huan hsin holdings ltd - 早报 · 2013. 5. 13. · the third new plant will be leased to the joint...

SUSTAINABLE GROWTH

THROUGH INNOVATION

H U A N H S I N H O L D I N G S LT D

ANNUAL REPORT 2002

Registered Office:6 Shenton Way #28-09DBS Building Tower 2Singapore 068809

CONTENTS

GroupAddresses

8 OperationsReview

10 FinancialHighlights

12 FinancialContents

15

CorporateProfile

Profile ofDirectors

1 6President’sMessage

3CorporateMission

2 CorporateInformation

5

Designed & Produced by press Media Pte Ltd • tel: (65) 6880 2838

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Annual Report 2002 | 1 | Huan Hsin Holdings Ltd

CORPORATE PROFILE Established in 1980, mainboard listed Huan Hsin

Group ("Huan Hsin") is an integrated contract

manufacturer of telecommunications, IT-related and

electronic products and components to Original

Equipment Manufacturers and Original Design

Manufacturers around the world.

Today, our operations include plastic injection, metal

stamping, wire and cable and finished product

assembly. With plants strategically located in the

People’s Republic of China and Malaysia, as well as

marketing offices in Taiwan and USA, Huan Hsin

has successfully diversified into higher value-added

and higher technology businesses such as notebook

casings and LCD monitor casings to capitalise on

the long term dynamics of the IT industry.


CORPORATE MISSION

We aim to achieve sustainable growth for the Group and to enhance shareholder value by providing quality

products and services. We will constantly upgrade and adapt our business to anticipate and meet evolving

customer needs in an increasingly challenging business environment. Our growing business, ISO9001 and

ISO14001 certifications are clear testimonies to our focus on quality products and customer satisfaction.

• Vertical integration of our manufacturing operations to

deliver finished products at the most competitive prices;

• Maintaining high quality standards and minimising costs at

all times;

• Strengthening relationships with our customers, staff and

business associates;

• Further development of synergistic investments.

AS WE CONTINUE TO EXTEND OUR REACH INTO GLOBAL MARKETS, WE

INTEND TO SHARPEN OUR COMPETITIVE EDGE THROUGH A MULTI-PRONGED

STRATEGY THAT ENCOMPASSES THE FOLLOWING:

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Ever since Huan Hsin diversified from its wire and cable business into electronics contract manufacturingbusiness in 1997, the Group has made tremendous progress in expanding its product range, its customerbase as well as its manufacturing base in China. Our diversification strategy is now beginning to contributestrongly to the Group’s profit and has taken over the wire and cable business as the largest contributor to theGroup’s turnover and profit.

Today, Huan Hsin has evolved into an integrated contract manufacturer of electronic products. Specifically,Huan Hsin is one of the leading notebook casing manufacturers in China. We will continue to build on thefoundations of our growth to enhance shareholder value.

FINANCIAL REVIEW

Despite challenging market conditions in 2002, Huan Hsin benefited much from the strategic tie-ups withmarket leaders and the outsourcing trend to China-based contract manufacturers. Group turnover rose 50%to reach an all-time high of S$171.3 million in 2002 compared with S$114.4 million in 2001. The rise inGroup turnover was driven mainly by the sterling performance of the mould, moulded plastic products andfinished product assembly segment which was fuelled by strong orders for products such as notebook casings,LCD monitor casings and paper shredders.

Group profit after tax improved to S$21.6 million in 2002 from S$21.3 million the year before. The 1%growth does not fully reflect the overall operating improvement due to the impact of tax rebate and foreignexchange fluctuations. In 2001, Group profit after tax included a foreign exchange gain of S$5.2 million anda tax rebate of S$2.0 million. In 2002, there was a foreign exchange loss of S$205,000 and no tax rebate.Eliminating the impact of foreign exchange fluctuations and tax rebate, Group profit after tax would havejumped 55% to S$21.8 million from S$14.1 million. Net Tangible Asset per share rose to 52.63 cents from49.78 cents.

DIVIDENDS

The Directors are recommending a final dividend of 6% tax-exempt per ordinary share of S$0.20 each.Subject to shareholders’ approval, the final dividend is payable on June 20, 2003. This, together with theinterim dividend of 4% tax-exempt per share already paid, will make a total distribution for the year of 10%tax-exempt per share, which is unchanged from year 2001, on an enlarged share capital after the one-for-fivebonus issue.

SHARE CAPITAL

A bonus issue of one-for-five was made in 2002, thereby raising the issued share capital to 300,000,000shares of $0.20 each.

SUBSEQUENT EVENT-PRIVATE PLACEMENT

In February 2003, Huan Hsin successfully placed 35,000,000 new shares at the price of S$0.91 each to fundits expansion plans, thereby raising the issued share capital to 335,000,000 shares of S$0.20 each. The netproceeds raised, amounting to approximately S$31.2 million will mainly be used to expand Huan Hsin’snotebook casing production capacity and spray-painting facilities.

PRESIDENT’S MESSAGE


PRESIDENT’S MESSAGE

OUTLOOK

Global PC shipments may not see a strong rebound in 2003, but the Group is optimistic that with itsstrategically located plants in China and established customer base, it will continue to benefit from theoutsourcing trend.

Current projections indicate that Taiwanese manufacturers are expected to produce about two thirds of theworld’s notebooks in 2003. Towards the end of 2002, major Taiwanese notebook manufacturers haveaccelerated the pace of expansion near the Group’s manufacturing base in Shanghai. As such, orders fornotebook casings are likely to remain strong and the Group expects to further improve its market position in2003.

Our expansion plans in 2003 include constructing three new plants in Shanghai. Two of the new plants willboost the Group’s notebook casing production and spray painting capacities to about 820,000 units permonth. The third new plant will be leased to the joint venture company formed by Huan Hsin and MinebeaCo., Ltd. to manufacture computer keyboards.

Barring unforeseen circumstances, the directors are optimistic of the Group’s performance in 2003.

ACKNOWLEDGEMENTS

Once again, our success in 2002 is attributable to the hard work of our management and employees at alllevels. On behalf of the Board, I thank them for their contributions. We also appreciate the loyal support ofour customers and business partners. To you, our shareholders, we value your investment in the Companyand remain resolute in our objective to maximise your returns.

HSU HUNG CHUNPresident

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CORPORATE INFORMATION

AUDITORS

Deloitte & Touche

Certified Public Accountants

Singapore

Partner-in-charge:

Mr. Aric Loh Siang Khee(appointed since 1998)

REGISTERED OFFICE

6 Shenton Way #28-09

DBS Building Tower 2

Singapore 068809

Tel: (65) 6532 3488

Fax: (65) 6535 4188

REGISTRAR

Compact Administrative

Services Pte Ltd

6 Shenton Way #28-09

DBS Building Tower 2

Singapore 068809

Tel: (65) 6532 3488

Fax: (65) 6535 4188

PRINCIPAL BANKERS

Bumiputra-Commerce Bank Berhad

Kedah, Malaysia

Oversea-Chinese Banking

Corporation Limited

Singapore

BOARD OF DIRECTORS

Hsu Hung Chun President

Hsu Cheng Chien Managing Director

Lim Hock Beng Independent Director

Lau Ping Sum, Pearce Independent Director

Lim Kee Nam Independent Director

Hsu Ming Hung Executive Director

Chang Shih Hsing Executive Director

AUDIT COMMITTEE

Lim Hock Beng Chairman

Lau Ping Sum, Pearce

Lim Kee Nam(appointed on November 1, 2002)

Hsu Cheng Chien(resigned on November 1, 2002)

NOMINATING COMMITTEE

Lim Hock Beng Chairman

Lau Ping Sum, Pearce

Lim Kee Nam

Hsu Hung Chun

REMUNERATION COMMITTEE

Lau Ping Sum, Pearce Chairman

Lim Hock Beng

Lim Kee Nam

Hsu Cheng Chien

COMPANY SECRETARY

Tan Cheng Siew @ Nur Farah Tan


PROFILE OF DIRECTORS

LIM HOCK BENG Independent Director

Mr. Lim Hock Beng, aged 63, was appointed to the Board on May 16, 1997 and is an independentnon-executive director. He serves as the Chairman of the Audit and Nominating Committees and amember of the Remuneration Committee.

He was the founder and the managing director of Lim Associates Pte Ltd, which provided corporatesecretarial services to private and public listed companies, for 27 years until his retirement in year 1995.Currently, he is the managing director of a private investment holding company. He holds a Diploma

in Management Accounting & Finance and is a member of the Singapore Institute of Directors.

Current directorships in public companies listed on SGX-ST include GP Industries Ltd, Colex Holdings Ltd, King Wan CorporationLtd and Vicplas International Ltd.

He does not hold any share but hold share options for 120,000 shares in the Company. He attended all the six (6) Board Meetingsheld in the financial year. He has no family relationship with any Director and/or substantial shareholder of the Company, nor anypersonal interest in any business involving the Company. He was last re-elected on May 20, 2002.

HSU CHENG CHIEN Managing Director

Mr. Hsu Cheng Chien, aged 45, was appointed to the Board on December 26, 1995 and subsequentlywas appointed Managing Director on May 28, 1997. He is a non-independent executive director andserves as a member of the Remuneration Committee.

As the Managing Director of the Group, he is in charge of the overall operations and production of theGroup, setting and implementing long-term business objectives and strategic planning of the Group.He graduated in 1974 from Yu Da Business School, Taiwan. Prior to joining the Group in 1980, he was

head of the material control and purchasing department in a manufacturing company. He is also a member of the SingaporeInstitute of Directors.

He is a substantial shareholder of the Company and has interest in certain transactions with the Group, which are disclosed in theReport of the Directors . He attended all the six (6) Board Meetings held in the financial year. He is the brother of Mr. Hsu HungChun.

HSU HUNG CHUN President

Mr. Hsu Hung Chun, aged 48, has been the Director and Chairman of the Board since December26,1995. He is a non-independent executive director and serves as a member of the NominatingCommittee.

Mr. Hsu Hung Chun is also the President and founder of the Group. He is responsible for businessdevelopment and all the marketing activities of the Group. He is also in charge of the Group’s investmentpolicy, banking and financial issues. He graduated in 1973 from the Tai Pei High School, Taiwan and

previously worked as a sales manager in a manufacturing company and a trading company. He is a member of the SingaporeInstitute of Directors.

He is a substantial shareholder of the Company and has interest in certain transactions with the Group, which are disclosed in theReport of the Directors. He attended all the six (6) Board Meetings held in the financial year. He is the brother of Mr. Hsu ChengChien and was last re-elected on May 21, 2001.

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LIM KEE NAM Independent Director

Mr. Lim Kee Nam, aged 55, joined the Board on November 1, 2002. He is an independent non-executive director and serves as a member of the Audit, Nominating and Remuneration Committees.

He started work in 1968 in Johnson Shoes Bhd, a shoe manufacturing company as Production Supervisorand was promoted to Production Manager in 1971. He joined American International Assurance Co.Ltd. in 1976 and is currently the District Agency Manager.

He was an independent non-executive director of Uchi Technologies Berhad, a public company listed on the Main Board of KLSE,from February 1998 to August 2001. He was also a member of the Audit Committee of Uchi Technologies Berhad from July 2000to August 2001.

He does not hold any share or share options in the Company. He attended two (2) Board Meetings held in the financial year. Hehas no family relationship with any Director and/or substantial shareholder of the Company, nor any personal interest in anybusiness involving the Company.

HSU MING HUNG Executive Director

Mr. Hsu Ming Hung, aged 42, was appointed to the Board on May 28, 1997. He is a non-independentexecutive director.

He is the Deputy General Manager of Huan Hsin Co. (M) Sdn Bhd. He is responsible for themanagement of the Malaysian operations and assists the Managing Director in implementing, reviewingand verifying the overall corporate strategy and policies of the Group. He graduated from Nan YaIndustrial Training School, Taiwan in 1983 and has been with the Group for more than 15 years.

He holds 750,000 shares and share options for 180,000 shares in the Company and has interest in certain related person transactionwith the Group, which is disclosed in the Report of the Directors. He attended all the six (6) Board Meetings held in the financialyear. He is the nephew of Messrs Hsu Hung Chun and Hsu Cheng Chien. He was last re-elected on May 21, 2001.

CHANG SHIH HSING Executive Director

Mr. Chang Shih Hsing, aged 41, was appointed to the Board on May 28, 1997. He is a non-independentexecutive director.

He is the plant manager of Shanghai Huan Hsin Electronics Co., Ltd. As the head of the productiondivision, he is responsible for the technical aspects of the operations, quality management and researchand development. He also oversees employee training programs and human resource development andmanagement. He has a general diploma and has been with the Group since 1985.

He holds directly 2,090,066 shares and share options for 180,000 shares in the Company. He attended four (4) of the six (6)Board Meetings held in the financial year. He is the brother-in-law of Mr. Hsu Hung Chun. He was last re-elected on May 20,2002.

LAU PING SUM, PEARCE Independent Director

Mr. Lau Ping Sum, Pearce, aged 62, was appointed to the Board on May 28, 1997. He is an independentnon-executive director and serves as the Chairman of the Remuneration Committee and a member ofthe Audit and Nominating Committees.

Currently, he is an Executive Director of PAP HQ and PAP Community Foundation HQ . Prior tojoining the Board, he had held management positions as head of IT in two financial institutions and astatutory board. He was a Member of Parliament between 1980 and 1996, Political Secretary to the

Minister of Health between 1981 and 1985 and Chairman of Ang Mo Kio/Yishun Town Council between 1995 and 1996.

Current directorships in public companies listed on SGX-ST include KLW Holdings Ltd, Nera Telecommunications Ltd, NewWave Technologies Ltd and Cortina Holdings Ltd.

He does not hold any share but hold share options for 120,000 shares in the Company. He attended all the six (6) Board Meetingsheld in the financial year. He has no family relationship with any Director and/or substantial shareholder of the Company, nor anypersonal interest in any business involving the Company. He was last re-elected on June 12, 2000.


GROUP ADDRESSES

Registered Office: Huan Hsin Holdings Ltd6 Shenton Way, #28-09 DBS Building Tower 2, Singapore 068809Tel: 65-65323488 Fax: 65-65354188

Malaysia Factory: Huan Hsin Co. (M) Sdn. Bhd.(Company No: 181556-x)Plot 3, Bakar Arang Industrial Estate, 08000 Sungai Petani, Kedah, MalaysiaTel: 604-4218866(5 lines) Fax: 604-4213366, 4226385

Shanghai Factory: Shanghai Huan Hsin Electronics Co., Ltd.Shanghai Qing Pu County Fengxi 201705 ChinaTel: 86-21-59770666 Fax: 86-21-59771688, 59772608

Shanghai Yi Hsin Industry Co., Ltd.Shanghai Zhan Hsin Industry Co., Ltd.No. 2666, Zhong Chun Road, Zhuan Qiao Town,Ming Hang Industry Area Shanghai 201108 ChinaTel: 86-21-64892888 Fax: 86-21-64892828, 64892626

Huan Hsin (BVI) Limited Taipei Branch6F, No. 815, Chung Hsiao E. Road, Sec. 5, Taipei Taiwan 115Tel: 886-2-26539696 Fax: 886-2-26539911

Shanghai Yao Shin Industry Co., Ltd.No. 2666, Zhong Chun Road, Zhuan Qiao Town,Ming Hang Industry Area Shanghai 201108 ChinaTel: 86-21-64897666 Fax: 86-21-64899666

Zhan Yun (Shanghai) Electronics Co., Ltd.No. 8-1 Rong Jiang RoadSongjiang Export Processing ZoneShanghai 201613 ChinaTel : 86-21-57748200 Fax : 86-21-57748050

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OPERATIONS REVIEW

In terms of contribution to Group turnover, the mould,moulded plastic products and finished product assembly(“moulded plastic & assembly”) segment is the largestcontributor at 73%, followed by the wire, cable and relatedcomponents (“wire”) segment at 23% and the pressed metalproducts (“metal”) segment at 4%.

Huan Hsin’s growth in 2002 was driven by the strongperformance of the moulded plastic & assembly segment.Being the largest contributor to Group turnover and Groupprofit before tax, its sterling performance in 2002 hasoutweighed the slowdown of the wire segment and metalsegment. The moulded plastic & assembly segment isexpected to remain the main growth driver for the Groupin 2003.

MOULD, MOULDED PLASTIC PRODUCTS AND FINISHED PRODUCT ASSEMBLY

As a result of increased outsourcing to China-based manufacturers and major customers expanding near theGroup’s manufacturing base in Shanghai, this segment enjoyed significant growth in orders for variouselectronic products including notebook casings, LCD monitor casings and paper shredders in 2002. Turnoverjumped 107% to S$125 million and profit before tax surged 111% to S$16.7 million.

Notebook casing was the fastest growing product in 2002. Unit shipments grew about 81% to 1.3 millioncompared with 720,000 in 2001. As Taiwanese manufacturers produced more than half of the world’snotebooks in 2002, the Group was pleased to announce in May 2002 that it had secured new orders fornotebook casings from another leading manufacturer from Taiwan. During the last two months of 2002,the Group received higher orders for notebook casings from all its customers as they accelerated the pace ofexpansion in China.

With a healthy track record and an establishedmanufacturing base in Shanghai, orders for notebookcasings in 2003 are expected to remain strong. In addition,increasing demand for notebooks with colourful casingshave presented the Group with new opportunities toprovide value-added services such as spray-painting ofnotebook casings. As a result, the Group announced plansin February 2003 to expand both its notebook casingproduction capacity and spray-painting facilities.

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OPERATIONS REVIEW

WIRE, CABLE AND RELATED COMPONENTS

The main products within the wire segment are telephonelines and cords for electrical and electronic products.Turnover eased 13% to S$39.2 million in 2002 fromS$44.8 million a year ago because orders for telephonerelated cords were affected by the slowdown of thetelecommunications industry globally. Orders for othercords and cables remained stable in 2002. With lowerturnover, profit before tax fell to S$10.4 million from S$12million a year ago.

Although this segment is not the main growth driver forthe Group, it will continue to contribute positively toGroup performance in 2003. With its established customer

base and generation of stable cash flow, this segment will support the growth of the moulded plastic &assembly segment.

PRESSED METAL PRODUCTS

As a result of lower orders for DVD and VCD casings, turnover for the metal segment fell to S$6.9 millionin 2002 from S$8.8 million in 2001. With lower orders and fixed operating costs, this segment incurred aloss of S$2.1 million compared with a loss of S$0.98 million a year ago.

Apart from DVD and VCD casings, the metal segment includes products such as metal parts for notebooks.To improve its utilisation rate in 2003, management is working towards securing more orders for metal partsfor notebooks.


FINANCIAL HIGHLIGHTSAs at December 31

1998 1999 2000 2001 2002 1998 1999 2000 2001 2002

1998 1999 2000 2001 2002 1998 1999 2000 2001 2002

1998 1999 2000 2001 2002 1998 1999 2000 2001 2002

74,25679,675

109,737 114,434

171,304

14,39113,513

23,562

20,78322,343

12,484 12,574

21,004 21,14219,930

4.19

4.84

7.377.11 7.20

32.31

36.29

42.90

49.7852.63

96,944

108,862

128,692

149,366157,909

REVENUE ($’000)

PROFIT AFTER TAX BEFOREMINORITY INTEREST($’000)

NET TANGIBLE ASSET PERORDINARY SHARE (cents)

PROFIT BEFORE TAX ($’000)

EARNINGS PER SHARE (cents)

SHAREHOLDERS’ FUNDS ($’000)

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1998S$’000

74,256

14,391

(1,907)

12,484

84

12,568

4.19

NA

1.20

1.20

1999S$’000

79,675

13,513

(939)

12,574

1,935

14,509

4.84

NA

1.20

1.20

2000S$’000

109,737

23,562

(2,558)

21,004

1,111

22,115

7.37

NA

2.00

2.00

2001S$’000

114,434

20,783

359

21,142

180

21,322

7.11

NA

2.00

2.00

2002S$’000

171,304

22,343

(2,413)

19,930

1,676

21,606

7.20

7.20

2.00

2.00

Operating Results Of TheGroup

Revenue

Profit before taxation

Taxation

Profit after taxation

Minority interest

Profit attributable toshareholders

Basis earnings per ordinaryshare (cents)(i) Based on the

number of ordinaryshares in issue (note 1)

(ii) On a fully dilutedbasis (note 2)

Dividend per share -Gross (cents)

Dividend per share -Net (cents)

Financial year ended


Notes :

(1) The earnings per ordinary share (“EPS”) and net tangible asset (“NTA”) backing per ordinary share are calculated on the issuedshare capital of 300,000,000 shares. The EPS and NTA for 1998 to 2000 have been restated to take into account the bonus issue of50,000,000 ordinary shares issued in 2001 and 2002 respectively. The EPS and NTA for 2001 have been restated to take intoaccount the bonus issue of 50,000,000 ordinary shares issued in 2002. The NTA for 1998 to 2000 have also been restated for thereclassification of proposed dividend to equity.

(2) Fully diluted EPS for 2002 is calculated on 300,057,303 ordinary shares assuming all the full exercise of employees’ share optionoutstanding during the year and adjusting the number of ordinary shares in issue to reflect the effect of all potentially dilutiveordinary shares. In December 1998, 1999, 2000 and 2001, there were no outstanding employees’ share options.

(3) The 1998 to 2000 comparative figures have been restated due to the adoption of Singapore Statement of Accounting Standards(SAS) 10 : Events after the balance sheet date which resulted in an increase in the shareholders’ equity as proposed dividendshave been reclassified as part of shareholders’ equity

1998 S$’000

48,154

(126)

5,247

65,144

(11,915)

53,229

(8,599)

97,905

96,944

961

97,905

32.31

1999S$’000

54,572

-

5,185

76,728

(19,184)

57,544

(1,696)

115,605

108,862

6,743

115,605

36.29

2000S$’000

59,634

-

5,252

89,592

(20,040)

69,552

-

134,438

128,692

5,746

134,438

42.90

2001S$’000

62,597

-

12,710

113,807

(26,432)

87,375

(7,404)

155,278

149,366

5,912

155,278

49.78

2002S$’000

80,505

-

36,891

127,475

(59,898)

67,577

(13,892)

171,081

157,909

13,172

171,081

52.63

Financial Position OfThe Group

Fixed assets

Deferred tax liabilities

Investment

Current assets

Current liabilities(note 3)

Net current assets

Non-current liabilities

Represented by :Shareholders’ funds(note 3)

Minority interest

Net tangible assetbacking per ordinaryshare (cents) (note 1)


As at


FINANCIAL CONTENTS

Report of theDirectors

Auditors’Report

BalanceSheets

Profit and LossStatements

Statements ofChanges in Equity

Notes to FinancialStatements

Statement ofDirectors

16 23 24 25

Consolidated CashFlow Statement

2726 28 48

Statistics ofShareholdings

Notice of AnnualGeneral Meeting

Proxy FormCorporate GovernanceReport

5549 56 59


The directors present their report together with the audited financial statements of the company and of the group for thefinancial year ended December 31, 2002.

1 DIRECTORS

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

Mr Hsu Hung ChunMr Hsu Cheng ChienMr Hsu Ming HungMr Chang Shih HsingMr Lim Hock BengMr Lau Ping Sum, PearceMr Lim Kee Nam(Appointed on November 1, 2002)

2 PRINCIPAL ACTIVITIES

The principal activities of the company are investment holding and the provision of services to its subsidiaries.

The principal activities of the associates and subsidiaries are stated in Notes 9 and 10 to the financial statements.

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

3 ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES

a) During the financial year, the company acquired/incorporated the following subsidiaries:

Group’sshare of net Group’s

Name of subsidiary Consideration tangible assets effective interest$’000 $’000 %

AMTEK System Co., Ltd * * 100

Shanghai Huan Yi 1,917 1,917 100Technology Co., Ltd

Zhan Yun (Shanghai) 9,366 9,366 51Electronics Co., Ltd

* Shares held by another subsidiary.

b) During the financial year, the following subsidiary was disposed:

Group’sshare of net Group’s

Name of subsidiary Consideration tangible assets effective interest$’000 $’000 %

Cai Hui Technology Co., Ltd 255 255 51

REPORT OF THE DIRECTORS


4 RESULTS FOR THE FINANCIAL YEARGroup Company$’000 $’000

Profit after income tax 19,930 6,673Minority interests 1,676 - Profit attributable to shareholders 21,606 6,673

5 MATERIAL TRANSFERS TO/FROM RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the financial year other than those disclosed inthe attached financial statements.

6 ISSUE OF SHARES AND DEBENTURES

a) During the financial year, the company issued bonus shares of 50,000,000 new ordinary shares of $0.20 each on thebasis of 1 new ordinary share credited as fully paid for every 5 existing shares of $0.20 each held in the company, byway of capitalisation of the share premium account. These bonus shares ranked pari passu in all respects with theexisting issued shares of the company.

b) During the financial year, the subsidiaries issued shares as follows:

i) Bao-Ji Development Co., Ltd, issued 10,000,000 ordinary shares of NT$10 each at par totalling NT$100,000,000(equivalent to $5,291,000) for cash for working capital purposes;

ii) Infospeed Pte Ltd issued 3,701,980 ordinary shares of $1 each at par for cash of $2,036,089 for working capitalpurposes and $1,665,891 in consideration for plant and machinery amounting to US$899,996 which are injectedinto a subsidiary, Shanghai Ju Hsin Electronic Co. Ltd;

iii) Shanghai Ju Hsin Electronics Co., Ltd increased its paid-up capital by US$1,150,000 (equivalent to $2,128,650)for plant and machinery injected;

iv) Shanghai Zhan Hsin Industry Co., Ltd increased its paid-up capital by US$1,533,000 (equivalent to $2,704,000)for cash for working capital purposes;

v) AMTEK System Co., Ltd issued 10,000,000 shares of NT$10 each at par for cash on incorporation;

vi) Shanghai Huan Yi Technology Co., Ltd registered paid up capital of US$1,050,000 (equivalent to $1,917,000)on incorporation; and

vii) Zhan Yun (Shanghai) Electronics Co., Ltd registered paid up capital of US$10,000,000 (equivalent to $18,365,000)on incorporation.

c) No debentures were issued by the company or its subsidiaries during the financial year.

7 ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARESAND DEBENTURES

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whoseobject is to enable the directors of the company to acquire benefits by means of the acquisition of shares or debentures inthe company or any other body corporate.



8 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The directors of the company holding office at the end of the financial year had no interests in the share capital of thecompany and related corporations as recorded in the Register of Directors’ Shareholdings kept by the company underSection 164 of the Singapore Companies Act except as follows:

Shareholdings in whichShareholdings registered directors are deemedin the names of directors to have an interest

At beginning At end of At beginning At end ofof financial year financial year of financial year financial year

The CompanyOrdinary shares of $0.20 each

Mr Hsu Hung Chun 81,006,470 97,207,764 2,251,337 2,701,604Mr Hsu Cheng Chien 38,873,328 46,747,995 3,972,587 4,767,104Mr Hsu Ming Hung 625,000 750,000 - -Mr Chang Shih Hsing 1,741,722 2,090,066 100,000 120,000

The SubsidiaryHuan Hsin Co. (M) Sdn BhdOrdinary shares of RM1 each

Mr Hsu Ming Hung - - 571,200 -

Employees share optiongranted to subscriber forordinary shares of $0.20 each

Mr Lim Hock Beng - 120,000 - -Mr Lau Ping Sum, Pearce - 120,000 - -Mr Hsu Ming Hung - 180,000 - -Mr Chang Shih Hsing - 180,000 - 60,000

By virtue of Section 7 of the Singapore Companies’ Act, Messrs Hsu Hung Chun and Hsu Cheng Chien are deemed to havean interest in all the related corporations of the company. The directors’ interests as at January 21, 2003 were the same asthose at the end of the year.

9 DIVIDENDS

Dividends paid or declared since the end of the company’s last financial year were as follows:

A final tax-exempt dividend at $0.012 per ordinary share totalling $3,000,000 on 250,000,000 ordinary shares of $0.20each proposed in the Director’s report for the year ended December 31, 2001 was paid in 2002.

An interim tax-exempt dividend of $0.008 per ordinary share totalling $2,400,000 on 300,000,000 ordinary shares of$0.20 each in respect of the financial year just ended.

The directors of the company now recommend that a final tax-exempt dividend be paid at $0.012 per ordinary sharetotalling $3,600,000 in respect of the financial year just ended December 31, 2002.

10 DIRECTORS’ ACTIONS RELATING TO BAD AND DOUBTFUL DEBTS

Before the profit and loss statement and the balance sheet were made out, the directors of the company took reasonablesteps to ascertain that proper action had been taken in relation to the writing off and providing for bad and doubtful debtsof the company and have satisfied themselves that all known bad debts of the company have been written off and thatadequate provision has been made for doubtful debts.



10 DIRECTORS’ ACTIONS RELATING TO BAD AND DOUBTFUL DEBTS (cont’d)

At the date of this report, the directors of the company are not aware of any circumstances which would render anyamounts written off or provided for bad and doubtful debts for the group of companies in the consolidated financialstatements of the company inadequate to any substantial extent.

11 DIRECTORS’ ACTIONS RELATING TO CURRENT ASSETS

Before the profit and loss statement and the balance sheet were made out, the directors of the company took reasonablesteps to ascertain that any current assets of the company which were unlikely to realise their book values, in the ordinarycourse of business, have been written down to their estimated realisable values or were adequately provided for.

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

12 CHARGES ON ASSETS AND EXISTENCE OF CONTINGENT LIABILITIES AFTER YEAR END DATE

At the date of this report:

a) there does not exist any charge on the assets of the company or any corporation in the group which has arisen sincethe end of the financial year which secures the liability of any other person; and

b) there does not exist any contingent liability of the company or any corporation in the group which has arisen since theend of the financial year.

13 ABILITY TO MEET OBLIGATIONS

No contingent or other liability of the company or any corporation in the group has become enforceable or is likely tobecome enforceable within the period of twelve months after the end of the financial year which, in the opinion of thedirectors of the company, will or may substantially affect the ability of the company and of the group to meet theirobligations as and when they fall due.

14 OTHER CIRCUMSTANCES AFFECTING FINANCIAL STATEMENTS

At the date of this report, the directors of the company are not aware of any circumstances not otherwise dealt with in thereport or consolidated financial statements which would render any amount stated in the financial statements of thecompany and the consolidated financial statements misleading.

15 UNUSUAL ITEMS

In the opinion of the directors of the company, the results of the operations of the company and of the group have notbeen substantially affected by any item, transaction or event of a material and unusual nature during the financial year.

16 UNUSUAL ITEMS AFTER YEAR END DATE

In the opinion of the directors of the company, no item, transaction or event of a material and unusual nature has arisen inthe interval between the end of the financial year and the date of the report which would affect substantially the results ofthe operations of the company and of the group for the financial year in which this report is made.



17 DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS

Since the beginning of the financial year, no director has received or become entitled to receive a benefit which is requiredto be disclosed under Section 201(8) of the Singapore Companies Act, by reason of a contract made by the company or arelated corporation with the director or with a firm of which he is a member, or with a company in which he has asubstantial financial interest except as disclosed in the financial statements and except that certain directors have receivedremuneration from related corporations in their capacity as directors and or executives of those related corporations.

18 OPTIONS TO TAKE UP UNISSUED SHARES

a) The Huan Hsin Share Option Scheme (“Share Option Scheme”) was approved by the shareholders at the ExtraordinaryMeeting held on May 21, 2001. The Share Option Scheme is administered by a committee of directors comprisingMessrs Lim Hock Beng, Lau Ping Sum, Pearce, Hsu Hung Chun and Hsu Cheng Chien.

Under the Share Option Scheme, an option entitles the option holder to subscribe for a specific number of newordinary shares of $0.20 each in the company comprised in the option at a subscription price per share determinedwith reference to the market price of the shares at the time of grant of the option. The Share Option Committee mayat its discretion, fix that subscription price at a discount up to 20% off market price but not lower than the par valueof the shares. The consideration for the grant of an option is $1.00. Options granted with the subscription price setat the market price shall only be exercised after the first anniversary but before the fifth anniversary of the date ofgrant of that option. Options granted with the market price set at a discount to the market price shall only beexercised after the second anniversary but before the fifth anniversary of the date of grant of that option. The sharesunder option may be exercised in whole or in part on the payment of the relevant subscription price. Options grantedwill lapse when the option holder ceases to be a full-time employee of the company or any company of the groupsubject to certain exceptions at the discretion of the Share Option Committee.

On November 21, 2002, on the dissolution of the Share Option Committee, the Remuneration Committee took overthe function of administering the Share Option Scheme. The Remuneration Committee is made up of three independentnon-executive directors comprising Messrs Lim Hock Beng, Lau Ping Sum, Pearce, Lim Kee Nam and an executivedirector, Mr Hsu Cheng Chien.

Under the Share Option Scheme, share options granted and exercised during the financial year and outstanding as atDecember 31, 2002 were as follows:

BalanceAt date Expired/ as at Subscription

Date of grant of grant Exercised Cancelled 31.12.2002 price Exercise period$

April 18, 2002 3,930,000 - - 3,930,000 0.90 April 19, 2004 toApril 18, 2007

December 17, December 18, 2004 to2002 300,000 - - 300,000 0.72 December 17, 2007

4,230,000 - - 4,230,000



18 OPTIONS TO TAKE UP UNISSUED SHARES (cont’d)

Aggregate options granted to directors/controlling shareholders of the company under the Share Option Schemesince the commencement of the Scheme are as follows:

Optionsoutstanding

as atDirectors Granted Exercised Expired 31.12.2002 Expiry date

Mr Hsu Ming Hung 180,000 - - 180,000 April 18, 2007Mr Chang Shih Hsing 180,000 - - 180,000 December 17, 2007Mr Lim Hock Beng 120,000 - - 120,000 April 18, 2007Mr Lau Ping Sum, Pearce 120,000 - - 120,000 April 18, 2007

Associates of controlling shareholders

Ms Hsu Bao Hwa 60,000 - - 60,000 December 17, 2007Mr Yang Chao Shun 60,000 - - 60,000 December 17, 2007

b) The number and proportion of options granted during the financial year at:

i) a discount of 10% or less off market price - nil

ii) a discount of more than 10% off market price - 4,230,000

c) During the financial year, no employee received 5% or more of the total number of options, available under the ShareOption Scheme and no shares were issued at a discount to market price.

d) During the financial year, no options to take up unissued shares of any subsidiary were granted and there were noshares of any subsidiary issued by virtue of the exercise of an option to take up unissued shares.

e) These options do not entitle the holder to participate by virtue of the options, in any share issue of any other corporations.

f) At the end of the financial year, there were no unissued shares of any subsidiary under option.

19 INTERESTED PERSON TRANSACTIONS

Interested person is a director, chief executive officer or controlling shareholder of the issuer.

Transactions with interested person during the financial year:Group

Nature of transaction Interested person 2002 2001$’000 $’000

Rental expense Hsu Hung Chun/Hsu Cheng Chien 54 56Rental expense Hsu Cheng Chien 2 1Licence fee Hsu Hung Chun/Hsu Cheng Chien 10 10Acquisition of 4.76% share capital Hsu Ming Hung 615 -

in Huan Hsin Co. (M) Sdn BhdSales Hsu Cheng Chien (12) (2)Rental income Hsu Hung Chun/Hsu Cheng Chien (1) (1)



20 AUDIT COMMITTEE

The members of the Audit Committee in office at the date of this report are as follows:

Mr Lim Hock Beng (Chairman)Mr Lau Ping Sum, PearceMr Lim Kee Nam (Appointed on November 1, 2002)

Mr Hsu Cheng Chien (Resigned on November 1, 2002)

The Audit Committee performed the functions specified in the Singapore Companies Act. In performing its functions, theCommittee reviewed the overall scope of the external audits and the assistance given by the company officers to theauditors. It met with the company’s external auditors to discuss the results of their examinations. The Committee alsoreviewed the financial statements of the company and the consolidated financial statements of the group for the financialyear ended December 31, 2002 as well as the auditors’ report thereon.

The Committee also met with the company’s internal auditors to review the overall scope of the internal audit and todiscuss the results of the internal audit.

The Audit Committee recommended to the Board of Directors the reappointment of Deloitte & Touche as external auditorsat the forthcoming annual general meeting of the company.

21 AUDITORS

The auditors, Deloitte & Touche, have expressed their willingness to accept re-appointment.

ON BEHALF OF THE DIRECTORS

Hsu Hung Chun

Hsu Cheng Chien

April 28, 2003



We have audited the accompanying financial statements of Huan Hsin Holdings Ltd and the consolidated financial statements ofthe group as at December 31, 2002 set out on pages 24 to 47. These financial statements are the responsibility of thecompany’s directors. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan andperform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating theoverall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion:

a) the accompanying financial statements of the company and consolidated financial statements of the group are properlydrawn up in accordance with the provisions of the Singapore Companies Act (“Act”) and Singapore Statements of AccountingStandard and so as to give a true and fair view of:

i) the state of affairs of the company and of the group as at December 31, 2002 and of the results, changes in equity ofthe company and of the group and cash flows of the group for the financial year then ended; and

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

b) the accounting and other records and the registers required by the Act to be kept by the company and those subsidiariesincorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of theAct.

We have considered the financial statements and auditors’ reports of all the subsidiaries of which we have not acted as auditors,being financial statements included in the consolidated financial statements. The names of these subsidiaries are indicated inNote 10 to the financial statements.

We are satisfied that the financial statements of the subsidiaries that are consolidated with the financial statements of thecompany are in form and content appropriate and proper for the purposes of the preparation of the consolidated financialstatements, and we have received satisfactory information and explanations as required by us for those purposes.

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

DELOITTE & TOUCHECertified Public Accountants

Aric Loh Siang KheePartner

SingaporeApril 28, 2003

AUDITORS’ REPORT

TO THE MEMBERS OF HUAN HSIN HOLDINGS LTD


Group CompanyNotes 2002 2001 2002 2001

$’000 $’000 $’000 $’000

ASSETS

Current assets:Cash 21,537 31,015 509 1,089Short-term investments 5 1 1 - -Trade receivables 6 68,802 35,364 - -Other receivables and prepaid expenses 7 7,917 25,465 23,799 87,957Inventories 8 29,218 21,962 - -Total current assets 127,475 113,807 24,308 89,046

Non-current assets:Investment in associates 9 25,089 1,343 27,345 4,115Investment in subsidiaries 10 - - 68,976 47,047Long-term receivables 11 - - 30,410 -Other long-term investments 12 11,802 11,367 6,282 6,282Property, plant and equipment 13 80,505 62,597 1,684 1,711Total non-current assets 117,396 75,307 134,697 59,155

Total assets 244,871 189,114 159,005 148,201

LIABILITIES AND EQUITY

Current liabilities:Trade payables 41,032 16,467 - -Other payables 14 6,873 7,032 2,966 2,840Short-term bank loan 15 3,769 112 - -Current portion of long-term bank loans 16 6,946 1,851 6,946 1,851Income tax payable 1,278 970 - -Total current liabilities 59,898 26,432 9,912 4,691

Non-current liabilities:Long-term bank loans 16 13,892 7,404 13,892 7,404

Minority interests 13,172 5,912 - -

Capital and reserves:Share capital 17 60,000 50,000 60,000 50,000Share premium 4,515 14,528 4,515 14,528Capital reserve on consolidation 956 931 - -Foreign currency translation reserve (206) 7,464 (2,165) -Legal reserves 5,298 5,110 - -Proposed dividend 3,600 3,000 3,600 3,000Accumulated profits 83,746 68,333 69,251 68,578Total equity 157,909 149,366 135,201 136,106

Total liabilities and equity 244,871 189,114 159,005 148,201

BALANCE SHEETS

DECEMBER 31, 2002

See accompanying notes to financial statements.


Group CompanyNotes 2002 2001 2002 2001

$’000 $’000 $’000 $’000

Revenue 18 171,304 114,434 8,778 17,212

Other operating income 19 2,473 5,664 - 4,856

Changes in inventories of finished goods and work-in-progress 2,528 996 - -

Raw material and consumables used (97,304) (57,034) - -

Staff costs 20 (18,974) (16,795) (489) (454)

Depreciation (8,543) (7,749) (27) (27)

Other operating expenses (29,378) (16,775) (1,154) (374)

Profit from operations 22,106 22,741 7,108 21,213

Finance costs (550) (128) (429) (121)

Profit before share of results of associates 21 21,556 22,613 6,679 21,092

Share of results of associates 787 (1,830) - -

Profit before income tax 22,343 20,783 6,679 21,092

Income tax 22 (2,413) 359 (6) 22

Profit after income tax 19,930 21,142 6,673 21,114

Minority interests 1,676 180 - -

Profit attributable to shareholders 21,606 21,322 6,673 21,114

Earnings per share (cents) 23

- Basic 7.20 7.11

- Fully diluted 7.20 N/A

PROFIT AND LOSS STATEMENTS

YEAR ENDED DECEMBER 31, 2002



2002 2001$’000 $’000

Cash flows from operating activities:Profit before share of results of associates 21,556 22,613Adjustments for:Depreciation expense 8,543 7,749Gain on disposal of investment (23) -Loss on disposal of plant and equipment 24 268Plant and equipment written off - 48Interest expense 550 128Interest income (228) (289)Operating profit before working capital changes 30,422 30,517

Trade receivables (33,438) (5,381)Other receivables and prepaid expenses 17,548 (2,599)Inventories (7,256) (1,285)Trade payables 24,565 5,813Other payables (159) 319Cash generated from operations 31,682 27,384

Dividends paid (5,400) (4,400)Income tax refunded (paid) (2,105) 493Interest paid (550) (128)Interest received 228 289

Net cash from operating activities 23,855 23,638

Cash flows from investing activities:Additions to property, plant and equipment (30,699) (7,469)Proceeds from disposal of plant and equipment 752 360Investment in associates (23,230) (1,412)Other long-term investments (435) (7,701)Proceeds from disposal of short-term investment 23 -

Net cash used in investing activities (53,589) (16,222)

Cash flows from financing activities:Share issue expenses (13) (27)Increase in long-term bank loans 11,583 7,522Short-term bank loan 3,657 8Contributions from minority shareholders 10,160 260

Net cash from financing activities 25,387 7,763

Net effect of exchange rate changes in consolidating subsidiaries (5,131) (229)

(Decrease) Increase in cash (9,478) 14,950Cash at beginning of financial year 31,015 16,065Cash at end of financial year 21,537 31,015

CONSOLIDATED CASH FLOW STATEMENT




CapitalShare Share reserve on Translation Legal Proposed Accumulated

Notes capital premium consolidation reserve reserves dividend profits Total$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

GROUP

Balance at December 31, 2000 40,000 24,555 931 3,709 5,086 2,400 52,011 128,692

Currency translation differences - - - 3,755 24 - - 3,779

Net profit after income tax - - - - - - 21,322 21,322

Dividends paid 24 - - - - - (2,400) (2,000) (4,400)

Proposed dividend 24 - - - - - 3,000 (3,000) -

Bonus share issue 10,000 (10,000) - - - - - -

Share issue expenses - (27) - - - - - (27)

Balance at December 31, 2001 50,000 14,528 931 7,464 5,110 3,000 68,333 149,366

Currency translation differences - - - (7,670) (5) - - (7,675)

Arising in current year - - 25 - - - - 25

Net profit after income tax - - - - - - 21,606 21,606

Transfer to legal reserve - - - - 193 - (193) -

Dividends paid 24 - - - - - (3,000) (2,400) (5,400)

Proposed dividend 24 - - - - - 3,600 (3,600) -

Bonus share issue 10,000 (10,000) - - - - - -

Share issue expenses - (13) - - - - - (13)

Balance at December 31, 2002 60,000 4,515 956 (206) 5,298 3,600 83,746 157,909

Share Share Translation Proposed AccumulatedNotes capital premium reserve dividend profits Total

$’000 $’000 $’000 $’000 $’000 $’000

COMPANY

Balance at December 31, 2000 40,000 24,555 - 2,400 52,464 119,419

Net profit after income tax - - - - 21,114 21,114

Dividends paid 24 - - - (2,400) (2,000) (4,400)

Proposed dividend 24 - - - 3,000 (3,000) -

Bonus share issue 10,000 (10,000) - - - -

Share issue expenses - (27) - - - (27)

Balance at December 31, 2001 50,000 14,528 - 3,000 68,578 136,106

Currency translation differences - - (2,165) - - (2,165)

Net profit after income tax - - - - 6,673 6,673

Dividends paid 24 - - - (3,000) (2,400) (5,400)

Proposed dividend 24 - - - 3,600 (3,600) -

Bonus share issue 10,000 (10,000) - - - -

Share issue expenses - (13) - - - (13)

Balance at December 31, 2002 60,000 4,515 (2,165) 3,600 69,251 135,201

STATEMENTS OF CHANGES IN EQUITY



NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 2002


1 GENERAL

The company is incorporated in the Republic of Singapore with its principal place of business at 3 Shenton Way, #15-08Shenton House, Singapore 068805 and registered office at 6 Shenton Way, #28-09 DBS Building Tower Two, Singapore068809. The financial statements are expressed in Singapore dollars.

The principal activities of the company are investment holding and the provision of services to its subsidiaries.

The principal activities of the associates and subsidiaries are stated in Notes 9 and 10 to the financial statements.

The financial statements of the company and of the group for the year ended December 31, 2002 were authorised forissue by the Board of Directors on April 28, 2003.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF ACCOUNTING - The financial statements are prepared in accordance with the historical cost convention and havebeen prepared in accordance with the provision of the Singapore Companies Act and Singapore Statements of AccountingStandard (“SAS”).

The company has adopted all the applicable new/revised SAS which become effective during the year. The adoption of thenew/revised SAS has not affected the results of the company and the group for the current and prior periods.

BASIS OF CONSOLIDATION - The consolidated financial statements include the financial statements of the company andenterprises controlled by the company (its subsidiaries) made up to December 31 each year. Control is achieved where thecompany has the power to govern the financial and operating policies of an investee enterprise so as to obtain benefitsfrom its activities. On acquisition, the assets and liabilities of the relevant subsidiaries are measured at their fair values atthe date of acquisition. The interest of minority shareholders is stated at the minority’s proportion of the fair values of theassets and liabilities recognised. The results of subsidiaries acquired or disposed of during the year are included in theconsolidated profit and loss statement from the effective date of acquisition or up to the effective date of disposal, asappropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accountingpolicies used in line with those used by other members of the group. All significant inter-company transactions andbalances have been eliminated on consolidation.

In the company’s financial statements, investments in subsidiaries and associates are carried at cost less any impairment innet recoverable value that has been recognised in the profit and loss statement.

FINANCIAL ASSETS - Financial assets include cash and bank balances, trade and other receivables and other investments.Trade and other receivables are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverableamounts. The accounting treatment of other investments is described below.

FINANCIAL LIABILITIES AND EQUITY - Financial liabilities and equity instruments are classified according to the substance ofthe contractual arrangements entered into. Financial liabilities include trade payables, other payables and bank loans.Trade and other payables are stated at their nominal value. Bank loans are recorded at the proceeds received, net oftransaction costs. Finance costs are accounted for on an accrual basis (effective yield method) and are added to thecarrying amount of the instrument to the extent that they are not settled in the period in which they arise. Equity instrumentsare recorded at the proceeds received, net of direct issue costs. Dividends on ordinary shares are recognised in shareholders’equity in the period in which they are declared. Share options are recorded when exercised and the exercise price isallocated between issued capital and share premiums accordingly.

OTHER INVESTMENTS - Investments held on a long-term basis are stated at cost less any impairment in net recoverablevalue. Short-term investments held for trading purposes are stated at the lower of cost or market value determined on anindividual investment basis.


DECEMBER 31, 2002


DECEMBER 31, 2002


2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

INVENTORIES AND WORK IN PROGRESS - Inventories and work in progress are stated at the lower of cost and net realisablevalue. Cost, which comprises direct materials and, where applicable, direct labour costs and those overheads that havebeen incurred in bringing the inventories and work in progress to their present location and condition, is calculated usingthe first-in, first-out method. Net realisable value is calculated as the actual or estimated selling price less estimated costs tobe incurred in completing production and the related costs of marketing, selling and distribution.

ASSOCIATES - An associate is an enterprise over which the group is in a position to exercise significant influence, throughparticipation in the financial and operating policy decisions of the investee. The results and assets and liabilities of associatesare incorporated in these financial statements using the equity method of accounting. The carrying amount of suchinvestments is reduced to recognise any decline in the net recoverable value of individual investments. Where a groupenterprise transacts with an associate of the group, unrealised profits and losses are eliminated to the extent of the group’sinterest in the relevant associate.

PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment are carried at cost less accumulated depreciation andany impairment loss where the recoverable amount of the asset is estimated to be lower than its carrying amount.Depreciation is provided to write off the cost of fixed assets over their estimated useful lives, using the straight line method.The estimated useful lives are as follows:

Leasehold land and buildings - over lease periods of 47 to 71 yearsPlant and equipment - 5 to 10 yearsMotor vehicles - 5 years

No depreciation is provided for buildings under construction until the construction is completed and the properties are putinto use.

CONSTRUCTION IN PROGRESS - Construction in progress represents properties under construction and equipment purchasedprior to completion and installation and is stated at cost. Cost comprises direct costs and, when applicable financeexpenses arising from borrowing used specifically to finance the construction of the properties and the acquisition ofequipment until the construction and installation are completed.

GOODWILL - Goodwill represents the excess of the cost of an acquisition over the fair value of the group’s share of the netassets of the acquired subsidiaries and associates at the date of acquisition. Goodwill is amortised over a period notexceeding 20 years.

Negative goodwill represents the excess of fair value of the group’s share of the net assets acquired over the cost ofacquisition. To the extent that negative goodwill relates to expectations of future losses and expenses that can be reliablymeasured, but do not represent identifiable liabilities, the portion of negative goodwill is recognised in the profit and lossstatement when the future losses and expenses are incurred. Any remaining negative goodwill, not exceeding the fairvalues of the non-monetary assets acquired, is recognised in the profit and loss statement over the remaining weightedaverage useful lives of those assets. Negative goodwill in excess of the fair value of those assets is recognised in the profitand loss statement immediately.

Prior to January 1, 2001, goodwill or capital reserve on consolidation arising from acquisition of subsidiaries and associatesare directly adjusted against shareholders’ equity.

The gain or loss on disposal of an entity includes the unamortised balance of goodwill relating to the entity disposed of, orfor acquisitions prior to January 1, 2001, the negative goodwill credited to shareholders’ equity.

IMPAIRMENT OF ASSETS - At each balance sheet date, the company and group reviews the carrying amounts of its tangibleand intangible assets to determine whether there is any indication that those assets have suffered an impairment loss (ifany). If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, thecarrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. Impairment losses are recognisedas an expense immediately.


DECEMBER 31, 2002


2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

PROVISIONS - Provisions are recognised when the company has a present obligation as a result of a past event where it isprobable that it will result in an outflow of economic benefits that can be reasonably estimated.

FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION - Transactions in foreign currencies are recorded in Singaporedollars at the rates ruling at the dates of the transactions. At each balance sheet date, recorded monetary balances that aredenominated in foreign currencies are reported at the rates ruling at the balance sheet date.

With effect from January 1, 2002, exchange differences arising on intercompany monetary items that, in substance,extension to or deduction from the company’s net investment in foreign subsidiaries and associates, are taken directly tocurrency translation reserve in the company’s financial statements. On disposal of the foreign entity, the accumulatedcurrency transaction differences are recognised as part of the company’s profit and loss on disposal. This accountingtreatment is due to the long-term foreign currency loans advanced to certain subsidiaries with effect from January 1, 2002that are in substance an extension to the company’s net investments in these foreign subsidiaries. All other realised andunrealised exchange adjustment profits and losses are dealt with in the profit and loss statement. This resulted in adecrease in currency transaction reserve by $2,165,000 and a corresponding increase in profit attributable to shareholdersby the same amount for the company and the group for 2002.

For inclusion in the consolidated financial statements, assets and liabilities of the foreign subsidiaries and associates aretranslated at the rates of exchange approximating those ruling at the balance sheet date. The profit and loss statementsare translated at the average rates of exchange for the year and the opening net investment in the foreign entities aretranslated at the historical rates. The resulting currency translation differences are taken to the currency translation reserve.On disposal of a foreign entity, the accumulated currency translation differences are recognised in the profit and lossstatement as part of the profit or loss on disposal.

REVENUE RECOGNITION - Revenue from sale of goods is recognised when significant risks and rewards of ownership aretransferred to the buyer and the amount of revenue and costs of the transaction can be measured reliably. Interest incomeis recognised as a time proportionate basis.

Dividend income from subsidiaries is recognised when declared to be payable. Other dividend income is recognised whenthe shareholders’ rights to receive payment have been established.

RETIREMENT BENEFIT COSTS - Payments to defined contribution retirement benefit plans (including state-managed retirementbenefit schemes) are charged as an expense as they fall due.

INCOME TAX - Tax expense is determined on the basis of tax effect accounting, using the liability method, and it is appliedto all significant temporary differences arising between the carrying amount of assets and liabilities in the financial statementsand the corresponding tax basis used in the computation of taxable profit except that a debit to the deferred tax balanceis not carried forward unless there is a reasonable expectation of realisation.

LEGAL RESERVE - Certain subsidiaries are required by laws established in their respective countries of incorporation to setaside certain percentage of their annual net profit after tax less prior years’ losses, if any, as legal reserve until the accumulatedreserve has reached an amount equal to the subsidiary’s paid-up capital. This legal reserve can be used to offset a deficit inthe retained earnings. It may be transferred to capital when the legal reserve reaches a level equivalent to a certainpercentage of the subsidiary’s paid-up capital.


DECEMBER 31, 2002


3 FINANCIAL RISKS AND MANAGEMENT

The group’s overall risk management policy seeks to minimise potential adverse effects on the financial performance of thegroup.

a) Credit risk

Credit risk refers to the risk that debtors will default on their obligations to repay the amount owing to the group,resulting in a loss to the group. The group has adopted procedures in extending credit terms to customers and inmonitoring its credit risk.

The credit policy includes guidelines on extending credit terms to customers including monitoring the process andusing of related industry’s practices as reference. This includes assessing and valuation of customer’s credit reliabilityand periodic review of the financial status to determine credit limits to be granted.

The maximum exposure to credit risk in the event that the counterparties fail to perform the obligations as at the endof the financial year in relation to each class of recognised financial assets is the carrying amount of those assets asstated in the balance sheets.

The company has no significant concentration of credit with any debtor or group of debtors except for other receivablesfrom subsidiaries and associates.

b) Interest rate risk

The company and the group’s primary interest rate risk relates to interest bearing bank deposits and bank loans. Theinterest rates and term of repayment of the bank loans are disclosed in the notes to the financial statements.

c) Foreign currency risk

The group’s foreign currency exposures arose mainly from the exchange rate movements of the U.S. dollars, theRenminbi, the New Taiwan dollars and the Singapore dollars which is also the group’s reporting currency. As atDecember 31, 2002, approximately 45% of the group’s payables were denominated in U.S dollars and approximately72% of the Group’s trade and other receivables were denominated in U.S. dollars. In addition, a substantial portionof the group’s revenue is denominated in foreign currency, primarily the U.S. dollars.

These exposures are managed primarily by using natural hedges that arise from offsetting assets and liabilities that aredenominated in foreign currencies.

d) Liquidity risk

Management is of the view that liquidity risk is minimal as the group has sufficient retained earnings to fund itsoperations.

e) Fair values of financial assets and financial liabilities

The fair values of financial assets and financial liabilities approximate their carrying amounts.


DECEMBER 31, 2002


4 RELATED PARTY TRANSACTIONS

Related parties are entities with common direct or indirect shareholders and or directors.

Some of the group’s transactions and arrangements are with related parties and the effect of these on the basis determinedbetween the parties are reflected in these financial statements. The balance due is unsecured and without fixed repaymentterms and interest.

Significant transactions with the related parties are as follows:Group

2002 2001$’000 $’000

Sales (9,480) (150)Rental income (6) (5)Purchases 173 188Processing expense 74 - Rental expense 56 57License fee 10 10

5 SHORT-TERM INVESTMENTSGroup Company

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

Quoted equity shares, at cost 1 1 - -

Market value 1 1 - -

6 TRADE RECEIVABLESGroup Company

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

Outside parties 62,529 36,247 - - Less: Allowance for doubtful debts (3,483) (883) - -

59,046 35,364 - -Related party (Note 4) 9,756 - - -

68,802 35,364 - -

Movements in allowance:

Balance at beginning of financial year 883 883 - - Charge to profit and loss 2,600 - - - Balance at end of financial year 3,483 883 - -


DECEMBER 31, 2002


7 OTHER RECEIVABLES AND PREPAID EXPENSESGroup Company

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

Subsidiaries (Note 10): - Short-term - - 21,261 64,205 - Current portion of long-term receivable (a) - - 2,431 2,591Associates (Note 9) 4 20,879 4 20,879Deposits 144 338 73 255Prepayment 356 1,255 28 25Tax recoverable 3,369 - - -Others (b) 4,044 2,993 2 2

7,917 25,465 23,799 87,957

(a) Amount due from subsidiaries and associates are non-trade in nature, unsecured, interest-free and have no fixedrepayment terms, except for an amount of $2,431,000 (2001 : $2,591,000) due from a subsidiary which bore interestat 5% per annum.

(b) Others is stated net of allowance for doubtful debts as follows:

Group Company2002 2001 2002 2001$’000 $’000 $’000 $’000

Arising in current year/Balance at end of year 43 - - -

8 INVENTORIESGroup Company

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

At cost: Raw materials 16,968 12,240 - - Work in progress 3,054 1,886 - -Finished goods at net realisable value 9,196 7,836 - -

29,218 21,962 - -

Finished goods are stated at net realisable value after the following allowance:

Balance at beginning of financial year 75 91 - -Current year provision (written back) 57 (16) - -Balance at end of financial year 132 75 - -

Inventories amounting to $3,335,000 (2001 : $4,632,000) is pledged to secure banking facilities of a fellow subsidiary (seeNote 13).


DECEMBER 31, 2002


9 INVESTMENT IN ASSOCIATESGroup Company

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

Unquoted equity shares, at cost 27,345 4,115 27,345 4,115Share of post-acquisition losses (2,160) (2,947) - - Currency translation (deficit) reserves (96) 175 - -

25,089 1,343 27,345 4,115

The details of the associates are as follows:

Name of associate and countryof incorporation/operation Principal activities Cost of investment Equity interest

2002 2001 2002 2001$’000 $’000 % %

Gilroy Enterprises Pte Ltd Investment holding and 2,927 2,927 35 35(Singapore) (1) provision of management

services.

Circuitech Holdings Pte Ltd Investment holding and * 1,188 24 48(Singapore) (1) provision of management

services.

Smart Idea Holdings Limited Investment holding 22,067 - 24 -(Cayman Islands) (2)

Sheng Ding Pte Ltd Investment holding 2,351 - 40 -(Singapore) (3)

27,345 4,115

* Shares held by Smart Idea Holdings Limited in 2002.

Notes on auditors1) Audited by Deloitte & Touche, Singapore.2) Audited by PriceWaterhouse Coopers, Taiwan.3) Audited by KPMG Peat Marwick, Singapore.

During the financial year, as part of the restructuring undertaken by the shareholders of Circuitech Holdings Pte Ltd(“Circuitech”), the company transferred its 48% equity interest in Circuitech comprising of 1,188,000 ordinary shares of$1 each to Smart Idea Holdings Limited (“Smart Idea”) in exchange for 720,000 ordinary shares of US$1 each in SmartIdea. In addition, the company assigned its other receivables from Circuitech amounting to $20,879,000 to Smart Idea inexchange for 11,280,000 ordinary shares of US$1 each in Smart Idea. As a result of the restructuring, Circuitech becomesa wholly-owned subsidiary of Smart Idea and the company owns 23.76% equity interest in Smart Idea.

10 INVESTMENT IN SUBSIDIARIESGroup Company

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

Unquoted equity shares, at cost - - 68,976 47,047


DECEMBER 31, 2002


10 INVESTMENT IN SUBSIDIARIES (CONT’D)

The details of the subsidiaries are as follows:

Name of subsidiary Principal activities Cost of investment Equity interest2002 2001 2002 2001$’000 $’000 % %

Bao-Ji Development Co., Ltd Investment holding. 6,556 1,265 100 100(1a), (A)

Cai Hui Technology Trading in office equipment - (a) - 51Co., Ltd (A) related products.

AMTEK System Co., Ltd (1a)(A) Design, manufacture and sale (a) - 100 -of computer equipment andrelated parts.

Chaoji Holdings Pte Ltd (B) Investment holding 8,415 8,415 51 51

Chaoji (BVI) Ltd (1a), (C) Provide procurement (b) (b) 51 51services.

Shanghai Yao Shin Industry Co., Manufacture and sales (b) (b) 51 51Ltd (1c) of electronic productions.

Huan Hsin (BVI) Ltd (1a), (C) Purchasing of raw materials (c) (c) 100 100and marketing of telephonecords and accessories.

Huan Hsin Co. (M) Manufacture of telephone 14,248 13,633 100 95.24Sdn Bhd (1b) (D) cords, telephone jacks, (g)

telephone handsets andpower cords.

I.P. (BVI) Ltd (1a), (C) Investment holding. (c) (c) 100 100

Infospeed Pte Ltd (B) Investment holding. 2,036 (d) 55 55

Shanghai Ju Hsin Electronics Manufacture and export of paper (e) (e) 55 55Co, Ltd (1c) shredder machine, telephones,

speakers and related products.

Infospeed (BVI) Limited (1a), (C) Provide procurement (e) (e) 55 55services.

Shanghai Huan Yi Technology Manufacturer and export of 1,917 - 100 -Co., Ltd (1c) electronic products and

components.

Integrated Products Inc.,(2), (E) Wholesales and marketing (f) (f) 100 100of wire and cable, plasticinjection and telephone access.

Shanghai Huan Hsin Electronics Manufacture and export of 10,374 10,374 100 100Co., Ltd (1c) telephone jacks, telephone

cords wires, AC DC cordsand various types of cables.

Shanghai Yi Hsin Industry Co., Colour-mixing of ABS resin, 7,962 7,962 100 100Ltd (1c) manufacture of telephone

handset receivers and plasticinjection moulding.


DECEMBER 31, 2002


10 INVESTMENT IN SUBSIDIARIES (CONT’D)

Name of subsidiary Principal activities Cost of investment Equity interest2002 2001 2002 2001$’000 $’000 % %

Shanghai Zhan Hsin Industry Co., Manufacture and repair 8,102 5,398 100 100Ltd (1c) of moulds.

Zhan Yun (Shanghai) Electronics Manufacture and sale of spare 9,366 - 51 -Co., Ltd (1c) parts for computers and

accessories.

68,976 47,047

Notes on auditors:

The above subsidiaries are audited by Deloitte & Touche, Singapore excepted as indicated below:

1) Audited by overseas practices of Deloitte Touche Tohmatsu as follows:a) Deloitte & Touche, Taiwanb) Deloitte KassimChan, Malaysiac) Deloitte Touche Tohmatsu, PRC

2) Audited by another firm of auditors, Teng Accountancy Corporation.

Notes on cost:a) Shares held by Bao-Ji Development Co., Ltdb) Shares held by Chaoji Holdings Pte Ltd.c) Cost is $2.d) Cost of investment was $11.e) Shares held by Infospeed Pte Ltd.f) Shares held by I.P. (BVI) Ltd.g) In 2002, the company acquired the remaining 4.76% of the share capital in this subsidiary from a related party for a

consideration of S$615,000.

Notes on country of incorporation:

The subsidiaries are incorporated in the People’s Republic of China except for subsidiaries indicated below:A) Taiwan, Republic of ChinaB) SingaporeC) British Virgin IslandsD) MalaysiaE) United States of America

The place of operation of the subsidiaries is the same as the country of incorporation except for Huan Hsin (BVI) Ltd, andChaoji (BVI) Ltd which operate through their branches in Taiwan.

11 LONG-TERM RECEIVABLESCompany

2002 2001$’000 $’000

Subsidiaries - Non-trade 32,841 2,591Less: Due within twelve months (2,431) (2,591)Due after twelve months 30,410 -


DECEMBER 31, 2002


12 OTHER LONG TERM INVESTMENTSGroup Company

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

Unquoted equity shares, at cost 11,802 11,367 6,282 6,282

13 PROPERTY, PLANT AND EQUIPMENT

Leaseholdland and Plant and Motor Construction

building equipment vehicles in progress Total$’000 $’000 $’000 $’000 $’000

Group

Cost: At beginning of financial year 22,694 67,972 2,837 698 94,201 Translation adjustments (1,273) (4,155) (173) (40) (5,641) Additions 4,711 18,405 505 7,078 30,699 Disposals - (692) - (164) (856) Transfer 573 1,827 - (2,400) - At end of financial year 26,705 83,357 3,169 5,172 118,403

Accumulated depreciation: At beginning of financial year 3,588 26,372 1,644 - 31,604 Translation adjustments (233) (1,824) (112) - (2,169) Depreciation during the financial year 938 7,236 369 - 8,543 Disposals - (80) - - (80) At end of financial year 4,293 31,704 1,901 - 37,898

Depreciation charge for last financial year 916 6,435 398 - 7,749

Net book value: At beginning of financial year 19,106 41,600 1,193 698 62,597

At end of financial year 22,412 51,653 1,268 5,172 80,505

Company

Cost: At beginning and end of financial year 1,818 14 - - 1,832

Accumulated depreciation: At beginning of financial year 115 6 - - 121 Depreciation during the financial year 26 1 - - 27 At end of financial year 141 7 - - 148

Depreciation charge for last financial year 25 2 - - 27

Net book value: At beginning of financial year 1,703 8 - - 1,711

At end of financial year 1,677 7 - - 1,684


DECEMBER 31, 2002


13 PROPERTY, PLANT AND EQUIPMENT (CONT’D)

A subsidiary has available banking facilities totalling $3,750,000 (2001 : $3,993,000). The facilities bear interest at 1.5 percent per annum above the lending bank’s base rate and are secured by legal charges over its leasehold land and buildingwith a net book value of $1,071,000 (2001 : $1,174,000), pledge of inventories of the subsidiary (Note 8) and a debentureincorporating fixed and floating charges over all the subsidiary’s assets amounting to $18,290,000 (2001 : $20,506,000)and a corporate guarantee given by the company.

As at December 31, 2002, the titles deed for two long leasehold properties with carrying value of $269,000 (2001 : $292,000)have yet to be issued by the relevant authority to a subsidiary.

Details of the leasehold land and buildings held by the Group as at December 31, 2002 are set out below:

Companies Location Description and area Tenure

Huan Hsin Co H.S.(M) 146/1977 Leasehold land and Lease term of 60 years(M) Sdn Bhd Plot 3 factory building commencing from January

Mukim Sungai 185,220 sq. ft. 29, 1977 to January 28, 2037Pasir subject to renewal for another 39Kuala Muda years.Malaysia

Lot 43 & 44 Leasehold land Lease term of 60 years from JuneKuala Ketil Industrial 177,289 sq. ft. 15, 1995 to June 14, 2055Estate in the Mukim with an option to extend forof Tawar Baling another 39 years.KedahMalaysia

Huan Hsin Lot TS30-U65L Leasehold building Lease term of 99 years fromHoldings Ltd 3 Shenton Way #15-08 126 sq. m. June 2, 1969 to June 1, 2068.

Shenton HouseSingapore 068805

Shanghai Huan Lot 38 Xin Mu 50 years land use Lease term of 50 years fromHsin Electronics Qiao rights of land and November 26, 1993 to NovemberCo., Ltd Shanghai Qing four factory buildings 25, 2043.

Pu County 114,704 sq. ft.Fengxi 201705 (10,656 sq.m.)PRC

Shanghai Yi Hsin Lot 78 50 years land use Lease term of 50 yearsIndustry Co., Ltd Zhuan Qiao Town rights of the land from August 25, 1996

Shanghai 147,653 sq. ft. to August 24, 2046.Ming Hang (13,717 sq. m.)PRC

Lot 339 50 years land use Lease term of 50 yearsGuang Zhong Road rights of the land from January 19, 1999Shanghai 4,860 sq. m. to January 18, 2049.Ming HangPRC


DECEMBER 31, 2002


13 PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Companies Location Description and area Tenure

Shanghai Huan Yi 631 Zhuan Qiao Town 50 years land use Lease term of 50 yearsTechnology Co., Shanghai rights of the land from October 17, 2002Ltd Ming Hang 80,286 sq. m to October 16, 2052.

PRC

Shanghai Lot 77 50 years land use Lease term of 50 yearsZhan Hsin Zhuan Qiao Town rights of the land from August 25, 1996Industry Co., Ltd Shanghai 147,600 sq. ft. to August 24, 2046.

Ming Hang (13,712 sq. m.)PRC

Lot 96 50 years land use Lease term of 50 years fromZhuan Qiao Town rights of the land August 25, 1996 to August 24,Shanghai Ming Hang 174,692 sq. ft. 2046.PRC (16,229 sq. m.)

Zhan Yun Lot 2 50 years land use Lease term of 50 years from(Shanghai) Songjiang Export rights of the land September 4, 2002 to SeptemberElectronics Co., Processing Zone 111 20,174 sq. m. 3, 2052.Ltd PRC

14 OTHER PAYABLESGroup Company

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

Related party (Note 4) - 237 - -Subsidiaries (Note 10) - - 2,678 2,600Directors 7 7 - -Shareholders of subsidiary 829 541 - -Accrued operating expenses 5,913 3,166 288 240Others 124 3,081 - -

6,873 7,032 2,966 2,840

The amounts due to related parties, subsidiaries, shareholders and directors are non-trade in nature, unsecured, interestfree and without fixed repayment terms.

Others pertains mainly to payables for plant and equipment.

15 SHORT-TERM BANK LOAN

In 2002, the short term bank loan of a subsidiary is secured on the building of the subsidiary with net book value of$2,487,000 and is guaranteed by a fellow subsidiary. In 2001, the loan was guaranteed by a fellow subsidiary. The loanbears interest at 5.9% (2001 : 6.435%) per annum.


DECEMBER 31, 2002


16 LONG-TERM BANK LOANSGroup and Company

2002 2001$’000 $’000

Loan 1 6,946 9,255Loan 2 13,892 -

20,838 9,255Less: Current portion (6,946) (1,851)Non-current portion 13,892 7,404

a) Loan 1 of US$5 million carries a negative pledge over the assets of the company and certain subsidiaries. The loan isrepayable in 3 instalments of US$1,000,000, US$2,000,000 and US$2,000,000 in July 2002, 2003 and 2004 respectively.

b) Loan 2 of US$8 million carries a negative pledge that the subsidiaries will not create or have outstanding security onor over their respective assets except as provided for in the credit agreement. The loan is repayable in 3 instalmentsof US$2,000,000, US$2,000,000 and US$4,000,000 in May 2003, 2004 and 2005 respectively.

These loans bear interest at 3.81% to 4.35% (2001 : 5.7% to 8.83%) per annum.

17 SHARE CAPITALGroup and Company

2002 2001$’000 $’000

Authorised: 1,250,000,000 ordinary shares of $0.20 each 250,000 250,000

Issued and fully paid: 300,000,000 (2001 : 250,000,000) ordinary shares of $0.20 each 60,000 50,000

a) During the financial year, the company made a bonus issue of 50,000,000 new ordinary shares of $0.20 each on thebasis of 1 new ordinary share credited as fully paid for every 5 existing shares by way of capitalising of $10,000,000from the share premium account.

b) As at the end of the financial year, the company has 4,230,000 share options outstanding granted to its employeesand directors as disclosed in paragraph 18(a) of the Directors’ Report.

18 REVENUEGroup Company

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

Sale of goods 171,076 114,145 - -Interest income 228 289 131 125Dividend income - - 8,647 17,087

171,304 114,434 8,778 17,212


DECEMBER 31, 2002


19 OTHER OPERATING INCOMEGroup Company

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

Gain on disposal of investments 23 - - -Rental income 41 - - -Foreign exchange gain - 5,219 - 4,856Income from processing, sales and assembly of moulds 1,959 411 - -Sundry income 248 65 - -Sales of scrap 226 237 - -Loss on disposal of plant and equipment (24) (268) - -

2,473 5,664 - 4,856

20 STAFF COSTSGroup Company

2002 2001 2002 2001

Costs of defined contribution plans* included in staff costs ($’000) 399 392 - -

Number of employees (including directors) at end of year 5,696 3,739 7 6

* This amount is the employers’ share of CPF (for Singapore), and similar schemes that may be applicable to subsidiariesincorporated in other countries.

21 PROFIT BEFORE SHARE OF RESULTS OF ASSOCIATES

This item includes the following charges (credits):Group Company

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

Auditors’ remuneration:Auditors of the company 86 80 68 60Other auditors 174 158 - -

Non-audit fees paid to auditors:Auditors of the company 9 8 8 6Other auditors 80 - - -

Directors’ remuneration:Directors of the company 1,899 1,834 240 240Directors of subsidiaries 127 122 - -

Directors fees:Directors of the company 232 209 232 209

Depreciation 8,543 7,749 27 27Foreign exchange loss (gain) 205 (5,219) 496 (4,856)Interest expense to non-related companies 550 128 429 121Loss on disposal of plant and equipment 24 268 - -Provision for inventories (Reversal) 57 (16) - -Allowances for doubtful debts: Trade receivables 2,600 - - - Non-trade debts 43 - - -Trade receivables written off 2 38 - -Dividend income (tax exempt) from subsidiaries - - (8,647) (17,087)Interest income from: Subsidiary - - (126) (124) Others (228) (289) (5) (1)Preliminary expenses written off 714 3 - -Plant and equipment written off - 48 - -Gain on sale of marketable securities (23) - - -


DECEMBER 31, 2002


22 INCOME TAXGroup Company

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

Current 2,309 1,680 - -Under (Over) provision in prior year 104 (2,039) 6 (22)

2,413 (359) 6 (22)

The income tax expense varied from the amount of income tax expense determined by applying the Singapore tax rate of22.0% (2001 : 24.5%) to profit before income tax as a result of the following differences:

Group Company2002 2001 2002 2001

$’000 $’000 $’000 $’000

Income tax expense at statutory 4,915 5,091 1,469 5,168Non-deductible (taxable) items 433 (982) 433 (982)Tax exempt income (1,661) (925) (1,902) (4,186)Effect of different tax rates of overseas operations (1,378) (1,504) - -Under (Over) provision in prior years 104 (2,039) 6 (22)Total income tax expense 2,413 (359) 6 (22)

Certain subsidiaries in the People’s Republic of China have been granted full income tax exemption for 2 years commencingfrom the first profit-making year, followed by a 50% exemption for the next 3 years.

As at the end of the financial year, the Group has the following deferred tax asset which is not recognised in the financialstatements as follows:

Group Company2002 2001 2002 2001

$’000 $’000 $’000 $’000

Tax effects of timing differences in respect of:

Unabsorbed tax losses 17,577 13,974 - -Unabsorbed capital allowance 950 1,561 - -Net deferred tax asset 18,527 15,535 - -

The realisation of the future income tax benefits from timing differences from capital allowances and investment allowancesof a foreign subsidiary is subject to the conditions imposed by the relevant tax authority. Where provision for deferred taxarising from timing differences has been offset against the above capital allowances and investment allowances, suchprovision for deferred tax will be required to be set up when the capital allowances and investment allowances are utilisedin the future.

23 EARNINGS PER SHARE

The basic earnings per share is calculated by dividing the Group’s profit attributable to shareholders of $21,606,000 (2001: $21,322,000) divided by increased number of ordinary shares in issue of 300,000,000 after the bonus issue referred to inNote 17 to the financial statement. The earnings per share in 2001 has been restated to take into account the bonus issueof ordinary shares.

In 2002, fully diluted earnings per ordinary share is based on the Group’s profit attributable to shareholders of $21,606,000and 300,057,303 ordinary shares after adjusting the number of ordinary shares in issue of 300,000,000 by 57,303 ordinaryshares to take into account the dilutive effect of the outstanding share options. In 2001, the diluted earnings per share isnot applicable as there were no outstanding share options.


DECEMBER 31, 2002


24 DIVIDENDS

a) Dividends paid during the financial year are as follows:Group and Company

2002 2001$’000 $’000

Previous year’s proposed final dividend of $0.012 per share,tax exempt on 250,000,000 (2001 : 200,000,000) ordinary shares 3,000 2,400

Interim dividend of $0.008 per share, tax exempt, on 300,000,000 (2001 : 250,000,000) ordinary shares 2,400 2,000

5,400 4,400

b) Proposed dividends as at the end of the financial year are as follows:Group and Company

2002 2001$’000 $’000

Proposed final dividend of $0.012 (2001 : $0.012) per share tax exempt on 300,000,000 (2001 : 250,000,000) ordinary shares 3,600 3,000

25 DIRECTORS REMUNERATION

Number of directors of the Company in remuneration bands is as follows:Group

2002 2001

$750,000 and above 2 2$500,000 to $749,999 - -$250,000 to $499,999 - -Below $250,000 5 4

7 6

26 SEGMENT INFORMATION

a) Business segments

The operations of the Group are in the manufacturing and sale of telephone and power cords, telephone jacks andaccessories, telephone handsets, moulded plastic products and computer casing and electronic products. Most of theassets of the Group are deployed in these operations.

Segment information includes results and identifiable net assets of associates. Total assets by segments are thoseassets that are used in the operations of each segment.

Segment information:

i) Segment revenue and expense are revenue and expense reported in the Group’s profit and loss statement thateither are directly attributable to a segment or can be allocated on a reasonable basis to a segment.

ii) Segment assets are all operating assets that are employed by a segment in its operating activities and that eitherare directly attributable to the segment or can be allocated to the segment on a reasonable basis. Segmentassets exclude interest-producing assets.

iii) Segment liabilities are all operating liabilities of a segment and that either are directly attributable to the segmentor can be allocated to the segment on a reasonable basis. Segment liabilities exclude interest-bearing liabilitiesand income tax liabilities.


DECEMBER 31, 2002


Mould,moulded

plasticproducts and

Wire, cable finished Pressedand related product metalcomponents assembly products Others Total

$’000 $’000 $’000 $’000 $’0002002

REVENUE 39,200 124,983 6,893 228 171,304

RESULTSegment result 10,418 16,673 (2,070) - 25,021Unallocated corporate expenses (5,616)Interest income 228Other non-operating income 2,473

PROFIT FROM OPERATIONS 22,106Finance costs (550)Share of results of associates 787PROFIT BEFORE INCOME TAX 22,343Income tax (2,413)

PROFIT AFTER INCOME TAX 19,930

OTHER INFORMATIONCapital expenditure 109 28,351 2,239 - 30,699Depreciation 1,413 5,065 2,018 47 8,543

BALANCE SHEET

AssetsSegment assets 31,077 155,258 16,155 - 202,490Investment in associate 25,089Other investment 11,802Unallocated corporate assets 5,490Consolidated total assets 244,871

LiabilitiesSegment liabilities 7,203 37,874 6,312 - 51,389Unallocated corporate liabilities 22,401Consolidated total liabilities 73,790


DECEMBER 31, 2002


Mould,moulded

plasticproducts and

Wire, cable finished Pressedand related product metalcomponents assembly products Others Total

$’000 $’000 $’000 $’000 $’0002001

REVENUE 44,832 60,472 8,841 289 114,434

RESULTSegment result 12,035 7,886 (981) - 18,940Unallocated corporate expenses (2,152)Interest income 289Other non-operating income 5,664

PROFIT FROM OPERATIONS 22,741Finance costs (128)Share of results of associates (1,830)PROFIT BEFORE INCOME TAX 20,783Income tax 359

PROFIT AFTER INCOME TAX 21,142

OTHER INFORMATION

Capital expenditure 241 5,932 1,296 - 7,469Depreciation 1,667 4,273 1,602 207 7,749

BALANCE SHEET

AssetsSegment assets 36,400 91,822 19,207 - 147,429Unallocated corporate assets 41,685Consolidated total assets 189,114

LiabilitiesSegment liabilities 2,998 13,840 6,302 - 23,140Unallocated corporate liabilities 10,696Consolidated total liabilities 33,836


DECEMBER 31, 2002


26 SEGMENT INFORMATION (CONT’D)

b) Geographical segments

The group operates in five geographical market segments - Malaysia, Republic of China, People’s Republic of China,Singapore and others.

The following table shows the carrying amount of segment assets and additions to property, plant and equipment bythe geographical segments based on geographical area in which the assets are located:

Carrying amount of Additions to property,segments assets plant and equipment

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

Malaysia 12,571 13,316 122 190People’s Republic of China 169,998 111,938 30,144 7,279Republic of China 28,244 30,888 433 -Singapore 33,825 32,661 - -Others 233 311 - -

244,871 189,114 30,699 7,469

The majority of the group’s products are supplied to Original Equipment Manufacturers (“OEM”). Sales invoices are sent tocentralised purchasing offices or purchasing agents of these OEMs. The manufacturers or principals will incorporate thegroup’s products into their own equipment or distribute it as accessories through their distribution network. The companyhas no information of end markets of their products and is therefore unable to prepare geographical segment informationon the basis of end markets of the products. The company is of the view that analysis of sales by geographical locationbased on the OEMs’ location is not meaningful and has therefore not presented this information.

27 UNSECURED COMMITMENTS AND CAPITAL EXPENDITURE

a) Capital expenditure contracted but not provided for in the financial statements of the subsidiaries amounted to$6,889,000 (2001 : $161,000).

b) Operating leases commitments:Group

2002 2001$’000 $’000

Minimum lease payments paid under operating leases 937 647

At the balance sheet date, the commitments in respect of operating leases with a term of more than one year were asfollows:

Group2002 2001$’000 $’000

Within 1 year 912 286Within 2 to 5 years 1,370 148After five years - -

c) Guarantees amounting to $2,513,000 (2001 : $112,000) given by a subsidiary to banks in respect of credit facilitiesgranted to a fellow subsidiary.


DECEMBER 31, 2002


28 SUBSEQUENT EVENTS

Subsequent to end of the financial year, the company:

a) issued placement shares of 35,000,000 new ordinary shares of $0.20 each at $0.91 each for cash for investment inplant and equipment of subsidiaries; and

b) increased its investment in an associate company, Sheng Ding Pte Ltd by US$2,668,000 (equivalent to $4,633,000).The group’s effective equity interest remains at 40%.


STATEMENT OF DIRECTORS

In the opinion of the directors, the accompanying financial statement of the company and consolidated financial statements ofthe group set out on pages 24 to 47 are drawn up so as to give a true and fair view of the state of affairs of the company andof the group as at December 31, 2002, of the results of the business and changes in equity of the company and of the group andof the cash flows of the group for the financial year then ended and at the date of this statement there are reasonable groundsto believe that the group will be able to pay its debts as and when they fall due.

ON BEHALF OF THE DIRECTORS

Hsu Hung Chun

Hsu Cheng Chien

April 28, 2003


CORPORATE GOVERNANCE REPORT

The Board of Directors fully appreciates the importance of adopting high standards of corporate governance within Huan HsinHoldings Limited (“the Company”) and its group of companies (“the Group”) as a fundamental part of discharging itsresponsibilities to protect and enhance the long-term shareholders’ value and the Group’s financial performance.

Set out below is the Report, which outlines the main corporate governance principles and best practices that were in placethroughout the financial year.

BOARD OF DIRECTORS

Board Composition and Balance

The current Board has seven members comprising of three independent non-executive and four executive directors. More thanone-third of our directors are non-executives and independent of the management.

The three independent non-executive directors are Mr. Lim Hock Beng, Mr. Lau Ping Sum, Pearce and Mr. Lim Kee Nam (appointedon November 1, 2002). The concept of independence adopted by the Board is in accordance with the definition of an independentdirector in the Code of Corporate Governance (“Code”). The key elements of fulfilling the criteria are the appointment of anindependent director who is not a member of the management and is free of relationship with the Company, related companiesor its officers that could interfere with the exercise of independent judgement or the ability to act in the interest of the Company.Every director is expected to act in good faith and always in the best interest of the Company. Collectively, the directors not onlyreflect the broad range of diverse experience and knowledge in business, accounting, finance, technology and managementexperience but also the importance of independence in decision-making at Board level.

After reviewing the independence of each non-executive director for financial year 2002, the Nominating Committee is of theview that the non-executive directors of the Company are independent directors and further, no individual or a small group ofindividual dominates the Board’s discussion process.

Although the Company’s Articles allow the appointment of a maximum of 12 directors, the Nominating Committee is of theview that the current board size of seven directors is appropriate, taking into consideration the nature and scope of the Group’operations.

Our Articles of Association require, with the exception of the Managing Director, one-third of our directors to retire and subjectto re-election by shareholders at every annual general meeting (“AGM”). The directors must submit themselves for re-nominationand re-election at regular interval of at least once every three years. In addition, a newly appointed director will submit himselffor retirement and re-election at the AGM immediately following his appointment. Thereafter, he is subject to retirement byrotation once every three years.

The directors standing for re-election at the forthcoming AGM under Article 91 are Mr. Lau Ping Sum, Pearce and Mr. Hsu MingHung and under Article 97 is Mr. Lim Kee Nam, the newly appointed director. The Nominating Committee recommends their re-election, after assessing their contribution and performance (including attendance, preparedness, participation and candour),including in the case of Mr. Lau Ping Sum, Pearce and Mr. Lim Kee Nam, as independent directors.

A brief profile of each director in page 6 and 7 in the annual report.

Board’s Conduct of its Affairs

Apart from its fiduciary duties and statutory responsibilities, the principal functions of the Board are to:

– guide the corporate strategy and direction of the Group, including decisions on strategic directions and guidelines and theapproval of major funding, investments and divestments;

– oversee the business and affairs of the Group, establish with managements, the strategies and financial objectives to beimplemented by management, and monitor the performance of management;

– oversee processes for evaluating the adequacy of internal controls, risk management, financial reporting and compliance;– approve the nomination of board director;– assume responsibility for corporate governance.


Regular Board meetings are held quarterly to deliberate on specific issues including significant transactions, investments anddisposals, the annual budget, review the performance of the Group and approve the release of the half-year and year-endresults. A total of six (6) board meetings were held in the year. Where circumstances require, ad-hoc meetings are convened.During the year, one of the board meetings was held in Shanghai, China, where the major part of the Group’s operations islocated. This is to enable the directors to update themselves on the operations in Shanghai as well as to meet with the seniormanagement. Visit to the operations in Sungai Petani, Kedah, Malaysia, was also made during the year.

Board papers are sent to members five days prior to Board meeting so that members may better understand the matter and havesufficient time to obtain further explanations where necessary to ensure that they are adequately informed for the Boardmeeting. The Company fully recognises that the continual flow of relevant information on an accurate and timely basis is criticalfor the Board to be effective in discharging its duties.

The Articles of Association of the Company provide for directors to convene meeting by teleconferencing. Where a physicalBoard meeting is not possible, timely communication with members of the Board is effected through electronic means, whichinclude electronic mail and teleconferencing. Newly appointed director is given briefings by the management on the businessactivities of the Group and the strategic directions as well as visits to overseas factories.

The Board is mindful of the best practice in the Code to initiate programme for directors to meet their relevant training needs.In this regard, the Company is considering allocating for on-going training budget for existing directors to fund directorsparticipation at industry conferences and seminars and to fund directors’ attendance at any course of training programme inconnection with their duties as director in the next financial year

The Board is supported by three Board committees with specific terms of reference. These committees are the Audit Committee,Nominating Committee and Remuneration Committee. All Board committees have written terms of reference.

The attendance of the directors at meetings of the Board and Board committees, as well as the frequency of such meetings, isdisclosed in this Report.

Chairman and Chief Executive Officer

Mr. Hsu Hung Chun, the President and founder of the Group, also assumes the role of Chairman of the Board. The Board ismindful of the dual roles held but is of the view that there are sufficient experienced and independent-minded directors on theBoard to provide the assurance that there is sufficient check and balance. Further, the dual roles has to a certain extent beenbalanced by the presence of Mr. Hsu Cheng Chien, the Managing Director, the most senior executive.

The Chairman ensures that board meetings are held when necessary and sets the meeting agenda in consultation with theManaging Director. He reviews the Board papers before they are presented to the Board and ensures that Board members areprovided with adequate and timely information. He also assists to ensure that the Company complies with the Code.

Assess to Information

To enable the Board to fulfill its responsibilities, management provides the board members with monthly management accountsand other financial statements within 21 days after the end of each month. Quarterly reports on the Group’s activities andperformances are also provided by the Managing Director. Board members have separate and independent access to seniormanagement and the company secretary at all time. The Board or an individual Board member may also take independentprofessional advice, if necessary, at the Company’s expense.

The company secretary attended all Board meetings and Board committee meetings except those meetings held overseas. Thecompany secretary is responsible to ensure that board procedures are followed and is also responsible for ensuring that theCompany complies with the requirements of the Companies Act and other rules and regulations, which are applicable to theCompany.




BOARD COMMITTEES

AUDIT COMMITTEE

The Audit Committee comprises of three members, all of whom are independent non-executive directors. The members of theAudit Committee are Mr. Lim Hock Beng, the Chairman, Mr. Lau Ping Sum, Pearce and Mr. Lim Kee Nam. The Audit Committeemet at least four occasions during the year, one of which was held in Shanghai. The external and internal auditors and directorswere invited to attend some of the meetings. At least once a year the Audit Committee met with the external auditors and theinternal auditors without the presence of the management. All minutes of the meetings are circulated to all members of theBoard. The company secretary is also the secretary to the Audit Committee.

The key responsibility of the Audit Committee is to assist the Board in its review and control of all financial aspects of the Group.The Audit Committee reviews issues of accounting policy and presentation for external financial reporting and the effectivenessof the internal financial control.

The Audit Committee performs the following functions:

– review with the external auditors, their audit plan, evaluate the internal accounting controls, audit report and management’sresponse thereto and any matters which the external auditors wish to discuss, without the presence of the executive directors;

– review with the internal auditors, the scope and the results of internal audit procedures and their evaluation of the internalcontrol system together with management’s responses thereto ;

– review the quarterly results and full year financial statements and other announcements to shareholders and the SGX-STprior to submission to the Board;

– make recommendations to the Board on the appointment of the external auditors and the audit fee;– review any related party transactions;– review assistance given by the Group’s officers to the external and internal auditors and ensure that the internal audit

function is adequately resourced;– carry out such other functions as may be agreed by the Audit Committee and the Board.

To effectively discharge it responsibilities, the Audit Committee has full access to and the co-operation of the management andfull discretion to invite any director and executive to attend its meetings. It is also able to obtain external professional advice, ifnecessary. Full resources have been made available to the Audit Committee to enable it to discharge its function properly.

The Audit Committee has reviewed the non-audit services provided by the external auditors, which comprise tax services and issatisfied with the independence of the external auditors. It is satisfied with the independence and objectivity of the externalauditors and recommends to the Board the nomination of Deloitte & Touche for reappointment as auditors of the Company.

Internal Controls

The Board is responsible for maintaining a sound system of internal controls, covering not only financial controls but alsooperational and compliance controls including risk management to safeguard shareholders’ investments and the Group’s assets.The Board is continuously reviewing the adequacy of the Group’s system of internal control and management informationsystems, including systems for compliance with applicable laws, regulations, rules directive and guidelines. The Board and theAudit Committee are informed of all control issues pertaining internal control and regulatory compliances.

Based on the internal audit reports and the management controls in place, the Board and the Audit Committee are satisfied thatthere are adequate internal controls in the Group.

Internal Audit

The Group outsourced its internal audit function to an international accounting firm that is not the external auditors. The SeniorManager of the Internal Audit reports to the Audit Committee and assists in monitoring and updating risks and adequacy of theinternal controls systems. The Internal Auditors assist management to identify, evaluate and update significant risks and developrisks based audit plan for review and approval by the Audit Committee. The performance of the Internal Auditors and its Reportswere regularly reviewed by the Audit Committee.


NOMINATING COMMITTEE

The Nominating Committee was constituted on November 21, 2002 and is made up of four members of whom three areindependent non-executives; namely, Mr. Lim Hock Beng as chairman, Mr. Lau Ping Sum, Pearce and Mr. Lim Kee Nam and anexecutive director, Mr. Hsu Hung Chun.

The Nominating Committees is entrusted with the specific task of recommending to the Board of all board appointments. Thisfunction extends to the recommendation on re-nomination having regard to the director’s contribution and performance. It ischarged with determining an a annual basis whether or not a director is independent and where a director has multiple boardrepresentations, whether the director is able to and has been adequately carrying out his duties as a director of the Company. Itis also mandated to undertake reviews on the performance of the Board.

The Nominating Committee met once on February 13, 2003 since it was established. All members were present during themeeting.

The Nomination Committee has yet to determine a formal process for accessing the effectiveness of the Board as a whole northe contribution by each director to the effectiveness to the Board and the Board’s performance. The Nominating Committee islooking into putting such formal assessment in place.

REMUNERATION MATTERS

Remuneration Committee

The Remuneration Committee was established on November 21, 2002 and is made up of three independent non-executivedirectors; namely, Mr. Lau Ping Sum, Pearce as chairman, Mr. Lim Hock Beng, Mr. Lim Kee Nam and an executive director, Mr.Hsu Cheng Chien. On the dissolution of the Share Option Scheme Committee, the Remuneration Committee took over thefunction of administering the Huan Hsin Share Option Scheme. The Remuneration Committee will have access to expert advicein the field of executive compensation outside the Company, when required.

The principle role of the Committee include the following:

– recommend to the Board a framework of remuneration for the Board members including directors’ fees and allowances;– determine specific remuneration packages including the terms of appointment for each executive director;– implementing and administering the Company’s Executive Share Option Scheme (“ the Scheme”) in accordance with the

Rules of the Scheme;– to do all other things that may form part of the responsibilities of the remuneration committee under the provision of the

Code.

The committee will formally meet in May 2003

The terms of reference for the Nominating Committee and the Remuneration Committee were reviewed by members of theAudit Committee.



Disclosure of Remuneration

The remuneration paid to each of the directors and key executives for the year ended December 31 2002 is set out below:

Directors’ Remuneration

Salary Performance Share OptionsRemuneration includes related grantedBand & annual income/ Director’s Total (number ofName of Director bonus bonus Fees Remuneration shares)

S$750,000 to S$1,000,000Hsu Hung Chun 33% 64% 3% 100% -Hsu Cheng Chien 33% 64% 3% 100% -

S$500,00 to S$749,999 - - - - -S$250,000 to S$499,999 - - - - -

Below S$250,000Lim Hock Beng - - 100% 100% 120,000Lau Ping Sum, Pearce - - 100% 100% 120,000Lim Kee Nam - - 100% 100% -Hsu Ming Hung 82% - 18% 100% 180,000Chang Shih Hsing 78% - 22% 100% 180,000

Remuneration of Top Five Key Executive

Remuneration Band No. of ExecutiveS$500,000 to S$749,999 -S$250,000 to S$499,999 -Below S$250,000 5

During the financial year ended December 2002, no employee of the Company or its related companies who are immediatefamily members of a director received remuneration exceeding S$150,000.

SECURITIES TRANSACTIONS

The Company has adopted its own internal Code of Best Practices on Securities Transactions (“Securities Transaction Code”),which is in line with SGX-ST Best Practices Guide with some modification. The Securities Transaction Code provides guidance tothe directors and key employees of the Group with regard to dealing in the Company’s shares. It emphasises that the law oninsider trading is applicable at all times notwithstanding the window periods for dealing in the shares. The Securities TransactionCode also enables the Company to monitor such share transactions by requiring employees to report to the Company wheneverthey deal in the Company’s shares. The Company issues circulars to its directors, executive and employees that they must nottrade in the listed securities of the Company one month before the release of the half-year and year-end financial results.

ADDITIONAL INFORMATION

No material contracts to which the Company or any related company is a party which involved the interest of the directors orcontrolling shareholders subsisted at, or have been entered into since the previous financial year.



COMMUNICATION WITH SHAREHOLDERS

The Board believes in regular, timely and effective communications with shareholders. In addition to the mandatory publicannouncements made through the MASNET, timely release of the financial results provides shareholders with an overview of theGroup’s performances and operations. The principle forum for dialogue with shareholders remains the Annual General Meeting,during which shareholders are encouraged to raise questions and participate in discussions pertaining to the operations andfinancials of the Group. The Company has a corporate communication and investor relations executive, who communicateswith its investors on a regular basis and attends to their queries. Any queries and concerns regarding the Group can be conveyedto the following person:

Mr. Parry Ng Pak Yew, VP, Corp. Comm. & Investor RelationsTelephone No. : 62257910Handphone No.: 97547236Fax No.: 64386221E-mail: [email protected]

Since the listing of the Company’s shares on SGX-ST, the Company had organised briefings for analysts and fund managers inconjunction with the release of its half-year and year-end financial results. The Company also participated in various investors’forums to keep them abreast of the Group’s developments. In recognition of the Company’s initiatives in this area, the Companyemerged runner-up for the Small Cap category as one of the most transparent companies at the Investors’ Choice Award 2002organised by the Securities Investors Association of Singapore.

In addition to the Annual Report, the Company also produced ‘Huan Hsin Newsletter’ covering the Company’s recent news andannouncements, related events as well as industry news. The newsletter is mailed to shareholders, analysts and fund managers.Shareholders can also obtain information on the Group’s activities on the Company’s website at www.huanhsin.com.

Directors’ Attendance at Board and Board Committee Meetings

Board Audit CommitteeNo of No of No of No of

Meeting Meeting Meeting MeetingName Held Attended Held Attended

Hsu Hung Chun 6 6 NA NAHsu Cheng Chien 6 6 7 5Lim Hock Beng 6 6 7 7Lau Ping Sum, Pearce 6 6 7 7Lim Kee Nam # 6 2 7 2Hsu Ming Hung 6 6 NA NAChang Shih Hsing 6 4 NA NA

# Mr. Lim Kee Nam joined the Board on November 1, 2002



STATISTICS OF SHAREHOLDINGS

AS AT APRIL 14, 2003

Authorised share capital : S$250,000,000Issued share capital : S$67,000,000Number of shares : 335,000,000Class of shares : ordinary shares of S$0.20 eachVoting rights : one vote per share

No. of No. ofSize of Shareholdings Shareholders Percentage Shares Held Percentage

1 - 999 134 5.17% 62,151 0.02%1,000 - 10,000 1,721 66.37% 7,248,050 2.16%10,001 - 1,000,000 712 27.46% 37,799,666 11.28%1,000,001 and above 26 1.00% 289,890,133 86.54%

2,593 100% 335,000,000 100%

Based on information available to the Company as at April 14, 2003 , approximately 47% of the issued ordinary shares of theCompany is held by the public and, therefore, Rule 723 of the Listing Manual issued by the Singapore Exchange SecuritiesTrading Limited is complied with.

Top Twenty Shareholders as at April 14, 2003

No. Name No. of Shares Percentage

1 HSU HUNG-CHUN 97,207,764 29.02%2 HSU CHENG-CHIEN 46,747,995 13.95%3 CITIBANK NOMS S’PORE PTE LTD 22,850,000 6.82%4 HSBC (SINGAPORE) NOMS PTE LTD 21,664,200 6.47%5 OCBC SECURITIES PRIVATE LTD 18,638,400 5.56%6 DBS NOMINEES PTE LTD 18,006,200 5.37%7 RAFFLES NOMINEES PTE LTD 12,928,200 3.86%8 LIAO HAN KUEI 7,237,388 2.16%9 G K GOH STOCKBROKERS PTE LTD 5,708,936 1.70%10 UNITED OVERSEAS BANK NOMINEES PTE LTD 4,920,000 1.47%11 YANG YU-LIN 4,767,104 1.42%12 WEN SHIH-JEN 3,750,000 1.12%13 YEH WANG FU-TAI 3,750,000 1.12%14 UOB KAY HIAN PTE LTD 3,482,700 1.04%15 HSU CHANG YU-MEI 2,701,604 0.81%16 CHANG SHIH HSING 2,090,066 0.62%17 OVERSEA CHINESE BANK NOMINEES PTE LTD 2,062,576 0.62%18 LIEN CHIN-HO 1,732,500 0.52%19 LEE TSU-CHIN @ RICHARD LEE 1,500,000 0.45%20 HSU BAO-HWA 1,410,000 0.42%

283,155,633 84.52%

Substantial ShareholdersAs shown in the Register of Substantial Shareholders

No. of SharesNo. Name of Shareholders Direct Interest Deemed Interest

1 Hsu Hung Chun* 97,207,764 2,701,6042 Hsu Cheng Chien** 46,747,995 4,767,1043 Chang Yu Mei* 2,701,604 97,207,7644 Yang Yu Lin** 4,767,104 46,747,9955 J.P. Morgan Chase & Co. and its affiliates - 19,132,000

* Husband and wife** Husband and wife


NOTICE IS HEREBY GIVEN that the Seventh Annual General Meeting of Huan Hsin Holdings Ltd will be held at Raffles Hotel,Casuarina Suite A, Level 3 (via Seah Street entrance) 1 Beach Road, Singapore 189673 on Wednesday, May 28, 2003 at 10.00a.m., for the following purposes:-

1. To receive and adopt the Directors’ Report and Audited Accounts of the Company for the financial year endedDecember 31, 2002. (Resolution 1)

2. To declare a final tax exempt dividend of 6% (1.2 Singapore cents) per ordinary share for the year endedDecember 31, 2002. (Resolution 2)

3. To approve Directors’ Fees of S$231,500/- for the year ended December 31, 2002. (2001 : S$209,000/-) (Resolution 3)

4. To re-elect the following Directors retiring in accordance with Articles 91 and 97 of the Company’s Articles ofAssociation : -a) Lau Ping Sum, Pearce (retiring under Article 91) (Resolution 4a)b) Hsu Ming Hung (retiring under Article 91) (Resolution 4b)c) Lim Kee Nam (retiring under Article 97) (Resolution 4c)

5. To re-appoint Deloitte & Touche as auditors of the Company and to authorise the Directors to fix their remuneration.(Resolution 5)

6. To transact any other ordinary business of an Annual General Meeting of which due notice shall have been given.(Resolution 6)

AS SPECIAL BUSINESS

To consider and, if thought fit, to pass the following ordinary resolutions with or without any modifications:-

7. “That pursuant to Section 161 of the Companies Act, Cap. 50 and the Listing Manual of the Singapore Exchange SecuritiesTrading Limited, the Directors of the Company be and they are hereby authorised to issue shares in the Company (whetherby way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such purposes and to suchperson as the Directors may in their absolute discretion, deem fit provided that the aggregate number of shares to beissued pursuant to this Resolution does not exceed 50 per centum of the issued share capital of the Company at the timeof the passing of this Resolution, of which the aggregate number of shares to be issued other than on a pro rata basis toexisting shareholders shall not exceed 20 per centum of the Company’s issued share capital of the Company at the time ofthe passing of this Resolution, and that such authority shall continue in force until the date that the next annual generalmeeting of the Company is held or is required by law to be held, whichever is the earlier, unless revoked or varied at ageneral meeting of the Company”. (Resolution 7)(see explanatory note (i))

NOTICE OF ANNUAL GENERAL MEETING

DECEMBER 31, 2002


AS SPECIAL BUSINESS – continued

8. “That the Directors of the Company be and they are hereby authorised to offer and grant options in accordance with theHuan Hsin Share Option Scheme (“the Scheme”) and to issue such shares as may be required to be issued pursuant to theexercise of the options under the Scheme provided always that the aggregate number of shares to be issued pursuant tothe Scheme shall not exceed 10 per centum of the issued share capital of the Company from time to time.”

(Resolution 8)

By Order of the Board

Tan Cheng Siew @ Nur Farah TanCompany Secretary

Singapore, May 9, 2003

NOTE :

1. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy toattend and vote instead of him/her. A proxy need not be a member of the Company. The instrument appointing a proxymust be deposited at the Registered Office of the Company, 6 Shenton Way #28-09 DBS Building Tower Two, Singapore068809, not less than 48 hours before the time set for holding the Meeting.

2. Messrs Lau Ping Sum, Pearce and Lim Kee Nam, will upon re-election as Directors of the Company, continue to serve in theAudit Committee of the Company and will be considered independent for the purposes of Clause 704(8) of the ListingManual of the Singapore Exchange Securities Trading Limited.

STATEMENT PURSUANT TO ARTICLE 54 OF THE COMPANY’S ARTICLES OF ASSOCIATION

i) The proposed Resolution 7, if passed, will empower the Directors of the Company from the date of the above Meeting untilthe next Annual General Meeting to issue shares in the Company up to an amount not exceeding in total 50 per centumof the issued share capital of the Company for such purposes as they consider would be in the interests of the Company.This authority will, unless previously revoked or varied at a general meeting, expire at the next Annual General Meeting ofthe Company.

The percentage of issued share capital is based on the Company’s issued share capital as at the date of the passing of thisResolution after adjusting for (a) new shares arising from the conversion of convertible securities or employee shareoptions on issue as at the date of the passing of this Resolution and (b) any subsequent consolidation or subdivision ofshares.

ii) The proposed Resolution 8, if passed, will empower the Directors of the Company, from the date of the above meetinguntil the Next Annual General Meeting, to issue shares of up to an amount in aggregate not exceeding 10 per centum ofthe issued share capital of the Company from time to time pursuant to the exercise of the options under the Scheme.

NOTICE OF ANNUAL GENERAL MEETING

DECEMBER 31, 2002


This page has been left intentionally blank.


I/We _________________________________________________________________________________________________________

of ___________________________________________________________________________________________________________

being a *Member/Members of the abovenamed Company hereby appoint:

HUAN HSIN HOLDINGS LTD(Incorporated in the Republic of Singapore)

PROXY FORM

NameProportion of

Shareholdings (%)NRIC/

Passport NumberAddress

and/or (delete as appropriate)

as *my/our proxy/proxies to vote for *me/us on *my/our behalf, at the Annual General Meeting of the Company, to be held atRaffles Hotel, Casuarina Suite A, Level 3 (via Seah Street entrance) 1 Beach Road, Singapore 189673 on Wednesday, May 28,2003 at 10.00 a.m. and at any adjournment thereof. *I/We direct *my/our *proxy/proxies to vote for or against the Resolutionsto be proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given, the *proxy/proxies will voteor abstain from voting at his/their discretion, as he/they will on any other matters arising at the Meeting.

No. AgainstForResolutions relating to :

1. Adoption of the Directors’ Report and Audited Accounts of the Company for thefinancial year ended December 31, 2002.

2. Final Tax-Exempt Dividend of 6% (1.2 Singapore cents) per ordinary share for theyear ended December 31, 2002.

3. Approval of Directors’ Fees of S$231,500/- for the year ended December 31, 2002.(2001 : S$209,000/-)

4. (a) Re-election of Mr. Lau Ping Sum, Pearce as a Director

(b) Re-election of Mr. Hsu Ming Hung as a Director

(c) Re-election of Mr. Lim Kee Nam as a Director

5. Re-appointment of Deloitte & Touche as auditors of the Company and to authorisethe Directors to fix their remuneration

6. Other ordinary business

7. Authority for the Directors to issue shares in the Company

8. Authority for the Directors to grant options and to issue shares under theHuan Hsin Share Option Scheme.

✃

Dated this __________ day of ____________________ 2003

_____________________________________________Signature(s) of Member(s) or Common Seal

* Delete Accordingly

Total Number of Shares Held


Important

1. A Member of the Company entitled to attend and vote at the meeting is entitled to appoint one or two proxies to attendand vote in his/her stead. A proxy need not be a Member of the Company and where there is more than one proxy, theproportion of Shares to be represented by each proxy must be stated.

2. Where a Member appoints two proxies, the appointments shall be invalid unless he specifies the proportion (expressed asa percentage of the whole) of his shareholdings to be represented by each proxy.

3. This instrument of proxy must be signed by the appointor or his/her duly authorised attorney or, if the appointor is a bodycorporate, signed by a duly authorised officer or its attorney or affixed with its common seal thereto.

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

5. The instrument appointing a proxy or proxies (together with the power of attorney [if any] under which it is signed or acertified copy thereof), must be deposited at the registered office of the Company at 6 Shenton Way #28-09 DBS BuildingTower Two, Singapore 068809 not less than 48 hours before the time fixed for holding the Annual General Meeting.

6. Please insert the total number of Shares held by you. If you have Shares entered against your name on the DepositoryRegister (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number ofShares. If you have Shares registered in your name in the Register of Members of the Company, you should insert thatnumber of Shares. If you have Shares entered against your name in the Depository Register and registered in your name inthe Register of Members, you should insert the aggregate number of Shares. If no number is inserted, this instrument ofproxy will be deemed to relate to all the Shares held by you.

7. The Company shall be entitled to reject this instrument of proxy if it is incomplete, or illegible or where the true intentionsof the appointor are not ascertainable from the instructions of the appointor specified in this instrument of proxy. Inaddition, in the case of Members whose Shares are deposited with The Central Depository (Pte) Limited (“CDP”), theCompany may reject any instrument of proxy lodged if such Member is not shown to have Shares entered against his namein the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting as certified byCDP to the Company.

huan hsin holdings ltd - 早报 · 2013. 5. 13. · the third new plant will be leased to the joint...

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