In line with our business rationalisation efforts, on 8 January 2010, we announced the conditional sale and purchase agreement with our associated company, Advanced Systems Automation Limited (“ASA”) wherein we propose to acquire the entire business and assets of ASA as a going concern for an aggregate consideration of $8.6 million to be satisfied by setting off against all outstanding loans and advances owing by ASA to ASTI; and to capitalise all the balance of the loans from ASTI, amounting to $19.1 million, by the allotment and issue of new ordinary shares in the share capital of ASA at $0.02 per share to ASTI. This is in conjunction with the reverse takeover exercise that is being proposed by ASA, which is pending the approval of its shareholders. If and when completed, ASTI’s interest in ASA will effectively be converted into a passive investment quoted in equity.

We had further streamline and restructure our business in FY2009 resulting in the divestment of non-core businesses and retrenchments. Impairment losses were also taken on property, plant and equipment, investments and other financial assets. In total, exceptional losses during the year amounted to about $9.8 million.

Due to the weak economic conditions in the first half, the Group’s revenue decreased by 17% to $428.7 million while net loss narrowed to $3.7 million compared to $14.7 million reported in the previous financial year. The latter is attributable to the implementation of tight cost management, which resulted in a 20% decline in operating costs amounting to about $16.2 million in cost savings.

The changing financial landscape and credit contractions among financial institutions coupled with our business streamlining has resulted in a reduction of our bank borrowings from $81.3 million to $61.2 million. At the close of FY2009, we have approximately $43.1 million in cash and bank balances compared to $52.7 million in FY2008.

PROSPECTS IN FY2010

The financial crisis gave us the window to speed up our restructuring efforts. Although we started FY2009 with a leaner organisation, the new fi nancial year will see an even trimmer operation. Our goals and our missions are now clear. Driven by the twin engines of our BEST and Distribution & Services businesses, we now have the ability to anticipate and react faster to changes in market demands. Nonetheless, we have yet to reach our goal post.

The new financial year will not be less challenging. Despite the upbeat demand seen in the final quarter of FY2009, the Semiconductor Industry Association is suggesting a modest slowdown in the first quarter of 2010. In view of the current landscape, our Distribution & Services business will continue to manage our cost efficiency and at the same time, strengthen our operations and hone our competitive capabilities. For our BEST business, while the cycle has been shortened, visibility remains low and we will continue to monitor market changes closely while adopting a cautious approach to our business management.


Charles Cher
Group Chief Executive Officer