Annual Report 2007 - Asian Micro Holdings Ltd.asianmicro.listedcompany.com/misc/ar2007.pdf ·...

Annual Report 2007

NGV technology: Putting you in the Green Lane

Photos on cover: (From left to right)

Van On Dual Diesel Fuel System

CNG Engine

CNG powered Tractor Head

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01 Corporate Profile and Information02 Chairman’s Message04 Board of Directors06 Key Management07 Financial Highlights09 Corporate Governance16 Director’s Reports21 Statement by Directors22 Independent Auditors’ Report23 Balance Sheet25 Consolidated Profit and Loss Account26 Consolidated Statement of Changes in Equity29 Consolidated Statement of Cash Flows31 Notes to the Financial Statements71 Supplementary Information73 Statistics of Shareholdings75 Notice of Annual General Meeting Proxy Form

contents

Asian Micro Holdings Annual Report 2007 page1

corporate profileAsian Micro Holdings Limited (listed in the SGX-SESDAQ in September 1999), provides recycling and precision cleaning of packaging trays and media/disk cassettes used in the hard disk drive and semiconductor industries in Singapore, China and Thailand. Asian Micro recently invested in Natural Gas Vehicle (NGV) conversion business and is now focused towards setting up a chain of network of NGV conversion centres. Though started only in July 2007, the Company has now set up a total of 6 NGV conversion centres in Thailand, Malaysia and Singapore. The Company also imports/exports NGV conversion kits, Compressed Natural Gas (CNG) engines, CNG cylinders, and CNG vehicles to expedite its growth and revenue. Currently specializing and promoting Dual Diesel Fuel (DDF) conversion for heavy duty diesel trucks, buses and prime movers to run on 50% diesel and 50% natural gas, it has become the alternate key business of the Company. Asian Micro intends to grow itself into an energy company entering the oil and gas sector by specializing in alternative and renewable fuels, mainly in Natural Gas.

corporate information

Board of Directors Executive Lim Kee Liew @ Victor Lim - CEO and Group Managing DirectorLeong Lai Heng - Executive DirectorLim Kee Hing - Executive Director

Non-ExecutiveDr. Wang Kai Yuen - Non-Executive ChairmanTeo Kio Choon @ Chang Chiaw Choon- Independent DirectorTan Siew Bin, Ronnie - Independent Director (appointed on 8 May 2007)Pang Kim Hin- Independent Director (resigned on 18 October 2006)

Audit CommitteeDr. Wang Kai Yuen - ChairmanTeo Kio Choon @ Chang Chiaw ChoonTan Siew Bin, Ronnie

Nominating CommitteeTeo Kio Choon @ Chang Chiaw Choon – ChairmanDr. Wang Kai Yuen Tan Siew Bin, Ronnie

Remuneration CommitteeDr. Wang Kai Yuen – ChairmanTeo Kio Choon @ Chang Chiaw ChoonTan Siew Bin, Ronnie

Company SecretaryNg Lai Ying

Registered & Business Office3 Tech Park CrescentTuas Tech ParkSingapore 638129Tel : 68627777 / Fax : 68626277Website: http://www.asianmicro.com.sg

SolicitorsCentral Chambers Law Corporation150, Cecil Street#16-00, Singapore 069543

ShookLin & Bok, Advocates & Solicitors1 Robinson Road#18-00 AIA TowersSingapore 048542

Bankers Malayan Banking BerhadOversea-Chinese Banking Corporation LimitedStandard Chartered Bank Limited

Share RegistrarB.A.C.S. Private Limited63 Cantonment RoadSingapore 089758

AuditorsErnst & Young One Raffles QuayNorth TowerLevel 18Singapore 048583Partner-in-charge: Tham Chee Soon(since financial year ended 30 June 2006)

Asian Micro Holdings Annual Report 2007

chairman’s message

“ ”“On behalf of the Board of Directors, I am pleased to present the Annual Report and the Audited Financial Statements of Asian Micro Holdings Limited and its subsidiaries for the financial year ended 30 June 2007.”

Dr. Wang Kai YuenChairman12 September 2007

Financial Highlights FY2007 continued to be a difficult and challenging year for the Group. The Group recorded reduced turnover of S$17.88 million, or a 32% drop compared to FY2006.The Group’s overall performance was further adversely affected following the merger of Maxtor and Seagate with full year impact recorded in the reporting period.

The Group’s clean room grade packaging products manufacturing and trading of clean room supplies business activities also contributed lower revenue in the reporting period due to intense competition.

Fortunately, the sharp drop in revenue from its precision tray and media / disk cassettes recycling was partially mitigated by increase of revenue generated from the Group’s plastics scrap recycling in Singapore and new customer base from its Thailand plant.

Net profit attributable to shareholders after taking into consideration of taxation and minority interest amounted to S$1.68 million as compared to S$2.08 million in last corresponding financial year.

Existing Business OverviewWhile the Group’s Singapore and Thailand plants are able to expand its business activities and secure new customers for its precision cleaning of packaging trays and media/disk cassettes, the new orders are not sufficient to offset the loss in orders from its previous major customer, namely Maxtor Corp.

The Group will increase its effort to broaden its customer case through extensive marketing and at the same time, rationalise its operation to keep operating cost low.

With the increased interest in the recycling and recovery from plastics related waste, the market is expected to remain competitive. The Company will focus on increasing capacity utilisation and operational efficiencies in this segment.

The competition remains keen in the market for the Group’s clean room grade packaging products manufacturing division. The higher oil price has meant higher cost for the resins used in the manufacturing. We will continue to monitor our cost and to improve efficiencies and will make necessary adjustments.


New Business Activity - Natural Gas Vehicle Conversion CentreThe Group has been exploring new business with higher growth potential. After extensive exploration, the Group had entered into a Joint Venture Investment Agreement with Mr. Piyawat and Ms. Acrcha, both Thai, for the setting up of natural gas vehicle (“NGV”) conversion centres in Thailand. A joint venture company, S.O. NGV (Thailand) Co., Ltd. (“SO NGV”) has been incorporated pursuant to the Agreement in early July 2007.

SO NGV has set up in total three conversion centres located at Wangnoi, Korat and Chiang Mai of Thailand within three months from July 2007 to meet the increasing demand of the conversion system in the region, whereby we convert diesel vehicles to run on pure natural gas or diesel supplemented with up to 50% natural gas.

In addition, the Company has also entered into a Memorandum of Understanding with a Malaysia registered company in September 2007 for a 30% stake holdings in the company for its existing natural gas vehicle conversion business in Kuala Lumpur and Johor Bahru, Malaysia.

The Company will also embark on an aggressive plan to import NGV related products, such as compressed natural gas (“CNG”) engines, CNG gas cylinder into Thailand and Malaysia riding on the conversion business. It will also supply such products to other conversion centres. The Company has established relationships with CNG engines and NGV related components manufacturing companies in China to secure long-term supply and distributorships.

Rationale In view of the strong demand for diesel and oil worldwide and stronger awareness on environmental protection, the Group views the investment as a strategic and timely expansion and diversification into a growing business, with fuel saving and elimination of black smoke emission from exhaust system of heavy-duty trucks and buses.

Thailand has the fastest growth rate in NGV conversions and the set-up of CNG refilling stations in the region. PTT Public Company Limited (“PTT”), a Thai National Gas Company

Chairman’s Message

Dr. Wang Kai YuenChairman12 September 2007

and also the certifying body for NGV conversion centres, is aggressively embarking on its strategy to reduce diesel consumption through its subsidies for CNG related activities and set up of refill gas stations.

We see tremendous opportunities for this sector and the Group intend to grow this oil and petrol related business into one of its major revenue streams in subsequent years.

Looking AheadThe Group will aggressively seek growth opportunities in the oil and petrol industries, particularly in the setting up of more NGV conversion centres in Thailand. It is also the Group’s plan to start NGV conversion business in Singapore and expand to a bigger scale in Malaysia.

We will continue to fine-tune our business strategies in line with market trends, and sharpen our focus on new businesses that would deliver sustainable value to our shareholders.

Appreciation On behalf of the Board, I would like to thank all our shareholders for their continued loyalty to the Company.

We also acknowledge the support of our customers, bankers, business associates of our Company in the year 2007, and we are looking forward to your continued support to help us achieve a better 2008 and beyond.

Last, but not least, I would like to thank all staff and management for their dedicated service and teamwork in 2007.


board of directors

1. Dr Wang Kai Yuen Dr Wang Kai Yuen was appointed as an Independent Non-Executive Chairman of the Group on 26th August 2006. He had been an Independent Non-Executive Director of the Group since 1999. He is also the Chairman of the Company’s Audit and Remuneration committees and a member of the Nominating Committee. He is currently the Managing Director of Xerox Singapore Software Centre and holds several other directorships including directorships in ComfortDelGro Corporation Limited, COSCO Corporation (Singapore) Ltd, Hiap Hoe Limited, Matex International Ltd, Nylect Technology Limited, Superbowl Holdings Limited, Koon Holdings Limited, China Lifestyle Food & Beverages Group Limited, HLH Group Limited and EOC Limited.

Dr Wang holds a Bachelor of Engineering (Electrical Engineering) (Hons) from the University of Singapore and a Masters of Science (Industrial Engineering), a Masters of Science (Electrical Engineering) and a PhD (Electrical Engineering) from Stanford University, USA.

2. Mr Victor Lim Mr Victor Lim is the Chief Executive Officer and Group Managing Director of the Company. Mr Lim is the key founder of

1 2 3 4

the Group and currently provides the overall strategic direction and policy decisions of the Group. Prior to setting up the Group, Mr Lim was the Engineering Support Manager in Micropolis Singapore Ltd from 1983 to 1989. Mr Lim holds a Diploma in Production Engineering from the Singapore Polytechnic and has more than 20 years experience in the electronic and hard disk drive industry.

He is currently a member of the Singapore Institute of Directors.

3. Ms Leong Lai Heng Ms Leong Lai Heng is an Executive Director of the Company and oversees the Group’s administrative matters and is responsible for staff matters such as recruitment and payroll, corporate affairs as well as general office administration.

4. Mr Lim Kee Hing Mr Lim Kee Hing was appointed as an Executive Director of the Company in August 1999. He is currently responsible for the operation of precision cleaning of packaging trays and media cassettes, clean room grade packaging products manufacturing and clean room supplies trading activities in Singapore, China and Thailand.


Board of Directors

5. Mr Teo Kio Choon @ Chang Chiaw Choon Mr Teo Kio Choon @ Chang Chiaw Choon is an Independent Non-Executive Director of the Company since 1999. He is also the Chairman of the Group’s Nominating Committee and a member of the Audit and Remuneration Committees. He is a partner of KC Teo Consultants, a management consultancy firm since 1992. Mr. Chang holds a Bachelor of Science (Honours) degree from the Nanyang University.

6. Mr Tan Siew Bin, Ronnie Mr. Tan Siew Bin, Ronnie was appointed as an Independent and Non-Executive Director of the Company since 8 May 2007. He is also a member of the Group’s Audit, Remuneration and Nominating Committees. Mr. Tan is one of the founding Directors of Central Chambers Law Corporation in Singapore with 16 years of practice. He is a Notary Public, Commissioner for Oaths and heads of the Civil and Criminal practice. Mr. Tan began his legal practice as a litigator and moved into areas of corporate and commercial advice.

Mr. Tan holds a Bachelor of Laws from University of London and admitted to the English and Singapore Bar in 1989 and 1991 respectively.

5 6

Jindun CNG Cylinder

Fiona Lee Ms Lee is the Financial Controller of the Group and responsible for overseeing all aspects of financial planning, financial budgeting and control, and corporate matters of the Group. She is also responsible and in charge of the Group’s various fund raising exercises, corporate affairs and a liaison person with various regulatory bodies. Ms Lee joined the company as an accountant in 1997 and was promoted to Finance Manager in 2002 and subsequently promoted to the current position in 2004. Ms Lee graduated from Monash University, Melbourne, Australia with a degree in Bachelor of Business (Accounting).

William Chan Mr Chan is the Marketing Director for Asian Micro (S) Pte Ltd, World Plastics Recovery Pte Ltd and ACI Industries Pte Ltd. His key role is to assist the Group CEO in the marketing activities of the Group’s core businesses in Singapore and overseas. Prior to joining the Group in 1996, he worked as a Sales Engineer for Niche Tech Pte Ltd and German Technical Consultants Pte Ltd from 1990 to 1995. Mr Chan holds a diploma in Electrical Engineering from Singapore Polytechnic and a diploma in Sales and Marketing from Marketing Institute of Singapore.

Ng Lee YianMs Ng joined the company since April 2007 as Senior Accountant. She is responsible for all accounting and financial matters of the Group. Ms Ng is a Certified Public Accountant and with more than 9 years of experience in the finance and accounting profession. Ms Ng graduated from Victoria University of Wellington, New Zealand with a degree in Bachelor of Accountancy.

key management

page6 Asian Micro Holdings Annual Report 2007

Jeslyn TaiMs Jeslyn Tai joined the company as the Human Resource and Administration Manager in May 2007. She oversees the Group’s staff and administrative matter and she has over 9 years of experience in corporate services which includes Human Resource and Administration operation. Ms Jeslyn holds a diploma in Management Studies from Singapore Institute of Management and a diploma in Business Administration from Singapore Productivity and Standard Board. Sophia Lin Ms Sophia Lin joined the Company as a Business Development Manager in December 2006 after obtaining her Masters of Social Sciences in Applied Economics from University of Singapore. She is responsible for development and expansion of the Group’s new business activities of natural gas vehicle conversion in Thailand, Singapore and Malaysia. She is also responsible for obtaining clearance and approval from the relevant local government authorities in setting up CNG conversion centers in Singapore. Ms Lin also oversees the import and sales of CNG products in Singapore.

18 seater mono-CNG passenger bus 31 seater mono-CNG passenger bus

CNG Conversion KitSensorGas Regulator

financial highlights

FiNaNcial YEar 2003 2004 2005 2006 2007 S$’000 S$’000 S$’000 S$’000 S$’000 ( restated)


rEsults oF opEratioN Turnover 50,796 29,967 28,127 26,326 17,883

Profit / (Loss) before taxation (8,606) 1,435 2,606 3,041 1,595 Taxation 265 (16) (774) (311) (41)Profit / (Loss) for the year (8,341) 1,419 1,832 2,729 1,554 Attributable to : Equity holders of the Company (8,385) 1,580 1,916 2,080 1,679 Minority Interests (44) 161 84 649 (125) FiNaNcial positioN Property, plant and equipment 6,857 5,310 7,292 8,652 9,464 Goodwill on Acquisition 544 - 752 752 752 Investment Property 2,700 2,700 2,600 2,600 2,600 Associated Company - 217 2,216 423 469 Current Assets 13,855 11,758 12,096 11,799 10,993 Current Liabilities (17,999) (9,542) (11,419) (7,617) (8,515)Net Current Assets/(Liabilities) (4,144) 2,216 677 4,182 2,478 Non-Current Liabilities (3,983) (3,193) (3,021) (3,532) (2,881)

rEprEsENtiNg : - Shareholders’ Equity 1,501 7,172 10,200 12,646 12,576 Minority Interests 473 78 316 431 306 EPS before Taxation (S$cents) (4.3) 0.5 0.8 0.9 0.5 EPS after Taxation & MI (S$cents) (4.1) 0.6 0.7 0.7 0.5 NTA per Share (S$cents) 0.6 2.5 3.4 4.0 4.0 Gearing Ratio 7.1 0.8 0.6 0.5 0.4

Year ended 30 June

financial highlights

page8 Asian Micro Holdings Annual Report 2007

‘03 ‘04 ‘05 ‘06 ‘07

50,796

Singapore 7,277Malaysia 2,862USA 1,295Thailand 1,727China / Hong Kong 4,051

Others 671

17,883

Turnover By Geographic Region

Tray Recycling 11,980Manufacturing 1,395Plastic Waste Recycling 2,514Trading 1,994

17,883

Turnover By Business Activities

TurnoverNet Profit (Loss) Attributable to Shareholders(S$’000)

29,967

28,127

26,326

17,883 1,6792,080

1,916

‘03 ‘04 ‘05 ‘06 ‘07

1,580

(8,385)

(S$’000)

7,277

2,8621,295

11,980

4,051

671

1,395

2,514

1,994

1,727

(s$’000)

(s$’000)


Report on Corporate Governance

Asian Micro Holdings Limited (the “Company”) recognizes the importance of corporate governance and is committed to up-hold the high standards of corporate governance, and to put in place effective self-regulatory corporate practices to preserve and enhance long term shareholders’ value.

This report outlines the Company’s corporate governance practices with specifi c reference to the Code of Corporate Gover-nance 2005 (the “Code”).

BOARD MATTERS

Principle 1 Board’s Conduct of its Affairs

The Board meets regularly and as warranted by circumstances. The principal functions of the Board, apart from its statutory responsibilities are :

(a) to approve the Group’s corporate policies ; (b) to approve annual budgets, key operational issues, major funding and investment proposals ;(c) to set overall strategies and supervision of the Group’s business and affairs ;(d) to review the fi nancial performance of the Group ; (e) to approve nominations of Directors and appointment to the various Board committees and key managerial personnel ;

and (f) to assume responsibility for corporate governance.

The Company has adopted a policy which welcomes Directors to request for further explanations, briefi ngs or informal discus-sions on any aspect of the Company’s operations or businesses from Management.

Management monitoring closely on changes to regulations and accounting standards. To keep pace with regulatory changes, where these changes have an important bearing on the Company or Directors’ disclosure obligations, Directors are briefed either during Board meetings or at specially convened sessions.

Principle 2 Board Composition and Balance

The Board comprises the following members :

Executive Directors

Mr. Lim Kee Liew @ Victor Lim (Chief Executive Offi cer & Group Managing Director)Ms. Leong Lai HengMr. Lim Kee Hing

Independent Non-Executive Directors

Dr. Wang Kai Yuen (Chairman)Mr. Teo Kio Choon @ Chang Chiaw ChoonMr. Tan Siew Bin, Ronnie (Appointed 8 May 2007)Mr. Pang Kim Hin (Resigned 18 October 2006)

The Board constantly reviews its composition of Directors to be satisfi ed that such composition is appropriate and that Indepen-dent Directors make up at least one-third of the Board. The Board will continually examine its size, the standing of its members in the business community, their experience and knowledge to allow discussions on matters of policy, strategy and performance to be critical, informed and constructive.



Key information on the Directors is set out below and on pages 4 and 5 of this Annual Report.

Name of Director Age

Shareholding in Company & its Related Companies @ 30 June 2007

Directorship(a) Date fi rst appointed(b) Date last re-elected

Due for re-election at next AGM

Mr. Lim Kee Liew @ Victor Lim

50 75,026,439 (a) 18/2/1997(b) NA -

Ms. Leong Lai Heng 49 74,561,982 (a) 18/2/1997(b) 18/10/2004

Retiring pursuant to Article 89

Mr. Lim Kee Hing 59 1,160,000 (a) 20/8/1999(b) 20/10/2005 -

Dr. Wang Kai Yuen 60 1,526,000 (a) 20/8/1999(b) 18/10/2006 -

Mr. Teo Kio Choon @ Chang Chiaw Choon

60 550,000 (a) 20/8/1999(b) 20/10/2005 -

Mr. Tan Siew Bin, Ronnie 46 0 (a) 8/5/2007(b) NA

Retiring pursuant to Article 89

Principle 3 Chairman and Chief Executive Offi cer

The roles of the Chairman and Chief Executive Offi cer are separate to ensure an appropriate balance of power, increased ac-countability and greater capacity of the Board for independent decision-making. The Chairman and the Chief Executive Offi cer are not related. The responsibilities of the Chairman include :

(a) scheduling meetings that enable the Board to perform its duties responsibly while not interfering with the fl ow of the Company’s operations ;

(b) exercising control over quality, quantity and timeliness of the fl ow of information between Management and the Board ; and

(c) assisting in ensuring compliance with the Company’s guidelines on corporate governance.

Mr. Lim Kee Liew @ Victor Lim, the Group Chief Executive Offi cer and Group Managing Director, sets the business strategies and directions for the Group and manages the business operations of the Group with Ms. Leong Lai Heng and Mr. Lim Kee Hing, who are Executive Directors and other management staff.

Principle 4 Board Membership

The Nominating Committee (“NC”) comprises three Directors, the majority of whom, including the Chairman, are Indepen-dent Non-Executive Directors. The members are :

Mr. Teo Kio Choon @ Chang Chiaw Choon (Chairman – appointed 8 May 2007)Dr. Wang Kai YuenMr. Tan Siew Bin, Ronnie (Appointed 8 May 2007)

The responsibilities of the NC are to make recommendations to the Board on all Board appointments. In addition, the functions of the NC includes the following :

• to develop and maintain a formal and transparent process for the appointment of Directors to the Board and all things incidental including to re-nominate and re-elect Directors at regular intervals and to determine annually whether or not a Director is independent ;

• to access the effectiveness of the Board as a whole, and the contribution by each Director to the effectiveness of the Board ;

• to decide how the performance of the Board may be evaluated and to propose objective performance criteria ; • to report to the Board its fi ndings from time to time on matters arising and requiring the attention of the NC ; and • to undertake such other reviews, projects, functions, duties and responsibilities as may be requested by the Board.



New Directors are appointed by the Board Resolutions, after the NC has recommended their appointments. Pursuant to Article 88 of the Company’s Articles of Association, such new Directors must submit themselves for re-election at the next Annual General Meeting (“AGM”) of the Company.

Article 89 of the Company’s Articles of Association requires one-third of the Directors (excluding the Managing Director), or the number nearest to one-third, to retire and subject themselves to re-election by shareholders at every AGM.

Principle 5 Board Performance

In determining the objective performance criteria for evaluation and determination for the FY2007, the NC had considered the attendance, participation and contribution of individual Directors at Board and Committee meetings to evaluate each Director’s performance. The attendances of the Directors at meetings of the Board and Board Committees during the year are as follows :

Board Meeting Audit Committee Remuneration

CommitteeNominating Committee

No. of meeting held : 2 2 1 1

Name of Director :Lim Kee Liew @ Victor Lim 2 NA NA NALeong Lai Heng 2 NA NA NALim Kee Hing 2 NA NA NADr. Wang Kai Yuen 2 2 1 1Teo Kio Choon @ Chang Chiaw Choon 2 2 1 1

Tan Siew Bin, Ronnie * 0 0 0 0

*Note : Mr. Tan Siew Bin, Ronnie was appointed as member of Audit Committee, Remuneration Committee and Nominating Committee on 8 May 2007.

Principle 6 Access to Information

Board members are provided with adequate and timely information prior to Board meetings, and on an ongoing basis, have separate and independent access to the Company’s senior management. Detailed Board papers are prepared for each Board meeting. The Board papers include suffi cient information on fi nancial, business and corporate issues from Management to en-able Directors to be properly informed on issues to be considered at Board Meetings.

The Company Secretary attends all Board meetings and is responsible to ensure that established procedures and all relevant statutes and regulations are complied with. Directors have separate and independent access to the Company Secretary.

The Board takes independent professional advice as and when necessary to enable it to discharge its duty and responsibilities effectively. The Board is updated on the regulations of the Singapore Exchange Securities Trading Limited (“SGX-ST”), Compa-nies Act, the Code and other statutory requirements, on a regular basis.

REMUNERATION MATTERS

Principle 7 Procedures for Developing Remuneration PoliciesPrinciple 8 Level and Mix of RemunerationPrinciple 9 Disclosure on Remuneration

The Remuneration Committee (“RC”) comprises the following members :

Dr. Wang Kai Yuen (Chairman)Mr. Teo Kio Choon @ Chang Chiaw ChoonMr. Tan Siew Bin, Ronnie (Appointed 8 May 2007)


The RC is guided by its terms of reference, which set out its principal responsibilities as follows :

• to review and recommend to the Board an appropriate and competitive framework of remuneration for the Board and key executives of the Group to attract, retain and motivate management staff of the required caliber to manage the Company successfully ;

• to determine and recommend to the Board specifi c remuneration packages for each Executive Director, taking into ac-count factors including remuneration packages of Executive Directors in comparable industries as well as the performance of the Company and that of the Executive Directors ;

• to review Management’s recommendation of the fees for Independent Non-Executive Directors ; and• to ensure the remuneration policies and systems of the Group to support the Group’s objectives and strategies.

The remuneration package adopted for the Executive Directors is as per the Service Contract entered into between the respec-tive Executive Director and the Company. The NC, together with the RC, decides on the specifi c remuneration packages for an Executive Director upon recruitment. Thereafter, the RC reviews subsequent increments, bonuses and allowances where these payments are discretionary. No Director or member of the RC is involved in deciding his or her own remuneration.

Independent Non-Executive Directors do not enter into any Service Contracts with the Company. Save for receipt of directors’ fees and participation in the Company’s Employees Share Option Scheme, Independent Non-Executive Directors do not receive any remuneration from the Company.

Directors’ fees are set in accordance with a remuneration framework comprising basic fees, attendance fees and additional fees for serving on any of the Board Committees. Directors’ fees are approved by the shareholders of the Company as a lump sum payment at the Annual General Meeting of the Company.

No immediate family members of a Director or the Chief Executive Offi cer have remuneration exceeding S$150,000 during the year.

A breakdown showing the level and mix of remuneration paid to each Director (in percentage terms) for FY2007 is as follows :

Remuneration band and Fee Salary Other Benefi ts Profi t Sharing Totalname of directors % % % % %S$500,000 and above :Lim Kee Liew @ Victor Lim - 82 10 8 100

S$250,000 to S$499,999 :Leong Lai Heng - 81 12 7 100

Below S$250,000 :Lim Kee Hing - 76 11 13 100Dr. Wang Kai Yuen 100 - - - 100Teo Kio Choon @ Chang Chiaw Choon 82 - 18 - 100Tan Siew Bin, Ronnie 100 - - - 100

The following table sets out the range of gross remuneration received by the top fi ve executives (excluding Executive Directors) of the Group for FY2007 :

Remuneration Bands No. of Executives$100,000 to $200,000 2Below S$100,000 4



ACCOUNTABILITY AND AUDIT

Principle 10 Accountability

In presenting the annual fi nancial statements and half-yearly announcements to shareholders, it is the aim of the Board to provide the shareholders with a detailed analysis, explanation and assessment of the Group’s fi nancial position and prospects. Management currently provides the Board with appropriately detailed management accounts of the Group’s performance, position and prospects on a half-yearly basis.

Principle 11 Audit CommitteePrinciple 12 Internal Control Principle 13 Internal Audit

The Audit Committee (“AC”) comprises the following members, all of whom are Independent Non-Executive Directors, appro-priately qualifi ed to discharge their responsibilities :

Dr. Wang Kai Yuen (Chairman)Mr. Teo Kio Choon @ Chang Chiaw ChoonMr. Tan Siew Bin, Ronnie (Appointed 8 May 2007)

The AC met twice (2) in FY2007. The AC is guided by its terms of reference and has the following principal functions : -

• to recommend to the Board of Directors the External Auditors to be nominated ; • to review the scope, audit plans, results and effectiveness of the Internal and External Auditors ;• to review any related signifi cant fi ndings and recommendations of the External Auditors, together with Management’s

responses thereto ; • to review the adequacy of the Group’s system of internal controls, fi nancial and management reporting systems ; • to review with Management on signifi cant risks or exposures that exist and assesses the steps that Management has

taken to minimize such risks to the Group ; • to review with Management the announcement of the interim and full-year results of the Group and its fi nancial state-

ments ; • to review interested party transactions as may be required by the regulatory authorities or the provisions of the Compa-

nies Act ; • to review legal and regulatory matters that may have a material impact on the fi nancial statements and reports action and

minutes of the AC to the Board of Directors with such recommendations as the AC considers appropriate ; and • to review arrangements by which staff of the Company may, in confi dence, raise concerns about possible improprieties

in matters of fi nancial reporting or other matters.

The AC has full access to and received co-operation from Management, and has full discretion to invite members of the man-agement to attend its meetings. Reasonable resources have been given to enable it to discharge its functions. Minutes of the AC meetings are circulated to the Board for its information.

The AC has conducted an annual review of all non-audit services by the external auditors to satisfy itself that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors.

The Board recognizes its responsibility for the Group’s system of internal controls and the need to review its adequacy and integrity regularly in order to safeguard the Group’s assets and therefore shareholders’ investments in the Group.

The Company’s senior management has made regular visits to the operating units within the Group. A management structure with clearly defi ned lines of responsibility that promotes effective internal control is in place.

To further strengthen internal control, Management will consider the establishment of an independent internal audit function either on an in-house or outsourced basis.



COMMUNICATION WITH SHAREHOLDERS

Principle 14 Communication with ShareholdersPrinciple 15 Greater Shareholder Participation

In line with the continuous disclosure obligations of the Company and pursuant to the Listing Manual of the SGX-ST and the Com-panies Act, Chapter 50, shareholders shall be informed of all major developments that impact the Group, in a timely manner.

The Company does not practise selective disclosure. All material and price sensitive information as well as information on the Company’s new initiatives are publicly released via SGXNET. In addition, the Company also responds to enquiries from share-holders, investors, analysts, fund managers and the press. All shareholders of the Company receive a copy of the Annual Report and Notice of Annual General Meeting (“AGM”) annually. Notice of the AGM is also advertised in a daily newspaper and made available on the SGX-ST website. At the AGM, shareholders are given the opportunity to air their views and ask questions re-garding the Company and the Group. The Company’s Articles of Association allow shareholders to appoint one or two proxies to attend and vote in their stead at the AGM.

Each item of special business included in the Notice of meetings is accompanied, where appropriate, by an explanation for the proposed resolution. Separate resolutions are proposed for substantially separate issues at meetings. The Chairmen of the Audit, Remuneration and Nominating Committees are normally available at the AGM to answer questions relating to the work of these committees.

RISK MANAGEMENT

The Company does not have a Risk Management Committee. However, Management reviews regularly the Company’s business and operational activities to identify areas of signifi cant business risks as well as appropriate measures to control and mitigate these risks. Management reviews all signifi cant control policies and procedures and highlights all signifi cant matters to the Board and the Audit Committee.

DEALINGS IN SECURITIES

The Company has adopted an internal code middled after the Code of Best Practices on Securities Transactions. Directors and Offi cers are not allowed to deal in the Company’s shares while in possession of unpublished material price sensitive information and shall not deal in the Company’s securities during the period commencing one month before the announcement of the Company’s half-year or full year fi nancial results.

MATERIAL CONTRACTS

Save for the service contracts between the Executive Directors and the Company, and the interested person transactions de-scribed below, there were no material contracts of the Company or its subsidiaries involving the interest of the chief executive offi cer or any director or controlling shareholders which are either still subsisting at the end of the fi nancial year or, if not then subsisting, entered into since the end of the previous fi nancial year.



INTERESTED PERSON TRANSACTIONS

The Company has established procedures to ensure that all transactions with interested persons are reported on a timely man-ner to the Audit Committee and that such transactions are carried out on normal commercial terms and will not be prejudicial to the interests of the Company and its minority shareholders.

The aggregate value of interested person transactions entered into FY2007 is as follows : -

Name of interested person

Aggregate value of all interested person transactions during the fi nancial year under review (excluding transaction less than

S$100,000 and transactions conducted under shareholders’ man-date pursuant to Rule 920)

American Converters Industries Pte Ltd S$228,000

Ultraline Technology (S) Pte Ltd S$252,000



Directors’ Report

The directors are pleased to present their report to the members together with the audited consolidated fi nancial statements of Asian Micro Holdings Limited (the Company) and its subsidiaries (collectively, the Group) and the balance sheet and statement of changes in equity of the Company for the fi nancial year ended 30 June 2007.

Directors

The directors of the Company in offi ce at the date of this report are:

Dr. Wang Kai YuenLim Kee Liew @ Victor LimLeong Lai HengLim Kee HingTeo Kio Choon @ Chang Chiaw ChoonTan Siew Bin, Ronnie (appointed on 8 May 2007)

Arrangements to enable directors to acquire shares and debentures

Except for the Asian Micro Holdings Limited Employees’ Share Option Plan as described below, neither at the end of nor at any time during the fi nancial year was the Company a party to any arrangement whose object is to enable the directors of the Com-pany to acquire benefi ts by means of the acquisition of shares or debentures of the Company or any other body corporate.

Directors’ interests in shares and debentures

The following directors, who held offi ce at the end of the fi nancial year, had, according to the register of directors’ sharehold-ings required to be kept under section 164 of the Companies Act, Cap. 50, an interest in shares of the Company and related corporations (other than wholly-owned subsidiaries), as stated below:

Direct interest Deemed interest At 1 July At 30 June At 21 July At 1 July At 30 June At 21 July 2006 2007 2007 2006 2007 2007

The Company Asian Micro Holdings Limited (Ordinary shares) Lim Kee Liew @ Victor Lim 81,103,439 75,026,439 78,526,439 79,877,526 79,877,526 79,877,526Leong Lai Heng 74,561,982 74,561,982 74,561,982 86,418,983 80,341,983 83,841,983Lim Kee Hing 7,310,000 1,160,000 2,560,000 - - - Dr. Wang Kai Yuen 1,526,000 1,526,000 1,526,000 - - - Teo Kio Choon @ Chang Chiaw Choon 550,000 550,000 600,000 - - -


Directors’ Report

Directors’ interests in shares and debentures (cont’d)

Direct interestAt

beginningof the year

At end of the

year

At 21 July 2007

Exercise price Exercise period

$The CompanyAsian Micro Holdings Limited(Options to subscribe for ordinary shares)

Lim Kee Hing 750,000 400,000 - 0.050 October 2002 – September 20112,000,000 2,000,000 2,000,000 0.090 October 2004 – September 2011

- 200,000 200,000 0.105 June 2008 – September 2011

Dr. Wang Kai Yuen 574,000 574,000 574,000 0.070 August 2004 – September 20111,180,000 1,180,000 1,180,000 0.090 October 2004 – September 2011

- 2,000,000 2,000,000 0.105 June 2008 – September 2011

Teo Kio Choon @ Chang Chiaw Choon 500,000 500,000 150,000 0.070 August 2004 – September 20111,500,000 1,500,000 1,500,000 0.090 October 2004 – September 2011

- 200,000 200,000 0.105 June 2008 – September 2011

Tan Siew Bin, Ronnie - 16,000 16,000 0.105 June 2008 – September 2011

By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Lim Kee Liew @ Victor Lim and Leong Lai Heng are deemed to have an interest in shares of the subsidiaries of the Company.

Except as disclosed in this report, no director who held offi ce at the end of the fi nancial year had interests in shares, share op-tions, warrants or debentures of the Company or of related corporations either at the beginning or end of the fi nancial year or 21 July 2007.

Directors’ contractual benefi ts

Except as disclosed in the fi nancial statements, since the end of the previous fi nancial year, no director of the Company has received or become entitled to receive a benefi t (other than as disclosed as directors’ remuneration and fees in the accompany-ing fi nancial statements and emoluments received from related corporations) by reason of a contract made by the Company or a related corporation with the director, or with a fi rm of which the director is a member, or with a company in which the director has a substantial fi nancial interest, except for signifi cant transactions with related parties as disclosed in Note 33 to the accompanying fi nancial statements.

Share options

Asian Micro Holdings Limited Employees’ Share Option Plan

1. Asian Micro Holdings Limited Employees’ Share Option Plan (the “Plan”) was approved by the shareholders at an extraor-dinary general meeting held on 28 September 2001.

2. Members of the Remuneration Committee who administered the Plan during the fi nancial year are:

Lim Kee Liew @ Victor Lim Leong Lai Heng Teo Kio Choon @ Chang Chiaw Choon


Share options (cont’d)

3. During the fi nancial year ended 30 June 2007:

• The Company granted 4,396,000 share options under the Plan. These options are only exercisable after the fi rst anniversary of the Date of Grant of options. These options expire on 28 September 2011 and are exercisable if the employee remains in service.

• 2,216,700 ordinary shares were issued at a weighted average exercise price of $0.06 upon the exercise of options granted pursuant to the Plan.

4. Details of all the options to subscribe for ordinary shares of the Company pursuant to the Plan as at 30 June 2007 are as follows:

Grant date Expiry dateExercise price

(S$) Number of options

October 2001 September 2011 0.050 800,000

November 2001 September 2011 0.060 270,000

May 2002 September 2011 0.180 56,000

June 2002 September 2011 0.165 68,000

August 2003 September 2011 0.065 261,000

August 2003 September 2011 0.070 1,074,000

October 2003 September 2011 0.090 7,860,000

October 2005 September 2011 0.090 525,000

May 2007 September 2011 0.090 1,550,000

June 2007 September 2011 0.100 330,000

June 2007 September 2011 0.105 2,516,000

15,310,000

5. Details of the options to subscribe for ordinary shares of the Company granted to directors of the Company pursuant to the Plan are as follows:

Name of directors

Options granted during the

fi nancial year

Aggregate options granted since commence-

ment of Plan

Aggregate options cancelled since commence-

ment of Plan

Aggregate options exercised since commence-

ment of Plan

Aggregate options

outstanding as at end of

fi nancial year

Lim Kee Hing 200,000 3,400,000 - (800,000) 2,600,000

Dr Wang Kai Yuen 2,000,000 4,880,000 - (1,126,000) 3,754,000

Teo Kio Choon @ Chang Chiaw Choon

200,000 3,400,000 - (1,200,000) 2,200,000

Tan Siew Bin, Ronnie

16,000 16,000 - - 16,000

Directors’ Report


Directors’ Report

Share options (cont’d)

6. Apart from the following who have in aggregate received 5% or more of the total number of options available under the Plan, none of the other executive directors and employees of the Group who participated in the Plan has received 5% or more of the total number of options available under the Plan:

Total options Total % of options granted under the Plan

Dr Wang Kai Yuen 4,880,000 11.94% Lim Kee Hing 3,400,000 8.32% Teo Kio Choon @ Chang Chiaw Choon 3,400,000 8.32% Pang Kim Hin (resigned as director on 18 October 2006) 3,180,000 7.79%

Except for the above, no options have been granted to other directors, controlling shareholders of the Company or their associates.

The options do not entitle the holder to participate, by virtue of the options, in any share issue of any other corpora-tion.

3,139,000 options had been exercised from the fi nancial year end to the date of this report. 900,000 options exercised were pertaining to options exercised by directors. No unissued shares, other than those referred to above, are under op-tion as at the date of this report.

None of the options were granted at a discount during the fi nancial year.


Audit committee

The audit committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50. The functions performed are detailed in the Report on Corporate Governance.

Auditors

Ernst & Young have expressed their willingness to accept re-appointment as auditors.

On behalf of the Board of directors,

Lim Kee Liew @ Victor LimDirector

Leong Lai HengDirector

18 September 2007

Directors’ Report


Statement by Directors

We, Lim Kee Liew @ Victor Lim and Leong Lai Heng, being two of the directors of Asian Micro Holdings Limited, do hereby state that, in the opinion of the directors,

(i) the accompanying balance sheets, consolidated profi t and loss account, statements of changes in equity and consoli-dated cash fl ow statement together with notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2007 and the results of the business, changes in equity and cash fl ows of the Group and the changes in equity of the Company for the year ended on that date, and

(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Board of directors,

Lim Kee Liew @ Victor LimDirector

Leong Lai HengDirector

18 September 2007


We have audited the accompanying fi nancial statements of Asian Micro Holdings Limited (the “Company”) and its subsidiar-ies (“the Group”) set out on pages 23 to 70 which comprise the balance sheets of the Group and the Company as at 30 June 2007, the statements of changes in equity of the Group and the Company and the profi t and loss account and cash fl ow state-ment of the Group for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes.

Directors’ Responsibility for the Financial Statements

The Company’s directors are responsible for the preparation and fair presentation of these fi nancial statements in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presenta-tion of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accor-dance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial state-ments. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material mis-statement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reason-ableness of accounting estimates made by directors, as well as evaluating the overall presentation of the fi nancial statements.

We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion,

(a) the consolidated fi nancial statements of the Group and the balance sheet and statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and Company as at 30 June 2007 and the results, changes in equity and cash fl ows of the Group and the changes in equity of the Company for the year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

ERNST & YOUNGCertifi ed Public Accountants

Singapore18 September 2007

Independent Auditors’ Report to the Members of Asian Micro Holdings Limited


Note Group Company 2007 2006 2007 2006 $ $ $ $

Non-current assets Property, plant and equipment 3 9,463,555 8,652,197 - - Intangible assets 4 751,856 751,856 - - Investments in subsidiaries 5 - - 4,928,720 4,928,720Investments in associated companies 6 468,934 423,137 - - Investment property 7 2,600,000 2,600,000 - - Current assets Inventories 8 2,246,792 934,050 - - Trade receivables 9 3,793,078 4,139,526 - - Other receivables and deposits 10 583,149 1,193,842 115,716 16,822Prepayments 96,586 175,714 - - Tax recoverable - - 36,203 - Due from subsidiaries (non-trade) 11 - - 4,848,651 4,314,867Due from affi liated companies (non-trade) 11 141,898 90,895 - - Due from affi liated company (trade) 67,550 54,599 - - Due from associated companies (non-trade) 11 - 7,254 - - Due from a director 11 120,440 - - - Asset held for sale 12 - 1,096,712 - - Fixed deposits 30 2,145,968 2,086,740 1,836,420 1,789,550Cash and bank balances 30 1,798,108 2,020,040 417,240 195,355 10,993,569 11,799,372 7,254,230 6,316,594 Current liabilities Bank overdrafts 30 95,610 103,499 - - Trade payables 13 1,961,090 1,728,035 - - Other payables 15 1,860,477 1,029,103 377,321 41,300Other liabilities 17 1,227,420 1,272,154 366,012 307,777Due to directors (non-trade) 11 103,449 43,117 - - Due to affi liated companies (non-trade) 11 254,954 252,958 - - Bills payable to banks 14 371,847 293,438 - - Interest-bearing loans and borrowings 16 2,478,710 2,390,028 440,525 457,632Provision for taxation 161,155 505,021 - 58,910 8,514,712 7,617,353 1,183,858 865,619

Balance Sheet As at 30 June 2007


Balance Sheet As at 30 June 2007 (cont’d)

Note Group Company 2007 2006 2007 2006 $ $ $ $

Net current assets 2,478,857 4,182,019 6,070,372 5,450,975 Non-current liabilities Interest-bearing loans and borrowings 16 2,724,735 3,370,198 - - Deferred tax liabilities 27 156,303 162,329 585 585 Net assets 12,882,164 13,076,682 10,998,507 10,379,110

Equity attributable to equity holders of the Company Share capital 18 33,938,513 33,747,592 33,938,513 33,747,592Share option reserve 19 24,042 76,622 24,042 76,622Premium paid on acquisition of minority shareholder’s interests 20 (638,162) (638,162) - - Translation reserve (1,564,071) (132,642) - - Accumulated losses (19,184,083) (20,407,638) (22,964,048) (23,445,104) 12,576,239 12,645,772 10,998,507 10,379,110Minority interests 305,925 430,910 - - Total equity 12,882,164 13,076,682 10,998,507 10,379,110

The accompanying accounting policies and explanatory notes form an integral part of the fi nancial statements.


Note 2007 2006 $ $

Revenue 21 17,883,230 26,325,881Cost of sales (12,794,932) (17,728,911) Gross profi t 5,088,298 8,596,970 Distribution and selling expenses (883,444) (1,048,383)Administrative expenses (5,171,130) (4,432,841)Other operating income, net 22 2,138,476 155,191 Profi t from operations 23 1,172,200 3,270,937Financial expenses 24 (414,640) (360,521)Financial income 24 77,508 45,288Share of results of associated companies 42,726 96,207Exceptional items 26 716,675 (10,911) Profi t before taxation 1,594,469 3,041,000Taxation 27 (40,688) (311,322) Profi t for the year 1,553,781 2,729,678 Attributable to: Equity holders of the Company 1,678,766 2,080,749Minority interests (124,985) 648,929 Profi t attributable to shareholders 1,553,781 2,729,678 Earnings per share (cents) Basic earnings per share (cents) 28 0.52 0.68Diluted earnings per share (cents) 28 0.52 0.68


Consolidated Profi t and Loss Account For the year ended 30 June 2007


Att

rib

uta

ble

to

eq

uit

y h

old

ers

of

the

Co

mp

any

Gro

upSh

are

cap

ital

Shar

e p

rem

ium

Shar

e o

pti

on

re

serv

eTr

ansl

atio

n

rese

rve

Prem

ium

pai

d

on

acq

uis

itio

n

of

min

ori

ty

shar

eho

lder

’s

inte

rest

sA

ccu

mu

late

d

loss

esTo

tal

Min

ori

ty

inte

rest

sTo

tal

equ

ity

$$

$$

$$

$$

$

Bal

ance

as

at 1

Ju

ly 2

005

14,9

91,1

5917

,229

,964

76,6

6426

3,38

7-

(2

2,36

1,47

6)10

,199

,698

316,

228

10,5

15,9

26C

urre

ncy

tran

slat

ion

di

ffer

ence

s-

-

-

(3

96,0

29)

-

-

(396

,029

)(1

2,40

9)(4

08,4

38)

Net

inco

me

reco

gnis

ed

dire

ctly

in e

quity

-

-

-

(396

,029

)-

-

(3

96,0

29)

(12,

409)

(408

,438

)N

et p

rofi t

for

the

yea

r-

-

-

-

-

2,

080,

749

2,08

0,74

964

8,92

92,

729,

678

Tota

l rec

ogni

sed

inco

me

an

d ex

pens

es f

or t

he y

ear

-

-

-

(396

,029

)-

2,

080,

749

1,68

4,72

063

6,52

02,

321,

240

Tran

sfer

of

shar

e pr

emiu

m

re

serv

e to

sha

re c

apita

l

acc

ount

* (N

ote

18)

17,2

29,9

64(1

7,22

9,96

4)-

-

-

-

-

-

-

Shar

es is

sued

dur

ing

the

ye

ar (N

ote

18)

1,16

0,00

0-

-

-

-

-

1,

160,

000

-

1,16

0,00

0Pr

emiu

m p

aid

on a

cqui

sitio

n

of m

inor

ity s

hare

hold

er’s

in

tere

sts

(Not

e 20

)-

-

-

-

(6

38,1

62)

-

(638

,162

)-

(6

38,1

62)

Redu

ctio

n of

min

ority

inte

rest

s ar

isin

g fr

om

ac

quis

ition

of

addi

tiona

l

inte

rest

in a

sub

sidi

ary

-

-

-

-

-

-

-

(521

,838

)(5

21,8

38)

Gra

nt o

f eq

uity

-set

tled

shar

e

optio

ns t

o em

ploy

ees

(Not

e 19

)-

-51

,604

--

-51

,604

-51

,604

Div

iden

d on

ord

inar

y sh

ares

(N

ote

36)

--

--

-(1

52,8

47)

(152

,847

)-

(152

,847

)Ex

erci

se o

f em

ploy

ee s

hare

opt

ions

(N

ote

18)

366,

469

-(2

5,71

0)-

34

0,75

9-

340,

759

Expi

ry o

f em

ploy

ee s

hare

opt

ions

(N

ote

19)

--

(25,

936)

-

-

25,9

36-

--

Bal

ance

as

at 3

0 Ju

ne

2006

(c/

f)33

,747

,592

-76

,622

(132

,642

)(6

38,1

62)

(20,

407,

638)

12,6

45,7

7243

0,91

013

,076

,682

Statement of Changes in Equity For the year ended 30 June 2007


Att

rib

uta

ble

to

eq

uit

y h

old

ers

of

the

Co

mp

any

Gro

up

Shar

eca

pit

al

Shar

e o

pti

on

re

serv

eTr

ansl

atio

n

rese

rve

Prem

ium

pai

d

on

acq

uis

itio

n

of

min

ori

ty

shar

eho

lder

’s

inte

rest

sA

ccu

mu

late

d

loss

esTo

tal

Min

ori

ty

inte

rest

sTo

tal

equ

ity

$$

$$

$$

$$

Bal

ance

as

at 1

Ju

ly 2

006

33,7

47,5

9276

,622

(132

,642

)(6

38,1

62)

(20,

407,

638)

12,6

45,7

7243

0,91

013

,076

,682

Cur

renc

y tr

ansl

atio

n di

ffer

ence

s-

- (1

,431

,429

)-

- (1

,431

,429

)-

(1,4

31,4

29)

Net

inco

me

reco

gnis

ed d

irect

ly in

equ

ity-

- (1

,431

,429

)-

- (1

,431

,429

)-

(1,4

31,4

29)

Net

pro

fi t f

or t

he y

ear

- -

- -

1,67

8,76

61,

678,

766

(124

,985

)1,

553,

781

Tota

l rec

ogni

sed

inco

me

and

expe

nses

in t

he y

ear

- -

(1,4

31,4

29)

- 1,

678,

766

247,

337

(124

,985

)12

2,35

2G

rant

of

equi

ty-s

ettle

d sh

are

optio

ns t

o em

ploy

ees

(N

ote

19)

- 23

,833

- -

- 23

,833

- 23

,833

Div

iden

d on

ord

inar

y sh

ares

(Not

e 36

)-

- -

- (4

80,9

53)

(480

,953

)-

(480

,953

)Ex

erci

se o

f em

ploy

ee s

hare

opt

ions

(Not

e 18

)19

0,92

1(5

0,67

1)-

- -

140,

250

- 14

0,25

0Ex

piry

of

empl

oyee

sha

re o

ptio

ns (N

ote

18)

- (2

5,74

2)-

- 25

,742

- -

-

Bal

ance

as

at 3

0 Ju

ne

2007

33,9

38,5

1324

,042

(1,5

64,0

71)

(638

,162

)(1

9,18

4,08

3)12

,576

,239

305,

925

12,8

82,1

64

Statement of Changes in Equity For the year ended 30 June 2007 (cont’d)


Statement of Changes in Equity For the year ended 30 June 2007 (cont’d)

Share Share Accumulated Share option Company capital premium losses reserve Total equity $ $ $ $ $

Balance as at 30 June 2006 14,991,159 17,229,964 (24,105,072) 76,664 8,192,715Net profi t for the year - - 786,879 - 786,879 Total recognised income and expenses in the year - - 786,879 - 786,879Transfer of share premium reserve to share capital account * (Note 18) 17,229,964 (17,229,964) - - - Shares issued during the year (Note 18) 1,160,000 - - - 1,160,000Grant of equity-settled share options to employees (Note 19) - - - 51,604 51,604Exercise of employee share options (Notes 18 and 19) 366,469 - - (25,710) 340,759Expiry of employee share options (Note 19) - - 25,936 (25,936) - Dividend on ordinary shares (Note 36) - - (152,847) - (152,847) Balance as at 30 June 2006 and 1 July 2007 33,747,592 - (23,445,104) 76,622 10,379,110Net profi t for the year - - 936,267 - 936,267 Total recognised income and expenses in the year - - 936,267 - 936,267Grant of equity-settled share options to employees (Note 19) - - - 23,833 23,833Exercise of employee share options (Note 18) 190,921 - - (50,671) 140,250Expiry of employee share options (Note 19) - - 25,742 (25,742) - Dividend on ordinary shares (Note 36) - - (480,953) - (480,953) Balance as at 30 June 2007 33,938,513 - (22,964,048) 24,042 10,998,507



Note 2007 2006 $ $

Cash fl ows from operating activities Profi t before taxation 1,594,469 3,041,000Adjustments: Bad debts written off - 11,901 Allowance for doubtful debts (trade) 41,703 103,753 Allowance for doubtful debts (non-trade) 32,350 67,048 Allowance for stock obsolescence 32,734 52,455 Write-back of allowance for doubtful debts (2,034) (25,433) Write-back of allowance for stock obsolescence (323) (94,220) Depreciation of property, plant and equipment 1,638,277 1,375,775 Gain on disposal of associated company (39,637) - Gain on disposal of investment property (677,038) - Property, plant and equipment written off - 14,859 Gain on disposal of property, plant and equipment (63,566) (71,375) Share-based payment expenses 23,833 51,604 Interest expense 414,640 315,550 Interest income (77,508) (45,288) Share of results of associated companies (42,726) (96,207) Impairment loss on investment in associated company - 602,395 Negative goodwill - (462,750) Currency translation (1,645,681) 39,916 Operating profi t before working capital changes 1,229,493 4,880,983Increase in stocks (1,345,153) (234,613)Decrease in trade and other receivables 885,122 1,390,029Decrease in prepayment 79,128 102,602Decrease in amount due from associated companies 7,254 372,033Increase in amount due from directors (non-trade) (120,440) - Increase/(decrease) in trade and other payables 967,529 (2,851,966)(Decrease)/increase in other liabilities (44,734) 85,552(Decrease)/increase in amount due from affi liated companies (63,954) 52,801Increase in bills payable to banks 78,409 87,886Increase in amount due to directors (non-trade) 60,332 29,411Increase/(decrease) in amount due to affi liated companies 1,996 (177,388) Cash generated from operations 1,734,982 3,737,330Interest paid (414,640) (315,550)Interest income received 77,508 45,288Income taxes paid (390,580) (784,847) Net cash from operating activities 1,007,270 2,682,221

Consolidated Statement of Cash Flows For the year ended 30 June 2007


Note 2007 2006 $ $

Cash fl ows from investing activities Purchase of investment property (1,822,962) - Proceeds from disposal of investment property 2,500,000 - Strike off of subsidiary - (660)Proceeds from disposal of associated company 1,197,605 - Proceeds from disposal of property, plant and equipment 348,884 78,110Purchase of property, plant and equipment 3 (2,325,128) (2,071,830) Net cash used in investing activities (101,601) (1,994,380) Cash fl ows from fi nancing activities Proceeds from issuance of new shares 140,250 340,759Payment of dividends on ordinary shares (480,953) (152,847)Proceeds from loans and borrowings 300,000 1,061,625Repayment of loans and borrowings (692,037) (782,638)Repayment of fi nance lease obligations (327,744) (131,454)Pledge of fi xed deposits (57,979) (8,764) Net cash (used in)/from fi nancing activities (1,118,463) 326,681 Net (decrease)/increase in cash and cash equivalents (212,794) 1,014,522Cash and cash equivalents at beginning of year 1,935,383 920,861 Cash and cash equivalents at end of year 30 1,722,589 1,935,383


Consolidated Statement of Cash Flows For the year ended 30 June 2007 (cont’d)


Notes to the Financial Statements 30 June 2007

1. Corporate information

Asian Micro Holdings Limited is a limited liability company, which is incorporated and domiciled in Singapore. The Com-pany is listed on the Stock Exchange of Singapore Dealing and Automated Quotation System (“Sesdaq”).

The registered offi ce and principal place of business of Asian Micro Holdings Limited is located at 3 Tech Park Crescent, Tuas Tech Park, Singapore 638129.

The principal activity of the Company is that of investment holding.

The principal activities of the subsidiaries are those of tray-recycling services, manufacturing of clean room grade poly-thene packaging materials, plastic waste recycling and trading in clean room supplies. Details of these subsidiaries are disclosed in Note 5 to the fi nancial statements. There have been no signifi cant changes in the nature of these activities during the fi nancial year.

2. Summary of signifi cant accounting policies

2.1 Basis of preparation

The consolidated fi nancial statements of the Group and the balance sheet and statement of changes in equity of the Company have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).

The fi nancial statements have been prepared on a historical cost basis except for an investment property that has been measured at revalued amount.

The fi nancial statements are presented in Singapore Dollars (SGD or $).

The accounting policies have been consistently applied by the Group and the Company and are consistent with those used in the previous fi nancial year.

2.2 Changes in accounting policies

(a) Adoption of amendments to FRS 39 – Financial Guarantee Contracts

The Company has issued corporate guarantees to banks for bank borrowings of its subsidiaries. These guarantees are fi nancial guarantee contracts as they require the Company to reimburse the banks if the subsidiaries fail to make principal or interest payments when due in accordance with the terms of their borrowings.

Previously, fi nancial guarantees issued by the Company to banks in relation to borrowings by subsidiaries are ac-counted for as contingent liabilities of the Company and are not recognised in the fi nancial statements until the Company has an obligation to make payment under the guarantee in accordance with FRS 37.

On 1 July 2006, the Company adopted the amendments to FRS 39 which require fi nancial guarantees to be ac-counted for initially at fair value and subsequently at the higher of:

(i) the amount initially recognised, less accumulated amortisation; and (ii) the amount of obligation that arises under the guarantee.



2. Summary of signifi cant accounting policies (cont’d)

2.2 Changes in accounting policies (cont’d)

(a) Adoption of amendments to FRS 39 – Financial Guarantee Contracts (cont’d)

The revised FRS 39 has been applied retrospectively to fi nancial guarantees existing as at 1 July 2005.

The adoption of revised FRS 39 did not result in any signifi cant impact to the fi nancial statements of the Group or the Company.

(b) FRS and INT FRS not yet effective

The Group and the Company have not applied the following FRSs and INT FRSs that have been issued but not yet effective:

Effective date (Annual periods beginning on or after) FRS 1 : Amendment to FRS 1 (revised), Presentation of fi nancial statements (Capital Disclosures) 1 January 2007 FRS 40 : Investment Property 1 January 2007 FRS 107 : Financial Instruments: Disclosures 1 January 2007 FRS 108 : Operating Segments 1 January 2009 INT FRS 110 : Interim Financial Reporting and Impairment 1 November 2006 INT FRS 111 : Group and Treasury Share Transactions 1 March 2007 INT FRS 112 : Service Concession Arrangements 1 January 2008

The directors expect that the adoption of the above pronouncements will have no material impact to the fi nancial statements in the period of initial application, except for FRS 108, FRS 107 and the amendment to FRS 1 as indi-cated below.

FRS 107, Financial Instruments: DisclosuresAmendment to FRS 1 (revised), Presentation of fi nancial statements (Capital Disclosures)

FRS 107 introduces new disclosures to improve the information about fi nancial instruments. It requires the disclo-sure of qualitative and quantitative information about exposure to risks arising from fi nancial instruments, including specifi ed minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk. The amendment to FRS 1 requires the Group to make new disclosures to enable users of the fi nancial state-ments to evaluate the Group’s objectives, policies and processes for managing capital. The Group will apply FRS 107 and the amendment to FRS 1 from annual period beginning 1 July 2007.

FRS108, Operating Segments

FRS108 requires an entity to adopt a “management perspective approach” in reporting fi nancial and descriptive information about its reportable segment. Financial information is required to be reported on the basis that it is used internally for evaluating operating segment performance and deciding how to allocate resources to operat-ing segments. FRS 108 introduces additional segmental disclosures to be made to improve the information about operating segments. The Group will apply FRS108 from annual period beginning 1 July 2009.




2.3 Signifi cant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the fi nancial statements. They affect the application of the Group’s accounting policies, reported amounts of assets, liabilities, income and ex-penses, and disclosures made. They are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances.

The key assumptions concerning the future and other key sources of estimation or uncertainty at the balance sheet date, that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year are discussed below.

(i) Income taxes

The Group has exposure to income taxes in numerous jurisdictions. Signifi cant judgement is involved in determin-ing the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the fi nal tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made. The carrying amount of tax pay-able at 30 June 2007 was $161,155 (2006: $505,021) for the Group and $Nil (2006: $58,910) for the Company. The carrying amount of deferred tax liabilities at 30 June 2007 was $156,303 (2006: $162,329) for the Group and $585 (2006: $585) for the Company.

(ii) Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the value in use of the cash-generating units to which the goodwill is allocated. Estimating the value in use requires the Group to make an estimate of the expected future cash fl ows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash fl ows. The carrying amount of the Group’s goodwill at 30 June 2007 was $751,856 (2006: $751,856). More details are given in Note 4.

(iii) Impairment of investment in associated company

The carrying values of investments in associated companies and the related goodwill are reviewed for impairment in accordance with FRS 28 Investments in Associates. As at 30 June 2007, the Group’s carrying amount of invest-ments in associated companies is $468,934 (2006: $423,137).

In the determination of the value in use of the investment, the Group is required to estimate the expected cash fl ows to be generated by the associated company and also to choose a suitable discount rate in order to calculate the present value of those cash fl ows.

(iv) Depreciation of machinery and equipment

The costs of machinery and equipment for the manufacturing activities are depreciated on a straight-line basis over the useful lives of the machinery. Management estimates the useful lives of the plant and equipment to be within 3 to 10 years. These are common life expectancies applied in the industry. The carrying amount of the Group’s plant and equipment at 30 June 2007 is stated in Note 3 to the fi nancial statements. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(v) Treatment of foreign exchange differences

The Group has monetary items that are receivable or payable between the subsidiaries and between the holding company and its subsidiaries. In the event that settlement is neither planned nor likely to occur in the foreseeable future, the exchange differences arising will form part of the entity’s net investment in that foreign subsidiary and shall be recognised in a separate component of equity at the Group level.

As management plans to settle the inter-company balances in the foreseeable future, the exchange gains totalling approximately $1,200,000 (2006: exchange gains of approximately $447,000) arising on the translation of inter-company balances have been included in the profi t and loss account (Note 22).



2.4 Functional and foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of the Company and its sub-sidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the closing rate of exchange ruling at the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance sheet date are recognised in the profi t and loss account except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign subsidiaries, which are recognised initially in a separate component of equity as foreign currency translation reserve in the consolidated balance sheet and recognised in the consolidated profi t and loss account on disposal of the subsidiary. In the Company’s separate fi nancial statements, such exchange differences are recognised in the profi t and loss account.

(ii) Foreign currency translation

The results and fi nancial position of foreign operations are translated into SGD using the following procedures:

• Assets and liabilities for each balance sheet presented are translated at the closing rate ruling at that balance sheet date; and

• Income and expenses for each income statement are translated at average exchange rates for the year, which approximates the exchange rates at the dates of the transactions.

All resulting exchange differences are recognised in a separate component of equity as foreign currency translation reserve.

On disposal of a foreign operation, the cumulative amount of exchange differences deferred in equity relating to that foreign operation is recognised in the profi t and loss account as a component of the gain or loss on disposal.

2.5 Principles of consolidation

The consolidated fi nancial statements comprise the fi nancial statements of the Company and its subsidiaries as at the balance sheet date. The fi nancial statements of subsidiaries are prepared for the same reporting date as the holding company. Consistent accounting policies are applied for like transactions and events in similar circumstances.

All intra-group balances, transactions, income and expenses and profi ts and losses resulting from intra-group transactions are eliminated in full.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Acquisitions of subsidiaries are accounted for using the purchase method. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest.




2.5 Principles of consolidation (cont’d)

Any excess of the cost of business combination over the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities represents goodwill. The goodwill is accounted for in accordance with the accounting policy for goodwill stated in Note 2.15.

Any excess of the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities over the cost of business combination is recognised in the profi t and loss account on the date of acquisition.

Minority interests represent the portion of profi t or loss and net assets in subsidiaries not held by the Group. They are presented in the consolidated balance sheet within equity, separately from the parent shareholders’ equity, and are sepa-rately disclosed in the consolidated profi t and loss account.

Acquisition of minority interest is accounted for using the entity concept method. The payment in excess of book value of minority interest is recognised as “premium paid on acquisition of minority interest in equity”.

2.6 Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the fi nancial and operating policies so as to ob-tain benefi ts from its activities. The Group generally has such power when it directly or indirectly, holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls the composition of the board of directors.

In the Company’s separate fi nancial statements, investments in subsidiaries are accounted for at cost less any impairment losses.

2.7 Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has signifi cant infl uence. This generally coincides with the Group having 20% or more of the voting power, or has representation on the board of directors.

The Group’s investments in associates are accounted for using the equity method. Under the equity method, the invest-ment in associate is carried in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associate. The Group’s share of the profi t or loss of the associate is recognised in the consolidated profi t and loss account. Where there has been a change recognised directly in the equity of the associate, the Group recognises its share of such changes. After application of the equity method, the Group determines whether it is necessary to recognise any additional impairment loss with respect to the Group’s net investment in the associate. The associate is equity accounted for from the date the Group obtains signifi cant infl uence until the date the Group ceases to have signifi cant infl uence over the associate.

Goodwill relating to an associate is included in the carrying amount of the investment.

Any excess of the Group’s share of the net fair value of the associate’s identifi able assets, liabilities and contingent liabili-ties over the cost of the investment is excluded from the carrying amount of the investment and is instead included as income in the determination of the Group’s share of the associate’s profi t or loss in the period in which the investment is acquired.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unse-cured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

The most recent available audited fi nancial statements of the associates are used by the Group in applying the equity method. Where the dates of the audited fi nancial statements used are not co-terminous with those of the Group, the share of results is arrived at from the last audited fi nancial statements available and un-audited management fi nancial statements to the end of the accounting period. Consistent accounting policies are applied for like transactions and events in similar circumstances.




2.8 Affi liated companies

An affi liated company is a company, not being a subsidiary or an associated company, in which one or more of the direc-tors or shareholders of the Company have a signifi cant equity interest or exercise signifi cant infl uence.

2.9 Financial assets

Financial assets are classifi ed as either fi nancial assets at fair value through profi t or loss, loans and receivables, held-to-maturity investments, or available-for-sale fi nancial assets, as appropriate. Financial assets are recognised on the balance sheet when, and only when, the Company becomes a party to the contractual provisions of the fi nancial instrument.

When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of fi nancial assets not at fair value through profi t or loss, directly attributable transaction costs. The Company determines the classifi cation of its fi nancial assets after initial recognition and, where allowed and appropriate, re-evaluates this designation at each fi nan-cial year-end.

Loans and receivables

Non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market are classifi ed as loans and receivables. Such assets are carried at amortised cost using the effective interest method, less impairment losses. Gains and losses are recognised in profi t and loss account when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

The Company classifi ed the following fi nancial assets as loans and receivables:

• Cash and short term deposits• Trade and other receivables, including amounts due from subsidiaries, affi liated company, associated companies,

holding company and amount due from director

2.10 Derecognition of fi nancial assets

A fi nancial asset is derecognised where the contractual rights to receive cash fl ows from the asset have expired. On derecognition of a fi nancial asset, the difference between the carrying amount and the sum of (a) the consideration received and (b) any cumulative gain or loss that has been recognised directly in equity is recognised in the profi t and loss account.

2.11 Impairment of fi nancial assets The Group assesses at each balance sheet date whether there is any objective evidence that a fi nancial asset or group of

fi nancial assets is impaired. Assets carried at amortised cost If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been incurred,

the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of es-timated future cash fl ows (excluding future credit losses that have not been incurred) discounted at the fi nancial asset’s original effective interest rate (i.e. the effective interest rate computed at initial recognition). The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is recognised in the profi t and loss account.




2.11 Impairment of fi nancial assets (cont’d) If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an

event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. Any subse-quent reversal of an impairment loss is recognised in the profi t and loss account, to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.

2.12 Impairment of non fi nancial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such

indication exists, or when annual impairment testing for an asset (i.e. an intangible asset with an indefi nite useful life, an intangible asset not yet available for use, or goodwill acquired in a business combination) is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its

value in use and is determined for an individual asset, unless the asset does not generate cash infl ows that are largely independent of those from other assets or groups of assets. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of continuing operations are recognised in the profi t and loss account as ‘impairment losses’.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment

losses recognised for an asset other than goodwill may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Reversal of an impairment loss is recognised in the profi t and loss account. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

2.13 Revenue recognition

Revenue is recognised to the extent that is probable that the economic benefi ts will fl ow to the Group and the revenue can be reliably measured.

(i) Sale of goods

Revenue is recognised upon the transfer of signifi cant risk and rewards of ownership of the goods to the customer which generally coincides with their delivery and acceptance of the goods sold. Revenue is not recognised to the extent where there are signifi cant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(ii) Tray recycling services

Revenue on tray recycling services is recognised when the work is completed and the recycled items are delivered to the customer.

(iii) Interest income

Interest income is recognised as interest accrues (using the effective interest method) unless collectibility is in doubt.




2.13 Revenue recognition (cont’d)

(iv) Dividends

Dividend income is recognised when the right to receive payment is established.

(v) Management fees

Management fees is recognised when services are rendered.

(vi) Rental income

Rental income is accounted for on a straight-line basis over the leased terms on ongoing leases. The aggregate cost of incentives provided to lessees is recognised as a reduction of rental income over the lease term on a straight-line basis.

2.14 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent to recognition property, plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is calculated on the straight-line method to write off the cost of the assets over their estimated useful lives.

Land has an unlimited useful life and therefore is not depreciated. Depreciation of an asset begins when it is available for use and is computed on a straight-line basis over the estimated useful life of the asset as follows:

Years

Buildings 20 - 50Furniture and fi ttings 5 - 10 Air conditioners 3 - 10 Machinery, equipment and motor vehicles 3 - 10 Offi ce equipment and computers 1 - 10Communications equipment 2Renovations and electrical installations 3 - 10

Fully depreciated assets are retained in the fi nancial statements until they are no longer in use and no further charge for depreciation is made in respect of these assets.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circum-stances indicate that the carrying value may not be recoverable.

The residual values, useful life and depreciation method are reviewed at each fi nancial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of con-sumption of the future economic benefi ts embodied in the items of property, plant and equipment.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefi ts are ex-pected from its use or disposal. Any gain or loss arises on derecognition of the asset is included in the profi t and loss account in the year the asset is derecognised.





2.15 Intangible assets

Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment loss. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allo-cated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefi t from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill is so allocated: • represents the lowest level within the Group at which the goodwill is monitored for internal management purposes;

and

• is not larger than a segment based on either the Group’s primary or the group’s secondary reporting format.

A cash-generating unit (or group of cash-generating units) to which goodwill has been allocated are tested for impair-ment annually and whenever there is an indication that the unit may be impaired, by comparing the carrying amount of the unit, including the goodwill, with the recoverable amount of the unit. Where the recoverable amount of the cash-generating unit (or group of cash-generating units) is less than the carrying amount, an impairment loss is recognised.

Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit re-tained.

2.16 Investment properties

Investment properties are investments in properties that are not occupied substantially for use by or in the operations of the Group. They are accounted for as long-term investments and are carried in the balance sheet at revalued amounts, representing open market value determined by an independent professional valuer. An independent valuation is made at least once every three years.

The surplus on revaluation is credited directly to revaluation reserve unless it reverses a previous revaluation decrease relating to the same class of assets, which are previously recognised as an expense. In these circumstances, the increase is recognised as income to the extent of the previous write down. Any defi cit on revaluation is recognised as an expense unless it reverses a previous surplus relating to that asset, in which case, it is charged against any related revaluation surplus, to the extent that the decrease does not exceed the amount held in the revaluation surplus in respect of that same class of assets. Any balance remaining in the revaluation surplus in respect of an investment property, is transferred directly to accumulated profi ts on retirement or disposal of property.




2.17 Inventories

Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:

• Raw materials – purchase costs on a fi rst-in, fi rst-out basis;• Finished goods and work-in-progress – costs of direct materials and labour and a proportion of manufacturing

overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion

and the estimated costs necessary to make the sale. Provision is made if necessary, for obsolete and slow-moving item.

2.18 Cash and cash equivalents

Cash and cash equivalents are defi ned as cash on hand, demand deposits and short-term, highly liquid investments read-ily convertible to known amounts of cash and subject to insignifi cant risk of changes in values. These also include bank overdrafts that form an integral part of the Group’s cash management.

2.19 Income taxes

(i) Current tax

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be re-covered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

(ii) Deferred tax

Deferred income tax is provided, using the liability method, on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for fi nancial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• Where the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profi t nor taxable profi t or loss; and

• In respect of taxable temporary differences associated with investments in subsidiaries, associates and inter-ests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profi t will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that suffi cient taxable profi t will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profi t will allow the deferred tax asset to be recovered.




2.19 Income taxes (cont’d)

(ii) Deferred tax (cont’d)

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substan-tively enacted at the balance sheet date.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(iii) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales tax except:

• Where the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• Receivables and payables that are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

2.20 Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) where, as a result of a past event, it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

2.21 Borrowing costs

Borrowing costs are recorded as expenses in the period in which they are incurred.

2.22 Leases

(i) As lessee

Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised. Lease payments are apportioned between the fi nance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the profi t and loss account. Contingent rents, if any, are charged as expenses in the periods in which they are incurred. Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term. Operating lease payments are recognised as an expense in the profi t and loss account on a straight-line basis over the lease term. The aggregate benefi t of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(ii) As lessor

Leases where the group retains substantially all the risks and rewards of ownership of the asset are classifi ed as operating leases. Initial direct costs incurred in negotiating an operating leases are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income (Note 2.13(vi)).




2.23 Employee benefi ts

(i) Defi ned contribution plan

The Group participates in the national pension schemes as defi ned by the laws of the countries in which it has operations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fund scheme in Singapore, a defi ned contribution pension scheme.

Contributions to national pension schemes are recognised as an expense in the period in which the related service is performed.

(ii) Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees. The estimated liability for leave as a result of services rendered by employees up to the balance sheet date.

(iii) Termination benefi ts

Termination benefi ts are payable when employment is terminated before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefi ts. The Group recognises termination ben-efi ts when it is demonstrably committed to either terminate the employment of current employees according to a detailed plan without possibility of withdrawal; or providing termination benefi ts as a result of an offer made to encourage voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the measure-ment of termination benefi ts is based on the number of employees expected to accept the offer. Benefi ts falling due more than 12 months after balance sheet date are discounted to present value.

(iv) Employee share option plans

Employees and directors of the Group receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for share options (‘equity-settled transactions’).

(v) Equity-settled transactions

The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which the share options are granted. In valuing the share options, no account is taken of any performance condi-tions, other than conditions linked to the price of the shares of the company (‘market conditions’), if applicable.

The cost of equity-settled transactions is recognised, together with a corresponding increase in the employee share option reserve, over the period in which the performance and/or service conditions are fulfi lled, ending on the date on which the relevant employees become fully entitled to the award (‘the vesting date’). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date refl ects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The profi t or loss charge or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition, which are treated as vested irrespective of whether or not the market condition is satis-fi ed, provided that all other performance conditions are satisfi ed.

Where the terms of an equity-settled award are modifi ed, as a minimum an expense is recognised as if the terms had not been modifi ed. In addition, an expense is recognised for any modifi cation, which increases the total fair value of the share-based payment arrangement, or is otherwise benefi cial to the employee as measured at the date of modifi cation.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modifi cation of the original award, as described in the previous paragraph.



3.

Pro

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ho

ld

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ipm

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Ren

ova

tio

ns

and

el

ectr

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in

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sTo

tal

$$

$$

$$

$$

$

Co

stA

t 1

July

200

545

1,68

04,

892,

397

253,

877

161,

275

6,24

1,96

359

9,31

093

9,87

12,

415,

192

15,9

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65A

dditi

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-

4,24

52,

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10,2

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387

44,4

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0,39

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Dis

posa

ls-

-

-

-

(1

51,0

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)-

-

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51,5

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-

-

-

-

(351

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-

(1

68,1

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ansl

atio

n di

ffer

ence

3,26

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97)

(7,8

08)

(202

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)(1

3,03

3)(1

3,45

6)(5

1,21

4)(5

07,5

13)

At

30 J

une

2006

and

1 J

uly

2006

454,

940

4,67

8,61

525

1,15

216

3,75

28,

262,

738

630,

227

926,

415

2,43

6,26

917

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Add

ition

s-

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15

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1,12

92,

112,

953

113,

851

-

341,

821

2,58

5,02

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-

(1,2

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(1,6

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(1,0

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-

-

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97)

Tran

slat

ion

diff

eren

ce49

,181

(29,

920)

(1,7

68)

(4,5

04)

165,

002

10,5

4386

,200

913

275,

647

At

30 J

une

2007

504,

121

4,64

8,69

526

3,40

815

8,72

79,

536,

196

754,

621

1,01

2,61

52,

779,

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19,6

57,3

86

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1,

340,

932

231,

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154,

340

4,08

1,36

338

8,13

093

8,98

51,

528,

785

8,66

3,53

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7,36

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4,58

881

4,51

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314,

443

1,37

5,77

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2006

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2006

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1,43

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5,81

315

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465

444,

921

926,

415

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7,95

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171,

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301

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5,72

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At

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1,59

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2,61

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1,72

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964,

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185,

306

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778,

313

8,65

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3,05

6,48

815

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4,92

84,

950,

363

227,

470

-

704,

373

9,46

3,55

5



3. Property, plant and equipment (cont’d)

During the year, the Group acquired property, plant and equipment with an aggregate cost of approximately $163,000 (2006: $493,000) held under fi nance leases.

The carrying amount of machinery, equipment and motor vehicles held under fi nance leases as at 30 June 2007 was ap-proximately $587,000 (2006: $648,000).

Leased assets are pledged as security for the related fi nance lease liabilities.

Leasehold land and building and plant and equipment of the Group of approximately $2,628,000 (2006: $3,139,000) and $588,700 (2006: $Nil) were pledged to banks for certain loan facilities granted to the Group as disclosed in Note 16.

Impairment loss amounting to $Nil (2006: $14,859) in relation to certain plant and equipment has been recognised in other operating expenses.

Company Furniture and fi ttings $ Cost As at 1 July 2005 and 30 June 2006 and 30 June 2007 6,136 Accumulated depreciation As at 1 July 2005 and 30 June 2006 and 30 June 2007 6,136 Net book value As at 30 June 2006 and 30 June 2007 -

4. Intangible assets

Goodwill

This relates to goodwill of $751,856 (2006: $751,856) that was recognised upon the acquisition of Micro Brite Technol-ogy Pte Ltd (“MBT”) on 28 November 2004.

Impairment testing of goodwill on consolidation

The recoverable amount of goodwill is determined based on value-in-use calculations, using cash fl ow projections based on fi nancial budgets approved by management covering a ten-year period. Cash fl ow projections beyond the fi ve-year period are extrapolated using the estimated rate stated below. The growth rate does not exceed the long term growth rate for the business activities. No impairment was noted as a result of performing the test.

Key assumptions used for impairment testing

The following describes the key assumptions on which management has based its cash fl ow projections to undertake impairment testing of goodwill.

Growth rate 1st and 2nd year: Nil growth 3rd year: 2% 4th year: 3% 5th year: 4% (nil thereafter) Discount rate 5.25%

Management determined the weighted average growth rates based on past performance and its expectations for market development. The discount rate used is pre-tax and refl ects specifi c risks relating to the relevant business activities.



5. Investments in subsidiaries

Company 2007 2006 $ $

Unquoted equity investments, at cost 10,908,626 10,908,626Less: Impairment loss (5,979,906) (5,979,906) Carrying amount of investments 4,928,720 4,928,720

Details of the subsidiaries held by the Company at the end of the fi nancial year are as follows:

Name of company

Country of incorporation and place of

business Principal activities

Effective equity

interest held by the Group

Cost of investment by the Company

2007 2006 2007 2006% % $ $

Held by the CompanyAsian Micro (S) Pte Ltd (“AMS”) (1)

Singapore Precision tray cleaning services 100 100 3,865,290 3,865,290

Asian Micro (Thailand) Co., Ltd. (“AMT”) (2)

Thailand Precision tray cleaning services and manufacture of clean room grade polythene packaging materials

100 100 1,510,101 1,510,101

Impact Polythene Pte Ltd (“Impact”) (1)

Singapore Manufacture of clean room grade polythene packaging materials

100 100 600,000 600,000

World Plastics Recovery Pte Ltd (“WPR”) (1) (formerly known as World Circuit Technology Pte Ltd)

Singapore Plastic waste collecting and recycling, and sales of scraps

100 100 250,000 250,000

ACI Industries Pte Ltd (“ACI”) (1)

Singapore Trading in clean room supplies and manufacture of clean room grade polythene packaging materials

100 100 168,387 168,387

Asian Micro Sdn. Bhd. (“AMM”) (5)

Malaysia Currently inactive 100 100 2,765,013 2,765,013

Asian Micro Manufacturing Phils., Inc. (“AMPI”) (4)

Philippines Currently inactive 100 100 1,163,926 1,163,926

Asian Micro Industries (Thailand) Co., Ltd (“AMI”) (5)

Thailand Investment holding 49 Note

(a)

49 213,430 213,430

A-P Precision Plastic Pte Ltd (“APP”) (1)

Singapore Currently inactive 68.4 68.4 267,216 267,216

A-P Engineering Pte Ltd (“APE”) (1)

Singapore Currently inactive 80.1 80.1 105,263 105,263

10,908,626 10,908,626



5. Investments in subsidiaries (cont’d)

(iv) Details of the subsidiaries held by subsidiary companies at the end of the fi nancial year are as follows:

Name of company

Country of incorporation

and place of business

Principal activities

Effective equity

interest held by the Group

Cost of invest-ment by the

Company2007 2006 2007 2006

% % $ $Held by subsidiary companies

Asian Micro Technology (Wuxi) Co., Ltd (“AMW”) (5)

People’s Republic of China

Currently inactive 100 100 - -

Micro Brite Technology Pte Ltd (“MBT”)(1)

Singapore Investment holding 80 80 - -

World Plastics Recovery Thai-land Co. Ltd. (“WPRT”) (5)

(formerly known as KK Asia Technology (Thai) Co. Ltd)

Thailand Plastic waste collecting and recycling, and sales of scraps

49 Note

(a)

49 - -

Asian Micro Technology (Suzhou) Co. Ltd (“AMSu-zhou”)(3)


Precision tray cleaning services and manu-facture of clean room grade polythene pack-aging materials

80 80 - -

Suzhou Asian Micro Re-covery Technology Co Ltd (“SAMRT”) (5)


Plastic waste collecting and recycling, and sales of scraps

40.8 40.8 - -

Wuxi Asian Brite Technology Co. Ltd (“ABT”) (5)


Precision tray cleaning services and manu-facture of clean room grade polythene pack-aging materials

100 - - -

(1) Audited by Ernst & Young Singapore(2) Audited by Ernst & Young Thailand(3) Audited by Suzhou Fangben Certifi ed Public Accountants, PRC(4) Audited by Armando G. Fajardo, Certifi ed Public Accountant, The Philippines (5) Audited by other fi rm

(a) While the Group holds 49% of issued share capital in AMI and WPRT, it has control over the fi nancial and opera-tional policies via the majority control over the voting power and the majority representation on the board of direc-tors of AMI and WPRT. Accordingly, AMI and WPRT are accounted for as subsidiaries.



6. Investments in associated companies Group 2007 2006 $ $

Unquoted equity investment, at cost 341,376 2,248,995Less: Impairment loss (Note 12) - (602,395)Share of post acquisition reserves 127,558 (126,751) 468,934 1,519,849Reclassifi ed as: Asset held for sale (Note 12) - (1,096,712) 468,934 423,137 Details of associated companies are as follows:

Name of company Principal activities

Country of incorporation and place of

business

Effective equity interest held by

the GroupCost of investment

by the Company2007 2006 2007 2006

Held by subsidiary companies

Shenzhen Bige Industrial Co. Ltd (“Bige”)

Manufacturing of precision disk cassettes

People’s Republic of China -

40Note (a) - -

A-P Technology (Shunde) Co., Ltd (1)

Production of precision engineering plastic components

People’s Republic of China 49 49 - -

(1) Audited by Foshan Shunde Xianyouhe Certifi ed Public Accountants.

(a) In prior year, a subsidiary decided to dispose of its 40% share in Bige for a consideration of S$1.2 million. Accord-ingly, the cost of investment, net of impairment loss, in Bige was reclassifi ed as asset held for sale (Note 12) in the prior year. The sale was completed in July 2006.

The summarised fi nancial information of the associate is as follows: 2007 2006 $ $

Assets and liabilities Current assets 892,586 1,840,688Non-current assets 1,108,308 1,520,083 Total assets 2,000,894 3,360,771 Current liabilities (860,701) (1,707,251) Total liabilities (860,701) (1,707,251) Results: Revenue 1,652,552 803,216Profi t for the year 87,196 55,159



7. Investment property Group 2007 2006 $ $

Investment property, at valuation, at 1 July 2,600,000 2,600,000Addition 1,822,962 - Disposal (1,822,962) - At 30 June 2,600,000 2,600,000

In year 2006, a subsidiary committed to purchase a factory at 12 Senoko Way. The purchase was completed in July 2006. In November 2006, the Group disposed the factory at a consideration of $2.5 million, resulting in a gain of approximately $677,000 (Note 26) during the year.

Investment property is carried at revalued amount. The latest valuation as at 30 June 2006 was performed by registered independent appraisers having an appropriate recognised professional qualifi cation and recent experience in the location and category of the properties being valued. This investment property has been pledged to certain banks for certain credit facilities granted to the Group as disclosed in Note 16.

The property rental income earned by the Group for the year ended 30 June 2007 from its investment properties, which were leased out under operating leases, amounted to approximately $405,000 (2006: $178,000). Direct operating expenses (including repairs and maintenance) arising on the rental-earning investment properties amounted to $69,800 (2006: $16,500) for the year.

8. Inventories Group 2007 2006 $ $

Raw materials 145,442 292,438Work-in-progress 153,680 64,454Finished goods 1,947,670 577,158 Total inventories at lower of cost and net realisable value 2,246,792 934,050

During the fi nancial year, the Group wrote down $32,734 (2006: $52,455) of inventories which are recognised as ex-penses in the profi t and loss account.

In the same year, the Group reversed $323 (2006: $94,220), being part of an inventory write-down made previously, as the inventories were utilised for production or sold to customers.

9. Trade receivables Group 2007 2006 $ $

Trade receivables 4,202,289 4,546,551Less: Allowance for doubtful debts (409,211) (407,025) 3,793,078 4,139,526



9. Trade receivables (cont’d)

Trade receivables

Trade receivables are non-interest bearing and are generally on 30 to 90 day terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

As at 30 June 2007, trade receivables for the Group were denominated in the following currencies:

Group 2007 2006 $ $

Singapore dollars 665,827 1,470,787United States dollars 1,932,975 2,531,105Thailand Baht 519,554 137,634China RMB 674,722 - 3,793,078 4,139,526

Allowance for doubtful debts

For the year ended 30 June 2007, an impairment loss of $41,703 (2006: $103,753) was recognised in the profi t and loss account.

In the current year, the Group reversed $2,034 (2006: $25,433), being part of trade receivables previously written down, as the trade receivables were collected from the customers.

10. Other receivables and deposits

Group Company 2007 2006 2007 2006 $ $ $ $

Other receivables 494,572 743,785 115,716 16,822Deposits 244,978 573,876 - - 739,550 1,317,661 115,716 16,822Less: Allowance for other receivables (156,401) (123,819) - - 583,149 1,193,842 115,716 16,822

As at 30 June 2007, other receivables and deposits were denominated in the following currencies:

Group Company 2007 2006 2007 2006 $ $ $ $

Singapore dollars 253,614 343,018 115,716 16,822United States dollars - 16,684 - - Malaysia Ringgit 148,022 330,178 - - Philippines Peso 31,799 29,092 - - Thailand Baht 86,848 164,051 - - China RMB 62,866 310,819 - - 583,149 1,193,842 115,716 16,822



11. Due from subsidiaries (non-trade) Due from affi liated companies (non-trade) Due from associated companies (non-trade) Due from a director Due to directors (non-trade) Due to affi liated companies (non-trade)

These amounts are unsecured and are to be settled in cash. These amounts are interest-free and are repayable on demand.

Due from subsidiaries (non-trade) are stated after deducting allowance for doubtful receivables.

Group Company 2007 2006 2007 2006 $ $ $ $

Movement of allowance for doubtful receivables Balance at 1 July - - 13,666,396 13,724,265Provision during the year - - 13,010 - Write back during the year - - (332,398) (57,869) Balance at 30 June - - 13,347,008 13,666,396

12. Asset held for sale

In the prior year, the Company reclassifi ed the cost of investment, net of an impairment loss of $602,395 (Note 26), amounting to $1,096,712 (Note 6), of an associated company, Shenzhen Bige Industrial Co. Ltd, to “asset held for sale”. The impairment loss of $602,395 was recognised in the profi t and loss account in year 2006, after taking into consider-ation the disposal consideration of S$1.2 million and the net investment in the associated company. The completion of the disposal in July 2006 resulted in a net gain of approximately $40,000 (Note 26) recognised at the Group level.

13. Trade payables

Trade payables are non-interest bearing and are normally settled on 30 to 90 day terms.

As at 30 June 2007, trade payables of the Group were denominated in the following currencies:

Group 2007 2006 $ $

Singapore dollars 319,915 622,756United States dollars 274,154 476,088Thailand Baht 175,993 174,946China RMB 905,678 454,245Philippines Peso 285,350 - 1,961,090 1,728,035



14. Bills payable to banks

The bills payables are secured (Note 16) and have repayment terms of less than 12 months.

As at 30 June 2007, bills payables of the Group were denominated in the following currencies:

Group 2007 2006 $ $

Singapore dollars 298,940 186,958United States dollars 72,907 106,480 371,847 293,438

Interest on bills payable to banks was charged at a range of 5.25% to 7.38% (2006: 5.25% to 6.75%) per annum.

15. Other payables Group Company 2007 2006 2007 2006 $ $ $ $

Other payables 1,741,858 933,592 377,321 41,300Deposit received 118,619 95,511 - - 1,860,477 1,029,103 377,321 41,300

Other payables are non-interest bearing and are normally settled on 30 to 90 day terms.

As at 30 June 2007, other payables were denominated in the following currencies:

Group Company 2007 2006 2007 2006 $ $ $ $

Singapore dollars 1,217,299 769,304 377,321 41,300Thailand Baht 304,896 130,721 - - China RMB 266,797 59,894 - - Malaysia Ringgit 54,980 54,084 - - Philippines Peso 16,505 15,100 - - 1,860,477 1,029,103 377,321 41,300



16. Interest-bearing loans and borrowings

* Average effective interest Maturity Group Company rate% p.a. 2007 2006 2007 2006 $ $ $ $

Current: Obligations under fi nance leases (secured) (Note 32) 6.27 2008 199,040 241,636 - - Promissory notes (secured) 12.50 2008 33,390 25,018 - - Short-term bank loans - SGD loan (secured) 4.71 2008 1,000,000 1,000,000 - - - USD loan (secured) 6.84 2008 440,525 457,632 440,525 457,632Term loans - SGD loans (secured) 7.10 2008 688,434 564,947 - - - Thai Baht loan (secured) 7.00 2008 117,321 100,795 - - 2,478,710 2,390,028 440,525 457,632 Non-current: Obligations under fi nance leases (secured) (Note 32) 6.27 2009 - 2012 442,690 564,838 - - Term loans - SGD loans (secured) 7.10 2009 - 2013 1,913,360 2,403,290 - - - Thai Baht loan (secured) 7.00 2010 368,685 402,070 - - 2,724,735 3,370,198 - -

* Based on average effective interest rates

Obligations under fi nance leases

These obligations are secured by a charge over the leased assets (Note 3).

Promissory notes

This relates to promissory notes drawn down by a subsidiary during the year. They have an average maturity of 60 days and interest is charged at 12.50% (2006: 11.25%) per annum.

Short-term bank loans

(i) The SGD loan represents a revolving credit facility drawn down by a subsidiary, which is repayable on demand but can be rolled over at the bank’s discretion. The loan bears interest at 3.72% to 4.88% (2006: 3.37% to 3.89%) per annum during the year.

(ii) The USD loan represents a revolving credit facility drawn down by the Company, which is repayable on demand but can be rolled over at the bank’s discretion. The loan bears interest at 6.81% to 6.94% (2006: 5.05% to 6.92%) per annum.



16. Interest-bearing loans and borrowings (cont’d)

Term loans

These comprised the following:

(i) A SGD loan taken up by a subsidiary which is repayable in 48 monthly installments, commencing August 2005. The loan bears interest at 1.25% per annum below the bank’s prevailing prime lending rate for the fi rst 24 monthly installments, 1% per annum below the bank’s prevailing prime lending rate for the next 12 monthly installments and the bank’s prevailing prime lending rate for the subsequent 12 monthly installments. The bank’s prime lending rate during the year was 5% per annum;

(ii) A SGD loan taken up by a subsidiary, which is repayable in 29 monthly installments, commencing July 2006. The loan bears an effective interest rate of 7.20%;

(iii) A SGD loan taken up by a subsidiary which is repayable in 96 monthly installments, commencing August 2005. The loan bears interest at 1.25% per annum below the bank’s prevailing prime lending rate for the fi rst 24 monthly installments, 1% per annum below the bank’s prevailing prime lending rate for the next 12 monthly installments and the bank’s prevailing prime lending rate for the subsequent monthly installments. The bank’s prevailing prime lending rate during the year was 5% per annum; and

(iv) A Thai Baht loan taken up by a subsidiary which is repayable in 57 monthly installments up to May 2010. The loan bears interest of 0.25% per annum above the prevailing bank’s prime rate. The bank’s prime lending rate during the year was 6.75% (2006: 6.25%) per annum.

The short-term bank loans, promissory notes, term loans, bills payable to banks (Note 14) and bank overdrafts (Note 30) are secured by:

(i) a legal mortgage over a subsidiary’s investment property valued at $2,600,000 (2006: $2,600,000);

(ii) a legal mortgage over a subsidiary’s leasehold building with a net book value of approximately $2,172,000 (2006: $2,390,000);

(iii) a legal mortgage over a subsidiary’s freehold land and leasehold building with a net book value of approximately $372,000 (2006: $372,000) and $456,000 (2006: $749,000);

(iv) corporate guarantee of $12,120,000 (2006: $12,120,000) from the Company;

(v) fi xed deposits from Group and Company of $2,125,877 (2006: $2,067,898) and $1,836,420 (2006: $1,789,550);

(vi) a legal mortgage over a property of an affi liated company, American Converters Industries Pte Ltd (owned by two directors of the Company); and

(vii) a subsidiary’s machineries with a carrying amount of approximately $588,700 (2006: Nil).

17. Other liabilities Group Company 2007 2006 2007 2006 $ $ $ $

Accrued operating expenses 328,769 563,350 76,900 126,530Accrued personnel expenses 863,680 708,804 289,112 181,247Advances from customers 34,971 - - - 1,227,420 1,272,154 366,012 307,777


18. Share capital Number of shares Group and Company 2007 2006 2007 2006 $ $ $ $

Issued and fully paid: Balance at 1 July 320,193,787 299,823,187 33,747,592 14,991,159Transfer of share premium to share capital - - - 17,229,964Issued for cash upon exercise of share options (Note 29) 2,216,700 5,870,600 190,921 366,469Issued in exchange for additional shares in a subsidiary (i) - 14,500,000 - 1,160,000 Closing balance at 30 June 322,410,487 320,193,787 33,938,513 33,747,592

(i) In prior year, the Company issued 14,500,000 ordinary shares at $0.08 per share as consideration for the acquisi-tion of additional shares in a subsidiary company.

The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction.

The Company has an employee share option plan (Note 29) under which options to subscribe for the Company’s ordinary shares have been granted to employees.

19. Share option reserve

Share option reserve represents the equity-settled share options granted to employees (Note 29). The reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of equity-settled share options, and is reduced by the expiry of the share options.

Group and Company 2007 2006 $ $

At 1 July 76,622 76,664Grant of equity-settled share options 23,833 51,604Exercise of share options (50,671) (25,710)Expiry of share options (25,742) (25,936) Closing balance at 30 June 24,042 76,622

20. Premium paid on acquisition of minority shareholder’s interests

The Group adopted the entity concept method to account for additional shares in subsidiaries acquired from a minority shareholder. The acquisition of additional shares from the minority shareholder is treated as a transaction between own-ers and the difference between the cost of the additional interests in the subsidiary acquired and the share of the assets and liabilities acquired from the minority shareholder is refl ected as premium arising from the acquisition of the minority shareholder’s interests.

The balance as at 30 June 2007 relates to the premium arising from the acquisition of minority shareholder’s interests in prior year.



21. Revenue Group 2007 2006 $ $

Sales of trading goods 1,994,290 1,266,875Sales of manufactured goods 1,395,333 2,036,176Tray recycling services 11,980,060 20,132,016Plastic scrap recovery 2,513,547 2,890,814 17,883,230 26,325,881

22. Other operating income, net Group 2007 2006 $ $

Other operating (income)/expense: Property, plant and equipment written off - 14,859 Foreign exchange (gain)/ loss (1,471,886) 221,113 Gain on disposal of property, plant and equipment (63,566) (71,375) Rental income (752,296) (460,684) Bad debts written off (trade) - 11,901 Allowance for doubtful debts (non-trade) 32,350 67,048 Allowance for doubtful debts (trade) 41,703 103,753 Allowance for stock obsolescence 32,734 52,455 Write back of allowance for doubtful debts (2,034) (25,433) Write back of allowance for stock obsolescence (323) (94,220) Others 44,842 25,392 (2,138,476) (155,191)

Included in the above is compensation of key management personnel as disclosed in Note 33.

23. Profi t from operations

Profi t from operations is stated after charging/(crediting) the following: Group 2007 2006 $ $

Cost of inventories sold 4,936,750 5,169,750Non-audit fee paid to: - auditors of the Company 57,000 57,000- other auditors 12,015 6,500Depreciation 1,638,277 1,375,775Operating lease expense 1,103,622 924,974Salaries and bonuses 4,833,855 5,648,306Central fund contributions 207,192 238,676Expenses of share-based payments 23,833 51,604Other personnel expenses 323,004 238,068




24. Financial (expenses)/income Group 2007 2006 $ $

Financial expenses Interest expense on: - bank overdrafts (13,234) (3,257)- fi nance leases (33,460) (43,420)- short term bank loans (31,023) (36,118)- term loans (268,678) (215,375)- bills payable to banks (26,864) (17,380) (373,259) (315,550)Bank charges (41,381) (44,971) (414,640) (360,521) Financial income Interest income from - fi xed deposits and bank balances 77,508 45,288

25. Directors’ remuneration

The number of directors of the Company whose emoluments fall within the following bands:

2007 2006 $ $

$500,000 and above 1 1$250,000 to $499,999 1 1Below $250,000 4 4 6 6

26. Exceptional items Group 2007 2006 $ $

Gain on disposal of investment property (Note 7) (677,038) - Gain on disposal of associated company (Note 12) (39,637) - Insurance claim received * - (128,734)Negative goodwill ** - (462,750)Provision for diminution in investment in associated company (Note 12) - 602,395 (716,675) 10,911

* Insurance claim received in prior year relates to the insurance claim arising from the fi re that broke out at a subsid-iary, Asian Micro Technology (Wuxi) Co, Ltd, in prior year. Subsequent to an arbitration settlement, the insurance company agreed to settle the claim at an amount of RMB 630,000 (≈ S$128,734).

** In March 2006, a subsidiary acquired the business of washing and cleaning of precision clean room trays and can-isters and component used in the hard-disk drive industry of Cinch Electronics Pte Ltd. The fair value of the assets acquired was in excess of the cost of acquisition, accordingly, an amount of $462,750 was recognised in the profi t and loss account in prior year.



27. Taxation Group 2007 2006 $ $

Current tax - current year 4,391 386,862- under/(over) provision in respect of prior years 36,297 (43,712)Deferred tax - movement in temporary differences - (8,791) - overprovision in respect of prior years - (23,037) 40,688 311,322

A reconciliation of the tax expense and the product of accounting profi t multiplied by the applicable tax rate is as follows:

Group 2007 2006 $ $

Accounting profi t 1,594,469 3,041,000 Tax at the applicable tax rate of 18% (2006: 20%) 287,004 608,200Tax effect of expenses not deductible for tax purposes 345,525 381,946Tax exemption (18,900) (31,500)Tax effect on income not subject to tax (347,518) (486,996)Under/(over) provision of tax in respect of prior year 36,297 (66,749)Realisation of deferred tax assets previously not recognised (399,013) (155,950)Deferred tax assets not recognised 151,187 127,727Effects of different tax rates in other countries (263) (33,518)Others (13,631) (31,838) Tax expense 40,688 311,322

Deferred taxation at 30 June relate to the following:

Group Company 2007 2006 2007 2006 $ $ $ $

Deferred tax liabilities - excess of net book value over tax written down value of fi xed assets (156,303) (162,329) (585) (585) Deferred tax liabilities (156,303) (162,329) (585) (585)

The Group

As at 30 June 2007, the Group has unutilised tax losses and unutilised capital allowances of approximately $8,268,000 (2006: $9,284,000) and $439,000 (2006: $800,000), which are available for offset against future taxable profi ts, sub-ject to agreement by the tax authorities and compliance with certain provisions of the tax legislation of the respective countries in which the Group operates. No deferred tax is recognised on these losses and unutilised capital allowances in accordance with the accounting policy as set out in Note 2.19(ii).

Management intends to transfer unabsorbed capital allowances and trade losses of $656,350 (2006: $140,000) from a subsidiary to a certain other subsidiary under the group relief system, subject to compliance with relevant rules and procedures and agreement of the Inland Revenue Authority of Singapore.



28. Earnings per share

Basic earnings per share is calculated by dividing the profi t attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by dividing the profi t for the year attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted aver-age number of ordinary shares that would be issued on the conversion of all the dilution potential shares into ordinary shares.

The following table refl ects the profi t and loss account and share data used in the computation of basic and diluted earn-ings per share for the years ended 30 June:

Group 2007 2006 $ $

Profi t for the year attributable to ordinary equity holders of the Company 1,678,766 2,080,749 Weighted average number of ordinary shares for basic earnings per share computation 320,425,777 307,394,284Dilutive effect of share options 480,121 825,893 Weighted average number of ordinary shares adjusted for the effect of dilution 320,905,898 308,220,177

8,509,000 (2006: 9,380,800) of share options granted to employees under the existing employee share option scheme have not been included in the calculation of diluted earning per share because they are anti-dilutive for the current and previous fi nancial year presented.

29. Employee benefi ts

The Company has an employee share option plan, Asian Micro Holdings Limited Employees’ Share Option Plan (“the Plan”) to confi rmed staff. The exercise price of the options is equal to the market price of the shares on the date of grant. The options may be exercisable at any time from 1 to 3 years beginning on the fi rst anniversary of the date of grant up to 28 September 2011. Options granted are cancelled when the option holder ceases to be under full time employment of the Company or any corporation in the Group subject to certain exceptions at the discretion of the Company. There are no cash settlement alternatives.

Information with respect to the number of options granted under the Scheme is as follows:



29. Employee benefi ts (cont’d)

Date grantedOption exercise

periodExercise

price

Balance at 1 July 2006

Options issued

during the year

Options cancelled

during the year

Options exercised

during the year

Balance at 30 June

2007

October 2001 October 2002- September 2011

$0.05 1,319,000 - - (519,000) 800,000

November 2001 November 2002 - September 2011

$0.06 406,000 - (106,000) (30,000) 270,000

January 2002 January 2003- September 2011

$0.065 - - - - -

March 2002 March 2003 - September 2011

$0.210 - - - - -

May 2002 March 2003 - September 2011

$0.18 56,000 - - - 56,000

June 2002 June 2003 - September 2011

$0.165 86,000 - (18,000) - 68,000

July 2002 July 2003 - September 2011

$0.14 - - - - -

August 2002 August 2003 - September 2011

$0.14 108,000 - (108,000) - -

February 2003 February 2004 - September 2011

$0.06 - - - - -


$0.065 1,393,700 - (485,000) (647,700) 261,000


$0.07 1,894,000 - - (820,000) 1,074,000

October 2003 October 2004 - September 2011

$0.09 7,860,000 - - - 7,860,000


$0.065 211,000 - (11,000) (200,000) -

September 2005

September 2006 - September 2011

$0.07 92,000 - (92,000) - -

October 2005 October 2006 - September 2011

$0.09 831,000 - (306,000) - 525,000

May 2007 May 2008 - September 2011

$0.09 - 1,550,000 - - 1,550,000


$0.100 - 330,000 - - 330,000


$0.105 - 2,516,000 - - 2,516,000

14,256,700 4,396,000 (1,126,000) (2,216,700) 15,310,000



29. Employee benefi ts (cont’d)

The following table illustrates the number and weighted average exercises prices (WAEP) of, and movements in, share options during the year.

No. WAEP($) No. WAEP($) 2007 2006 2007 2006

Outstanding at beginning of year (1) 14,256,700 0.08 21,940,000 0.07Granted during the year (2) 4,396,000 0.10 1,589,000 0.08Forfeited during the year (1,126,000) 0.08 (3,401,700) 0.07Exercised during the year (3) (2,216,700) 0.06 (5,870,600) 0.06 Outstanding at end of year (4) 15,310,000 0.09 14,256,700 0.08

(1) Included within these balances are equity-settled options that have not been recognised in accordance with FRS102 as these equity-settled options were granted on or before 22 November 2002. These options have not been subse-quently modifi ed and therefore do not need to be accounted for in accordance with FRS102.

(2) The weighted average fair value of options granted during the year was $0.10 (2006: $0.06).

(3) The weighted average share price at the date of exercise for the options exercised was $0.076 (2006: $0.09).

(4) The range of exercise prices for options outstanding at the end of the year was $0.05 to $0.18 (2006: $0.05 to $0.18). The weighted average remaining contractual life for these options is 7 years (2005: 8 years).

The fair value of share options as at the date of grant is estimated using the Binomial Option Pricing Model, taking into account the terms and conditions upon which the options were granted. The inputs to the model used for the years ended 30 June 2007 and 30 June 2006 are shown below.

2007 2006

Dividend yield% (year) 0.0 0.0Expected volatility (%) 87 87Risk-free interest rate (%) 2.35 - 3.54 2.35 - 3.54Expected life of option (years) 6.8 7.6Weighted average share prices ($) 0.09 0.07

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility refl ects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of the option grants were incorporated into the measure-ment of fair value.



30. Cash and cash equivalents

Cash and cash equivalents as at 30 June were as follows: Group Company 2007 2006 2007 2006 $ $ $ $

Cash and bank balances 1,798,108 2,020,040 417,240 195,355Fixed deposits 2,145,968 2,086,740 1,836,420 1,789,550Bank overdrafts (95,610) (103,499) - - 3,848,466 4,003,281 2,253,660 1,984,905Less: Fixed deposits pledged* (2,125,877) (2,067,898) (1,836,420) (1,789,550) 1,722,589 1,935,383 417,240 195,355

* This relates to fi xed deposits pledged in connection with credit facilities granted by a bank (Note 16).

Cash and cash equivalents were denominated in the following currencies at 30 June:

Group Company 2007 2006 2007 2006 $ $ $ $

Singapore dollars 984,232 428,690 306,169 45,102United States dollars 403,489 755,667 111,071 150,253Thai Baht (22,825) (100,476) - - Hong Kong dollars 93,570 436,090 - - China RMB 249,282 411,630 - - Malaysia Ringgit 13,257 2,151 - - Philippines Peso 1,584 1,631 - - 1,722,589 1,935,383 417,240 195,355

Cash at bank earns interest at rates based on daily bank deposit rates ranging from 0.05% to 0.11% (2006: 0.05% to 1%) per annum.

Fixed deposits are placed with fi nancial institutions for varying periods of between 1 month to 1 year depending on the immediate cash requirements of the Group. The fi xed deposits earn interest at fi xed deposit rates ranging from 1.81% to 3.12% (2006: 1.125% to 3%) per annum for SGD fi xed deposits and from 4.82% to 5.01% (2006: 3.03% to 4.82%) per annum for USD fi xed deposits.

Bank overdrafts are repayable on demand and have a weighted average effective interest rate of 7% (2006: 8%) per annum.



31. Segment information

Reporting format

The primary segment reporting format is determined to be business segments as the Group’s risks and rates of return are affected predominantly by differences in the products and services produced. Secondary information is reported geographically. The operating businesses are organised and managed separately according to the nature of the products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets.

Business segments

Tray recycling

Tray recycling segment provides services of recycling and precision cleaning of packaging trays and media/disk cassettes used in the hard disk drive and semiconductor industries. This segment also includes precision parts cleaning and parts visual inspection as well as clean room laundry cleaning services.

Manufacturing

Manufacturing segment refers to manufacturing of clean room grade packaging products such as LDPE/HDPE bags, ESD bags and aluminum moisture barrier bags for the electronics and hard disk drive industries.

Plastic waste recycling

Plastic waste recycling segment provides recycling services of recovering plastic waste from precision trays and clean room plastic packaging material and converting it into usable resin.

Trading

Trading segment refers to the trading of clean room consumable products such as cotton swabs, face masks, fl exible hose, sticky mat, adhesive products, etc.

Geographical segments

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

Allocation basis and transfer pricing

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

Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties. Segment revenue, expenses and results include transfers between business segments. These transfers are elimi-nated on consolidation.



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31.

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32. Commitments and contingencies

(a) Operating lease commitments

The Group leases certain properties under lease agreements. These leases have an average life of between 1 and 5 years with no renewal option or escalation clauses included in the contracts. There are no restrictions placed upon the Group or the Company by entering into these leases. Operating lease payments recognised in the consolidated profi t and loss account during the year amounted to $1,103,622 (2006: $924,974).

Future minimum lease payments under non-cancellable operating leases as at 30 June are as follows:

Group 2007 2006 $ $

Within one year 776,991 882,175After one year but not more than fi ve years 1,263,657 668,851More than fi ve years - 811,584 2,040,648 2,362,610

(b) As lessor

The Group sub-leases certain of its offi ce properties under operating lease arrangements, with leases negotiated up to 3 years. The terms of the leases generally also require the tenants to pay security deposits and provide for periodic rent adjustments according to the then prevailing market conditions.

As at 30 June 2007, the Group had total future minimum leases receivables under non-cancellable operating leases with its tenants falling due as follows:

Group 2007 2006 $ $

Within one year 275,720 275,094After one year but not more than fi ve years 98,064 119,000 373,784 394,094

(c) Capital expenditure commitments Group 2007 2006 $ $

Capital expenditure not provided for in the fi nancial statements: - commitments in respect of investment in a new subsidiary (Note 37(iii)(a)) 390,000 - - commitments in respect of technology and technical costs of a new subsidiary (Note 37(iii)(b)) 443,000 - - commitments in respect of contracts placed for the purchase of machineries - 100,000- commitments in respect of additional investment in subsidiaries 844,000 1,000,000- commitments in respect of purchase of a factory - 1,575,000 1,677,000 2,675,000



32. Commitments and contingencies (cont’d)

(d) Finance lease commitments

The Group has fi nance leases for certain items of machinery, equipment and motor vehicles (Note 3). These leases have terms of renewal but no purchase options and escalation clauses. There are no restrictions placed upon the group by entering into these leases. Renewals are at the option of the specifi c entity that holds the lease. The aver-age discount rate implicit in the leases is 6.27% p.a. (2006: 6.12%).

Future minimum lease payments under fi nance leases together with the present value of the net minimum lease payments are as follows:

Group Minimum Present value Minimum Present value lease payments of payments lease payments of payments 2007 2007 2006 2006 $ $ $ $

Not later than one year 220,517 199,040 274,210 241,636Later than one year but not later than fi ve years 509,375 442,690 623,210 552,885Later than fi ve years - - 14,510 11,953

Total minimum lease payments 729,892 641,730 911,930 806,474Less: Amounts representing fi nance charges (88,162) - (105,456) -

Present value of minimum lease payments 641,730 641,730 806,474 806,474

(e) Continuing fi nancial support

As at 30 June 2007, the Company had given an undertaking to certain subsidiaries to provide fi nancial support to enable them to operate as going concerns and to meet their obligations for at least 12 months from the respective date of their directors’ report.

33. Related party disclosures

An entity or individual is considered a related party of the Group for the purposes of the fi nancial statements if: (i) it pos-sesses the ability (directly or indirectly) to control or exercise signifi cant infl uence over the operating and fi nancial deci-sions of the Group or vice versa; or (ii) it is subject to common control or common signifi cant infl uence.

The following are the signifi cant intercompany transactions entered into by the Group with its related parties:

(a) Sales and purchases of goods and services

Group 2007 2006 $ $

Rental expense paid/payable to affi liated companies * 550,956 502,932Professional fees paid to the fi rm of which the director is a member 12,000 12,000

* The Group has entered into contracts with affi liated companies, Ultraline Technology Pte Ltd, American Converters Industries Pte Ltd and Ultraline Holdings (Thailand) Co. Ltd, all three companies owned by two directors, for the lease of factories on a time cost reimbursement basis.



33. Related party disclosures (cont’d)

(b) Compensation of key management personnel Group 2007 2006 $ $

Short-term employee benefi ts 1,676,018 1,537,271Central provident fund contributions 65,490 73,159Share-based payments 12,175 30,119 Total compensation paid to key management personnel 1,753,683 1,640,549 Comprise amounts paid to: - Directors of the company 1,267,646 1,223,236- Other key management personnel 486,037 417,313 1,753,683 1,640,549

Key management personnel interests in employee share options

At 1 July 2006, the directors and key management personnel held options to purchase ordinary shares of the Company under the employee share option plan as follows:

- 1,319,000 ordinary shares at a price of S$0.05 each, exercisable between October 2002 and September 2011;- 30,000 ordinary shares at a price of S$0.06 each, exercisable between November 2002 and September 2011;- 695,000 ordinary shares at a price of S$0.065 each, exercisable between August 2004 and September 2011;- 1,074,000 ordinary shares at a price of S$0.07 each, exercisable between August 2004 and September 2011;- 4,680,000 ordinary shares at a price of S$0.09 each, exercisable between October 2004 and September 2011;- 200,000 ordinary shares at a price of S$0.065 each, exercisable between June 2005 and September 2011.

During the year ended 30 June 2007, these directors and key management personnel exercised options of 1,344,000 ordinary shares at a price from S$0.05 to S$0.065 each, with a total consideration of S$79,425 in cash.

34. Financial risk management objectives and policies

The Group’s principal fi nancial instruments comprise bank loans and overdraft, fi nance leases and cash and fi xed depos-its. The main purpose of these fi nancial instruments is to raise fi nance for the Group’s operations. The Group has various other fi nancial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.

It is, and has been throughout the year under review, the Group’s policy that no trading in derivative instruments shall be undertaken.

The main risks arising from the Group’s fi nancial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are summarised below.

Interest rate risk

The Group obtains additional fi nancing through bank borrowings and leasing arrangements. The Group’s policy is to obtain the most favourable interest rates available without increasing its foreign currency exposure.

Surplus funds are placed with reputable banks.



34. Financial risk management objectives and policies (cont’d)

Liquidity risk

To ensure continuity of funding, the Group’s policy is to ensure availability of short-term funding through overdraft facili-ties. Long-term funding is through bank borrowings.

Foreign currency risk

The Group’s exposure to foreign currency risk relates primarily to its receivables and payables, which are denominated in foreign currencies, majority of which are in U.S. Dollars and translation of fi nancial statements of foreign subsidiaries for the purposes of consolidation. The Group manages its transactional exposure by matching, as far as possible, its receipts and payments in each individual currency. The Group monitors the U.S. dollar exchange rates closely so as to minimise any potential material adverse effects from these exposure in a timely manner. Foreign exchange differences arising from translation of fi nancial statements of foreign subsidiaries are taken to translation reserve, a component of equity.

Credit risk

The carrying amounts of trade and other receivables and cash and cash equivalents represent the Group’s maximum exposure to credit risk. No other fi nancial assets carry a signifi cant exposure to credit risk.

As at year end, 40% of the trade receivables is attributed to the top three customers of the Group. Based on past col-lection history and experience, these three customers are creditworthy third parties. Other than this, there are no other signifi cant concentrations of credit risk within the Group.

35. Financial instruments

(i) Fair values

The fair value of a fi nancial instrument is the amount at which the instrument could be exchanged or settled be-tween knowledgeable and willing parties in an arm’s length transaction, other than in a forced or liquidation sale.

Financial instruments whose carrying amount approximates fair value

The carrying amounts of cash and fi xed deposits, current trade and other receivables, bank overdrafts, current trade and other payables, amounts due from/(to) subsidiaries, associates and affi liated companies, due to directors, bills payable to banks and current bank loans, based on their notional amounts, reasonably approximate their fair values because these are mostly short term in nature or are repriced frequently.

The fair values of long term borrowings with variable interest rates approximate their carrying amounts.



35. Financial instruments (cont’d)

(ii) Interest rate risk

The following table sets out the carrying amount, by maturity, of the Group’s and the Company’s fi nancial instru-ments that are exposed to interest rate risk.

Within 1 to 5 After2007 Total 1 year years 5 yearsGroup $ $ $ $

Fixed rateFixed deposits 2,145,968 2,145,968 - - Promissory notes (33,390) (33,390) - - Obligation under fi nance leases (641,730) (199,040) (442,690) - Term loans (198,503) (123,486) (75,017) -

Floating rateTerm loans (2,889,297) (682,269) (2,207,028) - Short-term loans (1,440,525) (1,440,525) - -

Company

Fixed rate Fixed deposits 1,836,420 1,836,420 - -

Floating rate Short-term loan (440,525) (440,525) - -

2006Group

Fixed rateFixed deposits 2,086,740 2,086,740 - - Promissory notes (25,018) (25,018) - - Obligation under fi nance leases (806,474) (241,636) (564,838) -

Floating rateTerm loans (3,471,102) (665,742) (2,473,232) (332,128)Short-term loans (1,457,632) (1,457,632) - -

Company

Fixed rateFixed deposits 1,789,550 1,789,550 - -

Floating rate Short-term loan (457,632) (457,632) - -

Interest on fi nancial instruments subject to fl oating interest rates is contractually repriced monthly. Interest on fi -nancial instruments at fi xed rates are fi xed until the maturity of the instrument. The other fi nancial instruments of the Group and Company that are not included in the above tables are not subjected to interest rate risks.

36. Dividends 2007 2006 $ $

Interim one-tier tax exempt dividend of 0.05 cents per share 480,953 152,847



37. Subsequent events

(i) During the year, the Company decided to sell off its entire equity interest in a subsidiary, namely Asian Micro In-dustrial (Thailand) Co Ltd (“AMI”), to a company owned by three directors for approximately $281,000. The con-sideration was derived by adding a $50,000 mark-up to the book value of AMI as at May 2007. The transaction is pending approval from Thailand authority.

(ii) During the year, a subsidiary decided to reduce its shareholding in the associated company, A-P Technology (Shunde) Co Ltd, from 49% to 25%. Management has informed the other shareholder of this decision and has submitted the application of dilution in investment to the relevant authority and are currently awaiting the approval.

(iii)(a) Subsequent to the year end, the Company set up a Natural Gas Vehicle conversion business in Thailand with two Thai individuals. The new entity, S.O. NGV. (Thailand) Co., Ltd, incorporated in Thailand has a registered capital of approximately $2,000,000. The Company holds a 49% equity interest in the new entity. At the date of this report, the Group injected $250,000 into the new subsidiary.

(iii)(b) Subsequent to the year end, the Company paid one of the two Thai individuals, an amount of Thai Baht 10 mil-lion (approximately S$443,000) via issue of 3,692,000 new ordinary shares in the capital of the Company, for the transfer of technology and technical management to S.O. NGV. (Thailand) Co., Ltd.

(iv) Subsequent to the year end, the Group decided to dispose of the land and building at 21, Tuas South Street 1, Sin-gapore 638032 for S$3.1 million. The Group expects to realise a gain of approximately $908,000 from the disposal. The disposal has to be approved by the landlord, JTC Corporation, and is expected to be completed by November 2007.

(v) Subsequent to the year end, the Group incorporated a new entity called S.O. NGV (S) Pte Ltd to set up its fi rst Natural Gas Vehicles conversion business in Penjuru, Singapore. The Company holds 49% of the new entity and the remaining interest is held by 2 Thai individuals who are also shareholders of S.O. NGV. (Thailand) Co., Ltd (Note 37(iii)(a) ).

(vi) Subsequent to the year end, the Company issued 15,504,000 new ordinary shares at an issue price of $0.129 per share.

(vii) Subsequent to the year end, Impact Polythene Pte Ltd, a wholly-owned subsidiary, changed its name to AM NGV (S) Pte. Ltd.

38. Comparatives

The following comparative fi gures in the balance sheet as at 30 June 2006 have been reclassifi ed:

(i) Reclassifi cation of fi xed deposits to fi xed deposits pledged in one subsidiary as this did not form part of the cash and cash equivalents as at 30 June 2006.

Group As As previously reclassifi ed classifi ed $ $

Fixed deposits pledged 2,067,898 2,046,781Cash and cash equivalents 1,935,383 1,956,500

39. Authorisation of fi nancial statements

The fi nancial statements for the year ended 30 June 2007 were authorised for issue in accordance with a resolution of the directors on 18 September 2007.


Supplementary Information(Amounts in Singapore dollars unless otherwise stated)

Interested person transactions carried out during the fi nancial year pursuant to the Shareholders’ mandate obtained in accor-dance with chapter 9 of the SGX - ST Listing Manual are as follows:

Interested Parties Transactions

Location Lessee Lessor Amount Remark $

No 3 Tech Park Crescent ACI Industries American 68,400 Rental of FactorySingapore 638129 Pte Ltd Converters Building / Offi ce Industries Pte Ltd

No 3 Tech Park Crescent Asian Micro American 159,600 Rental of FactorySingapore 638129 (S) Pte Ltd Converters Building / Offi ce Industries Pte Ltd

No 1 Tech Park Crescent Asian Micro Ultraline 126,000 Rental of FactorySingapore 638131 (S) Pte Ltd Technology Building / Offi ce (S) Pte Ltd

No 1 Tech Park Crescent Impact Ultraline 126,000 Rental of FactorySingapore 638131 Polythene Technology Building / Offi ce Pte Ltd (S) Pte Ltd

129 Moo 3, Factory Land World Plastics Ultraline Holdings 70,956 Rental of FactoryT. Wangchulan, A.Wang Noi, Recovery (Thailand) (Thailand) Co. Ltd Building / Offi ceAyuthaya 13170, Thailand Co., Ltd. 550,956


SUPPLEMENTARY INFORMATION (Amounts in Singapore dollars unless otherwise stated)

Property Description

Area (Land)Sq. ft.

Area (Build-Up)

Sq. ft. TenureNBV @

30/6/2007

Investment Property

20 Tech Park Crescent, Tuas Tech Park, Singapore 638112

2 storey Semi-detached Factory

18,502 18,546 Leasehold for 60 years from 18/8/1993

$2,600,000

Fixed Asset Properties

21 Tuas South Street 1, Singapore 638032

Light Industrial Factory

53,949 30,085 Leasehold for 60 years from 1/8/1997

$2,172,000

6514 Lorong Ayam Didik, Kawasan Perindustrian Ringan, Taman Ria Jaya, 08000 Sungai Petani, Kedah, West Malaysia

Light Industrial Factory

25,000 12,800 Freehold RM1,037,632

130/171 & 130/172 Moo 3,Wang Chula Sub-District,Wang Noi District, Ayuthaya Province,13170 Thailand

Light Industrial Factories

27,986 23,250 FreeholdThai baht 17,359,000


Shareholdings STATISTIC30 June 2007

ISSUED AND FULLY PAID-UP CAPITAL : $36,065,404.00 NO. OF SHARES ISSUED : 340,869,487 CLASS OF SHARES : Ordinary Shares fully paid VOTING RIGHTS : 1 Vote per Share DISTRIBUTION OF SHAREHOLDINGS AS AT 11 SEPTEMBER 2007

Size of shareholdings No. of shareholders % No. of Shares %

1 - 999 4 0.10 1,222 0.001,000 - 10,000 2,782 68.50 10,537,000 3.0910,001 - 1,000,000 1,247 30.71 92,403,300 27.111,000,001 & ABOVE 28 0.69 237,927,965 69.80 TOTAL 4,061 100.00 340,869,487 100.00

TWENTY LARGEST SHAREHOLDERS AS AT 11 SEPTEMBER 2007

No. Name of shareholders No. of Shares %

1 LEONG LAI HENG 73,801,982 21.652 LIM KEE LIEW 65,030,439 19.083 MAYBAN NOMINEES (S) PTE LTD 13,000,000 3.814 LIN MEIJUAN SOPHIA 12,599,000 3.705 LIN XIANGLONG WINCHESTER 11,550,000 3.396 PIYAWAT JIRAWATOPHAT 4,992,000 1.467 ONG BEE HUAT 4,872,000 1.438 DBS VICKERS SECURITIES (S) PTE LTD 4,589,000 1.359 KELVIN CHNG BOON KIAN 4,376,000 1.2810 UNITED OVERSEAS BANK NOMINEES PTE LTD 4,004,000 1.1711 AMERICAN CONVERTERS INDUSTRIES PTE LTD 3,866,439 1.1312 DBS NOMINEES PTE LTD 2,827,000 0.8313 LIM KING HWAI 2,810,000 0.8214 KIM ENG SECURITIES PTE. LTD. 2,725,000 0.8015 ANG SENG THOR 2,638,000 0.7716 GOH KIAW CHOH 2,609,000 0.7717 LIM KEE HING 2,560,000 0.7518 NG LAI HENG 2,500,000 0.7319 ANG HWEE KENG 2,236,000 0.6620 OCBC SECURITIES PRIVATE LTD 2,202,000 0.65 TOTAL 225,787,860 66.23

Based on the information available to the Company as at 11 September 2007, approximately 52% of the Company’s equity securities are held in the hands of public. This is in compliance with Rule 723 of the Listing Manual issued by the SGX-ST which requires at least 10% of a listed issuer’s equity securities to be held by the public.


Substantial shareholders Direct Interest Deemed Interest

LIM KEE LIEW (a). 78,526,439 23.04% 79,877,526 23.43%LEONG LAI HENG (b). 74,561,982 21.87% 83,841,983 24.60%

Note : (a). For Mr. Lim Kee Liew @ Victor Lim, 13,000,000 shares registered under Mayban Nominee Pte Ltd and 496,000 shares

registered under DBS Nominees Pte Ltd. Deemed interest is in the name of spouse, Ms. Leong Lai Heng, Ultraline Technol-ogy (S) Pte Ltd * and American Converters Industries Pte Ltd *.

(b). For Ms.Leong Lai Heng, 760,000 shares registered under United Overseas Bank Nominees Pte Ltd. Deemed interest is in

the name of spouse, Lim Kee Liew @ Victor Lim, Ultraline Technology (S) Pte Ltd * and American Converters Industries Pte Ltd *.

* Mr. Lim Kee Liew @ Victor Lim and Ms. Leong Lai Heng each own 50% of the entire issued and paid-up share capital of Ultraline Technology (S) Pte Ltd and American Converters Industries Pte Ltd.

Shareholdings STATISTIC30 June 2007


NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Asian Micro Holdings Limited (“the Company”) will be held at Raffl es Marina, 10 Tuas West Drive, Singapore 638404 on Monday, 23 October 2007 at 10.00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 30 June 2007 together with the Auditors’ Report thereon. (Resolution 1)

2. To re-elect the following Directors of the Company retiring pursuant to Articles 88 and 89 of the Articles of Association of the Company:

Mr Tan Siew Bin, Ronnie (Retiring under Article 88) (Resolution 2)Ms Leong Lai Heng (Retiring under Article 89) (Resolution 3)

Mr Tan Siew Bin, Ronnie will, upon re-election as a Director of the Company, remain as a member of the Audit Commit-tee, Nominating Committee and Remuneration Committee and will be considered independent.

3. To approve the payment of Directors’ fees of S$58,300 for the year ended 30 June 2007 (2006: S$80,000) (Resolution 4)

4. To re-appoint Messrs Ernst & Young as the Auditors of the Company and to authorise the Directors of the Company to fi x their remuneration. (Resolution 5)

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

AS SPECIAL BUSINESS

To consider and if thought fi t, to pass the following resolutions as Ordinary Resolutions, with or without any modifi cations: 6. Authority to issue shares up to 50 per centum (50%) of the issued shares in the capital of the Company

That pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Ex-change Securities Trading Limited, the Directors of the Company be authorised and empowered to:

(a) (i) issue shares in the Company (“shares”) whether by way of rights, or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, war-rants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors of the Com-pany may in their absolute discretion deem fi t; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursu-ance of any Instrument made or granted by the Directors of the Company while this Resolution was in force,


provided that:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution shall not exceed fi fty per cen-tum (50%) of the issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of the Company shall not exceed twenty per centum (20%) of the issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for the purpose of determining the aggregate number of shares and Instruments that may be issued under sub-paragraph (1) above, the percentage of issued shares and Instruments shall be based on the number of issued shares in the capital of the Company at the time of the passing of this Resolution, after adjusting for:

(a) new shares arising from the conversion or exercise of the Instruments or any convertible securities;(b) new shares arising from exercising share options or vesting of share awards outstanding and subsisting at the

time of the passing of this Resolution; and (c) any subsequent consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force (unless such compliance has been waived by the Singapore Exchange Securities Trading Limited) and the Articles of Association of the Com-pany; and

(4) unless revoked or varied by the Company in a general meeting, such authority shall continue in force (i) until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of the Instruments.

[See Explanatory Note (i)] (Resolution 6) 7. Authority to issue shares under the Asian Micro Employees’ Share Option Scheme

That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be authorised and empow-ered to offer and grant options under the Asian Micro Employees’ Share Option Scheme (“the Scheme”) and to issue from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the exercise of options granted by the Company under the Scheme, whether granted during the subsistence of this author-ity or otherwise, provided always that the aggregate number of additional ordinary shares to be issued pursuant to the Scheme shall not exceed fi fteen per centum (15%) of the issued shares in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier.

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

By Order of the Board

Ng Lai YingSecretarySingapore, 2 October 2007



Explanatory Notes:

(i) The Ordinary Resolution 6 in item 6 above, if passed, will empower the Directors of the Company from the date of this Meeting until the date of the next Annual General Meeting of the Company, or the date by which the next Annual Gen-eral Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant instruments convertible into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of the issued shares in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to existing shareholders of the Com-pany.

For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital of the Company will be calculated based on the issued shares in the capital of the Company at the time this Ordinary Resolu-tion is passed after adjusting for new shares arising from the conversion or exercise of the Instruments or any convertible securities, the exercise of share options or the vesting of share awards outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent consolidation or subdivision of shares.

(ii) The Ordinary Resolution 7 in item 7 above, if passed, will empower the Directors of the Company, from the date of this Meeting until the next Annual General Meeting of the Company, or the date by which the next Annual General Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the exercise of options granted or to be granted un-der the Scheme up to a number not exceeding in total (for the entire duration of the Scheme) fi fteen per centum (15%) of the issued shares in the capital of the Company from time to time.

Notes 1. A member entitled to attend and vote at the Annual General Meeting (the “Meeting”) is entitled to appoint a proxy/prox-

ies to attend and vote in his/her stead. A proxy need not be a member of the Company. 2. The instrument appointing a proxy must be deposited at the registered offi ce of the Company at 3 Tech Park Crescent,

Tuas Tech Park, Singapore 638129 not less than 48 hours before the time appointed for holding the Meeting.


This page has been intentionally left blank.

I/We, ofbeing a member/members of Asian Micro Holdings Limited, hereby appoint:

Name NRIC/Passport No. Proportion of ShareholdingsNo. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of ShareholdingsNo. of Shares %

Address

or failing the person, or either or both of the persons, referred to above , the Chairman of the Meeting as my/our proxy/proxies to vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held on 23 October 2007 at 10.00 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no specifi c direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.

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

No. Resolutions relating to: For Against1 Directors’ Report and Audited Accounts for the year ended 30 June 20072 Re-election of Mr. Tan Siew Bin, Ronnie as a Director3 Re-election of Ms. Leong Lai Heng as a Director4 Approval of Directors’ fees amounting to S$58,3005 Re-appointment of Messrs Ernst & Young as Auditors6 Authority to issue new shares7 Authority to issue shares under the Asian Micro Employees’ Share Option Scheme

Dated this day of 2007

Total number of Shares in: No. of Shares(a) CDP Register

Signature of Shareholder(s) (b) Register of Membersor, Common Seal of Corporate Shareholder

IMPORTANT:1. For investors who have used their CPF monies to buy Asian

Micro Holdings Limited’s shares, this Report is forwarded to them at the request of the CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

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

3. CPF investors who wish to attend the Meeting as an observ-er must submit their requests through their CPF Approved Nominees within the time frame specifi ed. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specifi ed to enable them to vote on their behalf.

ASIAN MICRO HOLDINGS LIMITED(Company Registration No.199701052k)(Incorporated In The Republic of Singapore with limited liability)

PROXY FORM(Please see notes overleaf before completing this Form)

Notes :

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

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

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

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.

5. The instrument appointing a proxy or proxies must be deposited at the registered offi ce of the Company at 3 Tech Park Crescent, Tuas Tech Park, Singapore 638129 not less than 48 hours before the time appointed for the Meeting.

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

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

General:

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

No. 3, Tech Park Crescent, Tuas Tech Park, Singapore 638129Tel: 65-6862 7777 • Fax: 65-6862 6277Company registration No. 199701052K

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