementonastraight-linebasisovertheleaseterm.Theaggregatebenefitofincentivesprovidedbythelessorisrecognisedasareductionofrentalexpenseovertheleasetermonastraight-linebasis.

(b) As lessor

LeaseswheretheGroupretainssubstantiallyalltherisksandrewardsofownershipoftheassetareclassifiedasoperatingleases.Initialdirectcostsincurredinnegotiatinganoperatingleaseareaddedtothecarryingamountoftheleasedassetandrecognisedovertheleasetermonthesamebasesasrentalincome.TheaccountingpolicyforrentalincomeissetoutinNote2.20.



2.20Revenue

RevenueisrecognisedtotheextentthatisprobablethattheeconomicbenefitswillflowtotheGroupandtherevenuecanbereliablymeasured.Revenueismeasuredatthefairvalueofconsiderationreceivedorreceivable.

(a) Sale of goods

Revenue is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer.Revenueisnotrecognisedtotheextentwheretherearesignificantuncertaintiesregardingrecoveryoftheconsiderationdue,associatedcostsorthepossiblereturnsofgoods.

(b) Commission income

Commissionincomeisrecognisedasandwhenservicesarerendered.

(c) Dividend income

DividendincomeisrecognisedwhentheGroup’srighttoreceivepaymentisestablished.

(d) Interest income

Interestincomeisrecognisedusingtheeffectiveinterestmethod.

(e) Rental income

Rental income arising on investment properties is accounted for on a straight-line basis over the lease terms. Theaggregatecostsofincentivesprovidedtolesseesarerecognisedasareductionofrentalincomeovertheleasetermonastraight-linebasis.

(f) Grant income

Grantincomeisrecognisedattheirfairvalueasandwhenthereisreasonableassurancethatthegrantwillbereceivedandallattachingconditionswillbecompliedwith.

(g) Royalty income

RoyaltyincomeisrecognisedasandwhentheGroup’srighttoreceivepaymentisestablished.

2.21Incometaxes

(a) Current tax

Currenttaxassetsandliabilitiesforthecurrentandpriorperiodsaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenactedorsubstantiallyenactedbythebalancesheetdate.

Currenttaxesarerecognisedintheincomestatement.

(b) Deferred tax

Deferredincometaxisprovidedusingtheliabilitymethodonalltemporarydifferencesatthebalancesheetdatebetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.




2.21Incometaxes(cont’d)

(b) Deferred tax (cont’d)

Deferredincometaxliabilitiesarerecognisedforalltemporarydifferences,except:-

• Wherethedeferredtaxarisesfromtheinitialrecognitionofanassetorliabilityinatransactionthatisnotabusinesscombinationand,atthetimeofthetransactionaffectsneithertheaccountingprofitnortaxableprofitorloss;

• In respect of temporary differences associated with investments in subsidiaries, associates and interest in jointventures,wherethetimingofthereversalofthetemporarydifferencescanbecontrolledbytheGroupandit isprobablethatthetemporarydifferenceswillnotreverseintheforeseeablefuture;and

• Inrespectofdeductibletemporarydifferencesandcarry-forwardofunusedtaxcreditsandunusedtaxlosses,ifitisnotprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferencesandcarry-forwardofunusedtaxcreditsandunusedtaxlossescanbeutilised.

Thecarryingamountofdeferredtaxassetisreviewedateachbalancesheetdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredtaxassettobeutilised.Unrecogniseddeferredtaxassetsarereassessedateachbalancesheetdateandarerecognisedtotheextentthat ithasbecomeprobablethatfuturetaxableprofitwillallowthedeferredtaxassettobeutilised.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheyearwhentheasset isrealisedortheliabilityissettled,basedontaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedatthebalancesheetdate.

Deferredtaxesarerecognisedintheincomestatementexceptthatdeferredtaxrelatingtoitemsrecogniseddirectlyinequityisrecogniseddirectlyinequityanddeferredtaxarisingfromabusinesscombinationisadjustedagainstgoodwillonacquisition.

(c) Sales tax

Revenues,expensesandassetsarerecognisednetoftheamountofsalestaxexcept:-

• Wherethesalestaxincurredonapurchaseofassetsorservicesisnotrecoverablefromthetaxationauthority,inwhichcasethesalestaxisrecognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpenseitemasapplicable;and

• Receivablesandpayablesthatarestatedwiththeamountofsalestaxincluded.

Thenetamountof sales tax recoverable from,orpayable to, the taxationauthority is includedaspartof receivablesorpayablesinthebalancesheet.

2.22Segmentreporting

AbusinesssegmentisadistinguishablecomponentoftheGroupthatisengagedinprovidingproductsorservicesthataresubjecttorisksandreturnsthataredifferentfromthoseofotherbusinesssegments.AgeographicalsegmentisadistinguishablecomponentoftheGroupthatisengagedinprovidingproductsorserviceswithinaparticulareconomicenvironmentandthatissubjecttorisksandreturnsthataredifferentfromthoseofcomponentsoperatinginothereconomicenvironments.



2.23Contingencies

Acontingentliabilityorassetisapossibleobligationorassetthatarisesfrompasteventsandwhoseexistencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofuncertainfutureevent(s)notwhollywithinthecontroloftheGroup.

ContingentliabilitiesandassetsarenotrecognisedonthebalancesheetoftheGroup.

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

ThepreparationoftheGroup’sfinancialstatementsrequiresmanagementtomakejudgements,estimatesandassumptionsthataffectthereportedamountsofrevenues,expenses,assetsandliabilities,andthedisclosureofcontingentliabilitiesatthereportingdate.However,uncertaintyabouttheseassumptionsandestimatescouldresultinoutcomesthatcouldrequireamaterialadjustmenttothecarryingamountoftheassetorliabilityaffectedinthefuture.

3.1 Judgementsmadeinapplyingaccountingpolicies

IntheprocessofapplyingtheGroup’saccountingpolicies,managementhasmadethefollowingjudgements,apartfromthose involvingestimations,whichhasthemostsignificanteffectontheamountsrecognisedinthefinancialstatements:-

(a) Income taxes

TheGrouphasexposureto incometaxes innumerousjurisdictions. Significant judgement is involvedindeterminingtheGroup-wideprovisionforincometaxes.Therearecertaintransactionsandcomputationsforwhichtheultimatetaxdeterminationisuncertainduringtheordinarycourseofbusiness.TheGrouprecognisesliabilitiesforexpectedtaxissuesbasedonestimatesofwhetheradditionaltaxeswillbedue. Wherethefinaltaxoutcomeofthesemattersisdifferentfromtheamountsthatwereinitiallyrecognised,suchdifferenceswillimpacttheincometaxanddeferredtaxprovisionsin the period in which such determination is made. The carrying amount of the Group’s income tax payables anddeferredtaxliabilitiesatthebalancesheetdatewasUS$399,000(2006:US$313,000)andUS$245,000(2006:US$200,000)respectively.

3.2 Keysourcesofestimationuncertainty

Thekeyassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyatthebalancesheetdate, thathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.

(a) Useful lives of plant and equipment

Thecostofplantandequipmentforthemanufactureofelectroniccomponentsisdepreciatedonastraight-linebasisoverthemachineries’economicusefullives.Managementestimatestheusefullivesoftheseplantandequipmenttobewithin5to10years.Thesearecommonlifeexpectanciesappliedintheelectronicsindustry.Changesintheexpectedlevelofusageandtechnologicaldevelopmentscouldimpacttheeconomicusefullivesandtheresidualvaluesoftheseassets,therefore,futuredepreciationchargescouldberevised.ThecarryingamountoftheGroup’splantandequipmentatthebalancesheetdateisdisclosedinNote10tothefinancialstatements.

(b) Impairment testing on investments in subsidiaries and its fixed assets

The Company assesses at each reporting date whether there are any indicators of impairment for the investments insubsidiariesanditsfixedassets.Thisrequiresanestimationofthevalueinuseofthecashgeneratingunits.

EstimatingthevalueinuserequirestheGrouptomakeanestimateoftheexpectedfuturecashflowsfromtheassetsorcash-generatingunitsandtochooseasuitablediscountrateinordertocalculatethepresentvalueofthosecashflows.Furtherdetailsofthekeyassumptionsappliedintheimpairmentassessmentofinvestmentsinsubsidiariesanditsfixedassets,aregiveninNote13tothefinancialstatements.


3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT’D)

3.2 Keysourcesofestimationuncertainty(cont’d)

(b) Impairment testing on investments in subsidiaries and its fixed assets (cont’d)

ImpairmentlossesofUS$651,000(2006:NIL)(Note13)andUS$354,000(2006:NIL)(Note10)weremadeduringthefinancialyearforinvestmentinasubsidiaryanditsfixedassetsrespectively.

(c) Impairment of loans and receivables

TheGroupassessesateachbalancesheetdatewhetherthereisanyobjectiveevidencethatafinancialassetisimpaired.Todeterminewhetherthereisobjectiveevidenceofimpairment,theGroupconsidersfactorssuchastheprobabilityofinsolvencyorsignificantfinancialdifficultiesofthedebtoranddefaultorsignificantdelayinpayments.

Wherethereisobjectiveevidenceofimpairment,theamountandthetimingoffuturecashflowsarebeingestimatedbasedonhistoricallossexperiencewithsimilarcreditriskcharacteristics.ThecarryingamountoftheGroup’sloansandreceivablesatthebalancesheetdateisdisclosedinNote14tothefinancialstatements.

4. REVENUE

GROUP 2007 2006 US$’000 US$’000

Revenue:- Saleofgoods 486,327 454,069 Commissionincome 458 143 486,785 454,212

5. OTHER INCOME

GROUP 2007 2006 US$’000 US$’000

Otherincomeincludes:- Rentalincomefrominvestmentproperty 91 – Interestincomeonbankdeposits 347 412 Reversalofimpairmentlossoninvestmentproperty(Note11) 885 – Grantincome 261 79

6. FINANCE COSTS

GROUP 2007 2006 US$’000 US$’000

Interestexpenseon:- Bankloansandborrowings(includingbankoverdrafts) (2,233) (1,227) Obligationsunderfinanceleases (36) (25) (2,269) (1,252)



7. PROFIT BEFORE TAXATION

Thefollowingitemshavebeenincludedinarrivingatprofitbeforetax:-

GROUP 2007 2006 US$’000 US$’000

Otherexpenses -Netgain/(loss)ondisposalofproperty,plantandequipment 220 (291) -(Impairment)andreversalofimpairmentoffinancialassets(Note14) -Allowancefordoubtfultradedebts (1,070) (2,546) -Allowancefordoubtfultradedebtswrittenback 363 313 -Badtradedebtswrittenoff – (6) -Stockswrittendown/off (2,157) (2,532) -Reversalofstockswrittendown/stocksrecovered 2,456 1,659 -Impairmentonproperty,plantandequipment(Note10) (354) – -Netforeignexchangegain 138 190 Salariesandemployeebenefits(includingdirectors) -Salariesandbonuses (17,651) (15,721) -ContributionstoCPFandotherdefinedcontributionpensionschemes (1,371) (981) -Others (1,657) (1,349) Depreciationofproperty,plantandequipment (1,111) (894) Depreciationofinvestmentproperty (24) – Non-auditfeespaidtoauditorsoftheCompany (27) (20) Stocksrecognisedasanexpenseincostofsales (450,542) (419,871)

8. INCOME TAX EXPENSE

(a) Major components of income tax expense

Themajorcomponentsofincometaxexpenseforthefinancialyearsended31December2007and2006are:-

GROUP 2007 2006 US$’000 US$’000

Currentincometaxation (737) (848) Underprovisioninrespectofpreviousyears (112) (32) Deferredtaxation(Note22) (45) (112) Incometaxexpenserecognisedintheincomestatement (894) (992)


8. INCOME TAX EXPENSE (CONT’D)

(b) Relationship between tax expense and profit before taxation

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax rate for thefinancialyearsended31December2007and2006isasfollows:-

GROUP 2007 2006 US$’000 US$’000

Profitbeforetaxation 2,104 3,508 Taxexpenseatstatutorytaxrate (379) (702) Adjustments:- Non-deductibleexpenses (286) (694) Incomenotsubjecttotaxation 185 440 Taxrebatesandtaxincentives 37 14 Differenceintaxratesofoverseassubsidiaries (56) 85 Underprovisioninrespectofpreviousyears (112) (32) Lossesofforeignsubsidiariesnotavailableforset-offagainstprofitsof othercompanieswithintheGroup (283) (103) Incometaxexpenserecognisedintheincomestatement (894) (992)

ThecorporateincometaxrateapplicabletoSingaporecompaniesoftheGroupwasreducedto18%fortheyearofassessment2008onwards from20%foryearofassessment2007. Thecorporate incometaxrateapplicabletoMalaysiancompaniesoftheGroupwasreducedfrom28%to27%and26%fortheyearofassessment2007andtheyearofassessment2008onwardsrespectively.

Theabovereconciliationispreparedbyaggregatingseparatereconciliationsforeachnationaljurisdiction.

9. EARNINGS PER SHARE

BasicearningspershareamountsarecalculatedbydividingprofitaftertaxationforthefinancialyearattributabletoequityholdersoftheCompanybytheweightedaveragenumberofordinarysharesoutstandingduringthefinancialyear.

Thefollowingtablesreflecttheprofitandlossandsharedatausedinthecomputationofbasicearningspersharefortheyearsended31December:-

GROUP 2007 2006 ProfitaftertaxationattributabletoordinaryequityholdersoftheCompanyusedinthe computationofbasicearningspershare(US$’000) 1,210 2,516

Numberofordinarysharesforbasicearningspersharecomputation(‘000) 486,022 486,022



10. PROPERTY, PLANT AND EQUIPMENT

Furniture and Office Motor Leasehold Plantand Group fittings equipment vehicles Computers Renovations buildings machinery Total US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 Cost:- At1January2006 462 1,427 1,599 815 736 4,470 14 9,523 Additions 19 951 319 178 385 – 635 2,487 Disposals (45) (85) (277) (6) (142) (782) (196) (1,533) Currencyrealignment – – – 1 – – – 1 At31December2006 and1January2007 436 2,293 1,641 988 979 3,688 453 10,478 Additions 36 248 1,055 281 204 – 74 1,898 Disposals (27) (42) (760) – (12) – (193) (1,034) Transferto investmentproperty – – – – – (3,688) – (3,688) Currencyrealignment – – – 1 – – – 1 At31December2007 445 2,499 1,936 1,270 1,171 – 334 7,655 Accumulateddepreciationandimpairment:-

At1January2006 202 754 775 485 254 2,772 1 5,243 Chargeforthe financialyear 65 267 213 164 141 34 10 894 Disposals (38) (77) (142) (4) (68) (225) – (554) At31December2006and 1January2007 229 944 846 645 327 2,581 11 5,583 Chargeforthe financialyear 57 410 226 171 201 – 46 1,111 Impairmentloss 2 18 14 11 32 – 277 354 Transferto investmentproperty – – – – – (2,581) – (2,581) Disposals (19) (25) (527) – (8) – – (579) Currencyrealignment – – – (1) – – – (1) At31December2007 269 1,347 559 826 552 – 334 3,887 Netbookvalue:- At31December2007 176 1,152 1,377 444 619 – – 3,768 At31December2006 207 1,349 795 343 652 1,107 442 4,895


10. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Assetsheldunderfinanceleases

Thecarryingamountofmotorvehiclesandofficeequipmentheldunderfinanceleasesat31December2007isUS$434,000(2006:US$670,000).

Leasedassetsarepledgedassecurityfortherelatedfinanceleaseliabilities.

Office Company equipment US$’000 Cost:- At1January2006and31December2007 10 Accumulateddepreciation:- At1January2006 4 Chargeforthefinancialyear 1 At31December2006and1January2007 5 Chargeforthefinancialyear 2 At31December2007 7 Netbookvalue:- At31December2007 3 At31December2006 5

11. INVESTMENT PROPERTY

GROUP 2007 2006 US$’000 US$’000

Balancesheet Cost:- At1January – – Transferfromproperty,plantandequipment 3,688 – At31December 3,688 – Accumulateddepreciationandimpairment:- At1January – – Transferfromproperty,plantandequipment 2,581 – Chargeforthefinancialyear 24 – Reversalofimpairmentloss (885) – At31December 1,720 – Netbookvalue:- At31December 1,968 – Incomestatement Rentalincomefrominvestmentproperty 91 –



11. INVESTMENT PROPERTY (CONT’D)

Valuationofinvestmentproperty

Investmentpropertiesarestatedatcostlessaccumulateddepreciationandimpairment.Valuationontheinvestmentpropertywascarriedouton12December2007.Thevaluationisperformedbyanaccreditedindependentvaluerwithrecentexperienceinthelocationandcategoryofthepropertybeingvalued.Basedonthevaluation,therewasareversalofimpairmentlossamountingto$885,000(2006:$Nil)recognisedintheincomestatement.

Transferfromproperty,plantandequipment

AsaresultofadoptingFRS40,theGrouphastransferreditsleaseholdbuildingfromproperty,plantandequipmenttoinvestmentproperty,arisingfromachangeinuseoftheproperty.

12. INTANGIBLE ASSETS Club Group memberships US$’000 Cost:- At1January2006and31December2007 244 Accumulatedimpairment:- At1January2006and31December2007 21 Netbookvalue:- At31December2007and31December2006 223

13. INVESTMENTS IN SUBSIDIARIES COMPANY 2007 2006 US$’000 US$’000 Unquotedshares,atcost 13,700 13,700 Impairmentlosses (651) – 13,049 13,700

Impairmentassessment

Forpurposeofimpairmentassessment,theGroup’soperatingdivisionsofLightsElectronicsPteLtd(“LES”)GroupandExcelpointSolutionsPteLtd(“ESOL”)Groupwereassessedasthecash-generatingunits(“CGUs”).

TherecoverablevaluesoftheseCGUsaredeterminedbasedonavalue-in-usecalculation,usingthecashflowprojectionsbasedonthefinancialbudgetsapprovedbymanagementcoveringathree-yearperiod.Cashflowprojectionsarebasedonassumptionsoftheaveragegrowthratewhichareconsistentwithindustryreportandpastpractice.Thediscountratesappliedtothecashflowprojectionsisapproximately7%to10%(2006:8%to10%)perannumbasedontheweightedaveragecostofcapitalwhichreflectthespecificrisksrelatingtotherespectiveCGUs.


13. INVESTMENTS IN SUBSIDIARIES (CONT’D) Based on the above, the value-in-use for ESOL Group CGU is assessed to be below the carrying cost. Impairment losses of

US$651,000(2006:Nil)andUS$354,000(2006:Nil)havebeenrecognisedonboththeinvestmentinESOLGroupCGUanditsfixedassetsrespectively.

Thesubsidiarycompaniesasat31December2007are:-

NAME COUNTRY OFINCORPORATION

PRINCIPAL ACTIVITIES(PLACE OF BUSINESS)

UNQUOTED EQUITY SHARES, AT COST

PROPORTION (%) OF OWNERSHIP

INTEREST

2007US$’000

2006US$’000

2007%

2006%

HeldbytheCompany

ExcelpointSystems(Pte)Ltd(1)

Singapore Tradingofelectroniccomponents(Singapore)

3,927 3,927 100 100

ExcelpointSystems(H.K.)Limited(2)

HongKong Tradingofelectroniccomponents(HongKong)

5,951 5,951 100 100

LightsElectronicsPteLtd(1)

Singapore Dealersofalltypesofelectronicandelectricalcomponentsandaccessories(Singapore)

3,171 3,171 100 100

ExcelpointSolutionsPteLtd(1)

Singapore Investmentholdingandgeneralwholesaletrade(Singapore)

651 651 100 100

13,700 13,700



13. INVESTMENTS IN SUBSIDIARIES (CONT’D)

NAME COUNTRY OF INCORPORATION PRINCIPAL ACTIVITIES(PLACE OF BUSINESS)

PROPORTION (%) OF OWNERSHIP

INTEREST

2007%

2006%

Held by Excelpoint Systems (Pte) Ltd

ExcelpointSystemsSdn.Bhd.(3) Malaysia Dormant 100 100

Held by Excelpoint Systems (H.K.) Limited

ExcelpointInternationalTrading(Shanghai)Co.,Ltd.(4)

ThePeople’sRepublicofChina Tradingofelectroniccomponents(ThePeople’sRepublicofChina)

100 100

ExcelpointInternationalTrading(Shenzhen)Co.,Ltd.(5)


100 100

GeneralEngineers(H.K.)Limited(2) HongKong Dormant 100 100

Held by Lights Electronics Pte Ltd

LightsElectronics(Shanghai)Co.,Ltd.(4)


100 100

LightsElectronics(Shenzhen)Co.,Ltd.(5)


100 100

LightsElectronics(H.K.)Limited(2) HongKong Tradingofelectroniccomponents(HongKong)

100 100

LightsElectronics(China)Limited HongKong Dormant –* 100

SunLightsElectronics(M)Sdn.Bhd.(6)

Malaysia Saleanddistributionofelectroniccomponents(Malaysia)

100 100

Held by Excelpoint Solutions Pte. Ltd.

ExcelpointManufacturingPte.Ltd.(1)

Singapore Contractmanufacturer(PCBAandelectronicsub-systems)(Singapore)

100 100

Held by Excelpoint Manufacturing Pte. Ltd.

ExcelpointManufacturing(ZhuHai)Co.,Ltd(7)

ThePeople’sRepublicofChina Contractmanufacturer(PCBAandelectronicsub-systems)(ThePeople’sRepublicofChina)

100 100

ExcelpointManufacturing(DongGuan)Co.,Ltd

ThePeople’sRepublicofChina Dormant –* 100

(1) AuditedbyErnst&Young,Singapore. (2) AuditedbyErnst&Young,HongKong. (3) AuditedbyYong&LeonardCharteredAccountants,MalaysiaformerlyknowasK.K.Yong&Co.CharteredAccountants,Malaysia. (4) AuditedbyShanghaiShenzhouCertifiedPublicAccountantsCo.,Limited,ThePeople’sRepublicofChina. (5) AuditedbyShenzhenYiDaCertifiedPublicAccountantsCompanyLimited,ThePeople’sRepublicofChina. (6) AuditedbyNg&AssociatesCharteredAccountants,Malaysia. (7) AuditedbyZhuhaiRongAnDa,CertifiedPublicAccountantsCompanyLimited,ThePeople’sRepublicofChina. * Subsidiariesderegisteredduringthefinancialyear


14. TRADE DEBTORS

GROUP COMPANY 2007 2006 2007 2006 US$’000 US$’000 US$’000 US$’000

Tradedebtors 69,935 65,018 5 2

Tradedebtorsarenon-interestbearingandaregenerallyon30to90days’terms.Theyarerecognisedattheiroriginalinvoiceamountswhichrepresenttheirfairvalueoninitialrecognition.

Tradedebtorsthatarepastduebutnotimpaired

TheGrouphastradedebtorsamountingtoUS$27,358,000(2006:US$27,534,000)thatarepastdueatthebalancesheetdatebutnotimpaired.Thesereceivablesareunsecuredandtheanalysisoftheiragingatthebalancesheetdateisasfollows:-

GROUP 2007 2006 US$’000 US$’000

Tradedebtorspastdue:- 1to30days 16,550 16,850 31to60days 6,859 6,716 61to90days 2,147 1,073 Morethan90days 1,802 2,895 27,358 27,534 Tradedebtorsthatareimpaired

TheGroup’stradedebtorsthatareimpairedatthebalancesheetdateandthemovementoftheallowanceaccountsusedtorecordtheimpairmentareasfollows:-


Tradedebtors–nominalamounts 3,612 8,846 – – Allowancefordoubtfultradedebts (2,838) (4,618) – – 774 4,228 – – Allowancefordoubtfultradedebts:- Atbeginningoffinancialyear (4,618) (3,216) – – Allowanceduringthefinancialyear (1,070) (2,546) – – Allowancewrittenback 363 313 – – Baddebtswrittenoff 2,511 844 – – Currencyrealignment (24) (13) – – Atendoffinancialyear (2,838) (4,618) – –



14. TRADE DEBTORS (CONT’D)

Tradedebtors thatare individuallydeterminedtobe impairedat thebalancesheetdaterelatetodebtors thatare insignificantfinancialdifficultiesandhavedefaultedonpayments.Thesereceivablesarenotsecuredbyanycollateralorcreditenhancements.

Includedintradedebtorsarethefollowingamountsdenominatedindifferentcurrencies:-


USD 66,062 61,582 – – RMB 2,921 3,054 – – HKD 156 128 – – MYR 196 43 – – SGD 570 211 5 2 EUR 30 – – – 69,935 65,018 5 2

15. OTHER DEBTORS


Otherdebtors:- Recoverablesfromsuppliers – 942 – – Deposits 813 641 – – Staffloans 24 29 – – Others 262 103 1 1 1,099 1,715 1 1

Staffloans

Staffloansareunsecured,non-interestbearingandhavescheduledrepaymentdates.

Includedinotherdebtorsarethefollowingamountsdenominatedindifferentcurrencies:- GROUP COMPANY 2007 2006 2007 2006 US$’000 US$’000 US$’000 US$’000

USD 143 741 – – RMB 518 497 – – HKD 192 235 – – MYR 11 6 – – SGD 200 236 1 1 INR 35 – – – 1,099 1,715 1 1


16. STOCKS

GROUP 2007 2006 US$’000 US$’000

BalanceSheet:- Tradingstocksatlowerofcostandnetrealisablevalue 63,437 49,807 IncomeStatement:- Stockswrittendown/off (2,157) (2,532) Reversalofstockswrittendown/stocksrecovered 2,456 1,659 Reversalofstockswrittendownandstocksrecoveredweremadewhentherelatedstocksweresoldabovetheircarryingamounts. 17. AMOUNTS DUE FROM SUBSIDIARIES

Allamountsduefromsubsidiariesarenon-interestbearing,repayableondemand,unsecuredandaretobesettledincash.

COMPANY 2007 2006 US$’000 US$’000

Amountsduefromsubsidiaries(non-trade) -loans 18,473 19,218 -non-trade 3,131 644 Less:Impairmentlosses -loans (762) – -non-trade (6) – 20,836 19,862

Atthebalancesheetdate,theCompanyhasprovidedfor impairmentoftheunsecuredloanandreceivablefromasubsidiarycompany.Thissubsidiarycompanyhasbeensufferingfinanciallossesforthecurrentfinancialyear.

Includedinamountsduefromsubsidiariesarethefollowingamountsdenominatedindifferencecurrencies:-

COMPANY 2007 2006 US$’000 US$’000

USD 20,095 19,278 SGD 741 584 20,836 19,862



18. TRADE CREDITORS AND ACCRUALS


Tradecreditors (65,843) (65,069) – – Accruals (3,528) (2,448) (148) (117) (69,371) (67,517) (148) (117)

Tradecreditorsandaccrualsarenon-interestbearingandarenormallysettledon30to90days’terms.

Includedintradecreditorsandaccrualsarethefollowingamountsdenominatedindifferentcurrencies:-


USD (66,219) (61,170) (133) – RMB (1,528) (1,526) – – HKD (1,486) (870) – – SGD (63) (3,934) (15) (117) MYR (68) (14) – – Others (7) (3) – – (69,371) (67,517) (148) (117)

19. OTHER CREDITORS

GROUP 2007 2006 US$’000 US$’000

Recoverablesduetosuppliers (1,715) (2,088) Depositsreceived (1,860) (1,544) Sundries (823) (1,079) (4,398) (4,711)

Othercreditorsarenon-interestbearingandarenormallysettledon30to90days’terms.

Includedinothercreditorsarethefollowingamountsdenominatedindifferentcurrencies:-

GROUP 2007 2006 US$’000 US$’000

USD (3,028) (1,304) RMB (711) (420) HKD (151) (2,624) SGD (506) (363) Others (2) – (4,398) (4,711)


20. INTEREST-BEARING LOANS AND BORROWINGS

WEIGHTED AVERAGE GROUP EFFECTIVE INTEREST RATE MATURITY 2007 2006 PER ANNUM US$’000 US$’000

Current:- Billspayable,unsecured 5.37%to6.75% 2008 (30,456) (12,151) Shorttermloan,unsecured 7.27%to8.20% 2008 (925) – (31,381) (12,151)

Theshort-termbankloanbearsinterestat2%(2006:Nil)abovethebanks’costoffundsperannum.TheGroup’sbillspayablebearinterestrangingfrom1.0%to1.5%(2006:1.0%to1.5%)perannumaboveSIBOR.Theinterest-bearingloansandborrowingsaredenominatedinUSD.

21. FINANCE LEASE OBLIGATIONS

TheGrouphasfinanceleasesforcertainitemsofmotorvehicles.Thefinanceleasesbeareffectiveratesfrom4.51%to6.09%(2006:3.82%to6.09%)perannum.Theinterestratesforthefinanceleaseobligationsarefixeduponenteringintotheleaseagreementsandarethereforenotsubjectedtofluctuationsinmarketinterestrates.

GROUP 2007 2006 US$’000 US$’000

Thepresentvalueoffinanceleaseobligationsmaybeanalysedasfollows:- Withinoneyear (96) (129) Withintwotofiveyears (178) (217) Presentvalueofnetminimumleasepayments[Note28(c)] (274) (346)

22. DEFERRED TAX LIABILITIES

GROUP 2007 2006 US$’000 US$’000

Atbeginningoffinancialyear (200) (88) Chargeforthefinancialyear(Note8) (45) (112) Atendoffinancialyear (245) (200) Deferredtaxliabilitiesrecognisedareasfollows:- Differencesindepreciation (251) (239) Otherdeferredtaxliabilities (59) (18) Provisionforemployeeleaveentitlement 65 57 Netdeferredtaxliabilitiesrecognised (245) (200)

Unrecognisedtemporarydifferencesrelatingtoinvestmentsinsubsidiaries

Atthebalancesheetdate,nodeferredtaxliability(2006:Nil)hasbeenrecognisedfortaxesthatwouldbepayableontheundistributedearningsofcertainoftheGroup’ssubsidiariesasthereisnosignificantdeferredtaxliabilityinrelationtotheundistributedearnings.

Taxconsequencesofproposeddividends

Therearenoincometaxconsequences(2006:Nil)attachedtothedividendstotheshareholderspropsoedbytheCompanybutnotrecognisedasaliabilityinthefinancialstatement(Note33).



23. SHARE CAPITAL AND SHARE PREMIUM

GROUP AND COMPANY 2007 2006 US$’000 US$’000

Share capital Issuedandfullypaid:- Atbeginningoffinancialyear-486,022,200(2006:486,022,200)ordinaryshares 31,429 14,872 Transferofsharepremiumreservetosharecapital – 16,557 Atendoffinancialyear-486,022,200(2006:486,022,200)ordinaryshares 31,429 31,429

TheholdersofordinarysharesoftheCompanyareentitledtoreceivedividendsasandwhendeclaredbytheCompany.AllordinarysharesoftheCompanycarryonevotepersharewithoutrestrictions.

In accordance with the Companies (Amendment) Act 2005, on 30 January 2006, the shares of the Company ceased to have aparvalueandtheamountstandinginthesharepremiumreservebecomepartoftheCompany’ssharecapital.

24. STATUTORY RESERVE FUND

InaccordancewiththeForeignEnterpriseLawapplicabletothesubsidiariesinthePeople’sRepublicofChina(“PRC”),asubsidiaryisrequiredtomakeappropriationtoaStatutoryReserveFund(“SRF”).At least10%ofthestatutoryaftertaxprofitsasdeterminedinaccordancewiththeapplicablePRCaccountingstandardsandregulationsmustbeallocatedtotheSRFuntilthecumulativetotaloftheSRFreaches50%ofthesubsidiary’sregisteredcapital.SubjecttoapprovalfromtherelevantPRCauthorities,theSRFmaybeusedtooffsetanyaccumulatedlossesorincreasetheregisteredcapitalofthesubsidiary.TheSRFisnotavailablefordividenddistributiontoshareholders.

GROUP 2007 2006 US$’000 US$’000

At1January 17 17 Transfertostatutoryreservefund 8 – At31December 25 17

25. FOREIGN CURRENCY TRANSLATION RESERVE

TheforeigncurrencytranslationreserverepresentsexchangedifferencesarisingfromthetranslationofthefinancialstatementsofforeignoperationswhosefunctionalcurrenciesaredifferentfromthatoftheGroup’spresentationcurrency.

GROUP 2007 2006 US$’000 US$’000

At1January (938) (910) Neteffectofexchangedifferencesarisingfromthetranslationof financialstatementsofforeignoperations 11 (28) At31December (927) (938)


26. CASH AND CASH EQUIVALENTS


Cashandbankbalances 8,355 4,786 87 356 Short-termfixeddeposits 1,261 2,172 – – 9,616 6,958 87 356

Cashatbanksearnsinterestatfloatingratesbasedondailybankdepositrates.Short-termdepositsaremadeforvaryingperiodsofbetweenonedayandonemonthdependingontheimmediatecashrequirementsoftheGroup,andearninterestsattherespectiveshort-termdepositrates.

Includedincashandcashequivalentsarethefollowingamountsdenominatedindifferentcurrencies:-


USD 6,944 4,825 49 325 RMB 1,006 1,406 – – HKD 677 301 – – SGD 602 193 38 31 Others 387 233 – – 9,616 6,958 87 356

27. RELATED PARTY TRANSACTIONS

(a) Sales and purchase of goods and services

In addition to those related party information disclosed elsewhere in the financial statements, the following significanttransactionsbetweentheGroupandrelatedpartiestookplaceduringthefinancialyearattermsagreedbetweentheparties:-

GROUP 2007 2006 US$’000 US$’000

Rentalexpensepaidtoadirector 72 64

(b) Compensation of key management personnel

GROUP 2007 2006 US$’000 US$’000

Short-termemployeebenefits 2,944 2,795 ContributionstoCPFandotherdefinedcontributionpensionschemes 66 57 Directors’fee 151 81 3,161 2,933 Compriseamountspaidto:- DirectorsoftheCompany 1,988 1,818 Otherkeymanagementpersonnel 1,173 1,115 3,161 2,933



28. COMMITMENTS

(a) Operating lease commitments – as lessee

The Group leases certain properties under lease arrangements that are non-cancellable. The leases have an average life ofbetween1monthand4yearswithrenewaloptionandescalationclausesincludedinthecontracts.Therearenorestrictionsplaced upon the Group by entering into these leases. Operating lease payments recognised in the consolidated incomestatementduringthefinancialyearamountedtoUS$2,292,000(2006:US$1,972,000).

Futureminimumleasepaymentspayableundernon-cancellableoperatingleasesasat31Decemberareasfollows:-

GROUP 2007 2006 US$’000 US$’000

Notlaterthanoneyear 2,259 1,980 Laterthanoneyearbutnotlaterthanfiveyears 1,604 1,264 3,863 3,244 (b) Operating lease commitments – as lessor

TheGrouphasenteredintopropertyleaseonitsinvestmentproperty.Thisnon-cancellableleasehasremainingleasetermof3months.Theleasewillberenewedforafurthertermof2yearsuponexpiry.

Futureminimumrentalsreceivableundernon-cancellableoperatingleaseatthebalancesheetdateareasfollows:-

GROUP 2007 2006 US$’000 US$’000

Notlaterthanoneyear 159 87 Laterthanoneyearbutnotlaterthanfiveyears 250 22 409 109

(c) Finance lease commitments

TheGrouphasfinance leases forcertain itemsofmotorvehicles. Thefinance leasesdonotcarryanyescalationclauses,renewal options and do not provide for contingent rents. There are no restrictions placed upon the Group by enteringintotheseleases.Futurecommitmentpaymentsunderfinanceleasetogetherwiththepresentvalueofthenetminimumpaymentsareasfollows:-

GROUP 2007 2006 US$’000 US$’000

Minimumleasepaymentsdue:- Withinoneyear (108) (151) Withintwotofiveyears (201) (253) (309) (404) Less:Futurefinancecharges 35 58 Presentvalueofminimumfinanceleasepayments(Note21) (274) (346)


28. COMMITMENTS (CONT’D)

(d) Contingent liabilities

Corporateguarantees

Asat31December2007,theCompanyhasgivencorporateguaranteestobanksinconnectionwithbankingfacilitiesprovidedtosubsidiarycompanies,ofwhichUS$31,381,000(2006:US$12,151,000)ofthebankingfacilitieshavebeenutilisedasatyearend.

29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

TheGroupandtheCompanyisexposedtofinancialrisksarisingfromitsoperationsandtheuseoffinancialinstruments.Thekeyfinancialrisksincludecreditrisk,liquidityrisk,interestrateriskandforeigncurrencyrisk.Itis,andhasbeenthroughoutthecurrentandpreviousfinancialyeartheGroup’spolicythatnoderivativesshallbeundertaken.TheGroupandtheCompanydonotapplyhedgeaccounting.

ThefollowingsectionsprovidedetailsregardingtheGroup’sandtheCompany’sexposuretotheabove-mentionedfinancialrisksandtheobjectives,policiesandprocessesforthemanagementoftheserisks.

(a) Credit risk

Creditriskistheriskoflossthatmayariseonoutstandingfinancialinstrumentsshouldacounterpartydefaultonitsobligations.TheGroup’sexposuretocreditriskarisesprimarilyfromtradeandotherdebtors.Forotherfinancialassets(includingcashandcashequivalents),theGroupandtheCompanyminimisecreditriskbydealingwithhighcreditratingcounterparties.

TheGroup’sobjectiveistoseekcontinualrevenuegrowthwhileminimisinglossesincurredduetoincreasedcreditriskexposure.TheGrouptradesonlywithrecognisedandcreditworthythirdparties.ItistheGroup’spolicythatallcustomerswhowishtotradeoncredittermsaresubjecttocreditverificationprocedures.Inaddition,receivablebalancesaremonitoredonanongoingbasiswiththeresultthattheGroup’sexposuretobaddebtsisnotsignificant.

Atthebalancesheetdate,theGroup’sandtheCompany’smaximumexposuretocreditriskisrepresentedbythecarryingamountofeachclassoffinancialassetsrecognisedinthebalancesheetsandanamountofUS$31,381,000(2006:US$12,151,000)relatingtothecorporateguaranteesprovidedbytheCompanytovariousbanksonsubsidiaries’bankloans.

Creditriskconcentrationprofile

TheGroupdeterminesconcentrationsofcreditriskbymonitoringthecountryprofileofitstradereceivablesonanon-goingbasis.ThecreditriskconcentrationprofileoftheGroup’stradeatthebalancesheetdateisasfollows:-

GROUP 2007 2006 US$’000 %oftotal US$’000 %oftotal

Singapore 16,815 24.0% 17,532 27.0% Malaysia 7,894 11.3% 7,875 12.1% Thailand 5,461 7.8% 3,382 5.2% Philippines 735 1.1% 521 0.8% India 1,728 2.5% 2,455 3.8% HongKong/ThePeople’sRepublicofChina 36,404 52.1% 32,324 49.7% Others 898 1.2% 929 1.4% 69,935 100.0% 65,018 100.0%



29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONT’D)

(a) Credit risk (cont’d)

Financialassetsthatareneitherpastduenorimpaired

TradeandotherdebtorsthatareneitherpastduenorimpairedarecreditworthydebtorswithgoodpaymentrecordwiththeGroup.Cashandcashequivalentsthatareneitherpastduenorimpairedareplacedwithorenteredintowithreputablefinancialinstitutionsorcompanieswithhighcreditratingsandnohistoryofdefault.

Financialassetsthatareeitherpastdueorimpaired

InformationregardingfinancialassetsthatareeitherpastdueorimpairedisdisclosedinNote14Tradedebtors.

(b) Liquidity risk

LiquidityriskistheriskthattheGrouportheCompanywillencounterdifficultyinmeetingfinancialobligationsduetoshortageoffunds.TheGroup’sandtheCompany’sexposuretoliquidityriskarisesprimarilyfrommismatchesofthematuritiesoffinancialassetsandliabilities.TheGroup’sandtheCompany’sobjectiveistomaintainabalancebetweencontinuityoffundingandflexibilitythroughtheuseofstand-bycreditfacilities.

TheGroupmonitorsitsliquidityriskandmaintainsadequateliquidfinancialassetsandstand-bycreditfacilitieswithdifferentbankstofinancetheGroup’soperationsandtomitigatetheeffectsoffluctuationsincashflows.

Atthebalancesheetdate,theGroup’sandtheCompany’sfinancialliabilitieswillmatureinlessthanoneyear,exceptfornon-currentfinanceleaseobligations.ThematurityprofileoftheGroup’sandtheCompany’sfinancialliabilitiesatthebalancesheetdatebasedonthecontractualundiscountedpaymentistabledinNote29(c).

(c) Interest rate risk

InterestrateriskistheriskthatthefairvalueorfuturecashflowsoftheGroup’sandtheCompany’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketinterestrates.TheGroup’sexposuretointerestrateriskarisesprimarilyfromtheirinterest-bearingloansandborrowings.

TheGroup’spolicyistoobtainthemostfavourableinterestratesavailablewithoutincreasingitsforeigncurrencyexposure.Surplusfundsareplacedwithreputablebanks.



(c) Interest rate risk (cont’d)

The followingtablesetsout thecarryingamountof theGroup’sandtheCompany’sfinancial instrumentsthatareexposedtointerestraterisk:-

WITHIN Group 1 YEAR 1-2 YEARS 2-3 YEARS TOTAL US$’000 US$’000 US$’000 US$’000

2007 Fixedrate Obligationsunderfinanceleases (96) (96) (82) (274) Floatingrate Cashandcashequivalents 9,616 – – 9,616 Billspayable (30,456) – – (30,456) Short-termbankloan (925) – – (925) 2006 Fixedrate Obligationsunderfinanceleases (129) (129) (88) (346) Floatingrate Cashandcashequivalents 6,958 – – 6,958 Billspayable (12,151) – – (12,151)

Company

2007 Floatingrate Cashandcashequivalents 87 – – 87 2006 Floatingrate Cashandcashequivalents 356 – – 356

Sensitivityanalysisforinterestraterisk

Asthebalancesheetdate,ifUSDinterestrateshadbeen100(2006:100)basispointslower/higherwithallothervariablesheldconstant,theGroup’snetprofitoftaxwouldhavebeenUS$314,000(2006:US$122,000)higher/lower,arisingmainlyasaresultoflower/higherinterestexpenseonfloatingrateloansandborrowings.

(d) Foreign currency risk

TheGrouphastransactionalcurrencyexposuresarisingfromitsordinarycourseofbusinessthataredenominatedinacurrencyotherthantherespectivefunctionalcurrenciesofGroupentities,primarilyUSD.TheforeigncurrenciesinwhichthesetransactionsaredenominatedaremainlyinSingaporeDollars(SGD),HongKongDollars(HKD)andRenminbi(RMB).

TheGroupandtheCompanyalsoholdcashandcashequivalentsdenominatedinforeigncurrenciesforworkingcapitalpurposes.SuchforeigncurrencybalancesfortheGroupandtheCompanyaredetailedinNote26Cashandcashequivalents.




(d) Foreign currency risk (cont’d)

Sensitivityanalysisforforeigncurrencyrisk

Thefollowingtabledemonstratesthe(decrease)/increaseintheGroup’sprofitaftertaxationtoareasonablypossiblechangeintheSGD,HKDandRMBexchangerates(againstUSD),withallothervariablesheldconstant:-

GROUP 2007 2006 US$’000 US$’000

SGD-strengthened5%(2006:5%) (37) 240 SGD-weakened5%(2006:5%) 43 (131) HKD-strengthened5%(2006:5%) 31 125 HKD-weakened5%(2006:5%) (30) (156) RMB-strengthened5%(2006:5%) (93) (109) RMB-weakened5%(2006:5%) 124 188

30. FINANCIAL ASSETS


Tradedebtors(Note14) 69,935 65,018 5 2 Add:- Otherdebtors(Note15) 1,099 1,715 1 1 Cashandcashequivalents(Note26) 9,616 6,958 87 356 Amountsduefromsubsidiaries(Note17) – – 20,836 19,862 Totalloansandreceivables 80,650 73,691 20,929 20,221

31. FINANCIAL LIABILITIES


Tradecreditorsandaccurals(Note18) (69,371) (67,517) (148) (117) Add:- Othercreditors(Note19) (4,398) (4,711) – – Interest-brearingloansandborrowings(Note20) (31,381) (12,151) – – Financeleaseobligations(Note21) (274) (346) – – Totalfinancialliabilitiescarriedatamortisedcost (105,424) (84,725) (148) (117)

32. FAIR VALUE OF FINANCIAL INSTRUMENTS

Cash and cash equivalents, current trade and other debtors, current trade and other creditors, other liabilities, and current interest-bearing loans and borrowings at floating rates

Thecarryingamountsofthesefinancialassetsandliabilitiesarereasonableapproximationoffairvalues,eitherduetotheirshort-termnatureorthattheyarefloatingrateinstrumentsthatarefrequentlyrepricedtomarketinterestrates.



32. FAIR VALUE OF FINANCIAL INSTRUMENTS (CONT’D)

Non-current finance lease obligations

Thefairvalueofnon-currentfinanceleaseobligationsthatarenotcarriedatfairvalueandwhosecarryingamountsarenotreasonableapproximationoffairvalueareasfollows:-

GROUP 2007 2006 US$’000 US$’000 US$’000 US$’000 Carrying Carrying amount Fairvalue amount Fairvalue

Obligationsunderfinanceleases 178 195 217 236

33. CAPITAL MANAGEMENT

TheprimaryobjectiveoftheGroup’scapitalmanagementistoensurethatitmaintainsastrongcreditratingandhealthycapitalratiosinordertosupportitsbusinessandmaximiseshareholdervalue.

TheGroupmanagesitscapitalstructureandmakesadjustmentstoit,inlightofchangesineconomicconditions.Tomaintainoradjustthecapitalstructure,theGroupmayadjustthedividendpaymenttoshareholders,returncapitaltoshareholdersorissuenewshares.Nochangesweremadeintheobjectives,policiesorprocessesduringtheyearsended31December2007and2006.

TheGroupmonitorscapitalusingagearingratio,whichisnetdebtovertotalcapitalplusnetdebt.TheGroup’spolicyistokeepthe

gearingratiobetween30%to100%.TheGroupincludeswithinnetdebt,loansandborrowings,lesscashandcashequivalents.CapitalincludesequityattributabletotheequityholdersoftheCompanylessstatutoryreservefund.

GROUP 2007 2006 US$’000 US$’000

Loansandborrowings(Note20) 31,381 12,151 Less:Cashandcashequivalents(Note26) (9,616) (6,958) Netdebt 21,765 5,193 EquityattributabletoequityholdersoftheCompany 44,169 44,553 Less:Statutoryreservefund (25) (17) Totalcapital 44,144 44,536

Capitalandnetdebt 65,909 49,729 Gearingratio 33.0% 10.4%

34. SEGMENT INFORMATION

(a) Reporting format

TheprimarysegmentreportingformatisdeterminedtobebusinesssegmentsastheGroup’srisksandratesofreturnareaffectedpredominantlybydifferencesintheproductsandservicesproduced.Secondaryinformationisreportedgeographically.

Theoperatingbusinessesareorganisedandmanagedseparatelyaccordingtothenatureoftheproductsandservicesprovided,witheachsegmentrepresentingastrategicbusinessunitthatoffersdifferentproductsandservesdifferentmarkets.


34. SEGMENT INFORMATION (CONT’D)

(b) Business segments

TheGroupisorganisedinto3mainoperatingdivisionsnamely:-

• Design-in • Distribution • Sub-systemmanufacturing

Design-insegmentrelatestoproductsalesthat includefieldapplicationservicesanddesignanddevelopmentserviceswhichrequireahigherleveloftechnicalexpertiseandinvolveresearchanddevelopment.

Distributionsegmentincludesvalue-addeddistributionandsupplychainmanagementwhichprimarilyinvolvetheprovisionofelectroniccomponentsandrelatedlogisticstocustomers.

Sub-systemmanufacturingsegmentincludesthemanufactureofmemorymodulesandcommunicationproductsforcustomers.

SegmentaccountingpoliciesarethesameasthepoliciesdescribedinNote2tothefinancialstatements.Segmentresults,assetsandliabilitiesincludeitemsdirectlyattributabletoasegmentaswellasthoseexpenses,assetsandliabilitiesthatcanbeallocatedonareasonablebasisbasedonthepercentageofrevenue.

Segmentassetsconsistprimarilyoffixedassets,intangibleassets,currentassetsandexcludetaxrecoverable.Segmentliabilitiescomprisemainlycurrentliabilitiesandexcludetaxationliabilities,loansandborrowingsandfinanceleaseobligations.

Transferpricesbetweenbusinesssegmentsaresetonanarm’s lengthbasis inamannersimilartotransactionswiththirdparties.Segmentrevenue,expensesandresultsincludetransfersbetweenbusinesssegments.Thesetransfersareeliminatedonconsolidation.



(b) Business segments (cont’d)

ThefollowingtablepresentssegmentinformationregardingtheGroup’sbusinesssegmentsfortheyearsended31December2007and2006.

SUB-SYSTEM DESIGN-IN DISTRIBUTION MANUFACTURING TOTAL 2007 2006 2007 2006 2007 2006 2007 2006 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Segmentrevenue Salestoexternal customers 247,803 231,279 235,310 210,288 3,672 12,645 486,785 454,212 Segmentresults 3,281 2,997 2,146 2,066 (1,054) (303) 4,373 4,760 Financecosts (2,269) (1,252) Profitbeforetaxation 2,104 3,508 Taxation (894) (992) Profitforthefinancialyear 1,210 2,516 Segmentassets 76,868 65,865 72,993 59,888` 277 2,930 150,138 128,683 Unallocatedassets 99 1,108 Totalassets 150,237 129,791 Segmentliabilities 37,389 36,510 35,504 33,196 876 2,522 73,769 72,228 Unallocatedliabilities 32,299 13,010 Totalliabilities 106,068 85,238 Othersegmentinformation Capitalexpenditure 97 97 1,715 1,799 86 591 1,898 2,487 Depreciation 57 85 1,001 759 77 50 1,135 894 Allowancefor doubtfultradedebts 445 1,197 625 1,349 – – 1,070 2,546 Allowancefor doubtfultradedebts writtenback (34) (21) (329) (292) – – (363) (313) Stockswritten down/off 1,021 1,263 1,055 1,269 81 – 2,157 2,532 Reversalofstocks writtendown/ stocksrecovered (1,259) (754) (1,197) (905) – – (2,456) (1,659) Impairmentlosses – – – – 354 – 354 – Reversalof impairmentloss (522) – (363) – – – (885) –

(c) Geographical segments

The Group’s geographical segments are based on the location of the Group’s assets. Sales to external customers disclosed ingeographicalsegmentsarebasedonthegeographicallocationofitscustomers.




(c) Geographical segments (cont’d)

Segment revenue

2007 2006 US$’000 US$’000

Sales Singapore 75,776 84,373 Malaysia 34,850 61,140 Thailand 29,526 9,130 Philippines 3,429 4,082 India 32,610 30,786 HongKong/ThePeople’sRepublicofChina 303,886 258,734 Others 6,708 5,967 486,785 454,212

Other geographical information

SEGMENT ASSETS CAPITAL EXPENDITURE 2007 2006 2007 2006 US$’000 US$’000 US$’000 US$’000

Singapore 61,219 51,335 1,369 462 Malaysia 4,084 1,435 10 5 Thailand – 5 – – HongKong/ThePeople’sRepublicofChina 84,934 77,016 519 2,020 150,237 129,791 1,898 2,487

35. DIVIDEND PROPOSED

GROUP AND COMPANY 2007 2006 US$’000 US$’000

Paidduringthefinancialyearinrespectofthepreviousfinancialyear Dividends on ordinary shares Finalexempt(one-tier)dividendfor2006:0.50Singaporecents(2005:0.25Singaporecents)pershare 1,605 759

Proposedbutnotrecognisedasaliabilityasat31December Dividends on ordinary shares, subject to shareholders’ approval at the AGM Finalexempt(one-tier)dividendfor2007:0.25Singaporecents(2006:0.50Singaporecents)pershare 846 1,605

Thedirectorsproposethatafirstandfinaltaxexempt(one-tier)dividendof0.25centspershareamountingtoS$1,215,056(2006:S$2,430,112),bepayableforthefinancialyearended31December2007.

TherearenoincometaxconsequencesattachedtothedividendstotheshareholdersproposedbytheCompany.

36. COMPARATIVE FIGURES

The financial statements for the year ended 31 December 2006 were presented in SGD.With effect from this financial year, thefinancialstatementsarepresentedinUSD,whichisalsothefunctionalcurrencyoftheCompany.Accordingly,thecomparativesarepresentedinUSD.

37. AUTHORISATION OF FINANCIAL STATEMENTS

Thefinancialstatementsforthefinancialyearended31December2007wereauthorisedforissueinaccordancewitharesolutionofthedirectorson11March2008.


//SHAREHOLDERS’ INFORMATIONAS AT 5 MARCH 2008

Issuedandfullypaid-upcapital : S$51,355,583Classofshares : OrdinaryshareVotingrights : Onevotepershare

ThereisnotreasurysharesheldintheissuedcapitaloftheCompany.

STATISTICS OF SHAREHOLDINGS

SIZE OF NUMBER OF % NUMBER OF % SHAREHOLDING SHAREHOLDERS SHARES

1-999 0 0.00 0 0.001,000-10,000 1,220 46.20 6,847,000 1.4110,001-1,000,000 1,398 52.93 96,080,000 19.771,000,001andabove 23 0.87 383,095,200 78.82 2,641 100.00 486,022,200 100.00

SUBSTANTIAL SHAREHOLDERS(AsrecordedintheRegisterofSubstantialShareholders)

DIRECT % DEEMED % INTEREST INTEREST

AlbertPhuayYongHen 237,779,520(1) 48.92 12,990,840(2) 2.67AlanKwanWaiLeon 30,981,220 6.37 0 0

Notes:-

(1) Includes2,000,000heldbyKimEngSecuritiesPteLtd

(2) Deemedtobeinterestedasfollows:-

(i) 830,000sharesheldbyAP21HoldingsPte.Ltd.;and (ii)12,160,840sharesheldbyhisspouse.

//SHAREHOLDERS’ INFORMATION

TWENTY LARGEST SHAREHOLDERS

NO. NAME OF SHAREHOLDERS NUMBER OF SHARES %

1. PhuayYongHen 235,779,520 48.512. KwanWaiLoen 30,981,220 6.373. UOBKayHianPteLtd 29,530,000 6.084. CitibankNomineesSingaporePteLtd 13,150,000 2.715. OCBCSecuritiesPrivateLtd 12,436,000 2.566. HanJiakSiew 12,160,840 2.507. UnitedOverseasBankNominees(Pte)Ltd 9,063,000 1.868. MaybanNominees(Singapore)PteLtd 5,321,000 1.109. DBNominees(Singapore)PteLtd 5,020,000 1.0310. CIMB-GKSecuritiesPte.Ltd. 4,122,000 0.8511. KimEngSecuritiesPte.Ltd. 3,817,000 0.7912. PhillipSecuritiesPteLtd 2,965,000 0.6113. KokFatKeung 2,371,620 0.4914. DBSNomineesPteLtd 2,341,000 0.4815. HoChaiMong 2,235,000 0.4616. NgBanHock 2,125,000 0.4417. WongKumFookAugustine 2,100,000 0.4318. OCBCNomineesSingaporePteLtd 1,542,000 0.3219. LowMongChai 1,529,000 0.3120. TayYewChin 1,330,000 0.27 Total 379,919,200 78.17

PERCENTAGE OF SHAREHOLDING IN PUBLIC’S HANDS

39.39% of the Company’s shares are held in the hands of public. Accordingly, the Company has complied with Rule 723 of theListingManualoftheSGX-ST.


NOTICE IS HEREBY GIVENthattheSeventhAnnualGeneralMeetingofExcelpointTechnologyLtdwillbeheldatParamountHotel,25MarineParadeRoad,Parawave,Level4,Singapore449536onWednesday,16April2008at3.00p.m.forthefollowingpurposes:-

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the financial year ended31December2007togetherwiththeAuditors’Reportthereon. (Resolution1)

2. Todeclareafirstandfinaltaxexemptone-tierdividendof0.25Singaporecentsperordinaryshareforthefinancialyearended

31December2007(2006:0.50centsperordinaryshare). (Resolution2)

3. Tore-electthefollowingDirectorsoftheCompanyretiringpursuanttoArticles108and104oftheArticlesofAssociationoftheCompany:-

Mr.KwahThiamHock (RetiringpursuanttoArticle108) (Resolution3) Mr.SunnyWongFookChoy (RetiringpursuanttoArticle104) (Resolution4) Mr.DavidKokFatKeung (RetiringpursuanttoArticle104) (Resolution5)

Mr. Kwah will, upon re-election as a Director of the Company, remain as Chairman of the Audit Committee and a member of the Remuneration Committee and will be considered independent.

Mr. Sunny Wong will, upon re-election as a Director of the Company, remain as Chairman of the Remuneration Committee and a member of the Audit Committee and Nominating Committee and will be considered independent.

4. ToapprovethepaymentofDirectors’FeesofS$213,000totheIndependentDirectorsforthefinancialyearfrom1January2008to31December2008(2007:S$180,000). (Resolution6)

5. To re-appoint Ernst & Young as the Auditors of the Company and to authorise the Directors of the Company to fix theirremuneration. (Resolution7)

6. TotransactanyotherordinarybusinesswhichmayproperlybetransactedatanAnnualGeneralMeeting.

AS SPECIAL BUSINESS

Toconsiderandifthoughtfit,topassthefollowingresolutionsasOrdinaryResolutions,withorwithoutanymodifications: 7. Authoritytoissuesharesupto50percentum(50%)ofthetotalnumberofissuedsharesinthecapitaloftheCompany

(A) That pursuant to Section 161 of the Companies Act, Chapter 50 and Rule 806 of the Listing Manual of the SingaporeExchangeSecuritiesTradingLimited,theDirectorsoftheCompanybeauthorisedandempoweredto:

(a) (i) issuesharesintheCompany(“shares”)whetherbywayofrights,bonusorotherwise;and/or

(ii) make or grant offers, agreements or options (collectively,“Instruments”) that might or would require shares tobe issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants,debenturesorotherinstrumentsconvertibleintoshares,

atanytimeanduponsuchtermsandconditionsandforsuchpurposesandtosuchpersonsastheDirectorsoftheCompanymayintheirabsolutediscretiondeemfit;and

(b) (notwithstandingtheauthorityconferredbythisResolutionmayhaveceasedtobeinforce)issuesharesinpursuanceofanyInstrumentmadeorgrantedbytheDirectorsoftheCompanywhilethisResolutionwasinforce,

//NOTICE OF SEVENTH ANNUAL GENERAL MEETING


providedthat:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or grantedpursuanttothisResolution)andInstrumentstobeissuedpursuanttothisResolutionshallnotexceedfiftypercentum(50%) of the total number of issued shares in the capital of the Company (as calculated in accordance with sub-paragraph(2)below),ofwhichtheaggregatenumberofsharesandInstrumentstobeissuedotherthanonaproratabasistoexistingshareholdersoftheCompanyshallnotexceedtwentypercentum(20%)ofthetotalnumberofissuedsharesinthecapitaloftheCompany(ascalculatedinaccordancewithsub-paragraph(2)below);

(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for thepurposeofdeterminingtheaggregatenumberofsharesandInstrumentsthatmaybeissuedundersub-paragraph(1)above,thepercentageofissuedsharesandInstrumentsshallbebasedonthetotalnumberofissuedsharesinthecapitaloftheCompanyatthetimeofthepassingofthisResolution,afteradjustingfor:

(a) newsharesarisingfromtheconversionorexerciseoftheInstrumentsoranyconvertiblesecurities; (b)newsharesarisingfromexercisingshareoptionsorvestingofshareawardsoutstandingandsubsistingatthetime

ofthepassingofthisResolution;and (c) anysubsequentbonusissue,consolidationorsubdivisionofshares;

(3) inexercisingtheauthorityconferredbythisResolution,theCompanyshallcomplywiththeprovisionsoftheListingManualoftheSingaporeExchangeSecuritiesTradingLimitedforthetimebeinginforce(unlesssuchcompliancehasbeenwaivedbytheSingaporeExchangeSecuritiesTradingLimited)andtheArticlesofAssociationoftheCompany;and

(4) unless revoked or varied by the Company in a general meeting, such authority shall continue in force (i) until theconclusionofthenextAnnualGeneralMeetingoftheCompanyorthedatebywhichthenextAnnualGeneralMeetingoftheCompanyisrequiredbylawtobeheld,whicheverisearlieror(ii)inthecaseofsharestobeissuedinpursuanceoftheInstruments,madeorgrantedpursuanttothisResolution,untiltheissuanceofsuchsharesinaccordancewiththetermsoftheInstruments.[SeeExplanatoryNote(i)] (Resolution8)

(B) ThatapprovalbeandisherebygiventotheDirectorstoofferandgrantoptionsfromtimetotimeinaccordancewiththeprovisionsoftheExcelpointShareOptionScheme,and,pursuanttoSection161oftheCompaniesAct,Chapter50,toallotandissuefromtimetotimesuchnumberofsharesinthecapitaloftheCompany(the“SchemeShares”)asmayberequiredtobeissuedpursuanttotheexerciseofoptionsgrantedundertheExcelpointShareOptionSchemeandtodoallsuchactsandthingsasmaybenecessaryorexpedienttocarrythesameintoeffect,providedalwaysthattheaggregatenumberofSchemeSharesshallnotexceedfifteenpercentum(15%)ofthetotalnumberofissuedsharecapitaloftheCompanyfromtimetotime. (Resolution9)

ByOrderoftheBoard

TanCherLiangWongYoenHarSecretaries

Singapore,1April2008


EXPLANATORY NOTES:

(i) TheOrdinaryResolution8initem7(A)above,ifpassed,willempowertheDirectorsoftheCompanyfromthedateofthisMeetinguntilthedateofthenextAnnualGeneralMeetingoftheCompany,orthedatebywhichthenextAnnualGeneralMeetingoftheCompanyisrequiredbylawtobeheldorsuchauthorityisvariedorrevokedbytheCompanyinageneralmeeting,whicheveristheearlier,toissueshares,makeorgrantinstrumentsconvertibleintosharesandtoissuesharespursuanttosuchinstruments,uptoanumbernotexceeding,intotal,50%ofthetotalnumberofissuedsharesinthecapitaloftheCompany,ofwhichupto20%maybeissuedotherthanonapro-ratabasistoexistingshareholdersoftheCompany.

For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital of theCompanywillbecalculatedbasedonthetotalnumberofissuedsharesinthecapitaloftheCompanyatthetimethisOrdinaryResolutionispassedafteradjustingfornewsharesarisingfromtheconversionorexerciseoftheInstrumentsoranyconvertiblesecurities,theexerciseofshareoptionsorthevestingofshareawardsoutstandingorsubsistingatthetimewhenthisOrdinaryResolutionispassedandanysubsequentbonusissue,consolidationorsubdivisionofshares.

(ii) The Ordinary Resolution 9 in item 7(B) above, if passed, will empower the Directors of the Company, from the date of thisMeetinguntilthenextAnnualGeneralMeetingoftheCompany,orthedatebywhichthenextAnnualGeneralMeetingoftheCompanyisrequiredbylawtobeheldorsuchauthorityisvariedorrevokedbytheCompanyinageneralmeeting,whicheveristheearlier,toissuesharesintheCompanypursuanttotheexerciseofoptionsgrantedortobegrantedundertheSchemeuptoanumbernotexceedingintotal(fortheentiredurationoftheScheme)fifteenpercentum(15%)ofthetotalnumberofissuedsharesinthecapitaloftheCompanyfromtimetotime.

NOTES:

1. AMemberentitledtoattendandvoteattheAnnualGeneralMeeting(the“Meeting”)isentitledtoappointaproxytoattendandvoteinhis/herstead.AproxyneednotbeaMemberoftheCompany.

2. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 15 Changi Business Park

Central1,5thLevel,Singapore486057notlessthanforty-eight(48)hoursbeforethetimeappointedforholdingtheMeeting.


THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.

IMPORTANT:1. For investors who have used their CPF monies to buy Excelpoint Technology Ltd.’s

shares,thisReportisforwardedtothemattherequestoftheCPFApprovedNomineesandissentsolelyFORINFORMATIONONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for allintentsandpurposesifusedorpurportedtobeusedbythem.

3. CPF investors who wish to attend the Meeting as an observer must submit theirrequests through their CPF Approved Nominees within the time frame specified. Iftheyalsowishtovote,theymustsubmittheirvotinginstructionstotheCPFApprovedNomineeswithinthetimeframespecifiedtoenablethemtovoteontheirbehalf.

EXCELPOINT TECHNOLOGY LTD.(CompanyRegistrationNo.200103280C)(IncorporatedInTheRepublicofSingaporewithlimitedliability)

PROXY FORM(PleaseseenotesoverleafbeforecompletingthisForm)

I/We,

of

beingamember/membersofEXCELPOINTTECHNOLOGYLTD.(the“Company”),herebyappoint:

NAME NRIC/PASSPORT NO. PROPORTION OF SHAREHOLDINGS

NO. OF SHARES %

ADDRESS

and/or(deleteasappropriate)

NAME NRIC/PASSPORT NO. PROPORTION OF SHAREHOLDINGS

NO. OF SHARES %

ADDRESS

orfailingtheperson,oreitherorbothofthepersons,referredtoabove,theChairmanoftheMeetingasmy/ourproxy/proxiestovoteforme/usonmy/ourbehalfattheSeventhAnnualGeneralMeeting(the“Meeting”)oftheCompanytobeheldatParamountHotel,25MarineParadeRoad,Parawave,Level4,Singapore449536onWednesday,16April2008at3.00p.m.andatanyadjournmentthereof.I/Wedirectmy/ourproxy/proxiestovotefororagainsttheResolutionsproposedattheMeetingasindicatedhereunder.IfnospecificdirectionastovotingisgivenorintheeventofanyothermatterarisingattheMeetingandatanyadjournmentthereof,theproxy/proxieswillvoteorabstainfromvotingathis/herdiscretion.Theauthorityhereinincludestherighttodemandortojoinindemandingapollandtovoteonapoll.

(Pleaseindicateyourvote“For”or“Against”withatick[√]withintheboxprovided.)

NO. RESOLUTIONS RELATING TO: FOR AGAINST

OrdinaryBusiness

1 ToreceiveandadopttheDirectors’ReportandtheAuditedAccountsforthefinancialyearended31December2007togetherwiththeAuditors’Reportthereon.

2 Todeclareafirstandfinaltaxexemptone-tierdividendof0.25Singaporecentsperordinaryshareforthefinancialyearended31December2007.

3 Tore-electMr.KwahThiamHockasaDirector(underArticle108).

4 Tore-electMr.SunnyWongFookChoyasaDirector(underArticle104).

5 Tore-electMr.DavidKokFatKeungasaDirector(underArticle104).

6 ToapprovethepaymentofDirectors’FeesofS$213,000totheIndependentDirectorsforthefinancialyearfrom1January2008to31December2008.

7 Tore-appointMessrsErnst&YoungasauditorsandtoauthoriseDirectorstofixtheirremuneration.

SpecialBusiness

8 ToauthoriseDirectorstoissuesharesand/orInstrumentspursuanttoSection161oftheCompaniesAct,Chapter50.

9 ToauthoriseDirectorstoofferandgrantoptionsandtoissuesharespursuanttothegrantoftheoptions.

SignatureofShareholder(s)or,CommonSealofCorporateShareholder

Datedthis__________________dayof________________________2008

TOTAL NUMBER OF SHARES IN: NO. OF SHARES

(a)CDPRegister

(b)RegisterofMembers

NOTES:

1. PleaseinsertthetotalnumberofordinarysharesinthecapitaloftheCompany(“Shares”)heldbyyou.IfyouhaveSharesenteredagainst your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore),youshouldinsertthatnumberofShares.IfyouhaveSharesregisteredinyournameintheRegisterofMembers,youshouldinsertthatnumberofShares.IfyouhaveSharesenteredagainstyournameintheDepositoryRegisterandSharesregisteredinyourname in theRegisterofMembers,youshould insert theaggregatenumberofSharesenteredagainstyourname inthe Depository Register and registered in your name in the Register of Members. If no number is inserted, this instrumentappointingaproxyorproxieswillbedeemedtorelatetoallSharesheldbyyou.

2. AmemberoftheCompanyentitledtoattendandvoteataMeetingoftheCompanyisentitledtoappointoneortwoproxiestoattendandvoteinsteadofhim.AproxyneednotbeamemberoftheCompany.

3. Whereamemberappointstwoproxies,theappointmentsshallbeinvalidunlesshespecifiestheproportionofhisshareholding(expressedasapercentageofthewhole)toberepresentedbyeachproxy.

4. ThisinstrumentappointingaproxyorproxiesmustbedepositedatthebusinessofficeoftheCompanyat15ChangiBusinessParkCentral1,5thLevel,Singapore486057notlessthan48hoursbeforethetimeappointedfortheAnnualGeneralMeeting.

5. Theinstrumentappointingaproxyorproxiesmustbeunderthehandoftheappointerorofhisattorneydulyauthorisedinwriting.Wheretheinstrumentappointingaproxyorproxiesisexecutedbyacorporation,itmustbeexecutedeitherunderitssealorunderthehandofanofficerorattorneydulyauthorised.

6. AcorporationwhichisamembermayauthorisebyresolutionofitsdirectorsorothergoverningbodysuchpersonasitthinksfittoactasitsrepresentativeattheAnnualGeneralMeeting,inaccordancewithSection179oftheCompaniesAct,Chapter50ofSingapore.

7. ACompanyshallbeentitledtorejecttheinstrumentappointingaproxyorproxiesifitisincomplete,improperlycompletedorillegibleorwherethetrueintentionsoftheappointerarenotascertainablefromtheinstructionsoftheappointerspecifiedinthisinstrumentappointingaproxyorproxies.

8. InthecaseofmemberswhoseSharesareenteredagainsttheirnamesintheDepositoryRegister,theCompanymayrejectanyinstrumentappointingaproxyorproxieslodgedifthemembersarenotshowntohaveSharesenteredagainsttheirnamesintheDepositoryRegisterasat48hoursbeforethetimeappointedforholdingtheAnnualGeneralMeetingascertifiedbyTheCentralDepository(Pte)LimitedtotheCompany.

WWW.EXCELPOINT.COM

15ChangiBusinessParkCentral15thand6thLevelSingapore486057

Tel: 67418966Fax: 67418980Website: www.excelpoint.com

CompanyRegistrationNo.200103280C

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