SINGATRONICS LIMITED. Annual Report

2001 S INGATRONICS LIMITED Annual Report contents C o n t e n t s Chairman’s Statement 2 Operations Report 6 Corporate Information 10 Grou...
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2001

S INGATRONICS LIMITED

Annual Report

contents

C o n t e n t s

Chairman’s Statement

2

Operations Report

6

Corporate Information

10

Group Structure

12

Corporate Governance

14

Financial Report

16

Shareholding Statistics

72

Notice of Annual General Meeting

73

Proxy Form

C h a i r m a n ’ s

S t a t e m e n t

chairman’s statement

C h a i r m a n ’ s S ta t e m e n t

Financial Review The weakness in the global economy and the downturn of the electronics industry had adversely affected our Group’s two core businesses in contract manufacturing and hotel operations during the year ended 31 December 2001. Group’s turnover for the year decreased from $73.475 million to $61.950 million. With the significant drop in turnover coupled with higher depreciation and interest expense, the Group recorded an operating loss before tax of $6.331 million in the year under review against a profit before tax of $6.253 million in the previous year. After providing for income tax and share of loss by associated company, the Group reported a loss after tax of $8.969 million for the year ended 31 December 2001 as compared to a profit of $3.915 million in year 2000. It is to be noted that with effect from the financial year ended 31 December 2001, the Group has adopted the various changes in the Singapore Statements of Accounting Standards (“SAS”), in particular the revised SAS 10 and the new SAS 34. With the adoption of the revised SAS 10, dividend income from subsidiaries will only be included in the accounting period in which the dividend is declared rather than in the accounting period for which the dividend is proposed. As for the new SAS 34, it requires all deferred expenditure for a reporting period to be written off instead of being amortised over a five year period. As a result of these changes, the Group’s comparative figures for 2000 have been adjusted to take into account of the new requirements of the SAS.

Performance Review The Group’s contract manufacturing subsidiary in Malaysia, Astral Supreme Berhad (“ASB”), experienced a substantial decline in sales turnover due to cutback of orders from its customers. Revenue dropped by 46% to $21.54 million with a profit before tax of $0.97 million as compared to $4.81 million in the previous year. The lower profit was also partly due to higher corporate expenses incurred by ASB in 2001. Business and leisure travel which had been adversely affected by the global economic slowdown were further curtailed in the aftermath of the September 11 events. Consequently, the Group’s hotel operations in Australia and New Zealand did not perform well during the year under review. The situation was worsened by the collapse of Australian airline, Ansett which accounted for a substantial share of the domestic travel market. Occupancy and room rates in all the Group’s five hotels were affected in 2001. Notwithstanding the lower occupancy and room rates, total revenue from our hotel operations rose by 20% to $40.41 million mainly due to the inclusion of a full year operation of Le Meridien Sydney in 2001 as compared to only six months operation in the previous year. With increased depreciation and higher interest expense, this division recorded an operating loss before tax of $4.56 million in 2001 as compared to a loss of $0.584 million in 2000. As at end of the year, there was a further drop in the value of the Group’s investment in quoted securities for which a provision of $297,000 was made. The Group’s associated company, compact disc manufacturer Eastgate Technology Ltd was also adversely affected by the downturn of the electronics industry and incurred an operating loss for the year ended 31 December 2001. The Group’s share of this loss amounted to $953,000 as compared to a profit of $622,000 in the previous year.

03

C h a i r m a n ’ s S ta t e m e n t

Profit Guarantee In connection with the public listing of the Group’s subsidiary, ASB, on the second board of the Kuala Lumpur Stock Exchange in 1999, the Company and two substantial shareholders (“the Guarantors”), had entered into an agreement with ASB whereby the Guarantors severally guaranteed that the audited consolidated profit before tax of ASB group for the financial years ended 31 December 1999, 2000 and 2001 should not be less than RM11.82 million, RM10.45 million and RM10.45 million respectively. ASB’s profit before tax for the first two years of 1999 and 2000 exceeded the guaranteed amounts. However, ASB’s profit before tax for the year ended 31 December 2001 fell short of the guaranteed profit. Consequently, the Company is required to compensate ASB for its 72% share of the shortfall amounting to RM6.09 million. As ASB is currently a 54%-owned subsidiary of the Company, the impact of RM6.09 million compensation payable to ASB was reduced to a loss of RM1.52 million (or approximately $0.747 million) at the Group level. This loss had been included into the Group’s results.

Investment by Subsidiary In February last year, we had announced the US$2 million investment by ASB in Gains Micro-Optics, Inc (“GMO”), a California company involved in the development of optical devices for use in high definition televisions. In conjunction with this investment, ASB and GMO entered into an agreement to form a joint-venture company in Malaysia to manufacture products developed by GMO. As one of the conditions precedent was not complied with, the joint-venture was subsequently aborted but ASB’s interest in GMO would remain via its 26% equity holding in the company.

Divestment of Melbourne Hotel In my statement to shareholders last year, we had made known that the Group might consider divesting certain investments and re-deploy its resources in other activities. In this respect, on 26 March 2002, Singa Hotels and Properties Pty Ltd (“SHP”), a wholly-owned subsidiary of the Group, completed the sale of its hotel in Melbourne for a cash consideration of A$37.65 million. The hotel, Parkroyal on St Kilda Road, was leased to a hotel management company with the lease expiring in a few years’ time when the net income and valuation of the hotel are expected to drop significantly. In view of this, the Directors are of the opinion that this divestment was in the best interest of the Group.

Dividends The sale of the Group’s hotel in Melbourne has resulted in a net cash inflow of approximately $13 million after repayment of A$22.75 million of bank loan. As there are currently no plans to utilise this surplus cash, the Directors have decided to return part of this cash to shareholders through dividend payout. However, in the light of the Group adopting the revised SAS 10 which requires that the Company recognises dividend income from subsidiaries in the accounting period in which such income are declared payable, the Company is unable to declare a final dividend in respect of the year ended 31 December 2001. In its place, the Directors have declared an interim dividend of 20% (tax exempt) or 4 cents per share (tax exempt) for the year ending 31 December 2002 to be paid to shareholders on 12 June 2002.

04

C h a i r m a n ’ s S ta t e m e n t

Current Year Prospects There are indications that the global economic slowdown has bottomed out but there remains some uncertainty as to the speed and extent of the anticipated recovery. Furthermore, recent global developments such as the September 11 events and China’s entry to WTO may have shifted or dramatically changed some business landscapes. Under these uncertain circumstances, the Group is expecting to face a challenging and difficult current year. The Group will continue to strive to improve performance via cost effectiveness and higher productivity and more importantly, to enhance and deliver value to shareholders.

Acknowledgements On behalf of the Board of Directors, I take this opportunity to express our thanks and gratitude to all management, staff and employees of the Group for their dedicated service and our business associates and friends for their support. Last but not least, I wish to thank my fellow directors for their continuous contributions and guidance.

Eddie FOO Chik Kin Chairman & Chief Executive Officer

28 March 2002

05

operations report

O p e r a t i o n s

R e p o r t

Operations Report

Contract Manufacturing The Group’s contract manufacturing business in the year ended 31 December 2001 was adversely affected by the global economic slowdown and the downturn of the electronics sector. Turnover dropped substantially from $39.91 million in the previous year to $21.54 million. This was mainly due to reduction in orders from existing customers. The steep decline in sales resulted in a substantial drop in operating profit before tax to $0.97 million from the previous year’s profit before tax of $4.81 million. This business is undertaken by the Group’s 54%-owned Malaysian subsidiary, Astral Supreme Berhad (“ASB”) at ASB’s manufacturing facility in the Kulim Industrial Estate in Kedah. Products manufactured for customers during the year were electronic musical instruments, home security systems and other electronics products. Although the facility is situated at a relatively low cost location which has contributed to the competitiveness of this business in the past years, ASB is now facing strong competition from other lower cost countries like China and Indonesia. ASB has adopted a two-prong strategy to face the more challenging business environment ahead. It will focus on securing new customers and at the same time continue its relentless efforts to improve its competitiveness through higher productivity and cost efficiency. Recent marketing efforts have succeeded in securing two new customers in the current year to manufacture components for use in electrical equipment and appliances. Whilst contribution from these new customers will not be significant in the current year, there is good growth potential for the business in the future.

07

Operations Report

Hotel Operations The Group’s hotel business in 2001 was affected by several events that had a drastic impact on the global travel and tourism industry. Although Australia and New Zealand which are generally considered as safe havens, were in a more favourable position than most other countries, they were not left unscathed. Apart from the global economic slowdown, the September 11 events and the collapse of Ansett Airline in Australia resulted in significant reduction of business and leisure travellers. As a result of this, severe competition sets in with each property trying to secure a share of the much-reduced business which inevitably led to drastic cuts in room rates. The Group’s four hotels in Australia and one hotel in New Zealand experienced a lower occupancy and room rates. However, total revenue for the year under review increased from $33.57 million to $40.41 million with the inclusion of a full year operation of Le Meridien Sydney which commenced business in July 2000. Higher depreciation and interest expense attributed to Le Meridien Sydney resulted in the hotel operations recording an operating loss before tax of $4.56 million in 2001 when compared to a loss of $0.58 million in the previous year. Of all the five hotels, four properties are managed by international hotel management companies with the remaining property, the Parkroyal on St Kilda Road in Melbourne leased to a hotel operating company with the lease expiring in a few years’ time. Upon the expiry of the lease, the contribution and the valuation of this property is expected to be substantially reduced. In view of this, the Directors decided that it was in the best interest of the Group to dispose of the hotel when the property still commands an acceptable valuation. Consequently, the Group, through its wholly-owned Australian subsidiary, Singa Hotels and Properties Pty Ltd, on 26 December 2001, entered into an agreement to sell the hotel for a cash consideration of A$37.65 million. The sale has since been completed on 26 March 2002. Going forward, the Group’s remaining four hotel properties will focus on increasing their market-share in their respective market areas. Furthermore, the 415-room Le Meridien in Sydney could see further improvement by achieving higher room rate.

08

Operations Report

Associated Company The Group’s consolidated financial statements include the equity accounting of its associated company, Eastgate Technology Ltd (“Eastgate”). Also listed on the main board of SGX, Eastgate is involved in the manufacture and sale of compact discs for audio, video and computer storage systems. Besides its manufacturing facility in Singapore, Eastgate has expanded into the region and has now production operations in Hong Kong and Taiwan. It is also considering to establish another facility in Thailand. Like many corporations, Eastgate’s performance in the year ended 31 December 2001 has also been adversely affected by the global economic slowdown. It reported an operating loss before tax of $5.38 million for the year. The Group’s share of Eastgate’s loss based on its 17.7% shareholding in Eastgate, amounted to approximately $0.95 million. For the current year, Eastgate expects an improved performance with better contribution from its off-shore facilities.

09

corporate information C o r p o r a t e

I n f o r m a t i o n

Corporate Information

Board Of Directors Eddie FOO Chik Kin (Chairman) Dr WONG Kwei Cheong LIM Jiew Keng FOO Meng Tong LEOW Siew Beng

Audit Committee Dr WONG Kwei Cheong (Chairman) LIM Jiew Keng LEOW Siew Beng

Company Secretary LEE Seng Hua

Registered Office 506 Chai Chee Lane Singapore 469026 Tel : 6448 6211 Fax : 6445 2506

Registrar Barbinder & Co Pte Ltd 8 Cross Street #11-00 PWC Building Singapore 048424

Auditors PricewaterhouseCoopers Certified Public Accountants, Singapore Partner in charge of the audit : QUEK See Tiat

11

group structure G r o u p

S t r u c t u r e

Gro u p S t r u c t u r e Country of Incorporation Singapore

Malaysia

Australia

New Zealand

70% St Leonards Hotel & Conference Centre Pty Ltd 100% Astral-GMO Sdn Bhd

70% Townsville Hotel Pty Ltd

100% Singatronics.com Pte Ltd

100% Singatronics (M) Sdn Bhd

100% Glopeak Properties & Hotels Pte Ltd

100% Singatronics Asset Holdings Pte Ltd

100% Singatronics Investment Pte Ltd

54% Astral Supreme Bhd

Singatronics Limited 17.7% Eastgate Technology Ltd

100% Singatronics Manufacturing (S) Pte Ltd 100% Glopeak Land Pte Ltd

100% Glopeak Investment Pte Ltd

100% Solid Micron Materials Pte Ltd

100% Glopeak NZ Hotels Pte Ltd

100% Pinpeak Investment Pte Ltd

100% Jamison Pte Ltd

100% Glopeak NZ Hotels Pte Ltd - NZ Branch 100% Glopeak Australia Pty Ltd

100% Singa Hotels & Properties Pty Ltd

13

corporate governance report

C o r p o r a t e

G o v e r n a n c e

R e p o r t

Corporate Governance Report

Singatronics Limited is committed to adopt corporate governance practices in compliance with the requirements of the Listing Manual and the Best Practice Guide issued by the Singapore Exchange Limited (“SGX”). The Board is currently reviewing the Code of Corporate Governance issued by the Corporate Governance Committee in March 2001 to determine the measures required by the Company towards achieving full compliance by end of 2002.

Board of Directors The Board currently comprises five directors with the majority of three directors being independent. The Board presently meets at least two times a year and provides overall supervision of the management of the business and affairs of the Company. Responsibilities of the Board include approving strategic directions, annual budgets, major funding and investment/disposal proposals and reviewing financial performance and other key financial functions of the Company. The Board also has the responsibility of setting up various Board Committees with specific functions delegated by the Board. So far, the Audit Committee has been established by the Board.

Audit Committee The Audit Committee (“AC”) currently comprises three members, two of whom are independent non-executive directors. The Chairman of the AC is an independent non-executive director. The AC meets regularly during the year and has the following functions: (a) Reviews with the external Auditors on the audit plan, adequacy of internal control system, audit report and any other matters which the external Auditors may wish to discuss; (b) Reviews the interim and annual financial statements and the Auditors’ Report of the Company including announcements of results to shareholders prior to submission to the Board for approval; (c) Reviews interested person transactions; (d) Reviews the level of co-operation provided by the Company’s officers to the external Auditors; (e) Authorises the commission of any internal investigations into matters affecting the Company and reviews the findings of such investigations; and (f) Makes recommendation on the appointment of external Auditors and reviews the audit fees and the issue of resignation or dismissal of the Auditors.

Dealings in Securities The Company has established and adopted internal compliance codes based on the provisions and recommendations of the Best Practice Guide issued by SGX to provide guidance to its directors and employees with regard to dealings in the Company’s shares by the directors and employees.

15

f i n a n c i a l

r e p o r t

financial report Financial Highlights

17

Directors’ Report

18

Statement by Directors

28

Auditors’ Report

29

Income Statements

30

Balance Sheets

31

Consolidated Statement of Changes in Equity

32

Statement of Changes in Equity - Company

33

Consolidated Cash Flow Statements

34

Notes to the Financial Statements

36

Financial Highlights

2001 S$'000

2000 S$'000

61,950 (7,284 ) (8,783 ) (8,969 )

73,475 6,875 5,661 3,915

FOR THE YEAR ENDED 31 DECEMBER Turnover (Loss)/profit before tax (Loss)/profit after tax (Loss)/profit attributable to shareholders AS AT 31 DECEMBER Fixed assets Net assets Shareholders' funds

158,994 132,988 118,666

182,061 149,458 135,444

PER ORDINARY SHARE (Loss)/earnings (cents) Net tangible assets (cents)

(3.7 ) 48.5

1.6 55.4

17

Dire c t o r s ’ R e p o r t For The Financial Year Ended 31 December 2001

The directors present their report to the members together with the audited financial statements of the Company and of the Group for the financial year ended 31 December 2001. Directors The directors of the Company in office at the date of this report are as follows: Eddie FOO Chik Kin LEOW Siew Beng Dr WONG Kwei Cheong LIM Jiew Keng FOO Meng Tong

(Chairman and Chief Executive Officer) (Executive Director) (Non-executive Director) (Non-executive Director) (Non-executive Director)

Principal activities The principal activity of the Company is investment holding. The principal activities of the companies in the Group consist of : -

contract manufacture of electronic and electrical consumer and industrial products; property development and leasing; hotel ownership; and investment holding of property and shares.

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

Results for the financial year The consolidated loss after tax attributable to the members of the Company for the financial year was $8,968,749. The Company made a profit after tax for the financial year of $575,572.

Material transfers to or (from) reserves and provisions Material transfers to or (from) reserves during the financial year were as follows: The Group $ Foreign currency translation reserve: - Effect of adopting SAS 34 - Net translation adjustments during the year Asset revaluation reserve: - Currency translation difference - Deficit on revaluation of investment properties - Transfer to deferred taxation

$

62,189 (413,594 )

-

(109,224 ) (2,679,000 ) (940,000 )

-

Material movements in provisions are set out in the notes to the financial statements.

18

The Company

Dire c t o r s ’ R e p o r t For The Financial Year Ended 31 December 2001

Acquisition and disposal of subsidiaries On 8 May 2001, Astral-GMO Sdn Bhd (“A-G”) was acquired by the Company’s 54%-owned subsidiary, Astral Supreme Berhad, for a cash consideration of RM2,500. A-G has a paid-up capital of RM2.00 consisting of 2 ordinary shares of RM1.00 each and an authorised capital of RM100,000 and has not commenced operation as at 31 December 2001. There were no other acquisition or disposal of interests in subsidiaries during the financial year.

Issue of shares or debentures There were no issues of shares or debentures by the Company or any subsidiary during the financial year.

Arrangements to enable directors to acquire shares and debentures Neither at the end nor at any time during the financial year was the Company a party to any arrangement whose object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate, other than as disclosed under “Share Options” on page 23.

Directors’ interest in shares and debentures (a) According to the register of directors’ shareholdings kept by the Company for the purposes of section 164 of the Companies Act, the undermentioned persons who were directors of the Company at the end of the financial year had an interest in the shares of the Company and a related corporation. Name of directors and description of shares The Company Ordinary shares of $0.20 each fully paid Eddie FOO Chik Kin LEOW Siew Beng LIM Jiew Keng Astral Supreme Berhad Ordinary shares of RM1.00 each fully paid Eddie FOO Chik Kin

Direct interests 31.12.2001

21.1.2002

1.1.2001

21,100,000 1,230,000 -

21,100,000 1,230,000 -

21,100,000 1,230,000 -

97,617,729 8,000

97,617,729 8,000

97,617,729 8,000

-

-

-

24,300,000

24,300,000

24,300,000

1.1.2001

Deemed interests 31.12.2001 21.1.2002

Mr Eddie FOO Chik Kin’s deemed interests in the above related corporation is by virtue of his having an interest of not less than 20% of the issued share capital of the Company.

19

Dire c t o r s ’ R e p o r t For The Financial Year Ended 31 December 2001

Directors’ interest in shares and debentures (continued) (b) Under the Singatronics Share Option Scheme, the following options were granted to Mr LEOW Siew Beng, an Executive Director, to take up unissued ordinary shares of $0.20 each of the Company: Exercise price per option $

Number of options 1.1.2001 31.12.2001 21.1.2002

Date options granted

Exercise period

1 November 1996

1 November 1998 to 31 October 2001

0.56

100,000

-

24 October 1997

24 October 1999 to 23 October 2002

0.47

100,000

100,000

100,000

12 November 1998

12 November 2000 to 11 November 2003

0.22

100,000

100,000

100,000

17 September 1999

17 September 2001 to 16 September 2004

0.46

100,000

100,000

100,000

-

(c) Under the Singatronics Limited (2001) Share Option Scheme, on 5 July 2001, certain directors of the Company were granted options to take up unissued ordinary shares of $0.20 each of the Company as set out below:

Exercise period

20

Exercise price per option $

Number of unissued ordinary shares of $0.20 each under option held by director 5.7.2001 31.12.2001 21.1.2002

LEOW Siew Beng

5 July 2003 to 4 July 2011

0.2491

350,000

350,000

350,000

Dr WONG Kwei Cheong

5 July 2003 to 4 July 2006

0.2491

200,000

200,000

200,000

LIM Jiew Keng

5 July 2003 to 4 July 2006

0.2491

200,000

200,000

200,000

FOO Meng Tong

5 July 2003 to 4 July 2006

0.2491

200,000

200,000

200,000

Dire c t o r s ’ R e p o r t For The Financial Year Ended 31 December 2001

Dividends Dividends paid, declared or proposed since the end of the Company’s previous financial year were as follows:

$ A final dividend of 1.5 cents per share (tax exempt) was paid on 6 June 2001 in respect of the financial year ended 31 December 2000 as proposed in the Directors’ Report for that financial year.

3,666,808

The sale of the Group’s Melbourne hotel had resulted in a net cash of approximately $13 million (see Note 37 to the financial statements). As the Group has no immediate plans to utilise this surplus cash, the Directors have decided to return part of the cash to shareholders. However, in the light of the Group adopting the revised SAS 10 which requires that the Company recognises dividend income from subsidiaries in the accounting period in which such income are declared payable (see Note 2(d) to the financial statements), the Company does not have the profits from which a final dividend can be proposed in respect of the year ended 31 December 2001. In its place, the Directors have declared an interim dividend of 4 cents per share (tax exempt) for the financial year ending 31 December 2002 amounting to $9,778,155.

Bad and doubtful debts Before the financial statements of the Company were made out, the directors took reasonable steps to ascertain the action taken in relation to the writing off of bad debts and providing for doubtful debts of the Company, and have satisfied themselves that all known bad debts of the Company have been written off and that adequate provision has been made for doubtful debts. At the date of this report, the directors are not aware of any circumstances which would render any amounts written off for bad debts or provided for doubtful debts in the Group inadequate to any substantial extent.

Current assets Before the financial statements of the Company were made out, the directors took reasonable steps to ascertain that current assets which were unlikely to realise their book values in the ordinary course of business have been written down to their estimated realisable values or that adequate provision has been made for the diminution in value of such current assets. At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with in this report, which would render the values attributed to current assets in the consolidated financial statements misleading.

21

Dire c t o r s ’ R e p o r t For The Financial Year Ended 31 December 2001

Charges on assets and contingent liabilities At the date of this report, no charges have arisen since the end of the financial year on the assets of the Company or any corporation in the Group which secure the liability of any other person, nor have any contingent liability arisen since the end of the financial year in the Company or any other corporation in the Group.

Ability to meet obligations No contingent or other liability of the Company or any corporation in the Group has become enforceable or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may substantially affect the ability of the Company and the Group to meet their obligations as and when they fall due.

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

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

Unusual items after the financial year In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which would affect substantially the results of the operations of the Company and of the Group for the financial year in which this report is made other than the post balance sheet event as disclosed in note 37 to the financial statements.

Directors’ contractual benefits Since the end of the previous financial year, no director of the Company has received or become entitled to receive a benefit (other than as disclosed in the consolidated financial statements and in this report) by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

22

Dire c t o r s ’ R e p o r t For The Financial Year Ended 31 December 2001

Share options (a) Singatronics Share Option Scheme On 26 May 1989, the Company introduced a share incentive scheme for executive employees of the Company called the Singatronics Executives’ Share Option Scheme. Pursuant to the Extraordinary General Meeting held on 25 May 1990, this scheme was amended to extend eligibility to non-executives of the Company and its name was changed to Singatronics Share Option Scheme (the “1990 Scheme”). Options to subscribe for 177,000, 191,000, 191,000 and 196,000 ordinary shares for $0.20 each were granted on 1 November 1996, 24 October 1997, 12 November 1998 and 17 September 1999 respectively. Details of these options have been disclosed in the Directors’ Reports for the financial years in which the options were granted. The 1990 Scheme expired on 31 December 1999 and the last options granted under the 1990 Scheme will remain exercisable until 16 September 2004. (b) Singatronics Limited (2001) Share Option Scheme The Singatronics Limited (2001) Share Option Scheme (“the 2001 Scheme”) in respect of unissued ordinary shares of $0.20 each in the Company was approved by the members of the Company at an Extraordinary General Meeting on 17 May 2001 to replace the 1990 Scheme. On 5 July 2001, 4,630,000 options were granted pursuant to the 2001 scheme to 141 employees of the Group which included the following directors of the Company: No. of options for ordinary shares of $0.20 each LEOW Siew Beng Dr WONG Kwei Cheong LIM Jiew Keng FOO Meng Tong

350,000 200,000 200,000 200,000

Statutory information regarding the 2001 scheme is as follows: (i)

(ii)

Options granted

Exercise period

Exercise price

600,000 3,140,000 890,000

5 July 2003 to 4 July 2006 5 July 2003 to 4 July 2011 5 July 2002 to 4 July 2011

0.2491 0.2491 0.2930

The options expire at the end of the respective exercise periods unless they lapse earlier in the event of death, bankruptcy or cessation of employment of the participant or the take-over or winding up of the Company.

23

Dire c t o r s ’ R e p o r t For The Financial Year Ended 31 December 2001

Share options (continued) (b) Singatronics Limited (2001) Share Option Scheme (continued) (iii)

Share options are granted to Group employees and non-executive directors at a 15% discount to the market price, except for participants who are employees of the Company’s subsidiaries in Malaysia. For such participants, the subscription price per share shall be the market price as determined by the Committee.

(iv)

The options may be exercised in full or in respect of 1,000 shares or a multiple thereof, on the payment of the exercise price.

(v)

The maximum number of new ordinary shares to be allotted shall not exceed 15% of the total issued and paid-up ordinary share capital of the Company.

(vi)

The scheme shall be for a maximum duration of 10 years.

(c) Options outstanding – Singatronics Share Option Scheme At 31 December 2001, options to take up 545,000 unissued shares of $0.20 each in the Company under the 1990 Scheme were outstanding, details of which are as follows: Date of grant 24.10.1997 12.11.1998 17.9.1999

Options granted

Balance at 1.1.2001

Lapsed

Balance at 31.12.2001

191,000 191,000 196,000

177,000 179,000 189,000 545,000

-

177,000 179,000 189,000 545,000

Exercise price per option $ 0.47 0.22 0.46

Date of expiry 23.10.2002 11.11.2003 16.09.2004

The options granted under the 1990 Scheme can be exercised only after two years from the date of grant. The persons to whom the options have been granted do not have the right to participate, by virtue of the options, in any share issue of any other company. (d) Options outstanding – Singatronics (2001) Share Option Scheme At 31 December 2001, options to take up 3,655,000 unissued shares of $0.20 each in the Company under the 2001 Scheme were outstanding, details of which are as follows:

Date of grant 05.07.2001 05.07.2001 05.07.2001

Options granted

Cancelled/ rejected/ lapsed

Balance at 31.12.2001

600,000 3,140,000 890,000 4,630,000

(705,000) (270,000) (975,000)

600,000 2,435,000 620,000 3,655,000

Exercise price per option $ 0.2491 0.2491 0.2930

Date of expiry 04.07.2006 04.07.2011 04.07.2011

The persons to whom the options have been granted do not have the rights to participate by virtue of the options, in any share issue of any other company.

24

Dire c t o r s ’ R e p o r t For The Financial Year Ended 31 December 2001

Share options (continued) (e) Employee’s share options scheme of Astral Supreme Berhad The Company’s listed subsidiary in Malaysia, Astral Supreme Berhad, had introduced its own employee share option scheme during the year. The Astral Employee share option scheme (“the Astral Scheme”) was approved by the Securities Commission of Malaysia (“SC”) on 10 January 2001 and by the members of Astral Supreme Berhad (“Astral”) at an Extraordinary General Meeting held on 8 May 2001. Subsequently, on 25 June 2001, Astral announced that it proposed to amend the existing By-Laws governing the Astral Scheme in order to adopt the flexibilities allowed by the SC in the SC’s revised guidelines on employee share option schemes which were introduced on 10 May 2001. Astral’s proposed amendments to the By-Laws were approved by the SC on 13 July 2001 and by the members of Astral at an Extraordinary General Meeting held on 10 January 2002. Statutory information regarding the Astral Scheme are as follows: (i)

The maximum number of new ordinary shares to be allotted by Astral under the Astral Scheme shall not exceed 10% of the total issued and paid-up ordinary share capital of Astral.

(ii)

The Astral Scheme shall be for a duration of 10 years.

(iii) Eligibility for participation in the Astral Scheme shall be at the discretion of the Astral Scheme Committee subject to the employees, inter-alia, being at least 18 years of age and confirmed in service on the offer date. (iv) An executive director shall only be eligible to participate in the Astral Scheme if he is holding a full time executive position and the specific allotment to be made to the executive director has been approved by the shareholders of Astral in general meeting. (v)

The subscription price for the new ordinary shares to be issued under the Astral Scheme is the higher of the weighted average market price of the shares of Astral for the five market days preceding the offer date (subject to a discount of not more than 10% which the Astral Scheme Committee may at its discretion decide to give), and the par value of the shares of Astral or RM1.

(vi) The new ordinary shares to be issued upon the exercise of any option under the Astral Scheme will upon allotment, rank pari passu in all respects with the then existing issued and paid-up ordinary shares of Astral except that the new ordinary shares so allotted will not be eligible for any dividends, rights, allotments or other distributions, the entitlement date for which is before the date of exercise of the option. (vii) The Astral Scheme Committee shall have the discretion to determine the maximum number of options that are exercisable by the eligible employees in a particular year.

25

Dire c t o r s ’ R e p o r t For The Financial Year Ended 31 December 2001

Share options (continued) (f) During the financial year, no shares of the Company or any subsidiary were allotted and issued by virtue of the exercise of options to take up unissued shares of the Company or any subsidiary. (g) Other information required by the Singapore Exchange Securities Trading Limited (“SGX”) Pursuant to Clause 947 (Practice Note No. 9h) of the Listing Manual of SGX, in addition to information disclosed elsewhere in the report, it is reported that during the financial year : (i) The committee administering the 1990 and 2001 Schemes comprises two directors of the Company: Mr Eddie FOO Chik Kin and Mr LIM Jiew Keng. The committee administering the Astral Scheme comprises three directors of Astral: Mr THIA Peng Hock, Mr SIEH Kok Jiun and Mr TAN Choon Sin. (ii) No options have been granted to controlling shareholders or their associates, parent group employees and no employee has received 5% or more of the total options available under the 1990 and 2001 Schemes and the Astral Scheme. (iii) Except for the above, no other options were granted by the Company or any subsidiary during the financial year and there were no other unissued shares under option at the end of the financial year.

26

Dire c t o r s ’ R e p o r t For The Financial Year Ended 31 December 2001

Audit committee The Audit Committee comprises three members, of whom two are non-executive directors. The members of the Audit Committee are : Non-executive directors Executive director

- Dr WONG Kwei Cheong, Chairman - Mr LIM Jiew Keng - Mr LEOW Siew Beng

The Audit Committee carried out its functions in accordance with section 201B(5) of the Companies Act. In performing those functions, the Committee reviewed : (a) the audit plan of the Company’s auditors and their evaluation of the systems of internal accounting controls arising from their audit examination; and (b) the financial statements of the Company and the consolidated financial statements of the Group for the year ended 31 December 2001 before their submission to the board of directors, as well as the auditors’ report on those financial statements. The Audit Committee has nominated PricewaterhouseCoopers for re-appointment as auditors of the Company at the forthcoming Annual General Meeting.

Auditors The auditors, PricewaterhouseCoopers have expressed their willingness to accept re-appointment.

On behalf of the directors

Eddie FOO Chik Kin Chairman and Chief Executive Officer

LEOW Siew Beng Executive Director

Singapore 28 March 2002

27

Statement by Dire c t o r s

In the opinion of the directors, the financial statements set out on pages 30 to 71 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group at 31 December 2001 and of the results of the business, and changes in equity, of the Company and of the Group and the cash flows of the Group for the financial year then ended, and at the date of this statement there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the directors

Eddie FOO Chik Kin Chairman and Chief Executive Officer

Singapore 28 March 2002

28

LEOW Siew Beng Executive Director

Auditors’ Report of Singatronics Limited And Its Subsidiaries

We have audited the financial statements of Singatronics Limited and the consolidated financial statements of the Group for the financial year ended 31 December 2001 set out on pages 30 to 71. These financial statements are the responsibility of the Company’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 and perform our audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall 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 properly drawn up in accordance with the provisions of the Singapore Companies Act ("Act") and Singapore Statements of Accounting Standard and so as to give a true and fair view of: (i) the state of affairs of the Company and of the Group at 31 December 2001, the results and changes in equity of the Company and of the Group, and the cash flows of the Group for the financial year ended on that date; and (ii) the other matters required by section 201 of the Act to be dealt with in the financial statements of the Company and the consolidated financial statements of the Group; and (b) the accounting and other records, and the registers required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act. We have considered the financial statements and auditors’ report of the subsidiaries of which we have not acted as auditors, being financial statements included in the consolidated financial statements. The names of the subsidiaries are stated in Note 16 to the financial statements. We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated financial statements 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 subsidiaries incorporated in Singapore did not include any comment made under section 207(3) of the Act.

PricewaterhouseCoopers Certified Public Accountants Singapore 28 March 2002

29

Income Statements For The Financial Year Ended 31 December 2001

Notes

Sales Cost of sales Gross profit Other operating income Net (losses)/gains associated with long-term investments Distribution costs Administrative expenses Other operating expenses Operating profit/(loss) Finance income Finance costs Share of results of associated company (Loss)/profit before tax

3

The Group 2001 $

2000 $

61,949,616 (46,157,666 ) 15,791,950

73,475,250 (52,045,366 ) 21,429,884

2001 $

The Company 2000 $ -

309,342

1,279,298

122,369

5

(642,853 ) (2,926,912 ) (8,342,489 ) (3,855,447 ) 333,591

4,279,152 (2,009,863 ) (6,744,968 ) (7,406,359 ) 10,827,144

(336,330 ) (1,624,968 ) (862,612 ) (2,701,541 )

1,400,859 (1,729,040 ) (895,072 ) (1,111,616 )

8 9

1,229,068 (7,893,867 )

1,519,823 (6,093,746 )

4,680,246

4,077,715 -

(952,614 ) (7,283,822 )

622,155 6,875,376

1,978,705

2,966,099 (126,363 ) 2,839,736

4

111,637

-

Tax (Loss)/profit after tax

10

(1,499,133 ) (8,782,955 )

(1,214,095 ) 5,661,281

(1,403,133 ) 575,572

Minority interests

11

(185,794 )

(1,745,989 )

-

Net (loss)/profit

(Loss)/earnings per share - Basic - Diluted

-

(8,968,749 )

3,915,292

575,572

2,839,736

12 (3.67) cents (3.67) cents

1.60 cents 1.60 cents

The accompanying notes form an integral part of these financial statements. Auditors’ Report - Page 29 30

Balance Sheets As at 31 December 2001

Notes

Non-current assets Investments Associated company Subsidiaries Investment property Fixed assets Building held for sale

14 15 16 17 18 19

The Group 2001 $

2000 $

6,136,342 9,702,545

2,728,906 10,455,036 -

2001 $

The Company 2000 $

-

3,737,905 96,737,367

35,391,000 158,994,059 13,056,376 223,280,322

38,880,000 182,061,068

1,262,791 2,215,608 1,692,748 3,915,639 17,066,700 6,649,234 32,802,720

1,541,822 4,455,893 1,589,110 1,564,118 27,190,266 6,368,434 42,709,643

323,890

256,083,042

276,834,653

114,256,418

1,138,931 5,477,223

1,693,070 5,331,374

230,683

13,374,550 1,106,130 21,096,834

11,194,600 975,969 19,195,013

385,000 615,683

98,342,800 2,472,858 1,182,197 101,997,855

105,427,200 2,525,472 228,683 108,181,355

Total liabilities

123,094,689

127,376,368

615,683

402,105

Net assets

132,988,353

149,458,285

113,640,735

116,731,971

48,890,776 78,676,773 1,514,492

48,890,776 78,676,773 5,242,716

48,890,776 78,676,773

48,890,776 78,676,773 -

6,694,632

19,330,189

(13,926,814 )

(17,110,310 ) 118,666,363 14,321,990 132,988,353

(16,696,716 ) 135,443,738 14,014,547 149,458,285

Current assets Stocks Trade debtors Short-term investments Other current assets Fixed deposits Bank and cash balances

21 22 23 24 25 25

Total assets Current liabilities Trade creditors Other current liabilities Current portion of long-term bank loans (secured) Taxation

Non-current liabilities Long-term bank loans (secured) Long-term loans (unsecured) Deferred taxation

Share capital and reserves Share capital Share premium Asset revaluation reserve Revenue reserve/ (accumulated loss) Foreign currency translation reserve Shareholders’ funds Minority interests

26 27

27 28 29

30 31

32 11

-

3,516,365 93,919,536 13,516,579 110,952,480

234,125,010

370,602 13,056,376 113,902,250

30,278 354,168

117,134,076

-

402,105

-

402,105

-

-

-

113,640,735 113,640,735

400,720 4,376,776 1,404,100 6,181,596

(10,835,578 ) 116,731,971 116,731,971

The accompanying notes form an integral part of these financial statements. Auditors’ Report - Page 29 31

Consolidated Statement Of Changes In Equity For The Financial Year Ended 31 December 2001

Notes

Balance at 1 January 2001 - as previously reported - effect of adopting SAS 10 - effect of adopting SAS 34 - as restated

Share capital $

Share premium $

48,890,776 13

78,676,773 -

48,890,776

Deficit on revaluation of investment property Transfer to deferred taxation Currency translation differences Net loss not recognised in the income statement

Asset revaluation reserve $

5,242,716 -

78,676,773

5,242,716

Revenue reserve $

Foreign currency translation reserve $

18,919,975 3,666,808 (3,256,594 ) 19,330,189

(16,758,905 ) 62,189 (16,696,716 )

134,971,335 3,666,808 (3,194,405 ) 135,443,738

Total $

-

-

(2,679,000 ) (940,000 ) (109,224 )

-

(413,594 )

(2,679,000 ) (940,000 ) (522,818 )

-

-

(3,728,224 )

-

(413,594 )

(4,141,818 )

Net loss

-

-

Total recognised losses for the financial year

-

-

-

-

Final dividend for 2000

13

Balance at 31 December 2001

Balance at 1 January 2000 - as previously reported - effect of adopting SAS 10 - effect of adopting SAS 34 - as restated

48,890,776

78,676,773

48,890,776 13 20 48,890,776

Currency translation differences - restated for the effect of adopting SAS 34 Net loss not recognised in income statement

(3,728,224 ) 1,514,492

78,676,773 -

-

5,952,667 -

78,676,773

5,952,667

(8,968,749 )

(8,968,749 ) (3,666,808 )

-

(413,594 ) -

(8,968,749 )

(13,110,567 ) (3,666,808 )

6,694,632

(17,110,310 )

118,666,363

15,936,328 2,444,539 (521,431 ) 17,859,436

(6,167,035 ) (6,167,035 )

143,289,509 2,444,539 (521,431 ) 145,212,617

-

-

(709,951 )

-

(10,529,681 )

(11,239,632 )

-

-

(709,951 )

-

(10,529,681 )

(11,239,632 )

Net profit – restated for the effect of adopting SAS 34

-

-

Total recognised gains/(losses) for the financial year

-

-

-

-

Final dividend for 1999 Balance at 31 December 2000

13 48,890,776

78,676,773

-

(709,951 ) 5,242,716

3,915,292

3,915,292 (2,444,539 ) 19,330,189

-

(10,529,681 ) (16,696,716 )

3,915,292

(7,324,340 ) (2,444,539 ) 135,443,738

The accompanying notes form an integral part of these financial statements. Auditors’ Report - Page 29 32

Statement Of Changes In Equity - Company For The Financial Year Ended 31 December 2001

Notes

Balance at 1 January 2001 - as previously reported - effect of adopting SAS 10 - as restated

Share capital $

48,890,776 48,890,776

13

Balance at 31 December 2001

(11,404,770 ) 569,192 (10,835,578 )

116,162,779 569,192 116,731,971

575,572

-

-

(3,666,808 )

78,676,773

575,572 (3,666,808 )

(13,926,814 )

113,640,735

-

(11,436,290 ) 205,515 (11,230,775 )

116,131,259 205,515 116,336,774

-

-

2,839,736

2,839,736

-

-

(2,444,539 )

(2,444,539 )

78,676,773

48,890,776

48,890,776

Total $

-

-

13

Accumulated loss $

-

48,890,776

Total recognised gains – Net profit – restated for the effect of adopting SAS 10

Balance at 31 December 2000

78,676,773

48,890,776

Balance at 1 January 2000 - as previously reported - effect of adopting SAS 10 - as restated

Final dividend for 1999

78,676,773 -

Total recognised gains – Net profit Final dividend for 2000

Share premium $

78,676,773

78,676,773

(10,835,578 )

116,731,971

The accompanying notes form an integral part of these financial statements. Auditors’ Report - Page 29 33

Consolidated Cash Flow Statement For The Financial Year Ended 31 December 2001

Notes Cash flows from operating activities Net (loss)/profit before tax Adjustments for: Depreciation of fixed assets Dividend income Gain on disposal of fixed assets Loss on disposal of long-term investments Gain on disposal of short-term investments Interest expense Interest income Profit guarantee to minority shareholders of a subsidiary Provision for diminution in value of long-term investments Provision for diminution in value of short-term investments Share of post acquisition reserves less losses of an associated company Operating cash flow before working capital changes Decrease/(increase) in stocks Decrease/(increase) in debtors Decrease in creditors Translation differences Cash generated from operations Tax paid Net cash inflow from operating activities Cash flows from investing activities Dividends received Interest income received Investment in convertible debt Proceeds from return of capital of long-term investment Proceeds from sale of fixed assets Proceeds from sale of long-term investments Proceeds from sale of short-term investments Proceeds from disposal of an associated company Purchase of fixed assets Purchase of long-term investments Purchase of short-term investments Purchase of quoted equity warrants of an associated company Net cash outflow from investing activities

2001 $

2000 $

(7,283,822 )

6,875,376

8,242,331 (212,325 ) (16,130 ) 9,271 7,893,867 (885,383 ) 746,544 274,501 -

3,502,450 (105,454 ) (1,167 ) (982,910 ) 6,093,746 (1,324,750 ) 3,055,710 440,680

952,614 9,721,468

(7,576,044 ) 9,977,637

279,031 1,050,054 (408,290 ) (71,284 ) 10,570,979 (1,329,277 ) 9,241,702

(545,427 ) (3,636,541 ) (4,048,174 ) 776,043 2,523,538 (1,131,596 ) 1,391,942

389,557 885,383 40,744 10,434 (774,409 ) (3,701,642 ) (398,772 ) (3,548,705 )

105,454 1,324,750 (2,000,000 ) 197,676 128,062 4,284,905 3,323,077 (24,768,616 ) (149,800 ) (1,819,358 ) (19,373,850 )

The accompanying notes form an integral part of these financial statements. Auditors’ Report - Page 29 34

Consolidated Cash Flow Statement For The Financial Year Ended 31 December 2001

Notes

Cash flows from financing activities Proceeds from long-term bank loans Dividends paid by subsidiary to minority shareholders Dividend paid Interest paid Repayment of bank loans Repayment of long-term loans to minority shareholders Net cash (outflow)/inflow from financing activities Net decrease in cash and cash equivalent held Cash and cash equivalent at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalent Cash and cash equivalents at the end of the financial year

25

2001 $

2000 $

(2,589,664 ) (3,666,808 ) (7,893,867 ) (2,806,400 ) (16,956,739 )

21,888,955 (2,811,916 ) (2,444,539 ) (6,093,746 ) (29,814 ) 10,508,940

(11,263,742 )

(7,472,968 )

33,558,700 1,420,976 23,715,934

41,105,989 (74,321 ) 33,558,700

The accompanying notes form an integral part of these financial statements. Auditors’ Report - Page 29 35

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

1. General The Company is domiciled and incorporated in Singapore and is listed on the Singapore Exchange. The address of its registered office is: Singatronics Limited 506 Chai Chee Lane Singapore 469026 The principal activity of the Company is investment holding. The principal activities of the companies in the Group consist of : -

contract manufacture of electronic and electrical consumer and industrial products; property development and leasing; hotel ownership; and investment holding of property and shares.

2. Significant accounting policies (a) Basis of preparation The financial statements are prepared in accordance with and comply with Singapore Statements of Accounting Standards (“SAS”). The financial statements are prepared in accordance with the historical cost convention, modified to include the revaluation of a quoted equity investment in a subsidiary, leasehold land and buildings, and investment properties. The financial statements are expressed in Singapore Dollars. In 2001, the Group adopted the following standards: SAS 10 (Revised 2000) SAS 17 (Revised 2000) SAS 22 (Revised 2000) SAS 31 SAS 32 SAS 34 SAS 35 SAS 36

36

Events after the Balance Sheet Date Employee Benefits Business Combinations Provisions, Contingent Liabilities and Contingent Assets Financial Instruments - Disclosure and Presentation Intangible Assets Discontinuing Operations Impairment of Assets

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

2. Significant accounting policies (continued) (a) Basis of preparation (continued) In particular, the effects of adopting SAS 10 and SAS 34 are summarised in the consolidated statement of changes in shareholders’ equity and further information is disclosed in notes 13 and 20.

(b) Basis of consolidation The consolidated financial statements include the financial statements of the Company and all its subsidiaries made up to the end of the financial year. The results of subsidiaries acquired or disposed of during the financial year are included in or excluded from the consolidated income statement from the date of their acquisition or disposal. All intercompany transactions and balances and resulting unrealised profits have been eliminated on consolidation. Where necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the Group.

(c) Foreign currencies Monetary assets and liabilities denominated in foreign currencies are translated into Singapore dollars at exchange rates prevailing at the balance sheet date. Transactions in foreign currencies during the year are converted into Singapore dollars at the exchange rates prevailing at transaction dates. All exchange differences are taken to the income statements. For the purposes of consolidation of subsidiaries and the equity accounting of associated companies, the balance sheets are translated into Singapore dollars at the exchange rates prevailing at the balance sheet date, and the results are translated using the weighted average exchange rates for the financial year. The exchange differences arising on translation of foreign subsidiaries, and the Group’s share of exchange differences arising from the translation of foreign associated companies, are taken directly to the foreign currencies translation reserve. On disposal, these translation differences are recognised in the consolidated income statement as part of the gain or loss on sale.

(d) Revenue recognition (i)

Revenue from the sale of products is recognised upon shipment to customers, net of goods and service tax and sales returns.

(ii)

Revenue from the rendering of services is recognised when the service is rendered.

37

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

2. Significant accounting policies (continued) (d) Revenue recognition (continued) (iii)

Dividend income from investments other than investment in subsidiaries is recorded gross in the income statement in the accounting period in which a dividend is declared payable by the investee companies.

(iv)

Dividend income from subsidiaries is included gross in the income statement of the accounting period in which the dividend is declared. This accounting policy was adopted on 1 January 2001 as a result of revisions to SAS 10 and represents a change to the accounting policy adopted prior to that date. Prior to 1 January 2001, the accounting policy in respect of dividend income from subsidiaries was to include the gross amount of the dividend receivable in the income statement of the accounting period in respect of which the dividend was proposed. The effects of the change in accounting policy are disclosed in Note 2(t).

(v)

Interest income from bank deposits is accrued on a day to day basis.

(vi)

Rental income is recognised on an accruals basis.

(e) Taxation Taxation is determined on the basis of tax effect accounting using the liability method. Deferred taxation is provided on significant timing differences arising from the different treatments in accounting and taxation of relevant items. In accounting for timing differences, deferred tax assets are not recognised unless there is reasonable expectation of their realisation.

(f) Investments Quoted and unquoted investments, including investments in limited partnerships and club memberships that are intended to be held for the long term are stated in the financial statements at cost less provision. Provision is made where there is a decline in value that is other than temporary. Investments held as current assets are stated at the lower of cost and market value on a portfolio basis. Cost is determined based on the weighted average method. Profits or losses on disposal of investments are taken to the income statements.

38

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

2. Significant accounting policies (continued) (g) Subsidiaries and associated companies Investments in subsidiaries and associated companies are stated in the financial statements of the Company at cost except for an investment in equity shares of a subsidiary which is stated at valuation. Surplus arising on revaluation was credited directly to revaluation reserves. The investment in subsidiary carried at valuation was based on a valuation carried out by the directors in 1981. It has not been the practice of the Company to state its investments in other subsidiaries and associated companies at valuation subsequent to that date. Provision is made for any diminution in value that is other than temporary. An associated company is a company, not being a subsidiary, in which the Group has long-term interest and in whose commercial and financial decisions the Group exercises significant influence. Associates are accounted for under the equity method whereby the Group’s share of the results of associated companies is included in the consolidated income statement and the Group’s share of net assets is included in the consolidated balance sheet.

(h) Goodwill Goodwill represents the excess of the fair value of the consideration given over the fair value of the identifiable net assets of the subsidiaries and associated companies acquired. Goodwill is amortised on a straight-line basis, through the consolidated income statement, over its useful economic life of up to a maximum of 20 years. Goodwill which is assessed as having no continuing economic value is written off to the consolidated income statement. This accounting policy was adopted on 1 January 2001 to comply with the revised SAS 22 and represents a change to the accounting policy adopted prior to that date. Prior to 1 January 2001, goodwill was written off in full against reserves in the year of acquisition. As allowed under SAS 22, this policy has not been applied retrospectively.

39

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

2. Significant accounting policies (continued)

(i) Investment properties Investment properties are stated at valuation made each year on an open market value on existing use basis. Investment properties are not subject to depreciation. The net surplus or deficit on revaluation is taken to the asset revaluation reserve account unless the balance of revaluation surplus is insufficient to cover the deficit, in which case the amount by which the deficit exceeds the amount in the asset revaluation reserve account is charged to the consolidated income statement. On disposal of an investment property, the difference between the net disposal proceeds and the carrying amount is charged or credited to the income statement; any amounts in revaluation and other reserves, relating to that investment property is transferred to the consolidated income statement.

(j) Fixed assets Fixed assets are stated at cost except for certain leasehold land and buildings which are included at valuation, with subsequent additions, at cost. An increase in the carrying amount arising from the revaluation is credited to an asset revaluation reserve. The leasehold land and factory building carried at valuation was based on an independent valuation carried out in 1981. It has not been the practice of the Group to state its other fixed assets at valuation subsequent to that date. When the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount.

40

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

2. Significant accounting policies (continued) (k) Depreciation of fixed assets No depreciation is provided on freehold land. Leasehold land and buildings are amortised on a straight line basis over the shorter of the periods of leases or the estimated useful lives of the buildings. Depreciation is calculated on a straight line basis to write off the cost or revalued amount of other fixed assets over their expected useful lives. The estimated useful lives are as follows:Leasehold land, factory and buildings Factory installations, plant and machinery Factory equipment Motor vehicles Furniture, fittings and office equipment Renovation

-

1% - 2% 7.5% - 50% 7.5% - 50% 12.5% - 20% 7.5% - 50% 33 1/3%

Building held for sale Building held for sale refers to the Company’s factory building which was retired from active use in 1996 with the cessation of the Company’s manufacturing operations. No depreciation has been provided for the factory building since 1997. It is stated at the lower of net carrying amount and net realisable value.

(l) Accounting for leases A distinction is made between finance leases which effectively transfer from the lessor to the lessee substantially all the risks and benefits incidental to the ownership of the leased assets, and operating leases under which the lessor effectively retains substantially all such risks and benefits. Finance leases are capitalised at the estimated present value of the underlying lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate of return on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance charge is charged to the income statements over the lease period. Operating lease payments are charged to the income statements on a straight line basis over the period of the lease.

41

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

2. Significant accounting policies (continued) (m) Deferred expenditure Deferred expenditure consists of pre-production, pre-operating and preliminary expenses which are charged to income statement in the financial year they are incurred. This accounting policy was adopted on 1 January 2001 to comply with the revised SAS 34 and represents a change in accounting policy adopted prior to that date. Prior to 1 January 2001, deferred expenditure is accounted for at cost less amortisation calculated on a straight line basis over a five year period. The effects of the change in accounting policy are disclosed in Note 2(t).

(n) Stocks Stocks are stated at the lower of cost and net realisable value. Cost is determined either on a first-in firstout basis or using standard cost appropriately adjusted at balance sheet date. In the case of finished goods and work-in-progress, cost includes materials, direct labour and an appropriate proportion of production overheads.

(o) Provisions Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made.

(p) Employee benefits Employee leave entitlement Employee entitlements to annual leave is recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date. Equity compensation benefits Share options pursuant to the Singatronics Share Option Scheme and Singatronics Limited (2001) Share Option Scheme are granted to directors and to all eligible employees. The Group and the Company do not recognise share options issued under these schemes as a charge to the income statements.

42

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

2. Significant accounting policies (continued) (q) Dividends Dividends on ordinary shares are recognised in equity in the period in which they are declared. This accounting policy was adopted on 1 January 2001 to comply with the revised SAS 10 and represents a change to the accounting policy adopted prior to that date. Prior to 1 January 2001, dividends proposed or declared after the balance sheet date were recognised as liabilities in the financial year in respect of which the dividends were proposed or declared. The effects of the change in accounting policy are disclosed in Note 2(t).

(r) Financial risk management Financial risk factors The Group’s activities expose it to a variety of financial risks, including the effects of changes in debt and equity market prices, foreign currency exchange rates and interest rates. Certain companies in the Group use derivative financial instruments such as interest rate swaps to hedge certain exposures. The Group’s overall risk management is carried out under guidance from the Board of Directors. The Board provides guidance for overall risk management, as well as specific areas, such as foreign exchange risk, interest rate risk, credit risk, liquidity risk and use of derivative financial instruments. (i)

Foreign exchange risk The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures primarily with respect to Malaysian Ringgit, New Zealand Dollar, Australian Dollar and US Dollar. The Company has a number of investments in foreign subsidiaries, whose net assets are exposed to currency translation risk. Net assets of the Group’s subsidiaries in Malaysia, New Zealand and Australia are translated at exchange rates prevailing at balance sheet date for consolidation purposes.

(ii)

Interest rate risk The Group monitors the interest rate on borrowings closely to ensure that the borrowings are maintained at favourable rates. Where necessary, the Group will use derivative financial instruments to hedge the interest rate risks to convert borrowings from variable rates to fixed rates.

(iii)

Credit risk The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history.

(iv)

Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, management aims at maintaining flexibility in funding by keeping committed credit lines available.

43

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

2. Significant accounting policies (continued) (s) Comparatives Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current year. Where applicable, the comparatives have been adjusted or extended to take into account the requirements of the revised or new SAS which the Group implemented in 2001.

(t) Effects of changes to accounting policies The changes to accounting policies set out in Note 2(d)(iv), 2(m) and 2(q) have been accounted for retrospectively and the comparative figures restated to conform with the changed policies. The adjustments made to the comparative figures are as follows: Increased/(decreased) by The Group The Company 2000 2000 $ $ Balance sheets Deferred expenditure Dividends receivable - subsidiaries Provision for proposed dividends Foreign currency translation reserve

(3,194,405 ) (3,666,808 ) 62,189

(3,097,616 ) (3,666,808 ) -

Income statements Profit before tax Taxation Net profit for the financial year attributable to members

(2,735,163 ) (2,735,163 )

(872,200 ) (13,608 ) (858,592 )

Basic earnings per share Diluted earnings per share

(1.12 ) (1.11)

-

Further information on the effects of adopting SAS 10 and SAS 34 is disclosed in the Consolidated Statement of Changes in Equity, Statement of Changes in Equity-Company, Notes 13 and 20.

44

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

3. Revenue The Group

Sale of products Sale of services Sales Dividend income Interest income Other operating income

2001 $

2000 $

21,540,503 40,409,113 61,949,616 212,325 885,383 309,342 63,356,666

39,907,957 33,567,293 73,475,250 105,454 1,324,750 1,279,298 76,184,752

2001 $

The Company 2000 $ -

4,552,700 58,226 122,369 4,733,295

3,833,432 189,374 111,637 4,134,443

4. Net gains/(losses) associated with long-term investments The Group 2001 $ (Provision)/write back for diminution in value of long-term investments Recovery of land deposit in China

2000 $

The Company 2000 $

(274,501 )

(3,055,710 )

22,751

387,463

380,973

387,463

Gains arising on the voluntary liquidation of an associated company

-

Profit guarantee to minority shareholders of a subsidiary (see note 16)

(746,544 ) (9,271 )

Loss on sale of investments

2001 $

(642,853 )

6,953,889

4,279,152

(1,802,324 )

380,973

-

2,822,210

-

(746,544 )

-

-

-

-

(336,330 )

1,400,859

45

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

5. Operating profit/(loss) The Group

The Company 2000 $

2001 $

2000 $

2001 $

102,000

102,000

65,000

60,000

8,440 74,433 3,502,450

5,895 90,584

4,066 90,197

Operating profit/(loss) is stated after: Charging: Auditors’ remuneration - Auditors of the Company - current - under-provision in respect of prior year - Other auditors Bad trade debts written off Depreciation of fixed assets Remuneration of the directors of the Company - Fees - Other emoluments Fees paid/payable to auditors of the Company for non-audit work Deferred expenditure written off Provision for diminution in value of club memberships Provision for diminution in value of short-term investments Provision for doubtful trade debts Stocks written off Rental expense – operating lease And crediting: Bad trade debts recovered Gain on disposal of fixed assets Gain on disposal of short-term investments Rental income Write back of provision for stock obsolescence

46

8,831 99,893 35,974 8,242,331

101,880 580,280

101,520 555,055

96,000 580,280

96,000 555,055

31,497 -

49,443 3,111,338

12,824 -

23,803 -

-

91,000

-

91,000

59,528 81,157 264,762

440,680 4,932 28,481 181,472

-

-

16,130

33,100 1,167

300

-

3,711,303

982,910 3,546,070

-

111,637

-

223,615

-

-

122,069

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

6. Remuneration band of directors of the Company 2001

2000

2 3 5

2 3 5

Number of directors of the Company in remuneration bands: $500,000 and above $250,000 - $499,999 Below $250,000

7. Staff costs The Group 2001 $ Wages and salaries Pension costs – defined contribution plans

2001 $

17,788,746

14,843,599

1,033,263

1,010,624

1,160,080 18,948,826

893,296 15,736,895

91,920 1,125,183

68,906 1,079,530

The Group

Number of employees at 31 December

The Company 2000 $

2000 $

2001 $

2000 $

2001 $

The Company 2000 $

952

1,202

19

19

2000 $

2001 $

The Company 2000 $

8. Finance income The Group 2001 $ Dividend income (gross) - Quoted equities - Subsidiaries - Associated company Interest income - Banks Net foreign exchange gain

212,325

105,454 -

885,383 131,360 1,229,068

-

1,324,750 89,619 1,519,823

4,552,700 58,226 69,320 4,680,246

3,656,200 177,232 189,374 54,909 4,077,715

47

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

9. Finance costs The Group

Interest expenses - Bank facilities

2001 $

2000 $

7,893,867

6,093,746

2001 $

The Company 2000 $ -

-

10. Taxation The Group 2001 $

The Company 2000 $

2000 $

2001 $

1,621,913 60,756 1,682,669

772,772

In respect of current year: Current taxation Deferred taxation

Adjustments in respect of prior years: Current taxation

Associated company

730,174 18,278 748,452

772,772

729,264 1,477,716

(480,610 ) 1,202,059

630,361 1,403,133

21,417 1,499,133

12,036 1,214,095

1,403,133

299,376 299,376

(173,013 ) 126,363 -

126,363

The current taxation charge of the Company for 2001 relates principally to tax deducted at source on Malaysian dividends which cannot be fully offset against taxable income in Singapore. Despite an operating loss, the Group has recorded a current income tax charge mainly due to losses of certain subsidiaries which cannot be used to set-off against the taxable income of other subsidiaries in the Group. As at 31 December 2001, the subsidiaries have tax losses carried forward of approximately $18,843,000 (2000: $21,889,000) available for setting off against future taxable income subject to meeting certain statutory requirements by those subsidiaries in their respective countries of incorporation. Deferred tax benefits arising from tax losses carried forward have not been recognised in the financial statements.

48

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

11. Minority interests

The Group

Balance at 1 January Share of net translation adjustments during the year Share of profit after tax of subsidiaries Profit guarantee in respect of a subsidiary (see Note 16) Dividends Balance at 31 December

2001 $

2000 $

14,014,547 803,479 185,794 1,907,834 (2,589,664 ) 14,321,990

14,509,006 571,468 1,745,989 (2,811,916 ) 14,014,547

12. (Loss)/earnings per share The Group

(Loss)/profit after tax attributable to members of Singatronics Limited

2001 $

2000 $

(8,968,749 )

3,915,292

Number of ordinary shares used in the earnings per share calculation 2001 2000 $ $ Weighted average number of ordinary shares in issue for basic earnings per share calculation Adjustment for assumed conversion of share options Weighted average number of ordinary shares for diluted earnings per share calculation

244,453,881

244,453,881

127,367

577,733

244,581,248

245,031,614

The Group

(Loss)/earnings per share - Basic - Diluted

2001 $

2000 $

(3.67 ) (3.67 )

1.60 1.60

49

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

12. (Loss)/earnings per share (continued) Basic (loss)/earnings per share is calculated by dividing the (loss)/profit after tax attributable to members by the weighted average number of ordinary shares in issue during the financial year. For the purposes of calculating diluted (loss)/earnings per share, the weighted average number of ordinary shares in issue is adjusted to take into account the dilutive effect arising from the exercise of all outstanding share options granted to employees where such shares would be issued at a price lower than the fair value (average share price during the financial year). The difference between the number of shares to be issued at the exercise prices under the options and the number of shares that would have been issued at the fair value based on the assumed proceeds from the issue of these shares are treated as ordinary shares issued for no consideration. The number of such shares issued for no consideration is added to the number of ordinary shares outstanding in the computation of diluted (loss)/earnings per share. No adjustment is made to (loss)/profit after tax attributable to members of Singatronics Limited. As detailed in note 20, the Group changed its accounting policy with respect to deferred expenditure with the adoption of new SAS 34 during the financial year. For comparative purposes, the basic earnings per share and the dilutive earnings per share at 2000, previously reported at 2.72 cents and 2.71 cents, respectively, have been adjusted for the effect of adopting SAS 34.

13. Dividends The Group and The Company 2001 2000 $ $ Final dividend of 1.5 cents per share (tax exempt) in respect of the financial year ended 31 December 2000 (2000: 1 cent per share (tax exempt) in respect of the financial year ended 31 December 1999)

3,666,808

2,444,539

Prior to 1 January 2001, dividends proposed or declared after the balance sheet date were recognised as liabilities in the financial year in respect of which the dividend were proposed or declared. With effect from 1 January 2001, with the adoption of SAS 10 (Revised 2000) dividends proposed or declared after the balance sheet date are not recognised as liabilities at the balance sheet date.

50

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

13. Dividends (continued) Accordingly, the retained earnings at 1 January 2001 and the comparatives have been restated for the proposed final dividend in respect of the financial year ended 31 December 2000 of 1.5 cents per share (tax exempt), amounting to $3,666,808. This amount has been accounted for in the shareholders’ equity as an appropriation of retained earnings in the current financial year.

14. Investments The Group

Quoted investments: - Equity shares at cost Unquoted investments: - Interest in a limited partnership at cost - Equity shares at cost - Convertible preference shares at cost (see details below) - Convertible debt in a company at cost

Less: Provision for diminution in value

Market value of quoted equity shares

2001 $

2000 $

8,783,176

8,801,881

669,395

2001 $

692,146 1,000

3,724,393

The Company 2000 $ -

-

-

692,146 -

-

-

669,395

2,000,000 2,692,146

(669,395 ) -

(2,692,146 ) -

669,395

-

13,176,964

-

2,000,000 11,495,027

(7,040,622 ) 6,136,342

(8,766,121 ) 2,728,906

2,411,949

2,727,906

-

-

Movement in provision for diminution in value of investments is as follows: The Group

Balance at 1 January Provision/(write back) during the year Written off against provision Balance at 31 December

The Company 2000 $

2001 $

2000 $

2001 $

8,766,121

5,716,188

2,692,146

274,501 (2,000,000 ) 7,040,622

3,055,710 (5,777 ) 8,766,121

(22,751 ) (2,000,000 ) 669,395

889,822 1,802,324 2,692,146

51

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

14. Investments (continued) Unquoted investment in convertible preference shares of a company: This investment, when converted, will represent a 26% equity interest in a US-based company principally involved in the development of optical devices for use in high definition televisions. This company is in a start-up phase and has one of its products patented with another in the process of being patented. Accordingly, it is not practicable within constraints of timeliness or cost to determine the fair value of this investment with sufficient reliability.

15. Associated company The Group

Quoted equity warrants at cost Quoted equity shares at cost Dividend receivable Group’s share of post acquisition reserves less losses

Market value of quoted equity shares and warrants

2001 $

2000 $

2001 $

398,772 3,339,133

3,339,133

-

The Company 2000 $

398,772 3,339,133

-

3,339,133 177,232

-

5,964,640 9,702,545

7,115,903 10,455,036

3,737,905

-

3,516,365

8,905,908

11,963,160

8,905,908

11,963,160

Details of the associated company are as follows: Place of operation/ Country of incorporation

Percentage equity held 2001 2000 % %

Principal activity

Associated company (Held by Company) (Quoted) Eastgate Technology Ltd and its subsidiaries

52

Singapore

17.7

17.7

Manufacture and sale of compact discs for audio, video and computer data storage systems

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

16. Subsidiaries

2001 $ Quoted equity shares - at cost - at directors’ valuation Unquoted equity shares - at cost Less: Provision for diminution in value of investment in subsidiaries

Due from subsidiaries (non-trade) Less: Provision for amounts due from subsidiaries

Market value of quoted equity shares

The Company 2000 $

9,573,103 1,552,500 11,125,603

7,333,470 1,552,500 8,885,970

14,767,012 25,892,615

14,767,012 23,652,982

(4,767,000 ) 21,125,615

(4,767,000 ) 18,885,982

88,274,368 109,399,983 (12,662,616 ) 96,737,367

87,696,170 106,582,152 (12,662,616 ) 93,919,536

31,315,410

27,721,440

The amounts due from subsidiaries are unsecured and interest-free. It is not the Company’s intention to call for repayment within the next 12 months. Accordingly, the fair value of these balances cannot be reliably determined.

53

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

16. Subsidiaries (continued) Details of the subsidiaries are as follows: Place of operation/ Country of incorporation

(a) Subsidiary companies (Quoted) (Held by Company) Astral Supreme Berhad * (see Note (ii) below)

Percentage equity held 2001 2000 % %

Principal activities

Malaysia

11,125,603

8,885,970

54

54

Investment holding

Singapore

2

2

100

100

Investment holding

Glopeak Land Pte Ltd

Singapore

3,400,000

3,400,000

100

100

Dormant

Glopeak NZ Hotels Pte Ltd

Singapore

2

2

100

100

Investment holding

Glopeak Properties & Hotels Pte Ltd

Singapore

2

2

100

100

Investment holding

Singapore

2

2

100

100

Investment holding

Singatronics Asset Holdings Pte Ltd

Singapore

10,000,000

10,000,000

100

100

Dormant

Singatronics Investment Pte Ltd

Singapore

2

2

100

100

Investment holding

Singatronics Manufacturing (S) Pte Ltd

Singapore

1,000,000

1,000,000

100

100

Dormant

Singatronics.com Pte Ltd

Singapore

2

2

100

100

Dormant

Solid Micron Materials Pte Ltd

Singapore

367,000

367,000

100

100

Dormant

14,767,012

14,767,012

(b) Subsidiary companies (Unquoted ) (Held by Company) Glopeak Investment Pte Ltd

Pinpeak Investment Pte Ltd

Balance carried forward

54

Cost/valuation of investment held by the Company 2001 2000 $ $

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

16. Subsidiaries (continued) Place of operation/ Country of incorporation

Balance brought forward

Cost/valuation of investment held by the Company 2001 2000 $ $

Percentage equity held 2001 2000 % %

Principal activities

14,767,012

14,767,012

Australia

-

-

100

100

Investment holding of hotel

Jamison Pte Ltd

Singapore

-

-

100

100

Investment holding

Singa Hotels and Properties Pty Ltd *

Australia

-

-

100

100

Investment holding of hotel

Astral-GMO Sdn Bhd

Malaysia

-

-

54

-

The Company has not commenced operations as at 31 December 2001

Singatronics (Malaysia) Sdn Bhd*

Malaysia

-

-

54

54

Contract manufacture of electronic and electrical consumer and industrial products

St. Leonards Hotel & Conference Centre Pty Ltd *

Australia

-

-

70

70

Provision of trustee services

Townsville Hotel Pty Ltd *

Australia

-

-

70

70

Investment holding of hotel

14,767,012

14,767,012

(b) Subsidiary companies (Unquoted) (Held by subsidiaries) Glopeak Australia Pty Ltd *

55

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

16. Subsidiaries (continued)

Place of operation/ Country of incorporation

Cost/valuation of investment held by the Company 2001 2000 $ $

Percentage equity held 2001 2000 % %

Principal activities

(c) Unquoted unit trust (Held by a subsidiary) Glenview Unit Trust *

Australia

-

-

70

70

Investment holding of property

Notes: (i)

All the entities in the Group are audited by PricewaterhouseCoopers, Singapore, except otherwise indicated: * Audited by PricewaterhouseCoopers firms outside Singapore.

(ii) Of the 24.3 million shares held by the Company in Astral Supreme Berhad (“Astral”) as at 31 December 2001, 4.5 million shares (2000 : 4.5 million shares) have been deposited with an appointed nominee stakeholder in accordance with the terms of a Profit Guarantee Agreement in 1999. This agreement was entered into by the Company and two other substantial shareholders of Astral in connection with the listing of Astral on the Second Board of the Kuala Lumpur Stock Exchange on 10 February 1999, whereby the Company and these substantial shareholders guarantee certain levels of pretax profits in Astral to other shareholders for each of the three years to 31 December 2001. During the financial year, the guarantee was called upon as the pretax profit of Astral fell short of the guaranteed profit. The Company’s share of the shortfall was accrued for as at 31 December 2001. The portion of the Company’s share benefitting the minority shareholders of Astral had been written off to the income statements. The remaining portion had been accounted for as additional equity injection into Astral.

56

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

17. Investment property The Group 2001 $

2000 $

Cost Exchange differences

38,893,110 (5,956,602 ) 32,936,508

38,893,110 (5,255,826 ) 33,637,284

Surplus on revaluation taken to revaluation reserves

2,454,492 35,391,000

5,242,716 38,880,000

Details of the investment property are as follows: Property

Tenure

The Parkroyal, 562 St Kilda Road Melbourne, Australia

Freehold

Land area (sq. m.) 2,323

Description

Nine-storey hotel with 220 guest rooms and food and beverage outlets, as well as a two-level basement carpark for 134 car spaces.

The investment property was valued by the directors on an open market basis and is subject to a first registered mortgage for a bank loan of $22.1 million (2000 : $24.0 million).

57

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

18. Fixed assets

The Group

Leasehold land $

Freehold land $

Factory and other leasehold buildings $

55,200 55,200 3,600

31,892,311 31,892,311 (586,923 )

16,639,179 1,232,800 17,871,979 13,926 177,278

-

-

-

135,016,738 388,684 (41,772,766 ) (2,215,360 )

9,628,866 289,368 26,084,624 (113,406 ) 916,344

830,776 4,508 (2,640 ) 54,181

-

(15,153,723 ) 2,909,460

91,417,296

Cost or valuation At 1 January 2001 Cost Valuation

Additions Reclassifications Disposals Exchange adjustments Reclassified to Building held for sale At 31 December 2001 58,800 Representing: Cost Valuation

58,800 58,800

31,305,388

31,305,388

Motor vehicles $

9,628,866

830,776

1,327,797

-

36,805,796

197,405,401 1,288,000 198,693,401 774,409 (403,247 ) (1,575,764 )

140,091

(15,153,723 ) 182,335,076

-

140,091 140,091

180,963,076 1,372,000 182,335,076

1,343,079 2,341,872 (14,670 ) 364,438 29,014

10,960 46,699 715

16,632,333 8,242,331 (378,633 ) 942,333

-

(2,097,347 ) 23,341,017

-

(261,500 ) 23,037

1,938,220 77,923 15,688,142 (25,701 ) 43,502

1,327,797

1,089,334

17,722,086

-

2,708,298 58,006 39,845

4,642,459 2,430,129

-

(2,097,347 ) 708,802

6,282,007

11,030,455

682,454

503,574

4,063,733

58,374

91,417,296

886,825

131,514 131,514 8,577

1,938,220

91,417,296

31,305,388

36,805,796

Total $

-

886,825

Renovation $

36,805,796

(755,860 ) (34,721 )

886,825

6,765,925 3,106,111 (99,913 ) 391,422 866,910

-

1,089,334 1,089,334

551,361 97,685 (2,550 ) 35,958

-

17,722,086 17,722,086

599,902 161,235 (261,500 ) 3,937

-

-

Net book value At 31 December 2001

47,182

31,305,388

2,200,658

85,135,289

25,775,341

204,371

585,760

13,658,353

81,717

158,994,059

Net book value At 31 December 2000

44,851

31,892,311

15,163,681

130,374,279

2,862,941

279,415

727,895

595,141

120,554

182,061,068

The Company

Cost At 1 January 2001 Additions Disposals Reclassified to Building held for sale At 31 December 2001 Accumulated depreciation At 1 January 2001 Depreciation charge Disposals Reclassified to Building held for sale At 31 December 2001 Net book value At 31 December 2001 Net book value At 31 December 2000

58

135,016,738

Factory equipment $

Furniture, fittings and office equipment $

1,596,260 1,313,200 2,909,460

-

Accumulated depreciation At 1 January 2001 10,349 Depreciation charge 594 Disposal Reclassifications Exchange adjustments 675 Reclassified to Building held for sale At 31 December 2001 11,618

Freehold buildings $

Factory installations, plant and machinery $

Factory building $

15,153,723

Motor vehicles $

Furniture, fittings and office equipment $

Total $

-

931,611 (261,500 )

690,582 983 -

16,775,916 983 (261,500 )

(15,153,723 ) -

670,111

691,565

(15,153,723 ) 1,361,676

2,097,347 -

496,589 83,765 (261,500 )

665,401 6,819 -

3,259,337 90,584 (261,500 )

(2,097,347 ) -

318,854

672,220

(2,097,347 ) 991,074

-

351,257

19,345

370,602

13,056,376

435,022

25,181

13,516,579

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

19. Building held for sale The Company’s factory building was retired from active use in late 1996 with the cessation of the Company’s manufacturing operations and is stated at the lower of net carrying amount and net realisable value. No depreciation has been provided for the factory building since 1 January 1997. The book carrying amount of the building has been reclassified from fixed assets to better reflect the intention of the Company. The directors are confident that the net realisable value as at 31 December 2001 will exceed the book carrying amount of $13,056,376, comprising cost of $15,153,723 and accumulated depreciation of $2,097,347.

20. Deferred expenditure The Group 2001 $ Balance at 1 January, net of accumulated amortisation - as previously stated - effect of adopting SAS 34 As restated Additions Written off during the year

2000 $

-

521,431 (521,431 ) 3,090,097 (3,090,097 ) -

21. Stocks The Group

At cost Work-in-progress Raw materials Finished goods Less: Provision for stock obsolescence

2001 $

2000 $

7,249 960,552 294,990 1,262,791 1,262,791

86,540 1,069,607 385,675 1,541,822 1,541,822

Movements in provision for stock obsolescence is as follows : Balance at 1 January Exchange adjustment Write back during the year Written off against provision Balance at 31 December

-

224,091 10,186 234,277 (223,615 ) (10,662 ) -

59

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

22. Trade debtors The Group

Trade debtors Less : Provision for doubtful trade debts

2001 $

2000 $

2,305,214 (89,606 ) 2,215,608

4,491,275 (35,382 ) 4,455,893

35,382 (168 ) 35,214 59,528 (5,136 ) 89,606

37,602 (1,222 ) 36,380 4,932 (5,930 ) 35,382

Movements in provision for doubtful trade debts are as follows: Balance at 1 January Exchange adjustment Provision during the year Written off against provision Balance at 31 December

23. Short-term investments The Group

Quoted investments - Equity shares at cost Less: Provision for diminution in value

Market value of quoted equity shares

2001 $

2000 $

2,823,668 (1,130,920 ) 1,692,748

2,650,790 (1,061,680 ) 1,589,110

1,694,028

1,589,470

1,061,680 69,240 1,130,920 1,130,920

594,000 27,000 621,000 440,680 1,061,680

Movements in provision for diminution in value of investments are as follows : Balance at 1 January Exchange adjustment Provision during the year Balance at 31 December

60

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

24. Other current assets The Group

Sundry debtors Deposits Prepayments Dividend receivable

2001 $

2000 $

3,282,812 106,999 525,828

842,626 111,763 448,729 161,000 1,564,118

3,915,639

2001 $

The Company 2000 $

252,950 61,000 9,940 323,890

169,426 61,000 9,294 161,000 400,720

Included in deposits is an amount of $61,000 (2000: $61,000) relating to entrance fees for transferable club membership. The amount is stated net of provision as follows: The Group and The Company 2001 2000 $ $ Balance at 1 January Provision during the year Balance at 31 December

179,000

88,000 91,000 179,000

179,000

25. Cash and cash equivalents Cash and cash equivalents consist of cash on hand and balances with banks less bank overdrafts. Cash and cash equivalents included in the consolidated cash flow statement comprise the following balance sheet amounts: The Group 2001 $ Fixed deposits Bank and cash balances

17,066,700 6,649,234 23,715,934

2000 $ 27,190,266 6,368,434 33,558,700

61

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

26. Other current liabilities The Group

Other creditors Accrued operating expenses Deposits received

2001 $

2000 $

933,368 4,543,855

777,226 4,493,057 61,091 5,331,374

5,477,223

2001 $

The Company 2000 $ -

402,105 402,105

230,683 230,683

27. Long-term bank loans (secured) (a)

The Group 2001 $ Due within one year Due between 2 and 5 years

13,374,550 98,342,800 111,717,350

2000 $ 11,194,600 105,427,200 116,621,800

Long-term bank loans comprise the following : (i) Commercial bills acceptance/discount facility of $22.1 million (2000 : $24.0 million) denominated in Australian dollar, secured by a first registered mortgage over the Parkroyal, an investment property in Melbourne, Australia as well as the debenture and assets of a subsidiary. The loan is repayable over 5 years commencing July 1998 by half-yearly instalments of A$500,000 (S$470,000) for the first and second years, A$750,000 (S$705,000) for the third and fourth years and A$1,000,000 (S$940,000) for the fifth year. (ii) Commercial bill facility of $6.4 million (2000 : $6.7 million), denominated in Australian dollar, secured by a first registered mortgage over the property and fixed assets of a subsidiary. The facility was renewed in August 2001 for 3 years till 31 July 2004. (iii) Term loan of $9.1 million (2000 : $9.8 million), denominated in New Zealand dollar, secured on a first registered mortgage over buildings situated on freehold land of a subsidiary. The loan was drawndown on 26 November 1996 and is repayable by monthly instalments of NZ$85,000 (S$65,450).

62

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

27. Long-term bank loans (secured) (continued) (iv) Commercial bill facility of $4.5 million (2000 : $5.1 million), denominated in Australian dollar, secured by a first registered mortgage over property situated at Woolcock Street, Townsville and first registered mortgage debenture over the assets and undertakings of a subsidiary. The facility was drawndown on 7 September 1998 and renewed in August 2001 for 3 years till 31 July 2004. (v) Term loan of $69.6 million (2000 : $71.0 million), denominated in Australian dollar, secured by a first registered mortgage over the freehold building in Sydney, Australia of a subsidiary. The loan was drawndown on 1 August 2000 and is repayable in 4 years by way of semi-annual instalments of A$1,500,000 (S$1,410,000) commencing 1 February 2002 and followed by a bullet repayment at the end of the fourth year. (vi) Interest rates for the above bank facilities range between 4.40% and 8.66% per annum (2000 : 5.8% and 8.1% per annum). (b) Effective interest rates The weighted average effective interest rates for the long-term bank loans (secured) at the balance sheet date was 6.9% (2000: 5.4%). (c) Carrying amount and fair values The fair value of the long-term bank loans (secured) as at 31 December 2001 was $111,811,000 (2000: $117,462,000 ). The fair values are based on discounted cash flows using a discount rate based upon the borrowing rate which the directors expect would be available to the Group at the balance sheet date.

28. Long-term loans (unsecured) The long-term loans are amounts due to minority shareholders of subsidiaries for their portion of funding of the respective subsidiaries. The amounts are unsecured, interest-free and have no fixed terms of repayment. Accordingly, the fair value of these loans cannot be reliably determined.

63

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

29. Deferred taxation The Group 2001 $ Balance at 1 January Exchange adjustment Transfer from asset revaluation reserve Provision during the year Balance at 31 December

2000 $

228,683 (4,764 ) 223,919 940,000 18,278 1,182,197

190,667 (22,740 ) 167,927 60,756 228,683

Composition of deferred taxation Provision for deferred tax comprises the estimated tax expense at current tax rates on the following items: The Group 2001 $ Difference in depreciation of fixed assets for accounting and income tax purposes Expenditure currently deductible for tax but deferred and amortised for accounting purposes

2000 $

1,228,484

151,403

(46,287 ) 1,182,197

77,280 228,683

30. Share capital The Group and The Company 2001 2000 $ $ Authorised: 500,000,000 ordinary shares of $0.20 each

100,000,000

100,000,000

Issued and fully paid: 244,453,881 ordinary shares of $0.20 each

48,890,776

48,890,776

Share options are granted to directors and employees. During the financial year, no shares of the Company were allotted and issued by virtue of the exercise of options to take up unissued shares of the Company. As at 31 December 2001, the total number of options granted under the Singatronics Share Option Scheme which remained outstanding was 545,000 (2000: 709,000). These options have exercise prices ranging from S$0.22 to S$0.47. The dates of expiry of these options are between 23 October 2002 and 16 September 2004. As at 31 December 2001, the total number of options granted under the Singatronics Limited (2001) Share Option Scheme which remained outstanding was 3,655,000 (2000 : Nil). These options have exercise prices ranging from $0.2491 to $0.2930. The dates of expiry of these options are between 4 July 2006 and 4 July 2011.

64

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

31. Asset revaluation reserve Asset revaluation reserve comprises surplus on revaluation of investment properties. The Group

Balance at 1 January Exchange differences

Transfer to deferred taxation Deficit on revaluation of investment properties Balance at 31 December

2001 $

2000 $

5,242,716 (109,224 ) 5,133,492

5,952,667 (709,951 ) 5,242,716

(940,000 ) (2,679,000 ) 1,514,492

5,242,716

32. Foreign currency translation reserve The Group 2001 $

2000 $

Balance at 1 January - as previously reported - effect of adopting SAS 34 - as restated

(16,758,905 ) 62,189 (16,696,716 )

(6,167,035 ) (6,167,035 )

Net translation adjustments (comparative restated for the effect of adopting SAS 34) Balance at 31 December

(413,594 ) (17,110,310 )

(10,529,681 ) (16,696,716 )

33. Lease commitments Commitments in relation to non-cancellable operating leases contracted for at the reporting date but not recognised as liabilities are as follows:The Group

Less than one financial year Later than one financial year but not later than five financial years More than five financial years

2001 $

The Company 2000 $

2001 $

2000 $

364,827

439,129

346,800

396,951

1,391,982 14,132,100 15,888,909

1,607,817 16,576,366 18,623,312

1,387,200 14,132,100 15,866,100

1,587,805 16,572,703 18,557,459

65

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

33. Lease commitments (continued) The Company’s building is situated on leasehold land under an agreement with the Jurong Town Corporation. The lease is for a term of 60 years commencing 1 October 1987. The annual rental payable of $346,800 (2000 : $396,951) is subject to annual revision.

34. Contingent liabilities A subsidiary in the Group has given a Guarantee and Indemnity for A$2.5 million (S$2.35 million ) (2000: S$2.40 million) to a bank in favour of another subsidiary in respect of a bank loan obtained for the construction of a hotel in Sydney. The Guarantee and Indemnity is secured against the assets of the former subsidiary.

35. Financial instruments Interest rate swaps A subsidiary in the Group has entered into interest rate swap contracts that entitle it to receive interest at floating rates on notional principal amounts and oblige it to pay interest at fixed rates on the same amounts. The interest rate swaps allow the Company to raise long-term borrowings at floating rates and swap them into fixed rates that are lower than those available if it borrowed at fixed rates directly. Under the interest rate swaps, the Company agrees with other parties to exchange, at specified intervals (half-yearly), the difference between fixed rate and floating rate interest amounts calculated by reference to the agreed notional principal amounts. At 31 December 2001, the fixed interest rate is 6.01% (2000 : 6.01%) and the floating rate is 4.34% (2000: 6.61%). The remaining terms and notional principal amounts of the outstanding interest rate swap contracts at 31 December were: 2001 $ Less than one year One to five years Five to ten years

69,560,000 69,560,000

66

2000 $ 71,040,000 71,040,000

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

35. Financial instruments (continued) Fair values The fair values of the subsidiary’s interest rate swap contracts at the balance sheet date were: 2001 $ Unfavourable interest rate swap contracts

764,040

2000 $ 86,442

The fair values of interest rate swaps have been calculated (using rates quoted by the Group’s bankers) assuming the contracts were to mature at the balance sheet date. The fair values of long-term quoted investments, short-term investments and long-term loans (secured) are disclosed in notes 14, 23 and 27 respectively. The fair values of long-term unquoted investments and long-term loans (unsecured) are not disclosed as it is not practicable within constraints of timeliness or cost to determine their fair values with sufficient reliability. Further details of these long-term unquoted investments and long-term loans (unsecured) are set out in notes 14 and 28 respectively. The carrying amounts of the following financial assets and financial liabilities approximate their fair values: trade debtors and creditors, other current assets and liabilities, fixed deposits and bank and cash balances.

67

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

36. Segment information (a) Primary reporting format – business segments

2001

Contract Manufacturing $

Sales

21,540,503

40,409,113

-

287,446

3,059,611

(3,013,466 )

Operating profit Finance income Finance costs Share of results of associated company Loss before tax Tax Loss after tax Minority interests Net loss Segment assets Associated company Consolidated total assets

68

Property development and leasing and hotel operations $

Investment holding and others $

Group $ 61,949,616 333,591 1,229,068 (7,893,867 ) (952,614 ) (7,283,822 ) (1,499,133 ) (8,782,955 ) (185,794 ) (8,968,749 )

29,162,950

200,910,685

16,306,862

246,380,497 9,702,545 256,083,042

Segment liabilities Consolidated total liabilities

903,813

121,024,269

1,166,607

123,094,689 123,094,689

Capital expenditure Depreciation

85,365 508,103

688,061 7,643,644

983 90,584

774,409 8,242,331

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

36. Segment information (continued) (a) Primary reporting format – business segments (continued) Property development and leasing and hotel operations $

2000

Contract Manufacturing $

Sales

39,907,957

33,567,293

4,024,091

5,074,478

Operating profit Finance income Finance costs Share of results of associated company Profit before tax Tax Profit after tax Minority interests Net profit Segment assets Associated company Consolidated total assets Segment liabilities Consolidated total liabilities Capital expenditure Depreciation

Investment holding and others $ 1,728,575

Group $ 73,475,250 10,827,144 1,519,823 (6,093,746 ) 622,155 6,875,376 (1,214,095 ) 5,661,281 (1,745,989 ) 3,915,292

31,891,895

211,989,861

22,497,861

266,379,617 10,455,036 276,834,653

1,637,516

124,784,731

954,121

127,376,368 127,376,368

696,317 472,847

24,062,466 2,939,406

9,833 90,197

24,768,616 3,502,450

The Group is organised into three main business segments. • Contract manufacture of electronic and electrical consumer and industrial products. • Property development and leasing and hotel operations. • Investment holding and others.

69

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

36. Segment information (continued) (a) Primary reporting format – business segments (continued) There are no sales or other transactions between the business segments. Segment assets consist primarily of fixed assets, investment property, building held for sale, non-current investments, current assets and exclude associated company. Segment liabilities comprise current liabilities, long-term loans and deferred taxation. Capital expenditure comprises additions to fixed assets.

(b) Secondary reporting format – geographical segments The Group’s three business segments operate in three main geographical areas. Singapore – home country of the Company which is an investment holding company. Malaysia – the main activities are contract manufacture of electronic and electrical consumer and industrial products. Australia and New Zealand – the main activities are property development and leasing and hotel operations. Sales

Singapore Malaysia Australia and New Zealand

Total assets

Capital expenditure 2001 2000 $ $

2001 $

2000 $

2001 $

2000 $

21,540,503

39,907,957

26,009,407 29,162,950

32,952,897 31,891,895

983 85,365

9,833 696,317

40,409,113 61,949,616

33,567,293 73,475,250

200,910,685 256,083,042

211,989,861 276,834,653

688,061 774,409

24,062,466 24,768,616

Sales revenue is based on the country in which the customer is located. It would not be materially different if based on the country in which the order is received. Total assets and capital expenditure are shown by the geographical area in which the assets are located.

70

N o t e s To T h e F i n a n c i a l S t a t e m e n t s For The Financial Year Ended 31 December 2001

37. Subsequent event On 24 December 2001, a subsidiary entered into an agreement to dispose of its investment property known as Parkroyal on St. Kilda Road, located at 562 St. Kilda Road, Melbourne, Australia for a cash consideration of A$37,650,000 (S$35,391,000). The disposal was completed on 26 March 2002.

38. Authorisation of financial statements These financial statements were authorised for issue in accordance with a resolution of the directors on 28 March 2002.

71

Shareholding Statistics As At 15 April 2002

Authorised share capital Issued and fully paid-up capital Class of shares Voting rights

Size of Holding of Shares 1-1,000 1,001-10,000 10,001-1,000,000 1,000,001- and above Total

-

500,000,000 shares of S$0.20 each 244,453,881 shares of S$0.20 each Ordinary shares of S$0.20 each One vote per share

No. of Shareholders

% of Shareholders

1,470 5,680 1,216 16 8,382

17.53 67.77 14.51 0.19 100.00

No. of Shares

% of Shares

1,444,485 28,145,115 42,317,552 172,546,729 244,453,881

0.59 11.51 17.31 70.59 100.00

Total no. of shares

% of shares

118,717,729

48.56

Substantial Shareholder No. of shares Direct Interest Deemed Interest Eddie FOO Chik Kin

21,100,000

97,617,729

Twenty Largest Shareholders

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Megabyte Investment Pte Ltd Oversea-Chinese Bank Nominees Pte Ltd KB Nominees Pte Ltd RHB Bank Nominees Pte Ltd BEF Investment Pte Ltd United Overseas Bank Nominees Pte Ltd DBS Nominees Pte Ltd Citibank Nominees S'pore Pte Ltd Eddie FOO Chik Kin Overseas Union Bank Nominees Pte Ltd UOB Kay Hian Pte Ltd Raffles Nominees Pte Ltd Kim Eng Ong Asia Securities Pte Ltd Citibank Consumer Nominees Pte Ltd CHAN Kai Onn LEOW Siew Beng HOO Len Yuh OCBC Securities Pte Ltd Hong Leong Finance Nominees Pte Ltd Philip Securities Pte Ltd Total

72

No. of shares

% of Shares

26,117,729 24,961,000 24,194,000 20,500,000 19,000,000 17,776,000 16,312,500 4,858,000 4,100,000 4,041,000 3,038,500 2,079,000 1,695,000 1,394,000 1,250,000 1,230,000 952,000 782,500 576,000 500,000

10.68 10.21 9.90 8.39 7.77 7.27 6.67 1.99 1.68 1.65 1.24 0.85 0.69 0.57 0.51 0.50 0.39 0.32 0.24 0.21

175,357,229

71.73

Notice Of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Twenty-Third Annual General Meeting of the Company will be held at Mandarin Court A, 4th Floor, Main Tower, Mandarin Singapore, 333 Orchard Road, Singapore 238867 on Thursday, 30 May 2002 at 11.00 a.m. to transact the following business:-

As Ordinary Business 1. To receive and adopt the Directors’ Report and Audited Financial Statements for the financial year ended 31 December 2001. (Resolution 1) 2. To re-elect the following Directors, who will retire pursuant to Article 99 of the Articles of Association of the Company and who, being eligible, will offer themselves for re-election: •

Mr Leow Siew Beng Mr Leow Siew Beng will, upon re-election as Director, remain as a member of the Audit Committee and will be considered non-independent pursuant to Clause 902(4)(a) of the Listing Manual of the Singapore Exchange Limited. (Resolution 2)



Dr Wong Kwei Cheong Dr Wong Kwei Cheong will, upon re-election as Director, remain as a member and Chairman of the Audit Committee and will be considered independent pursuant to Clause 902(4)(a) of the Listing Manual of the Singapore Exchange Limited. (Resolution 3)

3. To approve proposed Directors’ fees of S$96,000 for the financial year ending 31 December 2002. (Resolution 4) 4. To re-appoint Messrs PricewaterhouseCoopers as Auditors and to authorise the Directors to fix their remuneration. (Resolution 5) 5. To transact any other business that may be transacted at an Annual General Meeting.

As Special Business 6. To consider and, if thought fit, to pass with or without modifications, the following resolutions as Ordinary Resolutions:(a) That pursuant to Section 161 of the Companies Act, Cap. 50 and subject to the prevailing listing rules of the Singapore Exchange Limited, approval be and is hereby given to the Directors to issue shares in the Company at any time, upon such terms and conditions, for such purposes and to such persons as the Directors may in their absolute discretion deem fit, provided that the aggregate number of shares to be issued pursuant to this Resolution does not exceed fifty per cent (50%) of the issued share capital of the Company for the time being, of which the aggregate number of shares issued other than on a pro rata basis to existing shareholders shall not exceed twenty per cent (20%) of the Company’s issued share capital for the time being and that such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company. (Resolution 6)

73

Notice Of Annual General Meeting

(b) That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors be and are hereby authorised to issue such shares as may be required to be issued pursuant to the exercise of options which were granted under the terms and conditions of the Singatronics Share Option Scheme (the “Scheme”) provided always that the aggregate number of shares to be issued pursuant to the Scheme shall not exceed five per cent (5%) of the issued share capital of the Company from time to time. (Resolution 7) (c) That authority be and is hereby given to the Directors to offer and grant options in accordance with the provisions of the Singatronics Limited (2001) Share Option Scheme (the “2001 Scheme”) and pursuant to Section 161 of the Companies Act, Cap. 50 to allot and issue from time to time such number of shares as may be required to be issued pursuant to the exercise of the options granted under the 2001 Scheme provided always that the aggregate number of shares to be issued pursuant to the 2001 Scheme shall not exceed fifteen per cent (15%) of the issued share capital of the Company from time to time. (Resolution 8) By Order of the Board

Lee Seng Hua Company Secretary Singapore 13 May 2002

NOTES 1. A Member entitled to attend and vote at the Annual General Meeting is entitled to appoint one or more proxies to attend and vote in his/her stead. Such proxy need not be a Member of the Company and where there are two or more proxies, the number of shares to be represented by each proxy must be stated. 2. The instrument or form appointing a proxy, duly executed, must be deposited at the Company’s registered office at 506 Chai Chee Lane, Singapore 469026, not less than 48 hours before the time for holding the above Annual General Meeting.

EXPLANATORY NOTES ON SPECIAL BUSINESS TO BE TRANSACTED 1. Ordinary Resolution 6 is to empower the Directors to issue shares in the Company of up to an amount not exceeding in total 50% of the issued share capital of the Company for the time being and for such purposes as they consider would be in the interests of the Company. For issues of shares other than on a pro rata basis to all shareholders, the aggregate number of shares to be issued shall not exceed 20% of the existing issued share capital of the Company. This authority will expire at the next Annual General Meeting, unless previously revoked or varied at a general meeting. 2. Ordinary Resolution 7 is to empower the Directors to issue shares pursuant to the exercise of share options under the Singatronics Share Option Scheme. The Scheme expired on 31 December 1999 but options granted under the Scheme are still valid for subscription of shares in the Company up to 5 years from the respective dates of grant. 3. Ordinary Resolution 8 will empower the Directors of the Company from the date of the above meeting until the next Annual General Meeting to issue shares in the Company up to an amount not exceeding in total 15% of the issued share capital of the Company for the time being pursuant to the exercise of the options under the 2001 Scheme. This authority will continue to be in force until the next Annual General Meeting of the Company, unless previously revoked or varied at a general meeting. 74

Proxy Form

IMPORTANT: 1. For Investors who have used their CPF moneys to buy shares of Singatronics Limited, the Annual Report 2001 is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. 2.

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

3.

CPF Investors who wish to vote should contact their CPF Approved Nominees.

I/We, of being a member/members of the abovenamed Company, hereby appoint

Name (a) or, failing him/her (b) and/or (delete as appropriate) (c)

Address

(Name) (Address)

NRIC/ Passport No.

Proportion of Shareholdings (%)

as my/our proxy/proxies to attend and to vote for me/us and on my/our behalf and, if necessary, to demand a poll, at the Annual General Meeting of the Company to be held at Mandarin Court A, 4th Floor, Main Tower, Mandarin Singapore, 333 Orchard Road, Singapore 238867 on Thursday, 30 May 2002 at 11.00 a.m. and at any adjournment thereof. (Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the Resolutions to be proposed at the Meeting as indicated hereunder. In the absence of specific directions, the proxy/proxies will vote or abstain from voting at his/their discretion.) No. 1 2 3 4 5 6 7 8

Resolutions relating to: Adoption of Directors’ Report and Financial Statements Re-election of Mr Leow Siew Beng as Director Re-election of Dr Wong Kwei Cheong as Director Approval of Directors’ fees Re-appointment of PricewaterhouseCoopers as Auditors Authority for Directors to issue shares pursuant to Section 161 of the Companies Act, Cap.50 Authority for Directors to issue shares under the Scheme Authority for Directors to offer and grant options and issue shares pursuant to the 2001 Scheme

Dated this

day of

Total number of shares in: a) CDP Register b) Register of Members

For

Against

2002 No. of Shares

Signature of Individual Shareholder or Common Seal of Corporate Shareholder

Notes: 1.

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

2.

This Proxy Form must be signed by the appointor or his/her duly authorised attorney or, if the appointor is a body corporate, signed by a duly authorised officer or his attorney and affixed with its common seal thereto.

3.

This instrument appointing a proxy [together with the power of attorney (if any) under which it is signed or a certified copy thereof], must be deposited at the registered office of the Company at 506 Chai Chee Lane, Singapore 469026 not less than 48 hours before the time fixed for holding the Annual General Meeting.

4.

Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in Register of Members, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

5.

The Company shall be entitled to reject this instrument of proxy if it is incomplete, not properly completed or illegible or where the true intention of the appointor are not ascertainable from the instructions of the appointor specified in this instrument of proxy. In addition, in case of members whose Shares are deposited with The Central Depository (Pte) Limited (“CDP”), the Company may reject any instrument of proxy lodged if such member is not shown to have Shares entered against his name in the Depository Register 48 hours before the time fixed for holding the Annual General Meeting as certified by CDP to the Company. fold along this line (1)

Please affix postage stamp

The Company Secretary Singatronics Limited 506 Chai Chee Lane Singapore 469026

fold along this line (2)