Document:

exv10w14

 

EXHIBIT 10.14

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Financial Report

for the financial year ended 31 December 2004

Contents

	 	 	 
	 	 	Page
	 
	 	 
	Report of Independent Registered Accounting Firm
	 	1
	 
	 	 
	Balance Sheet
	 	2
	 
	 	 
	Income Statement
	 	3
	 
	 	 
	Statement of Changes in Equity
	 	4
	 
	 	 
	Cash Flow Statement
	 	5
	 
	 	 
	Notes to the Financial Statements
	 	6-17
	 
	 	 
	Statement by Directors
	 	18

 

 

Report Of Independent Registered Accounting Firm To The Members Of

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia) 

Company No: 501396-U

We have audited the financial statements set out on pages 2 to 17. The preparation of the
financial statements is the responsibility of the Company’s directors. Our responsibility is to
express an opinion on the financial statements based on our audit.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight
Board in the United States of America. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free of material
misstatement. Our audit included examining, on a test basis, evidence relevant to the amounts and
disclosures in the financial statements. Our audit also included assessing the accounting
principles used and significant estimates made by the directors, as well as evaluating the overall
adequacy of the presentation of information in the financial statements. We believe our audit
provides a reasonable basis for our opinion.

In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as at 31 December 2004 and its results and cash flows for the financial
year ended on that date in conformity with accounting principles generally accepted in the United
States of America.

The financial statements for the preceding financial year were audited by another firm of auditors
whose report dated 25 February 2004 expressed an unqualified opinion on those statements.

			
	/s/ Horwath
	 	/s/ Eddy Chan Wai Hun
	Firm No: AF 1018
	 	Approval No: 2182/10/05 (J)
	Chartered Accountants

	 	Partner
	Penang	 	 
	
	 	 
	18 March 2005
	 	 

Page 1

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia) 

Company No: 501396-U

Balance Sheet As At 31 December 2004

 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	2004	 	 	 	2003	 	 
	 	 	Note	 	 	USD	 	 	 	USD	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	NON-CURRENT ASSETS
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Property, plant and equipment
	 	4	 	 	 	333,602	 	 	 	 	393,605	 	 
	Deferred tax assets
	 	5	 	 	 	0	 	 	 	 	30,789	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	CURRENT ASSETS
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Inventories
	 	6	 	 	 	2,011,104	 	 	 	 	1,473,773	 	 
	Trade receivables
	 	7	 	 	 	7,318,500	 	 	 	 	4,389,962	 	 
	Other receivables, deposits and prepayments
	 	 	 	 	 	21,339	 	 	 	 	14,320	 	 
	Cash and bank balances
	 	8	 	 	 	268,227	 	 	 	 	394,079	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	9,619,170	 	 	 	 	6,272,134	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	CURRENT LIABILITIES
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Trade payables
	 	9	 	 	 	3,793,509	 	 	 	 	2,964,426	 	 
	Other payables and accruals
	 	10	 	 	 	362,721	 	 	 	 	122,038	 	 
	Hire purchase payable
	 	11	 	 	 	1,824	 	 	 	 	2,875	 	 
	Bank borrowings — unsecured
	 	12	 	 	 	3,404,769	 	 	 	 	1,873,684	 	 
	Provision for tooling costs
	 	13	 	 	 	44,458	 	 	 	 	103,712	 	 
	Current tax liabilities
	 	 	 	 	 	11,596	 	 	 	 	10,395	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	7,618,877	 	 	 	 	5,077,130	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	NET CURRENT ASSETS
	 	 	 	 	 	2,000,293	 	 	 	 	1,195,004	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	2,333,895	 	 	 	 	1,619,398	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	FINANCED BY:-
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Share capital
	 	14	 	 	 	1,315,789	 	 	 	 	660,000	 	 
	Retained profits
	 	 	 	 	 	1,018,106	 	 	 	 	957,574	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	SHAREHOLDERS’ EQUITY
	 	 	 	 	 	2,333,895	 	 	 	 	1,617,574	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	NON-CURRENT LIABILITY
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Hire purchase payable
	 	11	 	 	 	0	 	 	 	 	1,824	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	2,333,895	 	 	 	 	1,619,398	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 

			
	

	 	 
	 
	The annexed notes form an integral part of these financial statements.	Page 2

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Income Statement

For The Financial Year Ended 31 December 2004

 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	2004	 	 	2003	 
	 	 	Note	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 	 	 
	REVENUE
	 	15	 	 	19,822,673	 	 	 	12,639,956	 
	 
	 	 	 	 	 	 	 	 	 	 
	COST OF SALES
	 	 	 	 	(18,347,195	)	 	 	(11,693,100	)
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	GROSS PROFIT
	 	 	 	 	1,475,478	 	 	 	946,856	 
	 
	 	 	 	 	 	 	 	 	 	 
	OTHER OPERATING INCOME
	 	 	 	 	24,392	 	 	 	24,183	 
	 
	 	 	 	 	 	 	 	 	 	 
	ADMINISTRATIVE AND GENERAL EXPENSES
	 	 	 	 	(548,255	)	 	 	(396,277	)
	 
	 	 	 	 	 	 	 	 	 	 
	SELLING AND DISTRIBUTION EXPENSES
	 	 	 	 	(48,946	)	 	 	(45,918	)
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROFIT FROM OPERATIONS
	 	 	 	 	902,669	 	 	 	528,844	 
	 
	 	 	 	 	 	 	 	 	 	 
	FINANCE COSTS
	 	 	 	 	(95,511	)	 	 	(67,658	)
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	PROFIT BEFORE TAX
	 	16	 	 	807,158	 	 	 	461,186	 
	 
	 	 	 	 	 	 	 	 	 	 
	TAX EXPENSE
	 	17	 	 	(90,837	)	 	 	(34,225	)
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	NET PROFIT FOR THE YEAR
	 	 	 	 	716,321	 	 	 	426,961	 
	 
	 	 	 	 	 	 	 	 

			
	

	 	 
	 
	The annexed notes form an integral part of these financial statements.
	 	Page 3

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Statement Of Changes In Equity

For The Financial Year Ended 31 December 2004

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Share	 	 	Retained	 	 	 	 
	 	 	capital	 	 	profits	 	 	Total	 
	 	 	USD	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Balance at 1 January 2003
	 	 	660,000	 	 	 	530,613	 	 	 	1,190,613	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Net profit for the year
	 	 	0	 	 	 	426,961	 	 	 	426,961	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	Balance at 31 December 2003
	 	 	660,000	 	 	 	957,574	 	 	 	1,617,574	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Issue of bonus shares
	 	 	655,789	 	 	 	(655,789	)	 	 	0	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Net profit for the year
	 	 	0	 	 	 	716,321	 	 	 	716,321	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	Balance at 31 December 2004
	 	 	1,315,789	 	 	 	1,018,106	 	 	 	2,333,895	 
	 
	 	 	 	 	 	 	 	 	 

			
	

	 	 
	 
	The annexed notes form an integral part of these financial statements
	Page 4

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Cash Flow Statement

For The Financial Year Ended 31 December 2004

 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	2004	 	 	 	2003	 	 
	 	 	 	USD	 	 	 	USD	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	CASH FLOWS FROM OPERATING ACTIVITIES
	 	 	 	 	 	 	 	 	 	 	 
	Profit before tax
	 	 	 	807,158	 	 	 	 	461,186	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Adjustments for:-
	 	 	 	 	 	 	 	 	 	 	 
	Allowance for slow moving inventories
	 	 	 	0	 	 	 	 	26,316	 	 
	Depreciation
	 	 	 	78,955	 	 	 	 	69,825	 	 
	Interest expense
	 	 	 	95,511	 	 	 	 	67,658	 	 
	Provision for tooling costs
	 	 	 	54,680	 	 	 	 	58,684	 	 
	Interest income
	 	 	 	(3,044	)	 	 	 	(1,340	)	 
	 
	 	 	 	 	 	 	 	 	 
	Operating profit before working capital changes
	 	 	 	1,033,260	 	 	 	 	682,329	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	(Increase)/Decrease in inventories
	 	 	 	(537,331	)	 	 	 	376,790	 	 
	(Increase)/Decrease in receivables
	 	 	 	(2,935,557	)	 	 	 	263,824	 	 
	Increase/(Decrease) in payables
	 	 	 	1,069,766	 	 	 	 	(1,940,419	)	 
	 
	 	 	 	 	 	 	 	 	 
	Cash absorbed by operations
	 	 	 	(1,369,862	)	 	 	 	(617,476	)	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Income tax paid
	 	 	 	(58,847	)	 	 	 	(56,725	)	 
	Tooling costs paid
	 	 	 	(113,934	)	 	 	 	(6,132	)	 
	 
	 	 	 	 	 	 	 	 	 
	Net cash used in operating activities
	 	 	 	(1,542,643	)	 	 	 	(680,333	)	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	CASH FLOWS FROM INVESTING ACTIVITIES
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	Interest received
	 	 	 	3,044	 	 	 	 	1,340	 	 
	Purchase of property, plant and equipment
	 	 	 	(18,952	)	 	 	 	(67,604	)	 
	 
	 	 	 	 	 	 
	Net cash used in investing activities
	 	 	 	(15,908	)	 	 	 	(66,264	)	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	CASH FLOW S FROM FINANCING ACTIVITIES
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Increase/(Decrease) in short term bank borrowings (net)
	 	 	 	1,531,085	 	 	 	 	(399,474	)	 
	Interest paid
	 	 	 	(95,511	)	 	 	 	(67,616	)	 
	Repayment of hire purchase obligations
	 	 	 	(2,875	)	 	 	 	(1,753	)	 
	 
	 	 	 	 	 	 
	Net cash from/(used in) financing activities
	 	 	 	1,432,699	 	 	 	 	(468,843	)	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Net decrease in cash and cash equivalents
	 	 	 	(125,852	)	 	 	 	(1,215,440	)	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	Cash and cash equivalents brought forward
	 	 	 	394,079	 	 	 	 	1,609,519	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 
	Cash and cash equivalents carried forward
	 	 	 	268,227	 	 	 	 	394,079	 	 
	 
	 	 	 	 	 	 	 	 	 

			
	

	 	 
	 
	The annexed notes form an integral part of these financial statements.
	 	Page 5

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

 

	1.  	General Information

	 
	   	The Company is a private company limited by shares, incorporated and domiciled in
Malaysia.

	 
	   	The local currency of the Company is Ringgit Malaysia (RM). The reporting currency used in
presenting this set of financial statements is United States Dollars (USD).

	 
	   	The Company is principally engaged in the manufacture of colour monitors. There has been no
significant change in the nature of this activity during the financial year.

	 
	   	The registered office of the Company is located at 3rd Floor, Wisma Wang, 251-A,
Jalan Burma, 10350 Penang, Malaysia.

	 
	   	The principal place of business of the Company is located at Lot 316 & 317, Jalan PKNK 3/2,
Kawasan Perindustrian Sungai Petani, 08000 Sungai Petani, Kedah, Malaysia.

	 
	   	The total number of employees of the Company as at 31 December 2004 was 48 (2003 : 41).

	2.  	Financial Risk Management

	 
	   	The activities of the Company expose it to certain financial risks, including currency
risk, interest rate risk, credit risk, liquidity risk and cash flow risk. The overall
financial risk management objective of the Company is to maximise shareholders’ value by
minimising the potential adverse impacts of these risks on its financial position,
performance and cash flows.

	 
	   	The Board of Directors explicitly assumes the responsibilities of financial risk management
which is carried out mainly through risk reviews and internal control systems.

	 
	   	Currency Risk

	 
	   	The Company’s exposure to currency risk arises mainly from normal trading transactions
denominated in foreign currencies.

	 
	   	The Company does not use any derivative financial instruments to manage its exposure to
currency risk as the directors are of the opinion that the net exposure is not significant
in view of the present Ringgit Malaysia exchange rate peg against United States Dollars.

	 
	   	Interest Rate Risk

	 
	   	The Company’s exposure to interest rate risk arises mainly from borrowings.

	 
	   	The Company manages its exposure to interest rate risk by seeking to obtain the most
favourable interest rates available without increasing its other financial risk exposures.

			
	

	 	 
	 
	
	 	Page 6

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

 

	2.  	Financial Risk Management (cont’d)

	 
	   	Credit Risk

	 
	   	The Company’s exposure to credit risk arises mainly from cash deposits and receivables. The
maximum credit risk exposure is best represented by the total carrying amount of these
financial assets in the balance sheet.

	 
	   	The Company manages its exposure to credit risk by seeking to invest cash assets safely and
profitably, assessing counter parties’ financial standings on an ongoing basis, setting and
monitoring counter parties’ limits and credit terms. The Company does not have any major
concentration of credit risk other than the significant amount owing by a related party as
disclosed in Note 7 to the financial statements.

	 
	   	Liquidity and Cash Flow Risks

	 
	   	The Company’s exposure to liquidity and cash flow risks arises mainly from general funding
and business activities.

	 
	   	The Company practises prudent liquidity risk management by maintaining sufficient cash and
the availability of funding through certain committed credit facilities.

	3.  	Significant Accounting Policies

	 	3.1  	Basis of Preparation of Financial Statements

	 
	 	   	The financial statements of the Company are prepared under the historical cost
convention, modified to include other bases of measurement as disclosed in other
sections of the significant accounting policies, and in compliance with the
accounting principles generally accepted in the United States of America.

	 
	 	3.2  	Financial Instruments

	 
	 	   	Recognised and Unrecognised

	 
	 	   	The accounting policies for recognised financial instruments are disclosed in the
individual policies associated with each item. The Company does not have any
unrecognised financial instruments.

	 
	 	   	Fair Values

	 
	 	   	The carrying amounts of financial assets and liabilities with short maturity periods
are assumed to approximate their fair values.

			
	

	 	 
	 
	
	 	Page 7

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

	3.  	Significant Accounting Policies (cont’d)

	 	3.3  	Property, Plant and Equipment

	 
	 	   	Property, plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses, if any.

	 
	 	   	Property, plant and equipment are depreciated on a straight-line method over the
estimated useful lives of the assets using the following annual rates:-

	 	 	 	 	 
	Plant and machinery
	 	 	10-20	%
	Electrical installation and renovation
	 	 	10	%
	Motor vehicles
	 	 	20	%
	Office equipment
	 	 	20	%
	Furniture and fittings
	 	 	10	%
	Computer
	 	 	10-20	%
	Factory tools and equipment
	 	 	20	%
	Mould
	 	 	10	%

	 	3.4  	Impairment of Assets

	 
	 	   	The carrying amounts of assets, other than deferred tax assets, inventories and
financial assets, are reviewed at each balance sheet date to determine whether there
is any indication that an item of asset may be impaired. If any such indication
exists, the recoverable amount of the asset is estimated. Any excess of the carrying
amount of the asset over its recoverable amount represents an impairment loss and is
recognised as an expense in the income statement.

	 
	 	   	An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount and it is reversed only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, had no impairment loss been
recognised. The reversal is recognised in the income statement.

	 
	 	3.5  	Inventories

	 
	 	   	Inventories are valued at the lower of cost (determined on the first-in, first-out
basis) and net realisable value. Cost consists of all costs of purchase, costs of
conversion and other costs incurred in bringing the inventories to their present
location and condition.

	 
	 	3.6  	Receivables

	 
	 	   	Receivables are recognised at cost less an allowance for any doubtful debts.
Specific allowance for doubtful debts is made when collection is no longer probable.
Bad debts are written-off as incurred.

			
	

	 	 
	 
	
	 	Page 8

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

	3.  	Significant Accounting Policies (cont’d)

	 	3.7  	Payables

	 
	 	   	Payables are recognised at cost which is the fair value of the consideration to be
paid in the future for goods and services received.

	 
	 	3.8  	Hire Purchase

	 
	 	   	Assets acquired under hire purchase agreements are included in property, plant and
equipment and the capital element of the hire purchase commitments is shown as hire
purchase payables. The capital element of the hire purchase instalments is applied
to reduce the outstanding obligations and the interest element is charged to the
income statement so as to give a constant periodic rate of interest on the
outstanding liability at the end of each accounting period. Assets acquired under
hire purchase agreements are depreciated over the useful lives of equivalent owned
assets.

	 
	 	3.9  	Loans and Borrowings

	 
	 	   	All loans and borrowings are initially recognised at cost which is the fair value of
the proceeds received. The loans and borrowings are subsequently stated at amortised
cost using the effective yield method. The effective interest rate is the historical
rate for a fixed rate instrument and the current market rate for a floating rate
instrument.

	 
	 	   	All borrowing costs are recognised as an expense in the period in which they are
incurred.

	 
	 	3.10  	Provisions

	 
	 	   	A provision is recognised when it is probable that an outflow of resources embodying
economic benefits will be required to settle a present obligation (legal or
constructive) as a result of a past event and a reliable estimate can be made of the
amount.

	 
	 	3.11  	Foreign Currency Transactions and Translation

	 
	 	   	Transactions in foreign currencies are converted into the reporting currency at the
rates of exchange ruling at the transaction dates. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated into the
reporting currency at the rates of exchange ruling at that date. Non-monetary assets
and liabilities which are stated at cost denominated in foreign currencies are
translated into the reporting currency at the rates of exchange ruling at the
transaction dates. Exchange gains and losses arising on foreign currency
transactions and translation are recognised in the income statement.

	 
	 	   	The principal closing rate used in translation is RM1.00 : USD0.2632.

			
	

	 	 
	 
	
	 	Page 9

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

 

	3.  	Significant Accounting Policies (cont’d)

	 	3.12  	Share Capital

	 
	 	   	The Company has only one class of share capital, i.e. ordinary shares of RM1.00
(equivalent to USD0.2632) each, which is classified as equity. External costs
directly attributable to the issue of new shares are written-off to the share
premium account or, where there is no such account, charged to the income statement.

	 
	 	3.13  	Income Recognition

	 
	 	   	Income from the sale of goods is recognised upon delivery of goods and customer’s
acceptance. Interest income is recognised on an accrual basis.

	 
	 	3.14  	Income Taxes

	 
	 	   	Income taxes for the year comprise current tax and deferred tax.

	 
	 	   	Current tax represents the expected amount of income taxes payable in respect of the
taxable profit for the year and is measured using the tax rates that have been
enacted or substantially enacted by the balance sheet date.

	 
	 	   	Deferred tax is provided for under the balance sheet liability method in respect of
all temporary differences between the carrying amount of an asset or liability in
the balance sheet and its tax base except for those temporary differences associated
with goodwill, negative goodwill or the initial recognition of an asset or liability
in a transaction which is not a business combination and affects neither accounting
nor taxable results at the time of the transaction.

	 
	 	   	A deferred tax liability is recognised for all taxable temporary differences whereas
a deferred tax asset is recognised for all deductible temporary differences, unused
tax losses and unused tax credits to the extent that it is probable that future
taxable profit will be available against which the deductible temporary differences,
unused tax losses and unused tax credits can be utilised. Deferred tax assets and
liabilities are measured at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on the tax rates that
have been enacted or substantially enacted by the balance sheet date.

	 
	 	3.15  	Research and Development Expenditure

	 
	 	   	Research and development expenditure is recognised as an expense in the period in
which the expenditure is incurred unless the development expenditure meets the asset
recognition criteria in which case the expenditure will be capitalised.

			
	

	 	 
	 
	
	 	Page 10

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

 

	3.  	Significant Accounting Policies (cont’d)

	 	3.16  	Employee Benefits

	 
	 	   	Short-term Employee Benefits

	 
	 	   	Short-term employee benefits such as wages, salaries, bonuses and social security
contributions are recognised as an expense in the period in which the associated
services are rendered by the employees.

	 
	 	   	Defined Contribution Plans

	 
	 	   	As required by law, employers in Malaysia make contributions to the state pension
scheme, Employees Provident Fund (“EPF”). Such contributions are recognised as an
expense in the period in which the associated services are rendered by the
employees.

	 
	 	3.17  	Cash and Cash Equivalents

	 
	 	   	Cash and cash equivalents comprise cash in hand, bank balances, demand deposits,
deposits pledged with financial institutions, bank overdrafts and short-term, highly
liquid investments that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.

			
	

	 	 
	 
	
	 	Page 11

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

 

	4.  	Property, Plant And Equipment

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Balance at	 	 	 	 	 	 	 	 	 	 	Balance at	 
	 	 	1.1.2004	 	 	Additions	 	 	Disposals	 	 	31.12.2004	 
	At Cost	 	USD	 	 	USD	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Plant and machinery
	 	 	355,001	 	 	 	1,447	 	 	 	0	 	 	 	356,448	 
	Electrical installation and renovation
	 	 	11,399	 	 	 	0	 	 	 	0	 	 	 	11,399	 
	Motor vehicles
	 	 	27,074	 	 	 	0	 	 	 	0	 	 	 	27,074	 
	Office equipment
	 	 	9,570	 	 	 	495	 	 	 	0	 	 	 	10,065	 
	Furniture and fittings
	 	 	7,069	 	 	 	0	 	 	 	0	 	 	 	7,069	 
	Computer
	 	 	15,094	 	 	 	8,772	 	 	 	0	 	 	 	23,866	 
	Factory tools and equipment
	 	 	102,989	 	 	 	8,238	 	 	 	0	 	 	 	111,227	 
	Mould
	 	 	94,421	 	 	 	0	 	 	 	0	 	 	 	94,421	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	622,617	 	 	 	18,952	 	 	 	0	 	 	 	641,569	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Balance at	 	 	Charge for	 	 	 	 	 	 	Balance at	 
	 	 	1.1.2004	 	 	the year	 	 	Disposals	 	 	31.12.2004	 
	Accumulated Depreciation	 	USD	 	 	USD	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Plant and machinery
	 	 	140,154	 	 	 	35,816	 	 	 	0	 	 	 	175,970	 
	Electrical installation and renovation
	 	 	4,006	 	 	 	1,140	 	 	 	0	 	 	 	5,146	 
	Motor vehicles
	 	 	10,825	 	 	 	5,415	 	 	 	0	 	 	 	16,240	 
	Office equipment
	 	 	6,679	 	 	 	1,964	 	 	 	0	 	 	 	8,643	 
	Furniture and fittings
	 	 	2,189	 	 	 	707	 	 	 	0	 	 	 	2,896	 
	Computer
	 	 	2,372	 	 	 	3,405	 	 	 	0	 	 	 	5,777	 
	Factory tools and equipment
	 	 	31,267	 	 	 	21,066	 	 	 	0	 	 	 	52,333	 
	Mould
	 	 	31,520	 	 	 	9,442	 	 	 	0	 	 	 	40,962	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	229,012	 	 	 	78,955	 	 	 	0	 	 	 	307,967	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	Carrying Amount	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Plant and machinery
	 	 	180,478	 	 	 	214,847	 
	Electrical installation and renovation
	 	 	6,253	 	 	 	7,393	 
	Motor vehicles
	 	 	10,834	 	 	 	16,249	 
	Office equipment
	 	 	1,422	 	 	 	2,891	 
	Furniture and fittings
	 	 	4,173	 	 	 	4,880	 
	Computer
	 	 	18,089	 	 	 	12,722	 
	Factory tools and equipment
	 	 	58,894	 	 	 	71,722	 
	Mould
	 	 	53,459	 	 	 	62,901	 
	 
	 	 	 	 	 	 
	 
	 	 	333,602	 	 	 	393,605	 
	 
	 	 	 	 	 	 

Included in property, plant and equipment is a motor vehicle with a carrying amount of
USD1,623 (2003 : USD4,407) acquired under hire purchase agreement.

			
	

	 	 
	 
	
	 	Page 12

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

	5.  	Deferred Tax Assets

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Balance at 1 January
	 	 	30,789	 	 	 	22,368	 
	Deferred tax (expense)/income relating to
origination and reversal of temporary differences
	 	 	(30,789	)	 	 	11,579	 
	Deferred tax expense underprovided in prior year
	 	 	0	 	 	 	(3,158	)
	 
	 	 	 	 	 	 
	Balance at 31 December
	 	 	0	 	 	 	30,789	 
	 
	 	 	 	 	 	 

The deferred tax assets are in respect of the deductible/(taxable) temporary
differences of the following items:-

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Inventories
	 	 	14,118	 	 	 	23,850	 
	Receivables, payables and provisions
	 	 	20,619	 	 	 	36,413	 
	Property, plant and equipment
	 	 	(34,737	)	 	 	(29,474	)
	 
	 	 	 	 	 	 
	 
	 	 	0	 	 	 	30,789	 
	 
	 	 	 	 	 	 

6. Inventories

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	At Cost	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Raw materials
	 	 	1,701,695	 	 	 	1,063,728	 
	Work-in-progress
	 	 	65,137	 	 	 	15,055	 
	Finished goods
	 	 	235,695	 	 	 	394,990	 
	Goods-in-transit
	 	 	8,577	 	 	 	0	 
	 
	 	 	 	 	 	 
	 
	 	 	2,011,104	 	 	 	1,473,773	 
	 
	 	 	 	 	 	 

	7.  	Trade Receivables

Included herein is an amount of USD7,203,908 (2003 : USD4,389,962) owing by a
substantial shareholder of the Company.

The credit terms of trade receivables range from 60 to 75 days.

			
	

	 	 
	 
	
	 	Page 13

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

 

	8.  	Cash And Bank Balances

     The currency exposure profile of cash and bank balances is as follows:-

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	United States Dollars
	 	 	64,605	 	 	 	65,439	 
	Ringgit Malaysia
	 	 	203,622	 	 	 	328,640	 
	 
	 	 	 	 	 	 
	 
	 	 	268,227	 	 	 	394,079	 
	 
	 	 	 	 	 	 

	9.  	Trade Payables

Included herein are amounts totalling USD2,587,503 (2003 : USD2,420,032) owing to the
shareholders of the Company.

The currency exposure profile of trade payables is as follows:-

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	United States Dollars
	 	 	2,253,782	 	 	 	1,812,219	 
	Ringgit Malaysia
	 	 	1,539,727	 	 	 	1,152,207	 
	 
	 	 	 	 	 	 
	 
	 	 	3,793,509	 	 	 	2,964,426	 
	 
	 	 	 	 	 	 

The credit terms of trade payables range from 30 to 60 days.

	10.  	Other Payables And Accruals

Included herein is an amount of USD70,994 (2003 : USD80,303) owing to a substantial
shareholder of the Company. The amount due is unsecured, non-interest bearing and has no
fixed term of repayment.

	11.  	Hire Purchase Payable

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Minimum hire purchase payments:-
	 	 	 	 	 	 	 	 
	- not later than one year
	 	 	1,890	 	 	 	3,240	 
	- later than one year and not later than five years
	 	 	0	 	 	 	1,890	 
	 
	 	 	 	 	 	 
	 
	 	 	1,890	 	 	 	5,130	 
	Future finance charges
	 	 	(66	)	 	 	(431	)
	 
	 	 	 	 	 	 
	Present value of hire purchase liability
	 	 	1,824	 	 	 	4,699	 
	 
	 	 	 	 	 	 

			
	

	 	 
	 
	
	 	Page 14

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

 

	11.  	Hire Purchase Payable (cont’d)

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Current:-
	 	 	 	 	 	 	 	 
	- not later than one year
	 	 	1,824	 	 	 	2,875	 
	Non-current:-
	 	 	 	 	 	 	 	 
	- later than one year and not later than five years
	 	 	0	 	 	 	1,824	 
	 
	 	 	 	 	 	 
	 
	 	 	1,824	 	 	 	4,699	 
	 
	 	 	 	 	 	 

     The effective interest rate of hire purchase payable is 10.68% (2003 : 10.68%) per annum.

	12.  	Bank Borrowings — Unsecured

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Bankers acceptance
	 	 	2,875,526	 	 	 	1,873,684	 
	Short-term loans
	 	 	529,243	 	 	 	0	 
	 
	 	 	 	 	 	 
	 
	 	 	3,404,769	 	 	 	1,873,684	 
	 
	 	 	 	 	 	 

     The currency exposure profile of bank borrowings is as follows:-

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	United States Dollars
	 	 	529,243	 	 	 	0	 
	Ringgit Malaysia
	 	 	2,875,526	 	 	 	1,873,684	 
	 
	 	 	 	 	 	 
	 
	 	 	3,404,769	 	 	 	1,873,684	 
	 
	 	 	 	 	 	 

Bank borrowings are guaranteed by the holding company of a substantial shareholder of the
Company. The effective interest rates of bank borrowings range from 2.85% to 3.75% (2003 :
3.2%) per annum.

	13.  	Provision For Tooling Costs

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Balance at 1 January
	 	 	103,712	 	 	 	51,160	 
	Provision made during the year
	 	 	54,680	 	 	 	58,684	 
	Payment made during the year
	 	 	(113,934	)	 	 	(6,132	)
	 
	 	 	 	 	 	 
	Balance at 31 December
	 	 	44,458	 	 	 	103,712	 
	 
	 	 	 	 	 	 

			
	

	 	 
	 
	
	 	Page 15

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

 

	14.  	Share Capital

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Ordinary shares of RM1.00 (equivalent to USD0.2632) each
	 	 	 	 	 	 	 	 
	Authorised:-
	 	 	 	 	 	 	 	 
	10,000,000 shares
	 	 	2,631,579	 	 	 	2,631,579	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Issued and fully paid-up:-
	 	 	 	 	 	 	 	 
	At 1 January – 2,508,000 shares
	 	 	660,000	 	 	 	660,000	 
	Bonus issue – 2,492,000 (2003:NIL) shares
	 	 	655,789	 	 	 	0	 
	 
	 	 	 	 	 	 
	At 31 December - 5,000,000
(2003:2,508,000) shares
	 	 	1,315,789	 	 	 	660,000	 
	 
	 	 	 	 	 	 

	15.  	Revenue
	 
	   	Revenue represents income from the sale of goods. Included herein are amounts totalling
USD19,319,539 (2003 : USD12,639,956) arising from sales to a substantial shareholder.
	 
	16.  	Profit Before Tax

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Profit before tax is arrived at after charging:-
	 	 	 	 	 	 	 	 
	Allowance for slow moving inventories
	 	 	0	 	 	 	26,316	 
	Auditors’ remuneration
	 	 	 	 	 	 	 	 
	- current year
	 	 	4,605	 	 	 	3,684	 
	- underprovision in prior year
	 	 	1,053	 	 	 	0	 
	Depreciation
	 	 	72,080	 	 	 	67,352	 
	Interest expense
	 	 	95,511	 	 	 	67,658	 
	Management fee
	 	 	149,114	 	 	 	113,200	 
	Provision for tooling costs
	 	 	54,680	 	 	 	58,684	 
	Realised loss on foreign exchange
	 	 	8,468	 	 	 	5,876	 
	Rental of premises
	 	 	56,117	 	 	 	55,705	 
	Research and development expenditure
	 	 	 	 	 	 	 	 
	- depreciation
	 	 	6,875	 	 	 	2,473	 
	- others
	 	 	113,973	 	 	 	60,685	 
	Staff costs
	 	 	279,895	 	 	 	236,123	 
	 
	 	 	 	 	 	 	 	 
	And crediting:-
	 	 	 	 	 	 	 	 
	Interest income
	 	 	3,044	 	 	 	1,340	 
	 
	 	 	 	 	 	 

	   	Included in staff costs are contributions to a defined contribution plan amounting to
USD13,244 (2003 : USD11,733).

			
	

	 	 
	 
	
	 	Page 16

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

 

	17.  	Tax Expense

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	USD	 	 	USD	 
	 
	 	 	 	 	 	 	 	 
	Tax based on results for the year:-
	 	 	 	 	 	 	 	 
	Malaysian income tax
	 	 	60,281	 	 	 	43,553	 
	Deferred tax
	 	 	30,789	 	 	 	(11,579	)
	 
	 	 	 	 	 	 
	 
	 	 	91,070	 	 	 	31,974	 
	 
	 	 	 	 	 	 	 	 
	Tax (over)/underprovided in prior year:-
	 	 	 	 	 	 	 	 
	Malaysian income tax
	 	 	(233	)	 	 	(907	)
	Deferred tax
	 	 	0	 	 	 	3,158	 
	 
	 	 	 	 	 	 
	 
	 	 	90,837	 	 	 	34,225	 
	 
	 	 	 	 	 	 

	   	The numerical reconciliation between the applicable tax rate, which is the statutory income
tax rate, and the average effective tax rate is as follows:-

	 	 	 	 	 	 	 	 	 
	 	 	2004	 	 	2003	 
	 	 	%	 	 	%	 
	 
	 	 	 	 	 	 	 	 
	Applicable tax rate
	 	 	28.00	 	 	 	28.00	 
	Non-deductible expenses
	 	 	0.46	 	 	 	0.74	 
	Tax exempt income from pioneer status
	 	 	(17.18	)	 	 	(21.81	)
	 
	 	 	 	 	 	 
	Average effective tax rate
	 	 	11.28	 	 	 	6.93	 
	 
	 	 	 	 	 	 

	   	As at 31 December 2004, the Company has sufficient tax credits and tax exempt accounts to
frank its retained profits in full if paid out as dividends.

	18.  	Financial Instruments
	 
	   	Recognised and Unrecognised
	 
	   	The information about the extent and nature of significant recognised financial instruments
is disclosed in the individual notes associated with each item. The Company does not have
any unrecognised financial instruments.
	 
	   	Fair Values
	 
	   	The carrying amounts of financial assets and liabilities of the Company as at 31 December
2004 and 2003 approximate their fair values.

			
	

	 	 
	 
	
	 	Page 17

 

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-U

Notes To The Financial Statements

For The Financial Year Ended 31 December 2004

 

Statement By Directors

We, Hsu, Che-Chen and Yeh, Kuo-Sheng, being two of the directors of Wells Eastern Asia
Displays (M) Sdn. Bhd., do hereby state that in the opinion of the directors, the financial
statements set out on pages 2 to 17 are drawn up in accordance with the accounting principles
generally accepted in the United States of America so as to give a true and fair view of the state
of affairs of the Company as at 31 December 2004 and of its results and cash flows for the
financial year ended on that date.

 

			
	Hsu, Che-Chen
	 	Yeh, Kuo-Sheng

Penang,

Date: 18 March 2005

 

 

Page 18

 

WELLS EASTERN ASIA DISPLAYS (M) SDN. BHD.

(Incorporated in Malaysia)

Company No: 501396-Uexv10w15

 

Exhibit 10.15

FIRST, SECOND, THIRD AND FOURTH AMENDMENT TO THE EMPLOYMENT AGREEMENT

BETWEEN THE COMPANY AND ANTHONY SPIER

FIRST AMENDMENT TO AMENDED EMPLOYMENT AGREEMENT

     This First Amendment made effective as of February 10, 1999 between ANTHONY SPIER (“Employee”)
and WELLS-GARDNER ELECTRONICS CORPORATION, an Illinois CORPORATION (“Company”).

     WHEREAS, Employee and Company entered into an Amended Employment Agreement effective as of
February 29, 1996 (the “Amended Employment Agreement”); and

     WHEREAS, Employee and Company desire to amend the Amended Employment Agreement in accordance
with the specific terms and provisions set forth in this First Amendment.

     NOW THEREFORE, in consideration of the premises hereto and consideration, the receipt and
sufficiency of which is he acknowledged, Employee and Company hereby amend the Amended Employment
Agreement as follows:

     1. Paragraph 3 is hereby amended in its entirety to read as follows:

      “3. Term. The term of Employee’s employment hereunder
shall be until December 31, 2002.”

     2. Paragraph 4 is hereby amended in its entirety to read as follows:

      “4. Compensation. For all services rendered by Employee,
Company agrees to pay Employee a salary from and after the effective
date hereof at a minimum annual rate of $232,000, payable in such
installments as the parties shall mutually agree, plus such additional
compensation as the Board of Directors shall from time to time
determine.”

     3. Subparagraph 7(a)(vi) and the second full paragraph of Subparagraph 7(a) are hereby deleted
in their entirety.

     4. Subparagraph 12(d) is hereby amended in its entirety to read as follows:

     “The Company will pay the annual fee for the preparation of Employee personal federal and state tax
returns.”

     EXCEPT AS AMENDED HEREBY, the Amended Employment Agreement shall continue in full force and
effect.

     IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as of the day and
year first above written.

	 	 	 	 	 
	Company:
	 	WELLS-GARDNER ELECTRONICS CORPORATION, an Illinois corporation
	 
	 	 	 	 
	

	 	By:
	 	/s/ Marshall L. Burman
	

	 	 	 	 
	 
	 	Title: Chairman, Compensation Committee
	 
	 	 	 	 
	Employee:
	 	/s/ Anthony Spier
	 
	 	 
	 
	 	Anthony Spier

 

 

SECOND AMENDMENT TO AMENDED EMPLOYMENT AGREEMENT

     This Second Amendment made effective as of February 11, 2002, between ANTHONY SPIER
(“Employee”) and WELLS-GARDNER ELECTRONICS CORPORATION, an Illinois corporation (“Company”).

     WHEREAS Employee and Company entered into an Amended Employment Agreement effective as of
February 29, 1996, as amended by that certain First Amendment dated as of February 10, 1999, and as
further amended by resolution of the Compensation Committee at its April 24, 2001 meeting (as so
amended, the “Employment Agreement”); and

     WHEREAS Employee and Company desire to further amend the Employment Agreement in accordance
with the specific terms and provisions set forth in this Second Amendment.

     NOW THEREFORE, in consideration of the premises hereto and consideration, the receipt and
sufficiency of, which is hereby acknowledged, Employee and Company hereby an the Employment
Agreement as follows:

     Paragraph 3, as previously amended and restated in the First Amendment, is hereby deleted in
its entirety and amended in its entirety to read as follows:

      “3. Term. The term of Employee’s employment hereunder
shall be until December 31, 2005.”

     EXCEPT AS AMENDED HEREBY, the Employment Agreement shall continue in full force and effect.

     IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the day and year
first above written.

	 	 	 	 	 
	Company:
	 	WELLS-GARDNER ELECTRONICS CORPORATION, an Illinois corporation
	 
	 	 	 	 
	

	 	By:
	 	/s/ Marshall L. Burman
	

	 	 	 	 
	 
	 	Title: Chairman, Compensation Committee
	 
	 	 	 	 
	Employee:
	 	/s/ Anthony Spier
	 
	 	 
	 
	 	Anthony Spier

 

 

THIRD AMENDMENT TO AMENDED EMPLOYMENT AGREEMENT

     This Third Amendment made effective as of December 18, 2002, between ANTHONY SPIER
(“Employee”) and WELLS-GARDNER ELECTRONICS CORPORATION, an Illinois corporation (“Company”).

     WHEREAS, Employee and Company entered into an Amended Employment Agreement effective as of
February 29, 1996, as amended by that certain First Amendment dated as of February 10, 1999, and as
further amended by resolution of the Compensation Committee at its April 24, 2001 meeting, and as
further amended by that certain Second Amendment dated as of February 11, 2002 (as so amended, the
“Employment Agreement”); and

     WHEREAS Employee and Company desire to further amend the Employment Agreement in accordance
with the specific terms and provisions set forth in this Third Amendment.

     NOW THEREFORE, in consideration of the premises hereto and consideration, the receipt and
sufficiency of, which is hereby acknowledged, Employee and Company hereby an the Employment
Agreement as follows:

     Paragraph 12(a) is hereby deleted in its entirety and amended in its entirety to read as
follows:

      “12(a). Commencing January 1, 2003, the Company shall pay to
Employee an automobile allowance of $22,000 per annum, payable in
equal monthly installments.”

     EXCEPT AS AMENDED HEREBY, the Employment Agreement shall continue in full force and effect.

     IN WITNESS WHEREOF, the parties have executed this Third Amendment as of the day and year
first above written.

	 	 	 	 	 
	Company:
	 	WELLS-GARDNER ELECTRONICS CORPORATION, an Illinois corporation
	 
	 	 	 	 
	

	 	By:
	 	/s/ Marshall L. Burman
	

	 	 	 	 
	 
	 	Title: Chairman, Compensation Committee
	 
	 	 	 	 
	Employee:
	 	/s/ Anthony Spier
	 
	 	 
	 
	 	Anthony Spier

 

 

FOURTH AMENDMENT TO AMENDED EMPLOYMENT AGREEMENT

This Fourth Amendment made effective February 8, 2005, between ANTHONY SPIER (“Employee”) and
WELLS-GARDNER ELECTRONICS CORPORATION, an Illinois Company (“Company”).

WHEREAS Employee and Company entered into an Amended Employment Agreement effective as of February
29, 1996, as amended by that certain First Amendment to Amended Employment Agreement dated as of
February 10, 1999; and as amended by resolution of the Compensation Committee at its April 24, 2001
meeting; and as amended by that certain Second Amendment dated as of February 11, 2002; and as
further amended by that certain Third Amendment dated December 18, 2002 (as so amended, the
“Employment Agreement”); and

WHEREAS Employee and Company desire to further amend the Employment Agreement in accordance with
the specified terms and provisions set forth in this Third Amendment.

NOW THEREFORE, in consideration of the premises hereto and consideration, the receipt and
sufficiency of which is hereby acknowledged, Employee and Company hereby amend the Employment
Agreement as follows:

Paragraph 3 is hereby amended in its entirety to read as follows:

“3. Term. The term of Employee’s employment hereunder shall be until December 31, 2008.”

EXCEPT AS AMENDED HEREBY, the Employment Agreement shall continue in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment as of the day and year
first above written.

	 	 	 	 	 
	Company:
	 	WELLS-GARDNER ELECTRONICS CORPORATION, an Illinois corporation
	 
	 	 	 	 
	

	 	By:
	 	/s/ Marshall L. Burman
	

	 	 	 	 
	 
	 	Title: Chairman, Compensation Committee
	 
	 	 	 	 
	Employee:
	 	/s/ Anthony Spier
	 
	 	 
	 
	 	Anthony Spier

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]