Mission · Announcement of Half-Year Financial Results 13 February 2006 Payment of Interim Dividend...

Annual Report2006

PCI LimitedCo. Reg No. 198804482N

386 Jalan Ahmad Ibrahim

Singapore 629156

Tel: (65) 6265 8181

Fax: (65) 6265 3333

Website: www.pciltd.com.sg

Email: [email protected]

PC

I Lim

ited

2006A

nnual Report

MissionStatement

Contents1 Group Financial Highlights/ Financial Calendar

2 Five-year Group Financial Statistics

3 Corporate Data

4 Corporate Profile

7 Senior Management

8 Board of Directors

10 Chairman’s Message

“PCI aims to be a leading global high technology electronics manufacturing services company.”

“PCI delivers high quality, high value and timely supply chain solutions at competitive cost.”

“PCI’s strategy is to extend its core competence through alliances with a network of technology partners and suppliers to create optimal solutions for customers.”

Group FinancialHighlights

Financial Calendar

INCREASE /

2006 2005 (DECREASE)US$’000 US$’000 %

Turnover 166,022 144,044 15.26%Profit before taxation 7,073 8,368 (15.48%)Profit after taxation 6,018 6,354 (5.29%)Paid up share capital 44,552 29,668 50.17%

US Cents US Cents

Net Asset Value Per Share (Cents) 25.37 24.92 1.81%Basic Earnings Per Share (Cents) 3.01 3.21 (6.23%)

11

PCI Limited Annual Report 2006

Financial Year End 30 June 2006

Announcement of First Quarter Financial Results 28 October 2005

Announcement of Half-Year Financial Results 13 February 2006

Payment of Interim Dividend 13 March 2006

Announcement of Third Quarter Financial Results 5 May 2006

Announcement of Full-Year Financial Results 4 August 2006

Despatch of Annual Report to Shareholders 3 October 2006

Annual General Meeting 20 October 2006

Book Closure to Register Members for Dividend Payment 3 November 2006

Proposed Payment of Final Dividend 15 November 2006

2006 2005 2004 2003(1) 2002(1)

US$’000 US$’000 US$’000 US$’000 US$’000Income StatementTurnover 166,022 144,044 143,763 83,377 91,756Profit/(loss) before taxation 7,073 8,368 12,140 6,909 4,182Profit/(loss) after taxation 6,018 6,354 9,259 4,462 2,491Profit/(loss) attributable to shareholders 5,978 6,360 9,214 4,495 2,552Interim dividends paid 974 – – – –Proposed final dividends 1,986 2,821 2,784 1,358 864

Balance SheetCurrent assets 80,826 53,297 55,894 45,954 50,369Property, plant and equipment 12,342 10,205 9,478 10,018 10,279Available-for-sale investments 6,191 21,844 23,001 13,531 1,102Other non-current assets 294 294 294 257 257

99,653 85,640 88,667 69,760 62,007

Shareholders’ equity 50,366 49,405 44,161 36,659 33,018Current liabilities 48,627 35,497 43,857 32,160 28,133Deferred taxation 591 711 447 785 815Minority interests 69 27 202 156 41

99,653 85,640 88,667 69,760 62,007

Per Share DataBasic earnings/(losses) per share (US cents) 3.01 3.21 4.70 2.33 1.32

Fully diluted earnings/(losses) per share (US cents) 3.01 3.20 4.66 2.31 1.32

Dividend rate per share (less tax) (S$ cents) 3.00 3.00 3.00 1.50 1.00

Net tangible assets per share (US cents) 25.37 24.92 22.32 19.02 17.14

Issued and paid-up capital (US$’000) 44,552 29,668 29,612 28,863 28,849

(1) These have been remeasured and presented in United States Dollars due to change in functional currency.

Five-year GroupFinancial Statistics

2

Board of DirectorsMr Peh Kwee Chim (Executive Chairman)

Mr Teo Teck Chuan (Chief Executive Officer)

Dr Tan Cheng Bock

Mr Loh Kee Kong

Mr Lim Kwee Siah

Ms Tey Swee Nai Nancy

Audit CommitteeMs Tey Swee Nai Nancy (Chairman)

Dr Tan Cheng Bock

Mr Lim Kwee Siah

Remuneration CommitteeDr Tan Cheng Bock (Chairman)


Mr Lim Kwee Siah

Nominating CommitteeDr Tan Cheng Bock (Chairman)

Mr Peh Kwee Chim


Company SecretaryMr Lee Keng Poh

Registered Office386 Jalan Ahmad Ibrahim

Singapore 629156

Telephone: (65) 6265 8181

Facsimile: (65) 6265 3333



Share RegistrarTricor Barbinder Share

Registration Services

(A division of Tricor Singapore Pte. Ltd.)

8 Cross Street #11-00

PWC Building

Singapore 048424

CorporateData

AuditorsDeloitte & Touche

6 Shenton Way #32-00

DBS Building Tower Two

Singapore 068809

Partner-in-Charge: Ms Ng Peck Hoon

Date of Appointment: 1 July 2002

3


Corporate Profile4

Electronics Manufacturing Services SolutionsPCI Limited delivers manufacturing services to a global customer base. Our business is to create competitive advantage for our customers through helping them bring products to market in the quickest possible time, at the right price and performance point, and with the highest quality. Everyday PCI provides complete manufacturing supply chain services to leading global technology companies.

Whether we are helping to facilitate the launch of new products, or enhancing the competitiveness of existing projects, PCI offers services at all points in the manufacturing outsourcing cycle. These include design, manufacturing engineering, material sourcing and procurement, assembly, test, and logistics. PCI’s aim is to add value at each step in the supply chain.

The manufacturing we are engaged in encompasses printed circuit board assembly, customer user interface design and manufacture, and full turnkey electronics manufacturing. Examples of projects are networking and wireless communications products, mobile digital appliances, liquid crystal modules for mobile communications products, control panels for computer peripherals, and a broad range of medical, industrial, and automotive products.

PCI’s CompetenciesPCI’s primary strength is the dedication of our employees, and their knowledge of all aspects of electronics manufacturing. Combined with a network of technology and supply chain par tners we deliver a high quality service. With more than thir ty years experience in providing manufacturing solutions, we have a clear understanding of customer’s technology and supply chain needs.

PCI has its headquar ter in Singapore. We also house our Design & Development Centre, Quality Engineering Laboratory and Manufacturing Engineering Centre. PCI has manufacturing facilities in Singapore, Batam and Shanghai. We have flexibility and capacity to meet the most demanding requirements from low volume to high volume projects, including high value and high product mix needs.

Our design team provides product manufacturability and test solutions at any stage between initial design concepts, through to helping facilitate the final touches to a new product.

Design engineers interact closely with customer counter- par ts on all technical aspects of projects with a constant exchange of information and design suggestions.

Design activities are based in a fully equipped design center in Singapore. Our experience includes radio frequency, global positioning system, liquid crystal module, control panel, printed circuit board, and mechanical design.

Manufacturing capabilities consist of a range of high volume, or medium volume surface mount technology (SMT) assembly lines, and 50 wire bonding machines, with up to date demonstrated competencies for 0201, chip scale package (CSP), chip on board, chip on flex, and chip on glass component assembly. Automatic inser t capabilities are available for axial components, radial components and jumpers. PCI has significant manual assembly (conveyor belt system) capacity to complete medium to high volume module level, or full box build assembly.

PCI provides rapid development of test protocol, and automated test stations for many functional test applications including telecommunications, networking and RF technologies. Par ticular strength is in the design and assembly of jigs and fixtures for product test requirements.

Supply Chain ManagementPCI’s materials operations take care of our customer’s total mater ial requirements, encompassing global procurement, purchasing, and material management. PCI’s purchasing leverage helps to secure complete bill of materials in time to meet our customers’ product launches and shipment deadlines.

Our procurement team works globally, and frequently visits suppliers to evaluate quality, technology, and deliverability capabilities. The development of long-term relationships with suppliers allows us to provide customers the support they need to source and procure electronic components and mechanical par ts at highly competitive prices.

5


Materials management takes care of the planning and purchasing needs for on time delivery, and at the same time controls carefully the customer’s material procurement commitment, and logistics. When supply problems surface, we will pro-actively offer alternative solutions, including product redesign to replace end of life, costly, or scarce components.

QualityBeing a cost leader in manufacturing does not compromise our commitment to the highest quality. The company received ISO 9002 cer tification for both Singapore and Batam in early 1993. The cer tification obtained from both the British Standards Institute and the Singapore PSB, attest

to PCI’s uncomprising long term commitment to meeting the exacting quality demands of our customers. Certification was enhanced in 1999 for our design and development services, with ISO 9001 cer tification by the Singapore PSB.

PCI is well abreast of the latest development in quality management. We have all our ISO cer tificates awarded to the latest ISO9001:2000 standard. Certification for Shanghai was received in early 2005. In addition, we have also achieved the ISO/TS 16949:2002 cer tification in March 2006 which replaces the QS9000 standard.

The Quality Assurance team serves a vital link between customers and our manufacturing locations. They play an extremely active role during project introduction and subsequent quality improvement.

PCI heavily utilizes a comprehensively equipped Accelerated Life Test (ALT) laboratory based in our Singapore facility, to qualify new products, and to provide prediction and diagnosis of failures.

A Dedicated PartnerPCI is a secure and dependable long-term par tner. Our experience supplying manufacturing solutions to the most demanding global customers is assurance that PCI can get the job done. Customers frequently compliment us on providing a responsive and individual service regardless of the size of the project, and PCI has been conferred numerous awards by happy customers.

It’s easy to work with PCI, customers have ready access to key individuals in Singapore, and support from local marketing personnel. Communications advances and our regular experience of working late into the night, help eliminate time zone differences. Once a program star ts,

a dedicated program manager will ensure a smooth transition from initiation through to manufacturing. We have a “can do” attitude, and pro-active in working towards the best solution for our customers.

PCI has been listed on the Singapore Exchange Securities Trading Limited since 11 May 1992.

6

Senior Management

Mr Teo Eng LinChief Operating Officer

Mr Teo joined PCI Limited (“PCI”) in June 1995. He held the position of Sourcing and Marketing Support Manager from 1995 to 2000. He was appointed as Business Development Manager in September 2000 and promoted to Vice President, Business Development responsible for the business development of EMS Division in October 2001. Mr Teo was appointed as Assistant Chief Operating Officer in November 2002 and as Chief Operating Officer in October 2003. He is responsible for the management of the business activities comprising Business Development, Engineering, Sourcing, Business Operations, Material Operations and Manufacturing Operations.

Mr Teo holds a Bachelor of Electrical Engineering degree from the National University of Singapore.

Ms Wendy Teo Senior Vice President, Operations Control

Mdm Wendy Teo joined PCI in March 1990 as Deputy Finance Manager. Prior to joining PCI, she was the Accounting Manager of Chuan Hup Holdings Limited. She was appointed Chief Financial Officer in January 2000. Mdm Wendy Teo assumed the current appointment of Senior Vice President, Operations Control, in November 2004. She assists the Chief Operating Officer to ensure that Business Operation, Material Operation and Manufacturing Operation are conducted within the parameters and in consideration of the Company’s business strategy and plan.

Mdm Wendy Teo holds a diploma in Business Studies from Ngee Ann Polytechnic and is a member of The Institute of Internal Auditors Singapore.

Mr Lee Keng Poh

Chief Financial Officer /Company Secretary

Mr Lee joined PCI in March 1990 as Finance Manager. He was appointed Group Financial Controller and Company Secretary in 1993 and Senior Vice President, Corporate Finance in January 2002. Mr Lee assumed the current appointment of Chief Financial Officer in November 2004.

Mr Lee holds a Bachelor of Accountancy degree from the then Singapore Nanyang University and is a member of the Institute of Certified Public Accountants of Singapore.

Mr Tay Joo ChewVice President, Manufacturing Operations

Mr Tay joined PCI in July 1995 as Quality Assurance Manager. He is responsible for the manufacturing and engineering operations of the PCI Group. Prior to joining PCI, he was the Operations Manager of a US-based multi-national company.

Mr Tay holds a Business Administration degree from the then Royal Melbourne Institute of Technology and a diploma in Electronics and Telecommunication Engineering from the Singapore Polytechnic.

7


Mr Teo Teck ChuanChief Executive Officer & Executive Director

Mr Teo Teck Chuan is an Executive Director and the Chief Executive Officer of PCI. He was appointed as Director and Chief Operating Officer in October 1994 and Chief Executive Officer in October 2003. He is responsible for the overall performance of the Company. Mr Teo has over 20 years of working experience in the electronics and telecommunication industry. His extensive exposure to the various aspects of the industry range from research and development, manufacturing, quality assurance and control to business development and management.

Mr Teo graduated in 1980 from Ecole Nationale Supérieure d’Electronique et de Radioélectricité de Grenoble, France (ENSERG) with a Master in Engineering degree, with mention trés bien.

Mr Peh Kwee ChimExecutive Chairman

Mr Peh Kwee Chim is the Executive Chairman of PCI Limited (“PCI”). He was appointed as a Director and Chairman in November 1989. Mr Peh has over 20 years of experience in the contract manufacturing industry and has been instrumental in building up the PCI Group. He oversees the management, strategic planning and business development of the Group. He is also a member of the Nominating Committee.

Mr Peh is also an Executive Director of Chuan Hup Holdings Limited. He was one of the co-founders of Chuan Hup Holdings Limited in 1970 and has over 30 years of experience in the marine transportation, marine logistics and offshore support services industries. Mr Peh is also a Director of CH Offshore Ltd, Scomi Marine Bhd, Dredging International Asia Pacific Pte Ltd and Security Land Corporation.

Mr Peh graduated from the University of Western Australia in 1969 with a Bachelor of Engineering (Mechanical) degree.

Dr Tan Cheng BockNon-Executive, Independent Director

Dr Tan Cheng Bock is a Non-Executive , Independent Director of PCI. He was appointed in March 1992. Dr Tan is also the Chairman of the Remuneration and Nominating Committees and a member of the Audit Committee.

Dr Tan is the Non-Executive Chairman of Chuan Hup Holdings Limited and the Chairman of Dredging International Asia Pacific Pte Ltd. He was a Board member of Land Transpor t Authority until 2005.

Dr Tan served as a Member of Parliament for Ayer Rajah from 1980 to 2006. He was also the Leader of the Singapore Southeast Asia Parliamentary Group, Chairman of the West Coast - Ayer Rajah Town Council, Vice-Chairman of the South West Community Development Council and member of the Government Parliamentary Committee for Defence and Foreign Affairs.

After retiring from politics, he continued to serve the Ministry of

8

Board of Directors

Health as Chairman of the Advisory Board, Jurong Health Connect and as Chairman of the Jurong Medical Centres.

A private medical practitioner by profession, Dr Tan obtained his Bachelor of Medicine and Surgery degree from the then University of Singapore in 1968. In addition, he is a fellow of the College of Family Practitioners and an Honorary Member of the Singapore Medical Association.

Mr Lim Kwee SiahNon-Executive Director

Mr Lim Kwee Siah is a Non-Executive Director of PCI. He was appointed in August 1989. Mr Lim is also a member of the Audit and Remuneration Committees.

Mr Lim is also a Director of Scomi Marine Bhd. Mr Lim was an Executive Director of Chuan Hup Holdings Limited (“CHH”) from November 1989 to October 2005. He oversaw the Finance and Accounting functions of the CHH Group during his term and was a member of the Audit Committee.

Mr Lim graduated from the then University of Singapore in 1976 with a Bachelor of Accountancy degree and is a Fellow Member of the Institute of Certified Public Accountants of Singapore.

Mr Loh Kee KongExecutive Director

Mr Loh Kee Kong is an Executive Director of PCI. He was appointed in August 1989.

Mr Loh is also a Director of Finbar International Ltd and Cedar Woods Properties Limited, both of which are listed on the Australian Stock Exchange. Mr Loh is also an Alternate Director to Mr Peh Kwee Chim on the Board of CH Offshore Ltd.

Mr Loh graduated from the then University of Singapore in 1976 with a Bachelor of Accountancy degree and is a member of the Institute of Certified Public Accountants of Singapore.

Ms Tey Swee Nai NancyNon-Executive, Independent Director

Ms Tey Swee Nai Nancy is a Non-Executive, Independent Director and was appointed to this position in February 2005. She is also the Chairman of the Audit Committee and a member of the Nominating and Remuneration Committees.

Ms Tey has extensive experience in accounting, auditing and tax. She worked as an Assistant Examiner in the Income Tax Department (now known as Inland Revenue Authority) from 1962 to 1967. In 1967, she joined Peat, Marwick, Mitchell & Co. (now known as KPMG) as a Tax Senior before being promoted to Tax Manager. Thereafter, she joined the United Overseas Bank Group and was appointed as First Vice President in 1990. In 2004, she retired to pursue her personal interests.

Ms Tey was admitted to membership of the Australian Society of Accountants in 1965.

99


Chairman’s Message

Financial ReviewThe revenue of the Group was US$166 million; this is a 15% increase over the previous year’s revenue of US$144 million. This increase was mainly contributed by the growth of the Electronic Manufacturing Services activity, which remains the core activity and contributed close to 99% of the revenue.

The net profit after tax attributable to shareholders was US$6.018 million; it was US$6.354 million the previous year.

The Group remains financially healthy. As at June 30, 2006 its total assets and liabilities were US$99.7 million and US$49.2 million respectively. There was no borrowing.

Earnings before financial cost, income tax, depreciation and minority interest were US$9.3 million.

Operational ReviewThe revenue of the Group increased by 15% over the previous year ; the increase in revenue results from the gearing-up of the business development activities over the last years to add new customers and to expand the services provided to existing customers.

The Profit from Operations was US$7.1 million; it was US$8.4 million the previous year. This drop is due to the higher operations cost resulting from a sharp revision of the minimum wage in our foreign factories.

10

Peh Kwee ChimAugust 25, 2006

To maintain the growth momentum, the Group had continued to increase its business development resources and to upgrade and augment the manufacturing capabilities of its plants; US$4.1 million was invested in additional equipment, machinery and facilities. OutlookThe Directors are cautiously optimistic. The global Electronics Manufacturing Services market is forecasted to expand at a compound annual growth rate of 11.6% over the next 5 years; however the unabated rise of oil prices and the uncertainty of the Middle East foretell the continuation of the current challenging business environment into the near future.

The Group plans to continue investing in business development resources and operational capabilities and capacities as the major thrusts to achieve organic growth.

AcknowledgementThe Board of Directors expresses its appreciation for the dedication and efforts of the Management and staff. The Board also thanks our customers, suppliers, business partners and shareholders for their continued support.

1111


12

Financial Contents13 Report of the Directors

19 Auditor’s Report to the Members of PCI Limited

20 Balance Sheets

21 Profit and Loss Statements

22 Statements of Changes in Equity

26 Consolidated Cash Flow Statement

28 Notes to Financial Statements

69 Statement of Directors

70 Corporate Governance Report

78 Statistics of Shareholding

79 Notice of Annual General Meeting

83 Proxy Form

13


The directors present their report together with the audited financial statements of the company and the consolidated financial statements of the group for the financial year ended June 30, 2006.

1 DIRECTORS

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

Mr Peh Kwee ChimMr Teo Teck ChuanDr Tan Cheng BockMr Loh Kee KongMr Lim Kwee SiahMs Tey Swee Nai, Nancy

In accordance with Article 110 of the articles of association, Mr Peh Kwee Chim and Dr Tan Cheng Bock retire by rotation and being eligible, offer themselves for re–election.

2 ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enable the directors of the company to acquire benefits by means of the acquisition of shares or debentures in the company or any other body corporate except for the Company’s Employees’ Share Option Scheme as detailed in paragraph 5.

Report of the Directors

14

3 DIRECTORS’ INTERESTS IN SHARES

The directors of the company holding office at the end of the financial year had no interests in the share capital of the company and related corporations as recorded in the register of directors’ shareholdings kept by the company under Section 164 of the Singapore Companies Act except as follows:

Shareholdings registered in the name

of directors

Shareholdings in which directors are deemed to

have an interest

PCI Limited At beginning of year

At end of year

At beginning of year

At end of year

Ordinary shares

Mr Peh Kwee Chim – – – 64,900,000 (a)

Mr Teo Teck Chuan 100,000 100,000 – –

Ms Tey Swee Nai, Nancy 50,000 50,000 – –

Options to subscribe for ordinary shares at an exercise price of S$1.09 each

Mr Teo Teck Chuan 120,000 120,000 – –


Mr Teo Teck Chuan 300,000 300,000 – –


Mr Teo Teck Chuan 300,000 300,000 – –

The directors’ interests as at July 21, 2006 were the same as those at end of the financial year.

Note:(a) Mr Peh Kwee Chim has a deemed interest in 64,900,000 shares by virtue of section 7(4) of the

Companies Act, as he holds 20.18% of the issued shares of Chuan Hup Holdings Limited.

Report of the Directors (continued)

15


4 DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS

Since the beginning of the financial year, no director has received or become entitled to receive a benefit which is required to be disclosed under Section 201(8) of the Singapore Companies Act, by reason of a contract made by the company or a related corporation with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interest except as disclosed in the financial statements.

5 SHARE OPTIONS

a) The PCI Limited Employees’ Share Option Scheme (the “1992 Scheme”) which was approved on October 30, 1992, expired on June 30, 2003. This has since been replaced by a new Share Option Scheme, the PCI Limited Employees’ Share Option Scheme 2003 (the “2003 Scheme”) which was approved by the shareholders of the company at an Extraordinary General Meeting held on November 12, 2003. Options granted under the 1992 Scheme which have not been exercised at the time of expiration of the 1992 Scheme shall remain valid until such a time where the options have been exercised or have lapsed, and will continue to be administered under the rules of the 1992 Scheme as approved on October 30, 1992 and amended on November 10, 2000.

b) During the financial year, no options to take up unissued shares in the company under the 2003 Scheme was granted.

c) Share options granted, exercised and cancelled during the financial year and outstanding as at June 30, 2006 pursuant to the 1992 Scheme were as follows:

No. of share options

Date of grantBalance as at July 1, 2005 Exercised Cancelled

Balance as at June 30, 2006

Subscription price Expiry Date

December 5, 2000 1,109,000 – – 1,109,000 S$1.09 December 4, 2010

April 18, 2001 1,725,000 250,000 – 1,475,000 S$0.53 April 17, 2011

September 30, 2002 670,000 20,000 – 650,000 S$0.27 September 29, 2012

3,504,000 270,000 – 3,234,000


16

5 SHARE OPTIONS (continued)

d) During the financial year, the following options in respect of unissued ordinary shares in the company were exercised by the following full time employees of the group under the 1992 Scheme.

Share options exercised

No. of employees No. of options


Non–directors 1 250,000


Non–directors 1 20,000

e) Under the 1992 Scheme, the details of share options granted to directors of the company are as follows:

Name

Aggregate options granted since

commencement of scheme

Aggregate options exercised since


Aggregate options expired since


Aggregate options outstanding as at

end of financial year under review

Mr Teo Teck Chuan 900,000 100,000 80,000 720,000

f) Statutory information regarding the options granted in 1999, 2000, 2001 and 2002 under the 1992 Scheme have been set out in the Reports of the Directors for the years ended June 30, 2000, 2001, 2002 and 2003.

Subject to Rule 11(b) and Rule 20 of the Scheme, a Grantee may exercise the option at any time during the Option Period. The Option Period commences after the first anniversary of the date of grant and expires before the 10th anniversary of the date of grant.

Under Rule 11(b), a grantee who has been employed by the group for less than 12 months as at the offering date may only exercise the option after the 2nd anniversary.

Under Rule 20, the option shall become void on the death of a Grantee, termination of employment of Grantee, where a Grantee does an act where he would be deprived of the legal or beneficial ownership of his option, where he is subject to a petition of bankruptcy or where a Grantee commits any breach of any terms of his option.


17


5 SHARE OPTIONS (continued)

g) Both the 1992 Scheme and the 2003 Scheme were administered by the Remuneration Committee. At the date of this report, the committee members are Dr Tan Cheng Bock, an independent non–executive director, Ms Tey Swee Nai, Nancy, an independent non–executive director and Mr Peh Kwee Chim, an executive director.

h) Non–executive directors, controlling shareholders or their associates are not eligible to participate in the 1992 Scheme and the 2003 Scheme.

i) No options have been granted to eligible participants which, in aggregate, represent 5% or more of the total number of new shares available under the 1992 Scheme and the 2003 Scheme and the Performance Share Plan, as detailed under the “Performance Share Plan” (“PSP”) collectively.

j) No options were granted under the 2003 Scheme during the financial year under review at a discount.

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

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

6 PERFORMANCE SHARE PLAN (“PSP”)

The PSP was approved and adopted by the shareholders at the Extraordinary General Meeting on November 10, 2000. Under the PSP, awards, which represent the right to receive the company’s ordinary shares free of charge upon the achievement of certain prescribed performance targets, will be given to those participants eligible to participate in the PSP. The aggregate number of ordinary shares to be issued pursuant to the PCI Employees’ Share Option Scheme and those to be awarded under the PSP, shall not exceed 15% of the issued share capital of the company on the day preceding the relevant grant date. The PSP is administered by the Remuneration Committee (“Committee”). The PSP shall continue to be in force at the discretion of the Committee subject to a maximum period of 10 years commencing November 10, 2000. Further details of the PSP are set out in the company’s Circular dated October 25, 2000.

No awards have been granted under the PSP since its commencement.

7 AUDIT COMMITTEE

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50, and the Singapore Exchange Securities Trading Limited Listing Manual. The functions carried out are detailed in the Corporate Governance Report.


18

8 AUDITORS

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

ON BEHALF OF THE DIRECTORS

...............................................Teo Teck ChuanAugust 25, 2006

...............................................Peh Kwee ChimAugust 25, 2006


19


We have audited the financial statements and consolidated financial statements of PCI Limited set out on pages 20 to 68 for the financial year ended June 30, 2006. These financial statements are the responsibility of the company’s directors. Our responsibility is to express an opinion on these financial statements based on our audit.

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

In our opinion,

a) the accompanying consolidated financial statements of the group and the financial statements 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 of the company as at June 30, 2006 and of the results, and changes in equity of the group and of the company and cash flows of the group for the year ended on that date; and

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

...............................................Deloitte & ToucheCertified Public Accountants

Ng Peck HoonPartner

SingaporeAugust 25, 2006

Auditors’ Report to the Members of PCI Limited

20

The Group The Company

Note 2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

ASSETS

Current assets:Cash and bank balances 6 19,597 27,174 16,055 25,312Trade receivables 7 28,881 11,725 28,465 10,884Other receivables and prepayments 8 967 567 608 359Due from subsidiaries 9 – – 8,938 3,541Derivative financial instruments 10 6 – 6 – Inventories 11 16,969 11,908 16,922 11,895Available–for–sale investments 12 14,406 1,923 14,406 1,923Total current assets 80,826 53,297 85,400 53,914

Non–current assets:Investments in subsidiaries 13 – – 4,285 4,399Investment in associate 14 – – – – Investment in joint venture 15 – – – – Property, plant and equipment 16 12,342 10,205 4,695 4,043Available–for–sale investments 12 6,191 21,844 6,100 21,753Other assets 17 294 294 294 294Total non–current assets 18,827 32,343 15,374 30,489

Total assets 99,653 85,640 100,774 84,403

LIABILITIES AND EQUITY

Current liabilities:Trade and other payables 18 45,901 32,476 42,456 28,121Due to subsidiaries 9 – – 4,842 1,603Derivative financial instruments 10 27 – 26 – Income tax payable 2,699 3,021 2,598 2,915Total current liabilities 48,627 35,497 49,922 32,639

Non–current liability:Deferred income tax 19 591 711 585 665

Capital and reserves:Share capital 20 44,552 29,668 44,552 29,668Reserves 5,814 19,737 5,715 21,431

Equity attributable to equity holders of the company 50,366 49,405 50,267 51,099Minority interests 69 27 – – Total equity 50,435 49,432 50,267 51,099

Total liabilities and equity 99,653 85,640 100,774 84,403

Balance Sheets June 30, 2006

See accompanying notes to financial statements.

21


The Group The CompanyNote 2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Revenue 22 166,022 144,044 162,269 139,708

Cost of sales:

Raw material and consumables (133,850) (113,841) (131,691) (111,708) Manufacturing expenses (14,510) (11,050) (17,395) (10,936) Other operating expenses (843) (781) – – Direct depreciation (1,994) (2,421) (1,236) (1,804)

(151,197) (128,093) (150,322) (124,448)

Gross profit 14,825 15,951 11,947 15,260

Other operating income 23 369 425 746 2,279

Other expenses: Business development expenses (4,052) (3,693) (4,059) (3,782) General and administrative expenses (4,055) (3,878) (3,629) (3,362) Indirect depreciation (233) (362) (157) (269) Impairment of goodwill – (10) – – Foreign exchange gain (loss) 268 (30) 232 (4)

(8,072) (7,973) (7,613) (7,417)

Finance costs (49) (35) (22) (18)

Profit before tax 24 7,073 8,368 5,058 10,104

Income tax expense 25 (1,055) (2,014) (1,040) (1,877)

Profit for the year 6,018 6,354 4,018 8,227

Minority interests (40) 6 – –

Profit attributable to shareholders 5,978 6,360 4,018 8,227

US Cents US Cents

Earnings per share

– Basic 26 3.01 3.21

– Diluted 26 3.01 3.20

Profit and Loss Statements


22

Share capital

Share premium

Investment revaluation

reserveHedging reserve

Dividend reserve

Currency translation

reserve

Retained earnings/

(Accumulated losses)

Attributable to equity of the company

Minority interest Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 Group

Balance at July 1, 2004 29,612 14,763 (1,810) – 2,784 1,396 (2,584) 44,161 202 44,363

Currency translation differences – – – – – 174 – 174 1 175

Transfer to profit and loss on disposal of available–for–sale investments (Note 12) – – (107) – – – – (107) – (107)

Increase in fair value of available–for–sale investments (Note 12) – – 1,510 – – – – 1,510 – 1,510

Net income recognised directly in equity – – 1,403 – – 174 – 1,577 1 1,578

Profit attributable to shareholders – – – – – – 6,360 6,360 (6) 6,354

Acquisition of shareholding for minority shareholders – – – – – – – – (170) (170)

Reclassification (Note 21) – – – – – 975 (975) – – –

Underprovision of dividends for 2004 – – – – 4 – (4) – – –

Dividends paid – – – – (2,788) – – (2,788) – (2,788)

Dividends proposed for 2005 – – – – 2,821 – (2,821) – – –

Issue of shares (Note 20) 56 39 – – – – – 95 – 95

Balance at June 30, 2005 29,668 14,802 (407) – 2,821 2,545 (24) 49,405 27 49,432

Effect on adoption of FRS 39 – – – (102) – – – (102) – (102)

Balance at July 1, 2005 29,668 14,802 (407) (102) 2,821 2,545 (24) 49,303 27 49,330

Statements of Changes in Equity Year ended June 30, 2006

23


Share capital

Share premium



Dividend reserve

Currency translation

reserve

Retained earnings/

(Accumulated losses)

Attributable to equity of the company

Minority interest Total

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000Group

Currency translation differences – – – – – (166) – (166) 2 (164)

Decrease in fair value of available–for–sale investment (Note 12) – – (1,164) – – – – (1,164) – (1,164)

Transfer to profit and loss on disposal of available– for–sale investments (Note 12) – – 47 – – – – 47 – 47

Transfer to profit and loss on cash flow hedge – – – 102 – – – 102 – 102

Losses on cash flow hedges – – – (21) – – – (21) – (21)

Net (expense) income recognised directly in equity – – (1,117) 81 – (166) – (1,202) 2 (1,200)

Profit attributable to shareholders – – – – – – 5,978 5,978 40 6,018

Dividends paid (Note 27) – – – – (2,821) – (974) (3,795) – (3,795)Issue of shares (Note 20) 40 42 – – – – – 82 – 82Adjustment arising from

abolition of par value of share (Note 20) 14,844 (14,844) – – – – – – – –

Balance at June 30, 2006 44,552 – (1,524) (21) – 2,379 4,980 50,366 69 50,435

Statements of Changes in Equity Year ended June 30, 2006 (continued)


24

Share capitalShare

premium



Dividend reserve

Retained earnings/(Accumulated

losses)

Attributable to equity of the

company

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Company

Balance at July 1, 2004 29,612 14,763 (1,810) – 2,784 (1,187) 44,162

Increase in fair value of available–for–sale

investments (Note 12) – – 1,510 – – – 1,510

Transfer to profit and loss on disposal of available– for–sale investments (Note 12) – – (107) – – – (107)

Net income recognised directly in equity – – 1,403 – – – 1,403

Profit attributable to shareholders – – – – – 8,227 8,227

Underprovision of dividends for 2004 – – – – 4 (4) –

Dividends paid – – – – (2,788) – (2,788)

Dividends proposed for 2005 – – – – 2,821 (2,821) –

Issue of shares (Note 20) 56 39 – – – – 95

Balance at June 30, 2005 29,668 14,802 (407) – 2,821 4,215 51,099

Effect on adoption of FRS 39 – – – (102) – – (102)

Balance at July 1, 2005 29,668 14,802 (407) (102) 2,821 4,215 50,997



25


Share capitalShare

premium



Dividend reserve

Retained earnings/(Accumulated

losses)

Attributable to equity of the

company

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

Company

Decrease in fair value of available–for–sale investment (Note 12) – – (1,164) – – – (1,164)

Transfer to profit and loss on disposal of available–for– sale investments (Note 12) – – 47 – – – 47

Transfer to profit and loss on cash flow hedge – – – 102 – – 102

Losses on cash flow hedges – – – (20) – – (20)

Net income recognised directly in equity – – (1,117) 82 – – (1,035)

Profit attributable to shareholders – – – – – 4,018 4,018

Dividends paid (Note 27) – – – – (2,821) (974) (3,795)Issue of shares (Note 20) 40 42 – – – – 82Adjustment arising from

abolition of par value of share (Note 20) 14,844 (14,844) – – – – –

Balance at June 30, 2006 44,552 – (1,524) (20) – 7,259 50,267



26

2006 2005

US$’000 US$’000

Cash flows from operating activities:

Profit before income tax 7,073 8,368

Adjustments for :

Depreciation expense 2,227 2,783

Impairment of goodwill from additional investment in subsidiaries – 10

Gain on disposal of plant and equipment (9) (41)

Loss (Gain) on disposal of available–for–sale investments 47 (107)

Loss on liquidation of subsidiary 37 –

Loss on liquidation of investment in joint venture company 2 –

Interest income (659) (672)

Operating profit before working capital changes 8,718 10,341

Trade receivables (17,156) 2,803

Other receivables and prepayments (401) 107

Inventories (5,061) 5,241

Trade and other payables 13,426 (6,938)

Cash (used in) generated from operations (474) 11,554

Interest received 659 672

Income tax paid (1,499) (3,218)

Net cash (used in) from operating activities (1,314) 9,008

Cash used in investing activities:

Proceeds on disposal of plant and equipment 11 79

Purchase of property, plant and equipment (4,050) (3,476)

Acquisition of additional investment in subsidiaries – (180)

Proceeds on maturity of available–for–sale investments 2,006 –

Liquidation of subsidiary (37) –

Liquidation of investment in joint venture company (2) –

Proceeds on disposal of available–for–sale investments – 15,917

Acquisition of available–for–sale investments – (15,173)

Net cash used in investing activities (2,072) (2,833)

Consolidated Cash Flow StatementYear ended June 30, 2006

27


2006 2005

US$’000 US$’000

Cash used in financing activities:

Dividend paid (3,795) (2,788)

Proceeds from issue of shares 82 95

Net cash used in financing activities (3,713) (2,693)

Net effect of exchange rate changes in consolidating subsidiaries (478) 149

Net (decrease) increase in cash (7,577) 3,631

Cash and cash equivalents at beginning of year 27,174 23,543

Cash and cash equivalents at end of year, represented by cash and bank balances 19,597 27,174

Consolidated Cash Flow StatementYear ended June 30, 2006 (continued)


28

1 GENERAL

The company (Registration No. 198804482N) is incorporated in the Republic of Singapore, with its registered office and principal place of business at 386 Jalan Ahmad Ibrahim, Singapore 629156. The company is listed on the Singapore Exchange Securities Trading Limited. The financial statements are expressed in United States dollars as majority of the group’s and the company’s transactions are denominated in United States dollars.

The principal activities of the company are investment holding and providing electronics manufacturing services.

The principal activities of the subsidiaries are disclosed in Note 13 to the financial statements.

The financial statements of the company and the consolidated financial statements of the group for the year ended June 30, 2006 were authorised for issue by the Board of Directors on August 25, 2006.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a) BASIS OF ACCOUNTING – The financial statements are prepared in accordance with the historical cost convention, except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”).

In the current financial year, the Group and the Company have adopted all the new and revised FRSs and Interpretations of FRS (“INT FRS”) issued by the Council on Corporate Disclosure and Governance that are relevant to their operations and effective for annual periods beginning on or after January 1, 2005. The adoption of these new/revised FRSs and INT FRSs has no material effect on the financial statements except as disclosed below and in the notes to financial statements.

FRS 39 – Financial Instruments: Recognition and Measurement

FRS 39 requires the recognition and measurement of financial assets and liabilities. The new accounting standard moves measurement from a cost base to a fair value base for certain categories of financial assets and liabilities. The change in accounting policy has been accounted for prospectively in accordance with transitional provision of FRS 39. The adoption of FRS 39 has resulted in recognition of derivative financial instruments (liability) with fair value of $102,000 as at July 1, 2005 and recognised on the balance sheet and the resulting adjustments transferred to the hedging reserve. Derivative financial instruments were carried at fair value at the balance sheet date. As at June 30, 2006, the group and the company derivative financial instruments were fair valued at $6,000 (assets) and $27,000 (liabilities) and $6,000 (assets) and $26,000 (liabilities) respectively. The fair value changes of the hedging instruments that were determined to be effective, are recognised in the hedging reserve in equity.

Notes to Financial StatementsJune 30, 2006

29


2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

At the date of authorisation of these financial statements, the directors anticipate that the adoption of the following FRSs, INT FRSs and amendments to the FRSs that were issued but not yet effective until future periods will not have a material impact on the financial statements of the group and the company in the period of initial application:

FRS 40 – Investment Property

FRS 106 – Exploration for and Evaluation of Mineral Resources

FRS 107 – Financial Instruments: Disclosures

INT FRS 104 – Determining whether an Arrangement contains a Lease

INT FRS 105 – Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

INT FRS 106 – Liabilities Arising from Participation in a Specific Market – Waste Electrical and Electronic Equipment

INT FRS 107 – Applying the Restatement Approach under FRS 29 Financial Reporting In Hyperinflationary Economies

INT FRS 108 – Scope of FRS 102 Share–based Payment

INT FRS 109 – Reassessment of Embedded Derivatives

Amendments to FRS 1 Presentation of Financial Statements on Capital Disclosures.

Amendments to FRS 19 Employee Benefits on Actuarial Gains and Losses, Group Plans and Disclosures.

Amendments to FRS 21 The Effects of Changes in Foreign Exchange Rates on Net Investment in a Foreign Operation.

Amendments to FRS 39 Financial Instruments: Recognition and Measurement on hedge accounting provisions, fair value option and financial guarantee contracts.

Amendments to FRS 101 First–time Adoption of Financial Reporting Standards on comparative disclosures for FRS 106 Exploration for and Evaluation of Mineral Resources.

Amendments to FRS 104 Insurance Contracts on financial guarantee contracts.

Consequential amendments were also made to various standards as a result of these new/revised standards.

Notes to Financial Statements (continued)June 30, 2006

30


b) BASIS OF CONSOLIDATION – The consolidated financial statements incorporate the financial statements of the company and entities controlled by the company (its subsidiaries) made up to June 30 each year. Control is achieved when the company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated profit and loss statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with those used by other members of the group. All intra–group transactions, balances, income and expenses are eliminated on consolidation.

Minority interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination (see below) and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover its share of those losses.

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

c) BUSINESS COMBINATIONS – The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the group in exchange for control of the acquiree, plus any costs directly attributable to the business combination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS 103 are recognised at their fair values at the acquisition date.

Goodwill arising on acquisition is recognised as an asset and 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 identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in the consolidated profit and loss statement.

The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.


31



d) FINANCIAL INSTRUMENTS – Financial assets and financial liabilities are recognised on the group’s balance sheet when the group becomes a party to the contractual provisions of the instrument.

Trade and other receivables

Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in the profit and loss statement when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

Investments

Investments are recognised and derecognised on a trade date basis where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value and in the case of investments not at fair value through profit and loss, plus directly attributable transaction costs.

At subsequent reporting dates, investments classified as available–for–sale are measured at subsequent reporting dates at fair value. Gains and losses arising from changes in fair value are recognised directly in equity, until the security is disposed of or is determined to be impaired, at which time the cumulative gain or loss previously recognised in equity is included in the profit or loss for the period. Impairment losses recognised in profit or loss for equity investments classified as available–for–sale are not subsequently reversed through profit or loss. Impairment losses recognised in profit or loss for debt instruments classified as available–for–sale are subsequently reversed if an increase in the fair value of the instrument can be objectively related to an event occurring after the recognition of the impairment loss.

Cash and cash equivalents

Cash and bank balances comprise of cash on hand and demand deposits and other short–term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

Financial liabilities and equity

Financial liabilities and equity instruments issued by the group are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out below.


32


Trade payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

Derivative financial instruments and hedge accounting

The group’s activities expose it primarily to the financial risks of changes in foreign exchange rates.

The group uses derivative financial instruments (primarily foreign currency forward contracts) to hedge its risks associated with foreign currency fluctuations relating to certain firm forecasted transactions. The group designates these as cash flow hedges of foreign exchange rate risk.

The use of financial derivatives is governed by the group’s policies approved by the board of directors, which provide written principles on the use of financial derivatives consistent with the group’s risk management strategy. The group does not use derivative financial instruments for speculative purposes.

Derivative financial instruments are initially measured at fair value on the contract date, and are remeasured to fair value at subsequent reporting dates.

Changes in the fair value of derivative financial instruments that are designated and effective as hedges of future cash flows are recognised directly in equity and the ineffective portion is recognised immediately in profit or loss. If the cash flow hedge of a forecast transaction results in the recognition of an asset or a liability, then, at the time the asset or liability is recognised, the associated gains or losses on the derivative that had previously been recognised in equity are included in the initial measurement of the asset or liability. For hedges that do not result in the recognition of an asset or a liability, amounts deferred in equity are recognised in profit or loss in the same period in which the hedged item affects profit or loss.

Changes in the fair value of derivative financial instruments that do not qualify for hedge accounting are recognised in profit or loss as they arise.

Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. At that time, for forecast transactions, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to profit or loss for the period.

Derivatives embedded in other financial instruments or other non–financial host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contract and the host contract is not carried at fair value with unrealised gains or losses reported in profit or loss.


33



e) LEASES – Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The group as lessor

Rental income from operating leases is recognised on a straight–line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight–line basis over the lease term.

The group as lessee

Rental payable under operating leases are recognised on a straight–line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight–line basis over the lease term.

f) INVENTORIES – Inventories are measured at the lower of standard cost (which approximate actual cost on a weighted average basis) and net realisable value. Cost comprises direct materials, direct labour costs and those production overheads, where applicable, that have been incurred in bringing the inventories to that present location and condition. Net realisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing, selling and distribution.

In arriving at net realisable values, allowances are made where necessary for obsolete, slow–moving and defective stocks.

g) ASSOCIATES – An associate is an entity over which the group has significant influence and is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

In the financial statements of the company, investment in associates is carried at cost less any impairment in net recoverable value that has been recognised in the profit and loss statements.

The results and assets and liabilities of associates are incorporated in the financial statements using the equity method of accounting. Under the equity method, investments in associates are carried in the consolidated balance sheet at cost adjusted for post–acquisition changes in the group’s share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the group’s interest in that associate (which includes any long–term interests that, in substance, form part of the group’s net investment in the associate) are not recognised.


34


Any excess of the cost of acquisition over the group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of the associate recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying amount of the investment and is assessed for impairment as part of the investment. Any excess of the group’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognised immediately in the consolidated profit and loss statement.

Where a group entity transacts with an associate of the group, profits and losses are eliminated to the extent of the group’s interest in the relevant associate.

h) INTERESTS IN JOINT VENTURES – A joint venture is a contractual arrangement whereby the group and other parties undertake an economic activity that is subject to joint control that is when the strategic financial and operating policy decisions relating to the activities require the unanimous consent of the parties sharing control.

In the company financial statements, investment in joint venture is carried at cost less any impairment in net recoverable value that has been recognised in the profit and loss statements.

Where a group entity undertakes its activities under joint venture arrangements directly, the group’s share of jointly controlled assets and any liabilities incurred jointly with other venturers are recognised in the financial statements of the relevant entity and classified according to their nature. Liabilities and expenses incurred directly in respect of interests in jointly controlled assets are accounted for on an accrual basis. Income from the sale or use of the group’s share of the output of jointly controlled assets, and its share of joint venture expenses, are recognised when it is probable that the economic benefits associated with the transactions will flow to/from the group and their amount can be measured reliably.

Joint venture arrangements that involve the establishment of a separate entity in which each venturer has an interest are referred to as jointly controlled entities. The group reports its interests in jointly controlled entities using equity accounting.

Any goodwill arising on the acquisition of the group’s interest in a jointly controlled entity is accounted for in accordance with the group’s accounting policy for goodwill arising on the acquisition of an associate.

Where the group transacts with its jointly controlled entities, unrealised profits and losses are eliminated to the extent of the group’s interest in the joint venture.

i) PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are carried at cost, less accumulated depreciation and any impairment loss where the recoverable amount of the asset is estimated to be lower than its carrying amount.

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the profit and loss statements.


35



Depreciation is charged so as to write off the cost of assets over their estimated useful lives, using the straight–line method, on the following bases:

Leasehold land, buildings and improvements – 2% to 20%Plant and equipment – 10% to 331/3%

Fully depreciated assets still in use are retained in the financial statements.

j) GOODWILL – Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of a subsidiary recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.

For the purpose of impairment testing, goodwill is allocated to each of the group’s cash–generating units expected to benefit from the synergies of the combination. Cash–generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash–generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro–rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

k) IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS EXCLUDING GOODWILL – At each balance sheet date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). If the recoverable amount of an asset (or cash–generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash–generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profit and loss statement.

When an impairment loss subsequently reverses, the carrying amount of the asset (or cash–generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash–generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the profit and loss statement.


36


l) PROVISIONS – Provisions are recognised when the group has a present obligation as a result of a past event, and it is probable that the group will be required to settle that obligation. Provisions are measured at the director’s best estimate of the expenditure required to settle to obligation at the balance sheet date, and are discounted to present value where the effect is material.

m) REVENUE RECOGNITION – Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and sales related taxes. Revenue from the sale of goods is recognised when significant risks and rewards of ownership are transferred to the buyer and the amount of revenue and the costs of the transaction can be measured reliably.

Sales of goods are recognised when goods are delivered and title has passed.

Rental income is recognised on a straight–line basis over the term of the relevant lease.

Revenue arising from the disposal of available–for–sale investments is recognised upon sale of the investment.

Interest income is accrued on a time proportionate basis, by reference to the principal outstanding and at the interest rate applicable, on an effective yield basis.

n) RETIREMENT BENEFIT COSTS – Payments to defined contribution retirement benefit plans are charged as an expense as they fall due. Payments made to state–managed retirement benefit schemes, such as the Singapore Central Provident Fund, are dealt with as payments to defined contribution plans where the groups’ obligations under the plans are equivalent to those arising in a defined contribution benefit plan.

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses that exceed 10% of the greater of the present value of the group’s defined benefit obligation and the fair value of plan assets are amortised over the expected average remaining working lives of the participating employees. Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight–line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service cost, and as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to unrecognised actuarial losses and past service cost, plus the present value of available refunds and reductions in future contributions to the plan.

o) EMPLOYEE LEAVE ENTITLEMENT – Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.


37



p) INCOME TAX – Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the profit and loss statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are not taxable or tax deductible. The group’s liability for current tax is calculated using tax rates that have been enacted in countries where the company and its subsidiaries operate by the balance sheet date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interests in joint ventures, except where the group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.

q) SHARE-BASED PAYMENTS – The company issued equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the group’s and the company’s estimate of shares that will eventually vest and adjusted for the effect of non market-based vesting conditions.

For share options granted prior to 22 November 2002, and fully vested as at 1 July 2005, the share option are not recognised as an expense.


38


r) FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION – The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). The consolidated financial statements of the group and the balance sheet of the company are presented in United States dollars, which is the functional currency of the company, and the presentation currency for the consolidated financial statements. In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non–monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non–monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or loss for the period. Exchange differences arising on the retranslation of non–monetary items carried at fair value are included in profit or loss for the period except for differences arising on the retranslation of non–monetary items in respect of which gains and losses are recognised directly in equity. For such non–monetary items, any exchange component of that gain or loss is also recognised directly in equity.

In order to hedge its exposure to certain foreign exchange risks, the group enters into forward contracts and options (please see above for details of the group’s accounting policies in respect of such derivative financial instruments).

For purpose of presenting consolidated financial statements, the assets and liabilities of the group’s foreign operations (including comparatives) are expressed in United States dollars using exchange rates prevailing on the balance sheet date. Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the group’s translation reserve. Such translation differences are recognised in profit or loss in the period in which the foreign operation is disposed of.

On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary items that, in substance, form part of the net investment in foreign entities), and of borrowings and other currency instruments designated as hedges of such investments, are taken to the foreign currency translation reserve.

Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the closing rate.


39


3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Critical judgements in applying the entity’s accounting policies

In the process of applying the group’s accounting policies which are described in Note 2 above, the management is of the opinion that there are no critical judgements involved that have a significant effect on the amounts recognised in the financial statements. Key sources of estimation uncertainty

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

Impairment in investment in subsidiaries, associates and joint venture

Determining whether investments in subsidiaries, associates and joint venture are impaired requires an estimation of the fair values less cost to sell and value in use of those investments. The process requires the company to estimate the future cash–flows expected from the cash–generating units and an appropriate discount rate in order to calculate the present value of the future cash–flows. Management has evaluated the recoverability of those investments based on such estimates.

Allowance for inventory

The group and the company review its inventory levels in order to identify slow moving and obsolete merchandise. Where the group and company identifies items of inventory that have a market price that is lower than its carrying amount, the group and the company estimates the amount of inventory loss as allowance on inventory. Market price is generally the merchandise selling price quoted from the market of similar items.

Allowance for doubtful debts

The policy for allowance for doubtful debts of the group and the company are based on the evaluation of collectibility and ageing analysis of accounts and on management’s estimates. A considerable amount of estimation is required in assessing the ultimate realisation of these receivables, including the current worthiness and the past collection history of each customer.


40

4 FINANCIAL RISKS AND MANAGEMENT

The group’s overall risk management programme seeks to minimise potential adverse effects on the financial performance of the group. The policies for managing specific risks are summarised below:

a) Credit risk

The group’s credit risk is primarily attributable to its cash, trade receivables and other receivables. Cash is placed with credit worthy financial institutions. The group has adopted stringent procedures in extending credit terms to customers and monitoring its credit risk.

The group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics.

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

b) Interest rate risk

The group’s exposure to market risk for changes in interest rates relates primarily to its portfolio of investments. The group does not use derivative financial instruments to hedge against such risk exposure.

c) Foreign exchange risk

The group’s foreign currency exposures arise mainly from the exchange rate movements of the Singapore dollar and the Indonesian Rupiah vis–à–vis the United States dollar, which is the functional currencies for the group entities.

The exposure is managed primarily by natural hedges that arise from offsetting assets and liabilities that are denominated in foreign currencies. The group may enter into derivative foreign exchange contracts, if necessary, to hedge against foreign exchange risk.

d) Liquidity risk

Liquidity risk refers to the risk in which the group is unable to meet its short–term obligations and this arises from the possibility that customers may not be able to settle their obligations within the normal terms of trade. Liquidity risk is managed by matching the payment and receipt cycle. Management is of the opinion that liquidity risk is minimal as the group has sufficient funds generated through operations to meet funding requirements and adequate lines of credit are also maintained to ensure the necessary liquidity.


41


4 FINANCIAL RISKS AND MANAGEMENT (continued)

e) Fair value of financial assets and financial liabilities

It is not practicable within the constraint of cost to reliably determine the fair values of other unquoted equity shares of $91,000 (2005 : $91,000) (Note 12). These instruments are recorded at cost, subject to impairment in value.

The carrying amounts of other financial assets and financial liabilities reported in the balance sheet approximate the fair value of those assets and liabilities.

5 RELATED COMPANY AND RELATED PARTY TRANSACTIONS

The company’s single largest corporate shareholder is Chuan Hup Holdings Limited, incorporated in the Republic of Singapore.

Related companies in these financial statements refer to members of PCI Limited’s group of companies.

Some of the company’s transactions and arrangements are between members of the group and the effect of these on the basis determined between the parties is reflected in these financial statements. The intercompany balances are unsecured, interest–free and repayable on demand unless otherwise stated. Significant transactions with subsidiaries:

The Company2006 2005

US$’000 US$’000

Rental expense 269 475Rental income (320) (323)Marketing expense 305 305Processing fee expense 13,167 6,606


42

5 RELATED COMPANY AND RELATED PARTY TRANSACTIONS (continued)

Related parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions.

Significant related parties transactions:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Rental income (286) (279) – –

Project start–up expense 528 479 528 479

6 CASH AND BANK BALANCES


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Cash at bank 2,299 4,145 985 3,240

Fixed deposits 17,298 23,029 15,070 22,072

Total 19,597 27,174 16,055 25,312

Bank balances and cash comprise of cash and short–term bank deposits with an original maturity of three months or less. The carrying amounts of these assets approximate their fair values.

Fixed deposits held during the year bear interest at rate of 1.81% to 10.40% (2005 : 0.50% to 6.50%) per annum and of a tenure of approximately 30 days (2005 : 30 days).

The group and company’s cash and bank balances that are not denominated in the functional currency of the respective entities are as follows:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Singapore dollars 1,774 16,251 1,488 15,944

Euro – 52 – 52

Chinese renminbi 450 195 – –

Indonesian rupiahs 2,266 1,040 – –

Sterling pound – 148 – 148


43


7 TRADE RECEIVABLES


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Outside parties 28,972 11,816 28,556 10,975

Less: Impairment allowance (91) (91) (91) (91)

Net 28,881 11,725 28,465 10,884

An impairment allowance has been made for estimated irrecoverable amounts from the sale of goods to third parties of $91,000 (2005 : $91,000). This allowance has been determined by reference to past default experience.

The group and company’s trade receivables that are not denominated in the functional currency of the respective entities are as follow:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Singapore dollars 114 129 2 –


8 OTHER RECEIVABLES AND PREPAYMENTS


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Recoverables 626 369 591 348

Prepayments and deposits 338 182 17 10

Others 3 16 – 1

Total 967 567 608 359


44

8 OTHER RECEIVABLES AND PREPAYMENTS (continued)

The group and company’s other receivables and prepayments that are not denominated in the functional currency of the respective entities are as follow:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Singapore dollars 840 487 608 359


9 DUE FROM (TO) SUBSIDIARIES

The Company

2006 2005

US$’000 US$’000

Amount due from subsidiaries 11,115 5,780

Less: Impairment allowance (2,177) (2,239)

Net 8,938 3,541

Amount due from subsidiary (non–trade) 4,544 4,544

Less: Impairment allowance (4,544) (4,544)

Net – –

Amount due to subsidiaries (4,842) (1,603)

Net 4,096 1,938

The above balances are trade in nature, interest free and are repayable on demand, unless otherwise stated.

During the year, the company carried out a review of the recoverable amount from the sale of goods to the subsidiaries. An impairment allowance has been made for the estimated irrecoverable amounts of $2,177,000 (2005: $2,239,000). The recoverable amounts have been determined based on the present value of estimated discounted future cash flows.


45


9 DUE FROM (TO) SUBSIDIARIES (continued)

Amount due from (to) subsidiaries that are not denominated in the functional currency of the company are as follow:

The Company

2006 2005

US$’000 US$’000

Singapore dollars 6,166 4,454

Indonesian rupiahs 2,144 1,151

10 DERIVATIVE FINANCIAL INSTRUMENTS


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Forward foreign exchange contracts:

– assets 6 – 6 –

– liabilities (27) – (26) –

(21) – (20) –

The group utilises currency derivatives to hedge significant future transactions and cash flows. The group is party to a variety of forward foreign exchange contracts and options in the management of its exchange rate exposures. The instruments purchased are primarily denominated in the currencies of the group’s principal markets. At the balance sheet date, the total notional amount of outstanding forward foreign exchange contracts to which the group is committed are as follows:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Forward foreign exchange contracts

– Singapore dollars 3,000 – 3,000 –

– Indonesian rupiahs 6,200 2,000 – 2,000


46

10 DERIVATIVE FINANCIAL INSTRUMENTS (continued) In addition, the group had forward call options to sell $8,000,000 (2005 : $10,400,000) and $Nil (2005 : $1,000,000) for notional amounts of S$13,010,000 (2005 : S$17,435,500) and IDRNil (2005 : IDR9,517,500,000) respectively.

As at June 30, 2006, the net fair value of the group’s and company’s currency derivatives is estimated to be approximately $21,000 (2005 : $102,000) and $20,000 (2005 : $102,000) respectively. These amounts are based on quoted market prices for equivalent instruments at the balance sheet date. The fair value of currency derivatives that are designated and effective as cash flow hedges amounting to $21,000 and $20,000 for the group and the company have been deferred in equity. As the group had not adopted FRS 39 for the preceding year, the derivatives and the respective hedges amounting to $102,000 were not recognised on the balance sheet for the group and the company as at June 30, 2005. Adjustments were prospectively made to the opening balances in accordance with the transitional provisions of FRS 39.

Amount of $102,000 (2005 : $Nil) has been transferred to the profit and loss statement of the group and the company in respect of contracts matured during the year.

11 INVENTORIES


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Raw materials 11,218 6,866 11,182 6,853

Work in progress 3,837 2,913 3,830 2,913

Finished goods 1,914 2,129 1,910 2,129

16,969 11,908 16,922 11,895


47


12 AVAILABLE–FOR–SALE INVESTMENTS


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Mature within 12 months:

Quoted corporate fixed rate notes,

at fair value 14,406 1,923 14,406 1,923

Mature after 12 months:

Unquoted investments

At cost:

Unquoted equity shares 538 538 447 447

Impairment loss (447) (447) (447) (447)

Net 91 91 – –

Unquoted corporate floating rate notes 236 271 236 271

Impairment loss (236) (271) (236) (271)

Net – – – –

Quoted corporate fixed rate notes,

at fair value 6,100 21,753 6,100 21,753

Total available–for–sale investments 6,191 21,844 6,100 21,753

Movement in the investment revaluation reserve:The Group and the Company

2006 2005

US$’000 US$’000

At beginning of financial year (407) (1,810)

(Decrease) Increase during the financial year (1,164) 1,510

Transfer to profit and loss on disposal of available–for–sale investments 47 (107)

At end of financial year (1,524) (407)

The impairment allowance is made due to losses incurred by the unquoted equity investment in the past which cumulatively are not anticipated to be recovered from future cash flows based on information available at the balance sheet date. The impairment allowance is based on information available at the balance sheet date.


48

12 AVAILABLE–FOR–SALE INVESTMENTS (continued) The investments above include investments in corporate fixed and floating rate notes that offer the group and the company the opportunity for return through interest income.

The fair value of quoted investments are based on the quoted closing market prices on the last market day of the financial year.

The fair values of the quoted investments at balance sheet date approximate their carrying amounts.

The investments in quoted and unquoted debt securities have effective interest rates ranging from 3.0% to 6.0% (2005 : 3.0% to 6.0%) per annum with the following maturity dates:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Within one year 14,406 1,923 14,406 1,923

In the second to fifth years inclusive – 14,815 – 14,815

After five years 6,191 7,029 6,100 6,938

20,597 23,767 20,506 23,676

13 INVESTMENTS IN SUBSIDIARIES

The Company

2006 2005

US$’000 US$’000

Unquoted equity shares, at cost 11,301 11,415

Impairment loss (7,016) (7,016)

Net 4,285 4,399


49


13 INVESTMENTS IN SUBSIDIARIES (continued)

The subsidiaries of the group are set out below:

Name of subsidiary

Country of incorporation and

operation Cost of investment

Effective equity interest held by

the group Principal activities

2006 2005 2006 2005

US$’000 US$’000 % %

Subsidiaries of PCI Limited

Printed CircuitsInternationalIncorporated (1) (2)

United States of America

6,467 6,467 100 100 Investment holding and provision of support on electronics manufacturing services.

Printed CircuitsInternational(PCI) Phil., Inc. (1)

Philippines 702 702 60 60 Dormant.

P. T. PrimaCircuitamaIndonesia (2)

Indonesia 213 213 92.5 92.5 Provision of electronics manufacturing services for the group.

P.T. PCI Elektronik Internasional (2)

Indonesia 250 250 100 100 Provision of electronics manufacturing services for the group.

Ventrade Technologies Pte Ltd (3)

Singapore – 114 – 100 In the process of liquidation.

Pacific Gain Holding Limited (1) (2)

British Virgin Islands * * 100 100 Investment holding.

PCI China Pte Ltd Singapore 600 600 100 100 Investment holding.

Quijul Pte Ltd Singapore * * 100 100 Rental of property.

* Cost of investment at US$1.


50


Name of subsidiary




the group Principal activities

2006 2005 2006 2005

US$’000 US$’000 % %

Subsidiaries of Printed CircuitsInternational Incorporated

Printed Circuits International Private Limited

Singapore – – 100 100 Rendering of estate management services to related company.

PCI Displays Private Limited

Singapore – – 100 100 Provision of electronics manufacturing services.

Subsidiaries of Pacific Gain Holding Limited

Polymicro Corporation (Singapore) Pte Ltd (4)

Singapore 3,069 3,069 100 100 Investment holding.

Polymicro Precision Technology (Thailand) Co. Ltd (5)

Thailand – – 100 100 Dormant.

Subsidiaries of PCI China Pte Ltd

PCI-Gaozhi (Shanghai) Electronic Company Ltd (6)

China – – 90 90 Provision of electronics manufacturing services to the group.

PCI-Shanghai Electronic Company Ltd. (6)

China – – 100 – Provision of electronics manufacturing services to the group.

Total 11,301 11,415


51



All the companies are audited by Deloitte & Touche, Singapore except for the subsidiaries that are indicated as follows:

(1) Not required to be audited by law in its country of incorporation.

(2) Audited by another firm of auditors (Drs. Bernardi & Co. Registered Public Accountants Jakarta, Indonesia) for the financial year ended June 30, 2006. However, audited by Deloitte & Touche, Singapore for consolidation purposes.

(3) The subsidiary is currently in the process of being liquidated.

(4) The investment represents 8% equity interest and 5,000,000 redeemable convertible preference shares held by the company. The remaining 92% equity interest is held by Pacific Gain Holding Limited, a subsidiary of the company.

(5) Audited by another firm of auditors (V.A.T. Accounting) for the six months financial period ended December 31, 2005. However, audited by Deloitte & Touche, Singapore for the financial years ended June 30, 2005 and 2006 for consolidation purposes.

(6) Audited by another firm of auditors (Shanghai Linfang Certified Public Accountants, Co, Ltd. Shanghai, China) for the six months financial period ended December 31, 2005. However, audited by Deloitte & Touche Singapore for the finanical years ended June 30, 2005 and 2006 for consolidation purposes.


52

14 INVESTMENT IN ASSOCIATE


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Unquoted equity shares, at cost 551 551 551 551

Share of post–acquisition accumulated losses

(551) (551) – –

Impairment loss – – (551) (551)

Net – – – –

The associate of the group is set out below:

Name of associate




the group Principal activity

2006 2005 2006 2005

US$’000 US$’000 % %

First Pacific Realty Partners Corporation (1)

Philippines 551 551 29 29 Property investment

(1) Audited by another firm of auditors, Cesar G. Avila, Jr.

Summarised financial information in respect of the group’s associate is set out below:

2006 2005

US$’000 US$’000

Total assets 164 154

Total liabilities (57) (64)

Net assets 107 90

Group’s share of associates’ net assets 31 26

Revenue 26 33

Profit for the year 3 8

Group’s share of associates’ profit for the year 1 2

The group has not recognised profit amounting to $1,000 (2005 : $2,000) for First Pacific Realty Partners Corporation as such profit is insignificant. The accumulated profit not recognised were $3,000 (2005 : $2,000).


53


15 INVESTMENT IN JOINT VENTURE

The Group and The Company

2006 2005

US$’000 US$’000

Unquoted equity shares, at cost – *

* Cost of investment at US$1.

Name of joint ventureCountry of incorporation

and operation

Effective equity interest held

by group Principal activity

2006 2005

% %

PCI Avias Pte Ltd (1) Singapore – 50 Liquidated.

(1) FY 2005 audited by Deloitte & Touche, Singapore.

Summarised financial information in respect of the group’s joint venture is set out below:

2006 2005

US$’000 US$’000

Total assets – 2

Total liabilities – –

Net assets – 2

Revenue – 34

Expenses – 32

Proportionate consolidation of the joint venture was performed on the above amount instead of equity accounting due to immateriality.


54

16 PROPERTY, PLANT AND EQUIPMENT

Leasehold land, buildings and

improvementsPlant and

equipment Total

US$’000 US$’000 US$’000

The Group

Cost:

At July 1, 2004 6,821 17,881 24,702

Translation adjustment 65 (13) 52

Additions 656 2,820 3,476

Disposals (89) (1,034) (1,123)

At July 1, 2005 7,453 19,654 27,107

Translation adjustment 393 17 410

Additions 530 3,520 4,050

Disposals – (2,430) (2,430)

At June 30, 2006 8,376 20,761 29,137

Accumulated depreciation:

At July 1, 2004 750 14,474 15,224

Translation adjustment (3) (17) (20)

Depreciation 620 2,163 2,783

Disposals (89) (996) (1,085)

At July 1, 2005 1,278 15,624 16,902

Translation adjustment 80 13 93

Depreciation 677 1,550 2,227

Disposals – (2,427) (2,427)

At June 30, 2006 2,035 14,760 16,795

Carrying amount:

At beginning of financial year 6,175 4,030 10,205

At end of financial year 6,341 6,001 12,342

Details of the leasehold property of the group:

Description Lease term Location Area

Leasehold office cum factory building

60 years from July 1, 1966 322 / 386 / 388 / 390 Jalan Ahmad Ibrahim Singapore 629151 / 629156 / 629157 / 629155

76,500 square metres


55


16 PROPERTY, PLANT AND EQUIPMENT (continued)

Plant and equipment Total

US$’000 US$’000

The Company

Cost:

At July 1, 2004 16,850 16,850

Additions 2,764 2,764

Disposals (763) (763)

At July 1, 2005 18,851 18,851

Additions 2,045 2,045

Disposals (2,404) (2,404)

At June 30, 2006 18,492 18,492

Accumulated depreciation:

At July 1, 2004 13,459 13,459

Depreciation 2,073 2,073

Disposals (724) (724)

At July 1, 2005 14,808 14,808

Depreciation 1,393 1,393

Disposals (2,404) (2,404)

At June 30, 2006 13,797 13,797

Carrying amount:

At beginning of financial year 4,043 4,043

At end of financial year 4,695 4,695

17 OTHER ASSETS

The Group and the Company

2006 2005

US$’000 US$’000

Club membership at cost 373 373

Impairment loss (79) (79)

Net 294 294


56

18 TRADE AND OTHER PAYABLES


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Trade payables 28,318 14,344 27,286 13,568

Accruals 17,583 18,132 15,170 14,553

Total 45,901 32,476 42,456 28,121

Trade and other payables that are not denominated in the functional currency of the respective entities are as follow:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Singapore dollars 6,543 6,348 5,738 5,773

Indonesian rupiahs 1,432 2,669 – –


Australian dollars 99 99 99 99

19 DEFERRED INCOME TAX


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

At beginning of financial year 711 447 665 400

(Reversal) Charge for the financial year (Note 25)

(120) 265 (80) 265

Translation adjustment – (1) – –

At end of financial year 591 711 585 665

This balance comprises the tax effect of the excess of capital allowances over book depreciation.


57


20 SHARE CAPITAL


2006 2005 2006 2005

Number of ordinary share US$’000 US$’000

Issued and paid up:

At beginning of financial year 198,264,000 197,884,000 29,668 29,612

Issued during the financial year 270,000 380,000 40 56

Transfer from share premium account – – 14,844 –

At end of financial year 198,534,000 198,264,000 44,552 29,668

As a result of the Companies (Amendment) Act 2005, the concept of authorised share capital and par value has been abolished. Any amount standing to the credit of share premium account has been transferred to the company’s share capital account in the current year.

During the financial year, the company issued 270,000 ordinary shares of S$0.25 each at a price between S$0.27 and S$0.53 per ordinary share upon exercise of options pursuant to the PCI Limited Employees’ Share Option Scheme (the “Scheme”).

Details of the share options outstanding during the year are as follows:


2006 2005

Number of share options

Weightedaverage

exercise priceNumber of

share options

Weightedaverage

exercise price

S$ S$

Outstanding at the beginning of the year 3,504,000 0.66 4,107,000 0.64

Exercised during the year (270,000) 0.51 (380,000) 0.42

Cancelled during the year – (223,000)

Outstanding at the end of the year 3,234,000 0.67 3,504,000 0.66

Exercisable at the end of the year 3,234,000 3,504,000

The weighted average share price at the date of exercise for share options exercised during the year was S$0.53 (2005 : S$0.72). In 2006, the options outstanding at the end of the year have a weighted average remaining contractual life of 5.2 years (2005 : 6.2 years).

21 RECLASSIFICATION IN STATEMENT OF CHANGES IN EQUITY

In 2005, the group made a reclassification between the currency translation reserve and accumulated losses of $975,000 to reflect the proper presentation of these balances.


58

22 REVENUE


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Sale of goods 163,880 141,706 161,112 138,369

Gain (Loss) on disposal of available–for–sale investments (47) 107 (47) 107

Interest income from term deposits 658 672 616 650

Income from available–for–sale investments 588 582 588 582

Rental income 943 977 – –

Total 166,022 144,044 162,269 139,708

23 OTHER OPERATING INCOME


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Sundry income 294 361 290 349

Scrap sales 66 23 66 23

Other income from subsidiaries – – 320 323

Reversal of allowances for doubtful other receivables from subsidiaries – – 62 1,550

Gain on disposal of plant and equipment 9 41 8 34

Total 369 425 746 2,279


59


24 PROFIT BEFORE TAX

Profit before tax has been arrived at after charging (crediting):


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Directors’ fees 66 61 66 61

Directors’ remuneration 961 959 961 959

Employee benefit expense 15,637 11,281 6,895 5,807

Auditors remuneration:

Auditors of the company 59 76 47 44

Other auditors 21 2 – –

Non–audit fees paid to other auditors 33 27 – –

Movement in impairment of available–for–sale investments (35) (24) (35) (24)

a) Employee benefit expense included the following:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000


Cost of defined contribution retirement 755 578 379 335

Other employee benefits 6,338 4,203 2,977 2,335

Total 15,637 11,281 6,895 5,807


60

24 PROFIT BEFORE TAX (continued)

b) The remuneration of directors and other members of key management during the year was as follows:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000


Cost of defined contribution retirement 32 38 32 38

The remuneration of directors and key management is determined by the remuneration committee having regard to the performance of individuals and market trends.

25 INCOME TAX EXPENSE


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Current tax 1,144 1,713 1,120 1,645

Under (Over) provision in prior years 31 36 – (33)

Deferred tax (Note 19) (120) 265 (80) 265

Net 1,055 2,014 1,040 1,877


61


25 INCOME TAX EXPENSE (continued)

The income tax expense varied from the amount of income tax expense determined by applying the Singapore income tax rate of 20% (2005 : 20%) to profit before income tax as a result of the following differences:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Profit before tax 7,073 8,368 5,058 10,104

Income tax expense at statutory rate 1,415 1,674 1,011 2,021

Non–allowable (taxable) items 5 313 29 (111)

Under (Over) provision in prior years 31 36 – (33)

Deferred tax benefit not recognised (7) – – –

Tax effect of utilisation of tax losses not previously recognised (17) (9) – –

Tax effect of utilisation of other deferred tax benefit not previously recognised (372) – – –

Net 1,055 2,014 1,040 1,877

The company and the group have tax loss carryforwards available for offsetting against future taxable income as follows:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Amount at beginning of year 903 916 – –

Adjustment to prior years (24) 32 – –

Amount utilised in current year (87) (45) – –

Amount at end of year 792 903 – –

Deferred tax benefit on above unrecorded 158 181 – –


62

25 INCOME TAX EXPENSE (continued)

The realisation of the future income tax benefits from tax loss carryforwards is available for an unlimited future period subject to the conditions imposed by law including the retention of majority shareholders as defined. No deferred tax asset has been recognised due to the unpredictability of future profit streams. Temporary differences arising in connection with interests in associates and jointly controlled entitles are insignificant.

In November 2004, the Economic Development Board granted the Development and Expansion Incentive, under the International Headquarters (“IHQ”) Award, to the company. Subject to certain conditions to be met by June 30, 2007, the company enjoys a concessionary tax rate of 10% on its qualifying income in excess of the base for a period of 5 years commencing July 1, 2004. Accordingly, the company continues to provide for tax using the statutory tax rate of 20%.

26 BASIC AND FULLY DILUTED EARNINGS PER SHARE

The calculation of the basic and fully diluted earnings per share of the group is based on the following:

Group (Basic) Group (Diluted)

2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Profit attributable to shareholders 5,978 6,360 5,978 6,360

Number of shares Number of shares

2006 2005 2006 2005

‘000 ‘000 ‘000 ‘000

Number of weighted average ordinary shares used to compute earnings per share 198,394 198,203 198,772 198,826

Earnings per share (US Cents) 3.01 3.21 3.01 3.20

Number of shares

2006 2005

‘000 ‘000

Weighted average number of ordinary shares for the purpose of basic earnings per share 198,394 198,203

Effect of dilutive potential ordinary shares: Share options 378 623

Weighted average number of ordinary shares for the purposes of diluted earnings per share 198,772 198,826


63


27 DIVIDENDS

During the financial year ended June 30, 2006, the company declared and paid a final dividend of $0.01779 (S$0.03) per ordinary share less tax at 20% totalling $2,821,000 (S$4,758,000) in respect of the financial year ended June 30, 2005.

During the financial year ended June 30, 2006, the company declared and paid an interim dividend of $0.00625 (S$0.01) per ordinary share less tax at 20% totalling $974,302 (S$1,588,000) in respect of the financial year just ended.

Subsequent to June 30, 2006, the directors of the company proposed that a final dividend of $0.0125 (S$0.02) per ordinary share less tax at 20% totalling $1,986,000 (S$3,177,000) to be paid in respect of the financial year just ended. This dividend is subject to approval by shareholders at the Annual General Meeting and has not been included as liability in these financial statements. The proposed dividend is payable to all shareholders on the Register of Member on November 15, 2006.

28 CONTINGENT LIABILITIES


2006 2005

US$’000 US$’000

Guarantees (unsecured) 171 161

The maximum estimated amount that the group could become liable is shown above.

29 OPERATING LEASE COMMITMENTS

The group and the company as lesseeThe Group The Company

2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Minimum lease payments under operating leases recognised as an expense in the year 1,137 1,062 269 475


64

29 OPERATING LEASE COMMITMENTS (continued)

At the balance sheet date, the commitments in respect of non–cancellable operating leases for the rental of factory spaces, office premises, residential premises and land were as follows:

Future minimum lease payments payable:The Group The Company

2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Within one year 1,414 1,103 220 156

In the second to fifth years inclusive 3,805 3,170 384 –

After five years 11,570 11,441 – –

Total 16,789 15,714 604 156

Operating lease commitments include subsidiary’s lease agreements with Jurong Town Corporation for a parcel of land where the leasehold building is located. The lease agreements expired on June 30, 2026.

The group and the company as lessorThe Group The Company

2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Rental income for the year included in profit and loss statement 943 977 – –

At the balance sheet date, the group and the company has contracted with tenants for the following future minimum lease payments:


2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000

Within one year 730 670 – –

In the second to fifth years inclusive 396 34 – –

Total 1,126 704 – –


65


30 SEGMENT INFORMATION

For management purposes, the group is organised on a world–wide base into three operating divisions – electronics manufacturing services, investment and interest earned and rental income. The dominant source and nature of the group’s risks and returns are based on business segments. Therefore, the primary segment of the group is business segment.

Principal activities in each segment are as follows:

Electronics manufacturing services – Electronics manufacturing services encompassing printed circuit board assembly, customer user interface design and manufacture, and full turnkey electronics manufacturing.

Investment income and interest earned – Interest income and other income earned from bonds, including gains and losses on disposal of investments.

Rental income – Rental of premises.

Electronics manufacturing

services

Investment income and

interest earned Rental income Elimination Consolidated

US$’000 US$’000 US$’000 US$’000 US$’000

2006

Revenue:

External 163,880 1,199 943 – 166,022

Inter–segment – – 263 (263) –

Total 163,880 1,199 1,206 (263) 166,022

Results:

Segment results 6,346 1,199 (352) (71) 7,122

Finance cost (49) – (71) 71 (49)

Profit before income tax 6,297 1,199 (423) – 7,073

Income tax expense (1,055)

Profit after income tax 6,018


66

30 SEGMENT INFORMATION (continued)

Electronics manufacturing

services

Investment income

and interest earned Rental income Elimination Consolidated

US$’000 US$’000 US$’000 US$’000 US$’000

2006

Other information:Capital additions 4,012 – 38 – 4,050Depreciation 1,752 – 475 – 2,227

Assets:Segment assets 73,018 20,896 5,739 – 99,653

Liabilities:Segment liabilities 45,693 27 208 – 45,928Unallocated corporate liabilities 3,290

Total 49,218

2005

Revenue:External 141,706 1,361 977 – 144,044Inter–segment – – 463 (463) – Total 141,706 1,361 1,440 (463) 144,044

Results:Segment results 7,245 1,361 (142) (61) 8,403Finance cost (35) – (61) 61 (35)

Profit before income tax 7,210 1,361 (203) – 8,368Income tax expense (2,014)Profit after income tax 6,354

Other information:Capital additions 3,335 – 141 – 3,476Depreciation 2,305 – 478 – 2,783

Assets:Segment assets 55,620 24,061 5,959 – 85,640

Liabilities:Segment liabilities 32,264 – 212 – 32,476Unallocated corporate liabilities 3,732

Total 36,208


67


30 SEGMENT INFORMATION (continued)

Geographical segments

The following table shows the group’s sales based on geographical market except for the carrying amount of segment assests and additions to property, plant and equipment, analysed by the geographical area in which the assets are located:

Revenue Apportioned AssetsApportioned additions to

property, plant and equipment

2006 2005 2006 2005 2006 2005

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000

North America 26,252 24,533 – – – –

Europe 14,652 13,057 – – – –

Asia Pacific 125,118 106,454 99,653 85,640 4,050 3,476

Total 166,022 144,044 99,653 85,640 4,050 3,476

Segment revenues and expenses

Segment revenues and expenses are the operating revenue and expense reported in the group’s profit and loss statement that are directly attributable to a segment and the relevant portion of such revenue and expense that can be allocated on a reasonable basis to a segment.

Segment assets and liabilities

Segment assets include all operating assets used by a segment and consist principally of operating receivables, inventories and property, plant and equipment, net of allowances and provisions. Capital additions include the total cost incurred to acquire property, plant and equipment directly attributable to the segment. Segment liabilities include all operating liabilities and consist principally of accounts payable and accruals.

Inter–segment transfers

Segment revenue and expenses include transfer between business segments and between geographical segments. Inter–segment pricing is determined at fair market value. These transfers are eliminated on consolidation.


68

31 RECLASSIFICATIONS AND COMPARATIVE FIGURES

Certain reclassifications have been made to the prior year’s financial statements to enhance comparability with the current year’s financial statements. As a result, certain line items have been amended on the face of the balance sheet, cash flow statement and the related notes to the financial statements. Comparative figures have been adjusted to conform with the current year’s presentation.

The items were reclassified as follows:


Previouslyreported

Afterreclassification

Previously reported

Afterreclassification

2005 2005 2005 2005

US$’000 US$’000 US$’000 US$’000

Current assets Available for sale investments – 1,923 – 1,923

Non-current assets Available for sale investments 23,767 21,844 23,767 21,844

Cost of sales Manufacturing expenses (11,325) (11,050) (11,211) (10,936)

Other expenses Business development expenses (3,418) (3,693) (3,507) (3,782)


69


In the opinion of the directors, the accompanying financial statements of the company and consolidated financial statements of the group set out on pages 20 to 68 are drawn up so as to give a true and fair view of the state of affairs of the company and of the group as at June 30, 2006 and of the results and changes in equity of the company and of the group and cash flows of the group for the financial year then ended and at the date of this statement, there are reasonable grounds to believe that the company will be able to pay its debts as and when they fall due.

ON BEHALF OF THE DIRECTORS

...............................................Teo Teck ChuanAugust 25, 2006

...............................................Peh Kwee ChimAugust 25, 2006

Statement of Directors

70

INTRODUCTION

PCI Limited (“PCI”) is committed to achieving high standards of corporate governance to ensure greater transparency and maximize long-term shareholder value.

This report describes PCI’s main corporate governance practices with reference to the Singapore Code of Corporate Governance (the “Code”).

Board Matters

THE BOARD’S CONDUCT OF ITS AFFAIRS

The Board oversees the business affairs of PCI and therefore every Director is expected to act in good faith and always in the interests of the Company. The principal functions of the Board includes the approval of the Company’s strategic plans, the approval of major investments, divestments and fund-raising, overseeing processes for evaluating the adequacy of internal controls and risk management and being responsible for corporate governance practices. PCI has in place financial authorization and approval limits for operating and capital expenditure, as well as acquisitions and disposal of investments. The Board and the Audit Committee also approve the Group’s financial results.

The Board meets on a regular basis. Where necessary, additional Board meetings are held to deliberate on urgent substantive matters. An aggregate of 8 Board meetings were held for the Financial Year ended 30 June 2006. Details of the attendance of Board members at Board meetings and meetings of the various Board committees for the Financial Year ended 30 June 2006 are set out on page 77.

All new Directors appointed to the Board are briefed on the business activities of the Group and its strategic directions, as well as their statutory and other duties and responsibilities as Directors. In addition, Directors are briefed either during Board meetings or at specially convened sessions on changes to regulations and accounting standards which have an important bearing on the Company’s or Directors’ disclosure obligations. Where appropriate, Directors are encouraged to attend courses, conferences and seminars in relevant fields.

BOARD COMPOSITION AND BALANCE

The Board currently comprises 6 directors, 2 of whom are Non-Executive, Independent Directors and 1 of whom is a Non-Executive Director. The Non-Executive, Independent Directors are Dr Tan Cheng Bock and Ms Tey Swee Nai Nancy. The Non-Executive Director is Mr Lim Kwee Siah.

The Directors bring with them a broad range of expertise and experience in areas such as accounting or finance, business or management experience, industry knowledge and customer-based experience or knowledge. The diversity of the Directors’ experience allows for the useful exchange of ideas and views. Profiles of the directors are set out on pages 8 to 9 of this Annual Report.

Corporate Governance Report

71


Corporate Governance Report (continued)

CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Different individuals assume the Chairman and the Chief Executive Officer functions in PCI. There is a clear distinction between the roles and responsibilities of the Chairman and the Chief Executive Officer. The Chairman is responsible for the Board and the Board has delegated day-to-day management of PCI to the Chief Executive Officer.

BOARD MEMBERSHIP

The Nominating Committee comprises Dr Tan Cheng Bock (Committee Chairman), Mr Peh Kwee Chim and Ms Tey Swee Nai Nancy, the majority of whom, including the Chairman, are Non-Executive, Independent Directors.

The Nominating Committee reviews and assesses candidates for directorships before making recommendations to the Board. In recommending new Directors to the Board, the Nominating Committee takes into consideration the skills and experience required and the current composition of the Board, and strives to ensure that the Board has an appropriate balance of Independent Directors as well as Directors with the right profile of expertise, skills, attributes and ability.

In evaluating a Director’s contribution and performance for the purpose of re-nomination, the Nominating Committee takes into consideration a variety of factors such as attendance, preparedness, participation and candour.

Recommendations for nominations of new Directors and retirement of Directors are made by the Nominating Committee and considered by the Board as a whole. At each Annual General Meeting (“AGM”) of PCI, not less than one third of the Directors for the time being (being those who have been longest in office since their last re-election) are required to retire from office by rotation. A retiring Director is eligible for re-election by the shareholders of PCI at the AGM. Also, all newly appointed Directors during the year will hold office only until the next AGM and will be eligible for re-election.

BOARD PERFORMANCE

PCI believes that the Board’s performance is ultimately reflected in the performance of PCI. The Board should ensure compliance with applicable laws and Board members should act in good faith, with due diligence and care in the best interests of PCI and its shareholders. In addition to these fiduciary duties, the Board is charged with two key responsibilities: setting strategic directions and ensuring that PCI is ably led. The measure of a Board’s performance is also tested through its ability to lend support to Management especially in times of crisis and to steer PCI in the right direction.

PCI is of the opinion that the financial indicators set out in the Code as guides for the evaluation of Directors are more of a measure of Management’s performance and hence are less applicable to Directors. In any case, such financial indicators provide a snapshot of a Company’s performance, and do not fully measure the sustainable long term wealth and value creation of PCI.

The Board through the delegation of its authority to the Nominating Committee, has used its best efforts to ensure that Directors appointed to the Board possess the background, experience, knowledge and skills critical to the Company’s business and that each Director with his special contributions brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.

72

Informal reviews of the Board’s performance are undertaken on a continual basis by the Nominating Committee with inputs from the other board members.

The Board and the Nominating Committee have strived to ensure that Directors appointed to the Board possess the background, experience, knowledge and skills critical to the Company’s business, so as to enable the Board to make balanced and well-considered decisions.

ACCESS TO INFORMATION

Prior to each Board meeting, the Board is supplied with relevant information by the Management pertaining to matters to be brought before the Board for decision as well as ongoing reports relating to operational and financial performance of the Group. The Board also has separate and independent access to Senior Management and the Company Secretary at all times. The Board also has access to independent professional advice, where appropriate, at the expense of PCI.

Remuneration Matters

REMUNERATION COMMITTEE

The Remuneration Committee comprises of Dr Tan Cheng Bock (Committee Chairman), Ms Tey Swee Nai Nancy and Mr Lim Kwee Siah, all of whom are Non-Executive Directors and the majority of whom including the Chairman, are Independent Directors. The role of the Remuneration Committee is to review and approve the remuneration including the grant of aggregate variable bonuses, share options and performance shares to all employees of PCI including the Executive Directors.

While the Chief Executive Officer is in attendance at Remuneration Committee meetings, he does not attend discussions relating to the review of his performance and compensation.

The Remuneration Committee in establishing the framework of remuneration policies for its Directors and Senior Executives is largely guided by the financial performance of the Company. The primary objective is to align the interest of Management with that of the shareholders. In this respect, it believes that remuneration should be competitive and sufficient to attract, retain and motivate Executive Directors and Senior Executives to manage the Company well. Pay levels, benefits and incentives are structured to focus them to achieve corporate objectives.

The remuneration package is generally comprised of two components. One component is fixed in the form of a base salary that includes the 13th month based AWS. The other component is variable consisting of performance and incentive bonuses. The variable portion is largely dependent on the financial performance of the Company as the Remuneration Committee strongly supports and endorses the flexible wage system because it gives the Company more flexibility to ride through economic downturns. The Remuneration Committee has adopted set profitability levels to be achieved before performance bonuses are payable. The level of performance bonuses is also subject to how shareholders value is enhanced such as through the returns on their investment in the form of dividend paid.


73


The Executive Chairman, Mr Peh Kwee Chim has voluntarily declined receiving share options. Non-Executive Directors are not eligible for grant of share options as the Remuneration Committee believe that their independence can be better preserved and their discharge of their duties will not be influenced or affected by movements in the Company’s share price. All Non-Executive Directors are paid Directors’ fees which are subject to approval at AGMs.

The Directors’ remuneration in bands of US$150,000 is disclosed below. The remuneration of the top five Executives who are not also Directors of the Company in bands of US$150,000 is disclosed. The names of the top five Executives who are not also Directors of the Company have not been disclosed to maintain confidentiality of staff remuneration matters.

Directors’ Remuneration Paid or Payable in Financial Year ended 30 June 2006

Directors of companyBaseSalary

VariablePayment

DirectorsFees Total

Share Options Granted

US$450,000 to US$599,999Mr Peh Kwee Chim 46% 54% 0% 100% NIL

US$300,000 to US$449,999Mr Teo Teck Chuan 55% 45% 0% 100% NIL

Below US$150,000Mr Loh Kee KongMr Lim Kwee SiahDr Tan Cheng Bock Ms Tey Swee Nai Nancy

100%0%0%0%

0%0%0%0%

0%100%100%100%

100%100%100%100%

NILNILNILNIL

Notes:1. Base salary includes the 13th month AWS, allowances and benefits in kind such as the use of Company cars.2. Variable payments are subject to financial performance of the Company. Remuneration of Top Five Executives who are not also Directors of the Company in Financial year ended 30 June 2006

Remuneration Bands Number of Employees

US$300,000 to US$449,999 1

US$150,000 to US$299,999 3

Below US$150,000 1


74

AUDIT COMMITTEE

The Audit Committee comprises Ms Tey Swee Nai Nancy (Committee Chairman), Dr Tan Cheng Bock and Mr Lim Kwee Siah, all of whom are Non-Executive and the majority of whom, including the Chairman, are Independent. Mr Lim Kwee Siah and Ms Tey Swee Nai Nancy have accounting or related financial management expertise and experience. The Board considers Dr Tan Cheng Bock as having sufficient financial knowledge and experience to discharge his responsibility as a member of the Committee.

The Audit Committee meets at least four times a year to carry out its role of reviewing the financial reporting process, the systems of internal control, management of financial risks and the audit process.

The Audit Committee’s duties include:

(a) reviewing the audit plans and results of the external auditors’ examination and evaluation of the Group’s systems of internal accounting controls and any matters which the external auditors wish to discuss (in the absence of Management where necessary);

(b) reviewing the scope and results of the internal audit procedures;(c) reviewing the financial statements of the Company and the consolidated financial statements of the Group

before their submission to the Directors of the Company and the external auditors’ report on those financial statements;

(d) reviewing the half-yearly and annual announcements as well as the related press releases on the results and financial position of the Group and of the Company;

(e) reviewing the co-operation and assistance given by the Management to the Group’s external auditors;(f) evaluating the cost effectiveness, independence and objectivity of the external auditors and the nature and

extent of the non-audit services provided by them;(g) Making recommendation to the Board on the appointment, re-appointment and remuneration of the

external auditors of the Company; and(h) Monitoring interested person transactions and conflict of interest situations that may arise within the Group

including any transaction, procedure or course of action that raises questions of Management integrity.

The Audit Committee has authority to investigate any matters within its terms of reference and has full access to and cooperation from management, in addition to its direct access to the external auditors.

The Audit Committee is currently reviewing whistle-blowing arrangements to be instituted by the Group by which staff may in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters.

Accountability and Audit

ACCOUNTABILITY

PCI recognizes the importance of providing the Board with a continual flow of relevant information on an accurate and timely basis in order that it may effectively discharge its duties. On a monthly basis, Board members are provided with business and financial reports comparing actual performance with budget with highlights on key business indicators and major issues.


75


INTERNAL CONTROLS

The Board has ultimate responsibility for the system of internal controls maintained by the Company to safeguard the shareholders’ investments and the Company’s assets and for reviewing their effectiveness. The system is intended to provide reasonable but not absolute assurance against material misstatements or loss, and include the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, compliance with appropriate legislation, regulation and best practice, and the identification and containment of business risk.

PCI’s external auditors, Deloitte & Touche (“Deloitte”), have also, in the course of their statutory audit, carried out a review of the Company’s system of internal controls to the extent of their planned reliance as laid out in their audit plan. Any material non-compliance and internal control weaknesses noted during their audit and their recommendations to address such non-compliance and weaknesses are reported to the Audit Committee. The Audit Committee Chairman also sets aside time during the year to meet with the external auditors to discuss internal controls and various accounting issues, in the absence of Management. The Management follows up on Deloitte’s recommendations as part of its role in the review of the Group’s internal control systems. The Audit Committee is of the opinion that there are adequate internal controls in the Company.

The Audit Committee also reviewed the non-audit services provided by the external auditors and was satisfied that the independence of the external auditors would not be impaired. The Audit Committee has recommended to the Board that Deloitte be nominated for reappointment as auditors at the forthcoming AGM of the Company.

With the exception of PT Prima Circuitama Indonesia, PT PCI Elektronik Internasional, PCI Gaozhi (Shanghai) Electronic Co. Ltd., PCI Shanghai Electronics Co. Ltd. and Polymicro Precision Thailand Technology (Thailand) Co. Ltd., all the subsidiaries and associated companies listed on pages 49 & 50 of this Annual Report are audited by Deloitte & Touche Singapore. PT Prima Circuitama Indonesia and PT PCI Elektronik Internasional are audited by Drs. Bernardi & Co., PCI Gaozhi (Shanghai) Electronic Co. Ltd. and PCI Shanghai Electronics Co. Ltd. are audited by Shanghai Linfang CPA and Polymicro Precision Thailand Technology (Thailand) Co. Ltd. is audited by V.A.T. Accounting Auditors & Consultants.

The Board and the Audit Committee are satisfied that the appointment of Drs. Bernardi & Co. as the auditors of PT Prima Circuitama Indonesia and PT PCI Elektronik Internasional, the appointment of Shanghai Linfang CPA as the auditors of PCI Gaozhi (Shanghai) Electronic Co. Ltd. and PCI Shanghai Electronics Co. Ltd and the appointment of V.A.T. Accounting Auditors & Consultants as the auditors of Polymicro Precision Thailand Technology (Thailand) Co. Ltd. would not compromise the standard and effectiveness of the audit of the Group.

The Company had established an internal audit function that is independent of the activities it audits. The Head of Internal Audit reports primarily to the Chairman of the Audit Committee and administratively to the Chief Executive Officer. The Internal Auditors meet the standards set by recognized professional bodies including the Standards for the Professional Practice of Internal Auditing set by the Institute of Internal Auditors. The Audit Committee has reviewed the adequacy of the internal audit function and is satisfied that the Company’s internal audit function is adequately sound.

Risk Management

Risk management is essential to the Company’s business. The Company has established risk management policies, guidelines and control procedures to identify operational risks and monitor and manage these risks.


76

PCI has implemented a Group insurance program and has in place a Business Continuity Planning Program. The Group also has in place a system for financial monitoring and control.

Communication with Shareholders

PCI believes in regular and timely communication with investors. The Company is open to meetings with investors and analysts.

The Company maintains its own website which provides copies of all publicly disclosed financial information, annual reports, news releases and announcements.

PCI is in full support of the Code’s principle to encourage shareholder participation. PCI’s Articles of Association allow a member entitled to attend and vote to appoint a proxy to attend and vote instead of the member and also provide that a proxy need not be a member of PCI. Voting in absentia by facsimile or email is not currently permitted to ensure proper authentication of the integrity of shareholders and their voting intentions.

Securities Trading

The Group has adopted the SGX Best Practices Guide with respect to the dealings in securities for the guidance of Directors and officers. PCI’s Directors and officers are prohibited from dealing in PCI’s shares on short-term considerations and during the period commencing one month before the announcement of the Company’s financial statements for the half year or financial year, and ending on the date of the announcement of the relevant financial statements, or if they are in possession of unpublished price-sensitive information on the Group.

Interested Person Transactions

The Company has put in place an internal procedure to track interested person transactions (“IPTs”) of the Company.

The following are details of the interested person transactions entered into by PCI in Financial Year ended 30 June 2006:

Name of Interested Person

Aggregate value of all interested person transactions during the financial year ended 2006

(excluding transactions less than S$100,000/US$58,000)S$’000/US$’000

Chuan Hup Holdings Ltd. Group of Companies 470/286

Enabling Technology Pty Ltd. 869/528

Conclusion

PCI recognizes the importance of good corporate governance practices for maintaining and promoting investor confidence. PCI will continue to review and improve its corporate governance practices on an ongoing basis.


77


ATTENDANCE AT BOARD AND COMMITTEE MEETINGS

The attendance of each Director at Board meetings and Board committee meetings during the Financial Year ended 30 June 2006 is as follows:

Board MeetingsRegular Board Meetings Ad Hoc Board Meetings

Director

No. of meetings

held

No. ofmeetingsattended

No. ofmeetings

held


Mr Peh Kwee Chim 8 6 – –Dr Tan Cheng Bock (Independent) 8 7 – –Mr Loh Kee Kong 8 8 – –Mr Lim Kwee Siah 8 8 – –Mr Teo Teck Chuan 8 8 – –Ms Tey Swee Nai Nancy (Independent) 8 8 – –

Board Committee MeetingsNominatingCommittee

AuditCommittee

RemunerationCommittee

Notes

No. ofmeetings

held


No. ofmeetings

held


No. ofmeetings

held


Dr Tan Cheng Bock (Independent) – – 6 5 1 1Mr Lim Kwee Siah – – 6 6 – –Ms Tey Swee Nai Nancy (Independent) – – 6 6 1 1Mr Peh Kwee Chim (1) – – – – 1 1

Note: (1) Mr Peh Kwee Chim resigned as a member of the Remuneration Committee on 15 September 2006 and Mr Lim Kwee Siah was appointed as a member of the

Remuneration Committee in his stead.


78

SHARE CAPITAL

Issued and Fully Paid Capital S$74,878,770

BREAKDOWN OF SHAREHOLDINGS BY RANGE

Size of Shareholdings

No. of Shareholders

% of Shareholdings No. of Shares

% of IssuedShare Capital

1 - 999 11 0.15 1,900 –1,000 - 10,000 5,690 78.93 26,490,000 13.3410,001 - 1,000,000 1,493 20.71 55,412,200 27.911,000,001 - and above 15 0.21 116,629,900 58.75Total 7,209 100.00 198,534,000 100.00

TWENTY LARGEST SHAREHOLDERS

Shareholder’s Name No. of Shares % of Holdings

1 CHUAN HUP HOLDINGS LIMITED 64,900,000 32.69 2 MERRILL LYNCH (SINGAPORE) PTE LTD 9,048,900 4.56 3 UNITED OVERSEAS BANK NOMINEES PTE LTD 6,752,000 3.40 4 KIM ENG SECURITIES PTE. LTD. 6,289,000 3.17 5 LIM & TAN SECURITIES PTE LTD 5,931,000 2.99 6 DBS NOMINEES PTE LTD 5,485,000 2.76 7 DBS VICKERS SECURITIES (SINGAPORE) PTE LTD 4,579,000 2.31 8 RHB BANK NOMINEES PTE LTD 3,000,000 1.51 9 OCBC NOMINEES SINGAPORE PTE LTD 2,333,000 1.18 10 CHANG AI CHUNG 1,807,000 0.91 11 OCBC SECURITIES PRIVATE LTD 1,518,000 0.76 12 SINGAPORE NOMINEES PTE LTD 1,376,000 0.69 13 PHILLIP SECURITIES PTE LTD 1,357,000 0.68 14 CITIBANK NOMINEES SINGAPORE PTE LTD 1,201,000 0.60 15 HL BANK NOMINEES (SINGAPORE) PTE LTD 1,053,000 0.53 16 UOB KAY HIAN PTE LTD 920,000 0.46 17 CITIBANK CONSUMER NOMINEES PTE LTD 769,000 0.39 18 CHONG AH KAU @ CHONG LOONG TECK 730,000 0.37 19 TEO GUAT YAU 558,000 0.28 20 HENG SIEW ENG 519,000 0.26

Total: 120,125,900 60.51

SUBSTANTIAL SHAREHOLDERS (as shown in the Register of Substantial Shareholders)

Shareholder’s Name No. of Shares % of Holdings

CHUAN HUP HOLDINGS LIMITED 64,900,000 32.69

Notes:(a) Mr Peh Kwee Chim has a deemed interest in 64,900,000 shares by virtue of Section 7(4) of the Companies Act, as he

holds 20.18% of the issued shares of Chuan Hup Holdings Limited. (b) Based on information available to the Company as at 8 September 2006, approximately 67.23% of the issued ordinary

shares of the Company is held by the public and therefore, Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited is complied with.

(a)

(a)

Statistics of Shareholding as at 8 September

79


NOTICE IS HEREBY GIVEN that the SEVENTEENTH ANNUAL GENERAL MEETING of the Company will be held at The Board Room, 390 Jalan Ahmad Ibrahim, Singapore 629155 on 20 October 2006 at 10.30 a.m. to transact the following businesses:

Ordinary Business:

1. To receive and adopt the Audited Accounts for the Financial Year ended 30 June 2006 together with reports of the Directors and the Auditors thereon.

(Resolution 1)

2. To declare a final dividend of 2 Singapore cents per share less income tax of 20% for the Financial Year ended 30 June 2006.

(Resolution 2)

3. To re-elect Mr Peh Kwee Chim who retires by rotation in accordance with Article 110 of the Company’s Articles of Association and who, being eligible, offers himself for re-election. [See Explanatory Note 1]

(Resolution 3)

4. To re-elect Dr Tan Cheng Bock who retires by rotation in accordance with Article 110 of the Company’s Articles of Association and who, being eligible, offer himself for re-election [See Explanatory Note 2]

(Resolution 4)

5. To approve the payment of fees of S$108,000 for Non-Executive Directors for the Financial Year ended 30 June 2006 (FY2005: S$100,710).

(Resolution 5)

6. To appoint Auditors and to authorise Directors to fix their remuneration. (Resolution 6)

7. To transact any other business of an Annual General Meeting.

8. To consider, and if thought fit, to pass the following resolution as an Ordinary Resolution:

“That authority be and is hereby given to the Directors of the Company to: (Resolution 7)

(a) (i) issue shares in the capital of the Company ("shares") whether by way of rights, bonus 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) warrants, 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 may in their absolute discretion deem fit; and

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

PCI LIMITED(Incorporated in the Republic of Singapore)(Company Registration No. 198804482N)

Notice of Annual General Meeting

80

provided that:

(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50 per cent of the issued share capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 20 per cent of the issued share capital of the Company (as calculated in accordance with sub-paragraph (2) below);

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

(i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and

(ii) any subsequent consolidation or subdivision of shares; and

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and

(4) (unless revoked or varied by the Company in General Meeting) the authority conferred by this Resolution shall 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 the earlier.

9. To consider, and if thought fit, to pass the following resolution as an Ordinary Resolution:

“That approval be and is hereby given to the Directors to offer and grant options in accordance with the provision of the PCI Limited Employees’ Share Option Scheme 2003 (the “2003 Scheme”) and to offer and grant awards in accordance with the provisions of the PCI Limited Performance Share Plan (the "Plan") and to allot and issue from time to time such number of ordinary shares in the capital of the Company as may be required to be issued pursuant to the vesting of awards under the Plan, provided that the aggregate number of shares to be issued pursuant to the 2003 Scheme and the Plan shall not exceed fifteen per cent (15%) of the total issued share capital of the Company for the time being or such new limit as may be specified by the Singapore Exchange Securities Trading Limited Listing Manual from time to time.”

(Resolution 8)

Notice of Annual General Meeting (continued)

81


NOTICE IS ALSO HEREBY GIVEN that the Transfer Book and Register of Members of the Company will be closed on 3 November 2006 for the preparation of dividend warrants. Duly completed registrable transfers received by the Company’s Registrar, Tricor Barbinder Share Registration Services (a division of Tricor Singapore Pte. Ltd.) of 8 Cross Street #11-00, PWC Building, Singapore 048424, up to 5.00 p.m. on 3 November 2006 will be registered to determine members’ entitlements to the proposed dividend. The proposed dividend, if approved at the 17th Annual General Meeting, will be paid on 15 November 2006.

Members whose Securities Accounts with The Central Depository (Pte) Limited are credited with Shares at 5.00 p.m. on 2 November 2006 will be entitled to the proposed dividend.

Dated this 3rd day of October 2006

By Order of the Board

Lee Keng PohCompany Secretary

Notes:

1. A member of the Company who is entitled to attend and vote at the above Meeting is entitled to appoint a proxy to attend and vote on his behalf. Such proxy need not be a member of the Company.

2. The instrument appointing a proxy must be lodged at the registered office of the Company at 386 Jalan Ahmad Ibrahim, Singapore 629156, not less than 48 hours before the time appointed for the Annual General Meeting.

Explanatory Notes:

1. Mr Peh Kwee Chim, if re-appointed, will continue as a member of the Nominating Committee. Mr Peh is considered a non- independent director.

2. Dr Tan Cheng Bock, if re-appointed, will continue as Chairman of the Nominating and Remuneration Committees and a member of the Audit Committee. Dr Tan is considered an independent director.

PCI LIMITED(Incorporated in the Republic of Singapore)(Company Registration No. 198804482N)

Notice of Annual General Meeting (continued)

82

This page has been intentionanlly left blank

83

I/We____________________________________________________________________________(Name) of_____________________________________________________________________________(Address)being a member/members of PCI Limited (the” Company”) hereby appoint

NAME ADDRESS NRIC/PASSPORT NUMBER

PROPORTION OFSHAREHOLDINGS

(%)

(a)

and/or (delete as appropriate)

(b)

or failing him/her, the Chairman of the Meeting as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Seventeenth Annual General Meeting of the Company to be held at The Board Room, 390 Jalan Ahmad Ibrahim, Singapore 629155 on 20 October 2006 at 10.30 a.m. and at any adjournment thereof.

(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions as set out in the Notice of the Seventeenth Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting).

NO ORDINARY RESOLUTIONS FOR AGAINST

Ordinary Business

1 Adoption of Accounts and Reports2 Declaration of Final Dividend3 Re-election of Director – Mr Peh Kwee Chim4 Re-election of Director – Dr Tan Cheng Bock 5 Payment of Fees to Non-Executive Directors6 Appointment of Auditors

Special Business7 Approval of proposed Share Issue Mandate8 Authority to Grant Options and Awards and to Issue Shares

Pursuant to the PCI Limited Employees Share Option Scheme 2003 and the PCI Limited Performance Share Plan

Dated this _____________ day of ___________________ 2006

___________________________________ Signature(s) of Member(s) or Common Seal

IMPORTANT: PLEASE READ NOTES ON THE REVERSE

Proxy FormPCI LIMITED(Incorporated in the Republic of Singapore)(Company Registration No. 198804482N)

IMPORTANT1. For investors who have used their CPF moneys to buy

shares in the capital of PCI Limited, this Annual Report 2006 is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY.

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

Total Number of Shares held


Notes:

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

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead of him. Such proxy need not be a member of the Company.

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

4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 386 Jalan Ahmad Ibrahim, Singapore 629156, not less than 48 hours before the time appointed for the Annual General Meeting.

5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised.

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

General

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

84

PCI LimitedCo. Reg No. 198804482N

386 Jalan Ahmad Ibrahim

Singapore 629156

Tel: (65) 6265 8181

Fax: (65) 6265 3333



Date post:	03-Jun-2020
Category:	Documents
Upload:	others
View:	8 times
Download:	0 times

Mission · Announcement of Half-Year Financial Results 13 February 2006 Payment of Interim Dividend...

Documents