always innovating

ALWAYS INNOVATINGAnnual Report 2005

01 Corporate Profi le

02 Chairman’s and Group MD’s Joint Statement

06 AEM-Evertech Business and Market Presence

10 Board of Directors

12 Management Team

14 Corporate Information

15 Financial Highlights

17 Business Review

20 Corporate Structure

21 Corporate Governance

27 Financial Statements

71 Statistics of Shareholdings

72 Notice of Annual General Meeting

75 Proxy Form

CONTENTS

AEM-Evertech Annual Report 2005 | 1

CORPORATE PROFILE

VisionTo be among the World’s Top 3 companies supplying assembly & packaging equipment, materials and services for the global microelectronics industry through our innovative people.

MissionTo be recognised as a global company and innovator in the microelectronic industry by building trust, technical excellence and value chain, and to progressively exceed customer satisfaction and shareholders’ expectations.

Listed on the Singapore Exchange, AEM-Evertech Holdings was established in 2000 following the merger of AEM-Tech International Pte Ltd (established in 1996) and Ever Technologies Pte Ltd (established in 1992). AEM-Evertech acquired and established Microcircuit Technology(2002) Pte Ltd in 2002, the only plant in Singapore producing organic Ball Grid Array and Chipscale Packages (BGA/CSP) substrates for the semiconductor industry.

AEM-Evertech is in the core business of design and manufacturing of equipment, precision engineering products, chemicals and organic substrates as well as providing engineering materials and services to the microelectronics industry. With a growing sales revenue of more than US$100 million and a worldwide workforce of 1300, AEM-Evertech has 7 manufacturing plants in Singapore, Malaysia and China with a market presence in 20 countries spanning Asia, Europe and United States.

Core Values

• Commitment

• Customer Focus

• Teamwork

• Innovation

• Partnership

• Employee Focus

CHAIRMAN’S AND GROUP MD’S JOINT STATEMENT

Operating profi t for

substrates registered an

even more signifi cant

increase of 230.5% from

$1.8 million in 2004 to

$6.0 million in 2005.

This is the result of our

corporate strategy to

expand into materials

and services to reduce

our exposure to the

volatile equipment

business. The objective

of broadening the

Group’s revenue base

has been successfully

achieved.

On behalf of the Board, we are pleased to present to you the Group’s annual report for the fi nancial year ended 31 December 2005.

The Year in ReviewThe year started on a sombre note in the wake of the Asian tsunami in December 2004. Despite other natural disasters and uncertainties fueled by factors such as record energy prices, FY2005 turned out to be a good year for the semiconductor industry. Worldwide sales of semiconductors grew by 6.8% to reach US$227.5 billion.

For the period under review, Group revenue for AEM-Evertech registered a marginal decline from $174.6 million in FY2004 to $174.2 million in FY2005. Net profi t for the full year was $10.2 million in FY2005 compared with $13.1 million in FY2004.

The steady performance in 2005 includes highlights such as an important milestone in the history of the company. For the fi rst time, non-equipment revenue, comprising the materials and services industries, accounted for 66.3% of total revenue, overtaking equipment as the dominant contributor. In 2004, the non-equipment portion accounted for only 48.4% of group revenue.

2 | AEM-Evertech Annual Report 2005


By far the largest increase from non-equipment came from the substrates division, which contributed 31.9% to group revenue compared with 17.6% in FY2004. Operating profi t registered an even more signifi cant increase of 230.5% from $1.8 million in FY2004 to $6.0 million in FY2005. This strong performance from the substrates division was the result of strong order fl ows, doubled production output and higher capacity utilisation.

The overall fi nancial performance in 2005 refl ects the Group’s evenly-distributed solid fundamentals in both the equipment and non-equipment business. This is the result of our corporate strategy over the last few years to expand into materials and services to reduce our exposure to the volatile equipment business and the cyclical nature of the semiconductor industry. The objective of broadening the Group’s revenue base has been successfully achieved.

Corporate developmentMicrocircuit Technology (2002) Pte Ltd (MCT2002)

MCT2002 is the only semiconductor organic substrate plant in Singapore. In the year under review, the Group pumped in an additional $16.9 million of capital expenditure into new machinery to double the production capacity of MCT2002. In line with the expansion, MCT2002 shifted to a new location at Tuas with a total area of 12,200 sq m. An offi cial opening ceremony for MCT2002 is scheduled for the second quarter of 2006.

Singapore’s electronics industry, which the semiconductor sector is a major part of, will remain one of the most important pillars of the Singapore economy. The rise of IC design, wafer fabrication, assembly and packaging activities in Singapore are supported by a vibrant cluster of supporting industries from equipment, materials and services. MCT2002, which has the only semiconductor substrate technological capability of its kind in Singapore, stands to reap maximum benefi ts from this growth. MCT2002 will continue to focus on its in-house R&D capabilities to advance its high-technology roadmap through R&D collaborations or strategic joint ventures with like-minded partners. The commitment to R&D and the excellent growth prospects for the semiconductor substrates industry augur well for the future of MCT2002.


CHAIRMAN AND GROUP MD’S JOINT STATEMENT cont inued

Ngee Ann Polytechnic – Centre of Innovation

In line with the government’s emphasis on R&D and innovations, AEM-Evertech entered into a R&D joint venture with Ngee Ann Polytechnic to establish a Centre of Innovation facility at the Polytechnic. This centre, scheduled to be offi cially opened in the second quarter of 2006, will be manned by a team of full-time researchers and engineering specialists from both organizations. The primary objective in setting up the Centre of Innovation facility is to nurture a core team to develop ‘breakthrough’ technologies in the areas of lasers and photonics, vision systems, infrared technology, material fi nishing and chip packaging. This R&D joint venture will also strengthen Singapore’s precision engineering industry at all levels in R&D capabilities, particularly amongst supplier companies which provide components and special processes to AEM-Evertech. The Group will work with suppliers to broaden and deepen both the technical and quality systems capability of the community of supporting industries.

GlobalisationThe Group will continue to optimise the use of, and expand the existing capacity of its regional manufacturing plants in Malaysia and China to tap on the anticipated strong demand from neighbouring countries. Prime opportunities and investments in new geographical areas will be explored by the Group to advance its globalisation strategy. The Group will set up Centres of Innovation internationally to capitalise on global talents and resources for innovative product development.

Business Outlook The outlook for the worldwide semiconductor industry remains robust and is expected to grow by 7.9% for 2006 (source: Semiconductor Industry Association, 2 Feb 2006). This positive growth will be generated by increasing demand in electronics products and portable devices such as digital consumer products and handphone devices.

This outlook augurs well for the Group’s prospects in 2006. The Group’s business strategy of diversifying and building capabilities in the non-equipment industries will continue to play a critical role in broadening its revenue base and overcoming earnings volatility. Barring unforeseen circumstances, we expect the non-equipment businesses to build on their momentum of growth into 2006.

The equipment business will remain an important segment of the Group’s product profi le. We will work closely with our strategic business partners in developing new and innovative equipment and solutions to meet the demands of the markets and increase shareholder returns.


DirectorsWe would like to place on record our appreciation to Mr Yeo Wee Kiong who has resigned from the Board. An Independent Director since 2000, Mr Yeo made invaluable contributions to the company and its growth over the last fi ve years, and we thank him for his counsel.

We would also like to take the opportunity to welcome Mr Will Hoon Wee Teng and Mr Basil Chan to AEM-Evertech as Non-Independent Director and Independent Director respectively. Mr Hoon is the Executive Vice President of Transpac Capital and sits on the board of several other listed companies in Singapore. Mr Chan is the Founder and Managing Director of MBE Corporate Advisory Pte Ltd and sits on the board of other listed companies as well. With their wealth of experience, we believe Mr Hoon and Mr Chan will bring invaluable strategic counsel to the Board as we chart the next phase of growth for the company.

Management In November 2005, the top management of the company was reorganised to form a more streamlined reporting structure. Mr Patrick Cheong was appointed Executive Chairman while Mr Tok Kian You was re-designated Group Managing Director. Mr Ang Seng Thor, former Executive Director left the Group and we thank him for his contributions.

AppreciationOur strategy of building capabilities in the non-equipment business is now showing positive results, and for this, we wish to thank our management and staff for their hard work and contribution towards making this vision a reality. We also thank our customers, suppliers, bankers, business associates and shareholders for their past support and we look forward to their continuing collaboration in the current fi nancial year.

Patrick Cheong Tok Kian YouExecutive Chairman Group Managing Director


AEM-EVERTECH BUSINESS AND MARKET PRESENCE

California

Arizona

Mexico

Costa Rica

Florida

MassachusettsIndiana

Texas

United Kingdom

Morocco

France

Malta

Austria

Germany

Italy

Israel

AEM-Evertech Market PresenceLEGEND:

PortugalPennsylvania

OUR BUSINESS & MARKET PRESENCE

OUR BUSINESS

EquipmentWe design, develop and manufacture equipment for the assembly, testing and fi nishing processes of semiconductor manufacturing. We supply equipment for each individual process, as well as integrate the various processes into a single machine using our in-house design capabilities. Our products include laser marking machines, defl ashing, plating, solder dipping, vision inspection, lead conditioning, handlers, packaging systems and chip test handlers.

SubstratesWe design, develop and manufacture organic substrates, which are raw materials required in the production of semiconductor chips. We provide one-stop solution from design to volume production in our facility. Our products include ball grid array package, chip scale package and modules.


Korea Japan

Philippines

TaiwanChina

Precision EngineeringWe design, develop and manufacture precision engineering products used in the semiconductor assembly, testing and fi nishing processes. Our products include test sockets, device change kits, stiffeners and preventive maintenance kits.

Chemicals & ServicesWe develop processes and associated chemical formulations for surface fi nishing including defl ashing, solder dipping and plating of the leads of semiconductors and connectors. We provide surface fi nishing services for high-end specialised requirements in defl ashing and plating of connectors as well as contract manufacturing services such as re-packing, re-balling and modules assembly services to the integrated circuit manufacturing and electronics industry.

DistributionWe distribute a wide range of materials that include engineering plastics and adhesives to the manufacturing and electronics industry.

Thailand

Singapore

Indonesia

Malaysia


AEM-EVERTECH BUSINESS AND MARKET PRESENCE

AEM-Evertech Business Presence (manufacturing facilities)LEGEND:

MANUFACTURING FACILITIES

Tuas

Woodlands

Serangoon

Name : MicroCircuit Technology (2002) Pte Ltd

Location : Tuas / Singapore

Main activity : • Design & Manufacturing of Organic Substrates

• Research & Development - Advanced Substrates - Packaging Technologies

Name : AEM-Evertech Holdings Ltd Ever Technologies Pte Ltd

Location : Serangoon / Singapore

Main activity : • Corporate Headquarters

• Equipment Design & Manufacturing

• Precision Engineering & Manufacturing

• Research & Development - Equipment - Precision Engineering products

Name : AEM-Tech Engineers Pte Ltd

Location : Woodlands / Singapore

Main activity : • Chemicals Manufacturing

• Plating services

• Research & Development - Process Technologies - Chemicals


Name : AEM-Evertech (Suzhou) Co., Ltd

Location : Suzhou / China

Main activity : • Equipment Design & Manufacturing


• Chemicals Manufacturing

• Plating Services

• Research & Development - Equipment - Precision Engineering products - Chemicals

Name : Tianjin Ever Technologies Co., Ltd.

Location : Tianjin / China

Main activity : Manufacturing services

Name : Ever Technologies Sdn. Bhd.

Location : Penang / Malaysia

Main activity : • Equipment Design & Manufacturing


• Research & Development - Equipment - Precision Engineering products

Name : Eminent Dynamic Sdn. Bhd.

Location : Malacca / Malaysia

Main activity : Plating services

Penang

Malacca

Tianjin

Suzhou


BOARD OF D IRECTORS

Will Hoon Wee TengNon-Independent Director

Will Hoon Wee Teng has been our Non-Independent Director since 14 October 2005. He is currently the Executive Vice President of Transpac Capital. Mr Hoon has more than 16 years of experience in the private equity and management consulting industries. He sits on the boards of many of the companies in which Transpac Capital has investments. Mr Hoon graduated with a Bachelor of Science degree from the Massachusetts Institute of Technology, US. A Chartered Marketer, he has current professional organization fellowship of the Chartered Institute of Marketing, Hong Kong Institute of Directors and Marketing Council Asia and membership of the UK Institute of Directors and Singapore Institute of Directors.

Tok Kian You Group Managing Director

Tok Kian You is one of the founders of the AEM-TECH Group and has more than 15 years of experience in equipment and process development for surface fi nishing and chemical formulation in the semiconductor industry. He is instrumental in leading the Group in its strategic growth and product and technology development. Mr Tok graduated in 1982 from Ngee Ann Polytechnic with a Diploma in Mechanical Engineering. He is a member of Ngee Ann Polytechnic Mechanical Engineering Advisory Committee.

Patrick Cheong Chong Thye Executive Chairman

Patrick Cheong Chong Thye was appointed Executive Chairman of the company in November 2005. Prior to this appointment, he was a Non-Executive Director from 26 May 2001. He also holds the position of Senior Investment Manager at Transpac Capital Pte Ltd, a private equity investment fi rm based in Singapore. Mr Cheong has more than 15 years of experience in private equity and semiconductor engineering, production, planning and logistics. He was previously with Advanced Micro Devices, Siemens Components Pte Ltd, Chartered Semiconductor Manufacturing Ltd and Infi neon Technologies AG. Mr Cheong graduated from the National University of Singapore with a Bachelor of Science degree majoring in Physics. He also holds a Graduate Diploma in Financial Management and a Certifi cate of Competency in German as a business language.

Leong Siew LoonIndependent Director

Leong Siew Loon has been our Independent Director since 28 September 2000 and was last re-elected in 2004. He has several years of experience in investment banking, stockbroking and direct-investment business from his previous employment with Transpac Capital Pte Ltd, Grindlays Bank plc, Banque Nationale de Paris Groupe and OCBC Bank.


Ng Quek Peng Independent Director

Ng Quek Peng has been an Independent Director of the Company since 30 November 2000 and was last re-elected in 2004. He is a chartered accountant and has over 20 years of experience in the banking industry. He is the Managing Director of Halcyon Capital Pte Ltd, a corporate consultancy fi rm.

Yeo Wee Kiong *1

Independent Director

Yeo Wee Kiong has been an Independent Director since 1 December 2000 and was last re-elected in 2003. He holds an Honours degree in Mechanical Engineering from the University of Singapore, a Masters in Business Administration from the National University of Singapore and a LLB Honours degree from the University of London. He is the Managing Director of Yeo Wee Kiong Law Corporation. Mr Yeo sits on the board of several listed companies in Singapore.

Basil Chan *2

Independent Director

Basil Chan holds an Honours degree in Business Administration from the University of Wales Institute of Science and Technology and is a member of the Institute of Chartered Accountants in England and Wales and the Institute of Certifi ed Public Accountants in Singapore. He is the Founder and Managing Director of MBE Corporate Advisory Pte Ltd. Mr Chan sits on the board of several listed companies in Singapore. Mr Chan has more than 25 years of audit, fi nancial and general management experience, having held senior fi nancial and management positions in Schneider Electric South East Asia (HQ) Pte Ltd, Singapore Technologies Pte Ltd, Datacraft Asia Ltd and Hua Kok International Ltd.

*1 resigned on 8 March 2006

*2 appointed on 8 March 2006


MANAGEMENT TEAM

Tok Kian You 1

Ng See Hwee 2

Roslan Bin Affandi 3

Tan Hui Bin 4

Tarun Kanti Basu 5

Stanley Ling 6

Yuen Kok Keong 7

Tey Meng Huat 8

Lee Soon Kiat 9

Wong Chin Ming 10

678

9102 3 4 51


Tan Hui BinVice President, Precision Engineering Division & Managing Director, Malaysia Operations

Tan Hui Bin joined our Group in 1995 and has more than 20 years of experience in process development, assembly, testing and fi nishing processes in the semiconductor industry. Prior to joining our Group, he was a staff engineer in Intel for 17 years. He graduated from Ngee Ann Polytechnic in 1977 and holds a Diploma in Electrical and Electronics Engineering.

Tarun Kanti BasuVice President, Chemicals & Services Division

Tarun Kanti Basu is responsible for the process development, chemical formulation and plating and manufacturing services of the Group. He joined us in 1997 and has more than 10 years of experience in chemical related fi elds. He graduated in 1992 and holds a MSc in Chemistry from Dhaka University, Bangladesh.

Yuen Kok KeongVice President, Manufacturing Services & Distribution Division & Managing Director, China Operations

Yuen Kok Keong joined the Group in Sep 2005 and is responsible for operations in China. Prior to this, he had over 20 years experience with a German electronic manufacturer with more than 10 years operational experience in Hong Kong and China. He graduated from Ngee Ann Polytechnic with a Diploma in Mechanical Engineering, Diploma in Industrial Management from Singapore Polytechnic and holds a Bachelor of Business Administration degree from the Royal Melbourne Institute of Technology.

Tey Meng HuatVice President, Equipment Division

Tey Meng Huat joined our Group in Nov 2004 and has more than 18 years of experience in process development, assembly, testing and fi nishing processes, quality assurance and manufacturing in the semiconductor industry. Prior to joining our Group, he was an Operational Manager in STMicroelectronics for 18 years. He graduated from Federal Institute of Technology Malaysia in 1985 and holds a Diploma in Electrical and Electronics Engineering, a Full Technological Certifi cate for Electrical Engineering of City & Guilds of London Institute in 1985, and an MBA from University Sunshine Coast Australia in 2003.

Roslan Bin AffandiVice President, Substrates Division

Roslan Bin Affandi has been in the plating industry since 1983, with extensive experience in plating equipment, production and process. He was responsible for setting up of the plating services in the AEM-Evertech Group.

Lee Soon KiatVice President, Corporate Development & Estate Management

Lee Soon Kiat is the Vice President Corporate Development & Estate Management. Prior to joining our Group, he served as an Assistant General Manager of Hexon Technology Pte Ltd. He graduated in 1990 and holds a degree in Electronics Engineering from the National University of Singapore.

Stanley LingChief Financial Offi cer

Stanley joined the Group in Sep 2005 and is responsible for the Group’s Finance, Human Resource, Management Information System and Supply Chain Management. Prior to joining the Group, he was the CFO in a listed company in the hospitality industry and before that was with a major international oil company. Stanley has more than 26 years’ experience in the fi nance industry and is a Fellow of the Institute of Certifi ed Public Accountants of Singapore. He holds a Bachelor of Accountancy degree with honours from the University of Singapore.

Wong Chin MingChief Technical Offi cer

Wong Chin Ming is a co-founder of the AEM-TECH Group. He joined the Group in 1996 and has more than 15 years of experience in semiconductor equipment and process development for surface fi nishing. He graduated in 1987 from the French Singapore Institute with a Diploma in Electronics Engineering.

Ng See HweeSenior Vice President, Strategic Planning & New Business

Ng See Hwee joined our Group in Apr 2004 and has more than 22 years of experience in the semiconductor industry having worked in Infi neon Technologies and STMicroelectronics previously. He graduated from Federal Institute of Technology Malaysia and holds a Diploma in Mechanical, Certifi cate for Microelectronics of City & Guilds of London Institute and a Master Degree in MBA from Queen’s University Of Brighton.


CORPORATE INFORMATION

BOARD OF DIRECTORS

Executive:Patrick Cheong Chong ThyeExecutive Chairman

Tok Kian YouGroup Managing Director

Non-Executive:Will Hoon Wee Teng (appointed on 14 October 2005)Non-Independent Director

Leong Siew LoonIndependent

Ng Quek PengIndependent

Yeo Wee Kiong (resigned on 8 March 2006)Independent

Basil Chan (appointed on 8 March 2006)Independent

AUDIT COMMITTEE

Ng Quek PengChairman

Leong Siew Loon

Yeo Wee Kiong (resigned on 8 March 2006)

Basil Chan (appointed on 8 March 2006)

INVESTMENT COMMITTEE

Leong Siew LoonChairman

Patrick Cheong Chong Thye

Tok Kian You

REMUNERATION COMMITTEE

Yeo Wee Kiong (resigned on 8 March 2006)Chairman

Basil Chan (appointed on 8 March 2006)Chairman

Leong Siew Loon

Tok Kian You

NOMINATING COMMITTEE

Ng Quek PengChairman

Leong Siew Loon

Yeo Wee Kiong (resigned on 8 March 2006)


COMPANY SECRETARIES

Stanley Ling

Tan Cher Liang

REGISTERED OFFICE

52 Serangoon North Avenue 4Singapore 555853Tel: (65) 6483 1811Fax: (65) 6483 1822Website: http://www.aem-evertech.com

SHARE REGISTRARS

Lim Associates (Pte) Ltd10 Collyer Quay#19-08 Ocean BuildingSingapore 049315

AUDITORS

KPMG16 Raffl es Quay #22-00Hong Leong BuildingSingapore 048581

Audit Partner-in-chargeTan Yee Peng

Date of Appointment:1 September 2004

PRINCIPAL BANKERS

United Overseas Bank Limited80 Raffl es PlaceUOB PlazaSingapore 048624

GE Capital Services Pte Ltd6 Temasek Boulevard #35-01 Suntec Tower Four Singapore 038986

Malayan Banking Berhad50 Raffl es Place #01-00Singapore 048623

The Development Bank of Singapore Ltd6 Shenton WayDBS Building Tower OneSingapore 068809

Registration No. 200006417D


F INANCIAL H IGHLIGHTS

100

90

80

70

60

50

40

30

20

10

0

Turnover by Business Segment (in million)

100

90

80

70

60

50

40

30

20

10

0

Turnover by Geographical Segment (in million)

23.8

10.512.6

0.0

4.5

20.2

15.0

3.8

11.6

5.9

48.6

18.2

6.9

13.5

8.2

90.2

32.530.7

17.6

3.6

58.7

32.7

55.6

25.6

1.6

14.112.1

14.610.8 11.5

19.0

14.111.9

27.5

30.1

61.3

48.3

19.118.8

41.5

23.5

33.1

52.3 51.1

37.7

Equipment PrecisionEngineering

Substrates Chemicals & Services

Distribution

South-East Asia North Asia Non-Asia Singapore

2001 2002 2003 2004 2005

2001 2002 2003 2004 2005


(4.3)

2001 2002 2003 2004 2005

Profi t Before Tax (in million)

2001 2002 2003 2004 2005

Profi t After Tax (in million)

5

4

3

2

1

0

-1

Diluted Earnings Per Share(in cents)

20

15

10

5

0

Net Asset Value Per Ordinary Share(in cents)

20

15

10

5

0

-5

20

15

10

5

0

-5

* 2004 fi nancials have been re-stated arising from the effects of adopting the new/revised FRS

0.21.1

16.4

10.6

(3.3) 0.0 0.1

13.1

10.2

(0.9)

3.1

2.4

13.9 13.915.5

17.5

20.3

2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

F INANCIAL H IGHLIGHTS cont inued

0.0 0.0


BUSINESS REVIEW

OverallThe Group achieved a net profi t of $10.2 million on the back of $174.2 million in revenue. Revenue registered a marginal decline from $174.6 million in FY2004 to $174.2 million in FY2005. Net profi t for the full year of 2005 was $10.2 million compared with $13.1 million in FY2004. Diluted earnings per share also decreased from 3.1 cents in FY2004 to 2.4 cents in FY2005.

The overall fi nancial performance in FY2005 refl ects the Group’s evenly-distributed fundamentals in both the equipment and non-equipment business. For the fi rst time, non-equipment revenue, comprising the materials and services business, accounted for 66.3% of total revenue in FY2005 (FY2004: 48.4%), overtaking equipment as the dominant contributor. The increased contribution from the non-equipment sector was a result of the Group’s strategy to expand into materials and services to reduce our reliance on the volatile equipment business due to the cyclical nature of the semiconductor industry.

By far the largest increase for non-equipment came from the substrates division, which achieved an increase of 81.2% in revenue for FY2005. Operating profi t of the substrates division registered an even more signifi cant increase of 230.5% to $6.0 million in FY2005 from $1.8 million in FY2004. The better performance from the substrates division was the result of strong order fl ows, doubled production output and higher capacity utilisation.

The Group’s net profi t margin declined to 5.9% in FY2005 as compared to 7.5% in FY2004 due to higher operating expenses as a result of expansion in capacity and additional hirings.

The Group continued to sustain its profi table position and FY2005 marks the 4th consecutive year of profi tability since FY2002. The year ended with a strong fi nancial position with net assets amounting to $85.5 million. Our cash fl ow continues to be healthy, generating an operating cash fl ow of $8.9 million in FY2005. Cash and bank balances at end of the year stood at $16.4 million.

Turnover By Business Segment (in percentage)

2004 2005

Equipment

Precision Engineering

Substrates

Chemicals & Services

Distribution

51.6

17.6

18.6

10.1

2.1

33.7

31.9

18.8

14.7

0.9


Equipment We design, develop and manufacture equipment for the assembly, testing and fi nishing processes of semiconductor manufacturing.

Revenue from equipment division decreased 34.9% to $58.7 million as delivery of an exceptionally large contract secured in late FY2003 was completed in FY2004. The decrease was also a result of cyclical slow demand for capital equipment. Nonetheless, equipment manufacturing remained the largest contributor to group revenue, accounting for 33.7% or $58.7 million in FY2005. The sharp decline in revenue resulted in operating profi t for this segment to decrease by 78.3% to $2.1 million in FY2005. Despite the pressure on margins, the equipment division remained profi table in FY2005.

SubstratesWe design, develop and manufacture organic substrates, which are raw materials required in the production of semiconductor chips.

Substrates kept up the growth momentum that started in FY2004 with an increase of 81.2% in revenue from $30.7 million in FY2004 to $55.6 million in FY2005. This growth continued to be the most signifi cant among all the business divisions and is in line with the Group’s strategy of expanding into the materials and services business to reduce our exposure to the volatile equipment or capital goods business. Operating profi t registered an even more signifi cant increase of 230.5% to $6.0 million in FY2005 from $1.8 million in FY2004. The improved performance of the substrates division in FY2005 was a consequence of our sales strategy, expansion in capacity, larger economy of scale and operational effi ciency.

Precision EngineeringWe design, develop and manufacture precision engineering products used in the semiconductor assembly, testing and fi nishing processes.

Precision engineering registered a 0.6% increase in its revenue contribution of $32.7 million in FY2005 compared with $32.5 million in FY2004. Operating profi t fell by 6.9% to $5.8 million in FY2005 as compared to $6.2 million in FY2004 as margins were under pricing pressure with increased competition in the region. The profi t margins are however still strong. The performance of precision engineering refl ects our group’s strategy to broaden and develop our materials and services business which is less affected by the cyclical nature of the semiconductor industry, to mitigate the volatility impact of the income stream from the equipment business.

Revenue

Core Business FY 2005 FY 2004 Change

S$’000 % S$’000 % %

Equipment 58,721 33.7 90,188 51.6 - 34.9

Substrates 55,588 31.9 30,670 17.6 + 81.2

Precision Engineering 32,697 18.8 32,517 18.6 + 0.6

Chemicals & Services 25,618 14.7 17,640 10.1 + 45.2

Distribution 1,553 0.9 3,605 2.1 - 56.9

Total 174,177 100.0 174,620 100.0 - 0.3

BUSINESS REVIEW cont inued


Chemicals & ServicesWe develop processes and associated chemical formulations and services for surface fi nishing including defl ashing, solder dipping and plating of the leads of semiconductors and connectors in addition to contract manufacturing services.

Revenue from chemicals & services division grew 45.2% from $17.6 million in FY2004 to $25.6 million in FY2005. Sales of chemicals grew 35.0% from $12.0 million in FY2004 to $16.2 million in FY2005. This increase was due to orders from existing as well as new customers moving towards lead-free chemicals and plating chemicals sold together with plating equipment. This was further improved by increasing sales from our China operations. Services, comprising plating and manufacturing activities, grew by 67.9% from $5.6 million in FY2004 to $9.4 million in FY2005, due mainly to new plating services of base coil materials and sales contributed by our Malacca and Suzhou operations.

The division recorded an operating loss of $1.5 million in FY2005 due mainly to loss in plating services business. The plating services operating loss of $3.3 million in FY2005 was primarily due to start-up costs incurred in Malacca and Suzhou operations, delayed qualifi cations certifi cation in Malacca operation and the impact of the time lag in recovering the gold and other raw materials price increases from the customers in Singapore and Suzhou operations. The start-up diffi culties had largely been addressed and the operating performance of the plating services business had improved in the recent months. The Chemicals business operating profi t marginally improved to $1.8 million in FY2005 with the higher sales of environmentally - friendly products.

Distribution We distribute a wide range of materials that include engineering plastics and adhesives to the manufacturing and electronics industry.

Revenue from distribution division decreased by 56.9% from $3.6 million in FY2004 to $1.6 million in FY2005. The operating loss was higher by $0.1 million from $0.9 million in FY2004 to $1.0 million in FY2005 due to inventory write-off as the Group reviewed its products distribution portfolio and reduced dependency on distribution sale of third party products.

Profi t From Operations

Core Business FY 2005 FY 2004 Change

S$’000 % S$’000 % %

Equipment 2,077 18.2 9,550 55.3 - 78.3

Substrates 6,012 52.8 1,819 10.5 +230.5

Precision Engineering 5,802 50.9 6,232 36.1 -6.9

Chemicals & Services (1,491) (13.1) 553 3.2 -369.6

Distribution (1,004) (8.8) (874) (5.1) -14.9

Total 11,396 100.0 17,280 100.0 - 34.1


Ever Technologies

Sdn. Bhd.

Tianjin Ever Technologies

Co., Ltd.

Everplus Technologies HK Limited

Everplus Technologies,

Inc.

AEM-TECH Engineers

Pte Ltd

MicroCircuit Technology

(2002) Pte Ltd

CORPORATE STRUCTURE

OrchardvilleHoldings Pte Ltd

AEM-Evertech (Suzhou) Co., Ltd

AEM-TECH International

Pte Ltd

AEM-TECH Platronics

Pte Ltd

AEM-TECH Industries Sdn. Bhd.

Eminent Dynamic Sdn. Bhd.

AEM-Evertech Holdings Ltd

Ever Technologies

Pte Ltd

Shanghai Yong Gao Electronic Co., Ltd.


The Directors of AEM-Evertech Holdings Ltd are committed to comply with the Code of Corporate Governance (Code) issued by the Corporate Governance Committee in July 2005 so as to ensure greater transparency and protection of shareholders’ interests. This statement outlines the main corporate governance practices that were in place throughout the year. The Company has generally complied with the intent of the Code.

Board MattersBoard’s Conduct of its Affairs

The Board comprises six members and their principal functions are as follows:

• Formulate corporate strategies, financial objectives and directions for the Group• Ensure an adequate system of internal controls, risk management and financial reporting and compliance

processes• Oversee the proper conduct of the Group’s business• Assume responsibility for corporate governance

The Board also deliberates and makes decisions on material acquisitions and disposals of assets, corporate restructuring, dividends payments and other matters such as those that may involve a conflict of interest.

The directors are provided with regular updates on the relevant laws and regulations to enable them to make well-informed decisions. Our directors undergo orientation program to better understand our business and governance practices.

To efficiently discharge its responsibilities, the Board has established several board committees, namely, the Audit Committee, Nominating Committee, Remuneration Committee and the Investment Committee. These Committees are given specific responsibilities and are empowered to deal with matters within the limits of the authority set out in the terms of reference of their appointments. They assist the Board operationally without the Board losing authority over major issues.

The Board conduct regular scheduled meetings during the year and ad-hoc meetings are convened when circumstances require.

The attendance of the directors at Board and Board Committee meetings during the year is disclosed below:

Name of Board Audit Investment Remuneration Nominating

Director Committee Committee Committee Committee

No. of Attend- No. of Attend- No. of Attend- No. of Attend- No. of Attend-

meetings ance meetings ance meetings ance meetings ance meetings ance

Tok Kian You 7 7 NA NA 1 1 3 3 NA NA

Ang Seng Thor *1 7 7 NA NA 1 1 NA NA NA NA

Leong Siew Loon 7 7 3 3 1 1 NA NA 2 2

Ng Quek Peng 7 6 3 3 NA NA 3 3 2 2

Yeo Wee Kiong *2 7 7 3 3 NA NA 3 3 2 1

Patrick Cheong Chong Thye 7 7 NA NA 1 1 NA NA NA NA

Will Hoon Wee Teng *3 2 2 NA NA NA NA NA NA NA NA

*1 resigned on 25 November 2005

*2 resigned on 8 March 2006

*3 appointed on 14 October 2005

CORPORATE GOVERNANCE


Board Composition and Balance

The Company believes that there should be a strong and independent element in the Board to exercise objective judgment. Our current Board comprises six directors, of whom two-thirds of the Board are non-executive. All the non-executive directors, with the exception of Will Hoon, are independent. Mr Will Hoon is non-independent as he is representative of Transpac Nominees Pte Ltd, one of our substantial shareholders.

The Company also believes in having a diversity of expertise from its non-executive and independent directors to provide a balanced view. Our Board members bring with them diverse expertise in areas of accounting, finance, business, management, law, industry knowledge and strategic planning. Their areas of expertise are detailed in their profiles included on page 10 of the Annual Report.

Chairman and Group Managing Director

The roles of the Chairman and Group Managing Director are separate and held by two unrelated individuals.

The Chairman oversees the workings of the Board, ensuring that the Board is able to perform its duties and that there is a flow of information between the Board and management. The Chairman reviews the board papers before they are tabled at board meetings. Management staff who has prepared the board papers or who may provide additional insights is invited to present the papers or attend the board meetings.

The Chairman is assisted by the Group Managing Director and its management team in the effective implementation of the Group’s business strategies and to realise a common vision for the Group.

Board Membership

We believe board renewal to be an on-going process required to ensure good corporate governance and to maintain relevance to the changing needs of the Group’s business. All directors, with the exception of the Executive Chairman and the Group Managing Director, are required to submit themselves for re-nomination and re-election at regular intervals and at least once every three years.

The Nominating Committee (“NC”) is responsible for the identification and selection of new directors. The NC comprises three directors, all of whom are independent during the year. The members of the Nominating Committee comprises the following;

• Ng Quek Peng

• Leong Siew Loon

• Yeo Wee Kiong

Subsequent to the end of the financial year, Yeo Wee Kiong resigned on 8 March 2006.

Basil Chan was appointed as a member of NC Committee on 8 March 2006.

The structure, size and composition of the Board are reviewed periodically by the NC to ensure relevance. The NC evaluates the Board’s effectiveness as a whole and the contribution of each director to the effectiveness of the Board. It also determines annually whether or not a director is independent in accordance with the guidelines on independence as set out in the Code, and considers, reviews and recommends to the Board any re-appointment of directors.

Board Performance

The Company assesses the Board’s performance on its ability to steer the Group in the right direction.

The NC has adopted a formal system of evaluating the effectiveness of the Board’s performance as a whole.

For the purpose of evaluating the directors’ performance, the NC takes into account numerous factors including the directors’ attendance, participation and contribution at the main board and board committee meetings.

CORPORATE GOVERNANCE cont inued


Access to Information

Directors are regularly updated by Management on developments within the Group. The Board is provided with timely and complete information, prior to Board meetings and as and when necessary. Detailed papers are circulated as necessary for items requiring the Board’s approval. The Board also has separate and independent access to the Senior Management and the Company Secretary at all times. The Board receives periodic financial statements, budgets and forecasts from management to enable them to keep track of the Group’s financial performance.

The Company Secretary attends all board meetings and ensures that established procedures and regulations are complied with. The Board may seek and obtain independent professional advice at the Company’s expense, if necessary, to fulfill and discharge their duties and responsibilities as directors.

Remuneration MattersDirectors’ Remuneration Policies

We believe in adopting a formal and transparent procedure for determining the remuneration of the directors and key management so as to ensure that the level of remuneration is appropriate to attract, retain and motivate the directors and key management to run the Group successfully.

The Remuneration Committee (“RC”) reviews and recommends to the Board the framework of remuneration of directors and key management, taking into consideration the pay and employment conditions within the industry and in comparable companies as well as the performance of the Group and the individuals. When required, the RC is empowered to engage expert advice in discharging its responsibilities, at the Company’s expense.

Our RC comprises three directors of whom two are independent during the year. The members of the Remuneration Committee comprises the following;

• Yeo Wee Kiong

• Ng Quek Peng

• Tok Kian You


Basil Chan was appointed as Chairman of RC on 8 March 2006.

The Group Managing Director has a two-year contract with the Company. The service agreements may be terminated by the Company or the Director giving 3 months and 6 months notice respectively or pay-in-lieu. The performance related elements of remuneration form a significant proportion of the total remuneration package of the Group Managing Director.

No director is involved in any discussion relating to his own compensation and terms and conditions of service and the review of his performance.

Directors’ fees, as recommended by the RC, are subject to approval by the shareholders at the AGM.

Disclosure of Director’s Fees and Remuneration

The remuneration bands of our directors for the year ended 31 December 2005 are set out below:

Remuneration Bands Number of Directors

$0 to $249,999 5

$250,000 to $499,999 -

$500,000 and above 2

*1 Ang Seng Thor: resigned on 25 November 2005

*2 Yeo Wee Kiong: resigned on 8 March 2006

*3 Will Hoon Wee Teng: appointed on 14 October 2005


The Board is of the opinion that the disclosure of the remuneration of each individual director and the mix of their remuneration is disadvantageous to its business interests. However, the following information is presented for a better understanding of the directors’ remuneration.

- The non-executive directors received only directors’ fees during the year.

- The performance related elements of remuneration form a significant proportion of the total remuneration package of the Group Managing Director during the year. As approved in year 2000, a profit sharing scheme was adopted wherein a percentage of profits was allocated for distribution to the Group Managing Director and Senior Management.

- Other than salary and bonus which is linked to the performance of the Group and the executive director, the Group Managing Director is entitled to the use of a car and a club membership.

- No director was granted any share option under the AEM-Evertech Holdings Share Option Scheme during the year.

Key Management and Remuneration Policy

The Company adopts a remuneration policy for all staff comprising a fixed and variable component. The fixed component is in the form of a base salary and allowances. The variable component is in the form of a variable bonus that is linked to the Group and each individual’s performance.

The remuneration bands of our top nine executives (who are not directors of the Company) are disclosed below:

Remuneration Bands Number of Key Executives

$0 to $249,999 4

$250,000 to $499,999 5

There are no employees who are immediate family members of the directors or the Group Managing Director and whose remuneration exceed $150,000 during the year.

Accountability and AuditAudit Committee

The Audit Committee (“AC”) comprises three members and all its members are independent. These members are suitably qualified and possess relevant accounting and/or related financial management expertise or experience for the effective discharge of their responsibilities as members of the Audit Committee.

The members of the Audit Committee during the year, comprises the following;

• Ng Quek Peng

• Leong Siew Loon

• Yeo Wee Kiong


Basil Chan was appointed as a member of AC on 8 March 2006.

The AC performs the following main functions:

• Reviews the audit plans and scope of work of the internal and external auditors

• Reviews the findings of the internal and external auditors and the response from management



• Reviews the interim and full year announcements and the financial statements of the Group and of the Company as well as the auditors’ report thereon before they are submitted to the Board for approval

• Reviews the requirements for approval and disclosure of interested persons transactions (“IPT”)

• Nominates the external auditors for appointment or re-appointment and reviews the level of audit fees, cost effectiveness of the audit and the independence and objectivity of the external auditors

• Investigates any matters reported to the committee about improprieties in matters of financial reporting or other matters within its terms of reference

The AC is given full access to the management and receives its full cooperation. The AC has full discretion to invite any director or executive officer to attend its meetings. It has full access to records, resources and personnel to enable it to discharge its functions properly.

The Company outsources its internal audit function and the internal auditor reports primarily to the AC.

The AC meets with the internal and external auditors without the presence of management at least once a year in order to have free and unfiltered access to information it may require.

The AC has reviewed the quantum and nature of fees, expenses and emoluments paid to the auditors for the non-audit services and is satisfied that the provision of such services does not affect their independence.

The Board believes that an adequate system of internal controls to safeguard the shareholders’ investments and the Group’s assets is in place during the year.

Risk Management

The Group has identified the following key risk areas:

• Investment risk

• Operational risk

• Financial risk

(i) Investment risk

Investments, major acquisitions and disposals are undertaken only after extensive due diligence and benefit analyses. Such investments, acquisitions and disposals must be in line with the Group’s strategies. All investment proposals must be evaluated and must meet the minimum hurdle rate determined by the Group. All investments, major acquisitions and disposals are evaluated by the Investment Committee (“IC”) before they are tabled and recommended for the Board’s approval.

(ii) Operational risk

The Group’s operating risk is managed at each operating unit and monitored at the Group level. As operational risk cannot be eliminated completely, the Group balances between the cost of the risks occurring and the cost of managing the risks. The Group maintains insurance coverage on its property, plant and equipment and assets to minimise the risk of losses arising from natural calamity, accident, fire and theft.

(iii) Financial risk

The Group’s financial risk management objectives and policies are included in Note 28 of the Notes to the Financial Statements, found on pages 39 to 69 of the Annual Report.


Dealings in Company’s Securities

The Company adopts the Code of Best Practices on Securities Transactions issued by SGX, which prohibits dealings in securities of the Company while in possession of price-sensitive information as well as during the period two weeks prior to the announcement of the Group’s results. All directors and officers who have access to “price sensitive” information are required to comply with the Code.

Communication with ShareholdersThe Company adopts the practice of regularly communicating major developments in its business and operations through SGX NET and where appropriate also directly to shareholders, analysts, the media and its employees. The announcements of the Group’s results and material developments are released through SGXNET to the SGX’s website in a timely manner to ensure fair disclosure of information. The Board provides the shareholders a balanced and understandable assessment of the Group’s performance, financial position and prospects on a half-yearly basis.

All shareholders receive a copy of our Annual Report and the notices of the Annual General Meeting and any Extraordinary General Meeting.

The Company encourages feedback and participation of its shareholders at the general meetings.

The Chairman of the various committees and external auditors are available to address questions at all general meetings.



28 Directors’ Report

33 Statement by Directors

34 Report of the Auditors to the Members of AEM-Evertech Holdings Ltd

35 Balance Sheets

36 Consolidated Profit and Loss Account

37 Consolidated Statement of Changes in Equity

38 Consolidated Statement of Cash Flows

39 Notes to the Financial Statements

70 Additional Information

FINANCIAL S TAT E M E N T S


We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial year ended 31 December 2005.

Directors

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

Patrick Cheong Chong Thye

Tok Kian You

Leong Siew Loon

Ng Quek Peng

Will Hoon Wee Teng (appointed on 14 October 2005)


Directors’ Interests

According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act), particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares, debentures, warrants and share options in the Company are as follows:

Holdings at Holdings Name of director and corporation beginning at endin which interests are held of the year of the year

Patrick Cheong Chong ThyeAEM-Evertech Holdings Ltd- options to subscribe for ordinary shares of $0.05 each at: - $0.13 between 16/10/2003 and 15/10/2007 180,000 180,000

Tok Kian YouAEM-Evertech Holdings Ltd- ordinary shares of $0.05 each fully paid 39,484,168 39,984,168- options to subscribe for ordinary shares of $0.05 each at: - $0.24 between 28/11/2004 and 27/11/2013 700,000 700,000

Leong Siew LoonAEM-Evertech Holdings Ltd- options to subscribe for ordinary shares of $0.05 each at: - $0.104 between 16/10/2004 and 15/10/2007 180,000 180,000 - $0.20 between 28/11/2005 and 27/11/2008 180,000 180,000

Ng Quek PengAEM-Evertech Holdings Ltd- options to subscribe for ordinary shares of $0.05 each at: - $0.104 between 16/10/2004 and 15/10/2007 180,000 180,000 - $0.20 between 28/11/2005 and 27/11/2008 180,000 180,000

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

There were no changes in any of the above-mentioned interests in the Company between the end of the financial year and 21 January 2006.

DIRECTORS’ REPORT


Except as disclosed under the “Share Options” section of this report, neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Except for salaries, bonuses and fees and those benefits that are disclosed in this report and in notes 21 and 26 to the financial statements, since the end of the last financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member, or with a company in which he has a substantial financial interest.

Share Options

The AEM-Evertech Holdings Share Option Scheme (the Scheme) of the Company was approved and adopted by its members at an Extraordinary General Meeting held on 22 March 2002. The Scheme is administered by the Company’s Remuneration Committee (the Committee) comprising three directors. The members of the Remuneration Committee during the year were Yeo Wee Kiong (Chairman), Ng Quek Peng and Tok Kian You. Subsequent to the balance sheet date, Yeo Wee Kiong resigned as a director of the Company and Basil Chan was appointed as the Chairman of the Remuneration Committee.

Other information regarding the Scheme is set out below:

(i) The exercise price of the options shall be at up to a maximum discount of 20% to the market price immediately preceding the date of grant of the option or its nominal value, whichever is higher. Subject to this cap on the discount, the Committee will have the discretion and flexibility to decide the exact quantum of discount for each participant. The subscription price shall not be less than the nominal amount of the share.

(ii) An option may be granted at any time at the absolute discretion of the Committee, provided that where price sensitive information is being announced, options may only be granted after the third market day from the date on which the announcement is released. The grant of an option shall be accepted within thirty days from the date of grant and not later than 5.00 p.m. on the thirtieth day from the date of grant.

(iii) There are 3 types of options that may be granted by the Company, namely, (a) Market Price Options, (b) Discount Price Options and (c) Premium Price Options.

(iv) The new shares issued by the Company upon the exercise of the options shall rank in full for all dividends or other distributions declared or recommended in respect of the then existing shares and shall in all other respects rank pari passu with other existing shares of the Company.

(v) Discount Price Options are exercisable at any time after the second anniversary of the date of grant and before the expiry of the tenth anniversary of the relevant date of grant except that in the case of non-executive directors, such options will expire on the fifth anniversary of the date of grant.

Market Price Options and Premium Price Options are exercisable at any time after the first anniversary of the date of grant and before the expiry of the tenth anniversary of the relevant date of grant except that in the case of non-executive directors, such options will expire on the fifth anniversary of the date of grant.


At the end of the financial year, details of the options granted under the Scheme on the unissued ordinary shares of $0.05 each of the Company are as follows:

Number of share options Options OptionsDate of Exercise outstanding Options outstandinggrant of price at Options Options cancelled/ at Exerciseoptions per share 1/1/2005 granted exercised lapsed 31/12/2005 period

16/10/2002 $0.130 80,000 - - - 80,000 16/10/2003 to 15/10/2012

16/10/2002 $0.130 180,000 - - - 180,000 16/10/2003 to 15/10/2007

16/10/2002 $0.104 376,000 - (8,000) - 368,000 16/10/2004 to 15/10/2012

16/10/2002 $0.104 360,000 - - - 360,000 16/10/2004 to 15/10/2007

28/11/2003 $0.240 5,903,000 - - (1,082,000) 4,821,000 28/11/2004 to 27/11/2013

28/11/2003 $0.200 365,000 - - - 365,000 28/11/2005 to 27/11/2013

28/11/2003 $0.200 360,000 - - - 360,000 28/11/2005 to 27/11/2008

7,624,000 - (8,000) (1,082,000) 6,534,000

Save as disclosed above, there were no unissued shares of the Company or its subsidiaries under options granted by the Company or its subsidiaries as at the end of the financial year.

Details of options granted to directors of the Company under the Scheme are as follows:

Aggregate Aggregate Aggregate options options options Options granted exercised cancelled/ Aggregate granted since since lapsed since options for financial commencement commencement commencement outstanding year ended of Scheme of Scheme of Scheme as atName of director 31/12/2005 to 31/12/2005 to 31/12/2005 to 31/12/2005 31/12/2005

Ang Seng Thor (resigned on 25 November 2005) - 1,400,000 (700,000) (700,000) -

Patrick Cheong Chong Thye - 180,000 - - 180,000

Tok Kian You - 1,400,000 (700,000) - 700,000

Leong Siew Loon - 360,000 - - 360,000

Ng Quek Peng - 360,000 - - 360,000

DIRECTORS’ REPORT cont inued


Since the commencement of the Scheme, no options have been granted to the controlling shareholders of the Company or their associates. Except for Tok Kian You and Ang Seng Thor, no participant under the Scheme has been granted 5% or more of the total options available under the Scheme.

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

Audit Committee

The members of the Audit Committee during the year were:

• Ng Quek Peng (Chairman), non-executive director

• Leong Siew Loon, non-executive director

• Yeo Wee Kiong, non-executive director

Subsequent to the end of the financial year, Yeo Wee Kiong resigned as a director of the Company. At the date of this report, the members of the Audit Committee are:

• Ng Quek Peng (Chairman), non-executive director

• Leong Siew Loon, non-executive director

• Basil Chan, non-executive director

The Audit Committee performs the functions specified in section 201B of the Companies Act, the Listing Manual of the Singapore Exchange and the Code of Corporate Governance.

The Audit Committee held three meetings since the last directors’ report. In performing its functions, the Audit Committee met with the Company’s external and internal auditors to discuss the scope of their work, the results of their examination and evaluation of the Company’s internal accounting control system.

The Audit Committee also reviewed the following:

• assistance provided by the Company’s officers to the internal and external auditors;

• financial statements of the Group and the Company prior to their submission to the directors of the Company for adoption; and

• interested person transactions (as defined in Chapter 9 of the Listing Manual of the Singapore Exchange).

The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.

The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board of Directors that the auditors, KPMG, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.


Auditors’ Remuneration

The directors have reviewed the quantum and nature of fees, expenses and emoluments paid to the auditors for non-audit services under Section 206(1A) of the Companies Act and are satisfied that the provision of such services does not affect their independence.

Auditors

The auditors, KPMG, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

Tok Kian You Patrick Cheong Chong Thye

Director Director

27 March 2006

DIRECTORS’ REPORT cont inued


STATEMENT BY DIRECTORS Year Ended 31 December 2005

In our opinion:

(a) the financial statements set out on pages 35 to 69 are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2005 and of the results, changes in equity and cash flows of the Group for the year ended on that date; and

(b) 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.

The Board of Directors has, on the date of this statement, authorised these financial statements for issue.

On behalf of the Board of Directors

Tok Kian You Patrick Cheong Chong Thye

Director Director

27 March 2006


REPORT OF THE AUDITORS TO THE MEMBERS OFAEM-EVERTECH HOLDINGS LTD

We have audited the accompanying financial statements of AEM-Evertech Holdings Ltd for the year ended 31 December 2005 as set out on pages 35 to 69. 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 the audit to obtain reasonable assurance about 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 consolidated financial statements of the Group and the balance sheet of the Company are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2005 and of the results, changes in equity and cash flows of the Group for the year ended on that date; and

(b) the accounting and other records 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.

KPMG

Certified Public Accountants

Singapore

27 March 2006


BALANCE SHEETS As At 31 December 2005

Group Company Note 2005 2004 2005 2004 $'000 $'000 $'000 $'000 (Restated)

Non-current assetsProperty, plant and equipment 3 47,683 44,241 733 1,057Intangible assets 4 334 376 89 154Subsidiaries 5 - - 32,297 38,187Associate 6 - - - -Deferred tax assets 7 209 230 - -

48,226 44,847 33,119 39,398

Current assetsInventories 8 29,841 24,372 - -Trade and other receivables 9 55,434 43,917 16,842 9,929Other financial assets 10 2 2 - -Non-financial assets 11 53 53 52 52Cash and bank balances 12 16,389 11,008 3,645 262

101,719 79,352 20,539 10,243

Total assets 149,945 124,199 53,658 49,641

EquityShare capital 13 21,032 21,032 21,032 21,032Reserves 14 64,486 52,381 21,699 17,333

Total equity 85,518 73,413 42,731 38,365

Non-current liabilitiesInterest-bearing liabilities 15 8,605 6,053 1,012 1,749Deferred tax liabilities 7 1,296 1,025 47 47

9,901 7,078 1,059 1,796

Current liabilitiesTrade and other payables 16 45,586 31,053 9,176 8,362Interest-bearing liabilities 15 7,288 8,063 575 546Current tax payable 981 3,336 117 572Provisions 17 671 1,256 - -

54,526 43,708 9,868 9,480

Total liabilities 64,427 50,786 10,927 11,276

Total equity and liabilities 149,945 124,199 53,658 49,641

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


CONSOLIDATED PROFIT AND LOSS ACCOUNT Year Ended 31 December 2005

Note 2005 2004 $'000 $'000 (Restated)

Revenue 19 174,177 174,620Other operating income 4,454 2,065Changes in inventories of finished goods and work-in-progress 3,642 (148)Raw materials and other consumables (100,498) (99,620)Staff costs (37,695) (30,860)Depreciation of property, plant and equipment (6,432) (6,091)Amortisation of intangible assets (381) (326)Other operating expenses (25,871) (22,360)Finance costs 20 (774) (902)

Profit before tax 21 10,622 16,378Income tax expense 22 (394) (3,238)

Profit for the year 10,228 13,140

Earnings per share 23Basic 2.4 cents 3.1 cents

Diluted 2.4 cents 3.1 cents



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Year Ended 31 December 2005

Currency Share Share Capital translation Merger Accumulated capital premium reserve reserve reserve profits TotalGroup $’000 $’000 $’000 $’000 $’000 $’000 $’000

At 1 January 2004, as previously reported 20,988 17,340 144 (412) 139 26,987 65,186Effects of adopting FRS 21 - - - 1,736 - (2,198) (462)

At 1 January 2004, restated 20,988 17,340 144 1,324 139 24,789 64,724

Exchange differences arising on translation: - of financial statements of foreign subsidiaries - - - (2,468) - - (2,468) - of long-term intercompany balances - - - (96) - - (96)Transfer to non-distributable reserve of a foreign subsidiary in compliance with statutory requirement - - 11 - - (11) -

Net gains/(losses) recognised directly in equity - - 11 (2,564) - (11) (2,564)Share issue 44 66 - - - - 110Interim dividend paid of 0.5 cents: - 0.125 cents per share less tax at 20% - - - - - (420) (420) - 0.375 cents per share tax exempt - - - - - (1,577) (1,577)Net profit for the year - - - - - 13,140 13,140

At 31 December 2004 21,032 17,406 155 (1,240) 139 35,921 73,413

At 31 December 2004, as previously reported 21,032 17,406 155 (841) 139 37,444 75,335Effects of adopting FRS 21 - - - (399) - (1,523) (1,922)At 31 December 2004, restated 21,032 17,406 155 (1,240) 139 35,921 73,413

Exchange differences arising on translation: - of financial statements of foreign subsidiaries - - - 1,877 - - 1,877Transfer to non-distributable reserve of a foreign subsidiary in compliance with statutory requirement - - 59 - - (59) -

Net gains/(losses) recognised directly in equity - - 59 1,877 - (59) 1,877Share issue * * - - - - *Net profit for the year - - - - - 10,228 10,228

At 31 December 2005 21,032 17,406 214 637 139 46,090 85,518

* Less than $1,000.



CONSOLIDATED STATEMENT OF CASH FLOWS Year Ended 31 December 2005

Note 2005 2004 $'000 $'000 (Restated)

Operating activitiesProfit before tax 10,622 16,378Adjustments for:Depreciation and amortisation 6,813 6,417(Gain)/Loss on disposal of property, plant and equipment (629) 56Property, plant and equipment written off 284 -Impairment loss on intangible asset - 132Employee benefits 338 -Allowance made for diminution in value of marketable equity securities - 2Interest income (60) (29)Interest expense 774 902Provisions (585) 1,131

Operating profit before working capital changes 17,557 24,989

Changes in working capital:Inventories (8,346) (2,566)Trade and other receivables (11,853) (6,462)Trade and other payables 13,997 (8,441)

Cash generated from operations 11,355 7,520Income taxes paid (2,457) (397)

Cash flows from operating activities 8,898 7,123

Investing activitiesInterest received 60 28Purchase of property, plant and equipment (19,324) (6,629)Proceeds from sale of property, plant and equipment 14,852 181Purchase of intangible assets (334) (209)

Cash flows from investing activities (4,746) (6,629)

Financing activitiesInterest paid (774) (902)Proceeds from bank loans 11,942 6,691Repayment of bank loans (8,055) (4,199)Proceeds from share issue - 110Dividends paid - (1,997)Payment of finance lease liabilities (2,419) (2,481)Proceeds from finance lease liabilities 236 2,279Fixed deposits pledged to bank (3,198) 1,000

Cash flows from financing activities (2,268) 501

Net increase in cash and cash equivalents 1,884 995Cash and cash equivalents at beginning of year 11,008 10,097Effect of exchange rate changes on balances held in foreign currencies 239 (84)

Cash and cash equivalents at end of year 12 13,131 11,008



These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the directors on 27 March 2006.

1. Domicile and Activities

AEM-Evertech Holdings Ltd (the Company) is incorporated in the Republic of Singapore and has its registered office at 52 Serangoon North Avenue 4, Singapore 555853.

The principal activities of the Company are those relating to an investment holding company. The principal activities of the subsidiaries are set out in Note 5 to the financial statements.

The consolidated financial statements relate to the Company and its subsidiaries (referred to as the Group) and the Group’s interest in an associate.

2. Summary of Significant Accounting Policies

2.1 Basis of preparation

The financial statements are prepared in accordance with Singapore Financial Reporting Standards (FRS) including related Interpretations promulgated by the Council on Corporate Disclosure and Governance.

In 2005, the Group adopted the following new/revised FRSs which are relevant to its operations:

FRS 1 (revised) Presentation of Financial Statements

FRS 2 (revised) Inventories

FRS 8 (revised) Accounting Policies, Changes in Accounting Estimates and Errors

FRS 10 (revised) Events After the Balance Sheet Date

FRS 16 (revised) Property, Plant and Equipment

FRS 17 (revised) Leases

FRS 21 (revised) The Effects of Changes in Foreign Exchange Rates

FRS 24 (revised) Related Party Disclosures

FRS 27 (revised) Consolidated and Separate Financial Statements

FRS 28 (revised) Investment in Associates

FRS 32 (revised) Financial Instruments: Disclosure and Presentation

FRS 33 (revised) Earnings Per Share

FRS 36 (revised) Impairment of Assets

FRS 38 (revised) Intangible Assets

FRS 39 Financial Instruments: Recognition and Measurement

FRS 102 Share-based Payment

FRS 103 Business Combinations

FRS 105 Non-current Assets Held for Sale and Discontinued Operations

The effects of adopting the new/revised FRSs in 2005 are set out in note 24.

The financial statements are presented in Singapore dollars and rounded to the nearest thousand, unless otherwise stated. They are prepared on the historical cost basis except for certain financial assets and financial liabilities which are stated at fair value.

NOTES TO THE F INANCIAL STATEMENTS Year Ended 31 December 2005


2. Summary of Significant Accounting Policies (cont’d)

2.1 Basis of preparation (cont’d)

The preparation of financial statements in conformity with FRSs requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilities that are not readily apparent from other sources.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

2.2 Functional currency

The functional currency of the Company is the Singapore dollar. As transactions undertaken by the Company are denominated primarily in Singapore dollars and receipts from operations are usually retained in Singapore dollars, the directors are of the opinion that the Singapore dollar reflects the economic substance of the underlying events and circumstances relevant to the Company.

2.3 Consolidation

Subsidiaries are companies controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain benefits from its activities.

Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

Associates are companies in which the Group has significant influence, but not control, over the financial and operating policies.

Investments in associates are stated in the Company’s balance sheet at cost, less impairment losses. In the Group’s financial statements, they are accounted for using the equity method of accounting.

When the Group’s share of losses exceeds the carrying amount of the associate, the carrying amount is fully written down and recognition of further losses is discontinued except to the extent that the Group has incurred obligations in respect of the associate.

2.4 Foreign currencies

Foreign currency transactions

Monetary assets and liabilities in foreign currencies are translated into Singapore dollars at rates of exchange approximate to those ruling at the balance sheet date. Transactions in foreign currencies are translated at foreign exchange rates ruling on transaction dates. Foreign exchange differences arising from translation are recognised in the profit and loss account. Non-monetary assets and liabilities measured at cost in a foreign currency are translated using exchange rates at the date of the transaction.

Net investment in a foreign operation

Exchange differences arising from monetary items that in substance form part of the Company’s net investment in a foreign operation are recognised in the Company’s profit and loss account. Such exchange differences are reclassified to equity in the consolidated financial statements only when the loan is denominated in either the functional currency of the Company or the foreign operation. Deferred exchange differences are released to the profit and loss account upon disposal of the investment.

NOTES TO THE F INANCIAL STATEMENTS cont inued



2.4 Foreign currencies (cont’d)

Foreign operations

The assets and liabilities of foreign operations are translated into Singapore dollars for consolidation at the rates of exchange ruling at the balance sheet date. Revenues and expenses of foreign operations are translated at the average exchange rates for the year. Exchange differences arising on translation are recognised directly in equity. On disposal, the accumulated translation differences are recognised in the consolidated profit and loss account as part of the gain or loss on sale.

2.5 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.

Property, plant and equipment acquired through finance leases are capitalised at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against the profit and loss account. Capitalised leased assets are depreciated over the shorter of the economic useful life of the asset and the lease term.

Depreciation is provided on a straight-line basis so as to write off items of property, plant and equipment over their estimated useful lives as follows:

Leasehold buildings 30 years

Motor vehicles 5 to 10 years

Furniture and fittings 3 to 10 years

Renovation and installation 3 to 10 years

Computers 3 years

Plant and equipment 3 to 10 years

Capital work in progress is not depreciated until the related property, plant and equipment are brought to use.

The useful lives and residual values, if not insignificant, are reassessed annually.

2.6 Intangible assets

Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in the profit and loss account as an expense when it is incurred.

Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised if the product or process is technically and commercially feasible and the Company has sufficient resources to complete development. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads. Other development expenditure is recognised in the profit and loss account as an expense when it is incurred.

Capitalised development expenditure, net of government grant received and receivable, is stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to the profit and loss account on a straight line basis over its estimated useful life of 5 years from the date of commercialisation of these new or improved products. The unamortised balance is written off to the profit and loss account when the technical feasibility and commercial viability of the products become doubtful.



2.6 Intangible assets (cont’d)

Other intangible assets

Other intangible assets, comprising computer software and patents, are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to the profit and loss account on a straight line basis over the estimated useful lives as follows:

Computer software 3 - 5 years

Patents 5 years

2.7 Investments

Investments in equity securities

Financial instruments held for trading are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in the profit and loss account.

The fair value of financial instruments classified as held-for-trading is determined as the quoted bid price at the balance sheet date.

Financial instruments classified as held-for-trading investments are recognised by the Group on the date it commits to purchase the investments, and derecognised on the date a sale is committed.

2.8 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost of inventories of items segregated for specific projects and equipment are assigned using specific identification of their individual costs. Cost of chemicals and materials used for substrates production are determined using the first-in-first-out formula. All other inventories are determined using the weighted average cost formula.

Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories and work-in-progress, cost includes an appropriate share of overheads based on normal operating capacity.

2.9 Trade and other receivables

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for impairment.

2.10 Cash and cash equivalents

Cash and cash equivalents comprise cash balances and bank deposits. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts which are repayable on demand and which form an integral part of the Group’s cash management and exclude the short term deposits which are pledged to the bank as security and cannot be withdrawn on demand.

2.11 Impairment

The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated.




2.11 Impairment (cont’d)

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is charged to the profit and loss account unless it reverses a previous revaluation, credited to equity, in which case it is charged to equity.

Intangible assets not yet available for use are tested for impairment annually and as and when indicators of impairment are identified.

The recoverable amount of assets is the greater of their net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Reversals of impairment

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

2.12 Liabilities and interest-bearing liabilities

Trade and other payables are recognised initially at fair value. Interest-bearing liabilities are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between the cost and redemption value being recognised in the profit and loss account over the period of the borrowings on an effective interest method.

2.13 Provisions

A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

2.14 Deferred tax

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Temporary differences are not recognised for the initial recognition of assets or liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred tax is provided on temporary differences arising on investments in subsidiaries and associate, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not be reversed in the foreseeable future.



2.15 Revenue recognition

Sale of goods

Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer. Revenue excludes goods and services taxes or other sales taxes and is arrived at after deduction of trade discounts. No revenue is recognised if there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

Commission income

Commission income is recognised when services are rendered.

Interest income

Interest income from bank deposits is accrued on a time-apportioned basis.

Rental income

Rental income receivable under operating leases is recognised in the profit and loss account on a straight line basis over the term of the lease.

2.16 Government grants

Government grants are recognised when the right to receive payment is established.

Grants in recognition of specific expenses are taken to income in the same year as the relevant expenses. Grants related to depreciable property, plant and equipment are offset against the cost of the corresponding property, plant and equipment and the net amount is depreciated over the respective useful lives of the property, plant and equipment.

2.17 Employee benefits

Defined contribution plans

Obligations for contributions to defined contribution plans are recognised as an expense in the profit and loss account as incurred.

2.18 Operating leases

Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the profit and loss account on a straight line basis over the term of the lease.

2.19 Finance costs

Interest expense and similar charges are expensed in the profit and loss account in the period in which they are incurred, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest component of finance lease payments is recognised in the profit and loss account using the effective interest rate method.

2.20 Key management compensation

Key management personnel of the Company are those persons having authority and responsibility for planning, directing and controlling the activities of the Company. The Board of Directors and the senior management team of the Company are considered as key management personnel of the Company.



3 Property, Plant and Equipment

Furniture Renovation Plant Capital Leasehold Motor and and and work-in- buildings vehicles fittings installation Computers equipment progress Total Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Cost At 1 January 2004, as previously reported 21,813 1,781 1,598 8,543 2,468 21,850 1,051 59,104 Effects of adopting FRS 21 269 (18) 4 159 502 (529) (15) 372

At 1 January 2004, restated 22,082 1,763 1,602 8,702 2,970 21,321 1,036 59,476 Additions - 503 197 1,057 273 7,116 - 9,146 Transfers - - - - - 2,855 (1,051) 1,804 Disposals - (25) (8) (37) (7) (270) - (347) Effects of adopting FRS 21 (855) (21) (64) (330) (96) (553) 15 (1,904) Translation differences on consolidation - (15) (10) (76) (29) (377) - (507)

At 31 December 2004 21,227 2,205 1,717 9,316 3,111 30,092 - 67,668 At 1 January 2005, as previously reported 21,813 2,244 1,777 9,487 2,705 31,174 - 69,200 Effects of adopting FRS 21 (586) (39) (60) (171) 406 (1,082) - (1,532)

At 1 January 2005, restated 21,227 2,205 1,717 9,316 3,111 30,092 - 67,668 Additions - 166 477 2,668 448 15,866 - 19,625 Transfers - - - - - 3,987 - 3,987 Disposals (15,535) (1,241) - (529) (17) (792) - (18,114) Translation differences on consolidation 440 31 44 75 73 788 - 1,451

At 31 December 2005 6,132 1,161 2,238 11,530 3,615 49,941 - 74,617

Accumulated depreciation At 1 January 2004, as previously reported 2,483 437 1,124 4,265 2,057 7,414 - 17,780 Effects of adopting FRS 21 104 (12) 3 159 11 (77) - 188

At 1 January 2004, restated 2,587 425 1,127 4,424 2,068 7,337 - 17,968 Depreciation charge for the year 821 210 189 1,099 239 3,606 - 6,164 Disposals - (25) (3) (12) (7) (63) - (110) Effects of adopting FRS 21 (123) (8) (35) (161) (75) (81) - (483) Translation differences on consolidation - (3) (5) (16) (16) (72) - (112)

At 31 December 2004 3,285 599 1,273 5,334 2,209 10,727 - 23,427


3 Property, Plant and Equipment (cont’d)

Furniture Renovation Plant Capital Leasehold Motor and and and work-in- buildings vehicles fittings installation Computers equipment progress Total Group $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Accumulated depreciation At 1 January 2005, as previously reported 3,304 619 1,305 5,336 2,273 10,885 - 23,722 Effects of adopting FRS 21 (19) (20) (32) (2) (64) (158) - (295)

At 1 January 2005, restated 3,285 599 1,273 5,334 2,209 10,727 - 23,427 Depreciation charge for the year 308 178 225 1,264 322 4,089 - 6,386 Disposals (2,289) (332) - (145) (17) (486) - (3,269) Translation differences on consolidation 70 7 32 (17) 49 249 - 390

At 31 December 2005 1,374 452 1,530 6,436 2,563 14,579 - 26,934

Carrying amount At 1 January 2004, restated 19,495 1,338 475 4,278 902 13,984 1,036 41,508

At 31 December 2004 17,942 1,606 444 3,982 902 19,365 - 44,241

At 1 January 2005, restated 17,942 1,606 444 3,982 902 19,365 - 44,241

At 31 December 2005 4,758 709 708 5,094 1,052 35,362 - 47,683



3 Property, Plant and Equipment (cont’d)

Furniture Renovation Motor and and vehicles fittings installation Computers Equipment Total Company $’000 $’000 $’000 $’000 $’000 $’000

Cost At 1 January 2004 1,164 5 - 64 139 1,372 Additions - - - 12 - 12 Disposals - (5) - - - (5)

At 31 December 2004 1,164 - - 76 139 1,379

At 1 January 2005 1,164 - - 76 139 1,379 Additions - - 300 89 - 389 Disposals (692) - - - (63) (755)

At 31 December 2005 472 - 300 165 76 1,013

Accumulated depreciation At 1 January 2004 116 2 - 45 3 166 Depreciation charge for the year 116 - - 14 28 158 Disposals - (2) - - - (2)

At 31 December 2004 232 - - 59 31 322

At 1 January 2005 232 - - 59 31 322 Depreciation charge for the year 90 - 23 23 28 164 Disposals (181) - - - (25) (206)

At 31 December 2005 141 - 23 82 34 280

Carrying amount At 1 January 2004 1,048 3 - 19 136 1,206

At 31 December 2004 932 - - 17 108 1,057

At 1 January 2005 932 - - 17 108 1,057

At 31 December 2005 331 - 277 83 42 733

The carrying amount of property, plant and equipment of the Group and the Company includes amounts totalling $3,695,000 (2004, restated: $5,290,000) and $331,000 (2004: $932,000) respectively, in respect of plant and equipment and motor vehicles held under finance leases.

During the year, the Group acquired property, plant and equipment with an aggregate cost of $19,625,000 (2004, restated: $9,146,000), of which $236,000 (2004, restated: $3,353,000) was acquired under finance leases.

During the year, the Group transferred inventories of $3,987,000 (2004: $1,859,000) to plant and equipment. In the previous year, the Group also transferred plant and equipment with carrying amounts of $55,000 to inventories.


4 Intangible Assets

Development Computer costs software Patents Total Group $’000 $’000 $’000 $’000

Cost At 1 January 2004, as previously reported 219 3,061 20 3,300 Effects of adopting FRS 21 (6) 26 - 20

At 1 January 2004, restated 213 3,087 20 3,320 Additions - 209 - 209 Effects of adopting FRS 21 5 (110) - (105)

At 31 December 2004 218 3,186 20 3,424

At 1 January 2005, as previously reported 219 3,270 20 3,509 Effects of adopting FRS 21 (1) (84) - (85)

At 1 January 2005, restated 218 3,186 20 3,424 Additions - 334 - 334 Translation differences on consolidation 2 43 - 45

At 31 December 2005 220 3,563 20 3,803

Accumulated amortisation and impairment loss At 1 January 2004, as previously reported - 2,646 15 2,661 Effects of adopting FRS 21 - 26 - 26

At 1 January 2004, restated - 2,672 15 2,687 Amortisation charge for the year - 325 4 329 Effects of adopting FRS 21 - (100) - (100) Impairment loss 132 - - 132

At 31 December 2004 132 2,897 19 3,048

At 1 January 2005 132 2,971 19 3,122 Effects of adopting FRS 21 - (74) - (74)

At 1 January 2005, restated 132 2,897 19 3,048 Amortisation charge for the year 21 357 1 379 Translation differences on consolidation - 42 - 42

At 31 December 2005 153 3,296 20 3,469

Carrying amount At 1 January 2004, restated 213 415 5 633

At 31 December 2004 86 289 1 376

At 1 January 2005, restated 86 289 1 376

At 31 December 2005 67 267 - 334



4 Intangible Assets (cont’d)

Computer software Company $’000

Cost At 1 January 2004 237 Additions 197

At 31 December 2004 434

At 1 January 2005 434 Additions 155


Accumulated amortisation At 1 January 2004 81 Amortisation charge for the year 199


At 1 January 2005 280 Amortisation charge for the year 220

At 31 December 2005 500 Carrying amount At 1 January 2004 156


At 1 January 2005 154


The carrying amount of intangible assets of the Group includes amounts totalling $28,000 (2004, restated: $85,000) in respect of computer software held under finance leases.

5 Subsidiaries

Company 2005 2004 $’000 $’000

Investment in subsidiaries 32,333 32,333 Impairment losses (36) (36)

32,297 32,297 Loans to subsidiaries - 5,890

32,297 38,187


5 Subsidiaries (cont’d)

Details of subsidiaries are as follows:

Effective Place of equity held by incorporation the Group Name of subsidiary Principal activities and business 2005 2004 % %

1 Ever Technologies Design and manufacturing of Singapore 100 100 Pte Ltd and its semiconductor manufacturing subsidiaries: equipment and related tooling parts and precision machining of components for semiconductor industry

2 Ever Technologies Manufacturing and Malaysia 100 100 Sdn. Bhd. distribution of equipment and other engineering hardware 2 Everplus Technologies Trading of semiconductor Hong Kong 100 100 HK Limited manufacturing equipment and marketing and liaison services

+ Pro Power Technologies Inactive Singapore - 100 Pte Ltd 1 Orchardville Holdings Investment holding company Singapore 100 100 Pte Ltd and its subsidiary:

3 Shanghai Yong Gao Marketing and liaison People’s 100 100 Electronic Co., Ltd services Republic of China

4 Everplus Technologies, Inactive United States 100 100 Inc. of America

5 Tianjin Ever Provision of value-added People’s 100 100 Technologies subcontract services and Republic of Co., Ltd. solutions China

1 AEM-TECH Engineers Manufacturing and Singapore 100 100 Pte Ltd and its distribution of electronics, subsidiaries: engineering, chemical and related products



5 Subsidiaries (cont’d)

Effective Place of equity held by incorporation the Group Name of subsidiary Principal activities and business 2005 2004 % %

+ Mintgate Pte Ltd Inactive Singapore - 100 1 AEM-TECH Platronics Inactive Singapore 100 100 Pte Ltd

2 AEM-TECH Industries Inactive Malaysia 100 100 Sdn. Bhd.

2 Eminent Dynamic Provision of plating services Malaysia 100 100 Sdn. Bhd.

6 AEM-TECH International Investment holding company Singapore 100 100 Pte Ltd 7 AEM-Evertech (Suzhou) Design and manufacturing of People’s 100 100 Co., Ltd semiconductor manufacturing Republic of equipment, chemical and China related tooling parts and precision machining of components for semiconductor industry and provision of plating services

1 MicroCircuit Technology Design and manufacturing of Singapore 100 100 (2002) Pte Ltd semiconductor organic substrates

All significant subsidiaries are audited by KPMG Singapore or other member firms of KPMG International. A foreign subsidiary is considered significant if its net tangible assets represent 20% or more of the Group’s consolidated net tangible assets, or its profit before tax account for 20% or more of the Group’s consolidated profit before tax.

The loans to subsidiaries are unsecured and interest-free. The loans are re-classified to current assets during the year as they are now repayable on demand.

1 Audited by KPMG Singapore

2 Audited by other member firms of KPMG International

3 Audited by Shanghai Linfang Certified Public Accountants Co., Ltd., People’s Republic of China

4 Not required to be audited by law of country of incorporation

5 Audited by Tianjin Cheng Tai CPAs Ltd., People’s Republic of China

6 Audited by Audit Alliance

7 Audited by Welsen Certified Public Accountants Co., Ltd, People’s Republic of China

+ On 14 October 2005, the Group deregistered Pro Power Technologies Pte Ltd and Mintgate Pte Ltd.


6 Associate

Group Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000

Investment in associate - 12 - 286 Impairment losses - (12) - (286)

- - - - Details of the associate are as follows: Effective Place of equity held by incorporation the Group Name of associate and business 2005 2004 % %

Advent Energy Systems Pte Ltd Singapore - 45

On 8 July 2005, the associate, Advent Energy Systems Pte Ltd, was deregistered.

7 Deferred Tax

Movements in deferred tax assets and liabilities (prior to offsetting of balances) during the year are as follows:

Charged/ (Credited) At to profit and At 1 January loss account Exchange 31 December 2005 (Note 22) differences 2005 Group $’000 $’000 $’000 $’000

Deferred tax liabilities Property, plant and equipment 1,727 (17) 5 1,715

Deferred tax assets Trade and other receivables (443) 308 - (135) Provisions (242) - - (242) Tax value of losses carry-forward (205) - (4) (209) Tax value of capital allowances carry-forward (2) - - (2) Other items (40) - - (40)

(932) 308 (4) (628)



7 Deferred Tax (cont’d)

Charged/ (Credited) At to profit and At 1 January loss account Exchange 31 December 2005 (Note 22) differences 2005 Company $’000 $’000 $’000 $’000

Deferred tax liabilities Property, plant and equipment 47 - - 47

Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxation authority. The amounts determined after appropriate offsetting are included in the balance sheets as follows:

Group Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000

Deferred tax assets (209) (230) - -

Deferred tax liabilities 1,296 1,025 47 47

Deferred tax asset has not been recognised in respect of tax losses of $1,872,000 (2004: $1,105,000) for the Group because it is not probable that future taxable profit will be available against which the Group can utilise the benefits.

8 Inventories

Group 2005 2004 $’000 $’000 (Restated)

Raw materials 6,469 4,166 Work-in-progress: - at cost 15,188 9,813 Finished goods: - at cost 8,173 10,240 - at net realisable value - 135 Goods-in-transit 11 18

29,841 24,372


9 Trade and Other Receivables

Group Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000

Trade receivables 51,934 43,291 - - Allowance for doubtful trade receivables (636) (718) - -

Net receivables 51,298 42,573 - - Government grant receivable 701 - - - Staff advances 73 133 - 1 Deposits 843 518 3 6 Prepayments 2,517 598 128 120 Interest receivable 2 6 - - Other receivables - 89 46 3 Amounts due from: - subsidiaries (trade) - - 6,365 9,799 - subsidiaries (non-trade) - - 4,410 - Loans to subsidiaries - - 5,890 -

55,434 43,917 16,842 9,929

Transactions with subsidiaries are unsecured and priced at arm’s length basis. There is no allowance for doubtful debts arising from the outstanding balances.

The non-trade amounts and loans to subsidiaries are unsecured, interest-free and repayable on demand.

The Group’s primary exposure to credit risk arises through its trade receivables. Concentration of credit risk relating to trade receivables is limited due to the Group’s many varied customers. The Group’s historical experience in the collection of accounts receivable falls within the recorded allowances. Due to these factors, management believes that no additional credit risk beyond the amounts provided for collection losses is inherent in the Group’s trade receivables.

10 Other Financial Assets

Group 2005 2004 $’000 $’000

Quoted equity securities, held for trading 2 2

11 Non-Financial Assets

Group Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000

Transferable country club memberships, at cost 160 160 52 52 Impairment losses (107) (107) - -

53 53 52 52



11 Non-Financial Assets (cont’d)

In previous years, the Group made provision for impairment losses on its transferable club memberships based on estimated net selling price obtained from market quotation. In 2005, the Group re-assessed the provision made and concluded that there are no significant differences in net selling price as compared to those determined previously.

12 Cash and Cash Equivalents

Group Company Note 2005 2004 2005 2004 $’000 $’000 $’000 $’000

Cash at bank and in hand 13,191 11,005 1,617 262 Fixed deposits with banks 3,198 3 2,028 -

16,389 11,008 3,645 262 Bank overdrafts (secured) 15 (60) - - - Fixed deposits pledged to bank (3,198) - (2,028) -

13,131 11,008 1,617 262

The Group’s fixed deposits amounting to $3,198,000 (2004: Nil) have been pledged to a bank for:

(i) bank overdraft facilities granted (refer to Note 15); and

(ii) bank guarantees granted in relation to lease agreements entered into by the Group.

The weighted average effective interest rates per annum relating to cash and cash equivalents, excluding bank overdrafts, at the balance sheet date for the Group and the Company are 0.41% (2004: 0.22%) and 1.06% (2004: 0.15%) respectively.

Interest rates are repriced monthly.

13 Share Capital

2005 2004 No. of Shares $'000 No. of Shares $'000

Authorised: Ordinary shares of $0.05 each 1,000,000,000 50,000 1,000,000,000 50,000

Issued and fully paid: At 1 January 420,645,760 21,032 419,756,760 20,988 Issue of shares 8,000 * 889,000 44

420,653,760 21,032 420,645,760 21,032

* Amount less than $1,000

Unissued ordinary shares of $0.05 each of the Company under options granted to eligible directors and employees under the AEM-Evertech Holdings Share Option Scheme are disclosed in Note 18.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets.


14 Reserves

Group Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000 (Restated)

Share premium 17,406 17,406 17,406 17,406 Capital reserve 214 155 - - Currency translation reserve 637 (1,240) - - Merger reserve 139 139 - - Accumulated profits/(losses) 46,090 35,921 4,293 (73)

64,486 52,381 21,699 17,333

The application of the share premium account is governed by Section 69 of the Companies Act, Chapter 50.

The capital reserve of the Group comprises accumulated profits transferred by a foreign subsidiary as required by local legislations which can only be distributed upon approval by the relevant authorities.

The currency translation reserve of the Group comprises foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currency is different from that of the Company and the translation of monetary items which form part of the Group’s net investment in the foreign operations, provided certain conditions are met.

The merger reserve arises from the difference between the nominal value of shares issued by the acquiring company and the nominal value of shares of subsidiaries acquired under the pooling of interests method of accounting.

15 Interest-Bearing Liabilities

Group Company Note 2005 2004 2005 2004 $’000 $’000 $’000 $’000

Non-current liabilities Secured bank loans 6,693 2,001 - - Finance lease liabilities 1,912 4,052 1,012 1,749

8,605 6,053 1,012 1,749 Current liabilities Bank overdrafts (secured) 12 60 - - - Secured bank loans 5,489 4,065 - - Unsecured bank loans - 2,217 - - Finance lease liabilities 1,739 1,781 575 546

7,288 8,063 575 546

Total borrowings 15,893 14,116 1,587 2,295



15 Interest-Bearing Liabilities (cont’d)

Maturity of liabilities (excluding finance lease liabilities): Group 2005 2004 $’000 $’000

Within 1 year 5,549 6,282 After 1 year but within 5 years 6,693 2,001

12,242 8,283

The secured bank loans and bank overdrafts are secured on the following:

(i) mortgages over certain leasehold buildings of the Group with a total carrying amount of $4,758,000 at 31 December 2005 (2004, restated: $13,051,000);

(ii) pledge on fixed deposits of $3,198,000 at 31 December 2005 (2004: Nil); and

(iii) mortgages over certain machineries of the subsidiaries with a total carrying amount of $11,136,000 at 31 December 2005.

Finance lease liabilities

At 31 December 2005, the Group and the Company have obligations under finance leases that are payable as follows:

2005 2004

Principal Interest Payments Principal Interest Payments Group $’000 $’000 $’000 $’000 $’000 $’000

Repayable within 1 year 1,739 131 1,870 1,781 281 2,062 Repayable after 1 year but within 5 years 1,912 113 2,025 4,021 283 4,304 Repayable after 5 years - - - 31 - 31

1,912 113 2,025 4,052 283 4,335

3,651 244 3,895 5,833 564 6,397 Company

Repayable within 1 year 575 87 662 546 122 668 Repayable after 1 year but within 5 years 1,012 57 1,069 1,749 152 1,901

1,587 144 1,731 2,295 274 2,569

In 2004, the Company entered into finance lease arrangements for the acquisition of equipment on behalf of a subsidiary. The equipment acquired was subsequently transferred and recorded as property, plant and equipment of the subsidiary.


15 Interest-Bearing Liabilities (cont’d)

Effective interest rates and repricing/maturing analysis:

Effective --- Fixed interest rate maturing--- interest Floating within 1 to 5 after rate Interest 1 year years 5 years Total Group % $’000 $’000 $’000 $’000 $’000

2005 Secured bank loans: - US$ floating rate loans 3.50 - 4.37 1,665 - - - 1,665 - US$ fixed rate loans 5.65 - 6.50 - 2,828 6,883 - 9,711 - S$ fixed rate loans 5.00 - 502 304 - 806 Bank overdrafts 8.00 60 - - - 60 Finance lease liabilities 4.00 - 7.30 - 1,739 1,912 - 3,651

1,725 5,069 9,099 - 15,893 2004 Secured bank loans: - S$ floating rate loans 2.90 2,000 - - - 2,000 - RMB fixed rate loans 5.49 - 56 9 - 65 - S$ fixed rate loans 4.50 - 5.00 - 2,009 1,992 - 4,001 Unsecured bank loans: - RMB floating rate loans 5.55 - 5.84 989 - - - 989 - US$ floating rate loans 4.61 1,228 - - - 1,228 Finance lease liabilities 4.44 - 9.22 - 1,781 4,021 31 5,833

4,217 3,846 6,022 31 14,116 Company

2005 Finance lease liabilities 4.00 - 7.30 - 575 1,012 - 1,587 2004 Finance lease liabilities 3.16 - 7.30 - 546 1,749 - 2,295

16 Trade and Other Payables

Group Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000

Trade payables and accrued operating expenses 43,378 30,830 3,190 3,565 Trust receipts (secured) 1,957 - - - Amounts due to subsidiaries (non-trade) - - 5,842 4,797 Deposits received 188 190 144 - Other payables 63 33 - -

45,586 31,053 9,176 8,362

The non-trade amounts due to subsidiaries are unsecured, interest-free and repayable on demand.



16 Trade and Other Payables (cont’d)

The trust receipts as at 31 December 2005 were secured on mortgages over certain machineries of the subsidiaries.

The weighted average effective interest rate of trust receipts of the Group as at 31 December 2005 is 5.44% (2004: Nil) per annum.

17 Provisions

Warranties Group $’000

At 1 January 2005 1,256 Provisions reversed (585)


The provision for warranties is based on estimates made from historical warranty data associated with similar products and services. The Group expects to incur the liability over the next two years.

18 Employee Share Options

The AEM-Evertech Holdings Share Option Scheme (the Scheme) of the Company was approved and adopted by its members at an Extraordinary General Meeting held on 22 March 2002. The Scheme is administered by the Company’s Remuneration Committee (the Committee) comprising three directors. The members of the Remuneration Committee during the year were Yeo Wee Kiong (Chairman), Ng Quek Peng and Tok Kian You. Subsequent to the end of the financial year, Yeo Wee Kiong resigned as a director of the Company and Basil Chan, a newly appointed director, was appointed as the Chairman of the Remuneration Committee.

Other information regarding the Scheme is set out below:

(i) The exercise price of the options shall be at up to a maximum discount of 20% to the market price immediately preceding the date of grant of the option or its nominal value, whichever is higher. Subject to this cap on the discount, the Committee will have the discretion and flexibility to decide the exact quantum of discount for each participant. The subscription price shall not be less than the nominal amount of the share.

(ii) An option may be granted at any time at the absolute discretion of the Committee, provided that where price sensitive information is being announced, options may only be granted after the third market day from the date on which the announcement is released. The grant of an option shall be accepted within thirty days from the date of grant and not later than 5.00 p.m. on the thirtieth day from the date of grant.

(iii) There are 3 types of options that may be granted by the Company, namely, (a) Market Price Options, (b) Discount Price Options and (c) Premium Price Options.

(iv) The new shares issued by the Company upon the exercise of the options shall rank in full for all dividends or other distributions declared or recommended in respect of the then existing shares and shall in all other respects rank pari passu with other existing shares of the Company.

(v) Discount Price Options are exercisable at any time after the second anniversary of the date of grant and before the expiry of the tenth anniversary of the relevant date of grant except that in the case of non-executive directors, such options will expire on the fifth anniversary of the date of grant.

Market Price Options and Premium Price Options are exercisable at any time after the first anniversary of the date of grant and before the expiry of the tenth anniversary of the relevant date of grant except that in the case of non-executive directors, such options will expire on the fifth anniversary of the date of grant.

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19 Revenue

Group 2005 2004 $’000 $’000

Sale of semiconductor products and services 174,170 174,439 Commission income 7 181

174,177 174,620

20 Finance Costs

Group 2005 2004 $’000 $’000

Interest expense: - trust receipts and bills payable 45 253 - finance leases 318 309 - term loans and bank overdrafts 411 340

774 902

21 Profit Before Tax

The following items have been included in arriving at profit before tax: Group 2005 2004 $’000 $’000 (Restated) Interest income (60) (29) Government grant (732) (1,162) Rental income (650) (645) Allowance made for diminution in value of marketable equity securities - 2 Exchange (gain)/loss, net (1,603) 986 Impairment loss on intangible asset - 132 (Gain)/Loss on disposal of property, plant and equipment (629) 56 Property, plant and equipment written off 284 - Non-audit fees paid to: - auditors of the Company 67 96 - other auditors 60 3 Operating lease expense 3,725 1,910 Professional fee paid to a firm in which a director is a member 41 - Directors’ remuneration included in staff costs - the Company 2,138 2,718 - the subsidiaries 1,179 648



21 Profit Before Tax (cont’d)

Group 2005 2004 $’000 $’000 (Restated)

Directors’ fees 363 446 Remuneration of key management personnel other than directors of the Company and its subsidiaries 1,105 1,183 Contributions to defined contribution plans included in staff costs 3,260 2,693 (Reversal of allowance)/Allowance made for doubtful debts (85) 519 Allowance made for inventories 895 325 Inventories written off 1,610 - Bad debts written off 166 168

22 Income Taxes

Group 2005 2004 $’000 $’000

Current tax expense

Current year 366 3,236 (Over)/Under provided in prior years (263) 6

103 3,242 Deferred tax expense Movements in temporary differences 3 18 Under provided in prior years 288 48

Reduction in tax rate - (70)

291 (4)

Income tax expense 394 3,238 Reconciliation of effective tax rate

Profit before tax 10,622 16,378 Income tax using Singapore tax rate of 20% 2,124 3,276 Effect of different tax rates in other countries 655 (91) Expenses not deductible for tax purposes 540 406 Income not subject to tax (3,717) (536) Effect of reduction in tax rate - (70) Benefit of tax losses not recognised 767 199 Under provided in prior years 25 54

394 3,238



23 Earnings Per Share

The basic earnings per share is based on net profit attributable to ordinary shareholders of $10,228,000 (2004, restated: $13,140,000) and weighted average of 420,652,000 (2004: 420,435,000) shares outstanding during the year.

In calculating the diluted earnings per share, the weighted average number of ordinary shares is adjusted for the effect of all dilutive potential ordinary shares. The adjusted weighted average number of shares is as follows:

Number of shares 2005 2004 (’000) (’000)

Weighted average number of shares used in calculation of basic earnings per share 420,652 420,435 Weighted average number of shares under options that would have been issued at fair value 364 586

Weighted average number of shares used in calculation of diluted earnings per share 421,016 421,021

24 Changes in Accounting Policies

The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31 December 2005.

The changes in accounting policies arising from the adoption of FRS 21 (revised) The Effects of Changes in Foreign Exchange Rates are summarised below:

FRS 21 (revised) The Effects of Changes in Foreign Exchange Rates

In prior years, certain of the Group’s subsidiaries, namely AEM-Tech Engineers Pte Ltd, Ever Technologies Pte Ltd and Microcircuit Technology (2002) Pte Ltd measured transactions in Singapore dollars. With the adoption of FRS 21 (revised) in the current year, these subsidiaries have remeasured all their transactions in US dollars which has the same effect as if the accounting records had been kept in US dollars since incorporation. The change in accounting policy has been accounted for retrospectively.

The adoption of FRS 21 resulted in: Group 2005 2004 $’000 $’000

Decrease in opening accumulated profits 1,523 2,198

(Decrease)/Increase in opening currency translation reserve (399) 1,736

Increase in net profit for the year 675

Decrease in carrying amounts of property, plant and equipment 1,237

Decrease in carrying amount of intangible assets 11

Decrease in carrying amount of inventories 674

There is no significant impact on the basic and diluted earnings per share arising from the adoption of FRS 21.


25 Commitments

Operating lease commitments

At 31 December 2005, the Group has commitments for future minimum lease payments under non-cancellable operating leases as follows:

Group 2005 2004 $’000 $’000

Payable: - Within 1 year 3,911 1,703 - After 1 year but within 5 years 13,516 2,748 - After 5 years 15,980 6,673

33,407 11,124 Included in the above are leases for the following:

(a) a leasehold building, which is built on land subject to a 30-year lease, with an option to extend for a further 30 years, commencing from 1 June 1998. The annual land rent payable under the lease agreement is $26,000 (2004: $26,000). The land rent is subject to review every year, with a maximum increase in rent not exceeding 7.6% (2004: 7.6%) of the annual rent for the preceding year.

(b) a leasehold building, which is built on land subject to a 30-year lease, commencing from 1 November 1995. The annual land rent payable under the lease agreement is $63,000 (2004: $73,000). The land rent is subject to review every year, with a maximum increase in rent not exceeding 5.5% (2004: 5.5%) of the annual rent for the preceding year.

(c) a leasehold property for a period of 10 years, commencing from 28 September 2005, with an option to renew for a further 10 years. The initial annual rental is $1,296,000 and is subject to an increase of 1.75% per annum on the annual rental for the preceding year.

(d) a leasehold property for a period of 10 years, commencing from 4 April 2005, with an option to renew for a further 10 years. The initial annual rental is $1,854,000 and is subject to an increase of 1.75% per annum or the equivalent rate of Consumer Price Index percentage variation (being the total percentage variation of the Consumer Price Index of Singapore calculated on a month to month basis aggregated for the twelve month period immediately preceding the relevant rent revision), whichever is higher.

Sub-lease receivables

At 31 December 2005, the Group has minimum sub-lease income receivable under non-cancellable operating leases as follows:

Group 2005 2004 $’000 $’000

Receivable: - Within 1 year 477 390 - After 1 year but within 5 years 188 198

665 588



25 Commitments (cont’d)

Capital commitments Group 2005 2004 $’000 $’000

Authorised but not contracted for 1,866 17,913

Proposed dividends

After the balance sheet date, the Directors proposed the following dividend: Group 2005 2004 $’000 $’000

Final dividend proposed of 0.5 cents per share (tax exempt) (2004: Nil) 2,103 -

This dividend has not been provided for.

26 Significant Related Party Transactions

For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Other than as disclosed elsewhere in the financial statements, there were the following transactions with related parties:

Group 2005 2004 $’000 $’000

Sale of a motor vehicle to a director 94 -

27 Segment Information

Segment information is presented in respect of the Group’s business and geographical segments. The primary format, business segments, is based on the Group’s management and internal reporting structure.

Inter-segment pricing is determined on mutually agreed terms.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise corporate assets and expenses, interest income, interest expenses and related assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire segment assets that are expected to be used for more than one year.


27 Segment Information (cont’d)

Business Segments

The Group comprises the following main business segments:

Equipment : The design, development and manufacture of equipment for assembly, testing and finishing processes.

Precision engineering : The design, development and manufacture of precision engineering products for equipment used in the semiconductor assembly, testing and finishing processes.

Substrates : The design, manufacture and sale of semiconductor organic substrates.

Chemicals and services : The development of processes and associated chemical formulations.

Distribution : The distribution of engineering materials and products.

Geographical Segments

While the Group’s business activities are managed on a worldwide basis, it operates in four principal geographical areas, namely South East Asia, North Asia, Non-Asia and Singapore.

In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the assets.

Business Segments

Chemicals Inter- Precision and segment Equipment Substrates engineering services Distribution elimination Consolidated 2005 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue and expenses Total revenue from external customers 58,721 55,588 32,697 25,618 1,553 - 174,177 Inter-segment revenue 1,218 - 60 475 9 (1,762) -

Total revenue 59,939 55,588 32,757 26,093 1,562 (1,762) 174,177

Segment results 2,077 6,012 5,802 (1,491) (1,004) - 11,396

Finance costs (774) Income tax expense (394)

Profit for the year 10,228

Assets and liabilities Segment assets 36,747 47,817 16,544 29,356 2,042 - 132,506 Unallocated assets 17,439

Total assets 149,945 Segment liabilities 12,959 13,288 9,103 5,671 231 - 41,252 Unallocated liabilities 23,175

Total liabilities 64,427 Other segment information Capital expenditure 2,185 16,947 528 3,986 - - 23,646 Depreciation and amortisation 1,382 2,681 1,038 1,692 20 - 6,813 Other non-cash items (332) (590) (353) (280) (15) - (1,570)




Business Segments Chemicals Inter- Precision and segment Equipment Substrates engineering services Distribution elimination Consolidated 2004 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Revenue and expenses Total revenue from external customers 90,188 30,670 32,517 17,640 3,605 - 174,620 Inter-segment revenue 425 - 62 168 76 (731) -

Total revenue 90,613 30,670 32,579 17,808 3,681 (731) 174,620 Segment results, as previously reported 9,206 2,018 6,232 23 (874) - 16,605 Effect of adopting FRS 21 344 (199) - 530 - - 675

Segment results, restated 9,550 1,819 6,232 553 (874) - 17,280 Finance costs (902) Income tax expense (3,238)

Profit for the year, restated 13,140 Assets and liabilities Segment assets, as previously reported 42,978 25,306 14,822 19,786 1,109 - 104,001

Effect of adopting

FRS 21 (745) (738) - (439) - - (1,922)

Segment assets, restated 42,233 24,568 14,822 19,347 1,109 - 102,079 Unallocated assets 22,120

Total assets, restated 124,199

Segment liabilities 10,887 12,847 2,729 5,940 169 - 32,572 Unallocated liabilities 18,214

Total liabilities 50,786 Other segment information Capital expenditure, restated 320 5,184 908 2,572 371 - 9,355

Depreciation and amortisation, as previously reported 1,056 1,891 576 2,613 357 - 6,493 Effect of adopting FRS 21 8 (57) - (27) - - (76)

Depreciation and amortisation, restated 1,064 1,834 576 2,586 357 - 6,417 Impairment loss 132 - - - - - 132 Other non-cash items 2,940 232 168 361 16 - 3,717



Geographical Segments South-East North Asia Asia Non-Asia Singapore Consolidated 2005 $’000 $’000 $’000 $’000 $’000

Total revenue from external customers 52,305 51,119 37,699 33,054 174,177 Segment assets 14,576 16,941 - 118,428 149,945 Capital expenditure 1,931 2,337 - 19,378 23,646

2004 Total revenue from external customers 61,308 48,279 41,497 23,536 174,620

Segment assets 9,876 12,131 1 104,113 126,121 Effect of adopting FRS 21 - - - (1,922) (1,922)

Segment assets, restated 9,876 12,131 1 102,191 124,199 Capital expenditure, restated 887 1,417 - 7,051 9,355

28 Financial Instruments

Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved.

Credit risk

Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations to the Group, as and when they fall due.

Management has a credit policy in place and the exposure to credit risk is monitored on an on-going basis. Credit evaluations are performed on all customers requiring credit over a certain amount. Cash and fixed deposits are placed with banks which are regulated.

At the balance sheet date, there is no significant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheets.

Foreign currency risk

The Group incurs foreign currency risk on sales, purchases and borrowings that are denominated in currencies other than Singapore dollars. The currencies giving rise to this risk are primarily United States dollars, Hong Kong dollars, Chinese Renminbi and Malaysian Ringgit.

There is no formal hedging policy with respect to foreign currency exposure. Exposure to foreign currency risk is monitored on an on-going basis and the Group endeavours to keep the net exposure at an acceptable level.

Interest rate risk

The Group’s exposure to market risk for changes in interest rates relates primarily to the Group’s debt obligations.

There is no formal hedging policy with respect to interest rate exposure. The Group’s policy is to manage interest cost using a mix of fixed and variable rate debts.

Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.



28 Financial Instruments (cont’d)

Fair value

The aggregate net fair values of recognised financial liabilities, which are not carried at fair value in the balance sheets as at 31 December, are presented in the following table:

2005 2004 Carrying Fair Carrying Fair amount value amount value Group Note $’000 $’000 $’000 $’000

Financial liabilities Secured fixed rate loans 15 10,517 10,474 4,066 4,074 Finance lease liabilities 15 3,651 3,631 5,833 5,871

14,168 14,105 9,899 9,945 Company Financial liabilities Finance lease liabilities 15 1,587 1,590 2,295 2,271

The above fair values have been estimated by discounting future contracted cash flows at the current market rate available.

29 Contingent Liabilities

The Company issued guarantees to the bank in respect of banking facilities extended to certain subsidiaries. At 31 December 2005, the amount of banking facilities utilised amounted to $14,199,000 (2004: $8,138,000).

30 Comparative Information

Comparatives in the financial statements have been changed from the previous year due to the changes in accounting policies as described in note 24.


1 Directors’ Remuneration

Company’s directors1 receiving remuneration from the Group:

No. of directors 2005 2004

Remuneration of: $500,000 and above 2 2 $250,000 to $499,999 - - Below $250,000 5 4

7 6

1 Inclusive of a director who resigned during the year and a director who resigned after the end of the financial year.

2 Major Properties

Approximate area Location (sq ft) Purpose Tenure

7 Woodlands Walk 49,848 Industrial building 30-year lease commencing Singapore 738320 1 November 1995

11 Woodlands Sector 1 13,902 Industrial building 30-year lease commencing Woodlands East 1 June 1998 with a Industrial Estate conditional option to renew Singapore 738325 for a further 30 years

3 Interested Person Transactions

There were no interested person transactions entered into during the financial year.

4 Material Contracts

There were no material contracts entered into between the Company and its subsidiaries involving the interests of the Managing Director or each director of the Company during the financial year.

ADDIT IONAL INFORMATION Year Ended 31 December 2005


STATIST ICS OF SHAREHOLDINGS As At 13th March 2006

Authorised Share Capital : $50,000,000 Issued and fully paid-up capital : $21,032,688 Class of shares : Ordinary share of S$0.05 each Voting rights : One vote per share

Distribution Of Shareholdings

No. of Size of Shareholdings Shareholders % No.of Shares % 1 - 999 60 1.36 24,135 0.011,000 - 10,000 1,400 31.74 11,430,039 2.7210,001 - 1,000,000 2,926 66.33 161,838,136 38.471,000,001 And Above 25 0.57 247,361,450 58.80

Total 4,411 100.00 420,653,760 100.00

Twenty Largest Shareholders

No. Name No.of Shares %

1 Transpac Nominees Pte Ltd 93,581,121 22.252 Tok Kian You 39,984,168 9.513 Ang Seng Thor 20,146,281 4.794 Regional Investment Company Limited 16,856,328 4.015 United Overseas Bank Nominees Pte Ltd 10,940,000 2.606 DBS Nominees Pte Ltd 10,302,000 2.457 OCBC Securities Private Ltd 9,291,000 2.218 UOB Kay Hian Pte Ltd 6,944,000 1.659 DBS Vickers Securities (S) Pte Ltd 6,654,041 1.5810 Kim Eng Securities Pte. Ltd. 4,777,000 1.1411 Wong Chin Ming 3,629,449 0.8612 Phillip Securities Pte Ltd 3,161,000 0.7513 OCBC Nominees Singapore Pte Ltd 2,641,000 0.6314 Neo Lay Yong 2,164,282 0.5115 Legend East Investments (S) Pte Ltd 2,034,000 0.4816 Stone Forest Pte Ltd 2,029,780 0.4817 Lim & Tan Securities Pte Ltd 1,724,000 0.4118 Azam Essof Kolia 1,527,000 0.3619 Neo Eng Kiong 1,509,000 0.3620 Hong Leong Finance Nominees Pte Ltd 1,459,000 0.35

Total 241,354,450 57.38

Substantial Shareholders(As recorded in the Register of Substantial Shareholders)

No. Name Direct Interest % Deemed Interest %

1 Transpac Nominees Pte Ltd1 93,581,121 22.25 - -2 Tok Kian You 39,984,168 9.51 - -

1 Transpac Nominees Pte Ltd is a wholly-owned subsidiary of Transpac Capital Pte Ltd, a direct investment management company incorporated in Singapore. Transpac Nominees Pte Ltd act as a nominee to hold investments owned by funds under the management of Transpac Capital Pte Ltd. The beneficiaries of the shares held under the name of Transpac Nominees Pte Ltd are Transpac Capital 1996 Investment Trust, Transpac Capital Prallel 1996 Investment Trust and Transpac Managers III Limited.

Percentage Of Shareholdings In Hands Of The Public66.97% of the Company’s shares are held in the hands of the public. Accordingly, the Company has complied with Rule 723 of the Listing Manual of the SGX-ST.


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of AEM-EVERTECH HOLDINGS LTD (“the Company”) will be held at 30 Tuas Avenue 8, Singapore 639246 on Friday, 28 April 2006 at 10.00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Financial Statements of the Company for the year ended 31 December 2005 together with the Auditors’ Report thereon.

(Resolution 1)

2. To declare the payment of a tax exempt (1-tier) first and final dividend of Singapore 0.5 cents per ordinary share for the financial year ended 31 December 2005. (2004 : 0.5 cents per ordinary share)

(Resolution 2)

3. To re-elect the following Directors retiring pursuant to Article 108 of the Company’s Articles of Association:

(i) Mr Will Hoon Wee Teng (Retiring under Article 108) (Resolution 3)

(ii) Mr Basil Chan (Retiring under Article 108) (Resolution 4)

Mr Basil Chan will, upon re-election as a Director of the Company, remain as Chairman of the Remuneration Committee and members of the Audit and Nominating Committees and will be considered independent for the purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited.

4. To note the retirement of Mr Leong Siew Loon, a Director retiring under Articles 104 and 105 of the Company’s Articles of Association who would not be seeking re-election.

Upon retirement of Mr Leong Siew Loon, he will be relinquishing his position as a member of the Audit and Nominating Committees.

5. To approve the payment of Directors’ fees of S$362,500 for the year ended 31 December 2005 (2004: S$446,000).

(Resolution 5)

6. To re-appoint Messrs KPMG as the Company’s Auditors and to authorise the Directors to fix their remuneration.

(Resolution 6)

7. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications:


8. Authority to allot and issue shares up to 50 per centum (50%) of issued shares in the capital of the Company

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Directors be empowered to allot and issue shares and convertible securities in the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares (including shares to be issued in accordance with the terms of convertible securities issued, made or granted pursuant to this Resolution) to be allotted and issued pursuant to this Resolution shall not exceed fifty per centum (50%) of the issued shares in the capital of the Company at the time of the passing of this Resolution, of which the aggregate number of shares and convertible securities to be issued other than on a pro rata basis to all shareholders of the Company shall not exceed twenty per centum (20%) of the issued shares in the capital of the Company and that such authority shall, unless revoked or varied by the Company in general meeting, continue in force (i) until the conclusion of the Company’s next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier or (ii) in the case of shares to be issued in accordance with the terms of convertible securities issued, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of such convertible securities.

[See Explanatory Note (i)] (Resolution 7)

9. Authority to allot and issue shares under the AEM-Evertech Holdings Share Option Scheme

That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors be authorised and empowered to allot and issue shares of the Company to all the holders of options granted by the Company, whether granted during the subsistence of this authority or otherwise, under the AEM-Evertech Holdings Share Option Scheme (“the Scheme”) upon the exercise of such options and in accordance with the terms and conditions of the Scheme, provided always that the aggregate number of additional ordinary shares to be allotted and issued pursuant to the Scheme shall not exceed fifteen per centum (15%) of the issued ordinary shares in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in general meeting, continue in force until the conclusion of the Company’s next Annual General Meeting or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (ii)] (Resolution 8)

By Order of the Board

Tan Cher LiangStanley LingCompany SecretariesSingapore, 10 April 2006


Explanatory Notes:

(i) The Ordinary Resolution 7 proposed in item 8 above, if passed, will empower the Directors from the date of this Meeting until the date of the next Annual General Meeting, or the date by which the next Annual General Meeting is required by law to be held or when varied or revoked by the Company in general meeting, whichever is the earlier, to allot and issue shares and convertible securities in the Company. The number of shares and convertible securities that the Directors may allot and issue under this resolution would not exceed fifty per centum (50%) of the issued shares in the capital of the Company at the time of the passing of this resolution. For issue of shares and convertible securities other than on a pro rata basis to all shareholders, the aggregate number of shares and convertible securities to be issued shall not exceed twenty per centum (20%) of the issued shares in the capital of the Company.

For the purpose of this resolution, the percentage of issued shares is based on the issued shares in the capital of the Company at the time this proposed Ordinary Resolution is passed after adjusting for new shares arising from the conversion or exercise of convertible securities, the exercise of share options or the vesting of share awards outstanding or subsisting at the time when this proposed Ordinary Resolution is passed and any subsequent consolidation or subdivision of shares.

(ii) The Ordinary Resolution 8 proposed in item 9 above, if passed, will empower the Directors of the Company, from the date of this Meeting until the next Annual General Meeting, or the date by which the next Annual General Meeting is required by law to be held or when varied or revoke by the Company in general meeting, whichever is the earlier, to allot and issue shares in the Company of up to a number not exceeding in total fifteen per centum (15%) of the issued ordinary shares in the capital of the Company from time to time pursuant to the exercise of the options under the Scheme.

Notes:

1. A Member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a Member of the Company.

2. If the appointor is a corporation, the instrument appointing a proxy must be executed under the seal or the hand of its duly authorised office or attorney.

3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 52 Serangoon North Avenue 4, Singapore 555853 not less than 48 hours before the time appointed for holding the Meeting.

NOTICE OF BOOKS CLOSURE

NOTICE IS HEREBY GIVEN THAT the Share Transfer Books and Register of Members of AEM-Evertech Holdings Ltd (the “Company”) will be closed on 10 May 2006 for the preparation of dividend warrants.

Duly completed registrable transfers received by the Company’s Share Registrar, Lim Associates (Pte) Ltd, 10 Collyer Quay #19-08 Ocean Building, Singapore 049315 up to 5.00 p.m. on 9 May 2006 will be registered to determine shareholders’ entitlements to the said dividend. Members whose Securities Accounts with The Central Depository (Pte) Limited are credited with shares at 5.00 p.m. on 9 May 2006 will be entitled to the proposed dividend.

Payment of the dividend, if approved by the members at the Annual General Meeting to be held on 28 April 2006, will be made on 23 May 2006.

NOTICE OF ANNUAL GENERAL MEETING cont inued

PROXY FORM AEM-EVERTECH HOLDINGS LTDCompany Registration No. 200006417D)(Incorporated In The Republic of Singapore with limited liability)

IMPORTANT:

1. For investors who have used their CPF monies to buy AEM-EVERTECH HOLDINGS LTD’s shares, this Report is forwarded to them at the request of the 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 attend the Meeting as an observer must submit their requests through their CPF Approved Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf.

*Delete where inapplicable

(Please see notes overleaf before completing this Form)

I/We, _______________________________________________________________________________________

of __________________________________________________________________________________________

being a member/members of AEM-EVERTECH HOLDINGS LTD (the “Company”), hereby appoint:

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

or failing him/her, the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held at 30 Tuas Avenue 8, Singapore 639246 on Friday, 28 April 2006 at 10.00 a.m. and any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.

(Please indicate your vote “For” or “Against” with a tick [ ] within the box provided.)

No. Resolutions relating to: For Against

1 Directors’ Report and Audited Financial Statements for the year ended 31 December 2005

2 Approval of payment of tax exempt (1-tier) first and final dividend

3 Re-election of Mr Will Hoon Wee Teng, as a Director pursuant to Article 108 of the Company’s Articles of Association

4 Re-election of Mr Basil Chan as a Director pursuant to Article 108 of the Company’s Articles of Association

5 Approval of Directors’ fees amounting to S$362,500

6 Re-appointment of Messrs KPMG as Auditors

7 Authority to allot and issue new shares

8 Authority to allot and issue shares under the AEM-EVERTECH HOLDINGS Employees’ Share Option Scheme

Dated this ______________ day of ______________ 2006 Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members

Signature of Shareholder(s)or, Common Seal of Corporate Shareholder

Notes :

1. 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 the 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.

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

3. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 52 Serangoon North Avenue 4, Singapore 555853 not less than 48 hours before the time appointed for the Meeting.

5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged with the instrument.

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

General:

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

AEM-Evertech Holdings Ltd52 Serangoon North Avenue 4, Singapore 555853Tel: (65) 6483 1811 Fax: (65) 6483 1822www.aem-evertech.com

Registration N

o. 200006417D

always innovating

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