##### 



WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(COMPANY NO.:501396U)
(Incorporated in Malaysia) FINANCIAL STATEMENTS
DECEMBER 31, 2003
(In Ringgit Malaysia)




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Company No.: 501396 U WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(Incorporated in Malaysia) FINANCIAL STATEMENTS
DECEMBER 31, 2003 CONTENTS PAGE(S)Directors report
    
    
    1-4Report of the auditors
    
    
    5Income statement
    
    
    6Balance sheet
    
    
    7-8Statement of changes in equity
    
    
    9Cash flow statement
    
    
    10-11Notes to the financial statements
    
    
    12-24Statement by directors
    
    
    25Declaration by the director primarily responsible for the financial
management of the Company
    
    
    25




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##### 



Company No.: 501396 U WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(Incorporated in Malaysia) DIRECTORS REPORT The directors of WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD. have pleasure in
submitting their report and the audited financial statements of the Company
for the financial year ended December 31, 2003. PRINCIPAL ACTIVITY The Company is principally involved in manufacturing colour monitors. There
has been no significant change in the nature of the activity of the Company
during the financial year. RESULTS OF OPERATIONS RMNet profit after tax for the year
    
    
    1,622,450
 In the opinion of the directors, the results of operations of the Company
during the financial year have not been substantially affected by any item,
transaction or event of a material and unusual nature. DIVIDENDS No dividend has been paid or declared by the Company since the end of the
previous financial year. The directors also do not recommend any dividend
payment in respect of the current financial year. RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the
financial year other than those disclosed in the financial statements. ISSUE OF SHARES AND DEBENTURES The Company has not issued any new shares or debentures during the financial
year. 1




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##### 



Company No.: 501396 U SHARE OPTIONS No options have been granted by the Company to any parties during the
financial year to take up unissued shares of the Company. No shares have been issued during the financial year by virtue of the exercise
of any option to take up unissued shares of the Company. As of the end of the
financial year, there were no unissued shares of the Company under options. OTHER FINANCIAL INFORMATION Before the income statement and balance sheet of the Company were made out,
the directors took reasonable steps:  (a)
    
    to ascertain that proper action had been taken in relation to the writing
off of bad debts and
the making of allowance for doubtful debts, and have satisfied themselves
that there are no
known bad debts to be written off and no allowance for doubtful debts is
required; and(b)
    
    to ensure that any current assets which were unlikely to realise their
book values in the
ordinary course of business have been written down to their estimated
realisable values. At the date of this report, the directors are not aware of any circumstances:  (a)
    
    which would require the writing off of bad debts or the setting up of
allowance for doubtful
debts in the financial statements of the Company; or(b)
    
    which would render the values attributed to current assets in the
financial statements of the
Company misleading; or(c)
    
    which have arisen which render adherence to the existing method of
valuation of assets or
liabilities of the Company misleading or inappropriate; or(d)
    
    not otherwise dealt with in this report or financial statements which
would render any amount
stated in the financial statements of the Company misleading. At the date of this report, there does not exist:  (a)
    
    any charge on the assets of the Company which has arisen since the end of
the financial year
and secures the liability of any other person; or(b)
    
    any contingent liability of the Company which has arisen since the end of
the financial year. 2




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Company No.: 501396 U No contingent or other liability has become enforceable or is likely to become
enforceable within the period of twelve months after the end of the financial
year which, in the opinion of the directors, will or may substantially affect
the ability of the Company to meet its obligations as and when they fall due. In the opinion of the directors, no item, transaction or event of a material
and unusual nature has arisen in the interval between the end of the financial
year and the date of this report which is likely to affect substantially the
results of operations of the Company for the succeeding financial year. DIRECTORS The following directors served on the Board of the Company since the date of the last report: Song, Kow-Wen
Hsu, Che-Chen
Liou Jenq Lin
Anthony Spier
Larry S. Mahl
Cheruvallimalayil Daniel Alexander DIRECTORS INTEREST The shareholdings in the Company of those who were directors at the end of the
financial year, as recorded in the Register of Directors Shareholdings kept
by the Company under Section 134 of the Companies Act, 1965, are as follows: No. of ordinary shares of RM1 eachBalance at
    
    
    
    
    
    
    
    
    
    Balance atShares in the Company
    
    1.1.2003
    
    Bought
    
    Sold
    
    31.12.2003Indirect interest:Liou Jenq Lin
    
    
    1,254,000
    
    
    
    
    
    
    
    
    
    
    
    1,254,000
 DIRECTORS BENEFITS Since the end of the previous financial year, none of the directors of the
Company has received or become entitled to receive any benefit by reason of a
contract made by the Company or a related corporation with the director or with
a firm of which he is a member, or with a company in which he has a substantial
financial interest. During and at the end of the financial year, no arrangement subsisted to which
the Company was a party whereby directors of the Company might acquire
benefits by means of the acquisition of shares in, or debentures of, the
Company or any other body corporate. 3




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Company No.: 501396 U AUDITORS The auditors, Messrs. Deloitte KassimChan, have indicated their willingness to
continue in office. Signed on behalf of the Board
in accordance with a resolution of the Directors, -s- SONG, KOW-WENSONG, KOW-WEN
 -s- HSU, CHE-CHENHSU, CHE-CHEN
 Penang,
25 FEB 2004 4




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Company No.: 501396 U (DELOITTE KASSIMCHAN LOGO) Deloitte KassimChan(AF 0080)
Chartered Accountants
4th Floor, Wisma Wang
251-A, Jalan Burma
10350 Penang
Malaysia Tel : +60(4)2288255
Fax: +60(4)2288355
penang@deloitte.com.my REPORT OF THE AUDITORS TO THE MEMBERS OF WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(Incorporated in Malaysia) We have audited the accompanying balance sheet as of December 31, 2003, and the related
statements of income, changes in equity and cash flows, for the year then ended. These financial
statements are the responsibility of the Companys directors. Our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in
Malaysia. These standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by the directors, as well as evaluating the
overall financial statements presentation. We believe that our audit provides
a reasonable basis for our opinion. In our opinion:  (a)
    
    the financial statements are properly drawn up in accordance with the
provisions of the
Companies Act, 1965 and the applicable approved accounting standards in
Malaysia so as to
give a true and fair view of:  (i)
    
    the state of affairs of the Company as of December 31,
2003 and of its results and cash flows for the year ended on that
date; and(ii)
    
    the matters required by Section 169 of the Act to be
dealt with in the financial statements; and  (b)
    
    the accounting and other records and the registers required by the Act to
be kept by the
Company have been properly kept in accordance with the provisions of the
Act. -s- DELOITTE KASSIMCHANDELOITTE KASSIMCHANAF 0080Chartered Accountants-s- TAN BOON HOETAN BOON HOE1836/07/05(J)PartnerFebruary 25, 2004
 (DELOITTE TOUCHE TOHMATSU LOGO) 5




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Company No.: 501396 U WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(Incorporated in Malaysia) INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2003 Note
    
    2003
    
    2002RM
    
    RMRevenue
    
    
    
    
    
    
    48,031,832
    
    
    
    48,124,322Cost of sales
    
    
    
    
    
    
    (44,433,779
    )
    
    
    (44,908,383
    )Gross profit
    
    
    
    
    
    
    3,598,053
    
    
    
    3,215,939Other operating income
    
    
    
    
    
    
    91,896
    
    
    
    135,374Distribution costs
    
    
    
    
    
    
    (174,490
    )
    
    
    (74,916
    )Administrative expenses
    
    
    
    
    
    
    (1,483,527
    )
    
    
    (1,202,414
    )Other operating expenses
    
    
    
    
    
    
    (22,326
    )
    
    
    (5,482
    )Profit from operations
    
    
    
    
    
    
    2,009,606
    
    
    
    2,068,501Finance costs
    
    
    
    
    
    
    (257,102
    )
    
    
    (156,734
    )Profit before tax
    
    
    4
    
    
    
    1,752,504
    
    
    
    1,911,767Income tax expense
    
    
    5
    
    
    
    (130,054
    )
    
    
    (83,000
    )Net profit for the year
    
    
    
    
    
    
    1,622,450
    
    
    
    1,828,767
 The accompanying notes form an integral part of the financial statements. 6




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Company No.: 501396 U WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(Incorporated in Malaysia) BALANCE SHEET
AS OF DECEMBER 31,2003 Note
    
    2003
    
    2002RM
    
    RMPROPERTY, PLANT AND EQUIPMENT
    
    
    6
    
    
    
    1,495,697
    
    
    
    1,504,140DEFERRED TAX ASSETS
    
    
    7
    
    
    
    117,000
    
    
    
    85,000CURRENT ASSETSInventories
    
    
    8
    
    
    
    5,600,337
    
    
    
    7,132,136Trade receivable
    
    
    9
    
    
    
    16,681,855
    
    
    
    17,668,691Other receivables and prepaid expenses
    
    
    10
    
    
    
    54,417
    
    
    
    70,275Cash and bank balances
    
    
    
    
    
    
    1,497,499
    
    
    
    6,210,056Total Current Assets
    
    
    
    
    
    
    23,834,108
    
    
    
    31,081,158CURRENT LIABILITIESTrade payables
    
    
    11
    
    
    
    11,264,818
    
    
    
    18,248,274Other payables and accrued expenses
    
    
    12
    
    
    
    463,744
    
    
    
    853,882Hire-purchase payable
    
    
    13
    
    
    
    10,925
    
    
    
    9,510Bank borrowings
    
    
    14
    
    
    
    7,120,000
    
    
    
    8,731,885Provision for tooling costs
    
    
    15
    
    
    
    394,106
    
    
    
    194,407Tax liability
    
    
    
    
    
    
    39,500
    
    
    
    93,000Total Current Liabilities
    
    
    
    
    
    
    19,293,093
    
    
    
    28,130,958NET CURRENT ASSETS
    
    
    
    
    
    
    4,541,015
    
    
    
    2,950,2006,153,712
    
    
    
    4,539,340
 (FORWARD) 7




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##### 



Company No.: 501396 U WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(Incorporated in Malaysia) BALANCE SHEET
AS OF DECEMBER 31, 2003 Note
    
    2003
    
    2002RM
    
    RMSHARE CAPITAL
    
    
    16
    
    
    
    2,508,000
    
    
    
    2,508,000RETAINED PROFIT
    
    
    17
    
    
    
    3,638,780
    
    
    
    2,016,330SHAREHOLDERS EQUITY
    
    
    
    
    
    
    6,146,780
    
    
    
    4,524,330HIRE-PURCHASE PAYABLE
    
    
    13
    
    
    
    6,932
    
    
    
    15,0106,153,712
    
    
    
    4,539,340
 The accompanying notes form an integral part of the financial statements. 8




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Company No.: 501396 U WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(Incorporated in Malaysia) STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED DECEMBER 31, 2003 Share Capital
    
    Retained Profit
    
    TotalRM
    
    RM
    
    RMBalance as of January 1, 2002
    
    
    2,508,000
    
    
    
    187,563
    
    
    
    2,695,563Net profit for the year
    
    
    
    
    
    
    1,828,767
    
    
    
    1,828,767Balance as of December 31, 2002
    
    
    2,508,000
    
    
    
    2,016,330
    
    
    
    4,524,330Net profit for the year
    
    
    
    
    
    
    1,622,450
    
    
    
    1,622,450Balance as of December 31,2003
    
    
    2,508,000
    
    
    
    3,638,780
    
    
    
    6,146,780
 The accompanying notes form an integral part of the financial statements. 9




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Company No.: 501396 U WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(Incorporated in Malaysia) CASH FLOW STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2003 2003
    
    2002RM
    
    RMCASH FLOWS FROM OPERATING ACTIVITIESProfit before tax
    
    
    1,752,504
    
    
    
    1,911,767Adjustments for:Depreciation of property, plant and equipment
    
    
    265,337
    
    
    
    234,513Interest expenses
    
    
    257,102
    
    
    
    156,734Provision for tooling costs
    
    
    222,999
    
    
    
    196,059Allowance for slow moving inventories
    
    
    100,000
    
    
    
    223,674Unrealised loss on foreign exchange
    
    
    4,836
    
    
    
    552Interest income
    
    
    (5,091
    )
    
    
    (5,282
    )Operating profit before working capital changes
    
    
    2,597,687
    
    
    
    2,718,017(Increase)/ Decrease in:Inventories
    
    
    1,431,799
    
    
    
    (2,504,827
    )Trade receivable
    
    
    985,419
    
    
    
    (7,597,544
    )Other receivables and prepaid expenses
    
    
    15,698
    
    
    
    167,307Increase/ (Decrease) in:Trade payables
    
    
    (6,985,009
    )
    
    
    7,663,573Other payables and accrued expenses
    
    
    (392,004
    )
    
    
    (452,047
    )Cash used in operations
    
    
    (2,346,410
    )
    
    
    (5,521
    )Income tax paid
    
    
    (215,554
    )
    
    
    (126,000
    )Tooling costs paid
    
    
    (23,300
    )
    
    
    (1,652
    )Net cash used in operating activities
    
    
    (2,585,264
    )
    
    
    (133,173
    )CASH FLOWS FROM INVESTING ACTIVITIESInterest received
    
    
    5,091
    
    
    
    5,282Purchase of property, plant and equipment
    
    
    (256,894
    )
    
    
    (141,472
    )Net cash used in investing activities
    
    
    (251,803
    )
    
    
    (136,190
    )
 (FORWARD) 10




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Company No.: 501396 U WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(Incorporated in Malaysia) CASH FLOW STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2003 Note
    
    2003
    
    2002RM
    
    RMCASH FLOWS FROM FINANCING ACTIVITIES(Decrease)/ Increase in bank borrowings
    
    
    
    
    
    
    (1,518,000
    )
    
    
    6,449,000Interest paid
    
    
    
    
    
    
    (256,942
    )
    
    
    (184,831
    )Repayment of hire-purchase payable
    
    
    
    
    
    
    (6,663
    )
    
    
    (9,508
    )Fixed deposit released as security value
    
    
    
    
    
    
    
    
    
    
    100,000Net cash (used in)/from financing activities
    
    
    
    
    
    
    (1,781,605
    )
    
    
    6,354,661NET
(DECREASE)/ INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    
    
    
    
    (4,618,672
    )
    
    
    6,085,298CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
    
    
    
    
    
    
    6,116,171
    
    
    
    30,873CASH AND CASH EQUIVALENTS AT
END OF YEAR
    
    
    19
    
    
    
    1,497,499
    
    
    
    6,116,171
 The accompanying notes form an integral part of the financial statements. 11




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Company No.: 501396 U WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.
(Incorporated in Malaysia) NOTES TO THE FINANCIAL STATEMENTS
DECEMBER 31, 2003  1.
    
    PRINCIPAL ACTIVITY  The Company is principally involved in manufacturing colour monitors.
There has been no significant change in the nature of the activity of
the Company during the financial year.  2.
    
    BASIS OF PREPARATION OF FINANCIAL STATEMENTS  The financial statements of the Company have been prepared in accordance
with the provisions of the Companies Act, 1965 and the applicable
approved accounting standards of the Malaysian Accounting Standards
Board.  The financial statements of the Company have been approved by the Board
of Directors for issuance on February 25, 2004.  3.
    
    SIGNIFICANT ACCOUNTING POLICIES  Basis of Accounting  The financial statements of the Company have been prepared under the
historical cost convention unless stated otherwise in the accounting
policies mentioned below.  Revenue  Revenue represents gross invoiced value of sales less returns.  Sales of goods are recognised upon delivery of products and when the
risks and rewards of ownership have passed.  Other operating income are recognised on an
accrual basis.Foreign Currency Conversion  Transactions in foreign currencies are converted into Ringgit Malaysia
at the exchange rates prevailing on the transaction dates and, where
settlement of liabilities and receivables have not yet taken place at
the end of the financial year, at the approximate exchange rates
prevailing on that date. Gains or losses arising from foreign currency
conversions are taken up in the income statement.  The principal closing rate used in translation of foreign currency
amounts is USD1: RM3.8005 (2002: USD1: RM3.8000).  Income Tax  The charge for current tax is based on the results for the year as
adjusted for items which are non-assessable or disallowed. It is
calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date. 12




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Company No.: 501396 U  Deferred tax is accounted for using the balance sheet liability method
in respect of temporary differences arising from differences between the
carrying amount of assets and liabilities in the financial statements
and the corresponding tax basis used in the computation of taxable
profit. Deferred tax liabilities are generally recognised for all
taxable temporary differences and deferred tax assets are recognised to
the extent that it is probable that taxable profits will be available
against which deductible temporary differences can be utilised. Such
assets and liabilities are not recognised if the temporary differences
arises from the initial recognition of assets and liabilities in a
transaction which affects neither the tax profit nor the accounting
profit.  At each balance sheet date, the Company re-assesses unrecognised deferred
tax assets and the carrying amount of deferred tax assets. The Company
recognises a previously unrecognised deferred tax asset to the extent
that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered. The carrying amount of a deferred tax
asset is reviewed at each balance sheet and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to
allow the benefit of part or all of the deferred tax asset to be
utilised.  Deferred tax is calculated at the tax rate that is expected to apply to
the period when the asset is realised or the liability is settled.
Deferred tax is charged or credited in the income statement, except when
it relates to items credited or charged directly to equity, in which
case the deferred tax is also dealt with in equity.  Employee Benefit Costs  Wages, salaries, bonuses, social contributions and other employee
benefits are recognised as expenses in the year in which the associated
services are rendered by employees of the Company. As required by law,
companies in Malaysia make contributions to a defined contribution plan,
the employees provident fund. Such contributions are recognised as
expenses in the income statement as incurred.  Employee leave entitlement is recognised when it accrues to employee.
Accrual is made for the estimated liability for unconsumed leave as a
result of services rendered by the employees of the Company up to the
balance sheet date.  Property, Plant and Equipment  Property, plant and equipment are stated at cost less accumulated
depreciation.  The carrying amounts of property, plant and equipment are reviewed at
each balance sheet date to determine whether there is any indication of
impairment. An impairment loss is recognised whenever the carrying
amount of an item of property, plant and equipment exceeds its
recoverable amount. The impairment loss is charged to the income
statement unless it reverses a previous revaluation in which case it is
treated as a revaluation decrease.  Gains or losses arising from the disposal of an asset is determined as
the difference between the estimated net disposal proceeds and the
carrying amount of the asset, and is recognised in the income statement.  All property, plant and equipment are depreciated on a straight line
method to their residual values at rates based on the estimated useful
lives of the various assets. 13




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##### 



Company No.: 501396 U The annual depreciation rates are as follows:Plant and machinery
    
    
    10% - 20
    %Electrical installation
    
    
    10
    %Motor vehicle
    
    
    20
    %Renovation
    
    
    10
    %Office equipment
    
    
    20
    %Furniture and fittings
    
    
    10
    %Computer
    
    
    10% - 20
    %Factor tools and equipment
    
    
    20
    %Mould
    
    
    10
    %Test equipment
    
    
    20
    %
  Property, Plant and Equipment Under Hire-Purchase Arrangements  Property, plant and equipment acquired under hire-purchase arrangements
are capitalised in the financial statements and the corresponding
obligations treated as liabilities.  Inventories  Inventories are valued at the lower of cost and net realisable value.
Cost is determined on the first-in, first-out basis. Net realisable
value represents the estimated selling price in the ordinary course of
business less selling and distribution costs and all other estimated
costs to completion.  Cost of raw materials consists of the original purchase price plus the
cost of bringing the inventories to their present location. Cost of
work-in-progress and finished goods consists of cost of raw materials,
direct labour and an appropriate proportion of factory overheads.  Receivables  Receivables are stated at nominal value as reduced by the appropriate
allowances for estimated irrecoverable amounts. Allowance for doubtful
debts is made based on estimates of possible losses which may arise from
non-collection of certain receivable accounts.  Provisions  Provisions are made when the Company has a present legal or constructive
obligation as a result of past events, when it is probable that an
outflow of resources will be recognised to settle the obligation, and
when a reliable estimate of the amount can be made.  Cash and Cash Equivalents  Cash and cash equivalents comprise cash and bank balances, demand
deposits, bank overdrafts and highly liquid investments which are
readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. 14




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##### 



Company No.: 501396 U  Financial Instruments  Financial instruments carried on the balance sheet include cash and bank
balances, receivables, payables and borrowings. The particular
recognition methods adopted are disclosed in the individual accounting
policy statements associated with each item.  Financial instruments are classified as liabilities or equity in
accordance with the substance of the contractual arrangement. Interests,
dividends, gains and losses relating to a financial instrument classified
as liability are reported as expense or income. Distributions to holders
of financial instruments classified as equity are charged directly to
equity. Financial instruments are offset when the Company has a legally
unforeseeable right to set off the recognised amounts and intends either
to settle on a net basis, or to realise the asset and settle the
liability simultaneously.  4.
    
    PROFIT BEFORE TAX  Profit before tax is arrived at: 2003
    
    2002RM
    
    RMAfter charging:Depreciation of property, plant and equipment
    
    
    255,940
    
    
    
    234,513Interest on:Bank borrowings
    
    
    251,452
    
    
    
    153,931Hire-purchase
    
    
    5,650
    
    
    
    2,803Research and development:Depreciation of property, plant and equipment
    
    
    9,397
    
    
    
    Other expenses
    
    
    230,602
    
    
    
    Provision for tooling costs
    
    
    222,999
    
    
    
    196,059Rental of:Premises
    
    
    211,679
    
    
    
    226,176Motor vehicles
    
    
    
    
    
    
    1,810Allowance for slow moving inventories
    
    
    100,000
    
    
    
    223,674Loss on foreign exchange:Realised
    
    
    17,490
    
    
    
    4,930Unrealised
    
    
    4,836
    
    
    
    552Audit fee:Current
    
    
    14,000
    
    
    
    14,000Overprovision in prior year
    
    
    
    
    
    
    (1,000
    )And crediting:Interest income on fixed deposits
    
    
    5,091
    
    
    
    5,282
  5.
    
    INCOME TAX EXPENSE 2003
    
    2002RM
    
    RMCurrent tax:Current year
    
    
    165,500
    
    
    
    201,000Overprovision in prior year
    
    
    (3,446
    )
    
    
    Deferred tax (Note 7)Current year
    
    
    (44,000
    )
    
    
    (118,000
    )Overprovision in prior year
    
    
    12,000
    
    
    
    130,054
    
    
    
    83,000
 15




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##### 



Company No.: 501396 U  The Company has been granted pioneer status by the Ministry of
International Trade and Industry (MITI) for the manufacturing of colour
monitors. Under this incentive, 70% of the Companys statutory income
from the manufacturing of colour monitors is exempted from income tax for
a period of five years commencing from the production day (the
commencement of tax free period). The production day has been fixed as of
August 1, 2000 by MITI.  The numerical reconciliation between the income tax expense and the
accounting profit at the statutory income tax rate is as follows: 2003
    
    2002RM
    
    RMAccounting profit
    
    
    1,752,504
    
    
    
    1,911,767Tax amount at the statutory income tax rate of 28%
    
    
    490,700
    
    
    
    535,000Tax effects on non-deductible/
(non-taxable) items:Depreciation of
non-qualifying property, plant and
equipment
    
    
    3,000
    
    
    
    1,000Other non-allowable expenses
    
    
    10,100
    
    
    
    13,000Non-taxable pioneer income
    
    
    (382,300
    )
    
    
    (466,000
    )Overprovision of current tax in prior year
    
    
    (3,446
    )
    
    
    Overprovision of deferred tax assets in prior year
    
    
    12,000
    
    
    
    Income tax expense
    
    
    130,054
    
    
    
    83,000
  6.
    
    PROPERTY, PLANT AND EQUIPMENT Beginning
    
    
    
    
    
    
    
    
    
    EndCost
    
    of year
    
    Additions
    
    Disposal
    
    of yearRM
    
    RM
    
    RM
    
    RM2003:Plant and machinery
    
    
    1,340,001
    
    
    
    9,000
    
    
    
    
    
    
    
    1,349,001Electrical installation
    
    
    9,861
    
    
    
    
    
    
    
    
    
    
    
    9,861Motor vehicle
    
    
    52,882
    
    
    
    50,000
    
    
    
    
    
    
    
    102,882Renovation
    
    
    33,456
    
    
    
    
    
    
    
    
    
    
    
    33,456Office equipment
    
    
    35,106
    
    
    
    1,258
    
    
    
    
    
    
    
    36,364Furniture and fittings
    
    
    25,723
    
    
    
    1,140
    
    
    
    
    
    
    
    26,863Computer
    
    
    17,976
    
    
    
    39,382
    
    
    
    
    
    
    
    57,358Factory tools and
equipment
    
    
    46,172
    
    
    
    145,392
    
    
    
    
    
    
    
    191,564Mould
    
    
    358,800
    
    
    
    
    
    
    
    
    
    
    
    358,800Test equipment
    
    
    189,071
    
    
    
    10,722
    
    
    
    
    
    
    
    199,7932,109,048
    
    
    
    256,894
    
    
    
    
    
    
    
    2,365,9422002
    
    
    1,967,576
    
    
    
    141,472
    
    
    
    
    
    
    
    2,109,048
 16




---



##### 



Company No.: 501396 U Accumulated
    
    Beginning
    
    Charge for
    
    
    
    
    
    EndDepreciation
    
    of year
    
    the year
    
    Disposal
    
    of yearRM
    
    RM
    
    RM
    
    RM2003:Plant and machinery
    
    
    396,784
    
    
    
    135,800
    
    
    
    
    
    
    
    532,584Electrical installation
    
    
    2,037
    
    
    
    986
    
    
    
    
    
    
    
    3,023Motor vehicle
    
    
    25,559
    
    
    
    15,577
    
    
    
    
    
    
    
    41,136Renovation
    
    
    8,854
    
    
    
    3,346
    
    
    
    
    
    
    
    12,200Office equipment
    
    
    18,337
    
    
    
    7,042
    
    
    
    
    
    
    
    25,379Furniture and fittings
    
    
    5,670
    
    
    
    2,648
    
    
    
    
    
    
    
    8,318Computer
    
    
    2,547
    
    
    
    6,466
    
    
    
    
    
    
    
    9,013Factory tools and
equipment
    
    
    11,582
    
    
    
    19,070
    
    
    
    
    
    
    
    30,652Mould
    
    
    83,896
    
    
    
    35,880
    
    
    
    
    
    
    
    119,776Test equipment
    
    
    49,642
    
    
    
    38,522
    
    
    
    
    
    
    
    88,164604,908
    
    
    
    265,337
    
    
    
    
    
    
    
    870,2452002
    
    
    370,395
    
    
    
    234,513
    
    
    
    
    
    
    
    604,908
 2003
    
    2002RM
    
    RMNet Book Value:Plant and machinery
    
    
    816,417
    
    
    
    943,217Electrical installation
    
    
    6,838
    
    
    
    7,824Motor vehicle
    
    
    61,746
    
    
    
    27,323Renovation
    
    
    21,256
    
    
    
    24,602Office equipment
    
    
    10,985
    
    
    
    16,769Furniture and fittings
    
    
    18,545
    
    
    
    20,053Computer
    
    
    48,345
    
    
    
    15,429Factory tools and equipment
    
    
    160,912
    
    
    
    34,590Mould
    
    
    239,024
    
    
    
    274,904Test equipment
    
    
    111,629
    
    
    
    139,4291,495,697
    
    
    
    1,504,140
 As of December 31, 2003, a motor vehicle with a carrying value of RM16,746 (2002:
RM27,323) is acquired under hire-purchase arrangement of which instalments are still
outstanding. 17




---



##### 



Company No.: 501396 U  7.
    
    DEFERRED TAX (ASSETS)/ LIABILITIES 2003
    
    2002RM
    
    RMAt beginning of year
    
    
    (85,000
    )
    
    
    33,000Transfer (to)/ from income statement (Note 5):Current year
    
    
    (44,000
    )
    
    
    (118,000
    )Over-provision in prior year
    
    
    12,000
    
    
    
    (117,000
    )
    
    
    (85,000
    )The deferred tax assets are
in respect of the following:Temporary differences between
tax capital
allowances and book depreciation of property,
plant and equipment
    
    
    (112,000
    )
    
    
    (169,000
    )Unused tax losses
    
    
    
    
    
    
    93,000Other timing differences
    
    
    229,000
    
    
    
    161,000117,000
    
    
    
    85,000
  8.
    
    INVENTORIES 2003
    
    2002RM
    
    RMAt cost:Raw materials
    
    
    4,042,165
    
    
    
    5,881,764Work-in-progress
    
    
    57,209
    
    
    
    1,225,712Finished goods
    
    
    1,500,963
    
    
    
    24,6605,600,337
    
    
    
    7,132,136At net realisable value:Raw
materials - net of allowance for
slow moving inventories of RM323,674;
(2002: RM223,674)
    
    
    
    
    
    
    5,600,337
    
    
    
    7,132,136
  9.
    
    TRADE RECEIVABLE Trade receivable denominated in United States Dollar comprises amount
receivable for the sales of goods to a shareholder of the Company. The
credit period granted on sale of goods is 45 days (2002: 45 days). 18




---



##### 



Company No.: 501396 U  10.
    
    OTHER RECEIVABLES AND PREPAID EXPENSES 2003
    
    2002RM
    
    RMRefundable deposits
    
    
    1,215
    
    
    
    12,415Prepaid expenses
    
    
    53,202
    
    
    
    57,86054,417
    
    
    
    70,275
  11.
    
    TRADE PAYABLES  Trade payables comprise amount outstanding for trade purchases. The
average credit period granted to the Company ranges from 30 to 90 days
(2002: 30 to 90 days).  Included in trade payables is an amount of RM11,607,339 (2002: RM
17,978,483) owing to shareholders of the Company.  The currency exposure profile of trade payables is as follows: 2003
    
    2002RM
    
    RMRinggit Malaysia
    
    
    4,378,388
    
    
    
    6,843,557United States Dollar
    
    
    6,886,430
    
    
    
    11,404,71711,264,818
    
    
    
    18,248,274
  12.
    
    OTHER PAYABLES AND ACCRUED EXPENSES 2003
    
    2002RM
    
    RMOther payables
    
    
    340,486
    
    
    
    691,891Accrued expenses
    
    
    123,258
    
    
    
    161,991463,744
    
    
    
    853,882
  Other payables comprise amounts outstanding for ongoing costs. 19




---



##### 



Company No.: 501396 U  The currency exposure profile of other payables and accrued expenses is as follows: 2003
    
    2002RM
    
    RMOther payables:Ringgit Malaysia
    
    
    300,875
    
    
    
    235,075United States Dollar
    
    
    39,611
    
    
    
    456,816340,486
    
    
    
    691,891Accrued expenses:Ringgit Malaysia
    
    
    123,258
    
    
    
    161,991463,744
    
    
    
    853,882
  13.
    
    HIRE-PURCHASE PAYABLE 2003
    
    2002RM
    
    RMTotal outstanding
    
    
    19,446
    
    
    
    31,759Less: Interest-in-suspense outstanding
    
    
    (1,589
    )
    
    
    (7,239
    )Principal outstanding
    
    
    17,857
    
    
    
    24,520Less: Current portion
    
    
    (10,925
    )
    
    
    (9,510
    )Non-current portion
    
    
    6,932
    
    
    
    15,010
  The non-current portion is repayable as follows: 2003
    
    2002RM
    
    RMLater than 1 year and not later than 2 years
    
    
    6,932
    
    
    
    9,510Later than 2 years and not later than 5years
    
    
    
    
    
    
    5,5006,932
    
    
    
    15,010
  It is the Companys policy to acquire certain of its property, plant and
equipment under hire-purchase arrangements. The term for this hire-purchase payable is five
years and the
effective interest rate is 10.71% per annum. Interest rate is fixed at the
inception of the hire-purchase arrangements.The hire-purchase payable is secured by the financial institutions charge
over the asset under hire-purchase. 20




---



##### 



Company No.: 501396 U  14.
    
    BANK BORROWINGS 2003
    
    2002RM
    
    RMUnsecured:Bankers acceptances
    
    
    7,120,000
    
    
    
    8,638,000Bank overdraft
    
    
    
    
    
    
    93,8857,120,000
    
    
    
    8,731,885
  The bank borrowings obtained from local licensed banks bear interests at
rates ranging from 1.00% to 2.00% (2002: 1.00% to 1.25%) per annum above
the lending banks base lending rates and cost of fund. The effective
interest rates as of December 31, 2003 range from 3.20% to 7.5% (2002:
3.03% to 7.65%) per annum. These facilities are covered by a corporate
guarantee given by the holding company of a shareholder of the Company.15.
    
    PROVISION FOR TOOLING COSTS 2003
    
    2002RM
    
    RMAt beginning of year
    
    
    194,407
    
    
    
    Additions
    
    
    222,999
    
    
    
    196,059Payment made
    
    
    (23,300
    )
    
    
    (1,652
    )At end of year
    
    
    394,106
    
    
    
    194,407
  16.
    
    SHARE CAPITAL 2003
    
    2002RM
    
    RMAuthorised:10,000,000 shares of RM1 each
    
    
    10,000,000
    
    
    
    10,000,000Issued and fully paid:2,508,000 ordinary shares of RM1 each
    
    
    2,508,000
    
    
    
    2,508,000
  17.
    
    RETAINED PROFIT  Based on the estimated tax credits and tax exempt income available and
the prevailing tax rate applicable to dividends, the tax credit
provision is sufficient to frank only about RM2,662,000 of the Companys
retained profit. The Company will be liable to incur additional income
tax of about RM273,000 if the balance of about RM977,000 in the retained
profit is to be distributed by way of cash dividend. The tax credits and
tax exempt income are subject to agreement by the tax authorities. 21




---



##### 



Company No.: 501396 U  18.
    
    LEASE COMMITMENTS  As of the end of the financial year, lease commitments pertaining to the
Company in respect of rental of premises are as follows: 2003
    
    2002RM
    
    RMNot later than 1 year
    
    
    198,091
    
    
    
    198,691
  19.
    
    CASH AND CASH EQUIVALENTS  Cash and cash equivalents comprise the following: 2003
    
    2002RM
    
    RMCash and bank balances
    
    
    1,497,499
    
    
    
    6,210,056Bank overdraft
    
    
    
    
    
    
    (93,885
    )1,497,499
    
    
    
    6,116,171
  The currency exposure profile of cash and bank balances is as follows: 2003
    
    2002RM
    
    RMRinggit Malaysia
    
    
    1,221,977
    
    
    
    121,202United States Dollar
    
    
    275,522
    
    
    
    5,994,9691,497,499
    
    
    
    6,116,171
  20.
    
    FINANCIAL INSTRUMENTS  a.
    
    Financial Risk Management Objectives and PoliciesThe operations of the Company is subject to a variety of financial
risks, including foreign currency risk, interest rate risk, credit
risk, liquidity risk and cash flow risk. The overall financial
risk management policy of the Company is to minimise the effect of
such risks on its financial performance.Various risk management policies are made and approved by the
Board for observation in the day-to-day operations for the
controlling and management of the risks associated with financial
instruments. 22




---



##### 



Company No.: 501396 U  i.
    
    Foreign currency riskThe Company has exposure to foreign exchange risk as a
result of transactions, receivables and payables in foreign
currencies arising from normal operating activities. The
Company does not speculate in foreign currencies.ii.
    
    Interest rate riskThe Companys exposure to changes in interest rate risk
relates primarily to financing through hire-purchase and
bank borrowings.iii.
    
    Credit riskThe Company is exposed to credit risk mainly from trade
receivable. All sales are made to a shareholder of the
Company.iv.
    
    Liquidity riskThe Company practices prudent liquidity risk management to
minimise the mismatch of financial assets and liabilities
and to maintain sufficient credit facilities for contingent
funding requirement of working capital.v.
    
    Cash flow riskThe Company reviews its cash flow position regularly to
manage its exposure to fluctuations in future cash flows
associated with its monetary financial instruments.  b.
    
    Financial AssetsThe Companys principal financial assets are cash and bank
balances, and trade and other receivables.c.
    
    Financial Liabilities and Equity InstrumentsSignificant financial liabilities include trade and other
payables, hire-purchase payable and bank borrowings.Equity instruments are recorded at the proceeds received.d.
    
    Credit RiskThere is a significant concentration of credit risk as all sales
are made to a shareholder of the Company. The maximum exposure to
credit risk is represented by the carrying amount of each
financial asset in the balance sheet. 23




---



##### 



Company No.: 501396 U  e.
    
    Fair Values  i.
    
    Financial liability Carrying
    
    FairAmount
    
    valueRM
    
    RMHire-purchase payable
    
    
    17,857
    
    
    
    17,857
  The fair values of the above financial liability is
estimated using discounted cash flow analysis based on
current borrowing rates for similar type of borrowing
arrangement.ii.
    
    Cash and cash equivalents, trade and
other receivables, trade and other
payables and bank borrowingsThe carrying amounts approximate fair values because of the
short maturity of these instruments.  21.
    
    GENERAL INFORMATION 2003
    
    2002RM
    
    RMStaff costs:Contributions to employees provident fund
    
    
    44,586
    
    
    
    32,721Other staff costs
    
    
    852,682
    
    
    
    777,994897,268
    
    
    
    810,715Number of directors and employees at end of year:Directors
    
    
    6
    
    
    
    6Employees
    
    
    41
    
    
    
    32
  Staff costs include salaries, bonuses, contributions to employees
provident fund and all other staff related expenses.  The registered office of the Company is at 3rd Floor, Wisma Wang, 251-A
Jalan Burma, 10350 Penang, Malaysia. The principal place of business of
the Company is at Lot 316 & 317, Jalan PKNK 3/2, Kawasan Perindustrian
Sungai Petani, 08000 Sungai Petani, Kedah, Malaysia. 24




---



##### 



Company No.: 501396 U WELLS EASTERN ASIA DISPLAYS
(M) SDN. BHD.
(Incorporated in Malaysia) STATEMENT BY DIRECTORS The
directors of WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD. state that, in their
opinion, the accompanying balance sheet, and the related statements of income,
changes in equity and cash flows, are drawn up in accordance with the
provisions of the Companies Act, 1965 and the applicable approved accounting
standards in Malaysia, so as to give a true and fair view of the state of
affairs of the Company as of December 31, 2003 and of its results and cash
flows for the year ended on that date. Signed in accordance with
a resolution of the Director, -s- SONG, KOW-WEN
    
    -s- HSU, CHE-CHENSONG, KOW-WEN
    
    HSU, CHE-CHEN
 Penang,
25 FEB 2004 DECLARATION BY THE DIRECTOR PRIMARILY RESPONSIBLE FOR
THE FINANCIAL MANAGEMENT OF THE COMPANY I, SONG, KOW-WEN, the director primarily responsible for the financial
management of WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD., do solemnly and
sincerely decline that the accompanying balance sheet, and the related
statements of income, changes in equity and cash flows, are,in my opinion,
correct, and I make this solemn declaration conscientiously believing the same
to be true, and by virtue of the provisions of the Statutory Declarations Act,
1960. Subscribed and solemnly declared by
    
    -s- SONG, KOW-WENthe above named SONG, KOW-WEN atGEORGETOWN in the State of PENANG
    
    Before me,on 25 FEB 2004
 [CLARIFY COPY]COMMISSIONER FOR OATHS
 LODGED BY
    
    :
    
    PFA CORPORATE SERVICES SDN. BHD. (148766 X)ADDRESS
    
    :
    
    3RD FLOOR, WISMA WANG251-A JALAN BURMA10350 PENANGTEL NO.
    
    :
    
    04-2288155
 25