C O N T E N T S Corporate Information 3-4 Chairman s Statement 5-9 Five Years Financial Summary Biographical Details of Directors and Senior Man

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2 C O N T E N T S Corporate Information 3-4 Chairman s Statement 5-9 Five Years Financial Summary Biographical Details of Directors and Senior Management Report of the Directors Corporate Governance Report Independent Auditor s Report Consolidated Income Statement 41 Consolidated Balance Sheet Balance Sheet 44 Consolidated Statement of Changes in Equity 45 Consolidated Cash Flow Statement Notes to the Consolidated Financial Statements

3 Corporate Information Directors Executive Directors Senta Wong (Chairman and Chief Executive Officer) Edward Ying-Chun Tsui (Group President and Chief Operating Officer) Byron Shu-Chan Ho (Chief Financial Officer) Bengie Man-Hang Kwong Hamed Hassan, El-Abd Non-Executive Director Hsu Hung-Chieh Independent Non-Executive Directors Peter Chung-Yin Lee L.L.D., J.P. (Vice-Chairman) John Ho Philip Wan-Chung Tse Gene Howard Weiner Company Secretary Lam Ka Mei Auditor PricewaterhouseCoopers Solicitor Stephenson Harwood & Lo Bankers The Hongkong and Shanghai Banking Corporation Limited Standard Chartered Bank (Hong Kong) Limited Hang Seng Bank Limited Citic Ka Wah Bank Limited Bank of China (Hong Kong) Limited Share Registrars Principal Registrar Butterfield Fund Services (Bermuda) Limited Hong Kong Registrar Tricor Standard Limited Registered Office Clarendon House 2 Church Street Hamilton, HM11 Bermuda Principal Office 23/F, One Kowloon No.1 Wang Yuen Street Kowloon Bay Kowloon Hong Kong Hamed Hassan El-Abd L.L.D., J.P. Gene Howard Weiner Butterfield Fund Services (Bermuda) Limited Clarendon House 2 Church Street Hamilton, HM11 Bermuda 1 23

4 WKK Technology park 王氏港建科技城 Administrative Building 行政大樓 Factory Outlook 廠房外貌

5 Chairman S Statement 主席報告書 BUSINESS REVIEW The Group s turnover and profit attributable to shareholders for the year 2008 was HK$4.4 billion and HK$55.9 million respectively, reflecting a decrease of approximately 2% and 48% compared to last year. 業務回顧 2% 48% Trading and Distribution Division (WKK Distribution) In spite of the increase in sales of approximately 18% in the first half of this year as compared to last year, the Trading and Distribution Division registered sales of HK$1.95 billion for the whole year, representing a decrease of approximately 6% compared to The operating profit for the year reduced by approximately 29% compared to last year. This was mainly attributable to the collapse of demand for the industrial products distributed by the Group in the fourth quarter of 2008 as a result of the recession of the global economy. Although the operations of the Division in Taiwan made a small operating profit in the last quarter, their contribution to the operating profits of the Division increased by 62% for the whole year as compared to last year mainly because of their good performance in the first three quarters of The operations of the Division in Hong Kong, the PRC and Thailand recorded decreases in operating profits and the operations in Singapore and Philippines registered operating losses for the whole year. 18% 6% 29% 62% OEM Manufacturing Division (WKK Technology) The turnover of the OEM Manufacturing Division was HK$2.45 billion for the year 2008, reflecting a slight increase of approximately 2% compared to The orders from customers decreased significantly in the last quarter as compared to the corresponding period last year due to the economic downturn. The operating profit was down by approximately 20% for the year as compared to last year mainly because of the appreciation of Renminbi and the escalating wages in the PRC. 2% 20%

6 Vitronics Soltec XPM3 Reflow 回流焊接平台 YAMAHA YS100 High-speed General Purpose Modular 高速通用模塊式貼片機 YAMAHA YS12 Compact High-Speed Modular 小型高速模塊式貼片機

7 FINANCE The Group has committed bank and other financing facilities totaling HK$2,075 million, of which HK$696 million was drawn down as at 31 December As at 31 December 2008, the Group s consolidated net borrowings amounted to HK$79 million and shareholders equity amounted to HK$1,199 million, resulting in a gearing ratio of 6.6%. 財務 6.6% Most of the Group s sales were conducted in the same currencies as the corresponding purchase transactions. Foreign exchange contracts were used to hedge exposures where necessary. CAPITAL STRUCTURE There had been no material change in the capital structure of the Group since 31 December 資本架構 HUMAN RESOURCES As at 31 December 2008, the Group had a total of 5,655 employees, of whom 347 were based in Hong Kong, 5,049 in the PRC and 259 overseas. The remuneration packages of the Group s employees are mainly based on their performance and experience, taking into account current industry practices. In addition to the provision of a provident fund scheme, medical allowances, in-house and external training programs are also available to employees. The grant of share options and the payment of discretionary bonuses are generally subject to the individual performance of the employees and the Group s overall financial performance. The remuneration package of the employees are regularly reviewed. 人力資源 5, ,

8 HIOKI Hitester 1116 飛針測試機 NIHON SUPERIOR Solder 63/37 for HASL 63/37 錫合金, 適用於噴錫制程 TA LIANG TL-RU4BII 電路板成型機 PCB Router

9 PROSPECTS In view of the global financial crisis, the economic downturn and the diminished capital expenditure of our customers, the directors expect that the demand for the industrial products distributed by the Trading and Distribution Division will remain to be weak in the foreseeable future. As the global recession deepens, it is expected 展望 that the orders for the OEM Manufacturing Division for this year will be affected. Cost-saving measures have been taken to alleviate the impact of the adverse market environment. The operations in the Philippines will be closed in the second quarter of this year. On behalf of the Board I wish to thank all employees for their continued effort, support and loyalty to the Group. By Order of the Board Senta Wong Chairman Hong Kong, 3 April 2009

10 FIVE YEARS FINANCIAL SUMMARY HK$Million Turnover 營業額 6,000 5,000 4,000 4,280 4,641 5,012 4,539 4,442 3,000 2, , HK$Million 250 Profit attributable to shareholders 股東應佔溢利 HK$Million 4,000 Total assets 資產總額 ,600 3,200 2,800 2,400 2,000 2,196 2,319 2,429 2,623 2, ,600 1, , , , Total assets 資產總額 Total shareholder s funds 股東資金總額

11 FIVE YEARS FINANCIAL SUMMARY For the year ended 31 December RESULTS Turnover 4,279,844 4,641,372 5,011,863 4,538,540 4,442,440 Profit attributable to shareholders 122, , , ,523 55,899 At 31 December ASSETS AND LIABILITIES Total assets 2,196,164 2,319,303 2,428,907 2,623,160 2,621, Total liabilities (1,481,590 ) (1,421,283 ) (1,295,489 ) (1,379,578 ) (1,346,322 ) Minority interests (39,583 ) (65,788 ) (73,174 ) (67,309 ) (76,664 ) Shareholders funds 674, ,232 1,060,244 1,176,273 1,198,935

12 BIOGRAPHICAL DETAILS OF DIRECTORS AND SENIOR MANAGEMENT EXECUTIVE DIRECTORS Wong, Senta, aged 66, began his career in the electronics industry in Mr. Wong is a founder of the Group in 1975 and it has been de-merged from Wong s International (Holdings) Limited (the WIH Group ) in Mr. Wong is responsible for the Group s overall management and formulation of its corporate strategies. He has been a director and chairman and chief executive officer of the Company since March Mr. Wong is the father of Mr. Wong, Vinci and the father-in-law of Mr. Chang Jui Shum, Victor Tsui Ying-Chun, Edward, aged 62, obtained a Bachelor of Arts degree from the University of Hong Kong and joined the WIH Group in 1982 as general manager in charge of corporate administration. In 1985, Mr. Tsui became the general manager and, in 1987, a director of the Group. Mr. Tsui had extensive experience in broadcasting, trading and manufacturing before joining the WIH Group. He has been a director of the Company since March Ho Shu-Chan, Byron, aged 64, graduated from the Chinese University of Hong Kong with a Bachelor of Commerce degree. Mr. Ho had more than 18 years of extensive working experience with the Inchcape group of companies as financial controller and general manager prior to joining the WIH Group in January He has been a director of the Company since March Kwong Man-Hang, Bengie, J.P. (Aust.), aged 61, is an Executive Program Graduate of the Graduate School of Business from the Stanford University and a MBA holder. He was formerly the chief executive of Hong Kong Quality Assurance Agency (Hong Kong Government subvented organization) an independent third party ISO 9000/14000 Quality and Environmental Management System Certification Body. He has more than 24 years senior management experience and has an impressive track record in the field of computer and electronics industry with multi-national organizations. Mr. Kwong has fellowships in various professional institutions, and has been appointed as vice president of the Institution of British Engineers England, and Fellow of the Institute of Directors (Royal Charter) U.K. He has been a director of the Company since February 1996, a director of WKK Japan Limited since February 1997 and a chief executive officer of WKK America (Holdings) Inc. since June J.P. (Aust.) 61 ISO 9000/14000 WKK Japan LimitedWKK America(Holdings) Inc.

13 El-Abd Hamed Hassan, aged 61, joined the Group in He is a director and the president of WKK Distribution Limited. Prior to joining the Group, he was president of Amistar AG a manufacturer of automated robotics used in electronics assembly in particular the area of Surface Mount Technology. In 1988 he founded his own consulting company and worked with Japanese, U.S. and European companies in the electronics area. Mr. El-Abd holds a BA degree in Journalism and an MA in International Affairs. He has been a director of the Company since May El-Abd Hamed Hassan 61 Amistar AG El-Abd NON-EXECUTIVE DIRECTOR Hsu Hung-Chieh, alias, Andrew Sheu, aged 62, is the Vice-Chairman and CEO of Taiwan Kong King Co., Limited ( TKK ) since 1981, a company listed in Taiwan. He has over 32 years of experience in the high technology equipment trading and manufacturing industry and he served in TKK as management, specialized in operating and marketing, for over 25 years. He holds a bachelor degree in Electrical Engineering from Tatung University in Taiwan. He has been a director of the Company since January INDEPENDENT NON-EXECUTIVE DIRECTORS Lee Chung-Yin, Peter, aged 82, is a practicing doctor in Hong Kong. He is the vice-chairman of the Sun Hing group of companies and director of a number of other private companies. He is the Visiting Professor in the Faculty of Medicine in the University of Birmingham of the United Kingdom and other major universities and medical schools in China. He served as the Head of the St. John Ambulance Association, the chairman of Hong Kong Cheshire Home Foundation, the chairman of the Hospital Governing Committee of the Cheshire Home, Shatin, and a member of the Court and Council of the University of Hong Kong, etc. His past public services include being past-chairman of Convocation of the University of Hong Kong, past-president of the Hong Kong Medical Association, founder-president of the Hong Kong College of Family Physicians, member of the Basic Law Consultative Committee of the Hong Kong Special Administrative Region of the People s Republic of China, past-president of the Confederation of Medical Associations in Asia and Oceania (CMAAO), past-president of the World Organisation of Family Doctors (WONCA), and a WHO Consultant in Family Medicine. He has been a director of the Company since March

14 Ho, John, aged 63, is a practising solicitor in Hong Kong. He obtained a Bachelor of Laws degree from the University of London. In 1972, he qualified as a solicitor and joined a major firm of solicitors. Mr. Ho is a senior partner of John Ho & Tsui. Mr. Ho was appointed an independent non-executive director of Wa Ha Realty Company Limited in 1994 and re-designated as a non-executive director in 2004 and also CEO and executive director of China Western Investments PLC, a London listed Company. He has been a director of the Company since March China Western Investments PLC 14 Tse Wan-Chung, Philip, aged 64, retired from DDB Advertising Agency Operations in 1997 and remained a member of the Company s Worldwide Board until Mr. Philip Tse has since focused on several new ventures. He has become involved in marketing consultancy work in Asia, publishing, property development and management in China, and has established a management agency, as well as become an art dealer. At present, Mr. Tse acts as managing agent to one of Hong Kong s largest art galleries, BaoQu Tang, which is set to expand in early 2006 to include exhibition and auction facilities. In addition to his personal business ventures, he is one of the founders of the Hong Kong Artists Guild for which he has been serving as Chairman of the Executive Committee since He was also appointed by the Hong Kong Government as a council member of the Hong Kong Academy of Performing Arts until 1999, has served as a member of the Young Presidents Organization since 1976, and is currently a member of the World Presidents Organization. He has been a Director of the Company since March DDB Advertising Agency Operations Young Presidents Organization World Presidents Organization Gene Howard Weiner, aged 72, is president of Gene H. Weiner & Associates, Inc., a business and technical consulting firm serving the speciality chemical and electronics industries. The clients of Gene H. Weiner Associates, Inc. have included several Fortune 100 companies. He is a founding partner of Quantum Solar Group, Inc., a market research organization in the photovoltaic solar industry. His executive experience includes acting as a director and the president of New England Laminates Co., Inc., a leading supplier of copper clad laminates to the electronics industry; vice president of sales and marketing of Dynachem Corporation (now part of Rohm & Haas Electronic Materials), one of the world s leading suppliers of photopolymers to the printed circuit industry; and vice president of marketing of Oxy Metal Finishing, a major specialty chemical firm. Mr. Weiner is on the Board of Advisors of P. D. Circuits, Inc., a U.S. company providing computer aided manufacturing, design for manufacture, test and other shared infrastructure services to Gene Howard Weiner 72 Gene H. Weiner & Associates, Inc. Fortune 100 Quantum Solar Group, Inc photovoltaic solar industry New England Laminates Co., Inc. Dynachem Corporation Rohm & Haas Electronic Materials Oxy Metal Finishing Weiner P.D.Circuits, Inc.

15 the printed circuit assembly industry, as well as on the Board of Advisors of Christopher Associates, Inc., a provider of equipment and specialty chemicals to the U.S. printed circuit industry. Mr. Weiner has been inducted into the IPC Raymond Pritchard Hall of Fame, the IPC s and the industry s highest award and recognition. He has been a director of the Company since April Christopher Associates, Inc. IPC Raymond Pritchard Hall of Fame Mr. Weiner IPC s SENIOR MANAGEMENT WKK DISTRIBUTION LIMITED Ying Yik-Hau, James, aged 48, joined the Group in He is now the Director and Senior Vice President of South East Asia of WKK Distribution Limited. He is responsible for overseeing the day-today operations of WKK Distribution business in all South East Asia. Besides running the day-to-day operations of our South East Asia business which includes Singapore, Malaysia, Indonesia, Thailand and Ho Chi Minh City and Hanoi office in Vietnam, Mr. Ying is also responsible for the development of our new expansion plans for South East Asia which includes our new operations in India. Mr. Ying holds a Diploma in Chemical Technology and has worked for a PCB component manufacturing company as marketing executive before he joined the Group Chang Jui Shum, Victor, aged 34, joined the Group in He is now the general manager of WKK Distribution Limited. He is responsible for formulating the sales and marketing strategy, and overseeing the development of new business. Mr. Chang holds a Bachelor degree in Commerce (Accounting & Finance) from the Monash University of Melbourne, and MBA from City University of Hong Kong. Mr. Chang is the son-in-law of Mr. Wong, Senta and the brother-in-law of Mr. Wong, Vinci. 34 Monash Fullwood, Lionel, aged 68, joined the Group in He is a technical director and manages the Technical Services for the PCB arena company wide. Prior to joining the group, he spent 34 years in the electronics industry, specializing in PCB manufacturing. He has designed, selected equipment, and been responsible for the design, building, and management of several new PCB manufacturing facilities in Asia and US. At the present time he is active in the Institute of Printed Circuits, chairing the 2222 and 2226 committees. He received the Institute s Distinguished Committee award in October of 2000, 2002 and 2007, as well as the IPC President s Award for At the 2005 IPC EXPO Conference, Mr. Fullwood was appointed General Chair of the IPC 110 set of Fullwood, Lionel Institute s Distinguished Committee IPC President s Award

16 committees. Mr. Fullwood holds a B.Sc in Chemistry and Maths., and a M.A. in Molecular Biology and Polymer Chemistry. He has authored or co-authored 33 technical papers and publications. Fullwood IPC 110 set of committees Fullwood To Wan-Sang, Stephen, aged 53, joined the Group in He is the general manager for New Product Development. He was the general manager for WKK Source Electronics (HK) Limited, a joint-venture with Source Electronics Asia Limited in U.S., mainly, a leader Integrated Circuit Programming Service. Mr. To has assumed various positions along the growth of the group. He was the engineering manager of World Storage Technology, a former manufacturing unit of the group for making floppy disk drives. He was also the service manager for China, sales manager for electronic equipment in Hong Kong, director and general manager for WKK (Thailand) Limited, director and general manager of WKK Electronics Pte Limited and largely being responsible for marketing of electronic equipment in various areas. Mr. To was the general manager for Special Products Group. Mr. To holds a MBA degree from UK, and a Higher Diploma in Electronic Engineering. 53 New Product Development Source Electronics Asia Limited World Storage Technology WKK (Thailand) Limited WKK Electronics Pte Limited WKK CHINA LIMITED Yeung Chuen-Hau, aged 61, joined the Group in He is the director and general manager of WKK China Limited and is responsible for marketing the Group s products and services in the PRC. 61 WKK ELECTRONIC EQUIPMENT LIMITED Lee Wai-Kong, Johnson, aged 50, joined the Group in He is the director and general manager of WKK Electronic Equipment Limited and is responsible for marketing the Group s electronic products in Hong Kong and the PRC. Mr. Lee holds a Bachelor degree in Science (Electronics Engineering) from the Chinese University of Hong Kong. 50 WKK PCB TRADING LIMITED Lui Kwok-Chak, Randy, aged 48, joined the Group in He is a director and the general manager of WKK PCB Trading Limited and is responsible for marketing the Group s PCB products in Hong Kong and the PRC. Mr. Lui holds a Bachelor of Science degree in Chemical Engineering and worked in the field of PCB manufacturing before he joined the Group. 48

17 WKK ENGINEERING SERVICE LIMITED Wong Man-Sing, Joe, aged 58, joined the Group in He is a director and the general manager of WKK Engineering Service Limited. He holds electronic diploma and has more than 27 years of experience in the managing and servicing of equipment used in the electronics industry. 58 TAIWAN WKK DISTRIBUTION CO. LIMITED Wu Yuan-Chieh, Vincent, aged 42, joined the group in 2006, he is now the general manager of Taiwan WKK distribution Co, Limited and responsible for marketing the group products on sales & service. Mr. Wu holds a bachelor degree of St. John s & St. Mary s Institute of Technology in Electrical Engineering. He has experience on PCB equipment manufacturing, service, application/sales & administration for more than 16 years. 42 St. John s & St. Mary s Institute of Technology 16 PCB WKK TECHNOLOGY LIMITED Wong Kwok-Wai, Jacky, aged 51, joined the Group in He is the executive director of WKK Technology Limited. Mr. Wong had been responsible for the Group s OEM production operation and the marketing of the Group s semiconductors products in the early years and is currently in charge of marketing the Group s OEM services. He holds a Higher Diploma in Industrial Engineering. He has been a director of WKK America (Holdings) Inc. since June WKK America (Holdings) Inc. 17 Wong Lup-Keung, Ben, aged 53, joined the Group in He is the director and general manager of Sales & Project Management Department of WKK Technology Limited. He has extensive industrial experience in various fields namely, R&D engineering, procurement, operations and sales & marketing areas etc. Mr. Wong holds a Bachelor degree in Science (Electronics Engineering) from the Chinese University of Hong Kong. 53 Leung Yuet-Wa, Karen, aged 49, joined the Group in She is the general manager of purchasing department of WKK Technology Limited. Miss Leung has got over 18 years purchasing & material experience in OEM/Telecom field. Miss Leung holds a Bachelor degree in Business Administration from Canada Management School and Diploma in Packaging Studies from Hong Kong Polytechnic University. 49

18 Tse Kai-Lam, aged 60, joined the Group in He is the general manager of Operations in PRC Plant of WKK Technology Limited. Mr. Tse has over 20 years manufacturing experience in both computer and consumer electronics industry. He holds a Bachelor degree in Business Administration WONG S KONG KING HOLDINGS LIMITED Chung Yiu Ming, Alvin, aged 61, joined the Group in Mr. Chung is the general manager of Human Resources & Administration Department of the Group. He has more than 30 years extensive HR&A experience in the industry. Prior to joining the Group, he brought with him well proven record in various regional multi-national organisations such as Ampex, Digital Equipment, Data General and National Semiconductor, etc. Mr. Chung holds a Graduate Diploma in Personnel Management from The Hong Kong Polytechnic University (formerly named as HK Technical College). He is the visiting lecturer of the Hong Kong Management Association, the Hong Kong Productivity Council and Shengchun University, etc. for over the past 10 years. Mr. Chung has been served as the Academic Chairman of the Hong Kong People Management Association (former named as Hong Kong Industrial Relations Association). 61 Ampex, Digital Equipment, Data General and National Semiconductor 10 Shengchun University Lam Ka-Mei, aged 40, joined the Group in She is the company secretary of the Group. She holds a Bachelor Degree in Business Administration and Postgraduate Diploma in Corporate Administration. She is an associate member of both The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Company Secretaries. Prior to joining the Group, she has about 15 years experience in the company secretarial field. 40 TAIWAN KONG KING CO., LIMITED Liao Hung-Ying, Smale, aged 45, joined the Group in He is president of Taiwan Kong King Co., Limited. Mr. Liao holds a Bachelor of Electronic degree in Electronic Engineering of St. John s & St. Mary s Institute of Technology. He has been a supervisor for Taiwan Printed Circuit Association since St. John s & St. Mary s Institute of Technology

19 WKK JAPAN LIMITED Harada Mitsuo, Henry, aged 69, joined the Group in He retired as the president and CEO of WKK Japan Limited on 31 March Prior to joining the Group, he started to work with a few electronics specialty firms and established his own companies and became chairman and presidents since He has about 40 years extensive international business experience in High-Tech electronics field of marketing, manufacturing and trading. He is also a director of The Japan Hong Kong Society which is Non-Profit Organisation since January WKK JAPAN LIMITED Harada Mitsuo, Henry 69 WKK Japan Limited The Japan Hong Kong Society Masato Watanabe, age 62, joined the Group in He is appointed as Representative Director and the President of WKK Japan Limited on 1st April Prior to taking this position, he was a Director of Apple Trading Company, Director/Vice President of Kysho America Corporation and Director/General Manager of Kysho Hong Kong Limited in charge of trading, sales and corporate administration. He is a Bachelor of Arts degree holder from Waseda University, Tokyo, Japan. WKK AMERICA (HOLDINGS) INC. Bacon Bruce, aged 50, joined the WIH Group in 1986 and transferred to the WKK Group in He is the president of WKK America (Holdings) Inc. Mr. Bacon is responsible for the Sales and Marketing activities of WKK Technology Limited in North America. He has over 25 years experience in the electronics and computer industry. Prior to joining the group in 1986, Mr. Bacon managed several Customer Service and Quality Assurance operations for U.S. based companies involved in the computer industry. Masato Watanabe 62 WKK Japan Limited Apple Trading Company Kysho America Corporation Kysho Hong Kong Limited Waseda University WKK AMERICA (HOLDINGS) INC. Bacon Bruce 50 WKK America (Holdings) Inc. Bacon Bacon 19 WKK TRAVEL LIMITED Ho Yim Wai Hing, Helen, aged 50, joined the Group in She is general manager of WKK Travel Limited. Mrs. Ho has over 18 years experience in administration. She holds a Diploma in Business Management. Mrs. Ho is the spouse of Mr. Ho Chi-Kin, deputy general manager of Wong s Kong King Holdings Limited. 50

20 20 3 KINGS HOLDING LIMITED Leung Kam-Fong, aged 67, obtained a Bachelor of Science degree and a post-graduate Certificate in Education from the University of Hong Kong. He began his career in technical education and training in 1965 at the Hong Kong Technical College and Hong Kong Polytechnic. He joined the Vocational Training Council in 1982, founded the Chai Wan Technical Institute in 1985, upgraded it to Hong Kong Technical College (Chai Wan) in 1992 and subsequently became Deputy Executive Director in In 1995 he was appointed Chief Executive of Tung Wah Group of Hospitals until In these 11 years Tung Wah experienced tremendous expansion, and he pioneered the development of a series of modern Chinese Medicine Specialist Clinics. He was awarded honorary doctorate degrees from Middlesex University, U. K. and Hunan University of Traditional Chinese Medicine, PRC and holds visiting professorship at Hunan and Chengdu University of Traditional Chinese Medicine, PRC. He has also been appointed Vice-Secretary General of the World Federation of Chinese Medicine Societies, PRC and President of the International Hua-Xia Medicine Society. He joined the group in 2007 as executive director and chief executive of 3 Kings Holding Ltd. to conduct business in healthcare and Chinese medicine. 67 Middlesex University Wong Vinci, aged 38, is the director and general manager of 3 Kings Holding Limited. He graduated from University of British Columbia with a Bachelor Commerce (marketing major) degree. He is a media personality well-known to Hong Kong and mainland China TV viewers as a quality presenter with accuracy. He has extensive networking experience with the local media and therefore enhances the advertising and sales promotion of company s product. Mr. Wong is the son of Mr. Wong, Senta and the brother-in-law of Mr. Chang Jui Shum, Victor. 38

21 REPORT OF THE DIRECTORS The Directors present their annual report and the audited consolidated financial statements of the Company for the year ended 31 December PRINCIPAL ACTIVITIES and geographical analysis of operations The Company acts as an investment holding company. The principal activities of its principal subsidiaries are trading and distribution of chemicals, materials and equipment used in the manufacture of printed circuit boards and electronic products and the manufacture of electrical and electronic products for OEM customers. An analysis of the Group s performance for the year by business and geographical segments is set out in note 6 to the financial statements. RESULTS The results of the Group for the year ended 31 December 2008 are set out in the consolidated income statement on page 41. DIVIDENDS An interim dividend of HK$0.015 per share amounting to HK$11,090,000 was paid to the shareholders during the year. The Board of Directors do not recommend the payment of final dividend for the year ended 31 December Reserves Details of the movements in reserves of the Group and the Company during the year are set out in note 31 to the financial statements. PROPERTY, PLANT AND EQUIPMENT Details of movements in property, plant and equipment of the Group are set out in note 17 to the financial statements. SHARE CAPITAL Details of the Company s share capital are set out in note 29 to the financial statements. distributable reserves The Company s reserves available for distribution to the shareholders, as calculated under the Companies Act 1981 of Bermuda and the Bye-laws of the Company, as at the balance sheet date, amounted to HK$185,511,000 (2007: HK$199,050,000). In addition, the company s capital redemption reserve and share premium may be distributed in the form of fully-paid bonus shares. PRE-EMPTIVE RIGHTS There are no provisions for pre-emptive rights under the Company s Bye-laws, or the laws of Bermuda, which would oblige the Company to offer new shares on a pro-rata basis to existing shareholders ,090, ,511,000199,050,000 21

22 22 RETIREMENT BENEFITS SCHEMES Details of the Group s retirement benefits schemes are set out in note 34 to the financial statements. Five year financial summary A summary of the results and the assets and liabilities of the Group for the last five financial years is set out on pages 10 to 11. PURCHASE, SALE OR REDEMPTION OF THE COMPANY S LISTED SECURITIES Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company s securities during the year. CHARITABLE DONATIONS During the year, the Group made charitable donations amounting to approximately HK$3,342,000. MAJOR CUSTOMERS AND SUPPLIERS 36% of turnover and 30% of purchases during the year were attributable to the Group s five largest customers and suppliers respectively. 9% of turnover and 12% of purchases during the year were attributable to the Group s largest customer and supplier respectively. None of the Directors, their associates or any shareholder (which to the knowledge of the Directors owns more than 5% of the Company s issued share capital) has any interest in the Group s five largest customers or five largest suppliers ,342,000 36% 30% 9% 12% 5% DIRECTORS The Directors of the Company during the year and up to the date of this report are: Executive Directors Senta Wong (Chairman and Chief Executive Officer) Edward Ying-Chun Tsui Byron Shu-Chan Ho Bengie Man-Hang Kwong Hamed Hassan El-Abd Non-Executive Director Hsu Hung-Chieh (appointed on 1 January 2009) Independent Non-Executive Directors Peter Chung-Yin Lee John Ho Philip Wan-Chung Tse Gene Howard Weiner In accordance with Bye-laws 103 to 105 of the Company s Bye-laws, Mr. Byron Shu-Chan Ho, Mr. Hamed Hassan El-Abd and Mr. Peter Chung-Yin Lee shall retire by rotation and, being eligible, offer themselves for election. Hamed Hassan El-Abd Gene Howard Weiner Hamed Hassan El-Abd

23 In accordance with Bye-law 109 of the Company s Bye-laws, Mr. Hsu Hung-Chieh retires at the forthcoming general meeting and, being eligable, offers himself for re-election. 109 The term of office for each Independent Non-Executive Director is the period up to his retirement by rotation in accordance with the Company s Bye-laws. The Company has received, from each of the Independent Non-executive Directors, an annual confirmation of his independence pursuant to Rules 3.13 of the Listing Rules. The Company considers all of the Independent Non-executive Directors to be independent. INTERESTS OF DIRECTORS At 31 December 2008, the interests or short positions of the Directors of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance ( SFO ) as recorded in the register required to be kept under Section 352 of the SFO or as otherwise notified to the Company and The Stock Exchange of Hong Kong Limited (the Stock Exchange ) pursuant to the Model Code for Securities Transactions by Directors of Listed Companies, were as follows: XV 23 The Company Total Interests Total (including Interests underlying as % of shares) of the issued as % of the share of Underlying share capital capital Shares (share Personal Family Corporate Other Total options) Name Interests Interests Interests Interests Interests % % Senta Wong 4,000,000 1,572, ,012, ,800, ,384, (Note 1) (Note 2) 1 2 Edward Ying-Chun Tsui 4,577,920 4,577, ,000, Byron Shu-Chan Ho 2,470, ,000 2,830, ,000, Bengie Man-Hang Kwong 3,150,000 3,150, ,250, Hamed Hassan El-Abd 750, , ,250, Gene Howard Weiner 330, , ,

24 Notes: ,012,723 shares were registered in the name of Wonder Luck International Limited, which was wholly owned by Senta Wong (BVI) Limited. The entire issued share capital of which was 50.25% owned by Mr. Senta Wong and 49.75% owned by his wife, Ms. Wong Wu Lai Ming. The references to 122,012,723 shares deemed to be interested by Mr. Senta Wong (as disclosed herein) and Senta Wong (BVI) Limited (as disclosed in the section headed Interests of substantial shareholders ) relate to the same block of shares ,012,723Wonder Luck International LimitedSenta Wong (BVI) Limited 50.25% 49.75% Senta Wong (BVI) Limited 122,012, ,800,000 shares were registered in the name of Rewarding Limited, which was wholly owned by Greatfamily Inc. (which was in turn wholly owned by Greatguy Inc.) for a discretionary trust, of which Mr. Senta Wong and Batsford Limited were regarded as the founders (by virtue of the SFO). The references to 207,800,000 shares deemed to be interested by Mr. Senta Wong (as disclosed herein). Greatfamily Inc. and Greatguy Inc. (as disclosed in the section headed Interests of substantial shareholders ) and Batsford Limited (as disclosed in Note 1(a) under the section headed Interests of substantial shareholders ) relate to the same block of shares. Certain Directors held qualifying shares in certain subsidiaries of the Group on trust for the Company or other subsidiaries of the Group ,800,000 Rewarding Limited Greatfamily Inc. Greatguy Inc. Batsford Limited Greatfamily Inc. Greatguy Inc. Batsford Limited 1(a) 207,800,000 Save as disclosed herein, as at 31 December 2008, none of the Directors of the Company or his associates had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under Section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies. 352 XV

25 SHARE OPTION SCHEME A summary of the Share Option Scheme (the Scheme ) which came into effect from 30 May 2005, disclosed in accordance with the Rules governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the Listing Rules ) is as follows: (1) Purpose of the Scheme The purpose of the Scheme is to provide the Eligible Participants with an opportunity to have a personal stake in the Company with a view to motivating the Eligible Participants to utilize their performance and efficiency for the benefit of the Group and attracting and retaining or otherwise maintaining an ongoing relationship with the Eligible Participants whose contributions are or will be beneficial to the long term growth of the Group. (1) (2) Participants of the Scheme The Board may at its discretion grant options to any director (whether executive, non-executive or independent nonexecutive) or full-time employee of any member of the Group. (2) 25 (3) Total number of shares available for issue under the Scheme and % of issued share capital at 31 December 2008 The number of share issuable under the share options granted under the scheme was 16,960,000 shares representing 2.29% of the issued share capital at 31 December (3) 16,960, % (4) Maximum entitlement of each participant under the Scheme The maximum number of shares issuable under the options to each participant in any 12-month period up to the date of grant must not exceed 1% of the shares in issue unless it is approved by shareholders in a general meeting of the Company. Any share options granted a substantial shareholder or an independent non-executive director of the Company or to any of their associates, in excess of 0.1% of the shares in issue and with an aggregate value (based on the closing price of the shares at the date of the grant) in excess of HK$5 million, in any 12-month period, are subject to shareholders approval in general meeting of the Company. (4) 1% 0.1% 5,000,000

26 (5) The period within which the shares must be taken up under an option An Option may be exercised as specified by the Board in relation to such option in its terms of grant which shall not be earlier than 1 year after its date of grant, nor be more than 10 years from its date of grant. (5) (6) The minimum period for which an option must be held before it can be exercised According to the share option scheme of the Company, no option can be exercised within 1 year after its date of grant unless otherwise determined by the board of directors of the Company. In addition, options will vest as to 25% on the first anniversary of its date of grant and as to the remainder on the second anniversary of its date of grant. (6) 25% 26 (7) The amount payable upon acceptance of option HK$10.00 is payable by the each Eligible Participant to the Company on acceptance of options within 21 days from the Offer Date. (8) The Basis of determining the exercise price The exercise price must be at least the higher of: (7) (8) (i) the closing price of a share as stated in the daily quotations sheet of the Stock Exchange on the Date of Grant which must be a business day; (i) (ii) the average of the closing prices of the Shares as stated in the daily quotations sheets of the Stock Exchange for the five business days immediately preceding the Date of Grant; and (ii) (iii) the nominal value of a Share. (iii) (9) The remaining life of the scheme The Scheme will expiry at the close of business on 29 May (9)

27 SHARE OPTIONS Particulars of the Company s share option scheme are set out in note 30 to the consolidated financial statements. Movements in the Company s share options during the year are as follows: 30 Outstanding Outstanding at 31 at 1 December January Cancelled/ Granted Exercised lapsed during Date of Exercise Exercisable Vesting during during the year Grant Price Period Period the year the year Category 1: Directors Senta Wong HK$ ,000,000 (3,000,000) Edward Ying-Chun Tsui HK$ ,000,000 3,000, Byron Shu-Chan Ho HK$ ,000,000 3,000, Bengie Man-Hang Kwong HK$ ,250,000 2,250, Hamed Hassan, HK$ El-Abd ,250,000 2,250, Gene Howard HK$ Weiner , , Total for directors 13,950,000 (3,000,000) 10,950,000 Category 2: Employees* HK$ ,634,000 (202,000) (150,000) 5,282, HK$ ,000 (12,000) 50, ,000 (38,000) 678, Total for employees 6,412,000 (202,000) (200,000) 6,010,000 Total for all categories 20,362,000 (3,202,000) (200,000) 16,960,000 * Including share options of Mr. Hsu Hung-Chieh who has been appointed as Non-Executive Director of the Company on 1 January *

28 INTERESTS OF SUBSTANTIAL SHAREHOLDERS The Company has been notified that, as at 31 December 2008, persons (other than Directors of the Company) who had interests or short positions in the shares or underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO were as follows: 336 Long positions in shares of the Company Percentage of Name of substantial Number of total issued shares shareholders Capacity shares held % Batsford Limited Founder of discretionary trust 238,413, % and trustee (Note 1) 1 28 Greatfamily Inc. Interest of controlled corporation (Note 2) 207,800, % 2 Greatguy Inc. Trustee (Note 2) 207,800, % 2 Senta Wong (BVI) Limited Interest of controlled corporation (Note 3) 122,012, % 3 Wong Chung Yin Beneficial owner, interest of child or 69,697, % spouse and founder of discretionary trust (Note 4) 4 HSBC International Interest of controlled corporations 47,066, % Trustee Limited LIM Asia Arbitrage Fund Inc. Benefical owner 36,988, %

29 Notes: 1. Batsford Limited was deemed (by virtue of the SFO) to be interested in 238,413,332 shares in the Company. These shares were held in the following capacity: 1. Batsford Limited 238,413,332 (a) 207,800,000 shares were registered in name of Rewarding Limited, which was wholly owned by Greatfamily Inc. (which was in turn wholly owned by Greatguy Inc.) for a discretionary trust, of which Mr. Senta Wong and Batsford Limited were regarded as the founders (by virtue of the SFO). Please see Note 2 under the section headed Interests of Directors. (a) 207,800,000Rewarding Limited Greatfamily Inc. Greatguy Inc. Batsford Limited 2 (b) 30,613,332 shares were held by Levy Investment Limited (which was in turn wholly owned by Batsford Limited) for a discretionary trust, of which Mr. Wong Chung Yin was regarded as the founder (by virtue of the SFO). The references to 30,613,332 shares deemed to be interested by Batsford Limited (as disclosed herein), Mr. Wong Chung Yin (as disclosed in Note 4(c) below) relate to the same block of shares. (b) 30,613,332 Levy Investment Limited Batsford Limited BatsfordLimited 4(c) 30,613, Please see Note 2 under the section headed Interests of Directors Please see Note 1 under the section headed Interests of Directors Mr. Wong Chung Yin was deemed (by virtue of the SFO) to be interested in 69,697,251 shares in the Company. These shares were held in the following capacity: 4. 69,697,251 (a) 3,500,000 shares were held by Mr. Wong Chung Yin personally. (a) 3,500,000 (b) 2,000,000 shares were held under the name of Mr. Wong Chung Yin and his wife, Ms. Woo Sin Ming. (b) 2,000,000 (c) 30,613,332 shares were held by Levy Investment Limited (which was in turn wholly owned by Batsford Limited) for a discretionary trust, of which Mr. Wong Chung Yin was regarded as the founder (by virtue of the SFO). Please see Note 1(b) above. (c) 30,613,332 Levy Investment Limited Batsford Limited 1(b) (d) 33,583,919 shares were held for The Pacific Way Unit Trust, of which Guardian Trustee Limited was regarded as the beneficiary (by virtue of the SFO). Mr. Wong Chung Yin was regarded as the founder of the trust (by virtue of the SFO) in relation to the same block of shares. (d) 33,583,919 The Pacific Way Unit TrustGuardian Trustee Limited

30 Save as disclosed, the Directors are not aware of any other persons who, as at 31 December 2008, had interests or short positions in the shares or underlying shares of the Company as recorded in the register required to be kept under Section 336 of the SFO. COMPLIANCE WITH CHAPTER 13 OF THE LISTING RULES The following informations are disclosed pursuant to rules and of Chapter 13 of the Listing Rules: On 25 July 2007, the Company and its indirect wholly-owned subsidiary, WKK Technology Limited, entered into a loan agreement with Citic Ka Wah Bank Limited in relation to a 2-year term loan facility of up to HK$200 million to refinance the Old Facility and for general working capital purposes. 30 The loan agreement includes covenants to the effect that: (a) Mr. Senta Wong, the controlling shareholder of the Company, together with his associates, must remain the single largest shareholder or group of shareholders of the Company; (b) Mr. Senta Wong, together with his associates and his other family members, must maintain unencumbered ownership of more than 50% of the issued share capital of the Company; and (c) Mr. Senta Wong must remain as the Chairman or the Chief Executive Officer of the Company. Any breach of the above covenants may constitute a default under the loan agreement. If such a default occurs, all amounts outstanding under the facility may become immediately due and payable, which may adversely affect the financial position of the Company. The Directors consider that the loan agreement is on normal commercial terms. As at the latest practicable date, none of the above events of default has occurred. (a) (b) (c) CORPORATE GOVERNANCE The Company is committed to maintaining a high standard of corporate governance practices. Information on the corporate governance practices of the Company is set out in the Corporate Governance Report on pages 32 to DIRECTORS INTERESTS IN CONTRACTS No contract of significance to which the Company or any of its subsidiaries was a party and in which a Director of the Company had a material interest, whether directly or indirectly, subsisted at the end of the year or at any time during the year. DIRECTORS SERVICE CONTRACTS No Director being proposed for re-election at the forthcoming annual general meeting has a service contract which is not determinable by the Group within one year without payment of compensation (other than statutory compensation).

31 Management contracts No contract concerning the management and administration of the whole or any substantial part of the business of the Company had been entered into or existed during the year. ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES At no time during the year was the Company, its subsidiaries or its associated corporations a party to any arrangement to enable the Directors or chief executives of the Company or their respective associates to acquire benefits by acquisition of shares or underlying shares in, debentures of, the Company or its associated corporations. PUBLIC FLOAT On the basis of information that is publicly available to the Company within the knowledge of the Directors as at the date of this Annual Report, the Company has complied with the public float requirements of the Listing Rules for the financial year ended 31 December AUDITOR Messrs. Shinewing (HK) CPA Limited resigned as auditor of the Company on 27 August 2008 and Messrs. PricewaterhouseCoopers was appointed on 27 August 2008 as auditor of the Company to fill the casual vacancy. PricewaterhouseCoopers will hold office until the conclusion of the forthcoming annual general meeting of the Company. 31 The financial statements for the year have been audited by Messrs PricewaterhouseCoopers who retire and, being eligible, offer themselves for reappointment at the forthcoming annual general meeting. On behalf of the Board Senta Wong Chairman Hong Kong, 3 April 2009

32 CORPORATE GOVERNANCE REPORT The Company recognizes that good corporate governance is vital to the success of the Group and sustains development of the Group. The Company aims at complying with, where appropriate, all code provisions set out in Appendix 14 Code on Corporate Governance Practices (the CG Code ) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ( Listing Rules ). 14 The Company s corporate governance practices are based on the principles and the code provisions ( Code Provisions ) as set out in the CG Code of the Listing Rules. The Company has, throughout the year ended 31 December 2008 complied with most of the Code Provisions and certain deviations from the Code Provisions in respect of code provisions A.2.1, A.4.1 and A.4.2, details of which are explained below. A.2.1 A.4.1 A DIRECTORS SECURITIES TRANSACTION The Company has adopted the Model Code for Securities Transactions by Directors of Listing Issuers (the Model Code ) as set out in Appendix 10 to the Listing Rules. Having made specific enquiry of all Directors, all Directors confirmed that they had complied with the required standard set out in the Model Code during the year ended 31 December BOARD OF DIRECTORS The Board comprises five Executive Directors, one Non-Executive Director and four Independent Non-Executive Directors. One of the Independent Non-Executive Directors process the appropriate professional qualifications or accounting or related financial management expertise as required under the Listing Rules. The directors, as at the date of this report, are Mr. Senta Wong, Mr. Edward Ying-Chun Tsui, Mr. Byran Shu-Chan Ho, Mr. Bengie Man- Hang Kwong, Mr. Hamed Hassan El-Abd, Mr. Hsu Hung-Chieh, Mr. Peter Chung-Yin Lee, Mr. John Ho, Mr. Philip Wan-Chung Tse and Mr. Gene Howard Weiner. Hamed Hassan El-Abd Gene Howard Weiner The biographical details of the Directors (including relationship among the members of the Board) are set out on pages 12 to 20 of this Annual Report Each of the Independent Non-Executive Directors has made an annual confirmation of independence pursuant to Rule 3.13 of the Listing Rules. The Company is of the view that all Independent Non-executive Directors meet the independence guidelines set out in Rule 3.13 of the Listing Rules