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Chairman's Message  

Dear Shareholders,

Our prudence dictated that we enter FY2012 on a cautious note. As we progressed through the second half of FY2012, our businesses were evidently affected by the global economic and political uncertainties - the continuing Eurozone crisis, the global slowdown, the pause in the China telecommunication markets, the adjustments in the PC markets, and the looming USA fiscal cliff uncertainties. Despite the many challenges in the operating environment, we forged ahead to strengthen our balance sheets through a series of exercises that will ultimately allow the different groups to strengthen their cores and pursue directions that may yield better returns to our shareholders.

Our collective strengthened balance sheets through the various rights issues and placements have allowed us to pursue strategic opportunities and directions which would transform our Group. In 2012, ASTI acquired the assets, technologies and know-how of EoPlex, Inc. (“EoPlex”), a Silicon Valley additive-manufacturing print-and-sinter technology company. EoPlex will apply this enabling and disruptive technology to build advanced packaging technologies and products for companies that manufacture semiconductors and beyond. EoPlex’s xLC carrier product may revolutionize wire bonding packages which can address the requirements of the mobility markets. We also increased our shareholding in APS Investment Pte Ltd (“APSI”) via an acquisition of 18.9% stake from our subsidiary, Advanced Systems Automation Limited (“ASA”). APSI develops proprietary technology and provides innovative and integrated flip chip solutions to companies that manufacture semiconductors. Both enterprises may contribute substantially to the advanced semiconductor packaging arena in the foreseeable future. Along the same route to address the advances in semiconductor packaging, our equipment subsidiary STI will launch a new wafer inspection equipment in the 1st half of 2013. This may be our growth driver for our equipment business going forward.

We will focus on developing new and advanced packaging solutions. Our ambition to be in the driver’s seat in the backend semiconductor packaging technology may bode well for our inspection and manufacturing services businesses. The lookahead may potentially allow our equipment and manufacturing services enterprises to leverage into other engagement or process points and customers, thus strengthening our overall enterprise value proposition.

On 13 September 2012, DGI entered into a conditional sale and purchase agreement with InflexionPoint Technologies Pte. Limited for the proposed disposal of all the issued and paid up ordinary shares in the share capital of Dragon Technology Distribution Pte. Ltd.. This divestment is expected to bring approximately US$19.5 million to DGI when completed. The divestment will allow the distribution business to operate on a platform better suited for such purpose, and will un-encumber ASTI of guarantees amounting to about $120 million to financial institutions and suppliers. This will allow both enterprises to pursue independent strategic directions that may bring better collective value to shareholders.

ASA acquired a 45% equity interest in Auramas Teknologi Sdn. Bhd. (“Auramas”), a plating technology company whose business and customer base complement ASA’s Equipment Contract Manufacturing Services activities, thereby increasing our skill-sets and enlarging our presence. With ASA’s significantly improved balance sheet, and the enlarged skill-sets in the ASTI Group, ASA will continue to seek opportunities where we can develop and apply our automation and precision engineering skill-sets in technology and market segments that will enhance our value proposition to our customers.

Our financial and business transformations will continue through 2013, and will poise us for the opportunity to bring better values to our shareholders in time to come.

We are acutely aware that our businesses are prone to economic uncertainties and the cyclical nature of the electronics and semiconductor industries. Many unforeseeable factors such as foreign exchange volatility, intellectual property litigations, product and technology obsolescence, inventory adjustments, etc, will continue to be challenges in our industry. In view of these factors, we will remain prudent and cautious in the management of our businesses.

In closing, I would like to thank all our customers, shareholders, business associates, and bankers for your trust and confidence in us, and I look forward to your support in the new financial year. To all our employees, I appreciate your perseverance and dedication, and I have confidence in your commitment to make our Group financially and technologically strong to ride the opportunities of this super-cycle.

Yours sincerely,

Dato' Michael Loh

Executive Chairman


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Blk 25 Kallang Avenue #06-01 Kallang Basin Industrial Estate Singapore 339416T (65) 6392 6922F (65) 6329 5522Company Registration No.: 199901514C
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