ElectroTech Investments Limited

Australian Stock ExchangeARBN 068 543 386

2000AnnualReport

Group Operating Structure

Company Particulars

Chairman’s Statement

Review of Operations

Directors’ Report

Corporate Governance Statement

Income Statements

Balance Sheets

Statements of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Financial Statements

Directors’ Declaration

Auditors’ Report

Shareholder Information

Notice of Annual General Meeting

Proxy Form

2

3

4-5

6-13

14-19

20-23

24

25-26

27

28

29-43

44

45

46-47

Insert

Insert

Contents

1

2

Precico Group Sdn. Bhd.

& ElectroTech HQ

Plot 410, Lorong Perusahaan 8B

Prai Industrial Estate

13600 Prai

Penang, Malaysia

Tel: +60 (0)4 390 7414

Fax: +60 (0)4 399 7877

Telecam Electronics Limited

(Cambridge, England)

49% Frencken Brno S.R.O.

(Brno, Czech Republic)

20% Fremach International N.V.

(Belgium, The Netherlands,

& Czech Republic)

Frencken Group B.V.

(Eindhoven, The Netherlands)

Picopak Oy

(Lohja, Finland)

Picopak Electronics Sdn. Bhd.

(Penang, Malaysia)

• Frencken Mechatronics B.V.

(Eindhoven, The Netherlands)

• Machinefabriek Gebrs. Frencken B.V.

(Eindhoven, The Netherlands)

• Optiwa B.V.

(Reuver, The Netherlands)

• Associate Companies

• Precico Sdn. Bhd.

(Penang, Malaysia)

• Precico Electronics Sdn. Bhd.

(Penang, Malaysia)

• Precico M & D Sdn. Bhd.

(Penang, Malaysia)

• Precico Components Sdn. Bhd. 52%

(Penang, Malaysia)

ElectroTech Europe

ElectroTech Investments Limited(Australia & Bermuda)

ElectroTech Asia

Group Operating Structure

3

Company Particulars

Registered Office EC/20460

& Share Registrar in Bermuda

ElectroTech Investments Limited

Clarendon House, Church Street

Hamilton HM 11

Bermuda

Tel: +00 1 441 295 5950

Fax: +00 1 441 292 4720

Principal Administrative Office

ElectroTech Investments Limited

Plot 407, Lorong Perusahaan 8B

Prai Industrial Estate

13600 Prai

Malaysia

Tel: +60 (0)4 399 8397

Fax: +60 (0)4 399 9397

Solicitors

Blake Dawson Waldron

Forrest Centre

221 St. George’s Terrace

Perth WA 6000

Australia

Registered Office in Australia

ARBN 068 543 386

c/o ChartPac Securities Limited

3rd Floor, 231 Adelaide Terrace

Perth WA 6000

Australia

Tel: +61 8 9325 3888

Fax: +61 8 9202 1061

Australian Share Registry

Advanced Share Registry Services

6th Floor, 200 Adelaide Terrace

Perth WA 6000

Australia

Tel: +61 8 9221 7288

Fax: +61 8 9221 7869

Auditors

PricewaterhouseCoopers

4th Floor, Wisma Penang Garden

Jalan Sultan Ahmad Shah

10050 Penang

Malaysia

Directors Dato’ Larry Low Hock Peng Chairman

Gooi Soon Hock

Richard Alan Lister

Low Heang Thong

Richard Oh

Executive Committee Gooi Soon Hock President

Richard Alan Lister Senior Vice President

Jack van Sprang Vice President

Willie Gan Vice President

Lim Eng Hong Vice President

Secretary Godfrey Charles Semini

Stock Exchange Listing ElectroTech Investments Limited shares are listed on the

Australian Stock Exchange

4

Dear Shareholder,

I am delighted to report on another year of substantial

revenue growth and on the successful consolidation of our

substantial acquisitions in Malaysia. The benefits expected

from the restructuring of the previous year are now mate-

rialising, with sales more than doubled to A$112.9 million.

The net profit of A$3.2 million compares well with the

exceptional losses in the previous year and indicates a

positive future direction for the enlarged ElectroTech

Group. Further growth in profits can be expected for the

coming year.

ElectroTech's profile has expanded significantly since its

initial registration in Bermuda and the 1995 flotation on the

Australian Stock Exchange.

In Europe, the main manufacturing subsidiary is Frencken

Group, which was acquired in stages until full ownership

was achieved during 1997. The financial performance has

consistently improved as its growth strategy has been

realised. I am proud to report the best ever sales and profits

in the long history of Frencken Group. Frencken Group

continues to invest in further growth and in

extending its prestigious customer base. The

rebuilding and extension of the Eindhoven

site will significantly expand capacity for

future years.

In Asia, the acquisitions now consolidated as Precico

Group were completed as recently as February 1999.

Precico Group already contributes more than half of

ElectroTech's total sales revenue and shows considerable

profit potential for the future. A similar expansion and

development programme is in progress, with both

Frencken Group and Precico Group sharing an identical

growth strategy.

These centres of manufacturing excellence, with their

complementary technologies, engineering teams and

markets, will be the focus for ElectroTech's main invest-

ments during the coming year. The Picopak

microelectronic technologies acquired in the initial

ElectroTech flotation are now consolidated within Precico

Group. The other original investment was restructured in

“...substantialrevenue growthand successful

consolidation...”

“...relocateElectroTech’s

country ofdomicile

...to Singapore”

Chairman’s Statement

market and in accordance with best public company

practice.

ElectroTech will continue to strengthen its resources and

technical expertise in response to an ever growing market

demand for problem-solving production partners in both

Europe and Asia. The proposals outlined above are only

part of a process of constant change and challenge. The

Review of Operations reports further details of progress

made during the year, including positive developments

within design, manufacture, client services and mixed

technology engineering. I congratulate the professional

and technical teams, and all other employees within

ElectroTech, who have contributed towards our achieve-

ments and objectives.

By satisfying customer expectations in full and by meeting

their future needs, ElectroTech will best assure business

conditions that sustain long-term growth and consistent

increases in profit. Our approach of total

solutions inclusive of co-design and full

engineering support is already delivering

good results at Frencken Group. We still

have unrealised potential throughout the

Group and can target significant gains over the next few

years.

Dato’ Larry Low Hock Peng

Chairman

5

the previous financial year, in the series of Malaysian

acquisitions and disposal.

Therefore the Board wishes to propose corresponding

changes to ElectroTech's corporate status, and where

appropriate and in due course, will submit its detailed rec-

ommendations with supporting information and

resolutions for the necessary shareholder approvals. Such

changes will better reflect the new operational structure

and composition of ElectroTech, its increased

size and the geographic location of its

principal shareholders and corporate

head office.

The principal recommendation will be to

relocate ElectroTech's country of domicile from Bermuda

to Singapore. When this proposal is finalised, an accompa-

nying shareholder circular will explain the consequential

tax benefits in facilitating the internal flow of funds. At

present, dividend payments from ElectroTech's principal

subsidiaries can attract withholding taxes, which are not

recoverable. The change from registration of ElectroTech

in Bermuda to the registration of ElectroTech in Singapore

is not expected to affect ElectroTech's listing on the

Australian Stock Exchange, or to alter its current status as a

public company, registered outside Australia.

A Singapore domicile will also allow the Board to explore

the possibility and various routes available for seeking an

eventual listing on the Singapore Stock Exchange. The

Board has no immediate recommendations in this respect,

but will evaluate all factors, including a timing most likely to

increase shareholder value. In the meantime, increased

investor interest in ElectroTech's shares are both noted and

appreciated. Subsequent to the financial year reported,

the Board is expecting to secure interim funding in the

form of a placement of new shares, representing approxi-

mately 5% of ElectroTech's share capital.

On the recommendation of its Remuneration Committee,

the Board intends in due course to propose an Employee

Share Option Scheme to shareholders. Shareholders will be

requested to support a wide-based scheme targeted at

the recruitment and retention of skilled professional exec-

utives and engineers on an internationally competitive

...Chairman’s Statement

“...good potentialfor profit growth...”

6

ElectroTech Investments Limited

ElectroTech Investments Limited is the Bermudan regis-

tered holding company for an international group of

manufacturing companies serving multinational consumer

electronics and industrial clients in Asia and Europe. The

holding company does not engage itself in the Group's

research, development or manufacturing interests, and

these interests are directed and managed by the Board

and Executive Committee in accordance with the

Corporate Governance Statement on page 20 of this

Annual Report. In his statement on page 4 of this Annual

Report, the Chairman has notified shareholders of the

Board's intention to recommend a change in the country

of registration of the holding company to Singapore.

Details will be contained in separate information to share-

holders in due course.

The Group's principal operating companies are listed on

page 2. The operations of each company are reviewed

separately in the subsequent sections of this report. In

comparison to the major restructure of the Group in the

previous financial year, there were no substantial changes

in the overall composition and

membership of the Group during

the year ended 28 February

2000. The Group results therefore

reflect a full year's contribution

from the Precico Group

companies, which were

acquired on 27 February 1999.

Corporate changes during the financial year reported

were already notified in the previous Annual Report, and

are confirmed in the relevant sections. These can be sum-

marised as consolidation of the Malaysia acquisitions

under Precico Group, and a reduction in Frencken Group's

shareholding in an associated company. In their prelimi-

nary final report to the Australian Stock Exchange, the

Directors advised that the remaining trading operations of

Picopak Oy in Finland would be transferred to other Group

companies during year 2000. None of these changes or

this subsequent notice is expected to materially affect the

overall performance or profile of the Group for the coming

year.

The financial performance of the Group for the year

ended 28 February 2000 is consistent with the half-year

results and, compared to the previous financial year, was

largely unaffected by exceptional items. This year has

therefore been a year of stable consolidation after the

radical restructure of the previous year.

The pre-tax profit for the year was

A$5.0 million compared to a loss in

the previous year of A$6.7 million.

For comparative purposes, the

underlying pre-tax profit before

deduction of all exceptional items

and restructuring effects (as defined in the previous

Annual Report) has increased by 56%. Total group

revenues for the year were A$112.9 million compared to

A$47.5 million in the previous year. Revenues in Europe

increased by 21% to A$53.7 million.The substantial increase

in Asian revenues is almost entirely due to the inclusion of

Precico Group companies.

ElectroTech promotes a common business strategy and a

shared marketing image throughout the Group. During the

year, inter-company links and sales office support have

been strengthened as described in the relevant sections.

This builds long-term customer confidence in ElectroTech's

technology spread and its capability to give rapid

response and support at the client's own operational

base. To date, neither of the two main manufacturing sub-

sidiaries, Frencken Group and Precico Group, are heavily

dependent upon each-other for their core customers and

technologies, and both are capable of autonomous

growth. However, the potential for increased inter-

company trading and for cross-fertilisation of specific

technologies developed within the Group gives a long-

term competitive edge.

Review of Operations

7

These links will be further developed in response to specific

client needs. The extent of convergence and overlap in

ElectroTech's complementary engineering sectors will be

market driven. In customer perceptions, ElectroTech's

diversity already distinguishes it from all average, regional

or single sector manufacturers. Global players need global

suppliers, and ElectroTech is structured to meet these

needs.

Individual Internet web-sites have been linked to and from

a new Group web-site, www.electrotechgroup.com. This

provides an abbreviated version of the corporate

brochure and certain Group notices and news items.

Feedback is welcomed on further development of this

web-site.

Neither the Group nor any of its subsidiaries experienced

problems with computer systems at turn of the Millennium.

Although vigilance is maintained, the strategy of using

leading-edge proprietary software and of constantly

renewing automated systems is considered to offer

adequate long-term protection, as well as being

necessary for competitive efficiency. Separate reference

to Year 2000 compliance has therefore been removed

from the Corporate Governance Statement.

It is encouraging to note increased investor interest in

ElectroTech shares. Enquiries from institutional investors and

stockbrokers in Australia, Singapore and Malaysia have

been particularly welcome. The Board considers all

suitable opportunities for extending the shareholder base,

including offers of interim funding, which can help offset

borrowings during the Group's current expansion.

Subsequent to the current year's balance sheet date, the

Board has commenced negotiations, which are expected

to result in the issue of 12 million new ElectroTech shares to

a Malaysian based fund management company for a

consideration of A$3.87 million in cash, excluding costs. This

placement would represent on completion approximately

5% of the Group's share capital and is equivalent to

A$0.3225 per ordinary share of par value A$0.20 each.

...Review of Operations

“...long-termcustomer

confidence...”

8

Precico Group

Precico Group is ElectroTech's principal subsidiary in Asia,

manufacturing a wide range of consumer and office

automation products with all supporting plastics and

metals production technology and electronics assembly

facilities. Major clients include divisions of Sony, Hitachi,

Canon, Motorola and Ericsson. Precico Group operates

from Penang, Malaysia and consists of 5 companies on

two principal sites. It is also the administrative headquarters

of ElectroTech and provides group infrastructure and

corporate support for the Group, including direct man-

agement of the Asian interests of both Picopak and

Frencken Group.

Full ownership of the Precico Group companies was

achieved in the previous financial year as a result of the

major restructuring of ElectroTech. During the year ended

28 February 2000, pre-tax profits from these companies

were approximately A$1.1 million on revenues of A$59.2

million.

ElectroTech now has a major manufacturing centre in Asia

which represented 51% of total Group assets and 52% of

total Group revenues in the reporting year. Precico Group

provides the experience and flexibility to support

ElectroTech's medium and high volume requirements

world-wide, and has markets and technologies which are

complementary to the main European manufacturing

centre at Frencken Group.

During the year, Precico Group has consolidated

individual companies under its ownership as pre-

viously reported and has focused on a common

growth strategy and on new investments in engi-

neering, technical resources, capacity and

equipment. As the benefits of investment and expansion

are realised, there is good potential for profit growth.

Revenues at Precico Electronics, formerly known as

Eastrade Electronics, were affected by reduced customer

demand for radio and pager products, and resulted in

lower profits. Pre-tax profit was

A$1.1 million on sales of A$30.3

million. During these market condi-

tions, the challenge of long-term

restructuring to meet new market

opportunities is being met by new

management and by Precico

Group's central engineering and marketing team. A

programme of reinvestment, which includes a new factory

layout, is in progress.This will improve flexibility and response

cycles for the manufacture of mixed technology products

with a wide range of volumes and variants. The microelec-

tronic assembly processes from Picopak have also been

accommodated within the Precico Electronics factory.

Precico Electronics is in transition, and will progressively

convert from an electronics contract assembler into

further integration with Precico Group as a main supplier.

Clients can be offered higher added-value from co-engi-

neering and from Precico Electronics' own development

of specialised processes.

This transition is already

becoming apparent at Precico,

the company within Precico

Group, which specialises in

precision moulded plastics

and, increasingly, in related manufacturing

and assembly work. Revenues for the year were A$28.9

million, with pre-tax profit increased significantly to A$1.4

million. Considerable progress has been made in strength-

ening the technology base and engineering

support, particularly on engineering plastics,

keypad technologies and on films for in-mould

processing. This has attracted contracts for

assembled modules using in-house mouldings,

but also including a high content of mixed com-

ponents purchased from Precico Components and

outside vendors.

...Review of Operations

“Precico...higheradded-value”

9

The growing flexibility and vertical

integration at Precico is also

promoted by an in-house capabil-

ity for mould manufacture

provided by Precico M&D. Further

growth is expected and invest-

ments are continuous. During the

coming year, Precico will invest in further expansion and

automation of its facilities towards manufacturing excel-

lence.

Precico Components, the machined parts company

jointly sponsored by Frencken Group and Precico Group,

maintained progress during the year, despite fluctuations

in external customer demand. Internal sales of precision

turned parts to Precico and of complex machined com-

ponents to Frencken Group are strategically important to

complement assembly activities at the main manufactur-

ing companies. Revenues for the year were A$3.3 million,

with pre-tax profit of A$0.2 million before minority interests.

The clear market trend indicated by major and prospec-

tive clients is to contract out all aspects of manufacture,

inclusive of component manufacture or

purchase, subsequent assembly and test,

and all the supporting functions of logistics

and engineering. This demands close inte-

gration with the customer, and constant

challenge on many levels. Precico Group is

responding in each of its companies and in

strengthening its support both centrally and close to the

end customer.

During the financial year, Precico Group has established a

small sales support office in Japan,and is increasingly using

the services of Telecam in England for supporting its

European based customers' operations. These internation-

al offices will additionally help attract new projects by

proximity to the engineering teams of existing and

prospective clients.

Capacity for expansion is being provided with a new

building programme within the factory complex. Precico

Group is also growing its certified supplier base and

already subcontracts its capacity overload of less

complex components. Active consideration will be given

to local acquisitions providing additional capacity or com-

plementary facilities. In addition, a full range of electronic

components and all items complementing the in-house

capabilities are purchased on a world competitive basis

throughout Asia. A central department for purchasing and

logistics has been established with professional responsibil-

ity for all external business supplies and relationships. This

resource is also available to clients as an additional out-

sourcing service.

Through these forward-looking initiatives, and by continu-

ous improvement and adaptation, Precico Group will

further develop. As the strategy delivers future growth, in-

house capacity will become absorbed by more complex

assembly and engineering. Nevertheless, a fully integrated

manufacturing service will be maintained offering total

solutions from both internal and external resources.

...Review of Operations

10

Frencken Group

Frencken Group is well established as a full service main

supplier and is ElectroTech's principal manufacturing

centre in Europe. It specialises in precision-engineered

assemblies and electro-mechanical

systems for high technology industry.

Major clients include divisions of Philips,

Bayer and ASML.

In the 12 months ended 31 December

1999, pre-tax profits increased by 52%

to A$7.3 million. Net turnover for the year increased by 24%

to A$51 million. These record results reflect the high quality

of technical expertise, the support of its excellent customer

base and the consistent application of long-term growth

strategies.

Part of the increased turnover can be attributed to

cyclical recovery in the markets served by certain key

clients, resulting particularly in an increased demand for

machinery used in the semiconductor processing industry.

Demand for medical systems such as cardio-vascular

scanners and X-ray spectrometers also met expectations.

In addition, new manufacturing growth is being generated

from clients recently attracted from the optics,diagnostics,

and factory automation industries. Production of electron

microscopes and

machinery for high-

speed manufacture

of CD-R's (compact

discs) is making an

increasing contribu-

tion to turnover.

Throughout the year, Frencken Group has continued to

support Precico Components in Malaysia with orders for

precision-engineered components, and with technical

and sales development. Precico Group is also the

potential manufacturing and assembly partner in a

Frencken Group project for designing a needleless

injection pistol, commissioned by the veterinary medicine

industry. Further exchanges between technical and man-

agement personnel at Frencken Group and Precico

Group are planned during the coming year.

Frencken Group is normally involved in the development

of a complete piece of apparatus from the initial specifi-

cation through to delivery of an end-product in

production volumes. This requires a client-oriented organi-

sation that can react flexibly to continuous changes.

Corresponding investments are made in engineering,

project purchases, assembly capacity and in logistics

management. This will continue to be a focus during the

coming year.

To achieve further increases in

turnover and profit, capacity at

the principal Eindhoven site is

being expanded. At the end of

1999 building work commenced on

a new extension of approximately

4000 m² consisting mainly of assembly

and clean-room facilities, but involving also the rebuilding

of existing factory and office space. The total investment

inclusive of infrastructure will be approximately A$7 million,

financed from retained profits and mortgage borrowings

at Frencken Group. Completion is scheduled for around

August 2000.

...Review of Operations

“Frencken...record results”

11

In June 1999, Frencken Group reduced its 40% sharehold-

ing in Fremach International NV to 20%, in a cash sale to

Fremach's directors for A$1.6 million, representing a A$0.4

million profit over the book value of these shares. The

Fremach directors, who hold the entire balance of

Fremach shares, wish to further develop this plastics tech-

nology associate with the benefit of increased

management participation.As a result of this partial divest-

ment, Fremach contributed A$0.3 million to Frencken

Group profits compared to A$0.6 million in the previous

financial year.

Frencken Group has achieved stable new levels of high

performance based upon long running contracts and a

good spread of industrial clients. It can continue to

expand and to add a few key projects each year,

however, future financial gains will realistically be more

modest when expressed in percentage terms. Building an

excellent reputation depends upon intensive professional

support from engineering and logistics teams who are

capable of highly intelligent added value. Frencken

Group consolidates its strengths and develops new

projects with the utmost care for sustain-

ing solid relationships and for

building long-term shareholder

value. The year 2000 is

expected to be another

successful year.

...Review of Operations

“...Eindhoven sitebeing expanded”

12

Picopak

Picopak develops microelectronic assembly processes for

application in ElectroTech's electronics factories. Picopak

has its original development subsidiary in Finland, and a

manufacturing subsidiary in

Malaysia.

It is disappointing to report that the

major manufacturing contract for

chip-module assemblies during the

financial year reported, was

suspended and subsequently cancelled due to break-up

of the end-client consortium in Japan. Reasons for the

beak-up are unconnected with vendor supply. The

capacity in Malaysia has since been re-deployed on a

number of smaller projects for the assembly of smart cards

and tags, and has been relocated within the Precico

Electronics factory. However, it has not been possible to

find a similar compensating workload for the specialist

operations in Finland. Combined turnover for the year from

Picopak operations was A$1.4 million with a loss of A$1.1

million.

In the preliminary final report to the Australian Stock

Exchange, the directors of ElectroTech announced the

intention to phase-out trading operations at Picopak Oy, in

Finland, by end of year 2000 and maintain only a small

research support activity. The related costs in the coming

year are not expected to exceed the losses of any

previous year, inclusive of the accelerated write-down of

goodwill already reported.

Many of the back-end microelectronic assembly

processes developed in Finland at Picopak Oy have

already been progressively transferred to its sister

company Picopak Electronics Sdn. Bhd., which was estab-

lished in Malaysia in 1995 for the express purpose of

realising production volumes. Picopak Oy has specialised

in supporting new process development including pre-pro-

duction evaluation and back-end processing prior to

manufacture in Malaysia. ElectroTech remains convinced

of the long-term potential for Picopak's technologies, but

recognises that sustained investment is necessary with

considerable infrastructure support. The business originat-

ing in Europe has been limited to date, and the continued

separation of a pre-production engineering facility from

the main production centre will become increasingly inef-

ficient to maintain. ElectroTech has therefore decided to

consolidate all Picopak's manufacturing operations within

its headquarters factory complex in Malaysia, where it

already has a supporting departmental infrastructure and

related business activities.

All viable and appropriate production activities remaining

at Picopak Oy will be transferred to Picopak Electronics in

the period between July and December 2000. Discussions

have already started with the existing customers of

Picopak Oy in order to offer continuity of supply, either

directly from Picopak Electronics in Malaysia, or through

ElectroTech's European sales office at Telecam in

Cambridge, England.

Picopak's co-founder and the

originator of its technology

will continue to support

Group activities, and will

maintain existing research

and development co-

operation between Picopak and external institutions, for

example, with the Helsinki University of Technology.

By deciding that further funding should focus on a single

microelectronics development centre in Malaysia,

ElectroTech fully expects that the

work pioneered in Finland can

continue effectively, for the future

commercial benefit of the

entire Group and its worldwide

client base.

...Review of Operations

“...a single micro-electronics

developmentcentre”

13

Telecam Electronics

Telecam Electronics is the UK corporate office of

ElectroTech with responsibility for business development

and the management of ElectroTech's interests in Europe.

During the financial year, this business activity earned

A$0.6 million in management service fees from other

ElectroTech Group companies.

The Group is also developing Telecam as a European sales

and engineering support facility, which provides local

service to existing Precico Group clients in Europe and

promotes Group facilities in general. During the financial

year, an increased proportion of the overhead was

allocated to this activity, although revenues to date are

nominal. An additional cost was the relocation of Telecam

to improved new office accommodation in Duxford,

Cambridge.

The product division continues to make a positive contri-

bution to the overall costs of this subsidiary. Sales increased

9% to A$1.4 million, and modest growth is expected to

continue during the coming year. Products are TV

antennae and signal amplifiers manufactured by Precico

Electronics and sold to UK retailers.This activity is supported

by one full-time employee, whilst the small design team at

Telecam is focused on assisting the Group's overall growth

objectives.

For the combined activities of Telecam Electronics, costs

during the reporting year exceeded revenues by A$0.2

million.Future results will be largely dependent on revenues

earned within the Group through commissions and fees,

and from developing new Group projects and trading

relationships.

Gooi Soon Hock Richard A. Lister

President Senior Vice President

...Review of Operations

“...assisting theGroup’s overall

growth objectives”

14

In respect of the financial year ended 28 February 2000, the directors of ElectroTech Investments Limited, the

Company, submit the following report made out in accordance with a resolution of the directors.

Incorporation and General Information

The Company was incorporated as an exempt company in Bermuda.As a result of this incorporation,the Company is subject

to Bermuda law and is required through its bye-laws to comply with the Listing Rules of the Australian Stock Exchange.

In this Directors' Report under the heading "Likely Developments and Expected Results of Operations", further

reference is made to the Company's incorporation in Bermuda.

The Company is not subject to the Corporations Law of Australia although it is registered as a foreign company under

the Corporations Law. The effect of this registration is that the Company is allocated an Australian registered body

number and is subject only to various reporting obligations under the Corporations Law.

The Company is not subject to any regulation in respect of take-overs including, in particular Chapter 6 of the

Corporations Law dealing with the acquisition of shares and substantial shareholdings.

Bermuda Law does not impose any specific limitations on the acquisitions of shares in the Company.

Directors

The following persons were directors of the Company during the whole of the financial year and up to the date of this report:

Dato' Larry Low Hock Peng

Gooi Soon Hock

Richard Alan Lister

Low Heang Thong

Richard Oh

Principal Activities

The Company is an investment holding company. The principal activities of the subsidiary companies are shown in

Note 11 to the financial statements.

Currency in the Financial Statements

The financial statements are expressed in thousands of Australian Dollars ("A$'000"). Amounts have been rounded off

to the nearest thousand Australian Dollars.

Trading Results Group Company

A$'000 A$'000

Profit/(loss) before taxation 5,026 (200)

Taxation (1,745) -

Profit/(loss) after taxation 3,281 (200)

Minority interests (95) -

Net profit/(loss) for the financial year 3,186 (200)

A Review of Operations is presented as a separate section in the Annual Report.

Directors’ Report

15

Dividends

The directors of the Company do not recommend the payment of a dividend for the financial year ended

28 February 2000.

Significant Changes in the State of Affairs

On 28 April 1999, the Company's shareholdings in subsidiary companies were restructured as follows:

• The Company acquired all the shares in Precico Group Sdn. Bhd. from Precico Sdn. Bhd. for a consideration of

A$850,700.

• The Company disposed of its entire interest in shares of Precico Sdn. Bhd. to Precico Group Sdn. Bhd. for a

consideration of A$11,820,400.

On 28 June 1999, the Company's subsidiary, Frencken Group BV disposed of a 20% shareholding interest in its associate

company, Fremach International NV for a consideration of A$1,600,000.

Matters subsequent to the end of the Financial Year

There have been no events occurring and no matters in hand that were finalised in the period between the end of

the financial year reported and the date of this report.

Likely Developments and Expected Results of Operations

Likely developments in the operations of the Company and its subsidiaries that were not finalised at the date of this

report included:

• The intention to seek shareholder approval for changing the Company's country of domicile from Bermuda to

Singapore on terms to be detailed separately from this Annual Report, but with references in the Chairman's

Statement and elsewhere in this Annual Report.

• The Board of Directors has commenced negotiations which are expected to result in the issue of 12 million new

ElectroTech shares to a Malaysian based fund management company for a consideration of A$3.87 million in

cash, excluding costs. This placement would represent on completion approximately 5% of the Group's share

capital, equivalent to A$0.3225 per ordinary share of par value A$0.20 each.

• The intention to phase-out trading operations at subsidiary company Picopak Oy during the financial year

ending 28 February 2001 as referred to in the Review of Operations section of this Annual Report.

• A proposal outlined in the Corporate Governance Statement of this Annual Report, under the heading

"Remuneration Committee", for establishing in due course an Employee Share Option Scheme, on terms not yet

finalised and subject to separate shareholder approval.

Included elsewhere in this Annual Report are comments that do not specifically quantify expected results, but are

illustrative of general expectations from the Group's operations.

Quantified information on expected results and further information on likely developments, other than those listed

above, are not included for reasons of commercial confidentiality. Nevertheless, all likely events are given due con-

sideration in the comments contained elsewhere in this Annual Report.

...Directors’ Report

16

Options

At 28 February 2000, the Company had no options on issue over its ordinary shares.

During the financial year ended 28 February 2000, 51,476,000 options have expired as unexercised and 40,000 options

were exercised prior to their expiry date at a price of A$0.25 per ordinary share.

Directors' Remuneration

For the financial year ended 28 February 2000, the total remuneration of the directors was approximately A$750,000

(1999: A$482,000).

The policy for determining the nature and amount of remuneration and its relationship with the Group's performance

is included in the Corporate Governance Statement under the section entitled "Remuneration Committee" on page

21 of the Annual Report.

Directors' Benefits

No director of the Company has, since the end of the previous financial year, received or become entitled to receive

a benefit by reason of a contract made by the Company, a subsidiary or a related body corporate with the director

or with a firm of which the director is a member, or with an entity in which the director has a substantial financial

interest with the exception of benefits that may be deemed to have arisen in relation to the following transactions

entered into in the ordinary course of business:

• The Company has signed a management agreement with Richard Oh & Co. Ltd. to provide secretarial and

advisory services on Australian Stock Exchange and Corporate Law matters at a fee of A$3,000 per month for

the financial year ended 28 February 2000.

• Precico Electronics Sdn. Bhd. paid factory rental of A$214,000 to Davex Holdings Berhad, a subsidiary company

of MWE Holdings Berhad in which Dato' Larry Low is a director and has an interest.

Directors' Interests in Contracts

No material contracts involving directors' interests were entered into since the end of the previous financial year other

than the transactions detailed in Note 26 to the financial statements.

Directors' Shareholdings at the date of this Report

Number of shares held

Direct Indirect

Dato' Larry Low Hock Peng 96,000 31,967,794

Gooi Soon Hock 10,376,000 75,457,006

Richard Alan Lister 120,000 -

Low Heang Thong 200,000 32,467,794

Richard Oh - 250,000

...Directors’ Report

17

Information on Directors and Executives

Dato' Larry Low Hock Peng

Dato' Larry Low (aged 48) is the founding non-executive Chairman of ElectroTech's Board of Directors, and chairs its

Remuneration Committee. He was educated in The London School of Economics and Political Science, University of

London where he obtained a degree in Economics (BSc (Econs) (Hons)). Subsequently, he obtained a Masters in

Business Administration (MBA) degree from the University of California, Los Angeles.

Dato' Larry Low holds several board positions in listed and unlisted companies in Malaysia, Singapore, Europe, United

States of America and New Zealand. He is currently the Executive Advisor of the Penang Chinese Chamber of

Commerce.

Gooi Soon Hock

Mr. S. H. Gooi (aged 46) is a founder and executive Director of ElectroTech, and is President of its Executive Committee.

He has extensive experience in the start-up of manufacturing companies and in developing them into successful

international businesses.

Mr. Gooi is the present Managing Director of Precico Group and a founder member and director of each of its

subsidiary companies in Malaysia. His early involvement in Picopak, Telecam, and Frencken Group were instrumental

in the creation and subsequent development of ElectroTech.

Richard Alan Lister

Richard Lister (aged 50) is an executive Director of ElectroTech, its original CEO and is now Senior Vice President of its

Executive Committee. He is a Chartered Engineer (MIEE) with an honours degree in engineering (MA) from

Cambridge University, England.

Mr. Lister is also Chairman and Supervisory Director of Frencken Group, and the founder and Chairman of Telecam in

Cambridge, England, where he is presently based. He has extensive previous experience in the management of

international electronics and manufacturing companies.

Low Heang Thong

Mr. H. T. Low (aged 47) has been a non-executive Director of ElectroTech since 1996 and is a member of the

Remuneration Committee. He represents the interests of certain major shareholders in Malaysia, including the family

interests of the Chairman, who is also a significant shareholder.

Mr. Low was educated in London where he obtained his diploma in Automobile Engineering and Business Studies. Mr.

Low has since become actively involved in the management and operations of his family's many varied businesses.

He currently also holds several board positions in companies primarily involved in property development and

investments.

Richard Oh

Richard Oh (aged 51) is a founding non-executive Director of ElectroTech and is a member of the Remuneration

Committee. He is an Australian national and represents ElectroTech's interests in Australia by providing management,

secretarial and advisory services on statutory and Stock Exchange matters. He is a Chartered Accountant (ACA,

...Directors’ Report

18

MAICD) and an affiliate member of the Securities Institute of Australia (SIA (Aff)). He has extensive experience in the

accounting, stockbroking and corporate consultancy professions.

Mr. Oh is Managing Director of ChartPac Securities Limited, a Member Corporation of Australian Stock Exchange

Limited. He has previously held positions as director and/or company secretary in various listed and unlisted public

companies. He is also a member of the Australian Institute of Company Directors and a foundation member of the

Western Australian Chinese Chamber of Commerce.

Jack van Sprang

Jack van Sprang (aged 56) is a Vice President on ElectroTech's Executive Committee and Managing Director of

Frencken Group and its subsidiaries.He joined Frencken Group in 1996,as Director of its Mechatronics Division,and was

appointed Managing Director of Frencken Group in April 1998.

Mr. van Sprang was most recently the Director of Philips Machinefactory and has 30 years previous experience in

various management, engineering and manufacturing positions within the Philips organisation in the Netherlands.

Willie Gan

Willie Gan (aged 44) is a Vice President on ElectroTech's Executive Committee and is presently responsible for

corporate affairs. He was previously Manager of Finance and Corporate Affairs for the Precico group of companies

from 1992 until acquisition by ElectroTech.

Mr. Gan qualified as a Chartered Accountant in the UK, before working for Price Waterhouse in Malaysia as an Audit

Manager, and subsequently as Regional Office Manager based in Penang.

Lim Eng Hong

Mr. E. H. Lim (aged 52) was appointed as a Vice President on ElectroTech's Executive Committee on 1 May 2000 and

is responsible for Group Finance. He is a Director of Precico Group and has been its Group Finance Manager since

joining the company in March 1999.

Mr. Lim was previously Financial Controller of Philips Electronic Supplies in Malaysia and has held various financial man-

agement positions within Philips and other manufacturing organisations. He is a fellow member of the Chartered

Association of Certified Accountants and a registered accountant of the Malaysian Institute of Accountants.

Directors' Meetings

The number of directors' meetings held during the financial year ended 28 February 2000 and the number of meetings

attended by each director were:

Board of Directors' meetings

Number held Number attended

Dato' Larry Low Hock Peng 8 8

Gooi Soon Hock 8 8

Richard Alan Lister 8 8

Low Heang Thong 8 8

Richard Oh 8 8

...Directors’ Report

19

The functions of the board and its committees are described in the Corporate Governance Statement.The Corporate

Governance Statement gives details of membership of each committee and attendance on committees by each

director.

Indemnification and Insurance of Officers

During the financial year the Company has not entered into any agreements to indemnify any directors of the

Company and its controlled entities against liabilities to persons (other than the Company or a related body

corporate) which arise out of the performance of their duties as director or executive officer other than indemnities

given to directors and officers of the Company or its subsidiaries for personal guarantees given by the directors or

officers to financial institutions to secure financial facilities for the ElectroTech Group of Companies. However, the

Company did not provide directors and officers with liability insurance.

Environmental Regulation

The Board does not consider that the Company or its subsidiaries are subject to unusual or onerous environmental reg-

ulation in any of the countries in which it operates. The management at each subsidiary is responsible for full

compliance with health, safety and environmental legislation and for meeting all regulations applicable in their

respective locations and industries. During the financial year reported and up to the date of this report, there were

no known breaches of any environmental regulation and no material issues arising.

Auditors

The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.

For and on behalf of the boar d

Dato' Larry Low Hock Peng Gooi Soon Hock

Director Director

Date: 20 May 2000

...Directors’ Report

20

The Board of Directors

The Board of Directors presently consists of a non-executive chairman, two executive directors and two non-executive

directors. There have been no changes in membership of the Board of Directors during the year. Details of the

directors are set out in the Directors' Report on page 17 under the heading "Information on Directors and Executives".

The Board meets regularly under non-executive Chairman, Dato' Larry Low, to direct the Group's holding interests and

strategy. The Directors are committed to apply best practice in corporate governance in a manner which is best

suited to the operational structure of the Group, and which is most appropriate to fulfilling their statutory responsibili-

ties and maintaining accountability. The Board keeps the adequacy of its corporate governance procedures under

review, and where necessary establishes committees. To allow detailed consideration of complex issues, these com-

mittees may consist of certain members of the Board, or of executive directors supported by suitably qualified

members of the Group's senior management.

Due to enlargement of the Group in the previous financial year, the Board established both an Executive Committee

and a Remuneration Committee during April 1999. The composition, responsibilities and principal activities of these

committees are stated below.

There are no other committees established by the Board at the date of this report.

Executive Committee

The Executive Committee is responsible to the Board for the management of ElectroTech's operational activities and

subsidiary interests. The Executive Committee reports to the Board on a regular basis, and the Directors as a whole

continue to hold statutory responsibility for the duties delegated to the Executive Committee and discharged by the

committee on behalf of the Board.

The Executive Committee at the time of this report has the following members -

Mr. Gooi Soon Hock President

Mr. Richard Alan Lister Senior Vice President

Mr. Jack van Sprang Vice President

Mr. Willie Gan Vice President

Mr. Lim Eng Hong Vice President (appointed 1 May 2000)

Mr. Gooi and Mr. Lister are executive Directors of ElectroTech. Mr. van Sprang is the Managing Director of Frencken

Group. Mr. Gan is the vice president responsible for corporate affairs, and Mr. Lim is the vice president responsible for

group finance. Further information on Directors and Executives is given in the Directors' Report on page 17.

A Review of Operations is presented on pages 6 - 13 of this Annual Report. This has been signed by the President and

by the Senior Vice President on behalf of the Board. A separate review of the work of the Executive Committee is not

considered appropriate and a table of attendance at meetings does not add to shareholder understanding of how

this committee operates.

Corporate Governance Statement

21

Members of the Executive Committee are also the principal directors and managers of each of the Group's sub-

sidiaries and are in constant day-to-day contact using all modern methods of computer assisted information transfer

and multi-user communications. As a complex technology-based Group, ElectroTech cannot rely upon formal face-

to-face meetings for rapid executive decision-making or effective inter-group co-ordination. Executives nevertheless

meet very regularly with one another, either formally, informally, electronically or with others on subsidiary board and

management meetings.

For corporate governance purposes, it is most appropriate to consider that the Executive Committee manages the

Group in real-time on a constant needs basis. Feedback and interchange with the Board takes place on each

occasion that the Board of Directors also meets.

Remuneration Committee

The Remuneration Committee consists of the Chairman, Dato' Larry Low, and the two non-executive Directors, Mr.

Richard Oh and Mr. H. T. Low.

The committee reviews the remuneration of executive Directors, and, based on the recommendation of executive

Directors, also approves the remuneration of other senior managers on the Executive Committee. The entire Board

determines the remuneration of non-executive Directors.

The committee also advises the Board on remuneration policies and practices generally, and makes specific recom-

mendations on terms of employment, performance related packages and other benefits and incentive schemes.

The Remuneration Committee meets concurrently with main board meetings on those occasions when there is

business to transact, or when the Board has referred specific items to the committee. There were 4 such meetings

during the reporting year and the entire committee attended these meetings.

The remuneration of directors is summarised on page 16 of the Directors' Report under the heading "Directors'

Remuneration". The broad policy for determining the nature and amount of emoluments is to consider professional

salary levels in each country of residence; the competitive demand locally for the individual's skills and experience;

the performance of each individual in respect to his contributions to, and against targets set within, the Group and

each subsidiary for which he has a responsibility; and the profitability, remuneration culture and strategic contributions

of each of these entities. In each of these respects, external expert advice and relevant comparative information is

obtained as appropriate.

During the year, the Remuneration Committee has considered methods by which certain subsidiary executives, key

managers, and engineers can also identify with the aims and objectives of ElectroTech as a whole, and can feel

recognised and rewarded within the culture of a public company parent. Principal loyalty has been to the immediate

operating company, which operates best employment practice in its own country, but rewards key employees in

accordance with own unit performance and locally competitive conditions. However, the present needs and

resources of the subsidiary may restrict the recruitment, development and retention of career professionals who are

capable of Group-wide contributions over a longer period. Such individuals can be encouraged by financial partic-

ipation in the Group and this helps to align their long-term self-interest and priorities with those of the shareholders.

...Corporate Governance Statement

22

On external expert advice, the Remuneration Committee has recommended a broadly-based Employee Share

Option Scheme to the Board. Exact terms will be separately submitted for shareholder approval when full details are

complete. The Remuneration Committee will administer the Employee Share Option Scheme. It is envisaged that

options will be awarded over a 3-year period to key employees based upon annual performance and profit contri-

bution. New ordinary shares will be issued up to a maximum of 10% of the issued share capital, and an option to

purchase these shares will be offered at the average market price prior to shareholder approval. The Scheme will be

subject to rules approved by the Australian Stock Exchange and will conform to best industry practice within interna-

tional public companies.

Nominations, Appointments and Retirements

The size of the Board and its Executive Committee are considered appropriate and adequate for the present opera-

tional structure of the Company. Major shareholding interests are suitably represented on the Board. Operational

management is suitably represented on the Executive Committee,and the Board considers that the current Executive

Committee can be further extended as the delegated workload and the required range of professional skills demand.

Appointments to the Board and retirements are handled in accordance with the Company's constitution. These

provide for directors to be initially appointed by the Board, subject to election by shareholders at the next annual

general meeting, and re-election at two-yearly intervals. Appointments to and discharges from the Executive

Committee are made by the entire Board on the recommendation of the executive Directors.

The entire Board therefore acts as a nominations committee, and a separate nominations committee is not

envisaged. The Directors continue to review the requirements for complementary skills and experience. They will

consider new internal or external appointments to the Board as the need arises, and will further strengthen or change

the Executive Committee in accordance with the Group's further development.

Independent Advice, Audit and Business Risk

As appropriate for the size of the Board, there is no formal audit committee nominated from members of the Board.

The Board as a whole considers and reviews the audit report, approves the annual financial statements, and monitors

the financial performance of the Company. During the financial year reported, the executive Directors advised the

Board on these matters and made available any internal audit reports. All external audit reports from the Group and

their corresponding management letters are also made available to non-executive Directors on request.

The Directors collectively take external professional advice as necessary, and as policy, non-executive Directors are

offered their own independent access to the Company's professional advisors on any reasonable request through the

Chairman.

Each subsidiary of ElectroTech is self-sufficient in financial reporting and compliance to the statutory requirements of

its country of registration. The subsidiary boards of directors are supported by one or more members of the Board and

Executive Committee, and are responsible for regular review of business risk, scope of audit, terms of engagement,

and the effectiveness and efficiency of internal controls within their specific companies.The internal audit department

within the Group gives additional support to the Executive Committee. Significant risks and events, supported by

financial reports, are highlighted through the monthly management structure to the Executive Committee, who in turn

advises the Board. All financial information, including audit reports and other external advice, are transparently

available to the Executive Committee, and are available to the Board on request. The Board remains ultimately

responsible for direction and review of the Group as a whole.

...Corporate Governance Statement

23

Ethical Standards

The Directors are determined to maintain high ethical standards through development of the Company's governance

requirements as necessary, and each has an awareness of the duties imposed on them as a director of a public

company. As policy throughout the Group, unethical conduct by any employee will not be tolerated. In all circum-

stances, all directors, executives and employees are charged with the highest standards of personal integrity and

objectivity, over and above strict compliance with the legislative regimes applicable in the countries in which they

operate.

...Corporate Governance Statement

24

Income Statements

Operating revenue 112,870 47,474 - -

Cost of sales (77,404) (20,719) - -

Gross profit 35,466 26,755 - -

Other operating income 1,308 610 - 111

Distribution costs (1,490) (651) - -

Administrative expenses (7,239) (3,053) (184) (477)

Other operating expenses (20,105) (31,996) - (2,909)

Operating profit/(loss) 4 7,940 (8,335) (184) (3,275)

Finance costs (3,269) (1,150) (16) -

Share of result of associates 355 2,794 - -

Profit/(Loss) before taxation 5,026 (6,691) (200) (3,275)

Taxation 5 (1,745) (1,819) - -

Profit/(Loss) from ordinary activities 3,281 (8,510) (200) (3,275)

Minority interests (95) 62 - -

Net profit/(loss) for the year 3,186 (8,448) (200) (3,275)

Net profit/(loss) per share - cents 20 1.45 (5.85) - -

Group Company

Notes 2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

for the financial year ended 28 February 2000

The notes on pages 29 to 43 f orm part of these financial statements.

25

Balance Sheets

The notes on pages 29 to 43 form part of these financial statements.

Assets

Inventories 6 19,113 17,146 - -

Accounts receivable 7 23,646 15,903 3,851 8,250

Cash and bank balances 8 889 883 19 5

Current assets 43,648 33,932 3,870 8,255

Property, plant and equipment 9 30,645 31,753 - -

Intangible assets 10 17,940 20,851 - -

Subsidiary companies 11 - - 42,914 40,474

Associated companies 12 2,190 2,883 - -

Non-current assets 50,775 55,487 42,914 40,474

Total Assets 94,423 89,419 46,784 48,729

Liabilities

Accounts payable 13 22,707 17,072 136 3,572

Lease creditors - current portion 14 456 1,104 - -

Short term borrowings 15 12,246 15,434 - -

Term loans - current portion 16 4,146 3,730 - -

Taxation 1,564 1,609 - -

Current liabilities 41,119 38,949 136 3,572

Term loans 16 7,131 9,524 - -

Hire purchase creditors - long term portion 14 344 349 - -

Deferred taxation 17 1,774 1,938 - -

Non-current liabilities 9,249 11,811 - -

Total Liabilities 50,368 50,760 136 3,572

Net Assets 44,055 38,659 46,648 45,157

Group Company

Notes 2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

as at 28 February 2000

26

...Balance Sheets

Equity

Share capital 18 44,501 43,148 44,501 43,148

Share premium account 5,972 5,634 5,972 5,634

Exchange fluctuation reserve 830 406 - -

Accumulated losses (7,534) (10,720) (3,825) (3,625)

Equity attributable to shareholders 43,769 38,468 46,648 45,157

Minority interests 286 191 - -

Total Equity 44,055 38,659 46,648 45,157

Approved by the board

Dato' Larry Low Hock Peng Gooi Soon Hock

Director Director

Group Company

Notes 2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

as at 28 February 2000 (continued)

The notes on pages 29 to 43 form part of these financial statements.

27

Statements of Changes in Equityfor the financial year ended 28 February 2000

The notes on pages 29 to 43 f orm part of these financial statements.

At 28.2.2000

At 1.3.1999 43,148 5,634 406 (10,720) 38,468

Currency translation differences - - 424 - 424

Net profit - - - 3,186 3,186

Issue of share capital 1,353 338 - - 1,691

At 28.2.2000 44,501 5,972 830 (7,534) 43,769

At 28.2.1999

At 1.3.1998 28,750 5,634 (92) (2,272) 32,020

Currency translation differences - - 498 - 498

Net loss - - - (8,448) (8,448)

Issue of share capital 14,398 - - - 14,398

At 28.2.1999 43,148 5,634 406 (10,720) 38,468

At 28.2.2000

At 1.3.1999 43,148 5,634 - (3,625) 45,157

Net loss - - - (200) (200)

Issue of share capital 1,353 338 - - 1,691

At 28.2.2000 44,501 5,972 - (3,825) 46,648

At 28.2.1999

At 1.3.1998 28,750 5,634 - (350) 34,034

Net loss - - - (3,275) (3,275)

Issue of share capital 14,398 - - - 14,398

At 28.2.1999 43,148 5,634 - (3,625) 45,157

Group Exchange

Share Share fluctuation Accumulated

capital premium reserve losses Total

A$’000 A$’000 A$’000 A$’000 A$’000

Company Exchange

Share Share fluctuation Accumulated

capital premium reserve losses Total

A$’000 A$’000 A$’000 A$’000 A$’000

28

Consolidated Statement ofCash Flows

Cash flows related to operating activities

Receipts from customers 106,338 49,768

Payments to suppliers and employees (95,947) (45,197)

Cash generated from operations 19 10,391 4,571

Interest and other items of similar nature received 70 200

Interest and other costs of finance paid (1,735) (1,207)

Taxes paid (1,994) (3,002)

Net operating cash flow 6,732 562

Cash flows related to investing activities

Payments for purchase of property, plant and equipment (4,880) (2,325)

Proceeds from disposal of plant and equipment 1,310 7

Proceeds from partial divestment of equity interest in associated company 1,570 -

Dividend received - 110

Net investing cash flow (2,000) (2,208)

Cash flows related to financing activities

Proceeds from issues of shares 10 -

(Repayment)/Proceeds from borrowings (68) 5,038

Repayment of lease creditors (1,384) 682

Net financing cash flow (1,442) 5,720

Net change in cash and cash equivalents 3,290 4,074

Cash and cash equivalents at beginning of financial year (6,608) (3,288)

Deconsolidation of a subsidiary - 447

Cash and cash equivalents of subsidiary at acquisition date 11 - (7,243)

Exchange rate adjustments 713 (598)

Cash and cash equivalents at end of financial year (2,605) (6,608)

Cash and cash equivalents

Deposits with banks 137 9

Cash in hand and at banks 752 874

Short term borrowings (3,494) (7,491)

(2,605) (6,608)

The notes on pages 29 to 43 f orm part of these financial statements.

Notes 2000 1999

A$’000 A$’000

for the financial year ended 28 February 2000

29

1 The Company

The Company, incorporated on 3 February 1995 under the laws of Bermuda, is listed on the Australian Stock

Exchange. The Company's principal activity is that of an investment holding company.

2 Currency Used in the Financial Statements

In view of the international nature of the Group's operation and the listing of the shares of the Company on the

Australian Stock Exchange, the financial statements are expressed in thousands of Australian Dollars ("A$'000").

3 Significant Accounting Policies

(a) Basis of accounting

The financial statements have been prepared under the historical cost convention and comply with

International Accounting Standards.

(b) Basis of consolidation

Subsidiary companies, which are those companies in which the Group, directly or indirectly, has an interest of

more than one half of the voting rights or otherwise has power to exercise control over the operations, have

been consolidated. Subsidiary companies are consolidated from the date on which effective control is

transferred to the Group and are no longer consolidated from the date of disposal. All intercompany

transactions, balances and unrealised surpluses and deficits on transactions between Group companies have

been eliminated. Separate disclosure is made of minority interests.

(c) Equity accounting

The Group equity accounts for its investments in associated companies in the consolidated financial statements.

Corporations in which the Group has a material interest and over which the Group exercises significant

influence, but does not control, are considered to be associated companies.

Equity accounting involves recognising in the income statement the Group's share of the associates' profit or loss

for the financial year. The Group's interest in the associate is carried in the balance sheet at an amount that

reflects its share of the net assets of the associate and includes goodwill on the acquisition.

(d) Goodwill

Goodwill arising on consolidation represents the excess of the consideration paid for shares in the subsidiary

companies over the fair value of the net assets acquired. Goodwill arising on consolidation is amortised using

the straight-line method over its estimated useful life. Goodwill arising from strategic acquisitions of the Group is

amortised over a maximum period of 20 years. Goodwill in high technology based companies is amortised over

a period of 5 years.

The carrying amount of goodwill is reviewed annually and written down for permanent impairment where it is

considered necessary.

(e) Property, plant and equipment

All property, plant and equipment are stated at cost less depreciation/amortisation, where applicable.

Notes to the Financial Statements

30

Freehold land is not depreciated. Long term leasehold land is amortised evenly over the leasehold period of

sixty years. All other assets are depreciated over their useful lives commencing from the time the assets are held

ready for use at the following principal annual rates of depreciation using the straight-line basis:

Buildings 2% - 3%

Plant, machinery and motor vehicles 10% - 25%

Office equipment, furniture and fittings 20% - 33%

Moulds 50%

(f) Research and development expenditure

Research costs net of government grants are expensed in the financial year in which they are incurred.

Development expenditures are charged against income as incurred, except to the extent that such costs are

expected to have future benefits. However, development costs initially recognised as an expense are not

recognised as an asset in a subsequent period.

Development costs that have been capitalised are amortised from the commencement of the commercial

production of the product to which they relate on a straight-line basis over the period of their expected benefit

but not exceeding five years.

The unamortised balance of development costs deferred in previous financial periods are reviewed regularly

and at each balance date, to ensure the criterion for deferral continues to be met. Where such costs are no

longer considered recoverable, they are charged to the income statement for the financial year.

(g) Revenue recognition

Sales are recognised upon delivery of products and customer acceptance, if any, or performance of services,

net of sales tax and discounts,and after eliminating sales within the Group. Interest income earned by the Group

is recognised on an accrual basis unless collectibility is in doubt.

(h) Inventories

Inventories are valued at the lower of cost and net realisable value. Costs, including an appropriate portion of

fixed and variable overhead expenses, are assigned to inventory on hand by the method most appropriate to

each particular class of inventory, with the majority being valued on a first-in first-out basis. Net realisable value

is the estimate of the selling price in the ordinary course of business, less the costs of completion and selling

expenses.

(i) Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents include cash on hand and at bank,

net of bank overdrafts which are repayable on demand.

(j) Leases

Plant and equipment under finance leases are capitalised and are depreciated in accordance with the

depreciation policy set out in note 3(e). Outstanding obligations under such leases are included in liabilities as

lease creditors. Finance charges arising from these leases are allocated to the income statement over the

periods of their lease agreements.

...Notes to the Financial Statements

31

(k) Income tax

Deferred income tax is provided, using the liability method, for all temporary differences arising between the tax

bases of assets and liabilities and their carrying values for financial reporting purposes. Currently enacted tax

rates are used to determine deferred income tax.

Under this method the Group is required to make provision for deferred income taxes on the revaluation of

certain non-current assets and, in relation to an acquisition, on the difference between the fair values of the net

assets acquired and their tax base. Provision for taxes, mainly withholding taxes, which could arise on the

remittance of retained earnings, principally relating to subsidiaries, is only made where there is a current

intention to remit such earnings.

The principal temporary differences arise from depreciation on property, plant and equipment, provisions and

tax losses carried forward. Deferred tax assets relating to the carry forward of unused tax losses are recognised

to the extent that it is probable that future taxable profit will be available against which the unused tax losses

can be utilised.

(l) Currencies

Transactions in currencies other than Australian Dollars have been brought to account using the exchange rates

in effect at the date of the transaction. Monetary items in currencies other than Australian Dollars at balance

sheet date are translated at the exchange rates existing at that date.

Exchange differences are brought to account in the income statements of the financial year in which they arise

except that exchange differences on transactions entered into in order to hedge the purchase or sale of

specific goods and services are deferred and included in the measurement of those transactions.

Income statements of foreign entities are translated into Australian Dollars at average exchange rates for the

year and the balance sheets are translated at the exchange rates ruling at the financial year-end. Exchange

differences arising from the re-translation of the net investment in foreign subsidiary companies and associated

companies are taken to reserve.

(m) Investments

Investments in subsidiary and associated companies are stated at cost less provision for any permanent

diminution in value.

(n) Comparatives

Where necessary, comparative figures have been adjusted to conform with changes in presentation in the

current year. In particular, the comparatives have been adjusted or extended to take into account the

requirements of the following revised or new International Accounting Standards which the Group

implemented during the financial year:

IAS 1 - Presentation of financial statements

IAS 14 - Segmental reporting

IAS 17 - Leases

IAS 19 - Employee benefits

...Notes to the Financial Statements

32

4 Operating Profit/(Loss) Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Operating profit/(loss) is stated after charging:

Depreciation of property, plant and equipment 4,528 2,644 - -

Amortisation of goodwill 2,804 6,506 - -

Development costs amortised 79 155 - -

Interest expense on long term loan 256 37 16 -

Other interest expenses 1,479 1,382 - 96

Net foreign exchange loss 1,316 - - 16

Loss on disposal of investment in an

associated company - 6,378 - 2,909

and after crediting:

Gain on partial divestment of equity interests

in an associated company 560 - - -

Rental income 129 36 - -

Net foreign exchange gain - 287 - -

5 Taxation Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Current tax (2,427) (1,318) - -

Deferred tax (351) (470) - -

Share of associated companies' tax - (31) - -

Overprovision in respect of previous financial year 1,033 - - -

(1,745) (1,819) - -

The charges for taxation are in respect of profits on activities undertaken outside Bermuda and are not subject

to taxation in Bermuda.

The Group's taxation charge is reconciled to the Group's profit 2000 1999

before taxation as follows: A$’000 A$’000

Profit/(Loss) before taxation 5,026 (6,691)

Tax at the domestic rates applicable to profits in the

countries in which the Group companies are domiciled (3,164) (2,296)

Income not subject to tax 426 505

Expenses not deductible for tax purposes (40) (28)

Overprovision in respect of previous financial year 1,033 -

Taxation charge (1,745) (1,819)

...Notes to the Financial Statements

33

6 Inventories Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Raw materials 11,060 8,006 - -

Work-in-progress 5,785 6,216 - -

Finished goods 2,245 2,902 - -

Consumables 23 22 - -

19,113 17,146 - -

7 Accounts Receivable Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Trade receivables 21,880 14,316 - -

Other receivables and prepayments 1,626 1,572 19 22

Amount due from subsidiary companies - - 3,832 8,228

Amount due from associated companies 140 15 - -

23,646 15,903 3,851 8,250

8 Cash and Bank Balances Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Deposits with banks 137 9 - -

Cash in hand and at banks 752 874 19 5

889 883 19 5

9 Property, Plant and Equipment - Group Plant, Officemachinery equipment

Land and and motor furnitureAt 28.2.2000 buildings vehicles and fittings Total

Cost A$’000 A$’000 A$’000 A$’000

At 1.3.1999 18,668 32,835 5,794 57,297

Exchange rate adjustments (887) (1,140) (337) (2,364)

Additions 1,233 3,237 1,271 5,741

Disposals (1,008) (1,029) (146) (2,183)

At 28.2.2000 18,006 33,903 6,582 58,491

Accumulated depreciation

At 1.3.1999 3,093 18,958 3,493 25,544

Exchange rate adjustments (236) (765) (262) (1,263)

Charge for the year 460 3,345 723 4,528

Disposals (241) (640) (82) (963)

At 28.2.2000 3,076 20,898 3,872 27,846

Net book value 14,930 13,005 2,710 30,645

...Notes to the Financial Statements

34

9 Property, Plant and Equipment - Group (continued) Plant, Officemachinery equipment

Land and and motor furnitureAt 28.2.1999 buildings vehicles and fittings Total

Cost A$’000 A$’000 A$’000 A$’000

At 1.3.1998 8,325 14,679 3,978 26,982

Exchange rate adjustments 872 1,391 429 2,692

At date of acquisition of subsidiary companies 9,240 17,641 2,443 29,324

Additions 231 1,930 393 2,554

Disposals - (2,813) (1,442) (4,255)

Reclassification - 7 (7) -

At 28.2.1999 18,668 32,835 5,794 57,297

Accumulated depreciation

At 1.3.1998 1,811 8,296 2,706 12,813

Exchange rate adjustments 194 836 295 1,325

At date of acquisition of subsidiary companies 716 9,610 1,017 11,343

Charge for the year 372 1,762 510 2,644

Written back on disposals - (1,549) (1,032) (2,581)

Reclassification - 3 (3) -

At 28.2.1999 3,093 18,958 3,493 25,544

Net book value 15,575 13,877 2,301 31,753

Plant and equipment with a net book value of A$1,652,465 (1999: A$1,634,787) as at 28 February 2000 were

acquired under finance leases.

10 Intangible Assets Group Company

2000 1999 2000 1999

Goodwill A$’000 A$’000 A$’000 A$’000

Opening net book value 20,745 19,823 - -

On (disposal)/acquisition of subsidiary company (12) 7,428 - -

Amortisation charge (2,804) (6,506) - -

Closing net book value 17,929 20,745 - -

Cost 29,446 29,458 - -

Accumulated amortisation (11,517) (8,713) - -

Net book value 17,929 20,745 - -

Development expenditure

Opening net book value 106 235 - -

Exchange rate adjustments (16) 26 - -

Amortisation charge (79) (155) - -

Closing net book value 11 106 - -

Cost 427 485 - -

Accumulated amortisation (416) (379) - -

Net book value 11 106 - -

Total net book value 17,940 20,851 - -

...Notes to the Financial Statements

35

11 Subsidiary Companies Company

2000 1999

A$’000 A$’000

Unquoted shares at cost 42,914 40,474

Details of subsidiary companies are as follows:

Percentage of

Country of equity held by

Subsidiary companies incorporation Company Subsidiary Principal activities

Picopak Holdings (M) Sdn. Bhd. Malaysia 100% - Investment holding

Picopak Electronics (M) Sdn. Bhd. Malaysia 100% - Technical and marketing support

services

Picopak Oy Finland - 100% Electronics manufacturing

Precico Group Sdn. Bhd. Malaysia *100% - Management company and

investment holding

Precico Sdn. Bhd. Malaysia - *100% Manufacture and sale of

precision moulded plastic parts

* During the year, the Company's shareholdings in subsidiary companies were restructured as follows:

• Acquisition of all the shares in Precico Group Sdn. Bhd. from Precico Sdn. Bhd. for a consideration of

A$850,700

• Disposal of its entire interest in shares of Precico Sdn. Bhd. to Precico Group Sdn. Bhd. for a consideration

of A$11,820,400.

Percentage of

Country of equity held by

Subsidiary companies incorporation Company Subsidiary Principal activities

Precico M&D Sdn. Bhd. Malaysia - 100% Manufacture and sale of

injection moulds for plastics

Precico Electronics Sdn. Bhd. Malaysia - 100% Manufacture and sale of

(formerly known as Eastrade Electronics (M) Sdn. Bhd.) electronics products and

assemblies

Telecam Electronics Limited United Kingdom 100% - Management company and the

marketing of Group products

and services

Permatech BV Netherlands 100% - Investment holding

Frencken Group BV Netherlands - 100% Investment holding

Frencken Mechatronics BV Netherlands - 100% Manufacturing, assembly and

engineering of precision

mechanical plant and

equipment

Frencken Technical Projects Netherlands - 100% Provision of services to group

Assembly BV companies

Machinefabriek Gebrs. Frencken BV Netherlands - 100% Manufacturing and/or assembly

of precision mechanical plant

and equipment

...Notes to the Financial Statements

36

Percentage of

Country of equity held by

Subsidiary companies (continued) incorporation Company Subsidiary Principal activities

Optiwa BV Netherlands - 100% Manufacturing and/or assembly

of precision mechanical plant

and equipment

Frencken Eindhoven BV Netherlands - 100% Provision of services to Group

companies

Gereedschapmakerij Fremach BV Netherlands - 100% Dormant

Frencken Investments BV Netherlands - 100% Property holding company

Frencken Investments Sro Czech Republic - 100% Property holding company

Precico Components Sdn. Bhd. Malaysia 20% 32% Manufacture of precision metal

parts

Details of the aggregate cash flows and consideration relating to the acquisition of the subsidiary company and

its aggregate assets and liabilities at date of acquisition in the previous financial year were as follows:

1999

Purchase consideration A$’000

- Value of shares acquired 11,820

Total purchase consideration 11,820

Net assets acquired (8,411)

Goodwill 3,409

Cash and cash equivalents (7,243)

Property, plant and equipment 17,981

Intangible assets 3,331

Receivables 8,052

Creditors (16,690)

Term loans (2,133)

Inventories 5,113

Net assets acquired 8,411

Goodwill 3,409

Total purchase consideration 11,820

Less:

Discharged by shares issued (11,820)

Cash and cash equivalents in subsidiary acquired 7,243

Cash outflow on acquisition 7,243

There was no post acquisition profit after tax and minority interest for the subsidiary companies acquired during

the financial year ended 28 February 1999 as the acquisition was effected on 27 February 1999.

...Notes to the Financial Statements

37

12 Associated Companies Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Unquoted shares at cost 1,741 1,771 - -

Group's share of post acquisition retained profits 449 1,112 - -

2,190 2,883 - -

During the financial year, the Company’s equity interest in the associated company, Fremach International N.V.

was reduced from 40% to 20% when it divested partially its investments in that associated company.

The following are the associated companies:

Name of Country of Effective

associated companies incorporation interest Principal activities

Frencken Brno Sro Czech Republic 49% Manufacturing of precision metal parts

Fremach International NV Belgium 20% Sale of precision moulded plastic parts

Fremach Plastic NV Belgium 20% Manufacturing and sale of precision moulded

plastic parts

Fremach Engineering NV Belgium 20% Provision of services for plastic moulding tools

(formerly known as Ydro NV)

Fremach Toolshop BV Netherlands 20% Design and manufacture of plastic moulding tools

13 Accounts Payable Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Trade payables 17,645 10,595 23 -

Other payables and accruals 4,708 6,264 32 1,751

Amount due to subsidiary companies - - 81 1,821

Amount due to associated companies 354 213 - -

22,707 17,072 136 3,572

14 Lease Creditors Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Due within twelve months 456 1,104 - -

Due after twelve months 344 349 - -

800 1,453 - -

Commitments for finance leases are payable Group Company

in the following financial years: 2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Not later than 1 year 541 1,239 - -

Later than 1 but not later than 5 years 404 417 - -

945 1,656 - -

Less: Future finance charges on finance leases (145) (203) - -

Present value of finance lease liabilities 800 1,453 - -

...Notes to the Financial Statements

38

15 Short Term Borrowings Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Bank overdraft 3,494 7,491 - -

Bankers acceptance 544 2,849 - -

Revolving credit 1,839 4,445 - -

Short term trade loans 6,369 577 - -

Trust receipts - 72 - -

12,246 15,434 - -

The short term borrowings are unsecured and carry interest at floating rates which ranged from 4.1% to 8.05%

(1999: 1.75% to 14.50%) per annum during the financial year.

16 Term Loans Group Company

The term loans are repayable as follows: 2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Due within 1 year - current portion 4,146 3,730 - -

Between 1 and 2 years 3,965 3,700 - -

Between 2 and 5 years 2,546 5,824 - -

Over 5 years 620 - - -

Long term portion 7,131 9,524 - -

Total 11,277 13,254 - -

The loans are repayable by instalments Group Company

through to February 2004 as follows: 2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Repayable by monthly instalments 4,212 2,337 - -

Repayable by quarterly instalments 3,244 6,493 - -

Repayable by half yearly instalments 227 385 - -

Repayable by yearly instalments 3,594 4,039 - -

11,277 13,254 - -

The term loan repayable by monthly instalments, which is denominated in Ringgit Malaysia, is secured by a first

legal charge of A$13,626,000 over the leasehold land and buildings of the subsidiary companies with a net

carrying value of A$7,330,000 and a corporate guarantee from ElectroTech Investments Limited of A$15,595,000.

The term loan repayable by quarterly instalments, which is denominated in Netherland Guilders, is secured by a

pledge on assets and stocks of certain subsidiary companies totalling A$25,253,000 as at the financial year end.

The term loans repayable by half yearly and yearly instalments, which are denominated in Netherland Guilders

are unsecured.

The term loans bear interest at floating rates ranging from 4.05% to 7.05% (1999: 4.30% to 13.30%) per annum

during the financial year.

...Notes to the Financial Statements

39

17 Deferred Taxation Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

At beginning of financial year 1,938 414 - -

Exchange rate adjustment (102) 47 - -

At date of acquisition of subsidiaries - 1,007 - -

Charge for the year 351 470 - -

Transfer to current taxation (413) - - -

At end of financial year 1,774 1,938 - -

Deferred taxation liability and deferred tax charge in the profit and loss accounts are attributable to the

following items:

At Charge for Reclassi- Exchange At

1.3.1999 the year fication difference 28.2.2000

A$’000 A$’000 A$’000 A$’000 A$’000

Accelerated tax depreciation 1,007 341 - - 1,348

Other taxable temporary differences 931 10 (413) (102) 426

Deferred taxation liability 1,938 351 (413) (102) 1,774

18 Share Capital

Ordinary shares at par value of A$0.20 each Group and Company

2000 1999

Authorised: A$’000 A$’000

- 500,000,000 ordinary shares 100,000 100,000

Issued and fully paid:

At beginning of financial year

- 215,737,800 ordinary shares (143,748,800 ordinary shares) 43,148 28,750

Issued during the financial year

- 6,768,000 ordinary shares (71,989,000 ordinary shares) 1,353 14,398

At end of financial year

- 222,505,800 ordinary shares (215,737,800 ordinary shares) 44,501 43,148

During the financial year, the Company issued 6,768,000 shares for cash of A$1,692,000, of which A$10,000 was

received in cash with the balance set off against accounts payable.

...Notes to the Financial Statements

40

19 Cash Generated from Operations

Reconciliation of profit/(loss) before taxation to cash 2000 1999

generated from operations: A$’000 A$’000

Profit/(Loss) before taxation 5,026 (6,691)

Adjustments for:

Depreciation of property, plant and equipment 4,528 2,644

Amortisation of goodwill 2,804 6,506

Development costs amortised 79 155

Provision for doubtful debts - 686

(Gain)/loss on disposal of investment in an associated company (560) 6,378

Interest expense 1,735 1,207

Interest income (87) (200)

Share of profit before tax of associated companies (355) (2,794)

Changes in working capital (excluding the effects of acquisition and disposal)

Inventories (766) (4,517)

Accounts receivable (6,917) 3,314

Accounts payable 4,904 (2,117)

Cash generated from operations 10,391 4,571

20 Net Profit/(Loss) per Share

The net profit/(loss) per share is calculated by dividing the net profit/(loss) of the Group for the financial year

amounting to A$3,186,000 by the weighted average number of ordinary shares in issue during the financial year

of 220,223,564 shares (1999: Loss of A$8,448,000 by 144,481,718 shares).

21 Capital Commitments

Capital commitments at balance sheet date but not recognised in the financial statements are as follows:

Group Company

2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000

Property, plant and equipment 1,314 2,096 - -

22 Contingent Liabilities

The Company has given unsecured corporate guarantees to secure banking facilities granted to subsidiary

companies amounting to A$19,744,000 (1999: A$5,317,500).

No liabilities exist in respect of termination benefits under service agreements with directors or persons who take

part in the management of the Company.

23 Financial Instruments

Credit risk

Financial assets which potentially subject the Group to concentrations of credit risk consist principally of

accounts receivable, bank balances and deposits. The Group's cash equivalents and short-term deposits are

placed with high creditworthy financial institutions. Accounts receivable are presented net of the allowance for

doubtful receivables. Credit risk with respect to trade receivables is limited as the Group does not have any

significant exposure to any individual customer or counterparty.

...Notes to theFinancial Statements

41

Interest rate risk

The Group's short-term deposits are placed at prevailing interest rates. The borrowings of the Group are mainly

in floating rate interest.

Fair values

At 28 February 2000, the carrying amounts of accounts receivable, bank balances and deposits, accounts

payable and bank overdrafts approximated their fair values due to the short-term maturities of these assets and

liabilities.

24 Group Segmental Information

(a) Primary reporting format - Business segments

Precision metal

parts, mechanical Electronics Plastic

plant & equipment manu- injection Investments

Financial year ended manufacturing facturing moulding holding Total

28.2.2000 A$’000 A$’000 A$’000 A$’000 A$’000

Operating revenue 52,302 32,039 28,529 - 112,870

Operating profit 7,526 (1,114) 1,811 (283) 7,940

Finance cost (3,269)

4,671

Share of associate’s profits 355

Profit before taxation 5,026

Taxation (1,745)

Profit after taxation 3,281

Minority interests (95)

Net profit for the year 3,186

Other financial information

Segment assets 41,314 19,927 24,377 8,805 94,423

Segment liabilities 25,164 13,543 11,594 67 50,368

Capital expenditure 2,683 1,634 1,406 18 5,741

Depreciation 2,193 1,646 680 9 4,528

Amortisation 314 - - 2,569 2,883

...Notes to theFinancial Statements

42

Precision metal

parts, mechanical Electronics

plant & equipment manu- Investments

Financial year ended manufacturing facturing holding Total

28.2.1999 A$’000 A$’000 A$’000 A$’000

Operating revenue 42,953 4,521 - 47,474

Operating profit 4,815 (6,287) (6,863) (8,335)

Finance cost (1,150)

(9,485)

Share of associate’s profits 2,794

Profit before taxation (6,691)

Taxation (1,819)

Profit after taxation (8,510)

Minority interests 62

Net profit for the year (8,448)

Other financial information

Segment assets 32,992 37,811 18,616 89,419

Segment liabilities 27,306 1,052 22,402 50,760

Capital expenditure 2,225 329 - 2,554

Depreciation 2,209 435 - 2,644

Amortisation 792 - 5,869 6,661

There are no sales or other transactions between the business segments. Segment assets consist primarily of

property, plant and equipment, intangible assets, inventories, receivables and operating cash and bank

balances. Segment liabilities comprise operating liabilities and exclude taxation. Capital expenditure comprises

additions to property, plant and equipment.

(b) Secondary reporting format - Geographical segments

Although the Group's four business segments are managed on a worldwide basis, they operate in four main

geographical areas:

Bermuda - The home country of the parent company whose operation is principally

in investment holding.

Malaysia - The main activities are the manufacturing of precision moulded plastic

parts and electronics assembly.

Netherlands - The main activities are the manufacturing of precision metal parts,

mechanical plant and equipment.

Other European countries - The main activities are electronics manufacturing.

...Notes to theFinancial Statements

43

Operating revenue Total Assets Capital expenditure

2000 1999 2000 1999 2000 1999

A$’000 A$’000 A$’000 A$’000 A$’000 A$’000

Bermuda - - 38 28 - -

Netherlands 50,766 40,597 34,638 32,399 2,133 2,075

Malaysia 59,148 3,300 58,451 43,947 3,557 186

Other European 2,956 3,577 1,296 13,045 51 293

Countries

112,870 47,474 94,423 89,419 5,741 2,554

Analysis of operating revenue 2000 1999

A$’000 A$’000

Sales of goods 112,334 47,012

Revenue from services 536 462

112,870 47,474

25 Staff Costs Group

2000 1999

A$’000 A$’000

Wages and salaries 20,656 20,083

Social security costs 2,052 1,950

22,708 22,033

The number of persons employed by the group during the year:

Full time 1,845 1,780

Part time 34 50

1,879 1,830

Malaysia 1,641 1,612

Netherlands 204 164

Other European countries 34 54

1,879 1,830

26 Related Party Disclosures Group Company

(a) Significant related company balances 2000 1999 2000 1999

were as follows: A$’000 A$’000 A$’000 A$’000

Amount due from subsidiary companies - Non-trade - - 3,832 8,228

Amount due to subsidiary companies - Non-trade - - 81 1,821

(b) Significant transactions between companies in the Group and related parties are as follows:

• The Company has signed a management agreement with Richard Oh & Co. Ltd. to provide secretarial

and advisory services on Australian Stock Exchange and Corporate Law matters at a fee of A$3,000 per month

for the financial year ended 28 February 2000.

• Precico Electronics Sdn. Bhd. paid factory rental of A$214,000 to Davex Holdings Bhd., a subsidiary

company of MWE Holdings Berhad in which Dato' Larry Low is a director and has an interest.

...Notes to theFinancial Statements

The directors declare that the financial statements and notes set out on pages 24 to 43:

(a) comply with International Accounting Standards; and

(b) give a true and fair view of the results of the Company and the Group and the Group's cash flows for the

financial year ended 28 February 2000 and the state of affairs of the Company and the Group as at 28 February

2000.

In the directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as

and when they become due and payable.

This declaration is made in accordance with a resolution of the directors.

Dato' Larry Low Hock Peng Gooi Soon Hock

Director Director

Date: 20 May 2000

44

Directors’ Declaration

45

To the Shareholders of

ElectroTech Investments Limited

We have audited the financial statements of ElectroTech Investments Limited on pages 24 to 43. These financial

statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these

financial statements based on our audit.

We conducted our audit in accordance with International Standards on Auditing. Those standards require that we

plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of

material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures

in the financial statements. An audit also includes assessing the accounting principles used and significant estimates

made by the management, as well as evaluating the overall financial statement presentation. We believe that our

audit provides a reasonable basis for our opinion.

In our opinion, these financial statements present fairly, in all material respects, the financial position of the Company

and the Group as at 28 February 2000, and the results of the Company's and the Group's operations and the Group's

cash flows for the financial year then ended in accordance with International Accounting Standards.

PricewaterhouseCoopers

Public Accountants

Penang, Malaysia

Date: 20 May 2000

Auditors’ Report

46

The shareholder information set out below was applicable as at 16 May 2000.

A. Distribution of Shares

Analysis of number of shareholders by size of holding: Ordinary Shares

Holders Units

1 - 1,000 4 883

1,001 - 5,000 37 128,310

5,001 - 10,000 176 1,457,093

10,001 - 100,000 214 8,605,683

100,001 and over 84 212,313,831

Total number of holders 515 222,505,800

There were 4 holders with less than a marketable parcel of 2,000 ordinary shares.

B. Twenty Largest Shareholders

The names of the twenty largest shareholders are listed below:

Number of % Held of issued

Name ordinary shares ordinary shares

Queenspac Corporation 31,267,794 14.05

Metra Nominees Sdn. Bhd. 27,420,000 12.32

Micro Compact (M) Sdn. Bhd. 26,332,206 11.83

Sinn Hin Company Sdn. Bhd. 15,080,000 6.78

Unaval Nominees Pty. Limited 14,223,500 6.39

Gim Thye Realty Sdn. Bhd. 14,168,000 6.37

Precico Holdings Sdn. Bhd. 12,382,000 5.57

Cayman Resources Sdn. Bhd. 12,163,800 5.47

Gooi Soon Hock 7,146,000 3.21

GBC Holdings Sdn. Bhd. 5,470,000 2.46

Jacobus Joseph Wilhelmus Poeth 5,000,000 2.25

K-Tee Holdings Sdn. Bhd. 4,060,000 1.83

Bersiam B.V. 3,280,800 1.48

Strategic Nominees Limited 3,000,000 1.35

Tung Keow Kheng 2,498,000 1.12

Tan Keng Tong 2,279,333 1.02

Ylex Oy 2,230,625 1.00

Gooi Soon Chai 1,965,000 0.88

Prime Logic (M) Sdn. Bhd. 1,600,000 0.72

Loi Lian Khuan 1,474,000 0.66

193,041,058 86.76

Shareholder Information

47

C. Substantial Shareholders

The Company’s Register of Substantial Shareholders recorded the following information:

Number of

Name ordinary shares

Precico Holdings Sdn. Bhd. 33,537,000

Queenspac Corporation 31,267,794

Micro Compact (M) Sdn. Bhd. 26,332,206

Sinn Hin Company Sdn. Bhd. 15,080,000

Unaval Nominees Pty. Limited 14,223,500

Gim Thye Realty Sdn. Bhd. 14,168,000

Cayman Resources Sdn. Bhd. 12,163,800

The Register of Substantial Shareholders records all holders of more than 5% of the total issued ordinary shares,

inclusive of any notified shareholdings held in nominee companies.

E. Voting Rights

All shares have the same rights and rank equally in all respects. Upon a poll every member present in person,

by proxy or by representative will have one vote for every share registered in his or her name.

...Shareholder Information

ElectroTech Investments Limited

Australian Stock ExchangeARBN 068 543 386

2000AnnualReport