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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549



---

FORM 10-K/A

(Amendment No. 1)



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(Mark One)



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------

For the fiscal year ended July 1, 2006

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from
 to

Commission file number 0-27026



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PERICOM SEMICONDUCTOR CORPORATION

(Exact Name of Registrant as Specified in
Its Charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|California                                                     |  | 77-0254621                       
|(State or Other Jurisdiction of Incorporation or Organization) |  | (IRS Employer Identification No.)

3545 North First Street, San Jose, California 95134

(Address of Principal Executive Offices) (Zip Code)

(408) 435-0800

(Registrants Telephone Number, Including Area Code)



---

Securities registered pursuant
to Section 12(b) of the Act:



|                                |  |                                     
|------------------------------- |  | ------------------------------------
|Title of Each Class             |  | Name of Exchange on which Registered
|Common Stock                    |  | NASDAQ Global Market                
|Preferred Share Purchase Rights |  | NASDAQ Global Market                

Securities registered pursuant to Section 12 (g) of the Act:

None



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Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. ̈Yes    x  No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. ̈Yes    x  No

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past
90 days.    x  Yes ̈No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not
contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.    x

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ̈Accelerated filer  x     Non-accelerated filer ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). ̈Yes    x  No

The aggregate market value of voting stock held by non-affiliates of the registrant, based on the closing price for the common stock on the Nasdaq Global
Market on the last business day of the registrants most recently completed fiscal second quarter (December 30, 2006), was approximately $280.4 million. Shares of common stock held by each officer and director have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes. As of April 19, 2007 the registrant had outstanding 25,958,417 shares of common stock.



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Explanatory Note

Pericom Semiconductor Corporation (the Company) is filing this Amendment No. 1 to Form 10-K to include financial statements of Pericom Semiconductor Technology Inc. at and for the fiscal year
ended June 30, 2006 (the PTI Financial Statements) in the Companys Form 10-K for the fiscal year ended July 1, 2006, which was filed with the Securities and Exchange Commission on September 14, 2006 (the
Original Filing).

This Form 10-K/A does not reflect events occurring after the Original Filing, and except for the PTI
Financial Statements and Exhibits 31.1 and 31.2, which are filed herewith, this Amendment No. 1 to Form 10-K does not modify, amend or update in any way the financial statements or any other item or disclosure in the Original Filing, and
this Amendment No. 1 continues to speak as of the date of the Original Filing.



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PART IV



|ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|-------- | ------------------------------------------

(a) The following
documents are filed as part of this report on Form 10-K/A:



|   |  |                                                                                                        
|-- |  | -------------------------------------------------------------------------------------------------------
|1. |  | Financial Statements                                                                                   
|   | 
|   |  | Independent Auditors Report to the Directors of Pericom Technology Inc.                               
|   | 
|   |  | Consolidated Income Statement of Pericom Technology Inc. for the year ended June 30, 2006              
|   | 
|   |  | Consolidated Balance Sheet of Pericom Technology Inc. at June 30, 2006                                 
|   | 
|   |  | Balance Sheet of Pericom Technology Inc. at June 30, 2006                                              
|   | 
|   |  | Consolidated Statement of Changes in Equity of Pericom Technology Inc. for the year ended June 30, 2006
|   | 
|   |  | Consolidated Cash Flow Statement of Pericom Technology Inc. for the year ended June 30, 2006           
|   | 
|   |  | Notes to the Financial Statements                                                                      



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PERICOM TECHNOLOGY INC.

REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2006



|         |  |                                             |  |        
|-------- |  | ------------------------------------------- |  | -------
|         |  | Pages                                      
|CONTENTS |  |                                            
|         |  |                                            
|1.       |  | Independent Auditors Report                |  | 1      
|         |  |                                            
|2.       |  | Consolidated Income Statement               |  | 2      
|         |  |                                            
|3.       |  | Consolidated Balance Sheet                  |  | 3  4  
|         |  |                                            
|4.       |  | Balance Sheet                               |  | 5  6  
|         |  |                                            
|5.       |  | Consolidated Statement of Changes in Equity |  | 7      
|         |  |                                            
|6.       |  | Consolidated Cash Flow Statement            |  | 8  9  
|         |  |                                            
|7.       |  | Notes to the Financial Statements           |  | 10  37



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INDEPENDENT AUDITORS REPORT

TO THE DIRECTORS OF

PERICOM TECHNOLOGY INC.

(Incorporated in the British Virgin Islands with limited liability)

We have audited the accompanying consolidated balance sheets of Pericom Technology Inc. (the Company) and its subsidiaries (the Group) as of
30 June 2006, and the related consolidated income statement, consolidated statement of changes in equity and consolidated cash flow statement for the year ended 30 June 2006. 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 audits.

We conducted our audits in
accordance with auditing standards generally accepted in the United States of America. 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 consideration of internal control over financial reporting as a basis for designing audit procedure that are appropriate in the circumstances, but not for the purposes of express an opinion on the effectiveness of the
Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and the Group as of 30 June
2006, and the result of its operations and its cash flows of the Group for the year ended 30 June 2006 in conformity with Hong Kong Financial Reporting Standards.



PCP CPA LimitedCertified Public AccountantsHong Kong,Chua Suk Lin, IvyPractising Certificate No.: P02044




1



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##### Table of Contents

PERICOM TECHNOLOGY INC.

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2006



|                                |  |      |  |            |   |  |            |  
|------------------------------- |  | ---- |  | ---------- | - |  | ---------- | -
|                                |  |      |  | 2006       |   |  | 2005       |  
|                                |  | Note |  | US$        |   |  | US$        |  
|Turnover                        |  | 5    |  | 12,512,670 |   |  | 6,166,067  |  
|                                |  |      | 
|Cost of sales                   |  |      |  | (5,812,561 | ) |  | (3,034,843 | )
|                                |  |      |  |            |   |  |            |  
|Gross profit                    |  |      |  | 6,700,109  |   |  | 3,131,224  |  
|                                |  |      | 
|Other revenues                  |  | 5    |  | 504,773    |   |  | 596,041    |  
|Share of losses of an associate |  |      |  | (19,730    | ) |  |           |  
|Distribution expenses           |  |      |  | (1,218,638 | ) |  | (611,121   | )
|Administrative expenses         |  |      |  | (3,368,237 | ) |  | (3,053,918 | )
|                                |  |      |  |            |   |  |            |  
|Profit before taxation          |  | 6    |  | 2,598,277  |   |  | 62,226     |  
|                                |  |      | 
|Taxation                        |  | 9    |  |           |   |  |           |  
|                                |  |      |  |            |   |  |            |  
|Profit for the year             |  |      |  | 2,598,277  |   |  | 62,226     |  
|                                |  |      |  |            |   |  |            |  



2



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PERICOM TECHNOLOGY INC.

CONSOLIDATED BALA
NCE SHEET

AT 30TH JUNE 2006



|                                         |  |      |  |            |  |           
|---------------------------------------- |  | ---- |  | ---------- |  | ----------
|                                         |  |      |  | 2006       |  | 2005      
|                                         |  | Note |  | US$        |  | US$       
|                                         |  |      |  |            |  | (Restated)
|Non-current assets                       |  |      |  |            |  |           
|Property, plant and equipment            |  | 10   |  | 1,269,420  |  | 1,076,090 
|Prepaid lease payments                   |  | 11   |  | 381,255    |  | 391,044   
|Interest in an associate                 |  | 13   |  | 208,988    |  | 200,128   
|                                         |  |      |  |            |  |           
|                                         |  |      |  | 1,859,663  |  | 1,667,262 
|                                         |  |      |  |            |  |           
|                                         |  |      | 
|Current assets                           |  |      |  |            |  |           
|Inventories                              |  | 14   |  | 2,262,635  |  | 1,801,565 
|Trade, other receivables and prepayments |  |      |  | 3,258,673  |  | 2,223,320 
|Other investments                        |  | 15   |  | 4,259,214  |  | 5,689,215 
|Cash and bank balances                   |  |      |  | 3,975,816  |  | 1,579,339 
|                                         |  |      |  |            |  |           
|                                         |  |      |  | 13,756,338 |  | 11,293,439
|                                         |  |      |  |            |  |           
|                                         |  |      | 
|Current liabilities                      |  |      |  |            |  |           
|Trade and other payables                 |  |      |  | 925,725    |  | 1,014,666 
|Amount due to a shareholder              |  | 16   |  | 349,462    |  | 55,862    
|Amount due to an associate               |  | 16   |  |           |  | 200,128   
|                                         |  |      |  |            |  |           
|                                         |  |      |  | 1,275,187  |  | 1,270,656 
|                                         |  |      |  |            |  |           
|                                         |  |      | 
|Net current assets                       |  |      |  | 12,481,151 |  | 10,022,783
|                                         |  |      |  |            |  |           
|                                         |  |      | 
|Total assets less current liabilities    |  |      |  | 14,340,814 |  | 11,690,045
|                                         |  |      |  |            |  |           



3



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##### Table of Contents

PERICOM TECHNOLOGY INC.

CONSOLIDATED BALANCE SHEET  CONTD

AT 30TH JUNE 2006



|                     |  |      |  |            |   |  |            |  
|-------------------- |  | ---- |  | ---------- | - |  | ---------- | -
|                     |  | Note |  | 2006 US$   |   |  | 2005 US$   |  
|                     |  |      |  |            |   |  | (Restated) |  
|CAPITAL AND RESERVES |  |      |  |            |   |  |            |  
|Capital              |  | 18   |  | 18,883,034 |   |  | 18,868,096 |  
|Reserves             |  |      |  | (4,542,220 | ) |  | (7,178,051 | )
|                     |  |      |  |            |   |  |            |  
|                     |  |      |  | 14,340,814 |   |  | 11,690,045 |  
|                     |  |      |  |            |   |  |            |  

Approved and authorised for issue by the board of directors on



|             |  |  |  |             
|------------ |  |  |  | ------------
|/s/ Alex Hui |  |  |  | /s/ John Hui
|Director     |  |  |  | Director    



4



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##### Table of Contents

PERICOM TECHNOLOGY INC.

BALANCE SHEET

AT 30TH JUNE 2006



|                                      |  |      |  |           |  |           
|------------------------------------- |  | ---- |  | --------- |  | ----------
|                                      |  |      |  | 2006      |  | 2005      
|                                      |  | Note |  | US$       |  | US$       
|Non-current assets                    |  |      |  |           |  |           
|                                      |  |      | 
|Interests in subsidiaries             |  | 12   |  | 1,842,836 |  | 699,994   
|Interest in an associate              |  | 13   |  | 208,988   |  | 200,128   
|                                      |  |      |  |           |  |           
|                                      |  |      |  | 2,051,824 |  | 900,122   
|                                      |  |      |  |           |  |           
|Current assets                        |  |      |  |           |  |           
|                                      |  |      | 
|Other receivables                     |  |      |  | 34,557    |  | 16,773    
|Other investments                     |  | 15   |  | 3,922,482 |  | 5,392,215 
|Amounts due from subsidiaries         |  |      |  | 1,531,153 |  | 3,934,758 
|Bank balances and cash                |  |      |  | 1,260,483 |  | 786,440   
|                                      |  |      |  |           |  |           
|                                      |  |      |  | 6,748,675 |  | 10,130,186
|                                      |  |      |  |           |  |           
|Current liabilities                   |  |      |  |           |  |           
|                                      |  |      | 
|Other payables                        |  |      |  | 21,705    |  | 22,000    
|Amount due to a shareholder           |  | 16   |  | 349,462   |  | 56,714    
|Amount due to an associate            |  | 16   |  |          |  | 200,128   
|                                      |  |      |  |           |  |           
|                                      |  |      |  | 371,167   |  | 278,842   
|                                      |  |      |  |           |  |           
|Net current assets                    |  |      |  | 6,377,508 |  | 9,851,344 
|                                      |  |      |  |           |  |           
|Total assets less current liabilities |  |      |  | 8,429,332 |  | 10,751,466
|                                      |  |      |  |           |  |           



5



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##### Table of Contents

PERICOM TECHNOLOGY INC.

BALANCE SHEET  CONTD

AT 30TH JUNE 2006



|                     |  |      |  |             |   |  |            |  
|-------------------- |  | ---- |  | ----------- | - |  | ---------- | -
|                     |  |      |  | 2006        |   |  | 2005       |  
|                     |  | Note |  | US$         |   |  | US$        |  
|CAPITAL AND RESERVES |  |      |  |             |   |  |            |  
|Capital              |  | 18   |  | 18,883,034  |   |  | 18,868,096 |  
|Reserves             |  |      |  | (10,453,702 | ) |  | (8,116,630 | )
|                     |  |      |  |             |   |  |            |  
|                     |  |      |  | 8,429,332   |   |  | 10,751,466 |  
|                     |  |      |  |             |   |  |            |  

Approved and authorised for issue by the board of directors on



|             |  |  |  |             
|------------ |  |  |  | ------------
|/s/ Alex Hui |  |  |  | /s/ Alex Hui
|Director     |  |  |  | Director    



6



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PERICOM TECHNOLOGY INC.

CONSOLIDATED STATEMENT OF CHANGES IN EQUIT
Y

FOR THE YEAR ENDED 30TH JUNE 2006



|                                                        |  |                                               |  |                            |  |                                    |  |                   |   |  |           
|------------------------------------------------------- |  | --------------------------------------------- |  | -------------------------- |  | ---------------------------------- |  | ----------------- | - |  | ----------
|                                                        |  | Attributable to equity holders of the company
|                                                        |  | Capital                                       |  | Exchangetranslationreserve |  | Employee sharescompensationreserve |  | Accumulatedlosses |   |  | Total     
|                                                        |  | US$                                           |  | US$                        |  | US$                                |  | US$               |   |  | US$       
|At 1 July 2004                                          |  | 18,661,596                                    |  |                           |  |                                   |  | (7,240,277        | ) |  | 11,421,319
|Shares issued on exercise of share options and warrants |  | 206,500                                       |  |                           |  |                                   |  |                  |   |  | 206,500   
|Profit for the year                                     |  |                                              |  |                           |  |                                   |  | 62,226            |   |  | 62,226    
|                                                        |  |                                               |  |                            |  |                                    |  |                   |   |  |           
|At 30 June 2005                                         |  | 18,868,096                                    |  |                           |  |                                   |  | (7,178,051        | ) |  | 11,690,045
|                                                        |  |                                               |  |                            |  |                                    |  |                   |   |  |           
|At 1 July 2005                                          |  | 18,868,096                                    |  |                           |  |                                   |  | (7,178,051        | ) |  | 11,690,045
|                                                        |  |                                               |  |                            | 
|Share base payment                                      |  |                                              |  |                           |  | 24,558                             |  |                  |   |  | 24,558    
|Shares issued on exercise of share options              |  | 14,938                                        |  |                           |  |                                   |  |                  |   |  | 14,938    
|Currency translation differences                        |  |                                              |  | 12,996                     |  |                                   |  |                  |   |  | 12,996    
|Profit for the year                                     |  |                                              |  |                           |  |                                   |  | 2,598,277         |   |  | 2,598,277 
|                                                        |  |                                               |  |                            |  |                                    |  |                   |   |  |           
|At 30 June 2006                                         |  | 18,883,034                                    |  | 12,996                     |  | 24,558                             |  | (4,579,774        | ) |  | 14,340,814
|                                                        |  |                                               |  |                            |  |                                    |  |                   |   |  |           



7



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PERICOM TECHNOLOGY INC.

CONSOLIDATED CASH FLOW STAT
EMENT

FOR THE YEAR ENDED 30TH JUNE 2006



|                                                                      |  |            |   |  |             |  
|--------------------------------------------------------------------- |  | ---------- | - |  | ----------- | -
|                                                                      |  | 2006       |   |  | 2005        |  
|                                                                      |  | US$        |   |  | US$         |  
|                                                                      |  |            |   |  | (Restated)  |  
|Cash flows from operating activities                                  |  |            |   |  |             |  
|Profit for the year                                                   |  | 2,598,277  |   |  | 62,226      |  
|Adjustments for:                                                      |  |            |   |  |             |  
|Amortisation of prepaid lease payments                                |  | 23,040     |   |  | 21,485      |  
|Bank interest income                                                  |  | (16,192    | ) |  | (1,944      | )
|Depreciation                                                          |  | 214,682    |   |  | 273,344     |  
|Exchange gain                                                         |  | (44,817    | ) |  |            |  
|Gain on disposal of other investments                                 |  | (181,774   | ) |  | (56,218     | )
|Investment interest income                                            |  | (171,010   | ) |  | (142,448    | )
|Allowances for inventories                                            |  | 600,557    |   |  | 240,095     |  
|Share of losses of an associate                                       |  | 19,730     |   |  |            |  
|Unrealised loss on other investments                                  |  | 46,516     |   |  | 42,371      |  
|Employee compensation reserve                                         |  | 24,558     |   |  |            |  
|                                                                      |  |            |   |  |             |  
|Operating profit before working capital changes                       |  | 3,113,567  |   |  | 438,911     |  
|Increase in inventories                                               |  | (1,061,627 | ) |  | (152,819    | )
|Increase in trade, other receivables and prepayments                  |  | (1,035,353 | ) |  | (474,125    | )
|Decrease in trade and other payables                                  |  | (88,941    | ) |  | (31,568     | )
|                                                                      |  |            |   |  |             |  
|Net cash generated from/(used in) operating activities                |  | 927,646    |   |  | (219,601    | )
|                                                                      |  |            |   |  |             |  
|Cash flows from investing activities                                  |  |            |   |  |             |  
|Bank interest received                                                |  | 16,192     |   |  | 1,944       |  
|Repayment to an associate                                             |  | (228,718   | ) |  |            |  
|Investment interest received                                          |  | 171,010    |   |  | 142,448     |  
|Proceeds on disposal of other investments                             |  | 1,565,259  |   |  | 13,652,153  |  
|Proceeds on disposal of property, plant and equipment                 |  |           |   |  | 1,072       |  
|Purchase of other investments                                         |  |           |   |  | (13,317,784 | )
|Purchase of property, plant and equipment                             |  | (376,446   | ) |  | (250,934    | )
|                                                                      |  |            |   |  |             |  
|Net cash generated from investing activities                          |  | 1,147,297  |   |  | 228,899     |  
|                                                                      |  |            |   |  |             |  
|Cash flows from financing activities                                  |  |            |   |  |             |  
|Proceeds from shares issued on exercise of share options and warrants |  | 14,938     |   |  | 206,500     |  
|Advance from/(repayment to) a shareholder                             |  | 293,600    |   |  | (167,754    | )
|                                                                      |  |            |   |  |             |  
|Net cash generated from financing activities                          |  | 308,538    |   |  | 38,746      |  
|                                                                      |  |            |   |  |             |  



8



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##### Table of Contents

PERICOM TECHNOLOGY INC.

CONSOLIDATED CASH FLOW STATEMENT  CONTD

FOR THE YEAR ENDED 30TH JUNE 2006



|                                                       |  |           |  |           
|------------------------------------------------------ |  | --------- |  | ----------
|                                                       |  | 2006      |  | 2005      
|                                                       |  | US$       |  | US$       
|                                                       |  |           |  | (Restated)
|Net increase in cash and cash equivalents              |  | 2,383,481 |  | 48,044    
|                                                       |  |          
|Cash and cash equivalents at the beginning of the year |  | 1,579,339 |  | 1,531,295 
|Effect on exchange rate changes                        |  | 12,996    |  |          
|                                                       |  |           |  |           
|Cash and cash equivalents at the end of the year       |  | 3,975,816 |  | 1,579,339 
|                                                       |  |           |  |           
|Analysis of cash and cash equivalents                  |  |           |  |           
|Cash and bank balances                                 |  | 3,975,816 |  | 1,579,339 
|                                                       |  |           |  |           



9



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##### Table of Contents

|1. | CORPORATE INFORMATION
|-- | ---------------------

Pericom Technology Inc. (the
Company) is a private limited company incorporated in the British Virgin Islands. The addresses of the registered office of the Company is located at Omar Hodge Building, Wickhams Cay 1 P.O. Box 362, Road Town, Tortola, British Virgin
Islands and the principal place of business of the Company is located at Unit 1517, 15/F, Chevalier Commercial Centre, 8 Wang Hoi Road, Kowloon Bay, Hong, Kong.

The Company is an investment holding company and its subsidiaries are principally engaged in the business of manufacturing, trading and provision of testing services for electronic components.

The Companys books of accounts are maintained in United States dollars, the currency in which the majority of its transactions are denominated.
These financial statements are presented in United States dollars.



|2. | ADOPTION OF HONG KONG FINANCIAL REPORTING STANDARDS (HKFRSs) AND CHANGES IN ACCOUNTING POLICIES
|-- | -------------------------------------------------------------------------------------------------

In the current year, the Company and its subsidiaries collectively (the Group) has applied, for the first time, all of the new and revised
Standards and Interpretations issued by the Hong Kong Institute of Certified Public Accountants that are relevant to its operations and effective for accounting periods beginning on or after 1 January 2005. The changes in presentation have been
applied retrospectively. The application of these new and revised Standards and Interpretations have resulted in changes to the Groups accounting policies in the following areas.

HKFRS 2Share-based payment

In
the current year, the Group has applied HKFRS 2 Share-based Payment which requires an expense to be recognised where the Group buys goods or obtains services in exchange for shares or rights over shares (equity-settled transaction) and
liabilities for cash-settled share-based payments to be recognised at the current fair value at each balance sheet date. The principal impact of HKFRS 2 results in a reduction in profit as such items have not been recognised as expenses. Prior to
the adoption of HKFRS 2, the Group did not recognise the financial effect of these share options until they were exercised. The Group has applied HKFRS 2 to share options granted on or after 7 November 2002. In relation to share options granted
on or before 7 November 2002 and vested before 1 January 2005, the group chooses not to apply HKFRS 2.

The financial impact on
adoption of HKFRS 2 has been disclosed in Note 3.



Auditors Report  page 1



10



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##### Table of Contents

|2. | ADOPTION OF HONG KONG FINANCIAL REPORTING STANDARDS (HKFRSs) AND CHANGES IN ACCOUNTING POLICIES  CONTD
|-- | ----------------------------------------------------------------------------------------------------------

HKAS 17Leases

In prior years,
leasehold land and buildings held for own use were stated at cost less accumulated depreciation and any impairment losses.

Upon the
adoption of HKAS 17, the Groups leasehold interest in land and buildings is separated into leasehold land and buildings. The Groups leasehold land is classified as an operating lease, because the title of the land is not expected to pass
to the Group by the end of the lease term, and is reclassified from property, plant and equipment to prepaid land lease payments, while buildings continue to be classified as part of property, plant and equipment. Prepaid land lease payments under
operating leases are initially stated at cost and subsequently amortised on the straight-line basis over the lease term.

This change in
accounting policy has had no effect on the consolidated income statement and retained earnings.



|3. | SUMMARY OF THE EFFECTS OF THE CHANGES IN ACCOUNTING POLICIES
|-- | ------------------------------------------------------------

The effects of the changes in the accounting policies described above on the results for the current and prior year are as follows:-



|                                |  |        |  |     
|------------------------------- |  | ------ |  | ----
|                                |  | 2006   |  | 2005
|                                |  | US$    |  | US$ 
|Effect on adoption of HKAS 17   |  |       |  |    
|Effect on adoption of HKFRS 2   |  | 24,558 |  |    
|                                |  |        |  |     
|Decrease in profit for the year |  | 24,558 |  |    
|                                |  |        |  |     

The cumulative effects of the application of the new HKFRSs on 30 June 2005 and 1 July
2005 on the consolidated balance sheet are summarised below:



|                              |  |                        |  |                                  |   |  |                 
|----------------------------- |  | ---------------------- |  | -------------------------------- | - |  | ----------------
|                              |  | As at 30 June 2005     |  | Effect onadoptingHKAS 17- Leases |   |  | As at1 July 2005
|                              |  | US$(originally stated) |  | US$                              |   |  | US$(restated)   
|Balance sheet items           |  |                        |  |                                  |   |  |                 
|Property, plant and equipment |  | 1,467,134              |  | (391,044                         | ) |  | 1,076,090       
|Prepaid lease payment         |  |                       |  | 391,044                          |   |  | 391,044         
|                              |  |                        |  |                                  |   |  |                 



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|3. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------



| | (a) | Basis of preparation
| | --- | --------------------

The consolidated financial
statements have been prepared under the historical cost convention, except for certain equity investments which are measured at fair values.

These financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (HKFRSs), which includes all applicable individual HKFRSs, Hong Kong Accounting Standards and Interpretations issued by the
Hong Kong Institute of Certified Public Accountants, accounting principles generally accepted in Hong Kong.

The preparation of financial
statements in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Companys accounting policies.



| | (b) | Basis of consolidation
| | --- | ----------------------

The consolidated financial
statements include the financial statements of the Company and all of its subsidiaries made up to 30 June of each year together with the Groups share of the results for the year of its associate.



| | (c) | Subsidiaries
| | --- | ------------

Subsidiaries are all entities over
which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether the Group controls another entity.

Intra-group balances and transactions, and any
unrealised profits arising from intra-group transactions, are eliminated in full in preparing the consolidated financial statements. Unrealised losses resulting from intra-group transactions are eliminated in the same way as unrealised gains, unless
the transaction provides evidence of an impairment of the asset transferred.

In the Companys balance sheet, the interests in
subsidiaries and amounts due from subsidiaries are stated at cost less any provision for impairment losses (see note 4(h)). The results of subsidiaries are accounted for by the Company on the basis of dividends received and receivable.



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|4. | SIGNIFICANT ACCOUNTING POLICIES  CONTD
|-- | ----------------------------------------



| | (d) | Associates
| | --- | ----------

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

An interest in an associate is accounted for in the consolidated financial statements under the equity method
and is initially recorded at cost and adjusted thereafter for the post acquisition change in the Groups share of the associates net assets. The consolidated income statement reflects the Groups share of the post-acquisition,
post-tax results of the associates for the year. When the Groups share of losses exceeds the carrying amount of the associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that
the Group has incurred obligations in respect of the associate.

Unrealised profits and losses resulting from transactions between the Group
and its associates are eliminated to the extent of the Groups interest in the associate, except where unrealised losses provide evidence of an impairment of the asset transferred, in which case they are recognised immediately in the income
statement.

In the Companys balance sheet, its interest in an associate is stated at cost less provision for impairment losses.



| | (e) | Property, plant and equipment
| | --- | -----------------------------



| | (i) | Valuation
| | --- | ---------

Property, plant and equipment are stated in
the balance sheets at cost less accumulated depreciation and impairment losses.

Subsequent expenditure relating to a property, plant and
equipment that has already been recognised is added to the carrying amount of the asset when it is probable that future economic benefits, in excess of the originally assessed standard of performance of the existing asset, will flow to the Group.
All other subsequent expenditure is recognised as an expense in the period in which it is incurred.



| | (ii) | Depreciation
| | ---- | ------------

Building situated on leasehold land are
depreciated over the shorter of the unexpired term of lease and their estimated useful lives, being 30 years.

Depreciation is calculated
to write off the cost of other property, plant and equipment over their estimated useful lives on a straight-line basis as follows:



|                                  |  |    |        
|--------------------------------- |  | -- | -------
|Leasehold improvements            |  | 10 | % - 20%
|Furniture, fixtures and equipment |  | 20 | % - 33%
|Motor vehicle                     |  | 20 | %      

The assets residual values and useful lives are reviewed, and adjusted if appropriate, at
each balance sheet date.



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|4. | SIGNIFICANT ACCOUNTING POLICIES  CONTD
|-- | ----------------------------------------



| | (e) | Property, plant and equipment  contd
| | --- | --------------------------------------



| | (iii) | Disposals
| | ----- | ---------

Gains or losses arising from the retirement or
disposal of a property, plant and equipment are determined as the difference between the estimated net disposal proceeds and the carrying amount of the asset and are recognised in the income statement on the date of retirement or disposal.



| | (f) | Research and development expenditure
| | --- | ------------------------------------

Expenditure
on research activities is recognised as an expense in the period in which it is incurred.



| | (g) | Leased assets
| | --- | -------------

Operating lease charges

Where the Group has the use of assets under operating leases, payments made under the leases are charged to the income statement in equal
instalments over the accounting periods covered by the lease term.

The cost of acquiring land held under an operating lease is amortised on
a straight-line basis over the period of the lease term.



| | (h) | Impairment of assets
| | --- | --------------------

Internal and external sources
of information are reviewed at each balance sheet date to identify indications that the assets may be impaired or an impairment loss previously recognized no longer exists or may have decreased.

If any such indication exists, the assets recoverable amount is estimated. An impairment loss is recognized in the income statement whenever the
carrying amount of such asset exceeds its recoverable amount.

In respect of assets other than goodwill, an impairment loss is reversed if
there has been a favourable change in the estimates used to determine the recoverable amount. An impairment loss in respect of goodwill is reversed only if the loss was caused by a specific external event of an exceptional nature that is not
expected to recur, and the increase in recoverable amount related clearly to the reversal of the effect of that specific event.

A reversal
of impairment losses is limited to the assets carrying amount that would have been determined had no impairment loss been recognized in prior years. Reversal of impairment losses is credited to the income statement in the year in which the
reversal is recognized.



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|4. | SIGNIFICANT ACCOUNTING POLICIES  CONTD
|-- | ----------------------------------------



| | (i) | Inventories
| | --- | -----------

Inventories are carried at the lower
of cost and net realisable value.

Cost is calculated using the weighted average method and comprises all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable
value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction
in the amount of inventories recognised as an expense in the period in which the reversal occurs.



| | (j) | Account and other receivables
| | --- | -----------------------------

Account and other
receivables are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method less impairment losses for bad and doubtful debt.



| | (a) | Interest free loans made to related parties without any fixed repayment terms or the effect of discounting being immaterial, that are measured at cost less impairment losses for bad
and doubtful debts, if any; and
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Short term receivables with no stated interest rate and the effect of discounting being immaterial, that are measured at their original invoice amount less impairment losses for bad
and doubtful debt, if any.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (k) | Cash and cash equivalents
| | --- | -------------------------

Cash comprises cash on
hand and at bank and demand deposits with bank. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.



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|4. | SIGNIFICANT ACCOUNTING POLICIES  CONTD
|-- | ----------------------------------------



| | (l) | Employee benefits
| | --- | -----------------



| | (i) | Short term employee benefits and contribution to defined contribution retirement plans
| | --- | --------------------------------------------------------------------------------------

Salaries, annual bonuses, paid annual leave, leave passage, contributions to defined contribution plans and the cost to the Group of non-monetary benefits are accrued in the year in which the associated services are
rendered by employees of the Group.

Contributions to Mandatory Provident Fund Scheme as required under the Hong Kong Mandatory Provident
Fund Schemes Ordinance are recognised as an expense in the income statement as incurred.



| | (ii) | Share-based payments
| | ---- | --------------------

The fair value of share options
granted to employees is recognised as an employee cost with a corresponding increase in an employee compensation reserve within equity. The fair value is measured at grant date using Black-Scholes Option Pricing Model, taking into account the terms
and conditions upon which the options were granted. Where the employees have to meet vesting conditions before becoming unconditionally entitled to the share options, the total estimated fair value of the share options is spread over the vesting
period, taking into account the probability that the options will vest.

During the vesting period, the number of share options that is
expected to vest is reviewed. Any adjustment to the cumulative fair value recognised in prior years is charged/ credited to the income statement for the year of review, unless the original employees expenses qualify for recognition of an asset, with
a corresponding adjustment to the employee compensation reserve. On vesting date, the amount recognised as an expense is adjusted to reflect the actual number of share options that vest (with a corresponding adjustment to the employee compensation
reserve) except where forfeiture is only due to not achieving vesting conditions that relate to the market price of the companys shares. The equity amount is recognised in the employee compensation reserve until either the option is exercised
or the option expires.



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|4. | SIGNIFICANT ACCOUNTING POLICIES  CONTD
|-- | ----------------------------------------



| | (m) | Income tax
| | --- | ----------

Income tax expense represents the sum
of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the period using tax rates that
have been enacted or substantively enacted by the balance sheet date. Taxable profit differs from net profit as reported in the income statement because it excludes items of income and expenses that are taxable or deductible in other years, and it
further excludes income statement items that are never taxable and deductible.

Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.

Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are recognized to the
extent that it is probable that taxable profits will be available against which the deductible temporary differences can be utilized.

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

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized, base on tax
rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets and liabilities are not discounted. Deferred tax is charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.



| | (n) | Trade and other payables
| | --- | ------------------------

Trade and other payables
are initially recognised at fair value and thereafter stated at amortised cost unless the effect of discounting would be immaterial, in which case they are stated at cost.



| | (o) | Revenue recognition
| | --- | -------------------



| | (i) | Sales of goods are recognised when goods are delivered and title has passed.
| | --- | ----------------------------------------------------------------------------



| | (ii) | Commission and service income are recognised when services are provided.
| | ---- | ------------------------------------------------------------------------



| | (iii) | Interest income is recognised on a time proportion basis, taking into account the principal amounts outstanding and interest rates applicable.
| | ----- | ----------------------------------------------------------------------------------------------------------------------------------------------



| | (iv) | Sales of investments in securities are recognised when the related bought and sold notes are executed.
| | ---- | ------------------------------------------------------------------------------------------------------



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|4. | SIGNIFICANT ACCOUNTING POLICIES  CONTD
|-- | ----------------------------------------



| | (p) | Investment in securities
| | --- | ------------------------

Other investments in
securities are classified as available-for-sale securities and are initially recognised at fair value. At each balance sheet date the fair value is re-measured, with any resultant gain or loss being recognised directly in equity, except for
impairment losses and , in case of monetary items such as debt securities, foreign exchange gain and losses which are recognised directly in profit or loss. Where these investments are interest-bearing, interest calculated using the effective
interest method is recognised in profit or loss. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss.



| | (q) | Translation of foreign currencies
| | --- | ---------------------------------

The individual
financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial
position of each entity are expressed in United States Dollars, the presentation currency for consolidated financial statements.

On
consolidation, the assets and liabilities of the Groups overseas operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period. Exchange
difference arising, if any, are classified as equity and transferred to the Groups translation reserve. Such translation differences are recognized as income or as expenses in the period in which the operation is disposed of.

In preparing the financial statements of the individual entities, transactions in currencies other than the entitys functional currency
(foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet dates.
Non-monetary items carried at fair value that are denominated in foreign currencies are re-translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a
foreign currency are not retranslated.

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



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|4. | SIGNIFICANT ACCOUNTING POLICIES  CONTD
|-- | ----------------------------------------



| | (r) | Related parties
| | --- | ---------------

A party is considered to be
related to the company if:



| | (i) | the party, directly or indirectly through one of more intermediaries,
| | --- | ---------------------------------------------------------------------

- controls, is controlled by, or is under common control with, the company;

- has an
interest in the company that gives it significant influence over the company; or

- has joint control over the company;



| | (ii) | the party is an associate;
| | ---- | --------------------------



| | (iii) | the party is a jointly-controlled entity;
| | ----- | -----------------------------------------



| | (iv) | the party is a member of the key management personnel of the company or its parent;
| | ---- | -----------------------------------------------------------------------------------



| | (v) | the party is a close member of the family of any individual referred to (i) or (iv); or
| | --- | ---------------------------------------------------------------------------------------



| | (vi) | the party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant voting power in such entity resides with, directly or
indirectly, any individual referred to in (iv) or (v).
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|5. | TURNOVER AND OTHER REVENUES
|-- | ---------------------------

The Company and its
subsidiaries are principally engaged in investment holding, manufacturing, trading and provision of testing services for electronic components. Revenue recognised during the year are as follows:-



|                                      |  |            |  |          
|------------------------------------- |  | ---------- |  | ---------
|                                      |  | 2006 US$   |  | 2005 US$ 
|                                      |  |           
|Turnover                              |  |            |  |          
|Sales of goods                        |  | 12,512,670 |  | 6,112,601
|Services rendered                     |  |           |  | 53,466   
|                                      |  |            |  |          
|                                      |  | 12,512,670 |  | 6,166,067
|                                      |  |            |  |          
|Other revenues                        |  |            |  |          
|Commission income                     |  |           |  | 307,013  
|Investment interest income            |  | 171,010    |  | 142,448  
|Gain on disposal of other investments |  | 181,774    |  | 56,218   
|Bank interest income                  |  | 16,192     |  | 1,944    
|Others                                |  | 51,898     |  | 88,418   
|Exchange differences                  |  | 83,899     |  |         
|                                      |  |            |  |          
|                                      |  | 504,773    |  | 596,041  
|                                      |  |            |  |          



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|6. | PROFIT BEFORE TAXATION
|-- | ----------------------



|                                                                        |  |           |  |           
|----------------------------------------------------------------------- |  | --------- |  | ----------
|                                                                        |  | 2006 US$  |  | 2005 US$  
|Profit before taxation is arrived at after charging:                    |  |          
|                                                                        |  |           |  | (restated)
|Auditors remuneration                                                  |  |           |  |           
|- Current year                                                          |  | 27,905    |  | 31,452    
|- Underprovision in prior years                                         |  |          |  | 1,000     
|Amortisation of prepaid lease payments                                  |  | 23,040    |  | 21,485    
|Cost of inventories                                                     |  | 2,262,634 |  | 2,661,998 
|Depreciation                                                            |  | 214,682   |  | 273,344   
|Exchange loss                                                           |  |          |  | 479       
|Allowances for inventories                                              |  | 600,557   |  | 240,095   
|Research and development costs                                          |  | 1,959,104 |  | 2,456,807 
|Directors remuneration                                                 |  |           |  |           
|- Fees                                                                  |  |          |  |          
|- Other emoluments                                                      |  | 188,236   |  | 161,953   
|- Retirement benefit scheme contributions                               |  | 6,296     |  | 5,954     
|Other staff costs                                                       |  | 2,219,356 |  | 2,023,452 
|Retirements benefit scheme contributions (excluding those of directors) |  | 26,120    |  | 214,633   
|                                                                        |  |          
|and after crediting:                                                    |  |           |  |           
|Bank interest income                                                    |  | 16,192    |  | 1,944     
|Investment interest income                                              |  | 171,010   |  | 142,448   
|Gain on disposal of other investment                                    |  | 181,774   |  | 56,218    
|                                                                        |  |           |  |           



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|7. | DIRECTORS REMUNERATION
|-- | -----------------------

Remuneration of the
directors disclosed pursuant to Section 161 of the companies Ordinance is as follows:



|                 |  |          |  |         
|---------------- |  | -------- |  | --------
|                 |  | 2006 US$ |  | 2005 US$
|                 |  |         
|Fees             |  |         |  |        
|Other emoluments |  | 194,532  |  | 167,907 
|                 |  |          |  |         
|                 |  | 194,532  |  | 167,907 
|                 |  |          |  |         



|8. | LOSS ATTRIBUTABLE TO SHAREHOLDERS
|-- | ---------------------------------

The loss
attributable to shareholders is dealt with in the financial statements of the company to the extent of US$2,361,630 (2005: US$4,864,266).



|9. | TAXATION
|-- | --------

No Hong Kong profits tax has been
provided in the financial statements as the company did not derive any assessable profits for the year.

Pursuant to the relevant laws and
regulations in the Peoples Republic of China (the PRC), the Groups PRC subsidiaries are entitled to exemption from PRC Enterprises Income Tax for two years starting from its first profit-making year of operation and
thereafter, followed by a 50% relief from PRC Enterprises Income Tax for the following three years.

No provision for PRC Enterprises Income
Tax has been made as the taxable profit of Pericom Technology (Shanghai) Co. Ltd. is exempted from PRC Enterprises Income Tax for its first profit-making year of operation and 

LOGO has incurred taxation losses for the year.



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|9. | TAXATION  CONTD
|-- | -----------------

The reconciliation
between the Groups actual tax charge and the amount which is calculated based on the statutory tax rate of Hong Kong is as follows:



|                                                                                  |  |           |   |  |          |  
|--------------------------------------------------------------------------------- |  | --------- | - |  | -------- | -
|                                                                                  |  | 2006 US$  |   |  | 2005 US$ |  
|                                                                                  |  |          
|Profit for the year                                                               |  | 2,598,277 |   |  | 62,226   |  
|                                                                                  |  |           |   |  |          |  
|Tax at the Hong Kong Profits Tax rate of 17.5% (2005: 17.5%)                      |  | 454,698   |   |  | 10,889   |  
|Tax effect of income not taxable for tax purpose                                  |  | (94,777   | ) |  | (234,409 | )
|Tax effect of expenses non-deductible for tax purpose                             |  | 107,048   |   |  | 917      |  
|Tax effect of tax losses not recognised                                           |  | 316,929   |   |  | 334,637  |  
|Utilisatoin of tax losses not previously recognised                               |  | (694,680  | ) |  | (97,340  | )
|Tax effect of different tax rate of subsidiaries operating in other jurisdictions |  | (89,218   | ) |  | (14,694  | )
|                                                                                  |  |           |   |  |          |  
|Tax expenses                                                                      |  |          |   |  |         |  
|                                                                                  |  |           |   |  |          |  



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|10. | PROPERTY, PLANT AND EQUIPMENT
|--- | -----------------------------



|                                           |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|------------------------------------------ |  | ------------- | - |  | -------------------------- |  | ------------------------------------- | - |  | ----------------- |  | --------- | -
|                                           |  | The Group     |  
|                                           |  | Buildings US$ |   |  | Leasehold improvements US$ |  | Furniture, fixtures and equipment US$ |   |  | Motor vehicle US$ |  | Total US$ |  
|                                           |  |               |   |  |                           
|                                           |  |               |   |  |                           
|                                           |  |               |   |  |                           
|Cost:                                      |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|At 1 July 2004                             |  | 865,651       |   |  | 15,782                     |  | 1,678,488                             |   |  | 39,140            |  | 2,599,061 |  
|Additions                                  |  | 41,997        |   |  |                           |  | 208,937                               |   |  |                  |  | 250,934   |  
|Disposal                                   |  |              |   |  |                           |  | (1,496                                | ) |  |                  |  | (1,496    | )
|                                           |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|At 1 July 2005                             |  | 907,648       |   |  | 15,782                     |  | 1,885,929                             |   |  | 39,140            |  | 2,848,499 |  
|Additions                                  |  | 307,449       |   |  |                           |  | 68,997                                |   |  |                  |  | 376,446   |  
|Reclassification                           |  | (715,529      | ) |  | 715,529                    |  |                                      |   |  |                  |  |          |  
|Exchange re-alignment                      |  | 29,746        |   |  |                           |  | 56,407                                |   |  | 1,327             |  | 87,480    |  
|                                           |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|At 30 June 2006                            |  | 529,314       |   |  | 731,311                    |  | 2,011,333                             |   |  | 40,467            |  | 3,312,425 |  
|                                           |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|Accumulated depreciation and impairments:- |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|At 1 July 2004                             |  | 236,052       |   |  | 15,782                     |  | 1,235,261                             |   |  | 12,394            |  | 1,499,489 |  
|Charge for the year                        |  | 54,392        |   |  |                           |  | 211,124                               |   |  | 7,828             |  | 273,344   |  
|Written back on disposal                   |  |              |   |  |                           |  | (424                                  | ) |  |                  |  | (424      | )
|                                           |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|At 1 July 2005                             |  | 290,444       |   |  | 15,782                     |  | 1,445,961                             |   |  | 20,222            |  | 1,772,409 |  
|Charge for the year                        |  | 20,256        |   |  | 29,664                     |  | 156,934                               |   |  | 7,828             |  | 214,682   |  
|Reclassification                           |  | (154,801      | ) |  | 154,801                    |  |                                      |   |  |                  |  |          |  
|Exchange re-alignment                      |  | 8,975         |   |  |                           |  | 45,989                                |   |  | 950               |  | 55,914    |  
|                                           |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|At 30 June 2006                            |  | 164,874       |   |  | 200,247                    |  | 1,648,884                             |   |  | 29,000            |  | 2,043,005 |  
|                                           |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|Net book value:                            |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|                                           |  |               |   |  |                           
|At 30 June 2006                            |  | 364,440       |   |  | 531,064                    |  | 362,449                               |   |  | 11,467            |  | 1,269,420 |  
|                                           |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  
|At 30 June 2005                            |  | 617,204       |   |  |                           |  | 439,968                               |   |  | 18,918            |  | 1,076,090 |  
|                                           |  |               |   |  |                            |  |                                       |   |  |                   |  |           |  

The buildings are situated in the PRC and held under medium leases.

The Company did not have any property, plant and equipment at the balance sheet date.



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|11. | PREPAID LEASE PAYMENTS
|--- | ----------------------

The Groups prepaid
lease payments represent prepaid lease payments on leasehold land in the Peoples Republic of China and their net carrying value are analysed as follows:



|                          |  |        
|------------------------- |  | -------
|                          |  | US$    
|Cost:                     |  |        
|At 1 July 2004            |  | 517,072
|Additions                 |  |       
|                          |  |        
|At 1 July 2005            |  | 517,072
|Exchange re-alignment     |  | 17,521 
|                          |  |        
|At 30 June 2006           |  | 534,593
|                          |  |        
|                          | 
|Accumulated amortisation: |  |        
|At 1 July 2004            |  | 104,543
|Amortisation charges      |  | 21,485 
|                          |  |        
|At 1 July 2005            |  | 126,028
|Amortisation charges      |  | 23,040 
|Exchange re-alignment     |  | 4,270  
|                          |  |        
|At 30 June 2006           |  | 153,338
|                          |  |        
|                          | 
|Net carrying value:       |  |        
|At 30 June 2006           |  | 381,255
|                          |  |        
|At 30 June 2005           |  | 391,044
|                          |  |        

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|12. | INTERESTS IN SUBSIDIARIES
|--- | -------------------------



|                                    |  |             |   |  |            |  
|----------------------------------- |  | ----------- | - |  | ---------- | -
|                                    |  | The Company |  
|                                    |  | 2006 US$    |   |  | 2005 US$   |  
|Unlisted investments, at cost       |  | 2,101,284   |   |  | 2,101,284  |  
|Less: Provision for impairment loss |  | (258,448    | ) |  | (1,401,290 | )
|                                    |  |             |   |  |            |  
|                                    |  | 1,842,836   |   |  | 699,994    |  
|                                    |  |             |   |  |            |  

Particulars of the subsidiaries at 30th June 2006 are as follows:



|                                            |  |                          |  |                     |  |                                       |   |  |                      |   |  |                                                                                   
|------------------------------------------- |  | ------------------------ |  | ------------------- |  | ------------------------------------- | - |  | -------------------- | - |  | ----------------------------------------------------------------------------------
|Name of subsidiary                          |  | Place ofincorporation    |  | Class ofshares held |  | Percentage helddirectly by thecompany |   |  | Principal activities
|                                            |  |                          |  |                     |  | 2006                                  |   |  | 2005                 |   |  |                                                                                   
|PTI Limited LOGO                            |  | Hong Kong                |  | Ordinaryshares      |  | 100                                   | % |  | 100                  | % |  | Trading andprovision oftesting servicesfor electroniccomponents                   
|Pericom Technology (Shanghai) Co. Ltd. LOGO |  | PeoplesRepublic ofChina |  | Registeredcapital   |  | 100                                   | % |  | 100                  | % |  | Manufacturing,sales, designand provisionof testingservices forelectroniccomponents
|LOGO                                        |  | PeoplesRepublic ofChina |  | Registeredcapital   |  | 100                                   | % |  | 100                  | % |  | Inactive                                                                          

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|13. | INTEREST IN AN ASSOCIATE
|--- | ------------------------



|                                           |  |           |   |             |          |  |          |  |         
|------------------------------------------ |  | --------- | - | ----------- | -------- |  | -------- |  | --------
|                                           |  | The Group |   | The Company
|                                           |  | 2006 US$  |   |             | 2005 US$ |  | 2006 US$ |  | 2005 US$
|Unlisted shares, at cost                   |  |          |   |             |         |  | 208,988  |  | 200,128 
|                                           |  |           |   |             |          |  |          |  |         
|Share of net assets of associates:         |  |           |   |             |          |  |          |  |         
|Balance as at 1 July                       |  | 200,128   |   |             | 200,128  |  |         |  |        
|Additional interest                        |  | 28,590    |   |             |         |  |         |  |        
|Share of profits less losses of associates |  |           |   |             |          |  |          |  |         
|- Share of losses before tax               |  | (19,730   | ) |             |         |  |         |  |        
|- Share of tax expenses                    |  |          |   |             |         |  |         |  |        
|                                           |  |           |   |             |          |  |          |  |         
|Balance as at 30 June                      |  | 208,988   |   |             | 200,128  |  |         |  |        
|                                           |  |           |   |             |          |  |          |  |         

The particulars of the companys principal associate, which are unlisted and limited liability
company, is set out as follows:

Details of the Groups interest in an associate is as follows:



|                                        |  |                                     |  |                                                     |   |  |                    |   |  |                   
|--------------------------------------- |  | ----------------------------------- |  | --------------------------------------------------- | - |  | ------------------ | - |  | ------------------
|Name of associate                       |  | Place ofincorporationand operations |  | Percentage ofissued shareheld directlyby theCompany |   |  | Principal activity
|                                        |  |                                     |  | 2006                                                |   |  | 2005               |   |  |                   
|Pericom Electronics (Hong Kong) Limited |  | Hong Kong                           |  | 40                                                  | % |  | 35                 | % |  | Investment holding

Summary financial information on associates related to the groups interests:



|               |  |           |   |  |         
|-------------- |  | --------- | - |  | --------
|               |  | The Group
|               |  | 2006 US$  |   |  | 2005 US$
|Assets         |  | 247,897   |   |  | 200,128 
|Liabilities    |  | (38,909   | ) |  |        
|Revenues       |  | 35,628    |   |  |        
|Loss after tax |  | (19,730   | ) |  |        
|               |  |           |   |  |         

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|14. | INVENTORIES
|--- | -----------



|                 |  |           |  |          
|---------------- |  | --------- |  | ---------
|                 |  | The Group
|                 |  | 2006 US$  |  | 2005 US$ 
|Raw materials    |  | 1,355,211 |  | 1,015,026
|Work in progress |  | 352,078   |  | 44,092   
|Finished goods   |  | 555,346   |  | 742,447  
|                 |  |           |  |          
|                 |  | 2,262,635 |  | 1,801,565
|                 |  |           |  |          

Inventories at cost of US$3,167,709 (2005: US$2,089,492), stated net of provision, in order to
state these inventories at lower of cost and estimated net realisable value.



|15. | OTHER INVESTMENTS
|--- | -----------------



|                         |  |           |  |             |  |           |  |          
|------------------------ |  | --------- |  | ----------- |  | --------- |  | ---------
|                         |  | The Group |  | The Company
|                         |  | 2006 US$  |  | 2005 US$    |  | 2006 US$  |  | 2005 US$ 
|Listed equity securities |  | 1,842,433 |  | 1,475,762   |  | 1,842,433 |  | 1,475,762
|Listed debt securities   |  | 2,416,781 |  | 4,213,453   |  | 2,080,049 |  | 3,916,453
|                         |  |           |  |             |  |           |  |          
|                         |  | 4,259,214 |  | 5,689,215   |  | 3,922,482 |  | 5,392,215
|                         |  |           |  |             |  |           |  |          
|Market values            |  | 4,259,214 |  | 5,689,215   |  | 3,922,482 |  | 5,392,215
|                         |  |           |  |             |  |           |  |          

All equity securities and debt securities are listed outside Hong Kong.



|16. | AMOUNT(S) DUE TO A SHAREHOLDER / AN ASSOCIATE
|--- | ---------------------------------------------

The
amounts are unsecured, interest-free and repayable on demand.

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|17. | DEFERRED TAXATION
|--- | -----------------

The following are the major
deferred tax liabilities and assets recognised by the Group and movements thereon during the current and prior reporting periods.



|                                                 |  |                                |   |  |               |   |  |         
|------------------------------------------------ |  | ------------------------------ | - |  | ------------- | - |  | --------
|                                                 |  | Accelerated taxdepreciationUS$ |   |  | Tax lossesUS$ |   |  | TotalUS$
|At 1 July 2004                                   |  | 13,339                         |   |  | (13,339       | ) |  |        
|Charge/(credit) to income statement for the year |  | (2,619                         | ) |  | 2,619         |   |  |        
|                                                 |  |                                |   |  |               |   |  |         
|At 30 June 2005                                  |  | 10,720                         |   |  | (10,720       | ) |  |        
|Charge/(credit) to income statement for the year |  | 836                            |   |  | (836          | ) |  |        
|                                                 |  |                                |   |  |               |   |  |         
|At 30 June 2006                                  |  | 11,556                         |   |  | (11,556       | ) |  |        
|                                                 |  |                                |   |  |               |   |  |         

For the purpose of balance sheet presentation, certain deferred tax assets and liabilities have
been offset. The following is the analysis of the deferred tax balances for financial reporting purposes:



|                                    |  |         |   |  |         |  
|----------------------------------- |  | ------- | - |  | ------- | -
|                                    |  | 2006US$ |   |  | 2005US$ |  
|Tax losses                          |  | 11,556  |   |  | 10,720  |  
|Accelerated depreciation allowances |  | (11,556 | ) |  | (10,720 | )
|                                    |  |         |   |  |         |  
|                                    |  |        |   |  |        |  
|                                    |  |         |   |  |         |  

At the balance sheet date, the Group has unused tax losses of approximately US$4.44 million (2005:
US$3.77 million) available for offset against future profits. A deferred tax asset has been recognised in respect of approximately US$66,000 (2005: US$61,000) of such losses. No deferred tax asset has been recognised in respect of the remaining tax
losses of approximately US$4.37 million (2005: US$3.71 million).

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|18. | CAPITAL
|--- | -------



|                                                                                                 |  |                 |  |                     
|------------------------------------------------------------------------------------------------ |  | --------------- |  | --------------------
|                                                                                                 |  | Number ofshares |  | Issued andfully paid
|Balance at 1 July 2004                                                                           |  | 2,391,986       |  | 82,442              
|Share issued at US$0.10 each on exercise of share options                                        |  | 40,000          |  | 4,000               
|Share issued at US$0.25 each on exercise of share options                                        |  | 40,000          |  | 10,000              
|Share issued at US$0.70 each on exercise of warrants                                             |  | 275,000         |  | 192,500             
|                                                                                                 |  |                 |  |                     
|Balance at 30 June 2005                                                                          |  | 2,746,986       |  | 288,942             
|Share issued at US$0.25 each on exercise of share options                                        |  | 50,000          |  | 12,500              
|Share issued at US$0.30 each on exercise of share options                                        |  | 8,125           |  | 2,438               
|                                                                                                 |  |                 |  |                     
|Balance at 30 June 2006                                                                          |  | 2,805,111       |  | 303,880             
|                                                                                                 |  |                 |  |                     
|Series A preferred Shares of US$0.50 each Balance at 1 July 2004, 30 June 2005 and 30 June 2006  |  | 5,054,309       |  | 2,527,155           
|                                                                                                 |  |                 |  |                     
|Series B preferred Shares of US$1.10 each Balance at 1 July 2004, 30 June 2005 and 30 June 2006  |  | 5,499,999       |  | 6,049,999           
|                                                                                                 |  |                 |  |                     
|Series C preferred Shares of US$1.667 each Balance at 1 July 2004, 30 June 2005 and 30 June 2006 |  | 6,000,000       |  | 10,002,000          
|                                                                                                 |  |                 |  |                     
|Balance at 30 June 2006                                                                          |  | 19,359,419      |  | 18,883,034          
|                                                                                                 |  |                 |  |                     
|Balance at 30 June 2005                                                                          |  | 19,301,294      |  | 18,868,096          
|                                                                                                 |  |                 |  |                     

The Company has no authorised share capital. The Company is authorised to issue 50,000,000 shares
divided into 30,000,000 common shares and 20,000,000 preferred shares with no par value and with one vote for each share. The preferred shares may be issued in up to three series. The first series shall be designated Series A Preferred
Shares and shall consist of 6,000,000 preferred shares. The second series shall be designated Series B Preferred Shares and shall consist of 7,000,000 preferred shares. The third series shall be designated Series C Preferred
shares and shall consist of 7,000,000 preferred shares.

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|18. | CAPITAL - CONTD
|--- | ----------------

All common shares and Series
A Preferred Shares shall have the same rights and powers except that in the event of any liquidation, dissolution, or winding up of the Company, either voluntary or involuntary, the holders of the Series A Preferred Shares shall be entitled to
receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the common shares by reason of their ownership of such shares, an amount per share equal to the sum of US$0.50 plus all
declared but unpaid dividends, for each Series A Preferred Share then held by them. If upon the occurrence of such event, the assets and funds thus distributed among the holders of the Series A Preferred Shares shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts, then the entire assets and funds of the Company legally available for distribution shall be distributed pari passu among the holders of the Series A Preferred Shares in proportion
to the full preferential amount each such holder is otherwise entitled to receive. After the payment or setting apart of payment to the holders of Series A Preferred Shares of the full amounts to which they shall be entitled as aforesaid, the
holders of common shares shall be entitled to receive ratably on a per share basis all the remaining assets of the Company.

Each Series A
Preferred Share shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, into one fully paid and non-assessable common share at US$0.50.

In the event of any liquidation, or winding up of the Company, either voluntary or involuntary, the holders of the Series B Preferred Shares shall be
entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company to the holders of the common shares of the Company or the Series A Preferred Shares of the Company by reason of their ownership of
such shares, an amount per share equal to the sum of US$1.10 plus all declared but unpaid dividends for each Series B Preferred Share then held by them. If upon the occurrence of such event, the assets and funds thus distributed among the holders of
the Series B Preferred Shares shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then the entire assets and funds of the Company legally available for distribution shall be distributed pari passu
among the holders of Series B Preferred Shares in proportion to the full preferential amount each such holder is otherwise entitled to receive. After the payment or setting apart of payment of the holders of Series B Preferred Shares of the full
amounts to which they shall be entitled as aforesaid, the holders of the Series A Preferred Shares and common shares shall be entitled to receive ratably on a per share shares basis all the remaining assets of the Company.

Each Series B Preferred Share shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, into one
fully paid and non assessable share of common share at the conversion price. The initial conversion price shall be US$1.10 per share. Such initial conversion price shall be subject to adjustment as hereinafter provided.

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|18. | CAPITAL - CONTD
|--- | ----------------

In the event of any
liquidation, or winding up of the Company, either voluntary or involuntary, the holders of the Series C Preferred Shares shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Company
to the holders of the Series A Preferred Shares of the Company, the Series B Preferred Shares of the Company, and the common shares of the Company, by reason of their ownership of such shares, an amount per share equal to the sum of US$1.667 per
share plus all declared but unpaid dividends for each Series C Preferred Share then held by them. If upon the occurrence of such event, the assets and funds thus distributed among the holders of the Series C Preferred Shares shall be insufficient to
permit the payment to such holders of the full aforesaid preferential amounts, then the entire assets and funds of the Company legally available for distribution shall be distributed in proportion to the full preferential amount each such holder is
otherwise entitled to receive. After the payment or setting apart of payment to the holders of Series C Preferred Shares of the full amounts to which they shall by entitled as aforesaid and for any preferential amounts payable to the holders of the
Series B Preferred Shares and the Series A Preferred Shares, the holders of the Series A Preferred Shares, Series B Preferred Shares and Series C Preferred Shares and common share shall be entitled to receive ratably on a per share as converted
basis all the remaining assets of the Company.

Each Series C Preferred Share shall be convertible, at the option of the holder thereof, at
any time after the date of issuance of such share, into one fully paid and non-assessable share of common share at the conversion price. The initial conversion price shall be US$1.667 per share. Such initial conversion price shall be subject to
adjustment as hereinafter provided.

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|19. | STOCK OPTION PLAN
|--- | -----------------

In 1994, the Company approved
the establishment of the Pericom Technology Inc. 1994 Flexible Stock Incentive Plan (the Plan), under which stock options awards (Option(s)) may be made to employees (including officers and directors who are employee) of the
Company and its subsidiaries. The Plan will remain effective unless terminated by the board of directors of the Company (the Board).

The maximum number of common stock which may be issued or delivered and as to which awards may be granted under the Plan was 2,250,000 shares. The exercise price for Options must be at least equal to 100% (110% with respect to incentive
stock options granted to persons holding 10% or more of the outstanding common stock) of the fair market value of the common stock on the date of grant of such Options for incentive option, which are available only to employees of the Company and
its subsidiaries, and 85% of the fair market value of the common stock on the date of grant of such stock option for other stock options.

The duration of each Option will be determined by a committee which the Board delegates the responsibility for administering the Plan (the Committee), but no Options will be exercisable more than ten years from the date of grant
(or, with respect to incentive stock options granted to persons holding ten percent or more of the outstanding common stock not more than five years from the date of grant). Unless otherwise determined by the Committee and provided in the applicable
option agreement, Options can be exercisable within three months of any termination of employment, including termination due to disability, death or normal retirement (but no later than the expiration date of the Options).

Details of the Options granted under the Plan are as follows:

Category 1: Directors of the Company



|                  |  |               |  |                          |  |                     |  |                          
|----------------- |  | ------------- |  | ------------------------ |  | ------------------- |  | -------------------------
|                  |  |               |  | Number of Options       
|Date of grant     |  | ExercisePrice |  | Outstandingat 1 July2005 |  | Gantedduringtheyear |  | Outstandingat 30 June2006
|                  |  | US$           |  |                          |  |                     |  |                          
|3 August 1999     |  | 0.20          |  | 228,125                  |  |                    |  | 228,125                  
|3 August 2000     |  | 0.25          |  | 120,000                  |  |                    |  | 120,000                  
|29 October 2002   |  | 0.30          |  | 80,000                   |  |                    |  | 80,000                   
|24 September 2003 |  | 0.30          |  | 125,000                  |  |                    |  | 125,000                  
|                  |  |               |  |                          |  |                     |  |                          
|                  |  |               |  | 553,125                  |  |                    |  | 553,125                  
|                  |  |               |  |                          |  |                     |  |                          

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|19. | STOCK OPTION PLAN  CONTD
|--- | --------------------------

Category 2:
Employees of the Group



|                          |  |                   |  |                          |  |                       |   |                         |         |   |                         |           |  |                           |  |                       |   |                         |         |   |                         |           |  |                          
|------------------------- |  | ----------------- |  | ------------------------ |  | --------------------- | - | ----------------------- | ------- | - | ----------------------- | --------- |  | ------------------------- |  | --------------------- | - | ----------------------- | ------- | - | ----------------------- | --------- |  | -------------------------
|                          |  | Number of Options
|Date of grant             |  | Exerciseprice     |  | Outstandingat 1 July2004 |  | Grantedduringthe year |   | Cancelledduringthe year |         |   | Exercisedduringthe year |           |  | Outstandingat 30 June2005 |  | Grantedduringthe year |   | Cancelledduring theyear |         |   | Exercisedduringthe year |           |  | Outstandingat 30 June2006
|                          |  | US$               |  |                          |  |                       |   |                         |         |   |                         |           |  |                           |  |                       |   |                         |         |   |                         |           |  |                          
|1 April 1998              |  | 0.10              |  | 40,000                   |  |                      |   |                        |         |   |                        |           |  | 40,000                    |  |                      |   |                        |         |   |                        |           |  | 40,000                   
|24 August 1998            |  | 0.10              |  | 40,000                   |  |                      |   |                        |         |   | (40,000                 | )         |  |                          |  |                      |   |                        |         |   |                        |           |  |                         
|3 August 1999             |  | 0.20              |  | 112,000                  |  |                      |   |                        |         |   |                        |           |  | 112,000                   |  |                      |   |                        |         |   |                        |           |  | 112,000                  
|5 November 1999           |  | 0.20              |  | 13,542                   |  |                      |   |                        |         |   |                        |           |  | 13,542                    |  |                      |   |                        |         |   |                        |           |  | 13,542                   
|13 March 2000             |  | 0.25              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  |                      |   |                        |         |   |                        |           |  |                         
|20 March 2000             |  | 0.25              |  | 100,000                  |  |                      |   |                        |         |   |                        |           |  | 100,000                   |  |                      |   | (50,000                 | )       |   | (50,000                 | )         |  |                         
|1 April 2000              |  | 0.25              |  | 10,000                   |  |                      |   |                        |         |   |                        |           |  | 10,000                    |  |                      |   |                        |         |   |                        |           |  | 10,000                   
|1 August 2000             |  | 0.25              |  | 50,000                   |  |                      |   |                        |         |   |                        |           |  | 50,000                    |  |                      |   |                        |         |   |                        |           |  | 50,000                   
|10 August 2000            |  | 0.25              |  | 40,000                   |  |                      |   |                        |         |   | (40,000                 | )         |  |                          |  |                      |   |                        |         |   |                        |           |  |                         
|24 August 2000            |  | 0.25              |  | 10,000                   |  |                      |   | (10,000                 | )       |   |                        |           |  |                          |  |                      |   |                        |         |   |                        |           |  |                         
|1 January 2001            |  | 0.30              |  | 4,000                    |  |                      |   |                        |         |   |                        |           |  | 4,000                     |  |                      |   |                        |         |   |                        |           |  | 4,000                    
|1 February 2001           |  | 0.30              |  | 10,000                   |  |                      |   | (10,000                 | )       |   |                        |           |  |                          |  |                      |   |                        |         |   |                        |           |  |                         
|12 February 2001          |  | 0.30              |  | 40,000                   |  |                      |   |                        |         |   |                        |           |  | 40,000                    |  |                      |   |                        |         |   |                        |           |  | 40,000                   
|1 July 2001               |  | 0.30              |  | 18,000                   |  |                      |   |                        |         |   |                        |           |  | 18,000                    |  |                      |   | (18,000                 | )       |   |                        |           |  |                         
|1 September 2001          |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  |                      |   |                        |         |   |                        |           |  |                         
|20 March 2002             |  | 0.30              |  | 20,000                   |  |                      |   |                        |         |   |                        |           |  | 20,000                    |  |                      |   | (20,000                 | )       |   |                        |           |  |                         
|24 April 2002             |  | 0.30              |  | 100,000                  |  |                      |   |                        |         |   |                        |           |  | 100,000                   |  |                      |   |                        |         |   |                        |           |  | 100,000                  
|16 May 2002               |  | 0.30              |  | 30,000                   |  |                      |   |                        |         |   |                        |           |  | 30,000                    |  |                      |   |                        |         |   |                        |           |  | 30,000                   
|1 August 2002             |  | 0.30              |  | 25,000                   |  |                      |   |                        |         |   |                        |           |  | 25,000                    |  |                      |   |                        |         |   |                        |           |  | 25,000                   
|8 October 2002            |  | 0.30              |  | 20,000                   |  |                      |   |                        |         |   |                        |           |  | 20,000                    |  |                      |   | (1,875                  | )       |   | (8,125                  | )         |  | 10,000                   
|1 November 2002           |  | 0.30              |  | 100,000                  |  |                      |   |                        |         |   |                        |           |  | 100,000                   |  |                      |   | (100,000                | )       |   |                        |           |  |                         
|20 November 2002          |  | 0.30              |  | 14,000                   |  |                      |   |                        |         |   |                        |           |  | 14,000                    |  |                      |   |                        |         |   |                        |           |  | 14,000                   
|12 February 2003          |  | 0.30              |  | 5,000                    |  |                      |   |                        |         |   |                        |           |  | 5,000                     |  |                      |   |                        |         |   |                        |           |  | 5,000                    
|20 March 2003             |  | 0.30              |  | 10,000                   |  |                      |   |                        |         |   |                        |           |  | 10,000                    |  |                      |   | (10,000                 | )       |   |                        |           |  |                         
|24 April 2003             |  | 0.30              |  | 10,000                   |  |                      |   |                        |         |   |                        |           |  | 10,000                    |  |                      |   |                        |         |   |                        |           |  | 10,000                   
|19 May 2003               |  | 0.30              |  | 5,000                    |  |                      |   | (5,000                  | )       |   |                        |           |  |                          |  |                      |   |                        |         |   |                        |           |  |                         
|1 June 2003               |  | 0.30              |  | 20,000                   |  |                      |   |                        |         |   |                        |           |  | 20,000                    |  |                      |   |                        |         |   |                        |           |  | 20,000                   
|1 August 2003             |  | 0.30              |  | 15,000                   |  |                      |   |                        |         |   |                        |           |  | 15,000                    |  |                      |   |                        |         |   |                        |           |  | 15,000                   
|4 August 2003             |  | 0.30              |  | 35,000                   |  |                      |   |                        |         |   |                        |           |  | 35,000                    |  |                      |   |                        |         |   |                        |           |  | 35,000                   
|15 September 2003         |  | 0.30              |  | 20,000                   |  |                      |   | (20,000                 | )       |   |                        |           |  |                          |  |                      |   |                        |         |   |                        |           |  |                         
|13 October 2003           |  | 0.30              |  | 24,000                   |  |                      |   |                        |         |   |                        |           |  | 24,000                    |  |                      |   |                        |         |   |                        |           |  | 24,000                   
|16 February 2004          |  | 0.30              |  | 8,000                    |  |                      |   |                        |         |   |                        |           |  | 8,000                     |  |                      |   |                        |         |   |                        |           |  | 8,000                    
|8 September 2004          |  | 0.30              |  |                         |  | 8,000                 |   |                        |         |   |                        |           |  | 8,000                     |  |                      |   |                        |         |   |                        |           |  | 8,000                    
|12 February 2005          |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  | 10,000                |   |                        |         |   |                        |           |  | 10,000                   
|16 March 2005             |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  | 25,000                |   |                        |         |   |                        |           |  | 25,000                   
|20 March 2005             |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  | 5,000                 |   | (5,000                  | )       |   |                        |           |  |                         
|1 April 2005              |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  | 3,000                 |   |                        |         |   |                        |           |  | 3,000                    
|24 April 2005             |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  | 15,000                |   |                        |         |   |                        |           |  | 15,000                   
|1 June 2005               |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  | 5,000                 |   |                        |         |   |                        |           |  | 5,000                    
|16 June 2005              |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  | 6,500                 |   |                        |         |   |                        |           |  | 6,500                    
|8 July 2005               |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  | 55,000                |   |                        |         |   |                        |           |  | 55,000                   
|1 August 2005             |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  | 80,000                |   |                        |         |   |                        |           |  | 80,000                   
|24 September 2005         |  | 0.30              |  |                         |  |                      |   |                        |         |   |                        |           |  |                          |  | 95,000                |   |                        |         |   |                        |           |  | 95,000                   
|                          |  |                   |  |                          |  |                       |   |                         |         |   |                         |           |  |                           |  |                       |   |                         |         |   |                         |           |  |                          
|                          |  |                   |  | 948,542                  |  | 8,000                 |   | (45,000                 | )       |   | (80,000                 | )         |  | 831,542                   |  | 299,500               |   | (204,875                | )       |   | (58,125                 | )         |  | 868,042                  
|                          |  |                   |  |                          |  |                       |   |                         |         |   |                         |           |  |                           |  |                       |   |                         |         |   |                         |           |  |                          
|Total of category 1 and 2 |  | 1,501,667         |  | 8,000                    |  | (45,000               | ) |                         | (80,000 | ) |                         | 1,384,667 |  | 299,500                   |  | (204,875              | ) |                         | (58,125 | ) |                         | 1,421,167
|                          |  |                   |  |                          |  |                       |   |                         |         |   |                         |           |  |                           |  |                       |   |                         |         |   |                         |           |  |                          

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##### Table of Contents

|19. | STOCK OPTION PLAN  CONTD
|--- | --------------------------

No
consideration has been received from the directors of the Company, former directors of the Company and any employees of the Group for taking up the Options granted for both years.



|20. | COMMITMENTS
|--- | -----------



| | (a) | Operating leases commitment
| | --- | ---------------------------

Minimum lease payment
paid under operating lease during the year:



|                                                                 |  |         |  |        
|---------------------------------------------------------------- |  | ------- |  | -------
|                                                                 |  | 2006    |  | 2005   
|                                                                 |  | US$     |  | US$    
|Minimum lease payment paid under operating lease during the year |  | 115,508 |  | 110,780
|                                                                 |  |         |  |        

The Group had total future minimum lease payments under non-cancellable operating leases in respect
of office premises as follows:



|                                      |  |        |  |       
|------------------------------------- |  | ------ |  | ------
|                                      |  | 2006   |  | 2005  
|                                      |  | US$    |  | US$   
|Within 1 year                         |  | 59,993 |  | 50,542
|In the second to fifth year inclusive |  | 12,040 |  | 1,800 
|                                      |  |        |  |       
|                                      |  | 72,033 |  | 52,342
|                                      |  |        |  |       

Operating lease payments represent rentals payable by the Group for rented premises. Leases are
negotiated for an average term of two years and rentals are fixed for an average of two years.

The Company did not have significant
commitments under non-cancellable operating leases at the balance sheet date.

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##### Table of Contents

|21. | CAPITAL COMMITMENTS
|--- | -------------------

The Group did not have any
significant capital commitments as at 30 June 2006.

The Company had capital commitment contracted for but not provided in the
financial statements amounting to US$1.3 million in 2005 in respect of further capital investment in a subsidiary. During the year, following a capital reduction of the subsidiary, the Company discharged its commitment to incur further capital
investment to that subsidiary.



|22. | RELATED PARTY TRANSACTIONS
|--- | --------------------------

During the year, the
Group had the following transactions with Pericom Semiconductor Corporation (PSC), a shareholder of the Company:



|                       |  |         |   |  |          |  
|---------------------- |  | ------- | - |  | -------- | -
|                       |  | 2006    |   |  | 2005     |  
|                       |  | US$     |   |  | US$      |  
|Nature of transactions |  |         |   |  |          |  
|Commission income      |  |        |   |  | 272,889  |  
|Sales of goods         |  | 120,825 |   |  | 75,384   |  
|Service income         |  | 33,333  |   |  | 20,000   |  
|Overhead recharge      |  | (83,799 | ) |  | (104,562 | )
|                       |  |         |   |  |          |  

In addition, PSC also provided certain rent-free equipments for the use by the Group in its
operations.

In the opinion of the directors, the above transactions were entered into in the normal course of the Groups business and
were carried out on pricing mutually agreed by both parties.

Save as disclosed above and in note 16, there were no other balances with
related parties during the year ended 30 June 2006 or balances with them at 30 June 2006.

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|23. | FINANCIAL INSTRUMENTS
|--- | ---------------------

Financial assets of the
Group mainly include inventories, trade, other receivable, and prepayments, cash and bank balances. Financial liabilities of the Group mainly include trade accounts and other payables and amount due to shareholders.

The directors considered that the carrying amounts of the Groups financial instruments approximated their fair values at the balance sheet date.
Fair value estimates are made at a specific point in time and based on relevant market information about the financial instruments. These estimates are subjective in nature and involve uncertainty and matters of significant judgment and therefore
cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The Group is exposed to various
kinds of risks in its operations and financial instruments. The Groups risk management objectives and policies mainly focus on minimizing the potential effects on the following risks of the Group by closely monitoring the individual exposure
as follows:



|(a) | Credit risk
|--- | -----------

Cash and bank balances

Substantial amounts of the Companys bank balances are deposited with the banks in the Peoples Republic of China, Taiwan and Hong Kong.

Trade and other receivables

The amounts presented in the balance sheet are net of allowances for doubtful receivables, if any, estimated by the companys management based on prior experience and their assessment of the current economic environment. All trade and
other receivables are closely monitored by the companys management.



|(b) | Liquidity risk
|--- | --------------

The Group manages its funds conservatively
by monitoring a comfortable level of cash and cash equivalents in order to meet continue operational need.



|(c) | Currency risk
|--- | -------------

The Group does not have a significant
foreign currency risk exposure arising from its sales and purchases transactions as these transactions are mainly carried out in United States Dollars, Hong Kong dollars and Renminbi. Since HK dollars is pegged to US dollars, there is no significant
exposure expected on US dollars transactions and balances.

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|24. | DIFFERENCE BETWEEN HKFRS AND US GAAP
|--- | ------------------------------------

The
consolidated financial statements of the Group for the year ended 30 June 2006 have been prepared in accordance with Hong Kong Financial Reporting Standards (HKFRS). Review has been conducted in accordance with the item 17 of Form
20-F and that there are no significant difference on the financial position and the result of the Group should the consolidated financial statements of the Group be prepared in accordance with the accounting principles generally accepted in the
United States of America (US GAAP).



|25. | COMPARATIVE FIGURES
|--- | -------------------

Certain comparative figures
have been reclassified to conform with changes in accounting policies.



|26. | APPROVAL OF THE FINANCIAL STATEMENTS
|--- | ------------------------------------

The financial
statements were approved and authorised for issue by the board of directors on.

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##### Table of Contents

|2. | Financial Statement Schedules
|-- | -----------------------------

All schedules have been
omitted as the required information is included in the financial statements filed herewith or notes thereto.



|3. | See Item 15(b)
|-- | --------------



|(b) | Exhibits:
|--- | ---------



|              |  |                                                                                                                                                  
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber |  | Description of Documents                                                                                                                         
|23.1          |  | Consent of PCP CPA Limited                                                                                                                       
|              | 
|31.1          |  | Certification of Chief Executive Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.              
|              | 
|31.2          |  | Certification of Chief Financial Officer pursuant to Rules 13a-14 and 15d-14 promulgated under the Securities Exchange Act of 1934.              
|              | 
|32.1          |  | Certification of Chief Executive Officer in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|              | 
|32.2          |  | Certification of Chief Financial Officer in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



|(c) | See Item 15(a)(2)
|--- | -----------------



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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



PERICOM SEMICONDUCTOR CORPORATIONBy:

/s/ ALEX C. HUIAlex C. HuiChief Executive Officer, President and Chairman of the Board of DirectorsDate:

April 23, 2007




39