C O N T E N T S Corporate Information 3-7 Chairman s Statement 8-9 Five Years Financial Summary Biographical Details of Directors and Senior Man

Transcription

1 (Stock Code: 0532) A N N U A L REP O R T 2012

2 C O N T E N T S Corporate Information 3-7 Chairman s Statement 8-9 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 48 Consolidated Balance Sheet Balance Sheet 51 Consolidated Statement of Comprehensive Income 52 Consolidated Statement of Changes in Equity 53 Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements

3 CORPORATE INFORMATION 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 Hamed Hassan El-Abd Non-Executive Director Hsu Hung Chieh Leung Kam Fong Independent Non-Executive Directors Peter Chung-Yin Lee L.L.D., J.P. John Ho Philip Wan-Chung Tse Gene Howard Weiner L.L.D., J.P. Gene Howard Weiner Company Secretary Cheng Ying Auditor PricewaterhouseCoopers 3 Solicitor Stephenson Harwood Bankers Standard Chartered Bank (Hong Kong) Limited The Hongkong and Shanghai Banking Corporation Limited Hang Seng Bank Limited Australia and New Zealand Banking Group Limited Bank of China (Hong Kong) Limited Share Registrars Principal Registrar Butterfield Fulcrum Group (Bermuda) Limited Hong Kong Registrar Tricor Standard Limited Butterfield Fulcrum Group (Bermuda) Limited Registered Office Clarendon House 2 Church Street Hamilton, HM11 Bermuda Clarendon House 2 Church Street Hamilton, HM11 Bermuda Principal Office 17/F, Octa Tower No.8 Lam Chak Street Kowloon Bay Hong Kong 8 17

4 Octa Tower, Kowloon 4 Corporate office 17/F Worker dormitory, Dongguan WKK Technology Limited is the pioneer in green manufacturing. Since 2002, over 1,600 solar panels were installed on the roof of worker dormitory in WKK Technology Park at Dongguan China for 24 hours hot water supplies to our 5,000 employees. 1, ,000

5 These OEM products are manufactured by WKK Technology Limited Bluetooth Speaker 5 Bluetooth Headset Bluetooth Headset

6 Disk Storage System 6 Medical X-Ray equipment control panel X

7 These products are manufactured or distributed by the subsidiaries of WKK Distribution Limited Tagarno Digital Magnification System Superb picture quality High magnification Ergonomic design Safety precautious 7 Rexxam Sherlock-300 Compact batch type AOI Camera: CMOS 2.2 mega pixel Lighting: RGB + warm white LEDs Highest inspection speed: 50 cm 2 /s Major inspection items: solder inspection, component inspection, foreign material, inversion, OCR character recognition CMOS 2.2M pixel RGB LEDs 50 cm 2 /s The Rainbow System Coating and Fine Line Imaging of Printed Circuit Panels A new, exciting, and green process for imaging inner layer PCB s The Rainbow process uses very little energy; 4KW! The Rainbow process requires less than 7 m x 4 m floor space! The Rainbow process is 100% solids; NO SOLVENTS! The Rainbow Process results in low volumes of waste to treat! 4KW 7 x 4

8 CHAIRMAN S STATEMENT BUSINESS REVIEW The Group s turnover for the year 2012 was HK$5.2 billion, reflecting a slight increase of approximately 0.2% compared to 2011 mainly due to record sales achieved by the Group s OEM Manufacturing Division which more than offset a drop in sales by the Trading and Distribution Division. However, the Group s profit attributable to shareholders for the year was HK$42.3 million, reflecting a decline of approximately 44% compared to last year. 0.2% 44% 8 Trading and Distribution Division (WKK Distribution) The Trading and Distribution Division recorded sales of HK$1.7 billion during 2012, representing a decrease of approximately 22% compared to As a result of the continuing global economic slowdown, demand for the Group s product range in the second half of this year dropped by approximately 6% compared to that in the first half of this year. Operating profit dropped by approximately 62% as all of the Division s major operations registered decreases in operating profits compared to last year. OEM Manufacturing Division (WKK Technology) The Group s OEM Manufacturing Division achieved a record turnover of HK$3.5 billion in 2012, reflecting an increase of approximately 16% compared to 2011, mainly because of the Group s more diversified customer base. Operating profit increased by approximately 17% compared to last year partly as a result of the increased use of factory automation to mitigate the impact of escalating labour costs in the PRC. 22% 6% 62% 16% 17% FINANCE The Group has committed bank and other financing facilities totalling HK$4,477 million, of which HK$1,060 million was drawn down as at 31 December As at 31 December 2012, the Group s consolidated net borrowings amounted to HK$367 million and total equity amounted to HK$1,498 million, resulting in a net gearing ratio of 24%. 24% 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.

9 CAPITAL STRUCTURE There have been no material changes in the capital structure of the Group since 31 December HUMAN RESOURCES As at 31 December 2012, the Group had a total of 5,881 employees, of whom 316 were based in Hong Kong, 5,234 in the PRC and 331 overseas. The remuneration packages of the Group s employees are mainly based on their performance and experience, taking into account current industry practices. Provident fund scheme, medical allowances, and in-house and external training programs are available to employees. Share options and discretionary bonuses are provided to employees according to the performance of the individual and the Group. The remuneration policy and packages of the Group s employees are regularly reviewed. 5, , PROSPECTS Given the currently more stable economic environment in 2013 after the third round of quantitative easing measures in the USA and the European Central Bank s rescue measures for the euro-zone, it is expected that demand for industrial products distributed by the Group will be slightly stronger for the coming year than last year. Nevertheless, market competition will remain tough. 9 The directors expect that, with the Group s diversified customer base and based on orders on hand, the revenue of the Group s OEM Manufacturing Division will continue to grow in the coming year. The Group will continue to enhance factory automation to alleviate the impact of continuing increases in labour costs in the PRC. On behalf of the Board, I wish to thank all employees for their loyalty, dedication and hard work throughout the year. By Order of the Board Senta Wong Chairman Hong Kong, 27 March 2013

10 FIVE YEARS FINANCIAL SUMMARY HK $ Million ,442 Turnover 3,095 5,192 5,238 5, HK $ Million 250 Profit/( loss) attributable to shareholders HK $ Million Total assets 3,883 3,647 3, ,622 2, ,199 1,164 1,304 1,362 1,398 Total assets Total shareholders funds attributable to the equity holders of the Company

11 FIVE YEARS FINANCIAL SUMMARY For the year ended 31 December RESULTS Turnover 4,442,440 3,095,362 5,192,120 5,237,518 5,249,294 Profit/(loss) attributable to shareholders 55,899 (41,245) 135,102 75,456 42,301 At 31 December ASSETS AND LIABILITIES 11 Total assets 2,621,921 2,332,508 3,646,578 3,883,076 3,254,493 Total liabilities (1,346,322) (1,100,012) (2,250,774) (2,441,817) (1,755,996) Non-controlling interest (76,664) (68,238) (91,946) (79,195) (100,854) Total shareholders funds attributable to the equity holders of the Company 1,198,935 1,164,258 1,303,858 1,362,064 1,397,643

12 BIOGRAPHICAL DETAILS OF DIRECTORS AND SENIOR MANAGEMENT EXECUTIVE DIRECTORS Wong, Senta, aged 70, 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. 70 Tsui Ying-Chun, Edward, aged 66, 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 68, 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 65, is an Executive Program Graduate of the Graduate School of Business, Stanford University, also a graduate of the Senior Executive Program on Negotiation (PON) at Harvard Law School, Harvard University and an 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 30 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.) 65 (PON) ISO 9000/14000 WKK Japan Limited WKK America (Holdings) Inc.

13 Hamed Hassan El-Abd, aged 65, 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 NON-EXECUTIVE DIRECTOR Hsu Hung Chieh, alias, Andrew Sheu, aged 66, joined the Group in 1981, is the Chairman of Taiwan Kong King Co., Limited ( TKK ), 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. Mr. Hsu holds a bachelor degree in Electrical Engineering from Tatung University in Taiwan. He has been a director of the Company since January Leung Kam Fong, aged 71, obtained a Bachelor of Science degree and a post-graduate Certificate in Education from the University of Hong Kong. Mr. Leung 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 as the 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 had been appointed Vice-Secretary General of the World Federation of Chinese Medicine Societies, PRC from 2006 to He has been elected President of the International Hua-Xia Medicine Society since Mr. Leung joined the Group in 2007 as the executive director and the chief executive of 3 Kings Holding Limited ( 3 Kings Holding ), a subsidiary of the Company to conduct business in health care and Chinese medicine. Mr. Leung has also been appointed as the director of 3 Kings Advertising Company Limited ( 3 Kings Advertising ), a subsidiary of the Company since Mr. Leung resigned from all the positions of 3 Kings Holding and 3 Kings Advertising in January Mr. Leung was appointed as a director of the Modernized Chinese Medicine International Association in He has been an Non- Executive director of the Company since January Hamed Hassan El-Abd 65 AmistarAG El-Abd Middlesex University 13

14 14 INDEPENDENT NON-EXECUTIVE DIRECTORS Lee Chung-Yin, Peter, aged 86, 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 Ho, John, aged 67, 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 consultant of John Ho & Tsui. Mr. Ho was appointed as 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 previously London listed company. He has been a director of the Company since March China Western Investments PLC Tse Wan-Chung, Philip, aged 68, retired from DDB Advertising Agency Operations in 1997 and remained a member of the Company s Worldwide Board until Mr. Tse had spent over 34 years in the advertising industry. Besides his involvement in advertising, Mr. Tse is one of the founders of the Hong Kong Artists Guild ( Guild ) in which he has been serving as the Chairman of the Executive Committee since Mr. Tse was appointed as the Chairman of Guild since He was also appointed by the Hong Kong Government as a council member of the Hong Kong Academy of Performing Arts in Mr. Tse has served as a member of the Young Presidents Organization since 1976 and is currently a member of the World Presidents Organization. In recent years, Mr. Tse focuses on marketing management and art and culture related business. He founded BaoQu Tang Gallery of Art ( BQT ) in BQT has become a well known brand in the art scene in Hong Kong and China. Mr. Tse also involved in auction business in Guangzhou. He has been a Director of the Company since March DDB Advertising Agency Operations Young Presidents Organization World Presidents Organization

15 Gene Howard Weiner, aged 76, is president of Weiner International Associates, a business and technical consultancy serving the specialty chemical and electronics industries. The clients of Weiner International Associates have included several Fortune 100 companies. He was a founding partner of Quantum Solar Group, Inc., a market research organization in the Photovoltaic solar industry as well as a founding member of the SMTA (Surface Mount Technology Association). His executive experience includes that of Director and President of New England Laminates Co. Inc. (subsidiary of Park Electrochemical), a leading supplier of copper clad laminates to the electronics industry; vice president of sales and marketing of Dynachem Corporation (now part of Dow Chemical), one of the world s leading suppliers of photopolymers specialty chemicals to the electronics industry; and vice president of marketing of Oxy Metal Finishing, a major specialty chemical firm. Mr. Weiner is on the Board of Advisors of NCAB USA, Inc. (formerly known as P. D. Circuits, Inc.), a U.S. company providing CAM, design for manufacture, tests and other shared infrastructure services to the printed circuit assembly industry. He is a member of the Advisory Board of the MBA program of the Malcolm Baldridge School of Business at Post University, founded over 100 years ago as a business school. Post is ranked in the top 20 among online education providers according to the Online Education Data Base (OEDb), a U.S. national resource for online degree programs. 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 Gene Howard Weiner 76 Weiner International Associates Weiner International Associates 100 Quantum Solar Group, Inc (SMTA) New England Laminates Co., Inc. Park Electrochemical Dynachem Corporation Dow Chemical Oxy Metal Finishing Weiner NCAB USA, Inc.P.D.Circuits, Inc. Post University MBA Post University 100 IPC Raymond Pritchard Hall of Fame Weiner IPC s 15 SENIOR MANAGEMENT WONG S KONG KING HOLDINGS LIMITED Chung Yiu Ming, Alvin, aged 65, 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 (formerly named as Hong Kong Industrial Relations Association). 65 Ampex, Digital Equipment, Data General and National Semiconductor 10 Shengchun University

16 Cheng Ying, aged 41, joined the Group in She is now the company secretary of the Group. She graduated from the Lingnan University with a Honours Diploma in Company Secretaryship and Administration. She is an associate member of both of the Hong Kong Institute of Company Secretaries and the Institute of Chartered Secretaries and Administrators. Prior to joining the Group, she has about 15 years of experience in company secretarial field. 41 WKK DISTRIBUTION LIMITED Chang Jui Shum, Victor, aged 38, joined the Group in He is now the Director and 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. 38 Monash 16 Fullwood, Lionel, aged 72, 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 seven PCB manufacturing facilities in Asia and US. At the present time, he is active in the Institute of Printed Circuits. 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 committees. Mr. Fullwood holds a B.Sc in Chemistry and Maths., and an M.A. in Molecular Biology and Polymer Chemistry. He has authored or coauthored 41 technical papers and publications. Fullwood, Lionel 72 Institute s Distinguished Committee IPC FullwoodIPC 110 Fullwood 41 In February of 2013, Mr. Fullwood was awarded the 2013 Raymond Pritchard award of the IPC, and inducted into the IPC Hall of Fame. This is the highest award the IPC presents, with only 33 recipients worldwide since Fullwood IPC IPC

17 To Wan-Sang, Stephen, aged 57, joined the Group in He is currently the Head of South East Asia operation and 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 in 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 manufacturing 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 territories. Mr. To was also the general manager for Special Products Group. Mr. To holds an MBA degree from UK, and a Higher Diploma in Electronic Engineering. 57 Source Electronics Asia Limited World Storage Technology WKK (Thailand) LimitedWKK Electronics Pte Limited WKK ELECTRONIC EQUIPMENT LIMITED Lee Wai-Kong, Johnson, aged 54, 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 WKK PCB TRADING LIMITED Lui Kwok-Chak, Randy, aged 52, 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 from National Taiwan University. He worked in the field of PCB manufacturing before he joined the Group. 52 WKK ENGINEERING SERVICE LIMITED Wong Man-Sing, Joe, aged 62, 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 30 years of experience in the managing and servicing of equipment used in the electronics industry. 62

18 CHINA BUSINESS Yeung Chuen-Hau, aged 65, 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. 65 Ng Ka Kui, Jimmy, aged 50, joined the Group in He is the General Manager of WKK Beijing office. Mr. Ng had been responsible for the Group s electronics assembly, printed circuit board and semiconductors business for North China market. He holds a Certificate in Electrical Engineering. 50 Yu Chun Yip, Tony, aged 45, joined the Group in He is the General Manager of WKK Trading (Shanghai) Co., Ltd. and Suzhou Branch. Mr. Yu is responsible for the marketing, sales and service of the SMT product in East China. He holds a Diploma in Marketing. 45 SMT 18 Lee Wai-Man, Raymond, aged 50, join the Group in He is the General Manager of WKK EMS Equipment (Shenzhen) Limited. Mr. Lee previously worked in the engineering department, sales & marketing for electronic assembly field, and is currently in charge of Group s distribution business in South China. 50 Lin Fu Chan, Frank, aged 58. Mr Lin graduated from the Jiangxi University of Science and Technology in Before joining the Group in 1991, he had been a civil servant of the Government of the People s Republic of China (PRC) for 8 years with over 10 years mechanical product design and management experience. He was granted a National Technology Improvement Award by the Government of the PRC in He is now the General Manager of WKK EMS Equipment (Chengdu) Ltd, WKK EMS Equipment (Chongqing) Ltd., WKK Electronic Equipment (Xi an) Ltd. and the Special Assistant to the Group Chairman. He is also a Director and Vice Chairman of Hong Kong Jiangxi Clansmen Association Ltd. 58 WKK DISTRIBUTION (SINGAPORE) PTE LTD. (FORMERLY KNOWN AS WONG S KONG KING (SINGAPORE) PTE LTD.) Leung Man Hoy, aged 63, joined the Group in He is the Director and General Manager of Wong s Kong King (Singapore) Pte Ltd. He is taking care of the operation management of South East Asia business. He holds electronic certificate and has over 30 years experience in electronics field. Prior to he transferred to Singapore, he was the regional manager of WKK Engineering Service Limited and Director and General Manager for WKK Thailand Limited. WKK DISTRIBUTION (SINGAPORE) PTE LTD. WONG S KONG KING (SINGAPORE) PTE LTD. 63 Wong s Kong King (Singapore) Pte Ltd WKK Thailand Limited

19 TAIWAN WKK DISTRIBUTION CO. LIMITED Liu Chien Wei, alias, Martin Leou, aged 49, joined Taiwan Kong King Co., Limited in He is now the general manager and Director of Taiwan WKK Distribution Co, Limited and is responsible for overseeing the day-to-day operations of Taiwan WKK Distribution business. He has over 26 years experience in service and customer management. Mr. Liu has also been appointed as the General Manager of PCB division of WKK China Shanghai office in October 2001 and is responsible for PCB, Optoelectronics and Semiconductor business in east China area. Mr. Liu holds a Bachelor degree in Electrical Engineering from the Qing Yun University. Martin Leou 49 WKK TECHNOLOGY LIMITED Wong Kwok-Wai, Jacky, aged 55, 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. 19 Wong Lup-Keung, Ben, aged 57, 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. 57 Tang Hang, aged 56, joined the Group in April He is the General Manager of Manufacturing Operations in PRC Plant of WKK Technology Limited. Mr. Tang has over 20 years manufacturing experience in both computer and consumer electronics industries. He holds a Bachelor degree in Radio and Telecom Technology from the South China University of Technology. 56 Wong Kong-Ting, David, aged 53, joined the Group in He is the General Manager of Material Management Department of WKK Technology Limited. He has over 30 years manufacturing experience in Planning and Material Control (PMC), Procurement Management, etc. He holds Bachelor of Science in Computer Information System and master in Business Administration. 53

20 DONGGUAN NISSIN PLASTIC PRODUCTS CO., LTD. Chan Wing Wah, Jonathan, aged 60, joined the Group in 2001 and was appointed as the assistant general manager of manufacturing (WKK Technology Ltd.). In 2005, Mr. Chan left the Group and furthered his study. He obtained a Master of Science degree in Strategic Human Resource Management from Hong Kong Baptist University. He also holds a Master degree in Engineering Management from University of Technology, Sydney, Australia. He rejoined the Group in 2008 and was promoted to managing director of Dongguan Nissin Plastic Products Co., Ltd since He has more than 20 years experience in electronics industries. Prior to joining the Group, he was the deputy managing director in a plastic fabrication shop, the China operations director of a trading company and the assistant general manager of an OEM company WKK TRAVEL LIMITED Ho Yim Wai Hing, Helen, aged 54, joined the Group in She is the general manager of WKK Travel Limited. Mrs. Ho has over 18 years experience in administration. She holds a Diploma in Business Management KINGS HOLDING LIMITED Wong Vinci, aged 42, is the director and general manager of 3 Kings Holding Limited ( 3 Kings ). He has been appointed as a director of 3 Kings on 1 December He graduated from the 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 net-working 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. 42 TAIWAN KONG KING CO., LIMITED Liao Hung-Ying, Smale, aged 49, joined the Group in He is the 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 was a supervisor for Taiwan Printed Circuit Association from 2002 to 2009 and has become the Executive Supervisor since St. John s & St. Mary s Institute of Technology

21 WKK JAPAN LIMITED Masato Watanabe, age 66, joined the Group in He is appointed as Representative Director and the President of WKK Japan Limited on 1 April Prior to taking this position, he was a Director/Vice President of Kysho America Corporation 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 54, 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 30 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. WKK JAPAN LIMITED Masato Watanabe 66 WKK Japan Limited Kysho America Corporation Waseda University WKK AMERICA (HOLDINGS) INC. Bacon Bruce 54 WKK America (Holdings) Inc. Bacon Bacon 21

22 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 SEGMENTAL INFORMATION 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. 22 An analysis of the Group s performance for the year by operating segments is set out in note 6 to the financial statements. RESULTS The results of the Group for the year ended 31 December 2012 are set out in the consolidated income statement on page 48. DIVIDENDS The Board of Directors do not recommend the payment of an interim divided for the six months ended 30 June The Board of Directors recommends a final dividend of HK$0.015 per share be paid in respect of the year ended 31 December The proposed final dividend will be payable on or about Tuesday, 23 July 2013, subject to approval at the Annual General Meeting, to shareholders whose names appear on the Register of Members of the Company on Wednesday, 19 June 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$249,572,000 (2011: HK$245,301,000). 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 ,572, ,301,000

23 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$1,185,000. MAJOR CUSTOMERS AND SUPPLIERS 46% of turnover and 27% of purchases during the year were attributable to the Group s five largest customers and suppliers respectively. 17% of turnover and 7% 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. 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 (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 Leung Kam Fong (Appointed on 1 January 2013) 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. Tsui Ying Chun, Edward, Mr. Leung Kam Fong, Mr. John Ho and Mr. Gene Howard Weiner shall retire by rotation and, being eligible, offer themselves for election ,185,000 46% 27% 17% 7% 5% Hamed Hassan El-Abd Gene Howard Weiner Gene Howard Weiner 23

24 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 Nonexecutive 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 CONTINUING CONNECTED AND RELATED PARTY TRANSACTIONS Details of the material related party transactions undertaken by the Group in its normal course of business are set out in Note 41 to the consolidated financial statements. Some of the related party transactions as set out in Note 41(a) to the consolidated financial statements also constitute continuing connected transactions under Chapter 14A of the Listing Rules (a) 14A 24 These continuing connected transactions are exempted from the reporting, annual review, announcement and independent shareholders approval requirements under Chapter 14A.33 of the Listing Rules. Save as disclosed, there is no other related party transaction which constitutes a connected/continuing connected transaction and is subject to the disclosure requirements under the Listing Rules. 14A.33

25 INTERESTS OF DIRECTORS At 31 December 2012, 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: 352 XV (I) The Company (I) 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 % % 25 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, Hsu Hung-Chieh 2,564,000 2,564, , Gene Howard Weiner 330, , ,

26 (II) The Company s associated corporation Taiwan Kong King Co., Ltd. (II) 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 % % Hsu Hung-Chieh 164,615 4, , 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 ,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 , 0 1 2, W o n d e r L u c k International Limited Senta Wong (BVI) Limited 50.25% 49.75% Senta Wong (BVI) Limited 122,012, ,800,000 Rewarding Limited Greatfamily Inc. Greatguy Inc. Batsford Limited Greatfamily Inc. Greatguy Inc. Batsford Limited 1(a) 207,800,000 Certain Directors held qualifying shares in certain subsidiaries of the Group on trust for the Company or other subsidiaries of the Group. Save as disclosed herein, as at 31 December 2012, 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

27 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 non-executive) or full-time employee of any member of the Group. (2) 27 (3) Total number of shares available for issue under the Scheme and % of issued share capital at 31 December 2012 The number of share issuable under the share options granted under the scheme was 16,444,000 shares representing 2.22% of the issued share capital at 31 December (3) 16,444, % (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 to 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

28 (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% 28 (7) The amount payable upon acceptance of option HK$10.00 is payable by each Eligible Participant to the Company on acceptance of options within 21 days from the Offer Date. (7) (8) The Basis of determining the exercise price The exercise price must be at least the higher of: (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 expire at the close of business on 29 May (9)

29 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 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 El-Abd HK$ ,250,000 2,250, Hsu Hung-Chieh HK$ , , Gene Howard Weiner HK$ , , Total for directors 11,700,000 11,700,000 Category 2: Employees HK$ ,016,000 4,016, HK$ ,000 50, , , Total for employees 4,744,000 4,744,000 Total for all categories 16,444,000 16,444,000

30 INTERESTS OF SUBSTANTIAL SHAREHOLDERS The Company has been notified that, as at 31 December 2012, 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 and trustee (Note 1) 1 207,800, % 30 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 spouse and founder of discretionary trust (Note 4) 4 67,197, % HSBC International Trustee Limited Interest of controlled corporations 47,066, % LIM Asia Arbitrage Fund Inc. Beneficial owner 36,988, % Notes: 1. Batsford Limited was deemed (by virtue of the SFO) to be interested in 207,800,000 shares in the Company. The 207,800,000 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). Please see Note 2 under the section headed Interests of Directors. 1. Batsford Limited 207,800, ,800,000Rewarding Limited Greatfamily Inc. Greatguy Inc. Batsford Limited 2 Batsford Limited was deregistered on 11 January Batsford Limited

31 2. 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 67,197,701 shares in the Company. These shares were held in the following capacity: 4. 67,197,701 (a) 3,000,000 shares were held by Mr. Wong Chung Yin personally. (a) 3,000,000 (b) 450 shares were held under the name of Ms. Woo Sin Ming, the wife of Mr. Wong Chung Yin. (b) 450 (c) 30,613,332 shares were held by Levy Investment Limited. The entire issued share capital of which was 100% owned by Mr. Wong Chung Yin. (c) 30,613,332 Levy Investment Limited (d) 33,583,919 shares were held by Pacific Way Limited. The entire issued share capital of which was 50% owned by Mr. Wong Chung Yin and 50% owned by his wife, Ms. Woo Sin Ming. Save as disclosed, the Directors are not aware of any other persons who, as at 31 December 2012, 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. (d) 3 3, 5 8 3, P a c i f i c Wa y Limited 50% 50% 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 33 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.