Growth and Value Creation · aerospace industry. We are committed to delivering increased proﬁ tability and to grow our portfolio selectively. On growth, our guiding principles

Annual Report 2005

Growth and Value Creation

Au

tron

Co

rpo

ratio

n L

imite

d A

nn

ua

l Re

po

rt 20

05

Global Headquarters

Autron Corporation Limited 53 Serangoon North Avenue 4 Singapore 555852Tel : (65) 6538 7055 Fax : (65) 6536 9790 www.autroncorp.com ABN 25 002 876 182

Autron Corporation Limited is an unrelated and distinct entity to Autron Electronics Pty Ltd

Autron AR05 Cover FA.indd 1Autron AR05 Cover FA.indd 1 10/10/05 6:31:30 PM10/10/05 6:31:30 PM

1 Mission Statement

2 Chairman’s Message

3 Group Executive Chairman’s Statement

4 Board of Directors

5 Signifi cant Events

6 Corporate Directory

7 Corporate Information

8 Financial Review

Contents

an E

qui

ty p

rodu

ctio

n

Autron AR05 Cover FA.indd 2Autron AR05 Cover FA.indd 2 10/10/05 6:31:31 PM10/10/05 6:31:31 PM

annual report 2005 1

mission statement

Maintain our dominant position and performance as the leading

solutions provider in Asia to meet the demands and satisfaction of

our customers and business partners, and for the ultimate benefit of

our employees and shareholders.

Our vision is to capitalize on our dominance with the largest network

in Asia to become the leading global SMT equipment solutions

provider to the electronics manufacturing industry. We want to be

continually known for our competency, reliability and expertise in

the successful delivery of comprehensive manufacturing process

solutions to our customers.

Autron AR05 P1-8 FA.indd 1Autron AR05 P1-8 FA.indd 1 10/10/05 6:25:21 PM10/10/05 6:25:21 PM

2 autron corporation limited

chairman’s message

Dear Shareholders,In my statement last year, I mentioned that we were stepping up the pace of our eff orts to realize customer-focused solutions. Indeed, we have been reshaping our business portfolio and taking actions such as strengthening our core operations and divesting our non-core businesses. However, the past year has turned out to be a challenging year for Autron with the expected growth proving to be slower than originally anticipated.

In fi scal 2005, business continued to improve in the fi rst half of 2004/5 with revenues slightly ahead of the previous year at A$101.8 million. However, the position reversed in the second half of the year and resulted in a lower than expected results, owing to various corporate realignment projects, insuffi cient contribution of service and spare parts income from our fl agship brand of Fuji pick and place equipment, and a loss-making equipment manufacturing unit. The strong revenue performance posted in the fi rst half of the year, coupled with actions to reduce costs has enabled us to deliver a small profi t for the year as a whole.

Nevertheless, Autron has continued to improve its ability to generate stronger earnings while at the same time ensuring the medium and long-term development of the Company. The strategic fi nancial alliance with CIT Group Inc. is an excellent example of our strategy to continuously enhance our core business off erings. These eff orts have been aimed at setting Autron apart and bolstering our ability to compete by leveraging the aggregate strengths of the entire Group and as a collection of strong businesses towards its ultimate aim of delivering superior shareholder value.

The continuing commitment and motivation of our people remains an important pillar within the Group, and I thank them for their dedication and hard work. I also thank my fellow directors

who continue to provide their expertise and time to guide Autron along its strategic path, and the executive team, who continues to show great leadership in driving Autron forward. The longer term future for the Group rests on our proven capability to grow Autron and to run our operations with ever greater effi ciency. By generating high earnings through the delivery of competitive equipment solutions, we remain confi dent of our ability to seize opportunities and to build on our strengths, expand our services, deepen our customer relationships and deliver further value to all our shareholders.

Professor Hang Chang-ChiehNon-Executive Chairman

The continuing commitment and motivation of our people

remains an important pillar within the Group...



2004/2005 was a very challenging year for Autron with a number of factors coinciding to result in a lower than expected performance for the year as a whole. However, this short term performance has to be reviewed against the longer term objective of establishing Autron as the dependable equipment solutions provider to ensure that we become an integral part of our customers’ manufacturing needs. On this count, the good progress which we have made in FY2005 will lay a strong foundation for the Group to deliver better performance in the future.

The Group recorded A$211.8 million (S$246.9 million) revenue in FY 2005 and maintained its GP margin of 21% as in FY 2004. However, the operational loss of A$4.0 million (S$5.1 million) in the equipment manufacturing unit has greatly aff ected the Group’s performance as a whole. Another factor that has impacted the performance was the lack of service and spare parts revenues arising from the changeover in principalship to Fuji in May 2004. With the initial 6 months dedicated to the training of Company’s engineers, and the provision of 12 months warranty, the Company was not able to reap the benefi ts of the lucrative service and spare parts revenues. Moving forward, we are confi dent of better growth through this channel.

In light of the unsatisfying performance of the equipment manufacturing unit, the Group has executed 2 cost management exercises, including the restructuring of the Singapore unit to a lower cost location in Malaysia. This reorganization programme would result in making overhead savings of some A$1.5 million (S$1.9 million) per annum. We are confi dent of making good progress with cost reduction and creating a more diff erentiated and resilient business.

The Company has also entered into an agreement to divest its 100% interest in Fine Pulse Sdn Bhd as part of its realignment strategy moving forward. To strengthen its core fundamentals, it has also acquired Smartech Enterprise Company Limited, another Fuji distributor in China. As the Company continues to focus on enhancing shareholders’ values, we have the clear priority to position the Company, establish a stronger and wider customer base; fortify in-depth market knowledge and operating skills across our core business units.

Late into the second half of 2005, the Group entered into a fi nancial alliance with CIT Group Inc., as it remains conscientious in its eff orts to continuously improve its market position. The suite of fi nancial and equipment solutions carved from the excellent fi t between the fi nancial and equipment capabilities of both

companies is defi nitely bridging the growing demand of technical and financial management solutions in today’s electronics manufacturing industry and truly diff erentiates us from the rest of the other distributors.

As many would have observed, the robust economic activity in China and India underpins today’s manufacturing markets, and it is expected that this will continue for some time. The Company has recently established its fi rst footprint in New Delhi and has also blueprint 2 other Indian offi ces as part of its strategic growth plan. To better focus our resources and manpower on the India investments, we have decided to postpone the establishment of our Nagoya offi ce. We are confi dent that the India operations would contribute signifi cantly to the Group’s future perfomance and generate better long-term values for our shareholders.

OutllookThe Group has now established a stronger distribution business and a more resilient equipment-manufacturing unit. The outlook for the Company’s Total Equipment Management Solutions remains encouraging with the increasing equipment outsourcing trend by global Original Equipment Manufacturers and Contract Manufacturers. We continue to seek new markets and prospects within the electronics manufacturing industry and to further expand our market share within the automotive, medical and aerospace industry. We are committed to delivering increased profi tability and to grow our portfolio selectively. On growth, our guiding principles remain fi nancial discipline and regional focus, and we will continue to allocate capital where we see good long-term value for our shareholders.

I pay tribute to the Board of Directors, which has provided immeasurable advice and support to the management throughout the years and into 2005. And I would like to extend my appreciation to the management team and the employees who are constantly enhancing our position along the growth and value axis. More importantly, the Group would not have achieved its progress over the past years without the loyalty and support of our business partners, principals, shareholders and the investment community.

Tan Cheng LeongGroup Executive Chairman

We continue to seek new markets and prospects within the

electronics manufacturing industry ... our guiding principles

remain fi nancial discipline and regional focus.

group executive chairman’s statement



board of directors

Professor Hang Chang-ChiehChairman of the Board

Professor Hang is currently the Director of Centre for Management of Science and Technology (CMOST) at the Faculty of Engineering, National University of Singapore. Professor Hang is an internationally renowned scholar in the area of adaptive and intelligent control systems and has published books, international papers and won several patents. He is also the Chairman of a statutory board – the Intellectual Property Offi ce of Singapore (IPOS) and has served as board member of several statutory boards and government-linked companies in Singapore. Professor Hang is the Chairman of the Nomination and Remuneration Committees.

Mr Tan Cheng LeongGroup Executive Chairman

Mr Tan is responsible for leading the growth of the Company. He has put together various partnerships with multinational corporations and made several important acquisitions for the Company’s organic growth and expansion to its current size. Mr Tan has previously accumulated more than 15 years experience in international banking and financial consultancy. He is a member of the Nomination and Remuneration Committees.

Mr Samuel Wu Man FanGroup President and CEO

Mr Wu is responsible for the business operations of the Company in Asia. He has extensive experience in the distribution of electronics equipment, especially in China. Mr Wu is also one of the co-founders of the American Tec Group.

Dr Lim Boh SoonGroup Corporate Director

Dr Lim provides support to the merger and acquisition activities of the Company. He has more than 16 years experience in the venture capital industry in Asia and over 20 years of corporate experience in various large local and multinational blue chip organizations. He sits on the Board of several major organizations locally and overseas. He is a member of the Audit Committee.

Mr Lim Kheng JooGroup Executive Director

Mr Lim is responsible for the Group’s fi nancial and reporting functions, accounting, treasury and budgeting, as well as strategic planning and driving integrations within the Group. He is also the Director of several of the Company’s subsidiaries. Mr Lim has more than 10 years of experience in accounting and fi nance.

Mr Philip Loong Tien ChoonNon-Executive Director

Mr Loong presently operates his own management consultancy services company. He has over 30 years of management, consultancy, audit as well as fi nance and corporate services experience in various senior management roles locally and overseas. Mr Loong is a qualifi ed Certifi ed Public Accountant and Chartered Secretary. He also serves on the boards of several local companies. Mr Loong is the Chairman of the Audit Committee and a member of the Nomination Committee.

Mr Warwick Desmond DaviesNon-Executive Director

Mr Davies was in the hospitality industry, owning and managing several hotels and has profound experience in retail and corporate finance. He is a member of the Remuneration and Audit Committees.

Mr Christopher Tsim Lo FaiNon-Executive Director

Mr Tsim has extensive experience in the importation development and distribution of electronics products. He was a Director of the Company’s Australian controlled entities, Microtel Australia Pty Ltd and Vision Tech (Aust) Pty Ltd prior to his current appointment.



signifi cant events

October 2004 Company’s subsidiary, IC Equipment Pte Ltd, entered into a

Put and Call Option Agreement with HSBC Institutional Trust Service (Singapore) Limited to sell and lease back its property at 53 Serangoon North Avenue 4 (the “Property”), for a total sale consideration of S$14 million. The sale of the property was completed on 27 December 2004.

On 27 October 2004, the Company announced its wholly owned subsidiary, AGS Pte Ltd (“AGS”) has signed a US$20 million equipment management facility agreement with Hangzhou Eastcom Cellular Phone Co. Ltd (“HECP”). This agreement will cover a three-year period where AGS will be the main SMT equipment supplier to HECP.

November 2004 On 10 November 2004, the Company announced that its wholly

owned subsidiary, AGS has offi cially opened its AGS center in Singapore. This ISO-9001 certifi ed facility is the anchor of the Company’s value-added solutions model involving the entire management of the customers’ equipment assets and spare parts.

February 2005 On 28 February, the Company announced its half yearly

results for FY 2005 ended 31 December 2004, which recorded a 50% increase in operating profits after tax to A$10.6 million.

March 2005 On 15 March 2005, a fi nal dividend of A$0.005 a share was

declared in relation to the profi table divestment of its 52 per cent interest in Smartag (S) Pte Ltd. The dividend was paid on 22 April 2005.

On 30 March 2005, the Company announced that it has established a strategic fi nancial alliance with CIT Group Inc. (“CIT”). Under this collaboration, CIT provides US$100 million in the form of innovative fi nancing programmes to global and major Asian electronics manufacturers for Autron’s equipment management solutions.

May 2005 On 6 May 2005, the Company announced that its subsidiary

Fine Pulse Sdn Bhd has entered into an agreement with Aseam bankers Malaysia Berhad for a proposed restructuring and listing of the company on Bursa Malaysia Securities Berhad.

September 2005 On 13 September 2005, the Company reported the full year

fi nancial results for FY 2005 with the net profi t after tax of A$3.5m (2004:profi t A$15.0m). It also announced moves to strengthen its core business including divestment of its non-core business, expansion of its core fundamentals and restructuring of its loss making equipment-manufacturing unit.



corporate directory

ARCTIC OCEAN

NORTH PACIFIC OCEAN

INDIANOCEAN

Black Sea Caspian Sea

North Sea

Norwegian Sea

Gulf of Oman

Arabian Sea

Bay of Bengal

AndamanSea Gulf of Thailand

Penang

SINGAPOREMALAYSIA

Sea of Japan

Sea of Okhotsk

East China Sea

Philippine Sea

South China Sea

THAILAND

AUSTRALIA

HONG KONG

PHILIPPINES

TAIWAN

CHINA

Java Sea

Timor Sea

Arafura Sea

Melbourne

Nonthaburi

Lumphun Muntinlupa

Kaoshiung

Taoyuan

Dalian

Qingdao

ShanghaiSuzhou

Xiamen

WuhanChongqin

Shenzhen

Kowloon

Dongguan

Chengdu

Xi’an

BeijingTianjin

Labuan

New Delhi

INDIAGlobal Headquarters

Autron Corporation LimitedNo. 53, Serangoon North Avenue 4 Singapore 555852Tel : (65) 6538 7055Fax : (65) 6536 9790Email : [email protected] : www.autroncorp.com

SINGAPORE

Autron Singapore Pte LtdNo. 53, Serangoon North Avenue 4 Singapore 555852Tel : (65) 6538 7055Fax : (65) 6536 9790

Aeromatrix Pte LtdNo. 53, Serangoon North Avenue 4Singapore 555852Tel : (65) 6482 1123Fax : (65) 6482 0291

AFD Pte LtdNo. 53, Serangoon North Avenue 4Singapore 555852Tel : (65) 6538 7055Fax : (65) 6280 1585

AGS Pte LtdNo. 53, Serangoon North Avenue 4 Singapore 555852Tel : (65) 6481 4511Fax : (65) 6481 4522

Autron (S.E.A.) Pte LtdNo. 53, Serangoon North Avenue 4 Singapore 555852Tel : (65) 6481 4511Fax : (65) 6481 4522

IC Equipment Pte LtdNo. 53, Serangoon North Avenue 4Singapore 555852Tel : (65) 6482 1123Fax : (65) 6482 0291

AUSTRALIA

Autron Corporation LimitedLevel 33, 120 Collins StreetMelbourne, Vic 3000AustraliaTel : 1800 001 748 (Toll Free)Fax : 1800 002 741 (Toll Free)

MALAYSIA

American Tec Company (L) BerhadLevel 6(D), Main Offi ce TowerFinancial Park Labuan ComplexJalan MerdekaP.O. Box 8088787018 Labuan F.T, MalaysiaTel : (60)(87) 420 255Fax : (60)(87) 420 266

Austratech Corporation (L) BerhadLevel 6(D), Main Offi ce TowerFinancial Park Labuan ComplexJalan MerdekaP.O. Box 8088787018 Labuan F.T, MalaysiaTel : (60)(87) 420 255Fax : (60)(87) 420 266

ER Mekatron Sdn BhdPlot 74-A Bayan Lepas Industrial ZonePhase IV, MK 12 Lintang Bayan Lepas 311900 Bayan Lepas, Penang, MalaysiaTel : (60)(4) 646 9028Fax : (60)(4) 646 7153

ER Mekatron Manufacturing Sdn BhdPlot 74-A Bayan Lepas Industrial ZonePhase IV, MK 12 Lintang Bayan Lepas 311900 Bayan Lepas, Penang, MalaysiaTel : (60)(4) 646 9028Fax : (60)(4) 646 7153

Fine Pulse Sdn BhdPG 118-A, Hicom Pegoh Industrial ParkFASA 1, 78000, Alor Gajah Melaka, MalaysiaTel : (60)(6) 552 0202Fax : (60)(6) 552 0203

Niche Tech (M) Sdn Bhd10, Persiaran Mahsuri 1/2

Sunway Tunas11900 Bayan LepasPenang, MalaysiaTel : (60)(4) 646 4566Fax : (60)(4) 646 4559

THAILAND

Autron (Thailand) Co. Ltd34/1-2 Moo. 3 Bangkruay-Sainoi RdBangrak-Pattana, BangbuathongNonthaburi 11110, ThailandTel : (662) 920 6355-61Fax : (662) 920 6354

PHILIPPINES

Autron S.E.A. Pte Ltd2/F Unit D 1208, China Bank Building (JJACCIS) Acacia Avenue, Madrigal Business ParkAyala Alabang, Muntinlupa City 1770PhilippinesTel : (63)(2) 842 8930 / 7971Fax : (63)(2) 842 4035

HONG KONG

American Tec Co. Ltd21/Floor, Millennium City 3 370 Kwun Tong RoadKwun Tong, Kowloon, Hong KongTel : (852) 2628 0288 Fax : (852) 2628 0111

CHINA

American Tec Co. Ltd

BeijingRoom 1115-1116, Beiao PlazaNo.2A, Huixin East StreetChaoyang DistrictBeijing 100029, PRCTel : (86-10) 8488 7509 -16Fax : (86-10) 8488 7507

ChengduRoom 918, 9/FWestern China Business TowerNo. 19, 4th Section, Renmin Nan RoadChengdu, Sichuan, PRCTel : (86-28) 8608 3808Fax : (86-28) 8526 8195

ChongqinRoom 02, 16/F Block A1, Bin XinFeng Ze Yuan, No. 5 Zhi Guang RoadYang Jia Ping, Jiu Long Po DistrictChongqin, PRCTel : (86-23) 6844 6479Fax : (86-23) 6844 6479

DalianRoom 401, Unit 2, No. 70, Yi Shan LiJin Ma Road, Development Area Dalian City 116600Liaoning Province, PRCTel : (86-411) 8731 3612Fax : (86-411) 8731 3625

DongguanRoom 903, No. 170Dong Xing RoadFashion Electrical CityDongguan, Guandong, PRCTel : (86-769) 2343 258Fax : (86-769) 2343 358

NanjingRoom 2138, No. 224Zhong Shan Nan RoadNUOYA Commercial MansionNanjing, PRCTel : (86-25) 8421 7671 / 2Fax : (86-25) 8420 3638

AGS (Shenzhen) Co. LtdBlock 1, Ground FloorZhuang Cun Industrial ParkXin Er Cun, Bao An DistrictShenzhen City, Guangdong, PRCTel : (86-755) 3392 1265Fax : (86-755) 3392 1266

IC Equipment (Shanghai) Co. Ltd6/F, No. 138 Qing Yun RoadPudong Zhangjiang Hi-Tech ParkShanghai 201203, PRCTel : (86-21) 3895 0381Fax : (86-21) 5855 1178

Taiwan Autron Corporation Suzhou13/F, 369 Lu Shan Road Suzhou New District Jiang Su Province, PRCTel : (86-512) 8518 3621Fax : (86-512) 8518 3622

EM Components (Shanghai)Co. LtdNo. 500, Bing Ke Road, Unit 227Wai Gao Qiao Free Trade Zone Shanghai, PRC

TAIWAN

Taiwan Autron Corporation6/F, No. 15 Chin Kou RoadTaoyuan, Taiwan, R.O.C.Tel : (886) 3357 0941Fax : (886) 3357 0942

Yo Hua Corporation32, Alley 51 Lane 118, Shuangliant Sec2Mintzu Road, Pingjen City, TaoyuanTaiwan, R.O.C.Tel : (886) 3 316 1071Fax : (886) 3 316 1072

Charming Star Technology Co. LtdLevel 2, Lotemau Centre, Vaea StreetApia, Samoa, PRC

INDIA

Autron India Pvt. Ltd1010, 10/F Mercantile House15, K. G Marg.New Delhi 110001, IndiaTel : (91) 11 2370 6055Fax : (91) 11 2370 6054

QingdaoRoom 301, Building 4Fan Hai Ming Ren Plaza No. 19, Fuzhou Nan RoadQingdao, Shandong, PRCTel : (86-532) 575 9930 / 6690 / 9601Fax : (86-532) 575 6003

ShanghaiRoom 2005-2007Shanghai Singular MansionNo. 322 Xian Xia RoadShanghai 200336, PRCTel : (86-21) 6219 4580Fax : (86-21) 6208 0948

ShenzhenFlat A, 1/F, Block 1Cyber-tech Zone, Gaoxin Ave 7.S Hi-tech Industrial ParkNanshan DistrictShenzhen 518038, PRCTel : (86-755) 6135 0555Fax : (86-755) 6135 0559

SuzhouRoom 02-16 Block A, No. 5, Xing Han StreetSuzhou Industrial ParkSuzhou 215021, PRCTel : (86-512) 6761 8859Fax : (86-512) 6761 9068

TianjinRoom AO, 24/F YunXiang MansionNo.72-74 Xi Kang RoadHe Ping DistrictTianjin 300074, PRCTel : (86-22) 8385 0410 / 12 / 13Fax : (86-22) 8385 0415

WuhanRoom 501, Unit 2Building 29, Zisong Garden88 Youke Yuan Road, Hongshan DistrictWuhan City 430074, PRCTel : (86-27) 8769 0363 / 0744Fax : (86-27) 8769 0484

XiamenRoom 304, No. 40, Jia Yuan Li RoadHu Li District, Xiamen, PRCTel : (86-592) 5688 322Fax : (86-592) 5607 969

Xi’anNo. 10, Block D, 4/F, Xietong BuildingNo. 12, The 2nd Gaoxin RoadXi’an, PRCTel : (86-29) 88386 175 - 8Fax : (86-29) 88386 179

AGS (Shanghai) Co. Ltd6/F, No. 138 Qing Yun RoadPudong Zhangjiang Hi Tech ParkShanghai 201203, PRCTel : (86-21) 3895 0171Fax : (86-21) 5895 7393



Board of DirectorsProfessor Hang Chang- Chieh (Chairman of the Board)

Tan Cheng Leong (Group Executive Chairman)

Samuel Wu Man Fan (Group President & CEO)

Dr Lim Boh Soon (Group Corporate Director)

Lim Kheng Joo (Group Executive Director)

Philip Loong Tien Choon (Non-Executive Director)

Warwick Desmond Davies (Non-Executive Director)

Christopher Tsim Lo Fai (Non-Executive Director)

Audit CommitteePhilip Loong Tien Choon (Chairman)

Dr Lim Boh SoonWarwick Desmond Davies

Nomination CommitteeProfessor Hang Chang-Chieh (Chairman)

Tan Cheng LeongPhilip Loong Tien Choon

Remuneration CommitteeProfessor Hang Chang-Chieh (Chairman)

Tan Cheng LeongWarwick Desmond Davies

Company SecretaryMourice Reginald Garbutt, CPA, FCIS, JP

Stock Exchange ListingsAustralian Stock Exchange Limited (Code: AAT)Singapore Exchange Securities Trading Limited (Code: AUTRON)

Registered Offi ceLevel 33, 120 Collins Street,Melbourne, Vic 3000, AustraliaTel : 1800 001 748 (Toll Free)Fax : 1800 002 741 (Toll Free)

Global HeadquartersNo. 53 Serangoon North Avenue 4,Singapore 555852Tel : (65) 6538 7055Fax : (65) 6536 9790Website : www.autroncorp.comEmail : [email protected]

South Asia Regional HeadquartersNo. 53 Serangoon North Avenue 4 Singapore 555852Tel : (65) 6481 4511Fax : (65) 6481 4522

North Asia Regional Headquarters21/Floor, Millennium City 3,370 Kwun Tong Road, Kwun Tong, Kowloon, Hong KongTel : (852) 2628 0288Fax : (852) 2628 0111

Principal Business Offi ce In AustraliaLevel 2, 90 William StreetMelbourne, Vic 3000, AustraliaTel : (613) 9605 5916

Share Registrar and Share Transfer Offi ce in AustraliaComputershare Investor Services Pty LimitedYarra Falls, 452 Johnston StreetAbbotsford, Vic 3067, AustraliaTel : (613) 9415 5000

Depository Registrar in SingaporeThe Central Depository (Pte) Limited4 Shenton Way, #02-01 SGX Centre 2, Singapore 068807Tel : (65) 6535 7511

Share Transfer Agent and Transfer Offi ce in SingaporeLim Associates (Pte) Ltd10 Collyer Quay #19-08Ocean Building, Singapore 049315Tel : (65) 6536 5355 AuditorsErnst & Young120 Collins StreetMelbourne, Vic 3000, Australia

Legal AdvisersSalter Power Pty Ltd52, Ord Street, West PerthWestern Australia 6005, Australia

Acies Law Corporation1 Raffl es Place, #39-01 OUB Centre, Singapore 048616

Yeo Wee Kiong Law Corporation1 Raffl es Place #39-01OUB Centre, Singapore 048616

Principal BankersDBS Bank Ltd DBS Building Tower One6 Shenton Way, Singapore 068809

KBC Bank N.V. Singapore Branch30 Cecil Street, #12-01Prudential Tower Singapore 049712

Malayan Banking BerhadMaybank Tower, 2 Battery RoadSingapore 049907

United Overseas Bank Limited80 Raffl es PlaceUOB Plaza, Singapore 048624

Overseas-Chinese Banking Corporation Limited65 Chulia Street, #10-00OCBC Centre Singapore 049513

The Hongkong and Shanghai Banking Corporation Limited128 Queen’s Road Central Offi ceG/F V. Heun Building CentralHong Kong

corporate information



9 Report of the Directors

24 Corporate Governance Statement

29 Statement of Financial Performance

31 Statement of Financial Position

32 Statement of Cash Flow

28 Notes to Financial Statements

68 Directors’ Declaration

69 Independent Audit Report

71 Additional Information

Financial Review



The directors are pleased to present their report together with the fi nancial statements of Autron Corporation Limited and the consolidated fi nancial statements of the Economic Entity, being the Company and its controlled entities, for the year ended 30 June 2005 and the Auditor’s Report thereon.

Directors

The directors of the Company in offi ce at the date of this report are:

Professor Hang Chang ChiehChairman of the Board & Independent DirectorAppointed as a Director on 15 March 2000; Last re-elected on 26 November 2003

Professor Hang is currently the Director for Centre for Management of Science & Technology, Faculty of Engineering, National University of Singapore. He is renowned in the fi eld of electronic engineering, specifi cally in the area of adaptive and intelligent control systems. He is also the Chairman of a statutory board – the Intellectual Property Offi ce of Singapore. He has served as board member of several public and private companies in Singapore. Professor Hang is the Chairman of the Nomination and Remuneration Committees.

During the past three years, Professor Hang has also served as a director of the following listed companies:

MMI Holdings Limited* Stratech Systems Limited*

*denotes current directorship

Mr Tan Cheng Leong Group Executive Chairman Appointed as a Director on 4 November 1998

Mr Tan is the Group Executive Chairman. He has more than 15 years experience in international banking and fi nancial consultancy experience. Mr Tan sets the vision for the Company and is responsible for the overall strategic direction of the Company and its controlled entities. He is a member of the Nomination and Remuneration Committees.

During the past three years, Mr Tan has also served as a director of the following listed companies:

Lee Metal Group Ltd (1 July 2002 to 29 April 2005) Eastern Publishing Ltd (1 July 2002 to 24 February 2005) Design Studio Furniture Manufacturer Limited (1 July 2002 to 27 April 2005)

Dr Lim Boh Soon Group Corporate Director Appointed as a Director on 28 November 2002; Last re-elected on 26 November 2004

Dr Lim is a highly regarded and experienced professional from the banking and fi nance industry in Asia. He has been in the venture and development capital industry in Asia for more than 16 years. He brings with him more than 20 years of corporate experience, having worked for various large local and multinational blue chip organizations. He sits on the Board of several major organizations locally and in overseas. He is a member of the Audit Committee.

Dr Lim has tendered his resignation on 22 July 2005 as one of the Company’s Executive Director. He will serve out his notice period of 6 months with the Company and then continue to work as an advisor to the Company’s Board of Directors on corporate projects.

report of the directors

Autron AR05 Fin9-64pp FA.indd 9Autron AR05 Fin9-64pp FA.indd 9 10/11/05 6:03:21 PM10/11/05 6:03:21 PM


During the past three years, Dr Lim has also served as a director of the following listed companies:

CSE Global Limited* MyWeb Inc.*


Mr Samuel Wu Man Fan Group President & CEO Appointed as a Director on 3 July 2000; Last re-elected on 26 November 2003 Mr Wu is a co-founder of the American Tec Group. He has extensive experience in the distribution of electronics equipment, especially in China. He is responsible for all operation aspects of Group’s business.

During the past three years, Mr Wu has not served as a director of any listed companies.

Mr Lim Kheng JooGroup Executive DirectorAppointed as a Director on 8 March 2005

Mr Lim joined the Company in 2001 and is the Group Executive Director of the Company. He has substantial experience in accounting and fi nancial and is currently responsible for the Company’s group fi nancial and reporting functions, treasury, budgeting as well as strategic planning and driving integration within the group.

Mr Lim is also currently a director of several of the group controlled entities.

During the past three years, Mr Lim has not served as a director of any listed companies.

Mr Philip Loong Tien ChoonIndependent DirectorAppointed as a Director on 25 October 2004; Last re-elected on 26 November 2004

Mr Loong is a qualifi ed Certifi ed Public Accountant and Chartered Secretary. He has substantial experience in management and consultancy fi elds. Mr Loong presently conducts his own management consultancy service company.

Mr Loong is a member and the Chairman of the Company’s Audit Committee and a member of the Nomination Committee.

During the past three years, Mr Loong has also served as a director of the following listed companies:

Lee Metal Group Ltd* EC Asia International Ltd*


Mr Warwick Desmond DaviesIndependent DirectorAppointed as a Director on 28 May 1997; Last re-elected on 26 November 2003

Mr Davies was in the hospitality industry, owning and managing several hotels prior to his appointment to the Board in 1997. Mr Davies is a member of the Remuneration and Audit Committee.

report of the directors (cont’d)



During the past three years, Mr Davies has not served as a director of any listed companies.

Mr Christopher Tsim Lo FaiIndependent DirectorAppointed as a Director on 6 May 2002; Last re-elected on 28 November 2002

Mr Tsim has extensive experience in the importation development and distribution of electronics products. He was Director of the Company’s Australian controlled entities, Microtel Australia Pty Ltd and Vision Tech (Aust) Pty Ltd prior to his current appointment.

During the past three years, Mr Tsim has not served as a director of any listed companies.

Ms Geraldine Ong Siew TingIndependent DirectorAppointed as a Director on 27 Dec 2000; Last re-elected 28 November 2002

Ms Ong is an Advocate and Solicitor of the Supreme Court of Singapore. She served as a legal adviser with the Singapore Government from 1988-1989. Ms Ong was a member of the Audit Committee.

Ms Ong has tendered her resignation as an independent director and the resignation was eff ective on 22 November 2004.

During the past three years, Ms Ong has also served as a director of the following listed companies:

Eastern Publishing Ltd* Voyage Afrique (International) Pte Ltd (1 July 2002 to 15 August 2005)


Mr Michael Chye Hin FahIndependent DirectorAppointed as a Director on 27 Dec 2000; Last re-elected 28 November 2002

Mr Michael Chye is the Corporate Services Director of Silvercord Capital (Singapore) Limited and Chief Financial Offi cer of Pacifi c Spirits Group. He has more than 20 years of experience in fi nancial management and commercial investments. Mr Chye was the Chairman of the Audit Committee.

Mr Chye has tendered his resignation as an independent director and the resignation was eff ective on 22 November 2004.

During the past three years, Mr Chye has not served as a director of any listed companies.

Mr Mourice Reginald GarbuttCompany Secretary

Mr Garbutt has been the company secretary of Autron Corporation Limited since March 2001 having substantial experience in the area of listed company secretarial matters, compliance and corporate governance over many years primarily within Australia but having worked in the Pacifi c region and Europe.

Mr Garbutt, through his professional corporate secretarial and compliance service company provides secretarial and corporate governance support to client companies in Australia many of which are listed on the Australian Stock Exchange Limited.




Directors’ Meetings

The number of Directors’ Meetings and Board Committee Meetings and number of meetings attended by each of the Directors of the Company during the fi nancial year were: Board Audit Committee Remuneration Committee A B A B A B Prof Hang Chang Chieh 3 3 - - 2 2Tan Cheng Leong 3 3 - - 2 2Samuel Wu Man Fan 3 3 - - - -Dr Lim Boh Soon 3 3 4 4 - -Lim Kheng Joo - - - - - -Warwick Desmond Davies 3 3 2 2 2 2Philip Loong Tien Choon 2 2 2 2 - -Christopher Tsim Lo Fai 3 3 - - - -Michael Chye Hin Fah 2 2 2 2 - -Geraldine Ong Siew Ting 2 2 2 2 - -

A = No. of meetings attendedB = No. of meetings held while a member

The Nomination Committee did not meet during the fi nancial year ended 30 June 2005.

Earnings Per Share CentsBasic earnings per share 0.50Diluted earnings per share 0.47

Dividends

Special dividends paid: Cents $’000On ordinary shares $0.005 3,472

This dividend was proposed and not recorded as a liability in the prior fi nancial year.

Corporate Structure

Autron Corporation Limited is a company limited by shares that is incorporated in Australia and principally domiciled in Singapore. Autron Corporation Limited has prepared a consolidated fi nancial report incorporating the entities that it controlled during the fi nancial year, which are outlined in note 12 to the fi nancial statements. The consolidated entity employed 1,074 employees as at 30 June 2005 (2004: 1,123 employees).

Nature of Operations and Principal Activities

The principal activities during the year of entities within the consolidated entity were those of agency representation; distribution of capital equipment; project management and consultancy; servicing; installation & logistical support; manufacturing of electronics accessories and development; design and manufacture of industrial machinery and robotic and automated systems and assembly of printed circuit boards.

There have been no signifi cant changes in the nature of those activities during the year.




Group Results

The consolidated profi t of the economic entity for the year in respect of continuing operations and after providing for income tax was $3,427,000 (2004: profi t of $14,768,000) on total revenue of $211,776,000 (2004: $208,536,000).

The consolidated profit attributable to members was $3,493,000 (2004: profit of $15,097,000) on total revenue of $211,776,000 (2004: $208,536,000).

Overview of the Operating Results for the Year

The Company posted earnings after tax of $3,493,000 for the 12 months ending 30 June 2005, compared to a profi t after tax of $15,097,000 in the previous corresponding period. The drop in profi t for the last 12 months can be attributed to the following non-recurrent charges:

(a) loss of lucrative spare parts sales revenue when changeover to the Fuji agency – the Company changed to the Fuji agency in July last year, and during the fi rst year of equipment sales, spare parts sales revenue dropped from corresponding period as parts and labour are covered by equipment warranty in the 1st year. The Company recorded spare parts revenue of $27,562,000 in FY 2004, as compared to $10,383,000 in FY 2005. This amounted to a loss of profi t of $8,000,000;

(b) additional write-down of goodwill of $4,000,000 (this is on top of $3,445,000 the Company amortised in the 12 month period);(c) operational loss of $4,047,000 recorded in IC Equipment;(d) additional training expenses of $800,000 was incurred during the year – the Company had to send its engineers to Japan for

training on the latest range of Fuji equipment.

The refurbished equipment business continued to grow in the last 12 months. The business had a 88% increase in turnover, posting revenue of $65,308,000 in FY 2005, as compared to a revenue of $34,673,000 in FY 2004.

The equipment management solution business saw its fi rst contract to Hangzhou Eastcom Cellular Phone Co Ltd (Hangzhou Eastcom) worth USD 20,000,000 signed in October 2004. This contract is for 3 years, but it is expected that the total amount of contract to surpass USD 20,000,000 in FY 2006. The Company is currently negotiating on several such contracts, and will be announcing them over the next few months.

The Company has taken steps to strengthen its core business. The loss making IC Equipment has undergone restructuring. Management has executed two cost management exercises in April and June 2005, which will see a cost savings of $2,000,000 in FY 2006. The Company acquired a profi table Malaysian equipment maker, ER Mekatron Sdn Bhd and ER Mekatron Manufacturing Sdn Bhd in April 2005 for a consideration of RM32,000,000 (equivalent to $10,888,000) at 4 times PE. IC Equipment will transfer its low end manufacturing to its Malaysian counterpart, and retains its design and high-end manufacturing unit in Singapore. This move is expected to save the Company $1,500,000 a year.

The Company has also disposed off its non-core business, Fine Pulse Sdn Bhd (Fine Pulse) for a consideration of RM100,000,000 (equivalent to $35,125,000) in September 2005. The proceeds will be used partly to acquire another Fuji distributor in China, Smartech Enterprise Co Ltd (Smartech). The acquisition will be HK$150,900,000 (equivalent to $25,751,000), payable in cash and shares over 2 years. Smartech has consistent track records in profi ts and positive cash fl ow, and the purchase consideration is conditional upon a profi t guarantee of HK$35,000,000 (equivalent to $5,973,000) net profi t in FY 2006.

The partnerships with CIT Group Inc (CIT) to provide fi nancing to customers also started at the end of April 2005. This partnership will see CIT providing operating and fi nancial leases to Autron’s customers and lighten Autron’s requirement for working capital moving forward. The full impact of this partnership will be felt in FY 2006, and together with the divestment of Fine Pulse, the amount of receivables and debts borrowings will be reduced by 40% and 30% respectively.

New SMT Equipment Distribution

The Company has been distributing Surface Mount Technology (SMT) equipment for the past 25 years in China and South East Asia. Today, the Company owns one of the largest distribution networks in Asia, and currently carries more than 30 number of brands that are market leader in their respective fi elds.




In July 2004, the Company changed its agency of the Placement (Pick and Place) Equipment from Assembleon to Fuji for the China market. The move is part of the Company’s long-term strategic plan to further strengthen its distribution business. Fuji Placement Equipment is an established brand, and Fuji is one of the oldest equipment makers in the SMT industry. Fuji range of the Pick and Place equipment is used widely amongst the Original Equipment Manufacturers (OEM) as well as 1st and 2nd tier contract manufacturers. The Company expects this segment of revenue to grow by CAGR of more than 20% per annum.

Revenue for this segment decreased from $163,609,000 in FY 2004 to $129,367,000 in FY 2005. The main reason for the curtailed growth is mainly due to the loss of revenue in both equipment and spare parts sales from the transition of Assembleon agency to that of Fuji’s range of products. In the fi rst few months of the year, the Company had to send its engineers to Japan for training, and as a result, the sales for the fi rst few months were not substantial.

EBITA for this segment decreased from $9,459,000 in FY 2004 to $4,106,000 in FY 2005. The reduction is due to some non-recurring expenses incurred during the year as the results of the Fuji agency change, which include the additional training and traveling expenses incurred. This line item has increased from $4,157,000 in FY 2004 to $5,322,000 in FY 2005. During the fi nancial year, this agency change also saw the loss of lucrative spare parts sales revenue, which plummeted from $26,879,000 in FY 2004 to $9,945,000 in FY 2005. This loss of spare parts income is nevertheless non-recurring. During the fi rst year of equipment sale, all spare parts are covered by principal’s (Fuji) warranty, and as such explains the dramatic drop in spare parts income in FY 2005. The Company expects to enjoy the usual spare parts income in FY 2006. Typically, spare parts income contributes about 15% of total revenue from this segment.

Refurbished SMT Equipment Distribution

The Company started the Refurbished Equipment unit in FY 2004. Since then, the Company has been supplying high quality refurbished SMT equipment to customers in South East Asia, China, Europe, and US. Sales revenue for this business unit has increased from $34,673,000 in FY 2004 to $65,308,000 in FY 2005. Autron’s refurbished equipment are well received in the market as the products leverage on the 25 years brand of Autron’s strong after sales support. In this segment of market, confi dence and credibility is of utmost importance, and the ability to off er customers high quality refurbished equipment, and strong after sales support gives the Company competitive advantage over its competitors. The refurbished equipment off ered by Autron comes complete with full documentation and warranty. Autron is also the only appointed Fuji’s worldwide refurbishment partner. All Autron engineers are trained and certifi ed to meet the stringent Fuji factory standards. This together with the original spare parts support from Fuji, ensures the high quality product standard of the refurbished Fuji equipment.

EBITA for this segment increased marginally from $9,115,000 in FY 2004 to $9,166,000 in FY 2005. This is mainly due to the higher percentage of direct sales, which had minimal refurbishment during the year, as the second refurbishment centre in Shenzhen, China was not ready during FY 2005. Moving forward, there will be 2 more refurbishment centre outside Singapore; a new facility in India will be set up by end of FY 2006 on top of the Shenzhen facility which was ready in September 2005. With these additional refurbishment facilities, the Company expects future sales transactions to be 90% full refurbishment in nature in FY 2006. The Company has also set up sales and support offi ces in New Delhi, India during the year. There will be another 2 offi ces set up in the new fi nancial year, and the India operation is expected to contribute about 30% of the refurbished equipment sales in the new fi nancial year.

Cost control is the prime consideration for the 2nd and 3rd tier PCB assemblers, and they are very receptive to Autron’s relatively inexpensive but certifi ed reconditioned equipment solution. With no dominant player in this segment, Autron has the opportunity to become a key player in the global reconditioned electronics manufacturing equipment market.

Equipment Management Solutions Business

The Company embarked on the Solution business more than 12 months ago. Essentially, Solutions business consists of the following:

1. contract supply of new equipment to Multi National Customers (MNC) for a certain period of time (typically 2 to 3 years);2. systematic buying over of customers existing old equipment (this in turn can be used as “raw materials” for the refurbished

equipment business);3. taking over of customers’ non-core SMT functions, for example in-house maintenance program; and4. management of critical spare parts for customers.




The Solution business builds on Autron’s 25 years experience as a complete SMT equipment provider, and systems integrator. The Solutions business allows Autron to off er more value added services to its customers, and be the long-term strategic partner in the customers’ supply chain management.

Autron clinched its fi rst Solutions contract in October 2004; the Company signed a USD20,000,000 Solutions contract with Hangzhou Eastcom. By the end of FY 2005, half of the USD20,000,000 has been used up, and the Company now expects the actual contract to exceed USD30,000,000 in two years’ time.

Equipment Manufacturing

The Group moved into equipment manufacturing business in Dec 2003 with the acquisition of IC Equipment Pte Ltd. The strategic plan is to build and create an equipment manufacturing unit to work together with the Group’s existing principals to manufacture equipment, peripherals and spare parts.

In line with its plan to grow its equipment manufacturing business, the Group acquired 2 Malaysia Companies, namely ER Mekatron Sdn Bhd and ER Mekatron Manufacturing Sdn Bhd (collectively known as ER Mekatron) on 8 April 2005. ER Mekatron specializes in material handling, automated warehouse, robotics and customized design machines. This acquisition allows the re-alignment of the equipment manufacturing business unit and accelerates the acquisition of new manufacturing capabilities.

In FY2005, IC Equipment incurred an operational loss with revenue drop of 30% as compared to FY2004; almost 70% sharp decrease in revenue in the 2nd half of the fi nancial period. IC Equipment’s performance for FY2005 recorded an operational loss after tax of $4,047,000 due to a one off provision and write off of inventory and restructuring cost amounting to $1,196,000. These losses were off set against an extraordinary profi t of $2,640,000 from the disposal of the 53 Serangoon North Ave 4 building.

The Group has restructured IC Equipment which involved the shifting of low end manufacturing to Penang, Malaysia, and a trimmed organization in Singapore. IC Equipment looks well positioned to benefi t from the acquisition of ER Mekatron. The Group expects the company to turnaround into profi t zone in FY2006.

Electronics Manufacturing Services (EMS)

The business unit achieved revenue of $6,513,000 and a net profi t after tax of $1,308,000. As part of the growth plan, Fine Pulse expanded to a new factory premise in FY2005 and purchased additional equipment. It now has almost 3 times of its previous production capacity. In the same year, the company secured new customers with manufacturing contracts for printers, MP3 players and cellular phones.

In line with the Group’s focus on its industrial core business to provide equipment solutions, the Group has divested its 100% shareholding stakes in Fine Pulse for a cash consideration of RM100,000,000 (equivalent to $35,125,000). The completion of the disposal is targeted to be in 1st/2nd quarter of FY2006.

Summarised operating results are as follow:

Business Segments Revenue Result $’000 $’000 New SMT Equipment Distribution 129,367 1,491Refurbished SMT Equipment 53,370 4,146Equipment Mgt Solutions Business 11,938 1,006Equipment Manufacturing 9,049 (3,503)Electronics Manufacturing Services 6,513 1,308

210,237 4,448Consolidation Adjustments (14,734) (955)

Net Total 195,503 3,493




Working Capital Management

Autron has leveraged on the debt market to fi nance its business growth in the higher margin refurbished equipment business for the year ending June 2005. This has resulted in an increase in external debt from $69,604,000 as at 30 June 2004 to $108,639,000 as at 30 June 2005.

The Company recorded the following external debt as at 30 June 2005: 30/6/05 30/6/04 $’000 $’000Bills Payable 42,670 20,920Trade Debtors fi nancing 9,472 2,955Bank Overdraft 10,394 7,805Other Loan 14,221 3,020Other Loan - Equity 6,200 6,200Term Loan (secured) 25,682 28,704

108,639 69,604

The increase of $39,035,000 over the last year was driven by: $’000Purchase of 2nd hand equipment 6,200Payments to trade creditors by invoice fi nancing 6,500Net purchase of property, plant and equipment 4,963General working capital requirements of the Group 12,200Payment to Fine Pulse vendor 3,779Financing of fi nance lease debtors 1,507Additional investment in subsidiaries 2,526Payment to Amtec vendor for performance reward 1,360

39,035

Autron relocated much of its fi nancial resources to boost the 3 new revenue streams of the refurbished equipment business, Solution business and Fine Pulse’s manufacturing business. These revenue streams have higher net profi t margins versus the traditional new equipment distribution that commands 5-5.5%. It is important for Autron to move into the new business landscape of value added solutions as products today have become more commoditized. The Company embarked on these revenue streams 24 months ago and in order to do that Autron was set to undergo several phases of progression. The fi rst phase was to kick start the 2 crucial new revenue streams of refurbished equipment and solutions businesses, which was done through debt fi nancing that was relatively cheap at that time. As a result, the Company successfully launched the 2 product lines which have higher margins and now contributes to about half of the total net profi t of the whole Company. It is of paramount importance that the Company leveraged on debt fi nancing in the 1st phase of its 5-year plan growth (FY2003-FY2007) so as to have a leading and entrenched position in the markets for refurbished equipment and equipment solutions ahead of any competitors. Failure to do so would mean that the transformation of Autron to a more resilient and profi table business would have taken a back seat. The 1st phase of growth for the 2 new revenue streams have now been completed. The investment in high working capital has also reached its peak in June 2005. Moving forward, the Group is expected to reduce its gearing, and by June 2006, the gearing ratio will be reduced to below 1.5. The Group has started to strengthen the Balance Sheet by the sales and leaseback of the 53 Serangoon North building which netted the Company $3,000,000 in free cash fl ow.

In April this year, the Company signed with CIT to provide fi nancial and operating leases to its customers. CIT is a USD50 billion fi nancing powerhouse listed on the New York stock exchange. Under this partnership, CIT will fi nance Autron’s customers directly, and hence will impact positively on the Company’s balance sheet. It is expected that about $60,000,000 of sales revenue in FY 2006 will be fi nanced by CIT directly to customer.




Working Capital Management (cont’d)

The Company is currently fi nalising the 100% disposal of Fine Pulse for a total consideration of RM100,000,000 (equivalent to $35,125,000). This will bring in about RM50,000,000 (equivalent to $17,562,000) of free cash fl ow to the Company. Autron expects to conclude the transaction in 1st/2nd quarter of FY2006.

The many initiatives that the Company has and will undertake will see positive results in strengthening both its Balance Sheet and operating cash fl ow position in FY 2006. The Company expects the initiatives set together with the fact that the new revenue stream of refurbished equipment has turned in positive cash fl ow, will see debts reduced by about 30% in FY 2006, and the return of positive cash fl ow for the Group.

State of Aff airs

Signifi cant changes in the state of aff airs of the consolidated entity during the fi nancial year were as follows:

On 27 October 2004, the Company announced its wholly owned subsidiary, AGS Pte Ltd (“AGS”) has signed a USD20 million equipment management facility agreement with Hangzhou Eastcom Cellular Phone Co. Ltd. This agreement will cover a three-year period where AGS will be the main SMT equipment supplier to Hangzhou Eastcom.

On 15 March 2005, a fi nal dividend of $0.005 a share was declared in relation to the profi table divestment of its 52 per cent interest in Smartag (S) Pte Ltd. The dividend was paid on 22 April 2005.

On 30 March 2005, the Company announced that it has established a strategic fi nancial alliance with CIT. Under this collaboration, CIT provides USD100 million in the form of innovative fi nancing programmes to global and major Asian electronics manufacturers for Autron’s equipment management solutions.

Between 3 December 2004 to 24 March 2005, 198,435 warrants (options) were exercised and converted to ordinary shares. Each warrant (option) was exercised at S$0.18 (equivalent to A$0.14). The warrants (options) can be exercised any times between 4 June 2004 and 3 June 2007.

Events Subsequent To Balance Sheet Date

On 22 July 2005, Dr Lim Boh Soon tendered his resignation as one of the Company’s Executive Director, due to deteriorating health reasons. He will serve out his notice period of 6 months with the Company and then continue to work as an advisor to the Company’s Board of Directors on corporate projects.

The Company has disposed its non-core business of Fine Pulse Sdn Bhd for a consideration of RM100,000,000 (equivalent of $35,125,000) in September 2005. The proceeds will be used partly to acquire another Fuji distributor in China, Smartech Enterprise Company Limited and Smartech Electronics Company Limited.

Likely Developments and Expected Results

The Company will continue to consolidate its position as a leading supplier of capital equipment to the electronics manufacturing industry in Asia. We will focus on providing higher margin products and value added services to our customers. We will continue to penetrate the market in Asia, especially the inner regions of China as manufacturers continue to move inwards in search of lower costs of production. We also plan to expand into markets such as India and Vietnam in collaboration with our customers as they move into these new markets.

Environmental Regulation

The consolidated entity’s operations are not subject to any signifi cant environmental regulations or legislation in the countries it operates in.




REMUNERATION REPORT

This report provides the remuneration policy and structure in place for the directors and senior executives of Autron Corporation Limited (the Company). It is the responsibility of the Board of Directors to put in place the remuneration policy and structure.

Remuneration Philosophy

The Board’s remuneration policy is to ensure that remuneration package properly refl ect the person’s duties and responsibilities; and are competitive in attracting, retaining and motivating employees of the highest quality.

Remuneration Committee (“RC”)

The RC makes recommendations to the Board on Directors’ fees and allowances and remuneration of the Executive Directors. Remuneration is set by reference to independent data, external professional advice, the company’s circumstances and the requirement to attract key management. RC members abstain from deliberations in respect of their own remuneration.

Remuneration Structure

In accordance with best practice corporate governance, the structure of non-executive director and executive director/senior executive remuneration is separate and distinct.

Executive directors and senior executives may receive both fi xed remuneration and variable remuneration based on the achievement of specifi c goals related to the performance of the consolidated entity (including operational results and cash fl ows). Non-executive directors do not receive any performance related remuneration. Non Executive Director Remuneration

Objective The Board will set a remuneration amount for each director which provides the company with the ability to attract and retain directors of good caliber whilst incurring a cost which is acceptable to shareholders.

StructureEach director receives a fi xed remuneration which is reviewed annually. The fee of the directors takes into account the geographical location of the directors, as some of the directors are located in Australia and some are in Singapore. One of the non-executive directors’ remuneration is higher due to the role of Non-Executive Chairmanship to the Board.

The Board agrees on 12 July 2004 that the fees payable to Non-Executive in their capacity as Directors of the company be now payable annually in arrears in June of each fi nancial year.

Executive Director and Senior Executive Remuneration

ObjectiveThe company aims to reward executives with a fi xed and variable remuneration which commensurates with their position and responsibilities within the company and so as to:

reward executives for company, business and individual performance against targets set by reference to appropriate benchmarks link reward with the strategic goals and performance of the company; and ensure total remuneration is competitive by market standards

StructureThere is no employment contracts entered with the executive directors and senior executives. The appointment of executive directors is every 3 years of each director and by way of rotation to retire and re-appointment.

Remuneration consists of the fi xed remuneration and variable remuneration.




Fixed Remuneration

ObjectiveThe fi xed remuneration is to provide a base level of remuneration which is both appropriate and is competitive in the market.

Fixed remuneration is reviewed annually by the RC and the process consists of a review of company, business unit and individual performance.

StructureThe fi xed remuneration is given in the form of cash and fringe benefi ts such as transport allowance and other allowance.

Variable Remuneration

ObjectiveThe objective is to reward and provide incentives to the executives for the achievement of the company’s operational targets. And as such the cost to the company is reasonable in this circumstances.

StructureActual payment granted would depend on the extent to which specifi c operating targets set at the beginning of the fi nancial year are met. Typically included measures are achievement of net profi t before tax, risk management, product management, and leadership contribution.

On an annual basis, the overall performance of the company is evaluated by the Remuneration Committee. After the evaluation on the company performance, the Remuneration Committee would propose the amount of bonus entitles to individual executive. Currently, the company has not specifi ed any quantum of bonuses to the executive.

All executive directors and executives are entitled to a bonus equaling one month of the normal underlying salary (with the exception of Colin Lim Tow Hin and Koh Kok Choon who are entitled to a 2 month bonus). All bonuses relating to the FY2005 have been paid and no bonus amounts have been withheld. Achievement of the bonuses are based upon discretion of the Remuneration Committee.

Moving forward, the Remuneration committee will introduce a comprehensive measure for the variable remuneration by way of setting specifi c Key Performance Indicators.

Remuneration of Directors and Senior Executives

The Remuneration Committee is responsible for making recommendations to the Board on remuneration policies and packages applicable to the Board members and senior executives of the Company. The Board’s remuneration policy is to ensure that remuneration package properly refl ect the person’s duties and responsibilities; and are competitive in attracting, retaining and motivating employees of the highest quality.

Executive directors and senior executives may receive bonuses based on the achievement of specifi c goals related to the performance of the consolidated entity (including operational results and cash fl ows). Non-executive directors do not receive any performance related remuneration.




Remuneration of Directors and Senior Executives (cont’d)

Details of the nature and amount of each major element of the emoluments of each director and the fi ve highest paid executive offi cers of the Company and the consolidated entity are: Base Pension OtherFY 2005 Emolument Bonuses Contributions Benefi ts TotalDirectors $ $ $ $ $Tan Cheng Leong 367,549 28,077 12,449 50,539 458,614 Samuel Wu Man Fan 355,879 27,200 2,044 - 385,123Dr Lim Boh Soon 220,146 16,750 8,918 - 245,814Lim Kheng Joo 159,908 10,369 9,059 11,451 190,787Professor Hang Chang Chieh 55,580 - - - 55,580Warwick Desmond Davies 36,000 - 3,240 - 39,240Christopher Tsim Lo Fai 36,000 - 3,240 - 39,240Philip Loong Tien Choon 19,143 - - - 19,143Michael Chye Hin Fah 25,669 - - - 25,669Geraldine Ong Siew Ting 25,669 - - - 25,669 Executive Offi cersStephen Wu Hon Fan 143,474 11,956 2,044 74,671 232,145Lim Tock Yen 163,674 12,443 8,310 7,657 192,084Allen Ong Pang Kheng 143,574 11,964 9,125 49,526 214,189Colin Lim Tow Hin 150,804 25,134 21,113 6,237 203,288 Koh Kok Choon 150,804 25,134 21,113 5,655 202,706

FY 2004DirectorsTan Cheng Leong 344,499 155,775 18,457 63,858 582,589Samuel Wu Man Fan 342,955 14,047 2,160 32,403 391,565Dr Lim Boh Soon 215,312 95,422 10,937 - 321,671Professor Hang Chang Chieh 48,934 - - - 48,934Warwick Desmond Davies 36,000 - 3,240 - 39,240Christopher Tsim Lo Fai 36,000 - 3,240 - 39,240Michael Chye Hin Fah 32,134 - - - 32,134Geraldine Ong Siew Ting 29,361 - - - 29,361

Executive Offi cersStephen Wu Hon Fan 140,413 11,700 2,160 67,780 222,053Lim Tock Yen 167,356 25,446 12,653 8,645 214,100Allen Ong Pang Kheng 123,478 39,637 12,352 9,623 185,090Dick Kam Yun Kwong 97,209 8,101 2,160 63,005 170,475Run Run Cheng Hwa Meng 109,666 9,138 - 2,290 121,094

Contributed Equity

Ordinary Fully Paid Shares (ASX Code : ‘AAT’ : SGX-ST : ‘AUTRON’)Balance on issue 30 June 2005 694,157,369Balance on issue 30 June 2004 693,373,890

Increase during the period 783,479

Represented by:

(i) Conversion of warrants (options) to shares 783,479

(ii) Net movement during the period 783,479




Warrants (Options) Over Unissued Shares

As at the date of this report, there were 230,826,957 unissued warrants (options) (230,826,957 at reporting date).

Warrants (options) holders do not have any right, by virtue of the option, to participate in any share issue of the Company or any related body corporate or in the interest issue of any other registered scheme.

The Company announced on 22 March 2004 the proposed renounceable rights issue of up to 231,610,436 warrants (options), each warrant (option) carrying the right to subscribe for one new ordinary share on the basis of one warrant (option) for every three ordinary share held. These warrants (options) were issued on 4 June 2004 at an issue price of S$0.02 (equivalent to A$0.02) and could be exercised at the price of S$0.18 (equivalent to A$0.15) per warrant (option). These warrants (options) can be exercised anytime within three years between 4 June 2004 and 3 June 2007.

As at 30 June 2005, a total of 783,479 warrants (options) were exercised and converted to ordinary shares. Each warrant (option) was exercised at S$0.18 (equivalent to A$0.14).

Indemnifi cation and Insurance of Offi cers and Auditors

During the year the Company has paid a premium in respect of a contract insuring its Directors and senior employees against liabilities that may be incurred in defending civil or criminal proceedings that may be brought against the offi cers in their capacity as offi cers of entities in the consolidated entity. In accordance with common practice the insurance policy prohibits disclosure of the nature of the liability insured against and the amount of the premium.

Directors’ Interest

The relevant interest of each director in the share capital of the companies within the consolidated entity, as notifi ed by the directors to the Australian Stock Exchange in accordance with the Corporations Act 2001, at the date of this report is as follows:

Autron Corporation Limited Ordinary Shares WarrantsTan Cheng Leong 63,471,768 16,157,254Samuel Wu Man Fan 23,587,384 7,862,461Dr Lim Boh Soon 450,000 75,000Lim Kheng Joo - -Professor Hang Chang Chieh - -Warwick Desmond Davies - -Philip Loong Tien Choon - -Christopher Tsim Lo Fai - -

Total 87,509,152 24,094,715

No shares or options have been issued by the Company to Directors during the fi nancial year and between the end of the fi nancial year ending 30 June 2005 and 30 September 2005.

On 23 May 2003, as announced through the ASX, Tan Cheng Leong, Samuel Wu Man Fan and Lim Tock Yen undertook a letter of undertaking. Subject to the terms and conditions of the letter, they are not to dispose of their shareholdings in the Company for the next 5 years commencing 23 May 2003.

Directors’ Benefi ts

Since the end of the previous fi nancial year, no Director of the Company has received or become entitled to receive a benefi t (other than a benefi t included in the aggregate amount of emoluments received or due and received by Directors shown in the Consolidated Accounts) by reason of a contract made by the Company, its controlled entities or a related body corporate with Director, with a fi rm of which he is a member, or with an entity in which he has a substantial fi nancial interest.




Auditor Independence and non-audit services

The directors received the following declaration from the auditor of Autron Corporation Limited.

120 Collins Street Tel 61 3 9288 8000 Melbourne VIC 3000 Fax 61 3 9654 6166 Australia DX 293 Melbourne

GPO Box 67 Melbourne VIC 3001

Auditor’s Independence Declaration to the Directors of Autron Corporation Limited

In relation to our audit of the fi nancial report of Autron Corporation Limited for the fi nancial year ended 30 June 2005, to the best of my knowledge and belief, there have been no contraventions of this auditor independence requirements of the Corporations Act 2001, or any applicable code of professional conduct.

Ernst & Young

David N BalcombePartner3 October 2005

Non-audit services

The directors are satisfi ed that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act. The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.

Refer to Note 23 of the fi nancial statements for the amounts received or are due to receive by Ernst & Young for the provision of audit and non-audit services.




Rounding

The amounts contained in this report and in the fi nancial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies. Dated at Singapore this 30th day of September 2005. Signed in accordance with a resolution of the Board of Directors.

Samuel Wu Man FanGroup President and Chief Executive Offi cer

Lim Kheng JooGroup Executive Director




The Corporate Governance Statement as set out below has been prepared and presented in a format consistent with the Australian Stock Exchange Limited (“ASX”) publication “Principles of Good Corporate Governance and Best Practice Recommendations” published in March 2003.

The Board of Directors of Autron Corporation Limited is responsible for the corporate governance of the consolidated entity. The Board guides and monitors the business and aff airs of Autron Corporation Limited on behalf of the shareholders by whom they are elected and to whom they are accountable.

Principle 1. Lay solid foundations for management and oversight

The Board has the responsibility of protecting the rights and interests of members and enhancement of long-term shareholder value.

Key tasks undertaken by the Board include:

1. Setting and monitoring of objectives, goals and strategic direction for management with a view to maximising shareholder wealth;2. Select and appoint the Chief Executive Offi cer, determine his conditions of service and monitor his performance against established

objective;3. Select and appoint the Chief Financial Offi cer, determine his conditions of service and monitor his performance against established

objective;4. Monitor fi nancial outcomes, the integrity of reporting and in particular, approve annual budgets and longer-term strategic and

business plans;5. Monitor senior management’s performance and implementation of strategy and ensuring appropriate resources are available;6. Approve and monitor the progress of major capital expenditure, capital management and acquisitions and divestitures;7. Ensure that eff ective audit, risk management and compliance systems are in place to safeguard the Company’s interests; and8. Monitor compliance with regulatory requirements (including continuous disclosure) and ethical standards

To assist it in carrying out its responsibilities, the Board has established standing committees. They are:

Audit Committee Nomination Committee Remuneration Committee

Principle 2. Structure of the board to add value

The skills, experience and qualifi cations relevant to the position of Director held by each Director in offi ce at the date of the annual report is included in the Directors’ Report.

The Board shall include both Executive and Non-Executive Directors. All the Non-Executive Directors are considered to be Independent Directors in accordance with the defi nition provided in the recommendations.

The majority of the Board is not independent as the Board consists of four Executive and four Independent Directors. Dr Lim Boh Soon had tendered his resignation as the Executive Director of the Company which will take eff ect in January 2006. The Nomination Committee is currently undertaking a review on the composition of the Board.

corporate governance statement



Principle 2. Structure of the board to add value (cont’d)

The following Directors of Autron Corporation Limited are considered to be independent:

Name PositionProfessor Hang Chang Chieh Chairman of the Board Mr Philip Loong Tien Choon Non-Executive Director Mr Warwick Desmond Davies Non-Executive Director Mr Christopher Tsim Lo Fai Non-Executive Director

Details of meetings of the Board of Directors and attendances thereat are set out in the Directors’ Report.

To assist in carrying out their responsibilities as Directors, after prior consultation with the Chairman of the Board of Directors, Directors are able to obtain independent professional advice at the expense of the Company. Such advices as received are available to all Directors for their consideration.

The Company’s Constitution does not require a shareholding qualifi cation for Directors. Details of each director’s entitlement to the Company’s shares are set out in the Directors’ Report.

Nomination Committee (“NC”)

The Board has established a NC, which meets as required, to ensure that the Board continues to operate within the established guidelines, including when necessary, selecting candidates for the position of director. The NC comprises the following members throughout the year:

Name PositionProfessor Hang Chang Chieh ChairmanMr Tan Cheng Leong MemberMr Philip Loong Tien Choon Member

NC regularly reviews the performance of Board members and legislative requirements to ensure that the Board continues to have the mix of skills and experience necessary for the conduct of the Company’s activities.

In so assuming these responsibilities, the procedures applied by the Board for appointing a Director include the selection of a panel of nominees with the skills and experience identifi ed as being required to complement the existing skills and experiences of the existing Board. The Board will also draw upon advices from external consultants and internal industry experiences.

The terms and conditions of the appointment are communicated to the nominees and include the level of remuneration.

Principle 3. Promote ethical and responsible decision making

The Board has established a Code of Conduct to guide all Board members, key executives and employees.

The Board also established a Securities Policy which guides the Directors and employees in relation to trading in the Company’s securities.

The restrictions imposed by law on dealings by Directors in the securities of the Company have been supplemented by the Board of Directors adopting guidelines which further limit any such dealings by Directors, their spouses, any dependent child, family company or family trust.

corporate governance statement (cont’d)



Principle 3. Promote ethical and responsible decision making (cont’d)

The guidelines provide that, in addition to the requirement that Directors not deal in the securities of the company when they have or may be perceived as having relevant unpublished price-sensitive information, Directors are only permitted to deal within certain periods. Within such periods the Directors are permitted to deal in securities in which they have a relevant interest without restriction for any period other than one calendar month before the release of annual or half yearly results. Thereafter, the Directors are required to wait at least 2 business days following the relevant release of these and any other announcement of the Company so that the market has had time to absorb the information.

Principle 4. Safeguard integrity of fi nancial reporting

The Chief Executive Offi cer and the Chief Financial Offi cer have provided written undertakings to the Board providing assurance that the Group’s fi nancial reports present a true and fair view and are in accordance with the relevant accounting standards. Audit Committee (“AC”)The AC comprises two Independent Directors and an Executive Director with relevant fi nancial, commercial and risk management experience. The chairman of the AC is separated from the chairman of the Board. The AC comprises the following members throughout the year:

Name PositionMr Philip Loong Tien Choon ChairmanMr Warwick Desmond Davies MemberDr Lim Boh Soon Member

The Board of Directors recognises and acknowledges that the composition of the AC does not presently accord with the recommended principle of Non-Executive Directors only. Dr Lim Boh Soon had tendered his resignation as the Executive Director of the Company which will take eff ect in January 2006. The Nomination Committee is currently undertaking a review on the composition of the Board as well as the AC.

The AC is charged with assessing the adequacy of the company’s fi nancial, operating risk management controls, compliance with legal requirements and ethical guidelines aff ecting the company.

The AC assesses and reviews external and internal audits and any material issues arising from these audits. It also assesses and reviews the accounting policies and practices of the Group as an integral part of reviewing the half yearly and full year accounts for recommendation to the Board. It also makes recommendations to the Board regarding the appointment of external auditors and the level of their fees and provides a facility, if necessary, to convey any concerns rose by the internal and external auditors independently of management infl uence.

Principle 5. Make timely and balanced disclosure

A continuous disclosure regime operates throughout the Group. Policies and procedures are in place to ensure matters that a person could reasonably expect to have a material eff ect on the share price are announced to the ASX and Singapore Exchange Securities Trading Limited (“SGX”) in a timely manner. These policies and procedures have been formally communicated to all relevant staff . The Company Secretary is the nominated Continuous Disclosure Offi cer. The Board is advised of any notifi able events. The Board approves all releases that are made to the ASX and the SGX.




Principle 6. Respect the rights of shareholders

The Company endeavours to keep its shareholders fully informed of matters likely to be of interest to them.

The annual report is distributed to all shareholders (unless a shareholder has specifi cally requested not to receive the document). A copy of the full annual report is available free of charge, upon request, from the Company and can be viewed on the Company’s website. The Board ensures that the annual report includes relevant information about the operations of the Company during the year, changes in the state of aff airs of the Company and details of future developments, in addition to the other disclosures required by the Corporations Act 2001.

The half-year report contains summarised fi nancial information and a review of the operations of the Company during the period. The half-year fi nancial report is prepared in accordance with the requirements of Accounting Standards and the Corporations Act 2001, and is lodged with the Australian Securities and Investments Commission and the ASX.

The Company’s internet website at www.autroncorp.com is regularly updated and provides details of recent material announcements by the Company to the ASX and the SGX, full year trading results, annual reports, and general information on the Company and its business.

The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identifi cation with the Company’s strategy and goals. Important issues are presented to the shareholders as single resolutions.

The external auditor attends the Company’s Annual General Meeting and is available to respond to questions about the conduct of the audit and the preparation and content of the Independent Audit Report. Members wishing to have questions put to the Auditors can now lodge written questions to the Auditors which will be presented at the meeting for answering and any discussion arising there from. Under recent changes to the Corporations Act the written questions are required to be lodged with the Company 5 business days prior to the holding of the Annual General Meeting.

Principle 7. Recognise and manage risk

In relation to identifying areas of signifi cant business risk and putting in place arrangements to manage such risk the Board relies on the advice and expertise of senior management acting in consultation with the Company’s external advisers. Where appropriate the Board obtains advice directly from external advisers. The Board has not considered it appropriate to appoint a separate Corporate Governance Committee and responsibility for developing and monitoring corporate governance policies and practices in areas outside the scope of the functions of the Audit Committee is retained and exercised directly at Board level.

Principle 8. Encourage enhanced performance

The Company will evaluate the performance of all employees, senior management and Board members against both measurable and qualitative indicators.




Principle 9. Remunerate fairly and responsibly

Remuneration Committee (“RC”)The RC makes recommendations to the Board on Directors’ fees and allowances and remuneration of the Executive Directors. Remuneration is set by reference to independent data, external professional advice, the company’s circumstances and the requirement to attract key management. RC members abstain from deliberations in respect of their own remuneration. The RC comprises the following members throughout the year:

Name PositionProfessor Hang Chang Chieh ChairmanMr Warwick Desmond Davies MemberMr Tan Cheng Leong Member

A detailed profi le of each committee member is set out in the Directors’ Report together with the number of committee meetings held and the attendances thereat.

Principle 10. Recognise the legitimate interests of stakeholders

The Company had in place a Code of Conduct which sets out the behaviour required of Directors and employees. The Code provides a mechanism to enable employees to report breaches of the Code without any fear of retribution. Senior management deals with breaches of the Code and monitors compliance.

At the meetings of shareholders, Directors are subject to questioning by shareholders about the Directors’ stewardship of the Company’s aff airs and it is shareholders who ultimately vote upon the fi nancial statements and reports, the election of Directors, appointment of Auditors and any matters of Special Business.

To assist shareholders and investors, the Company has established a toll-free communication facilities link with the global headquarter in Singapore:

Telephone 1800 001 748Facsimile 1800 002 741

and invite shareholders to visit the Company’s website at: www.autroncorp.com




statement of fi nancial performancefor the year ended 30 June 2005

Consolidated The Company Note 2005 2004 2005 2004 $’000 $’000 $’000 $’000Revenue from ordinaryActivitiesSales revenue 2 195,503 197,553 - -Cost of sales (153,736) (154,590) - -

Gross profi t 41,767 42,963 - -Other revenues from ordinary activities 2 16,273 10,983 10,781 16,383

58,040 53,946 10,781 16,383

Selling expenses (12,940) (11,692) (16) (6)Administrative expenses (32,375) (20,110) (11,212) (6,160)Occupancy expenses (1,348) (1,177) (103) (110)Borrowing costs expenses 3(c) (5,469) (2,726) (429) (326)

Total operating expenses 3(a)(b) (52,132) (35,705) (11,760) (6,602)

Profi t/(Loss) from ordinary activities before income tax expense 5,908 18,241 (979) 9,781

Income tax expense relating to ordinary activities 4 (2,481) (3,473) (512) 124

Net profi t/(loss) 3,427 14,768 (1,491) 9,905

Net loss attributable to outside equity interest 21 66 329 - -

Net profi t attributable to members of Autron Corporation Limited 20(c) 3,493 15,097 (1,491) 9,905

Net exchange diff erence on translation of fi nancial report of foreign controlled entity 20(b) (6,272) (957) - -

Warrant/Share issue costs 19 (6) (694) (6) (694)

Total revenues, expenses and valuation adjustments attributable to members of Autron Corporation Limited and recognised directly in equity (6,278) (1,651) (6) (694)

Total changes in equity other than those resulting from transactions with owners as owners attributable to members of Autron Corporation Limited (2,785) 13,446 (1,497) 9,211

Basic earnings per share (cents per share) 25 0.50 2.18

Diluted earnings per share (cents per share) 25 0.47 2.16



statement of fi nancial positionas at 30 June 2005

Consolidated The Company Note 2005 2004 2005 2004 $’000 $’000 $’000 $’000Current AssetsCash 6 9,730 14,277 (93) 1,558Receivables 7 104,278 103,777 1,779 5,214Inventories 8 51,717 46,848 - -Finance lease receivables 9 7,788 2,255 - -

Total Current Assets 173,513 167,157 1,686 6,772

Non-Current AssetsInvestment 10 68 - - -Other investments 11 417 - - -Receivables 7 147 1,498 5,259 3,917Finance lease receivables 9 6,560 2,727 - -Other fi nancial assets 12 - - 93,378 86,533Property, plant and equipment 13 38,154 26,235 4 -Intangible assets 14 48,862 41,706 - 6,628Deferred tax assets 4 39 158 - -

Total Non-Current Assets 94,247 72,324 98,641 97,078

Total Assets 267,760 239,481 100,327 103,850

Current LiabilitiesPayables 15 58,279 67,252 2,966 4,632Interest bearing liabilities 16 91,527 46,246 1,949 2,014Finance lease payables 17 881 - - -Current tax liabilities 4 2,568 4,820 512 -Provisions 18 556 423 - -

Total Current Liabilities 153,811 118,741 5,427 6,646

Non-Current LiabilitiesPayables 15 3,060 - 13,927 16,211Interest bearing liabilities 16 17,112 23,358 6,028 1,192Finance lease payables 17 560 - - -Deferred tax liabilities 4 1,625 918 - -

Total Non-Current Liabilities 22,357 24,276 19,955 17,403

Total Liabilities 176,168 143,017 25,382 24,049

Net Assets 91,592 96,464 74,945 79,801

EquityParent Entity InterestContributed equity 19 76,838 76,714 76,838 76,714Warrants 19 3,222 3,239 3,222 3,239Reserves 20 (10,978) (4,702) (68) (68)Retained profi ts/(Accumulated losses) 20 21,246 21,225 (5,047) (84)

Total Parent Entity Interest in Equity 90,328 96,476 74,945 79,801Outside equity interest 21 1,264 (12) - -

Total Equity 91,592 96,464 74,945 79,801



statement of cash fl owfor the fi nancial year ended 30 June 2005

Consolidated The Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000Cash fl ows from operating activitiesReceipts from customers 191,976 164,188 - -Payments to suppliers and employees (213,956) (179,031) (1,110) (514)Interest received 206 298 10 22Borrowing costs (3,980) (2,726) (105) (152)Income tax refund/(paid) (4,465) 162 - 123

Net cash fl ows from/(used in) operating activities (Note 30 (ii)) (30,219) (17,109) (1,205) (521)

Cash fl ows from investing activitiesProceeds from sale of property, plant and equipment 11,284 42 - -Proceeds on disposal of interest in subsidiary 4,428 - 4,428 -Purchase of property, plant and equipment (16,247) (2,842) (4) -Net cash fl ow from acquisition of controlled entity (Note 30 (iii)) (3,585) (1,587) - -Net cash fl ow from disposal of controlled entity (Note 30 (iv)) - (169) - -Additional investment in subsidiaries (2,526) - (8,206) -Purchase of licenses (258) - - -

Net cash fl ows used in investing activities (6,904) (4,556) (3,782) -

Cash fl ows from fi nancing activitiesProceeds from issues of warrants 108 3,239 108 3,239Payments for shares buy-back - (276) - (276)Proceeds from borrowings 32,803 27,339 - -Proceeds from/(Repayment of ) fi nance lease principal 1,042 (49) - -Dividends paid (3,472) (3,474) (3,472) (3,474)Loans - Subsidiary - - 6,765 799

Net cash fl ows from fi nancing activities 30,481 26,779 3,401 288

Net increase/(decrease) in cash held (6,642) 5,114 (1,586) (233)Cash as at beginning of fi nancial year 6,472 2,744 (456) 45Eff ects of exchange rate changes on cash held in foreign currencies at the beginning of the fi nancial year (494) (1,386) - (268)

Cash as at the end of the fi nancial year (Note 30 (i)) (664) 6,472 (2,042) (456)



notes to the fi nancial statements- 30 June 2005

1. Statement of Signifi cant Accounting Policies

The signifi cant policies which have been adopted in the preparation of these fi nancial statements are:

(a) Basis of preparation The fi nancial statements form part of a fi nancial report which has been prepared in accordance with the requirements of the

Corporations Act 2001 which includes applicable Accounting Standards and Urgent Issues Group Consensus Views. They have been prepared on the basis of historical cost convention and do not take into account changing money values or, except where stated, current valuations of non-current assets.

The accounting policies adopted are consistent with those of the prior year.

Lending ratio covenants have been breached in respect of three of the group’s fi nance facilities. This gives those lenders the right to request repayment. In addition the group has a signifi cant operating cash fl ow defi cit. The lenders have given the group a conditional waiver of the breaches for a period of time. The directors are confi dent that the lenders will continue to advance adequate fi nance and that the group will achieve increased operating cash fl ows in 2005-06, which combined with proceeds of asset sales and issue of additional equity in selected cases, will ensure adequate continued growth of the group. The directors have also put in place a strategy to reduce the investment in working capital by the use of external facilities to fi nance customer sales. Consequently the directors have prepared the fi nancial report on a going concern basis and have not re-classifi ed the borrowings as current liabilities. The fi nancial report takes no account of the consequences, if any, of the eff ects on the group of a material debt repayment being required before the due dates, or of the unlikely event that adequate fi nance will not be available, and/or strategies to improve cash fl ow are unsuccessful. If the strategies are not successful and material fi nance facilities are withdrawn then the group may have diffi culty in operating as a going concern and adjustments to the fi nancial statements may be required for the recoverability and classifi cation of recorded assets and amounts and classifi cation of liabilities.

(b) Principles of consolidation The consolidated fi nancial statements are those of the Economic Entity comprising Autron Corporation Limited, being the

parent entity and its controlled entities. Information from the fi nancial statements of subsidiaries is included from the date the parent entity obtains control until such time as control ceases. Where there is loss of control of an entity, the consolidated fi nancial statements include the results for the part of the reporting period during which the parent entity has control.

Subsidiary acquisitions are accounted for using the purchase method accounting.

The fi nancial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies.

Adjustments are made to bring into line any dissimilar accounting policies which may exist.

All intercompany balances and transactions, including unrealised profi ts arising from intra-group transactions, have been eliminated in full.

Unrealised losses are eliminated unless costs cannot be recovered.

Outside interests in the equity and results of the entities that are controlled by the Company are shown as a separate item in the consolidated accounts.

(c) Recoverable amount The carrying amounts of all non-current assets are reviewed at least annually to determine whether they are in excess of their

recoverable amount. If the carrying amount of a non-current asset exceeds the recoverable amount, the asset is written down to the lower value. In assessing recoverable amounts the relevant cash fl ows have not been discounted to their present value.



1. Statement of Signifi cant Accounting Policies (cont’d)

(d) Foreign currencies Translation of foreign currency transactions Transactions in foreign currencies of entities within the consolidated entity are converted to Australian currency at the rate of

exchange ruling at the date of the transaction.

Amounts payable to and by the entities within the consolidated entity that are outstanding at the balance date and are denominated in foreign currencies have been converted to local currency using rates of exchange ruling at the end of the fi nancial year.

Translation of fi nancial reports of overseas operations All overseas operations are deemed self-sustaining as each is fi nancially and operationally independent of Autron Corporation

Limited. The fi nancial reports of overseas operations are translated using the current rate method and any exchange diff erences are taken directly to the foreign currency translation reserve.

(e) Cash and cash equivalents Cash on hand and in banks and short-terms deposits are stated at nominal value.

For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, money market investments readily convertible to cash within 2 working days, net of outstanding bank overdrafts. Bank overdrafts are carried at the principal amount. Interest is recognised as an expense as it accrues.

(f) Intangibles Goodwill Goodwill represents the excess of the purchase consideration including the cost of non competition agreement over the fair

value of identifi able net assets acquired at the time of acquisition of a business or shares in a controlled entity. Goodwill is amortised on a straight-line basis over a 5 – 20 years period of time during which benefi ts are expected to be received.

The unamortised balance of goodwill is reviewed at least annually. Where the balance exceeds the value of expected future benefi ts, the diff erence is charged to the profi t and loss account.

License fees License fees represent the cost of acquiring the patent rights and know-how to develop, manufacture, improve or design the

licensed products. It is amortised on a straight-line basis over a period of 10 years which represents the duration of the patent and the payment terms of the patent.

Non competition agreement The cost of a non competition agreement entered into in respect of a business/controlled entity acquisition is being amortised

in the fi nancial report of the parent entity over the period of 3 to 5 years (depending on time of payment).

(g) Inventories Inventories are carried at the lower of cost and net realisable value. The cost of manufactured products include direct materials,

direct labour, and an appropriate portion of variable and fi xed overhead which is applied on the basis of normal operating capacity.

(h) Investments Controlled Entities Investments in controlled entities are carried in the Company’s fi nancial statement at the lower of cost and recoverable amount.

Dividends are brought to the account in the profi t and loss statement when they are declared by the controlled entities.

notes to the fi nancial statements (cont’d)- 30 June 2005




(i) Taxes Income taxes Tax eff ect accounting is applied using the liability method whereby income tax is regarded as an expense and is calculated

on the accounting profi t after allowing for permanent diff erences. To the extent timing diff erences occur between the time items are recognised in the fi nancial statements and when items are taken into account in determining taxable income, the net related taxation benefi t or liability calculated at current rates, is disclosed as a future income tax benefi t or a provision for deferred income tax.

The net future income tax benefi t relating to tax losses and timing diff erences is not carried forward as an asset unless the benefi t is virtually certain of being realised.

The income tax expense for the year is calculated using the applicable tax rate in each jurisdiction.

Goods and Services Tax (GST) (or equivalent tax) Revenues, expenses and assets are recognised net of the amount of GST(or equivalent tax) except:

where the GST(or equivalent tax) incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST(or equivalent tax) is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

receivables and payables are stated with the amount of GST(or equivalent tax) included.

The net amount of GST(or equivalent tax) recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial Position.

Cash fl ows are included in the Statement of Cash Flows on a gross basis and the GST (or equivalent tax) component of cash fl ows arising from investing and fi nancing activities, which is recoverable from, or payable to, the taxation authority are classifi ed as operating cash fl ows.

Commitments and contingencies are disclosed net of the amount of GST(or equivalent tax) recoverable from, or payable to, the taxation authority.

(j) Interest-bearing liabilities All loans are measured at the principal amount. Interest is charged as an expense as it accrues.

Bills of exchange and promissory notes are carried at the principal amount plus deferred interest.

(k) Provisions Provisions are recognised when the economic entity has a legal, equitable or constructive obligation to make a future sacrifi ce of

economic benefi ts as a result of past transactions or other past events, it is probable that a future sacrifi ce of economic benefi ts will be required and a reliable estimate can be made of the amount of the obligation.

A provision for dividends is not recognised as a liability unless the dividends are declared, determined or publicly recommended on or before the reporting date.





(l) Property, Plant and Equipment Cost and valuation Property, plant and equipment are initially recorded at cost, and then depreciated over their useful lives to the entity commencing

from the time the asset is held ready for use.

Depreciation Depreciation is provided on a straight-line basis on all land, property, plant and equipment, other than freehold land.

Major depreciation rates are: 2005 2004 Freehold & leasehold property - 1% - 3% 1% - 3% Plant and equipment - 6% - 33% 6% - 33% Leasehold improvements - 13% - 22% 13% - 22% Motor vehicles - 15% 15%

(m) Employee benefi ts Provision is made for employee benefi ts accumulated as a result of employees rendering services up to the reporting date. These

benefi ts include wages and salaries, annual leave, sick leave and long service leave.

Liabilities arising in respect of wages and salaries, annual leave, sick leave and any other employee benefi ts expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefi t liabilities are measured at the present value of the estimated future cashfl ow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cashfl ows, the market yield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, are used.

Employee benefi ts expenses and revenues arising in respect of the following categories:

Wage and salaries, non-monetary benefi ts, annual leave, long service leave, sick leave and other leave benefi ts; and Other types of employee benefi ts

Are recognised against profi ts on a net basis in their respective categories.

In respect of the consolidated entity’s defi ned benefi ts or other post retirement plans, any contributions made to the plans by entities within the consolidated entity are recognised against profi ts when due.

(n) Leases Leases are classifi ed at their inception as either operating or fi nance leases based on the economic substance of the agreement

so as to refl ect the risks and benefi ts incidental to ownership.

Operating leases The minimum lease payments of operating leases, where the lessor eff ectively retains substantially all of the risks and benefi ts of

ownership of the leased item, are recognised as an expense on a straight-line basis.

Finance leases Leases which eff ectively transfer substantially all of the risks and benefi ts incidental to ownership of the leased item to the group

are capitalised at the present value of the minimum lease payments and disclosed as property, plant and equipment under lease. A lease liability of equal value is also recognised.

The cost of improvements to or on leasehold property is capitalised, disclosed as leasehold improvements, and amortised over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is the shorter.





(o) Trade and Other Trade Receivables Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate

for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred.

Trade Payables Liabilities are recognised for amounts to be paid in the future for goods or services rendered.

(p) Earnings per share (EPS) Basic EPS is calculated as net profi t attributable to members, adjusted to exclude costs of servicing equity (other than dividends)

and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted EPS is calculated as net profi t attributable to members, adjusted for:

costs of servicing equity (other than dividends) and preference share dividends; the after tax eff ect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as

expenses; and other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential

ordinary shares;

divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(q) Share Capital Ordinary share capital is recognised at the fair value of the consideration received by the Company.

Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

(r) Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefi ts will fl ow to the entity and the revenue can be

reliably measured. The following specifi c recognition criteria must also be met before revenue is recognised.

Sales of Goods Control of the goods has passed to the buyer.

Commission Commission on agency sales is accounted for as revenue when the economic entity has fulfi lled substantially all its obligations

in respect of the sale to the third party. Where appropriate costs are accrued to account for any remaining obligations of the economic entity.

Rendering of Services When the contract outcome can be reliably measured, control of the right to be compensated for the services and the stage

of completion can be reliably measured. Stage of completion is measured by reference to the labour hours incurred to date as a percentage to total estimated labour hours for each contract. When the contract outcome cannot be reliably measured, revenue is recognised only to the extent that costs have been incurred.

Interest Control of the right to receive the interest payment.

Dividends Control of the right to receive the dividend payment.




2. Revenue from ordinary activities Consolidated The Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000

Revenues from operating activitiesRevenue from sale of - machinery and equipment 165,484 155,825 - - - spare parts and services 10,383 27,562 - -

- others 19,636 14,166 - -

Revenue from sale of goods 195,503 197,553 - -

Revenues from non-operating activities Rent 455 1,765 - - Commission 1,330 2,457 - - Management fees - Controlled entities - - 2,959 2,007 Interest - Others 206 298 10 22 Proceeds from disposal of subsidiary - 4,370 - 4,354 Proceeds from disposal of non current assets 11,284 - - - Exchange gain 2,211 - 2,134 - Dividend income - Controlled entities - - 5,678 10,000

Others 787 2,093 - -

Total revenues from non-operating activities 16,273 10,983 10,781 16,383

Total revenues from ordinary activities 211,776 208,536 10,781 16,383

3. Expenses and losses/(gains) (a) Expenses

(i) Depreciation of non-current assets Plant and equipment 2,466 1,493 - - Motor vehicles 190 141 - - Leasehold and freehold property 256 453 - -

Leasehold improvements 369 291 - -

Total depreciation of non-current assets 3,281 2,378 - -

(ii) Amortisation of non-current assets Goodwill 3,445 3,141 - - Preliminary expenses - 4 - Non competition agreements - - 3,319 3,313

Other 78 347 - 306

Total amortisation of non-current assets 3,523 3,492 3,319 3,619

Total depreciation and amortisation expenses 6,804 5,870 3,319 3,619




3. Expenses and losses/(gains) (cont’d) Consolidated The Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000 (a) Expenses (cont’d)

(ii) Amortisation of non-current assets (cont’d) Doubtful debts provided - trade 138 51 - - - non-trade - 590 - - Bad debts written off 232 39 1,631 - Provision for stock obsolescence 768 70 - -

Operating lease rental - minimum lease payments 38 31 - -

Superannuation contributions - Central Provident Fund 520 716 - - - Superannuation Guarantee 6 7 6 7 - Mandatory Provident Fund 77 67 - -

As at 30 June 2005, the Group has 1,074 (2004: 1,123) employees.

(b) Losses/(Gains) Net (gain)/loss on disposal of property, plant and equipment (3,566) (2) - - Net foreign currency losses/(gains) (2,211) 969 (1,833) (36)

(c) Borrowing cost expenses Bank overdraft interest 669 331 286 13 Finance lease interest 22 32 - - Term loan interest 2,748 1,080 46 -

Trade fi nancing interest 2,014 924 - -

5,453 2,367 332 13 Other borrowing costs 16 359 97 313

Total borrowing expenses 5,469 2,726 429 326

Specifi c Items Profi t from ordinary activities before income tax expenses includes the following specifi c revenues and expenses whose

disclosure is relevant in explaining the fi nancial performance of the entity:

Impairment of goodwill (4,000) - (3,309) - Impairment of development cost (955) - - - Inventories written off /provision for stock obsolescence (1,926) - - - Profi t on sale of non current assets 2,437 - - - Profi t on sale of subsidiary - 3,632 - 3,584




4. Income tax

The prima facie tax, using tax rates applicable in the country of operation, on operating profi t and extraordinary items diff ers from the income tax provided in the fi nancial statements as follows:

Consolidated The Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000

Prima facie tax on profi t from ordinary activities 630 3,170 (293) 2,935

Tax eff ect of permanent diff erence: Impairment of goodwill 1,200 - 992 - Amortisation of intangible assets 1,022 1,034 995 1,086 Non-deductible expenses 842 295 747 211 Impairment of development cost 191 - - - Tax loss benefi t not brought to account 411 308 - - Others 107 347 53 444

(Decrease)/Increase in income tax expenses due to: Non-taxable income (2,218) (1,662) (2,343) (4,677) (Over)/Under-provision in prior year 563 65 621 (123) Utilisation of capital allowance brought forward - (34) - - Utilisation of unrecorded tax losses brought forward (267) (50) (260) -

Total income tax attributable to operating profi t 2,481 3,473 512 (124)

Tax assets and liabilities Current tax payable 2,568 4,820 512 - Provision for deferred income tax - non-current 1,625 918 - - Future income tax benefi t - non-current 39 158 - -

Income tax losses Future income tax benefi t arising from tax losses not brought to account at balance sheet date as realisation of the benefi t is not regarded as virtually certain 363 1,262 - 869

This future income tax benefi t will only be obtained if: (a) future assessable income is derived of a nature and of an amount suffi cient to enable the benefi t to be realised; (b) the conditions for deductibility imposed by tax legislation continue to be complied with; and (c) no changes in tax legislation adversely aff ect the consolidated entity in realising the benefi t.

5. Dividends paid or provided for on ordinary shares

(a) Dividends paid during the year Special dividend Unfranked dividends (2005: A$0.005 per share) 3,472 3,474 3,472 3,474

(b) Dividends proposed and not recognised as a liability Unfranked dividends (2004: A$0.005 per share) - 3,467 - 3,467

(c) Franking credit balance The amount of franking credits available for the subsequent fi nancial year are: - franking account balance as at the end of fi nancial year (at 30%) 30 27

30 27




6. Cash Consolidated The Company 2005 2004 2005 2004 $’000 $’000 $’000 $’000 Current Cash at bank and on hand 4,537 12,563 (93) 1,558 Deposit at fi nancial institutions 5,193 1,714 - -

9,730 14,277 (93) 1,558

7. Receivables

Current Trade debtors 98,229 92,982 - - Less: Provision for doubtful debts (3,751) (5,238) - - Bills receivables 767 3,013 - -

95,245 90,757 - -

Other debtors 7,641 12,291 279 5,110 Due from a director 69 - - - Due from controlled entities - - 1,410 - Deposits 1,323 729 90 104

9,033 13,020 1,779 5,214 104,278 103,777 1,779 5,214

Non-Current Trade debtors - 508 - - Loans to controlled entities - - 5,259 3,917 Other debtor 147 990 - - 147 1,498 5,259 3,917

Terms and conditions Terms and conditions relating to the above fi nancial instruments:

(i) Trade debtors are non-interest bearing and generally on 30 days terms. Selected customers are given credit terms of up to 360 days. (ii) Sundry debtors and other receivables are non-interest bearing and have repayment terms between 30 to 90 days. (iii) Loan to controlled entities are non-interest bearing and have no fi xed terms of repayment. (iv) Details of the terms and conditions of related party receivables are set out in note 28.

8. Inventories

Finished goods - at cost 34,613 32,287 - - Provision for diminution in value (1,271) (527) - -

Finished goods - at net 33,342 31,760 - - Work-in-progress - at cost 18,115 14,628 - - Provision for diminution in value (760) (396) - -

Work-in-progress - at net 17,355 14,232 - - Raw materials - at cost 1,020 856 - -

51,717 46,848 - -



Documents

Growth and Value Creation · aerospace industry. We are committed to delivering increased proﬁ tability and to grow our portfolio selectively. On growth, our guiding principles