##### Table of Contents

As filed with the Securities and Exchange Commission on October 30, 2008







UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 20-F







| ̈ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------------

OR



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED APRIL 30, 2008
|- | -----------------------------------------------------------------------------------------------------------------------------

OR



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

OR



| ̈ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------------





Commission file number: 000-30842

ASAT Holdings Limited

(Exact name of Registrant as specified in its charter)

N/A

(Translation of Registrants name into English)





Cayman Islands

(Jurisdiction of incorporation or organization)

14th Floor, 138 Texaco Road

Tsuen Wan, New Territories

Hong Kong

(Address of principal executive office)





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

Name of each exchange and Title of each class on which registered:

None

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

American Depositary Shares, each representing 15 ordinary
shares, par value $0.01 per share

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

Indicate the number of outstanding shares of each of the Issuers classes of capital or

common stock
as of the close of the period covered by the annual report:



|                                 |  |                                                  
|-------------------------------- |  | -------------------------------------------------
|Class                            |  | Number of shares outstanding as of April 30, 2008
|Ordinary Shares, par value $0.01 |  | 759,295,377                                      





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

If this annual report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes   ̈    No  x

NoteChecking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 from their obligations under those Sections.

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
requirements for the past 90 days.    Yes  x    No   ̈

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   ̈                                    
    Non-accelerated filer  x

Indicate by check mark which basis of
accounting the registrant has used to prepare the financial statements included in this filing:



|             |  |                                                                                                          |  |         
|------------ |  | -------------------------------------------------------------------------------------------------------- |  | --------
|U.S. GAAP  x |  | International Financial Reporting Standards as issued by the International Accounting Standards Board   ̈ |  | Other   ̈

If Other has been checked in response to the previous question, indicate by check mark
which financial statement item the registrant has elected to follow.    Item 17   ̈    Item 18   ̈

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act.).    Yes   ̈    No  x









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##### Table of Contents

TABLE OF CONTENTS



|                                |  |                                                             |  |   
|------------------------------- |  | ----------------------------------------------------------- |  | --
|                                |  | Page                                                       
|GENERAL INFORMATION             |  | iii                                                        
|                                | 
|FORWARD-LOOKING STATEMENTS      |  | iv                                                         
|                                | 
|GLOSSARY OF SEMICONDUCTOR TERMS |  | v                                                          
|                                | 
|PART I                          |  | 1                                                          
|                                |  |                                                            
|ITEM 1.                         |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS       |  | 1 
|                                |  |                                                            
|ITEM 2.                         |  | OFFER STATISTICS AND EXPECTED TIMETABLE                     |  | 1 
|                                |  |                                                            
|ITEM 3.                         |  | KEY INFORMATION                                             |  | 1 
|                                |  | SELECTED FINANCIAL DATA                                     |  | 2 
|                                |  | RISK FACTORS                                                |  | 5 
|                                |  |                                                            
|ITEM 4.                         |  | INFORMATION ON THE COMPANY                                  |  | 28
|                                |  | HISTORY AND DEVELOPMENT                                     |  | 28
|                                |  | BUSINESS OVERVIEW                                           |  | 28
|                                |  | ORGANIZATIONAL STRUCTURE                                    |  | 40
|                                |  | LEASES                                                      |  | 42
|                                |  | PROPERTY, PLANT AND EQUIPMENT                               |  | 43
|                                |  |                                                            
|ITEM 4A.                        |  | UNRESOLVED STAFF COMMENTS                                   |  | 43
|                                |  |                                                            
|ITEM 5.                         |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                |  | 43
|                                |  | CRITICAL ACCOUNTING POLICIES                                |  | 43
|                                |  | OPERATING RESULTS                                           |  | 47
|                                |  | LIQUIDITY AND CAPITAL RESOURCES                             |  | 53
|                                |  | RESEARCH AND DEVELOPMENT                                    |  | 61
|                                |  | TREND INFORMATION                                           |  | 62
|                                |  | OFF-BALANCE SHEET ARRANGEMENTS                              |  | 62
|                                |  |                                                            
|ITEM 6.                         |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                  |  | 63
|                                |  | DIRECTORS AND SENIOR MANAGEMENT                             |  | 63
|                                |  | COMPENSATION                                                |  | 66
|                                |  | BOARD PRACTICES                                             |  | 66
|                                |  | EMPLOYEES                                                   |  | 67
|                                |  | SHARE OWNERSHIP                                             |  | 68
|                                |  |                                                            
|ITEM 7.                         |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS           |  | 69
|                                |  | MAJOR SHAREHOLDERS                                          |  | 69
|                                |  | RELATED PARTY TRANSACTIONS                                  |  | 71
|                                |  |                                                            
|ITEM 8.                         |  | FINANCIAL INFORMATION                                       |  | 74
|                                |  |                                                            
|ITEM 9.                         |  | THE OFFER AND LISTING                                       |  | 75
|                                |  |                                                            
|ITEM 10.                        |  | ADDITIONAL INFORMATION                                      |  | 76
|                                |  | RESTATED MEMORANDUM AND RESTATED ARTICLES OF ASSOCIATION    |  | 76
|                                |  | MATERIAL CONTRACTS                                          |  | 82
|                                |  | EXCHANGE CONTROLS AND OTHER LIMITATIONS                     |  | 87
|                                |  | TAXATION                                                    |  | 87
|                                |  | DOCUMENTS ON DISPLAY                                        |  | 93
|                                |  |                                                            
|ITEM 11.                        |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS |  | 94
|                                |  |                                                            
|ITEM 12.                        |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES      |  | 94



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|                                           |  |                                                                              |  |   
|------------------------------------------ |  | ---------------------------------------------------------------------------- |  | --
|                                           |  | Page                                                                        
|PART II                                    |  | 95                                                                          
|                                           |  |                                                                             
|ITEM 13.                                   |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              |  | 95
|                                           |  |                                                                             
|ITEM 14.                                   |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |  | 95
|                                           |  |                                                                             
|ITEM 15T.                                  |  | CONTROLS AND PROCEDURES                                                      |  | 95
|                                           |  |                                                                             
|ITEM 16A.                                  |  | AUDIT COMMITTEE FINANCIAL EXPERT                                             |  | 96
|                                           |  |                                                                             
|ITEM 16B.                                  |  | CODE OF ETHICS                                                               |  | 96
|                                           |  |                                                                             
|ITEM 16C.                                  |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       |  | 96
|                                           |  |                                                                             
|ITEM 16D.                                  |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   |  | 97
|                                           |  |                                                                             
|ITEM 16E.                                  |  | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS       |  | 97
|                                           | 
|PART III                                   |  | 98                                                                          
|                                           |  |                                                                             
|ITEM 17.                                   |  | FINANCIAL STATEMENTS                                                         |  | 98
|                                           |  |                                                                             
|ITEM 18.                                   |  | FINANCIAL STATEMENTS                                                         |  | 98
|                                           |  |                                                                             
|ITEM 19.                                   |  | EXHIBIT INDEX                                                                |  | 98
|                                           | 
|SIGNATURES                                 |  | 100                                                                         
|                                           | 
|INDEX TO CONSOLIDATED FINANCIAL STATEMENTS |  | F-1                                                                         



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GENERAL INFORMATION

In this annual report, the terms we, us, our, our company, Company and ASAT
refer, as the context requires, either individually or collectively, to ASAT Holdings Limited (ASAT Holdings) and also to ASAT Limited (ASAT HK), ASAT, Inc. (ASAT US), ASAT (Finance) LLC (ASAT
(Finance)), Timerson Limited (Timerson), ASAT (Cayman) Limited (ASAT Cayman), ASAT Korea Limited (ASAT Korea), ASAT GmbH (ASAT Germany), ASAT Semiconductor (Dongguan) Limited (ASAT
China), ASAT (S) Pte. Ltd. (ASAT Singapore), New ASAT (Finance) Limited (New ASAT (Finance)), Newhaven Holdings Limited (Newhaven), RBR Trading Holding (Curacao) N.V. (RBR Antilles) and
R.B.R. Trading Holding B.V. (RBR Netherlands) which are each, direct or indirect, wholly owned subsidiaries of ASAT Holdings. Since ASAT S.A. has been under court administration since November 21, 2001, we no longer consolidate its
financial results with our consolidated financial statements.

A Glossary of Semiconductor Terms set out definitions of
technical terms used in this annual report.

Each American Depositary Share (ADS) of ASAT Holdings represents 15 ordinary
shares of ASAT Holdings.

We publish our consolidated financial statements in United States dollars, which are referred to as
Dollars and $.

References to U.S. GAAP mean the generally accepted accounting principles in the United
States. Unless otherwise indicated, our financial information presented in this annual report has been prepared in accordance with U.S. GAAP. Effective from December 22, 2006, we changed our American Depositary Share, or ADS, to ordinary share
ratio from one ADS for every five of our ordinary shares to one ADS for every 15 ordinary shares. The data regarding our ADSs included in this annual report, including our financial information, has been retroactively restated to reflect this
change.



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FORWARD-LOOKING STATEMENTS

This annual report contains statements and information that involve risks, uncertainties and assumptions. These statements and information constitute
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking
statements are all statements that concern plans, objectives, goals, strategies, future events or performance and underlying assumptions and other statements that are other than statements of historical fact, including, but not limited to, those
that are identified by the use of words such as anticipates, believes, estimates, expects, intends, plans, predicts, projects and similar expressions.
Risks and uncertainties that could affect us include, without limitation, dependence on the highly cyclical nature of the semiconductor industry, our ability to rapidly develop and successfully bring to market advanced technologies and services, the
concentration of our business in the communications sector, the incurrence of significant capital expenditures for manufacturing technology and equipment, the success of operating our assembly and test facilities in Dongguan, China, the ability to
employ and retain senior management, our high leverage, our ability to service our debt obligations and the restrictive covenants contained in the agreements governing our indebtedness, fluctuating demand and continuous downward pressure on selling
prices in the semiconductor industry, low capacity utilization rates, loss of a large customer, weaknesses in global economies, natural disasters, losses of power to our facilities in Dongguan, China, volatility in the market price of our ADSs,
including the effects of the adjustment to our ADS ratio, delisting of our ADSs from the Nasdaq Capital Market and negative impact on the price and liquidity of our ADSs, environmental regulation, fluctuation in foreign currencies, uncertainty as to
demand from our customers over both the long-term and short-term, competitive pricing and declines in average selling prices we experience, the timing and volume of orders relative to our production capacity, complexity in our assembly processes,
the availability of financing, competition and the greater operating and financial resources of competitors, ability to successfully complete potential acquisitions and integrate other parties into our business, dependence on raw material and
equipment suppliers, ability to transfer funds to and from our Chinese operating subsidiary, seasonality in sales of our products and the enforcement of intellectual property rights by or against us. Should one or more of such risks and
uncertainties materialize, or should any underlying assumption prove incorrect, actual outcomes may vary materially from those indicated in the applicable forward-looking statements. Any forward-looking statement or information contained in this
document speaks only as of the date the statement was made.

All of our forward-looking statements made herein and elsewhere are qualified
in their entirety by the risk factors discussed in the section entitled Risk Factors and other cautionary statements appearing in Operating and Financial Review and Prospects. These risk factors and statements describe
circumstances which could cause actual results to differ materially from those contained in any forward-looking statement. We do not intend to update or revise any forward-looking statements made herein to reflect actual results or changes in
assumptions, future events or otherwise. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results.



iv



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GLOSSARY OF SEMICONDUCTOR TERMS

This glossary contains definitions and other terms as they relate to our businesses and as they are used in this annual report. As such, these
definitions may not correspond to standard industry definitions.



|Array | A group of items (elements, leads, bonding pads, circuits, etc.) arranged in rows and columns.
|----- | ----------------------------------------------------------------------------------------------



|BGA | A standard type of commodity semiconductor packaging known as a ball grid array where solder balls have been applied to the external electrical contacts on the package for subsequent use in
electrically affixing the package to the corresponding leads on a printed circuit board.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Chip | An individual integrated circuit that has not yet been packaged. Also used as a generic term for semiconductor devices. Often called a die.
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------



|Chipset | Two or more chips designed to perform as a unit for one or more functions.
|------- | --------------------------------------------------------------------------



|Chipscale packages | Any semiconductor package in which the package is approximately 1.2 times the size of the semiconductor chip.
|------------------ | -------------------------------------------------------------------------------------------------------------



|Deposition | A term applied to growing thin layers within in a vacuum condensation mode, or via electroplating techniques.
|---------- | -------------------------------------------------------------------------------------------------------------



|Die | A synonym for a semiconductor chip.
|--- | -------------------------------------



|Encapsulation | Enclosing the die in an organic medium which protects the die and wire bonds from the environment.
|------------- | --------------------------------------------------------------------------------------------------



|fpBGA | Fine Pitch Ball Grid Array. A distinct technically evolved version of a BGA package, mounted on substrate that has a solder ball pitch of less than 1.0 mm.
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



|FxBGA | A new and flexible advanced BGA package that is thinner and has a higher circuit density and improved electrical and thermal performance in comparison to traditional BGAs.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Flip chip | Type of PBGA package which uses an array of solder bumps on the bottom of the semiconductor chip to connect the chip to the balls on the bottom of the package.
|--------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



|Input/Output | A connector which interconnects the chip to the package or one package level to the next level in the hierarchy. Also referred to as pin-out connections or terminals. Sometimes referred to as
I/O.
|------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Integrated circuit | A combination of two or more transistors on a base material, usually silicon. All semiconductor chips, including memory chips and logic chips, are very complicated integrated circuits with thousands of
transistors.
|------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|Laminate substrate | An organic substrate used for the routing of PBGA products between the chip pads and the solder ball pads.
|------------------ | ----------------------------------------------------------------------------------------------------------



|Leadframe | A metal frame designed to connect to the bonding pads of the chip by lead that provides rigidity, heat dissipation and electrical connection to external points.
|--------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



|LPCC | Our acronym for our Leadless Plastic Chip Carrier, a leadframe based chipscale package.
|---- | ---------------------------------------------------------------------------------------



|Mixed signal products | Products that can process both digital and analog data signals.
|--------------------- | ---------------------------------------------------------------



|Molding | Encapsulating the chip, leadframe and wirebondings in molded plastic with leads protruding. The molded plastic is an epoxy based material called molding compound.
|------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



|PBGA | The acronym for a standard type of commodity BGA packaging known as plastic ball grid array, where the chip is placed on top of a laminate plastic substrate that has a grid of solder balls
underneath for use in connecting the packaged device to a printed circuit board.
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Pitch | The center-to-center distance between adjacent leads on a package.
|----- | ------------------------------------------------------------------



|Power management system | A class of semiconductor packages that incorporate features to increase the thermal dissipation properties of the package.
|----------------------- | --------------------------------------------------------------------------------------------------------------------------



|Printed circuit board | A laminate sheet made of organic materials with metallic interconnects into which integrated circuits are soldered. Wires on the board connect the circuits with each other, forming a larger functional unit.
Printed circuit boards generally are a subsystem within a larger electronic system.
|--------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|QFN | The acronym for the industry standard leadless chipscale package known as the quad flat pack no lead package type.
|--- | --------------------------------------------------------------------------------------------------------------------



|QFP | The acronym for the Quad Flat Pack, which is a semiconductor package with leads on all four sides attached to a printed circuit board by surface mounting.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------



|SiP | The acronym for system-in-package devices. SiP packages contain numerous electrically interconnected active and passive semiconductor components.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------



|Solder ball | A tin and lead alloy sphere that is attached to a BGA substrate to allow for printed circuit board attachment.
|----------- | --------------------------------------------------------------------------------------------------------------



|Substrate | The underlying material upon which a device, circuit, or epitaxial layer is fabricated, normally a silicon wafer.
|--------- | -----------------------------------------------------------------------------------------------------------------



|Surface mounting | A printed circuit board packaging technique in which the leads (pins) on the chips and components are soldered directly onto the top of the board.
|---------------- | --------------------------------------------------------------------------------------------------------------------------------------------------



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|TAPP | Our acronym for our Thin Array Plastic Packaging technology, which provides metallic contacts to the circuit board allowing high density circuitry in a small footprint package.
|----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|TBGA | Tape Ball Grid Array, which is a BGA package with a more flexible substrate and higher density than conventional plastic packages.
|---- | ----------------------------------------------------------------------------------------------------------------------------------



|TQFP | Thin Quad Flat Package, which is a standard leaded package.
|---- | -----------------------------------------------------------



|Wafer | Thin, round, flat piece of silicon that is the base of most integrated circuits. Many individual semiconductor die are fabricated at the same time on one wafer. These die are then saw-singulated into
individual semiconductor die or chips.
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Wire bonding | The method used to attach very fine wire to semiconductor components in order to provide electrical continuity between the semiconductor chip and a terminal in the lead frame or substitute.
|------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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PART I



|ITEM | 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|---- | -----------------------------------------------------------

Not applicable.



|ITEM | 2.    OFFER STATISTICS AND EXPECTED TIMETABLE
|---- | ---------------------------------------------

Not applicable.



|ITEM | 3.    KEY INFORMATION
|---- | ---------------------

The
following table represents selected historical consolidated financial data for ASAT for the five-year period ended April 30, 2008. The selected historical consolidated financial data below as of April 30, 2007 and 2008 and for the years
ended April 30, 2006, 2007 and 2008 were derived from our audited consolidated financial statements as of such dates and for such periods included elsewhere in this annual report. The selected historical consolidated financial data below as of
April 30, 2004, 2005 and 2006 and for the years ended April 30, 2004 and 2005 were derived from our audited consolidated financial statements as of such dates and for such periods not included in this annual report. The financial
information included in this annual report does not reflect our results of operations, financial position and cash flows in the future and our past operating results are no guarantee of our future operating performance. In this annual report, all
references to fiscal years are to the Companys fiscal years ended April 30th, thus fiscal year 2008 refers to the fiscal year ended on April 30, 2008.



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SELECTED FINANCIAL DATA

The selected historical consolidated financial data is qualified by reference to, and should be read in conjunction with, Item 5Operating and
Financial Review and Prospects and our consolidated financial statements and the related notes, included elsewhere in this annual report.



|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|------------------------------------------------------------------ |  | -------------------------------------------------------- | ----------- | - | ---- | - | ----------- | ---- |  | - | -------------- | - |  | ---- | ----------- | - |  | - | ----------- | -
|                                                                   |  | Fiscal Year Ended April 30,                              |            
|                                                                   |  | 2004                                                     |             |   | 2005 |   |             | 2006 |  |   | 2007(restated) |   |  | 2008 |            
|                                                                   |  | (In thousands of dollars, except for share and ADS data) |            
|Statement of Operations Data:                                      |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Sales                                                              |  | $                                                        | 214,674     |   |      | $ | 194,411     |      |  | $ | 182,115        |   |  | $    | 164,853     |   |  | $ | 155,961     |  
|Cost of sales                                                      |  |                                                          | 174,275     |   |      |   | 182,319     |      |  |   | 168,859        |   |  |      | 149,927     |   |  |   | 138,683     |  
|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Gross profit                                                       |  |                                                          | 40,399      |   |      |   | 12,092      |      |  |   | 13,256         |   |  |      | 14,926      |   |  |   | 17,278      |  
|Operating expenses:                                                |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Selling, general and administrative expenses                       |  |                                                          | 24,775      |   |      |   | 27,455      |      |  |   | 29,448         |   |  |      | 22,065      |   |  |   | 19,251      |  
|Research and development                                           |  |                                                          | 4,562       |   |      |   | 4,481       |      |  |   | 4,059          |   |  |      | 2,218       |   |  |   | 2,034       |  
|Reorganization expenses                                            |  |                                                          |            |   |      |   | 928         |      |  |   | 4,690          |   |  |      | 2,473       |   |  |   | 392         |  
|Litigation settlement                                              |  |                                                          |            |   |      |   | 4,603       |      |  |   |               |   |  |      |            |   |  |   |            |  
|Impairment of property, plant and equipment                        |  |                                                          | 2,387       |   |      |   | 19,944      |      |  |   | 3,890          |   |  |      |            |   |  |   |            |  
|Facilities and relocation charges                                  |  |                                                          | 306         |   |      |   |            |      |  |   | 1,054          |   |  |      | 3,047       |   |  |   |            |  
|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Total operating expenses                                           |  |                                                          | 32,030      |   |      |   | 57,411      |      |  |   | 43,141         |   |  |      | 29,803      |   |  |   | 21,677      |  
|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Income (loss) from operations                                      |  |                                                          | 8,369       |   |      |   | (45,319     | )    |  |   | (29,885        | ) |  |      | (14,877     | ) |  |   | (4,399      | )
|Other income (expense), net(1)                                     |  |                                                          | 689         |   |      |   | 688         |      |  |   | 3,438          |   |  |      | 643         |   |  |   | (722        | )
|Charges on early redemption of 12.5% senior notes(2)               |  |                                                          | (10,346     | ) |      |   |            |      |  |   |               |   |  |      |            |   |  |   |            |  
|Interest expense                                                   |  |                                                          | (15,425     | ) |      |   | (15,046     | )    |  |   | (16,633        | ) |  |      | (19,542     | ) |  |   | (19,526     | )
|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Loss before income taxes                                           |  |                                                          | (16,713     | ) |      |   | (59,677     | )    |  |   | (43,080        | ) |  |      | (33,776     | ) |  |   | (24,647     | )
|Income tax (expense) benefit                                       |  |                                                          | (4          | ) |      |   | (748        | )    |  |   | 649            |   |  |      | (1,264      | ) |  |   | (339        | )
|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Net loss                                                           |  | $                                                        | (16,717     | ) |      | $ | (60,425     | )    |  | $ | (42,431        | ) |  | $    | (35,040     | ) |  | $ | (24,986     | )
|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Net loss applicable to ordinary shareholders:                      |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Net loss                                                           |  | $                                                        | (16,717     | ) |      | $ | (60,425     | )    |  | $ | (42,431        | ) |  | $    | (35,040     | ) |  | $ | (24,986     | )
|Preferred shares:                                                  |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Cumulative preferred share dividends                              |  |                                                          |            |   |      |   |            |      |  |   | (976           | ) |  |      | (1,990      | ) |  |   | (2,028      | )
|Accretion of preferred shares                                     |  |                                                          |            |   |      |   |            |      |  |   | (500           | ) |  |      | (960        | ) |  |   | (1,195      | )
|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Net loss applicable to common stockholder                          |  | $                                                        | (16,717     | ) |      | $ | (60,425     | )    |  | $ | (43,907        | ) |  | $    | (37,990     | ) |  | $ | (28,209     | )
|Net loss per share (basic and diluted)(3)(5)                       |  | $                                                        | (0.02       | ) |      | $ | (0.09       | )    |  | $ | (0.06          | ) |  | $    | (0.05       | ) |  | $ | (0.04       | )
|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Net loss per ADS (basic and diluted)(3)(5)                         |  | $                                                        | (0.36       | ) |      | $ | (1.35       | )    |  | $ | (0.97          | ) |  | $    | (0.82       | ) |  | $ | (0.58       | )
|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  
|Basic and diluted weighted average number of shares outstanding(3) |  |                                                          | 671,721,610 |   |      |   | 677,953,380 |      |  |   | 679,357,820    |   |  |      | 691,798,216 |   |  |   | 724,599,796 |  
|Basic and diluted weighted average number of ADSs outstanding(3)   |  |                                                          | 44,781,441  |   |      |   | 45,196,892  |      |  |   | 45,290,521     |   |  |      | 46,119,881  |   |  |   | 48,306,653  |  
|                                                                   |  |                                                          |             |   |      |   |             |      |  |   |                |   |  |      |             |   |  |   |             |  



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|                                        |  |                           |         |      |   |         |      |  |   |                |   |  |      |         |   |  |   |          |  
|--------------------------------------- |  | ------------------------- | ------- | ---- | - | ------- | ---- |  | - | -------------- | - |  | ---- | ------- | - |  | - | -------- | -
|                                        |  | As of April 30,           |        
|                                        |  | 2004                      |         | 2005 |   |         | 2006 |  |   | 2007(restated) |   |  | 2008 |        
|                                        |  | (In thousands of dollars) |        
|Balance Sheet Data (at end of year):    |  |                           |         |      |   |         |      |  |   |                |   |  |      |         |   |  |   |          |  
|Cash and cash equivalents               |  | $                         | 62,610  |      | $ | 32,717  |      |  | $ | 11,915         |   |  | $    | 7,325   |   |  | $ | 6,011    |  
|Total assets                            |  |                           | 227,019 |      |   | 178,746 |      |  |   | 181,461        |   |  |      | 135,137 |   |  |   | 118,643  |  
|Total debt(4)                           |  |                           | 150,000 |      |   | 160,021 |      |  |   | 160,972        |   |  |      | 164,666 |   |  |   | 168,911  |  
|Total shareholders equity (deficit)(5) |  |                           | 33,782  |      |   | (26,456 | )    |  |   | (53,257        | ) |  |      | (84,136 | ) |  |   | (105,748 | )



|                                                    |  |                             |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        |  
|--------------------------------------------------- |  | --------------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------ | -
|                                                    |  | Fiscal Year Ended April 30, |        
|                                                    |  | 2004                        |         |   | 2005 |   |         | 2006 |  |   | 2007    |   |  | 2008 |        
|                                                    |  | (In thousands of dollars)   |        
|Other Data:                                         |  |                             |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |        |  
|Net cash provided by (used in) operating activities |  | $                           | 15,932  |   |      | $ | 1,886   |      |  | $ | (7,060  | ) |  | $    | 10,403  |   |  | $ | 2,777  |  
|Net cash used in investing activities               |  |                             | (24,095 | ) |      |   | (40,727 | )    |  |   | (23,404 | ) |  |      | (17,567 | ) |  |   | (8,302 | )
|Net cash provided by financing activities           |  |                             | 45,033  |   |      |   | 9,127   |      |  |   | 9,651   |   |  |      | 2,535   |   |  |   | 4,161  |  
|Depreciation of property, plant and equipment       |  |                             | 24,855  |   |      |   | 31,682  |      |  |   | 26,886  |   |  |      | 23,328  |   |  |   | 22,004 |  
|Amortization of deferred charges and debt discount  |  |                             | 1,479   |   |      |   | 958     |      |  |   | 1,947   |   |  |      | 3,705   |   |  |   | 3,245  |  
|Capital expenditures                                |  |                             | 28,530  |   |      |   | 40,740  |      |  |   | 23,520  |   |  |      | 17,748  |   |  |   | 9,073  |  



|(1) | Other income, net mainly consists of interest income, exchange difference, rental income, gain (loss) on disposal of
property, plant and equipment, unapplied payment from customers, write-back of long outstanding payable balances and reversal of the previously accrued write-off of ASAT S.A. See note 16 of the notes to our consolidated financial statements included
in this annual report.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Reflects charges incurred in connection with the early redemption of our 12.5% senior notes, which included $6.3 million
for the early redemption premium and $4.0 million for the non-cash write-off of deferred financing costs and debt discount in fiscal year 2004.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | The computation of net loss per share (basic and diluted) is calculated as the net loss for the year divided by the
weighted average number of shares outstanding during the year. The computation of net loss per share (basic and diluted) for the years ended April 30, 2004, 2005, 2006, 2007 and 2008 is based on a weighted average number of ordinary shares
during the year in the amount of 671,721,610, 677,953,380, 679,357,820, 691,798,216 and 724,599,796, respectively. Effective from December 22, 2006, we changed our ADS to ordinary share ratio from one ADS for every five ordinary shares to one
ADS for every 15 ordinary shares. Therefore, the basic and diluted earnings per ADS as well as the basic and diluted weighted average number of ADSs outstanding for the three fiscal years ended April 30, 2004, 2005 and 2006 have been
retrospectively restated based on the new ratio applied effective from December 22, 2006.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Debt consists of bank debt, senior notes, capital lease obligations and a purchase money loan facility. As of
April 30, 2008 and 2007, debt included our 9.25% senior notes, purchase money loan, capital lease obligations and loans made under revolving credit facilities. As of April 30, 2006, debt included our 9.25% senior notes, purchase money loan
and capital lease obligations. As of April 30, 2005, debt included our 9.25% senior notes, capital lease obligations and a short-term bank loan. As of April 30, 2004, debt included our 9.25% senior notes.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(5) | As a result of a change in the preferred shares conversion price from $0.45 per ADS to $0.325 per ADS during the fiscal
year ended April 30, 2007, the carrying amount of the preferred shares should have been reduced by $4.1 million and additional paid in capital should have been increased by $4.1 million during fiscal year ended April 30, 2007. The previously
reported fiscal 2007 financial statement amounts did not reflect this adjustment and, accordingly, have been restated.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|                            |  |                                                              |         |   |             |   |         |  
|--------------------------- |  | ------------------------------------------------------------ | ------- | - | ----------- | - | ------- | -
|                            |  | As previouslyreported                                        |         |   | As restated |  
|                            |  | (in thousands of dollars,except net loss per ordinary share) |        
|Preferred shares            |  |                                                              | 5,743   |   |             |   | 1,618   |  
|Additional paid in capital  |  |                                                              | 246,072 |   |             |   | 250,197 |  
|Net loss per ordinary share |  | $                                                            | (0.0553 | ) |             | $ | (0.0549 | )



| | There is no effect on the total assets, liabilities, or net loss for the year ended April 30, 2007.
| | ---------------------------------------------------------------------------------------------------



| | We reviewed and analyzed the impact of the error related to the accounting of the beneficial conversion features of the preferred shares using the Securities and Exchange
Commissions Staff Accounting Bulletin (SAB) No. 99, Materiality, Statement of Financial Accounting Standard (SFAS) No. 154 Accounting Changes and Error Correction and SAB Topic 5 F, Accounting
Changes Not Retroactively Applied Due to Immateriality, and taking into consideration that (i) the error did not have a material impact to the consolidated financial statements of annual periods taken as a whole and (ii) the impact of the
error on stockholders equity was not material to the consolidated financial statements of prior annual periods, we have determined that the error is not material. Although SFAS 154 states that the provisions of the standard do not need to be
applied to immaterial items, we decided, however, to restate the financial statements to correct the error.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Exchange Rate Information

The financial information presented in this annual report is in U.S. dollars. Such information assumes certain currency exchange rate
information, including that set forth below.

The Hong Kong dollar is freely convertible into other currencies (including the U.S. dollar).
Since 1983, the Hong Kong dollar has been linked to the U.S. dollar. Although the market exchange rate of the Hong Kong dollar against the U.S. dollar was and continues to be determined by forces of supply and demand in the foreign exchange market,
between 1983 and May 2005 Hong Kong maintained a fixed rate system which fixed the rate of exchange to HK$7.80 per U.S. dollar, or the Linked Exchange Rate System. However, in May 2005, the Hong Kong Monetary Authority broadened the 22-year trading
band from the original rate of HK$7.80 per U.S. dollar to a new range varying between HK$7.75 per U.S. dollar and HK$7.85 per U.S. dollar. This move was aimed at discouraging the use of Hong Kong dollars as a vehicle for speculation that the
Renminbi would appreciate. The Hong Kong government has indicated its intention to maintain the Linked Exchange Rate System. The Hong Kong government has also stated that it has no intention of imposing exchange controls and that the Hong Kong
dollar will remain freely convertible into other currencies, including the U.S. dollar. However, we cannot assure you that the Hong Kong government will maintain the trading band at HK$7.75 to HK$7.85 per U.S. dollar or at all. As a result of the
Linked Exchange Rate System, exchange rates between the Hong Kong dollar and other currencies are influenced by the value of the U.S. dollar.

Additionally, our exposure to fluctuations in the value of the Renminbi has significantly increased due to the completion of the move of our manufacturing, assembly and test facilities to Dongguan, China. From 1994 to July 2005, the
conversion of Renminbi into foreign currencies, including Hong Kong and U.S. dollars, was based on rates set by the Peoples Bank of China, which were set daily based on the previous days interbank foreign market exchange rate and current
exchange rates on the world financial markets. As a result, the exchange rate of the Renminbi to the U.S. dollar was previously substantially pegged or fixed. On July 21, 2005, the government of China announced that the exchange rate of the
Renminbi was being appreciated against the U.S. dollar and that the Renminbi would henceforth have a more flexible exchange rate within a narrow band that would float against a basket of foreign currencies. However, the Chinese government may decide
to change or abandon this policy at its sole discretion at any time in the future. As of September 30, 2008, the exchange rate was RMB6.86 to $1.00 as compared with RMB7.52 to $1.00 as of September 30, 2007. This appreciation of the
Renminbi against the U.S. dollar and any future appreciation in the exchange rate of the Renminbi against the U.S. dollar may increase our costs relating to our Dongguan, China operations.



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RISK FACTORS

Risk Factors

Risks relating to our business include the factors set forth below. Because of the following
factors, as well as other factors affecting our operating results and financial condition, past financial performance should not be considered to be a reliable indicator of future performance, and investors should not use historical trends to
anticipate results or trends in future periods.

Our ADSs have been delisted from the Nasdaq Capital Market, which may have a negative impact on the
price and liquidity of our ADSs.

On March 27, 2008, trading of our ADSs was suspended from the Nasdaq Capital Market. In June
2008, our ADSs were delisted from Nasdaq due to our non-compliance with Nasdaq continuing listing requirements, including maintaining the market value of our listed securities above $35 million, our stockholders equity above $2.5 million, and our
net income of at least $500,000 from continuing operations for the most recently completed fiscal year or two of the last three most recently completed fiscal years. Since April 17, 2008, our ADSs have been traded on the OTC Bulletin Board
(OTCBB) under the symbol ASTTY.OB. Although we have maintained our ADS program in the United States, we cannot guarantee that our ADSs will continue to be quoted on the OTCBB or, if quoted, that there will be an active public
market for our ADSs. Furthermore, the OTCBB is not a listing service or exchange, but is instead a dealer quotation service for our subscribing members. If our ADSs are not quoted on the OTCBB or if there is no public market for our ADSs, investors
may not be able to resell the ADSs at or above the price they paid or at all, and may lose all of their investment. The delisting of our ADSs from the Nasdaq Capital Market may have a negative impact on the price and liquidity of our ADSs.

We have been operating at a net loss for each of the past five fiscal years and have had negative operating cash flow in fiscal 2006.

We have been operating at a net loss for each of the past five fiscal years. Our net loss for the fiscal years ended April 30, 2004, 2005, 2006,
2007 and 2008 was $16.7 million, $60.4 million, $42.4 million, $35.0 million and $25.0 million, respectively. We also had negative operating cash flow in fiscal 2006 of $7.1 million. Although we had a positive operating cash flow since fiscal year
2007, we cannot assure you that we will be able to generate positive cash flow in the future.

Due to insufficient cash generated from
operations, we have funded our operations through the sale of equity and debt securities, borrowings, equipment lease financings, shareholder financings and other financing arrangements. While we have been implementing cost reduction programs since
the end of the January 2002 quarter, including the move of our assembly and test facilities from Hong Kong to lower-cost facilities in Dongguan, China, we continue to have significant fixed expenses and are incurring other manufacturing, sales and
marketing, product development and administrative expenses. We are also obligated to make significant interest payments on our 9.25% senior notes due 2011 of approximately $7.0 million on August 1 and February 1 of each year. In January
2006, we also obtained $10.0 million under our purchase money loan facility, which was originally due on April 30, 2009 and was subsequently been extended to January 31, 2010. On May 1, 2006, we entered into an advance payment
agreement with a customer to provide us with $6.0 million of financing in the form of advance payments for assembly and test services, subject to certain conditions. The advance was made to us on June 9, 2006 and was fully repaid in January
2008. In September 2006, ASAT China obtained a revolving credit facility of RMB30 million (approximately $4.3 million) with a term of one year from a Chinese bank. The revolving credit facility is secured by the pledge of certain equipment of ASAT
China purchased with the proceeds of such facility. On October 8, 2006, ASAT China drew down RMB20 million (approximately $2.9 million) which was due in October 2007 at an interest rate of 6.12% per annum. In September 2007, ASAT China
rolled over the original RMB20 million for another year at an interest rate of 7.29%. On April 30, 2007, ASAT China drew down the remaining balance of RMB10 million (approximately $1.4 million) of this revolving



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credit facility at an interest rate of 6.39% per annum and with a term of one year and subsequently repaid such amount on April 30, 2008. As such, the
outstanding balance of this revolving facility was RMB20 million as of April 30, 2008. In September 2008, ASAT China repaid the balance of RMB20 million credit facility. In September 2007, ASAT China obtained a second revolving multi-currency
credit facility of RMB150 million or equivalent (approximately $20 million) with a term of one year bearing interest at LIBOR plus 0.8%. This facility is secured by certain trade receivables of ASAT China. In October 2008, ASAT China obtained a
renewal of the second revolving credit facility and extended it for another year with the interest rate revised to LIBOR plus 4%. In April 2008, ASAT China obtained a third revolving credit facility of $5 million bearing interest at LIBOR plus
3%. The third revolving credit facility is secured by the pledge of certain equipment of ASAT China. In July 2008, ASAT China obtained a fourth revolving credit facilities of RMB60 million (approximately $8.6 million) bearing interest at the
published rate of the Peoples Bank of China plus a mark up of 15%. The fourth revolving credit facility is backed by a guarantee provided by ASAT HK. Both the third and fourth facilities are short term and will expire in April 2009. As of
October 30, 2008, ASAT China had an aggregate of approximately $10.5 million loans outstanding under the credit facilities.

In the
event that we continue to generate negative cash flow, we may be required to seek new or alternative financing to fund our operations in the future. Our ability to raise any future additional or alternative financing will be limited by our financial
situation, including our high level of debt and negative net worth, and may be limited by market conditions, our controlling shareholders, who may oppose transactions that reduce their control or dilute their ownership positions, the covenants in
our 9.25% senior notes due 2011, our purchase money loan agreement and our revolving credit facilities, any default or non-compliance with the covenants that govern any of our borrowings, as well as requirements to obtain approval of certain types
of financings from our shareholders. For details of our borrowings, see Item 3Key InformationRisk FactorsWe may not be able to finance future needs because of restrictions placed on us by the indenture governing our 9.25%
senior notes due 2011 and the purchase money loan agreement. We are also uncertain as to whether we can raise additional financing from our shareholders in the future. For these and other reasons outside our control, it may be difficult for us
to raise additional capital if and when it is required or at all. If we are unable to raise future additional or alternate financing when needed, any of the following may occur:



| |  |  | our customer relationships and orders with our customers could deteriorate;
| | - |  | ---------------------------------------------------------------------------



| |  |  | suppliers would be less willing to supply us or extend credit on acceptable terms, if at all;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | employee attrition could increase; and
| | - |  | --------------------------------------



| |  |  | lenders could be unwilling to provide or refinance our debt.
| | - |  | ------------------------------------------------------------

If adequate capital is not available to us as required, or if it is not available on favorable terms, our business and financial condition would be adversely affected, which could negatively affect our ability to
develop new technologies and products and services, increase production and compete effectively in our market, and we may not be able to meet our obligations as they become due. In addition, if adequate capital is not available to us, we will need
to sell assets or seek to undertake a restructuring of our obligations with our creditors, and we cannot give assurances that we would be able to accomplish either of these measures on commercially reasonable terms, if at all. In any such case, we
may not be able to continue as a going concern.

We will require a significant amount of cash to fund operating and capital expenditures and to service
our debt.

Our ability to fund operating and capital expenditures and to service debt will depend significantly on our ability to
generate cash from operations. For the fiscal year ended April 30, 2006, the earnings to fixed charges deficiency was $43.1 million, for the fiscal year ended April 30, 2007, the earnings to fixed charges deficiency was $33.8 million and
for the fiscal year ended April 30, 2008, the earnings to fixed charges deficiency was $24.6 million. For the purpose of this calculation, earnings consisted of loss before income taxes and fixed charges, and fixed
charges consisted of interest expense, including amortization of debt discount and debt issuance costs, and the interest portion within rental expenses which is estimated as one-third of the rental expenses relating to operating leases. We
will need to generate cash flow in excess of current levels to fund



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operating and capital expenditures and to service our debt, including our 9.25% senior notes due 2011 and our purchase money loan facility. However, we
cannot assure you that we will be able to generate cash flow or obtain funds from other financing sources to fund our planned operations and capital expenditures or to service our debt. Our ability to generate cash from operations is subject to
general economic, financial, competitive, industry, legal and other factors and conditions, many of which are outside our control. In particular, our operations are subject to cyclical downturns and price and demand volatility in the semiconductor
industry. If we cannot generate sufficient cash to service our debt or obtain financing, we may have to, among other things, reduce capital expenditures, reduce research and development expenditures, sell assets, restructure our debt, or obtain
alternate financing, which may not be available on acceptable terms or at all. We might not be able to take these actions or they may not be successful. Our ability to take any of these steps may be subject to approval by creditors, including future
creditors, our shareholders and the holders of our 9.25% senior notes due 2011.

Our substantial indebtedness, related interest payments and required
dividends could adversely affect our operations.

We have a significant amount of indebtedness that will increase further if we make any
additional drawdowns on our existing credit facilities or if we are able to secure new financing. Our related interest payments and semiannual dividend payments on our Series A Redeemable Convertible Preferred Shares, or Series A Preferred Shares,
also impose significant financial burdens on us. If further new debt is added to our consolidated debt level, the related risks that we now face could intensify. Covenants in the agreements governing our existing debt, and debt we may incur in the
future, may materially restrict our operations, including our ability to incur debt, pay dividends, make certain investments and payments, and encumber or dispose of assets. In addition, financial covenants contained in agreements relating to our
existing and future debt could lead to a default in the event our results of operations do not meet our plans and we are unable to amend such financial covenants prior to default. A default under one debt instrument may also trigger cross-defaults
under our other debt instruments. An event of default under any debt instrument, if not cured or waived, could have a material adverse effect on us, our financial condition and our capital structure.

Our substantial indebtedness has important consequences to our ability to operate our company. For example, it could, and does:



| |  |  | increase our vulnerability to general adverse economic and industry conditions;
| | - |  | -------------------------------------------------------------------------------



| |  |  | limit our ability to fund future working capital, capital expenditures, research and development and other general corporate requirements;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | require us to dedicate a substantial portion of our cash flow from operations to service interest and principal payments on our debt;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------



| |  |  | limit our flexibility to react to changes in our business and the industry in which we operate;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | place us at a competitive disadvantage to any of our competitors that have less debt; and
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------

We may not be able to finance future needs because of restrictions placed on us by the indenture governing our 9.25% senior notes due
2011 and the purchase money loan agreement.

The indenture governing our 9.25% senior notes due 2011 contains, and agreements governing
our future debt may contain, various covenants that limit our ability to, among other things:



| |  |  | pay dividends, redeem capital stock and make certain other restricted payments or investments, including loans, guarantees and advances;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------



| |  |  | incur additional indebtedness, including guarantees, or issue certain equity interests;
| | - |  | ---------------------------------------------------------------------------------------



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| |  |  | merge, consolidate or sell all or substantially all of our assets;
| | - |  | ------------------------------------------------------------------



| |  |  | issue or sell capital stock of some of our subsidiaries;
| | - |  | --------------------------------------------------------



| |  |  | sell or exchange assets or enter into new businesses;
| | - |  | -----------------------------------------------------



| |  |  | create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to us;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | create liens on assets; and
| | - |  | ---------------------------



| |  |  | enter into particular types of transactions with affiliates or related persons.
| | - |  | -------------------------------------------------------------------------------

On August 23, 2007, we obtained consent from holders of our 9.25% senior notes due 2011 to amend certain provisions of the indenture governing our
9.25% senior notes due 2011. As a result, we entered into a supplemental indenture on August 27, 2007, which was filed as an exhibit to the annual report on Form 20-F with the Securities and Exchange Commission in October 2007. The purchase
money loan agreement entered into in connection with our shareholder financing contains various restrictive covenants, including those described above, and additional restrictions on our ability to incur indebtedness. On August 23, 2007, we
entered into a waiver and amendment agreement with the lenders under our purchase money loan facility, and amended certain provisions of the purchase money loan agreement including, without limitation, extending the payment dates for certain
principal and interest payments. Such waiver and amendment agreement was filed as an exhibit to the annual report on Form 20-F with the Securities and Exchange Commission in October 2007. On October 17, 2008, we entered into an amendment agreement
with the lenders under our purchase money loan facility, and amended certain provisions of the purchase money loan agreement including, without limitation, extending the payment dates for certain principal and interest payments. Such amendment
agreement is filed as an exhibit to this annual report. For further details, see Item 7Major Shareholders and Related Party TransactionsRelated Party Transactions and Item 10Additional InformationMaterial
Contracts.

Our ability to comply with covenants contained in the indenture governing our 9.25% senior notes due 2011, our purchase
money loan agreement and other agreements governing indebtedness to which we may become a party may be affected by events beyond our control, including prevailing economic, financial and industry conditions. We operate in an industry that requires
large capital expenditures for productivity improvements, and the indenture governing our 9.25% senior notes due 2011, the purchase money loan agreement and agreements governing other debt we may incur, may limit our ability to finance these capital
expenditures. Our failure to comply with these covenants could result in an event of default which, if not cured or waived, could result in an acceleration of our indebtedness and cross-defaults under the agreements governing other indebtedness to
which we may become a party. Any such acceleration or cross-default could require us to repay or repurchase debt, together with accrued interest, prior to the date it otherwise is due, which could adversely affect our financial condition. Even if we
are able to comply with all applicable covenants, the restrictions on our ability to operate our business in our sole discretion could harm our business by, among other things, limiting our ability to take advantage of financing, mergers,
acquisitions and other corporate opportunities that we believe would be beneficial to us. Our ability to obtain needed future financing may require alternative financing arrangements with our customers to fund capital expenditures.

We are controlled by two principal groups of shareholders, and their interests may conflict with your interest.

Several private equity funds separately managed by or affiliated with JPMP Master Fund Manager, L.P. (formerly Chase Capital Partners) and Olympus Capital
Holdings Asia, respectively, referred to as the investor group in this annual report, collectively owned approximately 40.06% of the outstanding ordinary shares of ASAT Holdings as of April 30, 2008. The investor group has signed a
co-investment agreement generally to vote in unison on certain matters. QPL International Holdings Limited (QPL), its subsidiaries and its controlling shareholder collectively owned approximately 42.88% of the ordinary shares of ASAT
Holdings as of April 30, 2008. The investor group and QPL together control ASAT Holdings board of directors, the election and nomination of new directors, management and policies. In addition, our current Acting Chief Executive Officer is
a member of our board of directors and is affiliated with QPL, and our current Chief Financial Officer is the brother of a member of our board of directors who is affiliated with the investor group. For further information, see Item
7Major Shareholders and Related Party TransactionsRelated Party Transactions. QPL and the



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investor group are subject to a shareholders agreement and vote together on certain matters, including on the election of directors of ASAT Holdings. The
investor group and QPL are not obligated to provide any financing under their current shareholders agreement. The investor group and QPL are not obligated to exercise their rights as shareholders in the interests of ASAT Holdings and may engage in
activities that conflict with such interests. We have not established, and may be unable to establish, any procedures for resolving actual or perceived conflicts of interest between our principal shareholders and our other investors. Furthermore,
disagreements between the investor group and QPL which cannot be resolved could adversely affect the management of our company.

Our business is and
will continue to be substantially affected by the highly cyclical nature of the semiconductor industry, which cyclicality is beyond our control.

Our business is substantially affected by market conditions in the semiconductor industry, which is highly cyclical. The industry has been subject to significant downturns characterized by reduced product demand, increased competition and
declines in average selling prices and margins. Semiconductor industry conditions are often affected by manufacturing over-capacity and declining demand and reduced pricing in end-user markets.

The overall demand for semiconductors increased significantly during the period from the second quarter of calendar year 2003 through the first quarter
of calendar year 2004, but in the July 2004 quarter, the semiconductor industry experienced a downturn and our sales on a quarterly basis decreased sequentially from that quarter through the July 2005 quarter. Since the July 2005 quarter, the
semiconductor industry has experienced a gradual recovery, but we have failed to capture all the benefits of such recovery that we otherwise might obtain due to disruptions in our operations during our move to Dongguan, China, which was completed in
our October 2006 quarter. After moving our manufacturing operations to China, we are able to improve our cost structure by taking advantage of skilled and low cost labor pool. However, if any future downturn in the semiconductor industry proves to
be similar to the 2004 downturn, our business, financial condition and results of operations would be adversely affected, our cash position would further erode and we may be required to seek new financing, which may not be obtainable on acceptable
terms or at all. We may also be required to reduce our capital expenditures, which in turn could hinder our ability to implement our business plan and to improve our productivity. In addition, we may need to expand our production capacity and
throughput to maintain or increase revenues if average selling prices decline in connection with an industry downturn. Because of the past downturns in the semiconductor industry and the uncertainty of the gradual recovery, we continue to
re-evaluate our product mix and the direction of our business. This re-evaluation led to significant write-downs of property, plant and equipment of $81.8 million for the year ended April 30, 2003 and $19.9 million for the year ended
April 30, 2005. We may need to make additional write-downs in the future.

Our principal market is in the communications sector, which is subject
to fluctuating demand and continuous pressure on selling prices.

A significant percentage of our sales are derived from customers who
use assembly or test services for semiconductor devices used in the communications sector, which comprised around 48% of our sales for the year ended April 30, 2008. This sector has been subject to extreme fluctuations in demand, and in the
past we have experienced a prolonged industry-wide slowdown in demand in the communications sector. Historically, the average selling price of communications products has continuously declined, and the resulting pricing pressure on services provided
by us has led to reductions in our sales and decreasing margins. For the past few years, we have embarked upon a strategy to diversify our customer base, increase margins and reduce dependency on the communications sector. Some of the other market
sectors which we seek to diversify our customer base include the consumer, personal computers/computing and automotive/industrial sectors. However, decreasing average selling prices could also affect products in these sectors. Moreover, the
execution of our strategy continues to take time and may ultimately not be successfully implemented. For example, we may lose customers, experience reductions in sales or experience lower margins for customers outside the communications sector. If
we are unable to successfully implement our diversification strategy, our financial condition and results of operations could be materially adversely affected.



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Our ability to rapidly develop and successfully bring to market advanced technologies and services is important to
maintaining our competitive position and profitability.

The semiconductor industry is characterized by rapid technological
developments. Since we have been reducing our investments in research and development in the last five fiscal years (and particularly between fiscal years ended April 30, 2006 and 2007 during which time we were implementing significant cost
reduction measures), our research and development efforts may not yield commercially viable packages or test services to keep up with these technological changes. Any inability to meet our customers schedules for new product introductions
could affect our revenue, prospects for growth and future customer relationships. Our customers seek advanced and quick time-to-market assembly and test capabilities for their increasingly complex end-user applications. Failure to maintain or
increase investment in research and development or to advance our designs and process technologies successfully and in a timely manner could have a material adverse effect on our competitiveness and our profitability. Technological advances could
lead to significant decreases in prices for maturing product offerings. Extending reliance on mature product offerings could reduce our gross margins.

We could be required to incur significant capital expenditures for manufacturing technology and equipment to remain competitive.

Semiconductor manufacturing has historically required, and in the future is likely to continue to require, a constant upgrading of process technology to remain competitive, as new and enhanced semiconductor processes are developed which
permit the manufacture of smaller, more efficient and more powerful semiconductor devices. Our assembly and test facilities have required and will continue to require significant investments in manufacturing technology and equipment in the future.
We have made substantial capital expenditures and installed significant production capacity to support new technologies and increase production volume. For our fiscal year ended April 30, 2008, we made capital expenditures of $9.1 million. As
of April 30, 2008, we had commitments for future capital expenditures of approximately $0.2 million. We currently intend to fund these capital expenditures with the existing cash resources and positive cash flow generated from the savings
expected to be realized from reductions in cost structure associated with the completion of the move of our manufacturing operations to Dongguan, China, from financing provided by our customers to purchase equipment to expand our capacity and from
future new financings. However, our ability to generate positive cash flow from our customers is uncertain so we cannot assure you that we will have sufficient capital resources to make further necessary investments in manufacturing technology and
equipment. Our ability to sustain needed capital expenditures may require alternative financing, including financing arrangements with our customers to purchase equipment that primarily services such customers and new external financing. In
addition, due to the long lead time involved in the pre-deployment development and product qualification activities that must precede a new product release, we may be called upon to make substantial investments in both package design efforts and in
new manufacturing equipment well in advance of our being able to record appreciable revenues derived from those new products. Further, during each stage of the long qualification process required by customers for our products, which can take up to
six months to complete, there is a substantial risk that we will have to abandon a potential assembly or test service which is no longer marketable or technologically feasible or competitive and in which we have invested significant resources. Even
if we are able to qualify new packages, a significant amount of time will have elapsed between our investment in new packages and the receipt of any related revenues.

Because our industry is highly competitive and many of our competitors have greater operating and financial resources, we may not be able to secure new customers or maintain our customer base.

The semiconductor packaging and test industry is highly competitive, and we believe our principal competitors include Advanced Semiconductor Engineering,
Inc., Amkor Technology, Inc., or Amkor, Carsem (M) Sdn. Bhd., Siliconware Precision Industries Co., Ltd. and STATS ChipPAC Ltd. Many of our competitors have greater operating capacity and financial resources than we do and have proven research
and development and marketing capabilities. If demand for semiconductor assembly and test services were to continue to increase, our competitors would be at an advantage to us to capture this increased demand by utilizing their greater financial
resources to more rapidly increase capacity. Many of our competitors also have established



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relationships with many large semiconductor companies that are current or potential customers of ours. Further, lengthy qualification periods and a
familiarity between potential customers and their current assembly service providers may limit our ability to secure new customers.

We
also compete indirectly with the in-house assembly and test service resources of many of our largest customers, the integrated device manufacturers, or IDMs. These IDM customers may decide to shift some or all of their assembly and test services to
internally sourced capacity.

Due to this highly competitive environment, we may experience difficulties in securing business from new
customers, additional business from our existing customers or even maintaining our current level of business with our existing customers. In addition, if the trend for semiconductor companies to outsource their packaging needs does not continue, we
may not be able to maintain our customer base and our business and results of operations would be materially adversely affected.

If any of our
competitors grow through acquisitions or equity investment financing and we are unable to similarly grow, we may have difficulties competing against those competitors in terms of volume production, price competitiveness and array of services.

Some of our competitors with greater financial resources have been able to grow through acquisitions or equity investment financing. There
have been instances where one of our competitors has acquired the entire back-end assembly operations of an IDM. For example, Amkor acquired a substantial portion of IBMs assembly and test operations in China and Singapore. Other examples of
merger and acquisition activity among our competitors are the acquisition of ChipPAC, Inc. by ST Assembly Test Services Ltd., the acquisitions of UltraTera Corp. and NS Electronics Bangkok Ltd. by United Test and Assembly Center. An example of
equity investment financing is Temasek Holdings voluntary takeover bid to increase its equity shareholdings in STATS ChipPAC. As a result of such growth through acquisitions or equity investment financing, these competitors will have increased
capacity or stronger financial resources, and may be better positioned to increase their market share by decreasing prices. Additionally, as a result of such acquisitions or equity investment financing, these competitors may be able to provide a
broader array of services. If we are unable to grow our business through acquisitions or equity investment financing, we may have difficulties competing successfully against these competitors. In addition, the indenture that governs our 9.25% senior
notes due 2011 and our purchase money loan agreement require us to comply with certain covenants that limit our ability to enter into mergers or consolidations.

We face risks associated with potential acquisitions, investments, strategic partnerships or other ventures, including whether we can identify opportunities, complete the transactions and integrate the other parties into our business.

We believe that the semiconductor packaging industry may undergo consolidation, both with regard to consolidation among independent
assembly services providers and with respect to the outsourcing of in-house assembly capacity of semiconductor IDMs. We believe it may become increasingly important to acquire or make investments in complementary business, facilities, technologies,
services or products, or enter into strategic partnerships with parties who can provide access to those assets, if appropriate opportunities arise. From time to time we have had discussions with companies regarding our acquiring, investing in or
partnering with their businesses, products, services or technologies, and we regularly engage in such discussions in the ordinary course of our business. We may not be able to identify suitable acquisition, investment, strategic or other partnership
candidates or have sufficient resources to undertake such a transaction, which may place us at a disadvantage if our competitors are able to grow their market share through acquisitions, investments or strategic partnerships. If we do identify
suitable candidates, we may not be able to complete those transactions on commercially acceptable terms or at all. If we acquire another company, we could have difficulty in integrating that companys personnel, products, operations and
technology. In addition, the key personnel of the acquired company may decide not to work for us. These difficulties could disrupt our ongoing business, distract our management and employees, increase our expenses and reduce the expected benefits of
the acquisition.



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Our assembly and test processes are complex and prone to error, which may create defects and adversely affect
production yields.

Assembly and test services are prone to human error and equipment malfunction. Defective packages and services may
also result from:



| |  |  | improper programming of customer specified manufacturing instructions;
| | - |  | ----------------------------------------------------------------------



| |  |  | contaminants in the manufacturing environment;
| | - |  | ----------------------------------------------



| |  |  | equipment deviations from process specifications;
| | - |  | -------------------------------------------------



| |  |  | the use of defective raw materials; or
| | - |  | --------------------------------------



| |  |  | defective vendor-provided leadframes or component parts.
| | - |  | --------------------------------------------------------

These factors have periodically contributed to lower production yields and may continue to do so, particularly in connection with any expansion of capacity or change in processing steps. In addition, our production
yields on new packaging technologies could be lower during the period necessary for us to develop the requisite expertise and experience with these processes. Any failure by us to maintain high quality standards and acceptable production yields, if
significant and sustained, could result in delays in shipments, increased costs or cancellation of orders, which could have a material adverse effect on our business, financial condition and results of operations.

In order to meet customer demands for package design, assembly and test services, we may be required to add new test equipment, which can be very capital intensive
and may not result in expected revenues and/or margins.

We provide our customers with package design, assembly and test services. Many
of our customers seek to do business with independent assemblers who can provide a full range of assembly and test services, particularly testing of mixed-signal semiconductors which perform both analog and digital functions. In order to satisfy
such customers demands, we may be called upon to acquire additional test equipment capacity, which could require us to increase our capital expenditures on test equipment. We may not have sufficient cash resources or available financing to
increase our capital expenditures in response to our customers demands. Additionally, the use of mixed-signal test equipment involves complex software programming and the use of sophisticated and expensive equipment operated by a highly
skilled workforce. However, customers requesting these types of test services are typically not willing to commit to the utilization of such additional capacity beyond their short-term forecasts. If these customers do not place their expected orders
or we experience a general decrease in demand for our test services, we could have excess capacity and low utilization rates for our test equipment, which could increase our costs and negatively affect our expected revenues and/or margins. In
addition, any failure by us to provide package design, assembly and test services could result in the loss of customers or sales of our services, which could have a material adverse effect on our business, financial condition and results of
operations.

Our profitability has in past periods been affected by low capacity utilization rates, which are significantly influenced by factors
outside of our control.

As a result of the capital intensive nature of our business, our operations are characterized by high fixed
costs. Consequently, insufficient utilization of installed capacity can negatively affect our profitability. For example, in fiscal year 2003, our capacity utilization rates ranged from averages of approximately 42% to 67% per month for our
assembly operations as a result of the weak demand for our assembly and test services resulting from the prolonged downturn in the semiconductor industry. In addition, as a result of the most recent industry downturn, which occurred in late 2004,
our capacity utilization rates averaged approximately 68% in fiscal year 2005. While the industry has gradually recovered in fiscal year 2006, we were unable to capture all the benefits of such recovery that we might otherwise obtain due to
disruptions in our operations during our move to Dongguan, China, and our capacity utilization rates averaged approximately 64% and 70% for fiscal years 2007 and 2008, respectively. If we experience low capacity utilization in future periods, our
financial condition and results of operations could be adversely affected.



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Our customers generally do not place purchase orders far in advance, which makes it difficult for us to predict our
future sales, adjust our production costs and efficiently allocate our capacity on a timely basis and could therefore have an adverse effect on our business and operating results.

Although our customers provide us with forecasts of their expected orders, our customers generally do not place purchase orders far in advance of the
required shipping dates. In addition, due to the cyclical nature of the semiconductor industry, our customers purchase orders have varied significantly from period to period. As a result, we do not typically operate with any significant
backlog, which makes it difficult for us to forecast our sales in future periods. Also, since our costs of sales and operating expenses have high fixed cost components, including depreciation and employee costs, we may be unable to adjust our cost
structure in a timely manner to compensate for shortfalls in sales. Our current and anticipated customers may not place orders with us in accordance with our expectations or at all. As a result, it may be difficult to plan our capacity, which
requires significant lead time to ramp up and cannot be altered easily. If our capacity does not match our customer demand, we will either be burdened with expensive and unutilized overcapacity or be unable to support our customers
requirements, both of which would have an adverse effect on our business and results of operations.

We generate a significant amount of revenue from a
limited number of customers. The loss of, or reduced purchases by, one or more of our larger customers may have an adverse effect on our results of operations.

For each year ended April 30, 2006, 2007 and 2008, our single largest customer accounted for approximately 32.6%, 53.7% and 58.7%, respectively, of sales. For the fiscal year ended April 30, 2008, our five
largest customers by sales accounted for approximately 74.9% of sales and our ten largest customers by sales accounted for approximately 83.4% of sales. For the fiscal year ended April 30, 2007, our five largest customers by sales accounted for
approximately 69.0% of sales and our ten largest customers by sales accounted for approximately 79.3% of sales. If any key customer were to significantly reduce its purchases from us, our results of operations may likely be adversely affected. In
addition, there may be a trend toward increasing customer concentration.

In line with industry practice, new customers usually require us
to pass a lengthy and rigorous qualification process that can take up to six months and be a significant cost to us and the customer. As a result, customers are reluctant to qualify new assembly and test service providers and it may be difficult for
us to attract new major customers and/or break into new markets. In addition, if we fail to qualify packages with potential customers or customers with which we have recently become qualified do not use our services, then our customer base could
become more concentrated with an even more limited number of customers accounting for a significant portion of our sales. Furthermore, we believe that once a semiconductor company has selected a particular assembly and test companys services,
the semiconductor company generally relies on that vendors packages for specific applications and, to the extent possible, subsequent generations of that vendors packages. Accordingly, it may be difficult to achieve significant sales
from a customer once it selects another vendors assembly and test services.

We are vulnerable to weaknesses in the economies of Asian countries.

Most of our important suppliers of raw materials, leadframes and the semiconductor chips delivered to us for assembly and test are
located in Asia. Substantially all our customers are United States or European multinational companies and nearly 100% of our invoices are billed in U.S. dollars. We estimate that approximately 72.1% of our sales during the fiscal year ended
April 30, 2008 and 74.0% of our sales during the fiscal year ended April 30, 2007 represented packages shipped to distribution centers and destinations within Asia (including Hong Kong). These factors raise a number of financial,
operational and business risks, including:



| |  |  | exposure to regional economic and political developments;
| | - |  | ---------------------------------------------------------



| |  |  | changes in local intellectual property laws and commercial laws;
| | - |  | ----------------------------------------------------------------



| |  |  | the imposition of local currency controls;
| | - |  | ------------------------------------------



| |  |  | adverse changes in local tax law or adverse changes in customs duties and procedures;
| | - |  | -------------------------------------------------------------------------------------



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| |  |  | availability of supplies and materials in China;
| | - |  | ------------------------------------------------



| |  |  | transportation difficulties; and
| | - |  | --------------------------------



| |  |  | unfavorable changes to import/export regulations and procedures.
| | - |  | ----------------------------------------------------------------

These factors could adversely affect both our operations and the operations of our suppliers and customers. Future economic downturns in Asia or elsewhere would likely be detrimental to our business, financial
condition and results of operations.

Our ability to operate our Chinese manufacturing operations is dependent upon our working relationship with our
development partner in China.

Our development partner in China, the Dongguan Changan County Changshi Development Company
(Changshi), is an entity established by the Dongguan government to develop and manage several newly designated industrial parks in Changshi prefecture Chang An town, Dongguan City, Guangdong Province. Changshis performance during
the construction of Phase I and Phase II of our Dongguan, China facilities and completion of the interior finish and fixtures of our Phase I facility in Dongguan, China, met or exceeded our expectations with respect to the quality and timeliness of
the construction. However, Changshi may not continue to perform at these levels or at all during its assistance to us in the operation of our Dongguan, China facilities. Moreover, we could experience difficulties in our relationship with Changshi,
and the decisions made by Changshi may not be consistent with our interests, which in either case could be disruptive to our operations. Changshi is the owner of the Phase I and Phase II facilities land-use rights and buildings, constructed
our Phase I facilitys interior finish and fixtures. A dispute with Changshi could cause Changshi to be unwilling to perform its contractual obligations as lessor for our Dongguan, China facilities. In such circumstances, Changshi could prevent
us from operating the facilities, which, following transfer of all of our manufacturing operations to Dongguan, China means that we would be unable to conduct our business. Although we have the contractual right under our respective leases with
Changshi to purchase the Dongguan, China facilities from Changshi at stipulated times, there can be no assurance that we will have sufficient funds or access to financing in order to purchase the facilities. Any disruption in our business due to a
dispute with Changshi may have a material adverse effect on our results of operations. In addition, if Changshi were to breach one or more of its agreements with us, our agreements with Changshi provide that we must pursue any claims against it
through binding arbitration in Dongguan before the China International Economic and Trade Arbitration Commission. The outcome of any such arbitration would be controlled by Chinese law and could be time consuming and unfavorable to us.

Our direct labor, and certain indirect labor, workforce are composed primarily of Peoples Republic of China nationals, and we expect these employees to
unionize. If we encounter future labor problems, this could adversely affect our revenues and profitability.

None of our employees in
Dongguan, China or our other employees is currently represented by a union. However, our workers in our Dongguan, China facilities may unionize, although we are not sure what percentage of this workforce will be affected. It is possible that the
union will be subject to collective bargaining and wage agreements. These agreements could increase our labor costs in China and have an adverse impact on our operating results. In addition, once unionized, this workforce may undertake labor
protests and work stoppages, which could also have an adverse impact on our operating results. We cannot assure you that any potential issues with the expected labor union or other employees will be resolved favorably for us in the future, that we
will be successful in negotiating any potential wage and collective bargaining agreements, that we will not experience significant work stoppages in the future or that we will not record significant charges related to those work stoppages or our
compliance with changing minimum wage labor laws.



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Operating facilities in China can be fraught with uncertainty, including economic, political, legal operational and
financial risks, and there can be no assurances that our China facilities will bring their intended benefits to us.

Many economic,
political, legal, operational and financial risks may prevent us from realizing our intended benefits in China in connection with the completion of the move of our manufacturing operations to Dongguan, China. These risks include:



| |  |  | economic, political and social uncertainties in China;
| | - |  | ------------------------------------------------------



| |  |  | changes in, and the arbitrary enforcement of, bankruptcy laws, commercial laws, currency controls, import tariffs and duties, customs regulations and taxation laws
in China;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | local infrastructure problems, such as electrical power interruptions, in an area that has only recently undergone a very rapid industrial development;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | quality problems arising from the start up of new manufacturing processes by operators who lack experience with our sophisticated manufacturing equipment;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | transportation difficulties that may be encountered in receiving supplies and/or in shipping finished products by land or by air;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------



| |  |  | an unwillingness or hesitancy on the part of customers to qualify their products in the new facilities;
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | an inability to attract and retain sufficient and qualified management and engineering talent and other experienced employees;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------



| |  |  | measures which may be introduced to control inflation or deflation;
| | - |  | -------------------------------------------------------------------



| |  |  | changes in the rate or method of taxation;
| | - |  | ------------------------------------------



| |  |  | changes in tax holidays;
| | - |  | ------------------------



| |  |  | continuing fluctuations in the value of the Chinese Renminbi currency;
| | - |  | ----------------------------------------------------------------------



| |  |  | modifications to fiscal, banking or monetary policies to reduce the rate of future growth in China; and
| | - |  | -------------------------------------------------------------------------------------------------------



| |  |  | imposition of additional restrictions on currency conversion and remittances abroad.
| | - |  | ------------------------------------------------------------------------------------

While Chinas economy has experienced significant growth in the past twenty years, growth has been uneven, both geographically and among various
sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall economy in China, but may also have a negative effect on
us. For example, our operating results and financial condition may be adversely affected by governmental control over capital investments or changes in tax regulations applicable to us.

The economy in China has been transitioning from a planned economy to a more market-oriented economy. Despite recent transitions to a market-oriented
economy, a substantial portion of productive assets in China is still owned by the Chinese government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. It
also exercises significant control over Chinas economic growth through allocation of resources, controlling payment of foreign currency denominated obligations, setting monetary and banking policy and providing preferential treatment for
particular industries or companies.

The Chinese legal system is based on written statutes. These statutes remain largely untested and
prior court decisions interpreting them may be noted for reference but have limited value as precedents. Since 1979, the Chinese government has promulgated laws and regulations dealing with economic matters such as bankruptcy, foreign investment,
corporate organization and governance, commerce, taxation and trade. However, because these laws and regulations are relatively new and because of the limited volume of published cases and their



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non-binding nature, interpretation and enforcement of these laws and regulations involve significant uncertainty. In addition, as the Chinese legal system
develops, changes in such laws and regulations, their interpretation or their enforcement may lead to additional restrictions on our business.

The Chinese government and provincial and local governments have provided, and continue to provide, various incentives to Chinese domestic companies in the semiconductor industry, which includes ASAT China, our Chinese operating subsidiary,
in order to encourage development of the industry. Such incentives include tax rebates, reduced tax rates, tax holidays, favorable lending policies and other measures. Any of these incentives could be reduced or eliminated by governmental
authorities at any time. Any such reduction or elimination of incentives which may be provided to us could adversely affect our business and operating results.

There can be no assurances that economic, political, legal, operational and financial risks in China will not adversely affect our business.

Our corporate structure may restrict our ability to receive dividends from, and transfer funds to, ASAT China, our Chinese operating subsidiary, which could restrict our ability to make payments on our 9.25% senior
notes due 2011 or act in response to changing market conditions.

While ASAT Holdings is a Cayman Islands holding company, we conduct
our assembly and test operations through our Chinese subsidiary. The ability of this subsidiary to pay dividends and other payments to us may be restricted by factors that include changes in applicable foreign exchange and other laws and
regulations. In particular, under China law, a Chinese subsidiary may pay dividends only after at least 10% of its net profit has been set aside as reserve funds, unless such reserves have reached at least 50% of its registered capital. The profit
available for distribution from our Chinese subsidiary is determined in accordance with generally accepted accounting principles in China. This calculation may differ from one performed in accordance with U.S. GAAP. The ability of this subsidiary to
pay dividends will depend ultimately on the profitability of its business. As a result, we may not have sufficient distributions from our Chinese subsidiary to enable necessary profit distributions to us or any distributions to our shareholders in
the future.

Under the new Peoples Republic of China (PRC) Enterprise Income Tax Law effective January 1, 2008 (the
New EIT Law), dividends payable to foreign investors which are derived from sources within the PRC is subject to income tax by way of withholding. Since we are a holding company and most of our profits are generated from our
PRC subsidiary, ASAT China, dividends that we declare from such income may by deemed derived from sources with the PRC for purposes of the New EIT Law and therefore subject to a withholding tax. While the New EIT Law stipulates that such
taxes may be exempted or reduced, since no rules or guidance concerning the new tax law have been issued yet, it is unclear under what circumstances, and to what extent, such tax would be exempted or reduced. If we are required under the New EIT Law
to withhold PRC income tax on dividends payable to our non-PRC shareholders, our financial condition and results of operations may be harmed. As of the date of this annual report, we do not intend to distribute dividends other than dividends
required under our Preferred Shares.

Payments by our Chinese subsidiary to us other than as dividends, such as payments of loan principal
and interest, may be subject to governmental approval and taxation. It is also not permitted under China law for our Chinese subsidiary to directly lend money to our Hong Kong or other subsidiaries. Any transfer of funds from ASAT Holdings to our
Chinese subsidiary, either as a shareholder loan or as an increase in registered capital, is subject to registration or approval of Chinese governmental authorities, including the relevant administration of foreign exchange or other relevant
examining and approval authorities. Therefore, it is difficult to change our capital expenditure plans once the relevant funds have been remitted to our Chinese subsidiary. These limitations on the free flow of funds between us and our Chinese
subsidiary could restrict our ability to act in response to changing market conditions and reallocate funds from our Chinese subsidiary to our other subsidiaries in a timely manner, or at all.



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We conduct our operations at a single location in China. Accordingly, we are vulnerable to natural disasters, and
other disruptive regional events, which could cause us to lose revenue and perhaps lose customers.

We conduct our assembly and test
operations in our facilities in Dongguan, China. Significant damage or other impediments to any of these facilities, whether as a result of fire, weather, disease, civil strife, industrial strikes, breakdowns of equipment, difficulties or delays in
obtaining imported spare parts and equipment, natural disasters, terrorist incidents, industrial accidents or other causes, could temporarily disrupt or even shut down our operations, which would have an adverse effect on our financial condition and
operating results.

With respect to our facilities in Dongguan, China, Changshi has procured insurance covering the buildings and public
liability insurance, we have procured insurance covering the contents of the buildings, public liability insurance and business interruption insurance. We cannot assure you that our insurance or the insurance procured by Changshi would be adequate
to cover any direct or indirect loss or liability resulting from any of the events described above.

Any disruptions in available power supplies in
Dongguan, China could disrupt our operations, reduce our sales and increase our expenses.

We have transferred all of our assembly and
test operations to Dongguan, China, and they are dependent on a reliable source of electrical power. For economic and continuous manufacturing operations, we are dependent to a substantial degree on electrical power supplied by state run power
generating facilities. China is now experiencing an electrical power shortfall that is expected to increase in the near term as the imbalance between capacity and demand grows. The projected power shortfall is expected to be most acute in southern
China, including Dongguan, China, where our factory is located. In Dongguan, China demand for power exceeded supply since 2004. Should our Dongguan, China facilities be subject to rolling blackouts or should the power shortage result in brownouts of
increased severity, our operations may suffer temporary shutdowns or be otherwise inconvenienced. We believe that the potential for blackouts and brownouts that could affect our operations at the Dongguan, China facilities will be highest during
warm weather conditions.

We currently have dedicated power supply lines from two different power sources to support our facilities which
we expect to provide independent and continuous back-up power. In addition, we currently have back-up generators that support a portion of production at our Dongguan, China facilities. We expect that these dedicated power lines will not be subject
to temporary or rolling blackouts, although they and our back-up generators may not provide us with adequate power during prolonged blackouts. Any interruption in our ability to continue our operations at the Dongguan, China facilities could damage
our reputation, harm our ability to retain existing customers and to obtain new customers, and could result in lost revenue and increased expenses, any of which would substantially harm our business and results of operations.

In addition to the above, if retail electricity prices rise dramatically in Dongguan, China, we would expect our expenses to increase and our operating
results to be adversely affected.

We may not be able to continue to reduce our cost structure. Even if we do, it may not reduce our operating expenses
by as much as we anticipate.

Beginning in 2001, in response to a severe downturn in the semiconductor sector, we began to reduce costs.
Since the end of the January 2002 quarter, we have been implementing our corporate restructuring program in order to reduce our overall cost structure and achieve profitability. We implemented cost saving measures, including reductions in material,
labor, overhead and administrative costs. We continue to reduce our cost structure and have installed SAPs enterprise resource planning solution and Camstars manufacturing tracking and execution system to enable us to implement improved
business processes, which steps have involved implementation and integration problems that we are currently seeking to address. We have also completed the move of our assembly and test facilities from Hong Kong to lower-cost facilities in Dongguan,
China. We cannot



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assure you that these cost saving measures will lead to profitability. We may continue to incur additional expenses associated with operating our assembly
and test facilities in Dongguan, China. In addition, with respect to our new information systems, including our implementation of the SAP system, there can be no assurances that we will not encounter delays, errors or cost-overruns and other adverse
consequences in implementing such systems. As we upgrade our information systems, we have had and may continue to encounter difficulties in integrating such technology into our business and we may find that such new systems may not be appropriate
for our business. If our new information systems prove to be inadequate or their implementation severely delayed, our business, financial condition and results of operations may be harmed.

We rely on the development and perfection of ownership interests in a substantial amount of intellectual property in our business. If we are unable to protect this
intellectual property, we may lose advantages in innovation over our competitors.

We have patents, confidentiality agreements, and
other arrangements intended to protect certain of our proprietary manufacturing processes and product technologies. As of April 30, 2008, we had approximately 61 issued U.S. patents. In addition, in May 2005, we entered into a multi-year
cross-licensing agreement with LSI Logic Corporation (LSI) under which LSI will provide us with a license to use its Flip Chip semiconductor package assembly technology. During the April 2005 quarter, we entered into a multi-year cross
licensing agreement with Amkor under which we will provide Amkor with a license for our TAPP semiconductor package technology and Amkor will provide us with a license for its Flip Chip semiconductor package technology. During the October 2003
quarter, we also entered into a quad flat pack no lead chipscale package, or QFN, patent cross-license agreement with Amkor. These arrangements and any future measures we take might not adequately cover or protect our intellectual
property. We may also fail to maintain, grow or invest in research and development to strengthen our intellectual property. In particular, our competitors may be able to develop similar or superior products or manufacturing technologies, and many of
these competitors invest greater amounts of capital towards such development efforts than we do. As a result, our patent portfolio may not have the breadth or depth of that of some of our competitors. Also, we cannot assure you that the Asian
countries in which we manufacture and market our products will protect our intellectual property rights to the same extent as does the United States. In particular, the intellectual property laws of China, where we have moved our assembly and test
facilities, do not protect our intellectual property rights to the same extent as does the United States. This could leave us vulnerable to willful patent infringement or to the theft of trade secret information. In addition, even if we have valid
protections in place, we may not have sufficient financial and legal resources to protect or enforce our rights. Furthermore, because many of our products and technologies are not covered by any patents or pending patent applications, they are
susceptible to independent duplication and/or reverse engineering by competitors.

We are vulnerable to intellectual property infringement claims by
third parties and may need to enforce our intellectual property rights against third parties.

The semiconductor industry is
characterized by frequent claims regarding patent infringement. From time to time, third parties may claim that we are infringing on their intellectual property rights. Such claims could have a serious adverse effect on our business and financial
condition.

If a third party were to bring a valid legal claim against us for patent infringement, we could be required to:



| |  |  | discontinue the use of any of our processes considered infringing;
| | - |  | ------------------------------------------------------------------



| |  |  | cease the manufacture, use, import and sale of infringing products;
| | - |  | -------------------------------------------------------------------



| |  |  | pay substantial royalties and/or damages;
| | - |  | -----------------------------------------



| |  |  | develop non-infringing technologies; or
| | - |  | ---------------------------------------



| |  |  | acquire licenses to the technology that we had allegedly infringed.
| | - |  | -------------------------------------------------------------------



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We may seek licenses from such parties, but they could either refuse to grant us a license or demand
commercially unreasonable terms. We might not have sufficient resources both to pay for licenses and to remain competitive. Such infringement claims could also cause us to incur substantial liabilities and to have to suspend or permanently cease the
use of critical technologies or processes for the production and/or sale of major products. For instance, we settled a patent litigation case with Motorola, Inc., or Motorola, and Freescale Semiconductor, Inc., or Freescale, in connection with their
claim of a breach under a patent cross-license agreement in July 2005.

We may also need to enforce our patents and other intellectual
property rights against infringement by third parties. If we were called to defend against a claim of patent infringement, or were we compelled to litigate to assert our intellectual property rights, we could incur substantial legal and court costs
and be required to consume substantial management time and engineering resources in the process.

We could be adversely affected by an adverse outcome
in legal proceedings to which we are, or in the future may become, subject.

On December 8, 2006, ASAT Limited, one of our
subsidiaries, received an additional tax assessment from the Hong Kong Inland Revenue Department (HKIRD) with respect to the deductibility of certain expenses for Hong Kong profits tax purposes for fiscal year 2000/2001. Queries were
raised by the HKIRD concerning the deductibility of interest expenses related to certain borrowings of ASAT Limited for profits tax purposes and whether the related borrowings were used towards revenue-generating activities, which allow the
consequential interest expenses to be deductible for tax purposes. The assessment required us to pay HK$18.8 million (approximately $2.4 million) by January 12, 2007. On December 29, 2006, we filed an objection to the HKIRD for the full
amount. On January 29, 2007, we filed a request to the HKIRD to reconsider its holdover claim, and on January 30, 2007, the HKIRD offered us an unconditional holdover, i.e., waiver, for 50% of the total tax in dispute (approximately HK$9.4
million or $1.2 million). Although the case is not yet concluded and we are still required to provide further evidence to the HKIRD showing that the borrowings were used towards revenue-generating activities, the HKIRD has requested us to make
prepayment for the remaining 50% of the total tax in dispute. On January 31, 2007, we filed a proposal to the HKIRD for installment payments for the remaining HK$9.4 million (approximately $1.2 million). Such proposal was accepted on
March 27, 2007, and the amount was fully paid in June 2008. On August 1, 2008, the HKIRD issued a response letter to ASAT Limited and stating that a portion of the interest expenses should be disallowed for tax purposes as the related
portion of the borrowing was not applied towards revenuegenerating activities. On October 17, 2008, ASAT Limited submitted a reply and revised tax filing accepting the HKIRDs proposed basis of settlement to disallow a portion
of and interest expenses and related costs and with certain proposed amendments, and ASAT Limiteds tax liability under which would have been HK$8.5 million (approximately $1.1 million). This revised filing is subject to the IRDs review
and agreement.

On April 10, 2008, ASAT China received a notice from the Peoples Intermediate Court of the City of Dongguan,
Guangdong, China concerning a lawsuit initiated by Wellmean alleging that ASAT China breached its contract with Wellmean by failing to pay the final installment of the renovation fees of RMB7.7 million (approximately $1.1 million) in connection with
the construction of our Phase II manufacturing facility in Dongguan, China. On July 4, 2008, Wellmean and ASAT China entered into a settlement agreement, and ASAT China agreed to pay a consideration of approximately RMB7.7 million to settle
this court action. Subsequently, Wellmean withdrew its claim against ASAT China on July 9, 2008.

In addition, we have in the past and
may in the future become involved in various intellectual property, product liability, commercial, environmental, and tax litigations and claims, government investigations and other legal proceedings that arise from time to time in the ordinary
course of our business. Litigation is inherently unpredictable, and we could in the future have a judgment rendered against us or enter into settlement of claims that could have a material adverse effect on our results of operations. In addition, if
we receive a final unsatisfied judgment in any litigation not covered by insurance in excess of $10 million that is not cured within 60 days following such judgment, there will be an event of default under the indenture governing our 9.25% senior
notes



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due 2011 and our purchase money loan agreement. Upon an event of default, either the trustee or the holders of at least 25% of the outstanding principal
amount of the notes may declare the amounts payable on the notes due and payable. In the event that our obligations on the notes are accelerated at a time when we do not have sufficient funds to repay the amount due on the notes, there will be a
payment default on the notes and our financial results will be materially adversely affected. Similarly, if our obligations under the purchase money loan agreement are accelerated when we do not have sufficient funds to repay the amounts due, a
cross-default could arise under the indenture and our business financial results and operations would be materially adversely affected.

The loss of key
senior management and engineers could negatively impact our business prospects. In addition, our inability to attract and retain key personnel at all levels would limit our ability to develop new and enhanced assembly and test services.

We depend on our ability to attract and retain senior management, highly skilled technical, managerial, sales and marketing personnel.
Competition for senior management, highly skilled technical, managerial, sales and marketing personnel is intense, particularly in Hong Kong and Southern China, and the retention of skilled engineering personnel in our industry typically requires
competitive compensation packages. In attracting and retaining such personnel and other personnel at all level, we may be required to incur significantly increased compensation costs. We cannot predict whether we will be successful in attracting and
retaining the personnel we need to successfully develop and market new and enhanced assembly and test services in order to grow our business and achieve profitability.

On September 1, 2006 our former Chief Executive Officer resigned for personal reasons. Our current Acting Chief Executive Officer assumed his position for the interim period during which we are actively searching
for a permanent Chief Executive Officer. Our current Acting Chief Executive Officer is a member of our board of directors and is affiliated with one of our principal shareholder groups, QPL. On July 17, 2007, our former Acting Chief Financial
Officer resigned, and on July 18, 2007 our permanent Chief Financial Officer assumed his position. Our former Acting Chief Financial Officer is and continues to be a member of our board of directors and is affiliated with one of our principal
shareholder groups, the investor group. Our current Chief Financial Officer is the brother of our former Acting Chief Financial Officer. Although we are currently in the process of searching for permanent replacement, we cannot assure you that we
will be successful in attracting and retaining a permanent Chief Executive Officer in the near future or that our current Acting Chief Executive Officer will continue to serve ASAT until permanent hire is made.

In connection with our ongoing corporate restructuring to improve efficiency, various senior management, officers, managers, engineers and other
personnel in various departments have left our company. Their responsibilities are currently being assumed by other personnel within the company or replaced with new hires. We cannot assure you that we will be successful in attracting and retaining
sufficient and capable personnel at all levels and functions in our company to meet our human resources needs.

The loss of key suppliers or their
failure to deliver sufficient quantities of materials on a timely basis could negatively impact our business prospects. Our inability to qualify second sources for certain suppliers could limit our production capabilities.

The principal materials used in our assembly process are polymer substrates, leadframes, gold wire and plastic molding compounds. In the ordinary course
of business, we purchase most of our leadframes from QPL and its affiliates, our largest affiliated shareholder group, and our substrates from several suppliers in Taiwan, Japan and Korea. To maintain competitive packaging operations, we must obtain
from these suppliers, in a timely manner, sufficient quantities of acceptable quality materials and equipment at competitive prices. We purchase all of our materials on a purchase order basis and have no long-term contracts with any suppliers, other
than the inventory management and supply agreement we entered into with QPL Limited, or QPLL, and Talent Focus Industries Limited, or Talent Focus, on October 27, 2005 and the contract was expired in October 2007. From time to time,
particularly during industry upturns, vendors have extended lead times or limited the supply



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of required materials to us because of vendor capacity constraints and, consequently, we have experienced difficulty in obtaining acceptable materials on a
timely basis. In addition, particularly during industry upturns, prices that we pay for materials may increase due to increased industry demand. This increase could negatively impact our operating results especially if we are unable to pass this
cost on to our customers. In addition, increasing commodity prices have negatively impacted our supply purchases because our vendors have passed on the price increases to us. Further, if any of our vendors were to cease operations for any reason, we
may experience difficulty in obtaining acceptable materials from alternative vendors on a timely, cost effective basis. For example, in the April 2004 quarter, an upstream vendor to one of our key suppliers announced the discontinuance of the
production of metalized tape of a certain composition. This discontinuance forced our suppliers to send end of life notices to almost a dozen of its customers, several of whom were highly dependent on products assembled with the
discontinued material.

Environmental, health and safety laws could impose material liability on us and our financial condition may be negatively
affected if we are required to incur significant costs of compliance.

Our operations in China are required to comply with various
Chinese environmental laws and regulations administered by the central and local government environmental protection bureaus, including any environmental rules introduced by the local Chinese governments in Dongguan, China. These laws impose
controls on our air and water discharges, on the storage, handling, discharge and disposal of chemicals, and on employee exposure to hazardous substances and impose fees for the discharge of waste substances above prescribed levels, require the
payment of fines for serious violations and provide that the Chinese national and local governments may at their own discretion close or suspend any facility which fails to comply with orders requiring it to cease or cure operations causing
environmental damage. If these laws were to change, they could require us to incur costs to maintain compliance and could impose liability to remedy the effects of hazardous substance contamination. Stricter enforcement of existing laws, the
adoption of new laws or regulations or our failure to comply with these laws or regulations could cause us to incur material liabilities and require us to incur additional expense, curtail our operations and restrict our ability to grow.

We do not anticipate making material environmental capital expenditures in connection with our current operations in our Dongguan, China facilities.
However, we cannot predict whether future environmental, health and safety laws in China will require additional capital expenditures or impose other process requirements upon us, curtail our operations, or restrict our ability to expand our
operations. We could be subject to material liabilities if the governments in China adopt new environmental, health and safety laws, we fail to comply with new or existing laws, or other issues relating to hazardous substances arise.

The implementation of new environmental regulatory legal requirements, such as lead free initiatives, could, and do, impact our product designs and
manufacturing processes. The impact of such regulations on our product designs and manufacturing processes could, and do, affect the timing of compliant product introductions, the cost of our products as well as their commercial success. For
example, a directive in the European Union banned the use of lead and other heavy metals in electrical and electronics equipment beginning July 1, 2006. As a result, our customers selling products in Europe began demanding products from
component manufacturers, such as us, that do not contain these banned substances. Because most of our existing assembly processes utilize a tin-lead alloy as a soldering material in the manufacturing process, we changed some of our assembly
processes and materials for specified products and we redesigned some of our assembly processes and products to use soldering that does not contain lead in response to this legislation. The redesign has required increased research and development
costs and manufacturing and quality control costs. In addition, the products we assemble to comply with the new regulatory standards may not meet the same reliability levels as our products assembled with non-compliant materials and processes. If we
are unable to successfully and timely redesign existing products and introduce new products that meet the standards set by environmental regulation and our customers, sales of our products could decline, which could materially adversely affect our
business, financial condition and results of operations.



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Some of our costs are denominated in foreign currencies and the continued depreciation of the U.S. dollar against such
foreign currencies, including the Chinese Renminbi, could increase these costs.

While substantially all of our revenues and purchases
are U.S. dollar denominated, a portion of our costs are denominated in other currencies, primarily Chinese Renminbi and Hong Kong dollars. The Hong Kong dollar historically has accounted for the largest share of our costs, but we are now
increasingly exposed to the Chinese Renminbi. Because the exchange rate of the Hong Kong dollar to the U.S. dollar has remained close to the range varying between HK$7.75 per U.S. dollar and HK$7.85 per U.S. dollar since 2005, we have not
experienced significant foreign exchange gains or losses associated with that currency. However, the Hong Kong government could change the trading band at HK$7.75 to HK$7.85 per U.S. dollar at any time. The depreciation of the U.S. dollar against
the Hong Kong dollar would generally increase our Hong Kong dollar expenses, which could have an adverse effect on our financial condition and results of operations.

Additionally, our exposure to fluctuations in the value of the Chinese Renminbi has significantly increased due to the completed move of our manufacturing facilities to Dongguan, China. From 1994 to July 2005, the
conversion of Renminbi into foreign currencies, including Hong Kong and U.S. dollars, was based on rates set by the Peoples Bank of China, which were set daily based on the previous days interbank foreign market exchange rate and current
exchange rates on the world financial markets. As a result, the exchange rate of the Renminbi to the U.S. dollar was previously substantially pegged or fixed. On July 21, 2005 the government of China announced that the exchange rate of the
Renminbi was being appreciated against the U.S. dollar and that the Renminbi would henceforth have a more flexible exchange rate within a narrow band that would float against a basket of foreign currencies. However, the Chinese government may decide
to change or abandon this policy at its sole discretion at any time in the future. As of September 30, 2008, the exchange rate was RMB6.86 to $1.00 as compared with RMB7.52 to $1.00 as of September 30, 2007. This appreciation of the
Renminbi against the U.S. dollar and any further appreciation in the exchange rate of the Renminbi against the U.S. dollar will increase our costs relating to our Dongguan, China operations.

We may experience seasonality in the sales of our products, which could cause our operating results to be adversely impacted.

We may experience a decline in business activity during the Lunar New Year and Chinas National Day, which are major holidays celebrated in China.
Many businesses within China are closed for a period of approximately 3 to 10 days around the Lunar New Year, which occurs in January or February of each year, and Chinas National Day, which begins on October 1 of each year. This could
lead to decreased sales during the fiscal quarters in which the Lunar New Year and Chinas National Day fall. We expect that as we conduct our business in China, we will experience seasonality, although it is difficult for us to evaluate the
degree to which seasonality may affect our business in future periods.

We have in the past been, and may in the future be, in default or otherwise out
of compliance with the covenants and conditions in the agreements governing our debt.

As we continue to face commercial business
challenges, we have occasionally been in default or otherwise been out of compliance with the covenants and conditions in the agreements governing our debt. Such defaults have been cured or otherwise remedied by obtaining amendments or waivers from
our creditors. However, we cannot assure you that we will not have additional defaults in the future, or that we will be able to obtain any necessary amendments or waivers to cure additional defaults in a timely manner or at all. The occurrence of a
default or the failure to obtain any necessary amendment or waiver could have a material adverse effect on our business, financial condition and results of operations. In addition, these difficulties could disrupt our ongoing business, distract our
management and employees, increase our expenses and cause us to seek to undertake a restructuring of our obligations with our creditors, and we cannot give assurances that we would be able to accomplish a restructuring on commercially reasonable
terms, if at all. Please refer to Item 13Defaults, Dividend Arrearages and Delinquencies for additional information.



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We issued Series A Preferred Shares and warrants in connection with the preferred shares financing arrangement,
warrants in connection with the purchase money loan facility with our two principal shareholder groups, warrants in connection with amending the purchase money loan facility and warrants in connection with the recently approved amendments to the
indenture governing our 9.25% senior notes due 2011, which can have a significant dilutive effect upon our shareholders.

In July 2005,
we entered into a settlement agreement with Freescale, the former semiconductor products division of Motorola with whom we had an intellectual property infringement dispute. In connection with the settlement agreement, we issued to Freescale a
five-year warrant to purchase 10,937,500 of our ordinary shares, which is the equivalent of 729,167 ADSs, at an exercise price of $0.16 per share (equivalent to $2.40 per ADS). See Item 4Information on the CompanyBusiness
OverviewLegal Proceedings.

As described in Item 5Operating and Financial Review and ProspectsCapital
Expenditures and Material Financing Arrangements, in October 2005, we completed our preferred shares financing arrangement and satisfied the conditions for the effectiveness of our purchase money loan facility with our two principal
shareholder groups. We issued warrants in connection with the preferred shares commitment to two of our principal shareholder groups and to a member of the JPMP shareholder group in connection with the purchase money loan facility, and subsequently
issued additional warrants in connection with the borrowing of the first tranche of funding under the purchase money loan facility to the lenders that funded the first tranche of loans. The holders can convert their Series A Preferred Shares into
ordinary shares at any time prior to their maturity. The initial conversion price of the Series A Preferred Shares was $0.09 per ordinary share (equivalent to $1.35 per ADS), but was reset on October 31, 2006 to $0.065 per ordinary share
(equivalent to $0.975 per ADS). The conversion price is subject to adjustment under anti-dilution provisions, including weighted average based anti-dilution protection in the event of issuance of certain equity securities, and shall be
proportionally adjusted for share splits, dividends, recombinations and similar events. The warrants are exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS), subject to adjustment for stock splits and certain other
situations specified in the warrants. We have also issued additional Series A Preferred Shares and warrants in connection with our rights offering.

On August 23, 2007, we agreed to issue warrants for ordinary shares in connection with the amendment to our purchase money loan agreement, which was required as a condition to closing the solicitation of consents to amend our indenture
governing our 9.25% senior notes due 2011, as described below. These warrants will be issued to the lenders under the purchase money loan agreement, subject to certain conditions specified therein. These warrants would, in the aggregate, be
exercisable for a total of approximately 4.6% of ASAT Holdings total outstanding ordinary shares on a fully diluted basis as of the issue date (inclusive of ordinary shares issuable upon exercise of warrants to the holders themselves and which
ASAT Holdings will grant to the eligible holders of our 9.25% senior notes due 2011). The warrants will have an exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject to adjustment as provided in the warrants
and the other terms and conditions contained therein. These warrants and the ordinary shares into which they will be exercisable are not registered under the Securities Act of 1933, or any state securities laws, and will be issued in a private
transaction under Regulation D and/or in an offshore transaction under Regulation S. Unless the warrants and ordinary shares are registered in the future, they may not be offered or sold in the United States except pursuant to an exemption from the
registration requirements of the Securities Act and applicable state laws.

On August 27, 2007, we agreed to issue warrants for
ordinary shares in connection with the amendment of the indenture governing our 9.25% senior notes due 2011. These warrants will be issued to eligible holders of our 9.25% senior notes due 2011 who consented to our solicitation of consents ended
August 23, 2007 to amend the indenture governing our 9.25% senior notes due 2011, subject to certain conditions specified therein. These warrants would, in the aggregate, be exercisable for a total of approximately 4.6% of ASAT Holdings
total outstanding ordinary shares on a fully diluted basis as of the issue date (inclusive of ordinary shares issuable upon exercise of warrants to the holders themselves and which ASAT Holdings will grant to the lenders under its purchase money
loan agreement). The warrants will have an exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject to adjustment as provided in the warrants and the other terms and conditions



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contained therein. These warrants and the ordinary shares into which they will be exercisable are not registered under the Securities Act of 1933, or any
state securities laws, and will be issued in a private transaction under Regulation D and/or in an offshore transaction under Regulation S. Unless the warrants and ordinary shares are registered in the future, they may not be offered or sold in the
United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state laws.

If
holders convert the Series A Preferred Shares or exercise any of the foregoing warrants, we will issue additional ordinary shares, and such issuances will be dilutive to our holders of ordinary shares and ADSs.

In addition, we have the option to pay the semiannual dividend due on our outstanding Series A Preferred Shares in our ordinary shares, and we have done
so for each dividend payment date thus for. On September 15, 2007, we paid the dividend by issuing 84.84 ordinary shares per Series A Preferred Share and 25,452,045 ordinary shares in the aggregate to members of the investor group and Everwarm
Limited, a wholly owned subsidiary of QPL, and issuing 84.84 ordinary shares per Series A Preferred Share and 825,876 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to our rights offering, all in accordance
with the terms of our Series A Preferred Shares. On March 15, 2008, we paid the dividend by issuing 91.10 ordinary shares per Series A Preferred Share and 27,329,665 ordinary shares in the aggregate to members of the investor group and Everwarm
Limited and 835,269 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to our rights offering, all in accordance with the terms of our Series A Preferred Shares. On September 15, 2008, we paid the dividend
by issuing 158.91 ordinary shares per Series A Preferred Share and 47,672,829 ordinary shares in the aggregate to members of the investor group and Everwarm Limited and 1,457,107 ordinary shares in the aggregate to holders of Series A Preferred
Shares who subscribed to our rights offering, all in accordance with the terms of our Series A Preferred Shares. Future dividend payments on the Series A Preferred Shares in such shares or our ordinary shares will be dilutive to holders of ordinary
shares or ADSs. In addition, if such shareholders sell substantial amounts of their ADSs in the public market during a short period of time, prices of these securities may decline significantly.

Failure to achieve and maintain effective internal control over financial reporting could have a material adverse effect on the trading price of our ADSs.

We are subject to the reporting obligations under the United States securities laws, and beginning in this annual report on Form 20-F,
we are required by the Securities and Exchange Commission, as directed by Section 404 of the Sarbanes-Oxley Act, to include a report of management on the effectiveness of our internal control over financial reporting. In addition, beginning in
the annual report on Form 20-F for the fiscal year ending April 30, 2010, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting.

We may from time to time experience material weaknesses or significant deficiencies in our internal control. For example, as of April 30, 2008,
management identified a significant deficiency in the internal control over financial reporting. Specifically, management did not maintain a sufficient number of personnel with an appropriate level of accounting knowledge, experience and training in
the application of generally accepted accounting principles commensurate with managements financial reporting requirements. This resulted in deficiencies in internal controlover financial reporting for complex accounting transactions
and led to an error related to our accounting treatment with respect to the adjustment of the conversion price of our Series A Preferred Shares which occurred in October 2006. In preparing our consolidated financial statements as of and for the
fiscal year ended April 30, 2007, we did not apply the relevant principles under U.S. GAAP to revalue the preferred shares based on the adjusted conversion price in our consolidated balance sheet. To correct this error, such balance sheet has been
restated in this annual report on Form 20-F to reflect the adjusted conversion price (which reduced our liabilities for the Series A Preferred Shares by $4.1 million and increased our additional paid-in capital by $4.1 million as of that date).
Management has commenced a plan to remediate the significant deficiency, including evaluating current staffing needs and implementing monitoring controls over routine and non-routine complex transactions. There can be no guarantee that such efforts
will remediate the significant deficiency or that in future periods management may identify other significant deficiencies or material weaknesses.



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Although our management concluded that our internal control over financial reporting are effective in
this annual report on Form 20-F, our management may not conclude that our internal control over financial reporting are effective in the future. Moreover, even if our management concludes that our internal control over financial reporting is
effective, our independent public registered accounting firm may conclude our internal control over financial reporting is ineffective or may issue an adverse opinion on the effectiveness of our internal control over financial reporting. Any of
these possible outcomes could result in the loss of investor confidence in the reliability of our consolidated financial statements, which in turn could negatively impact the trading price of our ADSs.

Expiration of, or changes to, our tax incentives could have a material adverse effect on our operating results. There is also uncertainty associated with the
interpretation of new PRC Enterprise Income Tax Law.

On March 16, 2007, the PRC Enterprise Income Tax Law, or the EIT Law, was
enacted by the Chinese government. Under the EIT Law, effective January 1, 2008, China adopted a uniform tax rate of 25% for all enterprises (including foreign-invested enterprises) and revoked the tax exemption, reduction and preferential
treatments applicable to foreign-invested enterprises under the previous PRC Income Tax Law for Enterprises with Foreign Investment and Foreign Enterprise, or the FEIT law. However, there is a transition period for enterprises, whether
foreign-invested or domestic, that were receiving preferential tax treatments granted by relevant tax authorities at the time the EIT Law became effective. Enterprises that were subject to a statutory FEIT rate of 15% may continue to enjoy the lower
rate and gradually transition to the new tax rate within five years after the effective date of the EIT Law. However, enterprises those were subject to a statutory FEIT rate of 24% are subject to EIT of 25% after the effective date of the EIT Law.
Enterprises that are currently entitled to exemptions or reductions from the standard income tax rate for a fixed term may continue to enjoy such treatment until the fixed term expires.

Preferential tax treatments will continue to be granted to industries and projects that are strongly supported and encouraged by the state, and
enterprises otherwise classified as such encouraged high-tech enterprises will be entitled to a 15% EIT rate. On April 14, 2008, the Measures for the Recognition and Administration of New and High-tech Enterprises, or the Measures,
were promulgated jointly by the Ministry of Science and Technology, the Ministry of Finance and the State Administration of Taxation and became retroactively effective from January 1, 2008. Under the Measures, the term high-tech
enterprise is defined as a resident enterprise that has been registered in the PRC (excluding Hong Kong, Macao or Taiwan) for more than one year, conducts business in the new and high-tech fields encouraged by government as listed in an
appendix to the Measures, continuously undertakes research and development and technology conversion, and forms their own core proprietary intellectual property right as the basis of its business operation. Such new and high-tech enterprises may
apply for tax incentives. There is no assurance that ASAT China will qualify as a new and high-tech enterprise under the Measures.

The EIT
Law also provides that enterprises established outside of China whose de facto management bodies are located in China are considered as resident enterprises and will generally be subject to the uniform 25% EIT rate as to
their global income, including income they receive from their subsidiaries. Pursuant to the Implementation Rules to the Enterprise Income Tax law promulgated by State Council on December 6, 2007 and became effective on January 1, 2008 or
the Implementation Rules, the term de facto management bodies is defined as bodies that undertake overall management and control of the production, operation, human resource, finance, property and similar activities of the enterprise in
material respects. Despite the Implementation Rules, it is still not entirely clear under what situations an enterprises de facto management body is considered to be located in China. However, almost all of our management is
currently based in China, and will likely remain in China for the foreseeable future. In addition, although the EIT Law provides that dividend income between qualified resident enterprises is exempted income, it is not entirely clear
what is considered a qualified resident enterprise under the EIT Law. If we are required under the EIT Law to pay income tax for any dividends we receive from our subsidiaries, it will materially and adversely affect the amount of
dividends we may pay, if any, to our shareholders and ADS holders. Furthermore, unlike the FEIT Law (superseded by the EIT Law), which specifically exempted withholding tax on any dividends payable to non-PRC investors, the EIT Law



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and the Implementation Rules provide that an income tax rate of 10% will normally be applicable to dividends payable to non-PRC investors which are derived
from sources within China, although such income tax may be reduced by the relevant Sino-foreign tax treaties. We are a Cayman Islands holding company and substantially all of our income may come from dividends we receive from our operating
subsidiary located in China. If we declare dividends from such income, it is not clear whether it will be subject to EIT as if we are a China tax resident under the EIT Law. If we are required under the EIT Law to withhold income tax on our
dividends payable to our non-PRC shareholders and ADS holders, your investment in us may be materially and adversely affected.

Outbreaks of epidemics
and communicable diseases in Hong Kong, China and other parts of Asia may disrupt our business operations, causing us to lose customers and revenue.

In early calendar year 2003, China, Hong Kong and certain other countries, largely in Asia, experienced the spread of the Severe Acute Respiratory Syndrome, or SARS, virus. The SARS virus was believed to have first
originated in Southern China and then spread to Hong Kong before becoming an international health concern. The World Health Organization and several countries issued travel warnings against international travel to Hong Kong, China and several other
Asian nations during the period of the alert. This severely curtailed customer visits to our facilities. In addition, we have been unable to obtain insurance coverage at commercially reasonable rates for business interruptions resulting from the
spread of communicable diseases. In that regard, there can be no assurance that the SARS virus and/or a different or even more virulent virus will not make a reappearance in the future. If such an outbreak were to occur in Hong Kong and China, and
if the outbreak were to be prolonged, uncontrolled and/or associated with high mortality, our operations could be severely impacted, such as through plant closures and the imposition of other emergency measures, any of which would have material
adverse effect on our financial condition and results of operations. Furthermore, any outbreak in any of our premises or manufacturing plants could result in our management and employees being quarantined and our operations being required to be
suspended.

U.S.investors in the Company could suffer adverse tax consequences if we are characterized as a Passive Foreign Investment Company.

Based in part on the Companys projections and estimates of the composition, nature and value of the Companys assets, and
the sources and nature of the Companys income, the Company does not expect to be classified as a passive foreign investment company (PFIC) for US federal income tax purposes for the current taxable year or in the foreseeable
future. However, the determination of whether the Company is a PFIC is made on an annual basis and will depend on the composition and nature of the Companys income and the composition, nature and value of the Companys assets from time to
time. A non-US corporation will be considered a PFIC for any taxable year if either (i) at least 75% of its gross income is passive income or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the
assets during a taxable year) is attributable to assets that produce or are held for the production of passive income. Since the market value of the Companys assets may be determined in large part by the market price of the Ordinary Shares,
which is likely to fluctuate and the composition of the Companys income and assets will be affected by how, and how quickly, the Company spends any cash that is raised in any financing transaction, the Company may be a PFIC for any taxable
year. If the Company is treated as a PFIC for any taxable year, such characterization could result in adverse US tax consequences to a US investor. For example, if the Company is a PFIC, a US investor will become subject to increased tax liabilities
under US tax laws and regulations upon a disposition of the ADSs or ordinary shares or upon the receipt of certain distributions and will be subject to increased reporting requirements.

Certain U.S. investors in our company could suffer adverse tax consequences if we are characterized as a controlled foreign corporation for U.S. federal income tax purposes.

Generally, we will be a controlled foreign corporation (CFC) if more than 50% of the total combined voting power of all classes of our shares
or the total value of our shares is owned, actually or constructively, by



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U.S. 10% Shareholders. A U.S. 10% Shareholder is a citizen or resident of the United States, a domestic partnership, a domestic corporation, or a
estate or trust other than a foreign estate or trust which owns, actually or constructively, 10% or more of the total combined voting power of all classes of our shares. If we are a CFC and you are a U.S. 10% Shareholder with respect to us, your
investment could be materially adversely affected because you must include in your gross income for U.S. tax purposes your pro rata share of our Subpart F income and our earnings invested in U.S. property, regardless of whether we
actually distribute such amounts. In addition, if you are or were a U.S. 10% Shareholder at any time during the five-year period ending with a sale or other taxable disposition of our common shares by you, gain from such disposition will be treated
as ordinary income to the extent of our earnings and profits. If we are both a PFIC and a CFC, special rules may apply.

We do not believe
that we currently are a CFC. However, the principles for applying the tests described above are not entirely clear and this determination is based on factors beyond our control, such as the identity of our shareholders, and in the case of our
shareholders treated as pass-through entitles for U.S. federal income tax purposes, the identity of the owners of such entities. Accordingly, there can be no assurance that we will not be considered a CFC for the current or any future taxable year.

We are a Cayman Islands company and, because judicial precedent regarding the rights of shareholders is more limited under Cayman Islands law than that
under U.S. law, you may have less protection for your shareholder rights than you would under U.S. law.

Our corporate affairs are
governed by our amended and restated memorandum and articles of association, the Cayman Islands Companies Law (as amended) and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority
shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively
limited judicial precedent in the Cayman Islands as well as that from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our
directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than
the United States. In addition, some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders
than they would as shareholders of a U.S. public company.

You may have difficulty enforcing judgments obtained against us.

We are a Cayman Islands company and substantially all of our assets are located outside of the United States. Substantially all of our current operations
are conducted in China. In addition, most of our directors and officers are nationals and residents of countries other than the United States. As a result, it may be difficult for you to effect service of process within the United States upon these
persons. It may also be difficult for you to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors, most of whom are not
residents in the United States and the substantial majority of whose assets are located outside of the United States. In addition, there is uncertainty as to whether the courts of the Cayman Islands or China would recognize or enforce judgments of
U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state and it is uncertain whether such Cayman Islands or Chinese courts would be competent to hear original
actions brought in the Cayman Islands or China against us or such persons predicated upon the securities laws of the United States or any state.



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|ITEM | 4.    
INFORMATION ON THE COMPANY
|---- | ---------------------------------

HISTORY AND DEVELOPMENT

ASAT Holdings was incorporated in the Cayman Islands on October 20, 1999 as a limited liability company under the Companies Law (Revised) of the
Cayman Islands. The principal executive office for ASAT Holdings is located at 14th Floor, 138 Texaco Road, Tsuen Wan, New Territories, Hong Kong. ASAT Holdings registered office in the Cayman Islands is Ugland House, P.O. Box 309, South
Church Street, George Town, Grand Cayman, Cayman Islands. Our telephone number in Hong Kong is (852) 2408-7811, and the telephone number for our registered office in the Cayman Islands is (345) 949-8066.

Capital expenditures decreased to $9.1 million for the year ended April 30, 2008 from $17.7 million and $23.5 million for the years ended
April 30, 2007 and 2006, respectively. These expenditures for fiscal year 2008 were incurred primarily to support the requirements for our business. Expenditures were also made on the facilitization of our new manufacturing facilities located
in Dongguan, China. Our capital expenditures are incurred in the ordinary course of our business and operations and are generally funded out of our cash flow from operations and with the proceeds of financing activities. Further information with
respect to capital expenditures and funding sources is set forth in Item 5Operating and Financial Review and ProspectsLiquidity and Capital Resources.

Recapitalization

On October 29, 1999, three groups of private equity funds separately managed
by or affiliated with JPMP Master Fund Manager, L.P. (formerly Chase Capital Partners), Olympus Capital Holdings Asia and Orchid Asia Holdings LLC purchased a 50% equity interest in ASAT Holdings from QPL. Following the completion of our public
offering of ADSs on July 14, 2000, this investor group held an approximately 42% equity interest in ASAT Holdings.

BUSINESS OVERVIEW

We are a global provider of semiconductor package design, assembly and test
services. We are a leading developer of advanced packages and have achieved significant growth in chipscale packages, including the Fine Pitch Ball Grid Array, or fpBGA, and LPCC package families. We are an acknowledged early developer of the
quad flat pack no-lead, or QFN package, and the inventor of TAPP, as evidenced by our U.S. patents covering these technologies. We also provide semiconductor test services, particularly for mixed-signal semiconductors which perform
both analog and digital functions.

We work closely with customers to design and provide advanced assembly and test solutions for each new
product generation. We provide assembly and test services from our Dongguan, China facilities. We also provide package design services and thermal and electrical modeling from our Milpitas, California, Hong Kong and Dongguan, China facilities. Our
sales offices and representatives are strategically located in the United States, Germany, Hong Kong, Singapore and South Korea, allowing us to work directly with customers at their facilities to provide effective package design and customer
service. Through this network, we are able to provide highly focused design and production services with rapid time-to-market design and production solutions. During the fiscal year ended April 30, 2008, we shipped products to over 90 customers
and many of our top customers are among the worlds largest semiconductor companies. Our top three customers (in alphabetical order) by sales for the year ended April 30, 2008 were Broadcom Corporation, Maxim Integrated Products, Inc and
SiTel Semiconductor BV. These customers accounted for 68.3% of our total sales for the fiscal year ended April 30, 2008.

We
historically conducted all our assembly and test operations in Hong Kong. As part of our overall strategy to remain competitive, we moved all of our Hong Kong manufacturing operations to China in order to reduce our costs and to provide better
access to the high-growth semiconductor market in China. We completed



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the transfer of all of our equipment to Dongguan, China during the fiscal year ended April 30, 2007. We are committed to continuing reduction of our
costs while ensuring full operation of our assembly and test facilities in Dongguan, China. We conducted this move to Dongguan, China in two phases. To launch Phase I of this transition to China, in August 2002, we entered into a 15-year lease
agreement and a 6-year management agreement with Changshi, our development partner in the Zhenan Technology and Industrial Park, Changan County, Dongguan City, Guangdong, China. In August 2003, our modern Phase I 180,000 square foot facility (the
Phase I facility) was completed by Changshi to our specifications. In May 2004, we entered into another lease agreement with Changshi to build a 300,000 square foot Phase II facility (the Phase II facility) immediately
adjacent to our Phase I facility. The Phase II facility lease also involves Changshis subsidiary, Dongguan Changan ASAT Semiconductor Assembly and Test Factory, which holds the subject land use rights. Under the terms of the lease agreement,
we lease the completed Phase II factory building from Changshi for a period of 15 years. The Phase II facility was completed during the second quarter of fiscal 2006. During the fiscal year ended April 30, 2007, our Hong Kong assembly and test
operations were shut down, all of our assembly and test operations were transferred to Dongguan, China and the installation of our equipment was completed. Both of our Dongguan, China facilities are now fully operational.

Business Strategy

Our overall business strategy has
remained unchanged, which strategy is to grow our market share, focus on margins, lower costs and achieve profitability on a sustained basis. The principal elements of our strategy include:



| |  |  | Increasing our competency to gain market share by achieving higher levels of customer satisfaction. In particular, we have achieved faster response times as
a result of our leaner organizational structure that was implemented as part of our recent cost reduction programs and a more responsive, state-of-the-art facility that allows us to turn around orders rapidly. Our manufacturing output in Dongguan,
China continues to improve, resulting in better cycle times and yields. We believe that our improved operating metrics have increased our competitiveness and not only allow us to generate additional orders from existing customers, but are also
leading to new business opportunities and increased market share. Additionally, we expect that the equipment we have in place, and selected equipment that we plan to purchase to expand our capabilities, will provide us with sufficient capabilities
to meet our expected customer requirements.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Creating strategic customer teams to focus ourresources on strategic accounts. We are focusing on increasing sales to our strategic customers who
have the ability to add more business to existing product lines where we are already qualified. We have dedicated cross functional teams consisting of Sales, Customer Service, Engineering and Production focused along customer lines, which enables us
to respond more effectively to customer requirements and efficiently allocate resources throughout the organization.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Strengthening top customers while concurrently diversifying our customer base. We will continue to try to strengthen our relationships with existing top
customers, while concurrently pursuing new customers in an effort to diversify our customer base.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Focusing on customer driven new product development.This effort involves increasing our applications engineering function and participating in new customer
driven product introductions, which we believe has traditionally been a strength of our company. For example, we are developing a thinner package technology, what we call our Thin LPCC. We believe this technology will be in high demand as it will be
used in the newest generation of consumer and portable devices.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Continuing to reduce our cost structure and increase our working capital. Over the last year, as a result of the completion of our move to China we have
achieved a more efficient manufacturing process that enables us to achieve enhanced quality, cycle times and yields. We continue to manage costs resulting in a leaner and more efficient organizational structure, which provides us with a more
competitive cost structure that can enhance our margin and working capital.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Semiconductor Packages

We offer assembly services for a broad range of semiconductor packaging including chipscale (small) and non-chipscale (large) packages. Most of the revenue derived from test services comes from test services performed
in connection with assembly services. The following table sets forth the breakdown of sales by product category and as a percentage of total sales for the periods indicated:



|                           |  |                             |         |      |   |         |  |      |         |      |   |         |  |   |        
|-------------------------- |  | --------------------------- | ------- | ---- | - | ------- |  | ---- | ------- | ---- | - | ------- |  | - | -------
|                           |  | Fiscal Year Ended April 30,
|                           |  | 2004                        |         | 2005 |   | 2006    |  | 2007 |         | 2008
|                           |  | (in thousands of dollars)  
|Sales:                     |  |                             |         |      |   |         |  |      |         |      |   |         |  |   |        
|Chipscale packages (CSP)   |  | $                           | 86,567  |      | $ | 105,850 |  | $    | 115,028 |      | $ | 120,194 |  | $ | 114,330
|Non-CSP laminate packages  |  |                             | 35,887  |      |   | 21,651  |  |      | 17,119  |      |   | 16,048  |  |   | 18,549 
|Non-CSP leadframe packages |  |                             | 69,468  |      |   | 47,055  |  |      | 36,966  |      |   | 19,494  |  |   | 18,208 
|                           |  |                             |         |      |   |         |  |      |         |      |   |         |  |   |        
|Subtotal                   |  |                             | 191,922 |      |   | 174,556 |  |      | 169,113 |      |   | 155,736 |  |   | 151,087
|Test                       |  |                             | 22,752  |      |   | 19,855  |  |      | 13,002  |      |   | 9,117   |  |   | 4,874  
|                           |  |                             |         |      |   |         |  |      |         |      |   |         |  |   |        
|Total                      |  | $                           | 214,674 |      | $ | 194,411 |  | $    | 182,115 |      | $ | 164,853 |  | $ | 155,961
|                           |  |                             |         |      |   |         |  |      |         |      |   |         |  |   |        



|                           |  |                             |   |  |      |   |  |      |   |  |      |   |  |      |  
|-------------------------- |  | --------------------------- | - |  | ---- | - |  | ---- | - |  | ---- | - |  | ---- | -
|                           |  | Fiscal Year Ended April 30, |  
|                           |  | 2004                        |   |  | 2005 |   |  | 2006 |   |  | 2007 |   |  | 2008 |  
|                           |  | (in percentage)             |  
|Sales:                     |  |                             |   |  |      |   |  |      |   |  |      |   |  |      |  
|Chipscale packages (CSP)   |  | 40                          | % |  | 54   | % |  | 63   | % |  | 73   | % |  | 73   | %
|Non-CSP laminate packages  |  | 17                          |   |  | 11   |   |  | 10   |   |  | 10   |   |  | 12   |  
|Non-CSP leadframe packages |  | 32                          |   |  | 24   |   |  | 20   |   |  | 12   |   |  | 12   |  
|                           |  |                             |   |  |      |   |  |      |   |  |      |   |  |      |  
|Subtotal                   |  | 89                          |   |  | 89   |   |  | 93   |   |  | 95   |   |  | 97   |  
|Test                       |  | 11                          |   |  | 11   |   |  | 7    |   |  | 5    |   |  | 3    |  
|                           |  |                             |   |  |      |   |  |      |   |  |      |   |  |      |  
|Total                      |  | 100                         | % |  | 100  | % |  | 100  | % |  | 100  | % |  | 100  | %
|                           |  |                             |   |  |      |   |  |      |   |  |      |   |  |      |  

Semiconductors devices are an integral component in a wide variety of everyday products, including
telecommunications systems, personal computers, consumer electronics, office equipment and automotive products. Semiconductor packages are critical to the chips performance and functionality and facilitate the integration of the semiconductor
device into the end-product. We offer a wide range of semiconductor packages for a broad spectrum of electronic products. Our products and services can be grouped into four categories: chipscale packages (CSP), non-CSP laminate packages, non-CSP
leadframe packages and test services. In the chipscale package category, we have been recognized for our leadership position in advanced technology, most notably for our LPCC and TAPP product families.

Semiconductor packaging protects the enclosed semiconductor chip and provides a network of connections between the chip and a printed circuit board.
Non-CSP leadframe packages are a distinct packaging family type in that the chip is first attached to a metallic leadframe and then electrical interconnects (usually with fine gold bonding wires) are provided between the chips active
components and the corresponding leadframe electrical contacts. The chip and leadframe are then encapsulated in plastic leaving external metal leads from the leadframe exposed and surrounding the edge of the package. These exposed leads will enable
the device to be electrically connected to the circuit board on which it will be mounted. By contrast, in non-CSP laminate packages, the chip is mounted on a printed circuit board substrate (not on a metallic leadframe) to which it is electrically
connected (usually with fine gold bonding wires) to printed metallic interconnect circuitry that is in turn electrically connected to the printed circuit board via solder balls which have been incorporated as electrical contacts on the bottom of the
package.



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Chipscale Packages (CSP)

Chipscale packages include both leadframe and laminate based packages and are typically used in high-end packaging of semiconductors for applications that require small device footprints and high electrical and
thermal performance characteristics. Our chipscale packages have advanced thermal and electrical characteristics. These advanced characteristics are necessary to maximize the performance of high frequency semiconductor chips used in sophisticated
end-products. The chipscale packages are slightly larger than a semiconductor chip, which allow reduced package inductance and enhanced electrical performance. Chipscale packages are often designed for semiconductors that require dense ball arrays
in very small package sizes, such as wireless telephones, personal digital assistants, video cameras, digital cameras and pagers. We currently offer fpBGA, LPCC and TAPP chipscale packages.

fpBGA. Fine Pitch BGA, or fpBGA, is one of the most widely used semiconductor packages in the industry and is found in a wide range of device
applications such as memory, application specific integrated circuits, or ASICs, logic, analog, RF devices and small programmable logic devices or PLDs. The end user applications for this package type are primarily cell phones and pagers, notebook
computers, personal digital assistants, or PDAs, or other wireless/portable personal computing systems. fpBGA packages offer a cost-effective packaging option for integrated circuit devices for a wide range of I/O counts while meeting the
markets increasing requirements for small, light and thin package configurations.

LPCC. The Leadless Plastic Chip Carrier, or
LPCC, is our patented version of the industry standard quad flat pack, no lead device known widely as the QFN plastic package. The QFN is a new class of advanced packaging that was largely developed internally by ASAT in calendar 1998.
Our LPCCs are designed for use in mobile communications, particularly cell phones, analog to digital and digital to analog circuits, and the power management circuits widely used in consumer electronics. These packages are based on a new technology
which relies on conventional leadframes as the base material. Unlike traditional metal leadframe packages, however, the leads in LPCC packages do not protrude from the package but are flat with the package surface. Additionally, LPCCs are chipscale
packages with high density leads with an improved thermal and electrical performance that is similar to fpBGAs, a combination that enhances board level performance. LPCCs can be manufactured using conventional tooling and therefore do not require
large scale capital expenditures for manufacture.

TAPP.Our Thin Array Plastic Packaging, or TAPP, is another of our
proprietary product technology packages which provides metallic contacts to the circuit board allowing high density circuitry in a small footprint package. We believe TAPP is the next generation of leadframe based chipscale packaging
technology which will allow semiconductors to operate at higher frequencies with greater thermal performance in smaller and thinner packages at a relatively lower cost compared to industry standard QFN packaging technologies.

Non-CSP Laminate Packages

Non-CSP laminate packages
are characterized by a semiconductor chip mounted on an organic substrate, typically a printed circuit board substrate. After the electrical bonding pads on the semiconductor chip have been wire bonded to the corresponding electrical leads on or
within the substrate, the upper surface of the substrate, including the semiconductor chip, is encapsulated with a polymer resin-based material. Non-CSP laminate package technology is used in high performance applications, including hand held
consumer products, enterprise networks, wireless products, high speed telecommunications switching stations and routers, computer printer and servers, internet applications, desktop and notebook personal computers and global positioning systems.

PBGA. Plastic BGA, or PBGA, is a popular non-CSP laminate package technology which was first developed to accommodate the
increasingly high lead counts required for advanced semiconductors and to provide an increased circuit density per unit area. In a PBGA package, the semiconductor chip is placed on top of a laminate (plastic or tape) substrate rather than directly
onto a metallic leadframe. The chip is connected to the circuitry in the substrate by a series of fine gold wires that are bonded to the top of the substrate near its edges. On the bottom of the substrate is a grid of solder balls that connect the
packaged device to a printed circuit board.



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TBGA. Our patented Tape BGA, or TBGA, packages offer superior thermal management and enhanced
electrical performance using a flexible circuit substrate bonded to a copper plate. The TBGA also allows for a higher routing density than our conventional PBGA packages. These packages are designed for use in complex semiconductor products such as
high speed test systems, wireless communications systems and networking systems.

Flip Chip Packages. Like conventional PBGA
products, flip chip packages generally use solder balls to connect to the printed circuit board. Within the flip chip package, however, the chip is connected to these balls by the use of an array of solder bumps on the active surface of the chip as
opposed to the traditional method used in PBGA of wire bonding the chip to the interconnects to the solder balls. To attach the chip to the electrical interconnects imbedded in the laminate substrate, the chip is flipped over so that the active
surface and the solder bumps align directly with the corresponding electrical bonding pads on the substrate. This method of attachment further improves thermal and electrical performance of the chip and enables a higher density of interconnections
which facilitates smaller packages. Flip chip technology can be used in a wide array of applications ranging from consumer products to highly sophisticated ASICs, digital signal processors and memory packages. Flip chip technology is considered by
many in the semiconductor industry to be the next generation of BGA packaging technology.

Non-CSP Leadframe Packages

Non-CSP leadframe packages are characterized by a semiconductor chip mounted on a metallic leadframe which together are encapsulated in a plastic mold
compound with metal leads surrounding the perimeter of the package. As a first step in the manufacturing process, the chip is attached to a leadframe, which is usually performed for multiple devices on a single multi-site carrier used in
assembly. The electrical contacts for the active elements, ground and power leads in the chip are then wire bonded to corresponding electrical leads on the leadframe. The chip is then encapsulated in a plastic package, with the ends of the leadframe
protruding from the edges of the package to enable electrical connection to a printed circuit board. This packaging type has evolved from packages designed to be plugged into the printed circuit board by inserting the leads into holes on the printed
circuit board to the more modern surface mount design, in which the leads or pins are soldered directly to the surface of the printed circuit board. Specific packaging customization and evolutionary improvements are continually being engineered to
improve electrical and thermal performance, reduce the size of packages and enable multi-chip package assembly capability.

Non-CSP
leadframe packages are used in almost every electronics application, including automobiles, household appliances, desktop and notebook computers and telecommunications products. We offer several types of non-CSP leadframe packages to satisfy the
variations in our customers end-products such as our Quad Flat Package, or QFP. We also provide additional non-CSP leadframe packages, such as EDQUAD, which enable advanced thermal characteristics. These advanced characteristics are necessary
to maximize the performance of high-power semiconductor chips used in sophisticated end-products.

EDQUAD. Our patented Enhanced
Dissipation QUAD, or EDQUAD, technology for non-CSP leaded products offers what we believe to be the superior thermal performance in conventional leaded plastic packages. This group of packages is designed specifically for high performance
applications where large semiconductor die with a low to medium high number of inputs and outputs are required to be packaged in standard plastic leaded packages.

Test Services

We provide a wide array of test services for digital logic, analog and mixed signal products and have
recently expanded our RF test capabilities. Testing is the final stage in the semiconductor production process and involves using sophisticated test equipment and test programs to electronically test different operating specifications of the
encapsulated semiconductor device. These test specifications included electrical functionality, and conformance to voltage, current and timing parameters. We are able to test semiconductor



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chips upon initial delivery from the foundry in the wafer form as well as after they are packaged. We have engineers and test personnel located globally who
work closely with customers at their facilities to develop test programs and provide test services.

Digital Test. We test a variety
of digital semiconductors, including high performance devices used in computers, consumer applications, and communication systems. Specific digital semiconductors tested include field-programmable-arrays (FPGA), microcontrollers, high-speed digital
interface devices, digital ASICs, and custom digital designs.

Analog. We test a variety of analog devices applicable to the analog
device sector, including power devices, amplifiers, and switches. The majority of these devices are used in consumer applications such as mobile phones, PDAs, and mobile computing devices.

Mixed-Signal Test. We test a variety of mixed-signal semiconductors, including those used in communication applications such as network routers
and switches; broadband products such as internet and set-top boxes; mobile communication products such as cell phones and wireless networks; and other consumer electronic products. Mixed-signal testing involves testing a single device which has
both analog and digital functions designed within its block structures.

RF Test. We specialize in testing RF semiconductors,
including those found in cell phones, wireless applications such as Bluetooth, and wireless LAN products. We believe our cost-effective RF test technology, combined with our test engineering and production expertise, provides a competitive advantage
for us.

Geographic Markets

We believe
we operate in a single business segment comprising the assembly and test services of integrated circuits to customers in the semiconductor industry. Our sales are generated from the following geographical locations representing the geographical
areas from which sales invoices were issued for the years indicated:



|                                  |  |                             |          |   |      |   |          |      |  |   |          |  
|--------------------------------- |  | --------------------------- | -------- | - | ---- | - | -------- | ---- |  | - | -------- | -
|                                  |  | Fiscal Year Ended April 30, |         
|                                  |  | 2006                        |          |   | 2007 |   |          | 2008 | 
|                                  |  | (In thousands of dollars)   |         
|Hong Kong                         |  | $                           | 177,207  |   |      | $ | 161,516  |      |  | $ | 115,025  |  
|United States                     |  |                             | 60,481   |   |      |   | 37,915   |      |  |   |         |  
|China (excluding HK)              |  |                             | 74,278   |   |      |   | 379,631  |      |  |   | 279,227  |  
|Transfer between geographic areas |  |                             | (129,851 | ) |      |   | (414,209 | )    |  |   | (238,291 | )
|                                  |  |                             |          |   |      |   |          |      |  |   |          |  
|Total sales                       |  | $                           | 182,115  |   |      | $ | 164,853  |      |  | $ | 155,961  |  
|                                  |  |                             |          |   |      |   |          |      |  |   |          |  

Intercompany sales between geographic areas were recorded at cost plus a mark-up. Such transfers,
including unrealized profits, are eliminated on consolidation.

Our customers are primarily United States, Asian and European multinational
companies. We ship completed packages at the direction of our customers to various destinations. The following table provides a breakdown of the percentage of sales by geographic destination:



|              |  |                             |   |  |       |   |  |       |  
|------------- |  | --------------------------- | - |  | ----- | - |  | ----- | -
|              |  | Fiscal Year Ended April 30, |  
|              |  | 2006                        |   |  | 2007  |   |  | 2008  |  
|Asia(a)       |  | 63.0                        | % |  | 70.6  | % |  | 69.7  | %
|United States |  | 33.2                        | % |  | 23.0  | % |  | 22.8  | %
|Hong Kong     |  | 2.3                         | % |  | 3.4   | % |  | 2.4   | %
|Europe        |  | 1.5                         | % |  | 3.0   | % |  | 5.1   | %
|              |  |                             |   |  |       |   |  |       |  
|              |  | 100.0                       | % |  | 100.0 | % |  | 100.0 | %
|              |  |                             |   |  |       |   |  |       |  



|(a) | For our sales by geographic destination, Asia mainly represents Singapore, Taiwan, Japan, Malaysia, China (excluding
Hong Kong), Philippines and Korea.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------



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The geographical distribution of our identifiable assets are summarized as follows:



|              |  |                             |         |      |   |         |  |   |        
|------------- |  | --------------------------- | ------- | ---- | - | ------- |  | - | -------
|              |  | Fiscal Year Ended April 30,
|              |  | 2006                        |         | 2007 |   | 2008   
|Hong Kong     |  | $                           | 93,564  |      | $ | 71,404  |  | $ | 14,574 
|China         |  |                             | 78,094  |      |   | 54,209  |  |   | 96,701 
|United States |  |                             | 9,635   |      |   | 9,296   |  |   | 6,983  
|Asia(b)       |  |                             | 117     |      |   | 159     |  |   | 312    
|Germany       |  |                             | 51      |      |   | 69      |  |   | 73     
|              |  |                             |         |      |   |         |  |   |        
|              |  | $                           | 181,461 |      | $ | 135,137 |  | $ | 118,643
|              |  |                             |         |      |   |         |  |   |        



|(b) | For our identifiable assets, Asia represents Singapore and Korea.
|--- | -----------------------------------------------------------------

Marketing, Sales, Distribution and Customer Support

We sell our assembly and test services to our customers and support them through a network of international offices. To better serve our customers, our offices are located near our largest customers or near a concentration of several of our
customers. Our offices and representatives are located in California, Texas and Massachusetts in the United States, and in Hong Kong, Singapore, Korea, and Germany. We have reorganized our customer service, general and administrative presence in
connection with the completion of the move of our manufacturing operations to Dongguan, China. We offer global drop shipment services, whereby we deliver assembled and tested semiconductors to destinations in any part of the world as instructed by
our customers, including to their end-customers.

We have dedicated account managers, application engineers and customer service
representatives to work as teams in servicing customers and developing new business. Each of these teams focuses on specific customers and/or geographic regions. As part of this emphasis on developing business, these teams:



| |  |  | jointly work with customers on design and technology advancement;
| | - |  | -----------------------------------------------------------------



| |  |  | develop and implement focused strategies for broadening our customer base;
| | - |  | --------------------------------------------------------------------------



| |  |  | proactively address customer next generation silicon and end customer product applications; and
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | maintain close communication with production and provide timely feedback to our customers.
| | - |  | ------------------------------------------------------------------------------------------

Our marketing efforts focus on creating a brand awareness and familiarity with ASAT and our advanced assembly and test services as well as technologies
such as LPCC and TAPP, which offer customer diversification opportunities for ASAT. We enhance our marketing efforts by holding technical seminars for packaging engineers, making technical presentations to our customers end customers,
and publishing research articles in trade journals and periodicals. We will continue to evaluate what is most effective for customer support and will allocate resources to identified areas of importance so that optimal coverage is provided to ensure
that we have the best exposure to new opportunities that may be presented to us.

Customers

We provide semiconductor assembly and test services to over 90 customers worldwide. We design, assemble and test semiconductor packages for
end-applications in a variety of industries. During the years ended April 30, 2008, 2007 and 2006, approximately 48%, 61% and 52%, respectively, of our total sales were from assembling and testing of semiconductors used in communications
application, approximately 21%, 7% and 13%, respectively, of our total sales in each period were from semiconductors used in personal computers/computing applications, while the remainder of our total sales were from semiconductors used in consumer
and



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automotive/industrial applications. The table below sets forth information regarding a number of our customers that are important to our business in terms of
sales volume, strategic relationships, advanced technology demand or potential growth:



|                             |  |                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                          
|---------------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Industry                     |  | Customers                                                                                                                                                                                                                                       |  | Applications                                                                                                                                                                             
|Wireless Communication       |  | Broadcom Corporation, Maxim Integrated Products, Inc, Murata Manufacturing Co. Ltd., SiTel Semiconductor BV and Texas Instruments Incorporated                                                                                                  |  | Bluetooth; Wi-Fi; wireless handsets; wireless LAN; RF                                                                                                                                    
|                             |  |                                                                                                                                                                                                                                                
|Wired Communication          |  | Applied Micro Circuits Corporation, Agilent Technologies, Inc., Analog Devices, Inc., Broadcom Corporation, NXP Semiconductors Taiwan Ltd (formerly known as Philips Electronics
N.V.), PMC-Sierra, Inc and Vitesse Semiconductor Corporation |  | Internet applications; networking; signal processing; telecom; routers                                                                                                                   
|                             |  |                                                                                                                                                                                                                                                
|Consumer                     |  | Actel Corporation, Analog Devices, Inc., Broadcom Corporation, Maxim Integrated Products, Inc, Samsung Electronics Ltd., SigmaTel Inc., SiTel Semiconductor BV and STMicroelectronics
N.V.                                                      |  | CD and DVD players; camcorders; digital cameras; home audio and video entertainment; PDAs; Digital Audio Player; set-top boxes for direct satellite broadcast; video capture
applications
|                             |  |                                                                                                                                                                                                                                                
|Automotive/Industrial        |  | Analog Devices, Inc., Agilent Technologies, Inc., Samsung Electronics Ltd., STMicroelectronics N.V. and Texas Instruments Incorporated                                                                                                          |  | Automotive applications; ATE tester; entertainment, global positioning systems; instrumentation; power management, power systems; telematics                                             
|                             |  |                                                                                                                                                                                                                                                
|Personal Computers/Computing |  | Anadigics, Inc., Agilent Technologies, Inc., Analog Devices, Inc., Vimicro Corp. and Upek Pte Ltd.                                                                                                                                              |  | Desktop and mobile PCs; PC servers; web-camera; power management systems; printers; optical storage                                                                                      

Many of our customers are leading telecommunications and networking device manufacturers, whose
products require sophisticated semiconductor capabilities. Our success in becoming a provider of chipscale packaging technologies is due in significant part to our strong relationships with these customers and our dedication to working closely with
them to develop innovative solutions for their increasingly complex semiconductor performance requirements.

We plan on diversifying our
customer base by seeking new customers in the wireless and personal computers/computing industries, particularly those with advanced packaging needs across multiple market sectors, and by leveraging existing customer relationships to sell to a
broader array of market sectors. In addition, we believe that there is a discernible long-term trend towards semiconductor companies outsourcing their assembly and test services. We plan to continue to capitalize on this trend in implementing our
diversification strategy.

Operations

As part of our corporate restructuring program, we moved all of our Hong Kong manufacturing operations to Dongguan, China in order to significantly reduce our costs and access the high-growth semiconductor market



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in China. The state-of-the-art Dongguan facility comprises over 560,000 square feet area and is one of the largest and most advanced semiconductor
subcontract assembly and test manufacturing facilities in China. Strategically located in Dongguan, China, about 90 minutes from Hong Kong, the facility offers higher productivity, improved efficiency, and close proximity to our key end users.

We have invested in the latest generation ERP systems, which deliver better real-time visibility and control of our manufacturing process
across different manufacturing operations. In addition, we offer production lines for the most advanced packaging technologies, including leading quad flat no-lead (QFN) technology with its Leadless Plastic Chip Carrier (LPCC), fine pitch BGA, Flip
Chip, Thin Array Plastic Package (TAPP), and enhanced leaded packages.

The move has resulted in benefits from reduced manufacturing
costs in China and a highly motivated and cost efficient workforce. We believe that the facilities in Dongguan, China will serve as a gateway into the rapidly growing China market.

We believe that total quality management is a key element of our semiconductor assembly operations, and our 480,000 square foot factory facilities in
Dongguan, China are ISO 9001, ISO 14001, TS 16949, QCO 80000 and HSPM certified. All are worldwide manufacturing quality certification programs for product design and industrial quality that are administered by an independent standards organization.

Management Information Systems

We
have purchased and have installed SAPs enterprise resource planning software and Camstars manufacturing tracking and execution system software to support our customer service and cost containment efforts. The SAP software system is
designed to provide resource planning in areas such as customer service, sales and distribution, purchasing and logistics and financial controls. The Camstar manufacturing system is designed to manage, monitor and synchronize manufacturing
activities and integrate them with core business processes. We believe the coordination of operations between our Hong Kong, Dongguan, China and worldwide sales offices and our customers has been enhanced by the implementation of the SAP and Camstar
manufacturing information systems, although we continue to experience implementation and integration challenges with the SAP and Camstar systems. While installation of the SAP and Camstar manufacturing information systems has been completed, we
continue to expend resources to implement and integrate these systems into our operations.

Materials and Suppliers

The principal materials used in our assembly process are polymer substrates, leadframes, gold wire and plastic molding compounds. We work closely with our
primary materials suppliers to ensure that materials are available and delivered on time. In the ordinary course of business, we purchase most of our leadframes from QPL and our substrates from several suppliers in Taiwan, Japan and Korea. We
purchase our wire bonders and test equipment from major international manufacturers. We periodically purchase equipment through several suppliers to meet our assembly and test requirements. We work closely with major suppliers to ensure that
equipment is delivered on time and that the equipment meets our stringent performance specifications.

Competition

We believe the principal elements of competition in the overall independent semiconductor packaging market include technical competence, sophistication of
design services, quality, time-to-market, array of assembly services, production yields, customer service and price. In the area of test services, we compete on the basis of quality, cycle time, pricing, location, available capacity, engineering
capability, technical competence, customer service and flexibility. We believe that competition in the chipscale packaging and test industries centers primarily on service, technology, price and expertise.



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Our customers typically rely on at least two independent assembly and test providers. Semiconductor
assembly and test providers must pass a lengthy and rigorous qualification process that typically can take from three to six months. In addition, customers incur substantial costs in qualifying each new semiconductor assembler. Due to these factors
and the heightened time-to- market demands of semiconductor end-users, semiconductor manufacturers incur significant costs in switching assembly and test providers and thus are often reluctant to change or add their providers.

The semiconductor assembly and test industry is highly fragmented and our principal competitors include Advanced Semiconductor Engineering, Inc., Amkor,
Carsem (M) Sdn. Bhd., Siliconware Precision Industries Co., Ltd. and STATS ChipPAC Ltd. We also compete indirectly with the in-house assembly and test service resources of many of our largest customers, the IDMs.

We believe that our primary competitive advantage is our focus on identifying and meeting our customers needs in the most timely and efficient
manner. We have a reputation in the industry for being able to quickly turnaround ad hoc requests. This is a distinct competitive advantage given the inherently volatile nature of the industry. As well, we have a rich history of providing advance
technology with our leading package families. Also, we believe that our manufacturing facilities in Dongguan, China are a distinct advantage as competitive pricing will become an increasingly important factor in the ability to attract new business.
Furthermore, our process engineering teams continually monitor and seek to improve the existing manufacturing processes in order to achieve greater cost savings and improved cycle times.

Intellectual Property

We have obtained or applied for patents in the United States and certain
international jurisdictions relating to a number of our advanced semiconductor package designs and assembly manufacturing processes. As of April 30, 2008, we had 61 issued United States patents. Among those issued United States patents are
several key patents for our LPCC and the TAPP product families. We were issued patents on LPCC product types and TAPP product types in 2001, 2002 and 2003, respectively. Our primary trademark is ASAT and the ASAT logo and
that trademark is registered in the United States and in several international locations where we principally do business. On November 14, 2003, we announced that we had entered into a comprehensive patent cross-license agreement with Amkor for
our respective QFN semiconductor design and manufacturing process technology patents. The cross-license agreement includes Amkors and our currently issued QFN patents, as well as future QFN patents that may be granted to either party during
the term of the license. Amkors QFN product family includes the proprietary MicroLeadFrame, or MLF products, and our QFN product family includes our proprietary LPCC product family. On April 6, 2005, we announced that we entered into a
multi-year cross-licensing agreement with Amkor under which we will provide Amkor with a license for our TAPP semiconductor package technology, and Amkor will provide us with a license for its Flip Chip semiconductor package technology. On
May 17, 2005, we also entered into a multi-year cross-licensing agreement with LSI Logic Corporation (LSI) under which LSI will provide us a license to use its Flip Chip semiconductor package assembly technology.

We believe that our ability to succeed depends in large part on the technological skills of our engineering and manufacturing employees and in their
ability to continue to innovate and improve our technologies. We encourage our employees to continue to invent and innovate so as to maintain our competitiveness in the international marketplace.

Seasonality

Our current operations are not generally
subject to significant seasonal fluctuations, although we typically experience a slight downturn in the period from the middle of the first fiscal quarter through the beginning of the second fiscal quarter of each year (approximately June through
August). We do not believe that seasonality has had a material effect on our business, financial condition or results of operation. However, we expect that as we



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conduct more of our business in China, we will experience seasonality, including a decline in business activity during the Lunar New Year and Chinas
National Day, although it is difficult for us to evaluate the degree to which seasonality may affect our business in future periods.

Legal Proceedings

QPL entered into a patent cross license agreement with Motorola on October 1, 1993 (the Immunity Agreement). Under the
terms of the Immunity Agreement, QPL had been obligated to pay quarterly royalties to Motorola on a per solder ball pad basis for all BGA Packages, as defined therein. QPL, through its then subsidiary ASAT Limited, paid royalties on
certain products and not others based on its understanding of the obligations under the Immunity Agreement. When QPL assigned certain semiconductor assets to the Company in 1999, ASAT Limited continued to make payments to Motorola, even though the
Immunity Agreement was not assigned to the Company or any of its subsidiaries.

Motorola approached the Company in December 2002 claiming
that the Company had assumed QPLs obligations under the Immunity Agreement. It commissioned a third-party auditor to audit the royalty payments the Company had made for the three-year period ended October 31, 2002. Based on the results of
that audit, Motorola asserted that QPL and the Company collectively owed additional royalties of $8,000,000 along with interest under either the Immunity Agreement or implied in fact contract that mirrors the terms of the Immunity
Agreement. The bulk of the amount claimed stemmed from Motorolas contention that the Company and QPL owe royalties for the manufacture of fpBGA products, a contention that both entities denied.

On April 9, 2003, the Company and its subsidiary, ASAT, Inc., as co-plaintiffs initiated a lawsuit against Motorola in the United States District
Court for the Northern District of California (the Court) by filing a complaint for Declaratory Judgment seeking a declaration from the court that neither plaintiff owed Motorola any royalty payments under the Immunity Agreement or any
other agreement. Motorola counter-claimed for breach of contract against the Company, ASAT, Inc., ASAT Limited and QPL, seeking $8,000,000 plus interest accruing at the rate of 1% per month on the alleged unpaid royalties. The substantial
majority of Motorolas demand was directed to the Company and its subsidiaries.

In July 2005, the Company entered into a formal
settlement agreement and mutual release with Motorola and Freescale, the former semiconductor products division of Motorola, to fully and finally compromise, settle and discharge the claims, controversies, demands and disputes between the parties.
The formal written settlement agreement was executed in July 2005 and was filed with the Court on July 18, 2005. Under the settlement agreement and mutual release, we agreed to pay Freescale a total of $2.0 million in cash. We also agreed to
provide Freescale with a rebate of 20% on all future products sales and services invoiced by us to Freescale until the aggregate amount of the rebate provided to Freescale by us totals $1.75 million. This 20% rebate shall not expire until the
maximum total rebate of $1.75 million is paid back to Freescale. We also issued a 5-year warrant to Freescale for $1.75 million to purchase 10,937,500 ordinary shares, which is the equivalent of 729,166 ADSs, initially exercisable at a price of
$0.16 per ordinary share (equivalent to $2.40 per ADS).

On April 10, 2008, ASAT China received a notice from the Peoples
Intermediate Court of the City of Dongguan, Guangdong, China concerning a lawsuit raised by Wellmean alleging that ASAT China breached its contract with Wellmean by failing to pay the final installment of the renovation fees of RMB7.7 million
(approximately $1.1 million) in connection with the construction of our Phase II manufacturing facility in Dongguan, China. Whereas ASAT China disputes Wellmean has not fully performed obligations under the contract and accordingly, has not settled
the remaining balance of the renovation fee of RMB7.7 million. On July 4, 2008, Wellmean and ASAT China entered into a settlement agreement and ASAT China agreed to pay a consideration of approximately RMB7.7 million to settle this court
action. Subsequently, Wellmean withdrew its claim against ASAT China on July 9, 2008.



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Environmental Matters

Semiconductor assembly and test services produce a small amount of chemical waste. Since we had an assembly facility in Hong Kong prior to its move to Dongguan, China, disposal and storage of chemical waste from our
assembly and test services were subject to Hong Kong laws and government regulations. These laws impose controls on our air and water discharges, on the storage, handling, discharge and disposal of chemicals, and on employee exposure to hazardous
substances. For instance, a waste disposal facility is required under Hong Kong law to be installed before a license from the government may be granted for disposal of chemical waste. We hold a valid chemical waste disposal license granted by the
Hong Kong government authority which expired on October 30, 2007, however, this license was not renewed since it was not used after our assembly and test services were moved to Dongguan, China.

Our operations in China are required to comply with various Chinese environmental laws and regulations administered by the central and local government
environmental protection bureaus. We are also subject to the environmental rules introduced by the local Chinese governments in Dongguan, China. These laws impose controls on our air and water discharges, on the storage, handling, discharge and
disposal of chemicals, and on employee exposure to hazardous substances. If these laws were to change, they could require us to incur costs to maintain compliance and could impose liability to remedy the effects of hazardous substance contamination.
Stricter enforcement of existing laws, the adoption of new laws or regulations or our failure to comply with these laws or regulations could cause us to incur material liabilities and require us to incur additional expense, curtail our operations
and restrict our ability to grow. The Chinese national and local environmental laws and regulations impose fees for the discharge of waste substances above prescribed levels, require the payment of fines for serious violations and provide that the
Chinese national and local governments may at their own discretion close or suspend any facility which fails to comply with orders requiring it to cease or cure operations causing environmental damage. Under the terms of our lease agreement with
Changshi, they have agreed to assist us in procuring the necessary environmental licenses and permits in Dongguan, China, including a Certificate of Waste Substance Discharge. Furthermore, in accordance with the Administration Measures of the
Certificate of Waste Substances Discharge of Guangdong Province, the Certificate of Waste Substances Discharge must be subject to the annual review by the local authority of environmental protection. Our Phase I facility in Dongguan, China received
an Interim Certificate of Waste Substance Discharge for its probationary production on November 10, 2003. After the Dongguan facility became fully operational, the local authority of environmental protection conducted an assessment on the waste
substances discharge facilities and a formal Certificate of Waste Substance Discharge was issued in December 2004 for our Phase I facility for a term of one year and six months, which expired in June 2006. Upon completion of our Phase II facility
and migration of the entire manufacturing operations to Dongguan, China, we have obtained the same formal Certificate of Waste Substance Discharge, which is renewable annually, for the collective of Phase I and II facilities.



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ORGANIZATIONAL STRUCTURE

As of April 30, 2008, ASAT Holdings had the following direct or indirect wholly-owned subsidiaries:



|                                      |  |                            |  |                                   |   |  |                                                                   
|------------------------------------- |  | -------------------------- |  | --------------------------------- | - |  | ------------------------------------------------------------------
|Name                                  |  | Place of Incorporation     |  | Percentage ofBeneficial Ownership |   |  | Principal Activities                                              
|ASAT Limited(1)                       |  | Hong Kong                  |  | 100                               | % |  | Sales, marketing and investment holding                           
|                                      |  |                            | 
|Timerson Limited(2)                   |  | Hong Kong                  |  | 100                               | % |  | Dormant                                                           
|                                      |  |                            | 
|ASAT, Inc.                            |  | California, United States  |  | 100                               | % |  | Marketing and customer services                                   
|                                      |  |                            | 
|ASAT (Finance) LLC                    |  | Delaware, United States    |  | 100                               | % |  | Dormant                                                           
|                                      |  |                            | 
|ASAT (Cayman) Limited                 |  | Cayman Islands             |  | 100                               | % |  | Investment holding                                                
|                                      |  |                            | 
|ASAT (S) Pte. Ltd.                    |  | Singapore                  |  | 100                               | % |  | Marketing and customer services                                   
|                                      |  |                            | 
|ASAT Korea Limited                    |  | Korea                      |  | 100                               | % |  | Marketing and customer services                                   
|                                      |  |                            | 
|ASAT GmbH                             |  | Germany                    |  | 100                               | % |  | Marketing and customer services                                   
|                                      |  |                            | 
|ASAT Semiconductor (Dongguan) Limited |  | Peoples Republic of China |  | 100                               | % |  | Sales, assembly and test services for packaged integrated circuits
|                                      |  |                            | 
|New ASAT (Finance) Limited            |  | Cayman Islands             |  | 100                               | % |  | Financial services                                                
|                                      |  |                            | 
|Newhaven Holdings Limited(3)          |  | British Virgin Islands     |  | 100                               | % |  | Dormant                                                           
|                                      |  |                            | 
|RBR Trading Holding (Curaçao) N.V.(3) |  | Netherlands Antilles       |  | 100                               | % |  | Dormant                                                           
|                                      |  |                            | 
|R.B.R. Trading Holding B.V.(3)        |  | Netherlands                |  | 100                               | % |  | Dormant                                                           
|                                      |  |                            | 
|ASAT S.A.(3)                          |  | France                     |  | 99.9                              | % |  | None                                                              



|(1) | With effect from July 31, 2006, the entire assembly and test operations of ASAT Limited were transferred to ASAT
Semiconductor (Dongguan) Limited and ASAT Limited became the sales organization and corporate head office of the ASAT group.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | With effect from September 30, 2006, the entire assembly and test operations of Timerson Limited were transferred
to ASAT Semiconductor (Dongguan) Limited and ASAT Limited and Timerson Limited became dormant.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | In connection with the exercise of our option to purchase ASAT S.A. from QPL in December 2000, which was effective in
January 2001, we purchased from Newhaven, RBR Antilles and R.B.R. Netherlands. R.B.R. Netherlands owns approximately 99.9% of ASAT S.A. As ASAT S.A. has been under court administration since November 20, 2001, we no longer consolidate Newhaven,
RBR Antilles, R.B.R. Netherlands and ASAT S.A.s financial results with our consolidated financial statements.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ASAT
Holdings is a Cayman Islands holding company and does not have any material operations or assets other than its beneficial ownership of the entire issued share capital of ASAT Limited and Newhaven Holdings Limited. The consolidated financial
statements of ASAT Holdings include all of the above listed subsidiaries except for Newhaven, RBR Antilles, R.B.R. Netherlands and ASAT S.A.



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The following chart illustrates our corporate structure as of April 30, 2008:

LOGO



|(1) | On July 14, 2000, we completed our offering of ADSs to the public. We sold 6,666,666 ADSs, representing 100,000,000
ordinary shares of ASAT Holdings in our offering of ADSs to the public. Public shareholders held approximately 17.07% of the ownership interest in ASAT Holdings as of April 30, 2008.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | QPL holds an approximate 42.88% ownership interest in ASAT Holdings Limited through its wholly owned subsidiaries, The
Industrial Investment Company Limited, QPL (U.S.) Inc. and Everwarm Limited, which hold approximately 35.35%, 2.58% and 4.95% ownership interests in ASAT Holdings Limited as of April 30, 2008, respectively.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Several private equity funds separately managed by or affiliated with JPMP and Olympus Capital Holdings Asia
collectively owned approximately 40.06% of the outstanding ordinary shares of ASAT Holdings Limited as of April 30, 2008.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | Timerson is a nominee shareholder of ASAT Limited, holding one share in ASAT Limited in trust for ASAT Holdings Limited.
|--- | ------------------------------------------------------------------------------------------------------------------------



|(5) | ASAT (Cayman) Limited is a nominee shareholder of Timerson Limited, holding one share in Timerson Limited in trust for
ASAT Limited.
|--- | ------------------------------------------------------------------------------------------------------------------------------------



|(6) | In connection with the exercise of our option to purchase ASAT S.A. from QPL in December 2000, which was effective in
January 2001, we purchased from Newhaven, RBR Antilles and R.B.R. Netherlands. R.B.R. Netherlands owns approximately 99.9% of ASAT S.A. As ASAT S.A. has been under court administration since November 20, 2001, we no longer consolidate Newhaven,
RBR Antilles, R.B.R. Netherlands and ASAT S.A.s financial results with our consolidated financial statements.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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LEASES

In connection with the establishment of our Dongguan facility, the company entered into the following leases.

In August 2002 we entered into a lease agreement pursuant to which Changshi constructed an 180,000 square foot factory facility and leased the facility to us beginning in September 2003 for a term of 15 years. We are obligated to pay
monthly rental payments of HK$1.4 million (approximately $179 thousand at an assumed exchange rate of HK$7.80 per $1.00) for the first six years of the rental term, HK$350 thousand (approximately $45 thousand at an assumed exchange rate of HK$7.80
per $1.00) for the seventh to eleventh years and HK$385 thousand (approximately $49 thousand at an assumed exchange rate of HK$7.80 per $1.00) for the twelfth to fifteenth years. From October 30, 2004 and during the term of the lease, we have
an option and a right of first refusal to purchase the facility and the related land-use right at prices fixed in a predetermined schedule or, subsequent to October 2009, at prices based on the then fair market value of the factory facilities and
related land use right. Additionally, under a management services agreement, we were obligated to pay Changshi a monthly management service fee of HK$506 thousand (approximately $65 thousand at an assumed exchange rate of HK$7.80 per $1.00), which
amount includes a land use rights fee, foreign exchange remittance fees and certain administrative and management charges, commencing September 2003. Over the six years term of this agreement, Changshi has agreed to support the operation of the
facility by nominating employees for staffing of the facility, maintaining the facility and its systems in good repair and operating condition (at our cost) and assisting us with handling Chinese governmental and regulatory matters.

In May 2004, we entered into another lease agreement with Changshi to build a 300,000 square foot Phase II facility immediately adjacent to our Phase I
facility. The Phase II facility lease also included the participation of the Changshi subsidiary that holds the subject land use right, Dongguan Changan ASAT Semiconductor ASAT Assembly and Test Factory. Under the terms of the lease agreement, we
lease the Phase II factory from Changshi for a period of 15 years starting from August 2005. We are obligated to pay monthly payments of HK$1.4 million (approximately $179 thousand at an assumed exchange rate of HK$7.80 per $1.00) for the first six
years of rental term and HK$700 thousand (approximately $90 thousand at an assumed exchange rate of HK$7.80 per $1.00) per month for the seventh to fifteenth years of the lease term. From October 31, 2008 and during the term of the lease, we
have an option and a right of first refusal to purchase the facility and the related land-use right of the land at prices fixed in a predetermined schedule starting during the period from October 2008 to July 2011, and thereafter at prices based on
the then fair market value of the facility and related land-use right. Additionally, under a management services agreement with a six-year term, we are obligated to pay Changshi a monthly management service fee of approximately HK$639 thousand
(approximately $82 thousand at an assumed exchange rate of HK$7.80 per $1.00), starting from August 2005, and Changshi has agreed to support the operation of the facility by nominating employees for staffing of the facility, maintaining the facility
and its systems in good repair an operating condition (at our cost) and assisting us with handling Chinese governmental and regulatory matters.

Further to completing the transfer of the entire manufacturing operations to ASAT China, on June 30, 2008, the Company terminated the original lease agreements and management service agreements for both Phase I and Phase II facilities,
which were entered into between Timerson and Changshi. At the same time, ASAT China entered into the new lease agreements with Changshi for the remaining terms of the respective leases. Under the new lease agreements, the rental and service fees to
be paid will be denominated in Renminbi and the monthly amount payable is based on the predetermined schedule. The expiry of the lease terms for Phase I and Phase II factory premises remains August 31, 2018 and July 31, 2020, respectively,
and ASAT China also has the option and right of first refusal to purchase the facilities and the related land-use right of the land at prices fixed as stated in the predetermined schedule of the respective original lease agreements.



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PROPERTY, PLANT AND EQUIPMENT

Our headquarters and administrative offices operations are located in a leased 11,200 square foot facility in the Tsuen Wan district of Hong Kong. All
assembly operations in this facility have ceased and been moved to our Dongguan, China facilities in July 2006. ASAT HK currently leases our Hong Kong office premises under a lease with a two-year term expiring on August 31, 2010.

We have completed the move of our manufacturing operations and all operational equipment to Dongguan, China. This move occurred in two phases. In
Phase I of this transition of our operations, Changshi completed the construction and finish of the interior and fixtures of a modern facility to our specifications in Dongguan, China in August 2003. The Phase I facility covers approximately a total
of 180,000 square feet of office, storage, utilities and manufacturing space and has an adjacent six story 63,000 square foot dormitory for housing factory workers. Both Phase I buildings are constructed on a gated 525,000 square foot lot, in a
high-tech industrial park. In the July 2004 quarter, construction of a 300,000 square foot Phase II facility immediately adjacent to the Phase I facility commenced. This facility houses the balance of our former Hong Kong manufacturing operations
plus provides space for future expansion of our assembly and test operations. Construction of the Phase II facility and finish of its interior and fixtures is completed. Phase II facility is now in use and provides approximately 300,000 square feet
of usable floor space.

Our capital expenditures incurred in connection with the move of our manufacturing operations to Dongguan, China
were generally funded out of our cash flow from operations and with the proceeds of financing activities, including the financing from two of our principal shareholder groups. As of April 30, 2008, we had commitments for capital expenditures of
approximately $0.2 million. For more detail on the Dongguan, China facilities and our plans with respect to these facilities, see Item 3Key InformationRisk Factors and Item 5Operations and Financial Review
and ProspectsOperating Results. We believe that our current facilities are in good condition and adequate to meet the requirements of our present operations.



|ITEM | 4A.    UNRESOLVED STAFF COMMENTS
|---- | --------------------------------

Not Applicable.



|ITEM | 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|---- | --------------------------------------------------

You should read the following discussion and analysis in conjunction with the selected consolidated financial data, the consolidated financial statements, and the accompanying notes, and other financial information
about ASAT which appear elsewhere in this annual report. The following discussion includes various forward-looking statements that involve risks and uncertainties. See Forward-looking Statements for special information regarding our
forward-looking statements.

CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been
prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of
contingent assets and liabilities. On an on-going basis, we evaluate our estimates and judgments, including those related to going concern assumption, allowance for doubtful accounts, revenues, inventories, asset impairments, income taxes,
commitments and contingencies. We base our estimates and judgments on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities. Actual results may differ from these estimates and judgments under different assumptions or conditions. A summary of our significant accounting policies used in the preparation of consolidated financial
statements appears in Note 2 of the notes to the consolidated financial statements included in this annual report.



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The U.S. Securities and Exchange Commission, or SEC, has defined critical accounting policies as those
that are both most important to the portrayal of our financial condition and results and which require our most difficult, complex or subjective judgments or estimates. Based on this definition, we believe our critical accounting policies include
the policies of basis of presentation, revenue recognition and risk of loss, inventory valuation, impairment of long-lived assets, deferred income taxes and commitments and contingent liabilities. For all financial statement periods presented, there
have been no modifications to the application of these critical accounting policies.

Basis of Presentation.We determined that the
going concern basis of presentation is appropriate based on our estimates and judgments of future performance of our company, future events and projected cash flows. At each balance sheet date, we evaluate our estimates and judgments as part of our
going concern assessments. We believe that there are sufficient financial and cash resources to finance the company as a going concern in the next twelve months. Accordingly, we have prepared our consolidated financial statements on a going concern
basis.

Revenue Recognition and Risk of Loss.We do not take ownership of customer-supplied semiconductor wafers or die. The title
and risk of loss remains with the customers for these materials at all times. Accordingly, the cost of the customer-supplied materials is not included in the consolidated financial statements. No revenue is recognized unless there is persuasive
evidence that an arrangement exists, the price is fixed or determinable, delivery has occurred and services rendered and our ability to collect is reasonably assured, which is at the date when customer receives and accepts the goods. Revenue from
the assembly and test of semiconductor products is recognized when title and risk of loss relating to our materials transfer to the customer, which transfer generally takes place when the product is shipped to the customer from our facility.
Shipping and handling costs associated with product sales are included in cost of sales. Such policies are consistent with provisions in the SECs Staff Accounting Bulletin, or SAB, No. 101, Revenue Recognition in Financial
Statements, as revised by SAB No. 104, Revenue Recognition.

Inventory Valuation.At each balance sheet date,
we evaluate our ending inventories for obsolete and non-saleable items. This evaluation considers analyses of actual and projected future sales levels by product compared with inventories on hand, and evidence of customers expectation to buy
back excess inventories as per our written supplier agreements. To project future sales, we make estimates based on customers forecasted demand and historical sales performance. In addition, we consider the need to write down to net realizable
value of inventories we believe to be obsolete or non-saleable. Remaining inventory balances are adjusted to approximate the lower of cost or net realizable value. If future demand or market conditions are less favorable than our projections, we
would consider additional inventory write-downs which would be reflected in cost of sales in the period a determination is made.

Impairment of Long-Lived Assets. We routinely consider whether indicators of impairment of long-lived assets are present in accordance with Statements of Financial Accounting Standards, or SFAS, No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. For this purpose, assets are grouped at the lowest level for which separate cash flow information is available. For long-lived assets to be held and used, we determine whether the estimated
undiscounted cash flows attributable to the assets in question are less than their carrying values. If such indicators are present, we recognize an impairment charge equal to the difference between the fair value and the carrying value of such
assets. Fair value is best determined by quoted market prices in active markets. If quoted market prices are not available, other methods that can be used include discounted future cash flows or appraisals. If the assets determined to be impaired
are to be held and used, we recognize an impairment charge to the extent the fair value attributable to the asset is less than the assets carrying value. The fair value of the asset then becomes the assets new carrying value, which we
depreciate over the remaining estimated useful life of the asset. We may incur impairment losses in future periods if factors influencing our estimates change or if our expectations for future revenues and the ability to utilize our assets change.
While our cash flow assumptions and estimated useful lives are consistent with our business plan, there is significant judgment involved in determining these cash flows.



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In addition, we evaluate our asset utilization and consider whether certain long-lived assets should be
either written off or held for disposal. Assets classified as held for disposal are separately presented and are measured at the lower of their depreciated cost or fair value less costs to sell. A loss is recognized for any initial or subsequent
write-down to fair value less costs to sell. A gain is recognized for any subsequent increase in fair value less costs to sell, but not in excess of the cumulative loss previously recognized. A gain or loss not previously recognized that results
from the sale of a long-lived asset is to be recognized at the date of sale.

Deferred Income Taxes. We record a valuation allowance
to reduce our deferred tax assets to the amount that is more likely than not to be realized. We need to make judgments to estimate future taxable income and consider prudent and feasible tax planning strategies in determining the need for a
valuation allowance. In the event that we determine that we would not be able to realize all or part of our net deferred tax assets, an adjustment to the deferred tax assets would be charged to earnings in the period such determination is made.
Likewise, if we later determine that it is more likely than not the net deferred tax assets would be realized, then the previously provided valuation allowance would be reversed. We provided a full valuation allowance against the deferred tax assets
of subsidiaries in the United States, Hong Kong and China as of April 30, 2008, 2007 and 2006 due to uncertainties surrounding the realizability of these benefits in future tax returns.

Commitments and Contingent Liabilities. At each balance sheet date, when a loss contingency exists, we assess the likelihood that future events
will confirm the loss or impairment of an asset or the incurrence of a liability, which may include probability of an outcome of litigation unfavorable to us, and determine whether conditions for accrual of loss contingencies as stated in SFAS No.5,
Accounting for Contingencies are met. For this purpose, an estimated loss from a loss contingency is accrued by a charge to the consolidated statement of operations if (1) information available prior to issuance of the consolidated
financial statements indicates that it is probable that a liability had been incurred at the date of consolidated financial statements, and (2) the amount of loss can be reasonably estimated. Accordingly, no accrual is made if one or both of
these conditions are not met. The nature of such loss contingency, if any, is disclosed in the notes to the consolidated financial statements.

New Accounting Standard

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. This
Statement defines fair value, establishes a framework for measuring fair value and enhances disclosures about fair value measurements. This Statement is effective for financial statements issued for fiscal years beginning after November 15,
2007 and does not have any material impact to us. In February 2008, the FASB issued FASB Staff Position (FSP) 157-2. Effective Date of FASB Statement No. 157. FSP 157-2 provides a one-year deferral of the effective date of FASB
Statement 157. Fair Value Measurements, for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed in financial statements at fair value on a recurring basis. The deferral is not available, however, to
entities that issued interim or annual financial statements reflecting the measurement and disclosure provisions of Statement 157 before February 12, 2008. We do not expect the adoption of these statements to have any material impact on us.

In February 2007, the FASB issued FAS 159, The Fair Value Option for Financial Assets and Financial Liabilities (FAS 159). FAS
159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused
by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. FAS 159 is expected to expand the use of fair value measurement, which is consistent with the FASBs long-term measurement
objectives for accounting for financial instruments. FAS 159 also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and
liabilities. FAS 159 does not affect any existing accounting literature that requires certain assets and liabilities to be carried at fair value. This Statement does not establish requirements for recognizing and measuring dividend income, interest
income, or interest expense. This statement does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value



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measurements included in FASB Statements No. 157, Fair Value Measurements, and No. 107, Disclosures about Fair Value of Financial Instruments. FAS
159 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and we do not expect the adoption of this statement to have material impact on us.

In December 2007, the FASB issued SFAS No. 141(revised 2007), Business combinations (SFAS No. 141(R)). SFAS
No. 141(R) requires an acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all
assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141(R)
is effective for fiscal years beginning on or after December 15, 2008. As of the date of this annual report, we are not engaged in any acquisition transactions and SFAS No. 141(R) does not have any impact to us as of the date of this
annual report.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in consolidated Financial Statements,
an amendment of ARB No.51 (SFAS No. 160). SFAS No. 160 clarifies that a noncontrolling or minority interest in a subsidiary is considered an ownership interest and, accordingly, requires all entities to report such
interests in subsidiaries as equity in the consolidated financial statements. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. As of the date of this annual report, we do not have any investments that are
either not controllable by us or we own a minority interest and SFAS No. 160 does not have any impact to us as of the date of this annual report.

In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110, codified as SAB Topic 14. Share-based payment SAB No. 110 states that the SEC staff will continue to accept under certain
circumstances, the use of simplified method in developing an estimate of expected term of plain vanilla share options in accordance with Statement of Financial Accounting Standard No. 123 (revised 2004) and SAB No. 107 beyond
December 31, 2007. The adoption of SAB No. 110 did not require any adjustments to our consolidated financial statements for the year ended April 30, 2008.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB Statement No. 133 (SFAS No. 161).
SFAS No. 161 requires disclosures of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for and how derivative instruments and related hedged items affect an entitys
financial position, financial performance, and cash flows. SFAS No. 161 is effective for fiscal years beginning after November 15, 2008, with early adoption permitted. As of the date of this annual report, we do not have any hedging
derivative and SFAS No. 161 does not have any impact to us as of the date of this annual report.

In April 2008, the FASB finalized
Staff Position No. 142-3, Determination of the Useful Life of Intangible Assets (FSP 142-3). The position amends the factors that should be considered in developing renewal or extension assumptions used to determine the
useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The position applies to intangible assets that are acquired individually or with a group of other assets and both intangible
assets acquired in business combinations and asset acquisitions. FSP 142-3 is effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. As of the date of this annual report, we do not have any
intangible assets and FSP 142-3 does not have any impact to us as of the date of this annual report.

In May 2008, the FASB issued
SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles (SFAS No. 162). SFAS No. 162 defines the order in which accounting principles that are generally accepted should be followed.
SFAS No. 162 is effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles. We do not expect the adoption of SFAS No. 162 to have a material impact on our consolidated financial statements.



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In May 2008, the FASB finalized Staff Position No. APB 14-1, Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1). The position clarifies that convertible debt instruments that may be settled in cash upon conversion (including partial
cash settlement) are not addressed by APB Opinion No. 14 Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants. FSP APB 14-1 further specifies that issuers of such instruments should separately account for the
liability and equity components in a manner that will reflect the entitys nonconvertible debt borrowing rate when interest cost is recognized in subsequent period. FSP APB 14-1 is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those fiscal years. As of the date of this annual report, we do not have any convertible debt instruments that may be settled in cash upon conversion, and FSP APB 14-1 does not have
any impact to us as of the date of this annual report.

In June 2008, the FASB issued SFAS No. 163, Accounting for Financial
Guarantee Insurance Contracts. The new standard clarifies how FASB Statement No. 60, Accounting and Reporting by Insurance Enterprises, applies to financial guarantee insurance contracts issued by insurance enterprises, including the
recognition and measurement of premium revenue and claim liabilities. It also requires expanded disclosures about financial guarantee insurance contracts. The Statement is effective for financial statements issued for fiscal years beginning after
December 15, 2008, and all interim periods within those fiscal years, except for disclosures about the insurance enterprises risk-management activities. We do not have any financial guarantee insurance contracts and do not expect the
adoption of this standard to be relevant to our consolidated financial statements.

OPERATING RESULTS

Operating Environment and Overview

Industry
Demand. The semiconductor industry has been highly cyclical and, beginning in the July 2004 quarter, the semiconductor industry experienced a downturn, and our sales on a quarterly basis decreased from that time through our July 2005 quarter.
This decline in our sales can be attributed to a variety of factors, including: excess capacity in the assembly and test industry and related price pressure, a significant shift in our product mix, and an inventory correction within the
semiconductor industry. Since the July 2005 quarter, the semiconductor industry has experienced a gradual recovery, but we failed to capture all the benefits of such recovery that we might otherwise obtain due to disruptions in our operations during
our move to Dongguan, China in 2006. As a result, our sales for fiscal year ended April 30, 2006 was decreased by 6.3% from the fiscal year ended April 30, 2005. As the migration of our operations to China was not completed until the
October 2006 quarter, the non-availability of production facilities together with the requisite customer re-qualification at our new Dongguan facilities caused further impact to our revenue growth. In the April 2007 quarter, there was a downturn in
the semiconductor market as a result of soft demand in the end user markets which reflects an inventory correction and led to our customers cutting back production orders. The above factors cause our turnover for the fiscal year ended April 30,
2007 declined by 9.5% as compared to that of fiscal year ended April 30, 2006. This downturn continued until the end of the July 2007 quarter, which coupled with the general economic slowdown in the United States due in part to problems in the
sub-prime mortgage market, contributed to an overall reduction in sales for fiscal year ended April 30, 2008 by 5.4% as compared to that of fiscal year ended April 30, 2007.

Technology Migration. The semiconductor industry is subject to technology migration as increasingly complex semiconductor applications with higher
performance requirements and greater functionality are developed. Typically, the newest semiconductor applications with the highest performance initially demand the highest price. Pricing and margins on these products generally decline as they are
replaced by newer products with enhanced performance characteristics. Accordingly, the semiconductor industry (including the assembly and test industry) must continually develop products with greater functionality and performance.



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Pricing and Revenue Recognition. We charge our customers on a per unit basis, with price per unit
varying depending on the complexity of the package requested by the customer. Our pricing is significantly influenced by general demand in the semiconductor industry and by the sophistication of our assembly and test services. Other factors
affecting pricing include the cost of components and raw materials, the order size, strength and history of our relationships with our customers and our capacity utilization. Revenues are recognized from packaged semiconductors sold directly to
customers when persuasive evidence of an arrangement exists, the price is fixed or determinable, delivery has occurred and services are rendered, and collectibility is reasonably assured.

Cost of Sales. The most significant components of cost of goods sold are raw materials, fixed manufacturing costs, labor and depreciation.
Industry trends significantly affect our raw material costs, which account for a majority of our cost of sales.

Impairment of Property,
Plant and Equipment. We routinely consider whether indicators of impairment of long-lived assets are present in accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. For this purpose,
assets are grouped at the lowest level for which separate cash flow information is available. For long-lived assets to be held and used, we determine whether the estimated undiscounted cash flows attributable to the assets in question are less than
their carrying values. If such indicators are present, we recognize an impairment charge equal to the difference between the fair value and the carrying value of such assets. Fair value is best determined by quoted market prices in active markets.
If quoted market prices are not available, other methods that can be used include discounted future cash flows or appraisals. If the assets determined to be impaired are to be held and used, we recognize an impairment loss based on the excess of the
carrying amount of the assets over their respective fair value. The fair value of the asset then becomes the assets new carrying value, which we depreciate over the remaining estimated useful life of the asset. The continuous weakness in sales
and the substantial amount of operating losses, which mainly resulted from a shift in product mix and decrease in average selling prices in the second half of fiscal year 2005, triggered us to perform an impairment review of our long-lived assets in
the April 2005 quarter. We compared the undiscounted cashflow to the carrying values of our long-lived assets. For long-lived assets which the carrying values exceeded the undiscounted cashflow, we determined the fair values of these long-lived
assets based on the discounted cash flow model. Accordingly, we recorded a non-cash impairment charge of $16.5 million in relation to the long-lived assets associated with certain chipscale packages in the April 2005 quarter. In addition, in
connection with this review we determined that certain wire bonders and test equipment were either technologically obsolete or with low utilization and would not be fully utilized in our operations. As a result, we determined to write off or write
down these equipment items, which resulted in another $3.4 million impairment charge in the April 2005 quarter. During the April 2006 quarter, we recognized a total of $3.9 million of impairment losses for property, plant and equipment which were
not transferable to our facilities in Dongguan, China and could not be sold. We also performed the impairment reviews as of April 30, 2007 and as of April 30, 2008, and the results did not indicate the need for any further write down or
write-off of the property, plant and equipment. We may incur impairment losses in future periods if factors influencing our estimates change or if our expectations for future revenues and the ability to utilize our assets change. While our cash flow
assumptions and estimated useful lives are consistent with our business plan, there is significant judgment involved in determining these cash flows.

Research and Development. Because our new packaging technologies usually involve extensions and evolutions of existing technologies, we have been able to develop new products in recent years without
significantly increasing our research and development expenditures. Our focus on working closely in the package design process with customers to develop packages for application specific standard products enables us to use our research and
development resources efficiently. During each of our last three fiscal years, our research and development expenditures to develop technologies that would satisfy our customers future requirements have been reduced from $4.1 million to $2.0
million. We believe that by focusing our research and development resources on a few carefully selected and closely monitored projects, we will be able to both upgrade our assembly technology processes and refine the development of our leading edge
package technologies without increasing our year-over-year research and development expenditures. To help optimize the use of our research and development resources, we will continue to partner with our customers in the development of advanced



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technologies. However, there are risks associated with our reductions in research and development expenditures in the recent years. See Item 3Key
InformationRisk FactorsOur ability to rapidly develop and successfully bring to market advanced technologies and services is important to maintaining our competitive position and profitability.

Customers. For each year ended April 30, 2008, 2007 and 2006, our single largest customer accounted for approximately 58.7%, 53.7% and 32.6%,
respectively, of sales, while for those same years our top ten customers accounted for approximately 83.4%, 79.3% and 74.0%, respectively, of sales. We have one customer which accounted for 10.0% or more of sales in the years ended April 30,
2008, 2007 and 2006.

Results of Operations

The following table sets forth ASATs results of operations as a percentage of sales during the years shown:



|                                                  |  |                             |    |  |       |     |  |       |     |  |       |      |  |       |    
|------------------------------------------------- |  | --------------------------- | -- |  | ----- | --- |  | ----- | --- |  | ----- | ---- |  | ----- | ---
|                                                  |  | Fiscal Year Ended April 30, |   
|                                                  |  | 2004                        |    |  | 2005  |     |  | 2006  |     |  | 2007  |      |  | 2008  |    
|Sales                                             |  | 100.0                       | %  |  | 100.0 | %   |  | 100.0 | %   |  | 100.0 | %    |  | 100.0 | %  
|Cost of sales                                     |  | 81.2                        |    |  | 93.8  |     |  | 92.7  |     |  | 90.9  |      |  | 88.9  |    
|                                                  |  |                             |    |  |       |     |  |       |     |  |       |      |  |       |    
|Gross profit                                      |  | 18.8                        |    |  | 6.2   |     |  | 7.3   |     |  | 9.1   |      |  | 11.1  |    
|                                                  |  |                             |    |  |       |     |  |       |     |  |       |      |  |       |    
|Operating expenses:                               |  |                             |    |  |       |     |  |       |     |  |       |      |  |       |    
|Selling, general and administrative               |  | 11.5                        |    |  | 14.1  |     |  | 16.2  |     |  | 13.4  |      |  | 12.3  |    
|Research and development                          |  | 2.1                         |    |  | 2.3   |     |  | 2.2   |     |  | 1.3   |      |  | 1.3   |    
|Reorganization expenses                           |  |                            |    |  | 0.5   | (1) |  | 2.6   | (4) |  | 1.5   | (6)  |  | 0.3   | (9)
|Litigation settlement                             |  |                            |    |  | 2.4   | (2) |  |      |     |  |      |      |  |      |    
|Impairment of property, plant and equipment       |  | 1.1                         |    |  | 10.3  | (3) |  | 2.1   | (5) |  |      |      |  |      |    
|Facilities and relocation charges                 |  | 0.1                         |    |  |      |     |  | 0.6   |     |  | 1.8   | (7)  |  |      |    
|                                                  |  |                             |    |  |       |     |  |       |     |  |       |      |  |       |    
|Total operating expenses                          |  | 14.8                        |    |  | 29.6  |     |  | 23.7  |     |  | 18.0  |      |  | 13.9  |    
|                                                  |  |                             |    |  |       |     |  |       |     |  |       |      |  |       |    
|Income (loss) from operations                     |  | 4.0                         |    |  | (23.4 | )   |  | (16.4 | )   |  | (8.9  | )    |  | (2.8  | )  
|Other income (expense), net                       |  | 0.3                         |    |  | 0.4   |     |  | 1.9   |     |  | 0.4   |      |  | (0.5  | )  
|Charges on early redemption of 12.5% senior notes |  | (4.8                        | )  |  |      |     |  |      |     |  |      |      |  |      |    
|Interest expense                                  |  | (7.2                        | )  |  | (7.7  | )   |  | (9.1  | )   |  | (11.9 | )    |  | (12.5 | )  
|                                                  |  |                             |    |  |       |     |  |       |     |  |       |      |  |       |    
|Loss before income taxes                          |  | (7.7                        | )  |  | (30.7 | )   |  | (23.6 | )   |  | (20.4 | )    |  | (15.8 | )  
|Income tax (expense) benefit                      |  |                            |    |  | (0.4  | )   |  | 0.3   |     |  | (0.8  | )(8) |  | (0.2  | )  
|                                                  |  |                             |    |  |       |     |  |       |     |  |       |      |  |       |    
|Net loss                                          |  | (7.7                        | )% |  | (31.1 | )%  |  | (23.3 | )%  |  | (21.2 | )%   |  | (16.0 | )% 
|                                                  |  |                             |    |  |       |     |  |       |     |  |       |      |  |       |    



|(1) | Reflects a charge of $928 thousand associated with headcount reduction of approximately 300 workers primarily in our
Hong Kong operations.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Reflects a settlement amount of $4.6 million settled in the form of cash, warrants and rebates on future business
associated with a settlement agreement that was executed with Freescale in fiscal year 2005.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Reflects a charge of $19.9 million for the write-off and impairment related to certain property, plant and equipment in
fiscal year 2005.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------



|(4) | Reflects a charge of $4.7 million associated with headcount reduction of approximately 1,000 workers primarily in our
Hong Kong operations.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------



|(5) | Reflects a charge of $3.9 million for the write-off related to certain property, plant and equipment which could not be
transferred to our new manufacturing facility in Dongguan, China and could not be sold in fiscal year 2006.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(6) | Reflects a charge of $2.5 million associated with headcount reduction of approximately 370 workers primarily in our Hong
Kong operations.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------



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|(7) | Reflects a charge of $3.0 million associated with the transfer of our assembly and test operations from Hong Kong to
Dongguan, China.
|--- | -------------------------------------------------------------------------------------------------------------------------------------



|(8) | The income tax expense for the fiscal year ended April 30, 2007 was primarily attributable to provision for Hong
Kong profits tax concerning a tax dispute with respect to fiscal year 2000.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(9) | Reflects a charge of $392 thousand associated with headcount reduction of 46 staff worked in Hong Kong and United
States.
|--- | -------------------------------------------------------------------------------------------------------------------------

Fiscal Year Ended April 30, 2008 Compared to Fiscal Year Ended April 30, 2007

Sales.Sales decreased by 5.4% to $156.0 million for the year ended April 30, 2008 as compared to $164.9 million for the year ended
April 30, 2007.

Sales for assembly services decreased by 3.0% to $151.1 million for the year ended April 30, 2008 as compared to
$155.7 million for the year ended April 30, 2007. The decrease in sales for assembly services during the year was mainly attributed to a change in customer demand towards low end products with a lower ASP as a result of the general economic
down turn, primarily, in the United States. Sales for assembly services accounted for 96.9% and 94.5% of total sales for the years ended April 30, 2008 and 2007, respectively. Sales from chipscale packages represented 75.7% of assembly sales
for the year ended April 30, 2008 as compared to 77.1% of assembly sales for the year ended April 30, 2007. Our mix of assembly services shifted mostly toward chipscale packages during the year ended April 30, 2008 as consistent with
the corresponding prior year.

Sales from test services decreased by 46.5% to $4.9 million for the year ended April 30, 2008 as
compared to $9.1 million for the year ended April 30, 2007. This decrease is primarily attributable to decrease in unit test volume as a result of excess capacity in market for test services.

The communications market remained our largest market segment, representing 48% and 61% of total revenue for the years ended April 30, 2008 and
2007, respectively. The industrial, automotive and others markets accounted for approximately 13% and 23% of total revenue for the years ended April 30, 2008 and 2007, respectively. The personal computers and computing market segments accounted
for approximately 21% and 7% of total revenue for the years ended April 30, 2008 and 2007, respectively. The consumer market accounted for 18% and 9% of total revenue for the years ended April 30, 2008 and 2007, respectively.

Gross profit.Gross profit for the year ended April 30, 2008 was $17.3 million, as compared to gross profit of $14.9 million for the year
ended April 30, 2007. Gross margin increased to 11.1% for the year ended April 30, 2008, as compared to 9.1% for the year ended April 30, 2007. This increase was attributable to our ability to further reduce our manufacturing costs
after the migration of our entire manufacturing operations to China. In particular, labor costs were reduced as a result of further localization of our workforce at the middle management level, and production efficiency has improved due to
optimization of certain production processes. In addition, we recorded $0.9 million in inventory write-offs for the year ended April 30, 2008, as compared to $1.6 million for the year ended April 30, 2007.

Selling, general and administrative.Selling, general and administrative expenses decreased by 12.8% to $19.3 million for the year ended
April 30, 2008, as compared to $22.1 million for the year ended April 30, 2007, while sales decreased by 5.4% in the same period. This decrease primarily resulted from the restructuring of the sales organization and improvement in cost
control.

Research and development.Research and development expenses decreased by 8.3% to $2.0 million for the year ended
April 30, 2008, as compared to $2.2 million for the year ended April 30, 2007. The reduction of research and development expenses for the year was a result of the improved cost structure and more effective use of external research resource
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Reorganization expenses.During the years ended April 30, 2008 and 2007, we incurred $0.4
million and $2.5 million in reorganization expenses (pre-tax), respectively, consisting of severance payments in connection with a work force reduction of approximately 46 and 370 employees, respectively, as part of the move of our manufacturing
operations to Dongguan, China and corporate reorganization of our US operations, as part of our efforts to streamline our sales offices.

Other income (expenses), net.Other expenses, net were $0.7 million for the year ended April 30, 2008 as compared to other income, net of $0.6 million for the year ended April 30, 2007. This increase was primarily due to an
increase in exchange loss incurred as a result of the appreciation of the Renminbi during the year.

Facilities and relocation charges.During the year ended April 30, 2007, we incurred approximately $3.0 million in facilities and relocation charges in connection with the transfer of our assembly and test operations from Hong Kong to Dongguan, China. As the relocation was
completed in 2007, no such charges were incurred during the year ended April 30, 2008.

Interest expenses.Interest expense was
$19.5 million for the year ended April 30, 2008 and 2007. Of the $19.5 million recorded in the years ended April 30, 2008 and 2007, $13.9 million was attributable to interest on our 9.25% senior notes due 2011. The remaining balance mainly
represented interest paid for capital lease obligations and the short-term bank loans, as well as the amortization of deferred charges relating to the 9.25% senior notes due 2011, Series A Preferred Shares, and our purchase money loan facility.

Income tax expenses.During the year ended April 30, 2008, we incurred an income tax expense of $0.3 million as compared to
$1.3 million for the year ended April 30, 2007. The effective tax rate for the years ended April 30, 2008 and 2007 was -1.4% and -3.7%, respectively and the change in effective tax rate is mainly due to the recognition of additional tax
assessment from the HKIRD for the fiscal year 2000 during the year ended April 30, 2007. The income tax expense for the year ended April 30, 2008 was primarily attributable to provisions for taxes payable in the PRC, Hong Kong and the
United States. The income tax expenses for the year ended April 30, 2007 represent mainly a provision of $1.2 million in relation to a tax dispute for the fiscal year 2000.

Fiscal Year Ended April 30, 2007 Compared to Fiscal Year Ended April 30, 2006

Sales.Sales decreased by 9.5% to $164.9 million for the year ended April 30, 2007 as compared to $182.1 million for the year ended April 30, 2006.

Sales for assembly services decreased by 7.9% to $155.7 million for the year ended April 30, 2007 as compared to $169.1 million for the year ended
April 30, 2006. The decrease in sales for assembly services during the year was mainly attributed to the decrease in unit sales volume due to various factors including interruption from the migration of our operations from Hong Kong to Dongguan
and the inventory corrections that took place in April 2007 quarter. Sales for assembly services accounted for 94.5% and 92.9% of total sales for the years ended April 30, 2007 and 2006, respectively. Sales from chipscale packages represented
77.1% of assembly sales for the year ended April 30, 2007 as compared to 68.0% of assembly sales for the year ended April 30, 2006. Our mix of assembly services shifted mostly toward chipscale packages during the year ended April 30,
2007 as compared to the corresponding prior year.

Sales from test services decreased by 30.0% to $9.1 million for the year ended
April 30, 2007 as compared to $13.0 million for the year ended April 30, 2006. This decrease is primarily attributable to a decrease in unit test volume as a result of excess capacity in the market for test services.

The communications market remained our largest market segment, representing 61% and 52% of total revenue for the years ended April 30, 2007 and
2006, respectively. The industrial, automotive and others markets accounted for approximately 23% and 26% of total revenue for the years ended April 30, 2007 and 2006, respectively. The



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personal computers and computing market segments accounted for approximately 7% and 13% of total revenue for the years ended April 30, 2007 and 2006,
respectively. The consumer market accounted for 9% of total revenue for the year ended April 30, 2007, which remained unchanged from the corresponding prior year.

Gross profit.Gross profit for the year ended April 30, 2007 was $14.9 million, as compared to gross profit of $13.3 million for the year ended April 30, 2006. Gross margin increased to 9.1% for the
year ended April 30, 2007, as compared to 7.3% for the year ended April 30, 2006. This increase was attributable to our ability to reduce our manufacturing costs after the migration of our entire manufacturing operations to China. Labor
costs were reduced as a result of our access to skilled and low cost workforce in China. While production efficiency has improved with the support from the new factory premises with an improved layout design, we continue to explore options to
improve our cost structure during the course of localization. For the year ended April 30, 2007, we recorded $1.6 million in inventory write-offs, as compared to $1.8 million for the year ended April 30, 2006.

Selling, general and administrative.Selling, general and administrative expenses decreased by 25.1% to $22.1 million for the year ended
April 30, 2007, as compared to $29.4 million for the year ended April 30, 2006, while sales decreased by 9.5% in the same period. This decrease primarily resulted from the shut down of our Hong Kong manufacturing operations by the end of
July 2006, cost reduction as a result of the reorganization of our sales teams in Hong Kong, the U.S. and Europe and reallocation of our customer services team and back office functions in China, and certain pre-operating expenses, including rental
and utilities expenses incurred by the Dongguan, China manufacturing facility charged in the year ended April 30, 2006 which were no longer charged to selling, general and administrative expenses in the current year.

Research and development.Research and development expenses decreased by 45.4% to $2.2 million for the year ended April 30, 2007, as compared
to $4.1 million for the year ended April 30, 2006. The reduction of research and development expenses for the year was a result of the improved cost structure of our manufacturing operations in Dongguan, China, and the completion of certain
major projects and reduced investment in new projects.

Reorganization expenses.During the years ended April 30, 2007 and
April 30, 2006, we incurred $2.5 million and $4.7 million in reorganization expenses (pre-tax), respectively, consisting of severance payments in connection with a work force reduction of approximately 370 and 1,000 employees, respectively, as
part of the move of our manufacturing operations to Dongguan, China and corporate reorganization.

Impairment of property, plant and
equipment. No impairment of property, plant and equipment was recorded during the year ended April 30, 2007. During the year ended April 30, 2006, we recorded an impairment charge of $3.9 million which mainly represented a write-off of
certain property, plant and equipment which could not be transferred to our new manufacturing facility in China and which could not be sold.

Other income, net.Other income, net decreased from $3.4 million for the year ended April 30, 2006 to $0.6 million for year ended April 30, 2007, was primarily due to a $2.3 million reversal to other income for the
previously accrued write-off of ASAT S.A., our business in France that was closed as part of our global restructuring in November 2001, that was recorded in the year ended April 30, 2006. The three-year statue of limitations, which began in the
third quarter of fiscal 2003 and was applicable to the claims arising out of the closure of ASAT S.A., expired during the third quarter of fiscal 2006. There was no such income in the year ended April 30, 2007.

Facilities and relocation charges.During the years ended April 30, 2007 and April 30, 2006, we incurred approximately $3.0 million and
$1.1 million, respectively, in facilities and relocation charges in connection with the transfer of our assembly and test operations from Hong Kong to Dongguan, China.

Interest expenses.Interest expense was $19.5 million for the year ended April 30, 2007, as compared to $16.6 million for the year ended April 30, 2006, representing a $2.9 million increase. Of the
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recorded in the year ended April 30, 2007, $13.9 million was attributable to interest on our 9.25% senior notes due 2011. The remaining balance
represented interest paid for capital lease obligations and the short-term bank loans, as well as the amortization of deferred charges relating to the issuance of our 9.25% senior notes due 2011, Series A Preferred Shares, and our purchase money
loan facility. Of the $16.6 million recorded in the year ended April 30, 2006, $13.9 million was attributable to interest on our 9.25% senior notes due 2011. The remaining balance mainly represented interest paid for capital lease obligations
and the short-term bank loans, as well as the amortization of deferred charges relating to the issuance of 9.25% senior notes due 2011, Series A Preferred Shares, and our purchase money loan facility.

Income tax (expenses) benefit.During the year ended April 30, 2007, we incurred an income tax expense of $1.3 million as compared to an
income tax benefit of $649 thousand for the year ended April 30, 2006. The effective tax rate for the year ended April 30, 2007 was 3.7% as compared to a (1.5%) effective tax rate for the year ended April 30, 2006. The income tax
expense for the year ended April 30, 2007 was primarily attributable to provision for Hong Kong profits tax concerning a tax dispute with respect to the fiscal year 2000. The income tax benefit for the year ended April 30, 2006 was
primarily attributable to a tax refund from our U.S. operations, which was partially offset by an income tax expense paid for our German operations.

Inflation

We do not believe that inflation has had a material effect on our business, financial condition or results of
operations. However, inflation has been rising recently in the United States, China and other areas of the world where we do business. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such
higher costs through price increases. Our inability or failure to do so could adversely affect our business, financial condition and results of operations.

LIQUIDITY AND CAPITAL RESOURCES

Cash on hand and at bank, excluding restricted cash, as of
April 30, 2006, 2007 and 2008 was $11.9 million, $7.3 million and $6.0 million, respectively.

Net Cash Provided by (Used in) Operating Activities

Fiscal Year Ended April 30, 2008 Compared to Fiscal Year Ended April 30, 2007 and 2006

For the year ended April 30, 2008, our net cash provided by operating activities was $2.8 million, as compared to net cash provided by operating
activities of $10.4 million for the year ended April 30, 2007. This decrease in net cash provided by operating activities was primarily due to the repayment of $4 million under the advance payment agreement and payment of $0.8 million in
connection with the tax dispute concerning fiscal year 2000 during the fiscal year 2008. A gradual improvement in business towards the end of fiscal year 2008 has resulted in additional operating cash outflow to increase inventory holding.

For the year ended April 30, 2007, our net cash provided by operating activities was $10.4 million, as compared to net cash used in
operating activities of $7.1 million for the year ended April 30, 2006. This increase in net cash provided by operating activities was primarily due to a decrease in net loss and an improvement in working capital management as a result of our
improved control over inventory holding costs and close monitoring of accounts receivables to ensure timely collection.

Net Cash Used in Investing
Activities

Fiscal Year Ended April 30, 2008 Compared to Fiscal Year Ended April 30, 2007 and 2006

Net cash used in investing activities was $8.3 million for the year ended April 30, 2008, compared to $17.6 million for the year ended April 30,
2007. The investing activities for the year ended April 30, 2008 consisted of



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scheduled payments paid to Wellmean, a local contractor for the facilitation of the ASAT China plant, and purchase of equipment and machinery to enhance our
production capability to meet the needs of our customers new package designs.

Net cash used in investing activities was $17.6
million for the year ended April 30, 2007, compared to $23.4 million for the year ended April 30, 2006. The investing activities consisted of scheduled payments paid to Wellmean, a local contractor for the facilitation of the ASAT China
plant, and purchase of equipment and machinery to enhance our production capability in meeting needs of our customers new package design.

Net
Cash Provided by Financing Activities

Fiscal Year Ended April 30, 2008 Compared to Fiscal Year Ended April 30, 2007 and 2006

Net cash provided by financing activities was $4.2 million for the year ended April 30, 2008, as compared to $2.5 million for the year
ended April 30, 2007. Cash provided by financing activities for the year ended April 30, 2008 included $10.6 million from the draw down of new short-term bank loans, which was offset in part by $5.5 million in repayment of short-term bank
loans and $0.9 million in repayment of capital lease obligations.

Net cash provided by financing activities was $2.5 million for the year
ended April 30, 2007, as compared to $9.7 million for the year ended April 30, 2006. Cash provided by financing activities for the year ended April 30, 2007 included $3.8 million from the draw down of new short-term bank loans, $0.5
million in proceeds from our rights offering and $0.2 million in proceeds from stock options exercised, which was offset in part by $2.0 million in repayment of capital lease obligations. Cash provided by financing activities for the year ended
April 30, 2006 included net proceeds of $9.2 million from borrowing the first tranche of our purchase money loan facility, proceeds of $7.5 million from the issuance of Series A Preferred Shares (another $7.5 million for the issuance of Series
A Preferred Shares to QPL was in the form of a waiver of accounts payable owing to QPL) and proceeds from the exercise of stock options of $109 thousand. These proceeds were offset by $1.7 million of the payment of deferred financing expenses
associated with our $30.0 million private financing arrangements, repayment of a short-term bank loan of $4.2 million and repayment of capital lease obligations of $1.2 million.

Capital Expenditures and Material Financing Arrangements

Capital expenditures

Capital expenditures decreased to $9.1 million for the year ended April 30, 2008 from $17.7 million for the year ended
April 30, 2007. This decrease was due primarily to the completion of construction and relocation of Dongguan, China facilities in 2007.

For the year ended April 30, 2008, we incurred capital expenditures for the enhancement of our production equipment at our Dongguan, China facilities. For the year ended April 30, 2007, we incurred capital expenditures to enhance
our production capability in meeting the requirements of our customers new package designs and on the facilitization of our new manufacturing plant. For the year ended April 30, 2006, we incurred capital expenditures for additional
machinery and equipment to meet the capacity requirements of our customers and development of the new ERP and MES as well as the facilitization of our new manufacturing plant.

During the year ended April 30, 2005, we sold certain equipment for $6.5 million to TGGT Equipment (HK) Limited (TGGT) that was then
leased back from TGGT. Under the lease agreements, we are required to pay to TGGT on a quarterly basis the greater of (i) lease payment based on the reported usage of the equipment and (ii) a minimum commitment. The initial terms of the
lease agreements expire upon the earlier of the date that the committed usage has been achieved or 14 quarters after the commencement date of the lease agreements.

Pursuant to these sale-leaseback arrangements, TGGT entered into a separate term loan facility agreement for up to $5.0 million with Standard Chartered Bank. We and ASAT HK have fully and unconditionally guaranteed to
Standard Chartered Bank the obligations of TGGT for this $5.0 million term loan facility.



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In late December 2005, we were notified by Standard Chartered Bank of its unwillingness to grant an
extension beyond January 15, 2006 for us to meet a net worth requirement, which was a condition of our guarantee. On March 31, 2006, we deposited $3.3 million in cash with Standard Chartered Bank as collateral for our guarantee obligations
and, in consideration thereof, Standard Chartered Bank amended the term loan facility agreement and removed the net worth and financial requirements. On July 24, 2006, Standard Chartered Bank released us and ASAT HK from our guarantees. During
the fiscal year ended April 30, 2007, Standard Chartered Bank had released, in several tranches, the secured deposit of $1.5 million.

On January 31, 2008, we and the Lender entered into an early termination agreement with respect to the sale-leaseback arrangement, subject to certain requirements to be fulfilled therein, and agreed to offset the lease payable of $1.6
million against deposit paid. Accordingly, the lease agreement was terminated early and the entire restricted cash balance was released on March 4, 2008.

As of April 30, 2008, we had commitments for capital expenditures of approximately $0.2 million. These capital expenditures are expected to be used for enhancement of our production equipment at our Dongguan,
China facilities. We currently intend to fund our capital expenditures with the existing cash resources and positive cash flow generated from the savings that we are realizing from reductions in cost structure from the completion of the move of our
manufacturing operations to Dongguan, China. We will also continue to seek financing from customers and external financing to fund our future capital expenditures. The executions of these plans are highly dependent upon the progress of our business
growth and the technological requirements to maintain the competition edge of our company.

Material financing arrangements

Our subsidiary, ASAT China, was party to a Loan Agreement, dated February 23, 2005, with China Construction Bank, providing for a
loan in the original principal amount of RMB40 million (equivalent to approximately $4.8 million). The loan bore interest at a rate of 5.022% per annum and matured on February 28, 2006. We guaranteed ASAT Chinas obligations under the
loan agreement. In April 2005, we made a partial repayment of principal in the amount of $604 thousand under this loan agreement and, during the year ended April 30, 2006, the remaining $4.2 million was fully repaid.

On July 31, 2005, we entered into agreements for a private financing of $30 million with JPMP Master Fund Manager, L.P. (JPMP) related
funds and QPL, two of our principal shareholder groups, and affiliates of these two entities, in the form of a $15 million preferred share financing and a $15 million purchase money loan facility.

The preferred share financing provided for the issuance and sale of 300,000 Series A Preferred Shares for a total price of $15 million and the issuance
of five-year warrants for a total of 20 million ordinary shares exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS), of which five-year warrants for a total of 5 million ordinary shares were issued as an
arrangement fee. The securities purchase agreement for the Series A Preferred Share financing was amended and restated on October 27, 2005 to, among other things, add Olympus-ASAT II, L.L.C. (Olympus), as a party. The Series A
Preferred Share financing closed on October 27, 2005.

The second $15.0 million of this financing is a purchase money loan facility
from Asia Opportunity Fund, L.P., an affiliate of JPMP, and related funds. The facility may be drawn upon in two tranches. The first tranche of $10.0 million may be drawn upon if our consolidated cash position falls below $10.0 million. A second
tranche of an additional $5.0 million may be drawn upon if our consolidated cash position again falls below $10.0 million. The maturity date of the loans made in a tranche was originally two years from the date such tranche is advanced. The interest
rate payable on the loans is 15% per annum, with interest to be paid on a quarterly basis. We issued the administrative agent, on the date of the issuance and sale of Series A Preferred Shares described above, warrants to purchase an aggregate
of 5,000,000 ordinary shares, which is the equivalent of 333,333 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS).



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On January 25, 2006, we borrowed the first $10.0 million tranche of funding under the purchase money
loan facility. In return for drawing upon the first tranche, we issued the lenders under the purchase money loan facility warrants to purchase an aggregate of 15,668,170 ordinary shares, which is the equivalent of 1,044,544 ADSs, exercisable at a
price of $0.01 per ordinary share (equivalent to $0.15 per ADS), as well as paid a commitment fee of $850,000 on a pro rata basis to the lenders that funded the first tranche. In each case, the warrants are exercisable for five years from the date
of issuance. On July 31, 2007, the second $5.0 million tranche commitment expired and was not drawdown. Therefore, the remaining second tranche of $5 million is no longer available to us.

On August 23, 2007, we amended the purchase money loan facility to extend the maturity due date of the $10.0 million principal amount until
April 30, 2009 and to extend the payment due date for interest payments (and interest on such interest) for March 31, 2006, June 30, 2006, September 30, 2006, December 31, 2006, March 31, 2007,
June 30, 2007 and September 30, 2007 to become due on October 31, 2007. In return for amending the purchase money loan facility, on October 1, 2007, we issued 35,766,900 warrants to the lenders, which exercisable, in the
aggregate, for a total of approximately 4.6% of ASAT Holdings total outstanding ordinary shares on a fully diluted basis (inclusive of ordinary shares issuable upon exercise of warrants to the holders themselves and which ASAT Holdings will
grant to the eligible holders of our 9.25% senior notes due 2011). The warrants will have an exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject to adjustment as provided in the warrants and the other terms
and conditions contained therein. These warrants and the ordinary shares into which they will be exercisable are not registered under the Securities Act of 1933, or any state securities laws, and will be sold in a private transaction under
Regulation D and Regulation S. Unless the warrants and ordinary shares are registered in the future, they may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and
applicable state laws.

On October 10, 2007, we amended the purchase money loan facility to extend the payment due date for interest
including any penalty interest as required by the agreement. Interest that was due or will be due for payment on or before December 31, 2008 will be due and payable on December 31, 2008.

On October 17, 2008, we amended the purchase money loan facility to extend the maturity due date of the $10.0 million principal amount and certain
unpaid interest. The maturity due date for the $10.0 million principal was extended to January 31, 2010. For the total interest of $5,277,231 accrued and unpaid up to October 17, 2008, we were required to pay $441,667 upon signing the
amended agreement. The balance of the unpaid interest of $4,835,564 was converted into two separate loan principals with $2,435,564 due and payable on December 15, 2008 and $2,400,000 due and payable on January 31, 2010.

The purchase money loan facility is unsecured and contains various affirmative and negative covenants binding on us and our subsidiaries, including
limitations on our and our subsidiaries ability to incur indebtedness, grant liens on assets, pay dividends and enter into transactions with affiliates. In addition, we will be required to repay the loans with the net proceeds of certain
issuances of equity and debt and certain asset sales.

We have agreed to file a registration statement covering the resale of the shares
issuable upon exercise of the Series A Preferred Shares and warrants described above. Subsequently, we have obtained a waiver from the U.S. Securities and Exchange Commission, or SEC on such obligation until such time as we are notified to file a
registration statement, which has not yet occurred as of the date of this annual report. We have withdrawn all previous filings with the SEC, on this matter.

As required by the securities purchase agreement, in July 2006, we completed a rights offering of the Series A Preferred Shares and warrants for the benefit of existing shareholders, excluding the purchasers of the
Series A Preferred Shares and certain other shareholders that waived participation in the rights offering. In the rights offering, we distributed one subscription right for every 1,850 of our ordinary shares, or for every 123 of our



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ADSs, owned. Each subscription right entitled the recipient to purchase for $50.00 a unit consisting of one Series A Preferred Share and a warrant to
purchase 50 ordinary shares. We sold 9,799 units in this offering and received gross proceeds of $489,950 in the rights offering.

On
March 15, 2006, we paid the semiannual dividend due on our outstanding Series A Preferred Shares. We paid the dividend in our ordinary shares, issuing 11.15 of our ordinary shares per Series A Preferred Share and 3,345,054 ordinary shares in
the aggregate to members of the investor group and Everwarm Limited, a wholly-owned subsidiary of QPL.

On September 15, 2006, we paid
the semiannual dividend due on our outstanding Series A Preferred Shares. We paid the dividend in our ordinary shares, issuing 36.73 ordinary shares per Series A Preferred Share and 11,020,338 ordinary shares in the aggregate to members of the
investor group and Everwarm Limited, and issuing 9.97 ordinary shares per Series A Preferred Share and 97,706 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to our rights offering, all in accordance with the
terms of our Series A Preferred Shares.

On March 15, 2007, we paid semiannual dividend due on our outstanding Series A Preferred
Shares. We paid the dividend in our ordinary shares, issuing 26.74 ordinary shares per Series A Preferred Share and 8,021,906 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and issuing 26.74 ordinary shares
per Series A Preferred Share and 262,025 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to our rights offering, all in accordance with the terms of our Series A Preferred Shares.

On September 15, 2007, we paid semiannual dividend due on our outstanding Series A Preferred Shares. We paid the dividend in our ordinary shares,
issuing 84.84 ordinary shares per Series A Preferred Share and 25,452,045 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and issuing 84.84 ordinary shares per Series A Preferred Share and 825,876 ordinary
shares in the aggregate to holders of Series A Preferred Shares who subscribed to our rights offering, all in accordance with the terms of our Series A Preferred Shares.

On March 15, 2008, we paid semiannual dividend due on our outstanding Series A Preferred Shares. We paid the dividend in our ordinary shares, issuing 91.10 ordinary shares per Series A Preferred Share and
27,329,665 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and issuing 91.10 ordinary shares per Series A Preferred Share and 835,269 ordinary shares in the aggregate to holders of Series A Preferred Shares
who subscribed to our rights offering, all in accordance with the terms of our Series A Preferred Shares.

On September 15, 2008, we
paid semiannual dividend due on our outstanding Series A Preferred Shares. We paid the dividend in our ordinary shares, issuing 158.91 ordinary shares per Series A Preferred Share and 47,672,829 ordinary shares in the aggregate to members of the
investor group and Everwarm Limited, and issuing 158.91 ordinary shares per Series A Preferred Share and 1,457,107 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to our rights offering, all in accordance with
the terms of our Series A Preferred Shares.

On May 1, 2006, we entered into a financing agreement with a customer to provide us $6.0
million of financing in the form of advance payments for assembly and test services, subject to certain conditions. The advance was made to us on June 9, 2006. The primary purpose of this financing was to purchase new equipment to support the
customers production capacity demands. This financing bore no interest and was to be repaid beginning in January 2007 by off-setting amounts against our receivables from our future sales to the customer up to a fixed maximum monthly amount,
with any difference between this maximum amount and receivables from our sales to the customer in a given month being paid by us in cash. As of April 30, 2007, the outstanding balance on this customer financing was $4.0 million. The agreement
contains various affirmative and negative covenants, including notice requirements for specified actions or events, restrictions on acquisitions and dispositions of property, business or assets, and transactions with affiliates. Events of default



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under the agreement include failure by ASAT to pay or perform its obligations under the agreement, cross defaults with specified indebtedness and bankruptcy
events. Upon the occurrence of an event of default, the customer may require us to repay the remaining balance of the advance payment. Such arrangement was terminated on January 17, 2008, and the advance from customer was fully offset against
the receivable as of January 31, 2008.

In September 2006, ASAT China obtained a revolving credit facility of RMB30 million
(approximately $4.3 million) with a term of one year from a Chinese bank. The revolving credit facility was secured by the pledge of certain equipment of ASAT China purchased with the proceeds of such facility and may be extended after one year. On
October 8, 2006, ASAT China drew down RMB20 million (approximately $2.9 million) which was due in October 2007 at an interest rate of 6.12% per annum. In September 2007, ASAT China rolled over the original RMB20 million for another year at the
interest rate of 7.29%. On April 30, 2007, ASAT China drew down the remaining balance of this revolving credit facility and repaid in full on the due date of April 30, 2008. As such, the outstanding balance of this revolving facility was
RMB20 million as of April 30, 2008. In September 2008, ASAT China repaid the balance of the RMB20 million credit facility.

On
August 1, 2007, we did not pay the regularly scheduled interest payment of approximately $6.9 million on our 9.25% senior notes due 2011. We have subsequently paid such interest payment, including accumulated penalty interest, on
August 28, 2007, which was within the 30 days grace period permitted under the Indenture governing our 9.25% senior notes due 2011.

We have occasionally been in default or otherwise been out of compliance with the covenants and conditions in the agreements governing our debt. Such defaults have been cured or otherwise remedied by obtaining amendments or waivers from our
creditors.

On August 23, 2007, we received consents from approximately 98% of holders of our 9.25% senior notes due on 2011 to enter
into a supplemental indenture dated August 27, 2007, which amended certain provisions of the Indenture and waived certain defaults and events of default that may have occurred or may occur. The amendments included: (i) elimination of
restrictions on the value of the assets that may be held by ASAT China; (ii) expand the ability of our company and our subsidiaries to secure financing from additional sources; and (iii) extend the deadline for us to fulfill our reporting
obligations under the Indenture. In return, we agreed to issue warrants for ordinary shares in connection with the amendment of the Indenture and these warrants will be issued to eligible holders of our 9.25% senior notes due 2011 who consented to
the solicitation of consents ended August 23, 2007 to amend the Indenture, subject to certain conditions specified therein. On October 1, 2007, we issued in total of 35,766,900 warrants to the eligible holders. These warrants would, in the
aggregate, be exercisable for a total of approximately 4.6% of our total outstanding ordinary shares on a fully diluted basis as of the issue date. The warrants have an exercise price of $0.01 per ordinary share and will expire on February 1,
2011, subject to adjustment as provided in the warrants and the other terms and conditions contained therein.

In September 2007, ASAT
China obtained a second revolving multi-currency credit facility of RMB150 million or equivalent (approximately $20 million) with a term of one year. This facility is secured by certain trade receivables of ASAT China. In October 2008, ASAT
China obtained a renewal of the second revolving credit facility and is extended for another year with the interest rate revised to LIBOR plus 4%.

In April 2008, ASAT China obtained a third revolving credit facility of $5 million with a term of one year bearing interest rate at LIBOR plus 3%. The third revolving credit facility is secured by certain equipment of ASAT China.

In July 2008, ASAT China obtained a fourth short-term revolving credit facility of RMB60 million bearing interest at a rate published by
the Peoples Bank of China plus an markup of 15%. The revolving credit facility is backed by a guarantee provided by ASAT HK. The revolving credit facility will expire in April 6, 2009 and may be extended for further one year.



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As of the date of this annual report, ASAT China had drawn down approximately $10.5 million in total of
all its credit facilities.

We believe that our existing cash and cash equivalents and anticipated cash flow from operations based on
current market conditions and funds from various financing arrangements described above will be sufficient to meet our anticipated cash needs in the ordinary course of business for at least the next twelve months.

Debt.As of April 30, 2008, our total outstanding debt was approximately $168.9 million, consisting of $150 million of 9.25% senior notes due
2011, $70 thousand of capital lease obligations, $9.5 million under our purchase money loan facility (the principal amount of the loan which we must repay is $10 million) and $9.4 million under our revolving credit facilities with Chinese banks. The
Indenture, dated as of January 26, 2004, by and among New ASAT (Finance) Limited, ASAT Holdings Limited and its subsidiaries referred to therein as Guarantors, and The Bank of New York, as trustee (the Indenture), governing the
9.25% senior notes requires the Company to comply with certain covenants, which in addition to limiting our ability to incur debt, limit our ability to:



| |  |  | Pay dividends, redeem capital stock and make certain other restricted payments or investments, including loans, guarantees and advance;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Incur additional indebtedness, including guarantees, or issue certain equity interests;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | Merge, consolidate or sell all or substantially all of our assets;
| | - |  | ------------------------------------------------------------------



| |  |  | Issue or sell capital stock of some of our subsidiaries;
| | - |  | --------------------------------------------------------



| |  |  | Sell or exchange assets or enter into new businesses;
| | - |  | -----------------------------------------------------



| |  |  | Create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to us;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | Create liens on assets; and
| | - |  | ---------------------------



| |  |  | Enter into particular types of transactions with affiliates or related persons.
| | - |  | -------------------------------------------------------------------------------

Our purchase money loan facility contains these restrictions plus additional restrictions on our ability to incur debt.

Contractual Obligations. The following table summarizes our existing contractual obligations for future debt repayments, lease obligations and
capital expenditures as of April 30, 2008:



|                             |  |                       |  |                 |  |           |  |           |  |                 
|---------------------------- |  | --------------------- |  | --------------- |  | --------- |  | --------- |  | ----------------
|                             |  | Payment due by period
|Contractual Obligations      |  | Total                 |  | Less than1 year |  | 1-3 years |  | 4-5 years |  | More than5 years
|                             |  | (in thousands)       
|Long-term debt(1)            |  | 191,625               |  | 13,875          |  | 177,750   |  |          |  |                
|Purchase money loan(2)       |  | 17,756                |  | 3,806           |  | 13,950    |  |          |  |                
|Operating leases(3)          |  | 29,131                |  | 3,731           |  | 7,178     |  | 5,817     |  | 12,405          
|Capital lease obligations(4) |  | 77                    |  | 30              |  | 47        |  |          |  |                
|Capital expenditures(5)      |  | 3,800                 |  | 3,800           |  |          |  |          |  |                
|                             |  |                       |  |                 |  |           |  |           |  |                 
|Total                        |  | 242,389               |  | 25,242          |  | 198,925   |  | 5,817     |  | 12,405          
|                             |  |                       |  |                 |  |           |  |           |  |                 



|(1) | Long-term debt
|--- | --------------

Principal and interest for the 9.25% senior notes that would accrue are included.



|(2) | Purchase money loan
|--- | -------------------

Interest for the purchase money loan that would accrue is included based on an interest rate of 15% per annum. Interest on overdue interest that
would accrue is included based on an interest rate of 20% per annum.



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|(3) | Operating leases
|--- | ----------------

We lease certain land, buildings, equipment and machinery and motor vehicles under operating lease agreements expiring at various times through July 2020. We had a lease of a Hong Kong manufacturing facility that
expired in February 2007. We also negotiated an early termination of the lease of a different Hong Kong office and manufacturing facility, with the expiration date changed from March 2007 to August 2006. We have subsequently renewed our annual lease
for reduced Hong Kong office space, with the current expiration date being August 31, 2010. We entered into a lease of a factory facility (the Phase I facility) in Dongguan, China in August 2002, under which the lessor was
responsible for the design and construction of the interior finish and fixtures of the factory buildings. We are obligated to pay a monthly rental payment and management service fee for a period of 15 years from September 2003.

On May 7, 2004, we entered into a lease agreement of another factory facility (the Phase II facility) in Dongguan, China, under which the
lessor was responsible for the design and construction of the factory building. We are obligated to pay a monthly lease payment for a term of 15 years starting from August 1, 2005. Under the terms of the Phase II facility lease, we are
obligated to pay a monthly payment of $179 thousand for the first six years of the lease term and $90 thousand per month starting from the seventh year of the lease term.

Future minimum lease payments under operating leases as of April 30, 2008 are as follows:



|                                    |  |       
|----------------------------------- |  | ------
|                                    |  | $000 
|Fiscal year ending April 30:        |  |       
|2009 (the remainder of fiscal year) |  | 3,731 
|2010                                |  | 3,643 
|2011                                |  | 3,535 
|2012                                |  | 3,218 
|2013                                |  | 2,599 
|Thereafter                          |  | 12,405
|                                    |  |       
|                                    |  | 29,131
|                                    |  |       

On June 30, 2008, we terminated the original lease agreements and management service
agreements for both Phase I and Phase II facilities, which were entered into between Timerson and Changshi. At the same time, ASAT China entered into the new lease agreements with Changshi for the remaining terms of the respective leases. Under the
new lease agreements, the rent and service fees to be paid are denominated in Renminbi and the monthly amount payable is based on the predetermined schedule. The expiry of the lease terms for Phase I and Phase II factory premises remain
August 31, 2018 and July 31, 2020, respectively.



|(4) | Capital lease obligation
|--- | ------------------------

Future minimum lease payments under capital lease obligations as of April 30, 2008 are as follows:



|                                    |  |                   
|----------------------------------- |  | ------------------
|                                    |  | Motorvehicles$000
|Fiscal year ending April 30:        |  |                   
|2009                                |  | 30                
|2010                                |  | 30                
|2011                                |  | 17                
|                                    |  |                   
|Total minimum lease payments        |  | 77                
|Less: amounts representing interest |  | 7                 
|                                    |  |                   
|Present value of minimum payments   |  | 70                
|Current portion                     |  | 26                
|                                    |  |                   
|Non-current portion                 |  | 44                
|                                    |  |                   



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We are currently leasing two motor vehicles. These leases are classified as a finance lease and, as of
April 30, 2008, had a remaining lease term ranging from 2.25 years to 2.92 years.



|(5) | As of April 30, 2008 and April 30, 2007, we had contracted for capital expenditures on property, plant and
equipment of $0.2 million and $1.2 million, respectively, and unpaid trade payable of property, plant and equipment of $3.6 million and $6.6 million, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

RESEARCH AND DEVELOPMENT

We have a proven track record of introducing
innovative packages to the market. We target our research and development efforts toward leading edge packaging technologies and as a result of these efforts, we have made significant accomplishments in packaging, including the following:



| |  |  | We believe we are an acknowledged developer of the rapidly expanding and industry-wide standard package type known as the quad flat no-lead (QFN) device and have
issued U.S. patents for our LPCC product and our proprietary manufacturing processes. We also have several variations of QFN packages and methods for their manufacture with U.S. patent protection, including multi-row QFN and TAPP process for
manufacturing the various QFN packages. The QFN package technology is now generally recognized as the leading chipscale package format and has become a JEDEC standard.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We are a leading developer in what we believe may be the next generation QFN product type, our proprietary TAPP technology. The manufacturing processes for
our TAPP product family have been fine tuned by such techniques as high-density strip configuration to reduce costs and increase throughput. At the same time, we have been able to reduce the overall package dimensions to the point where the
finished package is truly chipscale and is not much larger than the semiconductor die itself. Our TAPP product was adopted as a JEDEC standard for the packaging industry.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | For flip chip technology, which has become a more common packaging format in many of our existing customers product portfolios, we have continued
to invest in research and development and have sought to differentiate our flip chip assembly capability by offering package and assembly technologies for use with the latest generation of integrated circuits, which utilize low-K
dielectric materials and copper interconnects.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

We believe that providing timely and effective improvements in assembly
technology is a key factor for success in the packaging market. This effort often involves close cooperation with our customers. This cooperation has enabled us to participate in the development of technology for next generation package designs. In
this effort, we have built a talented research and development team that works closely with customers early in the new product development cycle. When the selection of a package is critical to the overall development of a semiconductor device, our
design engineers work with our customers to select, design, model and develop the optimum package for that specific device.

We have
dedicated teams of engineers in Dongguan, China, Hong Kong and the United States to provide package design services as well as thermal and electrical performance computer simulation and measurement services. In fiscal year 2006, we transferred all
remaining engineers from our Hong Kong facility to Dongguan, China. We plan to expand our design and engineering services to more fully participate in the early stages of our customers design process. We strive to understand our
customers new semiconductor design and packaging needs to design advanced packaging solutions for each new product generation. Our relationships with our customers enables us to proactively anticipate our customers needs and to move
quickly bring the resulting package technologies to market. We seek to differentiate our package design services by working more closely with customers to co-develop packages in parallel with the development of the integrated circuit
itself. Given the growing co-dependencies between integrated circuit design on the one hand and package design on the other that are required to meet the demands of high-performance, fast signal, thermally demanding and reliable circuits, we believe
that we will be able to remain competitive in the marketplace for advanced packaging designs by offering customers the required engineering talent and design expertise at the outset of the development effort.



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In addition to our internal and co-development work with our customers, we also work closely with our
equipment and material suppliers in developing advanced processing capabilities and materials for use in our assembly processes. During our last three fiscal years, our research and development expenditures ranged between $2.0 million and $4.1
million or approximately 2.2% to 1.3% of sales. However, the decrease in our research and development expenditures in the last five fiscal years, particularly between fiscal years ended April 30, 2006, 2007 and 2008 may adversely affect us. See
Item 3Key InformationRisk FactorsOur ability to rapidly develop and successfully bring to market advanced technologies and services is important to maintaining our competitive position and profitability.

TREND INFORMATION

Please
see Operating Results and Item 4Information on the CompanyBusiness Overview for trend information.

OFF-BALANCE SHEET ARRANGEMENTS

Our off-balance sheet arrangements consist of the agreements relating to our Phase I and Phase II
facilities in Dongguan, China. We entered into a lease for our Phase I facility in Dongguan, China in August 2002 under which the lessor was responsible for the design and construction of the factory facility. We are obligated to pay a monthly
rental payment and management service fee for a period of 15 years from September 2003. These monthly rental payments of HK$1.4 million (approximately $179 thousand at an assumed exchange rate of HK$7.80 per $1.00) for the first six years of the
rental term, HK$350,000 (approximately $45 thousand at an assumed exchange rate of HK$7.80 per $1.00) for the seventh to eleventh years and HK$385,000 (approximately $49 thousand at an assumed exchange rate of HK$7.80 per $1.00) for the twelfth to
fifteenth years. Under the terms of the lease, we have an option and a right of first refusal to purchase the Phase I facility and the land-use right of the land on which the facility is located at prices fixed in a predetermined schedule or,
subsequent to October 2009, at prices based on the then fair market value of the factory facility and the related land use right. The highest price for the Phase I facility and the related land-use right listed on the predetermined schedule to the
lease agreement is HK$108.4 million (approximately $13.9 million at an assumed exchange rate of HK$7.80 per $1.00), which is the amount we would be obligated to pay if we were to exercise our option and right of first refusal under the lease in
October 2004.

We also entered into a lease for our Phase II facility in Dongguan, China in May 2004 under which the lessor was responsible
for the design and construction of the facility. We are obligated to pay a monthly lease payment for a term of 15 years starting from August 2005. Under the terms of this Phase II lease, we are obligated to pay monthly payments of HK$1.4 million
(approximately $179 thousand at an assumed exchange rate of HK$7.8 per $1.00) for the first six years of rental term and HK$700 thousand (approximately $90 thousand at an assumed exchange rate of HK$7.80 per $1.00) per month for the seventh to
fifteenth years of the rental term. From October 31, 2008 and onward during the term of the lease, we have an option and a right of first refusal to purchase the Phase II facility and the land-use right of the land on which the facility is
located at prices fixed in a predetermined schedule during the period from October 2008 to July 2011 and thereafter at prices based on the then fair market value of the facility and the related land-use right. The highest price for the Phase II
facility and the related land-use right listed on the predetermined schedule to the lease agreement is HK$60.0 million (approximately $7.7 million at an assumed exchange rate of HK$7.80 per $1.00), which is the amount that we would be obligated to
pay if we were exercise our option and right of first refusal under the Phase II lease in October 2008.

On June 30, 2008, we
terminated the original lease agreements and management service agreements for both Phase I and Phase II facilities, which were entered into between Timerson and Changshi. At the same time, ASAT China entered into the new lease agreements with
Changshi for the remaining terms of the respective leases. Under the new lease agreements, the rent and service fees to be paid are denominated in Renminbi and the monthly amount payable is based on the predetermined schedule described above. The
expiry of the lease terms



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for Phase I and Phase II factory premises remain August 31, 2018 and July 31, 2020, respectively, and ASAT China has the option and right of first
refusal to purchase the facilities and the related land-use right of the land at prices fixed as stated in the predetermined schedule of the respective original lease agreements.

These arrangements enabled us to lease the Phase I and Phase II facilities from a third party rather than finance the construction of the facilities
ourselves. If we had financed the construction of the Phase I and Phase II facilities, we would have been required to recognize a liability for obligations that we would undertake in connection with the financing.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

The following table sets forth information
about the persons who serve as directors and senior management of ASAT Holdings as of the date of this annual report. Shareholders are entitled to re-elect the board of directors at each annual meeting. Senior management are appointed by, and serve
at the discretion of, the board of directors. The business address of each director is 14th Floor, 138 Texaco Road, Tsuen Wan, New Territories, Hong Kong.

Directors



|                    |  |     |  |                                                                                                 |  |                                                                           
|------------------- |  | --- |  | ----------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------
|Name                |  | Age |  | Position                                                                                        |  | Position Held Since                                                       
|Kei W. Chua         |  | 35  |  | Director                                                                                        |  | June 2005                                                                 
|Peter Hopper        |  | 49  |  | Director                                                                                        |  | September 2006                                                            
|Kevin Kit Tong Kwan |  | 49  |  | Director                                                                                        |  | March 2006                                                                
|Tung Lok Li         |  | 56  |  | Director                                                                                        |  | October 1999                                                              
|Joseph A. Martin    |  | 60  |  | Director                                                                                        |  | March 2004                                                                
|Henry C. Montgomery |  | 72  |  | Director and Chairman of the Board and the Audit Committee                                      |  | Director since June 2004 Chairman since June 2005                         
|Glen G. Possley     |  | 68  |  | Director                                                                                        |  | November 2005                                                             
|Stephen M. Shaw     |  | 47  |  | Director and Chairman of the Compensation Committee and the Nominating and Governance Committee |  | Director since February 2003 Chairman of the Committees since October 2004
|Eugene Suh          |  | 41  |  | Director                                                                                        |  | August 2005                                                               

Senior Management



|                 |  |     |  |                                                               |  |                                                                                         
|---------------- |  | --- |  | ------------------------------------------------------------- |  | ----------------------------------------------------------------------------------------
|Name             |  | Age |  | Position                                                      |  | Position Held Since                                                                     
|Tung Lok Li      |  | 56  |  | Acting Chief Executive Officer                                |  | September 2006                                                                          
|Kei Hong Chua    |  | 37  |  | Executive Vice President and Chief Financial Officer          |  | July 2007                                                                               
|Jeffrey R. Osmun |  | 45  |  | President and Executive Vice President of Sales and Marketing |  | April 2008                                                                              
|Joseph A. Martin |  | 60  |  | Chief Business Officer                                        |  | April 2008 Formerly Executive Vice President of Sales and Marketing since September 2006
|Ernest Tan       |  | 54  |  | Senior Vice President of Manufacturing                        |  | May 2007                                                                                
|John R. McMillan |  | 62  |  | Senior Vice President of Quality and Engineering              |  | April 2008                                                                              



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There are no family relationships between any director and senior executive, except that
Mr. Kei W. Chua, our director, and Mr. Kei Hong Chua, our chief financial officer, are brothers.

Kei W. Chuais a
Partner of CCMP Capital Asia Pte. Ltd. (formerly known as J.P. Morgan Partners Asia Pte. Ltd.). From 1999 to 2000, Mr. Chua was Vice President of Cerberus Capital Management, a special situations investment fund. Before joining Cerberus,
Mr. Chua worked as an investment banker at Donaldson, Lufkin & Jenrette in both New York and Asia. Mr. Chua received a B.A. degree from Columbia University.

Peter Hopperis a Managing Director of CCMP Capital Asia Pte. Ltd. (formerly known as J.P. Morgan Partners Asia Pte. Ltd.). Recently,
Mr. Hopper has focused on supporting venture capital and private equity companies investing in technology companies in Asia. Prior to 2003, Mr. Hopper was with Philips Electronics where he served in many operational, general management and
chief executive officer roles with a number of business units, including the chief executive officer of the mobile display business unit based in Hong Kong. Mr. Hopper holds a Business Studies degree from Northumbria University and an M.B.A.
from Manchester Business School from the U.K.

Kevin Kit Tong Kwanis currently a member of the Board of Directors of QPL. Prior to
joining QPL in 1999, Mr. Kwan spent 20 years providing auditing, accounting and corporate advisory services at PricewaterhouseCoopers and public and private companies in Hong Kong and overseas. In addition, Mr. Kwan held various financial
control management positions with the China International Trust and Investment Corporation group of companies. Mr. Kwan is currently a nonexecutive director of Wafer Systems Limited, a Greater China-based provider of technologies for the
network infrastructure market. Mr. Kwan is a fellow member of the Chartered Association of Certified Accountants and the Hong Kong Institute of Certified Public Accountants. Mr. Kwan has a bachelors degree in commerce from the
University of Southern Queensland, Australia.

Tung Lok Lihas over 25 years of experience in the semiconductor sector and was
previously Chairman of ASATs Board and has served and continues to serve as the Chairman of the Board of QPL, which has been listed on the Stock Exchange of Hong Kong since 1989. Mr. Li was the Chairman of the Board of Peak Plastic until
he resigned in October 2001. Mr. Li holds a B.S. degree in chemical engineering from the University of Wisconsin, Madison.

Kei
Hong Chuais our Executive Vice President and Chief Financial Officer. He has over 15 years of banking, finance and accounting experience. Prior to assuming this position, Mr. Kei Hong Chua was head of Standard Chartered Banks
Alternate Investment Group in China, where he was responsible for proprietary investments in special situations across Asia. Previously, he served as a senior manager in Corporate Finance and Business Recovery Services at PricewaterhouseCoopers
in Hong Kong and as a senior manager in Arthur Andersens Global Corporate FinanceCorporate Restructuring Services in New York. In addition, he served as a founding partner and CFO of Vertical Think, Inc., a management and consulting
firm for companies engaged in eBusiness. He is a certified public accountant. Mr. Kei Hong Chua received a B.S. degree in finance and accounting, with magna cum laude honors, from New York University.

Joseph A. Martinis our Chief Business Officer. Prior to assuming this position, Mr. Martin was our Executive Vice President of Sales and
Marketing and from September 2006 to April 2008 and the Chief Executive Officer of QPL International Holdings, a position he occupied from February 2004 through September 1, 2006. From 1993 until he joined QPL, Mr. Martin was with ASAT
where he served in a number of senior level management positions, including Senior Vice President of Strategic Planning, Chief Operating Officer and as a Director. From 1983 until he joined ASAT, Mr. Martin was with Amkor Electronics where he
held various senior level positions, including Vice President of European Sales and Vice President of Marketing for Amkors advanced product lines. Prior to that, Mr. Martin held various sales, management and engineering positions with
TRW, Thompson CSF, and Texas Instruments. Mr. Martin received his undergraduate degree in chemistry from Lamar University.



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Henry C. Montgomeryhas more than 40 years of finance and management experience and is currently
the chairman and chief executive officer of Montgomery Pacific Outsourcing, LLC, an accounting and financial services and sourcing firm, and the chairman of Montgomery Professional Services Corporation, a financial and human resources services firm.
Previously, Mr. Montgomery held senior-level management positions at various technology companies including Spectrian Corporation, Indus International, Inc., Pinnacle Micro, Inc., SyQuest Technology, Inc., Trilogy Limited, WordStar
International Corporation, Saga Corporation, Memorex Corporation, and Fairchild Camera and Instrument Corporation. He also held positions at McKinsey & Company, ITT Corporation and Arthur Andersen & Co. Mr. Montgomery
currently serves on the board of directors of two other publicly traded companies. He serves as chairman of the board and chairman of the audit committee and a member of the compensation committee for Catalyst Semiconductor, Inc. and as a director,
chairman of the audit committee and as a member of the compensation committee for Swift Energy Company. Mr. Montgomery holds a bachelors degree in economics from Miami University in Oxford, Ohio.

Dr. Glen G. Possleyhas 38 years of experience in the semiconductor business focused on operations management, product and process
development and engineering. From January 1998 to the present, Dr. Possley served as a managing general partner at Glen-Ore Associates, a consulting company focused on the semiconductor business. From January 1998 to January 2000, he was a
partner at International Technology Ventures and N-Able Group. Dr. Possley serves as the director and member of the audit committee for Novellus Systems, Inc., and as a director, chairman of the corporate governance and nominating committee and
as a member of audit committee and compensation committee for Catalyst Semiconductor Inc. He received a B.S. in Mathematics from Western Illinois University and a Ph.D. in Physical Chemistry from the University of Kentucky.

Stephen M. Shawis President of SMS Development, Inc. Previously, Mr. Shaw was a senior partner with McKinsey and Company where he spent 16
years principally engaged in corporate strategy and organizational development projects for clients with a large presence in China. Prior to joining McKinsey, Mr. Shaw held several positions of increasing responsibility at Procter and Gamble
and Paine Webber Capital. Mr. Shaw holds a Sc.B. degree in electrical engineering and an A.B. in economics from Brown University and an M.B.A. from Harvard Business School.

Eugene Suhis a Partner at CCMP Capital Asia Pte. Ltd. Prior to joining CCMP Capital Asia Pte. Ltd., Mr. Suh was an associate director for
one year in the Distressed Debt Investment Group at Bear Stearns in Hong Kong where he was responsible for sourcing and evaluating distressed debt investments in Korea, Thailand and Hong Kong. Previously, Mr. Suh was a director at Ferrier
Hodgson, an internationally affiliated group that focuses on advising distressed corporations and banks in corporate finance, operational turnarounds and debt restructuring transactions. Before joining Ferrier Hodgson, Mr. Suh was a member of
Ernst & Youngs Restructuring and Reorganizational Group in New York. Mr. Suh is a certified public accountant. Mr. Suh holds a B.A. from Trinity College in the U.S. and an M.B.A. from the Stern School of Business at New York
University.

Jeffrey R. Osmunis our President and Executive Vice President of Sales and Marketing. Mr. Osmun has almost 20
years of semiconductor industry sales experience, including seven years at assembly and test provider STATS ChipPAC where he most recently served as Corporate Vice President of Worldwide Sales and Marketing. During this period, Mr. Osmun served
as a key member of the leadership team responsible for the integration of ST Assembly Test Services and ChipPAC in 2004, while at the same time leading the combined marketing, customer service and technical sales support organization. In addition to
his experience at STATS ChipPAC, Mr. Osmun was the Corporate Vice President of Sales and Marketing at White Electronic Designs, an Arizona-based provider of advanced technology solutions. Mr. Osmun also worked in several sales and
management positions, rising from sales engineer to national sales manager, during his 12 years career with Kyocera America, Inc. Mr. Osmun holds a Bachelor of Science degree in Mechanical Engineering from Lehigh University.



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Ernest Tanis our Senior Vice President of Operations. He has over 30 years of operational
experience from the electronics industry. Prior to joining ASAT, Mr. Tan held senior level operational roles for Intel, Motorola and Flextronics in Asia, the United States and other regions. In his positions in operational management, he has
focused on improving key customer interface to allow greater integration into customers capital budgeting cycle and improved service level. Mr. Tan holds diplomas in Electrical Engineering and Management Sciences. He studied his Masters
in Business Administration at the Brunel University, UK.

John R. McMillanis our Senior Vice President of Quality and Engineering
and he has more than 20 years of semiconductor assembly and test experience. Prior to joining ASAT, Mr. McMillan was Vice President of Quality, Reliability and Manufacturing Engineering of Amkor Technology. Mr. McMillan also served as
Director of Quality and Engineering at Tensolite Company, a division of the Carlisle Corporation, where he revamped quality control procedures and managed the transition of manufacturing operations to China from the United States of America.

Our current Acting Chief Executive Officer is a member of our board of directors and is affiliated with one of our principal shareholder
groups, QPL. Our current Chief Financial Officer is the brother of a member of our board of directors who is affiliated with the investor group. For further information, see Item 7Major Shareholders and Related Party
TransactionsRelated Party Transactions.

COMPENSATION

For the year ended April 30, 2008, we paid an aggregate compensation to our senior management and directors as a group of approximately $2.9 million.
For the year ended April 30, 2007, we paid an aggregate compensation to our senior management and directors as a group of approximately $2.5 million. As of April 30, 2007, the aggregate amount accrued and unpaid by us to provide fees,
pension retirement or similar benefits for our directors and executive officers as a group was approximately $0.2 million. No unpaid balance existed as of April 30, 2008.

Some of our executive officers have entered into employment agreements or arrangements with us that entitle these executive officers to certain
separation benefits in the event that they are terminated either without cause or due to a change in control as those terms are generally understood. Upon termination without cause, some executive officers may receive
severance amounts equaling from 30 days base salary to six months base salary. Additionally, several executive officers are entitled to receive severance payments in line with the amounts specified regarding a termination without cause, if they are
constructively terminated resulting from a material change in duties and responsibilities, a significant reduction in salary, a change in reporting relationships, etc.

For information on stock options held by directors and officers as a group, see Share Ownership.

BOARD PRACTICES

Under the
Restated Articles of Association of ASAT Holdings as amended, the board consists of no fewer than three and no greater than ten directors. Shareholders are entitled to re-elect the board of directors at each annual general meeting. Vacancies on the
board can be filled by a majority of the directors present at a board meeting and vacancies of independent director seats also require approval by a majority of the independent directors. Vacancies can also be filled by a written resolution signed
by all directors. Our board of directors has determined that Mr. Montgomery, Mr. Possley and Mr. Shaw are independent directors under the applicable rules promulgated by Nasdaq. However, since our ADSs were delisted from Nasdaq in
June 2008, rules promulgated by Nasdaq are no longer applicable to our Company.

Pursuant to the shareholders agreement among the investor
group (either directly or through managed or affiliated funds), QPL and certain other investors, those parties have agreed to vote their shares so that:



| |  |  | three of the directors are individuals selected by QPL,
| | - |  | -------------------------------------------------------



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| |  |  | three of the directors are individuals selected by Asia Opportunity Fund, L.P., and
| | - |  | -----------------------------------------------------------------------------------



| |  |  | three independent directors are individuals selected by Asia Opportunity Fund, L.P. and nominated by QPL for recommendation to board of directors for approval and
appointment by the board of directors, subject to decrease as their respective shareholding decreases.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See Item
7Major Shareholders and Related Party TransactionsShareholders Agreement. The investor group and QPL also agreed that as their respective shareholding decreases below specified thresholds, they will cause a related number of
directors, which they previously appointed to resign and those seats shall be filled by nominee(s) approved by a majority of the continuing directors present at a board meeting and a majority of the independent directors.

Board of Directors Committees

Our audit
committee consists of three members: Mr. Montgomery, Mr. Possley and Mr. Shaw. Mr. Montgomery serves as chairman and the designated financial expert of the audit committee. The audit committee performs the following duties, among
others: to appoint, determine funding for and oversee the activities of the independent auditor; to review the independence and performance of the independent auditors; to pre-approve all audit and permitted non-audit services to be provided by the
independent auditors; to review audited annual consolidated financial statements and other related financial matters; to review our annual and interim quarterly financial results and the associated financial news releases; to discuss with management
and independent auditors the quality and adequacy of our internal financial controls, critical accounting policies and practices, and all material written communications between the independent auditor and management; to receive and review on a
confidential basis all complaints received regarding our accounting controls or practices; and to review and approve any related party transactions involving us and any of our officers or directors. The charter of the audit committee is available on
our website at http://www.asat.com/investor/governance.php.

Our compensation committee consists of three members:
Mr. Shaw, Mr. Montgomery and Mr. Possley. Mr. Shaw serves as chairman of the compensation committee. The compensation committee performs the following duties, among others: to review matters relating to the compensation of
directors, senior management and employees; to administer our stock option plan, including the granting of individual incentive stock option awards; to oversee the adoption, implementation and administration of any of our short-term incentive and
bonus plans; and to oversee the adoption, revision, implementation and administration of all of our employee benefit plans. The charter of the compensation committee is available on our website at
http://www.asat.com/investor/governance.php.

Our nominating and governance committee consists of three members:
Mr. Shaw, Mr. Montgomery and Mr. Possley. Mr. Shaw serves as chairman of the nominating and governance committee. The nominating and governance committee performs the following duties, among others: to oversee the nominating
process for the independent directors who will serve on the board of directors; to assist in insuring that the board of directors meets its fiduciary obligations to our shareholders; and to insure that the board of directors and ASAT follow
appropriate corporate governance standards. The charter of the nominating and governance committee is available on our website at http://www.asat.com/investor/governance.php.

In addition, ad-hoc committees may be formed by the board of directors from time to time to address specific matters.

EMPLOYEES

As of
April 30, 2008, we employed 2,633 full-time employees, of whom 45 were employed in research and development, 1,647 in assembly, 109 in test services, 717 in material control, quality control, facility engineering and assurance, 66 in marketing,
sales and customer services and 49 in administration. There were 40 employees located in Hong Kong, 2,552 in China, 31 in the U.S., 8 in Asia (excluding Hong Kong and China) and 2 in Europe. We believe our relationship with our employees is
generally good. None of our employees belong to a union.



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SHARE OWNERSHIP

Stock Option Plan

We adopted the 2000 Stock Option Plan or the plan, on July 6,
2000. We have authorized 110,000,000 ordinary shares for issuance under the plan, equivalent to 7,333,333 ADSs. The plan is a non-qualified, discretionary option grant program under which eligible individuals may be granted options to purchase
ordinary shares. Under the plan, the board and when so delegated, the Compensation Committee of the board, will determine which individuals will be granted options, the number of ordinary shares subject to the option, the exercise price for the
shares, the vesting periods and any other terms that will apply as the board deems appropriate and consistent with the plan. The individuals eligible to participate in our stock option plan includes officers, employees, consultants and
non-employee directors of the ASAT group companies. The plan is designed to attract employees and important individuals to the ASAT group companies and to provide recipients with a proprietary interest in the financial success of ASAT. We
implemented the Stock Option plan on July 11, 2000, when we granted stock options for 76,655,065 ordinary shares at a per share exercise price equal to $2.40 per ordinary share (equivalent to $36.00 per ADS). Our stock options generally expire
10 years from the grant date.

On January 24, 2003, we announced the Employee Stock Option Exchange Program, a voluntary stock option
exchange program for our officers, employees and certain directors. We offered eligible stock option holders with exercise prices above the equivalent current bid price of our ADSs to voluntarily cancel their outstanding options. In exchange,
participants were offered new stock options at the fair market value of our ADSs no sooner than six months and one day after the cancellation of the options. The cancellation occurred on February 24, 2003 at the expiration of the offer to
participate. Under the terms of the Stock Option Exchange Program, options for 60,822,235 ordinary shares (equivalent to 4,054,815 ADSs) were surrendered for cancellation at a weighted average exercise price of $1.94 per ordinary share (equivalent
to $29.1 per ADS) and, on August 29, 2003, options for 32,948,550 ordinary shares at an exercise price of $0.288 per ordinary share (equivalent to options for 2,196,570 ADSs at an exercise price of $4.32 per ADS) were granted to these
participants who were still employed by us at that date to replace the surrendered options. All newly granted replacement options have the same vesting schedule as the cancelled options.

As of April 30, 2008, we had outstanding stock options for 53,899,470 ordinary shares, equivalent to 3,593,298 ADSs, with a weighted average
exercise price of $0.088 per ordinary share (equivalent to $1.32 per ADS). Of the total amount of outstanding exercisable stock options as of April 30, 2008, we had outstanding stock options granted to our directors and executive officers as a
group for 19,859,955 ordinary shares, equivalent to 1,323,997 ADSs, with a weighted average exercise price of $0.118 per ordinary share (equivalent to $1.77 per ADS).

The following chart sets forth as of April 30, 2008 the total ordinary shares that may be received by option holders upon exercise of currently outstanding options, the weighted average exercise price of those
outstanding options and the numbers of ordinary shares that are still available for future issuance under the plan after considering the stock options currently outstanding. All of the options currently outstanding and described below have been or
can be issued pursuant to our 2000 Stock Option Plan. The plan has been approved by our stockholders.



|                                                                          |  |                                                               |  |                                                                       |       |                                                             |   |                                                                                  |  |           
|------------------------------------------------------------------------- |  | ------------------------------------------------------------- |  | --------------------------------------------------------------------- | ----- | ----------------------------------------------------------- | - | -------------------------------------------------------------------------------- |  | ----------
|Plan Category                                                             |  | Number ofshares to beissued uponexercise ofoutstandingoptions |  | Weightedaverage exerciseprices ofoutstandingoptions perordinary share |       | Weighted-average exerciseprice ofoutstandingoptions per ADS |   | Number ofsharesremainingavailable forfuture issuanceunder
equitycompensationplan
|Equity compensation plans approved by stockholders 2000 Stock Option Plan |  | 53,899,470                                                    |  | $                                                                     | 0.088 |                                                             | $ | 1.32                                                                             |  | 43,447,535
|Equity compensation plan not approved by stockholders                     |  | None                                                          |  |                                                                       |      |                                                             |   |                                                                                 |  | None      
|Total                                                                     |  | 53,899,470                                                    |  | $                                                                     | 0.088 |                                                             | $ | 1.32                                                                             |  | 43,447,535



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|ITEM | 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|---- | -------------------------------------------------------

MAJOR SHAREHOLDERS

The following table contains information concerning the ownership of our
ordinary shares and our Series A Preferred Shares by each person who we know beneficially owns 5% or more of our ordinary shares or our Series A Preferred Shares as of April 30, 2008. The share ownership information of our ordinary shares in
the following table is based on information contained in statements on Schedule 13D or Schedule 13G filed by the shareholders with the SEC or information furnished to us by the shareholders. The percentage ownership of our ordinary shares in the
table below is based on 759,295,377 ordinary shares outstanding as of April 30, 2008. The share ownership information of our Series A Preferred Shares in the following table is based on information contained in our register of members. The
percentage ownership of our Series A Preferred Shares in the table below is based on 309,169 Series A Preferred Shares outstanding as of April 30, 2008.



|                                                   |  |                               |  |                                              |   |  |                                           |  |                                                       |  
|-------------------------------------------------- |  | ----------------------------- |  | -------------------------------------------- | - |  | ----------------------------------------- |  | ----------------------------------------------------- | -
|Shareholder                                        |  | Number ofOrdinary SharesOwned |  | Percentage ofOrdinarySharesBeneficiallyOwned |   |  | Number ofSeries APreferredSharesOwned (6) |  | Percentage ofSeries
APreferredSharesBeneficiallyOwned |  
|JPMP Master Fund Manager, L.P. related funds:      |  |                               |  |                                              |   |  |                                           |  |                                                       |  
|Asia Opportunity Fund, L.P.(1)                     |  | 142,868,045                   |  | 18.81                                        | % |  | 71,369                                    |  | 23.08                                                 | %
|Chase Asia Investment Partners II (Y), LLC(1)      |  | 57,216,735                    |  | 7.54                                         | % |  | 28,583                                    |  | 9.25                                                  | %
|CAIP Co-Investment Fund Parallel Fund (I) C.V.(1)  |  | 13,870,274                    |  | 1.83                                         | % |  | 6,929                                     |  | 2.24                                                  | %
|CAIP Co-Investment Fund Parallel Fund (II) C.V.(1) |  | 9,246,768                     |  | 1.22                                         | % |  | 4,619                                     |  | 1.49                                                  | %
|                                                   |  |                               |  |                                              |   |  |                                           |  |                                                       |  
|                                                   |  | 223,201,822                   |  | 29.40                                        | % |  | 111,500                                   |  | 36.06                                                 | %
|Olympus Capital Holdings Asia related funds(2)(3)  |  | 80,915,192                    |  | 10.66                                        | % |  | 38,500                                    |  | 12.45                                                 | %
|QPL International Holdings Limited(4)(5)           |  | 325,584,494                   |  | 42.88                                        | % |  | 150,000                                   |  | 48.52                                                 | %



|(1) | The amount of shares reported consists of ordinary shares owned by Asia Opportunity Fund, L.P. (Asia Fund),
Chase Asia Investment Partners II (Y), LLC (CAIP), CAIP Co-Investment Fund Parallel Fund (I) C.V. (CAIP Parallel I) and CAIP Co-Investment Fund Parallel Fund (II) C.V. (CAIP Parallel II and collectively with
Asia Fund, CAIP and CAIP Parallel I, the J.P. Morgan Entities). The sole member of CAIP is J.P. Morgan Asia Investment Partners, L.P. (JPM Investment), whose general partner is J.P. Morgan Asia Equity Partners, L.P.
(JPM Equity). The general partner of each of the J.P. Morgan Entities is Asia Opportunity Company (Asia Opportunity), a wholly owned subsidiary of JPM Equity. The general partners of JPM Equity are JPMP Asia Equity Company, a
Cayman Islands exempted company and wholly owned subsidiary of JPMP Master Fund Manager, L.P., whose general partner is JPMP Capital Corp., a wholly owned subsidiary of JPMorgan Chase & Co., a publicly traded company, and Liu Asia Equity
Company, a Cayman Islands exempted company.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | See Olympus Capital Holdings Asia below.
|--- | -------------------------------------------



|(3) | Daniel R. Mintz, Director, Funding Managing Director and President of Olympus Capital Holdings Asia (Olympus
Capital), Lawrence S. Miao, Director, Founding Managing Director and Vice President of Olympus Capital, Frederick J. Long, Director, Founding Managing Director and Vice President of Olympus Capital, and Jeffrey E. Glat, Managing Director,
Chief Financial Officer, Secretary and Treasurer of Olympus Capital, are the control persons and executive officers of Olympus Capital, the entity which has the power to vote, or direct the vote, and the sole power to dispose of, or direct the
disposition of, all of the Ordinary Share held of record by Olympus-ASAT II, L.L.C.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | The ordinary shares are held by The Industrial Investment Company Limited, QPL (US) Inc. and Everwarm Limited, wholly
owned subsidiaries of QPL, and the Series A Preferred Shares are held by Everwarm Limited.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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|(5) | In his most recently filed statement on Schedule 13D, Mr. Tung Lok Li, one of our directors, stated that he may be
deemed to have voting or investment power over these securities. See Directors and Executive Officers.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(6) | Each Series A Preferred Share is currently convertible into 769.231 ordinary shares.
|--- | ------------------------------------------------------------------------------------

Olympus Capital Holdings Asia

Olympus Capital
Holdings Asia, an investment management firm, is a company limited by shares organized under the laws of the Cayman Islands. Olympus Capital Holdings Asia serves as investment manager of Olympus-ASAT II, L.L.C. As such, Olympus Capital Holdings Asia
has the sole power to vote, or direct the vote, or direct the vote, and the sole power to dispose of, or direct the disposition of, all of the ordinary shares held of record by this entity.

QPL International Holdings Limited

QPL (Holdings)
Ltd. was formed in 1981 under the name of Quality Platers Limited. In 1989, QPL (Holdings) Ltd. undertook a group reorganization scheme whereby its listing was replaced by QPL International Holdings Limited which was incorporated in Bermuda in 1989.

Directors and Executive Officers

Other than Mr. Tung Lok Li, none of our directors or executive officers individually beneficially owns more than 1% of our outstanding ordinary shares. Mr. Tung Lok Li, one of our directors and our Acting Chief Executive Officer,
beneficially owns approximately 38.49% of QPL, which in turn indirectly owns approximately 325,584,494 ordinary shares or approximately 42.88% of ASAT Holdings ordinary shares. In his most recently filed amendment to his statement on Schedule
13D, Mr. Li stated that he may be deemed to be the beneficial owner of the 325,584,494 ordinary shares industry held by QPL pursuant to Rule 13d-3 of the Exchange Act. In addition, Mr. Li beneficially owns 1,448,010 ordinary shares, which
is equivalent to 96,534 ADSs, owns stock options for 2,500,000 ordinary shares, which is equivalent to 166,666 ADSs in total, at an exercise price of $4.32 per share with an expiration date on August 29, 2013, and owns 22,300,000 warrants,
which is equivalent to 1,486,666 ADSs in total.

Shareholders Agreement

The shareholders listed in the table above, Orchid Hong Kong Investment Holdings and certain other purchases of our equity securities entered into a
shareholders agreement relating to transfers of ASAT Holdings ordinary shares, voting rights and other matters. Under the shareholders agreement, the shareholders agreed to vote their ordinary shares and take all action so that three directors
on the board of director are appointed by Asia Opportunity Fund, L.P., three by QPL and three independent directors are individuals selected by Asia Opportunity Fund, L.P. and nominated by QPL for recommendation to the board of directors for
approval and appointment by the board of directors, subject to decrease as their respective shareholding decreases. Orchid Hong Kong Investment Holdings is no longer a party to the shareholders agreement.

The agreement also limits the ability of shareholders to transfer their ordinary shares in ASAT Holdings, except with respect to sales to transfer to
permitted transferees, sales on Nasdaq or on any other internationally recognized stock exchange on which the ordinary shares are listed, or through a registered public offering, in each case, subject to laws and regulations of the relevant
jurisdiction. These share transfer restrictions include rights of first offer, tag along rights and the right of QPL, Asia Fund and CAIP to require the other shareholders to participate in a sale of ordinary shares to a third party if the per share
purchase price meets a minimum threshold and if other conditions are met, as more fully described in the shareholders agreement. The investor group has signed an agreement generally to vote in unison.



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Our Dividend Distribution Policy

Our policy is not to pay dividends on our ordinary shares or our ADSs for the foreseeable future. Furthermore, our ability to pay dividends will be restricted by the covenants of the indenture governing our 9.25%
senior notes due 2011, our purchase money loan agreement and foreign law and exchange restrictions.

Our Series A Preferred Shares are
entitled to a semi-annual dividend equal to 13% of the purchase price therefore, or $50, payable in arrears on March 15 and September 15. Such dividends are payable, at our option, in cash unless payment in cash is prohibited by law or by
the terms of our debt instruments, or in additional Series A Preferred Shares or ordinary shares of the Company.

On September 15,
2007, we paid semiannual dividend due on our outstanding Series A Preferred Shares. We paid the dividend in our ordinary shares, issuing 84.84 ordinary shares per Series A Preferred Share and 25,452,045 ordinary shares in the aggregate to members of
the investor group and Everwarm Limited, a wholly-owned subsidiary of QPL, and issuing 84.84 ordinary shares per Series A Preferred Share and 825,876 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to our
rights offering, all in accordance with the terms of our Series A Preferred Shares. On March 15, 2008, we paid semiannual dividend due on our outstanding Series A Preferred Shares. We paid the dividend in our ordinary shares, issuing 91.10
ordinary shares per Series A Preferred Share and 27,329,665 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and issuing 91.10 ordinary shares per Series A Preferred Share and 835,269 ordinary shares in the
aggregate to holders of Series A Preferred Shares who subscribed to our rights offering, all in accordance with the terms of our Series A Preferred Shares. On September 15, 2008, we paid semiannual dividend due on our outstanding Series A
Preferred Shares. We paid the dividend in our ordinary shares, issuing 158.91 ordinary shares per Series A Preferred Share and 47,672,829 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and issuing 158.91
ordinary shares per Series A Preferred Share and 1,457,107 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to our rights offering, all in accordance with the terms of our Series A Preferred Shares. Future
dividend payments on the Series A Preferred Shares in such shares or our ordinary shares will be dilutive to holders of ordinary shares or ADSs. In addition, if such shareholders sell substantial amounts of their ADSs in the public market during a
short period of time, prices of these securities may decline significantly. See Item 3Key InformationRisk FactorsWe issued Series A Preferred Shares and warrants in connection with the preferred shares financing
arrangement, warrants in connection with the purchase money loan facility with our two principal shareholder groups, warrants in connection with amending the purchase money loan facility and warrants in connection with the recently approved
amendments to the indenture governing our 9.25% senior notes due 2011, which can have a significant dilutive effect upon our shareholders.

RELATED PARTY TRANSACTIONS

In March 2001, we entered into a supply agreement with QPLL and Talent Focus, both wholly-owned
subsidiaries of QPL, one of our principal shareholders, pursuant to which QPLL and Talent Focus, as our preferred suppliers, agreed to supply leadframes based on our orders from time to time during the term of the contract (the Original Supply
Agreement). QPL is our largest affiliated shareholder group. In addition, Mr. Tung Lok Li, our Acting Chief Executive Officer, is chairman of the board of QPL and beneficially owns approximately 38.49% of QPL. The Original Supply
Agreement expired on April 30, 2004. The prices for the leadframes provided to us under this Original Supply Agreement were fair market value plus a premium of not less than 5% of fair market value. We believe that the premiums paid to QPL for
leadframe materials under the Original Supply Agreement were fair and reasonable for a number of reasons, including: (i) we have been consistently granted priority for needed capacity for our orders even though QPL has been operating in an
environment during which it must allocate products among its other customers, (ii) QPL engineers have consistently given us first priority to address quality or production related issues with us, (iii) QPL engineers have consistently
worked closely with our engineers and production managers to expeditiously design and manufacture leadframes to our customer specifications, (iv) the close proximity of the QPL manufacturing facilities to our assembly operations, first in Tsuen
Wan, Hong Kong and more recently in Dongguan, China,



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have resulted in the expeditious delivery of leadframes to us, and (v) QPL has been willing to hold inventory for us and/or our customers under our
just-in-time inventory management system. Fair market value under this expired contract was determined by reference to the quotations obtained from two or more reputable vendors in the integrated circuit industry selected by us and
approved by QPLL and Talent Focus.

Pursuant to an interim supply agreement, dated as of May 1, 2004, we purchased from April 30,
2004 to May 1, 2005 substantially all of our leadframe requirements from QPLL and Talent Focus on substantially the same terms as described in the Original Supply Agreement. Notwithstanding the terms of this interim supply agreement that
require us to purchase leadframes from QPLL and Talent Focus at a 5% premium, we purchased our leadframes on a purchase order basis without any premium.

On June 23, 2005, we entered into a new supply agreement with QPLL and Talent Focus that covered purchases from QPLL and Talent Focus from May 1, 2005. The new supply agreement principally governed the
supply and delivery of lead frame, heat sinks and other related products to us based on our orders during the term of the new supply agreement. The new supply agreement also governed the treatment of the inventory supply arrangements under the new
supply agreement between the parties, as well as the extended payment term granted to us by QPLL and Talent Focus. Under the new supply agreement, the number of account payable days was extended to ninety days from the date of issuance of an
invoice.

On October 27, 2005, we entered into an Amended and Restated Supply Agreement with QPLL and Talent Focus (the Amended
Supply Agreement) amending and restating our June 23, 2005 agreement governing the supply and delivery of leadframes, heat sinks and other related products to us based on our orders during the term of the Amended Supply Agreement and the
treatment of the inventory supply arrangements under the Amended Supply Agreement. In connection with the financing agreements of two of our principal shareholder groups, we, QPLL and Talent Focus entered into this Amended and Restated Supply
Agreement to provide that the payment terms shall be no more than (a) 30 days for invoices issued prior to November 16, 2005 and (b) for invoices issued after November 15, 2005 but prior to October 27, 2006, the longer of
(i) 60 days or (ii) the average of such actual payable days achieved, consistent with past practice between us and our subsidiaries on the one hand and our material vendors on the other hand (as they are defined in the Amended Supply
Agreement), but in no event longer than 90 days; provided that all invoices issued on or before October 14, 2005 were deemed immediately due and payable as of the date of the Amended Supply Agreement. The Amended Supply Agreement is effective
until October 27, 2006, and thereafter shall automatically be renewed for additional 12 month terms, unless the Amended Supply Agreement is terminated by us upon written notice not less than six calendar months prior to the expiration date or
otherwise in accordance with the provisions of the Amended Supply Agreement. We have not terminated the Amended Supply Agreement, and it continues to be effective.

We purchase a significant amount of our leadframe requirements from QPL, as well as, to a significantly lesser extent, other raw materials, tooling and spare parts. We purchased leadframe requirements, other raw
materials, tooling and spare parts from QPL amounting to $22.9 million, $9.7 million and $11.6 million for the years ended April 30, 2006, 2007 and 2008, respectively. All purchases from QPL are made in accordance with the Amended Supply
Agreement.

In addition, we provided management information services and building facility services to QPL under a cost sharing agreement.
We received services income from the provision of such services of $19 thousand for the fiscal year ended April 30, 2006. After their relocation, we did not receive any service income for provision of management information service and building
facility services to QPL for the fiscal years ended April 30, 2007 and 2008.

The amount due to QPL, which represented the net payable
to QPL as a result of all of the above, was unsecured and interest free.

On July 31, 2005, we entered into agreements for a private
financing of $30 million with JPMP Master Fund Manager, L.P. (JPMP) related funds and QPL, two of our principal shareholder groups, and affiliates of these two entities, in the form of a $15 million preferred share financing and a $15
million purchase money loan facility.



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The preferred share financing provided for the issuance and sale of 300,000 Series A Preferred Shares for
a total price of $15 million and the issuance of five-year warrants for a total of 20 million ordinary shares exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS), of which five-year warrants for a total of
5 million ordinary shares were issued as an arrangement fee. The securities purchase agreement for the Series A Preferred Share financing was amended and restated on October 27, 2005 to, among other things, add Olympus-ASAT II, L.L.C.
(Olympus), as a party. The Series A Preferred Share financing closed on October 27, 2005.

The second $15.0 million of
this financing is a purchase money loan facility from Asia Opportunity Fund, L.P., an affiliate of JPMP, and related funds. The facility may be drawn upon in two tranches. The first tranche of $10.0 million may be drawn upon if our consolidated cash
position falls below $10.0 million. A second tranche of an additional $5.0 million may be drawn upon if our consolidated cash position again falls below $10.0 million. The second tranche of an additional $5.0 million expired on July 31, 2007
and was not drawn down. Therefore, the remaining second tranche of $5 million is no longer available to us. The maturity date of the loans made in a tranche was originally two years from the date such tranche is advanced. The interest rate payable
on the loans is 15% per annum, with interest to be paid on a quarterly basis. We issued the administrative agent, on the date of the issuance and sale of Series A Preferred Shares described above, warrants to purchase an aggregate of 5,000,000
ordinary shares, which is the equivalent of 333,333 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS).

On January 25, 2006, we borrowed the first $10.0 million tranche of funding under the purchase money loan facility. In return for drawing upon the first tranche, we issued the lenders warrants to purchase an aggregate of 15,668,170
ordinary shares, which is the equivalent of 1,044,544 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS), as well as paid a commitment fee of $850,000 on a pro rata basis to the lenders that funded the first
tranche. In each case, the warrants are exercisable for five years from the date of issuance.

On August 23, 2007, the purchase money
loan facility was amended to extend the maturity due date of the $10.0 million principal amount until April 30, 2009 and to extend the payment due date for interest payments (and interest on such interest) for March 31,
2006, June 30, 2006, September 30, 2006, December 31, 2006, March 31, 2007, June 30, 2007 and September 30, 2007 to become due on October 31, 2007. In return for amending the purchase money loan
facility, we issued 35,766,900 warrants to the lenders on October 1, 2007 under the purchase money loan facility warrants exercisable, in the aggregate, for a total of approximately 4.6% of ASAT Holdings total outstanding ordinary shares
on a fully diluted basis as of the issue date (inclusive of ordinary shares issuable upon exercise of warrants to the holders themselves and which ASAT Holdings will grant to the eligible holders of our 9.25% senior notes due 2011). The warrants
have an exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject to adjustment as provided in the warrants and the other terms and conditions contained therein.

On October 10, 2007, the purchase money loan facility was further amended to extend the payment due dates for the interest, including any penalty
interest as required by the agreement. Interest that was due or will be due for payment on or before December 31, 2008 will be due and payable on December 31, 2008.

On October 17, 2008, we amended the purchase money loan facility to extend the maturity due date of the $10.0 million principal amount and certain
unpaid interest. The maturity due date for the $10.0 million principal was extended to January 31, 2010. For the total interest of $5,277,231 accrued and unpaid up to October 17, 2008, we were required to pay $441,667 upon signing the
amended agreement. The balance of the unpaid interest of $4,835,564 was converted into two separate loan principals with $2,435,564 due and payable on December 15, 2008 and $2,400,000 due and payable on January 31, 2010.

The purchase money loan facility is unsecured and contains various affirmative and negative covenants binding on us and our subsidiaries, including
limitations on our and our subsidiaries ability to incur indebtedness,



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grant liens on assets, pay dividends and enter into transactions with affiliates. In addition, we will be required to repay the loans with the net proceeds
of certain issuances of equity and debt and certain asset sales.

We have agreed to file a registration statement covering the resale of
the shares issuable upon exercise of the Series A Preferred Shares and warrants described above. We have obtained a waiver from the U.S. Securities and Exchange Commission, or SEC on such obligation until such time as we are notified to file a
registration statement, which has not yet occurred as of the date of this annual report. We have withdrawn all previous filings with the SEC, on this matter.

As required by the securities purchase agreement, in July 2006, we completed a rights offering of the Series A Preferred Shares and warrants for the benefit of existing shareholders, excluding the purchasers of the
Series A Preferred Shares and certain other shareholders that waived participation in the rights offering. In the rights offering, we distributed one subscription right for every 1,850 of our ordinary shares, or for every 123 of our ADSs, owned.
Each subscription right entitled the recipient to purchase for $50.00 a unit consisting of one Series A Preferred Share and a warrant to purchase 50 ordinary shares. We sold 9,799 units in this offering and received gross proceeds of $489,950 in the
rights offering.

On September 1, 2006, our board of directors appointed Tung Lok Li as Acting Chief Executive Officer. Mr. Li is
chairman of QPL, one of our principal shareholder groups, and a member of our board of directors. Mr. Li has assumed his position for the interim period while we continue our search for a permanent Chief Executive Officer. While Mr. Li
will continue to serve as a member of our board of directors, his employment contract with us expressly prohibit him from entering into any related party transactions with QPL. On September 1, 2006, our board of directors appointed Joseph
Martin as Executive Vice President of Sales and Marketing. In April 2008, Mr. Martin assumed a new position as our Chief Business Officer. Mr. Martin was Chief Executive Officer of QPL, one of our principal shareholder groups, and is a
member of our board of directors. Mr. Martin resigned from his position with QPL effective September 1, 2006 to avoid any conflicts of interest with his current position at ASAT. On July 18, 2007, our board of directors appointed Kei
Hong Chua as Chief Financial Officer. Mr. Kei Hong Chua succeeds his brother, Mr. Kei W. Chua, our former Acting Chief Financial Officer and a current member of our board of directors, who is affiliated with one of our principal
shareholder groups, the investor group.

On October 1, 2007, we issued in total of 35,766,900 warrants to Asia Opportunity Fund, L.P.,
Chase Asia Investment Partners II (Y), LLC, CAIP Co-Investment Fund Parallel Fund (I) C.V. and CAIP Co-Investment Fund Parallel Fund (II) C.V., affiliates of one of our major shareholders, JPMP, in return for amending the purchase money loan
facility (see item 5Material financing arrangements for details). The warrants have an exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject to adjustment as provided in the warrants and the
other terms and conditions contained therein. The fair value of warrants issued is approximately $1.6 million and it is amortized as an adjustment of interest expense over the remaining term of the purchase money loan. As of April 30, 2008, the
unamortized fair value of the warrant was approximately $1.1 million and recorded in Deferred Charges, Net.

On
February 28, 2008, we issued warrants for a total of 41.8 million ordinary shares to Mr. Tung Lok Li, the Acting Chief Executive Officer, as part of his compensation. The warrant is exercisable with respect to 20.6 million
ordinary shares immediately, with the remainder subject to certain vesting or performance criteria. The fair value of warrants issued is approximately $1 million and it has an exercise price of $0.01 per ordinary share and will expire on
February 1, 2011, subject to adjustment as provided in the warrants and the other terms and conditions contained therein.

ITEM 8.    FINANCIAL INFORMATION

See Item 18 Financial
Statements.



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ITEM 9.    THE OFFER AND LISTING

Market Price InformationAmerican Depositary Shares (ADSs)

Our ordinary shares trade in the form of ADSs evidenced by American Depositary Receipts, or ADRs. Our ADSs are currently traded on the OTC Bulletin Board (OTCBB) in the United States under the symbol
ASTTY.OB. Information relating to our ADSs has been restated to give effect to the ADS ratio change from one ADS for every five ordinary shares to one ADS for every 15 ordinary shares effective December 22, 2006. The Bank of New
York acts as the depositary of our ADSs.

Following the offering of our ADSs in July 2000, our ADSs were quoted on the Nasdaq Global Market
(formerly the Nasdaq National Market) until June 2003. On June 26, 2003, as we did not meet the listing requirements for the Nasdaq Global Market, Nasdaq approved our application to transfer to the Nasdaq Capital Market (formerly the Nasdaq
SmallCap Market), where our ADSs were quoted from July 1, 2003 to April 12, 2004. On April 12, 2004, the ADSs once again became quoted on the Nasdaq Global Market. On November 28, 2005, as we again did not meet the listing
requirements for the Nasdaq Global Market, Nasdaq approved our application to transfer to the Nasdaq Capital Market, effective November 30, 2005. On March 27, 2008, trading of our ADSs was suspended from the Nasdaq Capital Market and our
ADSs were delisted from Nasdaq in June 2008. In April 2008, our ADSs became traded on the OTCBB. Currently, our ADSs are not listed on a public stock exchange.

The table below presents the high and low closing prices for our ADSs traded on the Nasdaq Global Market, the Nasdaq Capital Market, or the OTCBB, as applicable, for the periods presented.



|                                                |  |                                                                     |       |     |   |     
|----------------------------------------------- |  | ------------------------------------------------------------------- | ----- | --- | - | ----
|                                                |  | Price per ADS on NasdaqGlobal Market, NasdaqCapital Market or OTCBB
|                                                |  | High                                                                |       | Low
|Annually Highs and Lows                         |  |                                                                     |       |     |   |     
|Fiscal Year Ended April 30,                     |  |                                                                     |       |     |   |     
|2004                                            |  | $                                                                   | 13.80 |     | $ | 1.26
|2005                                            |  |                                                                     | 7.38  |     |   | 2.64
|2006                                            |  |                                                                     | 3.84  |     |   | 1.65
|2007                                            |  |                                                                     | 3.21  |     |   | 0.20
|2008                                            |  |                                                                     | 1.42  |     |   | 0.10
|                                                |  |                                                                    
|Quarterly Highs and Lows                        |  |                                                                     |       |     |   |     
|Fiscal Year Ended April 30, 2007                |  |                                                                     |       |     |   |     
|First Quarter                                   |  | $                                                                   | 3.21  |     | $ | 1.50
|Second Quarter                                  |  |                                                                     | 1.62  |     |   | 0.60
|Third Quarter                                   |  |                                                                     | 2.37  |     |   | 1.32
|Fourth Quarter                                  |  |                                                                     | 2.02  |     |   | 0.92
|                                                |  |                                                                    
|Fiscal Year Ended April 30, 2008                |  |                                                                     |       |     |   |     
|First Quarter                                   |  | $                                                                   | 1.42  |     | $ | 0.77
|Second Quarter                                  |  |                                                                     | 1.33  |     |   | 0.39
|Third Quarter                                   |  |                                                                     | 1.34  |     |   | 0.56
|Fourth Quarter                                  |  |                                                                     | 0.64  |     |   | 0.10
|                                                |  |                                                                    
|Fiscal Year Ended April 30, 2009                |  |                                                                     |       |     |   |     
|First Quarter                                   |  | $                                                                   | 0.60  |     | $ | 0.13
|Second Quarter (through October 28, 2008)       |  |                                                                     | 0.44  |     |   | 0.10
|                                                |  |                                                                    
|Monthly Highs and Lows (most recent six months) |  |                                                                     |       |     |   |     
|April                                           |  | $                                                                   | 0.35  |     | $ | 0.10
|May                                             |  |                                                                     | 0.60  |     |   | 0.21
|June                                            |  |                                                                     | 0.40  |     |   | 0.25
|July                                            |  |                                                                     | 0.40  |     |   | 0.13
|August                                          |  |                                                                     | 0.44  |     |   | 0.23
|September                                       |  |                                                                     | 0.40  |     |   | 0.20
|October (through October 28, 2008)              |  |                                                                     | 0.20  |     |   | 0.10



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All of the ordinary shares issued and outstanding are registered shares and not bearer shares, are fully
paid, duly authorized and validly issued and have a par value $0.01 per share. There is no public trading market for our ordinary shares.



|ITEM | 10.    
ADDITIONAL INFORMATION
|---- | ------------------------------

RESTATED MEMORANDUM AND RESTATED ARTICLES OF ASSOCIATION

We were incorporated on October 20, 1999 in the Cayman Islands as an exempted company with limited liability, and our affairs are governed by our
Restated Memorandum and Restated Articles of Association and The Companies Law (as revised) of the Cayman Islands and the common law of the Cayman Islands. The following is a summary of the Restated Memorandum and Restated Articles of Association,
including rights and privileges pertaining to our ordinary shares and Series A Preferred Shares.

Objects and Purpose

Our Restated Memorandum of Association provides that the objects for which we are established are unrestricted.

Directors

The Restated Articles of Association
provide that any contract or arrangement in which a director of ours is interested shall be approved by a majority of the disinterested directors or by the shareholders in a general meeting prior to entry into the contract or arrangement. No
director (except for the independent directors) shall be entitled to any remuneration for serving as a director. Our board of directors may exercise all the powers to borrow money without restriction. There is no mandatory age limit by which
directors must retire. There is no shareholding qualification for directors.

Share Capital

We have a total authorized share capital of $30,000,000, divided into 2,999,000,000 ordinary shares of par value $0.01, 759,295,377 of which were
outstanding as of April 30, 2008, and 1,000,000 Series A Redeemable Convertible Preferred shares, of par value $0.01 per share, 309,169 of which were outstanding as of April 30, 2008. All of the ordinary shares issued and outstanding are
registered shares and not bearer shares, and are fully paid, duly authorized and validly issued.

Cayman Islands laws provides that share
capital may be increased in such manner as is provided for in the articles of association of the relevant company. Our Restated Articles of Association provide that our share capital may be increased by ordinary resolution of the shareholders. The
Restated Articles of Association are permissive of a repurchase or a reduction in share capital subject to approval by special resolution and such additional approvals as are required under the Companies Law of the Cayman Islands (in the case of
reduction of capital, this would required approval of the Grand Court of the Cayman Islands).

Ordinary Shares. There are no
limitations in our Restated Articles of Association or under Cayman Islands law on the right to own securities, including the rights of non-resident or foreign shareholders to hold or exercise voting rights although no shares in an exempted company
may be offered to the public in the Cayman Islands.

Voting rights. The holders of ordinary shares are entitled on a show of hands
to one vote per holder and on a poll to one vote per share on all matters to be voted on by our shareholders.

Dividend Rights.
Holders of the ordinary shares are entitled to share equally, share for share, if dividends are declared on our ordinary shares, whether such dividends are payable in cash, property or securities. Any dividend unclaimed after a period of six years
from the date when it was declared shall be forfeited and shall revert to us.



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Liquidation Rights, Other Rights. In the event of a voluntary or an involuntary liquidation,
dissolution or winding up, the holders of our ordinary shares are entitled to share equally, share for share, in the assets available for distribution and shall be entitled to receive all assets and funds remaining and available for distribution,
divided on a pro rata basis according to the number of ordinary shares owned. Except as set forth above, holders of our ordinary shares have no conversion or redemption rights. Our Restated Articles of Association contain provisions dealing with the
manner in which capital calls can be made on shareholders but these only apply to situations in which the ordinary shares are issued partly paid and are subject to the specific terms of issue of such partly paid shares.

Series A Preferred Shares

Issue Price

The effective issue price of each Series A Preferred Share is $50.00.

Conversion Price

Each Series A Preferred Share is convertible at the holders option into
ordinary shares at a conversion price equal to $0.09 per ordinary share (equivalent to $1.35 per ADS). The conversion price is subject to adjustment as follows:



| |  |  | the conversion price is subject to customary adjustments for share splits, dividends, re-combinations and similar transactions;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------



| |  |  | subject to certain exceptions specified in our Restated Articles of Association, the conversion price will be adjusted on a weighted-average basis in the event of
any future issuance of ordinary shares or securities convertible, exchangeable or exercisable into ordinary shares, subject to certain exceptions, for no consideration or for consideration per share less than either the then-effective conversion
price of the ordinary shares, as determined based on the average closing prices of our ADSs for a thirty day trading period ending three days prior to the date of determination; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the conversion price is subject to a potential reset on October 31, 2006 to 80% of the average trading price of our ADSs during the preceding three months if
such amount were below the conversion price of $0.09 per ordinary share (equivalent to $1.35 per ADS), subject to a floor of $0.065 per ordinary share ($0.975 per ADS).
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

With respect to the second bullet point above, the exceptions include:



| | (1) | ordinary shares issued upon conversion of the Series A Preferred Shares and the exercise of any warrants issued pursuant to the securities purchase agreement or the purchase money
loan agreement;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | ordinary shares or other equity securities (as defined in our Restated Articles of Association) issued or issuable to our employees, consultants or directors directly or pursuant to
a stock option plan or restricted stock plan approved by our Board of Directors;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | ordinary shares or warrants with an exercise price that is equal to or greater than the fair market value (as defined in our Restated Articles of Association) on the date of
issuance issued to financial institutions or lessors in connection with commercial credit arrangements or equipment financings;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (4) | ordinary shares or other equity securities issuable upon exercise of equity securities outstanding as of the closing date of the securities purchase agreement; and
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (5) | ordinary shares or warrants issued for non-cash consideration in connection with any arms length agreement with a commercial or trade entity in connection with the delivery or
purchase of goods and services in the ordinary course of business approved by our board of directors.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

No adjustment to the
conversion price shall be required unless the adjustment would require an increase or decrease of at least 1.0% in the conversion price. However, any adjustments not required to be made as a result of



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the preceding sentence will be carried forward and taken into account in any subsequent adjustment. If the holders of at least 662/3% of the then outstanding Series A Preferred Shares consent in writing to limit, or waive in its entirety, any anti-dilution
adjustment to which the holder of the Series A Preferred Shares would otherwise be entitled to under our Restated Articles of Association, we will not be required to make any adjustment with respect to the Series A Preferred Shares in excess of such
limit or at all, as the terms of such consent dictate.

Voting; Transferability

The Series A Preferred Shares have no voting rights except as required by applicable law. No holder of Series A Preferred Shares may assign or transfer
any Series A Preferred Shares or any rights, interests or obligations thereunder without the prior written approval of a majority of the Series A Preferred Shares then outstanding, subject to certain exceptions. The Restated Articles of Association
permit the assignment or transfer of Series A Preferred Shares to a permitted transferee (as defined in the shareholders agreement among our major shareholders, which are generally the general partners and limited partners of a fund which is a
shareholder or wholly-owned subsidiaries of QPL) or to a party to the shareholders agreement among our major shareholders or their successors or assigns that agrees to be bound by the terms of such articles.

Dividends

The Series A Preferred Shares will accrue
dividends at the rate of 13% per annum, payable semi-annually in arrears on March 15 and September 15 of each year, commencing March 15, 2006. Such dividends will be payable, at our option, either in cash, unless payment in cash
is prohibited by law or by the terms of our debt instruments, or in additional Series A Preferred Shares or ordinary shares. Each of the indenture governing our 9.25% senior notes due 2011 and our purchase money loan agreement currently prohibits
payment of the dividends on the Series A Preferred Shares in cash and are likely to do so for the foreseeable future.

Liquidation Preference

In the event of any liquidation, dissolution or winding up of us, the holders of Series A Preferred Shares will be entitled to receive,
prior to and in preference to the distribution of any of our assets to holders of ordinary shares, an amount equal to 100% of the issue price of the Series A Preferred Shares, plus all accrued and unpaid dividends. Upon the completion of the
distribution to the holders of Series A Preferred Shares, our remaining assets available for distribution to our shareholders will be distributed among the holders of the Series A Preferred Shares and our ordinary shares pro rata based on the number
of ordinary shares held by each on an as-converted basis. Mergers, acquisitions and certain similar transactions will be deemed to be a liquidation, dissolution or winding up of us for these purposes.

Redemption

The Series A Preferred Shares are
redeemable, in whole or in part, at the option of the holders on or after May 4, 2011. In such event, the redemption price for the Series A Preferred Shares will equal the issue price of the Series A Preferred Shares plus accrued and unpaid
dividends to, but excluding, the redemption date. However, we will be under no obligation to redeem any Series A Preferred Shares unless the redemption is permitted by the terms of indenture governing our 9.25% senior notes due 2011, our purchase
money loan agreement and our facilities with Standard Chartered Bank.

The Series A Preferred Shares are also redeemable at our option, in
whole or in part, at any time at a redemption price equal to the higher of (i) the issue price of the Series A Preferred Shares plus accrued and unpaid dividends thereon to, but excluding, the redemption date, and (ii) the aggregate fair
market value of the ordinary shares into which the Series A Preferred Shares are then convertible.



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In calculating the redemption price, fair market value will be determined as follows:



| |  | if traded on the Nasdaq Global Market, the Nasdaq Capital Market or over the counter, the fair market value shall be deemed to be the average closing prices of our ADSs over the
thirty (30) day trading period ending three trading days prior to the determination date and dividing such average by the number of ordinary shares represented by each ADS; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  | if there is no public market for the ADSs, transfer market value shall be determined in good faith by our board of directors.
| | - | -----------------------------------------------------------------------------------------------------------------------------

Warrants. In a private placement transaction in October 1999, we issued 155,000 units consisting of 155,000 warrants to purchase ordinary share of
ASAT holdings and $155,000,000 aggregate principal amount of 12.5% senior notes due 2006 of ASAT (Finance) LLC, all of which notes were redeemed on February 25, 2004 and are no longer outstanding. Each warrant entitled the holder, subject to
specific conditions, to subscribe for 114.19 of our ordinary shares at an exercise price of $0.39 per share, subject to adjustment under specified circumstances. As a result of a share dividend of 47 ordinary shares for each outstanding share
undertaken contemporaneously with the completion of our offering of ADSs on July 14, 2000, the total number of our ordinary shares issuable upon exercise of the warrants was adjusted from 371,132 shares to 17,699,450 shares, and the exercise
price for the warrants was adjusted from $18.60 per ordinary share to $0.39 per ordinary share. The warrants were exercisable at any time on or after November 1, 2001 and expired on November 1, 2006.

In July 2005 we entered into a settlement agreement with Freescale Semiconductor, Inc. with respect to claim of royalty payments. In connection with the
settlement agreement, we issued to Freescale Semiconductor, Inc. a five-year warrant to purchase 10,937,500 of our ordinary shares, which is the equivalent of 729,167 ADSs, at an exercise price of $0.16 per share (equivalent to $2.40 per ADS).

In connection with the closing of the private financing, we issued five-year warrants to purchase an aggregate of 20,000,000 ordinary
shares exercisable at the price of $0.01 per share, of which warrants to purchase a total of 5,000,000 ordinary shares were issued as an arrangement fee. In connection with the closing of the rights offering, we issued five-year warrants to purchase
an aggregate of 489,950 ordinary shares exercisable at the price of $0.01 per share.

In connection with the closing of the purchase money
loan agreement, we issued five-year warrants to purchase an aggregate of 5,000,000 ordinary shares exercisable at a price of $0.01 per share as an arrangement fee. On January 25, 2006, we issued five-year warrants to purchase an aggregate of
15,668,170 ordinary shares exercisable at a price of $0.01 per share in connection with our borrowing of the first tranche of funding under the purchase money loan agreement.

On August 23, 2007, we agreed to issue warrants for ordinary shares in connection with the amendment to our purchase money loan agreement, which was
as required as a condition to closing the solicitation of consents to amend our indenture governing our 9.25% senior notes due 2011, as described below. On October 1, 2007, these warrants were issued to the lenders under the purchase money loan
agreement, subject to certain conditions specified therein. These warrants, in the aggregate, are exercisable for a total of approximately 4.6% of ASAT Holdings total outstanding ordinary shares on a fully diluted basis as of the issue date
(inclusive of ordinary shares issuable upon exercise of warrants to the holders themselves and which ASAT Holdings will grant to the eligible holders of our 9.25% senior notes due 2011). The warrants have an exercise price of $0.01 per ordinary
share and will expire on February 1, 2011, subject to adjustment as provided in the warrants and the other terms and conditions contained therein.

On August 27, 2007, we agreed to issue warrants for ordinary shares in connection with the amendment of the indenture governing our 9.25% senior notes due 2011. On October 1, 2007, these warrants were issued
to eligible holders of our 9.25% senior notes due 2011 who consented to our solicitation of consents ended August 23, 2007 to amend the indenture governing our 9.25% senior notes due 2011, subject to certain conditions specified therein. These
warrants, in the aggregate, are exercisable for a total of approximately 4.6%



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of ASAT Holdings total outstanding ordinary shares on a fully diluted basis as of the issue date (inclusive of ordinary shares issuable upon exercise
of warrants to the holders themselves and which ASAT Holdings will grant to the lenders under its purchase money loan agreement). The warrants have an exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject to
adjustment as provided in the warrants and the other terms and conditions contained therein.

On February 28, 2008, we issued warrants
for a total of 41.8 million ordinary shares to Mr. Tung Lok Li, the Acting Chief Executive Officer, as part of his compensation. The warrant is exercisable with respect to 20.6 million ordinary shares immediately, with the remainder
subject to certain vesting or performance criteria, provided that (i) Mr. Tung Lok Li ceases to serve as our executive officer for whatever reasons, including death or (ii) any person or entity becomes a beneficial owner of more than 50% of the
total voting power in each and all classes of our equity following the warrant issue date and Mr. Tung Lok Li ceases to serves as our executive officer due to such change of control, the warrant will become immediately exercisable with respect to an
aggregate of up to 35.8 million ordinary shares. The fair value of warrants issued is approximately $1 million and it has an exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject to adjustment as provided in
the warrants and the other terms and conditions contained therein.

Share Option Plans. We adopted the 2000 Stock Option Plan, or
the plan, on July 6, 2000. We have authorized 110,000,000 ordinary shares for issuance under the plan. This is equivalent to 7,333,333 ADSs. The plan is a non-qualified, discretionary option grant program under which eligible individuals may be
granted options to purchase ordinary shares. Under the plan, the board of directors and, when so delegated, the compensation committee of the board of directors, will determine which individuals will be granted options, the number of ordinary shares
subject to the option, the exercise price for the ordinary shares, the vesting periods and any other terms as the board of directors deems appropriate and consistent with the plan. The individuals eligible to participate in the plan includes
officers, employees, consultants and non-employee directors of the ASAT group companies. The plan is designed to attract employees and important individuals to the ASAT group companies and to provide recipients with a proprietary interest in the
financial success of ASAT.

On January 24, 2003, we announced an employee stock exchange program, a voluntary stock option exchange
program for our employees, employee director and non-employee directors. We offered eligible stock option holders with exercise prices above the current bid price of our ADSs the option of voluntarily canceling their outstanding options. In
exchange, participants were to be granted new stock options at the fair value of our ADSs no sooner then six months and one day after the cancellation of the options, which cancellation occurred on February 24, 2003. Under the terms of the
stock option exchange program, 60,822,235 options for ordinary shares (equivalent to 12,164,447 options to purchase ADSs) were surrendered for cancellation.

On August 29, 2003, options for 32,948,550 ordinary shares (equivalent to 2,196,570 ADSs) were granted under the employee stock option exchange program at an exercise price of $0.288 per ordinary share
(equivalent to $4.32 per ADS) to those participants who were still employed by us on that date. All newly granted options have the same date vesting schedules as the cancelled options.

As of April 30, 2008, we had outstanding stock options for 53,899,470 ordinary shares, equivalent to 3,593,298 ADSs, with a weighted average
exercise price of $0.088 per ordinary share (equivalent to $1.32 per ADS). Of the total amount of outstanding stock options as of April 30, 2008, we had outstanding stock options granted to our directors and executive officers as a group for
19,859,955 ordinary shares, equivalent to 1,323,997 ADSs, with a weighted average exercise price of $0.118 per ordinary share (equivalent to $1.77 per ADS).

Changing Shareholder Rights

A special resolution of shareholders (that is a resolution passed by a two thirds majority of
ordinary shareholders present at a properly convened and constituted shareholder meeting or unanimously in writing by all shareholders) is required to change the rights attaching to the ordinary shares.



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Transfer of Shares

Under our Restated Articles of Association, ordinary shares are freely transferable by way of an instrument of transfer as prescribed by the board of directors and Series A Preferred Shares are transferable only with
the consent of the holders of a majority of the outstanding Series A Preferred Shares.

Ordinary shares held by QPL, the investor group or
their permitted transferees are subject to a shareholders agreement between those parties. Under that agreement, the parties are not allowed to transfer any ordinary shares unless to permitted transferees, in registered public offerings, on Nasdaq
or an internationally recognized stock exchange on which the ordinary shares are listed, or in accordance with the right of first offer, tag along and drag along requirements in the agreement, subject to applicable law, including United States
securities law. Any ordinary share owned by QPL, the investor group or their permitted transferees will be released from these contractual transfer restrictions once the ordinary share is sold in a registered public offering, or on Nasdaq or an
internationally recognized stock exchange on which the ordinary shares are listed. The ADSs sold in the offering of our ADSs completed on July 14, 2000 by the selling shareholders, and the ordinary shares represented by the ADSs have not been
subject to these transfer restrictions since completion of the offering of our ADSs. See Item 7Major Shareholders and Related Party TransactionsShareholders Agreement.

Differences in Corporate Law

The Companies Law of
the Cayman Islands is modeled after that of England but does not follow recent United Kingdom statutory enactments and differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the significant
differences between the provisions of the Companies Law applicable to us and the laws applicable to companies incorporated in the United States and their shareholders.

Mergers and Similar Arrangements. Cayman Islands law does not provide for mergers as that expression is understood under United States corporate law. Mergers in the United States generally require the approval
of a majority of the outstanding common stock of both entities involved in the proposed merger. In the Cayman Islands, however, there are statutory provisions that facilitate the reconstruction and amalgamation of companies, provided that the
arrangement is approved by a majority of the shareholders or of each class of shareholders, as the case may be, and creditors with whom the arrangement is to be made and who must represent a majority in number representing three-fourths in value of
the shareholders or of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting or meetings convened for that purpose. The convening of the meetings and subsequently the
arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the
arrangement if it satisfies itself that:



| |  |  | the statutory provisions as to majority vote have been complied with;
| | - |  | ---------------------------------------------------------------------



| |  |  | the shareholders have been fairly represented at the meeting in question;
| | - |  | -------------------------------------------------------------------------



| |  |  | the arrangement is such as a businessman would reasonably approve; and
| | - |  | ----------------------------------------------------------------------



| |  |  | the arrangement is not one that would more properly be sanctioned under a different provision of the Companies Law.
| | - |  | -------------------------------------------------------------------------------------------------------------------

When a take-over offer is made and accepted by holders of 90% of the shares within four months, the offeror may, within a two-month period, require the
holders of the remaining shares to transfer such shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands, but this is unlikely to succeed unless there is evidence of fraud, bad faith or collusion.

If the arrangement and reconstruction is approved, the dissenting shareholder would have no rights comparable to appraisal rights, which
would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the shares.



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In addition, Cayman Islands law does not specifically require shareholder approval for a disposition of
all or substantially all of an entitys assets, which in the United States would typically require approval by at least a majority of the holders of the outstanding common stock of the entity proposing to dispose of its assets.

Shareholders Suits. Our Cayman Islands counsel is not aware of any reported class action having been brought in a Cayman Islands court.
Reported derivative actions have been brought but have not succeeded for technical reasons. In principle, a derivative action may not be brought by a minority shareholder. Instead, we would be the proper plaintiff. However, based on English
authorities, which are of persuasive authority in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:



| |  |  | a company is acting or proposing to act illegally or ultra vires;
| | - |  | -----------------------------------------------------------------



| |  |  | the act complained of, although not ultra vires, could be effected only if authorized by more than a simple majority vote (which has not be obtained); or
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | those who control the company are perpetrating a fraud on the minority.
| | - |  | -------------------------------------------------------------------------

Indemnification

Cayman Islands law does not limit the extent to which a companys articles of
association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the
consequences of committing a crime. Our Restated Articles of Association permit us to indemnify officers and directors for losses, damages, cost and expenses incurred in their capacities as such if they acted in good faith and in a manner they
reasonably believed to be in our best interests, and in any criminal action, if they had no reasonable cause to believe their conduct was unlawful. If the director or officer is found liable by the court, we may indemnify him only if the court
determines that the director or officer is fairly and reasonably entitled to indemnity.

Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable as a matter of United States law.

Annual General Meeting

As a matter of Cayman Islands law, we are not required to hold an annual general meeting of shareholders. If we do hold an annual general meeting then we
are required to call such meeting on not less than 21 days notice. Directors may call a meeting of shareholders at any other time. Where a special resolution is to be proposed at the meeting, such meeting shall be called by not less than 21
days notice in writing to all shareholders. Any other general meeting is required to be called by not less than 14 days notice in writing to all shareholders.

Inspection of Books and Records

Holders of our ordinary shares will have no general right under
Cayman Islands law to inspect or obtain copies of our list of shareholders or our corporate records. However, we will provide our shareholders with annual audited consolidated financial statements.

MATERIAL CONTRACTS

In March
2001, we entered into a supply agreement with QPLL and Talent Focus, both wholly-owned subsidiaries of QPL, pursuant to which QPLL and Talent Focus, as our preferred suppliers, agreed to supply leadframes based on our orders from time to time during
the term of the contract. QPL is our largest affiliated shareholder group. The Original Supply Agreement expired on April 30, 2004. The prices for the leadframes



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provided to us under this Original Supply Agreement were fair market value plus a premium of not less than 5% of fair market value. We believe that the
premiums paid to QPL for leadframe materials under the Original Supply Agreement were fair and reasonable for a number of reasons, including: (i) we have been consistently granted priority for needed capacity for our orders even though QPL has
been operating in an environment during which it must allocate product among their its other customers, (ii) QPL engineers have consistently given us first priority to address quality or production related issues with us, (iii) QPL
engineers have consistently worked closely with our engineers and production managers to expeditiously design and manufacture leadframes to our customer specifications, (iv) the close proximity of the QPL manufacturing facilities to our
assembly operations, first in Tsuen Wan, Hong Kong and more recently in Dongguan, China, have resulted in the expeditious delivery of leadframes to us, and (v) QPL has been willing to hold inventory for us and/or our customers under our
just-in-time inventory management system. Fair market value under this expired contract was determined by reference to the quotations obtained from two or more reputable vendors in the integrated circuit industry selected by us and
approved by QPLL and Talent Focus.

Pursuant to an interim supply agreement, dated as of May 1, 2004, we purchased from April 30,
2004 to May 1, 2005 substantially all of our leadframe requirements from QPLL and Talent Focus on substantially the same terms as described in the Original Supply Agreement. Notwithstanding the terms of this interim supply agreement that
require us to purchase leadframes from QPLL and Talent Focus at a 5% premium, we purchased our leadframes on a purchase order basis without any premium.

On June 23, 2005, we entered into a new supply agreement with QPLL and Talent Focus. The new supply agreement principally governed the supply and delivery of lead frame, heat sinks and other related products to
us based on our orders during the term of the new supply agreement. The new supply agreement also governed the treatment of the inventory supply arrangements under the new supply agreement between the parties, as well as the extended payment term
granted to us by QPLL and Talent Focus. Under the new supply agreement, the number of account payable days was extended to ninety days from the date of issuance of an invoice.

On October 27, 2005, we entered into an Amended and Restated Supply Agreement with QPLL and Talent Focus (the Amended Supply Agreement)
amending and restating our June 23, 2005 agreement and governing the supply and delivery of leadframes, heat sinks and other related products to us based on our orders during the term of the Amended Supply Agreement and the treatment of the
inventory supply arrangements under the Amended Supply Agreement. In connection with the financing agreements of two of our principal shareholder groups, we, QPLL and Talent Focus entered into this Amended and Restated Supply Agreement to provide
that the payment terms shall be no more than (a) 30 days for invoices issued prior to November 16, 2005 and (b) for invoices issued after November 15, 2005 but prior to October 27, 2006, the longer of (i) 60 days or
(ii) the average of such actual payable days achieved, consistent with past practice between us and our subsidiaries on the one hand and our material vendors on the other hand (as they are defined in the Amended Supply Agreement), but in no
event longer than 90 days; provided that all invoices issued on or before October 14, 2005 were deemed immediately due and payable as of the date of the Amended Supply Agreement. The Amended Supply Agreement is effective until October 27,
2006, and thereafter shall automatically be renewed for additional 12 month terms, unless the Amended Supply Agreement is terminated by us upon written notice not less than six calendar months prior to the expiration date or otherwise in accordance
with the provisions of the Amended Supply Agreement. We have not terminated the Amended Supply Agreement, and it continues to be effective.

As part of our corporate restructuring program, we made a strategic decision to move all of our Hong Kong manufacturing operations to Dongguan, China in order to significantly reduce our costs and access the high-growth semiconductor market
in China. To launch what we call Phase I of this transition of our operations to China, in August 2002 we entered into a lease agreement pursuant to which Changshi has constructed an 180,000 square foot factory facility and leased the facility to us
starting from September 2003 for a term of 15 years. We are obligated to pay monthly rental payments of HK$1.4 million (approximately $179 thousand at an assumed exchange rate of HK$7.80 per $1.00) for the first six years of the rental term, HK$350
thousand (approximately



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$45 thousand at an assumed exchange rate of HK$7.80 per $1.00) for the seventh to eleventh years and HK$385 thousand (approximately $49 thousand at an
assumed exchange rate of HK$7.80 per $1.00) for the twelfth to fifteenth years. From October 30, 2004 and during the term of the leases, we have an option and a right of first refusal to purchase the facility and the related land-use right at
prices fixed in a predetermined schedule or, subsequent to October 2009, at prices based on the then fair market value of the factory facilities and related land use right. Additionally, under a management services agreement, we were obligated to
pay Changshi a monthly management service fee of HK$506 thousand (approximately $65 thousand at an assumed exchange rate of HK$7.80 per $1.00), which amount includes a land use rights fee, foreign exchange remittance fees and certain administrative
and management charges for the next six year term, commencing September 2003. Over the six year term of this agreement, Changshi has agreed to support the operation of the facility by nominating employees for staffing of the facility, maintaining
the facility and its systems in good repair and operating condition (at our cost) and assisting us with handling Chinese governmental and regulatory matters.

In May 2004, we entered into another lease agreement with Changshi to build a 300,000 square foot Phase II facility immediately adjacent to our Phase I facility. The Phase II facility lease also included the
participation of the Changshi subsidiary that holds the subject land use right, Dongguan Changan ASAT Semiconductor ASAT Assembly and Test Factory. Under the terms of the lease agreement, we lease the Phase II factory from Changshi for a period of
15 years starting from August 2005. We are obligated to pay monthly payments of HK$1.4 million (approximately $179 thousand at an assumed exchange rate of HK$7.80 per $1.00) for the first six years of rental term and HK$700 thousand (approximately
$90 thousand at an assumed exchange rate of HK$7.80 per $1.00) per month for the seventh to fifteenth years of the lease term. From October 31, 2008 and during the term of the lease, we have an option and a right of first refusal to purchase
the facility and the related land-use right of the land at prices fixed in a predetermined schedule starting during the period from October 2008 to July 2011, and thereafter at prices based on the then fair market value of the facility and related
land-use right. Additionally, under a management services agreement, we are obligated to pay Changshi a monthly management service fee of approximately HK$639 thousand (approximately $82 thousand at an assumed exchange rate of HK$7.80 per $1.00) for
a period of six years, starting from the commencement date of the lease, and over the six year term of the agreement, Changshi has agreed to support the operation of the facility by nominating employees for staffing of the facility, maintaining the
facility and its systems in good repair an operating condition (at our cost) and assisting us with handling Chinese governmental and regulatory matters.

Further to completing the transfer of the entire manufacturing operations to ASAT China, on June 30, 2008, we terminated the original lease agreements and management service agreements for both Phase I and Phase
II facilities, which were entered into between Timerson and Changshi. At the same time, ASAT China entered into the new lease agreements with Changshi for the remaining terms of the respective leases. Under the new lease agreements, the rent and
service fees to be paid are denominated in Renminbi and the monthly amount payable is based on the predetermined schedule. The expiry of the lease terms for Phase I and Phase II factory premises remains August 31, 2018 and July 31, 2020,
respectively, and ASAT China has the option and right of first refusal to purchase the facilities and the related land-use right of the land at prices fixed as stated in the predetermined schedule of the respective original lease agreements.

On August 5, 2004, we entered into an agreement to engage a third party vendor, Wellmean, to complete the interior finish and
fixtures of our Phase II facility. The acquisition of capital equipment and the installation service charges under the terms of this agreement have been valued at approximately $28.9 million, which amount has been split into a series of three
payments totaling approximately $14.4 million followed by 24 monthly payments in the amount of $609 thousand per month. We made the first and second payments of approximately $2.9 million and $7.2 million, respectively, during the year ended
April 30, 2005. During the year ended April 30, 2006, we made payments totaling approximately $7.8 million to Wellmean. In April 2006, Wellmean agreed to defer the 3 monthly installments for March to May of 2006, totaling approximately
$1.8 million, to June 2006. In June 2006, Wellmean further agreed to defer the 3 monthly installments for June to August of 2006, totaling approximately $1.8 million, to September 2006. During the year ended April 30, 2007,



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we made payments totaling approximately $8.6 million to Wellmean. As of April 30, 2008, the outstanding balance payable to Wellmean was approximately
$1.1 million. The balance of the outstanding amount was fully settled in July 2008.

On July 31, 2005, we entered into agreements for
a private financing of $30 million with JPMP Master Fund Manager, L.P. (JPMP) related funds and QPL, two of our principal shareholder groups, and affiliates of these two entities, in the form of a $15 million preferred share financing
and a $15 million purchase money loan facility.

The preferred share financing provided for the issuance and sale of 300,000 Series A
Preferred Shares for a total price of $15 million and the issuance of five-year warrants for a total of 20 million ordinary shares exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS), of which five-year warrants for
a total of 5 million ordinary shares were issued as an arrangement fee. The securities purchase agreement for the Series A Preferred Share financing was amended and restated on October 27, 2005 to, among other things, add Olympus-ASAT II,
L.L.C. (Olympus), as a party. The Series A Preferred Share financing closed on October 27, 2005.

The second $15.0 million
of this financing is a purchase money loan facility from Asia Opportunity Fund, L.P., an affiliate of JPMP, and related funds. The facility may be drawn upon in two tranches. The first tranche of $10.0 million may be drawn upon if our consolidated
cash position falls below $10.0 million. A second tranche of an additional $5.0 million may be drawn upon if our consolidated cash position again falls below $10.0 million. The maturity date of the loans made in a tranche is two years from the date
such tranche is advanced. The interest rate payable on the loans is 15% per annum, with interest to be paid on a quarterly basis. We issued the administrative agent, on the date of the issuance and sale of Series A Preferred Shares described
above, warrants to purchase an aggregate of 5,000,000 ordinary shares, which is the equivalent of 333,333 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS).

On January 25, 2006, we borrowed the first $10.0 million tranche of funding under the purchase money loan facility. In return for drawing upon the
first tranche, we issued the lenders warrants to purchase an aggregate of 15,668,170 ordinary shares, which is the equivalent of 1,044,544 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS), as well as paid a
commitment fee of $850,000 on a pro rata basis to the lenders that funded the first tranche. In each case, the warrants are exercisable for five years from the date of issuance. The purchase money loan facility is unsecured and contains various
affirmative and negative covenants binding on us and our subsidiaries, including limitations on our and our subsidiaries ability to incur indebtedness, grant liens on assets, pay dividends and enter into transactions with affiliates. In
addition, we will be required to repay the loans with the net proceeds of certain issuances of equity and debt and certain asset sales. On August 23, 2007, the purchase money loan facility was amended to extend the maturity due date of the
$10.0 million principal amount until April 30, 2009 and to extend the payment due date for interest payments (and interest on such interest) for March 31, 2006, June 30, 2006, September 30,
2006, December 31, 2006, March 31, 2007, June 30, 2007 and September 30, 2007 to become due on October 31, 2007. In return for amending the purchase money loan facility, on October 1, 2007, the Company issued
35,766,900 warrants to the lenders under the purchase money loan facility, which exercisable, in the aggregate, for a total of approximately 4.6% of ASAT Holdings total outstanding ordinary shares on a fully diluted basis (inclusive of
ordinary shares issuable upon exercise of warrants to the holders themselves and which ASAT Holdings will grant to the eligible holders of our 9.25% senior notes due 2011). The warrants will have an exercise price of $0.01 per ordinary share and
will expire on February 1, 2011, subject to adjustment as provided in the warrants and the other terms and conditions contained therein.

On October 10, 2007, we amended the purchase money loan facility to extend the payment due date for interest including any penalty interest as required by the agreement. Interest that was due or will be due for payment on or before
December 31, 2008 will be due and payable on December 31, 2008.

On October 17, 2008, we amended the purchase money loan
facility to extend the maturity due date of the $10.0 million principal amount and certain unpaid interest. The maturity due date for the $10.0 million principal



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was extended to January 31, 2010. For the total interest of $5,277,231 accrued and unpaid up to October 17, 2008, we were required to pay $441,667
upon signing the amended agreement. The balance of the unpaid interest of $4,835,564 was converted into two separate loan principals with $2,435,564 due and payable on December 15, 2008 and $2,400,000 due and payable on January 31, 2010.

We have agreed to file a registration statement covering the resale of the shares issuable upon exercise of the Series A Preferred Shares
and warrants described above. We have obtained a waiver from the U.S. Securities and Exchange Commission, or SEC on such obligation until such time as we are notified to file a registration statement, which has not yet occurred as of the date of
this annual report. We have withdrawn all previous filings with the SEC, on this matter.

As required by the securities purchase agreement,
in July 2006, we completed a rights offering of the Series A Preferred Shares and warrants for the benefit of existing shareholders, excluding the purchasers of the Series A Preferred Shares and certain other shareholders that waived participation
in the rights offering. In the rights offering, we distributed one subscription right for every 1,850 of our ordinary shares, or for every 123 of our ADSs, owned. Each subscription right entitled the recipient to purchase for $50.00 a unit
consisting of one Series A Preferred Share and a warrant to purchase 50 ordinary shares. We sold 9,799 units in this offering and received gross proceeds of $489,950 in the rights offering.

On May 1, 2006, we entered into a financing agreement with a customer to provide us $6 million of financing in the form of advance payments for
assembly and test services, subject to certain conditions. The advance was made to us on June 9, 2006. The primary purpose of this financing was to purchase new equipment to support the customers production capacity demands. This
financing bore no interest and was to be repaid beginning in January 2007 by off-setting amounts against our receivables from our future sales to the customer up to a fixed maximum monthly amount, with any difference between this maximum amount and
receivables from our sales to the customer in a given month being paid by us in cash. Such arrangement was terminated on January 17, 2008, and the advance from customer was fully offset against the receivable as of January 31, 2008.

In September 2006, ASAT China obtained a revolving credit facility of RMB30 million (approximately $4.3 million) from a Chinese bank. The
revolving credit facility is secured by the pledge of certain equipment of ASAT China purchased with the proceeds of such facility and may be extended after one year. On October 8, 2006, ASAT China drew down RMB20 million (approximately $2.9
million) which was due in October 2007 at an interest rate of 6.12% per annum. In September 2007, ASAT China rolled over the original RMB20 million for another year at the interest rate of 7.29%. On April 30, 2007, ASAT China drew down the
remaining RMB10 million (approximately $1.4 million) of this revolving credit facility at an interest of 6.39% and subsequently repaid such amount on April 30, 2008. As such, the outstanding balance of this revolving facility was RMB20 million
as of April 30, 2008. In September 2008, ASAT China fully repaid the RMB20 million credit facility.

On August 1, 2007, we did
not pay the regularly scheduled interest payment of approximately $6.9 million on our 9.25% senior notes due 2011. We subsequently paid such interest payment, including accumulated penalty interest, on August 28, 2007, which was within the 30
days grace period permitted under the Indenture governing our 9.25% senior notes due 2011.

On August 23, 2007, we received consents
from approximately 98% of holders of our 9.25% senior notes due on 2011 to enter into a supplemental indenture dated August 27, 2007, which amended certain provisions of the Indenture and waived certain defaults and events of default that may
have occurred or may occur. The amendments included: (i) elimination of restrictions on the value of the assets that may be held by ASAT China; (ii) expand the ability of our company and our subsidiaries to secure financing from additional
sources; and (iii) extend the deadline for us to fulfill our reporting obligations under the Indenture. In return, we agreed to issue warrants for ordinary shares in connection with the amendment of the Indenture and these warrants were issued
to eligible holders of our 9.25% senior notes due 2011 who consented to the solicitation of consents ended August 23, 2007 to amend the Indenture, subject to certain conditions specified therein. On October 1, 2007, we



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issued in total of 35,766,900 warrants to the eligible holders. These warrants would, in the aggregate, be exercisable for a total of approximately 4.6% of
our total outstanding ordinary shares on a fully diluted basis. The warrants have an exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject to adjustment as provided in the warrants and the other terms and
conditions contained therein.

In September 2007, ASAT China obtained a revolving multi-currency credit facility of RMB150 million or
equivalent (approximately $20 million) with a term of one year bearing interest at a rate of LIBOR plus 0.8%. This facility is secured by certain trade receivables of ASAT China. In October 2008, ASAT China obtained a renewal of the revolving credit
facility and extended it for another year with the interest revised to LIBOR plus 4%.

In April 2008, ASAT China obtained a revolving
credit facility of $5 million with a term of one year bearing interest at a rate of LIBOR plus 3%. The revolving credit facility is secured by certain equipment of ASAT China.

In July 2008, ASAT China obtained a short-term revolving credit facility of RMB60 million (approximately $8.6 million) bearing interest at a rate
published by the Peoples Bank of China plus a markup of 15%. The revolving credit facility is backed by a guarantee provided by ASAT HK. The revolving credit facility will expire in April 6, 2009 and may be extended for further one year.

EXCHANGE CONTROLS AND OTHER LIMITATIONS

The laws of the Cayman Islands where ASAT Holdings is incorporated and those of Hong Kong where we operate certain of our businesses and the Restated Memorandum and Restated Articles of Association of ASAT Holdings do
not impose exchange control or restrictions on the remittance of dividends or other payments to nonresident holders of the ordinary shares and ADSs. However, our subsidiary and operations in China are subject to certain applicable PRC laws and
regulations. For the relevant limitations and restrictions, please refer to Risk FactorsOur corporate structure may restrict our ability to receive dividends from, and transfer funds to, ASAT China, our Chinese operating subsidiary,
which could restrict our ability to make payments on our 9.25% senior notes due 2011 or act in response to changing market conditions.

TAXATION

We discuss below the material United States federal income tax and general Cayman Islands and Hong Kong tax consequences
of the beneficial ownership and disposition of the ADSs and ordinary shares. This discussion is based on laws, regulations, rulings, income tax conventions or treaties, administrative practices and judicial decisions in effect at the date of this
annual report. Subsequent legislative, judicial or administrative changes or interpretations may be retroactive and could affect your tax consequences.

Your tax treatment as a holder of ADSs or ordinary shares may vary depending upon your particular situation, and some holders may be subject to special rules not discussed below. We do not discuss below the state,
local and foreign (other than Cayman Islands and Hong Kong) tax consequences of the ownership and disposition of the ADSs or ordinary shares. This summary does not address all tax aspects that may be important to you as a holder of our securities.

You are urged to consult your own tax advisors as to your particular tax consequences of the ownership, exercise and disposition of our ADSs or
ordinary shares, including whether any state, local or foreign tax laws apply to you.

United States Taxation

The following is a general discussion of the material United States federal income tax considerations relevant to the ownership and disposition of the
ADSs or ordinary shares. This summary is based on existing



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United States federal income tax law, which is subject to change, possibly retroactively. The discussion addresses only persons that hold ADSs or ordinary
shares as capital assets, which generally is property held for investment, under the United States Internal Revenue Code of 1986, as amended (the Code), and that use the United States dollar as their functional currency. The discussion
does not consider the circumstances of particular purchasers, such as banks, insurance companies, tax-exempt organizations, dealers, traders who elect to mark-to-market, persons holding ADSs or ordinary shares as part of a hedge, straddle, or
conversion transaction, persons treated as owning 10% or more of the voting power of our shares, and that are subject to special tax rules that may differ from those discussed below.

For purposes of this discussion, U.S. holder means a beneficial owner of ADSs or ordinary shares that is:



| |  |  | an individual who is a citizen or resident of the United States;
| | - |  | ----------------------------------------------------------------



| |  |  | a corporation, or other entity taxable as a corporation, created in or organized under the laws of the United States or any of its political subdivisions;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | a trust (1) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have
the authority to control all substantial decisions of the trust, or (2) that was in existence on August 20, 1996, was treated as a United States person under the Code on the preceding day and elected to continue to be so treated; or
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | an estate the income of which is subject to United States federal income taxation regardless of its source.
| | - |  | -----------------------------------------------------------------------------------------------------------

Non-U.S. holder means a beneficial owner of ADSs or ordinary shares that is not a U.S. holder.

If a partnership (including for this purpose any entity treated as partnership for United States federal income tax purposes) is a beneficial owner of
the ADSs or ordinary shares, the United States tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. A holder of ADSs or ordinary shares that is a partnership and
partners in such partnership should consult their own tax advisors about the United States federal income tax consequences of holding and disposing of the ADSs or ordinary shares.

Taxation of ADSs or Ordinary Shares

We believe that we are not subject to treatment as a passive
foreign investment company for United States federal income tax purposes. Except as expressly noted below, under the headings Passive Foreign Investment Company, the discussion below assumes that we will not be so treated.

Treatment of ADSs. In general, for United States federal income tax purposes, United States holders of ADSs will be treated as the
owners of the ordinary shares represented by the ADSs. Accordingly, no gain or loss will be recognized upon the exchange of ADSs for a U.S. holders proportionate interest in the ordinary shares represented by such ADSs. A U.S. holders
tax basis in the ordinary shares will be the same as its tax basis in the ADSs surrendered for such shares, and the holding period in such shares will include the period during which the holder held the ADSs. The United States federal income tax
consequences described below should apply regardless of whether a U.S. holder holds ADSs or ordinary shares.

Distributions on ADSs or
Ordinary Share. We do not currently anticipate paying dividends on the ADSs or ordinary shares in the foreseeable future. To the extent that a cash distribution on ADSs or ordinary shares is paid to a U.S. holder out of our current or
accumulated earnings and profits, as determined for United States federal income tax purposes, such distribution will be includable in the U.S. holders gross income in an amount equal to the gross amount of such distribution, without reduction
for any applicable foreign withholding tax. Dividends will not be eligible for the dividends-received deduction generally allowed to United States corporations in respect of dividends received from other United States corporations. Subject to
certain limitations, for taxable years beginning before January 1, 2011, dividends paid to non-corporate U.S. holders, including individuals, by a



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qualified foreign corporation, may be eligible for a reduced rate of taxation if we are deemed to be a qualified foreign corporation
for United States federal income tax purposes. A qualified foreign corporation includes a foreign corporation if:

(i) its
shares (or, according to the legislative history, its ADSs) on which dividends are paid are readily tradable on an established securities market in the United States; or

(ii) it is eligible for the benefits under a comprehensive income tax treaty with the United States.

There
is currently no income tax treaty in effect between the United States and the Cayman Islands. Our ADSs were delisted from the Nasdaq Capital Market in June, 2008. Therefore, such reduced rate of taxation will apply to dividends paid with respect to
our ADSs or ordinary shares.

To the extent that the amount of any distribution on ADSs or ordinary shares exceeds our current and
accumulated earnings and profits, as determined for United States federal income tax purposes, a U.S. holders pro rata share of such excess amount would be treated:



| |  |  | as a nontaxable return of capital that would be applied against and would reduce the U.S. holders tax basis in its ADSs, ordinary shares or Series A Preferred
Shares until this basis is equal to zero; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | to the extent excess distributions remain, as capital gain.
| | - |  | -----------------------------------------------------------

Distributions on ADSs, ordinary shares or Series A Preferred Shares will be income from sources outside the United States and for tax years beginning before January 1, 2007, generally will be passive
income, and for tax years beginning after December 31, 2006, generally will be passive category income or general category income for purpose of computing the United States foreign tax credit allowable to a U.S.
holders.

The amount of any distribution paid in a currency other than the United States dollar will be the U.S. dollar value of the
payment made, determined at the spot foreign exchange rate on the date such payment is includable in the income of the U.S. holder, regardless of whether the payment is in fact converted into U.S. dollars. Any gain or loss resulting from currency
exchange fluctuations during the period from the date the dividend payment is includable in income to the date such payment is converted into United States dollars will be treated as United States source ordinary income or loss.

Sale or Other Disposition. A. U.S. holder generally will recognize gain or loss upon a sale or other taxable disposition of ADSs or ordinary share
in an amount equal to the difference between the United States dollar value of the amount realized on the sale or other taxable disposition and the U.S. holders adjusted tax basis in the ADSs or ordinary shares, as applicable. Such gain or
loss generally will be capital gain or loss and will be long-term capital gain or loss if, at the time of sale or other taxable disposition, the U.S. holder held the ADS or ordinary share for more than one year. Any gain or loss recognized by a U.S.
holder on a sale or other taxable disposition of ADSs or ordinary shares will generally be treated as United States source gain or loss for foreign tax credit purposes. A U.S. holders ability to deduct capital losses in respect of ADSs or
ordinary is subject to limitations.

Passive Foreign Investment Company.

We generally will be a PFIC under Section 1297 of the Code if, for a taxable year, either (a) 75% or more of our gross income for such taxable
year is passive income (the income test) or (b) 50% or more of the average percentage, generally determined by fair market value, of our assets during such taxable year either produce passive income or are held for the production of
passive income (the asset test). Passive income includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and certain gains from commodities transactions.

Certain look through rules apply for purposes of the income and asset tests described above. If we own at least, directly or
indirectly, 25% by or more of the total value of the equity outstanding shares of another corporation, we will be treated for purposes of the passive foreign investment company tests as owning a



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proportionate share of the assets of the other corporation, and as receiving as if we (a) held directly a proportionate share of the other
corporations income. If we have been or are a passive foreign investment company for any taxable year, dividends paid by us to U.S. holders would not be eligible of the reduced rate of taxation applicable to non-corporate U.S. holders,
including individuals (seeDistributions on ADSs, Ordinary Shares and Series A Preferred Shares above). Additionally, U.S. holders generally would be required to treat any gain on the sale of the ADSs, ordinary shares or Series A
Preferred Shares as an excess distribution and may also be subject to an interest charge. The excess distribution or gain would be allocated ratably over their holding period, the amount allocated to the current tax year would be subject
to tax as ordinary income, the amount allocated to each previous tax year would be subject to tax at the highest applicable marginal rate in effect for that year and an interest charge would be imposed to recover the deemed benefit from the deferred
payment of the tax. These rules would effectively prevent a U.S. holder from treating the gain realized on the disposition of the ADSs, ordinary shares or Series A Preferred Shares as capital gain. You could avoid the application of the foregoing
rules if, at the time you acquired your ADSs, ordinary shares or Series A Preferred Shares, you were eligible for and timely made a mark-to-market election. We urge you to consult your tax advisor regarding the consequences of an investment in a
passive foreign investment company before purchasing ADSs, ordinary shares or Series A Preferred Shares. assets, and (b) received directly a proportionate share of the other corporations income. In addition, passive income does not
include any interest, dividends, rents, or royalties that are received or accrued by us from a related person (as defined in Section 954(d)(3) of the Code), to the extent such items are properly allocable to income of such related
person that is not passive income.

Under the income and asset tests, whether or not we are a PFIC will be determined annually based upon
the composition of our income and the composition and valuation of our assets, all of which are subject to change. In determining that we are not a PFIC, we are relying on our projected revenues and projected capital expenditures. If our actual
revenues and capital expenditures do not match our projections, we may become a PFIC. For example, if we do not spend enough of the cash (a passive asset) we raise from any financing transactions we may undertake, the relative percentage of our
passive assets will increase. In addition, our determination is based on a current valuation of our assets, including goodwill. In calculating goodwill, we have valued our total assets based on our market capitalization, determined using the market
price of our ordinary shares and ADSs. Such market price may fluctuate. If our market capitalization is less than anticipated or subsequently declines, this will decrease the value of our goodwill and we may become a PFIC. Furthermore, we have made
a number of assumptions regarding the amount of value allocable to goodwill. We believe our valuation approach is reasonable. However, it is possible that the IRS will challenge the valuation of our goodwill, which may result in our being a PFIC.

We do not believe that we are currently a PFIC. However, because the PFIC determination is highly fact intensive and made at the end of
each taxable year, there can be no assurance that we will not be a PFIC for the current or any future taxable year or that the IRS will not challenge our determination concerning our PFIC status.

Default PFIC Rules under Section 1291 of the Code.If we are a PFIC, you will be subject to the default tax rules of Section 1291
of the Code with respect to:



| |  |  | any excess distribution paid on ADSs or ordinary shares which means the excess (if any) of the total distributions received by you during the current
taxable year over 125% of the average distributions received by you during the three preceding taxable years (or during the portion of your holding period for the ADSs or ordinary shares prior to the current taxable year, if shorter); and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | any gain recognized on the sale or other taxable disposition (including a pledge) of ADSs or ordinary shares.
| | - |  | -------------------------------------------------------------------------------------------------------------

Under these default tax rules:



| |  |  | any excess distribution or gain will be allocated ratably over your holding period for the ADSs or ordinary shares;
| | - |  | -------------------------------------------------------------------------------------------------------------------



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| |  |  | the amount allocated to the current taxable year and any period prior to the first day of the first taxable year in which we were a PFIC will be treated as ordinary
income in the current taxable year;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the amount allocated to each of the other years will be treated as ordinary income and taxed at the highest applicable tax rate in effect for that year; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the resulting tax liability from any such prior years will be subject to the interest charge applicable to underpayments of tax.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------

Special rules for Non-Electing U.S. Holders will apply to determine U.S. foreign tax credits with respect to any foreign taxes imposed on distributions
on ADSs or ordinary shares.

If we are a PFIC for any taxable year during which you hold ADSs or ordinary shares we will continue to be
treated as a PFIC with respect to you for all succeeding years during which you hold ADSs or ordinary shares, regardless of whether we actually continue to be a PFIC. You may terminate this deemed PFIC status by electing to recognize gain (which
will be taxed under the default tax rules of Section 1291 of the Code discussed above) as if your ADSs or ordinary shares had been sold on the last day of the last taxable year for which we were a PFIC.

If we are a PFIC in any year with respect to you, you will be required to file an annual return on IRS Form 8621 regarding distributions received on ADSs
or ordinary shares and any gain realized on the disposition of ADSs or ordinary shares. Furthermore, as discussed below in Controlled Foreign Corporation, special rules will apply if we are both a PFIC and a CFC, and you are a U.S. 10%
Shareholder (as defined below).

QEF Election. If you make a QEF Election, you generally will not be subject to the default rules of
Section 1291 of the Code discussed above. Instead, you will be subject to current U.S. federal income tax on your pro rata share of our ordinary earnings and net capital gain, regardless of whether such amounts are actually distributed to you
by us. However, you can make a QEF Election only if we agree to furnish you annually with certain tax information, and we currently do not intend to prepare or provide such information.

Mark-to-Market Election.U.S. Holders of ADSs may make a Mark-to-Market Election with respect to the ADSs, but only if the ADSs are
regularly traded on a qualified exchange or other market meeting certain requirements. Stock is regularly traded for any calendar year during which it is traded (other than in de minimis quantities) on at least 15 days during each
calendar quarter on a qualified exchange. In general, a qualified exchange is defined as a national securities exchange that is registered with the SEC or the national market system established pursuant to section 11A of the Securities
Exchange Act of 1934. The ADSs were delisted from the Nasdaq Capital Market in June, 2008 and are currently traded on the OTCBB. At present, the IRS does not view the OTCBB as a qualified exchange for these purposes. Therefore, a U.S.
Holder will not be able to make a Mark to Market Election with respect to the ADSs or ordinary shares.

Since the PFIC rules are complex,
you should consult your own tax advisor regarding them and how they may affect the U.S. federal income tax consequences of the ownership and disposition of ADSs and ordinary shares.

Controlled Foreign Corporation.Generally, we will be a CFC under Subpart F of the Code if more than 50% of the total combined voting power of all
classes of our shares or the total value of our shares is owned, actually or constructively, by U.S. 10% Shareholders. A U.S. 10% Shareholder is a citizen or resident of the United States, a domestic partnership, a domestic corporation,
or a estate or trust other than a foreign estate or trust (each as defined in Section 7701(a)(30) of the Code) which owns, actually or constructively, 10% or more of the total combined voting power of all classes of our shares. Complex
attribution rules apply in determining whether a person is treated as a U.S. 10% Shareholder and whether U.S. 10% Shareholders in the aggregate own more than 50% of the total combined voting power of all classes of our shares or the total value of
our shares.

Classification as a CFC creates many complex results, one of which is the inclusion of certain income of a CFC by U.S. 10%
Shareholders. If we are a CFC and you are a U.S. 10% Shareholder, you will be treated as



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having received a current distribution of your pro rata share of (i) our Subpart F income (as defined in Section 952 of the Code), which generally
includes income of a passive nature, and (ii) our earnings invested in U.S. property. You will be taxed currently on such deemed distribution, regardless of whether we actually make such a distribution. Foreign tax credits (described above) may
reduce the U.S. federal income tax on this amount.

In addition, if you are or were a U.S. 10% Shareholder at any time during the five-year
period ending with a sale or other taxable disposition of ADSs or ordinary shares by you, gain from such disposition will be treated as ordinary income to the extent of our earnings and profits (accumulated in our taxable years beginning after 1962,
but only while the ADSs or ordinary shares were held by you and while we were controlled) attributable to the disposed ADSs or ordinary shares.

If we are both a PFIC and a CFC, special rules may apply. If you are a U.S. 10% Shareholder, we generally will not be treated as a PFIC with respect to you. This rule generally will be effective for your taxable years
beginning after 1997 and for our taxable years ending with or within such taxable years. Special rules will apply to you instead of the default PFIC rules under Section 1291 of the Code discussed above. Alternatively, if you are not a U.S. 10%
Shareholder, those default PFIC rules will continue to apply to you.

Due to the complexity of Subpart F, a more detailed review of these
rules is outside the scope of this discussion. We do not believe that we currently are a CFC. However, the principles for applying the tests described above are not entirely clear and this determination is based on factors beyond our control, such
as the identity of our shareholders, and in the case of our shareholders treated as pass-through entitles for U.S. federal income tax purposes, the identity of the owners of such entities. Accordingly, there can be no assurance that we will not be
considered a CFC for the current or any future taxable year. You should consult your tax advisor regarding the potential U.S. federal income tax consequences to you if we are or become a CFC.

Taxation of Non-U.S. Holders. Distributions on ADSs or ordinary shares to a non-U.S. holder generally would not be subject to United States
withholding tax or to United States federal income tax unless such income is effectively connected with the conduct by such non-U.S. holder of a trade or business within the United States (and, if required by an applicable income tax treaty, is
attributable to a U.S., permanent establishment). Gain realized by a non-U.S. holder on the sale or other taxable disposition of ADSs or ordinary shares generally will not be subject to United States federal income tax unless:



| |  |  | the gain is effectively connected with the non-U.S. holders conduct of a trade or business in the United States (and, if required by an applicable income tax
treaty, is attributable to a U.S., permanent establishment), or
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the non-U.S. holder is an individual who was present in the United States for at least 183 days in the taxable year of the sale or other disposition and certain
other conditions are met.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Information Reporting and Backup Withholding. Generally, information reporting
requirements will apply to distributions on ADSs or ordinary shares or proceeds on the disposition of ADSs or ordinary shares paid within the United States (and, in certain cases, outside the United States) to U.S. holders other than certain exempt
recipients, such as corporations. Furthermore, backup withholding (currently at 28%) may apply to such amounts if the U.S. holder fails to (i) provide a correct taxpayer identification number, (ii) report interest and dividends required to
be shown on its U.S. federal income tax return, or (iii) make other appropriate certifications in the required manner. U.S. holders who are required to establish their exempt status generally must provide such certification on IRS Form W-9.

Backup withholding is not an additional tax. Amounts withheld as backup withholding from a payment to you may be credited against your
U.S. federal income tax liability and you may obtain a refund of any excess amounts withheld by filing the appropriate claim for refund with the IRS and furnishing any required information in a timely manner.



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Cayman Islands Taxation

The Cayman Islands currently does not levy any taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax or estate duty. There are
no other taxes likely to be material to ASAT Holdings levied by the Government of the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of, the Cayman
Islands. The Cayman Islands are not party to any double tax treaties. There are no Cayman Islands restrictions on the repatriation of capital or earnings of a Cayman Islands public company to non-resident investors.

Hong Kong Taxation

The following is a general
outline of the material tax considerations in relation to any beneficial ownership and disposition of the ADSs or ordinary shares but it does not purport to deal with the tax consequences applicable to all categories of investors.

Tax on Dividends. Under the laws of Hong Kong, a holder of the ADSs or ordinary shares is not subject to Hong Kong tax on dividends, whether by
withholding or otherwise, paid by ASAT Holdings.

Profits Tax. In general, no tax is imposed in Hong Kong in respect of gains from
the sale of property, including ADSs and shares. However, trading gains from the sale of property by persons carrying on a trade, profession or business in Hong Kong where such gains are derived from or arise in Hong Kong from such trade, profession
or business will be chargeable to Hong Kong profits tax which is imposed at the rate of 16.5% for corporations and 15% for individuals during fiscal year 2008. Guidance provided by the Hong Kong Inland Revenue authority suggests that gains from
sales or disposition of ADSs or ordinary shares issued outside of and not listed in Hong Kong may be considered to be derived from or to arise in Hong Kong if the relevant purchase or sales contracts are negotiated and concluded in Hong Kong, and
such gains may be subject to Hong Kong profit tax if those persons deal or trade in the ADSs or ordinary shares as part of their business being carried out in Hong Kong. Whether profits of a trade are taken to be derived from Hong Kong is a question
of fact and may vary depending upon the nature of the persons involved.

Stamp Duty. A sale or purchase of shares is subject to Hong
Kong stamp duty if the transfer of such shares is required to be registered in Hong Kong. None of (1) the issuance of ordinary shares directly to the depositary or to the custodian for the account of the depositary, (2) the transfer and
delivery of ordinary shares directly to the depositary or to the custodian for the account of the depositary, and (3) the issuance of ADSs upon the deposit of ordinary shares with the depositary or the custodian as described in (1) or
(2) above should attract stamp duty. No Hong Kong stamp duty is payable in respect of any transfer of the ADSs or ordinary shares outside Hong Kong.

Estate Duty. The Revenue (Abolition of Estate Duty) Ordinance 2005 came into effect on February 11, 2006 in Hong Kong, pursuant to which estate duty ceased to be chargeable in Hong Kong in respect of the
estates of persons passing away on or after that date. No Hong Kong estate duty is payable and no estate duty clearance papers are needed for an application for a grant of representation in respect of holders of shares whose death occur on or after
February 11, 2006.

DOCUMENTS ON DISPLAY

We are subject to the informational requirements of the Securities Exchange Act of 1934, as amended, or Exchange Act. Accordingly, we file reports, including annual reports on Form 20-F and current reports on
Form 6-K, with the SEC. As a foreign private issuer, we are not subject to the proxy rules under Section 14 or the short-swing insider profit disclosure rules under Section 16 of the Exchange Act. You may inspect and copy the reports
and other information we file at the public reference facilities maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of such material by mail from the Public



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Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. You may obtain information about the public reference room
by calling the SEC at 1-800-SEC-0330. In addition, you can review copies of some of our filings and the registration statement through the SECs EDGAR (Electronic Data Gathering, Analysis and Retrieval) System, available on the
SECs website (http://www.sec.gov).

ITEM 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISKS

Substantially all of our revenue and costs, assets and liabilities have been denominated in either U.S. dollars or
Hong Kong dollars. Substantially all our sales are denominated and received in U.S. dollars. We purchase raw materials and machinery and equipment primarily in U.S. dollars. Labor, manufacturing cost, and administrative costs are incurred primarily
in Hong Kong dollars, Chinese Renminbi and, to a lesser extent, U.S. dollars. Overall, we estimate that in fiscal years 2008 and 2009, substantially all of our marketing costs and operating expenses (excluding depreciation) will be in Hong Kong
dollars, U.S. dollars or Chinese Renminbi. Following our recapitalization in 1999, substantially all borrowings have been in U.S. dollars or Chinese Renminbi.

The Hong Kong dollar historically has accounted for the largest share of our costs. Because the exchange rate of the Hong Kong dollar to the U.S. dollar has remained close to the range varying between HK$7.75 per U.S.
dollar and HK$7.85 per U.S. dollar since May 2005, we have not experienced significant foreign exchange gains or losses associated with that currency. However, the Hong Kong government could change the trading band at HK$7.75 to HK$7.85 per U.S.
dollar at any time. Depreciation of the U.S. dollar against the Hong Kong dollar would generally increase our Hong Kong dollar expenses. Following the shut down of the Hong Kong manufacturing operations, our spending in Hong Kong dollars has been
reduced.

Additionally, our exposure to fluctuations in the value of the Chinese Renminbi has significantly increased due to the completed
move of our manufacturing facilities to Dongguan, China. From 1994 to July 2005, the conversion of Renminbi into foreign currencies, including Hong Kong and U.S. dollars, was based on rates set by the Peoples Bank of China, which were set
daily based on the previous days interbank foreign market exchange rate and current exchange rates on the world financial markets. As a result, the exchange rate of the Renminbi to the U.S. dollar was previously substantially pegged or fixed.
On July 21, 2005 the government of China announced that the exchange rate of the Renminbi was being appreciated against the U.S. dollar and that the Renminbi would henceforth have a more flexible exchange rate within a narrow band that would
float against a basket of foreign currencies. However, the Chinese government may decide to change or abandon this policy at its sole discretion at any time in the future. As of August 31, 2008, the exchange rate was RMB6.86 to $1.00 as
compared with RMB7.52 to $1.00 as of August 31, 2007. This appreciation of the Renminbi against the U.S. dollar and any further appreciation in the exchange rate of the Renminbi against the U.S. dollar will increase our costs relating to our
China operations.

ITEM 12.    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.



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PART II

ITEM 13.    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

On August 1, 2007, we did not pay the regularly scheduled interest payment of approximately $7.0 million on our 9.25% senior notes due 2011. We subsequently paid such interest payment, including accumulated penalty interest, on
August 28, 2007, which was within the 30 days grace period permitted under the indenture governing such notes.

We have occasionally
been in default or otherwise been out of compliance with the covenants and conditions in the agreements governing our debt. Such defaults have been cured or otherwise remedied by obtaining amendments or waivers from our creditors.



|ITEM 14.    MATERIAL | MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|-------------------- | -------------------------------------------------------------------

Information regarding limitations on the payment of dividends resulting from the issuance of our 9.25% senior notes due 2011 is incorporated by reference from our report on Form 6-K, filed on March 16, 2004. In
addition, our purchase money loan agreement contains limitations on the payment of dividends. See Item 5Operating and Financial Review and ProspectsLiquidity and Capital Resources for a discussion of our purchase money loan
agreement.

ITEM 15T.    CONTROLS AND PROCEDURES

Disclosure controls and procedures

As required by
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Exchange Act), as amended, management, with the participation of our Acting Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of our disclosure controls and procedures as of April 30, 2008. Disclosure controls and procedures refer to controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange
Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information
required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Acting Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding our required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance
of achieving the desired control objectives.

Based on this evaluation, our Acting Chief Executive Officer and Chief Financial Officer have
concluded that our disclosure controls and procedures were effective as of April 30, 2008 at the reasonable assurance level.

Managements
Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal
control over financial reporting as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Companys internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Companys internal control over financial reporting includes those policies
and procedures that:



| |  |  | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets of the Company;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted
accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Companys management and directors; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material
effect on our financial statements.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Because of its inherent limitations, internal control over financial reporting may
not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

Management evaluated the effectiveness of our internal control over financial reporting as of
April 30, 2008 using the criteria in Internal ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal
control over financial reporting was effective as of April 30, 2008 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with
U.S. GAAP. We reviewed the results of managements assessment with the Audit Committee of our Board of Directors.

This annual
report does not include an audit report of the Companys independent registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to audit by the Companys independent
registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only managements report in this annual report.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting
that occurred during the year ended April 30, 2008 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16A.    AUDIT COMMITTEE FINANCIAL EXPERT

Our
board of directors has determined that Henry C. Montgomery is an audit committee financial expert as this term has been defined under the rules and regulations of the SEC and that he is independent under the applicable rules promulgated
by SEC.

ITEM 16B.    CODE OF ETHICS

We have adopted a code of ethics that applies to all of our employees, including our principal executive officer, principal financial officer, principal
accounting officer, and persons performing similar functions. A copy of the code of ethics was attached as an exhibit to our annual report on Form 20-F for the fiscal year ended April 30, 2005. Amendments to the code of ethics or any grant of a
waiver from a provision of the code of ethics requiring disclosure under applicable SEC rules, if any, will be disclosed on our website at http://www.asat.com.

ITEM 16C.    PRINCIPAL ACCOUNTANT FEES AND SERVICES

Under its charter, the audit committee of the board of directors reviews and pre-approves all audit and permissible non-audit services performed by PricewaterhouseCoopers as well as the fees charged by PricewaterhouseCoopers for such
services. In its review of non-audit services, the audit committee considered



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whether the provision of such services is compatible with maintaining the independence of PricewaterhouseCoopers. The following table sets forth the
aggregate fees billed by PricewaterhouseCoopers in connection with the following services during fiscal years 2007 and 2008:



|                      |  |                             |  |     
|--------------------- |  | --------------------------- |  | ----
|                      |  | Fiscal Year Ended April 30,
|                      |  | 2007                        |  | 2008
|                      |  | $000                      
|Audit Fees(1)         |  | 506                         |  | 430 
|Audit-Related Fees(2) |  | 573                         |  | 361 
|Tax Fees(3)           |  | 63                          |  | 142 
|All other fees        |  | 23                          |  |    
|                      |  |                             |  |     
|Total fees            |  | 1,165                       |  | 933 
|                      |  |                             |  |     



|(1) | The aggregate fees for the fiscal years 2007 and 2008 were for the professional services rendered for the audits of our
consolidated financial statements included in our annual report on Form 20-F, and review of the quarterly consolidated financial statements included in our current reports on Form 6-K.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | The aggregate fees for the fiscal years 2007 and 2008 were primarily for the professional services in relation to the
accounting advice and assistance in implementing accounting standards.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | The aggregate fees for the fiscal years 2007 and 2008 were primarily for professional services in relation to tax
compliance, tax planning, tax consulting service and general advice.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The audit committee has determined that the
provision of services rendered above for non-audit services is compatible with maintaining the independence of PricewaterhouseCoopers.

ITEM 16D.    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

As our ADSs only trade
over-the-counter via the OTCBB, we are not subject to any listing standards applicable to audit committee of our board of directors.



|ITEM 16E.    PURCHASES | OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|---------------------- | ------------------------------------------------------------

None.



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PART III

ITEM 17.    FINANCIAL STATEMENTS

We have responded
to Item 18 in lieu of responding to this item.



|ITEM | 18.    FINANCIAL STATEMENTS
|---- | ---------------------------

See pages F-1 through F-52.



|ITEM | 19.    EXHIBIT INDEX
|---- | --------------------



|         |  |                                                                                                                                                                                        
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  | Description                                                                                                                                                                            
|         | 
|1.1(1)   |  | Restated Memorandum of Association of ASAT Holdings Limited.                                                                                                                           
|         | 
|1.2(1)   |  | Restated Articles of Association of ASAT Holdings Limited, as amended.                                                                                                                 
|         | 
|2.1(1)   |  | Form of Deposit Agreement between ASAT Holdings Limited and The Bank of New York.                                                                                                      
|         | 
|2.2(1)   |  | Form of ADR (included in Exhibit 4.1).                                                                                                                                                 
|         | 
|2.3(1)   |  | Form of specimen certificate representing ordinary shares of ASAT Holdings Limited.                                                                                                    
|         | 
|4.1(2)   |  | ASAT Holding Limited Stock Option Plan.                                                                                                                                                
|         | 
|4.3(2)   |  | Form of ASAT Holdings Non-Qualified Stock Option Agreement.                                                                                                                            
|         | 
|4.4(3)   |  | Supply Agreement dated March 8, 2001 entered into among ASAT Limited, Talent Focus Limited and QPL Limited.                                                                            
|         | 
|4.5(4)   |  | Lease Agreement dated as of August 8, 2002 between Dongguan Changan County Changshi Development Company and Timerson Limited.                                                          
|         | 
|4.6(5)   |  | Indenture dated as of January 26, 2004, between New ASAT (Finance) Limited, ASAT Holdings Limited and its subsidiaries, and The Bank of New York, as trustee.                          
|         | 
|4.7(5)   |  | Form of 9.25% Senior Note due 2011 (included in Exhibit 4.6).                                                                                                                          
|         | 
|4.8(5)   |  | Lease Agreement dated as of May 7, 2004 among Dongguan Changan County Changshi Development Company, Dongguan Changan ASAT Semiconductor Assembly and Test Factory and Timerson
Limited.
|         | 
|4.9(6)   |  | Supply Agreement dated as of May 1, 2004 entered into among ASAT Limited, Talent Focus Industries Limited and QPL Limited.                                                             
|         | 
|4.10(6)  |  | Supply Agreement dated June 23, 2005 entered into among ASAT Limited, Talent Focus Industries Limited and QPL Limited.                                                                 
|         | 
|4.11(7)  |  | Amended and Restated Supply Agreement dated October 27, 2005 entered into among ASAT Limited, Talent Focus Industries Limited and QPL Limited.                                         
|         | 
|4.12(6)  |  | Purchase Money Loan Agreement dated as of July 31, 2005 among ASAT Holdings Limited, the Lenders named therein, and Asia Opportunity Fund, L.P.                                        
|         | 
|4.13(7)  |  | Amended and Restated Securities Purchase Agreement dated as of October 27, 2005 among ASAT Holdings Limited and the purchasers party thereto.                                          
|         | 
|4.14(7)  |  | Amended and Restated Shareholders Agreement dated November 10, 2005, by and among ASAT Holdings Limited and the shareholders party thereto.                                            
|         | 
|4.18(8)  |  | Form of Warrant Agreement between ASAT Holdings Limited and U.S. Bank National Association.                                                                                            



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|         |  |                                                                                                                                                                                          
|-------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |  | Description                                                                                                                                                                              
|         | 
|4.19(9)  |  | Second Supplemental Indenture dated as of August 27, 2007 between New ASAT (Finance) Limited, ASAT Holdings Limited and its guarantor subsidiaries, and The Bank of New York, as
trustee.
|         | 
|4.20(9)  |  | Waiver and Amendment Agreement dated as of August 23, 2007 among ASAT Holdings Limited, the Lenders named therein, and Asia Opportunity Fund, L.P.                                       
|         | 
|4.21(9)  |  | Revolving Credit Facility Agreement dated as of September 21, 2007 among X Y and Z (original in Chinese; English translation provided).*                                                 
|         | 
|4.22(9)  |  | Form of Warrant to Bondholders                                                                                                                                                           
|         | 
|4.23(9)  |  | Form of Warrant to Lenders                                                                                                                                                               
|         | 
|4.24(10) |  | Amended and Restated Lease Agreement dated as of June 30, 2008 between Dongguan Changan County Changshi Development Company and ASAT Semiconductor (Dongguan) Limited.                   
|         | 
|4.25(10) |  | Amendment Agreement dated as of October 17, 2008 among ASAT Holdings Limited, the Lenders named therein, and Asia Opportunity Fund, L.P.                                                 
|         | 
|4.26(10) |  | Revolving Credit Facility Agreement dated as of October 8, 2008 among X Y and Z (original in Chinese; English translation provided).**                                                   
|         | 
|8.0(9)   |  | Subsidiaries of the Registrant.                                                                                                                                                          
|         | 
|11.0(6)  |  | Code of Ethics.                                                                                                                                                                          
|         | 
|12.1(10) |  | Certification of the Acting Chief Executive Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.                                                                                  
|         | 
|12.2(10) |  | Certification of the Chief Financial Officer pursuant to §302 of the Sarbanes-Oxley Act of 2002.                                                                                         
|         | 
|13.1(11) |  | Certification of the Acting Chief Executive Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.          
|         | 
|13.2(11) |  | Certification of the Chief Financial Officer of the Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                 



|(1) | Incorporated herein by reference to Registrants Registration Statement on Form F-1 filed on July 7, 2000
(Registration No. 333-12124).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------



|(2) | Incorporated herein by reference to Registrants Registration Statement on Form S-8 filed on February 13, 2001
(Registration No. 333-55464).
|--- | --------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Incorporated herein by reference to Registrants annual report on Form 20-F filed on June 28, 2002.
|--- | ---------------------------------------------------------------------------------------------------



|(4) | Incorporated herein by reference to Registrants annual report on Form 20-F filed on July 28, 2003.
|--- | ---------------------------------------------------------------------------------------------------



|(5) | Incorporated herein by reference to Registrants annual report on Form 20-F filed on July 9, 2004.
|--- | --------------------------------------------------------------------------------------------------



|(6) | Incorporated herein by reference to Registrants annual report on Form 20-F filed on August 2, 2005.
|--- | ----------------------------------------------------------------------------------------------------



|(7) | Incorporated herein by reference to Registrants Quarterly Report on Form 6-K filed on January 11, 2006.
|--- | --------------------------------------------------------------------------------------------------------



|(8) | Incorporated herein by reference to Registrants Registration Statement on Form F-1 filed on January 27, 2006.
|--- | --------------------------------------------------------------------------------------------------------------



|(9) | Incorporated herein by reference to Registrants annual report on Form 20-F filed on October 15, 2007.
|--- | ------------------------------------------------------------------------------------------------------



|(10) | Filed herewith.
|---- | ---------------



|(11) | Furnished herewith.
|---- | -------------------



|* | Certain portions of this exhibit were omitted based upon a request for confidential treatment filed with the Securities Exchange Commission previously. The omitted portions were
separately submitted to the Securities and Exchange Commission.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|** | Certain portions of this exhibit have been omitted based upon a request for confidential treatment. The omitted portions will be separately submitted to the Securities and Exchange
Commission.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



99



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SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.



|                       |  |                       |  |                               
|---------------------- |  | --------------------- |  | ------------------------------
|                       |  | ASAT HOLDINGS LIMITED
|                       |  |                      
|Date: October 30, 2008 |  | By:                   |  | /s/  TUNG LOK LI              
|                       |  | Name:                 |  | Tung Lok Li                   
|                       |  | Title:                |  | Acting Chief Executive Officer
|                       |  |                      
|Date: October 30, 2008 |  | By:                   |  | /s/  KEI HONG CHUA            
|                       |  | Name:                 |  | Kei Hong Chua                 
|                       |  | Title:                |  | Chief Financial Officer       



100



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ASAT HOLDINGS LIMITED

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



|                                                                                                               |  |     
|-------------------------------------------------------------------------------------------------------------- |  | ----
|                                                                                                               |  | Page
|Report of Independent Registered Public Accounting Firm                                                        |  | F-2 
|Consolidated Balance Sheets as of April 30, 2007 and 2008                                                      |  | F-3 
|Consolidated Statements of Operations and Comprehensive Loss for the years ended April 30, 2006, 2007 and
2008 |  | F-4 
|Consolidated Statements of Shareholders Deficit for the years ended April 30, 2006, 2007 and
2008             |  | F-5 
|Consolidated Statements of Cash Flows for the years ended April 30, 2006, 2007 and 2008                        |  | F-6 
|Notes to Consolidated Financial Statements                                                                     |  | F-7 



F-1



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##### Table of Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF ASAT HOLDINGS LIMITED

In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations and comprehensive loss, consolidated statements of shareholders deficit, and consolidated
statements of cash flows present fairly, in all material respects, the financial positions of ASAT Holdings Limited (the Company) and its subsidiaries at April 30, 2007 and 2008 and the results of their operations and their cash
flows for each of the three years in the period ended April 30, 2008 in conformity with accounting principles generally accepted in the United States of America. These consolidated financial statements are the responsibility of the
Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits of these consolidated financial statements in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.



/s/    PRICEWATERHOUSECOOPERSHong KongOctober 30, 2008




F-2



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##### Table of Contents

ASAT HOLDINGS LIMITED

CONSOLIDATED BALANCE SHEETS

AS OF
APRIL 30, 2007 AND 2008

(Expressed in United States dollars)



|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------- |  | -------------- | - |  | -------------- | -
|                                                                                                                                                                                                                  |  | Note(s) |  | April 30, 2007 |   |  | April 30, 2008 |  
|                                                                                                                                                                                                                  |  |         |  | (restated)     |   |  |                |  
|                                                                                                                                                                                                                  |  |         |  | $000          |   |  | $000          |  
|ASSETS                                                                                                                                                                                                            |  |         |  |                |   |  |                |  
|Current assets:                                                                                                                                                                                                   |  |         |  |                |   |  |                |  
|Cash and cash equivalents                                                                                                                                                                                         |  |         |  | 7,325          |   |  | 6,011          |  
|Restricted cash                                                                                                                                                                                                   |  | 8       |  | 900            |   |  |               |  
|Accounts receivable, net                                                                                                                                                                                          |  | 6       |  | 17,704         |   |  | 17,540         |  
|Inventories                                                                                                                                                                                                       |  | 7       |  | 13,270         |   |  | 15,112         |  
|Prepaid expenses and other current assets                                                                                                                                                                         |  |         |  | 5,171          |   |  | 5,138          |  
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|Total current assets                                                                                                                                                                                              |  |         |  | 44,370         |   |  | 43,801         |  
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|Restricted cash, net of current portion                                                                                                                                                                           |  | 8       |  | 900            |   |  |               |  
|Property, plant and equipment, net                                                                                                                                                                                |  | 9       |  | 79,582         |   |  | 62,252         |  
|Deferred charges, net                                                                                                                                                                                             |  | 2       |  | 5,277          |   |  | 6,367          |  
|Other non-current assets                                                                                                                                                                                          |  | 14, 25  |  | 5,008          |   |  | 6,223          |  
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|Total assets                                                                                                                                                                                                      |  |         |  | 135,137        |   |  | 118,643        |  
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|LIABILITIES AND SHAREHOLDERS DEFICIT                                                                                                                                                                             |  |         |  |                |   |  |                |  
|Current liabilities:                                                                                                                                                                                              |  |         |  |                |   |  |                |  
|Short-term bank loan                                                                                                                                                                                              |  | 10      |  | 3,837          |   |  | 9,392          |  
|Accounts payable                                                                                                                                                                                                  |  |         |  | 25,926         |   |  | 27,908         |  
|Accrued liabilities                                                                                                                                                                                               |  | 11      |  | 22,445         |   |  | 18,915         |  
|Amount due to QPL                                                                                                                                                                                                 |  | 4       |  | 2,532          |   |  | 3,461          |  
|Current portion of capital lease obligations                                                                                                                                                                      |  | 14      |  | 1,822          |   |  | 26             |  
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|Total current liabilities                                                                                                                                                                                         |  |         |  | 56,562         |   |  | 59,702         |  
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|Other long-term payable                                                                                                                                                                                           |  | 12      |  | 2,086          |   |  | 2,400          |  
|Purchase money loan                                                                                                                                                                                               |  | 12      |  | 8,249          |   |  | 9,449          |  
|9.25% senior notes due 2011                                                                                                                                                                                       |  | 13      |  | 150,000        |   |  | 150,000        |  
|Capital lease obligations, net of current portion                                                                                                                                                                 |  | 14      |  | 758            |   |  | 44             |  
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|Total liabilities                                                                                                                                                                                                 |  |         |  | 217,655        |   |  | 221,595        |  
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|Series A Redeemable Convertible Preferred Shares                                                                                                                                                                  |  | 15      |  | 1,618          |   |  | 2,796          |  
|Commitments and contingencies                                                                                                                                                                                     |  | 25      |  |                |   |  |                |  
|                                                                                                                                                                                                                  |  |         | 
|Shareholders deficit:                                                                                                                                                                                            |  |         |  |                |   |  |                |  
|Common stock ($0.01 par value, 2,999,000,000 ordinary shares authorized, 711,401,844 and 766,348,377 ordinary shares issued, respectively;
704,348,844 and 759,295,377 ordinary shares outstanding, respectively) |  | 18      |  | 7,114          |   |  | 7,664          |  
|Less: Repurchase of shares at par                                                                                                                                                                                 |  |         |  | (71            | ) |  | (71            | )
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|                                                                                                                                                                                                                  |  |         |  | 7,043          |   |  | 7,593          |  
|Additional paid-in capital                                                                                                                                                                                        |  |         |  | 250,197        |   |  | 252,960        |  
|Accumulated deficit                                                                                                                                                                                               |  |         |  | (341,192       | ) |  | (366,178       | )
|Accumulated other comprehensive loss                                                                                                                                                                              |  |         |  | (184           | ) |  | (123           | )
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|Total shareholders deficit                                                                                                                                                                                       |  |         |  | (84,136        | ) |  | (105,748       | )
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  
|Total liabilities and shareholders deficit                                                                                                                                                                       |  |         |  | 135,137        |   |  | 118,643        |  
|                                                                                                                                                                                                                  |  |         |  |                |   |  |                |  

The accompanying footnotes are an integral part of these consolidated financial statements.



F-3



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##### Table of Contents

ASAT HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE YEARS ENDED APRIL 30, 2006, 2007 AND 2008 (Expressed in United States dollars,
except share and per share data)



|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|--------------------------------------------------------------- |  | ---------- |  | ----- | ----------- | - | ---------- | - | ----------- | ----- |  | - | ----------- | -
|                                                                |  | Note(s)    |  | 2006  |             |   | 2007       |   |             | 2008  | 
|                                                                |  |            |  |       |             |   | (restated) |   |             |       | 
|                                                                |  |            |  | $000 |             |   | $000      |   |             | $000 | 
|Sales                                                           |  |            |  |       | 182,115     |   |            |   | 164,853     |       |  |   | 155,961     |  
|Cost of sales                                                   |  | 4, 7       |  |       | 168,859     |   |            |   | 149,927     |       |  |   | 138,683     |  
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Gross profit                                                    |  |            |  |       | 13,256      |   |            |   | 14,926      |       |  |   | 17,278      |  
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Operating expenses                                              |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Selling, general and administrative                            |  | 4          |  |       | 29,448      |   |            |   | 22,065      |       |  |   | 19,251      |  
|Research and development                                       |  |            |  |       | 4,059       |   |            |   | 2,218       |       |  |   | 2,034       |  
|Reorganization expenses                                        |  | 21         |  |       | 4,690       |   |            |   | 2,473       |       |  |   | 392         |  
|Impairment of property, plant and equipment                    |  | 5          |  |       | 3,890       |   |            |   |            |       |  |   |            |  
|Facilities and relocation charges                              |  | 22         |  |       | 1,054       |   |            |   | 3,047       |       |  |   |            |  
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Total operating expenses                                        |  |            |  |       | 43,141      |   |            |   | 29,803      |       |  |   | 21,677      |  
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Loss from operations                                            |  |            |  |       | (29,885     | ) |            |   | (14,877     | )     |  |   | (4,399      | )
|Other income (expense), net                                     |  | 16         |  |       | 3,438       |   |            |   | 643         |       |  |   | (722        | )
|Interest expense:                                               |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Amortization of deferred charges                               |  | 2          |  |       | (1,947      | ) |            |   | (3,705      | )     |  |   | (3,245      | )
|Others                                                         |  | 10, 12, 13 |  |       | (14,686     | ) |            |   | (15,837     | )     |  |   | (16,281     | )
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Loss before income taxes                                        |  |            |  |       | (43,080     | ) |            |   | (33,776     | )     |  |   | (24,647     | )
|Income tax benefit (expense)                                    |  | 17         |  |       | 649         |   |            |   | (1,264      | )     |  |   | (339        | )
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Net loss                                                        |  |            |  |       | (42,431     | ) |            |   | (35,040     | )     |  |   | (24,986     | )
|Other comprehensive loss:                                       |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Foreign currency translation                                    |  |            |  |       | 11          |   |            |   | 39          |       |  |   | 61          |  
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Comprehensive loss                                              |  |            |  |       | (42,420     | ) |            |   | (35,001     | )     |  |   | (24,925     | )
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Net loss applicable to ordinary shareholders:                   |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Net loss                                                        |  |            |  |       | (42,431     | ) |            |   | (35,040     | )     |  |   | (24,986     | )
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Preferred shares:                                               |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Cumulative preferred share dividends                           |  | 15         |  |       | (976        | ) |            |   | (1,990      | )     |  |   | (2,028      | )
|Accretion of preferred shares                                  |  |            |  |       | (500        | ) |            |   | (960        | )     |  |   | (1,195      | )
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Net loss applicable to ordinary shareholders                    |  |            |  |       | (43,907     | ) |            |   | (37,990     | )     |  |   | (28,209     | )
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Net loss per ordinary share:                                    |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Basic and diluted net loss per share (dollars per share)        |  | 2          |  | $     | (0.06       | ) |            | $ | (0.05       | )     |  | $ | (0.04       | )
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  
|Basic and diluted weighted average number of shares outstanding |  | 2          |  |       | 679,357,820 |   |            |   | 691,798,216 |       |  |   | 724,599,796 |  
|                                                                |  |            |  |       |             |   |            |   |             |       |  |   |             |  

The accompanying footnotes are an integral part of these consolidated financial statements.



F-4



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##### Table of Contents

ASAT HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF SHAREHOLDERS DEFICIT

FOR THE YEARS ENDED APRIL 30, 2006, 2007 AND 2008

(Expressed in United States dollars, except
shares data)



|                                                                                             |  |                        |  |                          |  |         |                                 |  |       |                    |  |          |                                   |  |       |       |  |          |  
|-------------------------------------------------------------------------------------------- |  | ---------------------- |  | ------------------------ |  | ------- | ------------------------------- |  | ----- | ------------------ |  | -------- | --------------------------------- |  | ----- | ----- |  | -------- | -
|                                                                                             |  | Common Stock (Note 18) |  | Additionalpaid-incapital |  |         | Deferredstock-basedcompensation |  |       | Accumulateddeficit |  |          | Accumulatedothercomprehensiveloss |  |       | Total | 
|                                                                                             |  | Share                  |  | Amount                   |  |         |                                 |  |      
|                                                                                             |  | (in thousands)         |  | $000                    |  | $000   |                                 |  | $000 |                    |  | $000    |                                   |  | $000 |       |  | $000    |  
|Balance as of April 30, 2005                                                                 |  | 678,437                |  | 6,784                    |  | 231,108 |                                 |  | (393  | )                  |  | (263,721 | )                                 |  | (234  | )     |  | (26,456  | )
|Net loss for the year                                                                        |  |                       |  |                         |  |        |                                 |  |      |                    |  | (42,431  | )                                 |  |      |       |  | (42,431  | )
|Translation adjustment                                                                       |  |                       |  |                         |  |        |                                 |  |      |                    |  |         |                                   |  | 11    |       |  | 11       |  
|Exercise of stock options                                                                    |  | 1,025                  |  | 10                       |  | 99      |                                 |  |      |                    |  |         |                                   |  |      |       |  | 109      |  
|Reversal of deferred stock-based compensation                                                |  |                       |  |                         |  | (516    | )                               |  | 516   |                    |  |         |                                   |  |      |       |  |         |  
|Reversal of stock-based compensation                                                         |  |                       |  |                         |  |        |                                 |  | (186  | )                  |  |         |                                   |  |      |       |  | (186     | )
|Fair value of the beneficial conversion feature                                              |  |                       |  |                         |  | 10,179  |                                 |  |      |                    |  |         |                                   |  |      |       |  | 10,179   |  
|Amortization of the accretion of preferred shares                                            |  |                       |  |                         |  | (500    | )                               |  |      |                    |  |         |                                   |  |      |       |  | (500     | )
|Preferred shares dividend                                                                    |  | 3,345                  |  | 34                       |  | (34     | )                               |  |      |                    |  |         |                                   |  |      |       |  |         |  
|Issuance of warrants                                                                         |  |                       |  |                         |  | 6,017   |                                 |  |      |                    |  |         |                                   |  |      |       |  | 6,017    |  
|                                                                                             |  |                        |  |                          |  |         |                                 |  |       |                    |  |          |                                   |  |       |       |  |          |  
|Balance as of April 30, 2006                                                                 |  | 682,807                |  | 6,828                    |  | 246,353 |                                 |  | (63   | )                  |  | (306,152 | )                                 |  | (223  | )     |  | (53,257  | )
|Net loss for the year                                                                        |  |                       |  |                         |  |        |                                 |  |      |                    |  | (35,040  | )                                 |  |      |       |  | (35,040  | )
|Translation adjustment                                                                       |  |                       |  |                         |  |        |                                 |  |      |                    |  |         |                                   |  | 39    |       |  | 39       |  
|Exercise of stock options                                                                    |  | 2,140                  |  | 21                       |  | 197     |                                 |  |      |                    |  |         |                                   |  |      |       |  | 218      |  
|Reversal of deferred stock-based compensation                                                |  |                       |  |                         |  | (63     | )                               |  | 63    |                    |  |         |                                   |  |      |       |  |         |  
|Amortization of stock-based compensation                                                     |  |                       |  |                         |  | 888     |                                 |  |      |                    |  |         |                                   |  |      |       |  | 888      |  
|Fair value of the beneficial conversion feature                                              |  |                       |  |                         |  | 95      |                                 |  |      |                    |  |         |                                   |  |      |       |  | 95       |  
|Amortization of the accretion of preferred shares                                            |  |                       |  |                         |  | (1,232  | )                               |  |      |                    |  |         |                                   |  |      |       |  | (1,232   | )
|Preferred shares dividend                                                                    |  | 19,402                 |  | 194                      |  | (194    | )                               |  |      |                    |  |         |                                   |  |      |       |  |         |  
|Issuance of warrants                                                                         |  |                       |  |                         |  | 28      |                                 |  |      |                    |  |         |                                   |  |      |       |  | 28       |  
|                                                                                             |  |                        |  |                          |  |         |                                 |  |       |                    |  |          |                                   |  |       |       |  |          |  
|Balance as of April 30, 2007 (as previously reported)                                        |  | 704,349                |  | 7,043                    |  | 246,072 |                                 |  |      |                    |  | (341,192 | )                                 |  | (184  | )     |  | (88,261  | )
|Restatement re recognition of contingency conversion feature of preferred shares (note 2(b)) |  |                       |  |                         |  | 3,853   |                                 |  |      |                    |  |         |                                   |  |      |       |  | 3,853    |  
|Restatement re amortization of the accretion of preferred shares (note 2(b))                 |  |                       |  |                         |  | 272     |                                 |  |      |                    |  |         |                                   |  |      |       |  | 272      |  
|                                                                                             |  |                        |  |                          |  |         |                                 |  |       |                    |  |          |                                   |  |       |       |  |          |  
|Balance as of April 30, 2007 (as restated)                                                   |  | 704,349                |  | 7,043                    |  | 250,197 |                                 |  |      |                    |  | (341,192 | )                                 |  | (184  | )     |  | (84,136  | )
|Net loss for the year                                                                        |  |                       |  |                         |  |        |                                 |  |      |                    |  | (24,986  | )                                 |  |      |       |  | (24,986  | )
|Translation adjustment                                                                       |  |                       |  |                         |  |        |                                 |  |      |                    |  |         |                                   |  | 61    |       |  | 61       |  
|Stock based compensation expenses                                                            |  |                       |  |                         |  | 523     |                                 |  |      |                    |  |         |                                   |  |      |       |  | 523      |  
|Exercise of warrants                                                                         |  | 35                     |  |                         |  |        |                                 |  |      |                    |  |         |                                   |  |      |       |  |         |  
|Conversion of preferred shares                                                               |  | 468                    |  | 5                        |  | 13      |                                 |  |      |                    |  |         |                                   |  |      |       |  | 18       |  
|Amortization of the accretion of preferred shares                                            |  |                       |  |                         |  | (1,195  | )                               |  |      |                    |  |         |                                   |  |      |       |  | (1,195   | )
|Issuance of warrants (note 23)                                                               |  |                       |  |                         |  | 3,967   |                                 |  |      |                    |  |         |                                   |  |      |       |  | 3,967    |  
|Preferred shares dividend                                                                    |  | 54,443                 |  | 545                      |  | (545    | )                               |  |      |                    |  |         |                                   |  |      |       |  |         |  
|                                                                                             |  |                        |  |                          |  |         |                                 |  |       |                    |  |          |                                   |  |       |       |  |          |  
|Balance as of April 30, 2008                                                                 |  | 759,295                |  | 7,593                    |  | 252,960 |                                 |  |     |                    |  | (366,178 | )                                 |  | (123  | )     |  | (105,748 | )
|                                                                                             |  |                        |  |                          |  |         |                                 |  |       |                    |  |          |                                   |  |       |       |  |          |  

The accompanying footnotes are an integral part of these consolidated financial statements.



F-5



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##### Table of Contents

ASAT HOLDINGS LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED APRIL 30, 2006, 2007 AND 2008 (Expressed in United States dollars)



|                                                                                                                       |  |         |   |  |         |   |  |         |  
|---------------------------------------------------------------------------------------------------------------------- |  | ------- | - |  | ------- | - |  | ------- | -
|                                                                                                                       |  | 2006    |   |  | 2007    |   |  | 2008    |  
|                                                                                                                       |  | $000   |   |  | $000   |   |  | $000   |  
|Operating activities:                                                                                                  |  |         |   |  |         |   |  |         |  
|Net loss                                                                                                               |  | (42,431 | ) |  | (35,040 | ) |  | (24,986 | )
|Adjustments to reconcile net loss to net cash (used in) provided by operating activities:                              |  |         |   |  |         |   |  |         |  
|Depreciation and amortization:                                                                                         |  |         |   |  |         |   |  |         |  
|Property, plant and equipment                                                                                          |  | 26,886  |   |  | 23,328  |   |  | 22,004  |  
|Deferred charges and debt discount                                                                                     |  | 1,947   |   |  | 3,705   |   |  | 3,245   |  
|(Gain) loss on disposal of property, plant and equipment                                                               |  | (14     | ) |  | 173     |   |  |        |  
|Non-cash impairment of property, plant and equipment                                                                   |  | 3,890   |   |  |        |   |  |        |  
|Unrealized foreign exchange loss                                                                                       |  |        |   |  |        |   |  | 899     |  
|(Reversal) amortization of stock-based compensation                                                                    |  | (186    | ) |  | 888     |   |  | 523     |  
|Amortization of warrant compensation                                                                                   |  |        |   |  |        |   |  | 832     |  
|                                                                                                                       |  |         |  
|Changes in operating assets and liabilities:                                                                           |  |         |   |  |         |   |  |         |  
|Accounts receivable, net                                                                                               |  | (11,927 | ) |  | 11,903  |   |  | 164     |  
|Restricted cash                                                                                                        |  | (3,320  | ) |  | 1,520   |   |  | 1,800   |  
|Inventories                                                                                                            |  | (5,301  | ) |  | 9,939   |   |  | (1,728  | )
|Prepaid expenses and other current assets                                                                              |  | (929    | ) |  | 2,913   |   |  | (1,537  | )
|Other non-current assets                                                                                               |  | (1,324  | ) |  | (738    | ) |  | (1,215  | )
|Accounts payable                                                                                                       |  | 16,815  |   |  | (5,728  | ) |  | 5,063   |  
|Accrued liabilities                                                                                                    |  | 5,914   |   |  | 834     |   |  | (3,216  | )
|Amount due to QPL                                                                                                      |  | 2,920   |   |  | (3,294  | ) |  | 929     |  
|                                                                                                                       |  |         |   |  |         |   |  |         |  
|Net cash (used in) provided by operating activities                                                                    |  | (7,060  | ) |  | 10,403  |   |  | 2,777   |  
|                                                                                                                       |  |         |   |  |         |   |  |         |  
|Investing activities:                                                                                                  |  |         |   |  |         |   |  |         |  
|Proceeds from disposal of property, plant and equipment                                                                |  | 116     |   |  | 181     |   |  | 771     |  
|Acquisition of property, plant and equipment                                                                           |  | (23,520 | ) |  | (17,748 | ) |  | (9,073  | )
|                                                                                                                       |  |         |   |  |         |   |  |         |  
|Net cash used in investing activities                                                                                  |  | (23,404 | ) |  | (17,567 | ) |  | (8,302  | )
|                                                                                                                       |  |         |   |  |         |   |  |         |  
|Financing activities:                                                                                                  |  |         |   |  |         |   |  |         |  
|Proceeds from warrant and preferred shares exercised                                                                   |  |        |   |  |        |   |  | 1       |  
|Proceeds from draw down of new loans                                                                                   |  |        |   |  | 3,837   |   |  | 10,646  |  
|Repayment of short-term bank loan                                                                                      |  | (4,227  | ) |  |        |   |  | (5,546  | )
|Proceeds from stock options exercised                                                                                  |  | 109     |   |  | 218     |   |  |        |  
|Proceeds from issuance of Series A Redeemable Convertible Preferred Shares                                             |  | 7,500   |   |  |        |   |  |        |  
|Proceeds from purchase money loan                                                                                      |  | 9,150   |   |  |        |   |  |        |  
|Proceeds from right offering                                                                                           |  |        |   |  | 490     |   |  |        |  
|Payment of other deferred charges                                                                                      |  | (1,677  | ) |  |        |   |  |        |  
|Repayment of capital lease obligations                                                                                 |  | (1,204  | ) |  | (2,010  | ) |  | (940    | )
|                                                                                                                       |  |         |   |  |         |   |  |         |  
|Net cash provided by financing activities                                                                              |  | 9,651   |   |  | 2,535   |   |  | 4,161   |  
|                                                                                                                       |  |         |   |  |         |   |  |         |  
|Net decrease in cash and cash equivalents                                                                              |  | (20,813 | ) |  | (4,629  | ) |  | (1,364  | )
|Cash and cash equivalents at beginning of year                                                                         |  | 32,717  |   |  | 11,915  |   |  | 7,325   |  
|Effects of foreign exchange rates change                                                                               |  | 11      |   |  | 39      |   |  | 50      |  
|                                                                                                                       |  |         |   |  |         |   |  |         |  
|Cash and cash equivalents at end of year                                                                               |  | 11,915  |   |  | 7,325   |   |  | 6,011   |  
|                                                                                                                       |  |         |   |  |         |   |  |         |  
|Supplemental disclosure of cash flow information:                                                                      |  |         |   |  |         |   |  |         |  
|Cash paid (received) during the year for:                                                                              |  |         |   |  |         |   |  |         |  
|Interest expense                                                                                                      |  | 14,239  |   |  | 14,211  |   |  | 14,503  |  
|Income taxes                                                                                                          |  | (639    | ) |  | 102     |   |  | 877     |  
|Non-cash financing activities: Waiver of payment to QPL in exchange of Series A Redeemable ConvertiblePreferred Shares |  | 7,500   |   |  |        |   |  |        |  
|Settlement of capital lease payable against deposit placed                                                             |  |        |   |  |        |   |  | 1,570   |  

The accompanying footnotes are an integral part of these consolidated financial statements.



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##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless otherwise stated)



|1. | ORGANIZATION AND BASIS OF PRESENTATION
|-- | --------------------------------------

ASAT
Holdings Limited, a company incorporated under the laws of Cayman Islands (including its consolidated subsidiaries, collectively ASAT or the Company), was formed on October 20, 1999. ASAT is principally engaged in the
provision of assembly and test services for packaged integrated circuits to customers in the semiconductor industry. The Companys principal production facilities are located in the Peoples Republic of China (China). The
Companys sales offices are strategically located in the United States, Hong Kong, Singapore, Germany and Korea.

On July 14,
2000, the Company offered 6,666,666 American Depositary Shares (ADS) representing 100,000,000 ordinary shares at $36.00 per ADS to the public and has the ADSs quoted on The Nasdaq Capital Market under the symbol ASTT. On
January 3, 2008, the Company received a compliance letter from Nasdaq stating that the Companys market value of listed securities has been below $35,000,000 as required under Marketplace Rule 4320(e)(2)(B) for continued listing on the
Nasdaq Capital Market. The Company was provided with 30 calendar days, until February 4, 2008, to regain compliance with the Nasdaq Capital Markets continued listing requirements or be subject to delisting. The Company was also notified
by Nasdaq by the same compliance letter that the Company do not comply with the minimum stockholders equity of $2,500,000 or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last
three most recently completed fiscal years, which are also requirements for continued listing on the Nasdaq Capital Market.

On
January 3, 2008, the Company received another compliance letter from Nasdaq stating that, for a period of 30 consecutive trading days, the Companys ADSs had closed below the minimum bid price of $1.00 per ADS as required under Nasdaq
Marketplace Rule 4320(e)(2)(E)(ii) for continued listing on the Nasdaq Capital Market. The Company was provided with 180 calendar days, until July 1, 2008, to regain compliance with the Nasdaq Capital Markets continued listing
requirements or be subject to delisting.

On March 25, 2008, the Company received notice from the staff of Nasdaq regarding Nasdaq
Hearing Panels determination on the Companys non-compliance with Nasdaq continuing listing requirements, including maintaining the market value of the Companys listed securities above $35 million, the Companys stockholders
equity above $2.5 million, and the Companys net income of at least $500,000 from continuing operations for the most recently completed fiscal year or two of the last three most recently completed fiscal years. As a result, the Companys
ADSs were delisted and suspended from trading on the Nasdaq Capital Market on March 27, 2008.

After delisting from Nasdaq, the
Companys ADSs are now trading on the OTC Bulletin Board under the trading symbol ASTTY.OB.

The accompanying consolidated
financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America.

The
Company has experienced recurring net losses of $42.4 million, $35.0 million and $25.0 million for the years ended April 30, 2006, 2007 and 2008, respectively. As of April 30, 2007 and April 30, 2008, the Company had net liabilities
of $82.5 million and $103.0 million, respectively, and an accumulated deficit of $341.2 million and $366.2 million, respectively. In response to current financial conditions, the Company has explored various means of obtaining additional financing,
while reducing losses. In September 2006, ASAT Semiconductor (Dongguan) Limited (ASAT China), a wholly-owned subsidiary of the Company, obtained a revolving credit facility for RMB30 million (approximately $4.3 million) under which
drawdowns were permitted for a period of one year. The revolving credit facility is secured by the pledge of certain equipment of ASAT China purchased



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##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



with the proceeds of such facility (See Note 10 for details). On October 8, 2006, the Company drew down RMB20 million (approximately $2.9 million) which
was due in October 2007. In September 2007, ASAT China renewed the RMB20 million of the credit facility for another year. On April 30, 2007, the Company drew down the remaining balance of RMB10 million (approximately $1.4 million) of this
revolving credit facility and had subsequently repaid it on April 30, 2008. As such, the outstanding balance of this revolving facility was RMB20 million as of April 30, 2008. In September 2008, ASAT China fully repaid the RMB20 million
credit facility. On August 23, 2007, the Companys purchase money loan facility was amended to extend the maturity due date of the $10.0 million principal amount until April 30, 2009 and to extend the payment due date for interest
payments (and interest on such interest) for March 31, 2006, June 30, 2006, September 30, 2006, December 31, 2006, March 31, 2007, June 30, 2007 and September 30, 2007 to become due on
October 31, 2007. On October 10, 2007, the Company further amended the purchase money loan facility to extend the payment due date for interest including any penalty interest as required by the agreement. Interest that was due or will be
due for payment on or before December 31, 2008 will be due and payable on December 31, 2008. On October 17, 2008, the purchase money loan facility was amended to extend the maturity due date of the $10.0 million principal amount and
certain unpaid interest. The maturity due date for the $10.0 million principal was extended to January 31, 2010. For the total interest of $5,277,231 accrued and unpaid up to October 17, 2008, the Company was required to pay $441,667 upon
signing the amended agreement. The balance of the unpaid interest of $4,835,564 was converted into two separate loan principals with $2,435,564 due and payable on December 15, 2008 and $2,400,000 due and payable on January 31, 2010. In
September 2007, ASAT China obtained a revolving multi-currency credit facility of RMB150 million or equivalent (approximately $20 million) with a term of one year. This facility is secured by certain trade receivables of ASAT China. In October 2008,
ASAT China obtained a renewal of the revolving credit facility and was extended for another year with the interest revised to LIBOR plus 4%. In April 2008, ASAT China obtained a revolving credit facility of $5 million with a term of one year bearing
interest rate at LIBOR plus 3%. The revolving credit facility is secured by certain equipment of ASAT China. In July 2008, ASAT China obtained a short-term revolving credit facility of RMB60 million (approximately $8.6 million) bearing interest at a
rate published by the Peoples Bank of China plus a mark up of 15%. The revolving credit facility is backed by a guarantee provided by ASAT HK. The revolving credit facility will expire in April 6, 2009 and may be extended for further one
year. As of the date of this annual report, ASAT China drew down approximately $10.5 million in total of all its credit facilities.

The
Companys operating expenses has reduced in recent quarters as a result of achieving a lower cost structure after the migration of its entire manufacturing operations from Hong Kong to Dongguan, China. With the support of the existing external
financing, management believes that there will be sufficient financial resources to meet the Companys cash requirements for the next 12 months and the consolidated financial statements have been prepared on a going concern basis.



|2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | ------------------------------------------



| | (a) | Basis of Preparation
| | --- | --------------------

These consolidated financial
statements were prepared on a going concern basis. The Company has determined that the going concern basis of preparation is appropriate based on its estimates and judgments of future performance of the Company, future events and projected cash
flows. At each balance sheet date, the Company evaluates its estimates and judgments as part of its going concern assessment. Based on its assessment, the Company believes there are sufficient financial and cash resources to finance the Company as a
going concern in the next twelve months. Accordingly, management has prepared the consolidated financial statements on a going concern basis.



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##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



| | (b) | Restatement of consolidated financial statements for the year ended April 30, 2007
| | --- | ----------------------------------------------------------------------------------

As a result of a change in the preferred shares conversion price from $0.45 per ADS to $0.325 per ADS during the fiscal year ended April 30, 2007, the
carrying amount of the preferred shares should have been reduced by $4.1 million and additional paid in capital should have been increased by $4.1 million during fiscal 2007. The previously reported fiscal 2007 financial statement amounts did not
reflect this adjustment and, accordingly, have been restated.



|                            |  |                                                             |         |   |             |   |         |  
|--------------------------- |  | ----------------------------------------------------------- | ------- | - | ----------- | - | ------- | -
|                            |  | As previouslyreported                                       |         |   | As restated |  
|                            |  | (In thousands of dollars,except net loss perordinary share) |        
|Preferred shares            |  |                                                             | 5,743   |   |             |   | 1,618   |  
|Additional paid in capital  |  |                                                             | 246,072 |   |             |   | 250,197 |  
|Net loss per ordinary share |  | $                                                           | (0.0553 | ) |             | $ | (0.0549 | )

There is no effect on the total assets, liabilities, or net loss for the year ended April 30,
2007.



| | (c) | Basis of consolidation
| | --- | ----------------------

The consolidated financial
statements include the accounts of ASAT Holdings Limited and its subsidiaries (see Note 3 for details of the Companys principal consolidated subsidiaries). All significant intercompany balances and transactions have been eliminated upon
consolidation.



| | (d) | Revenue recognition and risk of loss
| | --- | ------------------------------------

The Company
does not take ownership of customer-supplied semiconductor wafers or die. Title and risk of loss remains with the customers for these materials at all times. Accordingly, the cost of the customer-supplied materials is not included in the
consolidated financial statements. The Company recognizes revenue from packaging semiconductors and performing test services directly to customers, when persuasive evidence of an arrangement exists, the price is fixed or determinable, delivery has
occurred and services rendered, and collectibility is reasonably assured, which is at the date when the customer receives and accepts the goods. Shipping and handling costs associated with product sales are included in cost of sales. Such policies
are consistent with provisions in the Securities and Exchange Commissions Staff Accounting Bulletin (SAB) No. 101, Revenue Recognition in Financial Statements, as revised by SAB No. 104 Revenue
Recognition.



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

Cash and cash
equivalents include cash on hand, cash accounts, interest bearing savings accounts placed with banks and financial institutions and all highly liquid debt instruments with original maturity of three months or less, less any amounts which are
restricted as to use.



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##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



| | (f) | Allowance for doubtful accounts
| | --- | -------------------------------

Allowance for
doubtful accounts is made against accounts receivable to the extent they are considered to be doubtful. Accounts receivable in the balance sheet are stated net of such allowance. The collectibility of the Companys accounts receivable is
evaluated based on a combination of factors. In circumstances where the Company is aware of a specific customers inability to meet its financial obligation to the Company, a specific reserve for bad debts is recorded against amounts due. A
provision is also made based on the aging of accounts receivable and the history of uncollectible accounts receivable.



| | (g) | Treasury stock
| | --- | --------------

The Company accounts for treasury
stock using the par value method.



| | (h) | Inventories
| | --- | -----------

Inventories consist of raw materials,
work-in-progress and finished goods and are stated at the lower of cost or market value. Cost of raw materials includes purchase and related costs incurred in bringing the products to their present location and condition. Cost is determined by the
first-in, first-out method. Cost of work-in-progress and cost of finished goods primarily include materials and an appropriate proportion of direct labor and manufacturing overhead.

The Company reserves for excess and obsolete inventories based on forecasted demand that the Company receives from its customers. When it is determined
that the inventories will not be either utilized in production based on customers forecast or recoverable from the customers, the material is written-off accordingly.



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

Property, plant and
equipment are recorded at cost less accumulated depreciation and impairment losses. Gains or losses on disposals are reflected in the consolidated statement of operations in current periods. Major expenditures for betterments and renewals are
capitalized. All ordinary repairs and maintenance costs are expensed as incurred.

Depreciation is provided using the straight-line method
over the estimated useful lives of the assets as follows:



|                       |  |                               
|---------------------- |  | ------------------------------
|Plant and machinery    |  | 5 - 12 years                  
|Leasehold improvements |  | Over the unexpired lease terms
|Fixtures and furniture |  | 5 - 10 years                  
|Loose toolings         |  | 5 - 10 years                  
|Motor vehicles         |  | 5 years                       
|Office equipment       |  | 3 - 5 years                   
|Computer and software  |  | 3 - 7 years                   



| | (j) | Impairment of long-lived assets
| | --- | -------------------------------

The Company
applies Statements of Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, which requires impairment losses to be recorded on long-lived assets used in operations
when indicators of impairment, such as reduction in demand or significant economic slowdown in the semiconductor industry, are present. Reviews are performed to determine whether the carrying value of asset group is impaired, based on comparison to
undiscounted expected future cash flows. If



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##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



this comparison indicates that there is an impairment, the impaired asset group is written down to fair value, which is determined by either using quoted
market prices in active markets or other valuation techniques such as present value techniques. Impairment is based on the excess of the carrying amount over the fair value of those assets.

Depreciation for the impaired assets is then provided using the straight-line method over the estimated remaining useful lives of the impaired assets.



| | (k) | Deferred charges
| | --- | ----------------

Deferred charges are fees and
expenses including fair value of warrants issued, directly related to the issuance of senior notes and other financing activities. Deferred charges attributable to the issuance of 9.25% senior notes and warrants issued in connection with the
amendment of the notes are capitalized and amortized over the life of the notes. Deferred charges attributable to the issuance of the Series A Redeemable Convertible Preferred Shares (the Series A Preferred Shares) and the warrants
issued in connection with such shares are capitalized and amortized over the expected life of the Series A Preferred Shares. Deferred charges attributable to the purchase money loan facility and the warrants issued in connection with such facility
are capitalized and amortized over the life of the purchase money loan facility. Deferred charges, net of accumulated amortization, as of April 30, 2007, were $5.3 million as compared to $6.4 million as of April 30, 2008. Accumulated
amortization as of April 30, 2007 and 2008 were $4.6 million and $6.6 million, respectively. Amortization of deferred charges included in interest expense for the years ended April 30, 2006, 2007 and 2008 were $1.6 million, $1.8
million and $2.0 million, respectively.



| | (l) | Research and development expenditures
| | --- | -------------------------------------

Research and
development expenditures include costs directly attributable to the conduct of research and development programs primarily related to the development of new package designs and improvement of the efficiency and capabilities of the Companys
existing production process. Such costs include salaries, employee benefit costs, materials costs, and the allocable portions of facility costs such as rent, building management fee, utilities, repairs and maintenance, depreciation and general
support services. All costs associated with research and development activities are expensed in the period as incurred.



| | (m) | Income taxes
| | --- | ------------

The Company accounts for income taxes
using SFAS No. 109, Accounting for Income Taxes, which requires the asset and liability approach for financial accounting and reporting for income taxes. Under this approach, deferred taxes are provided for the estimated future tax
effects attributable to temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases, and for the expected future tax benefits from items including tax loss carryforwards. Deferred tax
assets and liabilities are measured using the enacted tax rates expected in the years of recovery or reversal and the effect from a change in tax rates is recognized in income for the period of enactment. A valuation allowance is provided for the
portion of deferred tax assets that will more likely than not be unrealized.

In July 2006, the FASB issued FASB Interpretations 48,
Accounting for Uncertainty in Income Taxesan Interpretation of FASB Statement 109 (FIN 48). FIN 48 prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements
uncertain tax positions that the company has taken or expects to take on a tax return (including a decision whether to file or not to file a return in a particular jurisdiction). Under FIN 48, the financial statements will reflect expected future
tax consequences of



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##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



such positions presuming the taxing authorities full knowledge of the position and all relevant facts, but without considering time values. The Company
adopted the provision of FIN 48 effective May 1, 2007.

Prior to the adoption of FIN 48, the Company had made provision for the tax
uncertainty that was identified under FAS 5. The Company has determined that the adoption of FIN 48 did not result in additional uncertain tax benefits or FIN 48 liabilities as at May 1, 2007.



| | (n) | Foreign currency translation
| | --- | ----------------------------

The Company uses the
United States dollar as its functional and reporting currency. Monetary assets and liabilities denominated in currencies other than the United States dollar are remeasured into the United States dollar at the rates of exchange at the balance sheet
date. Transactions in currencies other than the United States dollar during the year are converted into the United States dollar at the rates of exchange at the transaction dates. Exchange differences are recognized in the consolidated statement of
operations.

On consolidation, balance sheets of subsidiaries whose functional currency is other than the United States dollar are
translated into the United States dollar at the rates of exchange at the balance sheet date. Statements of operations of subsidiaries denominated in currencies other than the United States dollar are translated into the United States dollar at
average rates of exchange during the year. Exchange differences resulting from the translation of financial statements denominated in currencies other than the United States dollar and the effect of exchange rate changes on intercompany transactions
of a long-term investment nature are accumulated and credited or charged directly to a separate component of shareholders equity (deficit) and are reported as other comprehensive income (loss).



| | (o) | Reorganization and relocation expenses
| | --- | --------------------------------------

The Company
has adopted SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities (SFAS No. 146) and SFAS No. 112 Employers Accounting for Postemployment Benefits (SFAS
No. 112) to record its reorganization and relocation expenses. SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity shall be recognized and measured initially at its fair value in the period
which the liability is incurred while SFAS No. 112 requires employers to recognize its obligation to provide postemployment benefits when the liability is probable and the amount can be reasonably estimated.



| | (p) | Net loss per share
| | --- | ------------------

Net loss per share is computed
in accordance with SFAS No. 128, Earnings Per Share by dividing net loss applicable to ordinary shareholders, for each year by the weighted average number of ordinary shares outstanding during the year.

Diluted net loss per share is computed by dividing net loss to ordinary shareholders for each year by the weighted average number of ordinary shares and
ordinary share equivalents outstanding during the year. The weighted average number of shares used to compute diluted net loss per share include the incremental shares of ordinary shares relating to outstanding options, conversion of preferred
shares and warrants to the extent that conversion of such into incremental shares are dilutive.

The diluted net loss per share was the
same as the basic net loss per share for the years ended April 30, 2006, 2007 and 2008 as all potential ordinary shares including the stock options, preferred shares and warrants are anti-dilutive and are therefore excluded from the
computation of diluted net loss per share.



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##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



| | (q) | Concentration of credit risk
| | --- | ----------------------------

The Company places
its cash investments with various financial institutions. The Company believes that no significant credit risk exists as these investments are made with high-credit, quality financial institutions.

The Companys business activities and accounts receivable are with customers in the semiconductor industry, the majority of which are located
throughout Asia, Europe and the United States. Also, the major customer represents over 50% revenue of the Company. The Company performs ongoing credit evaluations of its customers and makes frequent contact with its customers. The Company believes
that no significant credit risk exists as credit losses.



| | (r) | Risk and uncertainties
| | --- | ----------------------

The Companys future
results of operations involve a number of risks and uncertainties. Factors that could affect future operating results and cause actual results to vary materially from historical results include, but are not limited to, dependence on the highly
cyclical nature of the semiconductor industry, history of continuous operating losses, the Companys ability to rapidly develop and successfully bring to market advanced technologies and services, the incurrence of significant capital
expenditures for manufacturing technology and equipment, the working relationship with the Companys development partner in China, the Companys high leverage and the restrictive covenants contained in the agreements governing its
indebtedness, fluctuating demand and continuous downward pressure on selling prices in the communications sector, low capacity utilization rates, loss of a large customer, loss of key suppliers or their failure to deliver sufficient quantities of
materials on a timely basis, the loss of key executive officers, weakness in global economies, natural disasters, losses of power to the Companys facilities in Dongguan, China, volatility in the market prices of the Companys ADSs,
environmental regulation, fluctuations in foreign currency, uncertainty as to demand from its customers over both the long- and short-term, competitive pricing and declines in average selling price the Company experienced, the timing and volume of
orders relative to the production capacity, complexity in the Companys assembly processes, the availability of financing, the competition and the greater operating and financial resources of competitors, ability to successfully complete
potential acquisitions and integrate other parties into the Companys business, the potential economic, political, legal, operational and financial risks faced by the Company operating facilities in Dongguan, China, the ability to receive
dividends from and transfer funds to, the Companys Chinese operating subsidiary, dependence on raw material and equipment suppliers, the enforcement of intellectual property rights by or against the Company and the adequacy of internal
controls over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002.



| | (s) | Comprehensive income (loss)
| | --- | ---------------------------

The Company follows
SFAS No. 130, Reporting Comprehensive Income for the reporting and display of its comprehensive income (loss) and related components in the financial statements and thereby reports a measure of all changes in equity of an enterprise
that results from transactions and economic events other than transactions with the shareholders. Items of comprehensive income (loss) are reported in both the Consolidated Statement of Operations and Comprehensive Loss and the Consolidated
Statement of Shareholders Deficit.



| | (t) | Fair value of financial instruments
| | --- | -----------------------------------

The carrying
value of financial instruments, which consist of cash and cash equivalents, related company balances, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, short-term bank loan and capital lease
obligations, approximates fair value due to the short-term nature of these instruments.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



| | (u) | Use of estimates
| | --- | ----------------

The preparation of consolidated
financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated
financial statements and the reported amounts of net revenue and expenses during the reporting period. The Company regularly evaluates the estimates and assumptions related to going concern assessments, allowance for doubtful accounts, inventory
reserves, useful lives of property, plant and equipment, deferred income tax asset valuation allowance, accounting for financial arrangements, litigation and other contingencies. The Company bases the estimates and assumptions on experience and on
various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. To the
extent there are material differences between the estimates and the actual results, future results of operations will be affected. Actual results could differ from those estimates. Differences from those estimates are reported in the period they
become known and are disclosed to the extent they are material to the consolidated financial statements taken as a whole.



| | (v) | Segment information
| | --- | -------------------

The Company applies SFAS
No. 131, Disclosure about Segments of an Enterprise and Related Information. SFAS No. 131 establishes standards for the way that public business enterprises report information about operating segments in annual consolidated
financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. SFAS No. 131 also establishes standards for reporting information about operating segments on a basis
consistent with the Companys internal organization structure as well as information about geographical areas, business segments and major customers. It is the managements view that the services rendered by the Company constitute one
business segment.



| | (w) | Related parties
| | --- | ---------------

Parties are considered to be
related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its
management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the
other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an
ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is also a related party.



| | (x) | Stock-based compensation
| | --- | ------------------------

Prior to May 1,
2006, the Company accounted for share-based compensation awarded to employees and directors in accordance with Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees (APB
No. 25), and complied with the disclosure provisions of Statements of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation (SFAS No. 123). Under APB
No. 25, compensation cost is recognized based on the excess, if any, of the quoted market price of the Companys stock over the amount an employee is required to pay to acquire the stock, as determined on the date the option is granted.
Total compensation cost is recorded in shareholders equity as additional paid-in capital and deferred share-based compensation. Deferred share-based compensation is amortized on a straight-line basis and charged to expense over the vesting
period of the underlying options.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Effective May 1, 2006, the Company
adopted the fair value recognition provisions of SFAS No. 123 (revised 2004), Share- Based Payment (SFAS No. 123(R)), which revises SFAS No. 123, and supersedes APB No. 25. Under the fair value
recognition provisions of SFAS No. 123(R), the Company is required to measure the cost of employee services received in exchange for stock-based compensation measured at the fair value of the award as of the grant date. Beginning May 1,
2006, the Company applied the modified prospective transition method, which requires the application of SFAS No. 123(R) for new grants and nonvested grants that were outstanding as of such date. The Companys Consolidated Financial
Statements as of and for the year ended April 30, 2007 reflect the impact of SFAS No.123(R). In accordance with the modified prospective transition method, the Companys Condensed Consolidated Financial Statements for prior periods have
not been restated to reflect, and do not include, the impact of SFAS No.123(R). The valuation provisions of SFAS No. 123 (R) apply to new grants and nonvested grants that were outstanding as of the effective date. For new grants, the
Company will amortize stock-based compensation expenses on a straight-line basis over the requisite service period. Estimated compensation for nonvested grants that were outstanding as of the effective date are recognized over the remaining service
period using the compensation estimated for the SFAS No. 123(R) pro forma disclosures. See Note 19 below for further details.



| | (y) | Capital leases
| | --- | --------------

Leases that substantially transfer
to the Company all the risks and rewards of ownership of assets are accounted for as capital leases. Capital leases are capitalized at the inception of the leases at the lower of the fair value of the leased assets or the present value of the
minimum lease payments. Each lease payment is allocated between the capital and finance charges so as to achieve a constant rate on the capital balances outstanding. The corresponding rental obligations, net of finance charges, are included in
capital lease obligations. The finance charges are charged to the consolidated statement of operations over the term of the leases.

Assets
held under capital leases are depreciated over the shorter of their estimated useful lives or the term of the leases.



| | (z) | Operating leases
| | --- | ----------------

Leases where substantially all
the risks and rewards of ownership of assets remain with the leasing company are accounted for as operating leases.

Rental payments under
operating leases are expensed on a straight-line basis over the periods of the respective leases.



| | (aa) | Recent accounting pronouncements not yet adopted by the Company
| | ---- | ---------------------------------------------------------------

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SAFS 157 defines fair value, establishes a framework for measuring fair value, and enhances disclosures about fair value
measurements. This Statement is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The Company does not expect the adoption of these statements to have
any material impact on its consolidated financial statements. In February 2008, the FASB issued FASB Staff Position (FSP) 157-2. Effective Date of FASB Statement No. 157. FSP 157-2 provides a one-year deferral of the effective date
of FASB Statement 157. Fair Value Measurements, for nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed in financial statements at fair value on a recurring basis. The deferral is not available, however,
to entities that issued interim



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



or annual financial statements reflecting the measurement and disclosure provisions of Statement 157 before February 12, 2008. The Company does not
expect the adoption of these statements to have any material impact on its consolidated financial statements.

In February 2007, the FASB
issued FAS 159, The Fair Value Option for Financial Assets and Financial Liabilities (FAS 159). FAS 159 permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve
financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions. FAS 159 is
expected to expand the use of fair value measurement, which is consistent with the FASBs long-term measurement objectives for accounting for financial instruments. FAS 159 also establishes presentation and disclosure requirements designed to
facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. FAS 159 does not affect any existing accounting literature that requires certain assets and liabilities to be carried
at fair value. This Statement does not establish requirements for recognizing and measuring dividend income, interest income, or interest expense. This Statement does not eliminate disclosure requirements included in other accounting standards,
including requirements for disclosures about fair value measurements included in FASB Statements No. 157, Fair Value Measurements, and No. 107, Disclosures about Fair Value of Financial Instruments. FAS 159 is effective for financial
statements issued for fiscal years beginning after November 15, 2007. The Company does not expect the adoption of this statement to have any material impact on its consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141(revised 2007), Business combinations (SFAS No. 141(R)). SFAS
No. 141(R) requires an acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all
assets acquired and liabilities assumed; and requires the acquirer to disclose to investors and other users all of the information they need to evaluate and understand the nature and financial effect of the business combination. SFAS No. 141(R)
is effective for fiscal years beginning on or after December 15, 2008. As of the date of this annual report, the Company does not engaged in any acquisition and SFAS No. 141(R) does not have any impact on its consolidated financial
statements.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in consolidated Financial Statements, an
amendment of ARB No.51 (SFAS No. 160). SFAS No. 160 clarifies that a noncontrolling or minority interest in a subsidiary is considered an ownership interest and, accordingly, requires all entities to report such interests
in subsidiaries as equity in the consolidated financial statements. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. As of the date of this annual report, the Company does not have any investments that
are either not controllable by the Company or the Company own a minority interest and SFAS No. 160 does not have any impact on its consolidated financial statements.

In December 2007, the SEC issued Staff Accounting Bulletin (SAB) No. 110, codified as SAB Topic 14. Share-based payment: SAB No. 110 states that the SEC staff will continue to accept under
certain circumstances, the use of simplified method in developing an estimate of expected term of plain vanilla share options in accordance with Statement of Financial Accounting Standard No. 123 (revised 2004) and SAB No. 107
beyond December 31, 2007. The adoption of SAB No. 110 did not require any adjustments to the Companys consolidated financial statements for the year ended April 30, 2008.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities an amendment of FASB
Statement No. 133 (SFAS No. 161). SFAS No. 161 requires disclosures of how and why an entity uses derivative instruments, how derivative instruments and related hedged items are



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



accounted for and how derivative instruments and related hedged items affect an entitys financial position, financial performance, and cash flows.
SFAS No. 161 is effective for fiscal years beginning after November 15, 2008, with early adoption permitted. As of the date of this annual report, the Company does not have any hedging derivative and SFAS No. 161 does not have
any impact on its consolidated financial statements.

In April 2008, the FASB finalized Staff Position No. 142-3, Determination
of the Useful Life of Intangible Assets (FSP 142-3).The position amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset
under SFAS No. 142, Goodwill and Other Intangible Assets.The position applies to intangible assets that are acquired individually or with a group of other assets and both intangible assets acquired in business combinations
and asset acquisitions. FSP 142-3 is effective for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. As of the date of this annual report, the Company does not have any intangible assets and FSP
142-3 does not have any impact on its consolidated financial statements.

In May 2008, the FASB issued SFAS No. 162, The
Hierarchy of Generally Accepted Accounting Principles (SFAS No. 162).SFAS No. 162 defines the order in which accounting principles that are generally accepted should be followed. SFAS No. 162 is
effective 60 days following the SECs approval of the Public Company Accounting Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles. The Company does
not expect the adoption of SFAS No. 162 to have a material impact on its consolidated financial statements.

In May 2008, the
FASB finalized Staff Position No. APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) (FSP APB 14-1). The position clarifies that
convertible debt instruments that may be settled in cash upon conversion (including partial cash settlement) are not addressed by APB Opinion No. 14 Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants. FSP APB
14-1 further specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entitys nonconvertible debt borrowing rate when interest cost is recognized in
subsequent period. FSP APB 14-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. As of the date of this annual report, the Company does not have any
convertible debt instruments that may be settled in cash upon conversion and FSP APB 14-1 does not have any impact on its consolidated financial statements.

In June 2008, the FASB issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts. The new standard clarifies how FASB Statement No. 60, Accounting and Reporting by Insurance
Enterprises, applies to financial guarantee insurance contracts issued by insurance enterprises, including the recognition and measurement of premium revenue and claim liabilities. It also requires expanded disclosures about financial guarantee
insurance contracts. The Statement is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years, except for disclosures about the insurance enterprises
risk-management activities. The Company does not have any financial guarantee insurance contracts and the Company does not expect the adoption of this standard to be relevant to its consolidated financial statements.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



|3. | SUBSIDIARIES
|-- | ------------

Details of the Companys
principal consolidated subsidiaries as of April 30, 2007 and 2008 were as follows:



|                                      |  |                            |  |                                              |   |  |      |   |  |                                                                   
|------------------------------------- |  | -------------------------- |  | -------------------------------------------- | - |  | ---- | - |  | ------------------------------------------------------------------
|                                      |  |                            |  | Ownership InterestAttributable to theCompany |   |  |     
|Company Name                          |  | Place of Incorporation     |  | 2007                                         |   |  | 2008 |   |  | Principal Activities                                              
|ASAT Limited(1)                       |  | Hong Kong                  |  | 100                                          | % |  | 100  | % |  | Sales, marketing and investment holding                           
|Timerson Limited(2)                   |  | Hong Kong                  |  | 100                                          | % |  | 100  | % |  | Dormant                                                           
|ASAT, Inc.                            |  | California, United States  |  | 100                                          | % |  | 100  | % |  | Marketing and customer services                                   
|ASAT (Finance) LLC                    |  | Delaware, United States    |  | 100                                          | % |  | 100  | % |  | Dormant                                                           
|ASAT (Cayman) Limited                 |  | Cayman Islands             |  | 100                                          | % |  | 100  | % |  | Investment holding                                                
|ASAT (S) Pte. Ltd.                    |  | Singapore                  |  | 100                                          | % |  | 100  | % |  | Marketing and customer services                                   
|ASAT Korea Limited                    |  | Korea                      |  | 100                                          | % |  | 100  | % |  | Marketing and customer services                                   
|ASAT GmbH                             |  | Germany                    |  | 100                                          | % |  | 100  | % |  | Marketing and customer services                                   
|ASAT Semiconductor (Dongguan) Limited |  | Peoples Republic of China |  | 100                                          | % |  | 100  | % |  | Sales, assembly and test services for packaged integrated circuits
|New ASAT (Finance) Limited            |  | Cayman Islands             |  | 100                                          | % |  | 100  | % |  | Financial services                                                



|(1) | With effect from July 31, 2006, the entire assembly and test operations of ASAT Limited were transferred to ASAT
Semiconductor (Dongguan) Limited and ASAT Limited became the sales organization and corporate head office of the ASAT group.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | With effect from September 30, 2006, the entire assembly and test operations of Timerson Limited were transferred
to ASAT Semiconductor (Dongguan) Limited and Timerson Limited became dormant.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. | RELATED PARTY TRANSACTIONS
|-- | --------------------------

The Company undertook
transactions with one of its major shareholders, QPL International Holdings Limited and its group companies (collectively known as QPL). As described below, QPL owned approximately 42.4%, 42.5% and 42.9% of the Companys ordinary
shares as of April 30, 2006, 2007 and 2008, respectively.

Major transactions with QPL during the years ended April 30, 2006,
2007 and 2008 are summarized as follows:

Purchase of materialsThe Company purchased leadframes from QPL amounting to $22.5
million, $9.6 million and $11.4 million for the years ended April 30, 2006, 2007 and 2008, respectively.

The Company also
purchased other raw materials from QPL amounting to $0.4 million, $0.1 million and $0.2 million for the years ended April 30, 2006, 2007 and 2008, respectively.

Provision of management information servicesThe Company provided management information services to QPL under a cost sharing agreement and received service income from QPL of $7 thousand for the year
ended April 30, 2006. No such services were provided for the years ended April 30, 2007 and 2008.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Provision of facility
servicesThe Company provided building facility services to QPL under a cost sharing agreement and received service charges of $12 thousand for the year ended April 30, 2006. No such services were provided for the years ended
April 30, 2007 and 2008.

The amount due to QPL was unsecured and interest free.

On September 1, 2006, the Companys board of directors appointed Tung Lok Li as Acting Chief Executive Officer. Mr. Li is Chairman of QPL,
one of our principal shareholder groups, and a member of our board of directors. Mr. Li assumes his position for the interim period while the Company continues searching for a permanent Chief Executive Officer. While Mr. Li continues to
serve as a member of the board of directors, his employment contract with us expressly prohibit him from entering into any related party transactions with QPL. On September 1, 2006, the board of directors appointed Joseph Martin as Executive
Vice President of Sales and Marketing, who subsequently assumed the new position of Chief Business Officer in April 2008. Mr. Martin was Chief Executive Officer of QPL, one of our principal shareholder groups, and is a member of the board of
directors. Mr. Martin resigned from his position with QPL effective September 1, 2006 to avoid any conflicts of interest with his current position at ASAT. On July 18, 2007, the board of directors appointed Kei Hong Chua as Chief
Financial Officer. Mr. Kei Hong Chua succeeds his brother, Mr. Kei W. Chua, the former Acting Chief Financial Officer, a current member of the board of directors and a Partner of CCMP Capital Asia Pte. Ltd.

On October 1, 2007, the Company issued in total of 35,766,900 warrants to Asia Opportunity Fund, L.P., Chase Asia Investment Partners II (Y), LLC,
CAIP Co-Investment Fund Parallel Fund (I) C.V. and CAIP Co-Investment Fund Parallel Fund (II) C.V., affiliates of one of our major shareholders, JPMP, in return for amending the purchase money loan facility (see note 12 for details). The
warrants have an exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject to adjustment as provided in the warrants and the other terms and conditions contained therein. The fair value of warrants issued is
approximately $1.6 million and it is amortized as an adjustment of interest expense over the remaining term of the purchase money loan. As of April 30, 2008, the unamortized fair value of the warrant was approximately $1.1 million and recorded
in Deferred Charges, Net.

As of April 30, 2008, the Company has an outstanding loan obligation, net of fair value
adjustment, and interest payable to Asia Opportunity Fund, L.P., an affiliate of JPMP, and related funds of $13.4 million which are recorded in Purchase money loan, Accrued liabilities and Other long-term payable
in the Companys consolidated balance sheet, respectively.

On February 28, 2008, the Company issued warrants for a total of
41.8 million ordinary shares to Mr. Tung Lok Li, the Acting Chief Executive Officer, as part of his compensation. The warrant is exercisable with respect to 20.6 million ordinary shares immediately, with the remainder subject to
certain vesting or performance criteria, provided that (i) Mr. Tung Lok Li ceases to serve as an executive officer of the Company for whatever reasons, including death or (ii) any person or entity becomes a beneficial owner of more than 50% of the
total voting power in each and all classes of equity of the Company following the warrant issue date and Mr. Tung Lok Li ceases to serves as an executive officer of the Company due to such change of control, the warrant will become immediately
exercisable with respect to an aggregate of up to 35.8 million ordinary shares. The fair value of warrants issued is approximately $1 million and it has an exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject
to adjustment as provided in the warrants and the other terms and conditions contained therein.



|5. | IMPAIRMENT OF PROPERTY, PLANT AND EQUIPMENT
|-- | -------------------------------------------

For
the year ended April 30, 2006, the Company recognized a total of $3.9 million non-cash impairment charges to write-off property, plant and equipment which could not be transferred to the Companys new



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



manufacturing facilities in Dongguan, China and which could not be sold. The $3.9 million non-cash impairment charges were recorded as operating expenses in
the Companys consolidated statements of operations for the year ended April 30, 2006.

No impairment charge was recorded in the
Companys consolidated statements of operations for the years ended April 30, 2007 and 2008.



|6. | ACCOUNTS RECEIVABLE, NET
|-- | ------------------------



|                                   |  |        |   |  |        |  
|---------------------------------- |  | ------ | - |  | ------ | -
|                                   |  | 2007   |   |  | 2008   |  
|                                   |  | $000  |   |  | $000  |  
|Accounts receivable                |  | 18,364 |   |  | 18,339 |  
|Less: Allowance for doubtful debts |  | (660   | ) |  | (799   | )
|                                   |  |        |   |  |        |  
|                                   |  | 17,704 |   |  | 17,540 |  
|                                   |  |        |   |  |        |  

Movement in allowances for doubtful accounts receivable were as follows:



|                                                         |  |       |  |       |  
|-------------------------------------------------------- |  | ----- |  | ----- | -
|                                                         |  | 2007  |  | 2008  |  
|                                                         |  | $000 |  | $000 |  
|Balance as beginning of the year                         |  | 189   |  | 660   |  
|Provision made during the year                           |  | 471   |  | 289   |  
|Receivables written off during the year as uncollectible |  |      |  | (150  | )
|                                                         |  |       |  |       |  
|Balance at end of the year                               |  | 660   |  | 799   |  
|                                                         |  |       |  |       |  

Certain short-term bank loans of the Group are secured by certain trade receivables with an
aggregate carrying value of approximately nil and $8.2 million at of April 30, 2007 and 2008, respectively.



|7. | INVENTORIES
|-- | -----------

The components of inventories, net of
the related reductions to the lower of cost or net realizable value, were as follows:



|                 |  |        |  |       
|---------------- |  | ------ |  | ------
|                 |  | 2007   |  | 2008  
|                 |  | $000  |  | $000 
|Raw materials    |  | 12,060 |  | 13,309
|Work-in-progress |  | 875    |  | 1,702 
|Finished goods   |  | 335    |  | 101   
|                 |  |        |  |       
|                 |  | 13,270 |  | 15,112
|                 |  |        |  |       

Management continuously reviews slow-moving and obsolete inventories and assesses any inventory
obsolescence based on inventory levels, material composition and expected usage as of that date. During the years ended April 30, 2006, 2007 and 2008, there were non-cash write-offs of specific inventories of $1.8 million, $1.6 million and
$0.9 million, respectively.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



|8. | RESTRICTED CASH
|-- | ---------------

Restricted cash of $1.8 million as
of April 30, 2007 represents a bank deposit securing the Companys capital lease obligations. On August 7, 2007, the lender and a subsidiary of the Company had agreed to release $0.9 million of the bank deposit. As such $0.9 million
of the restricted cash was classified as current assets as at April 30, 2007. On January 31, 2008, the Company and the lender entered into an early termination agreement with respect to the sale-leaseback arrangement, subject to certain
requirements to be fulfilled therein. Accordingly, the lease agreement was terminated early and the entire restricted cash balance was released on March 4, 2008. See Note 14 for details of the capital lease.



|9. | PROPERTY, PLANT AND EQUIPMENT, NET
|-- | ----------------------------------

Property, plant
and equipment, net consisted of the following:



|                                                                                   |  |         |   |  |         |  
|---------------------------------------------------------------------------------- |  | ------- | - |  | ------- | -
|                                                                                   |  | 2007    |   |  | 2008    |  
|                                                                                   |  | $000   |   |  | $000   |  
|Plant and machinery                                                                |  | 96,621  |   |  | 73,195  |  
|Leasehold improvements                                                             |  | 31,044  |   |  | 31,247  |  
|Furniture and fixtures, computer and software, office equipment and motor vehicles |  | 21,065  |   |  | 17,459  |  
|Loose toolings                                                                     |  | 6,863   |   |  | 7,236   |  
|                                                                                   |  |         |   |  |         |  
|                                                                                   |  | 155,593 |   |  | 129,137 |  
|Less: Accumulated depreciation                                                     |  | (76,011 | ) |  | (66,885 | )
|                                                                                   |  |         |   |  |         |  
|                                                                                   |  | 79,582  |   |  | 62,252  |  
|                                                                                   |  |         |   |  |         |  

Included in the property, plant and equipment was motor vehicles under capital leases at cost of
$109 thousand less accumulated depreciation of $19 thousand as of April 30, 2008.

During the years ended April 30, 2006,
2007 and 2008, depreciation expenses amounted to $26.9 million, $23.3 million and $22.0 million, respectively.

Certain short term bank
loans of the Group are secured by property, plant and equipment with an aggregate carrying value of approximately $4.4 million and $3.0 million at of April 30, 2007 and 2008, respectively.

As described in Note 5, the Company recorded impairment charges of $3.9 million which were principally related to plant and machinery, furniture and
fixtures and loose toolings, for the year ended April 30, 2006. No such impairment charges were recorded for the years ended April 30, 2007 and 2008.



|10. | SHORT-TERM BANK LOAN
|--- | --------------------

In September 2006, ASAT China
obtained a revolving credit facility for RMB30 million (approximately $4.3 million) under which drawdowns were permitted for a period of one year, renewable after one year, which is secured by certain property, plant and equipment with a carrying
value of approximately $4.4 million and $3 million as of April 30, 2007 and 2008, respectively. On October 8, 2006, ASAT China drew down RMB20 million (approximately $2.9 million) which was due in October 2007 at an interest rate of
6.12%. In September 2007, ASAT China renewed the RMB20 million of the credit facility for another year at an interest rate of 7.29%. On April 30, 2007, the Company drew down the remaining balance of RMB10 million (approximately $1.4
million) of this revolving credit facility at an interest rate of 6.39% and had subsequently repaid on April 30, 2008. As such, the outstanding balance of this revolving facility was RMB20 million as of April 30, 2008.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



In September 2007, ASAT China obtained a
revolving multi-currency credit facility of RMB150 million or equivalent (approximately $20 million) with a term of one year bearing interest at LIBOR plus 0.8%. As of April 30, 2008, ASAT China has drawn down approximately $6.5 million of this
facility and such loans is secured by trade receivables of ASAT China of $8.2 million.

In April 2008, ASAT China obtained a revolving
credit facility of $5 million for a term of one year bearing interest rate at LIBOR plus 3%. This facility remained undrawn as of April 30, 2008. The revolving credit facility is secured by certain equipment of ASAT China.

As of April 30, 2007 and 2008, the Company has undrawn bank loan facilities of Nil and $21.3 million, respectively.

As of April 30, 2007 and 2008, the weight average interest rates for all short-term bank loans were 6.21% and 5.37%, respectively.



|11. | ACCRUED LIABILITIES
|--- | -------------------

Accrued liabilities consisted
of the following:



|                                                               |  |        |  |       
|-------------------------------------------------------------- |  | ------ |  | ------
|                                                               |  | 2007   |  | 2008  
|                                                               |  | $000  |  | $000 
|Accrued employee costs                                         |  | 720    |  | 985   
|Accrued severance payments and long service payments           |  | 565    |  | 40    
|Accrued vacation pay                                           |  | 262    |  | 274   
|Accrued senior notes interest and purchase money loan interest |  | 3,515  |  | 5,156 
|Accrued deferred financing costs                               |  | 10     |  |      
|Accrued legal and professional fees                            |  | 1,755  |  | 2,892 
|Accrued litigation settlement (Note a)                         |  | 1,621  |  | 1,621 
|Deferred revenue                                               |  | 10     |  | 10    
|Down payment received                                          |  | 735    |  | 200   
|Accrued value added tax and individual income tax              |  | 1,230  |  | 1,347 
|Accrued royalty expenses                                       |  | 217    |  | 45    
|Advance received from a customer (Note b)                      |  | 4,000  |  |      
|Provision for taxation (Note c)                                |  | 1,162  |  | 580   
|Accrued rental expense                                         |  | 2,549  |  | 2,427 
|Other accrued expenses                                         |  | 4,094  |  | 3,338 
|                                                               |  |        |  |       
|                                                               |  | 22,445 |  | 18,915
|                                                               |  |        |  |       



Notes:



|(a) | The amount represents a settlement to be made in the form of cash, rebates on future business associated with a settlement agreement with Freescale Semiconductor, Inc. that was
executed in July 2005 and was filed with the Court on July 18, 2005. During the fiscal year ended April 30, 2007, the Company paid $0.25 million cash to Freescale Semiconductor, Inc. (Freescale) and also issued a 5-year warrant
to Freescale for $1.75 million to purchase 10,937,500 ordinary shares, which is equivalent to 729,166 ADSs, initially exercisable at a price of $0.16 per ordinary share (equivalent to $2.40 per ADS) (Note 24) in connection with this settlement. The
Company did not pay any cash to Freescale during the year ended April 30, 2008.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(b) | On May 1, 2006, the Company entered into a financing agreement, as amended from time to time, with one of its
customers to provide the Company $6.0 million of financing in the form of advance payments for
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



| | assembly and test services, subject to certain conditions. The advance was made to the Company on June 9, 2006 and is included in accrued liabilities in
the Companys consolidated balance sheet as of April 30, 2007. The primary purpose of this financing bears no interest and is being repaid beginning in January 2007 by off-setting amounts against the Companys receivables from its
future sales to the customer up to fixed maximum monthly amount, and to the extent the maximum amount exceeds the receivables from the Companys sales to the customer in a given month, the difference shall be paid by the Company in cash. In
January 2008, the advance was fully offset against the trade receivable from the customer. Therefore, the advance received from a customer no longer existed as of April 30, 2008.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(c) | The amount mainly represents provision for the Hong Kong profits tax concerning a tax dispute for the fiscal year 2000. For details of the tax dispute, please refer to note 17.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|12. | PURCHASE MONEY LOAN FACILITY
|--- | ----------------------------

On July 31,
2005, the Company entered into agreements for a private financing of $30 million with JPMP Master Fund Manager, L.P. related funds (JPMP) and QPL, two of the Companys principal shareholder groups, in the form of a $15 million
preferred share financing (Note 15) and a $15 million purchase money loan facility. The purchase money loan facility from Asia Opportunity Fund, L.P., an affiliate of JPMP, and related funds, provides for up to $15 million of loans which can be
borrowed in two tranches, in the amount of up to $10 million and up to $5 million, respectively, each in the event that the Companys cash position falls below $10 million. The loans may be drawn during a 15-month drawdown period starting
from the date of the agreement, subject to the Companys compliance with certain conditions. Each tranche has a maturity of two years from the time of borrowing and bears interest at the rate of 15% per annum, with interest to be paid on a
quarterly basis. In October 2005, in connection with the closing of the Companys sale of Series A Redeemable Convertible Preferred Shares, the Company issued five-year warrants for a total of 5 million ordinary shares (equivalent to
0.3 million ADSs) exercisable at a price of $0.01 per share (equivalent to $0.15 per ADS) as an arrangement fee for the loan agreement.

On January 25, 2006, the Company borrowed the first $10.0 million tranche of funding under the purchase money loan facility. In return for drawing upon the first tranche, we issued the lenders under the purchase money loan facility
warrants to purchase an aggregate of 15,668,170 ordinary shares, which is the equivalent of 1,044,544 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS), as well as paid a commitment fee of $850,000 on a pro rata
basis to the lenders that funded the first tranche. In each case, the warrants are exercisable for five years from the date of issuance. On July 31, 2007, the second $5.0 million tranche commitment expired and was not drawdown. Therefore, the
remaining second tranche of $5 million is no longer available to the Company.

On August 23, 2007, the Company amended the purchase
money loan facility to extend the maturity due date of the $10.0 million principal amount until April 30, 2009 and to extend the payment due date for interest payments (and interest on such interest) for March 31, 2006, June 30,
2006, September 30, 2006, December 31, 2006, March 31, 2007, June 30, 2007 and September 30, 2007 to become due on October 31, 2007. In return for amending the purchase money loan facility, on
October 1, 2007, the Company issued 35,766,900 warrants to the lenders under the purchase money loan facility, which exercisable, in the aggregate, for a total of approximately 4.6% of the Companys total outstanding ordinary shares on a
fully diluted basis as of the issue date (inclusive of ordinary shares issuable upon exercise of warrants to the holders themselves and which the Company will grant to the eligible holders of our 9.25% senior notes due 2011). The warrants have an
exercise price of $0.01 per ordinary share and will expire on February 1, 2011, subject to adjustment as provided in the warrants and the other terms and conditions contained therein. These warrants and the ordinary shares into which they will
be exercisable are not registered under the Securities Act of 1933, or any state securities laws, and will be sold in a



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



private transaction under Regulation D and Regulation S. Unless the warrants and ordinary shares are registered in the future, they may not be offered or
sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state laws.

The fair value of warrants issued is determined using the Black-Scholes option pricing model, which is consistent with the valuation techniques allowed under U.S. GAAP. The determination of the fair value of warrants on the date of grant
using an option-pricing model is affected by the Companys stock price as well as assumptions regarding a number of complex and subjective variables, including the expected volatility of the Companys stock price over the term of the
warrants, actual and projected employee warrant exercise behaviors, risk-free interest rate and expected dividends. The assumptions used to value warrants issued are as follows:



|                          |  |      |  
|------------------------- |  | ---- | -
|Risk-free interest rate   |  | 4.05 | %
|Expected life (years)     |  | 3.33 |  
|Expected stock volatility |  | 98   | %
|Dividend yield            |  | 0    | %

Expected life represents the weighted average period of time that warrants granted are expected to
be outstanding giving consideration to historical exercise patterns. Expected stock volatilities are based on historical volatilities of the Companys stock price. Risk-free rate is based on U.S. Treasury zero-coupon issues with remaining terms
similar to the expected term on the stock-based awards. The Company does not anticipate paying any cash dividends in the foreseeable future.

The fair value of warrants issued is approximately $1.6 million and it is amortized as an adjustment of

interest expense over the remaining term
of the purchase money loan. As of April 30, 2008, the unamortized fair value of the warrant was approximately $1.1 million.

On
October 10, 2007, the Company amended the purchase money loan facility to further extend the payment due dates for the interest, including any penalty interest as required by the agreement. Interest that was due or will be due for payment on or
before December 31, 2008 will be due and payable on December 31, 2008. As of April 30, 2008, the accrued interest payable was $4.0 million and has been classified as Accrued Liabilities and Other long-term
payable.

On October 17, 2008, we amended the purchase money loan facility to extend the maturity due date of the $10.0 million
principal amount and certain unpaid interest. The maturity due date for the $10.0 million principal was extended to January 31, 2010. For the total interest of $5,277,231 accrued and unpaid up to October 17, 2008, we were required to pay
$441,667 upon signing the amended agreement. The balance of the unpaid interest of $4,835,564 was converted into two separate loan principals with $2,435,564 due and payable on December 15, 2008 and $2,400,000 due and payable on
January 31, 2010.

The purchase money loan facility is unsecured and contains various affirmative and negative covenants binding on us
and our subsidiaries, including limitations on our and our subsidiaries ability to incur indebtedness, grant liens on assets, pay dividends and enter into transactions with affiliates. In addition, the Company will be required to repay the
loans with the net proceeds of certain issuances of equity and debt and certain asset sales. The Company has agreed to file a registration statement covering the resale of shares issuable upon exercise of the warrants described above. Subsequently,
the Company has obtained a waiver from the U.S. Securities and Exchange Commission or SEC on such obligation until such time as the Company is notified to file a registration statement, which has not yet occurred as of the date of this annual
report.



|13. | 9.25% SENIOR NOTES DUE 2011
|--- | ---------------------------

On January 26,
2004, the Companys wholly-owned finance subsidiary, New ASAT (Finance) Limited, issued $150.0 million aggregate principal amount of 9.25% senior notes due in February 2011 (9.25% senior notes), which were issued at par with
semi-annual interest payable on February 1 and August 1 beginning on



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



August 1, 2004. The Company sold $150 million aggregate principal amount of its 9.25% senior notes to the initial purchaser pursuant to the exemption
from registration under Section 4(2) of the Securities Act for resale by the initial purchaser to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933 (the Securities Act), and to non-U.S. persons in
transactions outside the United States in reliance on Regulation S of the Securities Act. On March 17, 2005, the Company completed an exchange offer whereby it exchanged $150 million aggregate principal amount of 9.25% senior notes due 2011
that were registered under the Securities Act, for its outstanding 9.25% senior notes due 2011 that were subject to transfer restrictions under U.S. securities laws.

The 9.25% senior notes are unsecured and guaranteed on a senior unsecured basis by the Company and certain of the Companys subsidiaries which are restricted subsidiaries as defined in the indenture
governing the 9.25% senior notes. The indenture governing the 9.25% senior notes contains certain covenants that will, among other things, restrict the ability of the Company and its restricted subsidiaries to borrow money, pay dividends on or
repurchase capital stock of the Company and make certain other restricted payments or investments, sell assets or enter into mergers or consolidations and create liens on assets. The 9.25% senior notes are redeemable, by the Company, prior to
February 1, 2008, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest and liquidated damages and additional amounts, if any, plus a make-whole amount and on or after February 1,
2008 at the various redemption prices set out in the indenture governing the 9.25% senior notes.

In connection with the issuance of the
9.25% senior notes, the Company recorded $7.0 million in deferred financing fees and expenses, which are being amortized as a yield adjustment over the life of the notes.

Of the $150.0 million of 9.25% senior notes proceeds, the Company used $111.0 million to fully redeem the 12.5% senior notes with face value of $100.75 million on February 25, 2004. In connection with the
redemption of the 12.5% senior notes, the Company incurred a charge on early redemption of 12.5% senior notes of approximately $10.3 million, consisting of an early redemption premium of $6.3 million and $4.0 million for the non-cash write-off of
deferred financing costs and debt discount associated with the redeemed notes. This charge on early redemption was classified as ordinary as required by SFAS No. 145 effective in fiscal year 2004.

On August 23, 2007, the Company received consents from approximately 98% of holders of our 9.25% senior notes due on 2011 to enter into a
supplemental indenture dated August 27, 2007, which amended certain provisions of the Indenture and waived certain defaults and events of default that may have occurred or may occur. The amendments included: (i) elimination of restrictions
on the value of the assets that may be held by ASAT China; (ii) expand the ability of our company and our subsidiaries to secure financing from additional sources; and (iii) extend the deadline for us to fulfill our reporting obligations
under the Indenture. In return, we agreed to issue warrants for ordinary shares in connection with the amendment of the Indenture and these warrants will be issued to eligible holders of our 9.25% senior notes due 2011 who consented to the
solicitation of consents ended August 23, 2007 to amend the Indenture, subject to certain conditions specified therein. On October 1, 2007, the Company issued in total of 35,766,900 warrants to the eligible holders. These warrants would,
in the aggregate, be exercisable for a total of approximately 4.6% of the Companys total outstanding ordinary shares on a fully diluted basis as of the issue date. The warrants have an exercise price of $0.01 per ordinary share and will expire
on February 1, 2011, subject to adjustment as provided in the warrants and the other terms and conditions contained therein.

The fair
value of warrants issued is approximately $1.6 million and it is amortized as an adjustment of interest expense over the remaining term of the senior notes. As of April 30, 2008, the unamortized fair value of the warrant was approximately $1.3
million and recorded in Deferred Charges, Net.



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##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



|14. | CAPITAL LEASE OBLIGATIONS
|--- | -------------------------

Equipment

During the fiscal year ended April 30, 2005, the Company sold certain equipment for $6.5 million. The equipment was leased back from the purchaser
(the purchaser-lessor) under leases pursuant to which the Company is required to pay to the purchaser-lessor on a quarterly basis the greater of (i) a lease payment based on the reported usage of the equipment or (ii) a minimum
commitment. The initial terms of the leases expire upon the earlier of the date that the committed usage has been achieved under the leases or 14 quarters after the lease commencement date. In connection with the sale-leaseback, the Company
recognized a gain of approximately $115 thousand on disposal of fixed assets, which is being deferred and amortized in the consolidated statement of operations against depreciation expenses over the term of the leases.

At the inception of the lease, the Company paid to the purchaser-lessor a deposit and prepaid rent amount of $1.6 million. As of April 30, 2007, the
amount of this deposit classified as other non-current assets in consolidated balance sheets is $0.7 million.

At the end of each of the
initial lease terms, the Company has an option to (i) return all the equipment to the purchaser-lessor; (ii) purchase all the equipment at price based on the then fair market values of the equipment; or (iii) extend the lease terms by
two additional quarters and purchase the equipment at the price of $1,000 for each piece of equipment. Pursuant to these sale-leaseback arrangements, the purchaser-lessor entered into a separate term loan facility agreement for up to $5.0 million
with a bank in Hong Kong (the Lender). Upon demand by the Lender, the Company and one of its subsidiaries fully and unconditionally guaranteed the obligations of the purchaser-lessor under the $5.0 million term loan facility. The Company
believes that this guarantee (the Guarantee) has the characteristics set forth in Financial Accounting Standards Board (FASB) Interpretation No. 45, Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others, which requires initial recognition of the guarantee at fair value upon its inception. Nonetheless, the fair value of the Guarantee is considered to be insignificant given the
risk of loss on such Guarantee at the date of its inception and, therefore, no amount was recognized in the consolidated financial statements on the inception date.

On March 31, 2006, the Company deposited $3.3 million in cash with the Lender as collateral for the Guarantee obligations. In consideration thereof, the Lender released the Company and one of its subsidiaries
from the Guarantee. The Lender will return the deposit to the Company upon repayment of the term loan facility by the purchaser-lessor. The deposit is classified as restricted cash in the consolidated balance sheet as of April 30, 2007. On
February 12, 2007, $1.5 million of the deposit was returned to the Company and on August 7, 2007, the Lender had further returned $0.9 million of the remaining deposit to the Company. On January 31, 2008, the Company and the Lender
entered into an early termination agreement with respect to the sale-leaseback arrangement, subject to certain requirements to be fulfilled therein. Subsequently, the lease agreement was terminated early and the restricted cash balance of $0.9
million was released on March 4, 2008.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Motor vehicle

The Company is leasing two motor vehicles. These leases are classified as capital leases and have remaining lease terms ranged from 2.25 years to 2.92
years as of April 30, 2008.

Future minimum lease payments under capital lease obligations as of April 30, 2008 are as follows:



|                                    |  |              
|----------------------------------- |  | -------------
|                                    |  | Motor vehicle
|                                    |  | $000        
|Fiscal year ending April 30:        |  |              
|2009                                |  | 30           
|2010                                |  | 30           
|2011                                |  | 17           
|                                    |  |              
|Total minimum lease payments        |  | 77           
|Less: Amounts representing interest |  | 7            
|                                    |  |              
|Present value of minimum payments   |  | 70           
|Current portion                     |  | 26           
|                                    |  |              
|Non-current portion                 |  | 44           
|                                    |  |              



|15. | SERIES A REDEEMABLE CONVERTIBLE PREFERRED SHARES
|--- | ------------------------------------------------

On July 31, 2005, the Company entered into agreements for a private financing of $30 million with JPMP and QPL, two of the Companys principal shareholder groups, in the form of a $15 million preferred share financing and a $15
million purchase money loan facility (Note 12). The preferred share financing provided for the issuance and sale of 300,000 Series A Preferred Shares for a total price of $15 million and the issuance of five-year warrants for a total of
20 million ordinary shares (equivalent to 1.3 million ADSs) exercisable at a price of $0.01 per share (equivalent to $0.15 per ADS), of which warrants for a total of 5 million ordinary shares (equivalent to 0.3 million ADSs) were
issued as an arrangement fee. The securities purchase agreement for the Series A Preferred Share financing was amended and restated on October 27, 2005 to, among other things, add Olympus-ASAT II, L.L.C. (Olympus), as a party. The
preferred share financing closed on October 27, 2005. Half of this $15.0 million of financing was provided by JPMP related funds and Olympus, and half of the financing was provided by QPL and/or its affiliates. Each Series A Preferred Share
issued pursuant to the agreements is convertible at the option of the holder into ordinary shares at an initial conversion price equal to $0.09 per ordinary share (equivalent to $1.35 per ADS), but will be reset on October 31, 2006 to 80% of
the average trading price per share equivalent of the Companys ordinary shares during the preceding three months if such amount is below the conversion price of $0.09 per ordinary share (equivalent to $1.35 per ADS), subject to a floor of
$0.065 per ordinary share (equivalent to $0.975 per ADS). The conversion price and ratio shall be proportionally adjusted for share splits, dividends, re-combinations and similar events. Subject to certain exceptions specified in the Companys
restated articles of association, the conversion price will also be adjusted on a weighted-average basis in the event of any future issuance of ordinary shares or securities convertible, exchangeable or exercisable into ordinary shares, subject to
certain exceptions, for no consideration or for consideration per share less than the then-effective conversion price applicable to the Series A Preferred Shares, as determined based on the average closing prices of the Companys ADSs for a
thirty-day trading period ending three days prior to the date of determination.

The Series A Preferred Shares are entitled to a
semi-annual dividend equal to 13% per annum of the purchase price payable in arrears. Such dividend shall be payable, at the Companys option, in cash unless payment in cash is prohibited by law or by the terms of the Companys debt
instruments, or in additional



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Series A Preferred Shares or in ordinary shares of the Company. The Companys indenture governing its 9.25% senior notes currently prohibits such
payment in cash, and such prohibition is expected to continue in the foreseeable future. The Series A Preferred Shares are redeemable, in whole or in part, at the option of the holders on or after May 4, 2011. The redemption price for the
Series A Preferred Shares so redeemed will equal the issue price of the Series A Preferred Shares plus the accrued but unpaid dividends thereon to, but excluding, the redemption date. The Series A Preferred Shares are also redeemable for cash at the
Companys option, in whole or in part, at any time. The redemption price for the Series A Preferred Shares redeemed at the Companys option will equal the higher of the issue price of the Series A Preferred Shares plus accrued but unpaid
dividends thereon to, but excluding, the redemption date, and the aggregate fair market value of the ordinary shares into which such Series A Preferred Shares are then convertible.

In connection with this financing agreement, the Company issued to the shareholder groups, other than Olympus, as an arrangement fee, warrants to
purchase 5,000,000 ordinary shares, which is the equivalent of 333,333 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS). Simultaneous with the issuance and sale of the Series A Preferred Shares under the
financing agreement, the Company issued additional five-year warrants to purchase an aggregate of 15,000,000 ordinary shares, which is the equivalent of 1,000,000 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per
ADS). The warrants are exercisable for five years from the closing date of the securities purchase agreement.

The Company assessed the
fair value of the warrants referenced above and the intrinsic value of the beneficial conversion feature of the Series A Preferred Shares. The fair value of the warrants was estimated to be approximately $1.2 million and the intrinsic value of the
beneficial conversion feature of the Series A Preferred Shares was estimated to be approximately $10.1 million as of October 31, 2005. The fair value of the warrants and the intrinsic value of the beneficial conversion feature of the Series A
Preferred Shares have been deducted from the gross proceeds from the issuance of the $15 million preferred shares financing and has been allocated to additional paid-in capital upon the issuance of the Series A Preferred Shares on October 27,
2005.

The fair value of warrants issued is determined using the Black-Scholes option pricing model, which is consistent with the valuation
techniques requested in U.S. GAAP. The determination of the fair value of stock-based compensation awards on the date of grant using an option-pricing model is affected by the Companys stock price as well as assumptions regarding a number of
complex and subjective variables, including the expected volatility of the Companys stock price over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. The
assumptions used to value warrants issued are as follows:



|                          |  |      |  
|------------------------- |  | ---- | -
|Risk-free interest rate   |  | 4.55 | %
|Expected life (years)     |  | 5.5  |  
|Expected stock volatility |  | 101  | %
|Dividend yield            |  | 0    | %

On March 15, 2006, the Company paid the semiannual dividend of $743 thousand due on its
outstanding Series A Preferred Shares. The Company paid the dividend in its ordinary shares, issued 11.15 ordinary shares per Series A Redeemable Share and 3,345,054 ordinary shares in the aggregate to members of the investor group and Everwarm
Limited, a wholly-owned subsidiary of QPL. On September 15, 2006, the Company paid semiannual dividend due on our outstanding Series A Preferred Shares. the Company paid the dividend in our ordinary shares, issuing 36.73 ordinary shares per
Series A Preferred Share and 11,020,338 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, a wholly owned subsidiary of QPL, and issuing 9.97 ordinary shares per Series A Preferred Share and 97,706 ordinary
shares in the aggregate to holders



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



of Series A Preferred Shares who subscribed to our rights offering, all in accordance with the terms of our Series A Preferred Shares. On March 15,
2007, the Company paid semiannual dividend due on the outstanding Series A Preferred Shares. the Company paid the dividend in our ordinary shares, issuing 26.74 ordinary shares per Series A Preferred Share and 8,021,906 ordinary shares in the
aggregate to members of the investor group and Everwarm Limited, and issuing 26.74 ordinary shares per Series A Preferred Share and 262,025 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to the rights
offering, all in accordance with the terms of our Series A Preferred Shares. On September 15, 2007, the Company paid semiannual dividend due on our outstanding Series A Preferred Shares. The Company paid the dividend in ordinary shares, issuing
84.84 ordinary shares per Series A Preferred Share and 25,452,045 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and issuing 84.84 ordinary shares per Series A Preferred Share and 825,876 ordinary shares
in the aggregate to holders of Series A Preferred Shares who subscribed to the rights offering, all in accordance with the terms of our Series A Preferred Shares. On March 15, 2008, the Company paid semiannual dividend due on our outstanding
Series A Preferred Shares. The Company paid the dividend in our ordinary shares, issuing 91.10 ordinary shares per Series A Preferred Share and 27,329,665 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and
issuing 91.10 ordinary shares per Series A Preferred Share and 835,269 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to our rights offering, all in accordance with the terms of our Series A Preferred Shares.

Under the securities purchase agreement, the Company undertook a rights offering of the Series A Preferred Shares and warrants for the
benefit of existing shareholders other than the purchasers of the Series A Preferred Shares and certain other shareholders that have agreed to waive participation in the rights offering. This rights offering was completed on July 28, 2006 and
9,799 shares were subscribed. During the year ended April 30, 2008, 630 Series A Preferred Shares were converted into ordinary shares. No conversion of the Series A Preferred Shares was occurred during the years ended April 30, 2006 and
2007.

The Company has also agreed to file a registration statement covering the resale of the shares issuable upon exercise of the Series
A Preferred Shares and warrants described above. Subsequently, the Company has obtained a waiver from the U.S. Securities and Exchange Commission or SEC on such obligation until such time as the Company is notified to file a registration statement,
which has not yet occurred as of the date of this annual report. The Company has withdrawn all previous filings with the SEC on this matter.



|16. | OTHER INCOME (EXPENSE), NET
|--- | ---------------------------

Other income
(expense), net consisted of the following:



|                                                               |  |       |  |       |   |  |        |  
|-------------------------------------------------------------- |  | ----- |  | ----- | - |  | ------ | -
|                                                               |  | 2006  |  | 2007  |   |  | 2008   |  
|                                                               |  | $000 |  | $000 |   |  | $000  |  
|Interest income                                                |  | 394   |  | 366   |   |  | 148    |  
|Gain (loss) on disposal of property, plant and equipment       |  | 14    |  | (173  | ) |  |       |  
|Reversal of previously accrued write-off of ASAT S.A. (Note a) |  | 2,323 |  |      |   |  |       |  
|Exchange difference (Note b)                                   |  |      |  | (158  | ) |  | (1,084 | )
|Others, net                                                    |  | 707   |  | 608   |   |  | 214    |  
|                                                               |  |       |  |       |   |  |        |  
|                                                               |  | 3,438 |  | 643   |   |  | (722   | )
|                                                               |  |       |  |       |   |  |        |  



|Note: | 
|----- | 



|(a) | The amount represented the accrual for potential claims which could have arisen from the winding up of ASAT S.A. In December 2000, the Company exercised the option to acquire ASAT
S.A. in Nancy, France from QPL for $20.0 million and the acquisition became effective in January 2001. Accounted for under the purchase method, ASAT S.A. has become a wholly-owned subsidiary of the Company.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



In October 2001, the Company determined
not to fund ASAT S.A. as part of the global restructuring program. ASAT S.A. filed for court protection under French law and is under the process of court administered liquidation.

The three-year statute of limitations applicable to the claims arising out of the winding up of ASAT S.A. which began in the third quarter of fiscal year
2003 expired during the third quarter of fiscal year 2006. In view of such expiration, the Company reversed the accrued amount of $2.3 million and recorded as other income during the year ended April 30, 2006.



|(b) | Exchange difference for the years ended April 30, 2007 and 2008 mainly represented the appreciation of Renminbi during the years. The Company completed the transfer of its
assembly and test operations from Hong Kong to Dongguan, China in 2007, which increased its operating cost in Renminbi and the foreign exchange risk exposure in Renminbi.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|17. | INCOME TAXES
|--- | ------------

Income is subject to taxation in the
various countries in which the Company and its subsidiaries operate. The (loss) income before income taxes by geographical locations was as follows:



|                            |  |         |   |  |         |   |  |         |  
|--------------------------- |  | ------- | - |  | ------- | - |  | ------- | -
|                            |  | 2006    |   |  | 2007    |   |  | 2008    |  
|                            |  | $000   |   |  | $000   |   |  | $000   |  
|Hong Kong                   |  | (39,436 | ) |  | (44,551 | ) |  | (31,947 | )
|China                       |  | 3,071   |   |  | 17,680  |   |  | 13,976  |  
|United States               |  | (686    | ) |  | 2,317   |   |  | 264     |  
|Germany and other countries |  | (6,029  | ) |  | (9,222  | ) |  | (6,940  | )
|                            |  |         |   |  |         |   |  |         |  
|                            |  | (43,080 | ) |  | (33,776 | ) |  | (24,647 | )
|                            |  |         |   |  |         |   |  |         |  

The (provision) benefit for income taxes by geographical location were as follows:



|              |  |       |   |  |        |   |  |       |  
|------------- |  | ----- | - |  | ------ | - |  | ----- | -
|              |  | 2006  |   |  | 2007   |   |  | 2008  |  
|              |  | $000 |   |  | $000  |   |  | $000 |  
|Current:      |  |       |   |  |        |   |  |       |  
|Hong Kong     |  |      |   |  | (1,264 | ) |  | (99   | )
|China         |  |      |   |  |       |   |  | (148  | )
|United States |  | 665   |   |  |       |   |  | (85   | )
|Others        |  | (16   | ) |  |       |   |  | (7    | )
|Deferred:     |  |       |   |  |        |   |  |       |  
|Hong Kong     |  |      |   |  |       |   |  |      |  
|              |  |       |   |  |        |   |  |       |  
|              |  | 649   |   |  | (1,264 | ) |  | (339  | )
|              |  |       |   |  |        |   |  |       |  



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



An analysis of the Companys
deferred tax liabilities and deferred tax assets as of April 30, 2007 and 2008 was as follows:



|                                                                 |  |         |   |  |         |  
|---------------------------------------------------------------- |  | ------- | - |  | ------- | -
|                                                                 |  | 2007    |   |  | 2008    |  
|                                                                 |  | $000   |   |  | $000   |  
|Deferred tax liabilities:                                        |  |         |   |  |         |  
|Temporary differences arising from depreciation and amortization |  | (5,944  | ) |  | (258    | )
|                                                                 |  |         |   |  |         |  
|Total gross deferred tax liabilities                             |  | (5,944  | ) |  | (258    | )
|Deferred tax assets:                                             |  |         |   |  |         |  
|Reserves and accruals not currently deductible                   |  | 229     |   |  | 551     |  
|Temporary differences arising from depreciation and amortization |  |        |   |  | 3,004   |  
|Net operating losses carried forward                             |  | 39,254  |   |  | 31,581  |  
|                                                                 |  |         |   |  |         |  
|Total gross deferred tax assets                                  |  | 39,483  |   |  | 35,136  |  
|                                                                 |  |         |   |  |         |  
|Net deferred tax assets                                          |  | 33,539  |   |  | 34,878  |  
|Less: valuation allowance                                        |  | (33,539 | ) |  | (34,878 | )
|                                                                 |  |         |   |  |         |  
|                                                                 |  |        |   |  |        |  
|                                                                 |  |         |   |  |         |  

The Company provided a full valuation allowance against the deferred tax assets of the
subsidiaries in the United States, Hong Kong and China as of April 30, 2007 and 2008 due to the uncertainty surrounding the realizability of these benefits in future tax returns.

The reconciliation of the effective tax rate of the Company to the Hong Kong profits tax rate (the principal tax jurisdiction of the Company) was as
follows:



|                                                                  |  |       |   |  |       |    |  |       |   
|----------------------------------------------------------------- |  | ----- | - |  | ----- | -- |  | ----- | --
|                                                                  |  | 2006  |   |  | 2007  |    |  | 2008  |   
|Hong Kong profits tax rate                                        |  | 17.5  | % |  | 17.5  | %  |  | 16.5  | % 
|Tax effect of difference in Hong Kong and China tax rates         |  |      |   |  |      |    |  | 3.0   |   
|Tax effect of difference in Hong Kong and United States tax rates |  | 0.8   |   |  | 1.0   |    |  | (0.2  | ) 
|Non-taxable interest/other income                                 |  | 1.1   |   |  | 0.2   |    |  | 0.2   |   
|Income not subject to taxation                                    |  | (1.9  | ) |  | 1.2   |    |  | 2.8   |   
|Non-deductible expenses                                           |  | (2.0  | ) |  | (0.2  | )  |  | (0.3  | ) 
|Change in valuation allowance                                     |  | (16.7 | ) |  | (22.7 | )  |  | (23.4 | ) 
|Overpayment of overseas taxes                                     |  | 1.5   |   |  |      |    |  | 0.1   |   
|Under-provision of Hong Kong taxation in prior years              |  |      |   |  | (3.7  | )  |  | (0.4  | ) 
|Others, net                                                       |  | 1.2   |   |  | 3.0   |    |  | 0.3   |   
|                                                                  |  |       |   |  |       |    |  |       |   
|Effective tax benefit (expense) rate                              |  | 1.5   | % |  | (3.7  | )% |  | (1.4  | )%
|                                                                  |  |       |   |  |       |    |  |       |   

On February 2008, the Financial Secretary of the Government of the HKSAR announced a cut in the
Profits Tax rate applicable to the Companys operations in Hong Kong from 17.5% to 16.5% with effect from the year ended April 30, 2008. Accordingly, the applicable tax rate of the Hong Kong subsidiaries of the Company has decreased from
17.5% to 16.5% for the year ended April 30, 2008.

On March 16, 2007, the PRC Enterprise Income Tax Law, or the EIT Law, was
enacted by the Chinese government. Under the EIT Law, effective January 1, 2008, China adopted a uniform tax rate of 25% for all enterprises (including foreign-invested enterprises) and revoked the tax exemption, reduction and preferential



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



treatments applicable to foreign-invested enterprises under the previous PRC Income Tax Law for Enterprises with Foreign Investment and Foreign Enterprise,
or the FEIT law. However, there is a transition period for enterprises, whether foreign-invested or domestic, that were receiving preferential tax treatments granted by relevant tax authorities at the time the EIT Law became effective. Enterprises
that were subject to a statutory FEIT rate of 15% may continue to enjoy the lower rate and gradually transition to the new tax rate within five years after the effective date of the EIT Law. However, enterprises those were subject to a statutory
FEIT rate of 24% are subject to EIT of 25% after the effective date of the EIT law. Enterprises that are currently entitled to exemptions or reductions from the standard income tax rate for a fixed term may continue to enjoy such treatment until the
fixed term expires.

Under the new EIT law, the applicable income tax rate of ASAT China will increase from 24% to 25% and it will continue
to benefit from the 50% reduction of EIT during the 3 years ending December 31, 2010.

As of April 30, 2008, the Company had
available Hong Kong operating loss carryforwards of $169.1 million which, subject to the agreement by the Hong Kong Inland Revenue Department, can be carried forward indefinitely to offset against operating income arising in the future. From its
operation in the United States, it had available United States federal net operating loss carryforwards of approximately $10.1 million which, subject to agreement by the Internal Revenue Service, expires from 2011 to 2027. The extent to which the
loss carryforwards can be used to offset future taxable income to taxes may be limited, depending on the extent of ownership changes within any three-year period as provided by Section 382 of the Internal Revenue Code and applicable California
state tax law.

On December 8, 2006, ASAT Limited, a subsidiary of the Company, received an additional tax assessment from the Hong
Kong Inland Revenue Department (HKIRD) with respect to the deductibility of certain expenses for Hong Kong Profits Tax purposes for fiscal year 2000/2001. Queries were raised by the HKIRD concerning the deductibility of interest
expenses related to certain borrowings of ASAT Limited for Profits Tax purposes and whether the related borrowings were used towards revenue-generating activities, which allow the consequential interest expenses to be deductible for tax
purposes. The assessment requires ASAT Limited to pay HK$18.8 million (approximately $2.4 million) by January 12, 2007. On December 29, 2006, ASAT Limited filed an objection to the HKIRD for the full amount. On
January 29, 2007, ASAT Limited filed a request to the HKIRD to reconsider its holdover claim and on January 30, 2007, the HKIRD had offered ASAT Limited an unconditional holdover, i.e. an agreement to defer payment, for 50% of the total
tax in dispute (approximately HK$9.4 million or $1.2 million) until the final tax position is determined. Although the case was not yet concluded and ASAT Limited was still required to provide further evidence to the HKIRD showing that the
borrowings were used towards revenue-generating activities and therefore, the consequential interest expenses would be deductible for tax purposes, HKIRD had requested ASAT Limited to make prepayment for the remaining 50% of the total tax in
dispute. On January 31, 2007, ASAT Limited filed a proposal to HKIRD for installment payments for the remaining HK$9.4 million (approximately $1.2 million). Such proposal was accepted on March 27, 2007, and the amount was fully paid
in June 2008. On August 1, 2008, the HKIRD issued a response letter to ASAT Limited and stating that a portion of the interest expenses should be disallowed for tax purposes as the related portion of the borrowing was not applied towards
revenuegenerating activities. On October 17, 2008, ASAT Limited submitted a reply and revised tax filing accepting the HKIRDs proposed basis of settlement to disallow a portion of and interest expenses and related costs and
with certain proposed amendments, and ASAT Limiteds tax liability under which would have been HK$8.5 million (approximately $1.1 million). This revised filing is subject to the IRDs review and agreement.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



|18. | COMMON STOCK
|--- | ------------



|                                                                 |  |        |  |       
|---------------------------------------------------------------- |  | ------ |  | ------
|                                                                 |  | 2007   |  | 2008  
|                                                                 |  | $000  |  | $000 
|Authorized:                                                      |  |        |  |       
|2,999,000,000 (20072,999,000,000) ordinary shares of $0.01 each |  | 29,990 |  | 29,990
|                                                                 |  |        |  |       
|Issued:                                                          |  |        |  |       
|766,348,377 (2007711,401,844) ordinary shares of $0.01 each     |  | 7,114  |  | 7,664 
|                                                                 |  |        |  |       
|Outstanding:                                                     |  |        |  |       
|759,295,377 (2007704,348,844) ordinary shares of $0.01 each     |  | 7,043  |  | 7,593 
|                                                                 |  |        |  |       

No repurchase of ADSs occurred for the years ended April 30, 2006, 2007 and 2008. The Company
aggregately repurchased 7,053,000 ordinary shares since its ADS repurchase program announced in January 2001.

In a private placement
transaction that took place in October 1999, the Company issued 155,000 units consisting of 155,000 warrants to purchase ordinary shares of ASAT Holdings Limited and $155,000,000 aggregate principal amount of 12.5% senior notes due 2006 of ASAT
(Finance) LLC, all of which notes were redeemed on February 25, 2004 and are no longer outstanding. Each warrant entitles the holder, subject to specific conditions, to subscribe for 114.19 ordinary shares of ASAT Holdings Limited at an
exercise price of $0.39 per share, with both the exercise price and the number of ordinary shares issuable upon exercise subject to adjustment under specified circumstances. As a result of a share dividend of 47 ordinary shares for each outstanding
share undertaken contemporaneously with the completion of the Companys offering of ADSs on July 14, 2000, the total number of ordinary shares of ASAT Holdings Limited issuable upon exercise of the warrants was adjusted from 371,132 shares
to 17,699,450 shares, and the exercise price for the warrants was adjusted from $18.6 per ordinary share to $0.39 per ordinary share. The warrants are exercisable at any time on or after November 1, 2001 and will expire on November 1,
2006. The warrants do not provide the holders any voting rights but the shares to be issued upon exercise of the warrants will be voting shares.

The fair value of the warrants has been deducted from the gross proceeds from the issuance of the 12.5% senior notes and was allocated to additional paid-in capital upon the issuance of the 12.5% senior notes in October 1999. The fair value
of the warrants was determined using the Black-Scholes pricing model, which takes into account a number of factors, including expected volatility of the underlying stocks return, the level of interest rates, the relationship of the underlying
stocks price to the strike price of the warrants, and the time remaining until the warrants expire.

Pursuant to the securities
purchase agreement with JPMP related funds, QPL and Olympus which closed on October 27, 2005, the Company issued 300,000 units Series A Preferred Shares for a total price of $15 million. In connection with this securities purchase agreement,
the Company has issued to the shareholder groups, other than Olympus, as an arrangement fee, warrants to purchase 5,000,000 ordinary shares, which is the equivalent of 333,333 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to
$0.15 per ADS). Simultaneous with the issuance and sale of the Series A Preferred Shares under the securities purchase agreement, the Company issued additional five-year warrants to purchase an aggregate of 15,000,000 ordinary shares, which is the
equivalent of 1,000,000 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS). The warrants are exercisable for five years from the closing date of the securities purchase agreement.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



The Company assessed the fair value of
the warrants referenced above. The fair value of the warrants was estimated to be approximately $1.2 million as of October 31, 2005. The fair value of the warrants was deducted from the gross proceeds from the issuance of the $15 million Series
A Preferred Shares financing and was allocated to additional paid-in capital upon the issuance of the Series A Preferred Shares on October 27, 2005.

In connection to the purchase money loan facility, the Company issued to the administrative agent, as an arrangement fee, warrants to purchase an aggregate of 5,000,000 ordinary shares, which is the equivalent of
333,333 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS). The Company assessed the fair value of the warrants and the fair value was estimated to be approximately $692 thousand. The fair value of the warrants
was capitalized as deferred charges and amortized over the life of the purchase money loan facility. The fair value of the warrants was also credited to additional paid-in capital upon the effectiveness of the purchase money loan facility on
October 27, 2005.

On January 25, 2006, the Company borrowed the first $10.0 million tranche of funding under the purchase money
loan facility and issued five-year warrants for a total of 15,668,170 ordinary shares, which is the equivalent of 1,044,544 ADSs, exercisable at a price of $0.01 per ordinary share (equivalent to $0.15 per ADS), the warrants are exercisable for five
years from the date of issuance. The Company estimated the fair value of these warrants to be approximately $3.2 million. The fair value of the warrants and commitment fees was deducted from the gross proceeds of the $10.0 million purchase money
loan and amortized over the life of the purchase money loan.

On March 15, 2006, the Company paid the semiannual dividend of $743
thousand due on its outstanding Series A Preferred Shares. The Company paid the dividend in its ordinary shares, issuing 11.15 ordinary shares per Series A Preferred Share and 3,345,054 ordinary shares in the aggregate to members of the investor
group and Everwarm Limited, a wholly-owned subsidiary of QPL. On September 15, 2006, the Company paid semiannual dividend due on its outstanding Series A Preferred Shares. the Company paid the dividend in its ordinary shares, issuing 36.73
ordinary shares per Series A Preferred Share and 11,020,338 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, a wholly owned subsidiary of QPL, and issuing 9.97 ordinary shares per Series A Preferred Share and
97,706 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to the Companys rights offering, all in accordance with the terms of the Series A Preferred Shares. On March 15, 2007, the Company paid
semiannual dividend due on the outstanding Series A Preferred Shares. The Company paid the dividend in its ordinary shares, issuing 26.74 ordinary shares per Series A Preferred Share and 8,021,906 ordinary shares in the aggregate to members of
the investor group and Everwarm Limited, and issuing 26.74 ordinary shares per Series A Preferred Share and 262,025 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to its rights offering, all in accordance
with the terms of the Series A Preferred Shares.

On September 15, 2007, the Company paid semiannual dividend due on its outstanding
Series A Preferred Shares. The Company paid the dividend in its ordinary shares, issuing 84.84 ordinary shares per Series A Preferred Share and 25,452,045 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and
issuing 84.84 ordinary shares per Series A Preferred Share and 825,876 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to its rights offering, all in accordance with the terms of its Series A Preferred Shares.
On March 15, 2008, the Company paid semiannual dividend due on its outstanding Series A Preferred Shares. The Company paid the dividend in its ordinary shares, issuing 91.10 ordinary shares per Series A Preferred Share and 27,329,665
ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and issuing 91.10 ordinary shares per Series A Preferred Share and



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



835,269 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to its rights offering, all in accordance with the terms of
its Series A Preferred Shares.

On September 15, 2008, the Company paid semiannual dividend due on its outstanding Series A Preferred
Shares. The Company paid the dividend in its ordinary shares, issuing 158.91 ordinary shares per Series A Preferred Share and 47,672,829 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and issuing 158.91
ordinary shares per Series A Preferred Share and 1,457,107 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to its rights offering, all in accordance with the terms of its Series A Preferred Shares.

Effective at the close of business on December 22, 2006, the Company effected an adjustment to the ADS to ordinary share ratio from a ratio of
one ADS for every five ordinary shares to a ratio of one ADS for every fifteen ordinary shares. All ADS and per ADS amounts contained in this annual report have been restated to reflect the adjustment to our ADS ratio.



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

On July 6, 2000, the
Company adopted a Stock Option Plan (2000 Stock Option Plan) under which the Board of Directors may, at their discretion, invite any key officers, employees, consultants and non-employee directors of ASAT to subscribe for its shares up
to a maximum of 110,000,000 ordinary shares of the Company. The Board of Directors will determine which individuals will be granted options, the number of ADSs subject to the options, the exercise price for the options, the vesting periods and any
other terms that will apply as the Board deems appropriate.

Prior to May 1, 2006, the Company provided the disclosures required under
APB No. 25 and SFAS No. 123. APB No. 25 accounted for stock-based compensation awarded to employees using the intrinsic value method supplemented by pro forma disclosures in accordance with APB 25 and SFAS No. 123. If the Company
had accounted for its stock option plan by recording compensation based on the fair value at grant date for such awards consistent with the method of SFAS No. 123, the Companys net loss and net loss per share would have been increased to
the pro forma amounts for the year as follows:



|                                                                                                                              |  |         |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ------- | -
|                                                                                                                              |  | 2006    |  
|                                                                                                                              |  | $000   |  
|Net loss                                                                                                                      |  |         |  
|Net loss, as reported                                                                                                         |  | (43,907 | )
|Add: stock-based employee compensation reversal as included in the reported net loss, net of tax effect                       |  | (186    | )
|Deduct: stock-based employee compensation expense determined under fair value based method for all rewards, net of tax effect |  | (1,342  | )
|Net loss, pro forma                                                                                                           |  | (45,435 | )
|                                                                                                                              | 
|Net loss per ordinary share (dollars per share):                                                                              |  |         |  
|Basic                                                                                                                        |  | (0.06   | )
|Diluted                                                                                                                      |  | (0.06   | )
|                                                                                                                              | 
|Pro forma net loss per ordinary share (dollars per share):                                                                    |  |         |  
|Basic                                                                                                                        |  | (0.07   | )
|Diluted                                                                                                                      |  | (0.07   | )



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##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Effective May 1, 2006, the Company
adopted SFAS No. 123(R). Under the fair value recognition provisions of SFAS No. 123(R), the Company is required to measure the cost of employee services received in exchange for stock-based compensation measured at the fair value of the
award as of the grant date. Beginning May 1, 2006, the Company applied the modified prospective transition method, which requires the application of SFAS No. 123(R) for new grants and nonvested grants that were outstanding as of such date.
The Companys Consolidated Financial Statements as of April 30, 2007 reflect the impact of SFAS No. 123(R). In accordance with the modified prospective transition method, the Companys Consolidated Financial Statements for prior
periods have not been restated to reflect, and do not include, the impact of SFAS No. 123(R). The valuation provisions of SFAS No. 123(R) apply to new grants and nonvested grants that were outstanding as of the effective date. For new
grants, the Company will amortize stock-based compensation expenses on a straight-line basis over the requisite service period. Estimated compensation for nonvested grants that were outstanding as of the effective date were recognized over the
remaining service period using the compensation estimated for SFAS No. 123(R) pro forma disclosures.

SFAS No. 123(R) requires
that the deferred stock-based compensation on the Condensed Consolidated Balance Sheet on the date of adoption be netted against additional paid-in capital. As of April 30, 2006, there was a balance of $63 thousand of deferred stock-based
compensation that was netted against additional paid-in capital on May 1, 2006.

The fair value of stock-based compensation awards is
determined using the Black-Scholes option pricing model, which is consistent with the valuation techniques previously utilized for options in footnote disclosures required under SFAS No. 123. The determination of the fair value of stock-based
compensation awards on the date of grant using an option-pricing model is affected by the Companys stock price as well as assumptions regarding a number of complex and subjective variables, including the expected volatility of the
Companys stock price over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. The assumptions used to value stock-based compensation awards for the year ended
April 30, 2006, 2007 and 2008 are as follows:



|                          |  |      |   |  |      |   |  |             |  
|------------------------- |  | ---- | - |  | ---- | - |  | ----------- | -
|                          |  | 2006 |   |  | 2007 |   |  | 2008        |  
|Risk-free interest rate   |  | 4.71 | % |  | 4.67 | % |  | 2.8%  4.84 | %
|Expected life (years)     |  | 4    |   |  | 4    |   |  | 1  4       |  
|Expected stock volatility |  | 101  | % |  | 93   | % |  | 107%  159  | %
|Dividend yield            |  | 0    | % |  | 0    | % |  | 0           | %

Expected life represents the weighted average period of time that stock-based awards granted are
expected to be outstanding giving consideration to historical exercise patterns. Expected stock volatilities are based on historical volatilities of the Companys stock price. Risk-free rate is based on U.S. Treasury zero-coupon issues with
remaining terms similar to the expected term on the stock-based awards. The Company does not anticipate paying any cash dividends in the foreseeable future.

Changes in subjective input assumptions can materially affect the fair value estimate. In the opinion of the Companys management, the existing model may not necessarily provide a reliable single measure of the
fair value of the stock options.

Total share-based compensation recognized in selling, general and administrative expenses on the
Companys Consolidated Statements of Operations for the years ended April 30, 2007 and 2008 were $0.9 million and $0.5 million, respectively.



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##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Stock option activity related to the
Companys stock options for the year ended April 30, 2006, 2007 and 2008 is summarized as follows (stated in American Depositary Share, or ADS, equivalents based on fifteen ordinary shares per ADS:



|                              |  |                      |   |  |                                       |     
|----------------------------- |  | -------------------- | - |  | ------------------------------------- | ----
|                              |  | Outstanding Options 
|                              |  | Number ofADS options |   |  | Weighted-averageexercise priceper
ADS
|Outstanding at April 30, 2005 |  | 3,811,938            |   |  | $                                     | 5.79
|                              |  |                      |   |  |                                       |     
|Granted                       |  | 772,939              |   |  | $                                     | 2.46
|Cancelled/forfeited           |  | (1,707,298           | ) |  | $                                     | 5.91
|Exercised                     |  | (68,309              | ) |  | $                                     | 1.59
|                              |  |                      |   |  |                                       |     
|Outstanding at April 30, 2006 |  | 2,809,270            |   |  | $                                     | 4.92
|                              |  |                      |   |  |                                       |     
|Granted                       |  | 473,715              |   |  | $                                     | 1.64
|Cancelled/forfeited           |  | (1,290,439           | ) |  | $                                     | 5.94
|Exercised                     |  | (142,667             | ) |  | $                                     | 1.53
|                              |  |                      |   |  |                                       |     
|Outstanding at April 30, 2007 |  | 1,849,879            |   |  | $                                     | 3.66
|                              |  |                      |   |  |                                       |     
|Granted                       |  | 2,893,700            |   |  | $                                     | 0.69
|Cancelled/forfeited           |  | (1,150,281           | ) |  | $                                     | 3.48
|Exercised                     |  |                     |   |  |                                       |    
|                              |  |                      |   |  |                                       |     
|Outstanding at April 30, 2008 |  | 3,593,298            |   |  | $                                     | 1.32
|                              |  |                      |   |  |                                       |     
|ADS options exercisable at:   |  |                      |   |  |                                       |     
|April 30, 2006                |  | 1,789,527            |   |  | $                                     | 5.70
|April 30, 2007                |  | 1,234,137            |   |  | $                                     | 4.37
|April 30, 2008                |  | 1,100,049            |   |  | $                                     | 2.79

The aggregate intrinsic value was calculated as the difference between the exercise price of the
underlying awards and the quoted price of the Companys ADSs that were in-the-money at balance sheet date. During the years ended April 30, 2006, 2007 and 2008, the aggregate intrinsic value of options exercised were $88,512, $94,565 and
$Nil, respectively, determined as of the date of option exercise.

The weighted average grant-date fair value of options granted during the
years ended April 30, 2006, 2007 and 2008 was $1.79, $1.13 and $0.49, respectively.

As of April 30, 2008, there was
approximately $1.1 million of unrecognized compensation cost related to nonvested stock options. The cost is expected to be recognized over a weighted average period of 3.15 years.

The options generally vest over four years and expire ten years from the date of grant or within three months of termination of employment.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



The following table summarizes
information about stock options issued under the plan described above that are outstanding and exercisable as of April 30, 2008:



|                        |  |                      |  |                                |        |                                         |      |                      |           |                                |   |                                         |  |     
|----------------------- |  | -------------------- |  | ------------------------------ | ------ | --------------------------------------- | ---- | -------------------- | --------- | ------------------------------ | - | --------------------------------------- |  | ----
|                        |  | Options outstanding  |  | Options exercisable           
|Range of exercise price |  | Number ofADS options |  | Weighted-averageexercise price |        | Weighted-averagecontractual life(years) |      | Number ofADS options |           | Weighted-averageexercise price |   | Weighted-averagecontractual life(years)
|$0.30  $2.88           |  | 3,066,685            |  | $                              | 0.791  |                                         | 9.39 |                      | 588,530   |                                | $ | 1.342                                   |  | 8.38
|$2.97  $4.95           |  | 479,614              |  | $                              | 4.214  |                                         | 5.55 |                      | 464,520   |                                | $ | 4.250                                   |  | 5.48
|$5.91  $9.15           |  | 44,999               |  | $                              | 6.150  |                                         | 6.10 |                      | 44,999    |                                | $ | 6.150                                   |  | 6.10
|$12.75                  |  | 2,000                |  | $                              | 12.750 |                                         | 2.81 |                      | 2,000     |                                | $ | 12.750                                  |  | 2.81
|                        |  |                      |  |                                |        |                                         |      |                      |           |                                |   |                                         |  |     
|Total                   |  | 3,593,298            |  |                                |        |                                         |      |                      | 1,100,049 |                                |   |                                         |  |     
|                        |  |                      |  |                                |        |                                         |      |                      |           |                                |   |                                         |  |     



|20. | EMPLOYEE BENEFIT PLAN
|--- | ---------------------

The aggregate
employers contributions which have been made were as follows:



|                         |  |       |  |       |  |      
|------------------------ |  | ----- |  | ----- |  | -----
|                         |  | 2006  |  | 2007  |  | 2008 
|                         |  | $000 |  | $000 |  | $000
|Employers contributions |  | 1,343 |  | 682   |  | 5    
|                         |  |       |  |       |  |      

The Company has established a mandatory provident fund scheme for its Hong Kong employees who did
not join the defined contribution plan described below. The assets of the plan are held under provident funds managed by independent trustees. Both the employees and employers contributions are based on 5% of the individual
employees monthly basic salary or at a maximum of approximately $128 per month.

Also, the Company has a defined contribution plan
for its Hong Kong employees. The assets of the plan are also held under provident funds managed by independent trustees. The employees can elect to contribute a fixed percentage from 1% to 5% (in 1% increments) of an individual employees
monthly basic salary. The employers contributions are based on the percentage of contribution by the employee of the individual employees monthly basic salary. The employees are entitled to the whole of the employers contributions
and accrued interest thereon after 10 years of complete service or at a reduced scale of 30% to 90%, after completion of 3 to 9 years of service, respectively.

The decrease in employers contributions for the year ended April 30, 2008 is a result of refund of employers contributions of employee benefit plan related to staff laid off.

In addition, ASAT, Inc. has a 401(k) plan which covers all employees with six months or more of service. Employees who participate in the plan may
contribute a portion of their salaries up to a limit specified by law. The Companys contribution to the plan is based on the percentage of contribution by the employee of the individual employees monthly basic salary, whereby the
Companys contributions to the plan for the years ended April 30, 2006, 2007 and 2008 were $123 thousand, $42 thousand and $16 thousand, respectively.

As stipulated by the regulations of China, ASAT China participates in basic defined contribution pension plans organized by the Municipal Government under which it is governed. Employees in Mainland China are entitled
to retirement benefits equal to a fixed proportion of their salary at their normal retirement age. The Company has no other material obligation for payment of basic retirement benefits in China beyond the annual contributions which are calculated at
a rate based on the salaries, bonuses and certain allowances of its employees.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



|21. | REORGANIZATION EXPENSES
|--- | -----------------------

During the years ended
April 30, 2006, 2007 and 2008, as part of the transition to China, the Company incurred $4.7 million, $2.5 million and $392 thousand, respectively, of reorganization expenses for the lay-off of approximately 1,000, 370 and 46 employees,
respectively, who primarily served in the manufacturing functions in Hong Kong operations.



|22. | FACILITIES AND RELOCATION CHARGES
|--- | ---------------------------------

For the years
ended April 30, 2006 and 2007, the Company incurred facilities and relocation charges of $1.1 million and $3.0 million, respectively, in connection with the transfer of its assembly and test operations from Hong Kong to Dongguan, China.
The Company did not incur such expenses during the year ended April 30, 2008.



|23. | ISSUANCE OF WARRANTS
|--- | --------------------

On October 1, 2007, the
Company issued 35,766,900 warrants to the lenders of the Purchase Money Loan for a debt modification to extend the repayment date of interest and principal. Also, the Company has issued another 35,766,900 warrants to the holders of 9.25% Senior
Notes for the waiver of certain defaults and events of default that may have occurred or may occur.

All warrants have an exercise price of
$0.01 per ordinary share and will expire on February 1, 2011, subject to adjustment as provided in the warrants and the other terms and conditions contained therein. All warrants cannot be redeemed by cash and the maximum number of shares to be
issued is 71,533,800 ordinary shares which represents approximately 9.42% of the Companys total outstanding ordinary shares as of April 30, 2008.

The fair value of warrants issued is determined using the Black-Scholes option pricing model, which is consistent with the valuation techniques requested in U.S. GAAP. The determination of the fair value of
stock-based compensation awards on the date of grant using an option-pricing model is affected by the Companys stock price as well as assumptions regarding a number of complex and subjective variables, including the expected volatility of the
Companys stock price over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. The assumptions used to value warrants issued are as follows:



|                          |  |      |  
|------------------------- |  | ---- | -
|Risk-free interest rate   |  | 4.05 | %
|Expected life (years)     |  | 3.33 |  
|Expected stock volatility |  | 98   | %
|Dividend yield            |  | 0    | %

Besides warrants issued in relation to the lenders of the Purchase Money Loan and the holders of
9.25% Senior Notes, the Company issued warrants for a total of 41.8 million ordinary shares to Mr. Tung Lok Li, the Acting Chief Executive Officer, as part of his compensation. The warrant is exercisable with respect to 20.6 million
ordinary shares immediately, with the remainder subject to certain vesting or performance criteria, provided that (i) Mr. Tung Lok Li ceases to serve as an executive officer of the Company for whatever reasons, including death or (ii) any person or
entity becomes a beneficial owner of more than 50% of the total voting power in each and all classes of equity of the Company following the warrant issue date and Mr. Tung Lok Li ceases to serves as an executive officer of the Company due to such
change of control, the warrant will become immediately exercisable with respect to an aggregate of up to 35.8 million ordinary shares. The fair value of warrants issued is approximately $1 million and it has an exercise price of $0.01 per ordinary
share and will expire on February 1, 2011, subject to adjustment as provided in the warrants and the other terms and conditions contained therein. As of April 30, 2008, 22.4 million warrants are exercisable, which represents
approximately 2.94% of the Company total outstanding ordinary shares as of April 30, 2008.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



The fair value of warrants issued is
determined using the Black-Scholes option pricing model, which is consistent with the valuation techniques allowed under U.S. GAAP. The determination of the fair value of stock-based compensation awards on the date of grant using an option-pricing
model is affected by the Companys stock price as well as assumptions regarding a number of complex and subjective variables, including the expected volatility of the Companys stock price over the term of the awards, actual and projected
employee stock option exercise behaviors, risk-free interest rate and expected dividends. The assumptions used to value warrants issued are as follows:



|                          |  |      |  
|------------------------- |  | ---- | -
|Risk-free interest rate   |  | 2.1  | %
|Expected life (years)     |  | 2.92 |  
|Expected stock volatility |  | 73   | %
|Dividend yield            |  | 0    | %



|24. | LITIGATION SETTLEMENT
|--- | ---------------------

QPL entered into a patent
cross license agreement with Motorola, Inc. (Motorola) on October 1, 1993 (the Immunity Agreement). Under the terms of the Immunity Agreement, QPL had been obligated to pay quarterly royalties to Motorola on a per solder
ball pad basis for all BGA Packages , as defined therein. QPL, through its then subsidiary ASAT Limited, paid royalties on certain products and not others based on its understanding of the obligations under the Immunity Agreement. When
QPL assigned certain semiconductor assets to the Company in 1999, ASAT Limited continued to make payments to Motorola, even though the Immunity Agreement was not assigned to the Company or any of its subsidiaries.

Motorola approached the Company in December 2002 claiming that the Company had assumed QPLs obligations under the Immunity Agreement. It
commissioned a third-party auditor to audit the royalty payments the Company had made for the three-year period ended October 31, 2002. Based on the results of that audit, Motorola asserted that QPL and the Company collectively owed additional
royalties of $8,000,000 along with interest under either the Immunity Agreement or implied in fact contract that mirrors the terms of the Immunity Agreement. The bulk of the amount claimed stemmed from Motorolas contention that the
Company and QPL owe royalties for the manufacture of fpBGA products, a contention that both entities denied.

On April 9, 2003, the
Company and its subsidiary, ASAT, Inc., as co-plaintiffs initiated a lawsuit against Motorola in the United States District Court for the Northern District of California (the Court) by filing a complaint for Declaratory Judgment seeking
a declaration from the court that neither plaintiff owed Motorola any royalty payments under the Immunity Agreement or any other agreement. Motorola counter-claimed for breach of contract against the Company, ASAT, Inc., ASAT Limited and QPL,
seeking $8,000,000 plus interest accruing at the rate of 1% per month on the alleged unpaid royalties. The substantial majority of Motorolas demand was directed to the Company and its subsidiaries.

In July 2005, the Company entered into a formal settlement agreement and mutual release with Motorola and Freescale to fully and finally compromise,
settle and discharge the claims, controversies, demands and disputes between the parties. The formal written settlement agreement was executed in July 2005 and was filed with the Court on July 18, 2005. Under the settlement agreement and mutual
release, the Company agreed to pay Freescale a total of $2.0 million in cash. The Company also agreed to provide Freescale with a rebate of 20% on all future products sales and services invoiced by the Company to Freescale until the aggregate amount
of the rebate provided to Freescale by the Company totals $1.75 million. This 20% rebate will not expire until the maximum total rebate of $1.75 million is paid back to Freescale. Based on the discounted cash flows analysis and the expected
timeframe of the rebate utilization by Freescale, the fair value of the rebate was estimated to be approximately $1.62 million as of April 30, 2005. The Company also issued a 5-year warrant to Freescale for



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



$1.75 million to purchase 10,937,500 ordinary shares, which is equivalent to 729,167 ADSs, initially exercisable at a price of $0.16 per ordinary share
(equivalent to $2.4 per ADS). The Company assessed the fair value of the warrants and the fair value of the warrants was estimated to be approximately $982 thousand as of April 30, 2005.

The accrued litigation settlement totaling $4.6 million, representing $2.0 million cash settlement, $1.62 million fair value of future rebate and
$982 thousand fair value of the warrants, was charged to the Companys consolidated statements of operations for the year ended April 30, 2005.

The fair value of warrants issued is determined using the Black-Scholes option pricing model, which is consistent with the valuation techniques requested in U.S. GAAP. The determination of the fair value of
stock-based compensation awards on the date of grant using an option-pricing model is affected by the Companys stock price as well as assumptions regarding a number of complex and subjective variables, including the expected volatility of the
Companys stock price over the term of the awards, actual and projected employee stock option exercise behaviors, risk-free interest rate and expected dividends. The assumptions used to value warrants issued are as follows:



|                          |  |       |  
|------------------------- |  | ----- | -
|Risk-free interest rate   |  | 3.87  | %
|Expected life (years)     |  | 5     |  
|Expected stock volatility |  | 66.44 | %
|Dividend yield            |  | 0     | %

On April 10, 2008, ASAT China received a notice from the Peoples Intermediate Court of
the City of Dongguan, Guangdong, China concerning a lawsuit raised by Wellmean alleging that ASAT China breached its contract with Wellmean by failing to pay the final installment of the renovation fees of RMB7.7 million (approximately $1.1 million)
in connection with the construction of our Phase II manufacturing facility in Dongguan, China. On July 4, 2008, Wellmean and ASAT China entered into a settlement agreement and ASAT China agreed to pay a consideration of approximately RMB7.7
million to settle this court action. ASAT China had recognised the whole amount as of April 30, 2008. Subsequently, Wellmean withdrew its claim against ASAT China on July 9, 2008 and ASAT China paid the consideration of approximately RMB7.7
million to Wellmean on July 10, 2008.



|25. | COMMITMENTS AND CONTINGENCIES
|--- | -----------------------------

Capital
expenditure

As of April 30, 2006, 2007 and 2008, the Company had contracted for capital expenditure on property, plant and
equipment of $2.9 million, $1.2 million and $0.2 million, respectively.

Operating leases

The Company leases certain land, buildings, equipment and machinery and motor vehicles, under operating lease agreements expiring at various times through
July 2020. The Hong Kong facility leased from QPL is under a three-year term which expired in March 2007. On April 30, 2005, QPL completed the sale of ASATs leased facility from QPL to a third party that is unrelated to either party. The
lease agreement with QPL was transferred to this third party without any change in its terms and conditions. The lease of the Hong Kong facility was renewed in August 2006 under a one-year term which expired on August 31, 2007. Subsequently,
the Company surrendered a portion of its Hong Kong office premises and entered a new lease agreement with a one-year term expired on August 31, 2008, with an option to extend for an additional year. Currently, the Company leases the Hong Kong
office premises with a two-year term expiring on August 31, 2010.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



The Company entered into a lease of a
factory facility (the Phase I facility) in Dongguan, China in August 2002 under which the lessor was responsible for the design and construction of the interior finish and fixtures of the factory building. The Company is obligated
to pay a monthly rental payment and management service fee for a period of 15 years from September 2003.

From October 30, 2004 and
onward during the remaining term of the lease, the Company has an option and a right of first refusal to purchase the Phase I facility and the related land-use right of the land on which the facility is located at prices fixed in a predetermined
schedule or, subsequent to October 2009, at price based on the then fair market value of the factory facility and the related land-use right. The highest price for the Phase I facility and the related land-use right listed on the predetermined
schedule to the lease agreement is HK$108.4 million (approximately $13.9 million at an assumed exchange rate of HK$7.8 per $1.00).

On
May 7, 2004, the Company entered into a lease agreement of another factory facility (the Phase II facility) in Dongguan, China, under which the lessor is responsible for the design and construction of the factory building. The
Company is obligated to pay a monthly lease payment for a term of 15 years starting from August 1, 2005. Under the terms of the Phase II facility lease, the Company is obligated to pay monthly payment of $179 thousand for the first six
years of the lease term and $90 thousand per month for the seventh years of the lease term.

At any time on or after October 31, 2008,
the Company has an option and a right of first refusal under the lease to purchase the Phase II facility and the land-use right of the land on which the facility is located at price fixed in a predetermined schedule during the period from October
2008 to July 2011 and thereafter at prices based on the then fair market value of the factory facility and the related land-use right. The highest price for the Phase II facility and the related land-use right listed on the predetermined schedule to
the lease agreement is HK$60.0 million (approximately $7.7 million at an assumed exchange rate of HK$7.8 per $1.00).

Future minimum lease
payments under operating leases as of April 30, 2008 are as follows:



|                             |  |       
|---------------------------- |  | ------
|                             |  | $000 
|Fiscal year ending April 30: |  |       
|2009                         |  | 3,731 
|2010                         |  | 3,643 
|2011                         |  | 3,535 
|2012                         |  | 3,218 
|2013                         |  | 2,599 
|Thereafter                   |  | 12,405
|                             |  |       
|Total                        |  | 29,131
|                             |  |       



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



|26. | SEGMENT INFORMATION
|--- | -------------------

The Company operates in a
single business segment comprising the assembly and test services of integrated circuits to customers in the semiconductor industry. It is the managements view that assembly and test services comprise one business segment. The Companys
sales are generated from the following geographical locations representing the geographical areas from which sales invoices were issued for the years indicated:



|                                  |  |          |   |  |          |   |  |          |  
|--------------------------------- |  | -------- | - |  | -------- | - |  | -------- | -
|                                  |  | 2006     |   |  | 2007     |   |  | 2008     |  
|                                  |  | $000    |   |  | $000    |   |  | $000    |  
|Hong Kong                         |  | 177,207  |   |  | 161,516  |   |  | 115,025  |  
|United States                     |  | 60,481   |   |  | 37,915   |   |  |         |  
|China (excluding Hong Kong)       |  | 74,278   |   |  | 379,631  |   |  | 279,227  |  
|Transfer between geographic areas |  | (129,851 | ) |  | (414,209 | ) |  | (238,291 | )
|                                  |  |          |   |  |          |   |  |          |  
|Total sales                       |  | 182,115  |   |  | 164,853  |   |  | 155,961  |  
|                                  |  |          |   |  |          |   |  |          |  

Intercompany sales between geographic areas were recorded at cost plus a mark-up. Such transfers,
including unrealized profits, are eliminated on consolidation.

The Company ships completed packages at the direction of its customers to
various destinations. The following table provides a breakdown of the percentage of sales by geographic destination:



|              |  |       |   |  |       |   |  |       |  
|------------- |  | ----- | - |  | ----- | - |  | ----- | -
|              |  | 2006  |   |  | 2007  |   |  | 2008  |  
|United States |  | 33.2  | % |  | 23.0  | % |  | 22.8  | %
|Asia(a)       |  | 63.0  | % |  | 70.6  | % |  | 69.7  | %
|Hong Kong     |  | 2.3   | % |  | 3.4   | % |  | 2.4   | %
|Europe        |  | 1.5   | % |  | 3.0   | % |  | 5.1   | %
|              |  |       |   |  |       |   |  |       |  
|              |  | 100.0 | % |  | 100.0 | % |  | 100.0 | %
|              |  |       |   |  |       |   |  |       |  



|(a) | For the Companys sales by geographic destination, Asia mainly represents Singapore, Taiwan, Japan, Malaysia, China
(excluding Hong Kong), Philippines and Korea.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

The geographical distribution of the Companys identifiable assets is
summarized as follows:



|                            |  |         |  |         |  |        
|--------------------------- |  | ------- |  | ------- |  | -------
|                            |  | 2006    |  | 2007    |  | 2008   
|                            |  | $000   |  | $000   |  | $000  
|Hong Kong                   |  | 93,564  |  | 71,404  |  | 14,574 
|China (excluding Hong Kong) |  | 78,094  |  | 54,209  |  | 96,701 
|Asia(b)                     |  | 117     |  | 159     |  | 312    
|United States               |  | 9,635   |  | 9,296   |  | 6,983  
|Germany                     |  | 51      |  | 69      |  | 73     
|                            |  |         |  |         |  |        
|                            |  | 181,461 |  | 135,137 |  | 118,643
|                            |  |         |  |         |  |        



|(b) | For the Companys identifiable assets, Asia represents Singapore and Korea.
|--- | ---------------------------------------------------------------------------



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



The geographical distribution of the
Companys long-lived assets is summarized as follows:



|                            |  |         |  |        |  |       
|--------------------------- |  | ------- |  | ------ |  | ------
|                            |  | 2006    |  | 2007   |  | 2008  
|                            |  | $000   |  | $000  |  | $000 
|Hong Kong                   |  | 44,060  |  | 47,862 |  | 1,540 
|China (excluding Hong Kong) |  | 60,384  |  | 38,034 |  | 66,841
|Asia(c)                     |  | 35      |  | 35     |  | 26    
|United States               |  | 735     |  | 3,929  |  | 6,434 
|Germany                     |  | 2       |  | 7      |  | 1     
|                            |  |         |  |        |  |       
|                            |  | 105,216 |  | 89,867 |  | 74,842
|                            |  |         |  |        |  |       



|(c) | For the Companys long-lived assets, Asia represents Singapore and Korea.
|--- | -------------------------------------------------------------------------

27.    MAJOR CUSTOMERS

An
analysis of percentage of sales to major customers is as follows:



|          |  |      |   |  |      |   |  |      |  
|--------- |  | ---- | - |  | ---- | - |  | ---- | -
|          |  | 2006 |   |  | 2007 |   |  | 2008 |  
|Customer: |  |      |   |  |      |   |  |      |  
|A         |  | 32.6 | % |  | 53.7 | % |  | 58.7 | %
|B         |  | 8.6  | % |  | 5.0  | % |  | 5.3  | %
|C         |  | 7.0  | % |  | 4.1  | % |  | 4.3  | %
|D         |  | 7.0  | % |  | 3.4  | % |  | 4.0  | %
|E         |  | 4.0  | % |  | 2.8  | % |  | 2.6  | %

28.    SUBSEQUENT EVENTS

On June 30, 2008, the Company terminated the original lease agreements and management service agreements for both Phase I and Phase II facilities
which were entered into between Timerson Limited and the lessor. At the same time, ASAT China entered into the new lease agreements with the lessor for the remaining terms of the respective leases. Under the new lease agreements, the rent and
service fees to be paid are denominated in Renminbi and the monthly amount payable is based on the predetermined schedule. The expiry of the lease terms for Phase I and Phase II factory premises remain August 31, 2018 and July 31, 2020,
respectively, and ASAT China has the option and right of first refusal to purchase the facilities and the related land-use right of the land at prices fixed as stated in the predetermined schedule of the respective original lease agreements.

In July 2008, ASAT China obtained a short-term revolving credit facility of RMB60 million (approximately $8.6 million) bearing interest at
a rate published by the Peoples Bank of China plus a markup of 15%. The revolving credit facility is backed by a guarantee provided by ASAT Limited. The revolving credit facility will expire in April 6, 2009 and may be extended for
further one year.

On September 15, 2008, the Company paid semiannual dividend due on its outstanding Series A Preferred Shares. The
Company paid the dividend in its ordinary shares, issuing 158.91 ordinary shares per Series A Preferred Share and 47,672,829 ordinary shares in the aggregate to members of the investor group and Everwarm Limited, and issuing 158.91 ordinary shares
per Series A Preferred Share and 1,457,107 ordinary shares in the aggregate to holders of Series A Preferred Shares who subscribed to its rights offering, all in accordance with the terms of its Series A Preferred Shares.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



On October 17, 2008, the Company
amended the purchase money loan facility to extend the maturity due date of the $10.0 million principal amount and certain unpaid interest. The maturity due date for the $10.0 million principal was extended to January 31, 2010. For the
total interest of $5,277,231 accrued and unpaid up to October 17, 2008, we were required to pay $441,667 upon signing the amended agreement. The balance of the unpaid interest of $4,835,564 was converted into two separate loan principals with
$2,435,564 due and payable on December 15, 2008 and $2,400,000 due and payable on January 31, 2010.

On October 13 2008,
ASAT China obtained a renewal of the RMB150 million (approximately $20 million) revolving credit facility for further one year. This facility is secured by certain trade receivables of ASAT China bearing interest at LIBOR plus 4%.

29.    CONDENSED CONSOLIDATING FINANCIAL INFORMATION

On January 26, 2004, New ASAT (Finance) Limited, a wholly-owned subsidiary of the Company issued $150.0 million of its 9.25% senior notes as part of a refinancing transaction. See Note 13 for a more complete
description of the 9.25% senior notes.

Under the indenture governing the 9.25% senior notes, the Company and certain of its wholly-owned
subsidiaries that are restricted subsidiaries under the indenture governing the 9.25% senior notes have fully and unconditionally guaranteed the 9.25% senior notes on joint and several basis.

The condensed consolidating financial statements are presented below and should be read in connection with the Consolidated Financial Statements of ASAT
Holdings Limited. The subsidiary guarantors for the 9.25% senior notes are ASAT Limited, ASAT Inc., Timerson Limited and ASAT (Cayman) Limited. Separate financial statements and other disclosures concerning the subsidiary guarantors are not included
herein because (i) the subsidiary guarantors are wholly-owned and have fully and unconditionally guaranteed the 9.25% senior notes on a joint and several basis, and (ii) the Companys management has determined that such information is
not material to investors.

The condensed financial statements of ASAT Holdings Limited is also presented below in accordance with SEC
Regulation S-X Rule 5-04 and Rule 12-04 because the Company has a subsidiary in the PRC where $64 million of ASAT China is restricted for dividend distribution and capital return up to the Company as of April 30, 2008 in pursuant to the
covenant set forth in the prospectus of 9.25% senior notes.

The following condensed consolidated financial information presents the
condensed consolidated balance sheets as of April 30, 2008 and 2007 and the related condensed consolidated statements of operations and cash flows for the years ended April 30, 2008, 2007 and 2006 of (a) ASAT Holdings Limited, the
parent company; (b) New ASAT (Finance) Limited, the subsidiary issuer; (c) the guarantor subsidiaries of ASAT Holdings Limited on a combined basis; (d) the non-guarantor subsidiaries of the Company on a combined basis;
(e) eliminating entries; and (f) the total consolidated amounts.



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ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Condensed Consolidating Balance Sheet as of
April 30, 2008



|                                                     |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|---------------------------------------------------- |  | ------------------- | - |  | ------------------------ |  | --------------------- | - |  | ------------------------- | - |  | ------------------ | - |  | ----------------- | -
|                                                     |  | ASATHOLDINGSLIMITED |   |  | NEW ASAT(FINANCE)LIMITED |  | GUARANTORSUBSIDIARIES |   |  | NON-GUARANTORSUBSIDIARIES |   |  | ELIMINATINGENTRIES |   |  | CONSOLIDATEDTOTAL |  
|                                                     |  | $000               |   |  | $000                    |  | $000                 |   |  | $000                     |   |  | $000              |   |  | $000             |  
|ASSETS                                               |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Current assets:                                      |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Cash and cash equivalents                            |  | 21                  |   |  |                         |  | 1,282                 |   |  | 4,708                     |   |  |                   |   |  | 6,011             |  
|Accounts receivable, net                             |  |                    |   |  |                         |  | 10,505                |   |  | 7,035                     |   |  |                   |   |  | 17,540            |  
|Inventories                                          |  |                    |   |  |                         |  | 188                   |   |  | 14,924                    |   |  |                   |   |  | 15,112            |  
|Prepaid expenses and other current assets            |  | 261                 |   |  |                         |  | 1,441                 |   |  | 3,436                     |   |  |                   |   |  | 5,138             |  
|                                                     |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total current assets                                 |  | 282                 |   |  |                         |  | 13,416                |   |  | 30,103                    |   |  |                   |   |  | 43,801            |  
|Restricted cash                                      |  |                    |   |  |                         |  |                      |   |  |                          |   |  |                   |   |  |                  |  
|Property, plant and equipment, net                   |  |                    |   |  |                         |  | 1,617                 |   |  | 156,722                   |   |  | (96,087            | ) |  | 62,252            |  
|Investment in and advance to consolidated entities   |  | 249,067             |   |  | 150,702                  |  | 406,917               |   |  | 257,874                   |   |  | (1,064,560         | ) |  |                  |  
|Deferred charges and other non-current assets        |  | 3,600               |   |  | 2,767                    |  | 6,202                 |   |  | 21                        |   |  |                   |   |  | 12,590            |  
|                                                     |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total assets                                         |  | 252,949             |   |  | 153,469                  |  | 428,152               |   |  | 444,720                   |   |  | (1,160,647         | ) |  | 118,643           |  
|                                                     |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)       |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|                                                     |  |                     |   |  |                          | 
|Current liabilities:                                 |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Advance from consolidated entities                   |  | 2,727               |   |  |                         |  | 628,463               |   |  | 343,614                   |   |  | (974,804           | ) |  |                  |  
|Other current liabilities                            |  | 4,059               |   |  | 1,069                    |  | 17,658                |   |  | 36,916                    |   |  |                   |   |  | 59,702            |  
|                                                     |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total current liabilities                            |  | 6,786               |   |  | 1,069                    |  | 646,121               |   |  | 380,530                   |   |  | (974,804           | ) |  | 59,702            |  
|9.25% senior notes due 2011                          |  |                    |   |  | 150,000                  |  |                      |   |  |                          |   |  |                   |   |  | 150,000           |  
|Other non-current liability                          |  | 9,449               |   |  | 2,400                    |  | 44                    |   |  |                          |   |  |                   |   |  | 11,893            |  
|                                                     |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total liabilities                                    |  | 16,235              |   |  | 153,469                  |  | 646,165               |   |  | 380,530                   |   |  | (974,804           | ) |  | 221,595           |  
|                                                     |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Series A Redeemable Convertible Preferred Shares     |  | 2,796               |   |  |                         |  |                      |   |  |                          |   |  |                   |   |  | 2,796             |  
|Shareholders equity (deficit):                      |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Common stock ($0.01 par value)                       |  | 7,664               |   |  |                         |  | 7,271                 |   |  | 36,489                    |   |  | (43,760            | ) |  | 7,664             |  
|Less: Repurchase of stock at par                     |  | (71                 | ) |  |                         |  |                      |   |  |                          |   |  |                   |   |  | (71               | )
|Additional paid-in capital                           |  | 237,589             |   |  |                         |  | 41,367                |   |  |                          |   |  | (25,996            | ) |  | 252,960           |  
|Accumulated other comprehensive loss                 |  |                    |   |  |                         |  |                      |   |  | (123                      | ) |  |                   |   |  | (123              | )
|(Accumulated deficit) Retained earnings              |  | (11,264             | ) |  |                         |  | (266,651              | ) |  | 27,824                    |   |  | (116,087           | ) |  | (366,178          | )
|                                                     |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total shareholders equity (deficit)                 |  | 233,918             |   |  |                         |  | (218,013              | ) |  | 64,190                    |   |  | (185,843           | ) |  | (105,748          | )
|                                                     |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total liabilities and shareholders equity (deficit) |  | 252,949             |   |  | 153,469                  |  | 428,152               |   |  | 444,720                   |   |  | (1,160,647         | ) |  | 118,643           |  
|                                                     |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  



F-46



---

##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Condensed Consolidating Balance Sheet as of
April 30, 2007



|                                                                        |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|----------------------------------------------------------------------- |  | ------------------- | - |  | ------------------------ |  | --------------------- | - |  | ------------------------- | - |  | ------------------ | - |  | ----------------- | -
|                                                                        |  | ASATHOLDINGSLIMITED |   |  | NEW ASAT(FINANCE)LIMITED |  | GUARANTORSUBSIDIARIES |   |  | NON-GUARANTORSUBSIDIARIES |   |  | ELIMINATINGENTRIES |   |  | CONSOLIDATEDTOTAL |  
|                                                                        |  | (restated)          |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  | (restated)        |  
|                                                                        |  | $000               |   |  | $000                    |  | $000                 |   |  | $000                     |   |  | $000              |   |  | $000             |  
|ASSETS                                                                  |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Current assets:                                                         |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Cash and cash equivalents                                               |  | 232                 |   |  |                         |  | 6,508                 |   |  | 585                       |   |  |                   |   |  | 7,325             |  
|Restricted cash                                                         |  |                    |   |  |                         |  | 900                   |   |  |                          |   |  |                   |   |  | 900               |  
|Accounts receivable, net                                                |  |                    |   |  |                         |  | 17,543                |   |  | 161                       |   |  |                   |   |  | 17,704            |  
|Inventories                                                             |  |                    |   |  |                         |  | 12,452                |   |  | 818                       |   |  |                   |   |  | 13,270            |  
|Prepaid expenses and other current assets                               |  | 310                 |   |  |                         |  | 3,182                 |   |  | 1,679                     |   |  |                   |   |  | 5,171             |  
|                                                                        |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total current assets                                                    |  | 542                 |   |  |                         |  | 40,585                |   |  | 3,243                     |   |  |                   |   |  | 44,370            |  
|Restricted cash, net of current portion                                 |  |                    |   |  |                         |  | 900                   |   |  |                          |   |  |                   |   |  | 900               |  
|Property, plant and equipment, net                                      |  |                    |   |  |                         |  | 74,414                |   |  | 5,168                     |   |  |                   |   |  | 79,582            |  
|Investment in and advance to consolidated entities                      |  | 247,595             |   |  | 149,695                  |  | 363,412               |   |  | 570                       |   |  | (761,272           | ) |  |                  |  
|Deferred charges and other non-current assets                           |  | 1,503               |   |  | 3,774                    |  | 4,989                 |   |  | 19                        |   |  |                   |   |  | 10,285            |  
|                                                                        |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total assets                                                            |  | 249,640             |   |  | 153,469                  |  | 484,300               |   |  | 9,000                     |   |  | (761,272           | ) |  | 135,137           |  
|                                                                        |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)                          |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Current liabilities:                                                    |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Advance from consolidated entities                                      |  |                    |   |  |                         |  | 722,440               |   |  | 608                       |   |  | (723,048           | ) |  |                  |  
|Other current liabilities                                               |  | 57                  |   |  | 3,469                    |  | 43,950                |   |  | 9,086                     |   |  |                   |   |  | 56,562            |  
|                                                                        |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total current liabilities                                               |  | 57                  |   |  | 3,469                    |  | 766,390               |   |  | 9,694                     |   |  | (723,048           | ) |  | 56,562            |  
|9.25% senior notes due 2011                                             |  |                    |   |  | 150,000                  |  |                      |   |  |                          |   |  |                   |   |  | 150,000           |  
|Other non-current liability                                             |  | 10,335              |   |  |                         |  | 758                   |   |  |                          |   |  |                   |   |  | 11,093            |  
|                                                                        |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total liabilities                                                       |  | 10,392              |   |  | 153,469                  |  | 767,148               |   |  | 9,694                     |   |  | (723,048           | ) |  | 217,655           |  
|                                                                        |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Series A Redeemable Convertible Preferred Shares (restated) (note 2(b)) |  | 1,618               |   |  |                         |  |                      |   |  |                          |   |  |                   |   |  | 1,618             |  
|Shareholders equity (deficit):                                         |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Common stock ($0.01 par value)                                          |  | 7,114               |   |  |                         |  | 7,271                 |   |  | 10,723                    |   |  | (17,994            | ) |  | 7,114             |  
|Less: Repurchase of stock at par                                        |  | (71                 | ) |  |                         |  |                      |   |  |                          |   |  |                   |   |  | (71               | )
|Additional paid-in capital (restated) (note 2(b))                       |  | 234,826             |   |  |                         |  | 15,601                |   |  |                          |   |  | (230               | ) |  | 250,197           |  
|Accumulated other comprehensive loss                                    |  |                    |   |  |                         |  |                      |   |  | (184                      | ) |  |                   |   |  | (184              | )
|(Accumulated deficit) Retained earnings                                 |  | (4,239              | ) |  |                         |  | (305,720              | ) |  | (11,233                   | ) |  | (20,000            | ) |  | (341,192          | )
|                                                                        |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total shareholders equity (deficit)                                    |  | 237,630             |   |  |                         |  | (282,848              | ) |  | (694                      | ) |  | (38,224            | ) |  | (84,136           | )
|                                                                        |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total liabilities and shareholders equity (deficit)                    |  | 249,640             |   |  | 153,469                  |  | 484,300               |   |  | 9,000                     |   |  | (761,272           | ) |  | 135,137           |  
|                                                                        |  |                     |   |  |                          |  |                       |   |  |                           |   |  |                    |   |  |                   |  



F-47



---

##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Condensed Consolidating Statements of Operations for
the year ended April 30, 2008



|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|------------------------------------ |  | ------------------- | - |  | ------------------------ | - |  | --------------------- | - |  | ------------------------- | - |  | ------------------ | - |  | ----------------- | -
|                                     |  | ASATHOLDINGSLIMITED |   |  | NEW ASAT(FINANCE)LIMITED |   |  | GUARANTORSUBSIDIARIES |   |  | NON-GUARANTORSUBSIDIARIES |   |  | ELIMINATINGENTRIES |   |  | CONSOLIDATEDTOTAL |  
|                                     |  | $000               |   |  | $000                    |   |  | $000                 |   |  | $000                     |   |  | $000              |   |  | $000             |  
|Sales                                |  |                    |   |  |                         |   |  | 251,867               |   |  | 142,385                   |   |  | (238,291           | ) |  | 155,961           |  
|Cost of sales                        |  | 147                 |   |  |                         |   |  | 259,509               |   |  | 125,139                   |   |  | (246,112           | ) |  | 138,683           |  
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Gross profit                         |  | (147                | ) |  |                         |   |  | (7,642                | ) |  | 17,246                    |   |  | 7,821              |   |  | 17,278            |  
|Operating expenses:                  |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Selling, general and administrative |  | 3,099               |   |  |                         |   |  | 21,150                |   |  | 2,165                     |   |  | (7,163             | ) |  | 19,251            |  
|Research and development            |  |                    |   |  |                         |   |  | 575                   |   |  | 1,459                     |   |  |                   |   |  | 2,034             |  
|Reorganization expenses             |  |                    |   |  |                         |   |  | 196                   |   |  | 196                       |   |  |                   |   |  | 392               |  
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total operating expenses             |  | 3,099               |   |  |                         |   |  | 21,921                |   |  | 3,820                     |   |  | (7,163             | ) |  | 21,677            |  
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|(Loss) Income from operations        |  | (3,246              | ) |  |                         |   |  | (29,563               | ) |  | 13,426                    |   |  | 14,984             |   |  | (4,399            | )
|Other (expenses) income, net         |  | (4                  | ) |  | 14,933                   |   |  | 84,129                |   |  | 26,224                    |   |  | (126,004           | ) |  | (722              | )
|Interest expense:                    |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Amortization of deferred charges    |  | (1,863              | ) |  | (1,008                   | ) |  | (1,382                | ) |  |                          |   |  | 1,008              |   |  | (3,245            | )
|Third parties                       |  | (1,912              | ) |  | (13,925                  | ) |  | (13,931               | ) |  | (438                      | ) |  | 13,925             |   |  | (16,281           | )
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|(Loss) Income before income taxes    |  | (7,025              | ) |  |                         |   |  | 39,253                |   |  | 39,212                    |   |  | (96,087            | ) |  | (24,647           | )
|Income tax expense                   |  |                    |   |  |                         |   |  | (184                  | ) |  | (155                      | ) |  |                   |   |  | (339              | )
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Net loss                             |  | (7,025              | ) |  |                         |   |  | 39,069                |   |  | 39,057                    |   |  | (96,087            | ) |  | (24,986           | )
|Other comprehensive loss:            |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Foreign currency translation         |  |                    |   |  |                         |   |  |                      |   |  | 61                        |   |  |                   |   |  | 61                |  
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Comprehensive loss                   |  | (7,025              | ) |  |                         |   |  | 39,069                |   |  | 39,118                    |   |  | (96,087            | ) |  | (24,925           | )
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  



F-48



---

##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Condensed Consolidating Statements of Operations for
the year ended April 30, 2007



|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|------------------------------------ |  | ------------------- | - |  | ------------------------ | - |  | --------------------- | - |  | ------------------------- | - |  | ------------------ | - |  | ----------------- | -
|                                     |  | ASATHOLDINGSLIMITED |   |  | NEW ASAT(FINANCE)LIMITED |   |  | GUARANTORSUBSIDIARIES |   |  | NON-GUARANTORSUBSIDIARIES |   |  | ELIMINATINGENTRIES |   |  | CONSOLIDATEDTOTAL |  
|                                     |  | $000               |   |  | $000                    |   |  | $000                 |   |  | $000                     |   |  | $000              |   |  | $000             |  
|Sales                                |  |                    |   |  |                         |   |  | 435,000               |   |  | 144,067                   |   |  | (414,214           | ) |  | 164,853           |  
|Cost of sales                        |  | 83                  |   |  |                         |   |  | 442,973               |   |  | 154,303                   |   |  | (447,432           | ) |  | 149,927           |  
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Gross profit                         |  | (83                 | ) |  |                         |   |  | (7,973                | ) |  | (10,236                   | ) |  | 33,218             |   |  | 14,926            |  
|Operating expenses:                  |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Selling, general and administrative |  | 1,650               |   |  |                         |   |  | 20,967                |   |  | 2,642                     |   |  | (3,194             | ) |  | 22,065            |  
|Research and development            |  |                    |   |  |                         |   |  | 2,218                 |   |  |                          |   |  |                   |   |  | 2,218             |  
|Reorganization expenses             |  |                    |   |  |                         |   |  | 1,111                 |   |  | 1,362                     |   |  |                   |   |  | 2,473             |  
|Facilities and relocation charges   |  |                    |   |  |                         |   |  | 1,642                 |   |  | 1,405                     |   |  |                   |   |  | 3,047             |  
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total operating expenses             |  | 1,650               |   |  |                         |   |  | 25,938                |   |  | 5,409                     |   |  | (3,194             | ) |  | 29,803            |  
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|(Loss) Income from operations        |  | (1,733              | ) |  |                         |   |  | (33,911               | ) |  | (15,645                   | ) |  | 36,412             |   |  | (14,877           | )
|Other income (expenses), net         |  | 3                   |   |  | 14,882                   |   |  | 42,581                |   |  | 2,402                     |   |  | (59,225            | ) |  | 643               |  
|Interest expense:                    |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Amortization of deferred charges    |  | (2,322              | ) |  | (753                     | ) |  | (1,384                | ) |  |                          |   |  | 754                |   |  | (3,705            | )
|Third parties                       |  | (1,691              | ) |  | (14,129                  | ) |  | (13,911               | ) |  | (8,165                    | ) |  | 22,059             |   |  | (15,837           | )
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|(Loss) Income before income taxes    |  | (5,743              | ) |  |                         |   |  | (6,625                | ) |  | (21,408                   | ) |  |                   |   |  | (33,776           | )
|Income tax expense                   |  |                    |   |  |                         |   |  | (1,264                | ) |  |                          |   |  |                   |   |  | (1,264            | )
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Net loss                             |  | (5,743              | ) |  |                         |   |  | (7,889                | ) |  | (21,408                   | ) |  |                   |   |  | (35,040           | )
|Other comprehensive loss:            |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Foreign currency translation         |  |                    |   |  |                         |   |  | 4                     |   |  | 35                        |   |  |                   |   |  | 39                |  
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Comprehensive loss                   |  | (5,743              | ) |  |                         |   |  | (7,885                | ) |  | (21,373                   | ) |  |                   |   |  | (35,001           | )
|                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  



F-49



---

##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Condensed Consolidating Statements of Operations for
the year ended April 30, 2006



|                                             |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|-------------------------------------------- |  | ------------------- | - |  | ------------------------ | - |  | --------------------- | - |  | ------------------------- | - |  | ------------------ | - |  | ----------------- | -
|                                             |  | ASATHOLDINGSLIMITED |   |  | NEW ASAT(FINANCE)LIMITED |   |  | GUARANTORSUBSIDIARIES |   |  | NON-GUARANTORSUBSIDIARIES |   |  | ELIMINATINGENTRIES |   |  | CONSOLIDATEDTOTAL |  
|                                             |  | $000               |   |  | $000                    |   |  | $000                 |   |  | $000                     |   |  | $000              |   |  | $000             |  
|Sales                                        |  |                    |   |  |                         |   |  | 295,363               |   |  | 14,497                    |   |  | (127,745           | ) |  | 182,115           |  
|Cost of sales                                |  |                    |   |  |                         |   |  | 290,003               |   |  | 11,412                    |   |  | (132,556           | ) |  | 168,859           |  
|                                             |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Gross profit                                 |  |                    |   |  |                         |   |  | 5,360                 |   |  | 3,085                     |   |  | 4,811              |   |  | 13,256            |  
|Operating expenses:                          |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Selling, general and administrative         |  | 501                 |   |  |                         |   |  | 26,786                |   |  | 6,444                     |   |  | (4,283             | ) |  | 29,448            |  
|Research and development                    |  |                    |   |  |                         |   |  | 4,059                 |   |  |                          |   |  |                   |   |  | 4,059             |  
|Reorganization expenses                     |  |                    |   |  |                         |   |  | 4,114                 |   |  | 576                       |   |  |                   |   |  | 4,690             |  
|Facilities and relocation charges           |  |                     |   |  |                          |   |  | 1,054                 |   |  |                           |   |  |                    |   |  | 1,054             |  
|Impairment of property, plant and equipment |  |                    |   |  |                         |   |  | 3,890                 |   |  |                          |   |  |                   |   |  | 3,890             |  
|                                             |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Total operating expenses                     |  | 501                 |   |  |                         |   |  | 39,903                |   |  | 7,020                     |   |  | (4,283             | ) |  | 43,141            |  
|                                             |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|(Loss) Income from operations                |  | (501                | ) |  |                         |   |  | (34,543               | ) |  | (3,935                    | ) |  | 9,094              |   |  | (29,885           | )
|Other income (expenses), net                 |  | 1                   |   |  | 14,882                   |   |  | 9,187                 |   |  | 2,016                     |   |  | (22,648            | ) |  | 3,438             |  
|Interest expense:                            |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Amortization of deferred charges            |  | (742                | ) |  | (1,007                   | ) |  | (1,205                | ) |  |                          |   |  | 1,007              |   |  | (1,947            | )
|Third parties                               |  | (397                | ) |  | (13,875                  | ) |  | (14,246               | ) |  | (1,039                    | ) |  | 14,871             |   |  | (14,686           | )
|                                             |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|(Loss) Income before income taxes            |  | (1,639              | ) |  |                         |   |  | (40,807               | ) |  | (2,958                    | ) |  | 2,324              |   |  | (43,080           | )
|Income tax (expense) benefits                |  |                    |   |  |                         |   |  | 665                   |   |  | (16                       | ) |  |                   |   |  | 649               |  
|                                             |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Net loss                                     |  | (1,639              | ) |  |                         |   |  | (40,142               | ) |  | (2,974                    | ) |  | 2,324              |   |  | (42,431           | )
|Other comprehensive loss:                    |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Foreign currency translation                 |  |                    |   |  |                         |   |  |                      |   |  | 11                        |   |  |                   |   |  | 11                |  
|                                             |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Comprehensive loss                           |  | (1,639              | ) |  |                         |   |  | (40,142               | ) |  | (2,963                    | ) |  | 2,324              |   |  | (42,420           | )
|                                             |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  



F-50



---

##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Condensed Consolidating Statements of Cash Flows for
the year ended April 30, 2008



|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|---------------------------------------------------- |  | ------------------- | - |  | ------------------------ | - |  | --------------------- | - |  | ------------------------- | - |  | ------------------ | - |  | ----------------- | -
|                                                     |  | ASATHOLDINGSLIMITED |   |  | NEW ASAT(FINANCE)LIMITED |   |  | GUARANTORSUBSIDIARIES |   |  | NON-GUARANTORSUBSIDIARIES |   |  | ELIMINATINGENTRIES |   |  | CONSOLIDATEDTOTAL |  
|                                                     |  | $000               |   |  | $000                    |   |  | $000                 |   |  | $000                     |   |  | $000              |   |  | $000             |  
|Net cash (used in) provided by operating activities  |  | (1,466              | ) |  | 1,007                    |   |  | 2,145                 |   |  | (33                       | ) |  | 1,124              |   |  | 2,777             |  
|Net cash provided by (used in) investing activities  |  | 1,255               |   |  |                         |   |  | (6,460                | ) |  | (1,842                    | ) |  | (1,255             | ) |  | (8,302            | )
|Net cash (used in) provided by financing activities  |  |                    |   |  | (1,007                   | ) |  | (906                  | ) |  | 5,943                     |   |  | 131                |   |  | 4,161             |  
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Net (decrease) increase in cash and cash equivalents |  | (211                | ) |  |                         |   |  | (5,221                | ) |  | 4,068                     |   |  |                   |   |  | (1,364            | )
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Cash and cash equivalents at beginning of year       |  | 232                 |   |  |                         |   |  | 6,508                 |   |  | 585                       |   |  |                   |   |  | 7,325             |  
|Effects of foreign exchange rates change             |  |                    |   |  |                         |   |  | (5                    | ) |  | 55                        |   |  |                   |   |  | 50                |  
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Cash and cash equivalents at end of year             |  | 21                  |   |  |                         |   |  | 1,282                 |   |  | 4,708                     |   |  |                   |   |  | 6,011             |  
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  

Condensed Consolidating Statements of Cash Flows for the year ended April 30, 2007



|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|---------------------------------------------------- |  | ------------------- | - |  | ------------------------ | - |  | --------------------- | - |  | ------------------------- | - |  | ------------------ | - |  | ----------------- | -
|                                                     |  | ASATHOLDINGSLIMITED |   |  | NEW ASAT(FINANCE)LIMITED |   |  | GUARANTORSUBSIDIARIES |   |  | NON-GUARANTORSUBSIDIARIES |   |  | ELIMINATINGENTRIES |   |  | CONSOLIDATEDTOTAL |  
|                                                     |  | $000               |   |  | $000                    |   |  | $000                 |   |  | $000                     |   |  | $000              |   |  | $000             |  
|Net cash provided by (used in) operating activities  |  | (648                | ) |  | 1,006                    |   |  | 14,318                |   |  | (4,273                    | ) |  |                   |   |  | 10,403            |  
|Net cash provided by (used in) investing activities  |  | 78                  |   |  |                         |   |  | (9,893                | ) |  | (7,675                    | ) |  | (77                | ) |  | (17,567           | )
|Net cash provided by (used in) financing activities  |  | 709                 |   |  | (1,006                   | ) |  | (6,818                | ) |  | 9,573                     |   |  | 77                 |   |  | 2,535             |  
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Net increase (decrease) in cash and cash equivalents |  | 139                 |   |  |                         |   |  | (2,393                | ) |  | (2,375                    | ) |  |                   |   |  | (4,629            | )
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Cash and cash equivalents at beginning of year       |  | 93                  |   |  |                         |   |  | 8,901                 |   |  | 2,921                     |   |  |                   |   |  | 11,915            |  
|Effects of foreign exchange rates change             |  |                    |   |  |                         |   |  |                      |   |  | 39                        |   |  |                   |   |  | 39                |  
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Cash and cash equivalents at end of year             |  | 232                 |   |  |                         |   |  | 6,508                 |   |  | 585                       |   |  |                   |   |  | 7,325             |  
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  



F-51



---

##### Table of Contents

ASAT HOLDINGS LIMITED

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amount expressed in United States dollars unless
otherwise stated)



Condensed Consolidating Statements of Cash Flows for
the year ended April 30, 2006



|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|---------------------------------------------------- |  | ------------------- | - |  | ------------------------ | - |  | --------------------- | - |  | ------------------------- | - |  | ------------------ | - |  | ----------------- | -
|                                                     |  | ASATHOLDINGSLIMITED |   |  | NEW ASAT(FINANCE)LIMITED |   |  | GUARANTORSUBSIDIARIES |   |  | NON-GUARANTORSUBSIDIARIES |   |  | ELIMINATINGENTRIES |   |  | CONSOLIDATEDTOTAL |  
|                                                     |  | $000               |   |  | $000                    |   |  | $000                 |   |  | $000                     |   |  | $000              |   |  | $000             |  
|Net cash provided by (used in) operating activities  |  | 383                 |   |  | 1,007                    |   |  | (6,224                | ) |  | (2,226                    | ) |  |                   |   |  | (7,060            | )
|Net cash (used in) provided by investing activities  |  | (15,550             | ) |  |                         |   |  | (23,220               | ) |  | (184                      | ) |  | 15,550             |   |  | (23,404           | )
|Net cash provided by (used in) financing activities  |  | 15,084              |   |  | (1,007                   | ) |  | 10,680                |   |  | 444                       |   |  | (15,550            | ) |  | 9,651             |  
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Net (decrease) increase in cash and cash equivalents |  | (83                 | ) |  |                         |   |  | (18,764               | ) |  | (1,966                    | ) |  |                   |   |  | (20,813           | )
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Cash and cash equivalents at beginning of year       |  | 176                 |   |  |                         |   |  | 27,665                |   |  | 4,876                     |   |  |                   |   |  | 32,717            |  
|Effects of foreign exchange rates change             |  |                    |   |  |                         |   |  |                      |   |  | 11                        |   |  |                   |   |  | 11                |  
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  
|Cash and cash equivalents at end of year             |  | 93                  |   |  |                         |   |  | 8,901                 |   |  | 2,921                     |   |  |                   |   |  | 11,915            |  
|                                                     |  |                     |   |  |                          |   |  |                       |   |  |                           |   |  |                    |   |  |                   |  



F-52