2000 annual report - listed company
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ElectroTech Investments Limited
Australian Stock ExchangeARBN 068 543 386
2000AnnualReport
Group Operating Structure
Company Particulars
Chairman’s Statement
Review of Operations
Directors’ Report
Corporate Governance Statement
Income Statements
Balance Sheets
Statements of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Auditors’ Report
Shareholder Information
Notice of Annual General Meeting
Proxy Form
2
3
4-5
6-13
14-19
20-23
24
25-26
27
28
29-43
44
45
46-47
Insert
Insert
Contents
1
2
Precico Group Sdn. Bhd.
& ElectroTech HQ
Plot 410, Lorong Perusahaan 8B
Prai Industrial Estate
13600 Prai
Penang, Malaysia
Tel: +60 (0)4 390 7414
Fax: +60 (0)4 399 7877
Telecam Electronics Limited
(Cambridge, England)
49% Frencken Brno S.R.O.
(Brno, Czech Republic)
20% Fremach International N.V.
(Belgium, The Netherlands,
& Czech Republic)
Frencken Group B.V.
(Eindhoven, The Netherlands)
Picopak Oy
(Lohja, Finland)
Picopak Electronics Sdn. Bhd.
(Penang, Malaysia)
• Frencken Mechatronics B.V.
(Eindhoven, The Netherlands)
• Machinefabriek Gebrs. Frencken B.V.
(Eindhoven, The Netherlands)
• Optiwa B.V.
(Reuver, The Netherlands)
• Associate Companies
• Precico Sdn. Bhd.
(Penang, Malaysia)
• Precico Electronics Sdn. Bhd.
(Penang, Malaysia)
• Precico M & D Sdn. Bhd.
(Penang, Malaysia)
• Precico Components Sdn. Bhd. 52%
(Penang, Malaysia)
ElectroTech Europe
ElectroTech Investments Limited(Australia & Bermuda)
ElectroTech Asia
Group Operating Structure
3
Company Particulars
Registered Office EC/20460
& Share Registrar in Bermuda
ElectroTech Investments Limited
Clarendon House, Church Street
Hamilton HM 11
Bermuda
Tel: +00 1 441 295 5950
Fax: +00 1 441 292 4720
Principal Administrative Office
ElectroTech Investments Limited
Plot 407, Lorong Perusahaan 8B
Prai Industrial Estate
13600 Prai
Malaysia
Tel: +60 (0)4 399 8397
Fax: +60 (0)4 399 9397
Solicitors
Blake Dawson Waldron
Forrest Centre
221 St. George’s Terrace
Perth WA 6000
Australia
Registered Office in Australia
ARBN 068 543 386
c/o ChartPac Securities Limited
3rd Floor, 231 Adelaide Terrace
Perth WA 6000
Australia
Tel: +61 8 9325 3888
Fax: +61 8 9202 1061
Australian Share Registry
Advanced Share Registry Services
6th Floor, 200 Adelaide Terrace
Perth WA 6000
Australia
Tel: +61 8 9221 7288
Fax: +61 8 9221 7869
Auditors
PricewaterhouseCoopers
4th Floor, Wisma Penang Garden
Jalan Sultan Ahmad Shah
10050 Penang
Malaysia
Directors Dato’ Larry Low Hock Peng Chairman
Gooi Soon Hock
Richard Alan Lister
Low Heang Thong
Richard Oh
Executive Committee Gooi Soon Hock President
Richard Alan Lister Senior Vice President
Jack van Sprang Vice President
Willie Gan Vice President
Lim Eng Hong Vice President
Secretary Godfrey Charles Semini
Stock Exchange Listing ElectroTech Investments Limited shares are listed on the
Australian Stock Exchange
4
Dear Shareholder,
I am delighted to report on another year of substantial
revenue growth and on the successful consolidation of our
substantial acquisitions in Malaysia. The benefits expected
from the restructuring of the previous year are now mate-
rialising, with sales more than doubled to A$112.9 million.
The net profit of A$3.2 million compares well with the
exceptional losses in the previous year and indicates a
positive future direction for the enlarged ElectroTech
Group. Further growth in profits can be expected for the
coming year.
ElectroTech's profile has expanded significantly since its
initial registration in Bermuda and the 1995 flotation on the
Australian Stock Exchange.
In Europe, the main manufacturing subsidiary is Frencken
Group, which was acquired in stages until full ownership
was achieved during 1997. The financial performance has
consistently improved as its growth strategy has been
realised. I am proud to report the best ever sales and profits
in the long history of Frencken Group. Frencken Group
continues to invest in further growth and in
extending its prestigious customer base. The
rebuilding and extension of the Eindhoven
site will significantly expand capacity for
future years.
In Asia, the acquisitions now consolidated as Precico
Group were completed as recently as February 1999.
Precico Group already contributes more than half of
ElectroTech's total sales revenue and shows considerable
profit potential for the future. A similar expansion and
development programme is in progress, with both
Frencken Group and Precico Group sharing an identical
growth strategy.
These centres of manufacturing excellence, with their
complementary technologies, engineering teams and
markets, will be the focus for ElectroTech's main invest-
ments during the coming year. The Picopak
microelectronic technologies acquired in the initial
ElectroTech flotation are now consolidated within Precico
Group. The other original investment was restructured in
“...substantialrevenue growthand successful
consolidation...”
“...relocateElectroTech’s
country ofdomicile
...to Singapore”
Chairman’s Statement
market and in accordance with best public company
practice.
ElectroTech will continue to strengthen its resources and
technical expertise in response to an ever growing market
demand for problem-solving production partners in both
Europe and Asia. The proposals outlined above are only
part of a process of constant change and challenge. The
Review of Operations reports further details of progress
made during the year, including positive developments
within design, manufacture, client services and mixed
technology engineering. I congratulate the professional
and technical teams, and all other employees within
ElectroTech, who have contributed towards our achieve-
ments and objectives.
By satisfying customer expectations in full and by meeting
their future needs, ElectroTech will best assure business
conditions that sustain long-term growth and consistent
increases in profit. Our approach of total
solutions inclusive of co-design and full
engineering support is already delivering
good results at Frencken Group. We still
have unrealised potential throughout the
Group and can target significant gains over the next few
years.
Dato’ Larry Low Hock Peng
Chairman
5
the previous financial year, in the series of Malaysian
acquisitions and disposal.
Therefore the Board wishes to propose corresponding
changes to ElectroTech's corporate status, and where
appropriate and in due course, will submit its detailed rec-
ommendations with supporting information and
resolutions for the necessary shareholder approvals. Such
changes will better reflect the new operational structure
and composition of ElectroTech, its increased
size and the geographic location of its
principal shareholders and corporate
head office.
The principal recommendation will be to
relocate ElectroTech's country of domicile from Bermuda
to Singapore. When this proposal is finalised, an accompa-
nying shareholder circular will explain the consequential
tax benefits in facilitating the internal flow of funds. At
present, dividend payments from ElectroTech's principal
subsidiaries can attract withholding taxes, which are not
recoverable. The change from registration of ElectroTech
in Bermuda to the registration of ElectroTech in Singapore
is not expected to affect ElectroTech's listing on the
Australian Stock Exchange, or to alter its current status as a
public company, registered outside Australia.
A Singapore domicile will also allow the Board to explore
the possibility and various routes available for seeking an
eventual listing on the Singapore Stock Exchange. The
Board has no immediate recommendations in this respect,
but will evaluate all factors, including a timing most likely to
increase shareholder value. In the meantime, increased
investor interest in ElectroTech's shares are both noted and
appreciated. Subsequent to the financial year reported,
the Board is expecting to secure interim funding in the
form of a placement of new shares, representing approxi-
mately 5% of ElectroTech's share capital.
On the recommendation of its Remuneration Committee,
the Board intends in due course to propose an Employee
Share Option Scheme to shareholders. Shareholders will be
requested to support a wide-based scheme targeted at
the recruitment and retention of skilled professional exec-
utives and engineers on an internationally competitive
...Chairman’s Statement
“...good potentialfor profit growth...”
6
ElectroTech Investments Limited
ElectroTech Investments Limited is the Bermudan regis-
tered holding company for an international group of
manufacturing companies serving multinational consumer
electronics and industrial clients in Asia and Europe. The
holding company does not engage itself in the Group's
research, development or manufacturing interests, and
these interests are directed and managed by the Board
and Executive Committee in accordance with the
Corporate Governance Statement on page 20 of this
Annual Report. In his statement on page 4 of this Annual
Report, the Chairman has notified shareholders of the
Board's intention to recommend a change in the country
of registration of the holding company to Singapore.
Details will be contained in separate information to share-
holders in due course.
The Group's principal operating companies are listed on
page 2. The operations of each company are reviewed
separately in the subsequent sections of this report. In
comparison to the major restructure of the Group in the
previous financial year, there were no substantial changes
in the overall composition and
membership of the Group during
the year ended 28 February
2000. The Group results therefore
reflect a full year's contribution
from the Precico Group
companies, which were
acquired on 27 February 1999.
Corporate changes during the financial year reported
were already notified in the previous Annual Report, and
are confirmed in the relevant sections. These can be sum-
marised as consolidation of the Malaysia acquisitions
under Precico Group, and a reduction in Frencken Group's
shareholding in an associated company. In their prelimi-
nary final report to the Australian Stock Exchange, the
Directors advised that the remaining trading operations of
Picopak Oy in Finland would be transferred to other Group
companies during year 2000. None of these changes or
this subsequent notice is expected to materially affect the
overall performance or profile of the Group for the coming
year.
The financial performance of the Group for the year
ended 28 February 2000 is consistent with the half-year
results and, compared to the previous financial year, was
largely unaffected by exceptional items. This year has
therefore been a year of stable consolidation after the
radical restructure of the previous year.
The pre-tax profit for the year was
A$5.0 million compared to a loss in
the previous year of A$6.7 million.
For comparative purposes, the
underlying pre-tax profit before
deduction of all exceptional items
and restructuring effects (as defined in the previous
Annual Report) has increased by 56%. Total group
revenues for the year were A$112.9 million compared to
A$47.5 million in the previous year. Revenues in Europe
increased by 21% to A$53.7 million.The substantial increase
in Asian revenues is almost entirely due to the inclusion of
Precico Group companies.
ElectroTech promotes a common business strategy and a
shared marketing image throughout the Group. During the
year, inter-company links and sales office support have
been strengthened as described in the relevant sections.
This builds long-term customer confidence in ElectroTech's
technology spread and its capability to give rapid
response and support at the client's own operational
base. To date, neither of the two main manufacturing sub-
sidiaries, Frencken Group and Precico Group, are heavily
dependent upon each-other for their core customers and
technologies, and both are capable of autonomous
growth. However, the potential for increased inter-
company trading and for cross-fertilisation of specific
technologies developed within the Group gives a long-
term competitive edge.
Review of Operations
7
These links will be further developed in response to specific
client needs. The extent of convergence and overlap in
ElectroTech's complementary engineering sectors will be
market driven. In customer perceptions, ElectroTech's
diversity already distinguishes it from all average, regional
or single sector manufacturers. Global players need global
suppliers, and ElectroTech is structured to meet these
needs.
Individual Internet web-sites have been linked to and from
a new Group web-site, www.electrotechgroup.com. This
provides an abbreviated version of the corporate
brochure and certain Group notices and news items.
Feedback is welcomed on further development of this
web-site.
Neither the Group nor any of its subsidiaries experienced
problems with computer systems at turn of the Millennium.
Although vigilance is maintained, the strategy of using
leading-edge proprietary software and of constantly
renewing automated systems is considered to offer
adequate long-term protection, as well as being
necessary for competitive efficiency. Separate reference
to Year 2000 compliance has therefore been removed
from the Corporate Governance Statement.
It is encouraging to note increased investor interest in
ElectroTech shares. Enquiries from institutional investors and
stockbrokers in Australia, Singapore and Malaysia have
been particularly welcome. The Board considers all
suitable opportunities for extending the shareholder base,
including offers of interim funding, which can help offset
borrowings during the Group's current expansion.
Subsequent to the current year's balance sheet date, the
Board has commenced negotiations, which are expected
to result in the issue of 12 million new ElectroTech shares to
a Malaysian based fund management company for a
consideration of A$3.87 million in cash, excluding costs. This
placement would represent on completion approximately
5% of the Group's share capital and is equivalent to
A$0.3225 per ordinary share of par value A$0.20 each.
...Review of Operations
“...long-termcustomer
confidence...”
8
Precico Group
Precico Group is ElectroTech's principal subsidiary in Asia,
manufacturing a wide range of consumer and office
automation products with all supporting plastics and
metals production technology and electronics assembly
facilities. Major clients include divisions of Sony, Hitachi,
Canon, Motorola and Ericsson. Precico Group operates
from Penang, Malaysia and consists of 5 companies on
two principal sites. It is also the administrative headquarters
of ElectroTech and provides group infrastructure and
corporate support for the Group, including direct man-
agement of the Asian interests of both Picopak and
Frencken Group.
Full ownership of the Precico Group companies was
achieved in the previous financial year as a result of the
major restructuring of ElectroTech. During the year ended
28 February 2000, pre-tax profits from these companies
were approximately A$1.1 million on revenues of A$59.2
million.
ElectroTech now has a major manufacturing centre in Asia
which represented 51% of total Group assets and 52% of
total Group revenues in the reporting year. Precico Group
provides the experience and flexibility to support
ElectroTech's medium and high volume requirements
world-wide, and has markets and technologies which are
complementary to the main European manufacturing
centre at Frencken Group.
During the year, Precico Group has consolidated
individual companies under its ownership as pre-
viously reported and has focused on a common
growth strategy and on new investments in engi-
neering, technical resources, capacity and
equipment. As the benefits of investment and expansion
are realised, there is good potential for profit growth.
Revenues at Precico Electronics, formerly known as
Eastrade Electronics, were affected by reduced customer
demand for radio and pager products, and resulted in
lower profits. Pre-tax profit was
A$1.1 million on sales of A$30.3
million. During these market condi-
tions, the challenge of long-term
restructuring to meet new market
opportunities is being met by new
management and by Precico
Group's central engineering and marketing team. A
programme of reinvestment, which includes a new factory
layout, is in progress.This will improve flexibility and response
cycles for the manufacture of mixed technology products
with a wide range of volumes and variants. The microelec-
tronic assembly processes from Picopak have also been
accommodated within the Precico Electronics factory.
Precico Electronics is in transition, and will progressively
convert from an electronics contract assembler into
further integration with Precico Group as a main supplier.
Clients can be offered higher added-value from co-engi-
neering and from Precico Electronics' own development
of specialised processes.
This transition is already
becoming apparent at Precico,
the company within Precico
Group, which specialises in
precision moulded plastics
and, increasingly, in related manufacturing
and assembly work. Revenues for the year were A$28.9
million, with pre-tax profit increased significantly to A$1.4
million. Considerable progress has been made in strength-
ening the technology base and engineering
support, particularly on engineering plastics,
keypad technologies and on films for in-mould
processing. This has attracted contracts for
assembled modules using in-house mouldings,
but also including a high content of mixed com-
ponents purchased from Precico Components and
outside vendors.
...Review of Operations
“Precico...higheradded-value”
9
The growing flexibility and vertical
integration at Precico is also
promoted by an in-house capabil-
ity for mould manufacture
provided by Precico M&D. Further
growth is expected and invest-
ments are continuous. During the
coming year, Precico will invest in further expansion and
automation of its facilities towards manufacturing excel-
lence.
Precico Components, the machined parts company
jointly sponsored by Frencken Group and Precico Group,
maintained progress during the year, despite fluctuations
in external customer demand. Internal sales of precision
turned parts to Precico and of complex machined com-
ponents to Frencken Group are strategically important to
complement assembly activities at the main manufactur-
ing companies. Revenues for the year were A$3.3 million,
with pre-tax profit of A$0.2 million before minority interests.
The clear market trend indicated by major and prospec-
tive clients is to contract out all aspects of manufacture,
inclusive of component manufacture or
purchase, subsequent assembly and test,
and all the supporting functions of logistics
and engineering. This demands close inte-
gration with the customer, and constant
challenge on many levels. Precico Group is
responding in each of its companies and in
strengthening its support both centrally and close to the
end customer.
During the financial year, Precico Group has established a
small sales support office in Japan,and is increasingly using
the services of Telecam in England for supporting its
European based customers' operations. These internation-
al offices will additionally help attract new projects by
proximity to the engineering teams of existing and
prospective clients.
Capacity for expansion is being provided with a new
building programme within the factory complex. Precico
Group is also growing its certified supplier base and
already subcontracts its capacity overload of less
complex components. Active consideration will be given
to local acquisitions providing additional capacity or com-
plementary facilities. In addition, a full range of electronic
components and all items complementing the in-house
capabilities are purchased on a world competitive basis
throughout Asia. A central department for purchasing and
logistics has been established with professional responsibil-
ity for all external business supplies and relationships. This
resource is also available to clients as an additional out-
sourcing service.
Through these forward-looking initiatives, and by continu-
ous improvement and adaptation, Precico Group will
further develop. As the strategy delivers future growth, in-
house capacity will become absorbed by more complex
assembly and engineering. Nevertheless, a fully integrated
manufacturing service will be maintained offering total
solutions from both internal and external resources.
...Review of Operations
10
Frencken Group
Frencken Group is well established as a full service main
supplier and is ElectroTech's principal manufacturing
centre in Europe. It specialises in precision-engineered
assemblies and electro-mechanical
systems for high technology industry.
Major clients include divisions of Philips,
Bayer and ASML.
In the 12 months ended 31 December
1999, pre-tax profits increased by 52%
to A$7.3 million. Net turnover for the year increased by 24%
to A$51 million. These record results reflect the high quality
of technical expertise, the support of its excellent customer
base and the consistent application of long-term growth
strategies.
Part of the increased turnover can be attributed to
cyclical recovery in the markets served by certain key
clients, resulting particularly in an increased demand for
machinery used in the semiconductor processing industry.
Demand for medical systems such as cardio-vascular
scanners and X-ray spectrometers also met expectations.
In addition, new manufacturing growth is being generated
from clients recently attracted from the optics,diagnostics,
and factory automation industries. Production of electron
microscopes and
machinery for high-
speed manufacture
of CD-R's (compact
discs) is making an
increasing contribu-
tion to turnover.
Throughout the year, Frencken Group has continued to
support Precico Components in Malaysia with orders for
precision-engineered components, and with technical
and sales development. Precico Group is also the
potential manufacturing and assembly partner in a
Frencken Group project for designing a needleless
injection pistol, commissioned by the veterinary medicine
industry. Further exchanges between technical and man-
agement personnel at Frencken Group and Precico
Group are planned during the coming year.
Frencken Group is normally involved in the development
of a complete piece of apparatus from the initial specifi-
cation through to delivery of an end-product in
production volumes. This requires a client-oriented organi-
sation that can react flexibly to continuous changes.
Corresponding investments are made in engineering,
project purchases, assembly capacity and in logistics
management. This will continue to be a focus during the
coming year.
To achieve further increases in
turnover and profit, capacity at
the principal Eindhoven site is
being expanded. At the end of
1999 building work commenced on
a new extension of approximately
4000 m² consisting mainly of assembly
and clean-room facilities, but involving also the rebuilding
of existing factory and office space. The total investment
inclusive of infrastructure will be approximately A$7 million,
financed from retained profits and mortgage borrowings
at Frencken Group. Completion is scheduled for around
August 2000.
...Review of Operations
“Frencken...record results”
11
In June 1999, Frencken Group reduced its 40% sharehold-
ing in Fremach International NV to 20%, in a cash sale to
Fremach's directors for A$1.6 million, representing a A$0.4
million profit over the book value of these shares. The
Fremach directors, who hold the entire balance of
Fremach shares, wish to further develop this plastics tech-
nology associate with the benefit of increased
management participation.As a result of this partial divest-
ment, Fremach contributed A$0.3 million to Frencken
Group profits compared to A$0.6 million in the previous
financial year.
Frencken Group has achieved stable new levels of high
performance based upon long running contracts and a
good spread of industrial clients. It can continue to
expand and to add a few key projects each year,
however, future financial gains will realistically be more
modest when expressed in percentage terms. Building an
excellent reputation depends upon intensive professional
support from engineering and logistics teams who are
capable of highly intelligent added value. Frencken
Group consolidates its strengths and develops new
projects with the utmost care for sustain-
ing solid relationships and for
building long-term shareholder
value. The year 2000 is
expected to be another
successful year.
...Review of Operations
“...Eindhoven sitebeing expanded”
12
Picopak
Picopak develops microelectronic assembly processes for
application in ElectroTech's electronics factories. Picopak
has its original development subsidiary in Finland, and a
manufacturing subsidiary in
Malaysia.
It is disappointing to report that the
major manufacturing contract for
chip-module assemblies during the
financial year reported, was
suspended and subsequently cancelled due to break-up
of the end-client consortium in Japan. Reasons for the
beak-up are unconnected with vendor supply. The
capacity in Malaysia has since been re-deployed on a
number of smaller projects for the assembly of smart cards
and tags, and has been relocated within the Precico
Electronics factory. However, it has not been possible to
find a similar compensating workload for the specialist
operations in Finland. Combined turnover for the year from
Picopak operations was A$1.4 million with a loss of A$1.1
million.
In the preliminary final report to the Australian Stock
Exchange, the directors of ElectroTech announced the
intention to phase-out trading operations at Picopak Oy, in
Finland, by end of year 2000 and maintain only a small
research support activity. The related costs in the coming
year are not expected to exceed the losses of any
previous year, inclusive of the accelerated write-down of
goodwill already reported.
Many of the back-end microelectronic assembly
processes developed in Finland at Picopak Oy have
already been progressively transferred to its sister
company Picopak Electronics Sdn. Bhd., which was estab-
lished in Malaysia in 1995 for the express purpose of
realising production volumes. Picopak Oy has specialised
in supporting new process development including pre-pro-
duction evaluation and back-end processing prior to
manufacture in Malaysia. ElectroTech remains convinced
of the long-term potential for Picopak's technologies, but
recognises that sustained investment is necessary with
considerable infrastructure support. The business originat-
ing in Europe has been limited to date, and the continued
separation of a pre-production engineering facility from
the main production centre will become increasingly inef-
ficient to maintain. ElectroTech has therefore decided to
consolidate all Picopak's manufacturing operations within
its headquarters factory complex in Malaysia, where it
already has a supporting departmental infrastructure and
related business activities.
All viable and appropriate production activities remaining
at Picopak Oy will be transferred to Picopak Electronics in
the period between July and December 2000. Discussions
have already started with the existing customers of
Picopak Oy in order to offer continuity of supply, either
directly from Picopak Electronics in Malaysia, or through
ElectroTech's European sales office at Telecam in
Cambridge, England.
Picopak's co-founder and the
originator of its technology
will continue to support
Group activities, and will
maintain existing research
and development co-
operation between Picopak and external institutions, for
example, with the Helsinki University of Technology.
By deciding that further funding should focus on a single
microelectronics development centre in Malaysia,
ElectroTech fully expects that the
work pioneered in Finland can
continue effectively, for the future
commercial benefit of the
entire Group and its worldwide
client base.
...Review of Operations
“...a single micro-electronics
developmentcentre”
13
Telecam Electronics
Telecam Electronics is the UK corporate office of
ElectroTech with responsibility for business development
and the management of ElectroTech's interests in Europe.
During the financial year, this business activity earned
A$0.6 million in management service fees from other
ElectroTech Group companies.
The Group is also developing Telecam as a European sales
and engineering support facility, which provides local
service to existing Precico Group clients in Europe and
promotes Group facilities in general. During the financial
year, an increased proportion of the overhead was
allocated to this activity, although revenues to date are
nominal. An additional cost was the relocation of Telecam
to improved new office accommodation in Duxford,
Cambridge.
The product division continues to make a positive contri-
bution to the overall costs of this subsidiary. Sales increased
9% to A$1.4 million, and modest growth is expected to
continue during the coming year. Products are TV
antennae and signal amplifiers manufactured by Precico
Electronics and sold to UK retailers.This activity is supported
by one full-time employee, whilst the small design team at
Telecam is focused on assisting the Group's overall growth
objectives.
For the combined activities of Telecam Electronics, costs
during the reporting year exceeded revenues by A$0.2
million.Future results will be largely dependent on revenues
earned within the Group through commissions and fees,
and from developing new Group projects and trading
relationships.
Gooi Soon Hock Richard A. Lister
President Senior Vice President
...Review of Operations
“...assisting theGroup’s overall
growth objectives”
14
In respect of the financial year ended 28 February 2000, the directors of ElectroTech Investments Limited, the
Company, submit the following report made out in accordance with a resolution of the directors.
Incorporation and General Information
The Company was incorporated as an exempt company in Bermuda.As a result of this incorporation,the Company is subject
to Bermuda law and is required through its bye-laws to comply with the Listing Rules of the Australian Stock Exchange.
In this Directors' Report under the heading "Likely Developments and Expected Results of Operations", further
reference is made to the Company's incorporation in Bermuda.
The Company is not subject to the Corporations Law of Australia although it is registered as a foreign company under
the Corporations Law. The effect of this registration is that the Company is allocated an Australian registered body
number and is subject only to various reporting obligations under the Corporations Law.
The Company is not subject to any regulation in respect of take-overs including, in particular Chapter 6 of the
Corporations Law dealing with the acquisition of shares and substantial shareholdings.
Bermuda Law does not impose any specific limitations on the acquisitions of shares in the Company.
Directors
The following persons were directors of the Company during the whole of the financial year and up to the date of this report:
Dato' Larry Low Hock Peng
Gooi Soon Hock
Richard Alan Lister
Low Heang Thong
Richard Oh
Principal Activities
The Company is an investment holding company. The principal activities of the subsidiary companies are shown in
Note 11 to the financial statements.
Currency in the Financial Statements
The financial statements are expressed in thousands of Australian Dollars ("A$'000"). Amounts have been rounded off
to the nearest thousand Australian Dollars.
Trading Results Group Company
A$'000 A$'000
Profit/(loss) before taxation 5,026 (200)
Taxation (1,745) -
Profit/(loss) after taxation 3,281 (200)
Minority interests (95) -
Net profit/(loss) for the financial year 3,186 (200)
A Review of Operations is presented as a separate section in the Annual Report.
Directors’ Report
15
Dividends
The directors of the Company do not recommend the payment of a dividend for the financial year ended
28 February 2000.
Significant Changes in the State of Affairs
On 28 April 1999, the Company's shareholdings in subsidiary companies were restructured as follows:
• The Company acquired all the shares in Precico Group Sdn. Bhd. from Precico Sdn. Bhd. for a consideration of
A$850,700.
• The Company disposed of its entire interest in shares of Precico Sdn. Bhd. to Precico Group Sdn. Bhd. for a
consideration of A$11,820,400.
On 28 June 1999, the Company's subsidiary, Frencken Group BV disposed of a 20% shareholding interest in its associate
company, Fremach International NV for a consideration of A$1,600,000.
Matters subsequent to the end of the Financial Year
There have been no events occurring and no matters in hand that were finalised in the period between the end of
the financial year reported and the date of this report.
Likely Developments and Expected Results of Operations
Likely developments in the operations of the Company and its subsidiaries that were not finalised at the date of this
report included:
• The intention to seek shareholder approval for changing the Company's country of domicile from Bermuda to
Singapore on terms to be detailed separately from this Annual Report, but with references in the Chairman's
Statement and elsewhere in this Annual Report.
• The Board of Directors has commenced negotiations which are expected to result in the issue of 12 million new
ElectroTech shares to a Malaysian based fund management company for a consideration of A$3.87 million in
cash, excluding costs. This placement would represent on completion approximately 5% of the Group's share
capital, equivalent to A$0.3225 per ordinary share of par value A$0.20 each.
• The intention to phase-out trading operations at subsidiary company Picopak Oy during the financial year
ending 28 February 2001 as referred to in the Review of Operations section of this Annual Report.
• A proposal outlined in the Corporate Governance Statement of this Annual Report, under the heading
"Remuneration Committee", for establishing in due course an Employee Share Option Scheme, on terms not yet
finalised and subject to separate shareholder approval.
Included elsewhere in this Annual Report are comments that do not specifically quantify expected results, but are
illustrative of general expectations from the Group's operations.
Quantified information on expected results and further information on likely developments, other than those listed
above, are not included for reasons of commercial confidentiality. Nevertheless, all likely events are given due con-
sideration in the comments contained elsewhere in this Annual Report.
...Directors’ Report
16
Options
At 28 February 2000, the Company had no options on issue over its ordinary shares.
During the financial year ended 28 February 2000, 51,476,000 options have expired as unexercised and 40,000 options
were exercised prior to their expiry date at a price of A$0.25 per ordinary share.
Directors' Remuneration
For the financial year ended 28 February 2000, the total remuneration of the directors was approximately A$750,000
(1999: A$482,000).
The policy for determining the nature and amount of remuneration and its relationship with the Group's performance
is included in the Corporate Governance Statement under the section entitled "Remuneration Committee" on page
21 of the Annual Report.
Directors' Benefits
No director of the Company has, since the end of the previous financial year, received or become entitled to receive
a benefit by reason of a contract made by the Company, a subsidiary or a related body corporate with the director
or with a firm of which the director is a member, or with an entity in which the director has a substantial financial
interest with the exception of benefits that may be deemed to have arisen in relation to the following transactions
entered into in the ordinary course of business:
• The Company has signed a management agreement with Richard Oh & Co. Ltd. to provide secretarial and
advisory services on Australian Stock Exchange and Corporate Law matters at a fee of A$3,000 per month for
the financial year ended 28 February 2000.
• Precico Electronics Sdn. Bhd. paid factory rental of A$214,000 to Davex Holdings Berhad, a subsidiary company
of MWE Holdings Berhad in which Dato' Larry Low is a director and has an interest.
Directors' Interests in Contracts
No material contracts involving directors' interests were entered into since the end of the previous financial year other
than the transactions detailed in Note 26 to the financial statements.
Directors' Shareholdings at the date of this Report
Number of shares held
Direct Indirect
Dato' Larry Low Hock Peng 96,000 31,967,794
Gooi Soon Hock 10,376,000 75,457,006
Richard Alan Lister 120,000 -
Low Heang Thong 200,000 32,467,794
Richard Oh - 250,000
...Directors’ Report
17
Information on Directors and Executives
Dato' Larry Low Hock Peng
Dato' Larry Low (aged 48) is the founding non-executive Chairman of ElectroTech's Board of Directors, and chairs its
Remuneration Committee. He was educated in The London School of Economics and Political Science, University of
London where he obtained a degree in Economics (BSc (Econs) (Hons)). Subsequently, he obtained a Masters in
Business Administration (MBA) degree from the University of California, Los Angeles.
Dato' Larry Low holds several board positions in listed and unlisted companies in Malaysia, Singapore, Europe, United
States of America and New Zealand. He is currently the Executive Advisor of the Penang Chinese Chamber of
Commerce.
Gooi Soon Hock
Mr. S. H. Gooi (aged 46) is a founder and executive Director of ElectroTech, and is President of its Executive Committee.
He has extensive experience in the start-up of manufacturing companies and in developing them into successful
international businesses.
Mr. Gooi is the present Managing Director of Precico Group and a founder member and director of each of its
subsidiary companies in Malaysia. His early involvement in Picopak, Telecam, and Frencken Group were instrumental
in the creation and subsequent development of ElectroTech.
Richard Alan Lister
Richard Lister (aged 50) is an executive Director of ElectroTech, its original CEO and is now Senior Vice President of its
Executive Committee. He is a Chartered Engineer (MIEE) with an honours degree in engineering (MA) from
Cambridge University, England.
Mr. Lister is also Chairman and Supervisory Director of Frencken Group, and the founder and Chairman of Telecam in
Cambridge, England, where he is presently based. He has extensive previous experience in the management of
international electronics and manufacturing companies.
Low Heang Thong
Mr. H. T. Low (aged 47) has been a non-executive Director of ElectroTech since 1996 and is a member of the
Remuneration Committee. He represents the interests of certain major shareholders in Malaysia, including the family
interests of the Chairman, who is also a significant shareholder.
Mr. Low was educated in London where he obtained his diploma in Automobile Engineering and Business Studies. Mr.
Low has since become actively involved in the management and operations of his family's many varied businesses.
He currently also holds several board positions in companies primarily involved in property development and
investments.
Richard Oh
Richard Oh (aged 51) is a founding non-executive Director of ElectroTech and is a member of the Remuneration
Committee. He is an Australian national and represents ElectroTech's interests in Australia by providing management,
secretarial and advisory services on statutory and Stock Exchange matters. He is a Chartered Accountant (ACA,
...Directors’ Report
18
MAICD) and an affiliate member of the Securities Institute of Australia (SIA (Aff)). He has extensive experience in the
accounting, stockbroking and corporate consultancy professions.
Mr. Oh is Managing Director of ChartPac Securities Limited, a Member Corporation of Australian Stock Exchange
Limited. He has previously held positions as director and/or company secretary in various listed and unlisted public
companies. He is also a member of the Australian Institute of Company Directors and a foundation member of the
Western Australian Chinese Chamber of Commerce.
Jack van Sprang
Jack van Sprang (aged 56) is a Vice President on ElectroTech's Executive Committee and Managing Director of
Frencken Group and its subsidiaries.He joined Frencken Group in 1996,as Director of its Mechatronics Division,and was
appointed Managing Director of Frencken Group in April 1998.
Mr. van Sprang was most recently the Director of Philips Machinefactory and has 30 years previous experience in
various management, engineering and manufacturing positions within the Philips organisation in the Netherlands.
Willie Gan
Willie Gan (aged 44) is a Vice President on ElectroTech's Executive Committee and is presently responsible for
corporate affairs. He was previously Manager of Finance and Corporate Affairs for the Precico group of companies
from 1992 until acquisition by ElectroTech.
Mr. Gan qualified as a Chartered Accountant in the UK, before working for Price Waterhouse in Malaysia as an Audit
Manager, and subsequently as Regional Office Manager based in Penang.
Lim Eng Hong
Mr. E. H. Lim (aged 52) was appointed as a Vice President on ElectroTech's Executive Committee on 1 May 2000 and
is responsible for Group Finance. He is a Director of Precico Group and has been its Group Finance Manager since
joining the company in March 1999.
Mr. Lim was previously Financial Controller of Philips Electronic Supplies in Malaysia and has held various financial man-
agement positions within Philips and other manufacturing organisations. He is a fellow member of the Chartered
Association of Certified Accountants and a registered accountant of the Malaysian Institute of Accountants.
Directors' Meetings
The number of directors' meetings held during the financial year ended 28 February 2000 and the number of meetings
attended by each director were:
Board of Directors' meetings
Number held Number attended
Dato' Larry Low Hock Peng 8 8
Gooi Soon Hock 8 8
Richard Alan Lister 8 8
Low Heang Thong 8 8
Richard Oh 8 8
...Directors’ Report
19
The functions of the board and its committees are described in the Corporate Governance Statement.The Corporate
Governance Statement gives details of membership of each committee and attendance on committees by each
director.
Indemnification and Insurance of Officers
During the financial year the Company has not entered into any agreements to indemnify any directors of the
Company and its controlled entities against liabilities to persons (other than the Company or a related body
corporate) which arise out of the performance of their duties as director or executive officer other than indemnities
given to directors and officers of the Company or its subsidiaries for personal guarantees given by the directors or
officers to financial institutions to secure financial facilities for the ElectroTech Group of Companies. However, the
Company did not provide directors and officers with liability insurance.
Environmental Regulation
The Board does not consider that the Company or its subsidiaries are subject to unusual or onerous environmental reg-
ulation in any of the countries in which it operates. The management at each subsidiary is responsible for full
compliance with health, safety and environmental legislation and for meeting all regulations applicable in their
respective locations and industries. During the financial year reported and up to the date of this report, there were
no known breaches of any environmental regulation and no material issues arising.
Auditors
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
For and on behalf of the boar d
Dato' Larry Low Hock Peng Gooi Soon Hock
Director Director
Date: 20 May 2000
...Directors’ Report
20
The Board of Directors
The Board of Directors presently consists of a non-executive chairman, two executive directors and two non-executive
directors. There have been no changes in membership of the Board of Directors during the year. Details of the
directors are set out in the Directors' Report on page 17 under the heading "Information on Directors and Executives".
The Board meets regularly under non-executive Chairman, Dato' Larry Low, to direct the Group's holding interests and
strategy. The Directors are committed to apply best practice in corporate governance in a manner which is best
suited to the operational structure of the Group, and which is most appropriate to fulfilling their statutory responsibili-
ties and maintaining accountability. The Board keeps the adequacy of its corporate governance procedures under
review, and where necessary establishes committees. To allow detailed consideration of complex issues, these com-
mittees may consist of certain members of the Board, or of executive directors supported by suitably qualified
members of the Group's senior management.
Due to enlargement of the Group in the previous financial year, the Board established both an Executive Committee
and a Remuneration Committee during April 1999. The composition, responsibilities and principal activities of these
committees are stated below.
There are no other committees established by the Board at the date of this report.
Executive Committee
The Executive Committee is responsible to the Board for the management of ElectroTech's operational activities and
subsidiary interests. The Executive Committee reports to the Board on a regular basis, and the Directors as a whole
continue to hold statutory responsibility for the duties delegated to the Executive Committee and discharged by the
committee on behalf of the Board.
The Executive Committee at the time of this report has the following members -
Mr. Gooi Soon Hock President
Mr. Richard Alan Lister Senior Vice President
Mr. Jack van Sprang Vice President
Mr. Willie Gan Vice President
Mr. Lim Eng Hong Vice President (appointed 1 May 2000)
Mr. Gooi and Mr. Lister are executive Directors of ElectroTech. Mr. van Sprang is the Managing Director of Frencken
Group. Mr. Gan is the vice president responsible for corporate affairs, and Mr. Lim is the vice president responsible for
group finance. Further information on Directors and Executives is given in the Directors' Report on page 17.
A Review of Operations is presented on pages 6 - 13 of this Annual Report. This has been signed by the President and
by the Senior Vice President on behalf of the Board. A separate review of the work of the Executive Committee is not
considered appropriate and a table of attendance at meetings does not add to shareholder understanding of how
this committee operates.
Corporate Governance Statement
21
Members of the Executive Committee are also the principal directors and managers of each of the Group's sub-
sidiaries and are in constant day-to-day contact using all modern methods of computer assisted information transfer
and multi-user communications. As a complex technology-based Group, ElectroTech cannot rely upon formal face-
to-face meetings for rapid executive decision-making or effective inter-group co-ordination. Executives nevertheless
meet very regularly with one another, either formally, informally, electronically or with others on subsidiary board and
management meetings.
For corporate governance purposes, it is most appropriate to consider that the Executive Committee manages the
Group in real-time on a constant needs basis. Feedback and interchange with the Board takes place on each
occasion that the Board of Directors also meets.
Remuneration Committee
The Remuneration Committee consists of the Chairman, Dato' Larry Low, and the two non-executive Directors, Mr.
Richard Oh and Mr. H. T. Low.
The committee reviews the remuneration of executive Directors, and, based on the recommendation of executive
Directors, also approves the remuneration of other senior managers on the Executive Committee. The entire Board
determines the remuneration of non-executive Directors.
The committee also advises the Board on remuneration policies and practices generally, and makes specific recom-
mendations on terms of employment, performance related packages and other benefits and incentive schemes.
The Remuneration Committee meets concurrently with main board meetings on those occasions when there is
business to transact, or when the Board has referred specific items to the committee. There were 4 such meetings
during the reporting year and the entire committee attended these meetings.
The remuneration of directors is summarised on page 16 of the Directors' Report under the heading "Directors'
Remuneration". The broad policy for determining the nature and amount of emoluments is to consider professional
salary levels in each country of residence; the competitive demand locally for the individual's skills and experience;
the performance of each individual in respect to his contributions to, and against targets set within, the Group and
each subsidiary for which he has a responsibility; and the profitability, remuneration culture and strategic contributions
of each of these entities. In each of these respects, external expert advice and relevant comparative information is
obtained as appropriate.
During the year, the Remuneration Committee has considered methods by which certain subsidiary executives, key
managers, and engineers can also identify with the aims and objectives of ElectroTech as a whole, and can feel
recognised and rewarded within the culture of a public company parent. Principal loyalty has been to the immediate
operating company, which operates best employment practice in its own country, but rewards key employees in
accordance with own unit performance and locally competitive conditions. However, the present needs and
resources of the subsidiary may restrict the recruitment, development and retention of career professionals who are
capable of Group-wide contributions over a longer period. Such individuals can be encouraged by financial partic-
ipation in the Group and this helps to align their long-term self-interest and priorities with those of the shareholders.
...Corporate Governance Statement
22
On external expert advice, the Remuneration Committee has recommended a broadly-based Employee Share
Option Scheme to the Board. Exact terms will be separately submitted for shareholder approval when full details are
complete. The Remuneration Committee will administer the Employee Share Option Scheme. It is envisaged that
options will be awarded over a 3-year period to key employees based upon annual performance and profit contri-
bution. New ordinary shares will be issued up to a maximum of 10% of the issued share capital, and an option to
purchase these shares will be offered at the average market price prior to shareholder approval. The Scheme will be
subject to rules approved by the Australian Stock Exchange and will conform to best industry practice within interna-
tional public companies.
Nominations, Appointments and Retirements
The size of the Board and its Executive Committee are considered appropriate and adequate for the present opera-
tional structure of the Company. Major shareholding interests are suitably represented on the Board. Operational
management is suitably represented on the Executive Committee,and the Board considers that the current Executive
Committee can be further extended as the delegated workload and the required range of professional skills demand.
Appointments to the Board and retirements are handled in accordance with the Company's constitution. These
provide for directors to be initially appointed by the Board, subject to election by shareholders at the next annual
general meeting, and re-election at two-yearly intervals. Appointments to and discharges from the Executive
Committee are made by the entire Board on the recommendation of the executive Directors.
The entire Board therefore acts as a nominations committee, and a separate nominations committee is not
envisaged. The Directors continue to review the requirements for complementary skills and experience. They will
consider new internal or external appointments to the Board as the need arises, and will further strengthen or change
the Executive Committee in accordance with the Group's further development.
Independent Advice, Audit and Business Risk
As appropriate for the size of the Board, there is no formal audit committee nominated from members of the Board.
The Board as a whole considers and reviews the audit report, approves the annual financial statements, and monitors
the financial performance of the Company. During the financial year reported, the executive Directors advised the
Board on these matters and made available any internal audit reports. All external audit reports from the Group and
their corresponding management letters are also made available to non-executive Directors on request.
The Directors collectively take external professional advice as necessary, and as policy, non-executive Directors are
offered their own independent access to the Company's professional advisors on any reasonable request through the
Chairman.
Each subsidiary of ElectroTech is self-sufficient in financial reporting and compliance to the statutory requirements of
its country of registration. The subsidiary boards of directors are supported by one or more members of the Board and
Executive Committee, and are responsible for regular review of business risk, scope of audit, terms of engagement,
and the effectiveness and efficiency of internal controls within their specific companies.The internal audit department
within the Group gives additional support to the Executive Committee. Significant risks and events, supported by
financial reports, are highlighted through the monthly management structure to the Executive Committee, who in turn
advises the Board. All financial information, including audit reports and other external advice, are transparently
available to the Executive Committee, and are available to the Board on request. The Board remains ultimately
responsible for direction and review of the Group as a whole.
...Corporate Governance Statement
23
Ethical Standards
The Directors are determined to maintain high ethical standards through development of the Company's governance
requirements as necessary, and each has an awareness of the duties imposed on them as a director of a public
company. As policy throughout the Group, unethical conduct by any employee will not be tolerated. In all circum-
stances, all directors, executives and employees are charged with the highest standards of personal integrity and
objectivity, over and above strict compliance with the legislative regimes applicable in the countries in which they
operate.
...Corporate Governance Statement
24
Income Statements
Operating revenue 112,870 47,474 - -
Cost of sales (77,404) (20,719) - -
Gross profit 35,466 26,755 - -
Other operating income 1,308 610 - 111
Distribution costs (1,490) (651) - -
Administrative expenses (7,239) (3,053) (184) (477)
Other operating expenses (20,105) (31,996) - (2,909)
Operating profit/(loss) 4 7,940 (8,335) (184) (3,275)
Finance costs (3,269) (1,150) (16) -
Share of result of associates 355 2,794 - -
Profit/(Loss) before taxation 5,026 (6,691) (200) (3,275)
Taxation 5 (1,745) (1,819) - -
Profit/(Loss) from ordinary activities 3,281 (8,510) (200) (3,275)
Minority interests (95) 62 - -
Net profit/(loss) for the year 3,186 (8,448) (200) (3,275)
Net profit/(loss) per share - cents 20 1.45 (5.85) - -
Group Company
Notes 2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
for the financial year ended 28 February 2000
The notes on pages 29 to 43 f orm part of these financial statements.
25
Balance Sheets
The notes on pages 29 to 43 form part of these financial statements.
Assets
Inventories 6 19,113 17,146 - -
Accounts receivable 7 23,646 15,903 3,851 8,250
Cash and bank balances 8 889 883 19 5
Current assets 43,648 33,932 3,870 8,255
Property, plant and equipment 9 30,645 31,753 - -
Intangible assets 10 17,940 20,851 - -
Subsidiary companies 11 - - 42,914 40,474
Associated companies 12 2,190 2,883 - -
Non-current assets 50,775 55,487 42,914 40,474
Total Assets 94,423 89,419 46,784 48,729
Liabilities
Accounts payable 13 22,707 17,072 136 3,572
Lease creditors - current portion 14 456 1,104 - -
Short term borrowings 15 12,246 15,434 - -
Term loans - current portion 16 4,146 3,730 - -
Taxation 1,564 1,609 - -
Current liabilities 41,119 38,949 136 3,572
Term loans 16 7,131 9,524 - -
Hire purchase creditors - long term portion 14 344 349 - -
Deferred taxation 17 1,774 1,938 - -
Non-current liabilities 9,249 11,811 - -
Total Liabilities 50,368 50,760 136 3,572
Net Assets 44,055 38,659 46,648 45,157
Group Company
Notes 2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
as at 28 February 2000
26
...Balance Sheets
Equity
Share capital 18 44,501 43,148 44,501 43,148
Share premium account 5,972 5,634 5,972 5,634
Exchange fluctuation reserve 830 406 - -
Accumulated losses (7,534) (10,720) (3,825) (3,625)
Equity attributable to shareholders 43,769 38,468 46,648 45,157
Minority interests 286 191 - -
Total Equity 44,055 38,659 46,648 45,157
Approved by the board
Dato' Larry Low Hock Peng Gooi Soon Hock
Director Director
Group Company
Notes 2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
as at 28 February 2000 (continued)
The notes on pages 29 to 43 form part of these financial statements.
27
Statements of Changes in Equityfor the financial year ended 28 February 2000
The notes on pages 29 to 43 f orm part of these financial statements.
At 28.2.2000
At 1.3.1999 43,148 5,634 406 (10,720) 38,468
Currency translation differences - - 424 - 424
Net profit - - - 3,186 3,186
Issue of share capital 1,353 338 - - 1,691
At 28.2.2000 44,501 5,972 830 (7,534) 43,769
At 28.2.1999
At 1.3.1998 28,750 5,634 (92) (2,272) 32,020
Currency translation differences - - 498 - 498
Net loss - - - (8,448) (8,448)
Issue of share capital 14,398 - - - 14,398
At 28.2.1999 43,148 5,634 406 (10,720) 38,468
At 28.2.2000
At 1.3.1999 43,148 5,634 - (3,625) 45,157
Net loss - - - (200) (200)
Issue of share capital 1,353 338 - - 1,691
At 28.2.2000 44,501 5,972 - (3,825) 46,648
At 28.2.1999
At 1.3.1998 28,750 5,634 - (350) 34,034
Net loss - - - (3,275) (3,275)
Issue of share capital 14,398 - - - 14,398
At 28.2.1999 43,148 5,634 - (3,625) 45,157
Group Exchange
Share Share fluctuation Accumulated
capital premium reserve losses Total
A$’000 A$’000 A$’000 A$’000 A$’000
Company Exchange
Share Share fluctuation Accumulated
capital premium reserve losses Total
A$’000 A$’000 A$’000 A$’000 A$’000
28
Consolidated Statement ofCash Flows
Cash flows related to operating activities
Receipts from customers 106,338 49,768
Payments to suppliers and employees (95,947) (45,197)
Cash generated from operations 19 10,391 4,571
Interest and other items of similar nature received 70 200
Interest and other costs of finance paid (1,735) (1,207)
Taxes paid (1,994) (3,002)
Net operating cash flow 6,732 562
Cash flows related to investing activities
Payments for purchase of property, plant and equipment (4,880) (2,325)
Proceeds from disposal of plant and equipment 1,310 7
Proceeds from partial divestment of equity interest in associated company 1,570 -
Dividend received - 110
Net investing cash flow (2,000) (2,208)
Cash flows related to financing activities
Proceeds from issues of shares 10 -
(Repayment)/Proceeds from borrowings (68) 5,038
Repayment of lease creditors (1,384) 682
Net financing cash flow (1,442) 5,720
Net change in cash and cash equivalents 3,290 4,074
Cash and cash equivalents at beginning of financial year (6,608) (3,288)
Deconsolidation of a subsidiary - 447
Cash and cash equivalents of subsidiary at acquisition date 11 - (7,243)
Exchange rate adjustments 713 (598)
Cash and cash equivalents at end of financial year (2,605) (6,608)
Cash and cash equivalents
Deposits with banks 137 9
Cash in hand and at banks 752 874
Short term borrowings (3,494) (7,491)
(2,605) (6,608)
The notes on pages 29 to 43 f orm part of these financial statements.
Notes 2000 1999
A$’000 A$’000
for the financial year ended 28 February 2000
29
1 The Company
The Company, incorporated on 3 February 1995 under the laws of Bermuda, is listed on the Australian Stock
Exchange. The Company's principal activity is that of an investment holding company.
2 Currency Used in the Financial Statements
In view of the international nature of the Group's operation and the listing of the shares of the Company on the
Australian Stock Exchange, the financial statements are expressed in thousands of Australian Dollars ("A$'000").
3 Significant Accounting Policies
(a) Basis of accounting
The financial statements have been prepared under the historical cost convention and comply with
International Accounting Standards.
(b) Basis of consolidation
Subsidiary companies, which are those companies in which the Group, directly or indirectly, has an interest of
more than one half of the voting rights or otherwise has power to exercise control over the operations, have
been consolidated. Subsidiary companies are consolidated from the date on which effective control is
transferred to the Group and are no longer consolidated from the date of disposal. All intercompany
transactions, balances and unrealised surpluses and deficits on transactions between Group companies have
been eliminated. Separate disclosure is made of minority interests.
(c) Equity accounting
The Group equity accounts for its investments in associated companies in the consolidated financial statements.
Corporations in which the Group has a material interest and over which the Group exercises significant
influence, but does not control, are considered to be associated companies.
Equity accounting involves recognising in the income statement the Group's share of the associates' profit or loss
for the financial year. The Group's interest in the associate is carried in the balance sheet at an amount that
reflects its share of the net assets of the associate and includes goodwill on the acquisition.
(d) Goodwill
Goodwill arising on consolidation represents the excess of the consideration paid for shares in the subsidiary
companies over the fair value of the net assets acquired. Goodwill arising on consolidation is amortised using
the straight-line method over its estimated useful life. Goodwill arising from strategic acquisitions of the Group is
amortised over a maximum period of 20 years. Goodwill in high technology based companies is amortised over
a period of 5 years.
The carrying amount of goodwill is reviewed annually and written down for permanent impairment where it is
considered necessary.
(e) Property, plant and equipment
All property, plant and equipment are stated at cost less depreciation/amortisation, where applicable.
Notes to the Financial Statements
30
Freehold land is not depreciated. Long term leasehold land is amortised evenly over the leasehold period of
sixty years. All other assets are depreciated over their useful lives commencing from the time the assets are held
ready for use at the following principal annual rates of depreciation using the straight-line basis:
Buildings 2% - 3%
Plant, machinery and motor vehicles 10% - 25%
Office equipment, furniture and fittings 20% - 33%
Moulds 50%
(f) Research and development expenditure
Research costs net of government grants are expensed in the financial year in which they are incurred.
Development expenditures are charged against income as incurred, except to the extent that such costs are
expected to have future benefits. However, development costs initially recognised as an expense are not
recognised as an asset in a subsequent period.
Development costs that have been capitalised are amortised from the commencement of the commercial
production of the product to which they relate on a straight-line basis over the period of their expected benefit
but not exceeding five years.
The unamortised balance of development costs deferred in previous financial periods are reviewed regularly
and at each balance date, to ensure the criterion for deferral continues to be met. Where such costs are no
longer considered recoverable, they are charged to the income statement for the financial year.
(g) Revenue recognition
Sales are recognised upon delivery of products and customer acceptance, if any, or performance of services,
net of sales tax and discounts,and after eliminating sales within the Group. Interest income earned by the Group
is recognised on an accrual basis unless collectibility is in doubt.
(h) Inventories
Inventories are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of
fixed and variable overhead expenses, are assigned to inventory on hand by the method most appropriate to
each particular class of inventory, with the majority being valued on a first-in first-out basis. Net realisable value
is the estimate of the selling price in the ordinary course of business, less the costs of completion and selling
expenses.
(i) Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents include cash on hand and at bank,
net of bank overdrafts which are repayable on demand.
(j) Leases
Plant and equipment under finance leases are capitalised and are depreciated in accordance with the
depreciation policy set out in note 3(e). Outstanding obligations under such leases are included in liabilities as
lease creditors. Finance charges arising from these leases are allocated to the income statement over the
periods of their lease agreements.
...Notes to the Financial Statements
31
(k) Income tax
Deferred income tax is provided, using the liability method, for all temporary differences arising between the tax
bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax
rates are used to determine deferred income tax.
Under this method the Group is required to make provision for deferred income taxes on the revaluation of
certain non-current assets and, in relation to an acquisition, on the difference between the fair values of the net
assets acquired and their tax base. Provision for taxes, mainly withholding taxes, which could arise on the
remittance of retained earnings, principally relating to subsidiaries, is only made where there is a current
intention to remit such earnings.
The principal temporary differences arise from depreciation on property, plant and equipment, provisions and
tax losses carried forward. Deferred tax assets relating to the carry forward of unused tax losses are recognised
to the extent that it is probable that future taxable profit will be available against which the unused tax losses
can be utilised.
(l) Currencies
Transactions in currencies other than Australian Dollars have been brought to account using the exchange rates
in effect at the date of the transaction. Monetary items in currencies other than Australian Dollars at balance
sheet date are translated at the exchange rates existing at that date.
Exchange differences are brought to account in the income statements of the financial year in which they arise
except that exchange differences on transactions entered into in order to hedge the purchase or sale of
specific goods and services are deferred and included in the measurement of those transactions.
Income statements of foreign entities are translated into Australian Dollars at average exchange rates for the
year and the balance sheets are translated at the exchange rates ruling at the financial year-end. Exchange
differences arising from the re-translation of the net investment in foreign subsidiary companies and associated
companies are taken to reserve.
(m) Investments
Investments in subsidiary and associated companies are stated at cost less provision for any permanent
diminution in value.
(n) Comparatives
Where necessary, comparative figures have been adjusted to conform with changes in presentation in the
current year. In particular, the comparatives have been adjusted or extended to take into account the
requirements of the following revised or new International Accounting Standards which the Group
implemented during the financial year:
IAS 1 - Presentation of financial statements
IAS 14 - Segmental reporting
IAS 17 - Leases
IAS 19 - Employee benefits
...Notes to the Financial Statements
32
4 Operating Profit/(Loss) Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Operating profit/(loss) is stated after charging:
Depreciation of property, plant and equipment 4,528 2,644 - -
Amortisation of goodwill 2,804 6,506 - -
Development costs amortised 79 155 - -
Interest expense on long term loan 256 37 16 -
Other interest expenses 1,479 1,382 - 96
Net foreign exchange loss 1,316 - - 16
Loss on disposal of investment in an
associated company - 6,378 - 2,909
and after crediting:
Gain on partial divestment of equity interests
in an associated company 560 - - -
Rental income 129 36 - -
Net foreign exchange gain - 287 - -
5 Taxation Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Current tax (2,427) (1,318) - -
Deferred tax (351) (470) - -
Share of associated companies' tax - (31) - -
Overprovision in respect of previous financial year 1,033 - - -
(1,745) (1,819) - -
The charges for taxation are in respect of profits on activities undertaken outside Bermuda and are not subject
to taxation in Bermuda.
The Group's taxation charge is reconciled to the Group's profit 2000 1999
before taxation as follows: A$’000 A$’000
Profit/(Loss) before taxation 5,026 (6,691)
Tax at the domestic rates applicable to profits in the
countries in which the Group companies are domiciled (3,164) (2,296)
Income not subject to tax 426 505
Expenses not deductible for tax purposes (40) (28)
Overprovision in respect of previous financial year 1,033 -
Taxation charge (1,745) (1,819)
...Notes to the Financial Statements
33
6 Inventories Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Raw materials 11,060 8,006 - -
Work-in-progress 5,785 6,216 - -
Finished goods 2,245 2,902 - -
Consumables 23 22 - -
19,113 17,146 - -
7 Accounts Receivable Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Trade receivables 21,880 14,316 - -
Other receivables and prepayments 1,626 1,572 19 22
Amount due from subsidiary companies - - 3,832 8,228
Amount due from associated companies 140 15 - -
23,646 15,903 3,851 8,250
8 Cash and Bank Balances Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Deposits with banks 137 9 - -
Cash in hand and at banks 752 874 19 5
889 883 19 5
9 Property, Plant and Equipment - Group Plant, Officemachinery equipment
Land and and motor furnitureAt 28.2.2000 buildings vehicles and fittings Total
Cost A$’000 A$’000 A$’000 A$’000
At 1.3.1999 18,668 32,835 5,794 57,297
Exchange rate adjustments (887) (1,140) (337) (2,364)
Additions 1,233 3,237 1,271 5,741
Disposals (1,008) (1,029) (146) (2,183)
At 28.2.2000 18,006 33,903 6,582 58,491
Accumulated depreciation
At 1.3.1999 3,093 18,958 3,493 25,544
Exchange rate adjustments (236) (765) (262) (1,263)
Charge for the year 460 3,345 723 4,528
Disposals (241) (640) (82) (963)
At 28.2.2000 3,076 20,898 3,872 27,846
Net book value 14,930 13,005 2,710 30,645
...Notes to the Financial Statements
34
9 Property, Plant and Equipment - Group (continued) Plant, Officemachinery equipment
Land and and motor furnitureAt 28.2.1999 buildings vehicles and fittings Total
Cost A$’000 A$’000 A$’000 A$’000
At 1.3.1998 8,325 14,679 3,978 26,982
Exchange rate adjustments 872 1,391 429 2,692
At date of acquisition of subsidiary companies 9,240 17,641 2,443 29,324
Additions 231 1,930 393 2,554
Disposals - (2,813) (1,442) (4,255)
Reclassification - 7 (7) -
At 28.2.1999 18,668 32,835 5,794 57,297
Accumulated depreciation
At 1.3.1998 1,811 8,296 2,706 12,813
Exchange rate adjustments 194 836 295 1,325
At date of acquisition of subsidiary companies 716 9,610 1,017 11,343
Charge for the year 372 1,762 510 2,644
Written back on disposals - (1,549) (1,032) (2,581)
Reclassification - 3 (3) -
At 28.2.1999 3,093 18,958 3,493 25,544
Net book value 15,575 13,877 2,301 31,753
Plant and equipment with a net book value of A$1,652,465 (1999: A$1,634,787) as at 28 February 2000 were
acquired under finance leases.
10 Intangible Assets Group Company
2000 1999 2000 1999
Goodwill A$’000 A$’000 A$’000 A$’000
Opening net book value 20,745 19,823 - -
On (disposal)/acquisition of subsidiary company (12) 7,428 - -
Amortisation charge (2,804) (6,506) - -
Closing net book value 17,929 20,745 - -
Cost 29,446 29,458 - -
Accumulated amortisation (11,517) (8,713) - -
Net book value 17,929 20,745 - -
Development expenditure
Opening net book value 106 235 - -
Exchange rate adjustments (16) 26 - -
Amortisation charge (79) (155) - -
Closing net book value 11 106 - -
Cost 427 485 - -
Accumulated amortisation (416) (379) - -
Net book value 11 106 - -
Total net book value 17,940 20,851 - -
...Notes to the Financial Statements
35
11 Subsidiary Companies Company
2000 1999
A$’000 A$’000
Unquoted shares at cost 42,914 40,474
Details of subsidiary companies are as follows:
Percentage of
Country of equity held by
Subsidiary companies incorporation Company Subsidiary Principal activities
Picopak Holdings (M) Sdn. Bhd. Malaysia 100% - Investment holding
Picopak Electronics (M) Sdn. Bhd. Malaysia 100% - Technical and marketing support
services
Picopak Oy Finland - 100% Electronics manufacturing
Precico Group Sdn. Bhd. Malaysia *100% - Management company and
investment holding
Precico Sdn. Bhd. Malaysia - *100% Manufacture and sale of
precision moulded plastic parts
* During the year, the Company's shareholdings in subsidiary companies were restructured as follows:
• Acquisition of all the shares in Precico Group Sdn. Bhd. from Precico Sdn. Bhd. for a consideration of
A$850,700
• Disposal of its entire interest in shares of Precico Sdn. Bhd. to Precico Group Sdn. Bhd. for a consideration
of A$11,820,400.
Percentage of
Country of equity held by
Subsidiary companies incorporation Company Subsidiary Principal activities
Precico M&D Sdn. Bhd. Malaysia - 100% Manufacture and sale of
injection moulds for plastics
Precico Electronics Sdn. Bhd. Malaysia - 100% Manufacture and sale of
(formerly known as Eastrade Electronics (M) Sdn. Bhd.) electronics products and
assemblies
Telecam Electronics Limited United Kingdom 100% - Management company and the
marketing of Group products
and services
Permatech BV Netherlands 100% - Investment holding
Frencken Group BV Netherlands - 100% Investment holding
Frencken Mechatronics BV Netherlands - 100% Manufacturing, assembly and
engineering of precision
mechanical plant and
equipment
Frencken Technical Projects Netherlands - 100% Provision of services to group
Assembly BV companies
Machinefabriek Gebrs. Frencken BV Netherlands - 100% Manufacturing and/or assembly
of precision mechanical plant
and equipment
...Notes to the Financial Statements
36
Percentage of
Country of equity held by
Subsidiary companies (continued) incorporation Company Subsidiary Principal activities
Optiwa BV Netherlands - 100% Manufacturing and/or assembly
of precision mechanical plant
and equipment
Frencken Eindhoven BV Netherlands - 100% Provision of services to Group
companies
Gereedschapmakerij Fremach BV Netherlands - 100% Dormant
Frencken Investments BV Netherlands - 100% Property holding company
Frencken Investments Sro Czech Republic - 100% Property holding company
Precico Components Sdn. Bhd. Malaysia 20% 32% Manufacture of precision metal
parts
Details of the aggregate cash flows and consideration relating to the acquisition of the subsidiary company and
its aggregate assets and liabilities at date of acquisition in the previous financial year were as follows:
1999
Purchase consideration A$’000
- Value of shares acquired 11,820
Total purchase consideration 11,820
Net assets acquired (8,411)
Goodwill 3,409
Cash and cash equivalents (7,243)
Property, plant and equipment 17,981
Intangible assets 3,331
Receivables 8,052
Creditors (16,690)
Term loans (2,133)
Inventories 5,113
Net assets acquired 8,411
Goodwill 3,409
Total purchase consideration 11,820
Less:
Discharged by shares issued (11,820)
Cash and cash equivalents in subsidiary acquired 7,243
Cash outflow on acquisition 7,243
There was no post acquisition profit after tax and minority interest for the subsidiary companies acquired during
the financial year ended 28 February 1999 as the acquisition was effected on 27 February 1999.
...Notes to the Financial Statements
37
12 Associated Companies Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Unquoted shares at cost 1,741 1,771 - -
Group's share of post acquisition retained profits 449 1,112 - -
2,190 2,883 - -
During the financial year, the Company’s equity interest in the associated company, Fremach International N.V.
was reduced from 40% to 20% when it divested partially its investments in that associated company.
The following are the associated companies:
Name of Country of Effective
associated companies incorporation interest Principal activities
Frencken Brno Sro Czech Republic 49% Manufacturing of precision metal parts
Fremach International NV Belgium 20% Sale of precision moulded plastic parts
Fremach Plastic NV Belgium 20% Manufacturing and sale of precision moulded
plastic parts
Fremach Engineering NV Belgium 20% Provision of services for plastic moulding tools
(formerly known as Ydro NV)
Fremach Toolshop BV Netherlands 20% Design and manufacture of plastic moulding tools
13 Accounts Payable Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Trade payables 17,645 10,595 23 -
Other payables and accruals 4,708 6,264 32 1,751
Amount due to subsidiary companies - - 81 1,821
Amount due to associated companies 354 213 - -
22,707 17,072 136 3,572
14 Lease Creditors Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Due within twelve months 456 1,104 - -
Due after twelve months 344 349 - -
800 1,453 - -
Commitments for finance leases are payable Group Company
in the following financial years: 2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Not later than 1 year 541 1,239 - -
Later than 1 but not later than 5 years 404 417 - -
945 1,656 - -
Less: Future finance charges on finance leases (145) (203) - -
Present value of finance lease liabilities 800 1,453 - -
...Notes to the Financial Statements
38
15 Short Term Borrowings Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Bank overdraft 3,494 7,491 - -
Bankers acceptance 544 2,849 - -
Revolving credit 1,839 4,445 - -
Short term trade loans 6,369 577 - -
Trust receipts - 72 - -
12,246 15,434 - -
The short term borrowings are unsecured and carry interest at floating rates which ranged from 4.1% to 8.05%
(1999: 1.75% to 14.50%) per annum during the financial year.
16 Term Loans Group Company
The term loans are repayable as follows: 2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Due within 1 year - current portion 4,146 3,730 - -
Between 1 and 2 years 3,965 3,700 - -
Between 2 and 5 years 2,546 5,824 - -
Over 5 years 620 - - -
Long term portion 7,131 9,524 - -
Total 11,277 13,254 - -
The loans are repayable by instalments Group Company
through to February 2004 as follows: 2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Repayable by monthly instalments 4,212 2,337 - -
Repayable by quarterly instalments 3,244 6,493 - -
Repayable by half yearly instalments 227 385 - -
Repayable by yearly instalments 3,594 4,039 - -
11,277 13,254 - -
The term loan repayable by monthly instalments, which is denominated in Ringgit Malaysia, is secured by a first
legal charge of A$13,626,000 over the leasehold land and buildings of the subsidiary companies with a net
carrying value of A$7,330,000 and a corporate guarantee from ElectroTech Investments Limited of A$15,595,000.
The term loan repayable by quarterly instalments, which is denominated in Netherland Guilders, is secured by a
pledge on assets and stocks of certain subsidiary companies totalling A$25,253,000 as at the financial year end.
The term loans repayable by half yearly and yearly instalments, which are denominated in Netherland Guilders
are unsecured.
The term loans bear interest at floating rates ranging from 4.05% to 7.05% (1999: 4.30% to 13.30%) per annum
during the financial year.
...Notes to the Financial Statements
39
17 Deferred Taxation Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
At beginning of financial year 1,938 414 - -
Exchange rate adjustment (102) 47 - -
At date of acquisition of subsidiaries - 1,007 - -
Charge for the year 351 470 - -
Transfer to current taxation (413) - - -
At end of financial year 1,774 1,938 - -
Deferred taxation liability and deferred tax charge in the profit and loss accounts are attributable to the
following items:
At Charge for Reclassi- Exchange At
1.3.1999 the year fication difference 28.2.2000
A$’000 A$’000 A$’000 A$’000 A$’000
Accelerated tax depreciation 1,007 341 - - 1,348
Other taxable temporary differences 931 10 (413) (102) 426
Deferred taxation liability 1,938 351 (413) (102) 1,774
18 Share Capital
Ordinary shares at par value of A$0.20 each Group and Company
2000 1999
Authorised: A$’000 A$’000
- 500,000,000 ordinary shares 100,000 100,000
Issued and fully paid:
At beginning of financial year
- 215,737,800 ordinary shares (143,748,800 ordinary shares) 43,148 28,750
Issued during the financial year
- 6,768,000 ordinary shares (71,989,000 ordinary shares) 1,353 14,398
At end of financial year
- 222,505,800 ordinary shares (215,737,800 ordinary shares) 44,501 43,148
During the financial year, the Company issued 6,768,000 shares for cash of A$1,692,000, of which A$10,000 was
received in cash with the balance set off against accounts payable.
...Notes to the Financial Statements
40
19 Cash Generated from Operations
Reconciliation of profit/(loss) before taxation to cash 2000 1999
generated from operations: A$’000 A$’000
Profit/(Loss) before taxation 5,026 (6,691)
Adjustments for:
Depreciation of property, plant and equipment 4,528 2,644
Amortisation of goodwill 2,804 6,506
Development costs amortised 79 155
Provision for doubtful debts - 686
(Gain)/loss on disposal of investment in an associated company (560) 6,378
Interest expense 1,735 1,207
Interest income (87) (200)
Share of profit before tax of associated companies (355) (2,794)
Changes in working capital (excluding the effects of acquisition and disposal)
Inventories (766) (4,517)
Accounts receivable (6,917) 3,314
Accounts payable 4,904 (2,117)
Cash generated from operations 10,391 4,571
20 Net Profit/(Loss) per Share
The net profit/(loss) per share is calculated by dividing the net profit/(loss) of the Group for the financial year
amounting to A$3,186,000 by the weighted average number of ordinary shares in issue during the financial year
of 220,223,564 shares (1999: Loss of A$8,448,000 by 144,481,718 shares).
21 Capital Commitments
Capital commitments at balance sheet date but not recognised in the financial statements are as follows:
Group Company
2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000
Property, plant and equipment 1,314 2,096 - -
22 Contingent Liabilities
The Company has given unsecured corporate guarantees to secure banking facilities granted to subsidiary
companies amounting to A$19,744,000 (1999: A$5,317,500).
No liabilities exist in respect of termination benefits under service agreements with directors or persons who take
part in the management of the Company.
23 Financial Instruments
Credit risk
Financial assets which potentially subject the Group to concentrations of credit risk consist principally of
accounts receivable, bank balances and deposits. The Group's cash equivalents and short-term deposits are
placed with high creditworthy financial institutions. Accounts receivable are presented net of the allowance for
doubtful receivables. Credit risk with respect to trade receivables is limited as the Group does not have any
significant exposure to any individual customer or counterparty.
...Notes to theFinancial Statements
41
Interest rate risk
The Group's short-term deposits are placed at prevailing interest rates. The borrowings of the Group are mainly
in floating rate interest.
Fair values
At 28 February 2000, the carrying amounts of accounts receivable, bank balances and deposits, accounts
payable and bank overdrafts approximated their fair values due to the short-term maturities of these assets and
liabilities.
24 Group Segmental Information
(a) Primary reporting format - Business segments
Precision metal
parts, mechanical Electronics Plastic
plant & equipment manu- injection Investments
Financial year ended manufacturing facturing moulding holding Total
28.2.2000 A$’000 A$’000 A$’000 A$’000 A$’000
Operating revenue 52,302 32,039 28,529 - 112,870
Operating profit 7,526 (1,114) 1,811 (283) 7,940
Finance cost (3,269)
4,671
Share of associate’s profits 355
Profit before taxation 5,026
Taxation (1,745)
Profit after taxation 3,281
Minority interests (95)
Net profit for the year 3,186
Other financial information
Segment assets 41,314 19,927 24,377 8,805 94,423
Segment liabilities 25,164 13,543 11,594 67 50,368
Capital expenditure 2,683 1,634 1,406 18 5,741
Depreciation 2,193 1,646 680 9 4,528
Amortisation 314 - - 2,569 2,883
...Notes to theFinancial Statements
42
Precision metal
parts, mechanical Electronics
plant & equipment manu- Investments
Financial year ended manufacturing facturing holding Total
28.2.1999 A$’000 A$’000 A$’000 A$’000
Operating revenue 42,953 4,521 - 47,474
Operating profit 4,815 (6,287) (6,863) (8,335)
Finance cost (1,150)
(9,485)
Share of associate’s profits 2,794
Profit before taxation (6,691)
Taxation (1,819)
Profit after taxation (8,510)
Minority interests 62
Net profit for the year (8,448)
Other financial information
Segment assets 32,992 37,811 18,616 89,419
Segment liabilities 27,306 1,052 22,402 50,760
Capital expenditure 2,225 329 - 2,554
Depreciation 2,209 435 - 2,644
Amortisation 792 - 5,869 6,661
There are no sales or other transactions between the business segments. Segment assets consist primarily of
property, plant and equipment, intangible assets, inventories, receivables and operating cash and bank
balances. Segment liabilities comprise operating liabilities and exclude taxation. Capital expenditure comprises
additions to property, plant and equipment.
(b) Secondary reporting format - Geographical segments
Although the Group's four business segments are managed on a worldwide basis, they operate in four main
geographical areas:
Bermuda - The home country of the parent company whose operation is principally
in investment holding.
Malaysia - The main activities are the manufacturing of precision moulded plastic
parts and electronics assembly.
Netherlands - The main activities are the manufacturing of precision metal parts,
mechanical plant and equipment.
Other European countries - The main activities are electronics manufacturing.
...Notes to theFinancial Statements
43
Operating revenue Total Assets Capital expenditure
2000 1999 2000 1999 2000 1999
A$’000 A$’000 A$’000 A$’000 A$’000 A$’000
Bermuda - - 38 28 - -
Netherlands 50,766 40,597 34,638 32,399 2,133 2,075
Malaysia 59,148 3,300 58,451 43,947 3,557 186
Other European 2,956 3,577 1,296 13,045 51 293
Countries
112,870 47,474 94,423 89,419 5,741 2,554
Analysis of operating revenue 2000 1999
A$’000 A$’000
Sales of goods 112,334 47,012
Revenue from services 536 462
112,870 47,474
25 Staff Costs Group
2000 1999
A$’000 A$’000
Wages and salaries 20,656 20,083
Social security costs 2,052 1,950
22,708 22,033
The number of persons employed by the group during the year:
Full time 1,845 1,780
Part time 34 50
1,879 1,830
Malaysia 1,641 1,612
Netherlands 204 164
Other European countries 34 54
1,879 1,830
26 Related Party Disclosures Group Company
(a) Significant related company balances 2000 1999 2000 1999
were as follows: A$’000 A$’000 A$’000 A$’000
Amount due from subsidiary companies - Non-trade - - 3,832 8,228
Amount due to subsidiary companies - Non-trade - - 81 1,821
(b) Significant transactions between companies in the Group and related parties are as follows:
• The Company has signed a management agreement with Richard Oh & Co. Ltd. to provide secretarial
and advisory services on Australian Stock Exchange and Corporate Law matters at a fee of A$3,000 per month
for the financial year ended 28 February 2000.
• Precico Electronics Sdn. Bhd. paid factory rental of A$214,000 to Davex Holdings Bhd., a subsidiary
company of MWE Holdings Berhad in which Dato' Larry Low is a director and has an interest.
...Notes to theFinancial Statements
The directors declare that the financial statements and notes set out on pages 24 to 43:
(a) comply with International Accounting Standards; and
(b) give a true and fair view of the results of the Company and the Group and the Group's cash flows for the
financial year ended 28 February 2000 and the state of affairs of the Company and the Group as at 28 February
2000.
In the directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable.
This declaration is made in accordance with a resolution of the directors.
Dato' Larry Low Hock Peng Gooi Soon Hock
Director Director
Date: 20 May 2000
44
Directors’ Declaration
45
To the Shareholders of
ElectroTech Investments Limited
We have audited the financial statements of ElectroTech Investments Limited on pages 24 to 43. These financial
statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with International 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 management, as well as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company
and the Group as at 28 February 2000, and the results of the Company's and the Group's operations and the Group's
cash flows for the financial year then ended in accordance with International Accounting Standards.
PricewaterhouseCoopers
Public Accountants
Penang, Malaysia
Date: 20 May 2000
Auditors’ Report
46
The shareholder information set out below was applicable as at 16 May 2000.
A. Distribution of Shares
Analysis of number of shareholders by size of holding: Ordinary Shares
Holders Units
1 - 1,000 4 883
1,001 - 5,000 37 128,310
5,001 - 10,000 176 1,457,093
10,001 - 100,000 214 8,605,683
100,001 and over 84 212,313,831
Total number of holders 515 222,505,800
There were 4 holders with less than a marketable parcel of 2,000 ordinary shares.
B. Twenty Largest Shareholders
The names of the twenty largest shareholders are listed below:
Number of % Held of issued
Name ordinary shares ordinary shares
Queenspac Corporation 31,267,794 14.05
Metra Nominees Sdn. Bhd. 27,420,000 12.32
Micro Compact (M) Sdn. Bhd. 26,332,206 11.83
Sinn Hin Company Sdn. Bhd. 15,080,000 6.78
Unaval Nominees Pty. Limited 14,223,500 6.39
Gim Thye Realty Sdn. Bhd. 14,168,000 6.37
Precico Holdings Sdn. Bhd. 12,382,000 5.57
Cayman Resources Sdn. Bhd. 12,163,800 5.47
Gooi Soon Hock 7,146,000 3.21
GBC Holdings Sdn. Bhd. 5,470,000 2.46
Jacobus Joseph Wilhelmus Poeth 5,000,000 2.25
K-Tee Holdings Sdn. Bhd. 4,060,000 1.83
Bersiam B.V. 3,280,800 1.48
Strategic Nominees Limited 3,000,000 1.35
Tung Keow Kheng 2,498,000 1.12
Tan Keng Tong 2,279,333 1.02
Ylex Oy 2,230,625 1.00
Gooi Soon Chai 1,965,000 0.88
Prime Logic (M) Sdn. Bhd. 1,600,000 0.72
Loi Lian Khuan 1,474,000 0.66
193,041,058 86.76
Shareholder Information
47
C. Substantial Shareholders
The Company’s Register of Substantial Shareholders recorded the following information:
Number of
Name ordinary shares
Precico Holdings Sdn. Bhd. 33,537,000
Queenspac Corporation 31,267,794
Micro Compact (M) Sdn. Bhd. 26,332,206
Sinn Hin Company Sdn. Bhd. 15,080,000
Unaval Nominees Pty. Limited 14,223,500
Gim Thye Realty Sdn. Bhd. 14,168,000
Cayman Resources Sdn. Bhd. 12,163,800
The Register of Substantial Shareholders records all holders of more than 5% of the total issued ordinary shares,
inclusive of any notified shareholdings held in nominee companies.
E. Voting Rights
All shares have the same rights and rank equally in all respects. Upon a poll every member present in person,
by proxy or by representative will have one vote for every share registered in his or her name.
...Shareholder Information
ElectroTech Investments Limited
Australian Stock ExchangeARBN 068 543 386
2000AnnualReport
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