Ccet 02

Financial Highlights 1

Message from Chairman & President 2

Board of Directors 9

General Information 10

Nature of Business Operation 11

Risk Factors 17

Organization Chart 23

Related Party Transactions 26

Audit Committee Report 30

Controlling System & Internal Audit 31

Directorsû Reporting 31

Investor Relations 31

Social Responsibilities 32

Report of Independent Auditor 33

Management Explanation and Analysis 56

CONTENTS

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Cal-Comp Elect ron ics (Thai land) Plc.1

FINANCIAL HIGHLIGHTS

Balance Sheet Summary 2002 2001 2000

Cash in hand and at banks 832,719,330 982,524,375 960,743,184Accounts receivable 4,564,803,051 4,340,457,842 4,991,184,634Inventory 3,790,164,115 4,036,602,020 4,836,061,366Total current assets 10,561,465,151 10,919,707,251 11,462,579,224Investment 202,042,388 165,505,260 350,098,677Land, building and equipment (net) 2,719,141,248 2,815,638,346 2,732,654,325Total assets 13,752,183,942 14,210,103,002 14,880,734,505Loans from banks 971,505,366 2,343,392,079 4,311,751,664Accounts payable 2,786,821,175 3,976,022,759 3,492,944,288Total current liabilities 5,375,237,256 8,100,216,090 9,973,696,572Long-term loans - - -Non current liabilities (Convertible Bonds) 2,075,669,898 - -Total liabilities 7,450,907,154 8,100,216,090 9,973,696,572Registered capital 3,780,000,000 3,200,000,000 3,200,000,000Paid-up capital 3,020,000,000 3,020,000,000 3,020,000,000Retained earnings 2,789,616,650 2,551,713,533 1,329,982,903Total shareholdersû equity 6,301,276,788 6,109,886,912 4,907,037,933Number of shares Outstanding Dec 31 302,000,000 302,000,000 302,000,000Weighted average number of shares 302,000,000 302,000,000 272,000,000Profit & Loss Statement Summary 2002 2001 2000Sales 32,364,007,357 32,314,344,967 31,482,821,928Total income 32,502,545,768 32,512,538,862 31,504,169,951Cost of sales 30,055,401,976 29,717,319,352 29,382,008,506Selling and administrative expenses 739,553,747 907,409,420 582,962,513Total expenses 30,820,035,512 30,681,475,762 30,329,276,785Net profit 1,596,903,117 1,614,330,630 1,174,893,166Key Financial Ratios 2002 2001 2000

Liquidity Ratios

Current ratio 1.96 1.35 1.15Quick ratio 1.26 0.85 0.61Collection period (days) 51.20 51.98 37.41Inventory turnover (days) 46.87 53.74 50.06Payment period (days) 40.50 45.24 29.80Cash cycle (days) 57.57 60.48 57.67Profitability Ratios

Gross profit margin 7.13% 8.04% 6.67%Operating profit margin 4.85% 5.23% 4.82%Net profit margin 4.91% 4.97% 3.73%Return on equity 25.73% 29.31% 27.60%Efficiency Ratios

Return on total assets 11.43% 11.10% 7.89%Return on fixed assets 77.77% 58.19% 45.38%Total assets turnover (times) 2.35 2.27 2.12Leverage Ratios

Total liability / Total equity 1.18 1.33 2.03Interest coverage (EBIT/I) 21.12 8.74 5.19Information on Shares

Book value per share 20.87 20.23 18.04Earnings per share 5.29 5.35 4.33Dividend per share 4.50 3.00 1.30Growth rate

Total assets -3.22% -4.51% 58.82%Total liabilities -8.02% -18.78% 73.17%Sales 0.15% 2.64% 59.32%Total revenue -0.03% 3.20% 59.15%Cost of sales 1.14% 1.14% 58.13%Selling and administrative expenses -18.50% 55.65% 467.97%Net profit -1.08% 37.40% 46.78%

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CHAIRMAN & PRESIDENTMESSAGE FROM


MESSAGE FROM CHAIRMAN & PRESIDENT

Although the current world economic situation is above that of the year 2001, it is still

struggling to recover from the earlier crisis. Due to this difficult situation, demand from end user

has significantly reduced, leading to a reduction in purchasing order from our clients. However,

with hard efforts of all our employees, we are able to maintain a stable sales level similar to

that of last year.

Given tough competition, we had conducted a thorough study and decided to expand

manufacturing base by setting up new plant in China. We believe this new Plant will be able

to generate higher sales volume to Cal-Comp within next year. This ensures that we always

stay in the front peers of the competition in providing high quality services to our clients and

long-term profitability for our shareholders.

On behalf of the Chairman of Cal-Comp, I would like to express my heartfelt gratitude

to thanks all our shareholder, customers, suppliers, staff, financial institutions, and relevant

government and non-government agencies for their continuously cooperation and support.

Mr. Hsu, Sheng-HsiungChairman

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Year 2002 remained the year that every company in the world needed to have

concerted effort and perseverance in order to tackle with the worldwide economy downturnand competitive situation. We have been trying to expand our business by continuouslycreating new client and modifying our product mix to avoid adverse impact. Meanwhile, dueto the demand growth in China market currently, the company also had decided to make theinvestment in mainland china in order to increase global footprint and build up theproduction base close to our clients and market, which is our recent business strategy. We hadstarted the construction of the plant in order to manufacture firstly telecom products and thencomputer and peripheral later.

The board members and management realized the importance of our roles and dutiesto conduct the Companyûs business affairs through absolute responsibility as well as to directthe Company toward confident security and to affirm creditability and reliability in overallaspects of product quality and standard, operation and staff. The Board is confident ofCal-Compûs potential sales revenue growth and prosperity as one of the leader in EMS(Electronics Manufacturing Services) business in the near future.

I wish to express my heartfelt gratitude to the shareholders, investors, and all concernedwho confide in the companyûs management. Meanwhile, I would also like to thanks all staffsfor their commitment and dedication, which will contribute to the ultimate achievement of thecompany.


Mr. Chiang, Hsiao-chinPresident

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FACTORY AND MACHINE

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PRODUCT DIVERSITY

PRODUCT DIVERSITY

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PRODUCT DIVERSITY

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REWARD &QUALITY STANDARDISO 9002 Certified ISO 14001 CertifiedEN 46002 Certified QS 9000 Certified

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Cal-Comp Elect ron ics (Thai land) Plc.

BOARD OF DIRECTORS

Mr. Hsu, Sheng-Hsiung no. of shares 361,000

Education Bachelor of Chinese, National Taiwan Normal University

Working Experience 1992 - present The Chairman of the Board of Kinpo Electronics Inc.

1984 - present The Chairman of the Board of Compal Electronics Inc.

1989-pr esent The Chairman of the Board of Cal-Comp Electronic (Thailand) Plc.

Mr. Chiang, Hsiao-Chin no. of shares 1,001,000

Education Bachelor of Industrial Engineering, Taipei College

Working Experience 1999 - present Executive Vice President of Kinpo Group

1989 - present The President of Cal-Comp Electronic (Thailand) Plc.

Mr. Kuo, Hsien-Min no. of shares 456,000

Education Bachelor of Electrical Engineering, National Taiwan University

Working Experience 1995 - present The Director of the Board of Kinpo Electronics Inc.

1989 - present The Director of the Board of Cal-Comp Electronic (Thailand) Plc.

Mr. Hsu, Sheng-Chieh no. of shares 556,000

Education Bachelor of Architecture, Tamkang University



Mr. Ko, Charng-Chyi no. of shares 150,000

Education Master of BA, National Cheng Chi University

Bachelor of Business Administration, National Taiwan University


1989 - present The Chairman of the Board of Cal-Comp Electronic (Thailand) Plc.

Mr. Chou, Kung-Hsiung no. of shares 140,000

Education Bachelor of Engineering, Feng Chia University

Working Experience 2000 - 2002 Assistant Managing Director of Cal-Comp Electronic (Thailand) Plc.


Mr. William Hang Man Chao no. of shares - None -

Education MBA, Major in Finance and Marketing University of Chicago 1985

Working Experience 1998 - present Managing Director of Wing Wah Advisory (Thailand) Limited.


Mr. Chatchaval Jiaravanon no. of shares - None -

Education B.A., University of Southern California

Working Experience 2000 - present President and CEO of Telecom Holding Co., Ltd.

1997 - present President and CEO of Asia Multimedia Co., Ltd.

2000 - present The Independent Director of Cal-Comp Electronic (Thailand) Plc.

Mr. Alan Chi Yim Kam no. of shares - None -

Education Master of Business Administration University of Denver, Colorado

Working Experience 2002 - present Chief Executive Officer of Aberdeen Asset Management Co., Ltd.

2000 - present The Independent Director of Cal-Comp Electronic (Thailand) Plc.

Prof. Dr. Predee Kasemsup no. of shares - None -

Education Dr. Jur University of Bonn, Germany, 1968

Working Experience 1993 - present President of Oriental Culture Academy, Bangkok, Thailand

2000 - presen The Independent Director of Cal-Comp Electronics (Thailand) Plc.

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GENERAL INFORMATION

General information of the company

Cal-Comp Electronics (Thailand) Public Company Limited (the çCompanyé) was established in 1989 and engagedin the business of manufacturing electronic products in the form of OEM (Original Equipment Manufacturer). At present,the Companyûs groups of products consist of 3Cs convergence which include Computer Peripheral sectors such asInk Jet color printer, Photo printer, LCD monitors, Auto PC, Digital Camera, Web Pad, etc., and telecommunicationsequipment sectors such as Cordless Telephones, Mobile Phone (CDMA), FWT, Integrated Satellite Receivers andTransmitters, Cable Modems, etc. and consumer office equipment such as Facsimile Machines, Electronic Dictionary,PDA, MP-3, etc. The head office is located at 191/54 and 191/57 CTI T ower, 18 th Floor, Ratchadaphisek Road, Klongtoey,Bangkok 10110, T elephone 261-5033-40, F ax 261-5042, corp orate registration no. bor mor jor. 656, Homepagehttp\\:www.calcomp.co.th. In December 2000, the Company successfully converted into a public company limited withBaht 3,200 million registered capital which was increased to Baht 3,780 million on May 23, 2002 and divided into 302million shares with Baht 10 par each. The paid-up capital was Baht 3,020 million and listed in The Stock Exchange ofThailand.

Companies in which Cal-Comp Electronics PLC. holds 10% or more of the shares outstanding

▲ Logistar International Holding Co., Ltd. 100%On May 2001, the Company established a new subsidiary company abroad with an initial capital of USD 50,000.

The company held 100% of its t otal shares. The objective is to enhance the companyûs business potential in the future.The registered address is situated at Beaufort House, P.O. Box 438, Road Town, Tortola, British Virgin Islands.▲ Wise Sigma International Holding Co., Ltd. 45%

November 2001, The Companyûs 100% held subsi diary company named Logistar International Holding Co., Ltd. hadinvested at Wise Sigma International Holding Co., Ltd. with an initial capital of USD 50,000, which was increased to USD5,000,000, and it is 45% held by Logistar International Holding Co., Ltd. It was established for the objective to enhancethe companyûs business potential in the future. The registered address is situated at Beaufort House, P.O. Box 438, RoadTown, Tortola, British Virgin Islands.▲ Telian Corporation (Korea) 27.82%

Incorporated in Korea, 60% of initial registered capital of Telian shares are held by parties who have no related interestin Kinpo group and Cal-Comp group. This subsidiary is engaged in research and distribution of cordless phones andmobile phones by sending the prototype to Cal-Comp to manufacture and export. The office address is 4th Fl., DaewangPlaza B/D, 302-2 Haan-Dong, Kwang myung-Si, Kyung ji-Do, Korea. There were Increase and Decrease in RegisteredCapital on June and July, 2002, so it affected company shareholding structure by changing from 40% to 27.82%.▲ Wide Telecom Inc. (Korea) 11.58%

In the year 2001, Wi de Telecom was incorporated to engage in research and distribution of pagers and mobilephones. Cal-Comp will receive the prototype from Wide Telecom for production and export. The office address is Shindo-Ricoh Building 6F, 514-1 Y atap-Dong, Bundang-Ku, Sungnam-City, Kyunggi-Do, Korea.

Remark: Cal-Comp Management Information System Co., Ltd. that was 60% held by the Company was closed on November, 2002 due to theobjective accomplishment. This subsidiary was set up to develop computer software and to provide computer training to general public and toprovide network to the companyûs suppliers.

Other reference partiesShares Registrar :Thailand Securities Depository Co., Ltd.4th, 6-7th floor, The Stock Exchange of Thailand BuildingRachadapisek Road, Klongtoey, Bangkok 10110Tel : (662) 359-1200-1Fax : (662) 359-1259

Financial Advisor :Trinity Advisory 2001 Co., Ltd.26th floor, Bangkok City Tower179/108 South Sathon Rd., Sathon, Bangk ok 10120Tel : (662) 670-9100Fax : (662) 286-7222

Remark: Appointed January, 2003

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NATURE OF BUSINESS OPERATION

Cal-Comp Electronics (Thailand) Public Company Limited was established with an initial registered share capital ofBaht 125 milli on on 4th December, 1989 t o manufacture and export finished electronic products and accessories. Themajor shareholder was Kinpo Electronics, Inc., a giant manufacturer of electronic products in Taiwan. Its current productsare calculators, global positioning systems (GPS), digital cameras, personal digital assistants (PDA), etc. Kinpo ElectronicsInc. was listed on the Taiwan Stock Exchange (TSE) in 1989. A t present, the Companyûs major shareholders are KinpoElectronics, Inc. and Compal Electronics, Inc. (a company listed on TSE and being a company in the Kinpo Groupmanufacturing monitors and notebooks) holding 59.62% and 10.57% stake respectively in the Company.

Currently, the main electronic products manufactured by the Company are as follows: Ink Jet Color Printer, PhotoPrinter, Auto PC, LCD Monitors, Digital Camera, Cordless Telephones, Dect Phone, Mobile phone (CDMA and TDMA), FWT,Integrated Satellite Receiver and Recorder, Cable Modems, Electronics Calculator, Facsimile Machines, Blue tooth,Web Pad, Electronics Dictionary. The Company can provide its customers with integrated services. The Company hasinitiated the production of Hi-Tech products such as CDMA and TDMA mobile phones and already started for the massproduction and delivery to the customers. Afterwards, a research and development department has been establishedto design, develop and improve its products in an attempt to achieve the cost-efficiency aim, and to modify cosmeticsand mechanism of products to satisfy its cost reduction program and customersû requirements. As a result, the Companyhas become well known and recognized both locally and internationally for its high-standard quality of products. It wasamong certain famous companies in Thailand, which was preliminarily granted a certificate of standard entitled ISO9002, ISO 14001 and QS-9000.

The Company has been later converted into a public limited company with the Baht 3,200 million registered sharecapital which was increased to Baht 3,780 million on May 23, 2002 due to the allotment of ECB (Euro Convertible Bond)issuance, which the amount of Baht 3,020 million has been paid-up and listed in The Stock Exchange of Thailand. It hasbeen granted certificates of promotion by the Board of Investment in the category 5.6 in the areas of production ofelectronic products and 5.7 in the areas of production of component parts and accessories of electronic products. Plantsare located at 2 provinces of Thailand and 1 province of China i.e. 3 plants situated in Kratoomban District, Samutsakorn,3 plants situated in Khaoyoi District, Petchburi with 6,345 employees in total as of 31 December 2002 and 1 plant underconstruction at Su Zhou, Jiang Su province, China.

Investment policy and rights and benefits derived from investment in any subsidiary

company, associated company and other companies.

In an attempt to make investments in any subsidiary company, associated company and other companies, theCompany will particularly take into account the possibility of generating proceeds and benefits to be obtained by theCompany. As at present the Company plans to expand its base into the telecommunications, computer and internetindustries, it continues to make investments in such subsidiary companies, associated companies and other companiesin such industries in Korea and Taiwan which are well-recognized for their expertise in the research and development oftelecommunications and computer products. As a result, the sales volume of the Company has increased and the clientsbase expanded, such developing of client base will generate more sales and business opportunity to the company, andit has further received a great amount of profit in proportion to shareholding and dividend payment from suchinvestments. (Particulars of the Joint-Venture Agreement between Telian Corporation and Wide Telecom, Inc. are set forthin Agreement part).

BUSINESS OPERATIONNATURE OF

BUSINESS OPERATIONNATURE OF

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Wise Sigma

International

Holding Co., Ltd.

45%

Shareholding structure of Cal-Comp Group as of 31 December 2002

Cal-Comp Electronics

(Thailand) Plc.

Wide

Telecom Inc.

(Korea)

Logistar

International

Holding Co., Ltd.

Afreey,

Inc.

(Taiwan)

Power Digital

Communication

Co., Ltd. (Taiwan)

Telian

Corporation

(Korea)

27.8% 11.6% 100% 6.9%

4.7%

Income structure

Office Equipment1. Calculat ors 1,148.76 3.65 524.44 1.62 285.64 0.882. Fax Machine 3,181.91 10.11 1,787.35 5.53 1,185.07 3.66

Telecommunication accessories1. Cordless Phone 1,248.72 3.97 606.52 1.88 1,339.07 4.142. IRD 3,547.54 11.27 2,619.50 8.11 1,907.34 5.893. Pager 64.47 0.20 - - - -4. Cable Modem 4,042.81 12.84 2,584.65 8.00 2,427.29 7.505. Dect Phone - - 1,945.25 6.02 3,312.94 10.246. Mobile (CDMA, TDMA) - - - - 1,010.77 3.12

Computer accessories1. Pri nter : Inkjet and Dot Matrix 15,244.48 48.42 20,599.34 63.74 19,501.30 60.262. CD-ROM 1,106.56 3.51 41.21 0.13 - -3. Others 950.28 3.02 410.65 1.27 794.01 2.45Others1. Others 947.27 3.01 1,195.43 3.70 600.58 1.86

Total sales 31,482.80 100.00 32,314.34 100.00 32,364.01 100.00

Products2000 2001 2002

Million Baht % Million Baht % Million Baht %

Note:

1) All types of products are manufactured by the Company.

2) Fixed assets cannot be classified by product group due to the fact that several products are manufactured in the same line of production.

Remark : 1. Cal-Comp Management Information System Co., Ltd. was closed on November 27, 20022. Telian Corporation (Korea) has increased capital on June 2002 and decreased the capital on July 2002. Currently the

Telian Corporationûs Capital is KW 2,871.08 million or USD 2.39 million. It affected the companyûs shareholding structure by changingfrom 40% to 27.8%.

3. During the year 2002 Logistar have sold all of Power Digital Card Co., Ltd.ûs share to the third party.4. During the year 2002 Logistar have sold 4.7% of Power Digital Communication Co., Ltd.ûs share to the third party, so the

proportion of shares held by Logistar reduced from 9.4% to 4.7%.

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Material changes in 2002

▲ May 23, 2002, company increased registered capital from Baht 3,200 million to Baht 3,780 million for Euro convertible

debenture allotment.

▲ Successfully issued 3 years USD 48,000,000 Euro Convertible Bond (ECB).

▲ Under construction of first plant at Wu Jiang, China.

▲ Mass production of mobile phone CDMA (Code Division Multiple Access) and FWT (Fixed Wireless Terminal).

Global Outsourcing Trend

Mounting competitive pressure in the electronics market has forced technology companies to focus more on their

core competitive strengths, namely product design innovation, and brand building. This has resulted in the increased use

of manufacturing outsourcing to Electronics Manufacturing Service (EMS) providers that offer a critical mass and quality

production capability and expertise.

The EMS industry has become an integral part of the overall manufacturing supply chain. In working towards

increased revenue growth and improved margins, EMS vendors have become increasingly involved in the component

selection and procurement, component fabrication, product design, full system assembly, logistics and aftermarket

services. EMS vendors have also been increasingly active in strategic growth areas such as consumer products.

IDC1 believes that the trend toward outsourced manufacturing will continue into the foreseeable future. Branded

vendors are facing increased pressure to limit costs and increase efficiencies, and contract manufacturing provides an

opportunity to remove significant costs from the manufacturing process.

The Worldwide and Asian EMS Sectors

According to IDC, the worldwide EMS industry revenue increased by US$28.0 billion in 2000 to US$98.0 billion but

decreased by US$7.5 billion in 2001 and is expected t o decline to US$86.0 billion in 2002. However, IDC believes that EMS

industry will enjoy a steady growth from 2003 through 2006 to reach US$122.5 b illion in 2006, representing a compound

annual growth rate of 9.3%.

Asia has quickly become the focal point of the EMS industry as low-cost production has become even more of

a priority. Revenue from the region increased by 6.1% t o US$20.8 billion in 2001 e ven as the global industry revenue

decreased. Mainland China is expected to become the manufacturing centre of Asia, while Taiwan will remain the

research and design centre of Asia. Malaysia and Thailand are also important to the EMS industry as they offer low-cost

alternatives to China and Taiwan.

Competition within the EMS industry

The EMS industry has consolidated rapidly in the past three years in Asia. Revenue from Asia of the top 10 EMS

accounts for 54.9% of the total industry revenue in the region in 2001. Our major competit ors include the top-tier US EMS

vendors and Singapore-based EMS vendors, such as Solectron, Jabil, Flextronics, Celestica and Venture Manufacturing,

which have significant advantages in terms of scale, financial resources, and global footprint.

However, compared with EMS companies in the Americas and Europe, midtier and lower-tier manufacturers play

an important role in Asia and account for a considerable amount of the industry revenue. Technology companies take

into accounts not only production costs but also quality of products, and logistic services. Many designing companies

specify that the contractors be awarded ISO 9002 or ISO 14001 i n respect of environmental control.

CCET, which has all of its production facilities in the low cost base of Thailand, is aware of this general

outsourcing trend and of the aggressive expansion into Asia by top-tier EMS vendors. We have been gearing up to

benefit from this outsourcing trend and invested in flexible production lines to accommodate different products, such as

Ink Jet Colour Printers, Dect Phone, Cordless Phone, CDMA, TDMA, Integrated Satellite Receiver Decoders, Electronic

Remark : 1 A Year of Restructuring: EMS Industry Forecast and Analysis, 2001-2006, IDC, July 2002.

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Talking Dictionaries and Facsimile Machines, in each of our manufacturing line. We have established ourselves as a well-

known and reputable manufacturer with an ISO 9002 certification from AFAQ Ascert International.

Such strong points make us prevail over many of our competitors. Thanks to our good relationships with our

suppliers, we have a negotiating power to request amicable business terms and conditions. We have established an

active research and development department to oversee the quality of our products and made several investments in

companies specialising in designing computer and telecommunication equipment and accessories. We are also aware

that some customers, especially medium-sized companies, have not been getting enough attention from the top-tier

OEM and EMS players, and are increasingly turning to smaller EMS vendors. Rather than competing directly with top-tier

OEMs, we are well prepared to enhance our competitiveness within the midtier EMS business in Asia.

Procurement of products for sale

The manufacturing plants are located in 2 provinces i.e. 3 plants situated at No. 60 Moo 8, Settakij Road,

Kratoomban District, Samutsakorn and 3 plants situated at No. 138 Moo 4, Petchkasem Road, Khaoyoi District, Petchburi

with total area of 193,600 square metres.

Currently, the Companyûs manufacturing consumes one shift/day (8 hours). An average actual production

quantity on a daily basis is up to 75% of the full productivity. During 2000 - 2002, details of the actual production quantity

are set forth below.

(Unit in Thousand set)

Year 2000 Year 2001 Year 2002

Actual Production Quantity

(Thousand pieces)

Office equipment

1. Calculators 3,776 1,914 1,567

2. Fax machines 1,116 372 312

Telecommunications equipment

1. Cordless phones 836 776 2,164

2. IRDs 564 421 447

3. Pagers 63 - -

4. Cable modems 807.4 616 823

5. Dect Phones - 1,145 2,225

6. Mobile Phone (CDMA,TDMA) - - 120

Computer accessories

1. Printers (Ink Jet, Dot Matrix, 4,623 7,133 8,079

Photo, Printer for Electronics) 991 35 -

2. CD-ROMs 510 76 71

3. Others

Other equipment 235.5 155 101

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YEAR 2000 YEAR 2001 YEAR 2002


Local raw materials 4,623.70 14.21 2,481.17 8.83 1,889.67 6.51

Foreign raw materials 27,910.27 85.79 25,613.34 91.17 27,129.96 93.49

Total 32,533.97 100.00 28,094.51 100.00 29,019.63 100.00

Types and sources of essential raw materials

Most of raw materials are imported from foreign countries. The following list shows the sources of each kind of

raw materials.

Type Details Source

LCD Panel TFT LCD Panel, Module Taiwan, Korea, China

Radio Components RF Modulator, Tuner, Resonator, Antenna, filter Korea, Taiwan, China

Chip ICs, ICs, Electric circuits which vary in terms of usage Singapore, Japan,

and IC encoders and size according to types of electronic Korea, U.S.A.

appliances

Capacitors Equipment used in storing electric charge Singapore, Korea,

Taiwan, Japan

Pens Printer inks Singapore

Plastic resins Plastic granules Singapore, Korea,

Malaysia, U.S.A., Germany

Printed circuit boards (PCB) Electronic circuit boards used in all kinds of China, Taiwan

electronic appliances

Adapters and cables Electric cables and adapters Thailand, China, Malaysia

Printer heads Printer heads used in printers and Singapore, Japan

printing calculators

Miscellaneous parts Screws, nuts, washers, rollers China, Taiwan

Packaging raw materials Paper cartons, polyfoam, plastic bags, tapes, Thailand

glue, tags

Notes : No costs of any raw material exceed 50% of the total production costs.

Number of suppliers

In comparison between the quantity of local and the quantity of foreign raw materials, it appears that they are

not quite different in any year because it is the Companyûs policy to equally maintain the amicable relationships with

its counterparts, customers and suppliers. The Company does not depend on any supplier for more than 30% of the

purchase value of raw materials during the past three consecutive years.

Details of purchasing of local and foreign raw materials during 2000 - 2002

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Suppliers

Raw materials purchased by the Company from suppliers are divided into three groups as follows.

1) Direct purchase

2) Through parent company

3) Through subsidiary companies

The purchasing of essential raw materials such as ICs, chips is mainly subject to the specification of the customers.

Within this ambit, the parent company and subsidiary companies are deemed as the Companyûs customers. Random

check in respect of each kind of raw materials is proportionally and regularly made. Also the qualifications of each

supplier, by following the vendor quality assurance method prior to commencing any deal. The Company will purchase

raw materials from any supplier, which meets the Companyûs requirements such as those obtaining an ISO 9002

certificate.

Moreover, the Company has asked the following suppliers to relocate their plants within the area of the Company

so as to facilitate the quality control, save storage room for raw materials and reduce deliver time. The six suppliers have

no connections with the Company nor its executive officers.

Company (Located in plant area) Raw materials

Ever Jet Co., Ltd. Plastic component parts

Jet Industries (Thailand) Co., Ltd. Plastic component parts

Yong Deng Industry (Thailand) Co., Ltd. Steel component parts, pressing steel

Lanjo Enterprise (Thailand) Co., Ltd. Rollers

Hypertek Plastic Industry Co., Ltd. Plastic

Chung Cheng Plastic (Thailand) Co., Ltd. Plastic

YEAR 2000 YEAR 2001 YEAR 2002


1. Direct purchase 32,357.50 99.46 28,017.08 99.73 28,686.98 98.86

2. Through parent company 95.74 0.29 23.28 0.08 61.88 0.21

3. Through subsidiaries and 80.73 0.25 54.14 0.19 270.77 0.93

Joint Venture

Total 32,533.97 100.00 28,094.50 100.00 29,019.63 100.00

Purchasing Policy

The Companyûs purchasing policy is based upon the comparison of prices of raw materials quoted

by each supplier, and punctual delivery of the supplier to each shipment and taking into account the maximum

benefits to be obtained by the company. In the purchasing process, the sales department and the

production department will cooperate in planning the purchase of raw materials so as to ascertain the demands for

each period and maintain the inventory at an appropriate level from time to time.

Details of purchasing channels of raw materials during 2000 - 2002

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RISK FACTORS

1. Risk factors in short term borrowing

The Company high proportion of short-term debt means the company would be vulnerable in the event of acredit crunch and exposes the company to volatility associated with interest rates or market liquidity. However, thecompany had issued the US$48 million 3-year Euro Convertible Debentures on December 2002 which is able to diversifythe risk of borrowing and strengthen the balance sheet.

2. Foreign Exchange Fluctuation Risk

The fluctuation of the exchange rate of the Baht against dollar affects the companyûs sales and profitsignificantly. The Company major exposure arises from import of raw materials and export revenues. Occasionally, TheCompany has conservatively used the natural hedging policy to match expenses and revenues, mainly denominated inUS Dollar.

3. Risk factors in connection with the insufficiency of skilled labor force

Based on the fact that the growth of electronic industry is quite high and conspicuous in this day and age,the Company deems it necessary to recruit a number of skilled and professional persons such as engineers. By reasonof a limited number of high-quality human resources in Thailand and tendency of job changes, the Company decidedto invest in Mainland China and is able to bring more technical engineers to work and train Thai engineers with the lowercost compare to the Taiwan and Korea engineers.

4. Risk factors in connection with the labor wage rise

The labor wage tends to rise according to the skilled development and national economic growth. Such risemay marginally affect the production costs of the Company. However, the labor wage impact on the production costsis not significant compared to other foreign countries such as Mainland China and Taiwan. In those countries, the laborcosts are up to 2% and 7% respectively of the production costs. Therefore, it is assumed that the Thai labor costs arecompetitive in the world market.

5. Risk factors in connection with the change in life cycle of products and production

technology

Significantly, life cycle of electronic products always changes rapidly due to the continuity innovation oftechnology and general standards of products. This situation forces product designers to be alert and updated at alltimes. However, as the Company operates the OEM business mostly, it will not be materially affected by such situation.Moreover, the Companyûs production lines are ready to accommodate new products, and most machines areadaptable to the changing technology. It is necessary that a few machines will be updated to accommodate the newtechnology.

6. Market Competition

Due to the highly competitive electronics market especially during the low consumption period, the abilityto remain profitable is one of the risk for manufacturers. However, The Company has emerged in much betterdiversification of its strategic shift. Its economic of scales production, efficient supply chain, long-term relationships withclients and its transformation towards original design manufacturer (ODM) should help secure its earning stream.

7. Risk factors in War

The uncertainty of the war between United States and Iraq may cause the fluctuation of the exchange rateof Baht against dollar and the impact of the US consumption confident. Although the Company sales revenue is mostlydominated in terms of US dollar, the Company did conservatively use the natural hedging policy to square expenses andrevenue. In addition, half of the Companyûs sales revenue is generated from Asia market, therefore, the risk of reductionof sales revenue will be small.

8. Risk factors in connection with the obsolete inventories

The Companyûs inventories had reduced from Baht 4,836.06 million at 31 December 2000 to Baht 4,036.60million at 31 December 2001 and Baht 3,790.16 at 31 December 2002. Si nce the management are aware of the risk ofobsolete inventories, the Companyûs inventory turnover had improved since 2001 due t o the management policy ofstrictly control and better procurement planning. Therefore, the risk of obsolete inventories will be diminished.

9. Risk factors in connection with the dependence on support given from the major

customers

In general practice, the OEM business does not rely on a variety of customers. As far as the Company isconcerned, it has not entered into any long-term contract with its customers. It has more than 10 major cust omers.Hewlett Packard (HP) is the most important customers of the Company. To reduce the risk with the dependence on

A N N U A L R E P O R T 2 0 0 2


major customers, the Company has expanded its customer base through customers in the telecommunications, andcomputer peripheral. Therefore, expansion into the telecommunication should moderate such reliance on majorcustomers.

10. Risk factors regarding the dependence on and competition with the parent company.(Kinpo

Group)

Previously, the Companyûs sales were largely via the parent company, Kinpo Group. However, sales via theparent company have been declining as the Company established more direct dealings with customers. The Companysales through parent company had significantly reduced from 91% i n 1997 t o 9% in 2002. Over the past years, theCompany has been able to increase its direct sales portion, thus reducing its dependency on the parent company

11. Risk factors related to the dependence on and competition with the parent company are

divided into 3 aspects as follows.

1) Technology and know-howAs the Company operates the OEM business whereby the production is subject to the customersû

instructions, the Company is not quite dependent on technology and know-how of the Kinpo Group. In addition, theCompanyûs research and development department is responsible for improving the quality of products made by theCompany and production lines in order to maintain the lowest production costs. Meanwhile, the Company invested insome R&D technology companies in Korea and Taiwan in order to build up technology skill independently such as interm of telecommunication and computer peripheral.

2) CapitalKinpo Electronics, Inc. has provided the advance material payment amounting to US$ 17.50 milli on since

17 July, 2000, and the Company had return US$10 milli on to Kinpo Electronics as of Dec 31, 2002.3) Marketing

The Company treats Kinpo Group as one of its customers. The Company must maintain a good businessrelationship with the group while retaining a gross profit in making any deal, any deal between the two parties is madein the ordinary course of business. Products supplied by the Company to Kinpo Group include electronic calculators,facsimile machines and cable modem. However the Company has the policy to be less dependent on the parentcompany and carry out the marketing activities on its own. During 2000-2002, the proportion of sales to the parentcompany has continuously decreased from 26.94%, 15% and 9.62%, respectively. In 2002, the sales to the parentcompany had reduced to Baht 4,908 million.

12. Risk factors in connection with the influence of the parent company on the administrative

direction of the Company

At present, five members of the Companyûs current board of directors have been designated by Kinpo Groupin order to facilitate the cooperation between the Company and Kinpo Group as the major shareholder and acquirethe benefits from efficient administration and good relationships between the parties concerned. In other words, KinpoGroup may have the material influence on the administrative direction of the Company. However, there is a clear-cutseparation in the operational management and costs incurred between Kinpo Group and the Company.

As mentioned earlier, Kinpo Groupûs shareholding in the Company has been reduced to 59.62% after thepublic offering, making it unable to control voting at the shareholdersûs meeting. Normally, three-fourths of the votes arerequired to pass any significant issues, such as appointment of directors. There are also some matters requiring a majorityvote, except for those prescribed by laws or the Companyûs Articles of Association. Therefore, other shareholders maycollect votes as a check and balance on matters proposed by the major shareholder.

13. Risk factors in connection with the new competitors

OEM business is one of complex businesses. Significantly, new operators running their businesses for exportpurposes are granted promotion certificates by the government. It is forecasted that the competition situation in thisindustry will be quite strong and serious in the future. As the Company recognises the situation, it has a counterattackplan to improve production technology so as to maintain lowest costs, promote connections with its suppliers, enter intobusiness agreements with certain employing companies, retain long-lasting relationships with its existing customers,procure new potentially successful customers, and boost flexible production process to meet and satisfy the customersûdemands on a regular basis.

14. Risk factors in connection with the sufficient working capital

Adequate working capital is essential to ensure the smooth sales growth. The Company finances its workingcapital mainly via internal fund and short-term loan. As of 31 December 2002, the Company has the credit line of Baht5,480 million and US$ 204 million.

15. Risk factors in connection with the contingent liabilities

As of December 31, 2002, there were approximately Baht 97.42 million of outstanding bank guarantees issuedto Department of Customs, Electricity Generating Authority of Thailand, The Communication Authority of Thailand.

19A N N U A L R E P O R T 2 0 0 2


SHAREHOLDING STRUCTURE AND MANAGEMENT

Group of shareholders Nature of businessNo. of shares

as December 31, 2002%

1. Kinpo Electronics, Inc Manufacture and distribution 180,066,000 59.62

of electronic products

2. Compal Electronics, Inc Manufacture and distribution of 31,924,000 10.57

computer equipment and

accessories

3. Kingbolt International (Singapore) - 24,193,000 8.01

Pte., Ltd.

4. Government of Singapore Investment - 10,334,200 3.42

Corporation- C

5. HSBC (Singapore) Pte., Ltd - 5,802,300 1.92

6. Just International (Singapore) Pte., Ltd - 2,715,000 0.90

7. American International Assurance - 2,484,000 0.82

Company Limited- AIA5B

8. Government of Singapore Investment - 2,267,200 0.75

Corporation- J

9. American International Assurance - 2,211,600 0.73

Company Limited- AIA5E

10. Thai NVDR Company Limited - 1,955,000 0.65

Total 263,952,300 87.39

Notes: 1) Kinpo Group is including Kinpo Electronics, Inc. and Kingbolt International (Singapore) Pte. Ltd.

2) Compal Group is including Compal Electronics, Inc. and Just International (Singapore) Pte. Ltd.

List of top 10 shareholders



A N N U A L R E P O R T 2 0 0 2


Management Structure

Executive Committee

The Company has two executive committees, that is, the Board of Directors and the Audit Committee, particulars

of which are shown below.

Board of Directors

As of 31 st December 2002, the Companyûs Board of Directors consists of the following members.

1. Mr. Hsu, Sheng-Hsiung Chairman

2. Mr. Chiang, Hsiao-Chin President

3. Mr. Kuo, Hsien-Min Director

4. Mr. Ko, Charng-Chyi Director

5. Mr. Hsu, Sheng-Chieh Director

6. Mr. Chou, Kung-Hsiung Director

7. Mr. Chao Hang Man William Director

8. Prof. Dr. Preedee Kasemsup Independent and Audit Director

9. Mr. Chatchaval Jiaravanon Independent and Audit Director

10. Mr. Alan Chi Yim Kam Independent and Audit Director

Remark : 1. Board of Directors Total 10 persons

2 Directors are being management

5 Directors

3 Independent Directors

2. The Chairman and President is not the same person for the determination of corporate governance policy and

Management

Scope of powers and authorities

1. Performance of duties of the board of directors

The Board of Directors has applied its best knowledge, capability and experience to carefully perform its duties

in the Companyûs interests in accordance with the Objectives, Articles of Association and resolutions of any shareholdersû

meeting of the Company in an attempt to protect the Companyûs benefits and shareholders.

2. Duties on the Accountability to shareholders

The Board of Directors shall consistently have accountability to shareholders, protect the interests of

shareholders, and clearly and fully disclose information to the investors.

3. Review and approval of financial report and changes in accounting policy

The Board of Directors is responsible for approving the financial report that have been audited and/or

reviewed by the auditor and the audit committee and any changes in accounting policy.

4. Review and approval of policies, budget and business plan

The Board of Directors is responsible for reviewing and approving any appropriate policy, budget and direction

of the Companyûs business operation and plan as proposed by the management.

5. Supervision of management

The Board of Directors is responsible for supervising the effective performance of the Companyûs policy by the

management and informing the management of preparing any material report on the Companyûs business operation

21A N N U A L R E P O R T 2 0 0 2


and other related party transactions in accordance with the rules and regulations of The Office of Securities and

Exchange Commission and The Stock Exchange of Thailand.

In case of necessity, the Board of Directors will request any third party director to give professional or technical

advice on any matter, which may materially affect the Companyûs business.

6. Internal control and audit

The Board of Directors has had the Company establish the effective internal control and audit system whereby

the internal audit and supervision department takes charge following up and cooperating with the Audit Committee.

7. Independent performance of duties of non-management directors

The independent directors and third party directors have in their own discretion made decision on any

strategy, administration, appointment of directors and any other matter which may materially affect the benefits of the

Company, including the sufficient and appropriate access to information technology concerning financial and business

matters in the interest of the Companyûs operation.

8. Ethics and etiquette

The Board of Directors will prepare a compliance manual in relation to the ethics and etiquette of the

management and staff as guidelines for good and proper practice within the organization.

Scope of power and duties of the President

According to the Approval Authority List dated 1 st November, 1995, the President shall have the powers and duties

as follows :

1. To make a decision on important matters; determine the Companyûs mission, objectives, strategies and

policies; oversee the overall operations, productivity, customer relation and overseas marketing; and assume responsibility

to the Board of Directors.

2. To approve the Companyûs annual budgets.

3. To approve credit lines and terms of payment to the customers, conclusion of product supply agreements and

changes in dealing conditions, conclusion of insurance contracts, and management of obsolete inventories.

4. To have the authority to approve a purchase of fixed assets and settlement of payment in an amount up to

Baht 20 million.

5. To have the authority to approve investment in a new project in an amount up to Baht 20 million.

6. To determine and approve principles for personnel management and annual salary increase.

7. To approve the appointment of advisors on areas crucial for the operations.

8. To perform any activity relevant to the general administration, excluding connected transactions and

acquisition & disposal of properties under the regulations of the Stock Exchange of Thailand.

Management

As of 31 December 2002, the management of the Company consists of the following 5 executive officers.

1. Mr. Chiang, Hsiao-Chin President

2. Mr. Chou, Kung-Hsiung Vice Managing Director

3. Mr. Wu, Chun-Sheng General Manager, Material Management

4. Mr. Yeh, Tien-Kung Financial Controller

5. Mr. Chen, Cheng-Chung General Manager, Manufacturing Management

A N N U A L R E P O R T 2 0 0 2


Appointment of directors

No nominating committee is established to select any appropriate person to hold the office of director of the

Company. The Company has laid down the guidelines on appointment of the Companyûs directors as follows.

1. The Board of Directors is responsible for selecting any appropriate person, taking into account the experience,

vision, abilities and characters, and submitting a list of nominees to the shareholdersû meeting.

2. At each annual general meeting of shareholders, it is prescribed by the Articles of Association that at least

one-thirds of the directors will retire. In the event that any retired director is re-elected, a resolution of the shareholdersû

meeting will be required. At the time of nominating any candidate for the Board of Directors, the Company will prepare

a list of details and information about such candidate for the shareholdersû consideration.

According to the Articles of Association, the shareholdersû meeting will appoint the Board of Directors in

accordance with the following rules and procedures.

(1) Each shareholder has a vote for each share he/she holds.

(2) Each shareholder will exercise the right to elect one or more persons to be members of the Board of Directors;

provided, however, that a vote will not be divisible.

(3) A person who has the most votes will be elected to the Board of Directors in respective order up to the

number of directors to be elected at that time. In case of two or more candidates having an equality of votes,

exceeding the number of directors required for election at that time, the Chairman will have a casting vote.

Board of Directorsû Meeting

The Board of Directorsû Meeting would be held quarterly to consider and approve the companyûs operating

management and financial statement. However company might hold an extra meeting for approval the extra agenda,

the company will send the notice of Board of Directorsû Meeting including agenda and documents at least 7 days prior

to the meeting date.

For year 2002, the Board of Directorsû Meeting was held 4 times and the extra ordinary meeting was held 2 times

totally 6 times. There were at least 1/3 of directors present constituting the quorum as required by articles of association

of the company.

23A N N U A L R E P O R T 2 0 0 2


ORGANIZATION CHART

Mr. Hsu, Sheng-Hsiung

Chairman

Mr. Chiang, Hsiao-Chin

President

Mr. Chou, Kung-Hsiung

Vice Managing Director

Mr. Chen, Cheng-Chung

GM-Manufacturing

Mr. Yeh, Tien-Kung

Financial Controller

Mr. Wu, Chun-Sheng

GM-Procurement

A N N U A L R E P O R T 2 0 0 2


Directors Remuneration

Monetary remuneration

The following is a list of remuneration for 10 dir ectors and 5 executive officers in 2002.

Type of remuneration Remuneration for 10 directorsRemuneration for

5 Executive officers

Salary - 2,598,132

Bonus 22,080,000 456,222

Board allowance 1,920,000 -

Profit contribution - -

Others - 949,936

Total 24,000,000 4,004,290

Other remuneration (if any)

▲ Right to subscribe the shares or other security (please specify no. of security increase/decrease of the

executive officer)

▲ Provident Fund

- None -

Policy on Corporate Governance

The Board of Directors realized the importance of Corporate Governance in order to create reliability,

creditability and transparency to shareholders, investors and related party.

The followings are the main policy to support Corporate Governance:

▲ Issued policy for the Rights and Equitable Treatment Shareholders and various groups of stakeholders

▲ Management through absolute responsibility and oversee for conflict of interests by the Board of Directors

▲ Controlling system and Internal Audit for verifying financial statement and connected transaction with

related party

▲ Business Operation with transparency and disclosed

▲ Business Operation under risk management

▲ Code of Ethics is complied by Directors and employees.

Corporate Governance

The Board of Directors have implemented Best Practice Guidelines for Directors of Listed Companies set forth by

the Stock Exchange of Thailand such as roles, duties and responsibilities of company directors, appointment of directors,

fixing remuneration for directors, board meeting and shareholdersû meeting, and reporting financial information. And we

have also set up Audit Committee as resources for the board of directors and management of the company to turn to

for assistance if needed.

25A N N U A L R E P O R T 2 0 0 2


Shareholders: Rights and Equitable Treatment

Shareholdersû Meetings

The Company encourages equal treatments and opportunities for all shareholders to express their opinions and

raise question at the meeting, according to the agenda and the issues presented to the meetings. And The company

also has facilitated all shareholders to access to study company information, as well as in attending shareholdersû

meetings by lessen the difficult procedures and no expenses charged.

The Company has a policy for the Rights and Equitable Treatment Shareholders and Various groups of

Stakeholders by controlling of the exploitation of inside information by executive officers for securities trading since the

companyûs securities are listed on The Stock Exchange of Thailand. The Companyûs policy on such matter is described

as follows.

1. An executive officer will prepare and submit to the Company a securities holding report showing the number

of securities held by him/her, his/her spouses and minor children in the prescribed form immediately following the delivery

of such report to The Office of Securities and Exchange Commission and The Stock Exchange of Thailand as follows.

▲ Initial securities holding report (form 59-1) will be submitted withi n 30 days after the closing date of public

offering or after the date of appointment of such executive officer.

▲ Amendment to securities holding report (form 59-2) will be submitted within 3 days from the date of each

purchase, sale, transfer and acceptance of securities.

2. The Company has submitted to each and every executive officer a circular letter notifying that any executive

officer who is informed of any inside information will prohibit to do any trading transaction of the Companyûs securities

30 days prior to the Companyûs publication of its operating result (quarterly financial statement and annual financial

statement) or any other significant information which may materially affect the securities value.

The Company will inflict the maximum punishment on any executive officer who exploits the inside information or

performs any act in such a way that may disgrace or damage the Company.

Various groups of stakeholders

The various groups of companyûs stakeholders are treated with high priority as follows.

▲ Employees are treated equally and fairly. Benefits are paid appropriately.

▲ Products and service bought from supplier are in accordance with normal business condition and agreements.

▲ Customers are treated with care. Their information is treated as confidential.

▲ Competition is moral. No illegal practices are used to destroy competitors.

▲ Community, environment, and society are responsibly treated

Business Ethics

The Company adopted Code of Best Practice for the Board of Directors of listed companies issued by The Stock

Exchange of Thailand as companyûs Code of Ethics for directors to comply. The Company will review the Code of Ethics

in compliance with ethics of the management and staff as guidelines for good and proper practice within the

organization. The Company also has the regulations of employees in order to set the standard of the work, quality and

also the employees.

Conflict of interests

The Audit Committee was appointed to consider every transactions and conflict of interest in according to the

relevant rules and regulations of The Stock Exchange of Thailand.

A N N U A L R E P O R T 2 0 0 2


RELATED PARTY TRANSACTIONS

According to the definition of ça joint interested partyé as given in the Notification of the Securities and Exchange

Commission No. Gor Jor. 40/2540 re Rules, Conditions and Procedures for Disclosure of Information on Financial Position

and Operating Results of Issuers of Securities, Kinpo Electronics Inc., Forward International Ltd. and Compal Electronics Inc.

are the related parties.

Related party transactions executed by the Company and other companies within the Group from the last three

years until the recent accounting period are shown below.

Purchase value of raw materials through the Group and percentage of total purchase value of materials.

CompaniesYear 2000 Year 2001 Year 2002

Baht Million % Baht Million % Baht Million %

1. Ki npo Electronics, Inc. 95.74 0.34 23.29 0.08 61.88 0.21

2. Forward International Ltd. 1.97 0.01 3.41 0.01 - -

3. Compal Electronics, Inc. - - - - - -

4. Afreey Inc. - - 14.62 0.05 - -

5. Telian Corporation 19.32 0.07 30.69 0.11 70.29 0.24

6. Wide Telecom Inc. 59.44 0.21 5.44 0.02 200.48 0.69

Total 176.47 0.63 77.45 0.27 332.65 1.14

Notes: Forward International Ltd. is a wholly owned subsidiary company of Kinpo Electronics, Inc.

Purchase value of raw materials with Kinpo increased due to its lower cost compare to the other suppliers, but

the purchasing amount is still lower than that in the year 2000. The purchase value of raw materials with Joint Venture,

Telian and Wide Telecom, increased due to the increase of purchasing order from these two companies. Actually, the

source of raw materials is an essential part of the OEM production. Most raw materials are supplied by the employing

company. The purchase of raw materials from the associated companies Telian Corporation and Wide Telecom, Inc is

made in the ordinary course of business and under the Joint-Venture agreement. No joint interested party has any

beneficial stake in such affiliate companies.

27A N N U A L R E P O R T 2 0 0 2


Notes: The said figure includes proceeds from non-product items such as machinery.

The sale of products through Kinpo Group has declined on a continual basis on account of the Companyûs policyto reduce the dependence on such Group. In Taiwan, a marketing department has been established to procure newcustomers. However, the Company treats Kinpo Group as one of its customers under the terms and conditions of theSupply/Manufacturing Agreement.

In respect of the sale through associated companies, the Company regards such associated companies as itscustomers under the terms and conditions of the Joint-Venture Agreement and License Agreement.

Opinions of Independent Directors in connection with the Related Party Transactions

After due consideration, the independent directors have considered the connected transactions with relatedperson in the items of expenditures assets, and liabilities and have found that the transactions belongs to the companynormal operation and found no doubtful signs in the Companyûs internal audit report showing the product tradingtransactions between the Company and Kinpo Group during the year 2002. It appears that any and all tradingagreements and transactions have been made in line with the relevant agreements entered into by both parties.

The independent directors expressed their opinion that the shareholding structures among the company, itssubsidiary company, associated companies and related companies do not constitute conflicts of interests among thecompany, directors and executives and that no shareholding structure or management of companies in the group arenominees.

The independent directors and the Company have committed themselves to ensure that any potential relatedparty transaction would be subject to the relevant agreement and disclose to each other the type and value of anyrelated party transaction in connection with the joint related parties under the relevant notifications and regulations

of The Office of Securities and Exchange Commission and The Stock Exchange of Thailand.

CompaniesYear 2000 Year 2001 Year 2002

Baht Million % Baht Million % Baht Million %

1. Kinpo Electronics, Inc. 8,482.14 26.94 4,908.78 15.19 3,606.70 11.142. Forward International Ltd. 18.18 0.06 2.76 0.01 - -3. Compal Electronics, Inc. - - - - - -4. Power Digital Communication - - 42.22 0.13 52.23 0.16

Co., Ltd.5. Telian Corporation 1,196.83 3.80 61.9 0.19 441.56 1.366. Wide Telecom Inc. 88.9 0.28 5.55 0.02 779.07 2.417. Afreey Inc. 1,106.61 3.51 62.05 0.19 1.29 0.008. Logistar International Holding - - 827.18 2.56 8,865.07 27.39

Co., Ltd.Total 10,892.66 34.59 5,910.44 18.29 13,745.92 42.46

Sale value of products through the Group and percentage of total sales volume

A N N U A L R E P O R T 2 0 0 2


The following is the brief summary of the related agreements.

Supply/Manufacturing Agreement

Parties concerned : Cal-Comp Electronics (Thailand) Pcl.

and Kinpo Electronics, Inc. (a company incorporated under the laws of Taiwan).

Execution date : 1st December, 1999

Material subject : Kinpo Electronics, Inc. agrees to purchase products and services provided by

the Company as indicated in any purchase order and

1. to give a prior notice to Kinpo when it plans to change the raw materials used

in manufacturing process or change the manufacturing process; and

2. to ensure that all products must meet the Companyûs standards.

Expiry date : The Agreement shall be valid for one year and continue to be enforceable for

another one year unless otherwise objected by any party prior to its expiry date.

Joint Venture Agreement

Parties concerned : Cal-Comp Electronics (Thailand) Public Company Limited and Telian Corporation

(a company incorporated under the laws of Korea).

Execution date : 2nd April, 1998

Material subject : The Company shall be entitled to the following benefits.

1. Know-how: the Company is authorised to apply know-how, patents,

technology and formulae in connection with the production or sale of

cordless telephones and other telecommunications equipment owned,

designed and developed by Telian Corporation during the validity of the

Joint Venture Agreement at the fair market price.

2. Production: the Company is entitled to the first right refusal in connection

with any new product designed and developed by Telian. Parties

concerned will determine the remuneration and other relevant contractual

conditions from time to time.

Expiry date : This Agreement shall be terminated upon occurrence of any of the following

events.

1. Both parties agree to terminate the Agreement.

2. Either party claims for compensation from any defaulting party, but the latter fa

ils to pay the compensation within the period of 30 days.

29A N N U A L R E P O R T 2 0 0 2


License Agreement

Parties concerned : Cal-Comp Electronics (Thailand) Public Company Limited

and Wide Telecom Inc.(a company incorporated under the laws of Korea).

Execution date : 25th September, 2000 Material subject :

1. The Company is granted exclusive right to use patents and know-how for

production and distribution of products (pagers) owned by Wide Telecom

throughout the validity of the Agreement.

2. Wide Telecom agrees to provide technical assistance for production of

pagers.

3. The Company is entitled to sell Wide Telecom-technology pagers in any

country, except Korea.

4. The Company agrees not to enter into contract with any current and

potential customer of Wide Telecom. Both parties also agree to disclose their

lists of customers to each other from time to time.

Expiry date : This Agreement shall be terminated upon occurrence of any of the following

events.

1. Either party breaches any provision thereof, and fails to remedy within the

period of 60 days.

2. Either party participates in the bankruptcy proceedings.

3. Either party becomes an injured party due to any Act of God for an

uninterrupted period of more than 6 months from the date of notice given by

the other party.

Use-Right of Land Agreement

Parties Concerned : Cal-Comp Electronics(Thai land) Public Company Limited and Wujiang

State-Owned Land Administration Bureau

Execution Date : 4th June 2002

Material Subject : The company is granted 50 years usage-right of state-owned land of Wujiang City

for constructing plant. The constructed area and designing for each building

must be subjected to the layout of the city, and constructed as per ratified

designing program.

Expiry Date : 3rd June 2052

The contract may be terminated, if Cal-Comp delays the payment until 60 days.

A N N U A L R E P O R T 2 0 0 2


AUDIT COMMITTEE REPORT

The Board of Directors of Cal-Comp Electronics Public Company Limited had resolutions from the meetings dated23rd August, 2000 and 3rd October, 2000 to appoint the Audit Committee which consists of three independent directorsas members.

1. Prof. Dr. Preedee Kasemsup Chairman of Audit Committee2. Mr. Chatchaval Jiaravanon Audit Committee3. Mr. Alan Chi Yim Kam Audit Committee

The major responsibilities of the Committee are to ensure that financial records of the company are prepared inaccordance with applicable local law and regulations and that necessary and vital transactions are fully recorded,disclosed, and presented in line with generally accepted accounting principle and review before submission to theBoard of Directors; coordinate with the internal control about financial reports; review the compliance with relevantregulations and law; report to the Board of Directors on problems and significant points discovered as well as to proposeappointment of external auditors. The meeting was held 4 times in the year 2002.

Audit Committee have discussed with the companyûs executive, internal auditors and external auditor to consideron accounting and financial issues and clarify on internal control and financial statements of operating result of year2002. The Committees hereby acknowledged and accepted the companyûs financial statements duly audited by thecompanyûs certified auditor.

For the year 2003, the committees proposed to the Board of Directors to appoint external auditors of Ernst &Young Office Ltd. to be represented by Ms. Rungnapa Lertsuwankul, CPA No.3516 and/or Mr. Narong PuntawongCertified Public Accountant No. 3315, and/or Mr. Sophon Permsirevallop Certified Public Accountant No. 3182 and it issubject to the approval of the Shareholdersû Annual General Meeting.

On behalf of the Audit Committee

(Prof. Dr. Preedee Kasemsup)

Chairman of the Audit Committee

Scope of powers and authorities of the Audit Committee

1. To ensure that the Company prepares any quarterly and annual financial report which contains accurate and

sufficient information and cooperate with any third party auditor and executive officer in charge of preparing such

reports.

2. To ensure that the Company has adequate and efficient internal control and audit system.

3. To consider, select and nominate an auditor of the Company, as well as, determine an amount of

remuneration for such auditor.

4. To ensure that the conduct of business of the company is in compliance with the securities and exchange

law, regulations of the Stock Exchange or any other applicable law.

5. To make decision on disclosing any accurate and complete information of the company in the case of any

related party transaction or conflicting transaction.

6. To review the accounting policy, the financial reporting system and the information disclosure in conformance

with accounting standards.

7. To prepare an audit report and publish it in the annual report of the Company.

8. To perform any other act as assigned by the Board of Directors with the approval of the Audit Committee.

31A N N U A L R E P O R T 2 0 0 2


The Company realized important of the internal audit, internal audit department was established as compliance

unit to review and verify financial statement and connected transaction with related party. Moreover Internal audits are

independence unity and directly report to the audit committee.

CONTROLLING SYSTEM & INTERNAL AUDIT

DIRECTORS ÉREPORTING

The Board of directors are responsible for the accuracy and completeness of the company and its subsidiaryûs

financial statements. Accounting principles used and financial statements are in compliance with accounting standards

and disclosed.

In order to ensure the efficient internal control and audit system, the audit committee will regularly review the

financial statement and internal control system. The audit committee report had already disclosed in annual report.

Audit committee had clarified on internal audit with good management that can be confident for the financial

statement and its subsidiary as of 31 December 2002.

Mr. Hsu, Sheng-Hsiung Mr. Chiang, Hsiao-Chin

Chairman Managing Director

The Board of Directors realized in the rights and equitable treatment of shareholders and various groups of

stakeholders in the disclosure of correct and important information, so they have set up the Investor Relations Department

to represent the company in communication with institutional and individual investors, stock analysts and interested

person

Contact Department : Investor Relations Department

E-Mail Address : [email protected]

Telephone no. : 0-2261-5033-40 Ext: 5637-9

Fax no. : 0-2661-8039

INVESTOR RELATIONS

A N N U A L R E P O R T 2 0 0 2


The Company always realize that the successful factors in conducting business are not only perseverance of good

operation results but also the responsibility to society and environment, and the Company realized that students will

become the nationûs strength, therefore the Company has donated computers and set up network for the school in

needs, especially in the rural area which lack of equipments and willing to improve their computer skills

The objective of this project:

▲ To support computer equipment and technology to Thai students and educational institutes.

▲ As the world of everyday changing technology, we give the opportunity in studying, researching and using computer

technology to Thai students and educational institutes.

▲ To give computer and technology knowledge to Thai students and they will use their knowledge to develop their

nation thereafter.

During the year 2002, Company has donated

computer equipment and network setup to Barn Koo Kard School

in Khonkaen province through the cooperation of

Ministry of Education of Thailand.

The Company determined to continue further contribution,

though our activity is only a small social contribution,

but we did it with the great intention

to all in society.

SOCIAL RESPONSIBILITIES

33A N N U A L R E P O R T 2 0 0 2


I have audited the accompanying consolidated balance sheets of Cal-Comp Electronics (Thailand)Public Company Limited and its subsidiaries as at 31 December 2002 and 2001, and the r elated consolidatedstatements of earnings, changes in shareholdersû equity and cash flows for the years then ended; and theseparate financial statements of Cal-Comp Electronics (Thailand) Public Company Limited for the same years.These financial statements are the responsibility of the Companyûs management as to their correctness andthe completeness of the presentation. My responsibility is to express an opinion on these financial statementsbased on my audits. I did not audit the financial statements of Logistar International Holding Co., Ltd. andCal-Comp Electronics (Suzhou) Co., Ltd., two overseas subsidiary companies, which are included in theconsolidated financial statements for the years ended 31 December 2002 and 2001. Thesesubsidiariesû financial statements show total assets as at 31 December 2002 and 2001 of Baht 3,006 milli on andBaht 621 milli on, respectively, revenues for the years then ended totalling Baht 9,321 milli on and Baht 978million, respectively and net earnings for the years then ended of Baht 70 million and Baht 146 milli on,respectively. In addition, the financial statements of the Company only include its investments in itssubsidiaries presented under the equity method, amounting to Baht 378 million and Baht 148 milli on, as at31 December 2002 and 2001, r espectively, and its share of the profits of its subsidiaries for the years thenended, amounting to Baht 70 million and Baht 146 milli on, respectively. The financial statements of thesubsidiary companies were audited by other auditors, whose reports I have received, and my opinion, insofaras it relates to the amounts of the various transactions of Logistar International Holding Co., Ltd. andCal-Comp Electronics (Suzhou) Co., Ltd. included in the consolidated financial statements and the financialstatements of Company only, is based on those auditorsû reports.

I conducted my audits in accordance with generally accepted auditing standards. Those standardsrequire that I plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessingthe accounting principles used and significant estimates made by management, as well as evaluatingthe overall financial statement presentation. I believe that my audits, together with the report of other auditorsdiscussed in the first paragraph, provide a reasonable basis for my opinion.

As discussed in Note 11 t o the financial statements, the Company recorded its investment in anoverseas associated company under the equity method, based on information provided by that companyûsmanagement which was unaudited by its external auditor.

In my opinion, based on my audits and the report of other auditors, except for the effect on thefinancial statements of the matter described in the preceding paragraph, the financial statements referred toabove present fairly, in all material respects, the financial position of Cal-Comp Electronics (Thailand) PublicCompany Limited and its subsidiary companies and of Cal-Comp Electronics (Thailand) Public CompanyLimited as at 31 December 2002 and 2001, and the r esults of their operations and cash flows for the yearsthen ended in accordance with generally accepted accounting principles.

I draw attention to Note 7 to the financial statements that the Company presents significant productsales and raw material purchase transactions in the financial statements at prices mutually agreed among theCompany, its subsidiary and related companies.

CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES

Rungnapa LertsuwankulCertified Public Accountant (Thailand) No. 3516

Ernst & Young Office LimitedBangkok : 22 January 2003

Report of Independent Auditor

To The Board of Directors and Shareholders of

Cal-Comp Electronics (Thailand) Public Company Limited

REPORT OF INDEPENDENT AUDITOR

A N N U A L R E P O R T 2 0 0 2


BALANCE SHEETSCAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES

The accompanying notes are an integral part of the financial statements.

CONSOLIDATED THE COMPANY ONLY2002 2001 2002 2001

Note

As At 31 December 2002 and 2001 (Unit : Baht)

ASSETS

Current assetsCash and cash equivalents 832,719,330 982,524,375 66,912,555 520,386,272Short-term investments 4 45,364,025 111,722,400 45,364,025 111,722,400Trade accounts receivable 3,224,811,326 2,883,959,552 1,570,178,993 2,883,959,552Trade accounts receivable under agreements assigning

rights of claim 6 - 572,814,847 - 572,814,847Less : Allowance for doubtful accounts (58,752,779) (44,674,178) (58,752,779) (44,674,178)Trade accounts receivable, net 5 3,166,058,547 3,412,100,221 1,511,426,214 3,412,100,221Trade accounts receivable - related parties 1,403,467,743 929,986,621 3,383,443,779 1,036,613,949Trade accounts receivable - related parties under

agreements assigning rights of claim 6 - - 203,244,138 -Less : Allowance for doubtful accounts (4,723,239) (1,629,000) (4,723,239) (1,629,000)Trade accounts receivable - related parties, net 5, 7 1,398,744,504 928,357,621 3,581,964,678 1,034,984,949Short-term loans to related parties 7 266,647,679 88,167,200 - 88,167,200Amount due from related parties 7 48,681,308 - 94,031,697 56,213,241Inventories, net 8 3,790,164,115 4,036,602,020 3,790,164,115 4,036,602,020Goods in transit 23,625,350 285,041,087 23,625,350 285,041,087Advances payment for raw materials 9 214,890,365 245,830,547 214,890,365 245,830,547Value added tax refundable 42,392,616 48,356,236 42,392,616 48,356,236Other receivables 10 455,219,503 616,586,626 455,219,503 616,586,626Other current assets 276,957,809 164,418,918 54,963,745 62,830,372

Total current assets 10,561,465,151 10,919,707,251 9,880,954,863 10,518,821,171

Non-curent assetsInvestments accounted for under equity method 11 123,766,062 6,536,226 411,259,708 153,943,759Other long-term investments 12 78,276,326 158,969,034 49,458,332 102,755,793Property, plant and equipment, net 13 2,719,141,248 2,815,638,346 2,654,500,114 2,815,638,346Intangible assets

Deferred assets 9,977,650 7,281,921 9,977,650 7,281,921Land occupancy rights 14 68,554,665 - - -

Other non-current assetsMolds and spare parts 167,232,043 294,970,118 167,232,042 294,970,118Others 23,770,797 7,000,106 23,770,797 7,000,106

Total non-current assets 3,190,718,791 3,290,395,751 3,316,198,643 3,381,590,043

TOTAL ASSETS 13,752,183,942 14,210,103,002 13,197,153,506 13,900,411,214

35A N N U A L R E P O R T 2 0 0 2





Note

LIABILITIES AND SHAREHOLDERSû EQUITY

Current liabilitiesShort-term loans from financial institutions 15 971,505,366 2,343,392,079 971,505,366 2,343,392,079Trade notes payable 105,522,651 150,174,954 105,522,651 150,174,954Liabilities under agreements assigning rights of claim 6 474,041,700 - - -Trade accounts payable

- Related parties 7 144,502,238 9,778,041 143,351,638 9,778,041- Others 2,536,796,286 3,816,069,764 2,536,796,286 3,816,069,764

Total trade accounts payable 2,681,298,524 3,825,847,805 2,680,147,924 3,825,847,805Advance from and amount due to related parties 7 405,693,218 1,087,377,561 409,906,225 823,827,347Corporate income tax payable 2,675,135 - 2,675,135 -Accrued interest expenses 4,309,300 14,296,862 4,309,300 14,296,862Accrued expenses 232,479,690 190,102,294 231,543,604 188,110,160Other payable 16 205,730,832 254,215,871 201,515,790 254,215,871Other current liabilities 17 291,980,840 234,808,664 313,080,825 190,659,224

Total current liabilities 5,375,237,256 8,100,216,090 4,820,206,820 7,790,524,302

Non-current liabilitiesConvertible debentures 18, 7 2,075,669,898 - 2,075,669,898 -

Total non-current liabilities 2,075,669,898 - 2,075,669,898 -Total liabilities 7,450,907,154 8,100,216,090 6,895,876,718 7,790,524,302

Shareholdersû equityShare capital

Authorised share capital 19378,000,000 ordinary shares of Baht 10 each

(2001 : 320,000,000 ordinary shares of Baht 10 each) 3,780,000,000 3,200,000,000 3,780,000,000 3,200,000,000Issued and fully paid share capital

302,000,000 ordinary shares of Baht 10 each 3,020,000,000 3,020,000,000 3,020,000,000 3,020,000,000Additional paid-in capital

Premium on common stocks 636,000,000 636,000,000 636,000,000 636,000,000Other deficits (145,851,474) (98,588,488) (145,851,474) (98,588,488)

Convertible debentures-equity component 18 3,000,653 - 3,000,653 -Currency translation differences (1,489,041) 761,867 (1,489,041) 761,867Retained earnings

Appropriated-legal reserve 20 378,000,000 294,550,927 378,000,000 294,550,927Unappropriated 2,411,616,650 2,257,162,606 2,411,616,650 2,257,162,606

Total shareholdersû equity 6,301,276,788 6,109,886,912 6,301,276,788 6,109,886,912

TOTAL LIABILITIES AND SHAREHOLDERSû EQUITY 13,752,183,942 14,210,103,002 13,197,153,506 13,900,411,214

A N N U A L R E P O R T 2 0 0 2



Note CONSOLIDATED THE COMPANY ONLY2002 2001 2002 2001


REVENUES

Sales 32,364,007,357 32,314,344,967 32,377,109,343 32,297,537,420

Share of profit from investments accounted 27,185,399 - 93,109,366 88,856,036

for under equity method

Gain on exchange 21 - 136,290,902 - 1,337,986

Reversal of allowance for diminution in the value 52,310,872 - 52,310,872 -

of investment

Other income

- Service income 7 - - 249,397,003 -

- Others 59,042,140 61,902,993 26,863,649 59,075,428

Total revenues 32,502,545,768 32,512,538,862 32,798,790,233 32,446,806,870

Expenses

Cost of sales 30,055,401,976 29,717,319,352 30,055,401,976 29,717,319,352

Selling and administrative expenses 715,553,747 889,409,420 660,926,645 883,453,634

Share of loss from investments accounted - 56,746,990 - -

for under equity method

Loss on exchange 21 25,079,789 - 385,629,465 -

Directorsû remuneration 22 24,000,000 18,000,000 24,000,000 18,000,000

Total expenses 30,820,035,512 30,681,475,762 31,125,958,086 30,618,772,986

Earnings before interest expenses and income tax 1,682,510,256 1,831,063,100 1,672,832,147 1,828,033,884

Interest expenses (79,660,204) (209,547,888) (69,982,095) (206,518,672)

Corporate income tax 23 (5,946,935) (7,184,582) (5,946,935) (7,184,582)

Net earnings for the year 1,596,903,117 1,614,330,630 1,596,903,117 1,614,330,630

Basic earnings per share

Net earnings 5.29 5.35 5.29 5.35

Weighted average number of ordinary shares 302 302 302 302

(million shares)

Diluted earnings per share 24

Net earnings 5.23 5.35 5.23 5.35

Weighted average number of ordinary shares 306 302 306 302

(million shares)

STATEMENTS OF EARNINGSCAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES

37A N N U A L R E P O R T 2 0 0 2


For Th

e Ye

ars En

ded

31 D

ecem

ber 20

02 a

nd 2

001

(Unit : Ba

ht)

CO

NSO

LID

ATED A

ND T

HE C

OM

PA

NY O

NLY

Convert

ible

Curr

ency

Issu

ed a

nd fully

Pre

miu

m o

ndebentu

res-

tran

slat

ion

Reta

ined e

arnin

gs

Pai

d s

har

e c

apital

com

mon s

tock

sO

ther

defici

tsequity c

om

ponent

diffe

rence

sA

ppro

priat

ed

Unap

pro

priat

ed

Tota

l

Balanc

e - be

ginn

ing

of y

ear 2

001

3,02

0,00

0,00

063

6,00

0,00

0(78,27

6,72

3)-

(668

,247

)213,83

4,39

51,116,14

8,50

84,90

7,03

7,93

3

Unrealise

d loss

on c

hang

e in

the

--

(20,311,7

65)

--

--

(20,311,7

65)

value

of i

nves

tmen

t

Curre

ncy

translatio

n ad

justm

ent

--

--

1,430

,114

--

1,430

,114

Unrealise

d tra

nsac

tions in

earnin

gs-

-(20,311,7

65)

-1,4

30,114

--

(18,881,651)

statemen

t

Net ea

rnings

for t

he y

ear 2

001

--

--

--

1,614,330

,630

1,614,330

,630

Transferre

d to le

gal res

erve

--

--

-80

,716,532

(80,716,53

2)-

Divid

ends

paid

--

--

--

(392

,600

,000

)(392

,600

,000

)

Balanc

e - en

d of y

ear 2

001

3,02

0,00

0,00

063

6,00

0,00

0(98,58

8,48

8)-

761,8

6729

4,55

0,92

72,25

7,162,60

66,109,88

6,912

Unrealise

d loss

on c

hang

e in

the

--

(47,26

2,98

6)-

--

-(47,26

2,98

6)

value

of i

nves

tmen

t

Issuing

con

vertible

debe

ntures

--

-3,00

0,65

3-

--

3,00

0,65

3

durin

g the

year

Curre

ncy

translatio

n ad

justm

ent

--

--

(2,250

,908

)-

-(2,250

,908

)

Unrealise

d tra

nsac

tions in

earnin

gs-

-(47,26

2,98

6)3,00

0,65

3(2,250

,908

)-

-(46,513,24

1)

statemen

t

Net ea

rnings

for t

he y

ear 2

002

--

--

--

1,596

,903

,117

1,596

,903

,117

Transferre

d to le

gal res

erve

--

--

-83

,449

,073

(83,44

9,07

3)-

Divid

ends

paid

(Note

26)

--

--

--

(1,35

9,00

0,00

0)(1,

359,00

0,00

0)

Balanc

e - en

d of y

ear 2

002

3,02

0,00

0,00

063

6,00

0,00

0(14

5,85

1,474

)3,00

0,65

3(1,

489,04

1)37

8,00

0,00

02,411,6

16,650

6,30

1,276

,788

The

acco

mpa

nying

notes

are a

n int

egral p

art o

f the

fina

ncial s

tatemen

ts.

CA

L-CO

MP E

LECTRO

NIC

S (THA

ILA

ND) PUBLI

C C

OM

PA

NY L

IMIT

ED A

ND ITS S

UBSID

IARY C

OM

PA

NIE

S

STATE

MEN

TS O

F CHANGES

IN S

HARE

HOLD

ERSû

EQUITY

A N N U A L R E P O R T 2 0 0 2


STATEMENTS OF CASH FLOWSCAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES



For The Years Ended 31 December 2002 and 2001 (Unit : Baht)

Cash flows from operating activities

Net earnings for the year 1,596,903,117 1,614,330,630 1,596,903,117 1,614,330,630Adjustments to reconcile net earnings to net cashprovided by (paid from) operating activities:-

(Gains) loss on sales of investments (10,956,128) - 1,180,734 -Depreciation and amortisation 555,415,480 570,782,992 555,415,480 570,782,992Allowance for doubtful accounts 17,172,840 46,303,178 17,172,840 46,303,178Loss on disposal of equipment 1,392,497 5,425,556 1,392,497 5,425,556Share of (profit) loss from investments accounted (27,185,399) 56,746,990 (102,858,366) (88,856,036)

for under equity methodAllowance for diminution in value (52,310,872) 105,000,000 (52,310,872) 105,000,000

of investments (reversal)Provision for obsolete inventories (reversal) (637,017) 139,869,377 (637,017) 139,869,377Amortisation of discounts on convertible debentures 83,351 - 83,351 -Unrealised loss on exchange 55,043,229 18,886,851 55,043,229 48,564,841Earnings from operating activities before change in

operating assets and liabilities 2,134,921,098 2,557,345,574 2,071,384,993 2,441,420,538Operating assets (increase) decrease

Trade accounts receivable 219,338,118 310,597,497 1,873,970,450 310,597,497Trade accounts receivable - related parties (466,957,699) 284,328,855 (2,543,550,544) 177,701,527Amount due from related parties (48,681,308) - (37,818,456) -Inventories 247,069,845 659,589,969 247,069,845 659,589,969Goods in transit 261,415,737 (98,366,122) 261,415,737 (98,366,122)Advances payment for raw materials 33,709,433 (122,057,362) 33,709,433 (122,057,362)Value added tax refundable 5,963,620 22,005,965 5,963,620 22,005,965Other receivables 169,746,312 (412,505,364) 169,746,312 (468,718,605)Other current assets (112,415,931) (150,009,958) 7,989,588 (47,975,915)Other assets (12,228,092) - (12,228,092) -

Operating liabilities increase (decrease)Trade notes payable (44,652,303) (35,616,568) (44,652,303) (35,616,568)Trade accounts payable (1,279,913,870) 521,584,149 (1,289,691,911) 521,584,149Trade accounts payable - related parties 135,175,430 - 143,802,871 -Corporate income tax payable 2,675,135 (4,005,608) 2,675,135 (4,005,608)Accrued interest expenses (9,987,562) (16,674,977) (9,987,562) (16,674,977)Accrued expenses 42,994,943 16,700,784 44,021,481 14,708,650Other payable (98,583,131) 104,256,784 (102,798,173) 104,286,779Other current liabilities 25,582,001 155,649,177 (9,139,063) 81,821,748

Net cash from operating activities 1,205,171,776 3,792,822,795 811,883,361 3,540,301,665

39A N N U A L R E P O R T 2 0 0 2




Cash flows from investing activities

(Increase) decrease in short-term investments 66,358,375 (111,722,400) 66,358,375 (111,722,400)Increase in investments accounted for under equity method (91,225,172) - (155,638,318) -Decrease in long-term investments 97,877,457 4,199,000 58,345,347 58,132,241(Increase) decrease in short-term loans to related parties (178,480,479) - 88,167,200 -(Increase) decrease in currency translation differences (2,250,908) 1,430,114 (2,250,908) 1,430,114Increase in property, plant and equipment (256,920,994) (443,466,729) (192,279,860) (443,466,729)Increase in molds and spare parts (79,511,527) (201,532,952) (79,511,527) (201,532,952)Proceeds from sales of equipment 13,387,601 31,901,873 13,387,601 31,901,873Increase in land occupancy rights (68,554,665) - - -Increase in deposits (16,770,691) (8,368,166) (16,770,691) (8,368,166)

Net cash used in investing activities (516,091,003) (727,559,260) (220,192,781) (673,626,019)

Cash flows from financing activities

Decrease in short-term loans from financial institutions (1,402,783,773) (2,007,499,618) (1,402,783,773) (2,007,499,618)Increase in liabilities under agreements assigning rights 474,041,700 - - -

of claimIncrease in convertible debentures 2,083,008,000 - 2,083,008,000 -Decrease in advance from and amount due to (634,151,745) (480,541,036) (366,388,524) (744,091,250)

related partiesDecrease in long-term loan - (162,898,500) - (162,898,500)Dividends paid (1,359,000,000) (392,543,190) (1,359,000,000) (392,543,190)

Net cash used in financing activities (838,885,818) (3,043,482,344) (1,045,164,297) (3,307,032,558)Net increase (decrease) in cash and cash equivalents (149,805,045) 21,781,191 (453,473,717) (440,356,912)Cash and cash equivalents at beginning of year 982,524,375 960,743,184 520,386,272 960,743,184Cash and cash equivalents at end of year 832,719,330 982,524,375 66,912,555 520,386,272

Supplemental cash flows information:-

Cash paid during the year for:-Interest expenses 89,647,766 192,691,910 79,969,657 223,193,649Corporate income tax 3,271,800 19,731,889 3,271,800 19,731,889

Non-cash items consist of:-Sold investment to a related party that has not yet been - - - 56,213,244

collectedSold investment to other receivable that had yet been - 4,399,000 - 4,399,000

collectedUnrealised loss on change in the value of investment 47,262,986 20,311,765 47,262,986 20,311,765

For The Years Ended 31 December 2002 and 2001 (Unit : Baht)

A N N U A L R E P O R T 2 0 0 2


NOTES TO CONSOLIDATED FINANCIAL STATEMENTSCAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES

For The Years Ended 31 December 2002 and 20011. GENERAL INFORMATION

On 4 December 1989, Cal-Comp Electronics (Thailand) Public Company Limited was incorporated as a limitedcompany under Thai laws. Its major shareholder is Kinpo Electronics, Inc., a company incorporated in Taiwan. TheCompany operates its business in Thailand and its principal activity is the manufacture of electronic products in threesectors, such as computer and computer peripheral, telecommunication equipment and automation equipment. Itsregistered office is 191/54, 191/57 18th Floor, CTI T ower, Rachadapisek Road, Klongtoey, Bangkok 10110. The Companyhas 2 branches in Thailand located at Samutsakorn and Petchaburi province.

In 2000, the Company opened a branch in Taiwan to purchase raw materials and finished goods, to coordinatebetween the Company and its overseas customers, and to facilitate the Companyûs business operations.

2. BASIS OF CONSOLIDATION

During the second quarter of 2001, the Company established a 100% owned subsi diary, Logistar InternationalHolding Co., Ltd., incorporated in the British Virgin Islands with an authorized capital of USD 50,000. The subsidiarypurchases components for consumer electronics, communication products and personal information products, solely fromthe Company and sells them to Kinpo Electronics, Inc. and others.

During the third quarter of 2002, the Company established a 100% owned subsidiary, Cal-Comp Electronics (Suzhou)Co., Ltd., incorporated in The Peopleûs Republic of China with an authorized capital of USD 10 milli on. This subsidiary hasnot yet commenced its operations and therefore no earning statement has been prepared. This subsidiary is in theprocess of constructing its plant and expects to start its operation in 2003.

The consolidated financial statements include the financial statements for the years ended 31 December 2002 and2001 of Cal-Comp Electronics (Thailand) Public Company Limited (hereinafter called çthe Companyé) and its subsidiarycompanies, Logistar International Holding Co., Ltd. and Cal-Comp Electronics (Suzhou) Co., Ltd., which were incorpo-rated and operated their businesses in overseas (hereinafter call çthe subsidiariesé). The financial statements of thesubsidiaries were prepared by the management of the subsidiaries and audited by its auditor overseas.

The Company has subsidiary companies as follows :-

In 2001, the Company has excluded the financial statements of Cal-Comp Management Information System Co.,Ltd. in the consolidated financial statements because the financial statements of this subsidiary company are ofinsignificant value. In addition, in 2002 this company registered the dissolution as discussed in Note 11.

All intercompany balances and significant intercompany transactions have been eliminated from the consolidatedfinancial statements.

The financial statements of the branch office and subsidiaries incorporated overseas are translated into Thai Bahtat the closing exchange rate for assets and liabilities, and at the average exchange rate for revenues and expenses.

Revenue

Country of Nature of For the periods endedSubsidiariesû name Investment proportionincorporation business

Total assets31 December

2002 2001 2002 2001 2002 2001

% % Million Baht Million Baht Million Baht Million Baht

Cal-Comp Management - 62 Thailand Computer - 9 - 5 Information System Co., Ltd. training

servicesLogistar International 100 100 British Virgin Companyûs 2,842 621 9,321 978Holding Co., Ltd. Islands distributorCal-Comp Electronics 100 - The Peopleûs Manufacture 164 - - -(Suzhou) Co., Ltd. Republic of

China

41A N N U A L R E P O R T 2 0 0 2


The resultant difference is shown under the caption of çCurrency translation differencesé in shareholdersû equity.

3. SIGNIFICANT ACCOUNTING POLICIES

The financial statements have been prepared in accordance with accounting standards pronounced by theInstitute of Certified Accountants and Auditors of Thailand which are effective under the Accounting Act B.E. 2543.

Significant accounting policies adopted by the Company and its subsidiary companies are summarised below :-

3.1 Revenue and expense recognition

Sales and service income represent the invoiced value, excluding value added tax, of goods sold anddelivered after deducting discount and allowance and services rendered.

Expenses are recognised on an accrual basis.

3.2 Inventories

Inventories are valued at the lower of cost (first-in, first-out method) or net realisable value.Provision for obsolete stocks is made for damaged, slow-moving and obsolete stock.

3.3 Trade accounts receivable and other receivables

Trade accounts receivable and other receivables are recognised and carried at original invoice amount lessan allowance (if any) for any uncollectible amounts. An estimate for doubtful debts is made when collection of the fullamount is no longer probable.

3.4 Investments

a) Investments in unit trusts in overseas, which are held as short-term investments, are determined at fair value.Gains or losses arising from change in value is included in determining earnings.

b) Investments in marketable equity securities, which are held as available-for-sale securities, are determined atfair value. Gains or losses arising from changes in value have been separately shown in shareholdersû equity under thecaption of çOther deficitsé.

c) Investments in non-marketable equity securities, which the Company hold as, other investments, are valuedat cost. Loss on impairment (if any) of investments in available-for-sale securities and other investments is included indetermining earnings.

d) Investments in subsidiary and associated companies are valued under the equity method.

3.5 Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation of buildings,building improvements and equipment are calculated by reference to their costs on a straight-line basis over theestimated useful lives as follows :-

Buildings and building improvements - 11 - 41 yearsMachinery and factory equipment - 9 yearsOffice furniture and equipment - 5, 11 yearsMotor vehicles - 5, 9 yearsMiscellaneous equipment and research and development equipment - 2 - 3 years

No depreciation is provided for land, land improvement, construction in progress, equipment under installationand fixed assets in transit.

3.6 Intangible assets

Deferred assets are stated at cost and amortised on a straight-line basis over 3 years.Land occupancy rights are stated at cost and amortised on contract period of 50 years.

3.7 Deferred expenses

Deferred expenses are calculated by reference to their costs and amortised on a straight-line basis at thefollowing rates :

Convertible debentures issued expenses - 3 yearsMolds and spare parts - 1, 2, 5 years

A N N U A L R E P O R T 2 0 0 2


3.8 Foreign currencies

Foreign currency transactions incurred during the year are translated into Baht at the rates ruling on thetransaction dates. Monetary assets and liabilities denominated in foreign currency outstanding at the balance sheet dateare translated into Baht at the rates ruling on the balance sheet date.

Exchange gains and losses are included in determining earnings.3.9 Foreign exchange contracts

Foreign exchange contracts are accounted for as hedge against exposure to the foreign currency risk relatedto the Company and its subsidiaryûs purchases and sales to overseas in the normal course of business. Premium paid forforward exchange contracts are recognised as liabilities or assets and are amortised over the period of contracts andincluded in determining earnings.

3.10 Cash and cash equivalents

Cash and cash equivalents are cash and deposits at banks, excluded deposits at banks with an originalmaturity over 3 months and cash secured as collateral.

3.11 Interest rate swap

The notional amounts of interest rate swap agreements of its subsidiary are not recognised in the financialstatements since the agreements do not require the settlement of such notional amounts. The amounts receivable orpayable under the agreements resulting from the difference in the interest rates are recognised as interest income orinterest expense at the balance sheet dates and at settlement dates.

3.12 Foreign currency option

The notional amounts of the foreign currency option contracts of its subsidiary are not recognised as eitherassets or liabilities on the contract dates. However, amounts received on options written are recognised as liabilities, andamounts paid on options bought are recognised as assets. Such amounts are amortised using the straight-line methodover the terms of contracts and charged to current income. Gains or losses on the exercise of the options are chargedto current income.

3.13 Provident fund

The Company and its employees jointly established a provident fund as approved by the Ministry of Financein accordance with the Provident Fund Act B.E. 2530. The fund is contributed by both employees at the rate of 2 percentand the Company at the rate of 2 percent.

3.14 Basic earnings per share

Basic earnings per share is calculated by dividing net earnings for the year by the weighted average numberof ordinary shares held by outside shareholders outstanding during the year.

Diluted earnings per share is calculated by dividing net earnings for the year by the total sum of the weightedaverage number of ordinary shares held by outside shareholders outstanding during the year plus the weighted averagenumber of ordinary shares to issue for conversion of all dilutive potential ordinary shares into ordinary shares.

3.15 Use of accounting estimates

Preparation of financial statements in conformity with generally accepted accounting principles in circum-stances requires management to make estimates and assumptions that affect amounts reported in the accompanyingfinancial statements and notes thereto. Actual results could differ from these estimates.

4. SHORT-TERM INVESTMENTS

As at 31 December 2002 and 2001, the abo ve short-term investments are investment in open-ended mutual fundoverseas purchased by Taipei branch. The fair value of these investments is immaterially higher than their cost and theCompany has therefore recorded the short-term investments at cost.

CONSOLIDATED THE COMPANY ONLY

2002 2001 2002 2001

Trading securities

Unit trusts 45,364,025 111,722,400 45,364,025 111,722,400

(Unit : Baht)

43A N N U A L R E P O R T 2 0 0 2


The outstanding balances of trade accounts receivable - related parties is aged as follows :-


2002 2001 2002 2001Not yet due 981,438 659,721 2,963,191 766,349Overdue

Less than 1 month 317,110 3,514 408,487 3,5141 - 2 months 53,140 750 66,196 7502 - 3 months 400 481 87,930 4813 - 6 months 12,210 63,877 21,767 63,8776 - 12 months 38,213 154,994 38,160 154,994

Over 12 months 957 46,649 957 46,649

Total 1,403,468 929,986 3,586,688 1,036,614Less : Allowance for doubtful accounts (4,723) (1,629) (4,723) (1,629)

Net 1,398,745 928,357 3,581,965 1,034,985

5. TRADE ACCOUNTS RECEIVABLE/TRADE ACCOUNTS RECEIVABLE-RELATED PARTIES

The outstanding balances of trade accounts receivable is aged as follows :-

The Companyûs management believes that allowance for doubtful accounts set aside is adequate in the presentsituation.

6. TRADE ACCOUNTS RECEIVABLE UNDER AGREEMENTS ASSIGNING RIGHTS OF CLAIM

As at 31 December 2002, the Company has assi gned its rights of claim over trade receivables amounting to Baht677 million (2001: Baht 1,958 milli on) to banks, whereby the trade receivables have agreed in writing to make theirpayment against all invoices issued by the Company directly to these banks. The Company, as the assignor hassurrendered control over these debts, and the banks, as the assignee, have sole rights of claim over the tradereceivables. The Company has recorded the transactions as sales to the banks. The Company has received payment ofBaht 474 million (2001 : Baht 1,385 milli on) from the banks and recorded the amount as a deduction from the tradeaccounts receivable balance. The remaining Baht 203 million (2001 : Baht 573 milli on), for which no payment has yetbeen received from the banks, has been presented as çTrade accounts receivables under agreements assigning rightsof claimé in the balance sheet.

The Company has provided a guarantee to the banks to cover any defaults on payment by these accountsreceivable. However, no allowance has been set up against these assigned trade receivables since the Companybelieves that they are financially strong.


2002 2001 2002 2001

Not yet due 2,612,981 3,139,416 1,042,263 3,139,416Overdue

Less than 1 month 228,044 91,050 183,057 91,0501 - 2 months 7,987 54,291 7,972 54,291

2 - 3 months 95,222 5,500 66,272 5,500

3 - 6 months 48,917 5,689 38,955 5,6896 - 12 months 63,022 156,673 63,022 156,673Over 12 months 168,638 4,155 168,638 4,155

Total 3,224,811 3,456,774 1,570,179 3,456,774

Less : Allowance for doubtful accounts (58,753) (44,674) (58,753) (44,674)Net 3,166,058 3,412,100 1,511,426 3,412,100

(Unit : Thousand Baht)


A N N U A L R E P O R T 2 0 0 2


7. RELATED PARTY TRANSACTIONS

During the years, the Company had significant business transactions with its overseas related companies (relatedby way of having certain shareholders and/or directors in common). They are in connection with sales of goods, hireof manufacturing and purchases of raw materials. Such transactions, which have been concluded on the terms andbases agreed between the Company and those companies, are summarised below :-

(Unit : Thousand Baht)CONSOLIDATED THE COMPANY ONLY Pricing policy

2002 2001 2002 2001

Transactions with subsidiary(Eliminated from consolidated financial statements)

Sales - - 8,937,511 827,177 Gross profit margin + about 2%Service income - - 249,397 - USD 725,000 per month

Transactions with related partiesSales- Kinpo Electronics, Inc. 6,687,198 5,749,395 3,604,058 4,908,783 Gross profit margin + about 2%- Others 1,224,564 132,324 1,224,564 132,324 Gross profit margin + about 2%Purchases of raw materials 312,782 77,442 312,782 77,442 Nearly market priceInterest income 9,976 25,645 6,362 25,645 0-3.5%, 9% per annumInterest expenses 25,180 41,161 25,180 41,161 2.46-2.63% per annum

The outstanding balances of the above transactions have been presented in the balance sheets as follows :-



Relationship 2002 2001 2002 2001Trade accounts receivable - related parties

Subsidiary company(eliminated from consolidated financial statements)- Logistar International Holding Co., Ltd. Subsidiary company - - 2,379,940 106,628

Related companies- Kinpo Electronics, Inc. Parent company 367,135 659,948 170,415 659,948- Afreey Inc. Shareholder - 25,661 - 25,661- Telian Corporation Common directors 286,646 244,377 286,646 244,377- Wide Telecom, Inc. Shareholder 747,632 - 747,632 -- Others 2,055 - 2,055 -

Total 1,403,468 929,986 1,206,748 929,986Less : Allowance for doubtful accounts (4,723) (1,629) (4,723) (1,629)

1,398,745 928,357 1,202,025 928,357

1,398,745 928,357 3,581,965 1,034,985

Short-term loans to related partiesRelated companies

- Wise Sigma International HoldingCo., Ltd. Associated company 266,648 - - -

- Telian Corporation Common directors - 88,167 - 88,167

266,648 88,167 - 88,167

45A N N U A L R E P O R T 2 0 0 2




Relationship 2002 2001 2002 2001

Amount due from related partiesSubsidiary company(eliminated from consolidated financial statements)

- Logistar International Holding Co., Ltd. Subsidiary company - - 45,351 56,213Related companies

- Kinpo Electronics, Inc. Parent company 19,101 - 19,101 -- Telian Corporation Common directors 21,251 - 21,251 -- Wide Telecom, Inc. Shareholder 2,465 - 2,465 -- Others 5,864 - 5,864 -

48,681 - 48,681 -

48,681 - 94,032 56,213

Trade accounts payable - related partiesRelated companies

- Kinpo Electronics, Inc. Parent company 14,632 6,298 14,632 6,298- Wide Telecom, Inc. Shareholder 125,528 - 125,528 -- Telian Corporation Common directors 3,192 2,301 3,192 2,301- Others 1,150 1,179 - 1,179

144,502 9,778 143,352 9,778Advance from and amount due to related parties

Subsidiary company(eliminated from consolidated financial statements)

- Logistar International Holding Co., Ltd. Subsidiary company - - 4,213 -Related companies

- Kinpo Electronics, Inc. Parent company 363,073 1,087,378 363,073 823,827- Wide Telecom, Inc. Shareholder 919 - 919 -- Telian Corporation Common directors 41,701 - 41,701 -

405,693 1,087,378 409,906 823,827

Convertible debenturesRelated company

- Kinpo Electronics, Inc. Parent companyCost (par value) 4,000 units 173,215 - 173,215 -Less : Discount on convertible debentures

to be realised as interest expensesin the future (243) - (243) -

Convertible debentures, net 172,972 - 172,972 -

A part of advances from and amounts due to related parties of Baht 325 million as of 31 December 2002 was chargedinterest at the rate of 2.495 percent per annum.

A N N U A L R E P O R T 2 0 0 2


The Companyûs management believes that allowance for obsolete inventories set aside is adequate in the presentsituation.

9. ADVANCES PAYMENT FOR RAW MATERIALS

Included in the balances as at 31 December 2002 and 2001 mai nly consist of :-a) Short-term loans of Baht 124 milli on (2001 : Baht 149 milli on) provided to local suppliers for use as working

capital in agreed production of raw materials, on which interest is charged at the rate of 7 percent per annum.b) Advance payment of Baht 91 milli on to overseas suppliers (2001 : Baht 97 milli on) for the purchase of molds

and raw materials. The remaining balances is to be paid upon the completion of molds (please refer to Note 30.4).

10. OTHER RECEIVABLES

The balances as at 31 December 2002 and 2001 r epresent suspense accounts receivable set up for inventories towhich engineering or component changes have been made of which the expense can be passed on to customers orvendors and for raw materials which were purchased from suppliers and the orders later cancelled. The Company setsup these suspense account while awaiting the return of the raw materials to the creditors.

Short-term loans to Wise Sigma International Holding Co., Ltd. and Telian Corporation were denominated in US dollarcurrency and interest was charged at the rate of 0-3.5 percent and 9 percent per annum, respectively.

Net foreign currency assets and liabilities has been included in Note 31.3.

8. INVENTORIES

(Unit : Baht)


2002 2001 2002 2001

Finished goods 430,204,580 416,008,370 430,204,580 416,008,370Work in process 16,985,808 5,206,994 16,985,808 5,206,994Raw materials 3,568,161,654 3,775,695,441 3,568,161,654 3,775,695,441Raw materials outside contract 40,968,284 106,484,443 40,968,284 106,484,443

Total 4,056,320,326 4,303,395,248 4,056,320,326 4,303,395,248Less : Provision for obsolete inventories (266,156,211) (266,793,228) (266,156,211) (266,793,228)

Inventories, net 3,790,164,115 4,036,602,020 3,790,164,115 4,036,602,020


THE COMPANY ONLY

31 December 2001 Additional loans Repayment31 December 2002Short-term loan to related partyTelian Corporation 88,167 - (88,167) -

The movements of short-term loans to related parties during the year are as follows :-(Unit : Thousand Baht)

CONSOLIDATED

31 December 2001 Additional loans Repayment31 December 2002Short-term loans to related PartiesWise Sigma International Holding Co., Ltd. - 362,874 (96,226) 266,648Telian Corporation 88,167 - (88,167) -

88,167 362,874 (184,393) 266,648

47A N N U A L R E P O R T 2 0 0 2



CONSOLIDATED

Nature of Country of Investments Investments

Companyûs name business incorporation Paid up capital proportion Cost method Equity method

2002 2001 2002 2001 2002 2001 2002 2001

% %Investment in subsidiary companyCal-Comp Management Computer training Thailand - Baht 10 - 62 - 6,200 - 5,540

Information System Co., Ltd. services MillionInvestments in associated companiesTelian Corporation Mobile phone Korea KW 2,871 KW 1,997 27.8 40 57,825 57,825 32,456 -

Million MillionWise Sigma International Holding company British 45 45 97,198 996 91,310 996Holding Co., Ltd. Virgin

Islands

Total investments accounted for under equity method 155,023 65,021 123,766 6,536


THE COMPANY ONLY


Companyûs name business incorporation Paid up capital proportion Cost method Equity method

2002 2001 2002 2001 2002 2001 2002 2001% %

Investment in subsidiary companiesCal-Comp Management Computer training Thailand - Baht 10 - 62 - 6,200 - 5,540Information System Co., Ltd. services Million

Logistar International Holding Companyûs British USD 50,000 USD 50,000 100 100 2,280 2,280 214,812 148,404Co., Ltd. distributor Virgin

IslandsCal-Comp Electronics Manufacturing The Peopleûs USD 10 - 100 - 162,328 - 163,992 -

(Suzhou) Co., Ltd. Republic of MillionChina

Investment in associated companyTelian Corporation Mobile phone Korea KW 2,871 KW 1,997 27.8 40 57,825 57,825 32,456 -

Million Million

Total investments accounted for under equity method 222,433 66,305 411,260 153,944

11. INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD

This consolidated financial statements exclude the financial statements of Cal-Comp Management InformationSystem Co., Ltd., a subsidiary, due to the immateriality of its accounts. The Company instead reflected its interest in thiscompany in the çInvestmentsé account in the consolidated financial statements. In any case, on 27 November 2002, thiscompany registered its dissolution with the Ministry of Commerce and returned capital to its shareholders on 27December 2002. Its liquidation was registered with the Ministry of Commerce on 9 January 2003.

On 2 January 2003, the Company invested USD 6.2 million in Cal-Comp Electronics (Suzhou) Co., Ltd., which is equalto the subsidiary companyûs registered capital.

As at 31 December 2002 and 2001, the Company r especitvely recognised a Baht 32 million share of profit for 2002and a Baht 57 million share of loss for 2001, fr om its investment in Telian Corporation, an associated company. The figureswere recorded based on the information provided by that companyûs management, which was not audited by thecompanyûs external auditor as time constraints meant that the companyûs management was unable to arrange for theinformation to be audited in time. The Company received the audited financial statement of this associated companyfor the year 2001 i n 2002 and there was no material difference.

A N N U A L R E P O R T 2 0 0 2


In the year 2002, this associated company increased and decreased its capital but the Company did not increaseits investment in this company. As a result, the Companyûs holding has been diluted from 40 percent to 27.8 percent,and the shareholdersû equity of the associated company, which was in deficit in the year 2001 has returned to surplusin the year 2002.

In addition to the above, as at 31 December 2002 the Company g ranted a USD 1.5 milli on corporate guaranteeto this associated company.

12. OTHER LONG-TERM INVESTMENTS

In 2001, the Company sold its i nvestment in Power Digital Card Co., Ltd. to its overseas subsidiary company at cost.As at 31 December 2001, the Company has no t yet received the money from its subsidiary company. The Company hastherefore recorded in çAmount due from related partiesé in 2001 balance sheet. Duri ng the first quarter of 2002, thesubsidiary company sold this investment to third party.


CONSOLIDATED


Companyûs name business incorporation proportion Cost method Fair Value

2002 2001 2002 2001 2002 2001

% %Investments in other companiesWide Telecom, Inc. Pagers Korea 12 14 171,247 171,247 25,395 72,658

Less : Unrealised loss on changein the value of investment (145,852) (98,589)

25,395 72,658

Afreey Inc. Producing of CD ROM Taiwan 7 7 76,752 76,752Power Digital Card Co., Ltd. Electronic parts Taiwan - 8 - 56,213Power Digital Communication Co., Ltd. Trading of communication apparatus Taiwan 4.7 9 28,818 58,345

105,570 191,310Less : Allowance for diminution

in the value of investments (52,689) (105,000)52,881 86,310

Total other long-term investments 78,276 158,968


THE COMPANY ONLY


Companyûs name business incorporation proportion Cost method Fair Value

2002 2001 2002 2001 2002 2001

% %Investments in other companies

Wide Telecom, Inc. Pagers Korea 12 14 171,247 171,247 25,395 72,658Less : Unrealised loss on changein the value of investment (145,852) (98,589)

25,395 72,658

Afreey Inc. Producing of CD ROM Taiwan 7 7 76,752 76,752Power Digital Communication Co., Ltd. Trading of communication apparatus Taiwan - 9 - 58,345

76,752 135,097Less : Allowance for diminutionin the value of investments (52,689) (105,000)

24,063 30,097

Total other long-term investments 49,458 102,755

49A N N U A L R E P O R T 2 0 0 2


(Unit : Baht)

CONSOLIDATED

Construction inprogress, equipment

Buildings Machinery under installationLand and land and buildings and factory Office furniture and fixedimprovements improvements equipment and equipment Motor vehicles assets in transit Total

Cost31 December 2001 107,810,251 1,371,060,248 2,370,234,140 173,963,526 9,116,528 6,693,926 4,038,878,619Acquisitions - - - 2,199,301 - 258,723,729 260,923,030Disposals - (22,608) (19,505,590) (8,396,270) - - (27,924,468)Transfer in (out) 400,000 5,045,594 172,284,902 7,697,609 11,263,383 (196,691,488) -

31 December 2002 108,210,251 1,376,083,234 2,523,013,452 175,464,166 20,379,911 68,726,167 4,271,877,181Accumulated depreciation31 December 2001 - 228,808,633 931,833,067 58,249,198 4,349,375 - 1,223,240,273Depreciation for the year - 61,055,558 261,233,601 18,629,111 1,973,101 - 342,891,371Disposals - (16,518) (7,928,158) (5,451,035) - - (13,395,711)

31 December 2002 - 289,847,673 1,185,138,510 71,427,274 6,322,476 - 1,552,735,933

Net book value31 December 2001 107,810,251 1,142,251,615 1,438,401,073 115,714,328 4,767,153 6,693,926 2,815,638,346

31 December 2002 108,210,251 1,086,235,561 1,337,874,942 104,036,892 14,057,435 68,726,167 2,719,141,248

Depreciation charged in the earnings statements2001 323,155,279

2002 342,891,371

A part of depreciation of 2002 amounting to Baht 334 million (2001 : Baht 316 milli on) for the consolidated has beencharged to cost of sales and the remaining part of Baht 9 million (2001 : Baht 7 milli on) has been charged to selling andadministrative expenses.

(Unit : Baht)

THE COMPANY ONLY

Construction inprogress, equipment

Buildings Machinery under installationLand and land and buildings and factory Office furniture and fixedimprovements improvements equipment and equipment Motor vehicles assets in transit Total

Cost31 December 2001 107,810,251 1,371,060,248 2,370,234,140 173,963,526 9,116,528 6,693,926 4,038,878,619Acquisitions - - - 2,134,085 - 194,147,811 196,281,896Disposals - (22,608) (19,505,590) (8,396,270) - - (27,924,468)Transfer in (out) 400,000 5,045,594 172,284,902 7,697,609 11,263,383 (196,691,488) -

31 December 2002 108,210,251 1,376,083,234 2,523,013,452 175,398,950 20,379,911 4,150,249 4,207,236,047

Accumulated depreciation31 December 2001 - 228,808,633 931,833,067 58,249,198 4,349,375 - 1,223,240,273Depreciation for the year - 61,055,558 261,233,601 18,629,111 1,973,101 - 342,891,371Disposals - (16,518) (7,928,158) (5,451,035) - - (13,395,711)

31 December 2002 - 289,847,673 1,185,138,510 71,427,274 6,322,476 - 1,552,735,933

Net book value31 December 2001 107,810,251 1,142,251,615 1,438,401,073 115,714,328 4,767,153 6,693,926 2,815,638,346

31 December 2002 108,210,251 1,086,235,561 1,337,874,942 103,971,676 14,057,435 4,150,249 2,654,500,114

Depreciation charged in the earnings statements2001 323,155,279

2002 342,891,371

During the first quarter of 2002, the Company sold its investment in Power Digital Communication Co., Ltd. to itsoverseas subsidiary company at cost.

13. PROPERTY, PLANT AND EQUIPMENT

A N N U A L R E P O R T 2 0 0 2


18. CONVERTIBLE DEBENTURES

On 25 March 2002, the Companyûs Annual General Meeting of shareholders approved the issue and offering of notmore than Baht 2,500 million of unsecured convertible debentures, or the equivalent amount in any foreign currency, witha maturity of not more than 7 years. The offer price is to be determined later and will depend upon the market situationat the time the debentures are issued and offered for sale to institutional investors or specific groups of investors inaccordance with the Notification of the Securities and Exchange Commission.

On 6 December 2002, the Company issued 48,000 convertible debentures of USD 1,000 each, amounti ng to USD 48million, maturing in 3 years, redeemable on 6 December 2005, with the following terms are conditions.

Description of convertible debenture- Form Unsecured convertible debentures- Type Debentures with registered holders- Maturity period 3 years from the date of issuance convertible debentures- Issue date 6 December 2002- Maturity date 6 December 2005- Offering value USD 48 million- Offering amount 48,000 units

A part of depreciation of 2002 amounting to Baht 334 million (2001 : Baht 316 milli on) for the Company only hasbeen charged to cost of sales and the remaining part of Baht 9 million (2001 : Baht 7 milli on) has been charged toselling and administrative expenses.

As at 31 December 2002, the g ross carrying amount of fully depreciated machinery and factory equipment andoffice equipment of the Company still in use amounts to Baht 108 milli on.

14. LAND OCCUPANCY RIGHTS

The balance as at 31 December 2002 represents the land occupancy rights of its subsidiary in the Peopleûs Republicof China. These rights are for 50 years.

15. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS

Short-term loans from financial institutions of the Company and its subsidiary consist of loans from both local banksand overseas financial institutions in both local currency and foreign currency. The loans are mainly repayable within 3months, and carry interest rates of 0.97-2.75 percent per annum.

The Company has considered the foreign currency risk pertaining to the above loans. These loans which are nothedged with derivative financial instruments are included in note 31.3.

16. OTHER PAYABLE

The outstanding balance as at 31 December 2002 and 2001 r epresents trade accounts payable suspense for goodspurchases which there are subject to changes in price, specifications and other components. The Company hasrecorded the suspense account separately from normal trade accounts payable.

17. OTHER CURRENT LIABILITIES

The balance as at 31 December 2002 and 2001 consist of :-(Unit : Thousand Baht)


2002 2001 2002 2001Advances received from customers

- for purchase of molds 55,231 - 55,231 -- for preparation of production line 2,961 13,907 2,961 13,907

Money received from customerspending for clear 66,885 56,203 66,885 56,203

Other payables 53,812 68,550 6,665 68,550Other payable - forward contracts 72,477 40,233 72,477 40,233Others 40,615 55,916 8,862 11,766

Total 291,981 234,809 213,081 190,659

51A N N U A L R E P O R T 2 0 0 2


- Face value USD 1,000 per unit- Offering price USD 1,000 per unit- Coupon rate None- Conversion rate 1 con vertible debenture can convert to 1,211.9444 or dinary shares- Right to convert into shares Convertible from 6 March 2003 to 6 November 2005 at a conversion price

of Baht 36 per share (at a fixed rate of conversion of Baht 43.63 per USD 1).- Periodic redemption at the option Annually. Redeemable at a price of 102.01% of pri ncipal on 6 Decemberof the debenture holders 2003 and at 104.06% of pri ncipal on 6 December 2004.

- Redemption at the option of Redeemable within 2 years after the issue at a closing price of thethe issuer shares on the Stock Exchange of Thai land for each of 30

consecutive trading days, which is at least 130 percent of the convertibleprice.

- Yield to maturity 2 percent per annum.- Rights, benefits, and other conditions 1. The redemption is to be made at maturity date.

2. The debenture holders have the right to authorise the Company toredeem the debentures before the maturity date if there is a change inauthorisation.

- Alternative market N/A

19. SHARE CAPITAL

On 25 March 2002, the Companyûs Annual General Meeting of shareholders approved the reduction of registeredshare capital from Baht 3,200 million to Baht 3,020 million, comprising shares with a par value of Baht 10 and approvedthe increase registered share capital from Baht 3,020 million to Baht 3,780 million, comprising shares with a par value ofBaht 10, f or the purpose of the conversion of the convertible debentures as described in Note 18.

On 26 April 2002, the Company registered the increase in its share capital with the Ministry of Commerce. Registeredshare capital is Baht 3,780 million.

20. LEGAL RESERVE

Pursuant to section 116 of the Publi c Limited Companies Act B.E. 2535, 5 percent of the net earnings has been setaside as part of the statutory reserve in order to increase the amount of the reserve to the level of 10 percent of theregistered share capital. The statutory reserve could not use for dividend payment.

21. EXCHANGE GAINS (LOSSES)


FOR THE YEARS ENDED 31 DECEMBER


2002 2001 2002 2001Realised exchange gains (losses) 29,963 155,178 (330,586) 49,903Unrealised exchange losses (55,043) (18,887) (55,043) (48,565)

Exchange gains (losses)-net (25,080) 136,291 (385,629) 1,338

The unrealised exchange losses for the year 2002 included a Baht 10 milli on gains which is the result of netting theCompanyûs unrealised exchange losses against the subsidiaryûs unrealised exchange gains from translation under forwardcontracts using the exchange rate at the balance sheet date. These forward contracts were made for square hedgepurpose between the Company and its subsidiary.

22. DIRECTORûS REMUNERATION

Directorsû remuneration represents the benefits paid to the Companyûs directors in accordance with section 90 ofthe Public Limited Companies Act, exclusive of salaries and related benefits payable to Executive Directors.

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25. NUMBER OF EMPLOYEES AND RELATED COSTS

23. CORPORATE INCOME TAX

Corporate income tax has been calculated at the rate of 25 percent (2001 : 30 percent) on the non-BOI promotedearnings after adding back provisions and certain expenses which are disallowable for tax computation purposes.

24. RECONCILIATION OF DILUTED EARNINGS PER SHARE

2002

Weighted average EarningsNet earnings number of ordinary shares per share

Million Baht Million share BahtBasic earnings per share

Net earnings for the year of ordinary shareholders 1,596.9 302.0 5.29Effect of dilute potential ordinary shares

Convertible debentures 3.5 4.1Diluted earnings per share

Net earnings for the year of ordinary sharesholdersassuming the conversion of diluted potential

ordinary shares 1,600.4 306.1 5.23

2002 2001

Number of employees at the end of year 6,345 6,716Employee costs (Thousand Baht) 935,593 894,961

26. DIVIDEND

On 25 March 2002, the Companyûs Annual General Meeting of shareholders approved the payment of dividend ofBaht 3 per share from its earnings for the year 2001 t o the Companyûs shareholders, totalling Baht 906 million. TheCompany paid dividend on 22 April 2002.

On 30 September 2002, the Companyûs Board of Directors Meeting approved the payment of interim dividend ofBaht 1.5 per share from its earnings for the six-month period ended 30 June 2002 to the Companyûs shareholders, totallingBaht 453 million. The Company paid dividend on 30 October 2002.

27. PROVIDENT FUND

The Company and its employees jointly established a provident fund as approved by the Ministry of Finance inaccordance with the Provident Fund Act B.E. 2530. The fund is contributed by both employees at the rate of 2 percentand the Company at the rate of 2 percent and managed by TISCO Securities Company Limited. The fund will be paidto the employees upon termination in accordance with the rules of the fund. Total contributions of the Company for thecurrent year amounted to Baht 1.1 milli on (2001 : Baht 1.2 milli on).

28. BOARD OF INVESTMENT PRIVILEGES

The Company was granted the following tax privileges by the Board of Investment for certain specified categoriesof products, under the Investment Promotion Act B.E. 2520 :-

28.1 Exemption from corporate income tax on net profit for periods of 3 to 8 years commencing as from the dateof first earning operating income.

28.2 Dividends paid from the promoted operations which are exempt from corporate income tax are in turnexempted from inclusion in the determination of corporate income tax.

28.3 Exemption from import duty on the raw and essential materials imported for use specifically in producing forexport.

28.4 Exemption from import duty on items imported for re-export.28.5 Exemption from import duty on machinery as approved by the Board.28.6 An allowance of five percent of the increment in export income over that of the preceding year is deductible

from taxable income for a period of ten years commencing as from the date of earning operating income.28.7 A fifty percent reduction of the normal rate of corporate income tax on net profit, of for a period of 5 years

after the expiry of the corporate income tax exemption period.

53A N N U A L R E P O R T 2 0 0 2


(Unit : Million Baht)

For the years ended 31 December 2002 and 2001

Local sales Overseas sales Total Elimination Grand total

2002 2001 2002 2001 2002 2001 2002 2001 2002 2001Sales

- external 512 878 23,940 25,554 24,452 26,432 - - 24,452 26,432- related parties - - 16,849 6,706 16,849 6,706 (8,937) (824) 7,912 5,882

512 878 40,789 32,260 41,301 33,138 (8,937) (824) 32,364 32,314

Earnings from operations 2,309 2,597Other income 138 199Expenses and interest expenses (844) (1,175)Corporate income tax (6) (7)

Net earnings 1,597 1,614


Promoted Non-promoted Total

Revenues

Sales

Local 507 5 512

Overseas 29,870 1,995 31,865

Total 30,377 2,000 32,377


As at 31 December 2002 and 2001

Local Overseas Total Elimination Grand total

2002 2001 2002 2001 2002 2001 2002 2001 2002 2001ASSETS- Trade accounts receivable, net 5,094 4,448 1,911 73 7,005 4,521 (2,440) (180) 4,565 4,341- Inventories, net 3,788 4,036 2 1 3,790 4,037 - - 3,790 4,037- Property, plant and

equipment, net 2,645 2,805 74 11 2,719 2,816 - - 2,719 2,816- Other 1,634 2,458 1,191 764 2,825 3,222 (147) (206) 2,678 3,016

Total assets 13,161 13,747 3,178 849 16,339 14,596 (2,587) (386) 13,752 14,210

To be entitled to these rights and privileges, the Company must comply with conditions specified in the promotionalcertificates.

The Companyûs operating revenues for the year ended 31 December 2002 are below divided according to whetherthe revenues are from promoted and non-promoted activities :-

30. COMMITMENT AND CONTINGENT LIABILITIES

30.1 Financial derivatives

a) Forward foreign exchange contracts

As at 31 December 2002, the Company and its subsi diary had outstanding forward foreign exchange contractsoutstanding for the purchase of USD 100 milli on at ranging from Baht 42.47 to Baht 44.215 per USD 1 (2001 : USD 123million) and the sale of USD 110 milli on at ranging from Baht 42.50 to Baht 44.60 per USD 1 (2001 : USD 138 milli on). Theseforeign exchange contracts generally have maturities of less than 1 year and the counterparties to the transactions arefinancial institutions.

29. FINANCIAL INFORMATION BY SEGMENT

The Companyûs operations involve the single industry segment of manufacturing and distributing electronic equip-ment.

Information for the years ended 31 December 2002 and 2001 is below pr esented by geographic segment :-

The Company use the gross profit margin + 2% basis to set transfer prices between the geographic segment.

A N N U A L R E P O R T 2 0 0 2


Average buying rate Average selling rateCurrency (Baht per 1 USD) (Baht per 1 USD)

USD 43.0947 43.3039

b) Interest Rate Swap Transaction Agreement

A subsidiary of the Company has entered into USD 15 milli on Interest Rate Swap Transaction Agreement withan oversea bank. The contract is for a period of 1 y ear, maturing in April 2003. At the maturity date, the subsidiary isrequired to pay interest to the bank at 12 month LIBOR (as at 31 December 2002, the 12 month LIBOR w as 1.48625percent per annum) and the bank is required to pay interest to the subsidiary at a fixed rate of 4.53 percent per annum.

c) Option agreements

As at 31 December 2002, a subsi diary of the Company has outstanding option contracts under which it willpay USD 180 milli on and receive Baht 7,900 million on maturity dates between 17 Januar y 2003 and 18 June 2003.

The fair value of the option contracts was USD 179.9 milli on. Such fair value was based on forward exchangerate quoted by banks.

As at 31 December 2002, the exchange rate announced by the BOT is as following :-

30.2 Guarantees

a) As at 31 December 2002, there were outstanding bank guarantees of approximately Baht 97.4 million (2001: Baht 102 milli on) issued by banks on behalf of the Company in respect of certain performance bonds as required inthe normal course of the Companyûs business. Its parent company has issued a letter of awareness to a bank for creditfacilities.

b) As at 31 December 2002, the Company has issued a letter of guarantee of USD 16.9 milli on (2001 : USD 25.4million) to a financial institution to secure against credit facilities as granted by those financial institutions to a subsidiarycompany and a related company.

30.3 Sale of collection rights over trade accounts receivable

As discussed in Note 6, as at 31 December 2002 the Company had conti ngent liabilities to banks amountingto Baht 474 million (2001 : Baht 1,385 milli on) as a result of its sale of collection rights over trade accounts receivable areunable to repay their debt to the banks.

30.4 Agreements for hire of production of molds

As at 31 December 2002, the Company had outstandi ng commitments of Baht 32.1 milli on with overseassuppliers in respect of agreements for hire of production of molds.

30.5 Sales and marketing services agreement

As at 31 December 2002, a subsi diary company had an outstanding commitment of SGD 1.2 milli on under asales and marketing services agreement.

30.6 Commitment

As at 31 December 2002, its subsi diary had outstanding commitments of approximately RMB 57.3 million inrespect of agreements to construct a plant in the Peopleûs Republic of China.

31. FINANCIAL INSTRUMENTS

31.1 Financial risk management and policies

The Company and its subsidiaries are exposed to risks from changes in market interest rates and in currencyexchange rates and from nonperformance of contractual obligations by counter parties. The Company and its subsidiaryuse derivative instruments, as and when it, considers appropriate, to manage such risks.

31.2 Credit Risk

It is the Company and its subsidiaryûs policy to enter into financial instruments with creditworthy counterparties. Therefore theCompany and its subsidiary do not expect any material losses to arise from the counterpartiesû failure to perform theirobligations under the financial statements. The Companyûs and its subsidiaryû revenues are generated in the technologyindustry, which is characterised by short product life cycles and rapid advances in manufacturing technologies. Themaximum exposure to credit risk is the carrying amount of the financial assets less provision for losses as stated in thebalance sheets.

With respect to off-balance sheet derivative financial instruments, it is the Companyûs and its subsidiaryûs policyto enter into financial instruments with creditworthy counterparties. Therefore, the Company and its subsidiary do notexpect any material losses to arise from the counterpartiesû failure to perform their obligations under the financialinstruments.

55A N N U A L R E P O R T 2 0 0 2



CONSOLIDATED THE COMPANY ONLY Interest rate

2002 2001 2002 2001Cash on hand 0.4 0.3 0.4 0.3Cash at banks 832.3 982.2 66.5 520.1 Market rate

832.7 982.5 66.9 520.4

Million YEN Million USD Million NTD Million EURO Million SGD

2002 2001 2002 2001 2002 2001 2002 2001 2002 2001Foreign currency assets-Due within one year 5 3 116 149 16 - 6 - 0.4 0.6-Over one year - - - - - - - - - 0.2

Foreign currency liabilities-Due within one year (91) (2,842) (31) (11) (48) (48) (1) (0.6) - -

Net foreign currency assets (liabilities) (86) (2,839) 85 138 (32) (48) 5 (0.6) 0.4 0.8

31.3 Foreign currency risk

The Company and its subsidiaryûs exposure to foreign currency risk relates primarily to its receivable, payable,loans and convertible debentures which are denominated in foreign currencies.

As at 31 December 2002 and 2001, the Companyûs net f oreign currency assets and liabilities that were nothedged by derivative financial instruments were as follows.

31.4 Interest rate risk and liquidity

The interest rate risk is the risk that future movements in market interest rates will affect the results of operationsof the Company and its subsidiary and their cash flows. The Companyûs and its subsidiaryûs exposure to interest rate riskrelated primarily to their deposits at banks, short-term investments, loans to related parties and loans from financialinstitutions. The majority of these financial assets and liabilities carry interest rates which vary in line with market rates.However, one subsidiary of the Company has entered into interest rate swap agreements to hedge such interest rate risk,as discussed in note 30.1 b).

The cash flow requirements related to the Company and its subsidiaryûs forward contracts and interest rate swap arelimited to the net differences between the contracted forward rate and the spot rates prevailing at their settlementdates, and the net differences between the floating rate and fixed rate at the maturity date, respectively.

Cash and cash equivalents as at 31 December 2002 and 2001 ar e as follows :-

31.5 Fair value

Fair value is defined as the amount at which the instrument could be exchanged in a current transaction betweenknowledgeable willing parties in an armûs length transaction. Fair values are obtained from quoted market prices,discounted cash flow models or net asset value as appropriate.

The following methods and assumptions are used to estimate the fair value of each class of financialinstruments.

Cash on hand and at banks, current investments, accounts and notes receivable-the carrying values approxi-mate their fair values due to the relatively short-term maturity of these financial instruments.

Investment in shares-the fair values of publicly traded instruments are estimated based on the last biddingprice of the Stock Exchange of Thailand, all other instruments for which there are no quoted market prices, a reasonableestimate of fair value has been calculated based on the underlying net asset base for such investment, whichapproximates their carrying values.

Accounts payable-the carrying amounts of these financial liabilities approximates their fair values due to therelatively short-term maturity of these financial instruments.

32. PRESENTATION

The presentation of these financial statements have been made in compliance with the stipulations of thenotification of the Commercial Registration Department dated 14 September 2001 as emp owered under the AccountingAct. B.E. 2543.

Certain amounts in the financial statements for the year ended 31 December 2001 hav e been reclassified toconform to the current year classifications, with no effect on previously reported net earning or shareholdersû equity.

33. APPROVAL OF FINANCIAL STATEMENTS

These financial statements have been approved by the Companyûs directors.

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MANAGEMENT EXPLANATION AND ANALYSIS

1. Sales revenues: At the end of year 2002 the Companyûs sales revenues were Bt. 32,364.01 milli on which is

slightly increased 0.15 % fr om that in 2001. Sales Revenues increased due to the new order of Telecommunication

products at the end of year 2002, but the sales revenues from Computers equipmentûs product and Peripherals still

remain the same. In addition the Company had Gain on share of profit from investments accounted for under equity

method, Reversal of allowance for diminution in the value of investment and other revenues Bt. 27.19 and Bt. 52.31 milli on

and Bt. 59.04 million respectively. Therefore, total revenue were Bt. 32,502.55 million.

2. Cost of Goods Sold: Cost of goods sold for the year 2002 amounted to Bt. 30,055.40 million or 92.87% of sales

revenues which increased from 91.96% i n 2001, mai nly due to the price competition, and the decrease of unit selling

price of Computer products.

3. Selling and Administrative Expenses: The SG&A expenses in the year 2002 were Bt. 715.55 milli on or 2.21%

of total revenues compared to 2.75% in 2001, because of the ti ghtening control over the marketing expense.

4. Exchange Loss in the year 2002 amounted to Bt. 25.08 million; included a Bt. 10 milli on gains which is the result

of netting the Companyûs unrealized exchange losses against the subsidiaryûs unrealized exchange gains from translation

under forward contracts using the exchange rate at the balance sheet date. These forward contracts were made for

square hedge purpose between the company and its subsidiary.

5. Interest Expenses: The Company had interest expenses at Bt. 79.66 million, a sharply decrease from Bt. 209.55

million in the year 2001. This was due to the repayment of some portion of short-term loan and the downtrend of interest

rate.

6. Net Profit: the Company could make the net profit of Bt. 1,596.90 milli on in the year 2002 or a reduction of

1.08% compared to that in 2001, due t o the decrease of the unit selling price of computer equipment product even the

increase of sales quantities. The Companyûs earning per share was slightly decreased from Bt. 5.35 in 2001 t o Bt. 5.29

in 2002.

CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED

Ccet 02

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