TREK 2000 INTERNATIONAL LTD (Registration Number: N)

Transcription

1 TREK 2000 INTERNATIONAL LTD (Registration Number: N) Full Year Financial Statement and Dividend Announcement for the year ended 31 December 2008 PART I - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY (Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS 1 (a) An income statement for the group together with a comparative statement for the corresponding period of the immediately preceding financial year UNAUDITED RESULTS FOR THE FULL YEAR ENDED 31 DECEMBER 2008 The Board of Directors announces the results of the Group for the Full Year ended 31 st December These figures have not been audited. The financial statements are presented in United States Dollar (USD or US$). Year Ended Increase/ (decrease) % US$ 000 US$ 000 Revenue 107, ,266 (3.33) Cost of goods sold 100, ,805 (1.86) Gross profit 6,664 8,461 (21.24) Research and development expenses (2,040) (2,268) (10.05) Marketing and distribution expenses (1,064) (1,383) (23.07) General administration expenses (4,254) (2,075) (105.01) Other operating expenses (45) - nm Other operating income 1,091 3,573 (69.47) Operating profit 352 6,308 (94.42) Interest expense hire purchase (1) (1) Nm Share of profits of associated Companies Exceptional items Nm Profit before income tax 437 6,847 (93.62) Income tax (44) (570) (92.28) Profit for the financial year attributable to shareholders 393 6,277 (93.74) The following items have been included in arriving at the profit before income tax : Year Ended Increase/ (decrease) US$ 000 US$ 000 % Interest income fixed deposits 694 1,267 (45.22) Interest expense hire purchase (1) (1) nm Allowance for doubtful debts (182) (13) nm Depreciation of fixed assets (195) (317) (38.49) Impairment of associated company (2,367) (250) Impairment of unquoted investment - (74) (100.00) Fair value impairment on quoted investment (115) - nm Amortisation of intangibles (1,648) (1,614) 2.11 Write-off of intangibles (137) (323) (57.59) Gain on disposal of fixed assets Gain on disposal of investment 71 1,855 (96.17) Foreign exchange gain (53.49) Exceptional items - Legal costs for IP enforcement - (175) nm - Legal recovery from IP enforcement nm nm denotes not meaningful

2 Trek 2000 International Ltd Page 2 1 (b)(i) A balance sheet (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year GROUP COMPANY BALANCE SHEET as at 31 Dec Dec Dec Dec 2007 US$ 000 US$ 000 US$ 000 US$ 000 Fixed assets 1,227 1, Intangible assets 7,716 7,358 4,507 3,859 Investments Subsidiary companies - - 3,559 3,559 Associated companies 2,105 3,632 1,773 3,340 Quoted investments 3,654 2,483 3,654 2,483 Unquoted investments 851 1, ,941 6,610 8,056 9,837 11,323 Current assets Trade Debtors 16,549 19, Inventories 1,978 2, Quoted investments Amounts due from subsidiary - - 7,286 5,228 companies Amounts due from associated companies Other debtors Prepayment Fixed deposits 11,111 16,643 7,915 13,980 Cash and bank balances 12,565 12,395 4,441 3,335 43,441 52,065 20,550 23,422 Current liabilities Trade creditors & accruals 13,626 17, Other creditors 569 1, Hire purchase creditors Provision for income tax 1,270 1, ,471 20,176 1,052 1,454 Net current assets 27,970 31,889 19,498 21,968 Non-current liabilities Hire purchase creditors Net assets 43,515 48,448 33,853 37,169 Share capital ** 29,390 30,334 29,390 30,334 Treasury share (222) (222) (222) (222) Other reserves Revaluation reserve Revenue reserve 11,956 15,907 4,406 6,756 reserve 2,715 2, Translation reserve (687) (673) ,515 48,448 33,853 37,169 1 (b)(ii) Aggregate amount of group s borrowings and debt securities Amount repayable in one year or less, or on demand As at 31 December 2008 As at 31 December 2007 US$ 000 US$ 000 Secured Unsecured Secured Unsecured Amount repayable after one year As at 31 December 2008 As at 31 December 2007 US$ 000 US$ 000 Secured Unsecured Secured Unsecured Details of any collateral The Group s motor vehicles at carrying value of US$10,830 (2007: US$ 18,475) are pledged as collaterals to the hire purchase creditors.

3 Trek 2000 International Ltd Page 3 1 (c) A cash flow statement (for the group), together with a comparative statement for the corresponding period of the immediately preceding financial year CONSOLIDATED CASH FLOW STATEMENTS For The Full Year ended 31 st December 2008 Year Ended 31 st December Cash flow from operating activities:- US$ 000 US$ 000 Operating profit before income tax 437 6,847 Adjustments for:- Amortisation of intangible assets 1,648 1,614 Write-off of intangibles Depreciation of fixed assets Negative reserve on acquistion of related company (1) - Impairment of unquoted investment - 74 Impairment of associated company 2, Fair value impairment of quoted investment Share of profit of associated companies (86) (24) Profit on disposal of investment (71) (1,855) Gain on disposal of fixed assets (7) (6) Share-based payment expenses - - Interest income (694) (1,267) Interest expense 1 1 Translation difference arising on consolidation 1 25 Operating profit before reinvestment in working capital 4,042 6,299 Decrease / (Increase) in debtors 3,448 (9,889) Decrease / (Increase) in inventories 509 (704) (Decrease) / Increase in trade creditors & accruals (4,736) 7,184 Cash generated from operating activities 3,263 2,890 Income tax paid (29) (87) Interest paid (1) (1) Interest received 694 1,267 Net cash generated from operating activities 3,927 4,069 Cash flow from investing activities Purchase of fixed assets (263) (94) Payment for patent & trademark registration expenses (1,705) (1,386) Payment for development expenditures (438) (997) Purchase of shares in associated companies (732) - Purchase of quoted investments (9,119) (13,046) Purchase of unquoted investments - (851) Proceeds from disposal of fixed assets 7 8 Proceeds from sales of unquoted investments 8,184 14,232 Net cash used in investing activities (4,066) (2,134) Cash flow from financing activities Share bought back and cancelled (944) (667) Purchase of shares and held as Treasury shares - (222) Repayment of hire purchase instalments (7) (7) Decrease in amounts due from associated companies - 28 Payment of dividend (4,345) (5,975) Net cash used in financing activities (5,296) (6,843) Net decrease in cash and cash equivalents (5,435) (4,908) Cash and cash equivalents at beginning of year 29,038 34,079 Foreign exchange difference 73 (133) Cash and cash equivalents at end of year 23,676 29,038 Cash and cash equivalents in the consolidated cash flow statement consist the following balance sheet amounts: 31 Dec Dec 2007 US$ 000 US$ 000 Fixed deposits 11,111 16,643 Cash and bank balances 12,565 12,395 23,676 29,038

4 Trek 2000 International Ltd Page 4 1 (d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity other than those arising from capitalisation issues and distributions to shareholders, together with a comparative statement for the corresponding period of the immediately preceding financial year STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2008 THE GROUP Share Treasury Shares Foreign Currency Translation Revenue Other s Revaluation reserves US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Total 1 January ,001-2,688 (677) 15, ,158 translation difference Net change in fair value adjustment reserve Results for 1 st Qtr , , March ,001-2,688 (676) 16, ,537 translation difference (4) - (4) Net change in fair value adjustment reserve Dividends of US$ per share, less income tax of 18% Tax exempt dividends of US$ per share (497) - - (497) (3,385) - - (3,385) Results for 2 nd Qtr , , June ,001-2,688 (676) 14,455 1, ,627

5 Trek 2000 International Ltd Page 5 STATEMENT OF CHANGES IN EQUITY for the period ended 31 December 2008 (cont d) Share Treasury Shares Foreign Currency Translation Revenue Other s Revaluation reserves US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Total translation difference Bonus share issue by way of capitalization of subsidiary s retained profits adjustment reserve (29) Results for 3 rd Qtr , , September ,001-2,717 (674) 15,731 1, ,351 Shares bought back and cancelled (667) (667) Purchase of shares and held as Treasury Shares - (222) (222) translation differences adjustment reserve (1,191) - (1,191) Special interim dividend of US$ per share (2,093) - - (2,093) Results for 4 th Qtr , , December ,334 (222) 2,717 (673) 15, ,448

6 Trek 2000 International Ltd Page 6 STATEMENT OF CHANGES IN EQUITY for the period ended 31 December 2008 (cont d) THE GROUP 1 January 2008 Shares bought back and cancelled translation difference Net change in fair value adjustment reserve Share Treasury Shares Foreign Currency Translation Revenue Other s Revaluation reserves US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ ,334 (222) 2,717 (673) 15, ,448 (944) (944) (1) (1) (39) - (39) Total Results for 1 st Qtr March 2008 translation difference Net change in fair value adjustment reserve Negative revenue on acquisition of a related Company Tax exempt dividends of US$ per share 29,390 (222) 2,717 (674) 16, , (3) - (2) - (5) (66) - (66) - - (2) (2) (4,345) - - (4,345) Results for 2 nd Qtr June 2008 translation differences Net change in fair value adjustment reserve 29,390 (222) 2,715 (677) 13, , (9) (8) (93) - (93) Results for 3 rd Qtr September 2008 translation differences Net change in fair value adjustment reserves 29,390 (222) 2,715 (686) 13, , (1) Results for 4th Qtr (1,760) - - (1,760) 31 December ,390 (222) 2,715 (687) 11, ,515

7 Trek 2000 International Ltd Page 7 STATEMENT OF CHANGES IN EQUITY for the period ended 31 December 2008 (cont d) THE COMPANY 1 January 2007 adjustment reserve Share Treasury Shares Foreign Currency Translation Revenue Other s Revaluation reserves US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ , , , Total Results for 1 st Qtr March 2007 translation differences adjustment reserve Dividends of US$ per share, less income tax of 18% Tax exempt dividends of US$ per share 31, , , (4) - (4) (497) - - (497) (3,385) - - (3,385) Results for 2 nd Qtr June 2007 adjustment reserve Results for 3 rd Qtr September 2007 Shares bought back and cancelled Purchases of shares and held as Treasury shares adjustment reserve Special interim dividend of US$ per share 31,001 2,667 1,075 34, , ,897 1,492-35,390 (667) (667) - (222) (222) (1,191) - (1,191) (2,093) - - (2,093) Results for 4 th Qtr , , December ,334 (222) - - 6, ,169

8 Trek 2000 International Ltd Page 8 STATEMENT OF CHANGES IN EQUITY for the period ended 31 December 2008 (cont d) THE COMPANY Share Treasury Shares Foreign Currency Translation Revenue Other s Revaluation reserves US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 US$ 000 Total 1 January 2008 Shares bought back and cancelled adjustment reserve 30,334 (222) - - 6, ,169 (944) (944) (39) - (39) Results for 1 st Qtr March 2008 translation differences Tax exempt (one tier) per share adjustment reserve 29,390 (222) - - 6, , (2) - (2) (4,345) - - (4,345) (66) - (66) Results for 2 nd Qtr June 2008 adjustment reserves translation differences 29,390 (222) - - 2, , (93) - (93) Results for 3 rd Qtr September 2008 translation differences adjustment reserves 29,390 (222) - - 3, , Results for 4 th Qtr , , December ,390 (222) - - 4, ,853

9 Trek 2000 International Ltd Page 9 1(d)(ii) Details of any changes in the company s share capital arising from rights issue, bonus issue, share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the previous period reported on. State also the number of shares that may be issued on conversion of all the outstanding convertibles as at the end of the current financial period reported on and as at the end of the corresponding period of the immediately preceding financial year During the 4 th Qtr of FY 2008 under review, no new ordinary shares were issued except that as a result of the Share Purchase Mandate, shares purchased and cancelled are set out below: Share : Ordinary Shares Issued and fully paid No. of shares US$ Balance as at 1 st January ,561,925 30,333,928 Shares bought back and cancelled (4,000,000) (943,641) Balance as at 31 st December ,561,925 29,390,287 The Company movement in Treasury Share is as follows: Treasury Shares No. of shares US$ Balance as at 1 st January ,000,000 (221,397) Purchase of Shares and held as Treasury Shares during the year - - Balance as at 31 st December ,000,000 (221,397) The Company movement in Unexercised Share option is as follows: Unexercised Share Option No. of shares Balance as at 1 st January ,545,000 Share option withdrawn/expired (433,750) Balance as at 31 st December ,111, Whether the figures have been audited, or reviewed and in accordance with which standard (e.g. the Singapore Standard on Auditing 910 (Engagements to Review Financial Statements), or an equivalent standard) The above figures have not been audited or reviewed by our auditor, Messrs Ernst & Young LLP. 3. Where the figures have been audited or reviewed, the auditors report (including any qualifications or emphasis of matter) Not applicable. 4. Whether the same accounting policies and methods of computation as in the issuer s most recently audited annual financial statements have been applied The Group has applied the same accounting policies and methods of computation in the financial statements for the current financial period compared with those of the audited financial statements as at 31 December 2007.

10 Trek 2000 International Ltd Page If there are any changes in the accounting policies and methods of computation, including any required by an accounting standard, what has changed, as well as the reasons for, and the effect of, the change Please refer to paragraph 4 above. 6. Earnings per ordinary share of the group for the current period reported on and the corresponding period of the immediately preceding financial year, after deducting any provision for preference dividends THE GROUP Year Ended 31 st December Net profit after tax (US$ 000) 393 6,277 Weighted average number of ordinary shares of S$0.05 each in issue (in 000) 296, ,113 Weighted average number of ordinary shares of S$0.05 each in issue along with dilution effect (in 000) 308, ,327 (Amount in USD cents) Earnings per ordinary share for the year after deducting any provision for preference dividends:- (i) Based on existing issued share capital (ii) On a fully diluted basis Net asset value (for the issuer and group) per ordinary share based on issued share capital of the issuer at the end of the (a) current period reported on and (b) immediately preceding financial year NET ASSETS VALUE GROUP COMPANY 31 Dec Dec Dec Dec 2007 Number of ordinary shares (in 000) 296, , , ,113 (Amount in USD cents) Net assets value per ordinary share based on issued share capital at the end of the year A review of the performance of the group, to the extent necessary for a reasonable understanding of the group s business. The review must discuss any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors. It must also discuss any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on The Group reported revenues of US$ million in a challenging year at the close of FY2008. This is 3.3% lower than the revenue of US$111.3 million reported in the previous financial year ( FY2007 ), Revenue and Profitablity The marginal decline in revenue was a result of lower consumer demand, price erosion and keen competition in the 4 th Qtr of FY2008. Nevertheless, sales volume continues to increase despite the 60% price erosion of the NAND flash over the last twelve months. Therefore, while dollar value is lower, our total sales volume has increased. Revenue contribution from our licensing business decreased by 36.9%, declining from US$2.3 million to US$1.4 million. The quantum of our licensing revenue is also dependent on the ability of our licensees to market their product and solutions based on the license. Contributions from mobile media solutions business dipped by 1.48% from US$92.6 million to US$91.3 million due mainly to keen competition. Thereafter, the onslaught of the economic crisis after mid 2008 further depressed consumer demand. Operating amid keen competition, the Group s continuing focus on margin and efficiency improvements, particularly in the areas of operating and vendors costs management, has enabled us to achieve a gross profit margin of 6.20% (FY07: 7.6%)

11 Trek 2000 International Ltd Page 11 Expenses Total expenses amounted to US$7.4 million in FY 2008 (FY2007: US$5.7 million) representing a increase of 29.3%. This decrease is attributable to the following factors: reduced investments undertaken in research and development and IP registration activities (US$0.2million or 10.0%) decreased provision for doubtful debts in marketing and distribution activities (US$1.1 million or 23.0%) a 105.0% increase in general administration expenses, mainly as a result of an impairment in an associated company of US$2.4million and a US$0.1 million fair value impairment of a quoted investment. Net Profit After Tax Net profit after tax decreased by 93.7% from US$6.3 million (FY2007) to US$0.4 million in FY2008. The key factors underlying the lower profitability are : Lower contribution from licensing business and deduction of gross profit margin to 6.2%, (FY2007: 7.6%); Lower contribution from other operating income which reduced by 69.5% from US$3.6 million to US$1.1 million. This is largely attributable to lower contributions from interest earned on time deposits and the reduction in exceptional gain from disposal of investments; and Impairment in an associated company of US$2.4million (FY07: US$0.2 million). Balance Sheet Key Highlights Intangible Assets There was a US$0.4 million increase in intangible assets in FY2007 due to the registration of new patents in our core mobile media solutions division. This brought an increase in intangible assets value, which rose from US$7.3 million in FY2007 to US$7.7 million in FY2008. Being a technology leader in our space, Trek continues to emphasize and invest in research and development ( R&D ) activities. The Group s strategy aimed at building its library of patents is gaining momentum with 225 patents granted across the world (FY2007: 161 patents granted). Quoted Investments Investments in quoted investments increased to US$4.4 million from US$2.4 million, due mainly to investments in short-term bonds. Quoted investment with less than 12 months to maturity has been reclassified under current assets. Associated Company Investments in associated companies decreased by US$1.5 million from US$3.6million to US$2.1million. The movement is due mainly to a new investment in an associate in China as reported over SGXNET on 17 January 08, 16 May 08 and 15 September 08 and a non-cash impairment of an associated company in Hong Kong of US$2.4 million. We have decided to write-off STrek International (Hong Kong) Ltd, which has operations in Thailand, based on conservative prudent accounting to make a non-cash impairment, writing its value in our books to zero. There is no recourse to Trek. There is no cash impact on the Company and also no obligation for Trek to put in further money. Writing off this investment has no impact on our cash flow. Unquoted Investments Investment in unquoted investments decreased by US$1.0 million due the maturity of a principal protected investment during the year. Trade Debtors - At the close of FY2008, The Group s trade debtors balance stood at US$16.5 million (FY2007: US$19.2 million). Trade debtors turnover improved from 63 days in FY2007 to 56 days in FY2008 due to vigilant credit control and monitoring.

12 Trek 2000 International Ltd Page 12 Inventory The Group s inventory balance decreased from US$2.5 million (FY2007) to US$2.0 million (FY2008). Inventory turnover improved from 9 days in FY2007 to 7 days in FY2008. Shareholders Funds The Group s shareholders funds in FY2008 amounted to US$43.5 million (FY2007: US$48.4 million) representing a change of US$4.9million. The decrease is due mainly to dividends paid and shares bought back and cancelled during the year (see section 1(a)(ii). Cashflow The Group s operations generated cashflow amounting to US$3.9 million. (FY2007: US$ 4.0 million). At the close of the financial year under review, our cash and cash equivalents decreased from US$29.04 million to US$23.68 million due to the payment of dividends. There are no other significant factors that affected the revenues, costs, and earnings of the Group for the current year under review. Besides the factors mentioned above, there are no other material factors that affected the cash flow, working capital, assets or liabilities of the Group during the current period under review. There are no interested persons transactions during the current year under review. 9. Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between it and the actual results Not applicable. 10. A commentary at the date of the announcement of the competitive conditions of the industry in which the group operates and any known factors or events that may affect the group in the next reporting period and the next 12 months Supported by our healthy working capital; no borrowings and strong cash position, the Group is financially self-sufficient and at the close of FY2008, we have approximately US$23.68 million in cash and cash equivalents. On the business front, the Mobile Media Solutions Division ( MMS ) will continue to be our growth driver. Our MMS business provides solutions to both consumers and enterprises in the areas of data storage, transfer and security and encryption. We will continue to boost our R&D efforts by exploring opportunities to work with leading technological leaders in the industry. The industry remains very competitive and going forward the operating environment will become increasingly difficult due to prevailing global economic contractions. In view of the unusual operating environment, we will monitor our business vigilantly and we are confident to face the challenges ahead.

13 Trek 2000 International Ltd Page Dividend (a) Current Financial Period Reported On Yes, an ordinary dividend is recommended. Name of Dividend : First and Final Dividend Dividend Type : Cash Dividend Rate (cents) : 0.5 Singapore cent (Half Singapore Cent) Tax Rate : Tax-exempt dividend (one-tier) Total amount payable : S$1.48 million (b) Corresponding Period of the Immediately Preceding Financial Year Dividend declared and paid for the corresponding period of the immediately preceding financial year is as follows. Name of Dividend : First and Final Dividend (paid on 22nd May 2008) Dividend Type : Cash Dividend Rate (cents) : 2 Singapore cent less tax Tax Rate : Tax exempt dividend (one-tier) Total amount payable : S$5.911 million (US$4.345 million) c) Date payable The Dividend is payable on 20 th May (d) Books closure date The Register of Members and Register of Transfer of the Company will be closed on 11 th May 2009 for the purpose of determining shareholders entitlement of dividends. Registrable transfers received by the Company s Share Register, Boardroom Corporate & Advisory Services Pte Ltd, 3 Church Street #08-01 Samsung hub, Singapore , up to 5.00 p.m. on 8 th May 2009 will be registered before entitlements to the dividend are determined. 12. If no dividend has been declared/recommended, a statement to that effect Not applicable.

14 Trek 2000 International Ltd Page 14 PART II - ADDITIONAL INFORMATION REQUIRED FOR FULL YEAR ANNOUNCEMENT (This part is not applicable to Q1, Q2, Q3 or Half Year Results) 13. Segmented revenue and results for business or geographical segments (of the group) in the form presented in the issuer s most recently audited annual financial statements, with comparative information for the immediately preceding year Segment Results by Business Segment Customised Solutions Mobile Media Solutions Licensing Total US$ 000 US$ 000 US$ 000 US$ 000 Year ended 31 December 2008 Segment revenue 14,854,993 91,262,491 1,440, ,557,496 Segment operating profit (101,589) (811,552) 1,265, ,078 Finance costs (1,002) Share of results of associated 86,378 Companies Profit before income tax 437,454 Taxation (43,685) Profit for the financial year attributable to Shareholders 393,769 Segment Assets 6,156,407 37,817,932 7,715,602 51,689,941 Investment In Associates 2,104,745 Unallocated assets 5,198,514 Total Assets 58,993,200 Segment Liabilities 1,987,299 12,207,693-14,194,992 Unallocated Liabilities 1,283,512 15,478,504 Other Segment Information Expenditure Fixed Assets 28, , ,211 Expenditure Intangible Assets - 1,894, ,954 2,142,898 Depreciation of fixed assets 27, , ,264 Amortisation of intangibles - 1,473, ,793 1,647,948 Year ended 31 December 2007 Segment revenue 16,345,259 92,636,272 2,284, ,265,795 Segment operating profit 386,025 3,903,142 2,019,486 6,308,653 Finance costs (965) Share of results of associated 24,056 Companies Exceptional items 515,582 Profit before income tax 6,847,326 Taxation (569,895) Profit for the financial year attributable to Shareholders 6,277,431 Segment Assets 9,048,119 44,176,113 7,357,740 60,581,972 Investment In Associates 3,631,576 Unallocated assets 4,424,150 Total Assets 68,637,698 Segment Liabilities 3,218,391 15,713,318-18,931,709 Unallocated Liabilities 1,258,226 20,189,935 Other Segment Information Expenditure Fixed Assets 14,076 79,764-93,840 Expenditure Intangible Assets - 2,164, ,748 2,383,557 Depreciation of fixed assets 53, , ,398 Amortisation of intangibles - 1,349, ,778 1,614,360

15 Trek 2000 International Ltd Page 15 Segment Results by Geographical Segment Sales to external customers Year ended 31 December (US$ 000) Change % ASEAN 72,560 68, % United States 8,017 17,071 (53.04%) China/HK 11,374 11,635 (2.24% Japan 4,086 5,349 (23.61%) India 5,245 5, % Europe 2,574 2, % Others 3, % TOTAL 107, ,266 (3.33%) 14. In the review of performance, the factors leading to any material changes in contributions to turnover and earnings by the business or geographical segments. Segmental Analysis by Business Segments By business segments, MMS dominates as the key revenue generator accounting for about 85.0% of its revenue. Amongst the Group s range of MMS, the Trek s family of products/solutions like Thumbdrive solution; and other external storage media solutions (like SD cards; wireless Trekstor and HDD solutions) incorporating enhanced features (like Hardware-wired AES and Compression); and Trek s security-centric Enterprise Solutions continue to dominate as the main engine of growth for the MMS business segment. Customised Solutions ( CS ) Division contributed 13.8% of the Group s aggregate revenue in FY2008. This is consistent with the Group s strategy to gradually diversify its resources to the other business segments within the Group while still maintaining its existing customer base. The Group s licensing revenue continues to be an important part of the Group s business and has turned in a licensing revenue of US$1.4 million in FY2008, compared to US$2.2 million in FY2006, a 36.9% decrease. The success of the licensing revenue stems from the ability and efforts of our licensees in marketing our products and solutions, which has been dampened by the impact of the NAND flash price erosion by 60%; and the economic and financial crisis in the US that subsequently affected many other economies around the world. Going forward, this business segment will become increasingly important as businesses begin to seriously respect intellectual property rights ownership. Segmental Analysis by Geography In FY2008, the Group s business was affected by the keen market competition, price erosion of the NAND flash and weakening consumer demand due to the global economic and financial crisis. This is further evidenced by the decline in revenue contributions from markets in the US and Japan which declined by 53.0 % and 23.6 % respectively. On the other hand, sales to Europe rose by 12.0% and sales to ASEAN countries saw an increase of 5.2%. On the other hand, Trek saw higher demand in Europe, ASEAN, India and Others. Sales to Europe registered a 12% increase and sales to ASEAN, India and Others rose by 5.2%, 4.6% and 302.8% in FY2008, respectively.

16 Trek 2000 International Ltd Page A breakdown of sales (a) (b) (c) (d) Sales reported for first half year Operating profit reported for first half year Sales reported for second half year Operating profit reported for second half year Group US$'000 % Latest Full Year 2008 Previous Full Year 2007 Change 54,581 51, % 1,851 2,703 (31.52%) 52,976 60,246 (12.07%) (1,458) 3,574 (140.79%) 16. A breakdown of the total annual dividend (in dollar value) for the issuer s latest full year and its previous full year Latest Full Year 2008 Previous Full Year 2007 US$ US$ Ordinary 4,344,760 5,975,673 Preference - - Total 4,344,760 5,975,673 BY ORDER OF THE BOARD GURCHARAN SINGH Executive Director 26 th February 2009 CONFIRMATION BY THE BOARD PURSUANT TO RULE 705(4) OF THE LISTING MANUAL The directors confirm that, to the best of their knowledge, nothing has come to the attention of the Board of Directors which may render the unaudited financial statements for the year ended 31 December 2008 to be false and misleading in any material respect. On behalf of the Directors Signed HENN TAN Director Signed GURCHARAN SINGH Director 26 th February 2009